Girard v. Defenbach

• Decision Date: 22 October 1940
• Docket Number: 6798
• Citation: 61 Idaho 702,106 P.2d 1010
• Parties: FRANKLIN GIRARD, Respondent, v. BYRON DEFENBACH, Tax Commissioner of the State of Idaho, Appellant
• Court: Idaho Supreme Court

106 P.2d 1010

61 Idaho 702

FRANKLIN GIRARD, Respondent, v. BYRON DEFENBACH, Tax Commissioner of the State of Idaho, Appellant

No. 6798

Supreme Court of Idaho

October 22, 1940

STATUTES-CONSTRUCTION OF STATUTE ADOPTED FROM ANOTHER JURISDICTION-STATE INCOME TAX-CONSTITUTIONAL OFFICERS-JUDGES, DISQUALIFICATIONS.

1. The Supreme Court could not renounce jurisdiction of review of case involving question whether Secretary of State was required to pay income tax on his salary as a constitutional officer, because of fact that the Supreme Court justices were directly and individually interested in the question presented. (I. C. A., sec. 61-2401 et seq.; Const., art. 4 sec. 1.)

2. Where Idaho statute defining "gross income" which should be included in determining income tax was copied in the most part from federal statute, the fact that the Idaho statute did not contain provision corresponding to provision of the federal statute providing for taxation of salaries of president and federal judges was convincing evidence of legislative intent not to tax salaries of state constitutional officers. (I. C. A., sec. 61-2401 et seq.; Const., art. 4, sec. 1; art. 5, sec. 27.)

3. Where a statute is adopted from another jurisdiction, with a provision omitted, the court will conclude that it was not intended that the omitted provision should prevail in Idaho.

4. A statute which is adopted from another jurisdiction, including federal statute adopted by a state, will be presumed to have been adopted with the construction placed upon it by the courts of that state or country before its adoption.

5. Provision of state income tax statute that for purpose of determining "gross income" the decisions under federal income tax act should be the rule of decisions in the state courts and by the state tax commissioner disclosed intent of the state legislature to adopt interpretation previously placed upon the adopted statute by the United States Supreme Court to effect that salaries of certain officials were not considered as "gross income" within the federal act. (I. C. A., sec. 61-2401 et seq.)

6. The salary of the Secretary of State, who is a "constitutional officer" is not within legislative definition of "gross in- come" for purpose of state income tax, and is not subject to such tax. (I. C. A., sec. 61-2401 et seq.; Const., art. 4, sec. 1; art 5, sec. 27.)

APPEAL from the District Court of the Third Judicial District, for Ada County. Hon. Chas. F. Koelsch, Judge.

Action for declaratory judgment in re Income Tax Law. Judgment declaring salary of respondent as Secretary of State not subject to tax. Affirmed.

Affirmed.

Z. Reed Millar, for Appellant.

Although a judge is disqualified to act as such in a case in which he is personally interested (sec. 1-1801, I. C. A.) where such a rule would prohibit the adjudication of the matter jurisdiction will not be declined. (Evans v. Gore, 253 U.S. 245, 40 S.Ct. 550, 64 L.Ed. 887, 11 A. L. R. 519; Poorman v. State Board, 99 Mont. 543, 45 P.2d 307; Gordy v. Dennis, 176 Md. 106, 5 A.2d 69; State v. Nygaard, 159 Wis. 396, 150 N.W. 513, Ann. Cas. 1917A, 1065.)

The inclusion of the salary of a public officer for income tax purposes does not constitute diminution of his salary as contemplated by the Constitution. (O'Malley v. Woodrough, 307 U.S. 277, 59 S.Ct. 838, 83 L.Ed. 1289, 122 A. L. R. 1379, 1392; Magruder v. Brown, 106 F.2d 428; State v. Nygaard, supra; Taylor v. Gehner, 329 Mo. 511, 45 S.W.2d 59, 82 A. L. R. 986.)

Exemption from taxation is never implied or presumed. In all cases of doubt as to the inclusion or exemption, the presumption is in favor of the taxing power and the burden is on claimant to establish clearly a right to exemption. (Salisbury v. Lane, 7 Idaho 370, 63 P. 383; Cheney v. Minidoka Co., 26 Idaho 471, 144 P. 343; Kootenai Co. v. Seven-Seven Co., 32 Idaho 301, 182 P. 529; Gem Irr. Dist v. Gallet, 43 Idaho 519, 253 P. 128; Bistline v. Bassett, 47 Idaho 66, 272 P. 696, 62 A. L. R. 323.)

An exemption claim cannot be sustained unless it is shown to be within the spirit as well as the letter of the law. (Bistline v. Bassett, 47 Idaho 66, 272 P. 696, 62 A. L. R. 323; Filippe A. Broadbent Mantel Co. v. City of Baltimore, 134 Md. 90, 106 A. 250.)

The language of the income tax statute, using the term "every individual," included all individuals in the state, rich or poor, great or small, so long as they show income for the year in excess of the minimum fixed. (State v. Nygaard, supra; Taylor v. Gehner, supra; Dupont v. Greene, 38 Del. 566, 195 A. 273, 114 A. L. R. 1184; Martin v. Wolfford, 269 Ky. 411, 107 S.W.2d 267.)

Maurice H. Greene and George Donart, for Respondent.

Where a statute is adopted literally from another state, it will be presumed to have been adopted with the construction placed upon it by the courts of said state. The interpretation placed thereon by sister states prior to adoption by this state is highly persuasive, if not conclusive. (Griffiths v. Montandon, 4 Idaho 377, 39 P. 548; Stein v. Morrison, 9 Idaho 426, 75 P. 246; Merchants etc. Assn. v. Jacobsen, 22 Idaho 636, 127 P. 315; Gallafent v. Tucker, 48 Idaho 240, 281 P. 375; Mochel v. Cleveland, 51 Idaho 468, 5 P.2d 549; Hanson v. Rogers, 54 Idaho 360, 32 P.2d 126.)

The foregoing rule is applicable not only to statutes adopted from other states, but to federal statutes adopted by a state or territory. (59 C. J. 1063.)

Where a statute is adopted from another jurisdiction, but an integral part thereof is omitted, it is to be presumed that the omission was intentional and the omitted part should not prevail. (Hendrix v. Gold Ridge Mines, 56 Idaho 326, 54 P.2d 254.)

Where a statute is capable of two interpretations, one of which would make it constitutional, and the other unconstitutional, the courts should adopt the construction upholding the validity of the act; the presumption is that the legislature intended to enact a constitutional and enforceable law. (Hindman v. Oregon S. L. Railroad Co., 32 Idaho 133, 178 P. 837; Intermountain Title Guaranty Co. v. Egbert, 52 Idaho 402, 16 P.2d 390.)

In determining legislative intent at the time of enacting a law, it is proper to consider decisions of the Supreme Court of the United States interpreting or affecting the constitutionality of any of the provisions thereof. (Meredith v. State Tax Com., (Ore.) 96 P.2d 1082, 125 A. L. R. 1417.)

OPINION

PER CURIAM.

--October 18, 1939, respondent, Franklin Girard, filed complaint in the district court against appellant, Byron Defenbach, Tax Commissioner of the State of Idaho, under the declaratory judgment law, alleging he was elected Secretary of State November 8, 1932, for a term of two years, reelected November 6, 1934, for a term of two years, and for his services was paid $ 4,000 per annum and alleging the terms of sections 61-2420, I. C. A., and 61-2410, I. C. A., as amended by chapter 159, 1933 Session Laws and as further amended by chapter 30, 1935 Session Laws, First Extraordinary Session; that during whole of the calendar year of 1936 respondent was married and living with his wife and that their total income, other than his state salary, did not exceed $ 1,500 and that their total gross income other than salary received from the state of Idaho was less than $ 5,000, that respondent did not file an income tax return; that the salary of Secretary of State was not taxable at the time of the enactment of chapter 24, Title 61, I. C. A.; that the legislature did not levy a tax upon the salary of the Secretary of State, and that respondent was not required to make and file an income tax return for the year 1936, or to pay a tax thereon. It was further alleged the then tax commissioner, during 1933 adopted regulation No. 18, which excepted salaries of elective officers of the state; that notwithstanding such regulation and the provisions of the Income Tax Law, appellant notified various state officers they were required to file a return and pay a tax on their salaries for 1936 and that appellant construed the Income Tax Law to levy a tax upon the salary of the Secretary of State for the year 1936. A declaratory judgment pertaining thereto was prayed.

Appellant's answer in effect is an admission of the allegations of fact but denied that regulation No. 18 was a legal and proper regulation, and alleged it was contrary to law. Appellant prayed the Income Tax Law be interpreted to require respondent to report all salaries and wages received and to pay the tax thereon.

The matter was tried on such issues, no evidence being introduced, the trial court concluding the facts alleged in the complaint were admitted. Findings of fact and conclusions of law and judgment were entered against appellant and this appeal was then prosecuted.

The sole question presented is one of interpretation of law, namely: Whether the Secretary of State, a constitutional officer (art. 4, sec. 1, Const.), is required to file a return and pay a tax, with relation to his salary as Secretary of State, under the provisions of the Income Tax Law of the State of Idaho.

At the outset it may be said that the members of this court, as well as all judges and officials who come within the classification of constitutional officers, are directly and individually interested in the question presented, and we regret that its solution falls to us. However, as stated in a similar situation by the Supreme Court of the United States, we cannot renounce or decline jurisdiction. In Evans v. Gore, 253 U.S. 245, 40 S.Ct. 550, 551, 64 L.Ed. 887, 11 A. L. R. 519, the Supreme Court of the United States said:

"Because of the individual relation of the members of this court to the question . . . . stated, we cannot but regret that its solution falls to us; . . . . ...