Wiseman v. Phillips

• Court: Arkansas Supreme Court
• Writing for the Court: MCHANEY, J.
• Citation: Wiseman v. Phillips, 84 S.W.2d 91, 191 Ark. 63 (Ark. 1935)
• Decision Date: 03 June 1935
• Docket Number: 4-3942
• Parties: WISEMAN v. PHILLIPS

84 S.W.2d 91

191 Ark. 63

WISEMAN v. PHILLIPS

4-3942

Supreme Court of Arkansas

June 3, 1935

Appeal from Pulaski Chancery Court; Frank H. Dodge, Chancellor reversed.

Suit by A. Phillips against Earl R. Wiseman, Commissioner of Revenues, wherein I. B. Hall, Joe Isaacs, and William Henderson intervened. From a decree for plaintiff and interveners, defendant has appealed.

Decree reversed.

Louis Tarlowski and Millard Alford, for appellant.

Edward B. Dillon, Rowell & Dickey, Buzbee, Harrison, Buzbee & Wright, Oscar Fendler and Reid, Evrard & Henderson, for appellees.

Rose Hemingway, Cantrell & Loughborough, G. R. Smith, Joe C. Barrett, D. A. Bradham and Owens & Ehrman, amici curiae.

MCHANEY J. JOHNSON, C. J. concurring. Justice BAKER concurs in this opinion.

OPINION

MCHANEY, J.

The General Assembly of 1935 enacted act 233, the "Arkansas Emergency Retail Sales Tax Law," as it is named in § 1. Its purposes as defined in § 2 are "to provide relief for the free common schools of the State, for the wards of the State who are supported from the Charities Fund, and for other worthy causes." Section 3 consists of definitions of terms as used in the act. Section 4 levies the tax. It reads as follows:

"Beginning May 1, 1935, there is hereby levied upon, and shall be collected from all retail sales, as herein defined, a tax of two (2%) per centum of the gross proceeds derived from said sales.

"The tax imposed by this section shall apply to:

"(a) All sales at retail of tangible personal property.

"(b) All retail sales at or by restaurants, cafes, cafeterias, hotels, dining cars, auctioneers, photostat and blue-print sales, funeral directors, and all other establishments of whatever nature or character selling for a consideration any property, thing, commodity, and/or substance.

"(c) All sales of admission or admittance to athletic contests, theaters, both motion picture and stage performances, circuses, carnivals, dance halls and other places of amusement.

"(d) All retail sales of electric power and light, natural gas, water, telephone use and messages and telegrams.

"(e) Where there are adjoining cities or incorporated towns which are separated by a State line, the taxes and licenses to be paid by dealers in and on sales and services in such adjoining city or incorporated towns on the Arkansas side of the State line shall be at the same rate as provided by law in such adjoining State, if any, not to exceed the rate provided in this act."

Section 9 requires the retailer to collect the tax from the consumer, and account for same to the Commissioner of Revenues, who is required to deposit his collections in the State Treasury, 35 per cent. to the General Revenue Fund and 65 per cent. to the Common School Fund. There are many administrative provisions not deemed necessary or pertinent to a proper discussion of this case. Certain exemptions are set out in § 15, and the following is the concluding paragraph of said section:

"All foods necessary to life, more specifically defined as follows: Flour, meat, lard, sugar, soda, baking powders, salt, meal, butter fats, eggs, and all medicines necessary for the preservation of public health, each of above to be exempt from the provisions of this act."

Certain refunds of taxes paid by governmental agencies, hospitals and sanatoria are authorized by § 16, and § 17 makes it unlawful for any retailer to assume or absorb the tax or to advertise that he will do so. Section 20 provides that a tax on sales of separate articles of merchandise, commodity or personal property, sold in this State for use outside this State, for a price of $ 200 or more, "shall bear the rate of sales tax of the State where the same is to be taken and used."

Appellee brought this action to enjoin and restrain the appellant as Commissioner of Revenues from taking steps to enforce the act and from collecting the tax. Its constitutionality was attacked by appellee on five grounds, as follows: (1) That it is violative of § 5, article 16, of the Constitution of this State, in that (a) it is a property tax, and that it violates the provision of that section that a property tax shall be equal and uniform, because certain articles are exempt from the tax; and (b) that it is not uniform because in § 4, paragraph (b), the tax is levied on articles sold at certain designated places, and that such listed places does not include all places where retail sales are made of like tangible personal property. (2) That it is further violative of said section and article because the tax imposed is a privilege tax on the privilege of doing business as a merchant, which is a matter of common right not subject to be taxed. (3) That it imposes upon the citizens of the State a tax upon the privilege of using and consuming articles necessary for existence, which is a matter of common right not subject to be taxed. (4) That it is an occupation tax which may not be levied for State purposes. And (5) that it constitutes double taxation.

Appellant filed an answer denying all the allegations of unconstitutionality of the act. Later, two interventions were filed by citizens and taxpayers attacking the act on the same and additional grounds. One by J. B. Hall, a citizen of Little Rock, who alleges that said act is unconstitutional and void for the further reason that it imposes upon him and other citizens a tax upon the right or privilege of purchasing in the State of Arkansas, for their own use and consumption, articles and commodities which, as a common right, he and every other citizen of the State has a right to purchase in the ordinary course of business, free from the imposition of any tax upon the exercise of such right or privilege. Other allegations of unconstitutionality of the act are made, some of which will be hereinafter referred to. An intervention was also filed by Joe Isaacs, a dry goods and clothing merchant, of Blytheville, and William Hundhausen, a retail grocer and meat merchant of West Memphis. They make all attack on said act on numerous grounds, some of which will be hereinafter referred to. A demurrer was filed to this intervention and overruled. A stipulation was filed as to the intervention of Hall, and the case was submitted to the court on the complaint, the answer, the interventions, the stipulation and demurrer. From all of which the court found that the prayer of the complaint and of the Hall intervention should be granted, and, the demurrer to the Isaacs-Hundhausen intervention being overruled, and appellant declining to plead further, the court perpetually enjoined appellant from proceeding further in the enforcement of said act 233 of 1935. The case is here on appeal.

At the invitation of this court, several members of the bar have filed excellent briefs as amici curiae, some on one side of the question presented, and some on the other, in addition to the splendid briefs of counsel for the parties, including interveners. We are duly appreciative of this assistance and of the painstaking generosity of time and energy spent in this connection.

In determining whether an act of the General Assembly is constitutional, we must bear in mind that that instrument is not a "grant of enumerated powers of the Legislature, not an enabling, but a restraining act," and that the Legislature has the undoubted power to make the written laws of the State, unless it is expressly, or by necessary implication, prohibited from so doing by the Constitution; that the act is presumed to be valid, and that all doubt of its validity must be resolved in favor of the act. Bush v. Martineau, 174 Ark. 214, 295 S.W. 9.

In the Isaacs-Hundhausen intervention and brief it is alleged and contended that the act is void because its title is not germane to the body of the act, and that § 2, above quoted, falsely states the purpose of the act in that one of the purposes named is to provide relief "for the wards of the State who are supported from the Charities Fund," and that § 9 thereof apportions all the funds collected to the General Revenue and Common School Funds, and none to the Charities Fund. This objection is not well taken. It is well settled that a statute is not invalid because the title does not refer to all the matters covered in the body of the act. See Westbrook v. McDonald, 184 Ark. 740, 43 S.W.2d 356, 44 S.W.2d 331, for one of the latest cases on the subject. Nor can we hold the act void because no distribution is directly made to one of the enumerated purposes. The deposit of 35 per cent. of the funds to the general revenue fund is certainly germane and comes within the clause "and for other worthy causes," and the Legislature might take it out of the General Fund and put it in the charities fund.

It is next argued in the same brief that onerous and burdensome duties are placed on retail dealers in §§ 9 to 14 inclusive, against their will. But this court answered this contention in Standard Oil Co. v. Brodie, 153 Ark. 114, 239 S.W. 753, when it said on page 125 that: "It is next contended that the due process clause of the Constitution of this State and of the United States is violated by the requirement laid upon the dealers in gasoline to collect and pay the tax. It must be remembered that the tax is not laid on the sale of the gasoline, nor upon the business of the dealer. The dealer is not required to pay the tax, but to collect it, keep and present an account thereof, and pay it over to the county treasurer. The purpose of the statute is twofold, namely, to impose a tax upon the purchaser of gasoline for the use of the car, and to regulate the business of the dealer by requiring him to collect the tax and pay it over to the county treasurer. It is certainly within the power of the Legislature to...