40 Md. 22 | Md. | 1874
Lead Opinion
delivered the opinion of the Court.
The only question intended to he presented by this appeal, and which has been argued in this Court, is, whether the Act of the Legislature of 1872, ch. 274, is constitutional or not. All other questions arising on the pleadings have been waived, and the issue of fact disposed of by agreement.
The Act in question, is entitled “An Act to regulate the taxation of Coal Mining Companies in this State, for State purposes.”
By the first section it is provided, “ That it shall not he lawful for any Coal Mining Company or association in
The third section makes it the duty of the financial officers of the transportation companies, so receiving coal for transportation, to make returns in writing to the Comptroller of the Treasury, within thirty days after the first day of January, April, July and October of every year, stating fully and particularly the number of tons of coal mined in this State, and transported on or over their works, for the three months immediately preceding each of the above mentioned days; and it is made the duty of such transporting companies, at the time of making such returns, to pay into the treasury of the State, the tax so by them required to be collected.
The fourth, fifth and sixth sections provide penalties for failure or neglect by the transportation companies, or
By the seventh section, it is provided that whenever it shall appear to the Comptroller, by the returns of the officers of the transportation companies, tlmt any coal mining company in this State lias bona Jide worked its mine, and paid the tax upon the coal mined by it, in accordance with the requirement of the Act, the Comptroller shall give such company a discharge for State taxes on its capital stock for the year in which such tax on the coal mined lias been paid; it being declared to be tbe meaning of tbe Act that such mining companies shall not. be taxed at tlie same time on both their production, and their capital stock.
The eighth section clothes the Comptroller with power to examine the officers of the several transportation companies, and other persons, under oath, as to the amount of coal mined and transported, and provides a penalty for refusing to he sworn to give information.
The Act was made to take effect from the day of its passage, and was approved on the 1st of April, 1872.
The present suit was brought under this Act by the State against the appellee, the defendant; the latter being a transportation company, engaged in transporting the coal mined in Allegany Comity, directly and, immediately from the mines, thence to he put in course of transportation to the various markets of the country for sale; the amount in controversy, and for which the action is brought, being the alleged amount of tax on the coal transported by the defendant from the date of the Act, to and including the thirtieth of June, 1872, and the penalty of ten per cent, on the amount of the tax alleged to heulue.
The question of the constitutionality of the Act is raised by a demurrer, and though interposed by tbe State to the second plea of the defendant, it brings before the Court the sufficiency of the declaration as well as the plea.
The validity of the Act is called in question upon two distinct grounds ; first, that it is in conflict with the Constitution of the United States; and, secondly, that it is in conflict with the Constitution of this State.
Preliminary to the consideration of these questions, it is proper to say, that the taxing power of the State is of vital importance to it; indeed, so essential is the power, that the very existence of the State dep>ends upon the right to exercise it. All persons and property, therefore, within the jurisdiction of the State are liable to it; and the' power is conferred upon the State for the benefit of the • entire body politic. The power resides in the State as an attribute of its sovereignity, and the right of the Legislature, as the representatives of the people, to exercise it, should never be questioned, except in plain cases, where, the power is relinquished for valid consideration, or where to prevent its abuse, it has been placed under restriction, either as to the subjects liable to it, or the mode and manner of its exercise.
That the State’s power of taxation has been restrained and made subject to limitation by the Federal Constitution, as to certain subjects, is clear, and it is equally clear, that, with respect to the mode and manner of exercising the power by the Legislature, it has been restrained by the Constitution of the State.
1. Proceeding then to consider the questions immediately involved in this case, the first is, whether the tax upon coal, imposed by the Act of 1872, chapter 274, is repugnant to, or in violation of that provision of the Constitution of the United States, which declares that “ Congress shall have power to regulate commerce with foreign nations, and among the several States.”
Of course, it is not pretended that the clause referred to of the Constitution of the United States has any application, or creates any restriction, as to the tax imposed on the coal transported for sale exclusively within the State. The internal commerce of the State is exclusively within her control, and is liable to such taxation as the Legislature may think proper to impose upon it, provided there be no restriction in the State Constitution. But, in regard to the tax now under consideration, it is imposed directly upon the coal transported, and only that transported for sale; and as to all such portion of the coal as may be transported directly from the mines to places or markets beyond the limits of the State for sale, the tax would plainly appear to be an interference with and a restriction on inter-State commerce, and hence in contravention of that provision of the Federal Constitution which gives to Congress the power to regulate commerce among the several States.
Indeed, we are not left to construction or speculation as to this question. It has been recently before the Supreme
The case referred to is that of The Reading R. Co. vs. State of Pennsylvania, 15 Wall., 232. There the Act of the' State of Pennsylvania inrposing the tax, contained many of the provisions that are found in the Act now under consideration. The Pennsylvania Act required the officers of the transportation companies of that State, to make returns to the auditor-general of the number of tons of freight carried over, through, or upon the works of such companies, for the three months immediately preceding the first days of January, April, July and October of every year; and the several companies were required, at the time of making such returns, to pay to the State treasurer, for the use of the State, certain rates of tax per ton on each ton of freight carried ; the rate on coal being two cents per ton, the same as ju’escribed by the Act before 'us. The Act of Pennsylvania, in an action by the State for the recovery of the tax, was held to be valid and in all respects constitutional, by the Supreme Court of that State, notwithstanding it imposed a tax upon freight, taken up within the State, and carried out of it, or taken up without the State and brought within it. But on writ of error, the Supreme Court of the United States decided otherwise, and held the Act to be repugnant to the provision of the Constitution of the United States which we have before referred to, so far as it operated to tax interstate commerce; and it was held that the transportation of freight, the subjects of commerce, is a constituent of commerce itself, and that a tax upon freight, transported from State to State, is a regulation of commerce among the States.
In that case, a question was made and much discussed, as to the nature of the tax, and upon what it was really and
The Supreme Court, in the case referred to, after concluding as to the nature of the tax, and that it was really, though not in terms, imposed upon the freight carried, say that beyond all question the transportation of freight, the subjects of commerce, for the purpose of exchange or sale, is a constituent of commerce itself; and that this is a proposition that has never been doubted. They then ash, “why is not a tax upon freight transported from State to State a regulation of inter-State transportation, and, therefore, a regulation of commerce among the States ? Is it not prescribing a rule for the transporter, by which he is to be controlled in bringing the subjects of commerce into the State, and in taking them out? The present case,” they continue, “ is the best possible illustration. The Legislature of Pennsylvania has in effect declared that every ton of freight taken up within the State and carried' out, or taken up in other States and brought within her limits, shall pay a specified tax. The payment of that tax is a condition, upon which is made dependent the prosecution of this branch of commerce. And as there is no limit to
By the Act before us there is a positive prohibition to the transportation of coal “from any mine in this State to any place in this State or elsewhere, for sale,” until a State tax of two cents per ton is first paid, or provided to be paid. ' It is only the coal transported for sale that is the subject of this tax, and therefore it is by reason of the fact of transportation that the coal becomes liable to the tax at all; and it is quite clear that the Act contemplates the transportation of coal as freight beyond the State for sale ; and thus the payment of the tax becomes a condition precedent, and consequently an impediment to the prosecution of this branch of commerce. And though the tax be levied upon all coal transported, as well that transported to places within the State, as that transported
Without saying more in regard to this question, we are of opinion, upon the authority cited, that the Act of 1872, chapter 274, so far as it affects to impose the tax upon coal transported from the mines in this State to places beyond the State for sale, is unconstitutional and void.
And having thus declared the Act so far void, as being in conflict with the Constitution of the United States, it becomes a grave question whether the Act in its entirety, irrespective of any other constitutional objection, does not fail. As a general rule, where a statute is partly void, and its provisions all relate to a single subject-matter, the question whether the other parts shall remain operative, depends in a great measure upon a consideration of the object in view in the passage of the Act, and in what manner and to what extent the unconstitutional part affects the remainder. Here we can hardly suppose that the Legislature would have passed the Act in question with a knowledge that it could only be effectual as to the coal transported to places within the State; and thus intentionally have discriminated against the citizens of the State and in favor of those beyond its limits. It would not be fair to indulge such a presumption with respect to the purpose of the Legislature. But, without deciding this question, wo shall proceed to consider the second constitutional objection urged to the Act.
2. This question is founded on the 15th Article of the Bill of Eights of this State. It is said that the Act in question is in violation of this Article of the Bill of Eights, because it imposes a specific tax, without regard to the value of the article taxed, and without regard to the prin
The article of the Bill of Rights relied on declares that “every person in the State, or person holding property therein, ought to contribute Ms proportion of public taxes for. the support of the Government, according to his actual worth in real or personal property; yet fines, duties or taxes may properly and justly be imposed or laid with a political view, for the good government and benefit of the community.”
This is a fundamental declaration of the right of the citizen against unequal and undue assessments of taxes by the Government. It was not deemed a sufficient guarantee that no tax should be' imposed but by the representatives of the citizen in the Legislature, but, in order to prevent abuse of the power, which would otherwise be unlimited, the Legislature is required to cause all public taxation for the support of the Government to be fair and equal in proportion to the value of the property assessed, so that no class or species of property shall be unequally or unduly taxed. And this declaration of the right of the citizen is not simply directory to the Legislature, to be observed or not as that department of the Government may determine or think proper ; but it is a positive limitation or restriction on the power, and whenever it is transcended or disregarded, it becomes the duty of the Courts to declare the Act void. Hence, this Court has repeatedly declared that taxes, if imposed in violation of this fundamental rule, would be illegal and void. In the case of the Mayor & City Council vs. Balto. & Ohio R. R. Co., 6 Gill, 291, the Court, in referring to a tax on the franchise of an incorporated bank, say, if it were a special tax, technically speaking, levied for the support of the government of the State, it would be clearly unconstitutional and void, as being repugnant to the 15th Article of the Declaration of Rights. And in another part of the same opinion the
In construing this declaration of right, however, the terms employed can only apply to a direct tax on property, and not that the power of the Legislature should be limited as to the objects of taxation. The restriction is only intended to prevent an arbitrary taxation of property according to kind or quality, without regard to value. Sedg. on St. Law, 557. There are many other species of taxes that have been imposed from the foundation of the State goverment to the present time; and a power so long exercised unquestioned, could only be doubted upon the most conclusive argument against it.
What then is the character of the tax imposed by the Act in question? It is, beyond all doubt, a direct and specific tax upon coal, and therefore a tax upon property. It is not assessed with reference to any uniform value of the coal, nor with reference and in conformity to any rate of taxation imposed upon the other property of the State. It is therefore a specific, arbitrary tax levied for the support of the government, on a part of the personal property of the State, without regard to value, uniformity or equality. Upon the same principle that this tax of two cents per toil is attempted to be imposed, if legal, the State could impose fifty cents, or even a dollar per ton on all the coal mined and transported.
ISTow, the capital stock of the several mining companies of the State is liable to taxation according to a fixed and
Judgment affirmed.
Dissenting Opinion
dissented, and Judge Stewart delivered the following dissenting opinion:
The only question involved in this appeal is whether the Act of 1872, chapter 274, purporting to regulate the taxation of coal mining companies in this State is a valid exercise of legislative authority? The Circuit Court pronounced the law a nullity, as contravening the fifteenth Article of the Declaration of Rights. The counsel for the appellee now insist that it is repugnant to the Constitution of the United States.
These propositions are novel and startling to me, and if sustained by the authority of this Court, it is clear must create doubt as to the existing legislation of the State, in regard to the revenue, and seriously embarrass the Legislature in devising the means, according to its discretion, by the imposition of taxes, and the collection of the necessary revenue, to sustain the Government, and credit of the State. The 27th, 28th and 30th sections of Article 3 of the Constitution, are provisions showing the grave formality required in the enactment of a law. The 17th section in order to further guard against hasty, partial, or unconstitutional legislation, and encroachment upon the other departments, confers the qualified veto power upon the Governor. Every bill, before it can become a law, must have his sanction, not as a matter of mere form, but of substance ; or be passed by three-fifths of all the members elected to each House. The law in question having been enacted under all the forms required by the Constitution, by the Legislative branch, and been approved by the Governor, thus giving it the sanction of two great departments, ought not to be set aside by this Court upon any doubtful theory. The plainest principles of comity demand that every fair intendment should be made to sustain it. All Courts regard it as a grave occasion to justify them in pronouncing a law thus approved, to be of no effect. In the case of Baltimore vs. State, 15
Chief Justice Marshall, in Fletcher vs. Peak, 6 Cranch, 128, says it is not on slight grounds of implication and vague conjecture that the Legislature is presumed as transcending its powers and its Acts void.
Justice Washington, in Ogden vs. Sanders, 12 Wheaton, 170, says it is but a decent resjiect due to the wisdom, the integrity and patriotism of the Legislature by which any law is passed, to presume in favor of its validity; they legislate under the solemnity of an oath, which it is not supposed they will disregard. Chief Justice Shaw, in 16 Pickering, 95, says it must be a clear case, beyond reasonable doubt, to invalidate an Act of the Legislature.
It is an apposite remark of Mr. Cooley, in his excellent treatise on Constitutional Law, pages 487, 488, that there are cases of constitutional action by the representatives of the people which cannot be reached, except through, the ballot-box; and others, where the line of distinction between that which is allowable or otherwise, is so shadowy, that the decisions of the Legislature must be accepted as final, although the judicial opinion might be different.
The Supreme Court of the United States has always regarded the State power of taxation as essential to its preservation, and in determining questions as to the extent of the power of the State, so far as it might affect her relations with the General Government, has been cautious
The question as to the extent of the power of the State over taxation, in reference to any limitation thereon, con
As we understand the recent rulings of the Supreme Court, there is no conflict between them and former decisions, conceding the power of the State to impose such a tax as that in question. This is rendered more clear by
‘ ‘ according to this mode of construction, the power of taxation in Congress, or the power to regulate commerce, would annul the whole power of taxation of the States; and thus operate a virtual dissolution of their sovereignty; such a proposition has been constantly disclaimed.”
But Judge Story was mistaken in the disclaimer of such authority, if a simple law like this, imposing a tax of two cents per ton upon the mining of coal is to be held void, upon the theory that it interferes with inter-State commerce.
The same doctrine is held in Howell vs. State. The Court, say: “'Conceding to the United States, to the
In the case of the Providence Bank, 4 Peters, 563, Chief Justice Marshall further says, “that the power of legislation, and consequently of taxation, operates on all the persons and property belonging to the body politic— that it is an original principle which has its foundation in society itself. It is granted by all, for the benefit of all. It resides in Government as a part of itself and need not be reserved when property of any description, or the right to use it in any manner, is granted to individuals
That Article has been repeatedly examined by this Court, and in no solitary instance, has the power of the Legislature to pass such a law as this been denied.
If we pronounce it a nullity, it will certainly be the very first case.
The legislative department possesses original authority to pass any law over any subject of legislation within this State, unless restrained by constitutional prohibition, and in the great mass of cases they are the ultimate judges of their own authority. The representatives are amenable to their constituents, the people, and in such cases that consideration and their official oath are the only checks upon them. This Fifteenth Article was not the grant of the taxing power to the Legislature, but a limitation upon that power which it already possessed.
The Fifth Article declares that the inhabitants of Maryland are entitled to the Common Law of England. The British Parliament exercises transcendent and uncontrolled legislative power in virtue of the principles of the common law.
The General Assembly of Maryland, over all subjects of legislation within her limits, would exercise as great and transcendent powers as the British Parliament, within the scope of its authority, if there were no constitutional limitations. It was so stated by Chief Justice Chase in the case of Partridge vs. Dorsey, 3 H. & J., 322, and he quotes Coke and Blackstone as to the extent of parliamentary authority “that the power and jurisdiction of parliament is so absolute that it cannot be confined either for causes or persons within any bounds” that it has “sovereign and
If the General Assembly of Maryland pass a law oppressive to any one, and against what might be considered natural justice, the only remedy under our system of Government, in the absence of constitutional restraint, is by appeal to the people, who can displace the representatives, occasioning the injury, and select others to repeal the obnoxious law; such remedial power is recognized by the seventh Article of the Declaration of Rights in these terms: “That the right of the people to participate in the Legislature is the best security, and the foundation of all free government; for this purpose elections ought to he free and frequent.”
No such power is conferred upon the Courts. It is the duty of the Legislature to enact such laws for the government of the State as to it may seem just, and their authority is unlimited and unfettered by judicial supervision, unless there be a palpable violation of the Constitution. The 14th Article provides that no tax, aid, charge, burden, or fees, shall be levied under any pretence without the consent of the Legislature, necessarily implying its power to do so. The 15th Article prescribes a rule to control the Legislature in the exercise of the taxing power. The limitation provided by this Article from the nature of the case must he mainly directory, and designed to impose its moral restraint upon the consciences of the members of the Legislature affected by their official oath and responsibility to their constituents, and rarely reviewable in any ■case by the Courts. To show that this is the leading doc
Taking the 14th and 15th Articles together, it is manifest they were intended to assert as a fundamental rule of legislative action, that persons, as such, without property, were not proper subjects of taxation, hut only persons
There certainly was no other reason except this, requiring prohibition to tax per capita, or to tax paupers. Nothing could be effected by taxing this latter class, because ex nihilo nihil Jit. This is clearly manifest from the decision in the case of Egan vs. Charles County Court, 3 H. & McHenry, 170, where the Legislature had imposed a tax on attorneys, as other occupations, employments, business and officers, have been and still are taxed, and the question was raised there as here, that the Legislature could do no such thing, but the Court affirmed the power of the Legislature to impose the tax on the attorneys. This was an early case, and in a later one—the Germania vs. State, 7 Md., 1—this Court decided that the State has the power to tax the amusements of the people, either for the purpose of revenue or as a police regulation. They assert that with the exercise of this power in any particular case the Courts have nothing to do; they fulfill their office when they give effect to the constitutionally expressed will of the Legislative branch. The Bill of Rights is referred to as the authority. This power of the Legislature to impose taxes, as to it may seem just and proper, has in every instance when brought before this Court, been'recognized.
In the case of the Mayor vs. B. & O. R., 6 Gill, 288, it was announced by this Court as an unquestionable rule, that the right of taxation is never presumed to be surrendered by the sovereign power; and such surrender is never made unless it is the result of express terms or necessary inference. A decision of this Court denying the power of the Legislature to pass this law, virtually extinguishes the discretionary authority of the Legislature over the subject of taxation. In State vs. Mayhew, 2 Gill, 501, this Court
In Burgess vs. Pue, 2 Gill, 11, it is stated that the Legislature may delegate the power of taxation to the taxable inhabitants, for the purpose of raising a fund for the diffusion of knowledge and the support of primary schools. Grants of similar powers to other bodies for political purposes, have been co-eval with the Constitution, and no serious doubts have ever been entertained of their validity.
Some objection was made to this law, as imposing an unauthorized duty upon the transportation companies, in making them the collectors of the tax. The Legislature had the right to make them discharge this duty, and to hold them answerable for the payment of the tax imposed and due.
The case of the State vs. Mayhew, just referred to, expressly affirms such right.
In the case of the State vs. Sterling, 20 Md., 516, as in the case of Slate vs. Mayhew, this undoubted authority of the Legislature is specifically restated in the strongest terms. •‘The power of the Legislature is recognized not only as to the imposition of taxes, but as to the assessing of the value of property, besides prescribing the details of their collection.” What other reasonable construction can be put upon the power of the Legislature to impose taxes according to the value of the property held by a person, with authority to tax that value, unless the provision of the Fifteenth Article is to be considered merely as direc
In the effort to collect sufficient revenues for tbe exigencies of tbe public service, we find various and repeated evidences of this power of tbe Legislature to impose taxes upon almost all conceivable subjects. Every variety of scheme which tbe ingenuity of tbe representatives in tbe Legislature could devise, has been resorted to. A general
The Legislature has relieved property from the burdens of taxation; it is within their discretion to do so ; whether just and judicious to do so, it is their province to decide; such is now the remarkable exemption of mortgages, releasing from the burden a large mass of property. Whilst some property may thus not he taxed, other items may he taxed twice, or persons may possibly he taxed as the holders of property where they may not he the owners thereof; or the property in fact has no existence. It is impossible to have taxes upon persons on account of their property precisely equal, and if they are to he ’considered void if not so, the Legislature cannot practically devise the means to support the Government. The fundamental rules to
Notwithstanding a requirement that the rate of taxation shall be uniform, the Legislature may levy specific taxes on corporations, and exempt them from municipal taxation. Kneeland vs. Milwaukee, 15 Wisconsin, 454.
The universal acquiescence in the exercise of this discretionary power as to taxation by the Legislature, ought to estop the Courts from questioning its legitimate employment, unless no question is to be considered settled, but all matters pertaining to the action of the Government to be forever debatable.
Constitutional exposition by all parties; acquiescence by enlightened Courts through a long series of years, place the practice upon a foundation of authority which can not be shaken, without delivering over the subject to perpetual and irremediable doubts. 12 Wheaton, 190.
In the case of Watkins vs. Watkins, 2 Md., 356, it was said by Chief Justice LEeuAsro, “that in all human contrivances confidence must be reposed somewhere, and that under the distribution of the powers of Government in our State, it is not given to the Judiciary to compel action on the part of a co-ordinate branch of the Government.” Judge Stohy, in his Commentaries, sec. 456, refers to an admirable remark of Burke, which cannot be too often repeated, “that those called upon to interpret a Const! tu.tion should always bear in mind that Government is a
Believing the uniform practice of our predecessors to have been conformable to this theory and construction of out Declaration of Rights, and no reason, from the nature of this law, to justify the Circuit Court in pronouncing it a nullity, I think its judgment ought to he reversed.
Dissenting Opinion
filed the following dissenting opinion:
I am obliged to enter my dissent in this case. The Act of 1872, ch. 274, imposing a tax of two cents on every ton of coal mined in this State for transportation, is not, in my opinion, in conflict with Article 1, section 8, sub-section 3 of the Constitution of the U. States, which confers upon Congress the power to regulate commerce with foreign nations and among the several States ; nor is it in conflict with the Constitution of this State, which declares “that every person in the State, or person holding property therein, ought to contribute his proportion of public taxes for the support of the Government, according to his actual worth in real or personal property; yet fines, duties, or taxes may properly and justly he imposed or laid with a political view for the good government and benefit of the community.” Art. 15, Declaration of Rights.
If, however, it he in conflict with the Constitution of this State, as the majority of this Court have decided, then it was altogether unnecessary, in my judgment, to have decided whether it was in conflict with the Constitution of the United States.
Upon no one clause of the Constitution of the United States have the Judges of this country, both Federal and State, differed so widely in regard to its construction, as