The State at Relation & to Use of Koeln v. Southwestern Bell Telephone Co.

• Decision Date: 14 March 1927
• Docket Number: 25883
• Parties: The State at the Relation and to the Use of Edmond Koeln, Collector of the Revenue for City of St. Louis, Appellant, v. Southwestern Bell Telephone Company
• Court: Missouri Supreme Court

292 S.W. 1037

316 Mo. 1008

The State at the Relation and to the Use of Edmond Koeln, Collector of the Revenue for City of St. Louis, Appellant, v. Southwestern Bell Telephone Company

No. 25883

Supreme Court of Missouri

March 14, 1927

Motion for Rehearing Overruled April 9, 1927.

Appeal from Circuit Court of City of St. Louis; Hon. A. B Frey, Judge.

Reversed and remanded (with directions).

Edward W. Foristel and Frank H. Haskins for appellant.

(1) The rate of taxation for the year should be computed upon a basis of one and one-half per cent from January 1, 1921, to November 2, 1921, and at one-half per cent for the remainder of the year. Laws 1921 (1st Ex. Sess.) sec. 3, pp. 189-191. (2) The emergency clause to the act was unconstitutional void and inoperative and the act did not take effect until November 2, 1921. Mo. Constitution, art. 4, secs. 36, 57; Fahey v. Hackmann, 237 S.W. 762; State ex rel Westhues v. Sullivan, 283 Mo. 546. (3) The words "the date when this act shall take effect," used in the Act of 1921, have a well defined meaning and are technical words, having a peculiar and appropriate meaning in law and shall be understood according to their technical import. R. S. 1919, sec. 7058; item 1; State v. DeLay, 93 Mo. 102; Ex parte Bethurum, 66 Mo. 548. (4) Where there is no ambiguity in the meaning of the words used in a statute, their meaning cannot be changed to conform to a supposed intent of the legislators. State ex rel. v. Board of Education, 294 Mo. 106; St. L. & I. M. Ry. v. Clark, 53 Mo. 214; State ex rel. v. Corkins, 123 Mo. 56; State ex inf. Mytton v. Rackliffe, 164 Mo. 453; State ex rel. Atty. Gen. v. Gammon, 73 Mo. 421; Lackland v. Walker, 151 Mo. 210; Grier v. Ry., 286 Mo. 523; Slingluff v. Weaver, 66 Ohio St. 627; 2 Sutherland, Statutory Const. (2 Ed.) p. 701.

Thos. O. Stokes and George B. Whissell for respondent;

J. W. Jamison and Earl H. Painter of counsel.

(1) The legislative intent governs statutory construction. State ex inf. Barrett v. Joyce, 307 Mo. 49. (2) The rate of taxation for the year 1921 was one and one-twelfth per cent. Laws 1921 (1st Ex. Sess.) secs. 34, Mo. 189-191. (3) Said Section 4 may be invalid as an "emergency clause," but it can and should be given effect as the means used by the Legislature in fixing the rate of taxation for the year 1921. Every part of a statute must, if possible, be given some meaning and effect. R. S. 1919, secs. 13106, 13112; State ex rel. Marquette Hotel Co. v. State Tax Comm., 282 Mo. 213; Lincoln University v. Hackmann, 295 Mo. 118; State ex inf. Major v. Amick, 247 Mo. 271; Mitchell v. Railroad Co., 183 N.C. 162. (4) Although Section 4 may be invalid as an emergency clause under the decisions of this court, it can and should be considered as the best evidence of the Legislature's intention. State v. Bengsch, 170 Mo. 81; Sales v. Barber Asphalt Paving Co., 166 Mo. 671; Ruhland v. Waterman, 29 R. I. 365. (5) The doing of a vain, absurd and useless thing will not be imputed to the Legislature. Johnston v. Ragan, 265 Mo. 420; Ruhland v. Waterman, 29 R. I. 365. (6) Statutes imposing taxes are burdens placed by the State on its citizens, and are to be strictly construed against the State and in favor of the citizen. The citizen is exempt from taxation unless the language imposing the tax is clear and unequivocal. Miller v. Gearin, 258 F. 226; Benziger v. United States, 192 U.S. 38; Gould v. Gould, 245 U.S. 151; Edwards v. Wabash Ry. Co., 264 F. 617. (7) The amendment as construed by respondent can be given legal effect, and, as so construed, it is neither retroactive nor retrospective in the constitutional sense. Smith v. Dirckx, 283 Mo. 188; McManus v. Park, 287 Mo. 109. (8) The Legislature having by the unanimous vote on the emergency clause (Sec. 4, supra) fixed the time the amendment (Sec. 3, supra) was to go into effect at the date of its approval by the Governor (August 1, 1921), a court cannot by construction substitute a different time to correct defective legislation. State v. Roney, 82 Ohio St. 376. (9) A statute is never to be so construed as to prevent the very object of the Legislature in enacting it, but must be construed in the light of the end sought to be obtained. Missouri Granitoid Co. v. George, 150 Mo.App. 650; State ex rel. Tadlock v. Moneyham, 212 Mo.App. 573.

OPINION

White, J.

The plaintiff, Collector of the Revenue for the City of St. Louis, brought suit against the defendant to recover a balance claimed to be due on defendant's income tax for the year 1921. The case was tried on stipulated facts.

The defendant filed a return for state income taxes showing its net income for the year 1921 to be $ 1,392,977.73. The plaintiff collector presented to defendant a bill for income taxes for that year for $ 18,573.04. The defendant tendered in full payment of the bill $ 15,090.59. Then it was agreed that the defendant should pay the amount tendered without prejudice to either party, that it should not prevent the State from claiming the balance of the bill, nor prevent the defendant from resisting such claim. This suit is for that balance between the amount of the tax bill and the amount paid, $ 3,482.45.

The difference between the parties arises on the effect of the Act of 1921 amending Section 13112, Revised Statutes 1919, relating to income tax of corporations. That act reduced the income-tax rate from one and one-half per cent to one per cent. The dispute between the parties is as to when that reduction went into effect.

I. Whether a tax rate may be different for different parts of a year, instead of taking the year as a unit for taxation purposes, was settled by this court in case of Smith v. Dirckx, 283 Mo. 188.

The Legislature may provide for an income tax rate prevailing part of the year with a different rate for the other part of the year. The Act of 1921 (Extra Session Acts of 1921, pages 189 and 190) amended Section 13112, Revised Statutes 1919, so that it contains the following:

'Corporations, joint stock companies, insurance companies, etc. -- That there shall be levied, assessed, collected and paid annually upon the total net income received in the calendar year 1919, and in each year thereafter, from all sources by every corporation . . . a tax of one and one-half per cent upon such income; . . . Provided, however, that the taxes collected under this chapter shall for the years 1922 and subsequent years be levied, assessed, collected and paid annually at the rate of one per cent: Provided, further, that for that part of the calendar year 1921 which shall not have expired at the date this act shall take effect, said taxes shall be levied, assessed and collected at the rate of one-half of one per cent."

The act also contained an emergency clause as follows:

"The fact that until this act shall take effect income taxes must be levied, assessed and collected under the existing rates, which are excessive and continue an unreasonable burden on the taxpayer, creates an emergency within the meaning of the Constitution, and therefore, this act shall take effect and be in force from and after its passage and approval."

It is claimed by the respondent that the reduction from one and one-half to one per cent begins from August 1, 1921, when the act was approved. Appellant claims that the reduction begins from the time the act went into effect November 2, 1921. The emergency clause could not have the effect of putting the act into effect from the time of its approval, because it was not one of those laws excepted from the operation of a referendum as provided in Article 4, Section 57, of the Constitution.

The amendment provides that for that part of the year 1921 "which shall not have expired at the date this act shall take effect," the rate shall be one-half of one per cent instead of one per cent as provided for the future. Thus by the terms of the act after the year 1921 the rate should be one per cent of the income. During the year 1921 the old rate of one and one-half per cent should be levied and collected until the act should take effect, and then to the end of the year the rate should be one half of one per cent. Thus the amendment provides for two rates at different periods after the act shall take effect. It is argued by the respondent that the intention of the Legislature was to relieve corporations of the one and one-half per cent tax as soon as possible, and that it should approximate as nearly as possible one per cent for the year 1921. That is, that the reduction for that part of the year should be sufficient to make the entire year equal to one per cent. The emergency clause could not have the effect to put the amendment in operation until ninety days after the adjournment of Legislature. The language of Section 36 of Article 4 of the Constitution is very definite. It provides that "no law passed by the General Assembly, etc. . . . shall take effect or go into force until...