Pingree v. Auditor General

• Decision Date: 26 April 1899
• Citation: 78 N.W. 1025,120 Mich. 95
• Court: Michigan Supreme Court
• Parties: PINGREE, GOVERNOR, v. AUDITOR GENERAL. TECUMSEH TEL. CO. v. SAME.

78 N.W. 1025

120 Mich. 95

PINGREE, GOVERNOR, v. AUDITOR GENERAL.

TECUMSEH TEL. CO. v. SAME.

Supreme Court of Michigan

April 26, 1899

Application for mandamus by Hazen S. Pingree, governor, and the Tecumseh Telephone Company, respectively, against Roscoe D. Dix auditor general. Granted.

Charles D. Joslyn (Charles Flowers, Benton Hanchett, and Ashley Pond, of counsel), for relator Hazen S Pingree.

Carey W. Dunton (Benton Hanchett and Ashley Pond, of counsel), for relator Tecumseh Tel. Co.

Horace M. Oren, Atty. Gen. (Alfred Russell and Henry M. Cheever, of counsel), for respondent.

HOOKER J.

In the year 1881 the legislature passed an act (No. 168, Pub. Acts 1881) entitled "An act to provide for the assessment of telegraph and telephone lines, within the state of Michigan." Its provisions are, in substance, that the auditor general, state treasurer, and commissioner of the state land office shall assess telegraph and telephone lines at their true cash value, and levy a tax upon said assessment at a rate which shall equal the average rate of taxes (general, municipal, and local) levied throughout the state during the previous year, to be ascertained from the records and files of the auditor general's office, which tax shall be in lieu of all other taxes. This tax has since been paid, and the auditor general has treated it as a specific tax, and credited the amounts collected to the educational fund, under the provisions of section 1 of article 14 of the constitution, which provides: "All specific state taxes except those received from the mining companies of the Upper Peninsula, shall be applied in paying the interest upon the primary school, university and other educational funds, and the interest and principal of the state debt, in the order therein recited, until the extinguishment of the state debt other than the amounts due to educational funds, when such specific taxes shall be added to and constitute a part of the primary school interest fund. The legislature shall provide for an annual tax, sufficient, with other resources, to pay the estimated expenses of the state government, the interest of the state debt, and such deficiency as may occur in the resources." The application of the governor is for a mandamus to compel the auditor general to transfer to the general fund, from the primary school fund, the amount of moneys collected under the act mentioned, and now on hand, upon the ground that the tax provided in said act is not a specific tax. The Tecumseh Telephone Company's application is based upon the same ground, and asks that the tax be canceled, upon the further contention that the tax, not being a specific tax, is not levied in conformity to other provisions of the constitution, viz. sections 11 and 14 of article 14, which are as follows:

"Sec. 11. The legislature shall provide an uniform rule of taxation, except on property paying specific taxes, and taxes shall be levied on such property as shall be prescribed by law."

"Sec. 14. Every law which imposes, continues or revives a tax shall distinctly state the tax, and the object to which it is to be applied; and it shall not be sufficient to refer to any other law to fix such tax or object."

The auditor general has answered both petitions; claiming that the tax is specific, and not a property tax, and that, if it be determined otherwise, the tax is valid.

In addition to the sections quoted, sections 10 and 12 of article 14 of the constitution are as follows:

"The state may continue to collect all specific taxes accruing to the treasury under existing laws. The legislature may provide for the collection of specific taxes from banking, railroad, plank road, and other corporations hereafter created."

"All assessments hereafter authorized shall be on property at its cash value."

The first question presented, then, is, does Act No. 168 of the Laws of 1881 provide for a specific tax, within the meaning of the constitution? If it does, it disposes of the cases, and both applications should be denied.

Amasa Walker, in his Science of Wealth, at page 339, says that: "Duties are generally of two kinds,-specific and ad valorem. Specific duties are imposed by the pound, yard, gallon, etc." The late Mr. Justice Cooley, in his work on Taxation (2d Ed. p. 238), uses a similar classification as to taxes, and says of specific taxes that: "Under this head may be ranged those which impose a specific sum, by the head or number, or by some standard of weight or measurement, and which requires no assessment, beyond a listing and classification of the subjects to be taxed." He describes ad valorem taxes as follows: "Ad Valorem Taxes. A large proportion of the duties on imports are of this description, and so, sometimes, are many of the taxes which make up the internal revenue. The statute laying them prescribes the rule, but requires the action of appraisers in apportioning them between individuals. By far the larger proportion of all state taxation is also 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." A similar description of specific taxes is found in 25 Am. & Eng. Enc. Law, 17. In Colton's Public Economy, at page 576, it is said: "A specific duty is assessed by income,-as so much a yard, per gallon, per cwt., per caldron, etc.; the instrument of measure being such as the article requires." Perry, in his Principle of Political Economy, says: "What is the difference between specific and ad valorem taxes, and why should the student take careful note of them, both singly and combined? These terms are used more particularly in relation to tariff taxes, but there is nothing in the distinction itself so to limit its application. A specific tax is a tax of so many cents or dollars on the pound, yard, gallon, or other quantity measurable. An ad valorem tax is a tax of so much per centum on the invoiced or appraised money value of the goods subject to the tax." Bouv. Dict. tit. "Ad Valorem," says, "Ad Valorem. (Latin.) According to the valuation. Duties may be specific or ad valorem. Ad valorem duties are always estimated at a certain per cent. on the valuation of the property." Black's definition is: "Ad Valorem. According to value. Duties are either ad valorem or specific,-the former when the duty is laid in the form of a percentage on the value of the property; the latter where it is imposed as a fixed sum on each article or class, without regard to its value. The term 'ad valorem tax' is as well defined and fixed as any other used in political economy or legislation, and simply means a tax or duty upon the value of the article or thing subject to taxation." Black, Tax Titles, 83, says upon the subject that: "Difference between Specific and Ad Valorem Taxes. In regard to specific taxes, no other apportionment is requisite than that necessarily prescribed by the statute which lays the tax. The share of each taxpayer is completely determined by his condition with reference to the number of the given articles in his possession, or their weight or measurement, or with reference to the fact of his pursuing the particular avocation taxed, or enjoying the particular franchise, or otherwise, as the case may be. But the case is different with respect to ad valorem taxes. Here the intervention of ministerial officers is necessary to effect the apportionment between individuals. Assessors are called upon to estimate the value of the property to be taxed, and apportion the shares according to their valuation." This distinction has been recognized as applied to duties for many years. Benton's Thirty Years in Congress says of the custom's act of 1833: "Specific duties had been the rule, ad valorem the exception, from the beginning of the collection of the custom-house revenue. The specific duty was a question in the exact sciences, depending upon a mathematical solution, by weight, count, or measure." In Gibbons v. Ogden, 9 Wheat. 180, Chief Justice Marshall said: "The framers of the constitution, and the people who adopted it, must be understood to have employed words in their natural sense, and to have understood what they meant." Quoting this language. Judge Cooley, in his Constitutional Limitations, said at page 58: "This is but saying that no forced or unnatural construction is to be put upon their language, and it seems so obvious a truism that one expects to see it universally accepted without question; but the attempt is so often made, by interested subtlety and ingenious refinement, to induce the courts to force from these instruments a meaning which their framers never intended, that it frequently becomes necessary to declare this fundamental maxim."

It is urged that the framers of the constitution used the term "specific tax" in a different and broader sense and that, in contradistinction to the uniform tax contemplated by section 11, it should be construed to mean any tax on property not conforming to such uniform rule. We have only to examine the statute in force at the time the constitution was adopted, to see that the term "specific tax" was known and applied in this state previous to the meeting of the constitutional convention. Title 5 of the Revised Statutes of 1846 is divided into chapters 20 and 21. The former treats of the "Assessment and Collection of Taxes"; the latter, "Of Specific Taxes and Duties,"-thus indicating that specific taxes and duties embraced taxes other and different from those ordinary taxes which were provided for in chapter 20, and which were assessed and collected locally. An examination of chapter 21 will show that the term "specific taxes" was used in conformity to the definitions hereinafter given. Thus banks were...