*1 ‘ ‘Where a charitable trust is will, created it is dependent upon the of the existence, terms will for its instrument is the sole measure those who are to execute trust, called whether equity the trustees or a themselves court of in the ex- superintending- equity ercise of a control, and a court of ’’ authority any greater no powers. has to exercise Lodge The case F., McCarroll I. Grand O. O. upon by appellees 243 S. reiied in W. support chancery of the decree court, is not in point application no has to the facts in the instant creating case. The instrument the trust in case prohibitions against selling contained no restrictions or incumbering- pres eg devised. doc approximation trine —the doctrine of nearness —can applied invoked or of a execution trust which prohibits express doing thing words the trus attempting to do. tees In instant case, the trus attempting part tees are to incumber a part, incumber and sell and the other which the donor prohibited expressly doing- executing- them from trust. of the error- indicated,
On account the decree is re- per- and the cause is versed, remanded with directions to from, manently enjoin the selling- trustees or incumber- property. ing of said all JJ., dissent. McHanby,
Smith Phillips. Wiseman
4-3942 Opinion delivered 3, 1935. June *3 appellant. Louis Alford, Tarlowski and Millard for Dickey, Edward B. & Dillon, Buzbee, Harri Rowell Wright, Eyrard son, Buzbee & Reid, Oscar Fendler and appellees. & Henderson, for Hemingway, Loughborourgh,
Rose, & Cantrell G. R. Smith, Barrett, C. A. Joe B. Bradham and & Ehr Owens amici curiae. man, Assembly J. General of 1935 McHaney, Emergency act
enacted Tax “Arkansas Retail Sales purposes Law,” as it is named in § 1. Its as defined provide in § 2 are “to relief for the free common schools for sup- State, the wards the State who are of. ported from worthy the Charities Fund, and for other causes.” Section 3 consists of definitions terms used the act. Section 4 levies the tax. It reads as follows: May
“Beginning hereby upon, there is 1,1935, levied and shall be collected from all sales, retail as herein de- (2%) per a tax gross pro- fined, of two centum of the ceeds derived from said sales. imposed by
“The tax apply shall section to: “(a) All tangible personal sales at retail of property.
“(b) All retail at or sales restaurants, cafes, dining photostat cafeterias, hotels, cars, auctioneers, blue-print funeral sales, all directors, and other establish- selling ments of whatever nature character for a con- commodity, any property, thing, sub- sideration and/or stance.
“(c) All of admission or admittance sales picture stage motion contests, athletic both theaters, performances, and other circuses, carnivals, dance halls places of amusement. light,
“(d) of electric retail sales All telephone messages gas, use water, natural telegrams. adjoining or incor- cities
“(e) are there Where separated line, a State are porated which towns paid on sales in and dealers licenses taxes city incorporated adjoining towns in such and services at the same line shall be side of the State the Arkansas any, adjoining provided if law such rate as provided in this act.” rate not to exceed the requires collect the retailer Section and account same Commis- consumer, from the deposit required who col- his Revenues, sioner of cent, Treasury, per to the General lections the State cent, per Fund and 65 to the Common Revenue School many provisions not administrative Fund. There necessary pertinent proper to a discussion of deemed exemptions are set out in § 15, this case. Certain *4 concluding following paragraph of said section: necessary specifically more life,
“All foods de- sugar, baking fined as follows: Flour, meat, lard, soda, powders, eggs, salt, meal, fats, butter and all medicines necessary preservation public for the of each of health, ’’ exempt provisions above to be from the of this act. paid governmental of taxes refunds
Certain agencies, hospitals § authorized are sanatoria any for retailer to assume or it unlawful and 17 makes to advertise that he will do absorb the tax or so. Section separate provides that a tax on sales of articles of commodity personal property, or sold merchandise, price for for use outside this a of State, this State $200 of “shall bear the rate tax of the more, State sales ’’ taken and used. the same is where Appellee -brought enjoin and restrain this action to appellant taking from the steps as of Revenues Commissioner collecting the tax. Its enforce the act and from constitutionality by appellee on five was attacked grounds, (1) § of as follows: That it is violative article in that the Constitution of this (a) provision, it ais and that tax, it violates the equal of that section that a tax shall be exempt uniform, because certain articles are from the (b) para- tax; and that it not because in § uniform graph (b), the tax is on levied articles sold at certain designated places, places and that such listed does not places include all where retail sales made of like tangible personal property. (2) it vio- That is further imposed lative of said section and article because tax privilege privilege is a doing tax business as a right merchant, which is a matter of common sub- not ject (3) imposes upon to be taxed. That it the citizens upon privilege using State tax con- suming necessary for articles existence, which is a matter right subject (4) of common to be taxed. That it is occupation - tax Avhich not be levied purposes. (5) And that it constitutes double taxation.
Appellant denying allegations filed answer all the unconstitutionality of the act. Later, íavo interven- taxpayers attacking tions Averefiled citizens and grounds. act on the same and additional One J. B. alleges Hall, a citizen of Rock, Little Avho that said act is unconstitutional and void for further reason that imposes upon him and other citizens a .the right privilege purchasing Arkansas, the State of consumption, for their OAvnuse and articles and com- right, every Avhich, modities common he and other right purchase citizen of the State has the or- dinary imposition course free from business, right privilege. the exercise of such *5 allegations unconstitutionality Other of the act are made, some of which Avillbe hereinafter to. referred An dry goods filed Isaacs, intervention also a Avas Joe Blytheville, clothing and merchant, of and William Hund- grocer a hausen, retail and meat merchant of Mem- West phis. They act on numerous make an attack said grounds, some will referred to. of which be hereinafter A overruled. demurrer was filed to this intervention and stipulation.was Hall, A and filed as to the intervention complaint, the the case Submitted to the court on the stipulation and demurrer. answer, interventions, prayer of the From all of which the court found that the granted, complaint and of theTlall intervention should be intervention and, the demurrer to the Isaacs-Hundhausen plead being appellant declining to fur- overruled, enjoined appellant pro- perpetually from the court ther, ceeding act further in the enforcement of said appeal. The case is here on n theAt of this court, "invitation several members curiae, the bar have briefs amici some on filed excellent question presented, other, one side of the oh the some splendid par- briefs addition of counsel for duly appreciative including "Weare ties, interveners. painstaking generosity this assistance of'time and of energy spent connection. determining In ah As- whether act of General sembly mind that is we must bear in that constitutional, powers “grant of the is instrument Legislature, not enumerated enabling, restraining act,” but not an Legislature has the undoubted make that the expressly, of the unless it is the written laws prohibited necessary implication, doing from so presumed valid, act.is to be that the Constitution; validity that all doubt of its must resolved and favor Martineau, of the act. Bush . S. W. 9 intervention and brief it
In the Isaacs-Hundhausen alleged is void and contended act because body germane act, of the is not to the title % purpose quoted, falsely of the act in that above states provide purposes “for is to relief named one of the supported from the Charities who wards ’’ apportions funds all the col- and that 9 thereof Fund, Funds, Revenue Common School lected General objection Fund. This none to the Charities not invalid statute is It settled taken. well well
69 matters covered the title not refer to all the because does body McDonald, 184 v. (2d) in of the Westbrook the act. See (2d) for one 331, 43 44 S. W. S. W. subject. the Nor can we hold of the latest cases on the directly to one made act void because no distribution cent, per purposes. deposit of of the enumerated certainly general fund the revenue of funds germane for within the clause “and other comes worthy Legislature might take it out causes,” the put it the charities fund.. of the General Fund argued in It is next the same brief that onerous placed §§ on and burdensome duties are retail dealers against 9 to their court an 14, inclusive, will. But this Brodie, Oil Co. v. swered this contention Standard page 125 153 Ark. when it said W. process that: “It is next clause contended due of the of the Constitution this State and of United States requirement upon is violated the laid dealers in the gasoline pay to collect and the It must be remem- tax. gasoline, bered that the is not laid on the sale of the upon nor required the of is not business the dealer. The dealer pay keep present
to the but to tax, it, collect county pay an account treas- thereof, over purpose namely, urer. The of the statute is twofold, impose purchaser gasoline a tax of use regulate of the and to car, of the dealer business by requiring pay him to collect the tax it over to county certainly treasurer. It is within the Legislature regulate selling business gasoline, regulation, and it is not an unreasonable for it any payment perform- does not involve the ance of fee, nor the any purpose unreasonable task.” Here the impose pur- act the transaction of a consumption at retail chase for use or articles exempt, regulate and to the business of the retailer requiring pay him to collect the tax and it over to the of Revenue. This is not an unreasonable Commissioner any regulation, payment of “for it not involve the does performance nor the task.” fee, unreasonable Complaint that it is also made violates protection equal he- clause of the Federal Constitution
cause more for provision sales $200 use outside the shall the rate of sales tax of bear *7 the State where 4 to cities taken; relating also of (e) § and towns divided line above In the State quoted. claim place, first these do not that are they interveners provision. affected either the In next the recent place, Bollinger Watson, v. case 187 Ark. (2d) 63 S. W. 1044, holds to contrary. the It is next contended that is bad of that 5 because § that provision person a credit “may business doing make to application the permission Commissioner for to on prepare his returns the basis of cash actually re- ’ ‘ ’ ‘ . ceived. person And any such making application shall * * * be moneys taxable on all collected of the regardless date sale.” The made argument is that this a tax is upon sales, not gross receipts, a tax upon gross income; also is a that it discrimination against those who for what pay buy and those who on they buy credit do not pay at all. We cannot It is a agree. the transaction whether for cash credit. If on credit the collection and therefor accounting may postponed until the bill It is paid. is certainly interest to seller collect his credit sales, else a credit merchant would not stay business. long Per- mitting the to collect seller account for the tax when he collects the account is discriminatory. not v. Reif Barrett, 355 104, 188 Ill. N. E.
It unlawfully is next the act delegates legisla said it power to when in 6 provides: tive the Commissioner “The shall, therefore, Commissioner instruc prepare to them dealers out suitable brackets setting tions It for tax.” is said that prices applying pro power the Commissioner to fix the tax on gives vision do not with small sales. We this contention. The agree instructions given “prepare is to dealers power for out to suitable brackets setting prices apply them for to fix the that fixed in the tax, tax,” ing 2 As to of the Legislature act at cent. per an to make such rules and agency regulations constitute accomplish intent necessary legislative ex Riggs, Snow v. Ark. act, see 290 pressed (2d) Davis, S. W. W. 591; S. Sparling Refunding 513; Board, 71 W. 189 Ark. (2d) 182. appears
Having disposed to be thus to us of what against validity arguments we act, minor question come whether now to a consideration of the such a tax be levied at all under our Constitution. upon? What kind it? it a tax is What say Some of others tax, counsel it is ‘ n occupation is an it tax, others that occupation gross either a income tax or while tax, says another it has all the of a tax. earmarks appellant supporting amici Counsel and those curiae property, that view contend that it is neither a tax on *8 occupation gross nor a tax on it income; that is tax, privilege argument tax, excise tax or and the made is acquire right with some personal that force it is a tax the to property purchase consumption. for use or generally agreed prohibited It is that, unless the tax is by express language necessary implication in the levy. prohibited, it is a valid If it Constitution, either expressly impliedly, prohibition the must found in be § 5 of article of the Constitution, which follows: subject property
“All to taxation shall be taxed ac- cording to its that to value; value be in ascertained such Assembly making manner as the General shall direct, equal throughout' same and uniform No one State. species property, may from which tax be collected, higher species property shall be taxed than.another equal power, provided, Assembly value; General have shall peddlers, to
from time
to tax
time,
hawkers,
privileges,
ferries, exhibitions and
in such manner as
may
proper; provided,
be deemed
that the fol-
further,
lowing property
exempt
shall be
from taxation: Public
exclusively
public purposes;
used
for
churches
exclusively
such;
used as
buildings
cemeteries used
such; school
as
apparatus;
grounds
and
libraries and
ex-
used
clusively
purposes;
buildings
grounds
for school
and
and
exclusively
public charity.”
and
used
materials
generally
Decisions
courts
other States
hold
provisions
equality
that similar
of their Constitutions for
and uniformity
to taxes on
apply only
property,
and
to excises and
In 26 R.
privileges.
L.,C.
it is said:
p. 225,
“It
held that a
generally
constitutional
re
provision
taxation to be
to
quiring
equal
only
uniform applies
taxes on
no
what
polls
property,
has
reference
ever
excises.”
To the same effect see
J., p.
61 C.
Such has been the rule in
since
in
this State
the decision
Handlin,
100 Ark.
which
S. W.
sustained
inheritance
as
tax on a privilege.
There the court said:
“If
this were an
to tax
attempt
of the
there
be some merit
estate,
might
it
now
contention;
may
but
as settled
regarded
law that
are not
inheritance
taxes
laid upon property,
but
succession to
privilege
right
it; or,
in other
the nature of
and not
words,
tax,
excise
to the same tests with
subject
respect
equality
as taxes levied
uniformity
upon property.”
cases
Citing
recognize
this is
hold
continuing:
true,
“We
the tax
this act
provided by
upon the privilege
inheritances
estates
succeeding
well within
included
Legislature
impose, being
* * *
within
‘To tax
expressed power:
privileges
such manner
be deemed
A
proper’.”
study
on the
our cases
will disclose that
subject
the earlier
Washington
such as
cases
held
could
such
“that
Legislature
only
privileges
*9
and
to be such at
recognized
ascertained
the common
’’
in Baker v.
view was
expanded
law.
This
44 Ark.
to our
134,
present
arising subsequent
Constitution,
within
include those
were
subjects
police power
State
Since the decision in
v.
regulate.
State
supra, this court
Handlin,
has sustained
gasoline
Stand
as a tax on the
roads.
privilege
using
public
Brodie,
ard Oil Co. v.
153 Ark.
239
114,
S. W. 753. Also
Miller Lumber
case, Floyd
Co.,
Tax
v.
160
the Severance
Ark.
and
Cross Income Tax
17,
case,
S. W. 450,
Ahrens,
Sims v.
557,
167 Ark.
S. W. 1000, a net income was sustained on the theory prohibited by that it was an excise tax not Constitution. In Hixon v. School District Marion, 187 (2d) taxing W. act county sought warrants was to be sustained as an excise tax. The court refused to so decide, held that it was a tax on and therefore void. It there said: “A tax on warrants has none of the characteristics of an excise tax. There no excises, exact definition of ordinarily they but are duties laid on the manufacture, consumption sale of commodities, or certain callings occupations, generally and are referable to police power Sparling of the State.” See also Refunding (2d) Board, 189 Ark. 71 S. W.
Prom these we are bound conclude that decisions the tax privilege levied said act 233 is an excise tax or prohibited. tax that is not the Whether it is such a tax on purchase right acquire personal or the or the sale, consumption, use or whether it is tax' unnecessary on the transaction, to determine. What- ever it is and whatever name it be called, its character must be determined its incidents, validity must be measured the Constitution under the It is rules stated. certain that it is not a tax levied occupation, occupation one’s therefore *10 tax. is taxed. He a The merchant is collector. The required purchaser, tax is the merchant must buyer’s occupation for it. account collect is not buy pursuit occupation at retail It is or to taxed. not a consumption. for use
It article Constitution, is also that insisted under right providing 2, § 2, that all men have the inalienable acquiring, possessing protecting property, of is etc., destroyed away by this act. not the taken Such is Supreme to case. The Court of the held United States contrary Bromley McCaughn, 124, 136, 280 U. S. L. ed. 230. There the court had under considera constitutionality tion the of the Federal GriftTax Act. It upon there was contended that one the tax was essen right property give right tial away to inherent —the property that it was therefore tax on the —and and void direct It itself as tax. was there said: “It property rights that, since is the sum of said all the powers ownership, unapportioned incident if tax on upheld, exercise of of them the distinction be may wiped tween direct and other classes of taxes out, be property may since the itself levying likewise be taxed resort expedient upon to the taxes uses; numerous property keep one-of the it, that uses is to and that a upon possession keeping property is no property different from a tax on.the Even if itself. we prop that a assume erty tax levied all the which uses to put, single power be the exercise of a indispensable enjoyment of all others over it, upon property (see be in a tax would effect Dawson v. Kentucky Distilleries & Co., Warehouse 255 U. Sup. 272), L. ed. Ct. and hence a direct tax re quiring apportionment, that not the case before us. power give
“The cannot said to im- be more portant property than the use, incident Billings States, exercise which taxed in v. United though degree may even and a differences be carried to they produce point where distinctions in kind, present levy taxing generally falls so far short 'be uses it cannot likened taxes recognized itself which have been direct. It category imposts falls, rather, into or excises they apply only to which, since a limited exercise of property rights, have been to be indirect deemed and so *11 Boney, apportioned.” although valid State v. not also See sustaining 315, inheritance W. tax on dower. emergency
The act under consideration is meas- July expires specifically ure, declared to be which so, renewed or extended. The recitation in the unless emergency grave clause discloses with refer- situation public ence to the free schools. these While considera- validity may they tions cannot determine the of the act, be viewed to determine the out of necessities which arose. arguments against the
Other act are such made, exempting certain articles food and not others, other matters, incidental all which we have considered and find to be without substantial merit. provides
It will be noticed that 4 of the act that May beginning tax levied be shall collected The 1, 1935. injunction by chancery granted prevented this court being provides from 21 of done. Section the act that any provision of violation of shall act be a misde- by punishable exceeding a fine not or meanor, $1,000 imprisonment exceeding year jail, county not one in the day or both at the discretion the court, and each separate violation is made a offense. The act there- penal. highly fore Section Crawford & Moses’ Digest, provides: any “Whenever, the decision given any penal circuit construction court, every good done in statute, other act faith in conform- ity making construction after such of such deci- Avitli Supreme and before the reversal thereof sion, Court, party be so far valid doing
shall such any penalty be liable to act shall not forfeiture adjudged have act shall been such lawful such the circuit court.” decision apply the same would Of course proAdsion any chancery court. act
decision has therefore during period, suspended been and will become effec- judgment if the tiA^eAvhenand this court as here final. announced becomes on the whole
Our conclusion case act prohibited expressly the Constitution, either by necessary implication, validity and that must be sustained. chancery
The decree of the court is therefore re- and the cause remanded with directions enter versed, *12 opinion. in a with this decree accordance (concurring). a Johnson, C. J. Since constitutional majority Handlin, State v. court decline overrule Floyd Co., Ark. v. Miller Lumber 175, 1112, 100 139 S. W. Ahrens, v. 557, 160 Ark. 254 Sims 167 Ark. 17, 450, S. W. Stanley v. Gates, 720, 271 W. and 179Ark. 886, 19 S. S. W. by perceive (2d) I that we are 1000, bound doctrines and for concur therein announced this reason I in the view that Tax of 1935 is court’s the Sales Act constitu tional and valid. guished Sales Tax cannot be This Act distin principle
in from the Income Tax Act held con Stanley supra, in all Gates, v. and stitutional efforts prove immediately illogical. respect this Were I free logic, I reason should 16, follow hold that under art. 5§ of the of Constitution 1874 tax act in this sales by implies negation. hibited affirmation which a Such was express early holding of this court in the of case State Ashley, v. Ark. and adhered to and followed century. quarters three of a This case was decided under comparison but the Constitution of art. § 5, Constitution of 1874 with 1936 demon copied strates former was from the latter ex cept necessary point minor details not to here out. supra, Ashley, was followed and v. its
State doctrine approved this court in such re-examined cases as Colby v. Lawson, 5 Ark. State 303; v. Washmood, Ark. State, 314; v. 44 Ark. 26 W. Baker 11; Stevens and Washington 291; v. State, State, v. Woods 13 Ark. many supra. until other Ilandlin v. cases, 752 This case
arose under the inheritance tax statute, and the majority tax statute held the inheritance constitutional my thereby, opinion, for the first time ma valid, Ashley, terially impairing supra, v. and all subse quent Floyd its lead. v. which followed Miller cases Lum supra, levying against over an act arose Co., ber resources natural the severance court divided thereby impairing sustained, enactment was further this supra, Ahrens, cited. the line of cases heretofore Sims by a sustained statute and income tax arose over an presented anoma- which divided result court, question holding the act in the court lous situation affirmatively deciding in- that a invalid advance but approved proper the-court if income tax act would be Subsequently specifications. these under certain drawn legislative specifications complied with were constitutionality government, branch of the State planned Stanley presented in income act was opinion supra, approved Gates, the form and the there previous its the act and relied dictum as to constitutionality. history, reasoning, logic Such is the cited, and effect of the cases heretofore referred to and they and each of them should be overruled. *13 supra, -consistently Until State Handlin, we held v. prop that § art. of our a Constitution authorized erty prescribes applied tax and in rules to be assess ing collecting property, proviso taxes on with the Legislature levy authority a on shall have to tax peddlers, privileges. hawkers, exhibitions and ferries, principles interpretation, Under settled of constitutional provisions should be treated as of our Constitution these powers of taxation. Since the Con a limitation impliedly may prescribes levied, be what taxes stitution provided prohibits of taxation not therein other kind interpreta specify maxim of exclude” is a for. “To to may specifies im what taxes be The Constitution tion. posed. no levied which taxes are Therefore, specified. last referred should be
Moreover, the line of cases Fundamentally reason. courts another overruled still in and not nomenclatures. interested realities should be ignored referred An in each cases to. Realities hybrid property not a a on tax, tax is tax inheritance supra. Handlin, court v. Like as decided property, on a tax not a cross tax is severance awise Floyd court in v. Miller as decided tax, breed Demonstrably supra. certain an Co., income Lumber property excise decided and not one on tax majority Stanley of this court Sims v. Ahrens and v. supra. Gates, The two true last-mentioned cases are hybrids, illogic offspring and misnomer. beyond question,
The tax is sales tax cavil logic. or doubt, when measured law constitutional Supreme Court of the United so States has decided many, many times. The rule true a tax on sale of says highest is a article the article itself, so Dry court in the land. Stewart Goods Co. v. Lewis—U.S . Maryland, Brown —55 Ct. v. 525; S. Wheat. Cook 419; Pennsylvania, Pennsyl 97 U. 566; S. Crew Levic Co. v. 245 U. vania, Knox, S. Panhandle Oil 292; Co. U. S. Motorcycle S., and Indian Co. v. U. 283 U. coneededly, aIf tax, sales does not conform art. 16, 5, therefore is null void.
Necessity raising revenue should never be con- urgent ignore sidered so as warrant courts either seventy-five years For rewrite Constitution. we Legisla- 16, § treated art. as a limitation power, taxing perceive good ture’s I no reason for overturning ages only opening, the wisdom of the and not flood-gates destroying but of taxation, and I fear the ultimate results.
I not a member of this court when the novations perceive heretofore discussed were decided, therefore I my position myself, should, fairness to I make clear.
Justice Baker concurs this opinion. Company Bank of Insurance Lincoln. Unionaid Life 4-3887 Opinion delivered June