Case Name: TOMIKAWA v. GAMA
Court: Supreme Court of the State of Hawaii
Jurisdiction: Hawaii
Decision Date: 1902-10-31
Citations: 14 Haw. 431
Docket Number: 
Parties: TOMIKAWA v. GAMA.
Judges: Feear, O. J., Galbraith and Perry, JJ.
Reporter: Hawaii Reports
Volume: 14
Pages: 431–437

Head Matter:
TOMIKAWA v. GAMA.
Appeal from Circuit Judge, Fourth Circuit.
Submitted October 6, 1902.
Decided October 31, 1902.
Feear, O. J., Galbraith and Perry, JJ.
Chapter 64 of the Civil Laws of 1897, relating to Stamp Duties, is not inconsistent with the provisions of Section 8 of Article 1 of the Constitution of the United States and was continued in force by the Organic Act.
The item in the schedule of that .chapter relating to stamps on deeds does not provide for unequal taxation and is not invalid.
A decree in equity required the respondent to give to the complainant a good and sufficient deed of certain land. Held, that the giving of an unstamped deed was not a full compliance with the decree.

Opinion:
OPINION OF THE COURT BY
PERRY, J.
(Galbraith, J., dissenting.)
This is a suit in equity for the specific performance of a com tract to sell and convey land. After the entry of a decree granting the relief prayed for, the respondent in obedience to such decree, executed, acknowledged and filed a deed as to- the form of which no objection is made. The respondent, however, failed- and refused to stamp the deed as provided by Chapter 64 of the Civil Laws of 1897. The complainant thereupon moved for an order requiring the respondent to file "a good and sufficient deed which shall conform to the contract between tbe parties hereto and the final decree of this court made in this canse," claiming that an unstamped deed was not a sufficient compliance with the contract or decree. The court below denied the motion, holding, as we understand its written opinion on file, that our territorial legislature has no power to pass a law providing for the imposition or collection of stamp duties, that under Section 8 of Article 1 of the Constitution all duties must be "uniform throughout the United States", that if our statute is permitted to stand the stamp laws will not be uniform throughout the United States, that the enactment of such legislation is by the Constitution reserved exclusively to Congress and that therefore Chapter 64 of the Civil Laws is unconstitutional and void.
Chapter 64 was not specifically repealed by the Organic Act, although Chapter 65 immediately following it, relating to "Import Duties", was so repealed. The reason for the distinction is, of course; clear. Nor was Chapter 64 repealed by implication. Section 6 of the Organic Act provides that "the laws of Hawaii not inconsistent with the Constitution or laws of the Hnited States or the provisions of this Act shall continue in -force, subject to repeal or amendment by the legislature of Hawaii or the Congress of the Hnited States". Congress in the exercise of its power to govern the Territories had the authority to make the provision just quoted, as also to provide, as in Section 55, "that the legislative power of the Territory shall extend to all rightful subjects of legislation not inconsistent with the Constitution and laws of the United States locally applicable". Taxation, — the imposition of stamp duties for the purpose of revenue is but a method of taxation — is, clearly, a rightful subject of legislation. It was the intention of Congress by tbe Organic Act to authorize our Legislature to pass tax laws. This is further shown by other portions of the Act. The exercise of this power by tbe Territory is not inconsistent with the clause of the Constitution relating to uniformity. That clause, we have already held, "has no application to taxes imposed by Territorial legislatures". Robertson v. Pratt, 13 Haw. 590, 597.
That the Act under consideration is constitutional is the conclusion reached by United States District Judge Estee in the case of Achi v. Kapiolani Estate, Limited, decided April 24, 1901. See original records in that case.
It is also contended by counsel for the respondent, — this point apparently was not presented or passed upon in the court below — that Chapter 64 in the item as to stamps on deeds provides for unequal taxation and is therefore invalid. The tax prescribed is at the following, rates: $1 on deeds up 'to $500; $2 on deeds over $500 and up to $1000; from $1000 to $10,000, $3 for each $1000 on the whole amount; from $10,000 to $50,000, $4 on each $1000 of the whole amount; and when exceeding $50,000, $5 for each $1000 of the whole amount. The argument is that this constitutes unlawful discrimination against deeds for the higher amounts. We think that this progressive tax is valid. The classification is reasonable and justifiable. There is no reason for believing or holding that the burden thus imposed upon the wealthier is greater than that imposed upon the less wealthy. All who are within each class are treated alike. On the subject of taxation generally and classification in particular, see Robertson v. Pratt, supra, and cases there cited.
The objection that the adhesive stamps in use are not authorized by law because they are stamps "of the defunct ^Republic" and not issued in the name of the Territory, is untenable. There is nothing in the words, figures or device used, which would render the stamps invalid. The only words denoting the government or jurisdiction are "Hawaiian Islands." The words "Ningdom" or "Hepublic" do not appear.
Eor the respondent it is further contended that even though the statute is/ valid and in force, the giving of an unstamped deed is a sufficient compliance with the decree, and that the statute, if it requires stamps to be affixed, does not place upon the grantor the duty of affixing them. The record before us does not disclose the precise language of the contract to- convey or of the decree; still the proceedings had, the briefs of counsel and the opinion of the court below show that in substance the contract and the decree required the respondent to give a good and .sufficient deed. The statute is silent as to whether the stamps shall be affixed by the grantor or by the grantee. The question before us is whether the grantor has complied with this decree by tendering an unstamped deed. Section 927, Civil Laws of 1897, reads: "No instrument requiring to be stamped shall be recorded by the Registrar of Conveyances, or he of any validity in any court of this Republic, unless the same •shall be properly stamped. Provided that instruments improperly stamped may be received in evidence in Courts of Record if the unpaid duty and penalty be paid to> the clerk of the court, and on such payment being made the clerk of the court shall forward the instrument to. the Registrar of Public Accounts to be properly stamped." In view of the provision that an improperly stamped instrument may be: received iu evidence and, apparently, be considered as valid upon payment of the duty, a deed cannot be regarded as void merely because it lacks the necessary stamps. A void deed could not thus be given force and effect. Nevertheless it is clear that an unstamped deed must be regarded as of no validity or force, to prove, in any court of this Territory, a conveyance to the grantee. We think that a substantial compliance with the decree requires that the deed tendered be such as to be valid for this as well as for other purposes and therefore hold that the duty is upon the grantor to¡ affix the stamps. We understand that the practical construction of the statute ever since its enactment has been in accordance with this view.
Smith & Parsons for complainant.
Wise & Ross for respondent.
The decree appealed from is reversed and the cause remanded to the Circuit Judge of the Fourth Circuit for such further proceedings as may be proper.