Berry v. Com'r

• Decision Date: 16 January 1934
• Docket Number: No. 7861.,7861.
• Citation: 172 S.E. 896
• Court: West Virginia Supreme Court
• Parties: BERRY. v. FOX, Tax Com'r, et al.

172 S.E. 896

BERRY.

v.FOX, Tax Com'r, et al.

No. 7861.

Supreme Court of Appeals of West Virginia.

Jan. 16, 1934.

Syllabus by the Court.

1. The Act of the Legislature designated as Committee Substitute for House Bill No. 64, passed December 9, 1933, purporting "to appropriate from the general revenues of the state from taxes imposed by the Legislature on privileges, franchises and incomes of persons and corporations as authorized by section one, article ten of the constitution of West Virginia, as amended in the year one thousand nine hundred thirty-two, moneys to pay the interest, sinking fund and amortization charges of bond issues of counties, magisterial districts, school districts and other taxing districts, except municipalities, issued for roads, now used as a part of the state read system, and issued for schools, now used as a part of the state free school system, issued prior to the eighth day of November, one thousand nine hundred thirty-two, " is uncon-stitutional, null and void, because it involves the assamption of local debts by the state in violation of section 6, article 10, Constitution of West Virginia, which provides: "The credit of the State shall not be granted to, or in aid of any county, city, township, corporation or person; nor shall the State ever assume, or become responsible for the debts or liabilities of any county, city, township, corporation or person * * *."

2. The repeal of constitutional provisions by implication is not favored.

3. A constitutional amendment, as the last word from the people on a subject under consideration, should be given controlling effect where there is irreconcilable conflict between it and other constitutional provisions, but no such effect should be given where it and other provisions of the Constitution may be read together and harmonized without destroying the effect and purpose of any of them.

4. A legislative declaration in respect of an existing condition as of fact but actually juristical, is not conclusive.

WOODS, P., and HATCHER, j., dissenting.

Appeal from Circuit Court, Kanawha County.

Suit by A. M. Berry against Fred L. Fox, State Tax Commissioner, and others. A demurrer to the bill of complaint was sustained and a decree rendered dismissing the bill and plaintiff appeals.

Decree reversed, demurrer overruled and cause remanded, with directions.

Brown, Jackson & Knight and Price, Smith & Spilman, all of Charleston, for appellant.

Homer A. Holt, Atty. Gen., Ira J. Partlow, Asst. Atty. Gen., and Fred L. Fox, of Sutton,. for appellees.

MAXWELL, Judge.

The Legislature on the 9th of December, 1933, passed an Act known as Committee Substitute for House Bill No. 04, effective from passage, which purported to appropriate from the general revenues of the state from taxes imposed by the legislature on privileges, franchises and incomes of persons and corporations for the fiscal years ending June 30, 1934, and June 30, 1935, respectively, such moneys as may be required to meet all interest and sinking fund charges due and to become due during the said years upon bonded indebtedness of all counties, magisterial, school and other taxing districts except municipalities, incurred prior to November 8, 1932, for roads now used as a part of the state road system and incurred for schools now used as a part of the state free school system.

The plaintiff, A. M. Berry, a resident and taxpayer of Salt Lick District, Braxton County, challenges the constitutionality of the said enactment, and seeks to void the acts of the sinking fund commission and its secretary in drawing requisitions on the state auditor for warrants with which to discharge bonds, and interest thereon, issued by two taxing units in Fayette County, as well as the act of the auditor in issuing the warrants, and to enjoin the state treasurer from honoring and paying them.

The bill of complaint embodies the provisions of the Act and alleges that certain bonds issued by Falls District, Fayette County, prior to November 8, 1932, for schools, and certain bonds issued by Sewell Mountain District prior to November 8, 1932, for roads, and interest thereon, are due or about to become due; that there are moneys in the General Revenue Fund of the state treasury which, under the provisions of the aforesaid act, are subject to requisition of the state sinking fund commission and which arise from taxes imposed by the legislature on privileges, franchises, and incomes of persons or corporations as authorized by article 10, § 1, of the state Constitution, as amended, sufficient to pay said bonds and interest charges thereon; that the secretary of the state sinking fund commission, pursuant to that commission's direction, has drawn requisitions upon the state auditor for funds to pay the bonds and interest charges; that the state auditor has issued warrants therefor payable to the said commission; that the state treasurer has expressed his intention to honor the warrants and pay them out of the treasury; that the plaintiff will have to pay to the state a substantial sum of money as taxes imposed by the legislature on privileges, franchises, and incomes; that Salt Lick District has issued no bonds for roads or schools; that neither his property in Salt Lick District nor the taxes to be paid by him hereafter on privileges, franchises, or incomes are legally liable for or properly applicable to the payment of said bonds and interest charges; that plaintiff had no voice in the issuance of said bonds and owns no property in either of the districts which issued the bonds; that the act is violative of sections 4, 5 and 0, of article 10, and section 10 of article 3, Constitution of West Virginia, and section 1 of the Fourteenth Amendment of the Constitution of the United States; and that the acts of the sinking fund commission and its secretary and of the au-ditor, as well as the contemplated action of the treasurer, are without legal authority and to plaintiff's irreparable injury and damage.

The circuit court of Kanawha County sustained the defendants' demurrer and dismissed the bill. The plaintiff has appealed.

Section 6, article 10 of the Constitution of West Virginia reads:

"The credit of the State shall not be granted to, or in aid of any county, city, township, corporation or person; nor shall the State ever assume, or become responsible for the debts or liabilities of any county, city, township, corporation or person; nor shall the State ever hereafter become a joint owner, or stockholder in any company or association in this State or elsewhere, formed for any purpose whatever."

in justification of the suggestion that the state may undertake the payment of sinking fund and interest charges upon county and magisterial district road bonds without violating said constitutional provision against the assumption of debt by the state, reference has been made to certain observations in the opinion in the case of State Road Commission v. County Court of Kanawha County, 112 W. Va. 98, at page 106, 163 S. E. 815, 818, wherein, in reference to said section 6, it is said:

"in the debates at the Wheeling Convention which formulated this provision, the discussion related solely to state aid or credit to corporations for local and sectional improvements. See manuscript report of the convention, for the period February 1 to February 4, inclusive, 1862, Department of Archives and History. See, also, sketch 'Formation of West Virginia, ' 1 W. Va. Law Reports, 72. The language as well as the history of the section demonstrate that it has reference to state aid and state payments in matters of territorial interest to the county, and not to a situation like this where the advancement made the county by the state is essentially in the interests of the entire state."

in that case we had under consideration section 31, chapter 6, Acts 1923, which authorizes the state road commission to acquire lands "for the purpose of constructing, widening, straightening, grading or altering any state road, " and requires the county court of the county wherein such road is situated to pay for the lands so acquired. The definite question for decision was whether the state road commission could recover from the county court of Kanawha County the amounts which had been paid by the commission for lands in Kanawha County acquired by the commission for state road purposes. The case did not directly involve the question of the granting of the state's credit to a county. So that what was said in the opinion arguendo in the portion to which reference has been made, we do not deem conclusive of the questions now precisely before us.

The immediate precursor of said section 6, article 10 of our present Constitution, was section 6, article 8 of the Constitution of 1863. That section read:

"The credit of the State shall not be granted to or in aid of any county, city, town, township, corporation, or person, nor shall the State ever assume or become responsible for the debts or liabilities of any county, city, town, township, corporation, or person, unless incurred in time of war or insurrection for the benefit of the State."

It will be noted that down to and including the words "corporation, or person, " where they appear the second time, the two sections are identical except that the word "town" which appears in the old section was not carried into the new one.

The convention which wrote our first Constitution, known as the Constitution of 1863, convened at Wheeling on the 26th of November, 1861, and its first session continued until February 12, 1862. On January 31, 1862, the committee on taxation and finance made its report to the convention presenting several sections which, in the form finally adopted, became article 8 of the Constitution. It is pertinent here to make reference to sections 5 and 6 of that report. Those sections, as reported, read:

"5. No debt shall be contracted by this State except to meet casual deficits in the revenue--to redeem a previous...