60 N.H. 219 | N.H. | 1880
Lead Opinion
This case requires us to decide upon the constitutionality of c. 63, Gen. Laws. Whether, under any circumstances, the statute in question could be regarded as an exercise of the police power, we need not inquire. It is obvious it was not so intended or understood, either by the tax commissioners who reported it or the legislature by which it was enacted, or the commissioners under whose direction it was incorporated with the statutes in the volume of the General Laws. The report of the tax commissioners affords abundant evidence of their understanding that it was a statute solely for raising revenue. They speak of taxes to be raised from "express companies" as a new source of revenue, as one of the subjects of taxation. Report of Tax Com. 23, 24, 25. The title of the bill, as reported by them, was "An act to tax express corporations, companies, or persons carrying on express business in this state;" and the bill itself, as *234 enacted, is identical with that reported by the commissioners, with the exception that, as enacted, there was an additional section providing for the collection of the tax, and "license" was substituted for "tax" wherever that word occurred in the bill as reported, as though the name by which the imposition was called would determine its nature. In the General Laws it is placed under the general title "Of taxation," and the title of this particular act is "Taxation or the licensing of express companies and express men." The word "license" may have been substituted under the impression that, as an act imposing a tax, it could not be defended; and other reasons, not now necessary to be mentioned, may have led to the change; — but whatever may have been the object, and without considering the title of the act, either as reported or passed, or its particular title and location in the General Laws, in the light of all the surrounding circumstances, and having in mind the provisions of the act, the character of the business upon which it was designed to operate, and the nature, application, and extent of the police power, it can be considered in no other light than that of a statute the object of which is to raise revenue by taxation; and the question before us must be determined on this view of its scope and object.
In considering this case, we recognize the doctrine, so often expressed, that we have nothing to do with the propriety, expediency, or policy of any law; that these considerations concern the legislature, and not us; that our sole duty, when the validity of any statute is challenged, is to ascertain and declare whether it conflicts with the constitution as the paramount law, leaving all other considerations with the legislature and people, where they of right belong. The question is, Does the act in question conflict with the provision of the constitution on the subject of taxation and raising of revenue? — and on this question it is incumbent on the plaintiffs to show under what provision of that instrument it can be sustained. Savings-Bank v. Nashua,
The only provision of the constitution in which the power of taxation is given in express terms is found in article 5, in which it is declared that "full power and authority are hereby given and granted to the said general court, from time to time, to make, ordain, and establish all manner of wholesome and reasonable orders, laws, statutes, ordinances, directions, and instructions, either with penalties or without, so as the same be not repugnant or contrary to this constitution, as they may judge for the benefit and welfare of this state, and for the governing and ordering thereof, and of the subjects of the same for the necessary support and defence of the government thereof * * *; and to impose and levy proportional and reasonable assessments, rates, and taxes upon all the inhabitants and residents within the said state, and upon the estates within the same, to be issued and disposed of by warrant under the hand of the governor of this state for the time being, *235 with the advice and consent of the council, for the public service, in the necessary defence and support of the government of this state, and the protection and preservation of the subjects thereof, according to such acts as are or shall be in force within the same.
It is claimed that under this provision the legislature is vested with power to pass all manner of wholesome orders, laws, and statutes for the necessary support and defence of the government, and with the additional power to impose and levy proportional and reasonable taxes; that these provisions are separate and distinct; and that if c. 63 cannot be upheld under the latter clause, it may under the former. If this position can be sustained, the latter provision was superfluous: there was no occasion for it. But it may well be claimed, that if the first clause can be construed as authorizing the raising of revenue for any purpose or under any circumstances, it is modified and restricted by the last clause. The general power is subject to the subsequent limitation. It must not be forgotten that the constitution enforces the idea that the sovereignty is in the people, and that all the power not expressly delegated to the legislature was reserved to the people. The provisions of the constitution must be regarded in the light of a grant to the legislature, and as conferring no power except what is expressly granted, or is indispensable to the exercise and enjoyment of those powers which are expressly granted. While the power of the legislature to raise a revenue for the support and defence of the government is absolute, the way in which it may be exercised is specifically set forth, and the method designated must be followed. The rule, that the general intent appearing shall control the particular intent, must sometimes give way, and effect be given to a particular intent plainly expressed in one part of the constitution, though apparently opposed to a general intent deduced from other parts. Warren v. Shuman,
The question as to the construction of article 5, so far as it relates to the subject of taxation, was considered by the court in the opinion in
In article 12 of the bill of rights, it is declared that "every member of the community has a right to be protected by it in the enjoyment of his life, liberty, and property. He is therefore bound to contribute his share in the expense of such protection, and to yield his personal service, when necessary, or an equivalent." In article 6 of the constitution the doctrine of the equality of taxation is affirmed, and measures are provided by which it may be ensured. These provisions establish equality and justice as the basis of all constitutional taxation.
While the convention which framed and the people who adopted the constitution recognized the absolute necessity of taxation for the support and defence of the government, and in broad and comprehensive terms conferred the power on the legislature to dispose of the sums raised, they did not forget that the power to tax was a delicate and difficult one; that it was always regarded with jealousy by those on whom it was to be exercised; and it was therefore declared in the bill of rights (article 28), "that no subsidy, charge, tax, impost, or duty shall be established, fixed, laid or levied, under any pretext whatsoever, without the consent of the people, or their representatives in the legislature, or authority derived from that body." This power, inherent in the people, was by them delegated to the general court, subject to the condition that all taxes imposed should be proportional and reasonable upon all the inhabitants of and residents within the state, and upon all the estates within the same. While they granted the power in general terms, they qualified the manner of its execution, and determined the subjects upon which it should operate. It was confined to persons and estates. No other subjects or species of property were recognized as taxable. This was a restraint upon the power of the legislature to impose the taxes. Bank of Commerce v. N. Y. City, 2 Black 620.
If, then, equality and justice is the basis of all constitutional taxation, a statute founded on any other principle cannot be upheld. It is true that absolute equality of taxation cannot in all cases, perhaps not in any case, be attained; but if the inequality results from the inherent difficulty in applying the law, and not from the law itself, we cannot declare the law unconstitutional, and arrest the course of legislation. "The essential characteristics *237
of any system of taxation properly so called, are certainly equality and universality. All the persons and property within a state, district, city, or other fraction of territory having a local sovereignty for the purpose of taxation, should, as a general rule, constitute the basis of taxation." State v. Charleston, 12 Rich. 702, 732; O'Neal v. Bridge Co.,
But this general principle of equality, which, independent of any constitutional provision, underlies and forms the basis of all taxation, is enforced here by the provision of the constitution that requires that "all assessments, rates, and taxes shall be proportional and reasonable." It is not left to the discretion of the general court to determine what is equal and reasonable, and to impose such as they may consider equal, but any other than equal and reasonable taxes, rates, and assessments are prohibited; and the equality intended is, "that the same tax shall be levied on the same amount of property in every part of the state, so that each man's taxable property shall bear its due proportion of the tax according to its value."
In considering the constitutional provisions on the subject of taxation, it must not be forgotten that the constitution is not so much a grant of specific powers as a limitation on the exercise of general powers. "The legislative power extends to every proper object of legislation, and is only limited by the constitution, and by the fundamental principles of all government and the inalienable *238
rights of man. Dart. Coll. v. Woodward,
But it is urged that the contemporaneous and practical construction of the constitution is in harmony with the statute under consideration. It is said that for many years, under the present constitution, there was a tax of one twelfth of the net receipts of the income of mills, wharves, and ferries, and the constitutionality of that tax was never questioned. It is true, that Feb. 7, 1789, such a statute was enacted, in which it was also provided that other property should be taxed at a given rate; but this, as the title and preamble and the act itself show, was only a way of arriving at the valuation of the property, and the doctrine of the equality and justice of taxation was not overlooked. The title of the act is as follows: "An act to establish an equitable method of making rates and taxes, and determining who shall be legal voters in town and parish affairs, and for repealing certain acts hereinafter mentioned." The preamble recites, that "Whereas it is necessary that there should be an equitable rule established by law for making rates and taxes within this state so that every person may be compelled to pay in proportion to his or her estate, and also for ascertaining who shall be legal voters in town and parish meetings."
The act provides that henceforward all public taxes shall be made and assessed in proportion to the amount of each person's poll and ratable estate, which shall be as follows: viz., "All male polls from eighteen to seventy shall be estimated at ten shillings each; all wharves and ferries shall be estimated at one twelfth part of their net yearly income." It enumerates all the different kinds of property subject to taxation, and the rate of each kind. This act, with the title and preamble, may be found in a volume entitled "The Perpetual Laws of the State of New Hampshire, from July, 1776, to Dec., 1788." It was published at Portsmouth in 1789. It was continued in force, without change in the manner, but with slight changes in the rate and with the addition of other kinds of property, until 1833, when the present method of *239 determining the valuation for the purpose of taxation was adopted. This act falls far short of sustaining the view for which it is invoked. It is rather an argument against that view, for it shows, beyond question, that the understanding at that time was that taxes should be proportional and equal on all kinds of property, according to its valuation. Moreover, it only provided for a tax on property capable of valuation. It did not include business, or the receipts of business. Ferries, wharves, and mills are tangible; and their value can be estimated in different ways, either by taking their income, or the market or salable value, as the basis.
The provisions of our constitution on this subject will be found, on examination, identical with those of the Massachusetts constitution, from which they were copied; and the courts there have on several occasions given a construction to them which, from the ability and high character of the court, and the thoroughness with which the subject has been considered, entitle their adjudications. to great weight, if they are not authority binding upon us
In their constitution there is a provision authorizing "the general court to impose and levy reasonable duties and excises upon any produce, goods, wares, merchandise, and commodities whatsoever, brought into, produced, manufactured, or being within the same." Mass. Con., art. 4. The fact that our constitution was copied from that of Massachusetts, and that the foregoing provision of that constitution was omitted from ours, is significant, since it must have been intentional. The constitution of Massachusetts was adopted in 1780. The first constitution of this state was adopted by the convention in June, 1783, and ratified and adopted by the people, October 31, 1783; These facts warrant the inference that the convention which framed and the people who ratified it did not intend to confer upon the legislature the power to raise revenue in any other way than by an equal and just assessment upon persons and estates; and the previous history of the province, and the contests between the people on the one side and the royal authorities and the government of Massachusetts on the other, tend to show the jealousy with which the power of taxation was regarded. It may have been thought that direct taxation upon persons and estates would be more likely to encourage economy and frugality in the administration of the government, which it declares "are among the indispensable requisites for the preservation of liberty and good government." Bill of Rights, art; 38. But whatever was the reason for the omission, it could not have been accidental.
These provisions of the Massachusetts constitution were first considered and construed in Portland Bank v. Apthorp,
The subject was again considered in Com. v. Savings Bank, 5 Allen 428, on a bill in equity to enforce the payment of three fourths of one per cent. on the deposits in the defendant bank; and the court, Bigelow, C. J., say, "While the power to impose taxes is an inherent and essential power of government, and is conferred on the legislature, yet it is a power to be exercised carefully, and within the exact limits prescribed in that clause of the constitution which creates and defines it." In speaking of the validity of the tax, he says, "Viewed as a tax [assessed under the clause in their constitution similar to our own], it would be contrary to its provisions, because it is not proportional on all persons and estates in the commonwealth, but is assessed on a certain class selected by the legislature for the specific purpose of imposing a tax." The question again arose, in Lowell v. (Oliver, 8 Allen 247; and the court, by Bigelow, C. J., say (page 253), "The power of the legislature as to the imposition of taxes is clearly defined, but the delegation of authority, although ample, is subject to three restrictions: first, that the taxes imposed must be proportional and reasonable; second, that they must be laid according to a valuation on all estates in the commonwealth, made within the current decade [in this state every five years]; and third, that they shall be levied for objects which are within the general purposes enumerated in the clause of the constitution, for which public money may properly be expended."
In Oliver v. Washington Mills, 11 Allen 268, the validity of an act of the legislature, requiring every dividend-paying corporation, organized under a charter or general laws, paying dividends in stock, scrip, or money, to reserve one fifteenth of each and every dividend, and pay the same as a tax or excise to the treasurer of the commonwealth within ten days after the dividend is payable, was considered. The court say, "If it is to be regarded as a tax, it is not within the provisions of the constitution as proportional and reasonable." In defining what is meant by a tax under this clause of the constitution, they say, "It is a charge apportioned either among the whole people of the state, or those residing within certain districts, municipalities, or sections. It is required to be imposed so that if levied for the public charges of government it shall be shared according to the estate, real and personal, *241
which each person may possess; or, if raised to defray the cost of some local improvement of a public nature, it shall be borne by those who will receive some special and peculiar benefit or advantage which an expenditure for a public object may cause to those on whom the tax is assessed." "The power of the legislature to impose taxes is beyond dispute. It is conferred in express terms, but the limitation of the power is as express as the delegation of it. While on the one hand the authority is conferred in broad and comprehensive terms, so on the other the principle on which it is to be exercised is clearly defined." Com. v. Hamilton Manufacturing Co., 12 Allen 298, was an action to recover a tax on the value of the defendants' property in excess of their real estate and machinery; and the court held that it could not be justified as a tax, because it was not laid according to any rule of proportion, and it was therefore contrary to the provisions of the constitution requiring all taxes to be proportional and reasonable. And the same view was expressed in Com. v. Savings Inst., 12 Allen 312, which was an action to recover a tax under the act of 1862, imposing a tax of one per cent. on the average deposits in savings-banks. These views were reaffirmed in Com. v. Lowell (Gas-Light Co., 12 Allen 75; Ins. Co. v. Loud,
It will be seen that the construction of this clause of our constitution, for which the defendants contend, is sustained by the unbroken current of Massachusetts decisions from 1815 to the present time.
But if it is claimed, against the force of the opinion in 4 N.H. and the Massachusetts decisions, that the power of taxation is conferred by article 2 of our constitution, which declares that "the supreme legislative power within this state shall be vested in the senate and house of representatives, each of which shall have a negative on the other," and that this provision is not contained in the constitution of Massachusetts, it may be urged, in reply, that, granting that the power of taxation is conferred by article 2, it is limited and restricted by the provisions of articles 4 and 5, which follow. Those articles define, with great particularity, the powers which may be exercised by the general court, and would seem to confer all the power required by that body to enable it "to provide for the necessary defence and support of the government, and the protection and preservation of the subjects thereof." If articles 4 and 5 were not understood and intended as restrictions and limitations upon the general power conferred by article 2, it is difficult to understand why they were inserted. They were unnecessary, for they do not enlarge the power of the general court as conferred by article 2, and unless they may be treated as restrictions they are useless. If they are restrictions, it might be suggested that the whole power of taxation is contained in that part of article 5 which authorizes the levy of "proportional and reasonable taxes on *242 all the inhabitants and residents of and estates within the state," and that they restrict the power not only to the manner of the levy, but to the subjects upon which it can be exercised, viz., persons and estates. If this view is correct, it might well be claimed that the objections to the force to be given to the Massachusetts cases could not be sustained.
In the opinion of the justices,
It may also be urged, as is said in Oliver v. Washington Mills, supra, that "in a constitution, the great purpose of which was to *243 define and limit the powers of government, it cannot be supposed that the power to lay and assess taxes would be granted to the legislature without any obligatory restraint on its exercise. No power is capable of greater abuse, or can be made more oppressive and odious in practice. Of this the framers of the constitution and their contemporaries had had abundant experience and knowledge. Nor can we doubt that by the use of words in the constitution the natural import of which is to put a limit on the exercise of this power, they intended them to have that operation and meaning."
In order, however, that the tax should be proportional, it is not necessary that the rate of taxation should be the same in every town or taxing district in the state. This would be practically impossible, for each town determines for itself what amount must be raised to meet its ordinary expenses, and the amount of property and the persons from whom it is to be raised are different in different towns and taxing districts: but it is required that the rate shall be the same throughout the taxing district; — that is, if the tax is for the general purposes of the state, the rate should be the same throughout the state; if for the county, it should be uniform throughout the county; — and the requisite of proportion, or equality and justice, can be answered in no other way.
In Ohio, where the constitution requires that taxation shall be uniform, the court say, "taxing by a uniform rule requires uniformity, not only in the rate, but also in the mode of assessment upon the taxable valuation. Uniformity in taxing implies equality in the burdens of taxation; and this equality of burden cannot exist without uniformity in the mode of assessment as well as in the rate of taxation; and the uniformity must be coextensive with the territory to which it applies, and it must be extended to all property subject to taxation, that all property may be taxed alike and equally." Bank v. Hines,
The constitution of Wisconsin contains a similar provision; and the court there say that "the act of levying a tax on property consists of several distinct steps, such as the assessment or fixing the value and establishing the rate; and, in order to have the course of proceeding uniform, each step must be uniform, and so must the rate. Uniformity thus becomes equality; and there can be no uniform rule which is not at the same time an equal rule, operating alike on all property which is the subject of taxation." Knowlton v. Supervisors,
The same doctrine is held in Minnesota, where the constitutional provision is similar. Stinson v. Smith,
It is true, there are cases where a different doctrine is held; but they are in states in which the constitution contains no provision requiring that taxes shall be proportional and reasonable, or that they shall be equal, or that they shall be assessed by a uniform rule, or any similar form of expression, limiting the power of the legislature in this respect. Such are the cases of Weber v. Reinhard, 73 Penn. St. 373; Durach's Appeal, 62 Penn. St. 491; Bright v. McCullough,
If, then, the construction given to the constitutional provision in
The tax assessed bears no such proportion to the whole sum to be raised as the property of the tax-payer bears to the whole taxable property; and it is open to the further objection, that it is double taxation, — for not only is the property employed in the business taxed, but its capacity to earn money, as evidenced by the gross earnings, is also taxed. It is the same in principle as if all the horses or oxen in the state were taxed, and then the owners were required to pay a percentage of their gross earnings. There is no provision for deducting the amount of the tax assessed on the capital: and herein is another element of inequality. It is not imposed in proportion to the whole amount to be raised by assessment on all the property in the state. It is a fixed assessment laid on a certain class of persons regardless of the amount called for from other property, or the percentage assessed on the valuation of other property. It is the same in all cases, whether the property invested or the profits received are large or small. The amount raised is limited only by the success of the persons engaged in the business, without reference to the amount required by the state. If in any case a tax of this character could be levied on business, even then this statute could not be sustained. It is not a tax on all business alike, but one particular kind is singled out from all the others without regard to whether it is advantageous or injurious to the community, and made to bear the whole burden placed on business.
The idea of proportional and reasonable or just and equal taxation is founded on the declaration in the bill of rights, that every member of the community is bound to contribute his share in the expense necessary to the protection of his property. This proportion is wholly destroyed by fixing a tax upon value on one kind of property, and a tax on gross receipts upon another. While the amount to be raised on other kinds of property depends upon the amount required for public objects, and the rate of taxation depends upon the amount of property within the taxing district and the public necessities, under the statute in question the rate is always the same. There can be no proportion or equality between that which is fixed and that which is uncertain and fluctuating If the legislature could legally enact such a statute, there is nothing to prevent them from placing the whole expense of the government upon any one class of business. They can effectually des., roy any business which they choose. The arguments against this law regarded as imposing tax on property apply with equal force if it be regarded as an excise. *246
Upon these views the conclusion is that no part of the act in question can be supported under the constitution, for there is no warrant for the imposition of any other tax than one assessed upon a proportional and equal valuation of all the different kinds of property on which it is to be levied. We are not unmindful of the importance of the question, and of the difficulty and delicacy of the duty laid upon us, and the considerations by which we should be guided in deciding questions of this character; but when there is a plain and unmistakable conflict between the legislative act and the constitution, however ungrateful the task, we are bound to say that the law must give way, and the constitution be given its full; force and effect.
Concurrence Opinion
The question is of the constitutionality of chapter 63 of the General Laws, by the terms of which every railroad expressman is required to pay annually to the state, for a license, either two per cent. of the gross receipts of his business, or five dollars per mile. The unconstitutionality of an unequal division of public expense among New Hampshire tax-payers has been settled too long, and by too many decisions, to be a subject of debate or doubt. The question is, not whether an unequal division is constitutional, but whether this statute is a provision for dividing public expense among tax-payers; whether, in its operation and legal character, it is a violation of the rule of equality; and, if unequal, whether it is an exercise of some other power than that of taxation. The answer of this question requires a precise understanding of the reason and scope of the settled rule, its origin and history, and the end it is designed to accomplish. It is to be intelligently applied as a broad, fundamental, and rational principle, not as an arbitrary formula or mere technical method, and with due regard for precedents, legislative and judicial.
There have been in our taxation some inequalities merely nominal, and others not so substantially unjust as to have any weight as precedents of actual wrong, or as authorities for the introduction of exceptions to the rule. "Even after the Revolution, and the adoption of the constitution, although perhaps substantial justice was administered in most cases, little can be claimed for the courts on the score of their scientific administration of the law, according to strict legal rules. It was not in the very nature of things that legal investigations should be pursued at that day as they have been since." Pierce v. State,
Much of their operation was essentially equalized by an approximate uniformity of value, amount, and condition, that has now disappeared. Inequality of operation, gradually introduced by new subjects of taxation, and by increased differences in the values and varieties of old ones, has been met by legislative efforts to rectify the wrong. Such changes have taken place that methods of dividing the public expense, equitable enough for practical purposes in the last century, would now be good cause of complaint. A great mass of questions of constitutional administration, to be raised by the progress of society, and the enlarged and complicated industries and interests of future generations, were left for those generations to solve.
The title of the tax act of Feb. 7, 1789, is "An act to establish an equitable method of making rates and taxes." Its preamble is, "Whereas it is necessary that there should be an equitable rule established by law for making rates and taxes within this state, so that every person may be compelled to pay in proportion to his or her estate." Its first section is, "That henceforward all public taxes shall be made and assessed in proportion to the amount of each person's poll and ratable estate, which shall be as follows, viz., All male polls from eighteen to seventy years of age shall be estimated at ten shillings each: horses and oxen which have been wintered five winters, three shillings each," c., c. This pre-constitutional system of assessment (
Even if it could be shown that they who adopted the constitution understood it authorized an unequal division of public expense, we have their authority for adhering to the plain meaning of the document. The legislature exercised judicial power after the adoption of the constitution, as they did before, in reversing judgments and granting new trials: and that illegal procedure was not discontinued until it had flourished, under constitutional prohibition, for the space of thirty-four years. Merrill v. Sherburne,
So far as this case is concerned, the constitution has not been changed since the provisions on this subject were written, in 1781 *249 (9 Prov. Papers 852), when they were largely copied from the Massachusetts constitution of 1780. The Massachusetts form was, "The department of legislation shall be formed by two branches, a senate and house of representatives, each of which shall have a negative on the other." 1 U.S. Charters and Consts. 960. The New York form (of 1777) was, "The supreme legislative power within this state shall be vested in," c. 2 U.S. Charters and Consts. 1332. The New Hampshire copy is, "The supreme legislative power within this state shall be vested in the senate and house of representatives, each of which shall have a negative on the other." The items of legislature power, set forth in articles 4, 5, and 6 of the second part of our constitution (not including the proviso inserted in 1877), are for the most part a copy of Massachusetts articles 3 and 4, which (except the last paragraph — the model of our article 6) were copied from the Massachusetts province charter. 1 U.S. Charters and Consts. 951, 952. Thus it happens that the specification of New Hampshire legislative power, in articles 4 and 5, is, in general, the language of the law-officer of the crown, who in 1691 drew up the province charter of Massachusetts in the prolix style of the public and private law documents of that age.
That charter authorized the general court to impose and levy proportional and reasonable assessments, rates, and taxes. This was copied by the committee of the Massachusetts constitutional convention, who made the first draft of the state constitution. The convention added this clause: "And also to impose and levy reasonable duties and excises upon any produce, goods, wares, merchandise, and commodities." Journal of the Convention 60, 198, 229; 4 Works of John Adams 233. This clause the New Hampshire convention omitted. If they omitted it because they feared it would be a pretext for an unequal division of public expense, their fear has been justified by the result in Massachusetts. Portland Bank v. Apthorp,
It may be doubted whether the general grant of supreme legislative power, in the second article of the second part of our constitution, is much affected or explained by the grant of specific legislature powers, copied, in the fourth and fifth articles, from a copy of a diffuse English state paper. It may be doubted whether the supreme legislative power of article 2 does not include the specific legislative powers of articles 4 and 5, and whether the grant of the latter is not superfluous. Article 5 requires that all laws shall be not repugnant or contrary to the constitution, and again imposes the same condition upon a certain class of laws. This restriction is unnecessary, because the constitution is the supreme law. In the same article is a special grant of the power of taxation, accompanied by the limitation that taxation shall be proportional. As this grant is unnecessary, because included in the grant of the supreme legislative power in article 2, so the limitation is unnecessary, because immunity from an unequal division of public expense is reserved in the bill of rights, which, according to the testimony of its makers, "contains the essential principles of the constitution," "is the foundation on which the whole political fabric is reared, and is consequently a most important part thereof." Gould v. Raymond,
The bill of rights is a bill of their equal, private rights, reserved by the grantors of public power. The reservation precedes the grant. Before they create the power of proportional taxation in the fifth article, and the supreme legislative power in the second article, and before they form themselves into a state in the first article, they lay the foundation, and therein reserve those personal liberties, which, upon the evidence of history and their own experience, they think cannot safely be surrendered to government. The definition of taxation, given in the foundation, is taken from books with which the leading statesmen of the Revolution were familiar. "The public revenues," says Montesquieu, "are a portion that each subject gives of his property, in order to secure or enjoy the remainder." Spirit of Laws, b. 13, c. 1. Government is formed by men for the common good, for the preservation of their lives, liberties, and estates, and the enjoyment of them in peace and safety; and "it is fit every one who enjoys his share of the protection should pay out of his estate his proportion for the maintenance of it." Locke on Government, b. 2. c. 9, ss. 123, 124, 131; c. 11, ss. 134, 140. Government, says the bill of rights, is "instituted *251 for the general good," "for the common benefit, protection, and security of the whole community." Arts. 1, 10. "Every member of the community has a right to be protected by it in the enjoyment of his life, liberty, and property. He is therefore bound to contribute his share in the expense of such protection." Art. 12. Upon every member of the community is laid a constitutional obligation to contribute his share of public expense. "He is * * bound to contribute his share." The reason is given. He is entitled to the common benefit, protection, and security for which government is instituted; he has a right to be protected in the enjoyment of life, liberty, and property: "he is therefore bound to contribute his share" of the expense. The right of benefit and protection, and the duty of contribution, are reciprocal. The former is the consideration for the latter. The latter is the price of the former.
If the governmental expense of a state prison, county alms house, town highway, district school, or other common benefit, is $1,000, that expense is a tax to be paid by those who, in contemplation of law, enjoy or have a right to enjoy the benefit, and who are the joint purchasers of it through governmental agency. B. Mills. Co. v. W. Location,
The right of acquiring and possessing property is constitutionally reserved. Bill of Rights, art. 2; Ash v. Cummings,
"Neither has the legislature any constitutional right * * * to raise funds for a mere private purpose. No such authority passed to the assembly by the general grant of legislative power. This would not be legislation. Taxation is a mode of raising revenue for public purposes. When it is prostituted to objects in no way connected with the public interests or welfare, it ceases to be taxation, and becomes plunder. Transferring money from the owners of it into the possession of those who have no title to it, though it be done under the name and form of a tax, is unconstitutional for all the reasons which forbid the legislature to usurp any other power not granted to them." Black, C.J., in Sharpless v. Philadelphia, 21 Penn. St. 147, 169.
To the extent of its inequality, a disproportional division of public expense is an uncompensated and unauthorized transfer of private property, for a private purpose, from those who bear more than their shares of the common burden to those who bear less than their shares. Morrison v. Manchester,
The contract theory of the origin and object of government having become practical law in this state in 1784, we need not inquire into its previous soundness as a matter of political speculation or historical fact. Locke's statement of it is, Men being, by nature, all free, equal, and independent, no one is subjected to the political power of another without his own consent: the only way whereby any one divests himself of his natural liberty, and puts on the bonds of civil society, is by agreeing with other men to join and unite into a community for the preservation, security, and enjoyment of their lives, liberties, and estates. Thus the origin of government is in mutual consent or contract, and its object is the common benefit. Men, when they enter into society, give up rights which they had in the state of nature into the hands of the society, to be exercised for the preservation of themselves, their liberty, and their property. Treatise on Government, b. 2, cc. 7, 8, 9, 11. The bill of rights declares that all men are born equally free and independent; therefore, all government of right originates from the people, is founded in consent, and instituted for the general good. When men enter into a state of society, they surrender up some of their natural rights to that society in order to insure the protection of others. Government is instituted for the common benefit, protection, and security of the whole community, and every member of the community has a right to be protected by it in the enjoyment of his life, liberty, and property. Upon this constitutional establishment of the basis and authority of society, the *254 creation of government by a social contract is not a mere theory. For legal purposes, the original contract is made when, with such a bill of rights, "the people inhabiting the territory formerly called The Province of New Hampshire * * solemnly and mutually agree with each other to form themselves into a free, sovereign, and independent body politic, or state, by the name of The State of New Hampshire." Const., part 2, art. 1. Whether sound or unsound as a theory, the doctrine of the social contract, being organic law, cannot be officially controverted by either branch of a government thus created. And neither that doctrine, nor any express or implied stipulation of the contract, extends the authority of either branch of the government beyond the exercise of delegated, limited, and divided power, in a prescribed manner, for the common benefit. 1 Bl. Com. 47, 48, 49, Sharswood's notes.
In the supposed state of nature men exercise the natural, essential, and inherent right of acquiring and possessing property as best they can. By mutual agreement, establishing an agency called government, they impose upon it various duties, including that of protecting the natural and reserved right of acquisition and possession, and the duty of enforcing every one's obligation to contribute his share of the expense. Equally free and independent, they do not agree to contribute disproportionally. They do not give their agent a power of dividing their public expense unequally, which would be an unlimited and unnecessary power of transferring private property from its owner, without compensation, to another person, for a use and purpose entirely private. Such a transfer would be neither a protection of life, liberty, or property, nor a collection of the public expense of protection, but a mere destruction of the right of property by a servant, whose duty and authority are expressly limited to such protection and collection. And so long as constitutional government continues to be the execution of a written agreement, creating a limited agency for the purchase of common benefit, protection, and security, by proportional contribution, the contract can no more be executed by an unequal division of the expense, than the right of property can be protected by such an unauthorized extinguishment of it.
Government is "instituted for the common benefit, protection, and security of the whole community, and not for the private interest or emolument of any one man, family, or class of men." Bill of Rights, art. 10. The formation of a favored class is not a purpose of the contracting parties, and therefore not a power delegated by them. By a selection of subjects of taxation, or other method of classifying persons, requiring some to pay their neighbors' shares of public expense, the community would be divided into inferiors and superiors; and the agency, established for the common benefit of all, would be carried on, without authority, for the private interest and emolument of the privileged class, *255 to whom, for no public purpose, others would be forced to pay annual tribute. The custom of New Hampshire slavery, which transferred to some the ownership of the earnings and labor of others, having been abolished by the first reservation of the contract, it is impossible, under that and other reservations of equal rights, to introduce an inequality of classes that would differ in degree only, and not in legal principle, from the custom that vested in one class the entire product of the industry of another class. Equality is not one of many grades of servitude, nor a partial freedom from legal inferiority.
If equality were not retained by express reservations, and proportion were not expressly required by the fifth article of the grant, the contract would not authorize an unequal partition of the common burden. The people having voluntarily agreed with each other to form themselves into a body politic, the legal meaning of the written agreement is their intention and understanding, shown by competent evidence. There is no presumption of law or fact that they intended to share the expense disproportionally. An intention to subject themselves to disproportion cannot be implied from the nature of the enterprise, and can be proved only by an express stipulation of the contract, or other competent evidence. There is no such stipulation in the writing, and neither there nor elsewhere is there any competent or incompetent proof of such an intention. Sharing the expense among themselves, equally or unequally, would not be an exercise of the war power of confiscating the property of public enemies. Miller v. U.S., 11 Wall. 268, 305, 306, 315.
The supreme legislative power is the supreme power of making law. An unequal division of public expense would be a transfer of private property from its owner, without his consent and without compensation, to another person, for no purpose of public benefit. And such an act of violence not being public belligerent confiscation, would not be law, nor the enactment or enforcement of law. Cool. Const. Lim. 175; Loan Association v. Topeka, 20 Wall. 655, 662, 663, 664. In no legal sense would it be a rule of civil conduct. 1 Bl. Com. 44. It would no more be law within the meaning of the grant of law-making power, than it would be law of the land within the meaning of the fifteenth article of the bill of rights. "The whole of a public burden cannot be thrown on a single individual under pretence of taxing him, nor can one county be taxed to pay the debt of another, nor one portion of the state to pay the debts of the whole state. These things are not excepted from the powers of the legislature, because they did not pass to the assembly by the general grant of legislative power. A prohibition was not necessary. An act of assembly, commanding or authorizing them to be done, would not be a law, but an attempt to pronounce a judicial sentence, order, or decree." Black, C.J., in Sharpless v. Philadelphia, 21 Penn. St. 148, 168. It would not *256
be an exercise of any power granted to either branch of the government. Ashuelot R. R. Co. v. Elliot,
When exactness is impracticable in the exercise or vindication of an asserted right, it does not follow that the right does not exist, or that it is incapable of judicial vindication. Slavery was abolished by the reservation of equality, notwithstanding the historical and inevitable fact of inequality. The common right of light and air cannot be correctly divided; but the whole title is not therefore vested in the strongest, or in those whose number and combination for the time being make them an effective majority. There are many rights that cannot be mathematically adjusted. Rights of property, reputation, person, and family, are generally defended by due process of law, using a measure of damages far less accurate than arithmetical computation. Equality, being practically the source and sum of all rights, and the substance of the constitution, is not abolished by the impossibility of maintaining and enjoying it with precision. Many requirements of the common law, the statutes, and the constitution, are answered by approximations, reasonably free from error, and sufficient for the practical purposes of substantial justice. The difficulty of dividing public expense into the shares which the members of the community are bound to contribute, does not insert in their contract a power of imposing the share of one man, family, or class of men upon another man, family, or class.
Such a power could have been inserted in 1784. "All men are equally free; but some may be involuntarily bound to the service of bearing others' shares of the common burden. All men have the natural, essential, and inherent right of acquiring and possessing property; but, in dividing public expense, this right may be violated by transferring any one's property to some other person or persons, for no public purpose, and without compensation. Government is instituted for the common benefit, protection, and security of the whole community, and not for the private interest or emolument of any one man, family, or class of men; but, in the division of public expense, the ends of government may be perverted by classification. Every member of the community has a right to be protected by it in the enjoyment of his life, liberty, and property; he is therefore bound to contribute his share in the expense of such protection: but this obligation is not a constitutional one; the share which one member is bound to contribute may be collected from another member; and all the property of one man, family, or class of men may be taken by taxation to protect the untaxed property of another man, family, or class. No subject shall be deprived of his life, liberty, or estate but by the judgment of his peers or the law of the land; but, without fault, trial, notice, or compensation, his estate may be taken from him and given to his neighbors, for a private purpose, by a classifying method of dividing public expense; and making such a transfer *257 by an act entitled an act of taxation, is making law within the meaning of this instrument. Authority is granted to impose and levy proportional and disproportional assessments, rates, and taxes." By such a contract, taxation might have been made an exception to the rule of equal rights.
An act entitled an act of taxation may be valid, although not an exercise of the power of collecting the constitutional shares of expense. The title may be an immaterial misnomer and error of form only, and the act may be an exercise of some of the other powers which provide for the common benefit, protection, and security, and which may be conveniently grouped under the name of the protective power. A fine, imposed by this power, is practically as useful to the government as a tax of equal amount; and a protective law is not invalid merely because it produces public revenue. Vice, pauperism, and crime may be suppressed and prevented by a variety of measures. In behalf of property, health, life, and morals, the social contract may be performed by destroying buildings, burglars' tools, gambling and counterfeiting implements, and intoxicating liquors. The spread of fire, and physical, mental, and moral disease, may be stopped by vigorous action. Destruction may be protection. Peirce v. State, 5 How. 504, 589. For the common security, by the judgment of his peers and the law of the land, an offender may be deprived of his estate, liberty, and life. Wrong may be obstructed and repressed by methods less severe than capital punishment. The protective power may seek, by mild courses, to lessen an evil, or check its increase. Instead of destroying the life, liberty, or property of wrongdoers, it may discourage their noxious business, and restrain it within certain bounds.
In 1715 it was enacted, that "to prevent nurseries of vice and debauchery" there should be a limitation of taverns and ale-houses, and that the general sessions should license no more than eighteen in the province. Laws, ed. 1771, p. 59. The constitution did not abolish the right to restrain the sale and use of intoxicating liquor. Pierce v. State,
Notwithstanding the omission of the excise clause in our copy of the Massachusetts constitution, the power that can destroy liquor can put upon it an excise as a discouragement of its existence. It may be subjected to a depressing and destructive excise by the same statute that authorizes its extirpation by the ordinary mode of abating nuisances. And if the excise thus imposed is called a tax, it may nevertheless be protection. The constitutional question is not so much of the names as of the substance of things. The preambles of the liquor excise laws of 1781 and September 28, 1787, indicated that revenue was the sole object of those laws; and the title of the latter was "An act to raise a revenue to this state by excise." Whether any statute, evidently understood and intended by the legislature to be an act of the tax power, can be sustained as an act of the protective power, is a question that need not now be considered. But it is material to observe that if an excise or license law, enacted solely for a protective purpose, has a practical tendency to accomplish that purpose, its production of revenue is no more unconstitutional than the derivation of revenue from fines in criminal cases.
The congress of the confederation of 1778-1789 had no power to levy taxes or to raise revenue. 1 Story Const., ss. 232, 240, 253-258; 1 U.S. Charters and Consts., p. 7, art. 2; p. 8, arts. 5, 6; p. 9, arts. 8, 9. Our state constitution was substantially a national one from 1784, when it took effect, to 1789, when the federal government went into operation. And it is national now, except in those matters in which national power has been granted to the Union. Before the supreme legislative state power of laying duties on imports was suspended by the federal constitution, we had state tariff laws. The preamble of the New Hampshire tariff act of 1786 was, "Whereas the laying duties on articles of the produce and manufacture of foreign countries will not only produce a considerable revenue to the state, but will tend to encourage the manufacturing many of those articles in the same." That was an express avowal of the double purpose of revenue and encouragement of home manufactures. Nails were among the articles named in the *259 act. The preamble of an act of 1789, entitled "An act to encourage the making of nails within this state," was, "Whereas a general manufacturing of nails within this state would prevent great sums of money being sent abroad for purchasing that necessary article, and may be a means of employing many poor people, whose time will otherwise be misspent and totally lost to themselves and the community." The act offered a bounty for the manufacture of every hundred thousand of wrought twenty-penny, ten-penny, six-penny, and four-penny nails.
Another act of 1786, entitled "An act to encourage the manufacturing of linseed oil within this state," reciting in a preamble that "the manufacturing of oil from flax-seed within this state will furnish employment for poor persons, have a happy influence on the balance of trade, and greatly contribute to the wealth of the good subjects of this state," exempted linseed oil mills from taxation for ten years. By an act of 1787, mills for slitting, rolling, and plating iron, and shops for making nails, were exempted from taxation for ten years. The owners of such mills were to have annual abatements for seven years in their taxes for as many poll-taxes as they employed of proper workmen in such mills. A bounty of £ 100 was offered for the erection and completion of such a mill within one year, being the first of that kind in the state; and the first mill, with its mill privilege, was exempted from taxation so long as it continued to be occupied in the business. In 1789, by a similar act, the manufacture of sail-cloth was encouraged. In 1792, a ten-years act, entitled "An act to encourage the manufacture of malt liquors", subsidized brewers by exemption from taxation, for the alleged reason (stated in the preamble) that "the manufacture of malt liquors in this state will tend to promote agriculture, diminish the use of ardent spirits, and preserve the morals and health of the people." An act of 1786, reciting in a preamble that the importation of certain articles would greatly promote the manufactures of this state, allowed those articles to be imported free from duty. Another act of 1786 exempted gold and silver from import duties, on the ground (stated in the preamble) that the importation of gold and silver into this state, to exchange for produce or manufactures thereof, would much more promote the interest of the good subjects of the same than the importation of foreign luxuries. In 1816, "An act for the encouragement of manufactures" exempted from taxation for two years an amount not exceeding $10,000 of "capital stock employed in each and every manufactory now established in this state, for the manufacturing of cotton yarn and cotton cloth, of woollen yarn and woollen cloth, and of salt."
The payment of a bounty or subsidy out of the public treasury, by the protective power, may be made in the form and under the name of a tax exemption. "A law which subjects all real estate to taxation except houses of public worship and parsonages, thus subjecting all other estates to direct contribution to the public *260
charges, as effectually compels all such other to contribute to the support of the institution that maintains the church and parsonage as by a direct appropriation to that object. In its practical effect such exemption is a direct subsidy from the state to the church." Report of Judge Sawyer, Chairman of Tax Commissioners (1876), p. 39. Tax exemption has been adopted as a method of expending public money. The protective power has been exercised by giving bounties of exemption from taxation, as well as by giving bounties of money obtained by taxation. The generation by whom the constitution was adopted understood the state could pay a sum of money to an individual, for a public purpose, by exempting him from the payment of the same amount of tax. They did not understand there would be any constitutional virtue in going through the form of collecting money from him, and immediately paying it back to him. Whether, in all or any of the instances of exemption, the protective power has been constitutionally exercised, we need not now inquire. That power may discourage many things that are injurious by compulsory contributions to the revenue, and encourage many things that are beneficial by payments from the revenue. The same power has discouraged ale-houses and the consumption of intoxicating liquor, by excise, license, and prohibitory laws that brought money into the public treasury, and encouraged the manufacture of malt liquor by an exemption that was a payment of a bounty out of the same treasury. The payment of bounties by tax exemptions, and the receipt of compulsory contributions under the protective powers though they affect the revenue, are not to be confounded with the operation of the tax power which collects the constitutional shares of the expense of protection. Cool. Tax. 10, 11, 152; C. P. P. Co. v. Chicago,
The dog tax, so-called (G. L., c. 115, ss. 12, 13), is a discouragement of owning, keeping, and raising animals that are generally unprofitable, and often mischievous. Cool. Const. Lim. 595; Orne v. Roberts,
An act of Massachusetts, in force here during the last fifteen years of our union with that colony, gave a reason for taxing itinerant merchants and peddlers in any month of the year. Mass. Anc. Ch., c. 21, s. 5. The New Hampshire act of 1718, entitled "An act against hawkers, peddlers, and petty-chapmen," had the following preamble: "Whereas complaint is made of great hurt to *261 and the decay of trade, occasioned by hawkers, peddlers, and petty-chapmen, passing to and fro through the country, to vend goods, wares, and merchandises, much of which was purloined, obtained by robbery and stealing, so that divers men of trades, handicrafts-men, and others none of the best fame, having left off the exercise of their trades and businesses, turn hawkers, peddlers, and petty-chapmen." "For remedy of which mischief" peddling was wholly prohibited, under a penalty of £ 20. Laws, ed. 1771, p. 62. This act gave a reason for exercising the protective power against peddlers; and the power that can act against the evils there mentioned, by prohibition, can also act by the lesser coercion and restraint of excise and license. Chapter 49 of the Laws of 1878 requires peddlers of lightning-rods to pay the state an annual license fee of $500. The amount of the fee, the provisions of the second section of the act, and the notorious character of much of the recent lightning-rod traffic (not unfrequently exhibited in legal proceedings), show that this legislation is protective. In the trial of suits of various kinds, including many brought by endorsees of notes given for patented articles and patent rights, it is manifest that the community are insufficiently protected against the frauds of many transient persons. Excise and license laws for the prevention or mitigation of such evils are not acts of the tax power.
In some important respects the defendants are not the equals of men in general. They have voluntarily enlisted, as common carriers, in the public service. Others, in other occupations, may sell their services to some, and refuse to sell to others; may refuse to sell to any except for an exorbitant price; and may sell to one for more, and to another for less, than a reasonable price. The defendants have not this liberty. As public servants, they are bound to render equal service to all, for an equal and reasonable compensation. McDuffee v. Railroad,
The reasonable rates of such expressmen not being fixed by legal process, a railroad-express tax law, so called, might be *262 designed to be an act of discouragement, like a liquor excise. It would tend to discourage the employment of railroad expressmen by increasing their rates, and to encourage other carriers who cannot successfully compete with railroad expressmen without the assistance of a protective tariff. But there is no purpose for which we can presume the statute on which this suit is brought was designed to be a discouraging or encouraging act of the protective power.
A railroad-express tax law might be designed to be an act of taxation, laying upon railway-express transportation a burden to be equally distributed, by natural law, among the purchasers of such transportation and their customers, as a tax laid on any articles of property is distributed among the consumers or users of the article. The object might be to make the expressmen mere collectors of the tax. Crandall v. Nevada, 6 Wall. 35, 39, 40; Railroad v. Pennsylvania, 15 Wall. 284, 294, 298; Henderson v. Mayor,
In its original draft the act had the title of a tax law. Report of Tax Commissioners of 1878, p. 186. In the Laws of 1878, c. 51, it had the title of a license law. In the Gen. Laws, c. 63, it has the title of "Taxation or Licensing." "Its constitutionality must depend upon its real character, upon the end designed and to be accomplished, and not upon its title or professions." Pierce v. State,
In no view that has been suggested, and in none that occurs to us, can this statute be held to be an act of the protective power. An an act of taxation increasing the charges of railroad expressmen beyond a reasonable compensation for their services, and employing them as collectors of a tax laid upon the general public by whom express charges are directly or indirectly paid, it lacks necessary evidence of such a legislative design. As a taxation of such expressmen, it makes an unequal division of public expense, and binds them to the private service of paying their neighbors' shares. Expressmen are subject, by general law, to the uniform taxation of the whole community. In addition to that, this special law puts upon railroad expressmen a tax which is put upon nobody else. Whether it is a tax imposed upon person, property, income, business, gross receipts, profits, or earnings, is immaterial. It is a tax which one class of men are required to pay, and from which all others are exempt. It is a perfect example of unequal division of public expense. It does not tend towards equal right by any degree of approximation, but is as distant as possible from it, and diametrically opposite to it. It is inequality, pure and simple. There are other objections which need not be considered, because this one is decisive. If a special, discriminating tax of two per cent. could be taken from one class of men alone, a similar tax of one hundred per cent. could be taken from any man, any family, or any class of men; one man, one family, or one class could be singled out, and compelled to pay all the expense of the common benefits of government, and all others could thus be discharged from their constitutional obligation to contribute their shares. The action cannot be maintained.
Case discharged.
FOSTER and SMITH, JJ., did not sit: the others concurred in the result. *264
