Alderman v. Wells
| Decision Date | 12 April 1910 |
| Citation | 67 S.E. 781,85 S.C. 507 |
| Parties | ALDERMAN v. WELLS, County Treasurer. |
| Court | South Carolina Supreme Court |
Appeal from Common Pleas Circuit Court of Clarendon County; R. C Watts, Judge.
Action by D. W. Alderman against L. L. Wells, as Treasurer of Clarendon County. Judgment for defendant, and plaintiff appeals. Affirmed.
Charlton Du Rant, for appellant. J. Fraser Lyon, Atty. Gen., and J. H Lesesne, for respondent.
The plaintiff paid his income tax for the year 1905, under protest, and brought this action to recover it back, under the provisions of section 413 of the Civil Code of 1902. He alleges that the act which authorized the levy and collection of the tax is unconstitutional, because it denies to him the equal protection of the laws, and due process of law, in that: (1) Incomes under $2,500 are not taxed, and incomes over said amount are taxed, this being an arbitrary and unreasonable classification, and not being founded on the said income supporting a family, or being used in any particular manner or by any class of persons.
(2) That incomes less than $5,000 pay a tax of 1 per cent., and incomes from $10,000 to $15,000 pay a tax of 2 1/2 per cent. (3) That said tax includes all natural persons, and excludes all corporations. (4) That nearly all of plaintiff's income for the year for which the said tax was assessed was derived from dividends received from stock in corporations chartered under the laws of the state of South Carolina, and the said corporations had been required to pay the franchise tax in the proportion to the amount of their capital stock as required by the laws of the state of South Carolina, and, in addition, the said corporations had been taxed and required to pay taxes upon their property for usual state, county, and municipal purposes, and the same amounts to an unreasonable discrimination against and tax upon the stockholders of corporations. (5) In that no tax is assessed against the increase in values of property during the year or from property sold at greater than cost price, or for any increase in market values of stock, bonds, or other investments; this being an unreasonable and arbitrary classification of property for taxation. (6) In that no deduction is made for any interest or other like expenditures which reduce the net income and are not exempt in said act as expenses of carrying on business. (7) In that no deduction is made for taxes or other assessments paid the government; the said income tax act thereby being a tax on other taxes, and subjecting some property to double and treble taxation. (8) In that no deduction is allowed for losses without regard to the nature or cause of same. He also alleges that it violates sections 2 and 3, art. 10, of the Constitution, and that it was repealed by section 5, Supply Act 1905 (Act Feb. 18, 1905 [24 St. at Large, p. 993]).
To a proper understanding of the questions involved, it will be necessary to set out the first two sections of the act, which is incorporated in sections 325 to 331 of the Civil Code of 1902.
Section 327 defines the words "citizen" and "person," as used in the act, as including all natural persons, copartners, and members of any incorporated association, and as excluding all corporations chartered by the laws of the United States or of this or any other state. Section 328 provides that the tax shall be levied and collected at the same time and in the same manner and by the same officers as other taxes, and that they shall be paid into the state treasury, as other general state taxes. Sections 329 and 330 provide for the time and manner of making returns, and penalties for failure to make returns, and for making willfully fraudulent returns, and also that "the tax and the additions thereto as a penalty are to be assessed and collected in the manner provided for in the case of failure to make returns or lists of personal property." Section 331 is as follows: "In every respect not herein specified, the returns for and the levy and collection of the tax provided in this article shall be subject to all the provisions of law relative to the assessment and collection of taxes on personal property."
As one of the objections to the act is that it takes plaintiff's property "without due process of law," we state briefly, but substantially, the method of procedure in ordinary cases, required by the statutes of this state relative to the assessment and collection of taxes on personal property, which, by the terms of the income tax act, are made applicable to the assessment and collection of taxes thereunder. Between the 1st of January and the 20th of February in every year all persons are required to make a statement of return, on oath, to the county auditor of all such property, giving its value. The returns for each tax district are subsequently submitted to and passed upon by a board of assessors appointed for such district, who are sworn to fairly and impartially assess the value of such property. If the board increases the aggregate valuation put upon his property by the taxpayer by as much as $100, notice must be given to the taxpayer, and he has the right of appeal to the county board of equalization, which is composed of the chairmen of the boards of assessors for the several tax districts in the county, who are sworn fairly and impartially to discharge the duties imposed upon them by law. They hear all grievances and appeals from the valuations and assessments made by the boards of assessors, and may take testimony in regard to the same. If they raise the valuation of any property, the owner must be notified. If the taxpayer cannot get relief from the board of equalization, he has the right of appeal to the comptroller general, to whom all the testimony relative to each grievance must be forwarded, and he acts thereupon. After the assessments are fixed, the taxes, if not paid within the time prescribed by law, are collected by distress or by execution. If a taxpayer conceives that a tax assessed against him is unjust or illegal for any cause, he may pay the same under protest, and bring his action against the treasurer in the court of common pleas to recover it back. Under that provision of the law, this action was brought.
The provision of the fourteenth amendment to the Constitution of the United States which it is claimed this act violates reads as follows: "No state shall make or enforce any law which shall abridge the privileges or immunities of the citizens of the United States; nor shall any state deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws." Section 5, art. 1, of the Constitution of this state is to the same effect, and in nearly the same words. The rights guaranteed by these constitutional provisions have been the subject of frequent judicial consideration. The courts have not attempted to give a definition of the meaning of the words "due process of law" so as to cover all possible cases, nor have they undertaken to say what would or would not, under all circumstances, satisfy the guaranty of "the equal protection of the laws," but have generally been content to proceed by the process of inclusion and exclusion in ascertaining their intent and meaning and their application to the facts of each case as it is presented for decision, and with giving the reasons upon which the decision is rested.
The claim that the act deprives the plaintiff of his property without due process of law, and denies him the equal protection of the laws, raises questions under the federal Constitution, upon which the decisions of ...
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