Mississippi Mills v. Cook

56 Miss. 40 | Miss. | 1878

Lead Opinion

The judges delivered opinions seriatim.

Campbell, J.:

This case presents the question whether, under the Constitution of this State, adopted on the 1st December, 1869, it is within the power of the Legislature to grant to a corporation for pecuniary profit exemption from the taxation of its property, so as to free it from liability to be taxed during the time for which such immunity may have been granted.

The language of sect. 13, art. 12, of the Constitution is, *51The property of all corporations for pecuniary profits shall be subject to taxation the same as that of individuals ; ” and that of sect. 20 of the same article is, “ Taxation shall be equal .and uniform throughout the State. All property shall be taxed in proportion to its value, to be ascertained as directed by law.”

It was not intended by sect. 13 to confer power on the Legislature to tax the property of corporations of the class mentioned. That existed, without this section, as an inherent legislative power.

It could not have been intended by this provision to require the taxation of the propert}'- of corporations whose charter's, previously granted, secured them exemption from taxation ; for this was beyond the power of the framers of the Constitution, and of the people in adopting it, as repeatedly declared, by the Supreme Court of the United States in reference to that clause of the Constitution of the United States which forbids any State from passing any law impairing the obligation of contracts.

It is not to be supposed that it was designed by this provision to fetter legislative discretion by an inflexible rule that the property of all corporations for pecuniary profit must always be taxed.

It caunot be said that this section intended to exempt from taxation the property of corporations other than those for pecuniary profit.

The language of sect. 13 is peculiar, and we have no other guide for its interpretation except its terms. No other provision of the Constitution sheds any light on this, whose meaning must be ascertained from the fair import of the words employed. There is no difficulty in determining the meaning of the words ‘ ‘ the property of all corporations for pecuniary profits.” In the language of grammar, that is the subject in the sentence, being that of which something is affirmed; and that which is affirmed of it is, that it “ shall be subject to taxation, the same as that of individuals.” . An analysis of this predicate will show an affirmation that its subject, viz., the property of all corporations for pecuniary profits, “ shall be *52subject to taxation,” and of a certain kind, viz., “ the same as that of individuals.” It is not declared that the property of the corporations mentioned shall be “ subjected,” but “ shall be subject to taxation,” — that is, shall be liable to taxation. “ The property of all corporations for pecuniary profits shall be subject to taxation ; ” but how? The answer is, “ the same as that of individuals.” The liability of the property of all corporations for pecuniary profit to taxation is thus secured by the fundamental law, and it is to be “ the same as that of individuals.” The language is not, shall be subject to the same taxation, but to “ taxation the same as,” etc. If the language as used is equivalent to “ the same taxation as that of individuals,” it must nevertheless be held that its object and effect were to fix the sort of taxation to which the property of all corporations should be subject, and not to affect the condition of being subject to taxation. The peculiar arrangement of the words, “ the same as,” suggests as possibly within the contemplation of the framers of the Constitution this view, viz. : the property of all corporations for pecuniary profit shall be subject to taxation, just as the property of individuals is. That of individuals is liable to taxation. They have not been granted immunity from taxation. Their property is subject to taxation, and so, in like manner, the property of all corporations for pecuniary profit shall be liable to taxation.

The import and purpose of sect. 13 seem to have been to establish the condition of the property of all corporations for pecuniary profit as being subject to taxation, and to forbid the exemption of such property from the liability to be taxed, by placing the property of all corporations for pecuniary profit, the same as that of individuals (natural persons), Completely within the legislative power for the purpose of taxation, subject to the twentieth section of the same article of the Constitution; so that the Legislature may at all times_ impose taxes on the property of such corporations, just as it may on the property of individuals. The provision is mandatory, not that the property of corporations shall be taxed (that is left to the Legislature), but such property shall ever be subject — i.e., *53liable — to be taxed, if the Legislature so wills. Such property shall not be freed from liability to taxation, but shall always he liable to be taxed, just as the property of individuals is so liable. The “ same as ” are words of comparison. If such ■corporate property is placed, beyond the reach of the taxing power, it is not subject to taxation. The Constitution says it shall be “ subject to taxation, the same as that of individuals and the legislative act, whether it be a charter or other form of law, which says it shall be exempt, and not subject to taxation, is in conflict with the Constitution ; and none will contend that a charter which contains provisions violative of the Constitution confers any right wherein the conflict is.

This section of our Constitution is copied from the Constitution of Iowa, where it has been held by a majority of the court that it is not constitutional for the Legislature to exempt the property of corporations from the same taxes imposed on the property of individuals, and that the property of corporations must be taxed when that of individuals is taxed. City of Davenport v. Railroad Co., 38 Iowa, 635; City of Dubuque v. Illinois Central R. Co., 39 Iowa, 56. In these cases, Cole, J., dissented, holding the view that the constitutional provision is permissive, and not mandatory.

The Constitution of Alabama of 1868 has a provision nearly like the thirteenth section of art. 12 of ours, and it has been interpreted by the Supreme Court of that State to prohibit the Legislature from discriminating, in a revenue law, in favor of corporate property, so as to free it from bearing the same taxation which is imposed on individual property. Mobile v. Stonewall Ins. Co., 53 Ala. 570. In this case, it is said by the court that the provision was “ added, in itself self-executing, without the aid, in fact in restraint, of legislative power, subjecting corporate property to the taxation imposed on individuals and it is announced in that opinion, that “ If property of a particular kind is subjected to taxation, and owned by a corporation, it must bear the rate of taxation imposed on individuals.”

*54The principle upon which the cases in Iowa and Alabama-rest is, that the constitutional provision under consideration is mandatory to the Legislature, requiring it to impose upon the property of all corporations for pecuniary profit the same taxation as that imposed on the property of individuals; and, ■ therefore, that it is unconstitutional for the Legislature, in adopting a revenue law, to withdraw property of such corporations from the operation of it, so as to relieve them in any way from the same taxation imposed on the property of individuals. If the Legislature cannot, by a general revenue law, discriminate in any degree in favor of property of corporations, forbidden because it is owned by them, how can it be claimed that it can, by a particular act of incorporation, secure in advance to the corporation absolute immunity from taxation of all kinds, beyond the reach of legislative recall or interference ? If corporate property must be taxed the same as individual property, and the Legislature cannot omit to tax it when it taxes individual property : if the constitutional provision is self-executing, and per se subjects corporate property to the same taxation as individual property, as held by the courts of Iowa and Alabama, it is plain that the Legislature cannot thwart the constitutional requirement by the easy process of chartering corporations beyond the reach of the constitution al provision. If a corporation escapes taxation by virtue of a legislative act, it is not “ subject to taxation,” whereas the Constitution says it shall be, and thus a legislative act of incorporation is made to annul the Constitution. It is said that corporate property must be taxed when individual property is ; but how can that be, if corporate property is secure in immunity from taxation by virtue of a legislative grant?

The true view is that this provision of the Constitution fixes, beyond legislative act, the condition of the property of all corporations for pecuniary profit as being always liable to the exercise of the taxing power, so as to subject it, at the will of the Legislature, to the same taxation as the property of individuals may be subjected to. The Legislature may exempt *55property of a certain class, whether the owners be corporations or natural persons, but corporate property shall never be placed beyond the reach of the taxing power. It may not be taxed, but it must be ever liable. It need not be “subjected,” but it must always be “ subject,” to taxation, the same as that of individuals, for the Constitution so declares. The provision is mandatory as to universal liability to be taxed, but permissive to the Legislature to tax the property of such corporations, or exempt it, as it may see proper, in common with the property of individuals, which may be taxed, or not, for the time being.

Sect. 12, art. 12, of our Constitution prohibits the creation of corporations with certain privileges therein enumerated ; and then follows immediately sect. 13, which declares that •“ the proper!}' of all corporations for pecuniary profit shall be subject to taxation the same as that of individuals.” It is thus suggested that the thought of the framers of the Constitution was, to forbid the creation of corporations with certain privileges, and, leaving the Legislature free from restriction as to the powers it should confer on corporations, except as inhibited by the twelfth section, by the thirteenth section to declare the liability to taxation, the same as that of individuals, of the property of all corporations for pecuniary profit. Sect. 14 of the same article prohibits the authorization of any county, city, or town to become a stockholder in any company, association, or corporation, except upon a condition prescribed in it.

It is thus seen that sect. 13 is in the midst of restrictions upon legislative ¡lower as to corporations, and its association strengthens the idea its terms import. JSToscitur a sociis. Certain corporate privileges are absolutely forbidden by sect. 12. The liability of corporate bodies to taxation the same as that of individuals is fixed by sect. 13, and the restriction of sect. 14 completes the constitutional safeguards as to corporations. This section stands as a barrier to any legislative act whereby to make the property of corporations for pecu*56niary profit not “ subject to taxation the same as that of individuals.” It sprang from the experience that coi’porations were in the habit of asking and obtaining legislative exemption from liability to taxation, and it was intended to establish the inflexible rule of being “ subject to the same taxation ” that the property of individuals is, but leaving the Legislature free to tax the property of corporations or not, on the same principle on which it may or may not tax that of individuals.

The fact that our Constitution does not contain a provision against irrepealable charters argues nothing against the foregoing views. The Alabama court did not find in the provision of the Constitution of that State, like the thirteenth section of art. 12 of ours, the intention to reserve to the Legislature the power to subject corporate property to taxation at all times, because it said that purpose was accomplished by another section of their Constitution, and that this section was added to preclude the possibility of even a temporary exemption of corporate property from taxation. Undoubtedly, if under this section there could not be a temporary exemption, it would be absurd to say there could be a perpetual exemption by charter.

The first clause of sect. 20 establishes the rule of equality and uniformity throughout the State in taxation, and the other requires that all property shall be taxed in proportion to its value, to be ascertained as directed by law. This fixes the principle by which property shall be taxed, and leaves the Legislature free to tax other things than property, as it may deem to be best, subject only to the rule of equality and uniformity as declared by the first part of the section. The words £ ‘ all property shall be taxed in proportion to its value ’ ’ do not require that all property shall be taxed, and deny to the Legislature the right to exempt any. The purpose of their employment is to fix the rule for the taxation of property. Before the adoption of the present Constitution, the power and the practice existed to tax property without regard to value. The *57intent of this provision was to protect against the taxation of property except in proportion to its value, to be ascertained as directed by law. The ad valorem rule in taxing property is secured, and the ascertainment of this value, as directed by law, is made necessary, so that the proportion‘to its value may be borne in the matter of taxation of property. If the purpose had been to prohibit exemptions from taxation, it would have been declared in unmistakable terms. It was easy to declare that the Legislature shall not exempt any property from taxation. The omission of such a provision makes it certain that no such prohibition was thought of.

The Constitution of Missouri contained the provision that “ all property subject to taxation in this State shall be taxed in proportion to its value and in The State v. North et al., 27 Mo. 464, the judge delivering the opinion of the court said this provision “ has been repeatedly construed by this court to mean, not that all the property in the State must be taxed, but that when any article of property is selected for taxation, it shall be taxed in proportion to its value, and not specifically.” This view had been distinctly announced in Hamilton et al. v. St. Louis County Court, 15 Mo. 3. It is true that there seems to be a different view announced in a very singular opinion of the majority of the court, in Crow et al. v. The State, 14 Mo. 237; but the opinion of Naptou, J., in that case, is convincing in favor of the opposite view, and which, as seen subsequently, became firmly established in that State. He says : “ I understand this provision of our Constitution to be simply designed as an injunction upon the Legislature to lay ad valorem taxes upon such property as may be selected for taxation. It does not prohibit exemption or discrimination ; it does not deny to the Legislature the right to select such objects of taxation as they may deem most appropriate. * * The Legislature cannot make a law declaring that my horse, which is worth fifty dollars, shall pay the same tax with my neighbor’s, which is worth one hundred. This would be a specific tax upon horses, without reference to their value. But they may decline *58to tax, or exempt from taxation, all horses under a certain age, or all horses of a particular breed.”

The Constitution of California contained these words, viz.: “ All property in this State shall be taxed in proportion to its value.”

In The People v. Coleman, 4 Cal. 46, it was held, in a well-reasoned opinion, “ that the Legislature may select or exempt such property as in its discretion it may think proper,” for taxation. This ruling was followed in High v. Shoemaker, 22 Cal. 363. It is true that these cases were, as to this, overruled in The People v. McCreery, 34 Cal. 432, and that subsequent cases have followed the last-named case; but we consider the view held in the earlier cases named the sounder one, and certainly as that with which, if any, the framers of our Constitution were acquainted, because the case of The People v. McCreery was finally decided at the January term, 1868, of the Supreme Court of California, and was subsequently published in the volume of cases, and it is highly improbable that a knowledge of the new doctrine of the California court had become generally diffused. If, therefore, in borrowing this provision from the Constitution of California, it is to be held that we took it with the settled judicial construction placed upon it, the inference is a just one that the makers of the Constitution had in view the construction adopted in The People v. Coleman and High v. Shoemaker, ut supra, and which had been published for years, and acquiesced in by the courts and people of California until the time of the case in 34 Cal.

The Constitution of Arkansas required laws to be passed taxing all real and personal property, enumerating certain things not to be taxed, and providing that “ the General Assembly may exempt from taxation personal property to the value of five hundred dollars to each tax-payer.” Of course, under this it was held that the Legislature could not exempt other property than that embraced in the power to exempt. Fxpressio unius, exclusio alterius. Fletcher v. Oliver, 25 Ark. 289. And on examining the Constitutions of those States *59whose courts deny the right of the Legislature to exempt any thing from taxation, it will be found that this view results from an unmistakable requirement by the Constitution that every thing shall be taxed, except as to the court of California, of which we have already spoken.

It follows from these views, that it was competent for the Legislature to modify or repeal the act of April 1, 1872, and that the act of February 1, 1877 (Sess. Acts, 72), is constitutional, and that the bill of complaint is not maintainable.

Decree affirmed.

SlMRALL, C. J.:

The primary and general question for discussion and decision is the meauing and effect of the thirteenth and twentieth sections of the twelfth article of the Constitution. What is the meaning and for what purposes were the thirteenth and twentieth sections of the twelfth article of the Constitution adopted ?

The taxing power pertains to the State as a sovereignty. It vests in the Legislature, to which, in general terms, is committed the legislative power. See sect. 1 of art. 4. These sections were not in the Constitutions of 1817 nor 1832, yet the authority of the Legislature under these Constitutions to tax was plenary.

The sections not being necessary to confer power, must have been devised to regulate, control, or limit the power.

The twentieth section prescribes a plan, or rule, in accordance with which all laws imposing taxes must be framed. If the burden is imposed on property, the tax shall be in proportion to the value, and a scheme must be devised by which the value shall be ascertained. That idea is distinctly conveyed by the words, “ according to its value, to be ascertained as directed bylaw.” The entire clause reads, “All property shall be taxed in proportion to its value, to be ascertained as directed by law.”

The ad valorem principle is the rule applicable to property. *60What does the other clause of the section mean ? — “ Taxation shall be equal and uniform throughout the State.” Certainly it intends that the rate shall be the same in every county and locality. There shall be no discrimination in one part of the State against another.

If the tax be on cattle or horses, that species of jiroperty must be taxed in all parts of the State, and the rate must be the same everywhere.

The injunction to the Legislature is, that when it undertakes to tax property, and has selected the subjects on which the burden shall be imposed,, it must be laid on a valuation, and not on the acreage, for instance, and the per centum of the tax must be the same in all localities, and must be uniform ; that is, all persons, owners of the same sort of property, must bear equally the burden.

The section does not necessarily require that all property in the State at the time of the assessment must be taxed. It does not take away from the Legislature the discretion to select the subjects. But when the selection is made, all property of that sort must bear its proportional part of the burden.

I turn now to the thirteenth section, and will treat it in the same method as the twentieth section. A close analysis of the language discovers a distinction between the different kinds of corporations. The Convention excluded altogether those corporate bodies purely eleemosynary, whose chief object is to dispense benefits to the public, rather than make profit for their founders,— such as asylums for the sick, aged, or orphans ; institutions of learning, and to promote Christianity, etc.

The purpose of the exclusion was, not to negative the power •to tax them, but to leave them as they were before, and as they would have been without this section. In the legislative history of the State, such corporations never had been taxed. It seemed to have been the settled policy that they should not be. The Convention left these charitable and eleemosynary bodies corporate in possession of their traditional immunity. It simply declined to make any rule respecting them.

*61The omission (purposely) of these bodies from the section gives force to the view already advanced, that there is nothing-in the twentieth section, nor elsewhere in the Constitution, imperative on the Legislature to tax all property and exempt none. For it is manifest that these corporations were left out-of the thirteenth section so that they might continue to enjoy the legislative exemption or pretermission from taxation. The idea embodied is, that whilst the property of corporations for profit shall be subject to taxation, there is a distinction between them and those bodies associated under charters to-teach the Christian religion, to promote education, or provide asylums for the sick and destitute; these institutions are founded to dispense benefits to society, and not to those who establish them.

Pursuing further the analysis of the language, it will be observed that the sentence is constructed in the imperative mood, — shall be subject to taxation.

The words are mandatory, and are perpetually addressed to the Legislature, the department of government charged with the duty and the power to tax. The command is, “Do nothing, refrain from any act or law, by which the property of bodies-politic, for profit, shall be loosed or acquitted from continuous subjectibility to taxation.”

The next thing to be noticed is the import of the word1 “ subject ” — “ subject to ; ” not that the taxes must be laid in all circumstances, and at all times; not, indeed, that they must be imposed at all, but that the property of those bodies-shall be subject to taxation, as the Legislature in its wisdom and discretion shall order.

The complete text is, “The property of all corporations-for pecuniary profits shall be subject to taxation, the same as that of individuals.”

The same as that of individuals,” as prescribed in the-twentieth section, on the plan of “ equality,” “ uniformity,” and “ valuation.” The corporation shall pay no more, no less, than individuals. There shall be no discrimination or in*62vidious distinction. If that were the whole import of the section, it would be utterly meaningless and useless. It would hare no distinctive value or purpose, and might just as well have been left out of the Constitution. To come to that conclusion, we must impute folly to the Convention.

As already remarked, it did not require a grant of power to tax corporate property; and neither this section nor the twentieth were inserted in the instrument on any such idea, or for anjf such purpose.

Under the twentieth section, the Legislature is obliged, if it taxes the property of corporations for profit, to tax the same as it taxes individual property. If it did not, the law would infract the rules of “equality,” “uniformity,” and “ ad valorem ” there prescribed.

If the Legislature conformed to those rules (which to it are the supreme law), it is impossible that the corporate property could be taxed higher, or in any other way, than similar individual property. The Legislature is prohibited to enact an unjust, unequal, and discriminating law.

We must find some other motive for the thirteenth section than to accomplish something already secured by another section. That purpose is, the very important mandate .that the property of corporations for gain shall be subject to taxation like that of individuals. It is mandatory in this : that nothing shall be done, or can be done, which shall withdraw it from perpetual liability to taxation.

If the thirteenth section is obeyed, the Legislature cannot, in any form of statute, take from the corporate property its liability to taxation. It cannot, by an act of incorporation, in view of the prospective benefits of the enterprise of the corporation, bind a future Legislature so that it may not judge of the fitness and propriety of requiring the corporate property to share in part the public burden. If the exemption is granted in the form of a contract in the charter, that is. prohibited.

This section was first adopted in this State in 1869 ; it is *63■of modern origin in any of the American Constitutions. It is plainly the lesson of history, — as much so as any of the great principles taken from Magna Charla. It grew out of the enormous aggregations of capital associated under common control to make gain for the proprietors, which have had in modern years such stupendous development in the railroad, mining, banking, manufacturing, and navigation corporations ; and the habit of the Legislature of this and other States, to stipulate an exemption from taxation perpetually, or for a limited time, or until a certain profit was made. The exemption was granted on the consideration that these great enterprises would aid to .develop the industries of the State and increase its population. We had in this State no history, nor elsewhere, of the exemption of individuals', and no mischief, real or supposed, growing out of such exemption. There was, however, much experience, here and elsewhere, of the exemption of corporations such as I have named.

The thirteenth section contains no idea of hostility or repression towards corporations for profit. It gives no hint of a policy of discouragement. It contains no rebuke of legislation which pretermits from taxation the corporate property of an association struggling into existence. If the Legislature should determine that it was wise and for the general good to pretermit the taxation of all property employed in the manufacture of cotton and woollen cloths, or agricultural implements, or household furniture, as a means to encourage investments in these enterprises, there is nothing in the thirteenth section, or combined with the twentieth, which would prevent it. The exemption would be on account of the nature of the property and the use to which it is put. The exemption of a church edifice, of a college, or a hospital, is because of the use to which the property is put. In these instances the property is of a mixed nature, both realty and personalty. So, if the Legislature, from a motive to promote domestic industries, choose to exempt — that is, refrain from taxing — cotton or woollen factories, or plow or furniture facto*64ries, whether owned by joint-stock companies, corporate bodies, or individuals, it could do so. In such cases, in selecting the subjects of taxation, it passes by those sorts of property, or property put to a particular use. But distinction in the selection of the subjects cannot be made because the property belongs to a corporation or individuals, nor because the owners are poor or wealthy. If the exemption is because of the use, as in manufacturing, it must extend to the like property of individuals.

The struggle was long and arduous before the Supreme Court of the United States announced that a State, by an act of incorporation, could cede away for a time, or perpetually, the power to tax corporate property. A minority of the judges, as often as the question was presented, denied that such a grant in the charter was protected by the Federal Constitution,, on the ground that the State could not, in that form of contract, denude itself of one of its sovereign powers, so necessary for its self-preservation.

The State courts have never cheerfully yielded their assent, to this doctrine. The time, perhaps, will come, when the Supreme Court of the United States will recede from it. The necessity of the preservation of the taxing power in its integrity had, perhaps, much to do in the adoption of the thirteenth section. It is wiser and safer, when we consider that the State lives on, after successive generations have passed away, to leave to each Legislature, in time to come, to judge for itself upon what persons and things taxes shall be laid, rather than that a Legislature of to-day may declare that certain property, belonging to certain owners, and future accumulations to it, shall for a long term of years, or forever, be exempt from such impositions.

The Constitution commits that entire subject to each Legislature, when it comes to act on the subject, with the single restriction that, if taxes are imposed on manufacturing property (for illustration) owned by individuals, the like tax shall be paid by corporations; but if the Legislature, from *65considerations of policy, exempts property because of its use and the purpose for which it is employed, the exemption cannot be given to the corporation as owner, whilst the individual owner is required to pay the tax. That would not be equal or uniform.

There is no limitation on the power of the Legislature to incorporate railroad, manufacturing, or. other like corporations, and the grant of all the franchises usual and necessary to the complete and orderly pei’formance and conduct of the several businesses and enterprises, except that the Legislature cannot grant them an immunity from taxation. The Legislature is prohibited by the Constitution from making that contract with the corporations.

It is hardly necessary to say that these views do not apply to such charter exemptions granted before the present Constitution went into effect, if such exemption was irrevocable or irrepealable when granted.

I have read the cases cited from Iowa, California, and Alabama, and do not entirely agree, in the reasoning, with any one of them ; nor are these cases harmonious with each other.

The courts of the States having similar constitutional provisions do not seem to have given full and exhaustive deliberation to the subject; and, perhaps, have not reached a conclusion which will be accepted as a finality.

In the contrariety of views which they have expressed, I do not attach any more weight to their decisions than the reasoning is intrinsically worth. The subject is so new that it presents itself in this court as “ res integra,” and it ought to receive such solution as is approved by the reason and judgment of the members of the court.






Dissenting Opinion

Chalmees, J.,

dissenting.

As a citizen, I regard the construction placed by my associates on the Constitution as most fortunate for the interests of the State; as a judge, I cannot see that it is warranted by the language of the instrument. It is the settled doc*66trine of the Supreme Court of the United States that a State legislature, if not prohibited by the local constitution, may contract away the taxing power of the State in consideration of public benefits to be derived from a particular enterprise; and that thé law by which such a result is accomplished becomes, when passed, irrepealable, except by the consent of the persous in interest.

However erroneous I may regard such a doctrine, I am bound by my oath of office to observe and enforce it, until that court which is upon these questions the supreme judicial arbiter shall recede from their own decisions.

The inherent power, then, exists in the Legislature of this State, by charter or contract to exempt in perpetuity, or for a term of years, the property of individuals or of corporations, unless there is something in our Constitution to inhibit such contracts; and the contract or charter, when made and accepted, is irrepealable. The right to contract away the taxing power of the' State exists, unless expressly prohibited.

Let us look for the prohibition.

Two clauses of the Constitution only have any possible bearing on the question, to wit, the thirteenth and twentieth sections of art. 12.

“Sect. 13. The property of all corporations for pecuniary profits shall be subject to taxation, the same as that of individuals.”

“ Sect. 20. Taxation shall be equal and uniform throughout the State. AH property shall be taxed in proportion to its value, to be ascertained as directed by law.”

Sect. 13 plainly prescribes the same rule of taxation with regard to corporate property that is applicable or may be applied to the property of individuals. It prohibits any discrimination between the two classes of property. It declares that the property of corporations shall be liable or subject to taxation, the same as that of individuals. It thereby compels as against such property a rule as rigor*67ous, and prohibits in favor of such property a rule more rigorous, than that which is or may be applied to individual property. It is therefore both mandatory and inhibitory, — mandatory in the requirement that the rule of taxation shall be as onerous, inhibitory in the declaration that it shall not be more so. If it stood alone, if there was not elsewhere in the instrument some limitation upon legislative power with regard to the taxation of individual property, this section would have no other force or effect than that of establishing a uniform rule between the two classes of property, and that rule would be wholly determinable by the legislative will, except that it could not vary when applied to the different classes. In all other respects it would be left wholly to legislative wisdom.

Turning to the twentieth section, however, we find certain rules prescribed for the imposition of all taxes; and here, therefore, we discover those limitations upon the taxation of the property of individuals which the thirteenth section declares shall be applicable alike to the property of corporations for pecuniary profits.

The thirteenth section, therefore, is to be'read in connection with the twentieth, and can have no complete and perfect interpretation until the meaning of the twentieth section is ascertained.

Whatever rate or rule of taxation may be adopted under the one, may be adopted under the other. Whatever exemption may be granted under the one, may be granted under the other. Whatever contract may be made with reference to individual property under the twentieth section, may be made in reference to corporate property under the thirteenth. Similarity of taxation necessarily-implies similarity of exemption.

We all concur in holding that the twentieth section does not require the taxation of all the property in the State, but only that all that is taxed shall be taxed uniformly, equally, and according to value. These are the three rules, and the only rules, laid down with reference to taxing the property of *68individuals. What do they mean? The requirement of uniformity means that all property belonging to the same class shall be taxed alike; so that all horses shall be taxed at the same rate, and all lands, or stocks, or merchandise. There is to be no discrimination between property of the same class ; and it shall not be competent to levy one rate upon country lands and another upon city lands, or one rate upon horses of one breed and another upon horses of a different breed.

If the uniformity requirement stood alone, it would be competent to affix different rates to different kinds of property, and so to impose one rate on all lands, and another on all horses, and still another on all stocks, and still another on all merchandise. But this kind of discrimination is prohibited by the requirement of equality, by which it is made obligatory that the same rate shall be imposed on every kind and species of property that is subjected to taxation. This is the practical construction which has, by successive Legislatures, been placed on these words, and I think it the true one. The clause requiring ad valorem taxation needs no explanation.

It is quite manifest that there is nothing in these requirements of uniformity and equality, and of ad valorem taxation, which in the slightest degree militates against that inherent right to contract away the taxing power which the Supreme Court of the United States declares to reside in every State legislature, unless restricted by the organic law.

If a proposition so plain needed to be strengthened, its correctness is placed 'beyond controversy by the fact that clauses substantially similar to our twentieth section are found in the Constitutions of perhaps a third of the States of the Union; but in none of them Has it been held that their effect was to forbid such contracts or charters. My colleagues concede this. They admit that there is nothing in the Constitution to prohibit an irrepealable exemption, by contract, of the property of individuals. They admit that under the settled doctrine of the Supreme Court of the United States we would be compelled to uphold such a contract, if made with reference to the *69property of an individual. They confess their inability to discover any prohibition of such power of exemption in sect. 20. It follows, therefore, that said section contains an implied recognition of legislative power to make such contracts.

With this admitted and conceded interpretation of sect. 20, let us write out the two sections in full, giving sect. 13 literally, and giving sect. 20 as we have now ascertained its true meaning to be : —

“ Sect. 13. The property of all corporations for pecuniary profits shall be subject to taxation, the same as that of individuals.”
“ Sect. 20. Taxation shall be equal and uniform throughout the State. All property that is taxed shall be taxed in proportion to its value, to be ascertained as directed by law. The Legislature may, by contract, in consideration of public benefits, exempt property from taxation, and such exemptions shall be irrepealable during the terms for which they are granted.”

This rendering of sect. 20 must be admitted to be legitimate, since this meaning to its language is conceded to be the one which, under the decisions of the Supreme Court of the United States, we are bound to adopt.

How it is possible, with the two sections thus written, to deduce from sect. 13 a prohibition of chartered exemptions as to corporate property, I am wholly unable to perceive. Conceding that the exemption is permissible under the one section, I am at a loss to see how it is inhibited by the other.

I find no such magic as my colleagues in the words, “ shall be subject to taxation, the same as that of individuals.” To me they have no meaning, other than that which would be conveyed by the equivalent phrases, “shall be viewed in the matter of taxation;” or, “shall be treated;” or, “shall be dealt with,” “the same as that of individuals ; ” or, “ shall be liable to taxation, the same as that of individuals.” These, and many similar phrases which might perhaps be suggested, all convey but one and the same idea, namely, *70that the law-giver, in the imposition of taxes, shall know no difference between the property of individuals and that of corporations for pecuniary profits. Alike they shall be taxed equally, uniformly, and ad valorem; alike they may be omitted from the tax-lists for the current year; alike they may be made the subject of a contract of exemption, which, when made, shall be irrepealable. It is said that the injunction is, that the property of corporations “ shall be subject to taxation ; ” that this means that it shall ever be kept subject, and hence it can never be so dealt with that it will not be subject. If the sentence simply was, that “the property of all corporations for pecuniary profits shall be subject to taxation,” it is possible that it might bear this construction, though it would be a most lame and inadequate method of expressing the idea. But the injunction is not that it shall be subject, or shall be kept subject, to taxation, but that it shall be subject “the same as that of individuals.” Hence it follows that whatever may be done with reference to individual property may be done with reference to it.

There is no violation of the Constitution until some law has been enacted in regard to it which would be invalid if applied to individual property. It cannot be taxed otherwise than uniformly and equally and ad valorem, because the property of individuals cannot be so taxed. It may be the subject of an irrepealable contract of exemption, because the property of individuals may be.

It “ shall be subject to taxation the same as that of individuals.” How is that of individuals subject? Insubordination to the legislative right to exempt by contract. So, therefore, corporate property must be subject, also, in subordination to the right of exemption by contract or charter. The constitutional injunction that the subjectibility shall be the same is violated whenever a different rule is applied, either to the imposition of, or the exemption from, taxation, because the nule of similarity tolerates no distinction as to either.

It is said that the framers of the Constitution desired to pro-*71Mbit tbe perpetual exemption of corporate property, because that was a great evil of which they had practical knowledge; but they did not care to extend the prohibition to the property of individuals, because such exemptions, either in perpetuity or for a term of years, were unknown in American legislation. This might have afforded an excellent argument, in the Constitutional Convention, for making the distinction between the two sorts of property, but is worthless as showing that, in point of fact, such distinction was made.

But is it not remarkable that if the makers of the Constitution had an idea so wise, so well defined, so beneficent, they could find no appropriate words in which to express it? Since the case of Knoop v. Bank of Ohio, 16 How. 376, there has been a persistent struggle, both in the State and Federal courts, over this claim that one Legislature could, by contract or charter, so cede away the power of taxation as to fetter the hands of their successors. Many of the ablest jurists on the Federal bench, and a majority, perhaps, of the State courts, have questioned or denied it. If this was the idea which the framers of our Constitution wished to set at rest, how easy would it have been to have declared in a single line that all charters should be repealable, or that there should be no chartered exemption from taxation of corporate property. It seems scarcely respectful to the givers of the organic law to suppose that, with ideas so well defined, they should have couched them in language which can only be understood by the most labored construction.

But they seem to have been men who had no difficulty, ordinarily, in expressing their meaning. Our Constitution abounds with short, nervous, pithy sentences, which leave no doubt in the mind of the reader what it is that they intend to forbid or to sanction.

The thirteenth section of our Constitution is borrowed from that of Iowa, and has been twice considered by the Supreme Court of that State. The exact question here presented was not *72involved;, but in the several opinions delivered there is no hint that the section was intended to prohibit contract exemptions from taxation. The section is found also, somewhat broadened, in the Constitution of Alabama ; and in the single deliverance which has been made upon it in that State, there is a-distinct declaration that it was not intended to accomplish such a result. City of Davenport v. Railroad Co., 38 Iowa, 633; City of Dubuque v. Illinois Central R. Co., 39 Iowa, 56; City of Mobile v. Stonewall Ins. Co., 53 Ala. 570.

Both the Constitution of Iowa and that of Alabama, in addition to this section making the property of corporations for pecuniary profits subject to taxation the same as that of individuals, contain, also, clauses declaring all charters repeal-able.

The framers of our Constitution adopted the section with reference to the subjectibility to taxation of corporate property, and omitted the one making charters repealable. This, it seems to me, settles the question, and demonstrates that while they desired unmistakably to place individual and corporate property on the same footing as to taxation, they did not propose in any manner to interfere with that inherent legislative right to contract away the taxing power which the Supreme Court of the United States had for years before the making of our Constitution repeatedly declared to exist, except where denied by the organic law.

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