State v. Page

• Decision Date: 20 October 1925
• Docket Number: (C. C. No. 339.)
• Citation: 130 S.E. 426
• Parties: STATE. v. PAGE.
• Court: West Virginia Supreme Court

130 S.E. 426

STATE.

v.PAGE.

(C. C. No. 339.)

Supreme Court of Appeals of West Virginia.

Oct. 20, 1925.

Rehearing Denied Dec. 2, 1925.

(Syllabus by the Court.)

The penalty imposed by section 73, chapter 29, of the Code, for failure of the property owner to make return of his property for taxation, is constitutional and valid.

The subsequent entry on the property book of personal property omitted in former years, pursuant to sections 25 and 109 of chapter 29, and the levying of taxes against the same with interest, does not relieve the defaulting taxpayer from the penalty imposed by said section 73. The statute in terms imposes the penalty in addition to the taxes.

But where a delayed return is made, and the property is entered on the property book before the end of the assessment year, the taxpayer will not be liable to the penalty imposed by the statute.

Bonds issued by the political subdivisions of this state, not exempted from taxation by law or by contract, are taxable by the state in the same manner as other property.

A suit to enforce the penalty provided by section 73 of chapter 29 of the Code may be maintained against the administrator of the estate of the defaulting taxpayer.

(Additional Syllabus by Editorial Staff.)

Certified questions from Circuit Court, McDowell County.

Proceeding by notice of motion, pursuant to Code, c. 29, § 73, by the State against R. L. Page, administrator of J. A. Huddleston, deceased, to recover penalty for failure to return property for taxation. After overruling defendant's demurrer to the motion, and plaintiff's demurrer to defenses set up in the answer, return, and plea to the motion, and sustaining the demurrer as to other defenses, the trial court certified questions arising on its rulings. Rulings modified.

G. L. Counts, Pros. Atty., of Welch, and Jno. T. Simms, of Charleston, for State Tax Commissioner.

Strother, Sale, Curd & Tucker, of Welch, and Poffenbarger, Blue & Dayton, of Charleston, for defendant.

MILLER, J. This proceeding was instituted, by notice of motion, pursuant to the provisions of section 73 of chapter 29 of the Code, by the prosecuting attorney of McDowell County, against the administrator of the estate of J. A. Huddleston, deceased, to recover for the benefit of the state the penalty or forfeiture imposed by the statute, by reason of the failure of said Huddleston to return for taxation certain personal property for the years 1920, 1921, 1922, 1923, and 1924. The circuit court overruled defend-ant's demurrer to plaintiff's motion; and overruled plaintiff's demurrer to certain defenses set up in defendant's answer, return and plea to said motion, but sustained said demurrer as to certain other defenses. The questions arising on the rulings of the circuit court have been certified to us for decision.

That part of section 73 of chapter 29 of the Code, governing the questions certified, is as follows:

"If any person, firm or corporation, including the public service corporations, named in section one hundred and eighteen of this chapter, required by law to make return of property for taxation, whether such return is to be made to the assessor, the board of public works, or any other assessing officer or body, fails to return a true list of all property which should be assessed in this state, including money, credits and investments, such person, firm or corporation, in addition to all other penalties provided by law, shall forfeit ten per centum of the value of the property not returned and not otherwise taxed in this state. A forfeiture may be enforced for any such default occurring in any year not exceeding five years prior to the time the same is discovered. Each failure to make a true return as herein required, shall constitute a separate offense, and a forfeiture shall apply to each of them, but all such forfeitures to which the same person, firm or corporation is liable, shall be enforced in one proceeding againt such person, firm or corporation, or against the estate of any deceased person, and shall not exceed fifty per centum of the property not returned. It shall be the duty of the state tax commissioner, or prosecuting attorney of the county in which the defaulting taxpayer resides, or in which county such property should have been returned, to enforce the collection of the same in the name of the state of West Virginia against the defaulting taxpayer, or in case of a decedent, his personal representative, in the circuit court, upon motion, whereof the defendant shall have at least twenty days' notice. Either party shall have the right to have the issue tried by a jury, and the state as well as the defendant, shall have the right to an appeal."

First. Defendant contends that the statute above quoted is unconstitutional and void; that it violates the provision of the Constitution of the United States prohibiting "excessive fines, " and the provisions of the state Constitution prohibiting "excessive fines, " and providing that "penalties shall be proportioned to the character and degree of the offense."

The presumption is always in favor of the constitutionality of a law enacted by the Legislature, and the courts must be slow and cautious to overthrow legislative action. The Legislature is the supreme lawmaking power, and it can enact any law, where it is not prohibited by state or federal Constitution in express terms or by very strong implication. 3 Enc. Dig. Va. & W. Va. Rep. 161-164; Id. 2 Cum. Sup. 36-39; and the many cases cited. It is our duty, therefore, if we can do so, to uphold the validity of the statute in question.

When not limited by the Constitution, the power of the state, acting through its governmental agencies, to tax its citizens, is absolute and unlimited as to persons and property. This doctrine, as said by Mr. Gray in his work on Limitations of the Taxing Power, is evolved in the general theory of the state. The state exists for the purpose of securing the life, liberty and property of its citizens, and may, within the limits prescribed by the Constitution, exhaust all the resources of private propery in support and preservation of that existence. Gray on Limitations of the Taxing Power, § 44; Cooley's Constitutional Limitations (7th Ed.) 67S; 1 Cooley on Taxation (4th Ed.) § 72; McCulloch v. Maryland, 4 Wheat. 316, 4 L. Ed. 579, opinion by Mr. Chief Justice Marshall. The power of taxation is an incident of sovereignty, and is possessed by the state without express authority conferred by the people. 1 Cooley on Taxation, § 64; 13 Enc. Dig. Va. & W. Va. Rep. 78. The power of taxation lies exclusively in the legislative department of the state; and it has been said that:

"The power to impose taxes is one so unlimited in force and so searching in extent, that the courts scarcely venture to declare that it is the subject of any restrictions whatever, except such as rest in the discretion of the authority which exercises it." Cooley, Const. Lim. 678.

See, also, McCulloch v. Maryland, supra, and 13 Enc. Dig. Va. & W. Va. Rep. 78. The plenary power of the Legislature to levy and collect taxes is not questioned here, nor can it be questioned; but what we have just said clearly demonstrates the extent to which the legislative power can be extended in providing for the necessities of the state.

To make effective the power to levy and collect taxes, the state must necessarily have the power to discover and assess property on which to levy such taxes; and if no penalty attaches to the taxpayer's failure to return a true list of his property and to disclose its character and value to the officer whose duty it is to make the assessment, the taxpayer could readily conceal certain classes of property and suffer no loss when the property is discovered, for the state could then do no more than collect the taxes due. "Statutes imposing penalties for failure or refusal to make such returns or to return such lists are quite common, and have been uniformly upheld. Washington v. Commonwealth, 2 Va. Cas. 258; Commonwealth v. Byrne, 20 Grat. (Va.) 165; State v. Bell, 1 Phil. [61 N. C] 76; Commonwealth v. Cooke, 50 Pa. 201; City of Hartford v. Champion, 58 Conn. 208 ; 25 Am. & Eng. Enc. Law, 206." Iverson Brown's Case, 91 Va. 762, 769, 21 S. E. 357, 359 (28 L. R. A. 110). Such statutes have been held valid in many other states. Cooley, Const. Lim. (7tn Ed.) 748-750, and notes; Gray, Taxing Power, § 1217; 3 Cooley on Taxation (4th Ed.) S 1092; Western Union Tel. Co. v. State, 146 Ind. 54, 44 N. E. 793; Western Union Tel. Co. v. Indiana, 165 U. S. 304, 17 S. Ct. 345, 41 L. Ed. 725; Ex parte Lynch, 16 S. C. 32.

Is, then, the penalty imposed by the statute under consideration so excessive or disproportionate to the character and degree of the offense created thereby, that the courts can say that the Legislature exceeded its powers, under the Constitution? In view of what we have said regarding the power of the Legislature to levy and collect taxes, and the reasons given for conferring on the lawmaking body so great a power, is it not within the province of that body to determine the character and degree of the offense of one who refuses to contribute his share of the expenses of the state government? Perhaps the first duty of the Legislature is the preservation and security of the state. There is no way by which the Legislature can provide for the maintenance of the agencies of the government, but by taxation. If in any way the taxing power is interfered with, the whole system of government is impaired. The taxing power would be ineffectual, without the means of enforcing the laws in relation thereto. The Legislature must provide for the assessment of property and the collection of taxes, and does it not necessarily follow, that it is within the province of that body to prescribe the method by which such assessment and collection shall be enforced, even to the extent of the penalty that may be imposed for failure or refusal on the part of a...