Gruen v. State Tax Commission

• Citation: 211 P.2d 651,35 Wn.2d 1
• Decision Date: 05 November 1949
• Docket Number: 31083.
• Court: United States State Supreme Court of Washington
• Parties: GRUEN v. TAX COMMISSION et al.

211 P.2d 651

35 Wn.2d 1

GRUEN v. TAX COMMISSION et al.

No. 31083.

Supreme Court of Washington, En Banc.

November 5, 1949

Action by Charles H. Gruen against Tax Commission of the State of Washington and others to enjoin the execution of statute providing for a bonus to veterans of World War II by means of sale of bonds payable out of excise tax on cigarettes under existing statutes and an additional tax on sale, use, etc of cigarettes.

The Superior Court of Thurston County, John M. Wilson, J overruled defendants' demurrer to the complaint and on defendants' refusal to plead further granted a permanent injunction as prayed for, and the defendants appealed.

The Court, Simpson, C.J., reversed the judgment of the trial court and held that the statute was constitutional.

Hill Donworth, Robinson and Mallery, JJ., dissented.

Where a statute is open to two constructions, one of which will render it constitutional and the other unconstitutional former construction will be adopted.

Smith Troy, Lyle L. Iverson, Olympia, for appellants.

Willard J. Wright, Stimson Bullitt, Seattle, Joe S. Pearson, Seattle, Solie M. Ringold, Seattle, for respondent.

T. David Gnagey, Spokane, Clay Nixon, Ralph C. Hove, Seattle, Walthew, Gershon, Yothers & Warner, Seattle, Joseph P. Adams, Seattle, D. Van Fredenberg, Seattle, amici curiae.

SIMPSON Chief Justice.

Plaintiff, who is a taxpayer engaged in the sale of cigarettes in the city of Seattle, instituted this action in the superior court of Thurston county. The complaint contains several allegations attacking the constitutionality of the Session Laws of 1949, chapter 180.

Plaintiff asked for a permanent injunction against the tax commission of the state of Washington to prevent the collection of the taxes provided for in the act; a permanent injunction against the state finance committee to prevent the issuance, sale, or retirement of bonds; and, a permanent injunction against Honorable Cliff Yelle, state auditor, to prevent the issuance or the drawing of warrants, or otherwise doing or performing any of the acts or duties directed by the act.

The defendants interposed a demurrer to the complaint on the ground that a cause of action was not stated. The demurrer was overruled. The defendants refused to plead further to the complaint, and a permanent injunction was issued as prayed for. This appeal followed.

The assignments of error made by appellants are sufficient to challenge the judgment entered by the trial court.

The respondent contends that the act violates the following provisions of the Washington state constitution: (1) Art. II, § 19; (2) Art. II, § 37; (3) Art. VIII, § 5; (4) Art. I, § 12, and Amendment 14, United States constitution; (5) Amendment 1; (6) Art. VIII, §§ 1 and 3; and (7) Amendment 14.

The act under consideration provides for the payment of a bonus to the veterans of World War II. SEctions 2, 3, 4, 5, a portion of 7, 8, 10 and 11 of the act simply indicate the persons who are entitled to receive the bonus, and determine the legal machinery for the sale and disposal of the bonds issued to secure the money necessary to pay the bonus. The also indicate the duties of certain state officials in relation to the payments to veterans and the sale of the bonds, and the collection of taxes to retire them. Section 7 provides that limited bonds of the state of Washington be issued and sold in the sum of eighty million dollars for the purpose of paying the veterans' compensation. It makes the bonds payable in thirty years from the date of their issuance. Section 9 of the act provides that funds necessary to pay the bonds and interest thereon shall be secured from the excise tax on cigarettes imposed by Title XII, sections 82 to 95, inclusive, chapter 180, Laws of 1935 as amended, Rem.Rev.Stat. (Sup.), § 8370-83, -85, -87, -89, -90, -91, -94, -95; Rem.Supp.1941, § 8370-84, -86, -88, -92, -93; Rem.Supp.1943, § 8370-82, and an additional tax upon the sale, use, consumption, handling, or distribution of cigarettes in an amount equal to one cent upon each ten cents or fraction of the intended retail selling price thereof.

Before entering into a discussion of the questions appearing in this case, we deem it proper to refer to certain principles which must be applied in ascertaining whether or not a law passed by the legislature is constitutional.

In construing a statute, every reasonable intendment will be indulged in in favor of the construction that is in conformity with the provisions of the constitution. If a reasonable doubt appears, it should be resolved in favor of the validity of the law, the presumption being 'that the statute in question is constitutional' and the burden rests upon the attacking party to clearly establish its invalidity. State v. Hanlen, 193 Wash. 494, 76 P.2d 316, 317.

'It is a well-settled rule that, where a statute is open to two constructions, one of which will render it constitutional and the other unconstitutional, the former construction, and not the latter, is to be adopted. Poolman v. Langdon, 94 Wash. 448, 162 P. 578.' State ex rel. Campbell v. Case, 182 Wash. 334, 47 P.2d 24, 27.

'We are in complete accord with the principle announced in the case of Farquharson v. Yeargin, 24 Wash. 549, 64 P. 717, to the effect that all presumptions must be indulged in, in favor of the constitutionality of a legislative act, and that where possible, it will be presumed that the legislature has affirmatively determined any special facts requisite to the validity of the enactment, even though no legislative finding of fact appears in the statute.

'We are also in accord with the rule announced in the case of State ex rel. State Reclamation Board v. Clausen, supra, [110 Wash. 525, 188 P. 538, 14 A.L.R. 1133], State ex rel. Collier v. Yelle,

9 Wash.2d 317, 115 P.2d 373, 380.

'The statute, it must be remembered, is an exercise of the taxing power by the state. It must be remembered, also, that, Before a taxing statute is held to be in violation of the fundamental law, it must be so clearly so that no other rational conclusion can be reached.' Spokane International R. Co. v. State, 162 Wash. 395, 299 P. 362, 365.

A statute, when enacted, possesses that binding force and effect named therein, unless it is clearly in conflict with our fundamental law. In other words, a statute cannot be judicially declared beyond the power of the legislature to enact unless in conflict with some specific or definite provision of the constitution. State v. Emonds, 107 Wash. 688, 182 P. 584.

The legislature may legally enact any law not expressly or inferentially prohibited by our state constitution, the constitution being a limitation, not a grant of power. Walker v. Spokane, 62 Wash. 312, 113 P. 775, Ann.Cas.1912C, 994; State ex rel. Mountain Timber Co. v. Superior Court, 77 Wash. 585, 137 P. 994; Standard Oil Co. v. Graves, 94 Wash. 291, 162 P. 558; Sears v. Western Thrift Stores, 10 Wash.2d 372, 116 P.2d 756.

It must be remembered that the legislature is the chosen representative of the people. It speaks for them. Under our constitution the legislature passes laws and repeals laws as the sole representative of the people. This definite conclusion is admirably summed up in the case of Commonwealth ex rel. McCormick v. Reeder, 171 Pa. 505, 33 A. 67, 68, 33 L.R.A. 141, wherein the supreme court of Pennsylvania said: 'But whatever the people have not, by their constitution, restrained themselves from doing, they, through their representatives in the legislature, may do. This latter body represents their will just as completely as a constitutional convention, in all matters left open by the written constitution. Certain grants of power, very specifically set forth, were made by the states to the United States, and these cannot be revoked or disregarded by state legislation. Then come the specific restraints imposed by our own constitution upon our own legislature. These must be respected. But, in that wide domain not included in either of these boundaries, the right of the people, through the legislature, to enact such laws as they choose, is absolute. Of the use the people may make of this unrestrained power, it is not the business of the courts to inquire. We peruse the expressions of their will in the statute, then examine the constitution and ascertain if this instrument says, 'Thou shalt not'; and if we find no inhibition, then the statute is the law, simply because it is the will of the people, and not because it is wise or unwise.'

When the constitutionality of an act is questioned, it is the solemn duty of the court to lay the act alongside the constitution and, with that instrument alone as a yardstick, decide the question according to the applicable rules of law which we have set out.

The question presented here is: Does the act represent a valid exercise of the legislative power?

Respondent makes the contention that the title of the act does not comply with the provisions of Art. II, § 19, of our state constitution, which provides that no bill shall embrace more than one subject, and that shall be expressed in the title.

The title to chapter 180, Laws of 1949, reads as follows: 'An Act providing for the payment of a bonus to veterans of World War II from the proceeds of a bond issue repayable from the excise taxes on cigarettes as herein provided for; making an appropriation and providing penalties.'

The solution of this question depends upon whether the title to the act may be said to be general or restrictive.

In State ex rel. Seattle Electric Co. v. Superior Court, 28 Wash. 317, 68 P. 957 959, 92 Am.St.Rep. 831, this court said, in referring to Art. II, § 19 of our state constitution: 'The above constitutional provision is...