Court Opinion

ID: 3277201
Source: CourtListenerOpinion
Date Created: 2016-07-05 16:45:57.462202+00
Date Added: 2024-06-11T13:58:53.946430
License: Public Domain

I am so thoroughly convinced that the decree of the trial court should be affirmed, that I am impelled to dissent.
I think the learned chancellor was correct in his view that that part of the Gross Receipts Tax Law in question, under which appellant sought to force appellee to pay the tax, when similar sales by other farmers, or agriculturists, were exempt, though made exactly in the same circumstances — that is from locations on their farms — was class legislation, arbitrary, discriminatory and void.
Article 14 of 1 of the Constitution of the United States guarantees to appellee the equal protections of the laws and under the Constitution of Arkansas all taxes imposed upon any one class of citizens of this state must be equal and uniform. The tax sought to be imposed here is an excise tax and cannot be upheld if the legislature's classification of appellee is arbitrary, discriminatory or unreasonable.
The facts are not in dispute. It is conceded here by all parties that the appellee is a farmer or one engaged in agricultural pursuits. He confines his farming operations to raising many varieties of fruit trees, flowers, vegetables and berry plants. He sells plants for the production of grapes, strawberries, blackberries, and many other kinds of berries. He sells many types of fruit and nut trees such as apple, cherry, plum, pecan, etc. A large part of his business consists of the sale of vegetable plants to the farmer and the gardener. Appellee sells these farm products from an established place of business which is located on, his floral and nursery farm.
Appellee also maintains in Little Rock, Arkansas, a place of business where cut flowers are sold, on which he pays the two per cent. sales tax. Appellee makes no contention that he should not pay this tax on sales from his flower shop.
The act exempts from the tax sales of products made by the farmer to the consumer, or user, form a place of business on the farm. When sales are made to a consumer from a place of business located on the farm by the ordinary grain farmer, cotton farmer, stock farmer, *Page 499 
fruit farmer, truck farmer, floral farmer, or nursery farmer, the two latter sales are taxed, but the sales of each of the former are not taxed, even though all may sell raw products from the farm, including products sold by appellee.
I am unable to distinguish between the sale of a fruit tree, or a strawberry plant, and the sale of the fruit from the tree or the plant. It seems to me to be splitting hairs, and a strained construction, to distinguish between the sale of vegetable plants and the sale of the vegetables themselves after full growth. If the majority opinion be correct in holding that the legislature's classification of appellee is reasonable, then there is nothing to prevent subsequent legislatures from subdividing for taxing purposes, the farming industry in to as many classifications as there are products produced on farms. Such classifications should be based upon commonsense and reason. We cannot get away from, or escape the fact that one who tills the soil and produces grains, cotton, vegetables, or fruits, flowers, fruit trees, berry or vegetable plants therefrom, is a farmer and so classed, and I believe that appellee's constitutional rights have been invaded when the legislature singles him out as a man who only produces flowers, nursery products and plants, and forces him to pay the tax, and exempts farmers who do not confine what they produce on their farms to those produced by appellee, and attempts to exempt them from the tax imposed on appellee.
The general rule on classification for legislative purposes is stated in Fountain Park Co. v. Hensler,199 Ind. 95, 155 N.E. 465, 50 A.L.R. 1518: "In determining the legality of classifications, the subject to be regulated, the character, extent and purpose of the regulation, the classes of persons or corporations legally and naturally affected by the regulation should all be considered. One of the essential requirements in order that the classification equal protection of the laws is that it must be reasonable and natural and not capricious or arbitrary. 12 C.J. 1128-1130; 6 R.C.L. 373-386, and cases cited. *Page 500 
"The law requires something more than a mere designation of characteristics which will serve to divide into groups. Arbitrary selection or mere identification cannot be justified by calling it classification. Gulf, C.  S. F. R. Co. v. Ellis, 165 U.S. 150, 17 S. Ct. 255, 41 L. Ed. 666; Rosencranz v. City of Evansville, 194 Ind. 499,143 N.E. 593; McKinster v. Sager, 163 Ind. 671, 72 N.E. 854, 68 L.R.A. 273, 106 Am. St. Rep. 268. The characteristics which can serve as a basis of a valid classification must be such as to show an inherent difference in situation and subject-matter of the subjects placed in different classes which peculiarly requires and necessitates different or exclusive legislation with respect to them. (Citing cases.)
"A proper classification must embrace all who naturally belong to the class, an who possess a common disability, attribute or qualification, and there must be some natural and substantial difference germane to the subject and purposes of the legislation between those within the class included and those whom it leaves untouched. (Citing cases.) The legislature cannot take what might be termed a natural class of persons, split that class in two, and then arbitrarily designate the dissevered fractions of the original unit as two classes, and thereupon enact different rules for the government of each. State v. Julow, 129 Mo. 163, 29 L.R.A. 257, 50 Am. St. Rep. 443, 31 S.W. 781; State v. Miksicek, 225 Mo. 561, 135 Am. St. Rep. 597, 125 S.W. 507."
And in Chicago v. Ames, 365 Ill. 529, 7 N.E.2d 294, 109 A.L.R. 1509, the Supreme Court of Illinois said: "The general assembly may properly select a certain class and impose a tax upon it to the exclusion of all others, provided there is in such discrimination a reasonable basis of difference when considered in relation to the purposes of the act, but the general assembly may not properly exclude from a classification persons or things which in fact belong to such class. It may not legislate against the fact. Winter v. Barrett, 352 Ill. 441,186 N.E. 113, 89 A.L.R. 1398."
As said before, appellee is in fact a farmer belonging to a particular class and as said in the Ames case, supra, *Page 501 
the legislature cannot legislate against a fact. Here the legislature, as I view it, has attempted to divide a natural class of persons, the farming class to which appellee belongs, and this, I think, it does not have the power to do.
This court in Waters-Pierce Oil Co. v. Hot Springs,85 Ark. 509, 109 S.W. 293, 16 L.R.A., N.S., 1035, said: "It does not palliate the discriminatory effect of the ordinances to say that all persons who use wagons for the delivery of oil are taxed, for there is no sound reason why those who use wagons for that purpose should be taxed for such use when those who use the same kind of wagons for other purposes are exempted entirely or are allowed to escape with a substantially smaller tax. The fact that a discriminatory tax applies to all persons of a given class does not render it any the less obnoxious as an unjust discrimination against a class of citizens."
Appellant argues that appellee is not called upon to pay the tax, but that he is a tax collector. This is only partially true. Appellee is required, under the act, to collect the tax from the purchaser, but in the event the purchaser fails to pay, then appellee himself is required to pay the tax. In any event, the appellee, by virtue of the tax, is certainly being discriminated against unfairly when he under the act is required to sell his farm products to customers at a greater price than other farmers similarly situated selling the same products.
The economic well-being of this nation depends upon its farmers. As has been aptly said, if the farmers were to cease to produce, the grass would grow in the streets of our cities. But for the products and food, fruits and vegetables the farmers produce the city dweller would starve. It is my view that the decree should be affirmed.
Mr. Justice HUMPHREYS joins me in this dissent. *Page 502