State v. Stinson Canning Co.

• Decision Date: 09 July 1965
• Citation: 211 A.2d 553,161 Me. 320
• Parties: STATE of Maine v. STINSON CANNING COMPANY.
• Court: Maine Supreme Court

Page 553

211 A.2d 553

161 Me. 320

STATE of Maine v. STINSON CANNING COMPANY.

Supreme Judicial Court of Maine.

July 9, 1965.

Ralph W. Farris, Jon R. Doyle, Asst. Atty. Gen., Augusta, for plaintiff.

Richard B. Sanborn, Augusta, for defendant.

RUDMAN, Justice.

On report on an agreed statement of facts.

This is an action to recover the amount of a tax assessed against the defendant corporation by virtue of the Sardine Tax Law, Title 36, M.R.S., Sections 4691-4700.

The Defendant is a licensed and certified packer of sardines in Prospect Harbor, Maine, and was engaged, and has continued to be so engaged since the enactment of the Sardine Tax Law. It is admitted that the Defendant packed 3,345 cases of sardines during the month of June 1964 and the tax is unpaid. The State Tax Assessor levied an assessment for the tax due against the Defendant in the amount of $836.25.

The Defendant contends that the Sardine Tax Law is unconstitutional for the following reasons:

'1. Tax is a property tax not equally apportioned and assessed rather than an excise tax.

'2. An advertising tax for non-agricultural products is illegal.

'3. An advertising tax for processed or manufactured products is illegal.

'4. The tax is for a private rather than a public purpose.

'5. It is illegal for the State to engage in the business of buying and selling sardines.'

The Sardine Tax Law was first enacted by the Ninety-fifth Legislature. Public Laws 1951, Chapter 2.

The preamble reads as follows:

'Whereas, the packing and merchandising or sardines is one of the most important industries of the state and a benefit to the public generally; and

'Whereas, it is vitally necessary to furnish employment and enhance the livelihood of the coastal and other people of Maine; and

'Whereas, legislation is necessary to protect the public health and welfare and to promote and conserve the prosperity and welfare of the people of the state by fostering and promoting better methods of production, packing, merchandising and advertising in the sardine industry of this state; and

'Whereas, in the judgment of the legislature, these facts create an emergency, within the meaning of the constitution of Maine, and require the following legislation as immediately necessary for the preservation of the public peace, health and safety.'

The purposes of the Act are stated in Section 4691, as follows:

'The packing of sardines is one of the most important industries of the State, and this chapter will protect the public health and welfare, stabilize the industry and conserve and promote the prosperity and welfare of the State by fostering and promoting better methods of production, packing, merchandising and advertising in the sardine industry of this State.'

The declared purposes of the Act are to be accepted as true unless incompatible within its meaning and effect.

'The court is bound to assume that, in the passage of any law, the Legislature acted with full knowledge of all constitutional restrictions and intelligently, honestly, and discriminatingly decided that they were acting within their constitutional limits and powers. That determination is not to be lightly set aside. It is not enough that the court be of the opinion that, had the question been originally submitted to it for decision, it might have held the contrary view. The question has been submitted in the first instance to the tribunal designated by the Constitution, the Legislature, and its decision is not to be overturned by the court unless no room is left for rational doubt. All honest and reasonable doubts are to be solved in favor of the constitutionality of the act. This healthy doctrine is recognized as the settled policy of this court.' Laughlin v. City of Portland, 111 Me. 486, 489, 90 A. 318, 319. See Morris v. Goss, 147 Me. 89, 83 A.2d 556; Crommett v. City of Portland, 150 Me. 217, 107 A.2d 841; State v. The Fantastic Fair et al., 158 Me. 450, 186 A.2d 352.

Every intendment must be made in favor of the validity of the law, if it appears that the means adopted are suitable to the end in view, impartial in operation, not unduly oppressive upon the individuals, and has a real and substantial relation to their purpose.

It cannot be reasonably contended that the protection and promotion of the sardine industry in Maine is not of public concern or that the Legislature may not determine within reasonable bounds what is necessary for the protection and expedient for promotion of the industry.

We take judicial notice that the area where sardine factories are largely located was at the time of passage of the Act and still is an economically depressed area. The opportunities for employment are limited and though the sardine industry is one of the lesser industries in the State, it does furnish employment to a substantial number, who otherwise would be unemployed.

The Defendant contends that the sardine tax was assessed as a property tax in violation of Article IX, Section 8, of the Constitution of Maine, which provides:

'All taxes upon real and personal estate, assessed by authority of this state, shall be apportioned and assessed equally, according to the just value thereof; but the legislature shall have power to levy a tax upon intangible personal property at such rate as it deems wise and equitable without regard to the rate applied to other classes of property.'

It is clear that the tax is not upon the sardine itself as property but is an excise upon the privilege of packing sardines and is not prohibited by Article IX, Section 8. It is not measured by value and is not laid directly upon the property itself. The total amount of the tax paid is directly determined by the extent to which this privilege is exercised. The tax has none of the attributes of an ad valorem tax. It is not measured by value. The value of packed sardines may fluctuate as it will, but the amount per case of the tax remains constant.

Whenever it is apparent from the scope of the Act that its object is for the benefit of the public, and that the means by which the benefit is to be attained are of a public character, the Act will be upheld even though incidental advantage may accrue to individuals beyond those enjoyed by the general public.

It is for the Legislature to determine the manner and extent to which it will exercise this function of government and that its determination upon that point is limited by its own discretion.

In determining whether any pparticular measure is for the public advantage, it is not necessary to show that the entire body of the State is directly affected, but it is sufficient that a portion of the State shall be benefited thereby.

The State is made up of its parts, and those parts have such a reciprocal influence upon each other that any advantage which accrues to one of them is felt more or less by all of the others.

A Legislature that should refrain from all legislation that did not equally affect all industries of the State would signally fail in providing for the welfare of the public.

'The principle that the imposition of both an excise tax on a privilege, activity, occupation, or calling and an ad valorem tax on property used in the exercise, conduct, or performance of such calling, privilege, or activity is not invalid as double taxation is generally recognized. The principle is bottomed on the theory that the subject of ad valorem taxation is property and that of excise taxation is a right or privilege, and that consequently, the requirement frequently made essential to the existence of double taxation in the unconstitutional sense, namely, that both impositions must be against the same taxable subject, is lacking. The rule has received application in many diverse factual situations. Thus, it is well settled that a state may collect an ad valorem tax on property used in a calling and at the same time impose a license tax on the pursuit of that calling.' 51 Am.Jur., page 345.

'It is to be presumed, however, that when the legislature levies a tax and appropriates the proceeds thereof for a purpose which it declares to be for the public welfare that it has acted in good faith and within is constitutional powers. Unless it has clearly exceeded its constitutional powers in so doing, its action must be sustained. All rational doubts as to the constitutionality of statutes must be resolved in favor of the constitutionality thereof. Although it is the duty of the court to declare acts which transcend the powers...