State v. Cumberland & P.R. Co.

• Decision Date: 05 March 1874
• Citation: 40 Md. 22
• Parties: THE STATE OF MARYLAND v. THE CUMBERLAND AND PENNSYLVANIA RAILROAD COMPANY.
• Court: Maryland Court of Appeals

40 Md. 22

THE STATE OF MARYLAND v. THE CUMBERLAND AND PENNSYLVANIA RAILROAD COMPANY.

Court of Appeals of Maryland

March 5, 1874

APPEAL from the Circuit Court for Allegany County.

This was an action of debt instituted by the appellant, in the Circuit Court for Allegany County, to recover from the appellee the sum of $13,488.10, together with the penalty of ten per cent. thereon, for the tax sought to be imposed by the Act of 1872, ch. 274, of two cents per ton upon the coal alleged to have been mined in the State, and received for transportation over the railroad of the appellee to points within the State, and elsewhere, for sale, during the months of April, May and June, 1872.

The pleas were never indebted as alleged; and a special plea avowing that the Act of 1872, ch. 274, was, wholly inoperative, unconstitutional, null and void. The State demurred to the special plea. The Court overruled the demurrer and entered judgment thereon for the defendant. The State appealed.

The cause was argued before BARTOL C.J., STEWART, MILLER, ALVEY and ROBINSON, J., and was afterwards reargued before BARTOL C.J., STEWART, BOWIE, GRASON, MILLER, ALVEY and ROBINSON, J.

John H. Handy and Attorney General Syester for the appellant.

Two leading objections to the Act of 1872, ch. 274, are urged.

1st. That its provisions are in violation of the 15th Article of the Bill of Rights of this State.

2nd. That it is in violation of that provision of section 8 of Article 1, of the Constitution of the United States, which declares that Congress shall have power to regulate commerce with foreign nations, and among the several States.

1st. As to the 15 th Article of the Bill of Rights, we are told that because certain measures adopted to ascertain the value of all other property liable to taxation, have not been resorted to for the ascertainment of the value of the property taxed in this case, therefore this tax is laid without regard to, and in violation of, the Bill of Rights on this subject. It is to be noted in the first place, that this tax is in lieu of all other taxation on the entire property and franchises of these companies, and that the appellee has taken no steps to demonstrate, that the property and franchises of the mining companies are valued too high, or that a rate of taxation higher than that applied to other property, has been imposed upon the valuation. The entire objection lies in the fact that there was no assessment, and hence the tax is not uniform, being greater than that laid on other property.

There is nothing in the record, from which this Court can say, that the mining companies are paying more than their just proportion, in support of the Government according to their "actual worth in real and personal property."

All this is assumed; and it is assumed for no other reason, than because the Legislature has not adopted the same mode of ascertaining the value of the property of these companies, that is adopted in reference to other property, and laid the tax according to that valuation. But the answer to all this, is that there is nothing in the Constitution of this State, requiring the Legislature to adopt any one uniform mode of valuation; on the contrary, it may adopt different modes of valuation for different classes of property, and may dispense with all agencies, or tribunals for that purpose; and value the property, and impose the tax directly by legislative Act. "The duty of ascertaining taxable values, and of assessing * * the taxes thereon, necessarily rests in the discretion of the Legislature, and it may perform that duty by its own legislative Acts." * * * The State vs. Sterling, 20 Md., 517.

Indeed, to have construed the 15th Article of the Bill of Rights to mean what is contended for by the appellee in this case, would demolish almost the entire system of taxation in this State.

But it is insisted further by the appellee, that a rate of taxation, has been adopted in respect to this class of property, different from that imposed on other classes of property; and numerous cases are relied on from other States to establish the proposition, that where different rates of taxation, are applied to different classes of property, the assessment is obnoxious to the constitutional provision, requiring the rate to be uniform, and that the true interpretation of the 15th Article of the Bill of Rights, requires not only uniformity in the mode of ascertaing taxable values, but also uniformity of tax rates as to every class of property.

Now it must be remembered, that the power of taxation is inherent and absolute, acknowledging no other limits than those prescribed in the Constitution; that a State may adopt any mode of rating, and any rate of taxation it sees fit, and in the exercise of this acknowledged power may even destroy.

There is nothing in the 15th Article that requires either the mode of assessment, or the rate of taxation to be alike or uniform, as to every species and class of property. The case of Tyson vs. State, 28 Md., 577, when properly considered is decisive of both propositions.

In 28 Md., the subject of the tax on collateral inheritances was considered in its relations, to the very section of the Bill of Rights now before us. The 124th section of Article 81 of the Code, imposes a tax of two and one-half per centum on every hundred dollars of the clear value of the estates, money or securities therein mentioned.

The section singles out a particular class of property, and subjects that property to a rate of taxation, different from all other property in the State. "All estates, real, personal, and mixed, and all securities, money," & c., mentioned in that section are subjected to this tax, notwithstanding the same property is taxed under the assessment and according to the rates levied under the general law.

It results in a double tax on the property. It is a burden on that particular class of property not borne by any other property. And yet it is upheld as being within the power of the Legislature, and distinctly declared not to be obnoxious to the 15th Article of the Bill of Rights. It is answered to all this, that it " is a tax on the privilege of taking. " But the party taking, pays nothing. The property is taxed; it goes to the donee shorn of so much of its value; it is a tax on the property itself, "all estates * * * shall be subject to a tax " * *. The donee is not considered at all, it is his property, not himself, nor his privilege that is taxed.

But there is nothing in the 15th Article, requiring taxes to be laid on all classes of property according to the same rates. The doctrine of uniformity of taxation has never been so understood or applied, except under Constitutions expressly requiring that the same method of rating property shall be applied to all classes of property alike. There is nothing like this in the 15th Article, nor any where else in our Constitution. The most that can be said in behalf of this argument is, that the proper interpretation of that Article requires the rate of taxation to be uniform. It is nothing other than the result of a construction of the Article.

But to say that the proper interpretation of the Article is, that taxes shall be laid at a uniform rate on all classes of property, will not help the appellee. Something more must be found either expressed, or arising by necessary implication. For the declaration that taxes shall be uniform, has nowhere been held to mean that the same rate of taxation, shall and must be levied on every class of property alike. The requirement of uniformity is gratified by laying the same rates on the same class of property, throughout the taxing district.

The Constitution of the United States requires "that all duties, imposts and excises shall be uniform throughout the United States." But did it ever occur to any Court, to suppose that this meant that the same duty, &c., must be laid on every class of property subject to that tax?

The letter and spirit of the clause is gratified, by laying the same duty (or tax,) &c., on the same class of property, and is not violated by laying heavier burdens on one class, and lighter burdens on another.

The idea of uniformity, as contended for by the appellee, and as enforced in the decisions cited and relied on, never has prevailed in this State; and never can, without impregnating the 15th Article with a meaning that would break up a large and important part of the system of taxation now prevailing. The license system of this State would at once be destroyed. The merchant is paying more in support of Government, than the "actual worth" of his property would yield under a uniform rate of taxation, as understood and contended for by the appellee. His stock in trade is taxed, according to the usual and general rate. But this very same property is required to yield a specific tax, in addition to that levied under the general assessment. The license he pays burdens the merchant's property with a double tax. It is no answer to this, that the license is a tax on the business of the merchant. Because such taxation is expressly declared to be a tax on the property employed in the business. Nathan vs. State of Lousiana, 8 Howard, 77; Woodruff vs. Parham, 8 Wall., 140.

But we are answered, that such a tax falls within the police power of the State, and is laid with a "political view" for the "good government and benefit of the community," within the last clause of the 15th Article. But what police regulations are conserved in taxing the merchandise of a people? The sale of a yard of cloth, or purchase of a pound of sugar, cannot affect the health or morals of a people. These are not habits or practices that tend to evil. The tone of society is not affected in the most...