Person v. Doughton

• Decision Date: 20 December 1923
• Docket Number: 259.
• Citation: 120 S.E. 481,186 N.C. 723
• Parties: PERSON ET AL. v. DOUGHTON, COM'R OF REVENUE.
• Court: North Carolina Supreme Court

120 S.E. 481

186 N.C. 723

PERSON ET AL. v. DOUGHTON, COM'R OF REVENUE.

No. 259.

Supreme Court of North Carolina

December 20, 1923

Appeal from Superior Court, Wake County; Cranmer, Judge.

Application for writ of mandamus by W. M. Person and others against R. A Doughton, Commissioner by Revenue. From a judgment sustaining a demurrer, plaintiffs appeal. Affirmed.

Clark C.J., dissenting.

W. M Person, of Louisburg, for appellants.

James S. Manning, Atty. Gen., and Frank Nash, Asst. Atty. Gen., for appellee.

STACY, J.

In this action or proceeding, plaintiffs make application for a writ of mandamus to compel the defendant, Commissioner of Revenue of North Carolina, by order of court, to have listed for taxation, as personal property of the respective holders thereof, all stock in foreign corporations, held by individual stockholders and residents of this state. A demurrer was interposed in the trial court and sustained upon the grounds: (1) That the complaint, or petition, failed to state facts sufficient to constitute a cause of action; and (2) that the court had no jurisdiction or authority to grant the relief demanded. The appeal presents for review the correctness of the judgment sustaining the demurrer. We held in Person v. Board of State Tax Com'rs, 184 N.C. 499, 115 S.E. 336--a case on all fours with the one at bar, so far as the right to a writ of mandamus is concerned--that the plaintiff there had not only applied for the wrong remedy, but had also selected the wrong forum. The same dual error has been repeated here.

It is the position of the plaintiffs that, under article 5, § 3, of the Constitution, the Legislature is required to pass laws "taxing, by a uniform rule, all moneys, credits, investments in bonds, stocks, joint-stock companies, or otherwise; and, also, all real and personal property according to its true value in money"; and that this section has been violated by the following so-called "exemption clause" in section 4 of the Revenue Act of 1923 (Pub. Laws 1923, c. 4):

"Nor shall any individual stockholder of any foreign corporation be required to list or pay taxes on any share of its capital stock in this state, and the situs of such shares of stock in foreign corporations, owned by residents of this state, for the purposes of this act is hereby declared to be at the place where said corporation undertakes and carries on its principal business."

Wherefore plaintiffs pray that this clause in the Revenue Act of 1923 be declared null and void and that the defendant be required, by judicial decree, to have listed for taxation, as personal property of the respective holders thereof, all such stock in foreign corporations, held by individual stockholders and residents of this state.

Even if the above clause in the Revenue Act of 1923 be unconstitutional--which it does not seem to be, though the question is not before us for decision--still the plaintiffs would not be entitled to the relief demanded, for the judiciary is without power to levy assessments or to devise a scheme of taxation. Fert. Co. v. McFall, 128 Tenn. 645, 163 S.W. 806. This is a legislative and not a judicial function.

Mandamus lies only to compel a party to do that which it is his duty to do without it. It confers no new authority. The party seeking the writ must have a clear legal right to demand it, and the party to be coerced must be under a legal obligation to perform the act sought to be enforced. Missouri v. Murphy, 170 U.S. 78, 18 S.Ct. 505, 42 L.Ed. 955; Withers v. Com'rs, 163 N.C. 341, 79 S.E. 615; Edgerton v. Kirby, 156 N.C. 347, 72 S.E. 365; Betts v. Raleigh, 142 N.C. 229, 55 S.E. 145. As to when the writ will issue generally, see note to McCluny v. Silliman, 2 Wheat. 369, 4 L.Ed. 263.

It is rarely, if ever, proper to award a mandamus where it can be done only by declaring an act of the Legislature unconstitutional. People v. San Francisco, 20 Cal. 591; Wright v. Kelley, 4 Idaho, 624, 43 P. 565; People v. Stephens, 2 Abb. Prac. N. S. (N. Y.) 348. In State v. Douglas Co., 18 Neb. 506, 26 N.W. 315, this position is stated as follows:

"On an application for a mandamus against the county commissioners of Douglas county to compel them to call an election in the city of Omaha for twelve justices of the peace therein, there being six precincts, and alleging that the act reducing the number of justices in such city to three was unconstitutional and void, held, that the court would not in that proceeding determine whether or not the act was in contravention of the Constitution."

The presumption is that the Legislature has done its duty and that an act passed by it is not in conflict with the Constitution. It is incumbent upon all ministerial officers to obey the law, not to disregard it.

The courts have no direct supervisory power over the Legislature. The two are separate and distinct, though co-ordinate branches of the same government. The Constitution may contain provisions intended to guide and to control the course of legislation, but the courts will not undertake to enjoin or to prevent the enactment of unconstitutional laws, nor will they direct what laws shall be enacted. They may only render them harmless in individual cases, when properly presented. It is not the function of the courts to change or to repeal statutes. Their duties are judicial. They pass upon the rights of litigants and, in doing so, may declare an act of the Legislature valid or invalid, when directly and necessarily involved; but this is as far as they go in dealing with legislation. If the lawmaking body has failed to obey the constitutional mandates, the remedy is with the people, by electing other servants, and not through the courts.

The courts never anticipate a question of constitutional law in advance of the necessity of deciding it, and they never formulate a rule of constitutional law broader than is required by the precise facts to which it is to be applied. Liverpool, etc., Steamship Co. v. Com'rs of Immigration, 113 U.S. 39, 5 S.Ct. 352, 28 L.Ed. 900; Com'rs v. State Treasurer, 174 N.C. 148, 93 S.E. 482, 2 A. L. R. 726; Mass. v. Mellon, 262 U.S. 447, 43 S.Ct. 597.

Again, the courts will not adjudge legislative acts invalid unless their violation of the Constitution be clear, complete, and unmistakable. Bonitz v. School Trustees, 154 N.C. 379, 70 S.E. 735; Coble v. Com'rs, 184 N.C. 348, 114 S.E. 487. Speaking to this question in a recent case, Adkins v. Children's Hospital, 261 U.S. 525, 43 S.Ct. 394, 67 L.Ed. 440, 24 A. L. R. 1238, the United States Supreme Court says:

"The judicial duty of passing upon the constitutionality of an act of Congress is one of great gravity and delicacy. The statute here in question has successfully borne the scrutiny of the legislative branch of the government, which, by enacting it, has affirmed its validity, and that determination must be given great weight. This court, by an unbroken line of decisions from Chief Justice Marshall to the present day, has steadily adhered to the rule that every possible presumption is in favor of the validity of an act of Congress until overcome beyond rational doubt."

But we pursue the question no further, as the constitutionality of the above clause in section 4 of the Revenue Act of 1923 is not now before us for decision. The application for writ of mandamus in the instant case was properly denied.

Affirmed.

CLARK C.J. (dissenting).

The Constitution of North Carolina, art. 5, § 3, is the Magna Charta in its guaranty of equality and uniformity in taxation to protect the weaker and less influential part of our people from being oppressed by overtaxation either by discrimination in the laying of taxes, or by exempting the property of the wealthy and influential from their share of taxation and thereby increasing the taxation upon those who are less able to protect themselves from such inequality.

That section provides in unmistakable language, which can be construed by any one as clearly and intelligently, and doubtless more correctly, than by merely technical lawyers who sometimes construe Constitutions and legislation in the light most favorable to their clients.

This section is thus plainly expressed:

"Constitution, art. V, Section 3. Taxes Shall be by Uniform Rule and Ad Valorem.--Laws shall be passed taxing, by a uniform rule, all moneys, credits, investments in bonds, stocks, joint-stock companies, or otherwise; and, also, all real and personal property according to its true value in money."

The authority, which has been held to reside in the courts (beginning with Marbury v. Madison by Chief Justice Marshall), to set aside acts as unconstitutional, is based upon the fundamental idea that when the act of a Legislature is in conflict with, or impinges upon, any provision in the Constitution, such act is no law. Therefore it is exactly as if the act in question was not on the statute book at all, and the Constitution is unchanged by the attempted legislation. Upon this basis, therefore, the act which is impeached by the plaintiffs in this proceeding is a nullity. It stands as if it had never been enacted. It was not upon the statute book in any form in 1921, and in contemplation of the Constitution it is not there now.

All "investments in stocks" are necessarily made by those who buy them, and under this rule of uniformity so clearly and unmistakably prescribed by the Constitution, such investments should bear exactly the same rate of taxation that is imposed upon all other tangible property which is required to be taxed "by a uniform rule [as the Constitution expresses it] all moneys, credits, investments in bonds, stocks, joint-stock companies, or otherwise; and also, all real and personal property according to its true value in...