State ex rel. Stern v. Bodden

• Decision Date: 16 January 1917
• Citation: 160 N.W. 1077,165 Wis. 75
• Parties: STATE EX REL. BERNHARD STERN & SONS v. BODDEN, CITY TAX COM'R.
• Court: Wisconsin Supreme Court

165 Wis. 75

160 N.W. 1077

STATE EX REL. BERNHARD STERN & SONS

v.BODDEN, CITY TAX COM'R.

Supreme Court of Wisconsin.

Jan. 16, 1917.

Appeal from Circuit Court, Milwaukee County; W. J. Turner, Judge.

Certiorari by the State, on the relation of Bernhard Stern & Sons, against E. H. Bodden, Tax Commissioner for the City of Milwaukee. From an order denying the defendant's motion to supersede the writ of certiorari, defendant appeals. Affirmed.

This is a certiorari action to review the action of the board of review of the city of Milwaukee in making a personal property assessment against the plaintiff for grain in its elevator on May 1, 1916.

The petitioner operates a grain elevator and warehouse in the city of Milwaukee. On May 1, 1916, petitioner filed with the proper assessor of the city of Milwaukee a statement of all grain received or handled in its elevator and warehouse during the year immediately preceding May 1, 1916. A personal property assessment was made against the petitioner in the sum of $324,300, which included an item of $250,000 as “Manufacturer's stock” consisting entirely of grain in the possession of the petitioner on May 1, 1916. Petitioner filed objections against this assessment and appeared before the board of review of the city of Milwaukee and made full disclosure under oath of all personal property belonging to it on May 1, 1916. The board of review thereupon increased the personal property assessment on the grain from $250,000 to $467,060.

The petitioner then brought this certiorari proceeding to review the action of the board of review of the city of Milwaukee and have the personal property assessment set aside. The defendant obtained an order to show cause why the writ of certiorari should not be superseded and held for naught, and the action dismissed upon the ground that the facts stated by the petition are not sufficient to authorize the granting of the relief prayed. The circuit court entered an order denying defendant's motion to supersede the writ of certiorari, and it is from the order denying such motion that this appeal is taken.Clifton Williams, City Atty., and Garfield S. Canright, Asst. City Atty., both of Milwaukee, for appellant.

Carl F. Geilfuss, of Milwaukee (J. A. Murphy and W. R. Foley, both of Superior, of counsel), for respondent.

SIEBECKER, J. (after stating the facts as above).

This action was commenced in the Milwaukee county circuit court by the petitioner praying that a writ of certiorari issue to E. H. Bodden, as the city tax commissioner, having possession of the records and assessment roll for the 1916 assessment of taxes, to review an alleged erroneous and illegal assessment of the petitioner's personal property, described as “Manufacturer's stock” in the tax roll, which it is stated consisted of grains in petitioner's elevators and warehouse on May 1, 1916, located in the city of Milwaukee. The petitioner alleges that such assessment was erroneous and illegal for the reason that such grain was on May 1, 1916, exempt from taxation under the provisions of chapter 209, Laws of 1915, creating sections 1057m to 1057q, inclusive, Stats. 1915. The appellant claims that these statutes are unconstitutional and void, and that this grain was legally taxable and was properly assessed. Chapter 209, Laws of 915, is entitled:

“An act to create sections * * * of the statutes, providing for the exemption of grain from taxation, providing for the listing of grain in elevators and warehouses, and for an occupationaltax on operators of grain elevators and warehouses.”

Section 1057m of the act provides:

“Every person, copartnership, association, company or corporation operating a grain elevator or warehouse in this state, except elevators and warehouses on farms for * * * storage of grain raised by the owner thereof, shall on or before December fifteenth of each year pay an annual occupation tax of a sum equal to one-quarter of one mill per bushel upon all wheat and flax and one-eight of one mill per bushel upon all other grain received in or handled by such elevator or warehouse during the preceding year ending April thirtieth; and such grain shall be exempt from all taxation, either state or municipal.”

It is also provided in the act that the tax specified in the act “shall be separately assessed to the person * * * chargeable therewith by the assessor and shall be included in the assessment roll annually submitted by such assessor to the town, village or city clerk and shall be entered by said clerk on the tax roll.” Other parts of the act deal with the making of returns of amount of business done by operators of such elevators annually and the payment and collection of such tax, for correction of erroneous return and assessments for failure of making return by the operators of such elevators and warehouses.

[1] The appellant asserts that the law imposes a property tax within the provisions of section 1 of article 8 of the state Constitution. This section provides:

“The rule of taxation shall be uniform, and taxes shall be levied upon such property as the legislature shall prescribe. Taxes may also be imposed on incomes, privileges and occupations, which taxes may be graduated and progressive, and reasonable exemptions may be provided.”

The last clause of this section was added to the first clause by amendment in 1908. By the amendment the Legislature was expressly given the power to impose graduated and progressive taxes on incomes, privileges, and occupations. Privilege and occupation taxes were held to be proper before the adoption of the amendment, and exemption of various kinds had been approved as within legislative discretion when assailed in the courts. It was held in Nunnemacher v. State, 129 Wis. 190, 108 N. W. 627, 9 L. R. A. (N. S.) 121, 9 Ann. Cas. 711, that taxation by the state under the original constitutional provision, which declares that “the rule of taxation shall be uniform and taxes shall be levied upon such property as the Legislature shall prescribe,” does not limit taxation to an ad valorem property tax nor prohibit the levying of excise taxes. In commenting on early decisions of this court on the subject, the Chief Justice in that case declared:

“So we regard it as settled by the necessary effect of the decisions named that the railroad tax legislation of 1854, and a fortiori the railroad license legislation of 1860 and of following years, while imposing a tax in the proper sense, did not impose a tax upon property within the meaning of section 1 of article 8 of the Constitution, but was in fact excise taxation upon the privilege of transacting business.” And “it is a matter of history that this occupation or privilege tax has been continuously levied by the state unchallenged since the decision of the Kneeland Case supra, up to the passage of chapter 315, Laws of 1903, and that a very large part of the revenues of the state have been derived therefrom.”

Many other occupation taxes of business are referred to as in force and the properties thereof exempted from taxation, and it was held that this original constitutional provision “that the rule of taxation shall be uniform” so far as applicable to excise taxation “must necessarily mean taxation which does not discriminate, but which operates alike on all persons similarly situated. In other words, proper classification may be made and a different rate applied to each class.” 129 Wis. 221, 108 N. W. 636, 9 L. R. A. (N. S.) 121, 9 Ann. Cas. 711. These principles were also applied in the two railroad tax cases reported in 128 Wis. 449, 108 N. W. 594, and 128 Wis. 553, 108 N. W. 557, and other cases cited therein. These former decisions clearly show that the Legislature in dealing with the subject of taxation included in chapter 209, Laws of 1915, under the amendment to section 1 of article 8 of the state Constitution, was manifestly imposing an occupation tax and were not acting under the first clause of this section providing for a tax on such property as it might prescribe. A reading of the title of this chapter clearly indicates what the Legislature intended, for it is declared to be:

“An act * * * providing for the exemption of grain from taxation, providing for the...