4 Cal. 46 | Cal. | 1854
delivered the opinion of the Court.
This appeal is prosecuted from a pro forma decision of the District Court of Contra Costa County.
The suit was commenced in the nature of a prosecution, to recover the penalty for a violation of the Revenue Act of 1853.
The defendants demur, on the ground that the Act in question is repugnant to the Constitution of the United States, and the Constitution of the State of California.
In approaching the consideration of this question, we cannot but regret that the public mind has been prepared for a different decision than the one we are compelled to make, after a careful consideration of the principles involved.
The exactions of Government, by way of tax or assessment, are always met with reluctance; and the citizen, too often *forgetting that they are the price of his
To enable us to arrive at a correct determination of this ease, it may be well to lay down, in limine, a few principles, which, we believe, by long acceptation, have become universally recognized as truisms, and which have not, within our knowledge, been doubted, except, perhaps, by the learned counsel for respondents.
1st. That each State is supreme within its own sphere, as an independent sovereignty.
2d. That the Constitution of this' State is not to be considered as a grant of power, but rather as a restriction upon the powers of the Legislature; and that it is competent for the Legislature to exercise all .powers not forbidden by the
From this it follows, that the power of the Legislature to tax trades, professions, and occupations, is a matter completely within the control, and, unless inhibited by the Constitution, eminently belonging to, and resting in, the sound discretion of the Legislature. This principle has been repeatedly maintained by the Courts of almost every State in the Union, and reiterated by the decisions of the Supreme Court of the United States.
It becomes necessary, then, to inquire if this power has been withdrawn by our Constitution, from the Legislature.
This position seems to have been abandoned, upon the argument of the case. In fact, so strong are the authorities and obvious the rules of construction, that it would be almost insulting the intelligence of any respectable tribunal to contend for it.
But it is contended that, conceding this power to tax occupations and professions, it has been limited by the 18th section of the 11th Article of the Constitution, which provides that ‘ ‘ Taxation shall be equal and uniform throughout the State. All property shall be taxed in proportion
Do the words “shall be equal and uniform,” operate as a limitation upon the taxing power of the Legislature, and apply to every species of taxation to which Government may resort for the maintenance of itself, or are they to be taken as applying only to direct taxation upon property, as such, and intended to prevent the Legislature from fixing an arbitrary standard as to kind or quality, by providing that it shall be taxed in proportion to its value, to be ascertained as directed by law ?
In determining this point, much weight should be given
It is a safe rule of construction, that, when framing the organic law of this State, the Convention thought proper to borrow provisions from the Constitutions of other States, which provisions had already received a judicial construction, they adopted the provisions in view of such construction, and acquiesced in its correctness.
By reference to the Debates of the Constitutional Convention, pages 256, 364 and 375, it will be observed that the original section read: “All lands liable to taxation in this State,” etc. A motion was made to strike out the word “ lands,” and insert “immovable and movable property.” This section was afterwards amended so as to read “all property.”
It is apparent, from a perusal of the debates on this point, that the Convention intended, in the first place, to limit the taxing power of the Legislature over the subject of real estate alone.
The jealousies of the native California citizens, and a desire to protect them from an unequal system of taxation, gave rise to all the discussion upon this subject, which resulted in substituting the word “ property,” and providing for the election of Assessors in each county, by the qualified electors.
The expediency of placing any limitation or restraint upon the taxing power, of the Legislature, was strongly doubted, and the clause only adopted, as a pledge of security to the native * inhabitants, against imaginary
In adopting this provision as a substitute, the Convention seem to have supposed that it applied to lands only; and the member, Mr. Gwinn, who offered it, stated to the Convention that he had copied the provision from the Constitution of Texas, a State similarly situated to our own, where there were many large landholders, who owned estates which were not productive. “Taxation,” he says, “should be equal and uniform; all property in this State shall be taxed in proportion to its value, to be ascertained as direct
Tbe Constitution of Texas, from wbicb tbe provision now under consideration was taken, bas received tbe construction of tbe Supreme Court ot tbat State in tbe case of Aulanier v. The Governor (1 Tex. 653).
Tbe provision is as follows: ‘‘Taxation shall be equal and uniform, and all property shall be taxed in proportion to its value,” etc.
In this case, tbe Court say tbe word “property,” as used by tbe Constitution, cannot be tortured, by any forced construction, into meaning an occupation, calling or profession; and if tbe first part of tbe section can have any control over tbe exercise of tbe power of tbe Legislature, it is in this way tbat it would restrain tbe enactment of a law wbicb would make a difference, at different places in tbe State, on tbe tax imposed on tbe same occupation.
Here; then, we have tbe highest authority wbicb tbe character of tbe case will admit of; and tbe Court does not contend for, or treat with serious consideration, tbe proposition tbat professions and occupations cannot be taxed, or tbat this clause of tbe Constitution was intended to apply to anything else than a direct tax upon property.
This question arose in the case of Sawyer v. The City of Alton (4 Ill. 127) under tbe Constitution of Illinois, wbicb provides tbat “Tbe mode of levying a tax shall be
The Constitution of Massachusetts authorized the Legislature “to impose and levy proportionate and reasonable assessments, rates and taxes upon all the inhabitants of, and persons resident, and estates lying within the Commonwealth; and, also, to impose and levy reasonable duties and excises upon any produce, goods, wares, merchandise and commodities whatsoever, brought into, produced, or being within the same.”
Under the first clause of this section it was held that, as a tax upon the banks, the Act was unconstitutional; that taxes must, by the provision of this section of the Constitution, be proportionate and equal on all the persons and estates lying within the Commonwealth; that such clause required an estimate of all the property, and an assessment on each individual, according to the value of his property.
But the right to lay a specific tax upon banks was derived from the well accepted meaning of the word “commodity,” which was held to signify convenience, privilege and gains, as well as goods, chattels, etc.; that the first clause did not extend to the right so to tax professions or trades, which might'be taxed at the discretion of the Legislature; that “taxes of this sort must be equal, that is, they must operate upon all persons who exercise the employment so taxed.”
This point came before this Court in the case of The People v. Naglee (1 Cal. 232) and the same construction was given as that held by the Supreme Court of Texas.
*It is contended, however, that the question was
The able opinion delivered by the dissenting Judge, to our mind, is conclusive upon the whole case.
Other decisions might be cited, but we have deemed it unnecessary. The character which this, and other similar suits have assumed, as a public and political question alone, has induced us to resort to the authority of other Courts, to find a proper construction of this clause of our Constitution.
The argument of the respondent has proceeded upon the ground, that every species of property must be taxed at a uniform and equal rate; that, admitting the power of the Legislature to tax occupations, they must be taxed at an equal and uniform rate, or by “some standard or basis applicable alike to all occupations, and having reference to value. How this is to be done,” say the learned counsel, “is no part of our province to decide; nor are we to say whether it is possible to devise an occupation tax which would be equal and uniform, unless it be a tax levied equally, and for the same amount, upon all occupations. All that we maintain is, that an occupation tax, which is not equal and uniform, violates the Constitution.”
Is, then, the clause under consideration so vague, as to be wholly unsusceptible of a practical meaning, and the force of the provision to be defeated, from a want of some indefinable equality and uniformity existing in the imagination of learned counsel, but so subtle in its character as to defy the ordinary use of language in its description ?•
In construing this section, force and meaning must
It would be impossible for the State to protect, in any manner, her own domestic interests. Agriculture, manufactures and mechanical employments must languish 'for want of the healthy discrimination and fostering care of the State Government. The occupation of the humblest artisan, with no capital but his labor, the reward of whose toil secures to him only a scanty subsistence, must be taxed equally with the richest merchant, banker or broker, or, if not equally, at least the State has no right to release the miserable pittance so cruelly wrung from his hard earnings.
In case the Legislature should desire to exempt a meritorious class of citizens, or impose the burdens of Government upon a particular class of property, they would be met by this clause of the Constitution, which makes all property subject to taxation. Suppose it should be necessary to raise a revenue of 1300,000 on $100,000,000 of taxable property, instead of levying this tax directly upon real estate or other specific articles of taxation, which the Legislature might designate, everything must be taxed, from the surplice of the minister .to the plow of the husbandman. The assessment would, necessarily, be small on each one, but the expense of collecting it would, in many instances, amount to more than the tax itself.
No such absurd consequences were ever intended. The taxing power has been rightly denominated the right arm of the Government; fetter and restrict it, as contended for in this instance, and it “becomes an empty shadow, potential for evil, powerless for good.
The debates upon our Constitution show, that the *Convention regarded this power as belonging to the
We cannot presume that a high co-ordinate branch of the Government will ever be actuated by any other motive than a liberal, honest and enlightened regard for the interest and welfare of the State. If they should legislate ignorantly or corruptly, a remedy may be found for it at the ballot box; but if this Court should attempt to control their discretion, or usurp their powers, there is no remedy but by revolution, or change of the Constitution.
From these considerations we are of opinion, that the words “equal and uniform” apply only to a direct tax on property; that the Legislature may select or exempt such property as, in its discretion, it may think proper; and that these words do not, by any fair rule of interpretation, extend to tax on occupation.
But it is contended that the Act of May, 1853, violates that provision of our Constitution which provides that ‘£ all laws of a general nature shall be uniform in their operation. ”
Much of the reasoning upon the first branch of this case, is applicable to this point. By a “uniform operation,” it was intended that laws of this character should, as near as possible, affect persons and property alike. No legislation has ever yet produced a law taxing the subject for the support of Government, which really accomplished this object; from the very nature of the subject it is impossible. The citizen who is protected in $100,000 worth of improved property in the City of San Francisco, paying an income of from 15 to 30 per cent, per annum, pays no more State tax upon the same, than the one who lives in a remote portion of the State, owning the same amount of property in wild and unproductive lands.
The burdens of Government cannot fall equally upon all; the condition, estate and occupation of the individual must vary the operation of the law in almost every case.
But if, in trying to approximate to a correct standard, the law may work a hardship in particular supposed cases, it would rather be a consideration for the Legislature, than an argument for the Courts.
In the exercise of a large discretion committed to them, they have adopted a scale of taxation, and whether it is designed to operate on inhabitants, or on the amount of business transacted, we are not prepared to say that it is incorrect.
But it is contended that the portion of the Act which refers to the sale of consigned goods, is in violation of the ■8th section of the 1st Article of the Constitution of the United States, which provides that “Congress shall have power to regulate commerce with foreign nations, and among the several States, and with the Indian tribes;” and the 10th section of 1st Article, “ No State shall, without the consent of Congress, levy any impost or duties on imports or exports, except what may be absolutely necessary for executing its inspection laws. ”
That part of the Act of May, 1853, supposed to be in violation of these sections, provides: 1st, That all goods, wares etc., brought into the State from any other State or foreign country, to be sold in this State, owned by any person not domiciled in the State, shall be declared consigned goods; and 2d, That every person selling such consigned goods, shall be taxed 60 cents on every $100 worth of goods so sold, such tax to be paid by the person selling such goods, he having a lien on the owner for the same.
Is this an interference with the powers of Congress to regulate commerce, or is it the imposition of an impost duty ?
In support of this proposition, the ease of Brown v. The State of Maryland, 12 Wheat. 419, has been relied on.
This decision has but little application to the present case, and its soundness has even been doubted; in fact, so much has it been refined and trenched upon by the subsequent decisions of the same Court, that it may be said to stand alone, as the decision of a particular case, and of no authority beyond it.
It will be observed, the law of Maryland imposed this tax upon the importers or wholesale dealers, and the decision of the Court did not attempt to follow the goods beyond the possession of the importer or the wholesale merchant.
The reason of this distinction is by no means clear, and cannot be justified on any sound principles. If the importer cannot be taxed in the way of license, because the goods are foreign fabrics or manufactures, it is hard to say why the retail dealer should be compelled to pay a license for selling the same articles.
. There is a marked difference between our statute and the Maryland Act, and the decision of Brown v. The State of Maryland is by no means conclusive on this case,
The Act of May, 1853, does not propose to tax the importer or wholesale dealer in foreign goods, before the same have been broken, but provides that the vendors of consigned goods, i. e., goods belonging to persons not residing in the State, shall pay so much on every one hundred dollars’ worth sold.
Slight as this distinction may appear, on examination it will prove a substantial one, when taken in connection with the powers of a sovereign State to tax persons and property within its own territorial jurisdiction.
The taxing power is an incident of sovereignty, the exercise of which belongs exclusively to every State, and attaches alike upon everything which comes within its jurisdiction.
The argument of the Court in the case of Brown v. The
If this argument be correct, it would work a total destruction of the independence of the State Governments, and leave * them powerless to regulate their own
Under such a construction, every species of property, except the real property and actual productions of the State, would be exempt from taxation, upon the ground that they were articles of commerce.
The absurdity of such a proposition is, however, attempted to be avoided by accepting foreign goods from the operation of the rule, only until such time as they have been broken in bulk, and become a part of the general property of the ■State.
In construing the powers of Congress upon this subject, it is to be observed, that the prohibition of the States from levying any import or export duties, does not flow from that provision of the Federal Constitution which gives to Congress the right to regulate commerce.
They are independent provisions, and by well settled rules of construction, the right of the States to regulate commerce is concurrent with that of Congress, with the understanding always, that all State regulations inconsistent with those of the Federal Government, on this subject, must give way; but this Act does not attempt or purport to extend beyond the internal commerce of the State, neither does it propose, in terms, the imposition of any impost duty.
It is no argument that the tax may operate upon the instruments or vehicles of commerce.
The case of Nathan v. Louisiana, 8 How. 73, contains a full exposition of the qualifications under which we are to understand this power to regulate commerce.
This was a revenue law of the State of Louisiana, enacting that every money or exchange broker should pay an annual tax to the State of two hundred and fifty dollars. An indictment was found under this law, and the defense
Tbis is tbe doctrine of tbe Supreme Court, given in tbe forcible and pointed language of a Judge “who, on tbe question relating to tbe extent of tbe power over commerce vested in tbe General Government has been uniformly in favor of its exclusive character.’
After thus reviewing tbe decision of Judge McLean, in 8 Howard, Judge Napton, in tbe case of Crow v. The State of Missouri, proceeds to say: “It seems to be established beyond all dispute, by tbe present supreme judicial tribunal of tbe General Government, to which we look for authoritative expositions of tbe Constitution-and laws of tbe Union, that tbe grant of power to Congress to regulate commerce with foreign nations and among tbe several States, is a mere affirmative grant of power, not exclusive in its character, nor affecting, in tbe slightest degree, tbe taxing power of tbe States — that tbe Federal Government has an ample protection to a full and efficient exercise of tbis power over commerce, in tbe supremacy of its laws, made in pursuance of tbe Constitution, over any conflicting State enactments, and in total prohibition to tbe States of all power to impose duties on imports or exports, or tonnage. These safeguards are sufficient and ample to secure a just and fair execution of tbe powers rightfully claimed by tbe General Government, and to prevent all collision with tbe States. To require more, and, by construction, to claim that tbe taxing
In reviewing these decisions, Judge Napton observes: “The case of Brown v. Maryland stands by itself — a decision rendered twenty-four years ago — nearly all its principles since doubted or overruled, and narrowed down, and frittered away, until its power for good or evil is gone. As a precedent, it will reach no case, except just such a one as itself was. It is possible, that if a State should now enaci a law precisely in the language of the Maryland Act of 1821, such a law would yet be pronounced unconstitutional by the tribunal to which such questions belong; but I hesitate not to venture the opinion, that the doctrine will never be carried one jot or tittle further.”
Again it is contended, that the Act of May, 1858, is in violation of that clause of the Federal Constitution which guarantees to citizens of one State the same privileges and immunities which they are entitled to in their own States.
It is said that portion of the Act which refers to con
This is a mistake, and, on a proper examination of the Act, it will be seen that no tax is levied on the foreign owner of consigned goods in the hands of the consignee, but only upon the sale, while all other consigned goods are taxed by the system of licenses, as part of the general property of the State.
We have carefully examined all the arguments of the respondents, and are irresistably impelled to the conclusion, that the * Act of May, 1853, is neither in
This opinion is based, as we believe, on no new principles, and in announcing it, we but reiterate the decisions of the tribunals of other States.
Without any precedents, however, to control us, looking alone to the powers of a sovereign State, and its absolute control over persons and property within its own jurisdiction, as weil as to the ruinous consequences which would ensue from a different decision, we are fully of the opinion that the taxing power rests alone in the sound discretion of the Legislature, subject to the restrictions we have already laid down.
Without it, in cases of emergency or extraordinary necessity, State sovereignty and State power would be a baseless and visionary phantom, unable alike to maintain its own domestic independence and dignity, or to defend itself against the assaults of federal encroachment.
Judgment affirmed.
A petition for a rehearing was filed by respondents, but refused by the Court.
Note. — Cited Constitutional construction, power of State Legislature, in Thorne v. San Francisco, post, 157, 162; Thompson v. Williams, 6 Cal. 89; Wilson v. Broder, 10 Cal. 489; People v. Rogers, 13 Cal. 165; Cohen v. Wright, 22 Cal. 308; Ex parte Yale, 24 Cal. 244; People v. Webb, 38 Cal. 477; S. & V. R. R. Co. v. Stockton. 41 Cal. 162; Hinson v. Lott, 40 Ala. 127. Commented on, power in passage of Revenue Laws, in Crosby v. Patch, 18 Cal. 443; High v. Shoemaker, 22 Cal. 369. Over ruled as to constitutional limitations on power of taxation, in People v. McCreery, 34 Cal. 448, 461. See generally, People v. Bigler, 5 Cal. 23; People v. Folsom, Id. 373; Hobart v. Butte Co., 17 Cal. 23; People v. Judge of Twelfth District, Id. 547; Cal. St. Tel. Co. v. Alta Tel. Co., 22 Cal. 421; Bourland v. Hildreth, 26 Cal. 183; Taylor v. Palmer, 31 Cal. 254; Santa Barbara v. Stearns, 51 Cal. 501; S. J. v. S. J. & S. C. R. R., 53 Cal. 481; Sharon v. Sharon, 67 Cal. 190. See 15 Kan. 635; 27 La. An. 146: 40 Md. 71; 9 Wis. 430; 5 Thomp. & C. 313: 3 Hun, 87.