70 A. 387 | N.H. | 1908
Lead Opinion
The question in controversy is the meaning of the statute which provides that "every railroad corporation in this state, not exempted from taxation, shall pay to the state an annual tax upon the actual value of its road, rolling stock, and equipments on the first day of April of each year, at a rate as nearly equal as may be to the average rate of taxation at that time upon other property throughout the state." P. S., c. 64, s. 1. Similar language is used in the sections governing the taxation of telegraph *553 and telephone companies (Ib., s. 3), of express companies (Laws 1907, c. 81, s. 6), and of sleeping, dining, and parlor cars. Laws 1907, c. 91, s. 1.
The petition sets up the legal proposition that the rate is to be found by taking the average of the local tax rates, without including the assessment laid upon savings bank deposits and fire insurance capital. The defendants deny the plaintiff's proposition, and the case has been argued upon this point alone. All other questions have been waived for the time being, and the parties have united in an effort to present this controversy unhampered by any collateral issue.
The plaintiff says that his construction was adopted by the court when it acted as the assessing board; that the question was decided the same way in 1883, and that no change has been made in subsequent re-enactments of the statute; and that a construction including the savings bank tax in determining the average rate of taxation upon other property throughout the state would necessitate a conclusion that the statute is unconstitutional, unless it were held that the legislature intended to grant to railroads a special exemption supportable under the protective power.
The constitutionality of the statute is material in the present proceeding only as evidence of the legislative intent. If it were discovered that the statute sought to be enforced herein was in contravention of the constitution, the necessary result of such conclusion would be the dismissal of the petition. But whether the legislature can constitutionally burden railroad corporations by imposing higher taxes upon them than upon other owners of property throughout the state, or whether they may without violation of the organic law relieve them by a special exemption from the whole or a part of the taxes generally assessed upon property, need not be considered. Judicial decisions in view of which existing legislation upon the subject was originally adopted and subsequently re-enacted establish a legislative intent to treat railroads, for the purpose of taxation, as individuals taxable for the true value of their property at the rate at which other property is taxed in the same taxing district, and exclude any purpose to tax them "for a greater sum than their proportionate and equal share with the other property in the state, ascertained as nearly as it reasonably could be." Boston Maine R. R. v. State,
The state board of equalization, upon whom the duty of assessing taxes upon railroads is placed, are required to "determine the value of the property to be taxed . . . and the rate of taxation." *554 P. S., c. 63, s. 3; Ib., c. 64, 8. 4. In the performance of of this duty, it is alleged that the board added together the taxes assessed and collected by municipal officers, those assessed and collected upon unincorporated places by state and county officers, and those collected by the state treasurer upon savings bank deposits, the capital stock of building and loan associations, and insurance companies, and obtained the average rate of taxation by dividing the total amount of such taxes by the total of the selectmen's inventories, the valuation of unincorporated places, the savings bank deposits, and the building and loan and insurance capital. They then assessed the railroads of the state at the rate which in this way they found all other property in the state was assessed.
If one person owned all the property in the state except the railroads, although he paid taxes at different rates upon different portions of it, the average rate of the taxation of the whole would be obtained by the division of the total tax by the total amount of property upon which the several sums were levied. As between two persons, one owning all the railroads and the other owning all the other taxable property in the state, the taxation of the total property of each at the same rate would produce the equal division of public expense required by the constitution. As the taxation of all other property in the state at the same rate as railroads are taxed would produce in the aggregate the sum levied by varying rates on different classes or parcels of property, the owner of the whole could not complain that he paid too much, or the railroad owner too little, because each would pay the same. As the property in the state is divided among many, who hold the different classes of property in varying ratios, it follows that, as between certain individuals and railroads generally, some individuals will pay more and some less than is paid on the same value of railroad property. But so long as railroads pay upon their property the same amount as is paid on the average throughout the state upon that amount of property, their share of the public burden is borne by them. This is the rule applied in tax appeals from local assessors. Amoskeag Mfg. Co. v. Manchester,
The plaintiff contends that the tax upon savings bank deposits, building and loan associations, and insurance capital should not be considered. It is not suggested that the tax on building and loan associations stands any differently from the tax on savings bank deposits. So far, however, as the consideration of the tax upon insurance capital is concerned in this case, the question is purely academic. The tax is so inconsiderable as not to affect the result. Considering it, the exact arithmetical average is a small fraction of a cent less than the rate ($1.72) found by the board. Excluding it, the same rate is a similar fraction more than $1.72. In either event it cannot be held that the rate found by the board is not the average rate "ascertained as nearly as it reasonably could be." Boston
Maine R. R. v. State,
The plaintiff's contention is, that the tax levied with reference to some $66,000,000 of what the board considered property, owned by 183,243 depositors, — nearly one half the population of the state, — should be excluded from the computation, and the tax be determined by the rate upon the remaining $238,000,000, i.e., that more than one fifth of the whole property taxed should be omitted from the calculation. Upon the concession of the plaintiff as to the power of the legislature, the question appears to be, as stated at the outset, purely one of statutory construction. Giving to the language of the section its ordinary meaning, the only question raised by the plaintiff's contention, that the sum collected by the state from savings banks should not be included in computing "the average rate of taxation . . . upon other property throughout the state," is whether the sum so collected is a tax "upon other property throughout the state." As there is no contention that this sum so collected is not a tax of some sort, or that it is not exacted "throughout the state," the question is whether the savings bank tax is a tax upon property. As the question is the meaning of the statute, — what the legislature intended by the words used, — the exact point in issue is much narrower, and is: Was the savings bank tax understood by the legislature, in 1891, to be a tax upon property?
Savings banks, under provisions of the Public Statutes enacted contemporaneously with the section under consideration, are required to pay taxes in two ways. They are taxed for all real *556
estate owned by them in the towns where it is situate, precisely as all other individuals and corporations, except railroad, telegraph, and telephone companies, who are not so taxed for real estate used in their ordinary business. P. S., c. 64, s. 12. This is conceded to be a property tax. The tax which is collected by the state treasurer is not based upon property owned by the corporation; it is determined by the amount the bank owes its depositors. Section 5, chapter 65, Public Statutes, requires the payment of "one per cent upon the amount of the general and special deposits on which it [the bank] pays interest." The tax is laid upon the depositors' interest, and not upon the property of the bank. The property of the bank, except real estate, the value of which is deducted from the amount of the deposits taxed, is not taxed. P. S., c. 65, s. 12; Laconia Savings Bank v. Laconia,
From the manner in which the tax is determined, it can be argued with great force that this tax is not a tax upon property of savings banks. It is so declared in effect in the statute and has always been so understood. But because it is not a tax upon property of the bank, it does not follow it is not a property tax. It is a tax upon the amounts entrusted to the bank by the several depositors. The question therefore is: Was a deposit in a savings bank commonly understood to be property in 1891? For the legislature, in the absence of evidence that the terms employed in a statute have attained a peculiar significance in the law, must be understood to have employed the words in a statute with the meaning ordinarily attached to them. The legislature has directed that the words of a statute should be so construed. P. S., c. 2, s. 2. It cannot be claimed that deposits in savings banks are not commonly understood to be property. But it is not necessary to rely upon common understanding. That they are property is the foundation upon which the following decisions rest: Mann v. Carter, ante, 345, 351; Robinson v. Dover,
But neither of these considerations is now material. The legislature cannot be presumed to have known, in 1891, that the constitution would be amended in 1903, or that the judicial declarations as to the nature and character of the tax, then unquestioned, would subsequently be doubted. The statute must be read in the light of the circumstances then existing: the constitution as it was then written, and the law as it was then declared. Under the constitution as it existed and was interpreted from 1784 to 1903, the only subjects of taxation were polls and estates. Curry v. Spencer,
Bartlett v. Carter was decided in 1879. The provision therein construed was re-enacted in 1891 (P. S., c. 65, s. 5) without change. Applying the familiar rule, that the re-enactment of a statute without change is, in the absence of weighty evidence to the contrary, an adoption of previous judicial construction, we have a legislative declaration that the tax in question is intended as a tax upon the property of the depositors, and not as a privilege tax against the bank. That no different understanding was had of this tax by the legislature in 1891 has also been decided by this court. Petition of Savings Bank,
It may even be conceded that scientific study of the subject of taxation has developed that constitutional provisions for the division of the expense of government, by taking annually for that purpose a proportionate part of his property from each individual according to its value, does not equally distribute the burden, either in proportion to the ability of each to pay or in fair return for benefits received. Thompson v. Kidder, ante, 89, 92. Even if it could be held that the particular directions of the constitution as to the method of taxation might be controlled by general principles of equality of right contained therein (State v. Express Co.,
It is said that the provision of the Public Statutes discussed is a re-enactment, without intent to change the meaning, of the act of 1881 (c. 53), and that the language of this act excluded the savings bank tax. In support of this conclusion, the practice of the court in assessing the tax under a prior statute somewhat similar in terms is relied upon. Consideration of this contention necessitates a reference to the history of railroad taxation and an examination of the earlier statutes relating to the subject — a proceeding always competent and often of great value in the attempt to ascertain the meaning of a particular enactment.
Prior to the Revised Statutes (1842.), there were no special provisions for railroad taxation. Railroad stock, like bank stock, was taxable to the owner in the town in which he resided. Laws *559
1833, c. 108, ss. 1, 2; Pittsfield v. Exeter,
While there are no reported cases disclosing the methods of the prior assessment by the justices, it seems to be established with reasonable certainty that they assessed the tax as a municipal tax of the railroad towns, — that they took no account of the change in 1865 in the method of assessing the tax upon savings bank *560
deposits; and it was claimed by counsel for the state, in Boston etc. R. R. v. State,
The Boston, Concord Montreal Railroad appealed from the assessment made against them in 1879, alleging as grievances overvaluation, lack of proportion because of the failure to take into consideration the undervaluation of property by the local assessors, and the lack of uniformity in the assessment of the different railroads. The case was heard by referees, who found the value of the railroad, assessed the tax according to the rate in the railroad towns, but reduced the rate in the proportion in which they found other property was undervalued by the selectmen. The questions presented to the court upon this report were the validity of the assessment at the average rate of taxation in the towns in which the railroad was located and the action of the referees in considering the undervaluation of other property. In support of their contentions, counsel for the state relied upon the uniform practice of the justices in assessing the tax as a municipal tax of the railroad towns and in refusing to consider undervaluation of other property. It is held in the case, solely upon the manner in which the tax was distributed (as to which no change had been made in the law since 1842), that the railroad tax was not a town tax, was not assessable in proportion to the taxation of other property in the towns in which the railroad was located, and that it was "either a state tax, or a tax of a triple character, partly state, partly municipal in respect to the railroad towns, and partly municipal in respect to the stockholders' towns"; and the reduction on account of the undervaluation of other property was approved. The referees were instructed to find the facts necessary to be known if the tax were a state tax, or if either party claimed it was partly municipal. The subsequent history of the case shows that neither party claimed anything on account of the municipal character of the tax, and the case was *561
disposed of upon the theory that the tax was a state tax. The assessment of the referees in proportion to the taxation in railroad towns was set aside, upon the ground that, so far as the tax was a state tax, to be held valid it "must be proportional with the tax of other property throughout the state." Boston etc. R. R. v. State,
Although this decision overturned the practice of the court for over a generation, it was not deemed necessary in the opinion to refer to that practice, or to consider the argument of the state based thereon. The former practice of the court, apparently regarded as of no weight at all upon the two questions presented by that case, is not entitled to serious consideration upon the question now presented. The case well illustrates the little weight as a precedent attached to decisions upon questions which may have been involved, but which were not presented to or considered by the court. This case contains no reference to the savings bank tax, although the language of the court, that the tax if a state tax "must be proportional with the tax of other property throughout the state," — an expression which it is not probable was used in entire forgetfulness of the decision a year before in Bartlett v. Carter, — includes that tax unless some ground for exception can be found; but the particular question does not appear to have been presented, and it cannot fairly be said to have been decided, though embraced within the language used. Why the question now presented was not raised in that case, or the change heeded by the court in 1865, may not be very material. It should be borne in mind, however, that the practical question differs greatly today, when the taxable savings bank deposits have increased to $66,000,000 and the difference in rate has also been augmented by the increase in the municipal rate, while the bank rate is less than in 1879.
The act of 1864 taxing savings bank deposits was not passed, as has been assumed in argument, to encourage such deposits by a special method of taxation; but its purpose was to secure the taxation of such accumulations, which under existing law were largely escaping taxation. The existing method of taxing railroad corporations furnished the pattern followed. Robinson Hist. Taxation in N.H. 116, 117; Laws 1864, c. 2873; Laws 1861, c. 2493; R. S., c. 39, s. 3; Nashua Savings Bank v. Nashua,
The court, in 1880, having declared the provisions for railroad taxation to be in conflict with the constitution, the legislature at the next session repealed the provisions requiring every railroad corporation to pay "an annual tax as near as may be in proportion to the taxation of other property in the several towns and cities in which such railroad is located," and amended the section so "as to require every such railroad corporation to pay an annual tax as near as may be in proportion to the taxation of other property in all the cities and towns of the state." Laws 1881, c. 53. The occasion of the statute was the decision above referred to. Its purpose was to bring the statute within the constitutional requirements announced by the court, that such tax as a state tax "must be proportional with the tax of other property throughout the state." Boston etc, R. R. v. State,
But there is other evidence. By chapter 54, Laws 1878, telegraph companies were required to pay a tax of one per cent annually upon the value of their lines, to be appraised by the board of equalization. G. L., c. 62, s. 14. By section 2 of chapter 53, Laws 1881, above referred to, the provision for the taxation of *563
telegraph companies was amended so as to require them to "pay an annual tax as near as may be in proportion to the taxation of other property throughout the state, upon the value" of their property made taxable by the statute; and the board were required "to assess said telegraph property at the average rate of taxation of other property throughout the state." The two forms of expression are used in the same act. There is no ground for holding that the legislature intended to, or understood that they could, apply a different rule in the taxation of railroads from that by which they provided telegraph companies should be taxed. It must be concluded that the two expressions had exactly the same meaning. The latter is the form used by the court in the decision from which the legislation resulted. If the reference to cities and towns in section 1 would authorize the conclusion that only property taxed by city and town officers was referred to, the language is broad enough to include all property taxed in cities and towns, whether the tax is collected by municipal or state officers. As the expression used in section 2 of the act contains no terms implying a restriction to taxes collected by municipal officers, it follows that the terms of section 1 having the same meaning were not intended to be so restricted. Telephone companies, in 1883 (Laws 1883, c. 110), were required to "pay an annual tax, as near as may be in proportion to the taxation of other property throughout the state," and the board of equalization were directed to assess their property "at the average rate of taxation of other property throughout the state." In 1891, the commissioners in preparing the Public Statutes adopted the language found in the opinion of the court in
It is urged that the question now raised was decided in accordance with the plaintiff's contention in Boston etc. R. R. v. State,
The fundamental question is what did the case decide, not what is arguable from the language of the opinion. The language of an opinion, like that of all written documents, must be read in the light of the circumstances under which it is used. "Serious misapprehension of the scope and effect of a judicial opinion is often likely to occur, if the exact point in issue is disregarded." Hedding v. Gallagher,
The referees' report and briefs of counsel are accessible in 148 Briefs and Cases 321, et seq. The files of the court contain the report and the written motion of counsel setting forth the legal questions raised upon the facts found. The report sets out in detail the method adopted by the board of equalization to ascertain the average rate of taxation, including the savings bank deposits. This the board found to be $1.44 on each $100 of valuation; but upon the ground of the undervaluation of other property, they found railroads should be taxed at the rate of $1.25. The referees *566 found the value of the road, reducing the appraisal of the board, and found that property included in the selectmen's inventories was taxed at the rate of $1.52 on the appraisal, but was appraised at only 73.6 per cent of its value. They also found that a tax should have been assessed at the rate of $1.52 upon 73.6 per cent of the valuation found by them. This produced the same result as assessing the tax upon the true value at 73.6 per cent of $1.52, or $1.11872, — the method of the board.
Upon the filing of this report, counsel for the plaintiffs moved for judgment on the report in the following manner: (1) That the tax be wholly abated for the reason that the statute under which it was assessed was unconstitutional; (2) that, failing the sustaining of this contention, the tax be assessed at one per cent of .763 per cent of the actual value of the road as found by the referees, or (3) at one per cent of the actual value. In his printed brief counsel states his position as to the assessment in controversy, as follows: "Can said assessment be sustained by reason of the fact that a smaller tax was imposed upon the deposits in savings banks?" The position was taken, not as an attack upon the findings or rulings of the referees as to what the tax should be, but the attack was upon "the assessment of 1880." The position taken was, that the savings bank tax and the railroad tax, being both state taxes, must be uniform, and no higher tax could be assessed on railroads than upon the deposits. As counsel say in their brief: "When the legislature has only $42,000,000 [the total appraisal of railroads and deposits] of property on which to lay a tax, if they make that tax one per cent on two thirds of the property [the bank deposits] and 1.52 per cent on the remaining one third [the railroads], they undertake to do with respect to the remaining one third what they are prohibited from doing by the constitution of the state." The claim in effect was, that the savings bank tax only could be considered in finding the average rate of taxation upon property throughout the state. Whether the tax upon deposits should be considered in connection with all other property and taxation in the state in determining the average rate of taxation, the court were not asked to decide. The propriety of so including it was apparently conceded, as counsel for the state took the position that such consideration was all the constitution demanded or the plaintiffs could ask. The plaintiffs claimed more, and the denial of their contentions was a decision that constitutional equality did not require that railroads should be taxed at the same rate as savings banks; that in ascertaining the rate it was not necessary to exclude all property and taxes except savings bank deposits and the tax upon them. The substance of what was said was, that as taxes upon other property are assessed at *567 a higher rate than savings bank deposits, the railroads are not wronged if their property is so taxed. How the average rate should be determined, or the validity of the assessment made by the referees, did not arise upon the motions presented to the court, was not discussed, and consequently was not decided. Limiting the decision to the question presented, the subsequent action in reference to railroad taxation, otherwise inexplicable, is readily understood. The record contains no decree of abatement, and reference has been made to a settlement made by the parties with the state treasurer in 1888. From the amount paid on the execution it can be inferred what the parties understood the judgment was, and their understanding may be considered correct. The proposition, however, that from the amount paid and accepted it must be inferred that legal questions not disclosed by the record were presented to and considered by the court, does not require answer. If there had been a judgment of abatement greater than the amount allowed by the referees by the sum which consideration of the tax on deposits would affect the result, there would be evidence that the claim was made and either assented to by the state or decided for the plaintiffs, but a judgment for the amount found by the referees furnishes no evidence that the question was considered by the court or the parties, because the abatement must have been the same if the question was not considered at all, as it would have been if decided adversely to the plaintiffs.
An attempt is made, by assuming that, if the tax upon deposits were considered, the rate upon the valuation found by the referees would be $1.44 instead of $1.52, to show that the consideration of that tax would have materially affected the result, as a foundation for the argument that the question must have been raised and considered. But the referees did not find what the rate or valuation should be, considering only the taxation of the property included in the inventories and the deposits, although both may be computed from the facts found. The rate of $1.44, which the referees say was found by the board of equalization, is the average rate only upon the assumption that the property in the inventories was appraised at its full value, as were the bank deposits. It is apparent that the greater the undervaluation of the inventories, the nearer the tax of that property at $1.52 and of deposits at one per cent approach each other. Property taxed at, $1.52 upon 65.79 per cent of its true value would produce the same tax if taxed at one per cent upon its full value. If the undervaluation found to be 73.6 had been 7.8 per cent greater, the tax of both classes would have been equal. In this case consideration of the tax upon deposits would have reduced the rate upon the true value of the railroad property from $1.11872 to $1.1035, and the *568
rate upon the reduced valuation from $1.52 to $1.50 approximately. The plaintiffs' tax would have been approximately $279.68, exactly $288.61 less. But the valuation to which the plaintiffs were entitled upon their petition for abatement was one at the same ratio to its true value as that of all other property taxed. Amoskeag Mfg. Co. v. Manchester,
The case fails as an authority in the present controversy because it does not appear that any further questions of law as to what the tax should be were ever presented to the court or decided. The case stands precisely like Boston etc. R. R . v. State, an appeal from the tax of 1881, reported on a minor point in
Relying upon his construction of the decision in 1883 (Boston etc. R. R. v. State,
The interpretation put upon the statute by the board of equalization is therefore supported by the fact that, so assessed, the burden placed upon railroad property is its constitutional and equal share compared with that placed upon all other property in the state; by the language of the court in Boston etc. R. R. v. State,
If the savings bank tax is an anomaly to the extent that other property holders may not claim that their property cannot be taxed at a different rate, the effect of the anomaly cannot be extended beyond the acquiescence which created it. As there has been no acquiescence in the exclusion of the bank taxes in ascertaining the average rate of taxation throughout the state for the purpose of imposing a uniform tax upon railroads, but the reverse, there is no ground for the contention that such an exception to the constitutional rule of equality has been created by universal understanding. If the assessments, from 1865 to 1880, of a municipal *571 tax upon railroads, without objection, amended the constitution in this regard, the amendment, if it could apply to a tax assessed as a state tax, has been repealed by the contrary action for twenty-seven years. The reason why the discrimination, if one exists, is not regarded in the taxation of unincorporated persons and in their tax appeals, if it cannot be, may be determined when such question arises. The fact that no unincorporated person has raised the question, and that it has not been decided, is not conclusive against the incorporated person who first raises it.
Reliance is also placed upon some expressions culled from opinions of Chief Justice Doe in tax cases. In State v. Express Co.,
Aside from the effect of judicial decisions, constitutional interpretation, or the construction of statutory expressions of legislative purpose, the fundamental question involved in the discussion as to the proper method of assessing railroad property is whether the method employed imposes thereon its fair share of the public burden. Whether it does or not is evidence of the legislative purpose. Because individuals on the whole pay more on their property taxed by the local assessors, the impression has arisen that railroads were favored as to the rate; but as the lower average rate is produced by the fact that on between one fourth and one fifth of their whole property individuals embracing nearly one half of the population of the state pay a lower rate, there is no injustice, but mathematical accuracy, in imposing the average rate upon railroads, who are not depositors in savings banks, and whose money, if deposited therein, would not under existing legislation be exempt from taxation by the board of equalization. P. S., c. 64, s. 12; New England Tel. Tel. Co. v. Manchester,
It is in substance conceded in argument for the plaintiff, that the method followed is mathematically correct and just. Constitutional equality which is not also mathematically equal to a reasonable approximation is inconceivable. Taxes upon property, equal and proportional as a mathematical proposition, are constitutionally just. The substance of the entire argument in support of the plaintiff's claim is that a tax on savings bank deposits is not a property tax. If this proposition be conceded, the conclusions urged may properly follow; but until some ground is suggested for holding that when the language under discussion was used the tax on deposits was understood to be an excise and not a property tax, the argument fails. There has been no argument or claim in the entire discussion that this tax has been at any time since the decision in Bartlett v. Carter,
The constitutional question in this case and in Boston etc. R. R. v. State,
The equality of the constitution is a practical one. Strictly, it may be doubtful whether railroad property not located or owned in a local taxing district can be assessed for the local purposes of such district. The difficulties of attempting to distribute the property of a railroad among all the towns in which it may be situate or owned, and to tax these separate parcels according to the varying rates, — that is, of assessing the tax as a tax of a triple character, — would be insurmountable. The statute as it has been worked out by judicial decision and executive application, in view of the utter impossibility of any other course, places these public service corporations in a class by themselves, and does substantial justice by requiring them to pay the same rate of tax as is paid by all other property not in that class. Whether the legislature could properly devise some other method need not be considered. The method is just and equitable as between railroad and all other property, and does not violate any rule requiring proportional assessments. Even if the court agreed that some other method would be more economically sound, more productive of revenue, or technically more clearly within constitutional limits, the court has no power to improve the statute by adding to or taking therefrom. So long as the legislature directs, as they plainly have, the inclusion of the savings bank taxes in finding the average rate, the court has no power to order their exclusion.
The question so far as it relates to the taxation of insurance capital has not been considered, because the result in this case would not be affected by any conclusion that might be reached. Upon the facts alleged, the writ of certiorari could not be maintained if the claim as to this tax should be held well founded. The court are no more at liberty to advise the board of equalization at the plaintiff's request, than at their own. Bingham v. Jewett, *574
Demurrer sustained.
WALKER and YOUNG, JJ., concurred.
Dissenting Opinion
The opinion of the court decides that new method of railroad taxation was adopted either in 1881 or 1891. It rejects the view that the act of 1881 and the revision of 1891 merely amended the law so far as necessary to bring it within the constitutional requirements laid down in Boston etc. R. R. v. State,
The first statute on the subject was passed in 1842, as an amendment to the report of the commissioners who revised the statutes. Comm'rs' Rep. R. S., c. 39; R. S., c. 39, ss. 4-6. It provided for a tax of one per cent upon the value of that part of the capital stock expended within this state, to be determined by the certificate of the justices of the superior court. Ib., s. 4. No tax was ever assessed under this law. The Revised Statutes became effective March 1, 1843 (R. S., c. 230, s. 1), the court did not meet thereafter until July (R. S., c. 171, s. 12), and before that time the statute of 1842 had been repealed by the act of July 1, 1843, which provides that the tax shall be assessed "in proportion, as near as may be, to the taxation of other property on the first day of April, . . . in the several towns in which said railroads are situate." Laws 1843, c. 34, s. 4. Under this statute the court assessed a tax based upon the municipal tax rate from the beginning. In the language of their certificates filed with the state treasurer, they "assessed a tax on said corporation in proportion as near as might be to the taxation of other property the present year in the towns through which the road passes." Certificate of Justices Gilchrist, Woods, and Eastman, dated August 29, 1850.
The idea that the tax was at the fixed rate of one per cent until 1867 has apparently arisen from the error made by the compilers who edited the statutes in 1853. In this edition the acts of 1842 and 1843 are both printed, as though the tax were assessed *575 at one per cent and also at the local rate. C. S., c. 41, s. 4. The apparent impossibility of complying with both these requirements (except by some process of assessorial legerdemain) would of itself throw great doubt upon the editors' views. The action of the court is ample evidence that the act of 1842 was repealed in 1843, and further confirmation is found in the commissioners' report in 1867. "The capital of every railroad expended in this state shall be taxed as near as may be in proportion to the taxation of other property in April of each year, in the several towns in which such railroad is located." Comm'rs' Rep. G. S., c. 58, s. 1. In adopting this section, the commissioners understood that they were using substituted words to express the meaning of the existing law. They did not intend to change the sense. Ib., marginal notes; Introductory Rep., p. iv. The section was adopted without change (G. S., c. 57, s. 1), and the court continued to assess the tax as it had from the beginning. The commissioners' report on this topic is entitled to more than ordinary consideration, from the fact that each of the commissioners (Samuel D. Bell, Asa Fowler, and George Y. Sawyer) had been a member of the court and participated in assessing the railroad tax.
Prior to 1864, deposits in savings banks (less small exemptions) were taxed locally as money at interest. Laws 1833, c. 108. So long as this was the law, the tax upon savings bank deposits was included in the calculations for obtaining the local rate. In 1864, the system of savings bank taxation was changed, and a tax of three fourths of one per cent on the deposits and accumulations due to depositors was collected by the state. That representing the deposits of residents was paid to the cities and towns where they resided, and that on the deposits of non-residents was retained by the state. Laws 1864, c. 4028, s. 1. This change brought before the court, in 1865, the question now being litigated: Should the savings bank tax, collected. by the state, but for the direct benefit of the municipality, be considered in determining the average rate of taxation upon other property? The act of determining this question was judicial.
"In one class of tax cases our jurisdiction of the questions of liability and amount has been original. From 1843 to 1878 the statute required the railroad tax to be assessed by the justices of this court. . . . The obligatory force of this law has not been an open question since the judicial character of the assessment has been fully admitted. . . . Whatever doubt or opinion may have been entertained by any or all of the judges before the judicial nature of the work was seen and acknowledged, the record shows that for at least eighteen years — the latter half of the period during which the railroad tax was assessed by us and our *576
predecessors — the assessors understood they were acting in the official capacity of justices of this court." Doe, C. J., in Boody v. Watson,
In the performance of the recognized judicial duty, it was incumbent upon the court in 1865 to determine the status of the new tax as related to the railroad tax. The issue was not merely a theoretical one. Its decision involved substantial sums. In the city of Nashua alone, and as to one railroad only (the Nashua Lowell), it would have made a difference of over $200 in the annual tax. The circumstances were such as to call this matter into prominence. It was near the close of the war, when taxes were on the increase. To follow out the above example: The rate in Nashua went from $1.40 in 1864, to $2.25 in 1865. Twelve cents of this was caused by the withdrawal of savings bank deposits from the local assessment.
The decision of the court was that the tax should be assessed at the local rate, as it had been, and the savings bank tax was left out of the reckoning. Each year thereafter, until 1879, the question was before the court for decision, and the construction put upon the statute was always the same. This alone may well be deemed to settle and fix the meaning of the statute. Fitchburg R. R. v. Prescott,
Early in the seventies tax agitation increased. Judge Sawyer's report in 1876, as chairman of the first commission, does not refer to the railroad tax; but the report of the second commission, in 1878, gives the full record of the extended hearings upon this subject, and a copy of the legislation proposed by the commission. A perusal of the arguments advanced by counsel for the various railroads will disclose that none of them claimed that the savings bank tax was or ought to be included in calculating the rate. There was criticism of the theory adopted for valuing railroad property, and much complaint of the inequality of taxation caused by using the local rate instead of the average rate throughout the state; but no suggestion was made that there was either legal or equitable claim under existing statutes to a reduction of the railroad tax because of the favor shown savings banks. App. Rep. Tax Comm'rs, 1878, pp. 43, et seq. In the brief filed by counsel for the roads, the disparity between the savings bank tax and the *577 railroad tax is pointed out and urged as a reason against further increasing the railroad tax. It is not there claimed that the roads are entitled to share in the existing discrimination against taxpayers in general. Ib. 68, 69. The commission proposed an act levying the tax on the road, rolling stock, and equipments at the average rate of taxation in all the cities and towns in the state (Ib. 173), and an act establishing the state board of equalization (Ib. 193).
The commissioners to revise the statutes reported the existing law without change. Comm'rs' Rep. G. L., c. 58. The legislature adopted a compromise measure making the basis for valuation the road, rolling stock, and equipment, but retaining the provision as to the local rate (Laws 1878, c. 70; G. L., c. 62, s. 1), and established the board of equalization. Laws 1878, c. 73; G. L., c. 61. It would seem that this second re-enactment of the statute as to rate, after thirty-five years of uniform construction by the court, and in view of the arguments reported by the tax commissioners to the legislature, must have given a clear and settled meaning to the language of the act. The legislators must have understood that the rate named in the statute was the rate in cities and towns.
In 1879, the board of equalization assessed the tax as the court had theretofore assessed it, excluding the savings bank tax. The Boston, Concord Montreal Railroad ran through towns having a high tax rate; and upon an appeal by that road it was held that as the levy was in part, at least, a state tax, it must to that extent be assessed at the average rate throughout the state, because the state was the taxing district. The question whether it was wholly a state tax was left undecided. Boston etc. R. R. v. State,
After this decision, the board of equalization voted that the railroad tax be considered a state tax and that it be assessed at a uniform rate. To determine the average rate, they added the total of the local inventories to the taxable savings banks deposits, and the total local tax to the savings bank tax; and, dividing the second result by the first, found an average rate of $1.44 +. They then voted that the railroad rate be reduced from $1.44 to $1.25, because other property was undervalued, and assessed the tax at the last mentioned rate. From the tax so assessed the Boston, Concord Montreal Railroad again appealed, and the case was sent to three referees. Judge Jeremiah Smith was chairman of this board. The case was fully argued both before the referees *578 and the court. 148 Briefs and Cases 321, et seq. It was before the court on a preliminary ruling of the referees in June, 1882, and the next fall they made their final report. This report sets out in detail the method adopted by the board of equalization to include the savings bank tax. It also contains other computations, including that tax by a different method of calculation. After placing all phases of the matter fully before the court, the referees decided that the savings bank tax was to be wholly excluded, and found the amount of the railroad tax upon that basis.
In August, 1883, the court delivered the opinion affirming the judgment of the referees. "By the act of 1878 (G. L., c. 62, s. 1) and the act of 1881 (c. 53), railroads are taxed `as near as may be in proportion to the taxation of other property' in towns and cities. The savings bank tax (G. L., c. 65, s. 8) is an anomaly, resting on peculiar grounds of public policy, and is universally understood to have acquired the position of an exception to the constitutional rule of equality. It is so regarded in the assessment of state, county, and town taxes upon unincorporated persons, and in their tax appeals; and the plaintiffs' charter is not a statutory or constitutional ground of exemption." Boston etc. R. R. v. State,
It is urged that because this particular method of taking advantage of the savings bank rate was not argued to the supreme court, therefore the question was not there decided. This argument fails to take into account the nature of the proceeding and the duty of the court in the premises. The appeal is taken from the decision of the board of equalization to the supreme court at its law term; and upon the appeal the court is required to make such order as justice requires. G. L., c. 61, s. 9. By this procedure all questions of assessment are transferred to the court for final decision. Boody v. Watson,
It is further urged in disparagement of this case as an authority, that the final order for abatement, made at the June law term, 1884, is not in harmony with this view of the decision. Before taking the appeal the road paid $17,000 on the tax assessed against it, and the referees were of opinion that the tax should be $21,255.68, leaving a balance due of $4,255.68. The claim is that the court thereafter allowed an additional abatement of $2,331.10, so that the balance finally paid was but $1,924.58; and from this it is argued that whatever the decision may mean, it cannot be what the plaintiff here contends. When the facts are fully known, this position is seen to be untenable. The idea that only $1,924.58 was paid comes from a statement in the printed report of the state treasurer for the year 1888, wherein this sum is named as the balance received from the Boston, Concord Montreal on account of the tax for 1880. In fact, it was the balance of the $4,255.68 due upon the tax for 1880, after deducting therefrom an abatement of $2,331.10 which the road had obtained on the tax for 1881. Boston etc. R. R. v. State,
With the disposition of that case, litigation on this subject ceased, and the court had no further occasion to construe the statute until the question was raised in this proceeding. The record of forty years constant dealing with the matter of fixing the rate shows that one course was consistently pursued. From the assessment of the first tax in 1843, it was levied in proportion to the local rate. In 1865, it was decided by the judges to continue to assess at the local rate, and leave out the newly created savings bank tax. This decision was yearly reaffirmed when the assessments were made, until 1879. In that year the board of equalization followed the same rule, but abandoned it the next year. In 1882, Judge Jeremiah Smith held that the rule followed by the court was the correct one, rejecting the innovation sought to be introduced by the board of equalization. In 1883, the opinion heretofore quoted (
The legislature of 1881 amended the law to conform to the decision of Boston etc. R. R. v. State,
It is urged that there has been "continued uninterrupted acquiescence and recognition of the method of the board of equalization by the legislature." This assertion is not borne out by the record history of the board and its relations to the legislative department. The act creating the board contained no provision for its making any report of its doings to the legislature. An abstract of its equalization of local valuations throughout the state was to be compiled by the secretary of state as a basis for apportioning the state tax. The secretary of state was to lay this before the legislature at the opening of the session, when the state tax was to be apportioned. Laws 1878, c. 73, s. 8; G. L., c. 61, s. 8. The records of the board's proceedings were to be filed with the secretary of state. Laws 1878, c. 73, s. 2; G. L., *581 c. 61, s. 2. A certificate of "their determination" as to the railroad tax was to be filed with the state treasurer. Laws 1878, c. 70, s. 4; G. L., c. 62, s. 4. There were no other provisions for reporting the acts of the board. The provision requiring an annual "report of their doings" to be filed with the secretary of state was added by the commissioners who revised the statutes in 1891. Comm'rs' Rep. P. S., e. 62, s. 7; P. S., c. 63, s. 7. There are, then, three places where information concerning the acts of the board from 1879 to 1891 may be sought: the record filed with the secretary of state, the reports to the legislature, and the certificates filed with the state treasurer.
The records of the board for 1879 do not show what the rate was or how it was determined. After the decision in Boston etc. R. R. v. State,
VALUATION AND TAXATION, 1880.
Amount of inventories $168,995,309 Taxes on same $2,563,144.31 Savings bank deposits 28,293,929 " " " 282,939.29 ------------ ------------- Amount taxed $197,289,238 Amt. of taxes $2,846,083.60
Average rate 1.442 on a $100.
This is the assessment from which the appeal was taken which is reported
In 1881, below the record of the meeting held September 21, is a similar statement of valuation and taxation, giving a rate of $1.46. September 27, it was voted to fix the railroad rate at $1.25, "so that the rate be fixed proportionally as much below the average rate upon other property as other property has been undervalued."
In 1882, the board reheard many appeals from the tax of 1881, which were sent to them by the court under the rule adopted at the December, 1881, law term. There is no record of how the abatements were allowed, but the files of the court in the several counties seem to show that it was because other property was *582 undervalued. The rate question was not considered. There is a similar statement as to valuation and taxation this year, giving a rate of $1.41. The railroads were taxed at this rate, and their valuation was reduced eighteen per cent because other property was undervalued. By this method the railroads were given the benefit of the lower rate on savings banks twice — once by the reduction of rate and again by a reduction of values. The same thing is probably true of the preceding year, when the rate was reduced twice. From this time the method of reducing valuation, instead of a second reduction of the rate, was followed.
In 1883, a similar record was made. The rate was $1.49, and seventeen per cent was taken from the valuation.
All these assessments were made before the court decided the 1880 appeal. That decision was announced late in August 1883, and the assessment for that year was made July 13 — a month or two earlier than in former years. The first secretary of the board died before their sessions in 1884, and there is no further record of how the rate was made up, nor does it appear (as it did appear in the 1879 appeal case) that any consideration was given to the decision of the court. From 1884 to 1890, the record merely shows a vote to assess at the "average rate" of so much, with certain percentages deducted from the valuation.
The legislature did not understand that under the law the board was required to report to it upon the railroad tax. In 1881, the house adopted a resolution requesting the board to report in what way and manner they made the railroad tax, upon what basis they valued the railroad property, how they determined the rate of taxation, and whether they made the assessment in accordance with the statute. The board replied: "We regarded the railroad tax as a state tax, and held that as such it should be assessed as near as practicable upon a uniform valuation with the other property of the state and at a uniform rate. How we endeavored to effect these objects will more fully appear from our answer to the other branches of your inquiry. . . . The rate of taxation was determined by the average rate of taxation of the other property in the state, modified by a proportional value thereof. To this end we received evidence to show that the property of the state was not assessed at its full value; and having ascertained, so far as the evidence showed, the extent of such undervaluation, we deducted from the average rate of taxation a per cent equal to the per cent of undervaluation, and thus made the valuation and rate of taxation of railroads as near as practicable uniform with that of other property in the state. To the question whether this assessment is in accordance with the statute, we have to say: The statute (chap. 62, see. 1, Gen. Laws) provides that the tax on *583 railroads shall be `as near as may be in proportion to the taxation of other property . . . in the towns and cities in which such railroad is located.' This implies that the railroad tax is a municipal tax; but the supreme court, in the case of the Boston, Concord Montreal Railroad's appeal from our assessment of 1879, practically decided that this tax is a state tax. And in that opinion the court say that `if the railroad tax is a state tax, this statutory provision is in conflict with the constitution, since a state tax must be proportional throughout the state.' Following what seemed to us the plain interpretation of this opinion, we assessed the railroad tax as a state tax, and disregarded the statutory provision referred to. A copy of the valuation and assessment of the several railroads is hereto annexed." Journal of Senate and House, 1881, p. 395. There was no statement of the rate and no further information given as to how it was arrived at.
September 6, 1887, Governor Sawyer transmitted to the senate and house the report of the board for that year. In the house, this was ordered to be referred to a special committee of one from each county, and no further notice was taken of it. In 1889, the report of the board for 1888 was transmitted with other department reports. All others were referred, but nothing was done with this. Assuming that these were the printed reports, neither of them contained any reference to the railroad tax; and aside from these, the journals do not disclose any reports from the board from 1881 to 1891. These two reports (for 1887 and 1888) are included with the bound volumes of department reports for 1887 and 1889 respectively. No others were so included up to 1891.
It might be urged that the secretary of state presumably laid before the legislature the printed summary provided for by the statute, that this was probably the statement entitled "Valuation and Taxation in New Hampshire," and that in this way the legislators were informed. Assuming this to be true, what does it show for the period under consideration? The printed report for 1881 contains a summary of the local assessments and taxes, and at the foot a computation adding these to the savings bank deposits and tax, and a statement that the average rate is $1.46. This includes the savings bank figures, although that fact is not stated. Immediately following this, as a part of the same statement, is the following: "Add to the amount of taxes above given the railroad and telegraph taxes (estimated as assessed last year) $176,192, and we have the whole amount of taxes assessed upon the persons and property of the state, to wit, $3,111,007, being a little less than $9 for each inhabitant." There is no other reference to the railroad tax.
In 1882, there is a similar recapitulation giving an average rate *584 "including savings banks," followed by the summary for the preceding year. The reports for 1883, 1884, and 1885 are in similar form.
In 1886, there is the first statement of the railroad tax. It appears as a table giving taxable valuation of and the tax assessed against each road. In the summary of valuations, similar to those in former years, the rate is this year omitted for the first time. A mathematical computation shows that in the cities and towns it was $1.52, that including savings banks it was $1.413, and that the railroads were assessed at $1.42.
In 1887, the table of railroad taxes disappears, and the statement of the rate reappears. There was a similar report in 1888, with the additional element of capital in insurance companies and tax thereon.
In 1889 and 1890, the rate is given, followed by the usual statement of the rate, etc., for the previous year, and there is a table of valuation and taxation of railroads, but no accompanying statement of rate. In none of these years is railroad taxation or average rate mentioned in the preliminary report of the board. In the volumes of annual departmental reports, printed and bound by the state for preservation in its archives and for distribution to the towns and libraries in the state, this report was not included. G. L., c. 5, s. 6. The people were never officially informed of the acts of the board of equalization until the passage of the act of 1891, calling for a report. P. S., c. 63, s. 7. Such information on this subject as went to the legislature was an addendum to tables returned as a basis for assessing the state tax, to which this information was not germane. It appeared as information of general interest, with nothing to show its relation to the railroad tax. When requested to state how they determined the rate, in 1881, the facts were not given by the board, and they never stated in plain terms how the railroad rate was made up. Their certificates filed with the state treasurer follow in substance the form adopted by the court before 1878, and give no information on this subject.
It is immaterial why these reports were made as they were. The issue here is the publicity given to the details of the acts of the board. It is evident that what they had done could have been discovered by a search of the records in the secretary of state's office, coupled with mathematical computations based upon those records and the printed reports. But the claim here is that these acts were "notorious." The question is not: Could it have been proved that the acts were done? The issue is: Did the people know the facts? It rests upon the proponents of the doctrine of repeal by practical construction to establish their case. *585 The available evidence here seems to disprove their proposition. Certainly, it does not prove the things necessary to establish that the people of the state, by their representatives in the legislature of 1891, knowingly and intelligently abandoned the right to a considerable portion of the tax upon public service corporations.
If further proof is sought as to how much or how little was known in the late eighties of this course of procedure, it may be found in the interesting history of the Boston, Concord Montreal Railroad's appeal from the tax for 1881. That case was made an exception to the general practice in that year and was heard by the court, instead of being sent for a retrial before the board of equalization. The reason appears to have been that in this case there was a special question (the value of the road) not common to the other cases. At the trial early in 1888, counsel for the road claimed that the rate found by the board of equalization for 1881 was $1.46. February 24, 1888, the secretary of the board, in response to an inquiry from counsel for the state, wrote him that the "board rate" for 1881 was $1.40. This was accepted by counsel on both sides and by the court as final, and the decision in the case rests upon this letter. The rate was in fact $1.46. That fact could have been ascertained either by inspecting the records of the board on file with the secretary of state or from the printed statements of "Valuation and Taxation," often referred to as the reports of the board. The evidence was not obtained from either of these sources. The fact that the rate reported varied largely from that printed in the statement of valuation and taxation, and from the record at the state house, passed unnoticed by either court or counsel. It is evident that the notoriety of this procedure did not extend to the legal profession at that time. Knowledge of how the state board of equalization was assessing a tax, not possessed by eminent counsel or by judges of the supreme court, is not to be imputed to the constantly changing membership of the legislature.
There is another source from which it is quite likely the legislators obtained knowledge of this decision of 1883. Morrison's Digest, issued in the bound volume in 1891, was available in the advance sheets in 1890. Under the title "Taxation," subhead "Banks, Railroads, Telegraph Companies," he states the law of this case (p. 735): "In the assessment of a railroad `as near as may be in proportion to the taxation of other property' in towns, the rate at which savings banks are taxed by the state is not considered. B., C. M. Railroad v. State, 62-648." Whether this was or was not known to the legislators, it is convincing proof that knowledge of the overruling power of the acts of the board of equalization had not become universal in 1891. *586
The evidence is more persuasive that the legislators did not, than that they did, know how the board was assessing this tax. In one year (1881) we have the direct testimony of the house that it was ignorant of the rate and wished to be informed. It knew no more (so far as this issue is concerned) after the board made answer than it did before. If on the one hand it is to be urged that, with all this evidence of lack of knowledge, it is still presumed that the legislators knew what was being done by this board of lay judges, and that it approved and adopted their acts, what is to be said about their knowledge of the longer period covered by the contrary practice of the supreme court, of the earliest practice of this board, and of the reversal of its later action by the court? It is not to be presumed that the legislature understands that six years of disregard of a decision by the board of equalization overrules the action of the court of last resort.
It is said that, conceding the soundness of all that is urged as to the history of the statute, yet the legislature of 1891 must have intended to include the savings bank tax in the computation of the rate for the railroad tax because the court in 1879 held the former to be a property tax. This argument only takes into account a part of the evidence. If the legislature in 1891 knew that the court said in 1879 that the savings bank tax was a property tax, they also knew that in 1883 the court said "the savings bank tax is an anomaly, and is universally understood to have acquired the position of an exception to the constitutional rule of equality. It is so regarded in the assessment of state, county, and town taxes upon unincorporated persons, and in their tax appeals, and the plaintiffs' charter is not a statutory or constitutional ground of exemption."
But aside from the question of precedent, the case is against the defendants upon principle, because of the nature of the savings bank tax. The tax is computed at three fourths of one per cent upon the amount of general and one per cent upon the special deposits on which the corporation pays interest, including dividends declared but not paid, with certain exemptions. P. S., c. 65, s. 5, Laws 1895, c. 108, s. 1; Laws 1907, c. 102. It is not a tax levied upon a valuation put upon the property of the bank. It is not computed at the varying rate which is determined from year to year by the extent of the public needs. Whether the bank has much or little surplus, whether its assets have been carried on the books at a high or low figure, the amount of the assessment is not varied; and whether the needs of government be great or small, the rate is always the same. Such a tax is not a tax upon property, but rather a privilege tax, or an excise upon the *587
franchise which the bank enjoys. This is the almost universal rule. Jones v. Bank,
An ad valorem tax is a tax "upon property by a valuation, and effect can only be given to it by means of assessors, who value the property and apportion the tax by their estimate." Specific taxes are "those which impose a specific sum by the head or number, or by some standard of weight or measurement, and which require no assessment beyond a listing and classification of the subjects to be taxed. License taxes and other taxes on business or occupation, stamp taxes, taxes on franchises and privileges, are usually specific. . . . As regards all such taxes, the law by which they are laid is of itself a complete apportionment. Ministerial officers have nothing to do but to list the subjects of taxation; classify them where that is necessary; ascertain the number, weight, measurement, etc., . . . and collect the sum which the law has definitely fixed." Cool. Tax. (3d ed.) 412, 413.
"The decisive reason why it cannot be supported as a tax on property, in the sense in which that phrase is used in the constitution in the article cited, is that it is not `proportional'; that is, it is not laid according to any rule of proportion whatever, but is imposed only on the corporations designated in the act, without any reference to the amount required to be raised by taxation for public purposes, or to the actual property held by such corporation subject to taxation, or to the whole amount of property in the commonwealth liable to be assessed for the public service." Commonwealth v. Company, 12 Allen 298, 300.
The amount of the tax "is not fixed or determined by a valuation of the property of the bank. The average of deposits during a certain period includes only the amount credited to depositors. It does not embrace a valuation of the investments made by the bank, or the market value of its property. The tax is assessed wholly irrespective of investments, and without any regard to the profit or loss made or incurred by the corporation on *588 the property in its possession or on the business which it has carried on. The average of deposits during the period of time denoted in the statute may not be equivalent to the whole property owned by the bank, exclusive of money invested in the securities of the government. The amount of the tax in no way depends on the aggregate of the investments of the bank. It must be the same whether the investments have been profitable or otherwise. No valuation of property is necessary to the assessment of the tax, and none is in fact made. How, then, in any just sense, can the assessment be deemed to be a tax on property?" Commonwealth v. Inst. for Savings, 12 Allen 312, 314.
Much of the reasoning contained in these authorities appears to to have been approved in this state. "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." State v. Express Co.,
The suggestion that the savings bank tax is laid upon the property of the depositors is the only reason which has been advanced for the holding which is peculiar in this state. In no case is the matter reasoned out. No attempt has been made to answer the convincing logic which has prevailed in substantially all other jurisdictions. If the conclusions here reached resulted from irresistible logic, they should be followed, even against the unanimous judgment of all other courts. If they did not so result, they should be abandoned.
It was first held that the assessment upon savings banks was a property tax. Bartlett v. Carter,
The tax was sustained, as an anomaly, because of the universal understanding that such a tax was an exception to the constitutional rule of equality. It was anomalous because its name and kind had theretofore been excluded by the court from the New Hampshire constitutional scheme for taxation. There was no power to lay a franchise tax in this state. But by the universal understanding, such a tax was given a place in a constitutional scheme for taxation. It was an exception to the constitutional rule of proportional equality, as all specific taxes are. So while the court in this state generally denied the validity of these taxes that would be valid elsewhere, in this instance the tax was held to be valid. The universal understanding could not be ignored; yet the decision could not be reconciled with the previous utterances of the court. The court having declined to follow its argument to its legitimate conclusion, the logic of the situation called for a modification of the earlier cases. Whether the decision was intended to effect such a result, cannot be ascertained. The matter was disposed of with the brief declaration that the law was as stated. There is in all this at least a suggestion that the earlier decisions against the constitutionality of any tax not assessed by a proportion common to all other taxes may have been erroneous; and this doubt appears to have recent sanction. Thompson v. Kidder, ante, 89, 90.
But it is not necessary to now determine whether an excise on a franchise could or could not have been levied in 1880. By the amendment to the constitution adopted in 1903, taxes upon franchises are expressly provided for, and must now be valid if not repugnant to other constitutional limitations. Thompson v. Kidder, supra, 96. If before 1903 franchise taxes were anomalies which could not be classified under our constitution, they are so no longer.
Not being a property tax, this levy upon savings banks is not included in the class of taxes upon property. A tax upon a fixed basis of value, and at a fixed rate, has no logical relation to one upon the true value of property, assessed at a fluctuating rate adjusted to the varying public needs. "There can be no proportion or equality between that which is fixed and that which is *590 uncertain and fluctuating." State v. Express Co. supra; Oliver v. Washington Mills, 11 Allen 268, 277.
It is said that this reasoning is fallacious because the figures can be combined and the rule of three can be applied to the result. Of course, any figures relating to any subject, or to an indefinite number of subjects, can be thus combined and an arithmetically correct result obtained. But much more than a question of arithmetic is here involved. It is the constitutional question of whether, in assessing taxes upon property (as distinguished from excises), the rule of proportional equality must be followed. The soundness of that rule has never before been doubted by the courts of this state. The same line of reasoning now adopted by the court was urged by counsel in Amoskeag Mfg. Co. v. Manchester,
By the process here adopted by the majority of the court, the railroad tax is in part based upon an equal distribution of the public needs from year to year and in part upon an arbitrary rate. The result cannot be a tax based wholly upon an equal distribution of the annual burden. Unless it is true that A's property tax can be levied at the rate required for public uses and B's tax upon his property at a fixed rate, the process adopted is faulty and the conclusion reached is wrong. In Boston etc. R. R. v. State,
The railroad tax is a property tax, and must be laid in accordance with the constitutional rule of equality. If the statute calls for a levy in violation of this rule, it is unconstitutional and void. Boston etc. R. R. v. State,
A legislative intent to thus violate the rule of equality is not *591
shown in this case. The act of 1881 was passed because the court had just said that the statute as it then existed was an offence against that rule. The evident and only purpose of the legislature was to correct that error. It is as certain that it did not intend to include what the constitution excluded, as that it intended to correct the former exclusion of that which the constitution included. In a peculiar degree, the thought that the statute be kept within constitutional limits must have been in the minds of those legislators. "And when the intention of the legislature is plain, it is the duty of the court so to construe the act as to carry out the intention if the language used will fairly admit of such construction." State v. Jackson,
The case as to the insurance tax is still clearer. A stock fire insurance company pays "a tax of one per cent upon the amount of its paid-up capital on the first day of April." P. S., c. 65, s. 9. It is common knowledge that while the stock in some of these companies has been and is of large value, that in others has been worth nothing. But the same tax — one per cent upon the par value of the stock — is uniformly levied. It seems superfluous to extend the argument upon the proposition that this is not a property tax. The soundness of the conclusion appears to be conceded. Nor should the question be avoided upon the ground that the error has decreased the railroad tax but a few hundred dollars. In the year 1906, the board of equalization carried their tax rate to the third decimal. No good reason appears why this should not always be done in figuring these taxes, which deal with large amounts of property in single items.
If the exclusion of the insurance tax meant great and impractical labor in the computation of the railroad tax, there might be ground to justify its retention in the calculations. It might then well be said that the result was as near an approximation as could reasonably be arrived at. But the situation presents the reverse of this proposition. The inclusion of the insurance tax adds one more factor to the complications of the computation. Its exclusion would simplify the matter. In this posture of the affair, the erroneous inclusion which complicates cannot be justified on the plea of simplification; nor can the simplifying exclusion be refused because complications ought to be avoided. The question of the inclusion of this tax is directly involved in the present case. It should be decided. If, as the majority opinion suggests, the tax is to be differentiated from the savings bank tax, the reasons should be given.
The rights of the public service corporations are not infringed by the exclusion of the fixed savings bank and insurance taxes from the computation of their proportional shares of the public *592
burden. Those heretofore unclassified anomalies are not considered in the assessment of property taxes upon unincorporated persons, and the public service companies' charters are neither statutory nor constitutional grounds for claiming an exemption. Boston etc. R. R. v. State,
Dissenting Opinion
I agree with Judge Peaslee in all that he has said; and while little can be added to his able and exhaustive discussion, the question is of such importance, and the opinion of the majority is so fallacious in reasoning and unjust in its result, that I feel 1 would be remiss in the performance of my duties if I failed to state, in part at least, the views I entertain.
The main question in the case is whether the taxes assessed upon savings banks and fire insurance companies shall be taken into consideration in ascertaining the rate at which railroad, telegraph, telephone, and express companies shall be taxed. The board of equalization, acting under the advice of the attorney-general and in disregard of the decision of the court in Boston etc. R. R. v. State,
In Amoskeag Mfg[.] Co. v. Manchester,
Starting with these declarations as our premise, and they are undoubtedly sound, it is apparent that all taxes upon property which are sanctioned under the provisions of our constitution must be proportional and equal; that each man's taxable estate must bear its due proportion of the public burden according to its value; and that any scheme of mathematical reasoning which assesses against the property of one man in the same taxing district a tax greater or less than that assessed to others on the same amount of taxable property is in conflict with the constitution and fundamental principles of justice, and the reasoning by which such a result is reached is fallacious.
In Boston etc. R. R. v. State,
In Boston etc. R. R. v. State,
In State v. Griffin,
It was also held in Boston etc. R. R. v. State,
Again, in the case of Amoskeag Mfg. Co. v. Manchester, supra, in which the opinion was delivered by our present chief justice, it was decided that in determining the amount of the public burden to be apportioned to the Amoskeag Company as a tax upon its property, the tax assessed upon polls could not be taken into consideration; that a poll tax was not a property tax; that there was *596 "no constitutional provision as to the relative amounts to be assessed upon polls and upon property"; and that "a legislative enactment requiring such a distribution of the taxes between polls and estates as would compel a portion of the taxpayers to pay on their property more than others paid on the same amount of property would be in violation of the constitution."
But the chief justice, in delivering the opinion of the majority in the present case and construing the statute directing the assessment of taxes upon public service corporations, not only holds that the act directs that a less amount of tax shall be imposed upon the property of public service corporations than is imposed upon a like amount of property owned by others, but also that the statute so construed would be constitutional; for he decides that the board of equalization were right in taking into consideration the savings bank tax in determining the tax to be assessed upon public service corporations, and this notwithstanding the direct effect of such a method of computation is to permit them to pay some $70,000 or $75,000 less tax each year than other taxpayers are required to pay upon the same amount of property. It is indisputable that such a construction of the statute and method of computation produces this result. The answer to the chief justice's present position is that the statute, if it must be so construed, is clearly unconstitutional; and to use his own language as given in Amoskeag Mfg. Co. v. Manchester, supra, "any scheme of mathematical reasoning which . . . assesses against . . . [the public service corporations of the state] . . . a tax . . . less than that assessed to others upon the same amount of taxable estate, — a result in conflict with the constitution and fundamental principles of justice, — is inevitably unsound and erroneous, either in the theory itself, or in the premises upon which such system is based. . . . If the result is wrong, the reasoning is fallacious. The accuracy of the method is safely and sufficiently tested by the result."
The savings bank tax being a fixed tax, and not one laid according to any rule of proportion or equality, — no matter by what name it may be designated, whether anomaly, excise, or something else, — cannot be taken into consideration in ascertaining the proportional and equal share of the public burden to be assessed upon public service corporations; for, as said in State v. Express Co.,
What has been said as to the savings bank tax applies with equal force to the tax upon fire insurance capital. In neither case are the taxes assessed upon any basis of proportionality or equality to meet the public charges of government, as is the case with those levied upon public service corporations and individuals, and neither should be taken into consideration in assessing the taxes required to be levied upon such corporations or individuals.
