Court Opinion

ID: 3255332
Source: CourtListenerOpinion
Date Created: 2016-07-05 16:26:44.332169+00
Date Added: 2024-06-11T13:40:33.345142
License: Public Domain

I dissent, and in doing so I feel the question is such that I should give my reasons.
The Chief Justice has changed his mind as to the law governing in this case and gives as his principal reason for so doing the action of the Thirteenth Legislature, Laws 1937, First Special Session, chapter 2, in amending chapter 77 of the Laws of 1935, which he says was not known to him at the time or before our decision was handed down. He says, after enumerating *Page 50 
the various causes relied upon by movent for a rehearing:
"It may, perhaps, be true that the rule of contemporaneous practical construction should, as a result of these facts, be applied, but since my view of the matter in its present state rests upon a different proposition, I shall not undertake to say definitely whether it should be or not."
The decision in the case as originally presented to the court turned upon which of two lines of reasoning we should adopt. We adopted that line that held, under excise statutes somewhat like ours, that a contractor who builds permanent structures, such as bridges and houses, for the owner of land upon which such structures are placed, for a lump sum, sells the material entering into such structure as tangible personal property to the owner, and that the owner becomes and is the final consumer. That was, and is, the determinative question. In deciding this question, I concede that contemporaneous construction by the State Tax Commission, the body entrusted to administer the law, should be considered by the court, but deny that mere inaction by the commission is any construction whatever. The only construction of the act by that body of which we have any knowledge is that the act imposes a tax on contractors such as appellee. It is so alleged in the complaint. The rule seems to be that a failure of the body whose duty it is to enforce a law, especially a tax law, may not be treated as a contemporaneous construction thereof. In City of Louisville v. Board ofEducation, 154 Ky. 316, 157 S.W. 379, 380, it is said:
"The mere failure of public officers charged with a public duty to enforce statutory and constitutional provisions in respect to the levy and collection of taxes, or the acquiescence of public officers in conditions that exempted certain property from its fair share of the burdens of taxation, should not be permitted to stand *Page 51 
in the way of the correct administration of the law, or be construed to estop more diligent and efficient public officers when they attempt to perform their duty by bringing in to the revenue proper subjects of taxation that had theretofore been allowed to escape the payment of taxes."
In Bank of Hawaii v. Wilder, (C.C.A.) 8 F.2d 845, 847,certiorari to Supreme Court denied (270 U.S. 652,46 Sup. Ct. 351, 70 L. Ed. 781), it was said:
"Finally, there is the argument that the construction adopted for some years by territorial treasurers and executive officers, and not changed by legislation evincing dissent, justifies the interpretation contended for by the bank. Let it be that, if such construction of exemption had been uniform and continuous, resort to long-standing executive practice might be almost persuasive. But, where there have been differing constructions and lack of uniformity, the construction put upon the statute by the territorial Supreme Court should have very great weight. Omission of the taxing officers to assess and tax property did not lessen the duty put upon their successors, or take from the courts the power of construction of the law under which the exemption was claimed."
If this court's ideas of the law are to be influenced at all by executive construction of the sales tax law, why not yield to the construction of the law given by the Tax Commission, to the effect that appellee and others engaged as it was were subject to the tax. The commission's is the only affirmative contemporaneous construction we have.
Under such construction the Chief Justice suggests the appellee would have to pay 2 per cent. on the contract price of $118,000, or $2,360. But that should be no hardship on the appellee, for it knew that it would be expected to make such payment when it took the contract. The trial court found that the Tax Commission's construction had been given publicity at that time. Appellee could have taken care of the taxes, and *Page 52 
probably did in its price. By rejecting the commission's construction of the law, appellee and other contractors of the state, like the processors under the Agricultural Adjustment Act,48 Stat. 31, 7 U.S.C.A., § 601 et seq., are or may be the recipients of considerable bounties running into thousands of dollars.
The Chief Justice seems to base his present conclusion upon the intention of the Thirteenth Legislature and not the intention of the Twelfth, the one that passed the excise Revenue Act of 1935 (chap. 77). It is elementary that the intention of the legislature should control, but we should never mistake the legislature whose intention is to control. As is said in Reed
v. Huston, 24 Idaho 26, 132 P. 109, 111, Ann. Cas. 1915A 1237:
"The legislative intent that controls in the construction of statutes has reference to the Legislature which passed a given act, and that intent is indicated by the action of the Legislature, and not by their failure to act."
So, it is the intention of the Twelfth Legislature that we are particularly interested in and not that of the Thirteenth. After chapter 77 had been in effect for two years, it was amended by the subsequent legislature by redefining its words and phrases, adding new definitions, changing some of the rates, and reclassifying some of the articles to be taxed. Chapter 2, 1st Sp. Sess., 1937. The fact that the Thirteenth Legislature changed the rate, or reclassified an article, does not mean that the Twelfth Legislature did not have the intention to place the article in the classification given it or to impose the rate stated. It means simply that the subsequent legislature, in the respects mentioned, thought there should be changes made and consequently made them. These changes did not reflect the intention of the Twelfth Legislature but only the intention of the Thirteenth. *Page 53 
The fact that the Thirteenth Legislature took contractors out of a general class and placed them in a specific class, and changed the rate of the tax, may be some evidence that its members were aware that contractors were contending that they should pay no tax under chapter 77, whereas the Tax Commission was contending that they fell within article 2, section 2, subsection (d), and should pay a tax. By no stretch of the imagination is it any evidence that the Thirteenth Legislature thought or believed contractors were not taxable under such chapter. Placing them in a class to themselves and fixing a lower rate and exempting the amount paid for labor does not show that the legislature believed that contractors were not already being taxed. The last legislature said, in effect, if perchance the Twelfth Legislature did not tax contractors, we will now do it. In other words, it recognized that not to tax them was an unjust favoritism. If chapter 77 had been construed by the Tax Commission in a certain way for a considerable length of time, and if the legislature had re-enacted it or revised it, with knowledge of such construction, without any change, then the principle of contemporaneous construction might well apply. For this court to say that, because the Thirteenth Legislature amended and changed chapter 77, it construed it never to have intended contractors should pay taxes on the tangible material put into a bridge or house, and that we are bound by such construction, is dodging our duty to construe the laws and relegating it to a body authorized to make laws but not to construe them. Apropos of this thought, we quote from Cutrona
v. Mayor and Council of Wilmington, 14 Del. Ch. 434,127 A. 421, 426, as follows:
"In Jones v. Wootten, 1 Har. 77, in discussing this question, the Court said: *Page 54 
"`If that act is to be considered as an act declaratory of what the law was before its passage, it cannot as such have any weight with the court. Each department of our government must operate and be confined within its constitutional limits. The power that makes, is not the power to construe a law. The Legisture may declare what the law shall be, but not what it is or has been. That power belongs to the judicial department alone, and they in discharging their duty are to form their own opinion, and are not to be the mere organ of the Legislature and declare its opinion of what the law is or has been. This proposition is one so clear that the Supreme Court of the United States, in the case ofOgden v. Blackledge, 2 Cranch, 272 [2 L. Ed. 276], declined hearing an argument in its support, and stopped the counsel who was about to sustain it.'"
The quotation from Alexander v. Mayor etc. of Alexandria, 5 Cranch, 1, 7, 3 L. Ed. 19, found in the opinion of the Chief Justice, is unquestionably an expression of a good rule of construction when applied to a suitable state of facts. The Supreme Court was there considering this kind of a situation: In 1779 the Virginia legislature provided that the town of Alexandria could "assess the inhabitants for the charge of repairing the streets and highways." It was contended by an owner of land located in Alexandria, but who was not an inhabitant, that he was not taxable under such act. It appeared, however, that a later act (of 1796) provided that the town could recover taxes for street paving against nonresidents of the town holding lands therein. The court said: "Without deciding this question as depending merely on the original law, it is to be observed that acts in pari materia are to be construed together as forming one act," and then stated the rule of construction quoted. If the question here were whether contractors should be taxed after the amendment of chapter 77, the rule quoted would have application for the "subsequent *Page 55 
act [amending act] on the same subject affords complete demonstration of the legislative sense of its own language." But the question is not whether contractors may now be taxed but whether chapter 77 by its provisions, directly or indirectly, taxed them — whether the general provision levying a tax on all persons selling at retail tangible personal property for consumption is broad enough to include contractors such as appellee. We held in the original opinion that the line of cases sustaining such a tax, under similar acts, announced the sounder rule, and a rule that acquitted the legislature of favoritism to builders and contractors, and I am still of that opinion.
In reaching my conclusion, I have preferred to look for reasons to include contractors as taxable rather than reasons to exclude them, and I place paramount reliance upon the conviction that the legislature did not intend to tax people upon their purchases of food, clothing, and medicine and exempt contractors from paying taxes upon the building material entering into structures built by them under contract for a lump sum.