Miners & Merchants Bank v. Board of Supervisors of Cochise County

• Citation: 55 Ariz. 357,101 P.2d 461
• Decision Date: 22 April 1940
• Docket Number: Civil 4216
• Parties: MINERS & MERCHANTS BANK, a Corporation, Appellant, v. BOARD OF SUPERVISORS OF COCHISE COUNTY, STATE OF ARIZONA; and P. P. PAGE, JOHN WOOD and S. P. LEWIS, as Members of Said Board; and OAKLEY LUCAS, as County Treasurer and Ex-Officio Tax Collector of Said County; and JAMES L. POWELL, as County Assessor of Said County, and as Agent of the Motor Vehicle Division of the Arizona State Highway Department, Appellees
• Court: Supreme Court of Arizona

101 P.2d 461

55 Ariz. 357

MINERS & MERCHANTS BANK, a Corporation, Appellant, v. BOARD OF SUPERVISORS OF COCHISE COUNTY, STATE OF ARIZONA; and P. P. PAGE, JOHN WOOD and S. P. LEWIS, as Members of Said Board; and OAKLEY LUCAS, as County Treasurer and Ex-Officio Tax Collector of Said County; and JAMES L. POWELL, as County Assessor of Said County, and as Agent of the Motor Vehicle Division of the Arizona State Highway Department, Appellees

Civil No. 4216

Supreme Court of Arizona

April 22, 1940

APPEAL from a judgment of the Superior Court of the County of Cochise. John Wilson Ross, Judge. Judgment reversed.

Mandamus proceeding by the Miners & Merchants Bank, a corporation, against the Board of Supervisors of Cochise County, State of Arizona, and P. P. Page and others, as members of said Board, and others. From an adverse judgment plaintiff appeals.

Reversed and remanded, with directions.

Messrs Sutter, Gentry & Sutter, for Appellant.

Mr. Joe Conway, Attorney General, Mr. W. E. Polley, Assistant Attorney General, Messrs. Snell & Strouss, of Counsel, and Mr. Frank E. Thomas, County Attorney of Cochise County, for Appellees.

OPINION

LOCKWOOD, J.

Miners & Merchants Bank, a corporation, hereinafter called plaintiff, filed a petition in the superior court of Cochise county for a writ of mandamus against the board of supervisors, tax collector and assessor of that county, hereinafter called defendants, asking that they be required to assess, impose and collect an ad valorem tax for the fiscal year 1939-40 upon motor vehicles in Cochise county. The petition set up in substance the various provisions of the general statutes requiring the assessment and collection of ad valorem taxes on real and personal property, and alleged that defendants have failed to comply with these statutes so far as motor vehicles are concerned, and have declared they intend to continue to refuse to assess or collect any taxes upon any motor vehicles, except the tax provided by chapter 47 of the regular Session Laws of 1939. Plaintiff then alleged that said chapter 47, supra, is unconstitutional for many reasons, and prayed for judgment in accord with its petition.

Defendants demurred to the petition on the ground that it did not state a cause of action, and the demurrer being sustained, judgment was rendered in their favor, whereupon this appeal was taken.

The precise question involved is whether by reason of chapter 47, supra, the taxing authorities of Cochise county are relieved of the duty of levying and collecting upon any motor vehicles the general ad valorem property tax applying to all other forms of tangible real and personal property within the jurisdiction of tha taxing unit. If they were so relieved, the court properly rendered judgment in their favor. If, on the other hand, chapter 47, supra, does not have that effect, the demurrer should have been overruled and the writ of mandamus issued.

We, therefore, consider the chapter and its terms. In so doing we should keep before us two principles, (a) the provisions of the Constitution prevail over any legislative action, and (b) what the legislature is prohibited from doing directly it may not do indirectly. State v. Yuma Irr. Dist., ante, p. 178, 99 P.2d 704. As was said by the Supreme Court of the United States in Minnesota Tea Co. v. Helvering, 302 U.S. 609, 613, 58 S.Ct. 393, 395, 82 L.Ed. 474,

"A given result at the end of a straight path is not made a different result because reached by following a devious path."

Chapter 47, supra, is somewhat lengthy, and we think it sufficient to summarize its legal effect rather than to quote it in full. This effect, so far as material to the present case, may be stated as follows: Motor vehicles shall pay a "vehicle privilege license tax" levied and assessed in the manner set forth in the chapter. This tax is annual and non-cumulative and is payable only if, as, and when the motor vehicle is registered for operation upon the public highways and is proportioned to the fraction of the registration year remaining thereafter. So long as the vehicle is not so registered, the tax is not due nor payable. In a separate clause the tax described is said to be in lieu of all ad valorem property taxes upon motor vehicles subject thereto, and it is also stated that if any one provision of the chapter be held invalid, such invalidity shall not affect other provisions which can be given effect without the invalid one.

It is very apparent that the legislature, in chapter 47, supra, endeavored to avoid the features of chapter 66 of the regular session of 1937, which we determined in the case of Powell v. Gleason, 50 Ariz. 542, 74 P.2d 47, 114 A.L.R. 838, rendered the last-named chapter unconstitutional. We held the tax levied by chapter 66, supra, to be an ad valorem and not an excise tax, and that as such it violated the constitutional rule in regard to the classification of property for ad valorem taxation, in that the provisions that no ad valorem property tax need be paid until and unless the motor vehicle was registered, and that the amount of the tax was proportioned to the number of months in the calendar year for which the car was used after registration, were arbitrary and capricious in their nature and granted either total or partial exemption from ad valorem property taxation.

It will be noted that chapter 47, supra, states that the tax in question is not an ad valorem tax but a "vehicle privilege license tax," and it therefore falls within the category of an excise tax. It also provides in substance that the tax levied by the chapter shall be in lieu of all ad valorem property taxation

"on any motor vehicle... subject to said license taxes,"

thereby inferentially, it is argued, leaving motor vehicles which have not paid the vehicle privilege license tax subject to ad valorem taxation in the usual manner.

Sections 1 and 2 of article IX of the Constitution of Arizona read, respectively, as follows:

"The power of taxation shall never be surrendered, suspended, or contracted, away. All taxes shall be uniform upon the same class of property within the territorial limits of the authority levying the tax, and shall be levied and collected for public purposes only."

"That there shall be exempt from taxation all Federal, State, county and municipal property. [also describing other specific property exempt.] All property in the State not exempt under the laws of the United States or under this constitution, or exempt by law under the provisions of this section shall be subject to taxation to be ascertained as provided by law. This section shall be self-executing."

Motor vehicles, except when they are owned by certain specified persons or institutions, are not included in the list of property said by the Constitution to be exempt from taxation. These sections and others of similar character in other jurisdictions have been held repeatedly to apply to ad valorem property taxes, and not to the various forms of excise taxation. Gila Meat Co. v. State, 35 Ariz. 194, 276 P. 1; Morris v. State, 40 Ariz. 32, 9 P.2d 404. That the tax set up by chapter 47, supra, is not and ad valotem tax is admitted.

The legislature has full power to impose as many excise taxes in addition to the ad valorem tax as it sees fit. Sec. 12, art. IX, Const. Ariz. But it may not exempt from ad valorem taxation any given class of property not specifically exempted by the Constitution. Secs. 1 and 2, art. IX, supra. But it is said the legislature may substitute an excise tax for an ad valorem tax without violating the constitutional prohibition, and it is urged that in Pacific Fruit Express Co. v. Yuma, 32 Ariz. 601, 261 P. 49, and State Tax Com. v. Shattuck, 44 Ariz. 379, 38 P.2d 631, we have so held. In these cases there was no question of substituting an excise tax for an ad valorem tax, nor of relieving any class of property from the latter. They merely held that under the particular circumstances of the cases the method of assessing and collecting the ad valorem tax and the rate of taxation might be changed, and the proceeds used in a different manner. Had the chapter under consideration provided that the tax set forth therein was an ad valorem tax which should be assessed and collected on all motor vehicles at the same rate, regardless of whether they were in use or not, a situation similar to that in the cases cited would have been presented.

Counsel for defendants have cited to us many cases from other jurisdictions which they say authorize the substitution of an excise tax for the ad valorem tax. We have carefully examined and considered each and all of these cases, and also examined the constitutional provisions of the different states from which they are taken. The cases of State v. Wetz, 40 N.D. 299, 168 N.W. 835, 5 A.L.R. 731; Jasonwski v. Dilworth, 191 Mich. 287, 157 N.W. 891; Minneapolis v. Armson, 188 Minn 167, 246 N.W. 660; People v. Illinois Central R. Co., 273 Ill. 220, 112 N.E. 700; Northwestern Mut. L. Co. v. State, 163 Wis. 484, 155 N.W. 609, 158 N.W. 328; Kootenai County v. Seven-Seven Co., 32 Idaho 301, 182 P. 529; Covey Motor Car Co. v. Hurlburt, 104 Or. 414, 207 P. 166, all come from states which have constitutional provisions that clearly authorize the legislature to make exemptions from an ad valorem property tax under the circumstances involved. If it may...