Adams v. Mississippi State Bank

• Decision Date: 17 May 1897
• Citation: 23 So. 395,75 Miss. 701
• Court: Mississippi Supreme Court
• Parties: WIRT ADAMS, STATE REVENUE AGENT, v. MISSISSIPPI STATE BANK

23 So. 395

75 Miss. 701

WIRT ADAMS, STATE REVENUE AGENT, v. MISSISSIPPI STATE BANK

Supreme Court of Mississippi

May 17, 1897

March 1898

FROM the circuit court of Madison county HON. ROBERT POWELL Judge.

This case involved alone the constitutional question passed upon by the court. Its decision was urged by both parties, in the case of Adams v. Capital State Bank, 74 Miss. 307 but the court then declined to decide it. The court deciding the present case was composed of Woods, chief justice; Hon Jeff. Truly and Hon. W. G. Orr, special judges, the latter two being appointed to preside in place of Hon. T. R. Stockdale and Hon. A. H. Whitfield, regular judges, who were disqualified. The facts of the case on the merits are stated in the opinion of the court, delivered by Truly, special judge; and the facts involved on the motion are stated in the opinion thereon, delivered by Woods, C. J.

Judgment and cause remanded.

Mayes & Harris, for appellant.

Notwithstanding the power of the legislature to grant exemptions, yet, when it shall have designated property as subject to ad valorem taxation, the taxation imposed must be equal in its burden and uniform in its character, and in proportion to value, and if it lacks any one of these three elements, it is unconstitutional. We admit that there are certain peculiar species of property which are of such exceptional and extraordinary nature as to justify a provision by the legislature for a special and exceptional mode of assessment, as in the case of railroad and telegraph property, and, according to some authorities, bank property. But the principle goes no further. When the peculiar nature of the property has led to a peculiar mode of valuation, and that mode so contrived has wrought its perfect work of ascertaining the true value of the property for taxation, the limit of the exception is reached, and, if the legislature undertakes to impose another and different burden in the rate, it is unconstitutional as being neither uniform nor equal nor in proportion to value. That is precisely the trouble with the statute under consideration. The assessment by which the value of the bank property, for purposes of taxation, has been ascertained is one thing. That value is ascertained by assessment. For the legislature to add, based on that assessment, a different rate, or limit of rate, is to violate the constitution on all three of these lines, for the reason that it fixes an arbitrary difference which is purely mathematical. It is impossible to say that a six mill levy on property valued at one hundred dollars is equal with a fourteen mill levy on other property valued at the same amount. It is absurd to say that in such case there is uniformity. The whole scheme of taxation must rest for its justification, so far as the variant forms of property are concerned, and the different limits which go to make up their taxable liabilities, on the assessment made. The result of the ascertainment is the determination of a definite amount mathematically measured, and to apply to that amount so measured two rates, also mathematically measured, in which one term is as to the other in the proportion of one to three, or one to two, and to call the result equal and uniform, is absurd.

The special and heinous feature of this statute is that the favoritism shown to the banks, on the one hand, as against citizens on the other, and shown to the comparatively wealthy class of citizens who are money lenders, creditors, on the one hand, as against the comparatively poor class of citizens, who are borrowers and ordinary property holders, on the other, is that it consists in the levy on the values ascertained, and not in the method of the ascertainment. In that method of ascertainment there might be some play, and sometimes there is a play, for legislative discretion, but in the levy there can be none.

Again, considering this statute from the point of view of taxation in proportion to value--taxation in proportion to value means that the whole of the taxation shall be in proportion to value--it includes both the assessment and the levy. The assessment must be in proportion to value, and there, because of peculiar conditions, the legislature may have some discretion, but when that discretion is exercised, the rule is imperative that the levy must be in proportion to the ascertained value as well. Nothing else is justifiable morally. A taxation in proportion to value is not satisfied by the mere form of establishing that the sum to be collected shall be a certain rate per cent. upon the value assessed, but it means, and must mean, also that the rate so levied shall be a rate itself proportionable to the value of the property on which the levy is made, as compared with other values subject to the same taxation. Any other construction is mere legal jugglery, and would turn the constitution from a thing of substance into one of shadow. The books are full of expressions that absolute equality and uniformity of taxation cannot be achieved, owing to the variant conditions of human affairs. But those expressions are coupled always with the qualification, either expressly made or obviously implied, that equality and uniformity and proportion to value must be achieved so far as is reasonably practicable. It is impossible to say that a law which, in express terms, provides that the taxes collected shall not be equal, that they shall not be uniform, is an effort to make them equal and uniform. On the contrary, it is a plain, undeniable and inexcusable effort to defeat equality and uniformity in taxation.

Equality of taxation means apportioning the contributions of each person towards the expenses of government, so that he shall feel neither more nor less inconvenience from his share of the payment than every other person experiences. Kirby v. Shaw, 15 Pa. St., 258; Mills Pol. Ec., bk. 5, ch. 2., paragraph 2.

That taxation shall be uniform means that the cause shall be uniform. Each step must be uniform; the rate must be uniform. New Orleans v. Davidson, 30 La. Ann., 555; Knowlton v. Supervisors, 9 Wis. 510; Weeks v. Milwaukee, 10 Wis. 242. A tax on real estate only is not uniform. Gillman v. Sheboygan, 2 Black., 510; Muscatine v. Railroad Co., 1 Dill., 536; Winter v. City, 65 Ala. 403; Norris v. Waco, 57 Texas, 635, 641.

The statute violates the ad valorem rule, because, in effect, it provides that the tax collected shall be without reference to value. It is a delusion and a disguise; it is an effort to dodge and give the old commuted privilege tax of 1888 by another process. Johnston v. Macon, 62 Ga., 645; Atlantic R. Co. v. Contract Co., 75 N.C. 474; Cheshire v. Berkshire, 118 Mass. 386.

It is contended that this provision in the constitution does not apply to municipal taxation, but only applies to state taxation. We deny the proposition. We grant freely and frankly that the proposition is not without authority, but the overwhelming weight of authority is the other way, and not only that, but the more modern authorities, which more fully express the view arrived at by constitutional lawyers, after a long period of investigation and study in the light of historical and political philosophy is otherwise. So far as we have been able to discover, the states which have held that these provisions do not apply to municipal taxation, are Virginia, Arkansas and West Virginia. The Arkansas cases are Washington v. State, 13 Ark., 752, and McGehee v. May his, 21 Ark., 40. Those cases, however, proceed distinctly on the fact that the Arkansas constitution gave a distinct and independent power of taxation direct to the counties, without any delegation from the legislature, wherefore it was concluded that the general equality and uniformity clause in another portion of the constitution did not refer to county taxes, for the reason that the constitution itself made a special provision in respect to county taxation. Virginia held that the equality and uniformity clause obviously could not have been intended to require that all of the municipalities in the state, and all of the different counties in the state, should levy the same rate of taxation, since it was not to be presumed that the constitutional convention would, in adopting so inconvenient a rule, know, as it must have known, that the necessities of the various municipalities and counties were different, from which reasoning they drew the conclusion that the constitutional provision was not intended to apply to municipalities or counties. West Virginia simply followed Virginia.

The fallacy in that reasoning is manifest. The decision reached by the courts in the case may have been right. No one contends that the meaning of the equality and uniformity clause is that each county shall levy the same rate with every other county, or that each town shall levy the same rate with every other town. The true application of the clause to counties and municipalities is this: That taxation within a county for county purposes shall be equal and uniform, and taxation within a town for town purposes shall be equal and uniform, and that rule is the mandate of the constitution, and in that way the constitutional clause does apply. Such is unquestionably the law. See Cooley's Const. Lim. [ed. of 1890], p. 607, et seq.; Howell v. Bristol, 8 Bush [Ky.], 493; Lexington v. McQuillan's Heirs, 9 Dana, 513; Exchange Bank v. Hines, 36 Ohio St., 1; Bright v. McCulloh, 27 Ind., 223. East Portland v. Multnomoh Co., 6 Ore., 62, 66; Taylor v. Chandler, 9 Heis., 349; Chattanooga v. Railroad Co., 7 Lea, 561; New Orleans v. Kaufman, 29 La. Ann., 283; New Orleans v. Davidson, 30 La. Ann., 554.

In addition to the foregoing authorities from other states, we call the attention of the court to the...