Poorman v. State Board of Equalization

• Decision Date: 04 May 1935
• Docket Number: 7428.
• Parties: POORMAN v. STATE BOARD OF EQUALIZATION et al.
• Court: Montana Supreme Court

45 P.2d 307

99 Mont. 543

POORMAN v. STATE BOARD OF EQUALIZATION et al.

No. 7428.

Supreme Court of Montana

May 4, 1935

Original proceeding by Lulu J. Poorman, as administratrix of the estate of William H. Poorman, deceased, for an injunction against the State Board of Equalization, J. H. Stewart and others, members thereof, and another. On demurrer to the complaint.

Demurrer sustained, and proceeding dismissed.

L. L Callaway, of Helena, for plaintiff.

Raymond T. Nagle, Atty. Gen., Jeremiah J. Lynch and Enor K. Matson Asst. Attys. Gen., and W. T. Pigott, of Helena, for defendants.

MATTHEWS Justice.

On order to show cause, on the original application of Lulu J Poorman, as administratrix of the estate of William H Poorman, deceased, why the State Board of Equalization and the members thereof should not be permanently restrained and enjoined from collecting an income tax from the Poorman estate upon the salary paid to the deceased for a portion of the year 1934.

The Honorable William H. Poorman was elected as one of the judges of the First Judicial District of the State of Montana at the general election in 1916, and was reelected successively in 1920, 1924, 1928, and 1932; he died intestate on August 28, 1934. It is a grim commentary on the rewards of public service that, after almost eighteen years of honorable, faithful, and distinguished service, and frugal habits, the judge left no considerable estate, and his sole income for 1934 was that portion of his salary earned up to the date of his death.

Judge Poorman's widow, Lulu J. Poorman, was duly appointed administratrix of his estate and qualified as such. In due time demand was made upon her that she make return of, and pay, the tax on such income in accordance with the provisions of chapter 181 of the Laws of 1933. Being advised that the Constitution of this state prohibits the diminution of a judge's salary during the term for which he was elected, and believing that such tax constituted a diminution of such salary, the administratrix accompanied her return with a protest, and, on being advised as to the amount of the tax computed on her return, formally refused to pay the same and commenced this action.

On behalf of the defendant board, the Attorney General demurred to the complaint filed, and thereafter the legal questions thereby presented were duly argued and submitted for our determination.

At the outset we may well adopt the prefatory remarks of the Supreme Court of the United States in a similar case (Evans v. Gore, 253 U.S. 245, 40 S.Ct. 550, 551, 64 L.Ed. 887, 11 A. L. R. 519): "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; and this although each member has been paying the tax in respect of his salary voluntarily and in regular course. But jurisdiction of the present case cannot be declined or renounced." In the Gore Case, the court declared the question presented to be as to "the power to tax the compensation of federal judges in general," in the face of the constitutional prohibition that the compensation of such judges "shall not be diminished during their continuance in office."

The Supreme Court of North Carolina likewise declared that the question presented under a law similar to our own is: "Does a tax levied on plaintiff's official salary amount to a diminution thereof in derogation of the constitutional provision" identical with that of the federal Constitution? Long v. Watts, 183 N.C. 99, 110 S.E. 765, 767, 22 A. L. R. 277.

If we could agree that there is here presented the broad question of the right of the state to tax the salary paid by it to its judges, we could easily dispose of this case by overruling the demurrer to the complaint on the authority of the two cases cited above. A tax levied upon a salary, as such, and taken therefrom, clearly diminishes that salary to the extent of the tax paid. Thus, in Pennsylvania an early Legislature ^[1] passed an act providing that "there shall be annually levied upon salaries and emoluments of office, created or held by or under the Constitution, a tax of two per cent. upon every dollar thereof above $200; *** when *** paid *** directly by the treasurer, he shall retain out of said salary the amount imposed by the Act." The act was properly held to be unconstitutional in so far as judges were concerned, in view of the constitutional provision of Pennsylvania, identical with that of the Federal Constitution. Commonwealth v. Mann, 5 Watts & S. (Pa.) 403.

In Louisiana it was early held that a similar constitutional provision prohibited the city of New Orleans from taxing the salaries of the Justices of the Supreme Court, but the short opinion rendered does not indicate the nature of the taxing act. City of New Orleans v. Lea, 14 La. Ann. 197.

In 1932 the House of Representatives of Alabama submitted to the Justices of the Supreme Court a proposed act "to require and levy an occupation, license or privilege tax on every person who is an official of the State of Alabama," and "to provide that the warrant, check or voucher for the payment of the salary of such official *** shall be for the amount of the salary *** less the said tax." The justices very properly advised the House that constitutional provisions in that state forbidding the reduction of the salaries of judicial, and certain other state officers, prohibited such enactment as "plainly and palpably unconstitutional." In re Opinion of the Justices, 225 Ala. 502, 144 So. 111, 112.

The foregoing are all the cases which the industry of the learned counsel for plaintiff has enabled him to present in support of his position, except that of Miles v. Graham, 268 U.S. 501, 45 S.Ct. 601, 69 L.Ed. 1067, which is merely a further pronouncement of the Supreme Court of the United States based on the Gore Case.

The Miles Case has been cited as authority for the position that the constitutional provision protects judges appointed after as well as before the enactment of the Income Tax law. There the District Court so held on the theory that it was not for the court to say that Congress would have taxed few judges had it known that its efforts to tax all such would fail (284 F. 878), and the judgment was affirmed; the court pointing out that the salary of the plaintiff was specifically fixed by Congress after the enactment of the Income Tax law, and saying that if the dates were reversed it would be impossible to construe the taxing act as an amendment which would reduce the salary by the amount of the tax. It is clear that the holding was impelled by the inseparability of the two classes mentioned and by the peculiar facts controlling. Since the decision was promulgated, Congress, with knowledge thereof, has passed the 1928 Income Tax law (Revenue Act, 26 USCA § 2001 et seq.), and it is reasonably clear that the Supreme Court would not now extend the federal prohibition to include judges hereafter appointed.

The foregoing analysis of the cases relied upon by plaintiff demonstrates that the only courts holding that the collection of an "income tax" violates a constitutional prohibition against the diminution of official salaries during "continuance in office" are the Supreme Court of the United States, and the Supreme Court of North Carolina, and these two courts have only spoken respecting the judiciary as a protected class. The Federal Constitution contains a like provision exempting the salary of the President from diminution, and Mr. Justice Clark, in a concurring opinion in the North Carolina case, declares that their provision exempts only twenty-five judges and seven heads of the Executive Department, though the provision quoted in that decision applies only to the judiciary.

As will later appear, the situation in Montana, by virtue of our constitutional provisions which control, is vastly different.

In the Gore Case it is declared that the provision against diminution of salary is coupled with that as to tenure in office, federal judges being appointed "during good behavior," or for life, as a method of "attracting good and competent men to the bench and to promote that independence of action and judgment which is essential to the maintenance of the guaranties, limitations and prevailing principles of the Constitution and to the administration of justice without respect to persons and with equal concern for the poor and the rich." This conclusion was reached by reason of consideration of the declarations of such men as George Washington, Alexander Hamilton, and Chancellor Kent respecting the necessity of a judiciary independent of the control of the executive and legislative branches of the government--a necessity brought home to the minds of those great men by familiarity with the abuses recorded in history when the judges were at the mercy of unscrupulous monarchs, which history is more fully set forth in Commonwealth v. Mann, supra. There it is said that "experience has also taught us the useful lesson, that there is no more effectual way of destroying the liberties of the people, than by gradual encroachments under colour of law, and that no better instrument could be employed for that purpose, than a venal, time-serving, timid and subservient judiciary." It is then said, and the same thought is contained in the Gore opinion, that the framers of the Constitution "conversant with the history of the past, and looking with prophetic eye to the future" framed the prohibition against diminution to protect the judiciary, "the weakest and most exposed to attack" of the three departments of government, from the encroachments of the others. The Supreme Court of North Carolina adopted the reasoning of the Gore opinion and declared that...