Miller v. Mich. State Apple Comm'n

• Decision Date: 07 February 1941
• Docket Number: No. 50.,50.
• Citation: 296 Mich. 248,296 N.W. 245
• Parties: MILLER et al. v. MICHIGAN STATE APPLE COMMISSION et al.
• Court: Michigan Supreme Court

296 Mich. 248

296 N.W. 245

MILLER et al.

v.MICHIGAN STATE APPLE COMMISSION et al.

No. 50.

Supreme Court of Michigan.

Feb. 7, 1941.

Suit by John T. Miller and others against the Michigan State Apple Commission and others to restrain the enforcement of Act No. 87, Public Acts 1939, known as the Baldwin Apple Act. From a decree for plaintiffs, defendants appeal.

Decree reversed, and decree directed to be entered dismissing the bill of complaint.

WIEST and BUTZEL, JJ., dissenting.

Appeal from Circuit Court, Oakland County, in Chancery; H. Russel Holland, Judge.

Argued before the Entire Bench.

Thomas Read, Atty. Gen., and James A. Greene, Chief Asst. Atty. Gen. (Miller, Canfield, Paddock & Stone, of Detroit, of counsel), for appellants.

Fildew & DeGree, of Detroit, and Pelton & McGee, of Pontiac, for appellees.

CHANDLER, Justice.

At the last legislative session, there was passed Act No. 87, Pub. Acts 1939, known as the ‘Baldwin Apple Act’. The title thereof reads as follows: ‘An Act relating to apples; declaring the public policy of this state to promote the consumption and sale of apples by providing a research and a publicity and sales promotion program to increase the consumption of Michigan grown apples; levying an assessment on apple production and providing for its collection; creating an apple commission and vesting in it the administration of this act; providing for the powers, duties and authority of said commission; and providing penalties for the violation of this act.’

Section 1 relates the various reasons for passage of the act. Section 3 provides for the creation of a commission to administer the provisions thereof. Section 4 provides that the commission should be a body corporate, to have and possess all the powers of a corporation. Section 9 provides:

‘(a) There is hereby levied and imposed upon all apples grown in the year 1939, and annually thereafter, an assessment of 1 cent per bushel, or 2 cents per 100 pounds of all apples grown and produced in Michigan, payable by the grower or grower's agent when shipped, whether in bulk or loose in boxes or any other container, or packed in any style package: Provided, That the provisions of this act shall not apply to apples sold by growers or growers' agents direct to cider and/or vinegar plants for use in making cider and/or vinegar: Provided, That each grower or grower's agent shall be exempt from said assessment on a maximum of 300 bushels of apples for each calendar year.

‘(b) All moneys levied and collected under this act shall be expended exclusively to advertise apples.’

The bill of complaint herein, filed by several apple growers, seeks an injunction against the commission and others charged with the enforcement of the provisions of the act, to restrain the enforcement thereof on the ground that the enactment is violative of constitutional restrictions. Three circuit judges, sitting in banc, held the statute to be unconstitutional and granted the relief prayed.

Mich.Const.1908, art. 10, Sec. 4, provides: ‘The legislature may by law impose specific taxes, which shall be uniform upon the classes upon which they operate.’

A specific tax levied under art. 10, Sec. 4, supra, must not be discriminatory. It must operate with uniformity upon all within a given class. C. F. Smith Co. v. Fitzgerald, 270 Mich. 659, 259 N.W. 352. But plaintiffs claim that the selection of apple growers upon whom to levy a tax, out of all those engaged in agricultural pursuits, is an unreasonable and discriminatory classification, and that no reason exists why the apple grower should be singled out from all other fruit growers for taxation purposes.

The tax in question is a levy upon putting Michigan grown apples in the marts of commerce. According to Section 11 of the act hereinafter quoted, the tax is to ‘be paid prior to shipment’ and in case the commodity is not placed in the channels of commerce, there is no liability to pay the tax. It applies only to those who put their apples in the marts of commerce and is applicable to all that class without distinction.

‘Every laborer or farmer, merchant, mechanic, or professional man may be taxed for the privilege of pursuing his calling (Cooley, Tax'n [2dEd.] 570 et seq.; Webber v. Virginia, 103 U.S. 344, 26 L.Ed. 565;Shepperd v. Sumter County Com'rs, 59 Ga. 535, ); and every merchant who sells goods, or farmer who raises and sells cattle, may be required to pay a tax for the privilege of selling (Cooley, Tax'n [2d Ed.] 31, 177, 578, 602). ‘The legislature may raise revenues by capitation taxes, by special taxes upon carriages, horses, servants, dogs, franchises, and upon every species of property, and upon all kinds of business and trades.’ People v. Mayor, etc., of Brooklyn, 4 N.Y. 419 ;Stuart v. Palmer, 74 N.Y. 183, ;People v. Equitable Trust Co., 96 N.Y. 387; [President, etc., of Portland] Bank v. Apthorp., 12 Mass. 252;In re McPherson, 104 N.Y. 306, 10 N.E. 685 ; 1 Desty, Tax'n, 316. These are not taxes upon property, and have not usually been called such. They are held to be taxes upon privileges or civil rights held and exercised by sanction of law.' Union Trust Co. v. Probate Judge, 125 Mich. 487, 84 N.W. 1101, 1102.

Appellees state:

‘We might well ask what justification can there be for imposing such a tax upon apple farmers and failing to impose a like tax upon the privilege of shipping peaches, potatoes, sugar beets and wheat.

‘What logical connection with the object sought by the Act has a classification which carves a class out of a class?’

According to this argument but one classification could be made of those engaged in agricultural pursuits. It would include all so engaged and no levy could be made upon any particular group included therein, whether they be dairymen, fruit growers, poultry raisers or occupied entirely in the production of grain, as all would come within a definition of the broad word ‘farmer’. The Constitution imposes no such restrictions upon the power of the legislature to classify. This is patent from the examples collected in 26 R.L.C., Taxation, p. 249, § 221.

The primary purpose of the act, broadly stated, is to provide a source of revenue with which to stimulate sales of Michigan apples by advertising and other related means. It is claimed that this is not a public purpose. The argument in support of this theory is that the general welfare of the state is not benefited by the expenditure of the funds collected for the indicated purpose, but that the benefit, if any, will inure to only a small group engaged in the production of apples. We must assume that the advertising for which the funds are expended will accomplish the desired purpose, namely, stimulation of the use of Michigan apples, with a consequent increase in production and distribution. Thus, the primary question is not whether the expenditure of public funds for advertising is a public purpose but whether expenditures to increase the use of apples produced in this state are for such a purpose. The leading authority in this jurisdiction as to what constitutes a public purpose is People v. Township Board of Salem, 20 Mich. 452, 4 Am.Rep. 400, wherein Justice Cooley said: ‘I do not understand that the word public, when employed in reference to this power, is to be construed or applied in any narrow or illiberal sense, or in any sense which would preclude the Legislature from taking broad views of State interest, necessity or policy, or from giving those views effect by means of the public revenues. Necessity alone is not the test by which the limits of State authority in this direction are to be defined, but a wise statesmanship must look beyond the expenditures which are absolutely needful to the continued existence of organized government, and embrace others which may tend to make that government subserve the general well-being of society, and advance the present and prospective happiness and prosperity of the people.’

Taxation for farm aid generally has been upheld as for a public purpose. See annotation 92 A.L.R. 770. We take it that appellees' argument would stamp all the expenditures referred to in those cases as not for a public purpose.

Statistics indicate that the consumption of apples has shown a marked decrease while that of citrus fruits, extensively advertised, has correspondingly increased. That the production of apples is not an infant occupation is settled from the fact that the average annual value of the crop in this state for the past 10 years has been $6,785,000, exceeding the combined value of peaches, pears, grapes, cherries and plums.

We perceive that the stimulation of so large and important an industry will result in a benefit to the general public well-being, the increased prosperity of the entire apple growing industry of necessity being reflected throughout the commonwealth. The funds expended are not paid to apple growers or to any other particular individuals or class thereof as was the case in Michigan Sugar Company v. Auditor General, 124 Mich. 674, 83 N.W. 625,56 L.R.A. 329, 83 Am.St.Rep. 354. We hold that the tax is for a public purpose.

‘Next we consider the question, ‘Is the tax imposed for a public purpose?’ We held in an opinion prepared by Mr. Justice Ellis in the case of Johnson v. State ex rel. Maxcy, 99 Fla. 1311, 128 So. 853, 857, that the protection of the citrus industry is a matter within the police power of the state. In that case it was said:

‘The protection of a large industry constituting one of the great sources of the state's wealth and therefore directly or indirectly affecting the welfare of so great a portion of the population of the state is affected to such an extent by public interest as to be within the police power of the sovereign.’

* * *

‘So it cannot be reasonably contended that the protection and promotion of the citrus industry in Florida is not a matter of public concern or that the Legislature may not determine within reasonable bounds what is...