Allen v. Multnomah County

• Decision Date: 15 October 1946
• Parties: ALLEN <I>v.</I> MULTNOMAH COUNTY ET AL.
• Court: Oregon Supreme Court

179 Or. 548

173 P.2d 475

ALLENv.

MULTNOMAH COUNTY ET AL.

Supreme Court of Oregon.

Argued September 24, 1946.

Affirmed October 15, 1946.

Taxation — Exemptions

1. Courts have the duty to scrutinize carefully all claims of exemption from taxation, and to approve such claims only in the event that they fall within a specific legislative grant of exemption.

Taxation — Exemptions

2. A general exemption from taxation tends to equalize itself, and therefore it does not conflict with constitutional provisions respecting equality and uniformity of taxation.

Taxation — Exemptions

3. The grant of reasonable exemptions from taxation is within the authority of the state Legislature.

Taxation — Exemptions

4. Statute providing that all household furniture, domestic fixtures, household goods and effects actually in use as such in homes and dwellings, and all wearing apparel, watches, jewelry and similar personal effects actually in use, shall be exempt from taxation, is valid.

Taxation — Legislative intent

5. The intent of the Legislature to exempt must be clear beyond a reasonable doubt, and will not be implied from language that is susceptible of any other reasonable interpretation.

Statutes — Construction

6. If a statute is ambiguous it is court's duty to interpret by resort to rules of statutory instruction, in order to determine the legislative meaning if that is possible.

Taxation — Household furniture

7. The statute exempting from taxation all "household furniture", domestic fixtures, household goods and effects actually in use as such in homes and dwellings, does not apply to and exempt from taxation furniture owned by a landlord and placed in apartments for use by tenants.

Statutes — Construction

8. When the legislative intent in enacting a statute has been ascertained, the intent should be given effect in construing the statute, even though, in doing so, the literal meaning of the words used is not followed.

Statutes — Construction

9. In arriving at legislative intent, it is proper for a court to take into consideration the policy and purposes of a statute, and to consider, in that connection, whether such policy and purposes will be obtained by a literal interpretation of the language used.

Statutes — Construction

10. The general language of a statute should be limited to the persons and subjects to which it is reasonable to suppose it was intended to apply, especially when a literal interpretation would lead to harmful and absurd consequences.

Taxation — Exemptions

11. Exemptions from taxation are either personal, being granted directly in favor of such persons as are within contemplation of the act, or impersonal, being granted directly in favor of a certain class of property.

Statutes — Amendments

12. Presumably the Legislature does not do a vain thing when it amends a statute.

Statutes — Contemporaneous construction

13. Contemporaneous construction of a statute by officers or departments charged with the duty of administering it is entitled to great weight, and should not be disregarded or overturned except for cogent reasons, and unless it is clear that such construction is erroneous.

ROSSMAN, J., dissenting.

                  See 51 Am. Jur. 440; Use of property by lessee as affecting tax
                exemption, note, 157 A.L.R. 867; 61 C.J., Taxation, § 439
                

IN BANC.

Appeal from Circuit Court, Multnomah County.

JAMES R. BAIN, Judge.

Frank S. Sever and Carey Martin, both of Portland (with Crum, Dusenbery & Martin, on brief), for appellant.

Stanley Jones, Deputy District Attorney, of Portland (with T.B. Handley, District Attorney, of Portland, on brief), for respondents.

AFFIRMED.

HAY, J.

In this suit, plaintiff, the owner of an apartment house in Portland, sought to enjoin the defendant county and its sheriff from collecting taxes which, as of January 1, 1944, had been levied against certain household furniture owned by plaintiff and installed and in use by his tenants in the several apartments of his apartment house. He contends that, by the law of Oregon, such household furniture was exempt from taxation. The court sustained a general demurrer to the complaint. Plaintiff refused to plead further, and, the court having thereupon dismissed the complaint, he appeals.

In Oregon, all taxes are required to be levied and collected under general laws operating uniformly throughout the state. Ore. Const., Art. IX, section 1. Uniformity of taxation, upon subjects of like classification, is mandatory. Id., Art. I, section 32. All real property and all tangible personal property within the state, except as otherwise provided by law, is subject to assessment and taxation in equal and ratable proportion. Section 110-101, O.C.L.A., as amended by chapter 440, Laws 1941. Furniture and personal effects are classified as tangible personal property. Section 110-103, O.C.L.A. Therefore, plaintiff's property is taxable, unless, by law, it is specifically exempted.

The statute upon which plaintiff relies, as it existed at the time of the levy of which he complains, is codified as section 110-201, O.C.L.A. So far as pertinent, it reads as follows:

"The following property shall be exempt from taxation: * * *

"(8) All household furniture, domestic fixtures, household goods and effects actually in use as such in homes and dwellings; also all wearing apparel watches, jewelry and similar personal effects actually in use."

1. It is the duty of the courts to scrutinize carefully all claims of exemption from taxation, and to approve such claims only in the event that they fall within a specific legislative grant of exemption based upon a rule of sound public policy, "or such as, at least, makes the public at large interested in encouraging or favoring the class or interest in whose behalf the exemption is made." 2 Cooley, Taxation, 4 ed., ch. 13, section 653.

2-4. Throughout most of the American states, public policy has approved either entire or partial exemption of household furniture from taxation. Such furniture is a relatively small factor in the aggregate value of all taxable property, and is a class of property that everyone alike may be supposed to own. It is considered, therefore, that a general exemption thereof tends to equalize itself, and, for that reason, does not conflict with constitutional provisions respecting equality and uniformity of taxation. 51 Am. Jur., Taxation, section 547. Moreover, in the assessment of household furniture and personal effects, the assessors would be obliged to pry into the intimate domestic affairs of the people, a procedure which is regarded as not being justified by the relatively small amount of revenue which might be derived thereby. Day v. Lawrence, 167 Mass. 371, 373, 45 N.E. 751; Stimson: Exemption From the Property Tax in California, 21 Cal. Law Rev., p. 193. Exemptions of this sort would appear to be reasonable, and we have held that the grant of reasonable exemptions is within the authority of the state legislature. Portland v. Kozer, 108 Or. 375, 379, 217 P. 833; McPherson v. Fisher, 143 Or. 615, 622, 23 P. (2d) 913.

The history of this class of exemptions began with the act of January 26, 1855, passed by the territorial legislature. Section 6 of the act exempted from taxation "the personal property of every householder, to the amount of three hundred dollars, the articles to be selected by such householder, * * *". Deady, Gen. Laws, 1845-1864, p. 630. This act was still in force when Oregon achieved statehood in 1859, and, by Art. XVIII, section 7 of the state Constitution, was continued in effect. Section 6 was amended in 1903 (Gen. Laws, 1903, special session, p. 28), so as to exempt household goods, furniture and utensils, and certain other personal property, "if owned by a householder and in actual use, or kept for use, by and for his or her family". This amendment was declared unconstitutional in Wallace v. Board of Equalization (1906) 47 Or. 584, 86 P. 365, in that, as between residents and nonresidents, it violated the constitutional guaranty of equality and uniformity of taxation. In 1907 (Gen. Laws, 1907, ch. 268, sec. 4), the section was, in effect, reenacted in the language of the act of 1855. In 1912, the people of Oregon, by initiative procedure, amended the section to read as set forth in the beginning of this opinion. (Section 110-201, O.C.L.A.)

5. So far as practicable, all property should be required to bear its proportionate share of the public burdens, and it is familiar doctrine that taxation is the rule and exemption the exception. No exemptions should be allowed, therefore, unless they are plainly warranted, and the intent of the legislature to exempt must be clear beyond a reasonable doubt. Hibernian Benevolent Society v. Kelly, 28 Or. 173, 195-6, 42 P. 3, 30 L.R.A. 167, 52 Am. St. Rep. 769. An intention to exempt will not be implied from language which is susceptible of any other reasonable interpretation. Kappa Gamma Rho v. Marion County, 130 Or. 165, 170-1, 279 P. 555.

6. If the statute is ambiguous, it is our duty to interpret it, by resort to the rules of statutory construction, in order to determine the legislative meaning, if that be possible. We think that there is, in fact, some ambiguity or uncertainty as to the meaning of "household furniture * * * actually in use as such in homes and dwellings". No doubt, in popular understanding, "household furniture" means that type of furniture which is usually devoted to domestic uses. In this sense, a literal interpretation of the words would appear to include furniture of this sort, in actual use in homes, irrespective of its ownership. We think, however, that emphasis must be placed upon the adjective "household". As a noun, the word has been defined as "persons who dwell together as a family". Arthur v. Morgan, 112 U.S. 495, 5 S.Ct. 241, 28 L.ed. 825. "The words `family' and `household' are often interchangeably used. A family is a collective body of persons living in one house and...