Cruse v. Fischl

• Citation: 55 Mont. 258
• Decision Date: 04 November 1918
• Docket Number: No. 3939.,3939.
• Parties: CRUSE et al. v. FISCHL, Treasurer of Lewis and Clark County.
• Court: United States State Supreme Court of Montana

55 Mont. 258

CRUSE et al.
v.
FISCHL, Treasurer of Lewis and Clark County.

No. 3939.

Supreme Court of Montana.

Nov. 4, 1918.

Appeal from District Court, Lewis and Clark County; J. M. Clements, Judge.

Action by Richard Cruse and others, administrators with the will annexed of the estate of Thomas Cruse, deceased, against E. Fischl, treasurer of Lewis and Clark county. Judgment for defendant, and plaintiffs appeal. Affirmed.

Walsh, Nolan & Scallon, of Helena, for appellants.

S. C. Ford and Frank Woody, both of Helena, for respondent.

HOLLOWAY, J.

On the first Monday of March, 1915, the estate of Thomas Cruse, deceased, owned Montana State bonds, and bonds of Fergus county, Valley county, Yellowstone county, and Carbon county, all of the aggregate value of $207,500. These bonds were assessed at their par value, the tax thereon was paid under protest, and this action was instituted to recover the amount paid. The plaintiffs appealed from an adverse judgment, and submit for determination the question: Are state and county bonds held in private ownership subject to taxation?

In theory, the burden of taxation ought to be borne by every one in proportion to the value of his property. In practice it is not always so. Prior to the adoption of our state Constitution, there were few restraints upon the Legislature with respect to its power to declare what property should and what should not be taxed, with the result that from time to time certain classes of privately owned property were declared exempt. At the time the constitutional convention assembled the list of exempt property was a formidable one. It will be found in section 1668, Fifth Division, Compiled Statutes 1887. The abuse of power was manifest and the inequality in taxation plainly apparent. To obviate the difficulties confronting the new state, to provide the necessary revenue for public purposes, and to insure equal and exact justice in the matter of taxation so far as it was then deemed possible, the people withdrew from the lawmakers some of the legislative powers theretofore exercised, and in no uncertain terms prescribed limitations upon the authority to relieve property from its just proportion of the burdens of government.

The subject “Revenue and Taxation” is covered by article 12 of the Constitution. By section 2 of that article two classes of property, and only two, were deemed proper subjects of relief from taxation. The first comprises public property–that is, the property of the United States, the state, counties, cities, towns, school districts, municipal corporations and public libraries–and with respect to this property the Constitution declares that it shall be exempt. The second class comprises property of a quasi public character–that is, property used exclusively for agricultural and horticultural societies, educational purposes, places of actual religious worship, hospitals and places of burial not used or held for private or corporate profit, and institutions of purely public charity. The Legislature is permitted, but not required, to relieve any or all of the property of this class from taxation, and it has all been declared to be exempt. Section 2499, Rev. Codes.

There cannot be a difference of opinion concerning the meaning of the language employed in section 2 above. The authority to tax any property of the first class is denied the lawmakers absolutely. The provision is mandatory in character, is self–executing and the legislation thereafter enacted declaring property of that class exempt added nothing to its force or effectiveness.

When we recall that our Constitution is not a grant of authority, but a limitation upon the powers of government–that our Legislature exercises inherent and not delegated authority–the reference to the second class becomes equally explicit. While the language is permissive in form, it is prohibitory in effect. The Legislature may extend the exemption to the property enumerated, but it cannot go further or include any other. This is the construction uniformly placed upon such provisions, and is commanded by the rule of interpretation contained in the Constitution itself. Section 29, art. 3.

Section 2 thus expresses the entire will of the people with respect to the property absolutely exempt and the extent of legislative power to create exemptions. Section 2499, Revised Codes, is therefore to be construed...