Cyers Woolen Co. v. Town of Gilsum

Decision Date08 April 1929
Citation146 A. 511
CourtNew Hampshire Supreme Court

Transferred from Superior Court, Cheshire County.

Petition by the Eyers Woolen Company against the Town of Gilsum for the abatement of taxes. By a majority vote at an annual town meeting the plaintiff was given an exemption under Laws 1925, c. 297, but the selectmen refused to make the vote effective. The plaintiff is entitled to an abatement if the law and vote are valid. This question was transferred from the trial term. Petition dismissed.

Philip H. Faulkner and Henry C. Arwe, both of Keene, for plaintiff.

Orville E. Cain, of Keene, for defendant.

PEASLEE, C. J. The transferred case states the issue to be the validity of Laws 1925, chapter 297, which reads as follows: "Section 1. That the town of Gilsum in Cheshire county be authorized to exempt from taxation for a term of not more than ten years a new woolen mill and machinery to be installed therein proposed to be erected in said town by or for the Eyers Woolen Company."

I. It is claimed that the selectmen in making the assessment acted as agents of the town, and that as such agents their authority was limited by the exempting vote. Therefore, it is said, they possessed no authority to lay a tax upon the plaintiff's mill, and the assessment is void. One answer to this is that it is well settled here that in assessing taxes selectmen act in a judicial capacity, and not as agents of the town. Edes v. Boardman, 58 N. H. 580; Boody v. Watson, 64 N. H. 162, 9 A. 794; Canaan v. Enfield Village Fire District, 74 N. H. 517, 535, 70 A. 250.

Whether, in the exercise of this judicial function, they are bound to follow the directions given by illegal votes or unconstitutional statutes, as has sometimes been suggested (see Boody v. Watson, supra, 167 of 64 N. H. ), is not material here. On this petition for abatement the plaintiff is entitled to such relief only as justice requires. P. L. c. 64, § 14; Conn. Valley Lumber Co. v. Monroe, 71 N. H. 473, 479, 52 A. 940, and cases cited.

If the jurisdiction of the selectmen, acting as assessors, was limited as above suggested, that of the court has no such boundary. The constitutional right of the taxpayers of Gilsum, that the plaintiff pay its constitutional share of the public expense, is capable of vindication here, if not in the court of original assessment. Boody v. Watson, supra.

"However erroneous, in law or in fact, the assessment may be, the appeal being an equitable proceeding, and the appellant, seeking equity, being required to do equity, only so much of his tax is abated as in equity he ought not to pay. Perry's Petition, 16 N. H. 44, 48. This is necessarily so because the statute commands such order to be made as justice requires; and justice requires such an order as will not relieve the appellant from bearing his share of the common burden of taxation on account of any error in the process of finding the amount of his share, and setting it down, with his neighbors' shares, on a town book." Edes v. Boardman, 58 N. H. 580, 586.

The further suggestion that the exemption does not\ infringe any constitutional right of the town, because "there is no such right" (Canaan v. District, 74 N. H. 517, 535, 70 A. 250, 256), is sound (Keene v. Town of Roxbury, 81 N. H. 332, 334, 126 A. 7); but it does not dispose of the case. "But while no rights of the town are infringed by the exemption * * * the constitutionality of the exemption, as infringing constitutional rules of uniformity and equality and general legislation as to the individual taxpayers of the town, remains to be considered." Canaan v. District, supra, 537 of 74 N. H. (70 A. 257).

Nor does this case come within the rule that there is no authority to tax property exempted by act of the Legislature, even if the exempting act is void. Canaan v. District, supra, 540 et seq. (70 A. 250). That rule is based upon the principle that in matters of taxation the Constitution is not self-executing, and legislative authority to lay any tax is required. It does not apply here, because there is a general law covering the taxation of such property as the plaintiff holds. If the special exemption is void, a tax is authorized and required under the general law. The discussion of this topic in that case has to do with classes of property. "If we assume the action of the legislature to have been unconstitutional because of a failure to tax all classes of property, the unconstitutional action of the legislature in refusing or neglecting to provide for the taxation of certain classes of property would not authorize the court to invade the domain of the legislature and order the taxation of such property." 74 N. H. 541, 70 A. 259. The general legislative purpose to tax this class of property is plainly expressed. Its efficiency is not impaired by an unconstitutional special act relating to a specific piece of property within that class.

If the rule were otherwise, a most extraordinary situation would result. If this special act could be dealt with only upon the basis that it is an essential part of the general law taxing mills and machinery (P. L. c. 60, §§ 5, 6), its invalidity would require a holding that the whole law, of which it was an essential part, is invalid for lack of uniformity. The absurdity of such a conclusion is strong evidence of a different legislative intent. The legislative purpose is not doubtful. The provision for taxing mills and machinery was not designed to be made dependent upon the validity of this exempting act. The special act was an independent piece of legislation, standing or falling according to its own merits. If invalid, it simply leaves the general law upon the subject to be administered as though the special act had never been passed. The legislative intent to tax mills, independently of what becomes of this exemption, and to tax this particular mill, if the exemption act is invalid, is too clear to admit of any doubt. "It is universally held that a valid act is not affected by the enactment of a void amendment, even if there are words of express repeal, unless it is clear the legislature intended such repeal." Williams v. State, 81 N. H. 341, 353, 125 A. 661, 667. The doctrine is reaffirmed in Foster v. Farrand, 81 N. H. 448, 451, 128 A. 683.

II. It is urged on behalf of the plaintiff that since it accepted the offer of the town, made in pursuance of the act, and erected its mill upon the faith of the promised exemption, the town cannot now be heard to deny the validity of the legislation under which the parties acted. The opinion of the Court, 58 N. H. 623, is relied upon as authority. That opinion in turn is based upon federal authorities, wherein it is held that when a state Constitution has been given a certain construction those who have acted thereon are protected by the federal guaranty of the sanctity of contract obligations against a change in such interpretation. In accordance with this rule the justices advised the House of Representatives that General Laws, chapter 53, section 10, providing that towns might exempt certain new industries from taxation, was binding upon towns which had theretofore so voted, if the vote had been acted upon. The reason assigned for this conclusion was that there had been a practical construction of the Constitution recognizing the validity of such legislation, and that the federal rule forbade a change of interpretation to the disadvantage of those relying thereon.

This conclusion disposed of existing exemptions. But it did not answer the question which had been asked, nor define the status of future exemptions. As to future transactions, the House was advised that the same rule would continue to apply; and an answer to the question was withheld, as the time available for investigation was insufficient for a proper consideration of the subject.

It may well be doubted whether the advice as to the future was sound. Whether the earlier reliance upon a practical construction, which was not then known to have been questioned, might reasonably be continued after the issue had been raised, and expression of opinion upon it withheld because of the difficulties involved in its solution, is at least debatable. In the ordinary affairs of life one could hardly stand upon such a proposition.

But since the justices stated that such would be its effect, reliance could be put upon their statement as it had theretofore been put upon practical construction, and a like result could be obtained.

It is presumably for this reason that, in the cases involving these exemptions which have since arisen, the issue of constitutionality has not been considered. An examination will show that in the only cases where the exemption was treated as valid the required action relying upon the vote had been taken by the exempted party. "It is admitted that the improvements are exempted * * * under the vote. The question submitted is, whether the real estate is also exempted." Franklin Needle Co. v. Franklin, 65 N. H. 177, 178, 18 A. 318, 319. In Bean & Symonds Co. v. Jaffrey, 80 N. H. 343, 117 A. 12, the plant was erected after the vote, and was not taxed for seven years.

In the present case the question arises as to the circumstances which will support the claim of reliance upon an existing understanding as to the validity of a statute. The essential facts are stated in the briefs of the respective parties. The plaintiff alleges erection of its mill after the vote of the town: and the defendant replies that before this was done the tax commission notified all interested parties that the commission deemed the act to be unconstitutional. Neither party has denied the correctness of the other's allegations, and for the purposes of this decision they are taken to be true.

The statement in the opinion of the Court, 58 N. H. 623, 625, that, "So long as the existing laws remain unrepealed, and the constitutional...

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