Thompson v. McLeod

• Decision Date: 11 December 1916
• Docket Number: 18685
• Citation: 112 Miss. 383,73 So. 193
• Court: Mississippi Supreme Court
• Parties: THOMPSON, AUDITOR OF PUBLIC ACCOUNTS ET AL. v. MCLEOD

73 So. 193

112 Miss. 383

THOMPSON, AUDITOR OF PUBLIC ACCOUNTS ET AL. v. MCLEOD

No. 18685

Supreme Court of Mississippi

December 11, 1916

APPEAL from the chancery court of Hinds county, HON. O. B. TAYLOR Chancellor.

Bill for injunction by A. J. McLeod against Duncan Thompson auditor of Public Accounts to the State of Mississippi, and the treasurer of the state. From a decree for complainants defendants appeal.

Appellants are, respectively, auditor of public accounts and treasurer of the state of Mississippi, and prosecute this appeal from a decree of the chancery court of Hinds county, Miss overruling their demurrer to a bill of complaint filed by appellee to restrain these officials from levying and assessing the tax attempted to be imposed by chapter 110, Laws of 1912, being "An act to levy and collect and enforce the payment of an annual privilege tax or occupation fee upon all persons, associations of persons, or business firms and corporations, pursuing the business of extracting turpentine from standing trees." Appellee is a resident and citizen of Hancock county, Miss., and engaged extensively in the turpentine business. His bill of complaint is very lengthy, and it is unnecessary to set out the averments thereof in full. The material facts alleged are that complainant is the owner of several turpentine distilleries, and was, during the year preceding January 1, 1913, engaged in the extraction of sap and resin from a large number of pine trees and transporting the same to his distilleries and then and there distilling the crude gum or resin into the manufactured product called "turpentine"; that he was operating seventeen crops of turpentine on the trees, describing in Exhibit A and A 1 to the bill, consisting of one hundred and seventy thousand boxes; that the land shown in Exhibit A belonged exclusively to the complainant, while the trees standing upon the lands described in Exhibit A 1 were leased to the complainant for the purpose and with the right to extract the crude turpentine; that the timber upon all of the lands mentioned had been duly assessed for ad valorem taxes and taxes paid thereon; that in extracting resin from trees the so-called turpentine crops last usually about three years and during the first year about fifty per cent. of the entire value of the use of the sap is extracted, about thirty per cent. the second year, and twenty per cent. the third year, and that after the third year the trees are generally of no value for the purpose of extracting resin, but that complainant, however, was operating about two crops tapped or cupped four years ago; that five crops were operated by complainant for the first time, five crops the second year, five crops the third year, and two crops the fourth year; that complainant in operating turpentine distilleries in the state of Mississippi was already paying a privilege tax for the right so to do and in accordance with the statutes of this state. The bill then charges that chapter 110, Laws of 1912, attempting to impose a so-called privilege tax for the right to extract turpentine from standing trees, is unconstitutional and void for many reasons therein alleged, one of which is that the enforcement of the provisions of said act would contravene section 112 of our state Constitution, the contention being that the tax here attempted to be imposed is a property tax and not a privilege tax, and, being a property tax, it is not equal and uniform.

Section 1 of the act in question is as follows:

"Be it enacted by the legislature of the state of Mississippi, that there is hereby levied on the gross annual cutting or extraction the following annual privilege tax or occupation fee for the year 1912, and for each subsequent year, upon each person, association of persons, or business firms and corporations, pursuing the business of extracting turpentine from standing trees.

"That for carrying on the business of extracting turpentine from standing trees the license shall be one-fourth (1/4) of one cent each year for each cup or box."

Other sections of this act require sworn statements to be made to the auditor by all persons, firms, and corporations affected by the act; these sworn statements to be rendered on or before the 1st day of February for the year ending December 31st next preceding. The statement required is "a sworn statement of the total extracting of turpentine." A penalty is imposed for failure to pay the tax, and the state treasurer is authorized to distrain the goods and chattels belonging to the person, firm, or corporation in default and to sell a sufficient amount of the property of the taxpayer at public vendue to pay the taxes, together with ten per cent. thereon for each month for which the taxes remain unpaid; the moneys collected to be placed in the treasury to the credit of the general revenue fund of the state.

Decree affirmed.

Geo. H. Ethridge, Assistant Attorney-General, for appellants.

Green & Green and Jas. R. McDowell, for appellees.

STEVENS J. POTTER, J. dissents. COOK, J., joins in this dissent.

OPINION

STEVENS, J.

It is conceded by counsel for the state that, if the tax here attempted to be imposed is a property tax, the act imposing it is unconstitutional and void. In following the rule, so frequently announced by the courts, of looking through the form to the substance, it is manifest that the tax exacted by the act under review operates, and can only operate, as a property tax and is really not a privilege tax. We are not called upon to place any limitation upon the right of the state to exact licenses or impose privilege taxes that are really such and to require the taxes as a condition precedent to the right to do business within the confines of our commonwealth. We do not question the right of the state, also, to measure a privilege tax by the volume or amount of business done. The act here assailed does not even attempt to require a license or permit to be issued by any officer or department of the government as a condition precedent to the right of a citizen to extract crude turpentine from pine trees. No document of any kind is to be issued in advance. The tax demanded by the act is to be paid at the end of the year and after the resin is extracted--after the so-called privilege has been exercised. On default by the taxpayer, payment of the tax is enforced by seizure and sale of any property belonging to the defaulter. The enforcement of the tax conforms to the procedure adopted for the enforcement of ad valorem taxes. The act under review does not levy a privilege tax on the right or privilege of selling resin or the gum of the tree as originally extracted and commonly known as "crude;" but the privilege, if any, which is taxed, is the privilege or right of the owner or lessee of pine trees to "extract turpentine from standing trees." Section 1 of the act makes no effort to conceal the subject-matter of the tax. It expressly declares that it is "levied on the gross annual cutting or extraction," and the tax levied is "one-fourth of one cent each year for each cup or box." It is true the act in other language refers to it as a business--"a business of extracting turpentine from standing trees." The imposition of such a tax is not on a business, but on the property involved. Here we have a citizen of our state who owns and operates his own turpentine distilleries, who owns the pine trees which produce the resin, the crude product, without which his distilleries cannot be operated, and although he pays ad valorem taxes upon his land and standing trees at their true value, and although he pays a privilege tax for the right to manufacture spirits of turpentine from the annual product of the trees, he is now called upon to pay an additional tax of one-fourth of one cent on each box cut or chopped on the trees, and it requires no refinement to observe at once that this is an additional burden of taxation operating, not indirectly, but directly upon complainant's property. Here the legislature attempts to say to the citizen:

"Although we recognize that you are the lawful lessee or owner of standing pine trees which produce when tapped an annual product of resin, and although we have demanded and you have paid your full share of taxes upon these standing pine trees and the soil which continually feeds them, nevertheless, thou shalt not lay ax to the tree to extract the natural gum without subjecting any property which you have in the state of Mississippi to an additional tax of one-fourth of a cent for each box you cut."

This act strikes down the inherent right of the property owner to lay hand upon his own property. Every owner of a pine tree enjoys the same natural right to extract gum from the tree as the owner of a vineyard has to pluck his own grapes. It would be the same thing to require a privilege tax as a precedent right of the owner to pull the ripe pecans from his pecan orchard or to enjoy a drink of pure water from the cool spring of the old homestead. As stated, the levy is not imposed for the right to sell crude turpentine. If this were done, then any one engaged in the regular business of buying and selling crude gum might be liable. The writer is not disposed to commit this court to any unnecessary process of reasoning in this opinion, but having been born and reared amongst the tall, long-leaf pines of South Mississippi, is familiar therefore with the turpentine business and feels safe in asserting that there is no well-defined business of buying and selling the crude turpentine. It is true that many individuals tap their own trees and sell the annual crude product to the distilleries. It is also true that the owner of the turpentine distillery, more familiarly known as the "still," frequently...