State v. Spence & Goldstein

• Citation: 6 So.2d 102
• Decision Date: 02 February 1942
• Docket Number: 6365.
• Court: Court of Appeal of Louisiana (US)
• Parties: STATE v. SPENCE & GOLDSTEIN, INC.

6 So.2d 102

STATE v. SPENCE & GOLDSTEIN, INC.

No. 6365.

Court of Appeals of Louisiana, Second Circuit

February 2, 1942

Blanchard Goldstein, Walker & O'Quin, of Shreveport, for appellant.

Irion & Switzer, of Shreveport, for appellee.

TALIAFERRO Justice.

The state through Rufus W. Fontenot, Director of Revenue, proceeded by rule against defendant corporation to have it adjudged to be due corporation franchise taxes for the years 1934, 1935 and 1936, the aggregate of which, including statutory penalty of twenty per cent (20%) and ten per cent (10%) attorney's fees, is alleged to be $1,191.31. Judgment therefor is prayed. Service of process was made upon August Goldstein liquidator of the alleged tax debtor, who filed a plea of prescription of three years in bar of the state's demand basing same upon Section 19 of Article XIX of the Constitution. Prefatory to the plea, he alleged that long ago he completed the liquidation of the corporation and on July 8, 1936, filed with the Secretary of State appropriate evidence of that fact; that all assets of the corporation had been applied to the discharge of its obligations, and, therefore, its corporate existence had ceased.

When the rule was called for trial, defendant made no appearance and, of course, no evidence was offered in its behalf. Judgment was awarded plaintiff, but through error the amount thereof is fixed at $1,199.31, "together with twenty per cent statutory penalty thereon, and an additional amount of ten per cent * * * as attorney's fees", and costs. The lien and privilege in favor of the state was recognized. Defendant appealed.

Aside from the above mentioned error in the judgment, this appeal presents only one issue, that of law, to-wit:

Is the right to recover the taxes sued for barred by the prescription established by Section 19 of Article XIX of the constitution as amended by Act No. 35 of 1938, ratified by the voters on November 8, 1938? A correct decision of this question depends entirely upon the construction properly due this section of the organic law as amended, in this respect, to-wit:

Does it operate retroactively or prospectively only?

This section relates to the recording of mortgages and privileges on immovable property as a prerequisite to affecting third persons, with certain exceptions, including privileges for taxes, state, parish and municipal. The amendment reads as follows, to-wit: "* * * and provided, further, that all taxes and licenses, other than real property taxes, shall prescribe in three years from the 31st day of December in the year in which such taxes or licenses are due."

The referred to section of the Constitution, prior to the amendment, contained no period of prescription as regards enforcing payment of taxes and licenses due the state. It did provide, as it does now, that "tax liens, mortgages and privileges shall lapse in three years from the 31st day of December in the year in which the taxes are due", etc. And, it is conceded that unless the amendment operates retroactively, the plea of defendant is not tenable because there is no other Constitutional provision nor is there legislative enactment which provides any period of limitation against the state's right to sue for and recover franchise taxes of the character at issue herein. Prior to the amendment such taxes were imprescriptable. State v. Stewart Brothers Cotton Company, Inc., 193 La. 16, 190 So. 317. If defendant's position that the amendment has retroactive effect is correct, the plea is obviously well founded because more than three years have elapsed since the beginning of the current of prescription against the 1936 taxes, and prior to filing of this action.

It is a familiar canon of construction that legislative enactments as well as constitutional provisions do not operate retroactively unless the purpose to give them such effect clearly appears or is necessarily implied therefrom. Article 8 of the Civil Code contains the general rule on the subject. It tersely says:

"A law can prescribe only for the future; it can have no retrospective operation, nor can it impair the obligation of contracts."

American Jurisprudence, Volume 11, paragraph 35, p. 641, gives the rule of construction in this language:

"The presumption that statutory enactments are not to be considered retrospective in their operation unless the intention so to make them clearly appears from their terms has application as well to constitutional provisions."

25 R.C.L., Section 35, p. 787, has this to say on the subject, to-wit:

"Even though the legislature may have the power to enact retrospective laws, a construction which gives to a statute a retroactive operation is not favored, and such effect will not be given unless it is distinctly expressed or clearly and necessarily implied that the statute is to have a retroactive effect. There is always a presumption that statutes are intended to operate prospectively only, and words ought not to have a retrospective operation unless they are so clear, strong, and imperative that no other meaning can be annexed to them, or unless the intention of the legislature can not be otherwise satisfied. Every reasonable doubt is resolved against a retroactive operation of a statute. If all of the language of a statute can be satisfied by giving it prospective action only that construction will be given it."

In the case of City of Shreveport v. Cole, 129 U.S. 36, 9 S.Ct. 210, 213, 32 L.Ed. 589, the Court, confirmatory of the rule of construction laid down by the textwriters, said:

"Constitutions as well as statutes are construed to operate prospectively only, unless, on the face of the instrument or enactment, the contrary intention is manifest beyond reasonable question."

The syllabus in Etchison Drilling Company v. Flournoy, 131 La. 442, 59 So. 867, tersely declares the rule to be:

"A Constitution should operate prospectively only, unless the words employed show a clear intention that it should have a retrospective effect."

A large array of authorities is cited to justify this conclusion.

Now, in view of the well established rule of construction reflected from the above quotations and decisions, let us consider and weigh the language of the amendment, particularly in the light of conditions and circumstances prevailing at the time of its submission to and adoption by the voters of the state, in our effort to determine whether or not it was intended that its operative effect should be retrospective.

When this amendment was adopted, the taxes herein sued for were due and owing to the state. The right to collect such taxes and the correlative right to enforce collection then inhered in the state, and were vested rights within the meaning of Section 15 of Article IV of the Constitution. Certainly, for the state, through its electors, to strip itself of these rights and remit the amounts comprehended therein, as well as in many other cases of like character, involving, perhaps, large amounts in taxes, the intention to do so should be beyond doubt. Such intention does not appear from the language of the amendment. No strained construction is necessary to reach the conclusion that it was not the purpose of the amendment to waive rights at that time vested, but, on the contrary, that the same was intended to and in fact does operate only prospectively is easily deduced from a fair consideration of its own unambiguous language.

There is no reference whatever to past due taxes in the amendment. Simple words could...