Court Opinion

ID: 8011752
Source: CourtListenerOpinion
Date Created: 2022-09-09 01:59:00.239037+00
Date Added: 2024-06-11T16:36:06.724850
License: Public Domain

Barclay, J. —
It becomes necessary for the court in lane to decide, for the first time, whether the limitations to taxation, imposed by section 11 of article 10 of the Missouri constitution, apply to a tax levied under section 12 of that article, in a city of the fourth class, for the purpose of supplying the city with water.
It will not be needful to recite the facts out of which the ease arose. They have been already given in the opinion filed while the cause was in the first division (26 S. W. Rep. 1025),which will be published in the official report of the case.
1. The annual tax was held void in that opinion because adjudged by the court to be in .excess of the rate permitted by section 11.
That ruling presents the first point for determination. Its importance is great; and the effect of any action upon it will be far reaching. The whole court must attempt to solve the same problem which was discussed before the first division in the Columbia case (1892, 111 Mo. 365, 20 S. W. Rep. 236), and later before the court in banc in the State ex rel. v. Seibert (1893, 116 Mo. 415, 22 S. W. Rep. 732). But in the latter case it was found that a decision could be reached *210without meeting the difficulties which now confront us.
We have given the subject patient consideration. The writer has become convinced that an endeavor to practically apply the rule announced in the Columbia case will produce results which can not have been intended by the constitution, or by its authors. Hence he has felt obliged to recede from the position which his concurrence in the Columbia' judgment indicated. In that case (111 Mo. 374-6) the provisions of sections 11 and 12 of article 10 are copied at length. So they need not be repeated here.
The real difficulty in the way of that construction is developed by an attempt to keep those sections in harmony, when so construed.
Each of the sections is entitled to receive the same respect and obedience. Neither can be wiped out for the sake of enforcing a supposed wiser policy embodied in the other.
Our duty is only to construe the law; and all parts of the constitution are of equal moment and are equally binding upon us, as upon all other citizens of the state.
Before attempting to define our views as to the bearing of these sections on each other, let us, as briefly as possible, examine the practical consequences of attempting to maintain the construction put upon them in the Columbia litigation.
In endeavoring to arrive at the probable intention of a public enactment, whether it be organic or of lesser rank, it is always permissible to consider the consequences of any construction proposed to be given to it. Such consequences have a most important bearing in aid of the interpretation of any law. Eor it is not to be supposed that any unjust or unreasonable results were intended to flow from the law. Hence a construction which permits such results will not be accepted by judicial interpreters, where the language is susceptible *211of a more beneficial reading. Rutherforth’s Inst. [2 Am. Ed.], p. 414.
The inevitable implication in the ruling in the Columbia case is that the provisions of .section 12 for the levy of an annual tax (in the instances therein permitted) are intended to be operative within the limitations of section 11, and not otherwise. It is not, and could not be, denied that a tax may be imposed under section 12. The terms of that section are too clear on that subject to admit of question. The only doubt, or point of controversy, is whether the true intent of the constitution should be held to sanction such a tax in excess of the rate prescribed in section 11, or whether that tax must be levied within the range of rates stated in section 11.
In seeking to discern the intent of these provisious, let us begin by examining the workings of the legal machinery along the lines defined in the Columbia suit.
Section 11 prescribes a limitation of the maximum annual tax rate (as to cities of the size of Lamar) at fifty cents on the $100 valuation of taxable property.
So that the imposition of an annual tax under section 12 (if only capable of enforcement within the restrictions of section 11) might be held (under the Columbia ruling) to produce either one of two possible results. These we shall, for convenience of treatment, designate as alternatives a and b. We will consider each of them separately.
a. The annual tax, levied under section 12, might be held to be a fixed charge upon the local revenue, raised by the annual levy of fifty cents on the $100. So that the fund available for ordinary governmental purposes would be reduced accordingly, and would then be merely what remained after applying the tax under section 12 to its designated purpose.
*212If that theory prevailed, an annual tax of that sort, to the limit of fifty cents on the $100, could be imposed by vote in some cities (without going beyond the five per centum of taxable value), leaving nothing for the usual and necessary expenses of the local government. And a corresponding reduction of- annual revenue, available for the ordinary wants of the city, would follow any and every vote of indebtedness under section 12. In other words, taxes might be levied under the latter section, to meet, for example, a valid bonded indebtedness, to such an amount as to render the remainder of the annual rate (allowed by section 11) wholly inadequate to the needs of the city government.
The same thing could occur in a similar way in a county under these sections.
Yet these municipalities are agencies of the state government, and their maintenance is needed for the performance of many other functions besides the payment of debts.
The serious question which arises, upon this view of the rule in the Columbia case, is whether it is a reasonable construction of these constitutional provisions to hold that the people of these localities are authorized, by a vote under section 12, to divert to some special object, for a period of twenty years, all, or .such part as they please, of the general revenue raised under the rates in section 11, and imperatively needed for the support of the local autonomy.
Yet that consequence would be possible under the ruling that an annual tax under section 12 is a specific charge against the general revenue, within the limita-. tions of section 11.
If that view, however, seems unreasonable, let us turn to the other alternative.
b. The second alternative, under the Columbia ruling, would be to hold that, as section 11 plainly con*213templates the imposition of the taxes (mentioned therein) to meet the vital needs of government, the annual revenue must first be devoted to those needs, leaving any residue that might remain, from the prescribed annual levy, to be applied to the purpose designated by any tax levied by authority of section 12.
Of course, such a holding would reduce the supposed annual tax under section 12 to the consistency of a shadow. There would be nothing of substance in it. The local authorities could, at any time, by a slight enlargement of the ordinary allowances for the support of their government, cut down to zero-the residuum of the annual rates of section 11. Even if they always acted in entire good faith, the probability of increasing demands upon the local revenue, during the changes of conditions in a period of twenty years, would rendes any dependence upon a surplus from the annual rate highly illusory.
Certainly no bonded indebtedness in these days could be founded on such a shifting sand of credit as a tax would be under section 12, so construed. What creditor could be found who would loan funds to a municipality on such a basis?
That construction of the organic law would practically eliminate the grant of power to incur an indebtedness (except for public buildings), under the provisions of section 12. Its adoption would, in effect, give the latter section another proviso, namely, ‘‘provided such annual tax shall only be payable from any surplus of the annual rates, prescribed in section 11, that may remain after the ordinary demands of the local government are met, each year.”
How such a reading of the fundamental law would depart from its reasonable and natural purport, as it is now written, can be seen at a glance by any reader who will compare the closing lines of section 12 with *214the supposed proviso above, which attempts to express the second alternative construction possible under the Columbia case.
After the best consideration we have been able to give to that decision, we can not escape the impression that one of two results must necessarily follow from it; either the general revenue of the locality may be, in great part, or wholly, absorbed for twenty years, and diverted from the maintenance of- the government by the effect of an annual tax under, section 12; or, on the other hand, if the absolute needs of the local government are entitled to priority of payment from the authorized revenue under section 11, then any so-called “tax” imposed under section 12 must -depend wholly on the flimsy contingency whether or not any surplus remains from the regular rates after the ordinary expenses of the city, etc., have been satisfied.
Such a “tax” would be in reality no tax. It certainly would not be a “tax sufficient to pay” the indebtedness incurred, as section 12 demands. It would be a mere contingent charge against the unexpended portion of the general revenue of each year. It might never “pay” the indebtedness; and its struggle for any sort of existence would be against great odds.
So far, we have attempted to estimate the practical effects of giving section 12 play within the limitations of section 11, as required by the Columbia case. We now ask whether either of the alternative constructions above indicated can be accepted as a reasonable and true interpretation of the meaning of the constitution?
2. Or may not another alternative construction have been intended, one not sanctioned by the judgment in the Columbia case, however? That is to say, may it not have been intended that the “annual tax,” authorized to be imposed, upon a vote, under section 12, *215should be levied and collected (within the limitations of that section), in addition to the annual rates for local purposes permitted (without any vote) by section 11?
If that view were taken, no such consequences as have been pointed out could follow; there would be no clash between the sections, no struggle to be settled as to which of them is of paramount authority.
Section 12 could then be regarded as a proviso to section 11, and any tax duly levied to meet a voted indebtedness would have a solid foundation on the taxable resources of the locality. Yet on the other side, the possibility of depriving the municipality of means to sustain its government would disappear.
By that construction alone, it seems to us, can both of these sections be given full force.
The apparent obstacle to this construction is that part of section 11 which declares that “said restrictions as to rates shall apply to taxes of every kind and description, whether general or special,” with certain exceptions as to existing indebtedness and renewals thereof.
That provision has created the difficulty in dealing with these sections. The argument in favor of the Columbia ruling is based upon it. That argument is that a tax under section 12 is a “special” tax, within the meaning of section 11, and hence within its restrictions.
The tax authorized by section 12 is not therein called a “special” tax, but an “annual tax.” Mere names, however, are of slight weight in such an> investigation. The real inquiry should be whether a tax imposed under section 12 can, upon due consideration of the practical ends in view in these sections, be held to be included by the term “special” tax in section 11, within the intent of the constitution.
*216We think not; first of all, because of the singularly unreasonable consequences (already indicated) which would then be possible.
3. Furthermore, the general design and aim of sections 11 and 12 ■ support the assumption that the restrictions of the former as to “special” .taxes were not intended to nullify the grant of power as to annual taxes authorized by section 12 to be imposed after a vote of the people.
The two sections are component parts of a system of financiering which experience pointed out as furnishing a safer course than had been previously followed.
Two great objects were in view, and each of the sections treats of one of them.
One object was to limit the rates of taxation for raising the annual revenue required for local purposes; the other, to limit the power to incur indebtedness beyond the annual income and revenue provided for any one year.
Section 11 deals with rates of taxation for annual revenue which may be applied by the local authorities to meet “the ordinary and current expenses” of the local goverment. Book v. Earl (1885), 87 Mo. 252. (Compare Const. 1875, art. 9, see. 19.)
Section 12 deals with the subject of indebtedness, its limitations, and the ways and means to meet it when assumed.
All through section 11, “annual rates” of taxation are mentioned, and the limitations are iipon those rates. In the opening lines of section 12 appears a prohibition of indebtedness “for any purpose, to an amount exceeding in any year the income and revenue provided for such year,” without the assent of two thirds of the voters, etc.
*217The rates of annual taxes sanctioned by section 11 are the chief source of the revenue thus mentioned. If it had been the intention that the restrictions of section 11 as to rates of taxation should apply also to taxes to meet indebtedness, then- section 12 should certainly have ended at the word “jail.”
To authorize the creation of indebtedness would then have been quite enough.
If the only resource for payment of such indebtedness is the revenue already 'allowed by the rates prescribed in section 11, what need was thereto go further and authorize by the last lines of section 12 another tax levy which could only be operative within the limits of section 11. Taxes up to those limits could be levied annually under section 11, without the ceremony— rather say, farce — of levying an annual tax under the power given by section 12, which, we are told, conferred in reality no more power than already existed under section 11.
If the municipality was authorized to, and did, incur an indebtedness under the power contained in the first half of section 12, the obligation would necessarily be a charge against its revenues. Then why give further power, as is done by the second proviso of section 12, to levy any annual tax to meet such indebtedness, if all the tax that could be levied was already sanctioned by section 11?
If the view expressed in the Columbia case is sound, all of the latter proviso in section 12 (except, perhaps, as to the limit of twenty years to terms of indebtedness) could be absolutely stricken out without affecting the meaning of the constitution in the slightest particular. Certainly all that part of it which authorizes, or rather commands, the levy of an “annualtax” would be wholly worthless and null.
But we are not authorized to adopt a construction *218which substantially discards a clause of such a document, if another reasonable interpretation can be stated which will give effect to that clause.
The. principle of interpretation on that point is familiar, and we state it in the words of Judge Cooley.
“The rule applicable here is, that effect is to be given, if possible, to the whole instrument, and to every section and clause. If different portions seem to conflict, the court must harmonize them, if practicable, and must lean in favor of a construction which will render every word operative, rather than one which may make some words idle and nugatory.” Cooley’s Const. Lim. [6 Ed.], 1890, p. 72. '
If the word “special,” near the close of section 11, be held to apply to any special taxes that might be levied for use under the “cash system” which the constitution establishes, but not to apply to taxes expressly authorized, by the very next section, to meet indebtedness beyond the revenue, available on the cash basis for each year, then the last proviso of section 12, permitting an annual tax to pay a voted indebtedness, would have full vigor and effect; otherwise it can not have any force whatever.
It is therefore our duty to construe the word in that manner, under the rule defined by Judge Cooley, to save that proviso of section 12 from annihilation by construction.
4. The supreme court has definitely held that the term “special taxes,” used in section 11, does not include special assessments for street improvements, although the ruling concedes that those assessments are sustainable only as an exercise of the taxing power. Farrar v. St. Louis (1883), 80 Mo. 379.
That decision tends to sustain the opinion that the special taxes referred to in section 11 are only such as come within the general purview of that section.
*219The context must always be kept in view in determining the meaning of any one word of an enactment. That is a general, and very useful, canon of interpretation.
We should not, moreover, lose sight of the fact that, at the time the constitution was framed, certain special taxes were leviable in the counties, in addition to the general levies allowed. We recall, at this time, the road tax (2 Wag. Stat., 1872, p. 1225, sec. 38), and the poorhouse tax (2 Wag. Stat., 1872, p. 998, secs. 8-12). There may have been others.
These taxes might have been imposed at any time by the county authorities along with the general levies.
The limit of taxation for ordinary county purposes (except in St. Louis) was fifty cents on the $100 valuation when the constitution was in preparation (2 Wag. Stat. 1872, p. 1193, sec. 165). Under the statute of 1865, that limit was eighty cents (Gren. Stat. 1865, p. 121, sec. 76), and the laws of 1855 fixed it at forty cents (R. S. 1855, p. 1349, sec. 1). It was well known to the people of the state that the limit of fifty cents, in force in 1875, was barely sufficient in many counties to meet the annual requirements.
Bearing these facts in mind, what should be held to be the fair and intended scope of the terms ‘ ‘general and special” taxes, with reference to the restrictions of section 11? Were they not intended to include all taxes for raising current revenue in the specified municipalities, as distinguished from taxes expressly authorized (by the next section) to meet indebtedness?
5. Section 11 in no manner deals with future indebtedness, or (in express terms) with taxes to meet it. It refers to taxes to pay existing indebtedness, but only in order to declare that they are not within the scope of the section or of its restrictions. That remark as to existing indebtedness is in the nature of an exception *220to the limitations of section 11. And how much more clearly is such an exception expressed by the plain language of section 12 (which immediately .follows) as to taxes imposed thereafter upon a vote of the people on incurring new indebtedness authorized by the constitution itself?
The provisions of section 12 on that point are designed to ■ regulate a particular topic, namely, the laying of a “sufficient” annual tax to meet indebtedness duly incurred for certain governmental purposes, upon the requisite vote. These definite and special provisions treat of one phase only of the general subject of taxation, and their situation in the organic law indicates the intent to take them out of the general declarations as to rates in section 11. Otherwise, as we have shown, these provisions of section 12 had better in fact be stricken out of the fundamental law, for they will have utterly perished by construction.
6. View the subject as we may, the restrictions on rates in section 11 can not be applied to an annual tax authorized by section 12, without reaching results which will cancel from the organic law the second proviso of the latter section.
That must be the inevitable effect of following and attempting to apply the Columbia ruling.
It appears impossible to give that ruling effect without becoming involved in difficulties the solution of which will require the interpreter to discard some part of one or the other of these sections of the organic law to reach any sort of consistent construction.
It seems first of all necessary that the funds, permitted by section 11 to be raised, for the legitimate, ordinary purposes of the government, should be preserved from invasion or diminution by any tax levied under section 12. Experience demonstrates that the limitations of section 11 are narrow enough even as *221applied to the general needs of the municipalities which that section governs. The provisions of section 12 were not designed to cut down the annual revenue intended for the ordinary wants of the local governments. But such a cutting down would be imperative, if the first alternative ruling, already discussed, were adopted.
On the other hand, the terms of section 12 are not so drawn as to permit the conclusion that the tax levied under them was intended to be any such myth as it would be if it depended only on a surplus remaining, each year, from the rates levied under section 11.
The only escape from these results is in the reading of those sections which we have above attempted to justify, namely: That the tax expressly authorized in the last lines of section 12 may be imposed in excess of the rates named in section 11, if the other limitations in section 12 are observed.
7. "We believe also that a due consideration of the exceptions to the rate limitations of section 11 and of the exceptions in section 12 will tend to show that section 12 was never designed to be operative merely within the limits as to rates defined in section 11.
But we do not regard that point as requiring further development at this time, in view of the other reasons that support our conclusion.
8. We believe that conclusion gives proper and full effect to the views on this topic announced by many of the learned members of the constitutional convention of 1875 during its sessions; and it is in accord with the construction which the members of the general assembly appear to have adopted in various enactments in regard to revenue.
The learned trial judge, who decided the Columbia case on the circuit, felt bound, no doubt, to give much weight to some remarks in Barnard v. Knox County (1891), 105 Mo. 382, which seemed to point toward the *222result reached in the Columbia judgment. But in the Knox County case those remarks were unnecessary, and can not be considered to have authoritative force.
Our judgment is that the ruling in the Columbia case should no longer be followed, and that we should adopt a position which will recognize the force of all parts of sections 11 and 12.
No doubt the Columbia ruling might better express the constitutional commands as we would wish they were written, and the learned judge who delivered it has given the best reasons that can be assigned to sustain it; but we think the ruling appears faulty when practically applied, and that it will not bear the tests of time and trial.
9. If the case is to be governed by the terms of section 12, the question then arises whether the limitations of that section have been exceeded.
On that point there is some conflict in the precedents from other states; but the correct rule, we think, has been well stated by Judge Dillon in the latest edition of his work on Municipal Corporations, viz:
“Under the constitutional provisions in Iowa, Illinois, Indiana and Pennsylvania, referred to, it is held that a corporation may make a contract (at least for necessaries) covering a series of years, upon which an obligation to pay may arise from year to year as the thing contracted for is furnished, and in such case, the whole amount which may ultimately become due does not constitute a debt within the constitutional prohibition. But in order to ascertain whether the corporation by such contract is transgressing the limit, regard is had only to the amount which may fall due within a certain year or other period; and if the revenues for that year or other period are sufficient, over and above the payment of the other expenses, to pay such amount, there is no debt incurred within the constitutional pro*223hibition.” 1 Dillon’s Municipal Corporations [4 Ed.], 1890, sec. 136a.
The term “indebtedness” is a wide one, and must be construed in every case in accord with its context.
It has been very recently considered, in its application to the. subject in hand, by the court in banc, and the conclusion was announced that such an obligation to pay an agreed sum, year by year, for the furnishing of certain necessary supplies during a term of twenty years, was not an immediate indebtedness for the entire amount that might ultimately become due by installments, during that term.
There is no occasion to enter into an original discussion of the reasons for that conclusion, since they have been already given in the opinion of the court in banc in Saleno v. Neosho (1895), 127 Mo. 627 (30 S. W. Rep. 190).
Following that decision we hold that the indebtedness created by the Lamar ordinance did not pass beyond the limits as to amount prescribed by section 12.
10. On the remaining point, as to the meaning of “income and revenue provided for such year,” in section 12, we coincide with the view indicated in tha divisional opinion in the present case.
It follows that the judgment should be reversed and the cause remanded. It is so ordered.
Gantt, Sherwood and Robinson, JJ., concur in this opinion.
Brace, 0. J., and Macearlane and Burgess, JJ., dissent from the first, second, third, fourth, fifth, sixth, seventh and eighth paragraphs, and concur in the views expressed in the opinion delivered in this cause by Chief Justice Black, in the first division.