49 Mo. 490 | Mo. | 1872
deliyered the opinion of the court.
This case comes here for review on appeal from the St. Charles Circuit Court, before which the parties voluntarily appeared, submitting the matters in controversy between them on an agreed statement of facts. The court entered judgment for plaintiffs, and it is to reverse that judgment that this appeal is prosecuted.
Whilst some minor and incidental matters have been discussed, the real questions presented by the record all resolve themselves into one, namely, the validity of the convention ordinance of
The tax specified in the ordinance was to be collected from each company only for the payment of the principal and interest on the bonds, for the payment of which each company was liable; and whenever such bonds and interest were fully paid, then no further tax was to be collected from the company.
The objections urged against the ordinance, and contained in the agreed case, are that it is unconstitutional; that it violates the fifth and seventh amendments to the constitution of the United States, and that it is also opposed to that provision which declares that no State shall pass any law impairing the obligation of a contract.
The position assumed, that the ordinance is invalid because it is repugnant to the amendments designated, cannot be maintained. By a series of adjudications in the national courts it has been definitely settled that these amendments axe limitations of power on the general government, and have no application to the States.
In the case of Barron v. City of Baltimore, 7 Pet. 248, the whole question was fully considered and ably examined upon a writ of error to the Court of Appeals of the State of Maryland. The error alleged was that the State court sustained the action of the defendant under an act of the State Legislature, whereby the
That the amendments “were not designed as limits upon the State, governments in reference to their own citizens,” but “exclusively as restrictions upon Federal power,” was declared in Fox v. Ohio, 5 How. 434, to be “ the only rational and intelligible interpretation which these amendments can have.” And language equally decisive may be found in Smith v. State of Maryland, 18 How. 76, and Waters v. Buckley et al., 20 How. 90. The same doctrine is confirmed in the recent case of Twichell v. The Commonwealth, 7 Wall. 321, where it is said, “ the scope and application of those amendments are no longer subjects of discussion.”
But the main question, is whether the ordinance violates or
The plaintiff here, the North Missouri Railroad Company, made default in the payment of the interest on the bonds guaranteed by. the State, and by the provisions of an act of the Legislature,approved February 16, 1865, entitled “An act to provide for the.completion of the North Missouri Railroad and its West Branch,, and for the construction of a bridge over the Missouri river,” the.mortgage or first lien of the State was released for $4,350,000 ' (the amount which the State had guaranteed for the company) and made a second lien, in order- that $6,000,000 of the first mortgage bonds might be placed upon the road to complete it and build the bridge. The act also provided for the appointment by the governor of a fund commissioner for the company to receive all moneys belonging to the company, and to disburse the-same as follows:
. 1. To said corporation the amounts required from day- to day-for the actual current expenditure in operating said railroad' and carrying on the ordinary business of said corporation.
2. The amount of his salary as such fund commissioner in. monthly installments.
. 3. The interest upon said first mortgage as the same should fall due. • ■
. 4. The cost of construction and equipment of the said railroad..
5. The accruing dividends on preferred stock, not exceeding six per cent, per annum thereon, in accordance with the provisions of the act in relation" thereto.
6. The interest due on the outstanding' bonds of the State of Missouri, previously loaned to the company. .
7. The payment of the principal of the first mortgage bonds, or, if none should have become due, then the payment of the principal of the bonds of the State ; and,
Lastly. The balance to be paid to the corporation.
• The ordinance was adopted by the people in June, 1865, after.
It is readily admitted that the law of 1865 was a contract, and within the protection of the constitution of the United States, and that the State, after the acceptance of that law by the corporation, could not by an act, except the extinguishment of the mortgage thereby authorized, resume the position of first mortgagee. But is there anything in the act to prevent the State from exercising the sovereign power of taxation ? The act does not pretend to grant exemption from taxation in express terms, and the courts will never presume or infer that the State intends to abandon or surrender the important right of taxation. Whatever restrictions may have been imposed by the adjudications of the national tribunals on the sovereign rights of the States to exercise this vital power of taxation untrammeled, in cases where the State had parted with the right for a valuable consideration, yet all the courts proclaim that the abandonment of the right can never be presumed ; that the intention to abandon must appear in the most clear and unequivocal terms. Nor can there be any doubt of the power of the State, by reason of its sovereignty over the whole subject of taxation, to impose taxes on property previously exempt, or to raise the rates, unless there has been some express contract in limitation of the power upon a consideration deemed
In the present case I have failed to find anything whatever to show that the rate or manner of taxation of the corporation, its franchises or property, formed any part of the contract contained in the act of 1865. Nothing is said about taxation, and it does not seem to have entered into the contract between the parties, but was obviously left where the law had placed it before. No specific provision was made for the fund commissioner’s paying the taxes, but he was authorized in the first class of disbursements to pay the current expenditures for carrying on the ordinary business of the corporation, and the payment of taxes would certainly fall within this class.
It is also argued that the tax is unequal, and is therefore opposed to the clause in the constitution which enjoins a uniform rule as to the imnosition of taxes on all property. But it
We have thus far assumed that the assessment provided for in the ordinance came within the scope and character of taxation. Rut the point is taken and advanced by the plaintiff that it is not a tax, that it amounts to a sequestration of property for the purpose of paying a debt, and has none of the criteria or elements of a tax. The question then arises, is the burden thus imposed by the people on these corporations a tax within the proper meaning of that term, as legally defined? “Taxation,” says Chief Justice Marshall, “ is said to be an absolute power which acknowledges no other limits than those expressly prescribed in the constitution, and, like sovereign power of every description, is trusted to the discretion of those who use it.” (McCulloch v. Maryland, 4 Wheat. 429.) In the case of Glasgow v. Rowse, 43 Mo. 489, it was said, “ taxes are burdens or charges imposed by the legislative power upon persons or property, to raise money for public purposes or to defray the necessary expenses in administering the government.” A tax differs materially and essentially from a debt. The one is founded on contract; the other is not. A law which specifically appropriated the property of the citizen, and took it from one person and transferred it to another, would not be an exercise of the taxing power, no matter by what name it was called. To settle and fix the exact line of demarcation is a matter of great and perplexing difficulty; but mere oppressiveness in tax laws is no ground for setting them aside or arresting their operation. (Glasgow v. Rowse, supra.)
The power of the sovereign authority to tax is unlimited, and is a power to destroy. The only restraint is in the responsibility of those in whom the power is intrusted. Thus, in The People ex rel. Griffin v. The Mayor of New York, 4 Comst. 419, 423, it was held that the two clauses of the constitution which declare
■ These views are affirmed in the case of Brewster et al. v. The. City of Syracuse, 19 N. Y. 116, and also in the case of The Town of Guilford v. Board of Supervisors of Chenango County, 3 Kern. 143. It was held in the former of these cases that .the Legislature had the power to authorize the levy of a tax for the purpose of paying to one who had constructed a municipal improvement' an addition to the contract price, which the corporation by its charter was forbidden to pay. The case of The Town of Guilford v. The Supervisors of Chenango County holds that the Legislature have the power to levy a tax upon the taxable property of the town to meet a claim made against the town, although there is no legal obligation on the part of the town to' pay such claim ; and in a suit against the town it had been legally determined that the town was not liable to pay such claim. In the case of Thomas v. Leland et al., 24 Wend. 65, it was held that an act of the Legislature imposing a tax upon a local district of the State in reference to a public improvement, is valid, notwithstanding that, previous to the passage of the act a number of individuals of such district had entered into a bond to the State, by which they bound themselves to pay the whole expense of the improvement. These principles were reaffirmed in the case of Litchfield v. Vernon, 41 N. Y. 143, and in the case of The People ex rel. Crowell v. Lawrence et al., id. 137.
The settled principles to be deduced from these eases are that the sovereign power of taxation is lodged in the Legislature; that 'the power of taxing and the power of appropriating taxation are identical and inseparable ; that there is no constitutional restraint upon the exercise of its power; that the right of determining what portion of the public burdens, by way of taxation, shall be borne by any individual or class of individuals, must be determ
The judicial department of the government furnishes no redress in such cases. There is no power in the judiciary to remedy" injustice and oppression in a legislative act, except where in the attempted injustice or oppression some constitutional provision is violated. It was so decided by this court in Hamilton & Treat v. St. Louis County Court, 15 Mo. 3, where Gamble, J., said: It is a principle, in construing the constitution, that the mere fact that a law is unjust in its operation, or even in the principles upon which it was adopted, does not authorize any expansion of the prohibitions in the constitution beyond their natural and original meaning, in order to remedy the evil in the particular case.” This is the admitted construction in cases of legislative enactments, and when it comes to passing upon the organic law, the courts have no power to construe away its natural meaning, or grant relief on the supposed ground that it is founded on a wrong principle or commits an injustice. The New York cases are adjudications upon tax laws where the Legislature was.not restricted in its action over the subject by any constitutional limitations. But here the tax is levied by the constitution itself, where in the very nature of things there' would be no limitation or restriction over the body making the law and- ordering the levy. There is nothing objectionable that we can see in taxing the gross receipts of the corporation. They are an usual and ordinary subject of taxation, and they were selected as a species of property in this instance by the sovereign power, and we have no right to say that the selection was wrong.
It is further argued "that the money raised is not raised as a tax, because it was not levied or obtained for purposes of revenue. But this argument, it seems to .us, is fallacious. 'The tax was levied and raised for the purpose of paying the interest and principal on a part of the State’s indebtedness. How else does the
It is admitted by the agreed case that the bonds of the corporation are outstanding and have never been paid. But the agreed-case nowhere finds that the ten per cent, tax levied upon the gross earnings of the road decreased the fund to such an extent as to endanger the prompt payment of interest on the preferred bonds in any manner, or to shut out any of the distributees prior in order to the claims of the State for interest. I cannot, therefore, see that the ordinance is obnoxious to the charge of impairing the obligation of a contract, and I think also that it provides for nothing more than the legitimate exercise of the power of taxation. The question whether there was any informality in the matter of making the assessment, need not be discussed. If the ordinance-was valid, the assessor had jurisdiction, and in such a case the ■collector cannot be held responsible for any informal or irregulafcproceeding of the assessor.
It follows, therefore, that the judgment of the Circuit Court, must be reversed.