Court Opinion

ID: 7994607
Source: CourtListenerOpinion
Date Created: 2022-09-09 01:35:21.055452+00
Date Added: 2024-06-11T16:35:29.916847
License: Public Domain

Anderson, J.
(dissenting).
In my judgment the exemption claimed is void because under the Constitution the legislature was without power to grant it. As it appears to me, the outstanding purpose of sections 181 and 182 of the Constitution is to prohibit the exemption from taxation of the property of private corporations for pecuniary gain, except where devoted to new enterprises of public utility, in which cases it may be exempt for a period of not exeeding five years. The first clause of section 181, providing that “the property of all private corporations for pecuniary gain shall be taxed in the same way and to the same extent as the property of individuals,” has nothing whatever to do with uniformity and equality in taxation. That principle is specifically and fully provided for by section 112 of the Constitution. The clause of section 181 quoted, in my opinion, means simply this: That since property owned by individuals is taxed there shall be no exemption from taxation of the property of private corporations for pecuniary gain except for the five-year period referred to, and that the same shall be taxed in the same way and to the same extent as the prop*426erty of individuals. It seems that the language “shall be taxed in the same way and to the same extent as the property of individuals” could mean nothing else, eliminating from view of course the principle of uniformity and equality, which, as stated above, is taken care of by section 112.
The framers of the Constitution knew that probably.for all time some character of property in the hands of individuals would be taxed. They intended by this section to provide that as long as that was true the property of corporations for pecuniary gain should be taxed “in the same way and to the same extent.” If there were any doubt as to the meaning of section 181, such doubt, it seems to me, is entirely cleared up by the provisions of section 182. It is true that the first part of section 182 is apparently addressed alone to the power of the legislature to tax corporations. It provides that the power f,o tax shall never be “surrendered or abridged,” and then follows:
“Except that the legislature may grant exemption from taxation in the encouragement of manufactures and other new enterprises of public utility extending for a period not exceeding five years, the time of such exemptions to commence from date of charter, if to a corporation, and if to an individual enterprise, then from the commencement of work; but where the legislature grants such exemptions for a period of five years or less, it shall be done by general laws, which shall distinctly enumerate the classes of manufacturers and other new enterprises of public utility entitled to such exemptions, and shall prescribe the mode and manner in which the right to such exemptions shall be determined.”
The language of the section quoted shows- what was meant by the preceding phrase “shall never be surrendered or abridged.” Plainly the exemption provided for of not exceeding a period of five years is treated as a surrender or abridgment to that extent of the power of taxation. By that language the Constitution schedules the powers of the legislature with reference to granting exemptions to *427corporations for pecuniary gain. If the Constitution had been silent on the subject undoubtedly the power of the legislature to exempt would have been unlimited. But instead of being silent the Constitution deals with the subject specifically and in detail. It provides what character of corporations may be exempt, the maximum period such exemptions may continue, and that the same shall be provided for by general laws which shall distinctly enumerate the classes of new enterprises of public utility entitled to exemptions, and prescribe the manner in which such exemptions shall be determined. It is a universal principle of constitutional construction that where powers are granted and defined all others are excluded. In State V. Henry, 87 Miss. 125, 40 So. 152, 5 L. R. A. (N. S.) 340, the court said:
“Another principle is that, where the Constitution deals with a subject, its words must be the sole boundary, and sacred from the legislatures, except where it permits expressly or by necessary implication. Another is that, where the Constitution schedules powers, giving or taking away, it must be presumed to have scheduled all, and it only must be looked to, with its necessary implications, for the limit of authority or restriction.”
What would be the sense i/n section 182 providing for the exemption therein referred to, if the majority opinion be correct that the legislature had unlimited power to exempt? I am unable to see how Adams v. Railroad Co., 77 Miss. 194, 24 So. 200, 317, 28 So. 956, 60 L. R. A. 33, supports the majority opinion. It seems to me that case has more support for the views here expressed. So far as I have been able to find, this question has not been decided by this court, unless it was done in Harrison County v. Gulf Coast Military Academy, 126 Miss. 729, 89 So. 617. The language of the court in that case, it is true, is broad enough to cover the question here involved. But according to my view such language was not necessary to a decision of the questions in that case. Sections 181 and 182 of the Constitution by their express terms deal with corporations *428for “pecuniary gain.” It is true the Gulf Coast Military Academy was a corporation, and its students were charged for their education, which revenues belonged to the owners of the corporation. But the primary purpose of an institution of learning is for the education of the youth of the state. Pecuniary gain is a matter of secondary consideration. As held in Jackson v. Preston, 93 Miss. 366, 47 So. 547, 21 L. R. A. (N. S.) 164, it has always been the policy of this state to .exempt property of such institutions from taxation, whether owned by individuals or corporations, because of the public benefit' derived therefrom. It was held by the supreme court of Illinois in Academy v. Sullivan, 116 Ill. 376, 6 N. E. 183, 56 Am. Rep. 776, that an educational institution of the character of the Gulf Coast Military Academy was not a corporation for “pecuniary profit.” To the same effect is People v. Mezger, 98 App. Div. 237, 90 N. Y. Supp. 488-490; In re Ihmes’ Estate, 54 Iowa, 20, 134 N. W. 429-430. The thought of the framers of these sections of our Constitution was to provide for corporations whose chief aim and purpose ivas pecuniary gain. Therefore in my opinion the Gulf Coast Military Academy case was correctly decided, although the court in its opinion may have gone beyond what was necessary to the decision of the case.
If I am right in my views, it means that the legislature has put into one class all corporations for pecuniary gain, and provided that they shall not be exempt from taxation, except for the period and under the conditions provided in section 182, while all individuals are put in another class, whose property may be exempt from taxation at the will of the legislature and without limit. The question arises, then, whether such a classification would violate the equality clause of the Fourteenth Amendment of the Federal Constitution. As I understand, this question is answered in the negative by the cases of Lumber Co. v. Arkansas, 251 U. S. 532, 40 Sup. Ct. 304, 64 L. Ed. 396; and Flint v. Stone Tracy Co., 220 U. S. 107, 31 Sup. Ct. 342, 55 L. Ed. 389, Ann. Cas. 1912B, 1312. It was held in *429the first case named, that that identical classification was permissible under the equality clause of the Fourteenth Amendment of the Federal Constitution. In the last case the court, it is true, was passing on the question, among others, of uniformity and equality of a federal tax laid under article 1,< section 8, clause 1, of the Federal Constitution. This provision of the Constitution provides uniformity and equality in the taxes therein authorized. In discussing the question of the power to classify property for taxation the supreme court in that case used this language:
“In the case at bar we have already discussed the limitations which the Constitution imposes upon the right to levy excise taxes, and it could not be said, even if the principles of the Fourteenth Amendment were applicable to the present case, that there is no substantial difference between the carrying on of business by the corporations taxed, and the same business when conducted by a private firm or individual. The thing taxed is not the mere dealing in merchandise, in which the actual transactions may be the same, whether conducted by individuals or corporations, but the tax is laid upon the privileges which exist in conducting business with the advantages which, inhere in the corporate capacity of those taxed, and which are not enjoyed by private firms or individuals. These advantages are obvious^ and have led to the formation of such companies in nearly all branches of trade. The continuity of the business, without interruption by death or dissolution, the transfer of property interests by the disposition of shares of stock, the advantages of business controlled and managed by corporate directors, the general absence of individual liability, these and other things inhere in the advantages of business thus conducted, which do not exist when the same business is conducted by private individuals or partnerships. It is this distinctive privilege which is the subject of taxation, not the mere buying or selling or handling of goods, which may be the same, whether done by corporations or individuals.”