Whitinq v. Town Of West Point

• Decision Date: 17 March 1892
• Citation: 14 S.E. 698,88 Va. 905
• Parties: Whitinq et al. v. Town of West Point.
• Court: Virginia Supreme Court

14 S.E. 698

88 Va. 905

Whitinq et al.

v.Town of West Point.

Supreme Court of Appeals of Virginia.

March 17, 1892.

Municipal Corporations—Power to Exempt prom Taxation—Stare Decisis.

1. A municipal corporation, authorized by its charter to tax "all" the real and personal property therein, has no power to exempt any of such property from taxation.

2. Where, in the absence of two justices of a bench of five, a case is decided on the written opinion of two justices, and the concurrence of the third in the result only, and it is probable that the latter assents on other grounds, the principle on which such written opinion is based is not a precedent under the rule of stare decisis.

Lacy and Richardson, JJ., dissenting.

Petition for mandamus by C. T. Whiting and others, "tax-payers in the town of West Point, " to compel the council of the town of West Point to assess for taxation the property of the West Point Terminal Railway & Warehouse Company. On the 10th of June, 1882, an ordinance was passed exempting the property of the company, so long as it should keep its principal office in Virginia within the corporate limits of the town. This ordinance was, on the 2d of June, 1890, repealed, but was afterwards "revived and re-enacted" by an ordinance passed on 1st of September, 1890. Mandamus awarded.

H. R. Pollard and Isaac Diggs, for petitioners.

W. W. Goron, for defendants.

Lewis, P. The real question in this case is whether a municipal corporation has the inherent power to exempt from taxation any property which by its charter it is authorized to tax. The town of West Point, by the fourteenth section ofits charter, is authorized to tax "all the real and personal property" in the town; and by the following section it is made the duty of the town council annually to appoint an assessor, whose duty it is to assess "all personal property and all improvements put upon real estate" in the town since the last preceding assessment. Nothing is said in the charter about making exemptions. Has the corporation, then, the power to make them? We think it clear, both upon principle and authority, that it has not. A municipal corporation has no element of sovereignty. It is a mere local agency of the state, having no other powers than such as are clearly and unmistakably granted by the law-making power. A doubtful corporate power, it has been said, does not exist; and when any power is granted, and the mode of its exercise is prescribed, that mode must be strictly pursued. Minturn v. Larue, 23 How. 435; Roper v. Mc-Whorter, 77 Va. 214: Green v. Ward, 82 Va. 324; City of Richmond v. Daniel, 14 Grat. 385; 1 Dill. Mun. Corp. (4th Ed.) § 91. Now, the power of taxation is not only an attribute of sovereignty, but it is essential to the existence of government; and, as all are protected by the government, so all should contribute to its support. "However absolute the right of any individual may be, " says Chief justice Marshall, "It is still in the nature of that right that it must bear a portion of the public burdens, and that portion must be determined by the legislature." Bank v. Billings, 4 Pet. 514. Nor, strictly speaking, is this power of the legislature transferable, for, as we shall presently see, whenever taxes are imposed, whether by a municipality or the state, it is, in legal contemplation, the act of the state, acting either by her own officers or other agents designated for the purpose. So, also, is the power to make exemptions sovereign in its nature, and likewise resides in the legislature, unless the constitution otherwise ordains. It is therefore a legal solecism to say that the power of exemption, or any other sovereign power, is inherent in a municipal corporation, which, though invested with certain governmental powers for local purposes, is in no particular sovereign. An eminent writer, in treating specifically of the right to make exemptions, observes that the general rule on the subject is well settled and familiar. "Pertaining, as it does, to the sovereign power to tax, " be says, "the inferior municipalities of a state are not poss»ssed of it, and cannot, therefore, make exemptions, except as expressly authorized by the state;" and that, "when properly made, they must be determined in the legislative discretion; but even this, " he adds, "is not untrammeled." Cooley, Tax'n, 200. Judge Dillon, Desty, and other writers on the subject state the doctrine in the same way, and the adjudged cases to the same effect are numerous.

A leading case, and one which closely resembles the present, is State v. Railroad Co., 75 Mo. 209. In that case the city of Hannibal contracted with the railroad company to exempt its property from city taxation for and in consideration of the annual payment by the company of $700. The contract recited tha the company denied the right of the city to tax its property, and intended, if such right were exercised, to remove its general office and machine-shops from the city to some other point; and it was this that led to the making of the contract. Several years after the date of the contract, the company having in the mean time fully complied with it, the property of the company was assessed for city taxes, and thus the question arose whether the contract was valid, and it was held that it was not. The court rested its decision upon the ground that the power to make exemptions was not conferred by the city's charter, and that the delegated power to tax was in the nature of a public trust, which could not be surrendered in whole or in part. No argument, it was said, was necessary to show that the same principle which forbids the absolute cession by a municipality of this power, likewise forbids that which approximates thereto, namely, the right to make exemptions. It was said, moreover, that the idea of taxation imports equality of apportionment; that it is this which distinguishes taxation from arbitrary exaction; and that the exemption of the property of one person casts an inequitable burden on others not thus graciously favored. The same principle was enforced in City of Austin v. Coal Co., 69 Tex. 180, 7 S. W. Rep. 200. In that case the city of Austin contracted with the defendant company to exempt its property from taxation in consideration of its furnishing gas to the city at a reduced rate. The contract, however, was held to be ultra vires. "The legislature, " said the court, "never having attempted to confer upon the city the power to exempt any property which it was authorized to tax, the contract relied upon, in so far as it attempted to give the exemption claimed, must be held void." In Wilson v. Supervisors, 47 Cal. 91, an order remitting taxes, though made pursuant to a legislative act, was held void, on the ground that it was repugnant to the constitution of California, which provides that "taxation shall be equal and uniform, "and that "all property shall be taxed in proportion to its value."

These authorities, which are only a few of many that might be cited to the same effect, show that the rule requiring all municipal powers to be construed strictly, applies especially to a case like the present. And the reason, as already suggested, is this: that the power of taxation, being an attribute of sovereignty, can be exercised only by the sovereign. Hence, when delegated by the legislature to a municipal corporation, the latter is considered as, pro hac vice, the agent of the state, acting for the benefit of the municipality. In other words, the municipality, in the eye of the law, is the hand of the state by which the tax is laid and collected. Therefore the statutory authority must be strictly pursued, for as an agency to sell does not imply an agency to buy, so neither does a delegated power to tax imply a power to exempt. If this werenotso, and if a municipal corporation could, at pleasure, exempt the property of one person, it could exempt the property of all, and thus deprive itself of the means of existence, or of accomplishing: the objects for which it was created. This principle, which is the touchstone of the case, is not a new one. It has been recognized, not only by this court, but by the supreme court of the United States, and other courts...