Stanley v. Gates
Decision Date | 01 July 1929 |
Docket Number | (Nos. 58, 74.) |
Parties | STANLEY et al. v. GATES et al. |
Court | Arkansas Supreme Court |
Suit by Paul V. Stanley and others against David A. Gates and others. From a decree dismissing the complaint, plaintiffs appeal. Affirmed.
This is a suit in equity brought by taxpayers to enjoin the state commissioner of revenues and the Attorney General from doing any administrative acts in the enforcement of the Income Tax Act of 1929 (Acts 1929, No. 118, p. 573) on the ground that it is unconstitutional. The court sustained a demurrer to the complaint; and, the plaintiffs electing to stand on their complaint, it was dismissed for want of equity. The plaintiffs have appealed.
Horace Chamberlin, of Little Rock, for appellants.
Hal. L. Norwood, Atty. Gen., David A. Gates and John L. Carter, both of Little Rock, and Williamson & Williamson, of Monticello, for appellees.
Frank S. Quinn and Jones & Jones, all of Texarkana, W. H. Martin, of Hot Springs, Marsh, McKay & Marlin and Mahony, Yocum & Saye, all of El Dorado, Hall Brothers, of Paris, F. O. Butt, of Eureka Springs, Rose, Hemingway, Cantrell & Loughborough and Geo. Vaughan, all of Little Rock, Sam Rorex, of Russellville, Danaher & Danaher, Rowell & Alexander and Coleman & Gantt, all of Pine Bluff, Cecil Shane, of Blytheville, and Gaughan, Sifford, Godwin & Gaughan, of Camden, amici curiæ.
HART, C. J. (after stating the facts).
It is first earnestly insisted that the income tax law under consideration is a property tax, and is therefore violative of the equality and uniformity clause of article 16, § 5. of the Constitution; but the court held adversely to that contention in Sims v. Ahrens, 167 Ark. 557, 271 S. W. 720, where it was held that an income tax is neither a property tax nor an occupation tax within the meaning of the provision of the Constitution just referred to.
It is next insisted that this holding was obiter dictum and should not be considered binding upon the court in the case at bar. We do not agree with counsel in this contention. In the first place, this court is committed to the rule that, where grave public interests are involved in a question, the court may waive every point except that of determining the constitutionality of the act. Trammell v. Bradley, County Judge, 37 Ark. 374, and McClure v. Topf & Wright, 112 Ark. 342, 166 S. W. 174. In both those cases, the constitutionality of local liquor laws was involved. An income tax law works a great and important change in our tax laws and is a matter of grave public interest. Besides, we think the language used by the various judges in their opinions in that case indicate their judicial interpretation of the subject after careful study of it. The views expressed were pertinent to the subject at hand and appropriate as indicating their reasons for the conclusions announced.
In the early case of County of Pulaski v. Irvin, 4 Ark. 473, the court said:
The framers of the present Constitution in recognition of this great principle, in section 23 of the Declaration of Rights, provided that the state's ancient right of eminent domain and of taxation is herein fully and expressly conceded.
The principle was announced in Sanderson v. Texarkana, 103 Ark. 529, 146 S. W. 105, as follows:
Again, in the original opinion in the case of Sims v. Ahrens, 167 Ark. 557, 271 S. W. 720, it was said:
The court there considered whether the income tax was in violation of article 16, § 5, of the Constitution. The opinion of the majority of the judges was that the income tax law was in violation of that provision of the Constitution, and concludes as follows: "The State is without power to impose an income tax or an occupation tax for state purposes, and the court below was therefore correct in holding that act unconstitutional, and decree is affirmed."
Judge Humphreys and myself concurred in the result announced, instead of dissenting from the opinion of the majority in affirming the decree, because we believed that a gross income tax operating upon all persons and occupations alike was unconstitutional. Because the majority opinion was placed upon the broad ground that, under article 16, § 5, of the Constitution, the Legislature was prohibited from enacting any kind of income tax law, it became necessary for us to give our reasons for our disagreement to the conclusions of the majority; and after a careful consideration of the question, and stating our reasons therefor, we said: A motion for rehearing was filed, and granted, on the votes of Justices Wood, Hart, and Humphreys. Judge Wood gave his reasons for the change of views in a carefully prepared and seasoned opinion, which concludes as follows: "Therefore for the reasons stated, I concur in the conclusion reached by Justices Hart and Humphreys, that `it is within the discretion of the Legislature to pass a properly classified net income tax law,' and such, therefore, is now the opinion and holding of the majority of this Court."
Judge Smith wrote a dissenting opinion concurred in by Chief Justice McCulloch, which concludes as follows: "I, therefore, respectfully dissent from what is now the majority opinion."
Reference to the various opinions in that case will show that the court recognized that there was a division in the authorities upon the subject whether an income tax was a property tax or not; and we deliberately adopted the view that it was not a property tax. If it is not a property tax, it does not make any difference what name it is called. Whether it is called an excise tax, or a tax in the nature of an excise tax, or a personal tax, is a mere matter of definition, and does not in any wise change its character.
But it is again urged upon us to hold an income tax unconstitutional because article 16, § 5, of the Constitution, after saying that all property subject to taxation shall be taxed according to its value, etc., contains a provision that "the General Assembly shall have power from time to time to tax hawkers, peddlers, ferries, exhibitions and privileges in such manner as may be deemed proper," which they claim by necessary implication prohibits all forms of taxation except property taxes and the occupation taxes named in the proviso. This is in application of the maxim, "Expressio unius est exclusio alterius." In State v. Martin, 60 Ark. 343, 30 S. W. 421, 28 L. R. A. 153, Mr. Justice Wood, speaking for the whole court, said that the court is thoroughly committed to the doctrine that the maxim "is not to be applied with the same rigor in construing a state constitution as a statute; and that only those things expressed in such positive affirmative terms as plainly imply the negative of what is not mentioned will be considered as inhibiting the powers of the legislature." The reason is that the Constitution of a state is not a grant of enumerated power, but its chief object is to impose limitations upon the several departments of government. If a contested enactment is not prohibited either by the letter or the spirit of the Constitution, it is authorized. Vance v. Austell, 45 Ark. 400.
The proviso in the section of the Constitution referred to gives the Legislature power to tax certain named occupations without regard to the equality and uniformity clause applicable to property. This by necessary implication prohibits the taxation of other occupations for state purposes; but at the same time it also impliedly recognizes that a tax on occupations is a different kind of tax to a property tax; and "it does not by inference too strong to be resisted," as the rule is stated in Neal v. Shinn, 49 Ark. 227, 4 S. W. 771, cut off the Legislature from levying other recognized kinds of taxes than those dealt with in the clause of the constitution under consideration. In the application of this rule of construction in State v. Handlin, 100 Ark. 175, 139 S. W. 1112, the court sustained...
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