Mississippi State Tax Commission v. Brown

483 pay- for the on a vehicle a lien motor enforcement of privilege thereon. ment tax-due jurisdiction

Chancery this lien have to enforce courts Hug hy though specifically the statute. conferred gins Mutual Fire Insurance 107 Miss. v. Home Co., 65 So. only permit hy appellant authorized obtained transport a load of two without tons, and, when,

it to transported tons, excuse it a load fourteen therefor, protection, permit it no and was then afforded position operated it would have had it the same been permit any Consequently, at all. without therefor truck court below committed no error under Section year’s imposing required tax of the statute in $792 hy Paragraph 4 of Section of the statute a ten-ton twenty-five per plus thereof. cent Whether truck, higher impose a tax because of the four had capacity is not us additional tons truck’s before express opinion we no thereon. Affirmed.

Mississippi Tax State Commission v. Brown.

(In February 19, 1940.) Banc. So. 794.

[193 No. 33932.] (In April 15, 1940.) Banc.

[195 33932.] So. 465. No. Attorney-General, for Lauderdale, Assistant Jr., J. A. appellant. appellee. Brown &

Flowers, Jackson, Hester, appellant, suggestion of error. J. A.. on Lauderdale, Ethridge, opinion J., delivered court. appellee capital several stock owned shares of in a national and in- bank, the State Tax Commission cluded dividends him from stock received assessing chapter his income taxes under 120, Laws appellee Chancery 1934. The bill filed his Court county hearing upon of Hinds for the action of the State Tax making Commission in such assessment for income capital tax challenging right this stock, n setting Tax State Commission to do so, and allegations upon sought forth which he relief. petition alleged his he that the bank in which he held instrumentality stock a national an bank, of the Fed- capital, operations eral Government, franchise and except by which are not taxable the state, consent of only of the United and the States; consent given by Congress to several to tax states national banks is found section 548 of title 12 of United States Code Mississippi Annotated; the state of had elected to tax the according shares of national banks to their provided chapter value, section 3138 of 61, Code of ; all Mississippi upon and that taxes due the state of appellee shares of bank the said in which the owned preceding years shares duly for had been assessed paid to the state, and that therefore the share-holders required pay of the bank anything cannot be further either income taxes or thereon, ing otherwise, since elect- shares, said as above shown, the state Mississippi right exhausted to tax the bank or its appellee or the income prayed shares, therefrom. And general relief. through The Tax Attorney Commission, General, petition to the demurred or bill of appellee, demurrer was overruled Thereupon the Chancellor. Tax Commission an admitting filed answer, that the petitioner taxpayer is a citizen county, of Hinds Mis- prepared sissippi, that he within filed, the time

493 provided state of by tbe bis tax income returns law, all in- Mississippi; forth return set but denied tbat said alleged year, that due him the and come taxes for said authority petitioner complainant, of law, the without gross divi- sum of $2022, deducted from income the his national in a of stock dends him on shares received subject tax; the and which he were not bank, claimed petitioner paid tax the income due that all denied the had alleging Mississippi, said sum him to that the state of part his net of so constituted as dividends received chapter subject of income to taxation under Laws 120, 1934. national answer admitted that the bank was a

The. instrumentality of Federal and as such an bank, by the the bank was not taxable Government, that and except do. It of under consent so to state, spe Ann., section title U. S. Code averred that 548, cifically Mississippi levy an authorized state of to. petitioner same of when the income tax on net income bank; derived from owned him said shares on the the state levied valorem taxes admitted that ad according value; to their but averred under shares (c) title U. Code 12, Ann., subdivision section S. 548, levy net was a tax on income the state authorized petitioner. Chancery ap- hearing Otn Court held subject pellee, petitioner, not was to the tax on the the shares of said national found bank, income from petitioner improperly was therewith, assessed judgment appeal From this tax. and annulled such prosecuted. opinion are that the correct We Chancellor was Legislature holding. not the intention of the in so was enacting chap. 1934, 1934, in Laws 120, national derived shares which had income banks with in accordance value shares, been of such taxed provided by section Code of the state hav- 3138, 1930, ing to tax shares national banks elected as therein

provided, proposed under the other methods Chapter Section Title 548, U. S. Laws Code Ann., subject in a new enactment repealing chapter come Code of taxes, chapters directing of 1932. Laws This act levy collection of income taxes assessment, year phrase each calendar used the income,” “taxable provided being the basis of taxation 00 of on “the first $2,000.- any part taxable income or at rate of thereof, per two and one-half centum; any part the next or

“On of taxable income $3,000.00 per at the rate of thereof, one-half centum; three and part any the next $10,000.00 “On of taxable or income, per at the of thereof, rate five centum; on all taxable in- per come excess at $15,000.00 of of six the rate centum.” Section 3.

At the time of the enactment of this statute was by law of settled the United as shown of decision States, agencies Court at that that Federal time, be could not taxed states without the consent of Congress, and states were limited to the methods provided giving in the Federal statute, consent to only specified such assessment to a limited on extent, and presumed be Legislature, conditions. must that the enacting knowledge had statute, of Federal law construing of the court decisions it. By clause 3 of 6' article of the United States Constitu- ‘‘ provided: Rep- S. C. The A., U. tion, Senators and resentatives before and the mentioned, Members Legislatures, judicial several State and all executive and Officers, both of the United States and of several support shall be bound Oath or States, to Affirmation, religious but no Constitution; Test this shall ever be any required public Qualification as a to Officeor Trust under United States.” requirement that the members of the several state judicial

legislatures, and executive all both officers, United and of the several States, shall states, support Constitution, tbe bound imposes upon oatb affirmation powers any exercising

all office those tbe duty supporting wbicb carries Constitution, tbe tbe duty examination of tbe Constitu- it tbe of careful with placed upon high- byit tbe tion, and construction est Court. requires Mississippi members

Tbe also Constitution special oatb forth in section Constitu- take a set tbe tbe wbicb reads as follows: “Members of tion of legislature, discharge entering tbe of their before following' take do tbe oatb: ‘I,---, shall duties, (or faithfully support affirm) solemnly that will swear I tbe Mississippi; tbe United States and tbe state Constitution disqualified bolding office I am faithfully I will of this state; tbe Constitution discharge my legislator; that I as soon will, duties as practicable carefully (or read have read hereafter, me) will endeavor tbe Constitution this state, legislator requirements all tbe and as note, execute, imposed legislature; I will not vote tbe thereof on any promise any person of for measure because of or legislature any for measure member of to vote other this influencing person, him so as a of or them or or means ’ ’’ help to me God. do. So every presumed, of be that member It must therefore, gave thought study legislature to matter of tbe tbe and obligation governed support the and Constitution, bis requirements with tbe tbe in accordance of bis actions interpreted time at that Federal Constitution as tbe judicial authority highest nation of tbe which has tbe interpreting in- of tbe wbicb final Constitution, every terpretation binding is officer of Federal the government. state and tbe of Government, provided tbe . further in Clause 2 of Article VI of It is C. of tbe U. S. is A., Constitution United States ‘ ‘ supreme law of land. as This tbe tbe It reads follows: of tbe United States wbicb Laws Constitution, tbe made Pursuance and all Treaties thereof; shall be of the Authority the which be under made, or shall made, Land; and of the Law supreme be the United shall States, any thereby, be bound every State shall Judges the- to the State any Laws of or Constitution Thing ’’ Contrary notwithstanding. we the find Constitution, to other Turning parts granted Government, the of the Federal legislative power is vested in States, by the United Constitution of the consist which shall United States, being Representatives; powers Senate and House VIII of article 1 18 of section specified in clauses make all “To reading, the 18th clause Constitution, carrying proper necessary which shall be Laws all other Pow- foregoing into Execution Powers, in the Government vested this Constitution ers ’’ thereof. any Department Officer or in States, United in passing duty of legislature, It is, therefore, conform the Constitution legislation, interpreted then understood States, United authority to con- vested with highest judicial body be must now con- it. The here involved strue statute controversy been, strued as it would have had just at effective; after the statute became shortly, arisen then light decisions existing time, have been we would the United States Court, language of the duty statute, limit broad under to. to include the general enough wherever the language make it conform to the Federal as to involved, tax here so court of the highest United interpreted law as law the supreme land. States —which if statutory familiar rule of construction, reasonably statutes shall be construed possible, that broad to constitutional requirements,- conform re will limited to conform to constitutional language M. was held in the case of New Orleans This quirements. & v. 110 Miss. wherein the State, C. R. 70 So. 355, Co. on privilege tax laws levied language railroads, general the state Legislature classification, respect operative only limited to with make the statute with, respect to intrastate and to interstate commerce, not statutory general principle commerce. is a rule This page Statutory construction. See Black on Construction, construing where it a doubtful or am- is said: “In biguous presume statute, will that was the courts legislature intention of the enact and valid, sensible, just change prior law law, one which no should may necessary specific further than purpose be to effectuate the question. of the act in The construction should assumption possible. harmony be in with this whenever prevail presumptions against But this kind cannot ’’ explicit clear and terms of the law. page

It is further on of the same “It said, book, presumed legislature design any that the not at- does tempt rightful authority, transcend of its limits principles give violate the of international toor law, extraterritorial to its statutes.” effect Kennington Hemingway, 101Miss. 57 So. (N. S.) L. 810, 39 R. A. 541, Ann. Cas. 1914B, 392, required statute contracts and transactions between hus- writing actually band to be wife reduced re- public county corded on the to make it records language valid; and the Court limited broad gift by holding apply statute, that did to the ring to his husband wife there diamond involved. gift by It was there a husband held to his wife clothing, to her suitable station etc., life, is valid against person, although gift a third is not evidenced acknowledged a written instrument, recorded as provided by section Code 1906. It was also held chiefly construction courts statutes, desire to reach real intention of the framers of the law, interpretation adopt knowing this which will meet though meaning legislature, real such inter- may beyond pretation wider or within, narrower the mere letter of enactment. than

498 language very broad, there construed

provided conveyance goods and that, “Transfer or any or lands husband or between chattels, and lease lands, against person, any shall wife, not be valid as third conveyance writing unless the transfer or and ac- be in knowledged mortgage filed for record as a deed required possession property of trust be; is equivalent filing writing shall be for record, persons, writing but, affect must filed for third be ’’ record. page supra, In Black on Construction, etc., of at Laws, “Every legislature presumed 110', is said, act of the contrary to be valid and constitutional until the is shown. validity All are doubts resolved in favor of fairly open reasonably act. If it is more than adopted one that construction will construction, will reconcile the statute with the constitution and avoid consequence unconstitutionality.” Moyse

In Ascher & Baxter v. Edward 101 Co., Miss. & syllabus 36, 57 So. 8 it is 299, “Courts in con said, struing presume legislature will statute enacting the statute was familiar with its own enactments placed and with the construction which the courts had on those enactments.” This same idea is also the basis for the well settled doctrine in this state, that where a highest statute having has been construed court authority to construe it, afterwards re-enactment in change, legislature adopt statute without that the has part placed upon ed as a of the construction court’s decision. Henry v. sylla- 103 Henderson, Miss. 60 So.

bus 3 it “Where a statute said, has been construed highest court of and afterwards re-enacted in substantially legislature same terms, adopts along re-enactment with the statute such con- struction.”

See, also, to same effect Moody, Burks v. 141 Miss. syllabus, 378, 3rd 106 370. So. 107 So. 279; Womack

499 syllabus, 94 3rd Miss. 201, Central Lumber 131 Co., Id., section J., “Statutes,” 2. 59 title Also, So. C. 12 section Law,” title “Constitutional 650; J., section C. 220. duty the acts of the Court construe It is constitutionality. uphold legislature Easter their so as to ling 461; So. Lumber 106 Miss. Pierce, Co. v. City 977; So. Lumber Miss. Richards v. Co., 596; 55 So. 697, Natchez & R. v. 99 Miss. Crawford, S. Co. 51 & Miss. 53 918, R. 97 So. Co., 35, v. Louisville N. State construing statutes, In So. Ann. Cas. 1150. 1912C, 454, design legislature a to the not attribute Court should power ignore to on their constitutional limitation legislate. legislature be must understood Of course, existing knowledge time of at the have of the decisions anticipate that enactment not be held to their change Laws afterwards their decisions. courts would passed presumed are with and with deliberation, be knowledge subject, existing all on the full laws passing it will be reasonable to conclude held knowledge all it was with full such statute enacted Telephone Telegraph & State, Co. v. laws. Cumberland 99 Miss. 54 So. 446. 1, heading, under section “Mean L., 215, 25 R. C. 959,

ing Enactment,” said, of Time of to be Given as is ‘ ‘ always tendency, is said, has been to construe There they light appear when the con statutes easy given. It be one is is to wise after struction sees experience. rule are true statutes results they to be construed as were intended to understood they citing passed;” United States are v. Union when Schuyler County 224; 91 23 Pac. R. U. S. L. Ed. Co., 72, 88; 25 L. v. v. 98 U. S. Ed. Com. Erie 169, Thomas, & Am. Dec. 471; N. R. 27 Pa. 67 Platt v. Union Co., 339, E. 424; 25 Ed. 63, R. 99 U. S. L. Bloomer v. Co., 48, P. P. L. also, T. R. A. 599, 19 135, 1 111; 3 Wash. See, Todd, People N. v. 319 111.403, 150 E. State Barnett, 290; v. R. 123 A. Co., Me. 541. Boston, etc., 48, 121 500

Gray Taxing page on Limitation on the Power, 398, lays regard section rule down 788, taxation of national as follows: banks, “It well established law present system that the of National well as agencies, Banks, the old United States Federal Banks, constitute organized by Congress regulate under cur rency (citing Bank Yeazie 8 Wall. 19 L. 533, v. Fenno, Dearing, Ed. 482; Farmers Bank Ed. v. 91 U. S. 23 L. 29, 196; Davis v. Elmira Savings Bank, 161 U. S. ^[275] 283, 16 S. Ct. 40 L. 700; Ed. Owensboro Nat. Bank v. 850). 173 U. S. 19 43 L. Owensboro, S. Ct. Ed. agencies exempt except Such are from state taxation, Congress may exemption in so far as have waived the (McHenry Downer, v. 116 Cal. 45 L. A. P. R. 737; Covington City Bank v. Covington, C. C., F. ^[484] Carthage 489; Rich v. Bank, Packard Nat. 138 Mass. 527; Rep. v. First Nat. burg 71 Mo. Bank, Pitts 494; Am. “ 45). First Nat. 55 Pa. National are Bank, banks government of the Federal instrumentalities created for public purposes, subject necessarily and as to the paramount authority of United States. follows attempt an to define their state duties or control absolutely the conduct of their affairs is whenever void, attempted authority expressly exercise of con- the flicts with laws of the United States and either frus- purpose legislation impairs trates the national or efficiency agencies government the these of the Federal discharge performance they the duties for the of which principles were created. These were axiomatic and are by repeated adjudications the sanctioned of this court (Davis v. Elmira Savings Bank, 161 U. S. ^[275] 283, 16 700). necessarily, S. Ct. 40 It 502, L. Ed. follows then, respective from these conclusions that would states wholly any levy, without either direct tax, property, indirect, national their banks, as- permissive legis- were it sets, or not franchises, Congress. (Owensboro lation of Bank v. Owensboro, ” supra.)

501 Helvering 303 58 539, U. S. Ct. Therrell, v. S. 218-225, cases at the therewith, 82 Ed. and other decided 758, L. (2nd syllabus), “A state it was said

October term, 1937, by appropriate employed United cannot tax means delegated powers; and the States exercise employed by tax United States cannot instrumentalities discharge governmental state in the of its duties.” ‘‘ syllabus exemption that, was also held in the third instrumentalities from Federal taxation not does instrumentality may every which a state see fit extend to depends upon employ, but of the undertak nature ing.”

In New York ex v. 100 S. rel. Williams U. Weaver, authority 25 held that L. Ed. it was of a 539, state 705, wholly tax the shares of national banks is derived Congress, act of and without the consent of those See, shares cannot be states. taxed Albright, First Nat. Bank 208 28 548, v. S. S. Ct. also, U. L. 614. 52 Ed. 349, City

In Mercantile Bank National v. of New 121 York, 30 U. S. Ct. L. Ed. was S. held capital, neither national their nor shares of banks, stock subject then are held to taxation individuals they wherein states are without the consent of located, Congress. the law from when the

Thus, Court, Maryland, the case of McCulloch 316, 429, Wheat. opinion Ed. handed down an written L. Chief Justice until Marshall, the doctrine in maintained Supreme Court of the United States that the states any instrumentlity govern could the Federal Congress. ment without consent of Maryland, supra,

The discussion McCulloch v. legal judicial elaborate lucid, received expressed by country, majority sanction interesting, space permitted, of the It would be if courts. quote, length original great opinion by

to at from this greatest history jurist English speaking the of the passage quote only

people. therefrom: a brief I shall everything sovereignty which to “The of a state extends per- by by authority, its isor introduced exists its own which are those means but does it to mission; extend carry powers congress employed by con- into execution to body by people States? United the of the on that ferred powers Those does not. think it demonstrable, We They single given people by a state. are are given the government people to a States, of the United pursuance are made in constitution, whose laws, people supreme. Consequently, of a to be declared single sovereignty ex- which will cannot confer state a power w,e of taxation them. If measure tend over to sovereignty residing which the extent of a state, people single.state possess, can confer its the government, on a intelligible applicable an standard,

we have power applied. may every We to to which the case taxing principle have people which leaves the a property unimpaired; state which leaves of a resources, of all and which to a the command powers places beyond its all those which are reach, people gov- United States on the .conferred all those means are ernment of which Union, given purpose carrying powers exe- those into principle cution. have a is safe for states, We ought as we safe for Union. We are relieved, sovereignty; pow- clashing interfering from be, right repugnancy govern- between from a in one ers; acknowledged pull right ment to an down, what there is up; incompatibility from the in another build government right destroy, right in one what is there preserve. per- are not driven to the another We plexing judicial inquiry, department, so for the unfit what legitimate degree degree taxation use, and what may power. attempt amount to the abuse of employed government the pursuance use on means itself an constitution, abuse, Union,

503 people usurpation power which the because of single give. estate cannot . . . waiving theory present, this let re- for the us “But, inquiry, power be exercised sume whether this can respective consistently with a fair construc- states, tion of constitution?' power power destroy;

“That the to tax to involves the power destroy may that the to defeat render useless power plain repugnance to that there is a create; government power conferring on one to control constitutional measures of which with another, other, respect very supreme to those to be measures, is declared propositions over that which exerts the are control, to But be all denied. inconsistencies are to reconciled be by magic of the word confidence. it is said, Taxation, necessarily unavoidably carry destroy. does not To it to the excess destruction, would be an abuse, presume which, would banish that confidence which is government. essential to all people

“But is this a case of confidence? Would the any power one state trust those of another with a insignificant operations control the most government? of their state they Why, know We would not. then, suppose, people any should we that the one state should willing power be trust those of another with a operations government they control the of a to which important have confided their most and most valuable legislature In the interests? represented. of the Union are all alone, legislature The of the Union alone, there- people can trusted fore, controlling with the measures concern all, confidence it will not be abused. This, not a then, case con- really and we must fidence, consider it is as it is.” The Maryland, Court held that the State of therefore, not tax could the Bank of the United States, which was instrumentality agency an government, of the national delegated power. for the exercise of its Pres- Subsequently, et al. case Osborn States, the United the Bank of Directors of ident and was 6 L. Ed. U. Wheat. S. brought which was Court, the Federal before McCul- the doctrine announced to re-examined asked reaffirming Maryland, supra; the doc- this did, loch v. suit of v. Bank Osborn trine there announced. brought supra, to recover the United States, money paid state of Ohio directors bank’s adhered to its former rul- bank. The Court taxes on the ing, stating syllabus, Bank the “A cannot tax the in any part attempt, the of on States; the and United agents enforce the collection of such officers, its and against may property restrained the of the be bank, tax by

injunction from the circuit court.” creating the of the The act Bank United States was many repealed subsequently by Congress, but in- cases supremacy Congress volving controlling the in and powers delegated upholding protecting its it, the rights rights, against the states the were decided. as impossible the to set forth all of decisions be- various length opinion. subsequently cause of the of this But purpose States created National Banks for the United agency money powers, exercising because an its efficiently through be needed which its affairs could con- ducted. Dearing, Nat. Bank

In Farmers & Merchants v. 91 U. 23 L. Ed. decided in was held: “The S. States can exercise no control over national nor banks, operation;, anywise except in affect their inlsofar ’’ may permit. proper Congress opinion see In the course its principle case the Court “The in this said: indispensable in the announced authorities cited. independence, efficiency, and indeed to the bene- ficial Government; General otherwise existence, discharge important of most would be liable, annoyed caprice trusts, to be and thwarted the will or every State in the Union. Infinite confusion would government pitiable would be reduced to a follow. The might remain, The form but the condition of weakness. departed. complex sys- vital essence would have In the powers country, polity tem of this which obtains government may be into four classes:—Those divided exclusively belong which be- to the Those States; long exclusively to National Those Government; may independently concurently which by be exercised may by the both; those which And exercised States, express only implied, but with of Con- consent, gress.

“Whenever will of nation exclu- intervenes sively authority this class of re- State cases, abeyance proper tires lies until a occasion for Philadelphia, its exercise shall recur. Gilman Wall. parte 18 L. Ex 96; Ed. 20 L. Wall. McNeil, existing Ed. 625. The to tax the States na- . category tional banks lies within the last mentioned.” gave limited consent to the taxation of prescribing Banks, National conditions under which could be taxed banks states. Numerous de- support quoted cisions announced in doctrines the last applicable law decision; thereto has continued in year present effect at until least 1938—if not until the time, which we think it does. Gillespie

In v. 257 Oklahoma, U. S. 42 501, S. Ct. 171, may impose 66 L. tax “A Ed. was 338, held, upon by the net income derived a lessee of restricted Osage Creek and Indian lands of his sales share ’ ’ gas of oil his received under leases. This case in at decided the October term of the 1922, Court.

In & Burnet v. Coronado Oil Gas Co., 285 U. S. 393, 52 L. 443, S. Ct. 76 Ed. it was held “The 815, that, United lay gov- can no tax States on instrumentalities of state ’’ ernment. Phelps, In & Union Bank Trust v.Co. 288 U. S. 181, 321, 322, 687, 1438, 53 S. L. 83 Ct. 77 Ed. A. L. R.

506 lacked opinion, states “The several

Court in said, expressly except shares, tax national bank permitted by Congress. Bank Owens v. Owensboro Nat. Des 850; L. 537, 19 Ct. 43 Ed. 668, 173 U. S. S.

boro, 664, 106, 263 U. S. Fairweather, Nat. Bank Moines v. Anderson, Bank Nat. 191, [195]; 68 L. First S. Ct. Ed. L. Ct. Ed. 69 U. 341, 347, S. S. 2 negative enough the idea that shares “This essentially are same banks national and state purposes Court taxation. the Alabama And although Leg- her Constitution has held under may class of tax- have them in the islature included same permissible objects, distinction between able there is only accept To the doctrine that as the states can them. instrumentality permitted by when Con- tax a federal competitors they gress, of such in- tax therefore cannot general jurisdiction their some strumentalities within in violating the without Fourteenth Amend.- other fashion illogical and destructive of their would be both ment, independence. proper ex- instrumentalities are Such empted express without the from state taxation consent Congress, They the Federal Constitution. are of wholly ordinary property distinct class from the corporations and this fact be dis- cannot individuals, regarded by the state.” ex rel. Oklahoma Tax Comm. v. Barns Oklahoma

dall 296 U. S. 56 S. Ed. Ct. 80 L. Befineries, “A 366, it was held tax levied state of Okla that, produced oil homa on each barrel of used state and defray expenses administering the state Oil given Law Proration is not within the Gras consent authorizing March Act of the state 3,1921, levy upon production gross of Oklahoma Osage oil lands of lessees of tribe of Indians OisageCounty, proviso that all with taxes so collected county shall lieu all other state and taxes levied production gas provided by oil of as the the where such was Oklahoma, laws of statute in enacted existing production contemplation the then of part would and thus to the in counties was distributable Osage Coun- Indian owners lands be of the benefit to ty.” Rogers Graves, 299 ex rel. case New York that it was held L. Ed. 306,

U. S. 57 S. Ct. corporation government may means as a the Federal use powers granted carry into substantive effect corporation was immune from that Constitution; and corporation im that taxation; also where instrumentality of the taxation as an mune from state compensation government, salaries and Federal paid fixed capacity employees as in their its officers and rendered immune. decision was likewise This such are Court term the October, 1936, at up at time, to that least, and shows States; United gov of the Federal tax instrumentalities states could not Congress, except consent of and on with the ernment, prescribed Congress. the extent conditions and to at the time of the enact- All decided law, therefore, the effect that ment the statute here involved were not and could not taxed, Federal instrumentalities Congress. we must without consent And be taxed legislature here enacted in- the statute assume light intended these volved decisions, interpreted and its must be them; conform to action light of these decisions. Legislature held to foresee The cannot be legislative change decisions, Court would acts rightfully interpreted light cannot be of decisions after the enactment of the statute. rendered Amendment to Federal Sixteenth Constitution, enlarged power levy in- A., U. S. C. apportionment among come taxes without the several regard to and without states, enumeration; but it did any power, states confer and their prior to remains existed Sixteenth Amendment. elaborately gone of the We into the decisions have Supreme subject upon in Court of the States United largely among opinion difference because of of volved, Judges of this conclusion reached is that Court. The Legislature did not intend tax income shares although of this banks; national decision reached is by Mississippi equally an under the law divided Court, it is the Robertson, decision Court. State Revenue Agent Mississippi Valley v. 120 Miss. 81 So. Co., 801. fact, the result of the in such decision case by judges, concurred in one is four of whom is the trial judge, charged duty deciding is who with a con of troversy originally, approved opinion, whose when by Judges Supreme half of the of Court, becomes public necessity. on law, founded reason and sound composed Judges, is Court six it will happen equal opinion sometimes is an there division of Judges regard between the in to the correctness holding of the trial court. It was said the case of Agent Mississippi Valley State Robertson, Revenue position supra, announcing Co., Court in making such a decision an affirmative settlement of the ,e law in the Such a division court liable to cas any many occur at time; there are so cases in which, by consanguinity, reason of former interest, or connec controversy, judge disqualified tion with the one some sitting, that there liability would be constant equal an unequal division if the court consisted of an may If, number. a decision therefore, be made disre garded by judge a circuit because majority, not made we have large, and can have no settled law for at the state judge and each circuit will determine for himself conclu sively may be what shall law his circuit, make adjoining it different from the law court. This judicial would so much resemble a that I scandal should duty prevent my my deem yielding opin it own question up ion when the same should again, come if yielding prevent be should essential to conse- improper anything quence. he can there The notion opinion yielding judge good opposed his morals in requires justice isit one proper administration when a certainly doing Judges quite axe understand. I do not day; great every assume mistake to he a would expressed every judgment a court unites in which every judge.” concurring respects all the views recognized necessity that the must, therefore, approved af- an when court below, decision equally received had court, divided firmance, even an judicial judges, are judgment of whom all of four charged duty equally administering the law of with opinion, Such an in Constitution. accordance with the may supports Judges affirming be written as then, be fol- should which thereafter reached, the conclusion opinion. regardless personal precedent, It of lowed aas opinion personal judicial happens frequently and judge apart. diverge, lie a should far But and sometimes upon judicial opinion judicial path, act follow the judge a when settled. Often the law has been differently appellate a from court would decide case original predecessors, it matter were decision. his every stability judge law; if There should personal opinion, judicial rather than the followed his opinion predecessors, his associates and there would public thing as a rule. The be no such settled could not upon rely who counsel, safelv the advice of must form opinion upon the his decisions the Court. This Court given protection has to from over- citizens the effect of holding ruling cases, that transactions had under or done making a construction the act at the it valid time was leg'al, although change done continue afterwards of de- cision made was Court. See Wisconsin Lumber Longino 247; State, Co. v. 97 Miss. 54 So. State v. 1916E, al., et 109 Miss. Ann. So. 371. Cas. majority opinion

A of the Court are of the that sec- S,U, tion permit Ann., Code 548, title does upon levy to the dividends State an income tax the state had in national because shares stock banks, their value to tax the of national hanks on elected shares provided the first as such shares, the owners Congress; that if act of division of said act of Congress such power im- without was the state was valid, part pose upon of his tax such an income shares, income tax. opinion Congress Judges

Three of the are of power, to forbid the without under Constitution, levy state to owners such an income power free from state, shares; such exists congressional control. thing is a undertake to overturn serious a statute passed by Congress ap- States, United may possible

proved President; while he Judges to so do not have the final decision hold, we unnecessary questions. go think it into a We discussion the constitutional the statute here but in enact view of involved, already

decisions which have not been cited, overruled, so as the taxation of national banks is concerned, far we think we could not hold act unconstitutional. That question absolutely should be until becomes reserved necessary Every to so decide. reasonable doubt in re- gard constitutionality to the of statute should be resolved in its favor. judgment

It from these that the follows views court below affirmed.

Affirmed.

Dissenting Opinion. dissenting opinion. Smith, C. a J., delivered appear, will in with much As hereinafter I am accord opinion my Ethridge. is said in of Brother presents questions: The three record Chapter require 1. Does Laws dividends 120, 1934, in included an on shares of stock in national hank he Should for taxation? income of owner’s assessment then. question in the affirmative, be answered permit this A., S. C. Tit. 548, 2. Does Section U. question in answered be done? Should to be negative, then necessary permission to enable

3. Is na- stock include on shares a state to dividends income for the assessment of the owner’s bank in tional taxation? questions

Ordinarily, discussed these should be convenience, I have but, in which stated them, order last. will discussed the first only not does Tit. 12 U. S. A.,

First. C. Section permit, on inclusion dividends but forbids, Mississippi bank in national State shares income of the owner. the taxable assumption at the which had

This statute assumes, qualified approval the courts enactment a time its (Graves People New York ex rel. O’Keefe, of State of L. R. 83 L. Ed. A. 306 1466), 59 S. U. S. Ct. a tax on the source from tax on income is that a provides: the income is derived. may legislature each determine- and di- “The State subject provisions of this manner to the rect, section, place taxing banking all the of national shares within limits. The several States associations located (2) may (1) or include dividends said shares, taxable income of an owner therefrom derived (3) or tax such their holder associations on thereof, or according (4) to or their measured income, net provided following conditions are com- income, net plied with: any imposition by (a) any State

“1. one of of taxation be in four forms shall lieu of the above provided except as hereinafter in subdivision others, (c) of this clause.”

Mississippi banks taxes national and state on the shares Code stock, of their Section there- cannot, divi- under Section Tit. 12 U. S. C. include fore, A., dends from their stock the taxable income derived permission an or holder so do owner unless thereof, given (c) I of Clause of the in subdivision statute, “(c) of a tax on or which reads follows: case according to income an as- or measured the net except taxing may, case of sociation, State on net net income include entire received income, higher from all shall than but sources, rate corporations upon the rate other financial nor assessed highest higher than the rates assessed upon taxing manufacturing, State mercantile, and bus- corporations doihg within business its limits: iness imposes That however, a State which a tax Provided, according on or or to measured the net income of, or a franchise or excise tax on, financial, mercantile, manufacturing, corporations organized and business own under laws laws other States and also imposes may taxa the income of in- individuals, in such individual clude income dividends from national banking associations located within the State on con- dition that it also includes from dividends domestic corporations may likewise include dividends from banking national associations located without the State foreign on corporations, that it also condition includes dividends from higher imposed but no rate at than is on corporations.’’ dividends from such other things: (1) This subdivision of the statute does two prohibits against discrimination in taxation national banks in favor of other financial, manufac- mercantile, turing corporations; and business (2) permits taxing ways states provided national banks one preceding paragraph first of the section to include prescribed within the also, the limitations, dividends of stock thereof shares in the taxable income of the owners. provisions, in all

Clause of its only seems to deal taxing with what a state can do when national banks by permitted by first the the third fourth method paragraph on associations of the i. tax such e., section, according their to or measured their net or income, proviso the are net income. national banks taxed, "When permits shares of their include dividends from the state to the income of the owners to taxable stock be included provided pursued other same course is the thereof, corporations their shareholders. (Chap. Mississippi Laws stated,

As hereinbefore according 1934) method first taxes national banks provided by so i. their shares of e., stock, on statute, proviso (c) 1 seems of of subdivision Clause ap- apply. proviso if it that the not to here But be said plies taxing banks national also the first method of (it capital provided their stock i. on statute, e., apply there of second method could to the not, course, provided, bank include dividends from national is, thereof), income owner stock taxable result reached. same would be one

In order for state which national taxes banks ways provided of four the federal statute to include also their shares stock in the taxable dividends from of' things income of must concur: thereof, owners three impose (1) according The state must tax “a on or measured net or a excise income franchise or of, manufacturing, tax business on, mercantile, financial, corporations organized own of under laws or laws pn impose (2) States;” must other a tax the income (3) therein individuals; and include “dividends ’ ’ corporations, from etc. domestic Chapter imposes an income Laws tax on cor- porations, but does not include from their dividends shares of stock in taxable income there- owners It is of. true that the statute includes dividends from national bank stocks and state taxable income imposed the owner but income tax thereof, no on the consequently the three themselves; banks conditions of proviso (c) met subdivision of Clause are thereby. necessary permission Congress

Second. is not to enable a state to include from shares dividends stock in a taxable national bank in income. owner’s Nor has forbid constitutional to so do. That income tax on the on is a qual source the income is had the derived approval ified States Court United unqual when this statute has enacted, but been since disapproved by ifiedly People Court. Graves v. supra, State of New ex rel. author York, O’Keefe, there ities which cited, accords with State ex rel. Knox M. & Gulf, Co., O. R. 138 Miss. 104 70, So. 689, Compress of Union v. Stone, State Tax Chairman, Com recently 193 mission, Miss., 329, So. this decided Court yet reported. but not being,

The tax here under consideration therefore, a tax on a national or on of its shares bank, stock, imposition for the determination of the state alone; and the fact the income is derived from shares of a national bank confers on no to inter- fere therewith. Chapter imposes

Third. Section 3, 120, Laws an “upon every income net entire income resident corporation, individual, trust or association, estate”. exempts Section statute from the tax certain designated organizations, including national banks state banks. gross

“The term net income means the as de income fined less the hereunder, deductions allowed”. Sec. Chap. 1934. 120, Laws Gross Income “includes . . . any dividends ... gain business carried on profit or . . . , and any incomes derived from Chap. source whatever”. Sec. 7, 120, Laws 1934. It does not include during “Income received the taxable year corporation as from dividends on which such cor poration already paid has or is liable assessment to Chap. par. (b) (8), pay an tax.” Sec. income Laws 1934. appears are not national state banks thus consequently,

taxed on on tbeir dividends and, income, income of their are to be in the disappears shares of stock included Any owner when thereof. doubt to this predecessor, the statute Chap. in connection with its is examined Paragraph (b) (8) 1930. of Section 124, Code chapter “gross provides 5033 of that that the in- term during come” does not include “Income received year corporation taxable on from as dividends corporation already paid has or is liable assess- pay ment to an income dividends a national tax, or organised bank bank the state under the laws of (Italics Mississippi.” supplied.) When statute Chapter paragraph was re-enacted as this 120,Laws 1934, paragraph (8) (b) Section the Code became Chapter 7 of Section Laws and was amended by eliminating therefrom the words “or dividends from organized national bank or state bank under the laws Mississippi”. of the state of Legislature knowing

But it that the is said when the statute was enacted that the Court United holding States then that a tax on income was a tax property on from which it was derived, inter- preting prohibit Title Sec. 548, U. S. C. to A., it from including dividends from shares in a national bank the in taxable income the owner did not in- thereof, by Chapter tend Laws 1934,to include such dividends the in taxable income of the owners of such shares. Legislature

I do not know what the here had in mind, except disclosed My as the words of the statute. anyone guess, which is all can venture, would it permit construed Tit. 12, Sec. U. S. C. A., to imposition accordingly. the acted tax, and language Chap. plain The 120’,Laws is unambiguous. Income from state banks and national together, are with banks dealt the same words in the separately. di- the statute What not sentences, same rects I And the other. it directs also to as one, as permit the rule which would know of of construction no apply to was intended Court to that the statute hold apply it one not the other —that was intended but to income in to income shares state banks in banks. from shares national my in no error,

The Tax committed State Commission appellee’s opinion, including shares dividends from the in the court in in his taxable a national bank income, seeking petition have below should dismissed his annulment of this act of Commission. opinion. in Anderson, JJ.,

Griffith and concur this suggestion Per Curiam. A error been filed has opinion case the effect that hereto- this we erred might upon opinion safely rendered. fore We stand heretofore therein cited rendered, the authorities year show that until States the United Court had were without to tax held states the instrumentalities of the Government of United directly indirectly. either States, suggestion said in of error that the cases we People cited were not income tax but cases; case Rogers ex rel. v. Mark et al., Graves U. S. 401-409, Ct. 81 L. 57 S. Ed. was held that the state of levy New York not authorized an income tax on salary president Panama Railroad, employes company, entirely other of that which was op- owned Government of the States, United instrumentality. syllabus erated the second ‘‘ operations said: the Panama Com- Railroad capital pany, of the stock of United States is the owner, sole are so connected with the Panama Canal company immunity as to confer the railroad instrumentality a Federal firPm even taxation, 'state though company the railroad to a limited extent utilizes pas- freight private carry ships and railroad though operates Zone Canal in the sengers, it also commissary the benefit dairy, hotels, and a a company, personnel railroad of Canal, the Zone.” in States forces of United armed syllabus: “The Federal third It is held also carry corporation may government means to as a use a powers granted the Constitu- into effect substantive syllabus it held: “Where is in the fourth tion.” And an in- corporation state taxation as is immune from a government, strumentality salaries Federal fixed employees paid compensation to its officers ’’ capacity in the are likewise immune. And their as such employed general syllabus counsel, it is “The fifth said: corporation Federal salary, is a on fixed corporation employee rather instrumentality, an liability respects independent contractor, as than an ’’ salary his to state taxation. 1936, term, at October decision rendered This was than which was more Court, of the United States years involved after the enactment of statute two this suit. City

In the case of Fred Miller Milwaukee, v. S. 71 L. Ed. was held 713, U. 47 S. Ct. 280, corporation which becomes the basis where income of a derived from the United States dividends bonds lay government, income tax state cannot an they so dividends hands stock-holders far represent was de- This case income of such bonds. States at the October the United term, cided Supreme Court. Mark et al.

Until the decision in the case of Graves People ex rel. 306 U. 59 S. O’Keefe, S. Ct. Fed 83 L. Ed. 120 A. R. it is clear that L. eral law was that Federal subject instrumentalities were not- directly indirectly, taxation,

to state either necessary and that consent of before states could either di- instrumentalities, uncertainty, indirectly. rectly confusion and or Some the Federal in decisions of been shown had however, theory regard Supreme or of whether in Court, governmental engaged were in a instrumentalities engaged private where function; and that function, or in a governmental private, in a rather than a function, might at the term 1936, it. Until when October Court it in the case Brush held, was of Internal 300 U. S. 352 v. Commissioner Revenue, that Ct. 81 L. 108 A. L. R. 691, 57 Ed. -378, 495, 1428, S. municipal compensation paid the officersand salaries and employes, performance city’s gov engaged in are immune Federal functions, taxation, ernmental principle that neither a state nor Federal under a government may levy a tax which will the ac- burden although city of the other. This was held, tivities charged through for the use its exercised facilities, urged engaged being commissioners; and so that, price furnishing private charged, a in customers for subject government. were salaries page to taxation At page 372 of 300 U. 57 S. Ct. at 81 Ed. S., L. 501, 700, replied R. 108 A. L. Court to this 1428, the contention, saying:

“Respondent supply- municipality, that the contends in engaged ing selling water to its inhabitants, is water profit; stamps seems think that if for the this, true, private governmental

operation and not in char- pause acter. first to observe that We the overhead due system, enormous cost of the to the fact that large proportion pub- so a water is diverted for plainly suggests profit lic rather use, no real is likely say city to result. And to because the makes that, charge furnishing private a for water to consumers, it fol- operation corporate lows that the water works is beg question. governmental, and not city is to What the engaged doing respect is is rather render- selling commodity. ing a service than a If that service private governmental, it does not become because

519 profit charge for made A state, for realized. it, may, operates highway. example, constructs and compensation if it from those exact use chooses, Eagle (see Bingaman travel who over v. Golden Wes L. Lines, tern 297 S. 56 Ct. 80 Ed. 628, 624, U. S. 626, [930]); destroy 928 the claim that but does not this public govern highway the maintenance of the is a mental . . . function. The contention made our in South 199 States, decisions Carolina v. United U. S. Ed. 261 437, 461, [269, 270], S. Ct. 50 L. 110, Tracy 4 Ann. Cas. and Flint v. Stone U. S. Co., Ann. S. Ct. 55 L. Ed. 389 Cas. [421], supplying are to the effect that water 1912B, governmental is not but neither case was function; question by and what was said court issue, wholly unnecessary disposition was of the cases merely by way of illustration.” and corpo- in 1936 it was

Hence, held the fact that a governmental agency ration which was a instrumen- engaged tality, profit also in business for incident to its governmental destroy immunity does not function, its from state taxation.

In Indian Motorcvcle Co. United v. U. S. States, 51 S. Ct. 75 L. Ed. it as in- held: “The operations whereby and strumentalities, means, governmental powers United States exercises are ex- empt by from taxation instrumentali- states, operations whereby ties, states means, exert governmental powers belonging exempt to them are by by from taxation the United virtue States, of the principle implied independence from the of the national governments respective spheres state within their provisions and from the of the Constitution which look system.” to the maintenance of the dual syllabus: It was also held in the sixth “Where the principal exemption of Federal instrumentalities from taxation state state from instrumentalities Fed- applies, eral it is taxation not affected the amount of resulting particular inter- extent of the tax or the but absolute.” ference, syllabus “A sale of

It was in the seventh that: held municipal agency, motorcycles as a cor- to a state exempt police poration, for use in its service, imposed section 600 of the Revenue Act excise chap. [26 A. at L. 322 S. C. Int. Stat. U. motorcycles by the manufacturer.” Acts], Rev. on sales of at the term, 1930, This decision was rendered October States. Court of the United agencies immunity The that of from Federal was immunity agencies tax of Federal from state taxation; practically beginning has from the ation existed government government, and sales of officials were subject in 1842, held not to taxation states almost century ago, when the cause of Dobbins Commis of Erie 16 Pet. 10 L. Ed. 1022 Co., sioners 435, 449, opinion In the course of that case the decided. said: Court powers government only

“The of the national can compen- executed officers services must be whose by Congress. The is in its sated allowance discretion. compensation presumption given by is that the law only is no more than the services are such in worth, diligent per- as will from the amount secure officer the duties. ‘The officers formances his execute their public good. implies right for the offices This their recompense reaping they from thence the the services may may recompense being render without that deserve,’ any way except by sovereign power the lessened, by appointment, the officer derives his whom or delegated another sovereign power whom the first has the right objects of taxation over all the in com- taxation, mon with for the benefit itself, And both. no diminu- recompense just tion in the of an officer is and lawful, by way prospective, by unless it be of taxation the sovereignty power impose who has a it, and which is equally upon according intended bear all to their es- compensation the tate. The of an officerof United States by Congress. by conclu- law It is fixed made given. It sive what shall be discretion to determine con- exercises the discretion and fixes the and amount, upon right the officer it has fers to receive it when the by upon been earned. not a State Does tax, then, diminishing recompense, the law conflict with office, of it to the in its the United which secures officer States, any certainly It entireness?’ law effect; has an and imposing of a be State such a cannot constitutional, Congress pur- because it law conflicts with a made suance of the and which makes Constitution, su- preme law of the land.” case notes in the Law holding Edition are cases to the same effect. found other City In the E. case Chas. Smith Title Kansas & T. Co., 255 U. Ct. S. S. 65 L. 180, 243, 577, Ed.

was held that: “The creation of Federal land banks joint and stock land banks Federal Farm Loan July January Act of as Act amended 1916', grant [12 U. S. sec. C. of au- A. 991], thority government depositaries them to act for as public moneys purchasers government bonds, brings power them within creative al- though may they in connection with other intended, privileges making to facilitate duties, of loans ’’ security farm at low rates of interest. syllabus also held in the sixth was that: “Federal joint having land banks stock banks, land cre- been by Congress legitimate ated in the exercise of its au- thority by July the Federal Farm Loan Act of 17, January amended Act of make farm loan bonds them issued the au- under thority security mortgages of those acts on of farm exempt principal and notes as to and interest from Fed- municipal, necessarily eral, and local state, taxation, follows.” This decision rendered in at the October term of the Court of the United States, immunity and establishes the of Federal banks, land 522 municipal tax- from state and instrumentalities,

their ation. ’ Home Owners Luther Pittman v. recent case of In the Corp., Ed.--, L. U. S. Ct. Loan S. 60 84 im statute that: L. R. it held A. “A mortgage upon every posing offered recorded taxa every ten for for principal the rate of cents record, $100 at merely a fee not is, of the debt secured, amount recording privilege mortgage, but a for the inapplicable mortgage to as to be on so itself, instrumentality mortgage an for record offered syllabus it also held fourth States.” In the United authority of Con within the constitutional that: corporation gress provide fa .created to performance governmental functions, cilitate its Corporation (including the Home Owners’ Loan .such as corpora mortgages held made and loans municipal exempt tion) from state taxa shall be d : ’’ syllabus tion. fifth it is sai The activities And in the gov corporation through which national of a lawfully regarded governmental ernment acts must as immunity entitled to whatever attaches functions, performed by government to those functions when through departments.” itself its syllabus

In the it is further held that: sixth Con- only gress power, corporation has create a performance governmental to facilitate the functions protect operations validly but au also thus it, , ’’ syllabus thorized. And seventh was said power sary on all conferred to make laws neces proper carrying powers expressly out granted power preserve to it includes the what it has validly eighth syllabus created or authorized.” ,t protect it is In the exercise its held tha agencies Congress the lawful activities of has authority necessarily dominant inheres in its action within national field.” full has it will be seen cases

From these agencies protect state tax power it creates the many go unnecessary the into it we deem and ation, but same effect, cited to the cases which could other Mississippi involving the case a more, we shall cite one levy instrumentality upon Govern aof the being Mississippi, by the case of Pan ment the state of Mississippi R. on relation of of handle Oil Co. v. State Attorney 451, Ct. S. 48 S. General, 218, H. 277 U. Knox, it held that A. in which was L. Ed. 56 L. R. 857, 583, 72 ‘‘ of may or interfere with the exertion States not burden power take a of revenue or make it source national or perform the tax the used for the raised or means funds “A state of functions.” And, further, -Federal ance quantity upon may impose by the sold tax measured privilege selling gasoline of of the one its citizens government of its Fleet the Federal for use Coast Guard Hospital em or which the United States Veterans’ is operate.” powered by the to maintain Constitution and term of the 1927, case decided at the October, This have fresh in minds of the and must been Court, Legislature enacting 1934. when the statute of in Court,

It is true that United States People case ex rel. 306 U. S. O’Keefe, Graves 83 L. R. 927, 59 S. Ct. Ed. 120 A. L. many prior long in time overruled cases force for implied held that there no im thereto, was, effect, munity by in favor of either Constitution national government or state the manner of taxation of one by appears other; to have abolished all dis government far the Federal tinctions, so concerned governmental private between functions and functions by engaged corporations. United States created opinion in this the course case the Court said: single question “The we with which are now concerned upon salary the tax laid whether employed corporate respondent, instrumentality imposes government, the federal an unconstitutional bur- upon government. theory den of the tax im- munity government, of either state, national, and its from taxation has been instrumentalities, other, implied taxing rested an limitation on through such as to forestall undue each, interference, governmental power, exercise with of that activities may types immunity of the other. That two not, respects, recognized parity in all stand on a been has Maryland, beginning, supra, from the McCulloch v. [4 Ed. [579], Wheat. possible L. [316], 435, 609], application, deriving differences in from differ- immunity ences in nature source, extent governments agencies, pointed their out were during Court in detail and discussed this the last term. Helvering [304 pages supra, v. Gerhardt, U. S. 405], 412, 413, 416, 58 Ct. S. ^[969] pages 972, 973 [82 L. Ed. [1427], 1434]. 1432, far So now 1433, as relevant, those differ thought have been ences traceable to the fact that government powers delegated the federal is one of Congress supreme; every exercise of which is so that agency constitutionally can create is a governmental agency. power And since the to create agency implied power includes to do whatever appropriate, expressly needful or prohibited, is if not protect agency, there been has attributed Con gress scope, some is limits which it not now neces sary granting withholding immunity or define, agencies, (Citing long of federal from state taxation.” authorities). list of opinion

In the course of its the Court further said: theory, qualified “The approval, which once won a legally economically a tax on income is a tax on its longer source, no tenable. New York ex rel. Cohn 300 U. Graves, 313, S. 314, S. 308, 57 Ct. 466, 467, 81 L. Ed. 666 108 A. L. [670, 671], 721; R. Hale v. Iowa State Bd. & of Assessment Review, 302 U. S. 95, 108, 58 Helvering Ct. 82 106,

S. Ed. 102, [80]; L. 72 v. Gerhardt,

525 1427]” supra [304 Ed. S. Ct. L. 969, U. 58 S. 405, authorities. other Supreme .seems Court in words, this case

In other long repudiated that there a doctrine maintained, to have implied limitation constitutional on was an government to tax the instrumentalities one open question of or not Con left whether but other, gress taxation of instrumentalities. act forbid could its -question open Pittman v. so was in The left foreclosed 15, Ed.-, H. L. 60 S. Ct. 84 L. C., U. S. O. 21, Supreme States, A. R. 1263. Court the United L. & Farmers’ Loan Trust 158 U. S. Co., Pollock v. held that an income tax 15 Ct. 39 L. Ed. 1108, S. upon the source of the effect, income, was, if was from a Federal instrumental the income derived ity, was a tax on a tax to such income, extent, prohibited by instrumentality the Con itself, rendered in and stood stitution. This decision was recognized country law of the until overruled Consequently, at term of the Court. the October chapter at time the income tax law of 120' of plain legis the Laws of it is enacted, so that the understood. is said that rule lature legislature presumed knowledge to act with law applied, should not be for the reason that the act was' plain applied plainly face, on here the tax in volved. legislature enacting recognized law, beyond

there were incomes which were to its tax. chapter imposing In three of used section said the it tax, language, “On the first $2,000.00 the of taxable income any part per thereof, or at rate two one-half the and any centum; On the next of taxable income or $3,000.00 part per at rate three and thereof, one-half cent- regard um” so until in to the on, income without limitation, legislature “taxable income” words are used. The only

must have intended to that which lawfully it be understood could taxed, and to violate principles Court, of the constitutional decisions government that instrumentalities of the incomes from be taxed. could not “Subject to “taxable” as follows: Black defines

Mr. along with for liable to be taxation; assessed, others, subject are sometimes share in a Persons to taxation tax. may property be assessed ‘taxables;’ called so taxation is to taxable.” said be suggestion said in error that when is a decision necessarily original back to the overruled relates

time when the case decided was overruled, so validity law then in have from that effect should the effect time. also to the Court He cites cases pros- may overruling when limit law, decision, pective operation. legislature

We do not think that intended of a bank to be shares national because taxed, which then held that instrumentalities Court’s decisions not be United States could taxed as income. The overruling of a decision of the Court which has rendered necessary, operate action a course of should not to af- legality fect the situation de- under the former legislation especially contracts and made cisions, as to pursuance highest of law court of as declared person every obliged Every nation. officer highest accept binding, the decisions of the court as personal judgment yield judicial and their must to the legislature declaration. cannot assume that the in- We oppose private judgment, if it had a tended opinion, diverse Supreme decision the United States highest government. court of the national Court—the presumed It must here it enacted the law involved guided knowledge by, full to be of, with intent then force and declared be constitutional rules Court of the United States. Drainage Baxter Chicot Co. Dist. v. State Bank, S, 84 L. Ed.-, U. Ct. held that: S. actual of a statute which been “The existence has de- operative which is an fact cannot dared unconstitutional justly ignored, question of its be and of effect disposed unconstitutionality by merely ap- cannot be of principle invalidity.” plying’ a of absolute retroactive Hughes, speaking for “The Chief Justice said: Court, theory proceeded below that the Act courts have on the Congress, having of been unconstitutional, found to be inoperative, conferring law; no was not rights imposing affording no and hence no duties, decree,” challenged (Citing cases.) basis for quite “It is clear, such broad statements however, unconstitutionality as to the effect of a determination of qualifications. must be taken with The actual existence prior operative of a statute, is an determination, may consequences justly fact have cannot ignored. past always cannot be erased newa judicial subsequent ruling declaration. The of effect invalidity may as to have to be considered in various as- pects respect particular individual relations, —with particular corporate, private and of- conduct, rights Questions ficial. of claimed to have vest- become prior ed, status, determinations have deemed to finality upon accordingly, public policy and acted light of the nature both of the statute and of its previous application, ques- demand examination. These among tions are most difficult of those which have engaged the attention of state and courts, federal, it is manifest from numerous decisions an all-in- principle clusive statement a of absolute retroactive justified.” invalidity cannot be dealing is true that the Court was there with the

question adjudicata, of res and held that where it had adjudged been change ju- and had become final, finality dicial decision judgment. did not affect the Our own Court, in case Wisconsin Lbr. Co. State 97 Miss. Miss., So. 247, overruled former construction of the statute there but involved; held: according public land valid a sale

“Where expounded and administered the state, the of to laws highest judicial was made, when the sale tribunal its by any obligation impaired validity cannot be legislature, of subsequent the or decision the action of altering of under the law, construction courts sec. 10, art. States, 1, of the United Constitution pass- prohibiting the 16, sec. 1890, the state constitution obligation age impairing the contracts.” of of laws Longino, 67 Ann. 109 Miss. So. 125, 902, In State v. held: under Code “Where 371, Cas. this Court 1916E, providing be a criminal that it shall 1906, 1169, section conducting president, cashier, etc., for teller, offense deposit money, receiving to of on re etc., the business knowing any deposit, while that the institution is ceive judicially ap not statute was declared insolvent, subsequently ply ruling to certain but acts, and such acts criminal offense court was held a reversed, the two decisions de under the and between statute, fendant such acts. No conviction could committed be question had under the statute in com violations mitted between the first and decisions of second the court, holding by the court as since the to whether a criminal applicable particular or is to a statute of is, not, spirit prohibition facts within the constitutional against passage post facto laws, ex decision of part construing being a court in statute, as much a legislative law of the enactment, land as unlike relating their decision to the common which are law, mere evidence the law.” suggestion is said that error this Court,

in the case of Parker v. Tax State 178 Commission, Miss. presi salary 174 567, So.

680, held the vice subject dent of the Federal Bank Land was to income tax. This case was decided 1937, over March, ignored looked or the case of Federal Land Bank v. Ta 174 Miss. 164 tum, So. in which it 264, 319, was held Federal banks were instrumentalities land government, Federal was that the Law Moratorium applicable given Federal land not deeds trust banks. we the decision in the last mentioned followed case City

Smith v. & 180, Kansas Title Trust 255 U. S. Co., holding supra, 41 S. the mort Ct. L. Ed. 243, 577, subject gages and of trust were deeds of such bank taxation; Federal and also followed cases of Land Bank v. 385, 261 U. Crosland, S. S. Ct. 67 L. Ed. 29 A. R. Federal land banks L. gov were held of the Federal instrumentalities ernment. Tatum, The case of Federal Land Bank v. September, 174 Miss. 164 So. at decided understanding term, and accords with the upon subject taxing law the instrumentalities and state and such to be authorities, understands taxes prohibited in such cases. questions arising deciding

O'f the state in course, Court, under the Constitution States, of the and laws United appellate jurisdiction, is not a court of final and deci contrary controlling sions such cases are not if the Supreme decisions of the of the Court States. United exemplified This is in the & case of Louisville R. Co. N. v. State, 107 Miss. 65 where 597, So. the state Court 881, upheld chapter prohibits had Laws which foreign corporation removing from the Federal cases to by prohibiting doing courts, from an intrastate busi right if it ness, exercises such of removal. court The original Chancery jurisdiction, the first held the Court, judgment statute unconstitutional, which was reversed Supreme Court this it to be state, held whereupon and constitutional, remanded the case; again Chancellor held the state statute unconstitutional. The Chancery case was reversed remanded to the whereupon Court time, second that court followed Supreme the directions Court, entered the 530 appealed again

proper judgment. was cause the Federal Supreme meantime Court, Co., & Supreme S. F. R. v. Louis St. in Harrison Court S, A. 1915F. Ed. L. R. L. U. S. Ct. prohibiting statute held that the other cases, doing right a condition as of a Federal the exercise unconstitutional. state, business in intrastate former reversed its Court After these decisions this Supreme judgment, Court de- the Federal and followed declaring This Court unconstitutional. the statute cision, ‘‘ opinions opinion Ordinarily, the heretofore said: and the law of case, would constitute the rendered again not be examined decided matters therein would application no law case rule us; but the of the has by appellant right that the claimed reason here and laws of is arises under Constitution one which questions reference all with such States, and United simply jurisdiction, final an is one of but this court not ap- appellate decision an intermediate whose court, Supreme peal States, Court United lies to all are decisions of which court, matters, binding be followed us.” must Mississippi State Tax case of Parker Therefore, binding supra, it is first, not Commission, because, applicable the case one di- here; second, because prior overrule state court vision of Court cannot cannot decision, and overrule the United decisions stated, it is not a final Court; and, States authority. unnecessary go deem further

We into the discus- question presented, sion of the because the authorities opinion cited in case the former this sustain the hold- opinion ing controlling heretofore delivered. It protracted require opinion would to discuss the va- recognize point rious cases out the distinctions, holdings, their different if that even done. Such can be opinion require an rather conform would than volume, length opinion. to the of a Court suggestion have follows what we said hereby

of error must is, overruled. he, dissenting. J., Smith, Anderson, C. Griffith and JJ., Fink et Sugars, Inc., Godchaux ux.

(Division April Suggestion May A. Error 1940. Overruled 1940.) [195 34038.] 318. No. So. appellant. Clarksdale,

John W. Crisler,

Case Details

Case Name: Mississippi State Tax Commission v. Brown

Court Name: Mississippi Supreme Court

Date Published: Feb 19, 1940

Citation: 193 So. 794

Docket Number: No. 33932.

Court Abbreviation: Miss.