Court Opinion

ID: 7172670
Source: CourtListenerOpinion
Date Created: 2022-07-24 16:28:05.395392+00
Date Added: 2024-06-11T16:15:47.234113
License: Public Domain

On Rehearing.
O’NIELL, J.
[5] A rehearing was granted in this case on the question whether section 4 of article 10 of the Constitution of 1921, exempting from 'taxation credits due for merchandise or articles of commerce and for services, had the effect of remitting the taxes that had been levied on such credits for the year 1921. On the original hearing, it was thought that the exemption did have the effect of releasing the credits from the taxes levied for the year 1921. The reason given for the ruling was that the tax assessments for that year were not completed, throughout the state, and therefore the taxes for *1023that year had not become a fixed charge on the credits before they were exempted, on the 1st day of July of that year,- when the new Constitution, .under certain reservations, went into effect.
The attorneys for the tax assessor direct our attention to the fact that, although the taxes that had been levied for the year commencing on the 1st of January, 1921, were not due or owing on the 1st of July, of that year, they were accruing, and had been accruing for exactly half of the annual period. Hence it is said that the taxes for that year were included in the constitutional reservation of “all taxes due, owing or accruing” when the new Constitution was adopted.
The various stages in the process of assessing property for taxes are described in the original opinion rendered in this case, and they need not be described again. It is sufficient to say that the listing and valuation of the property on which taxes had been levied for the year 1921 were done by the assessors before July of that year. The assessments were not complete or final — and the taxes therefore had not become a fixed charge on the property assessed — -because the assessments were yet subject to review, revision and correction. But the taxes that had been levied for the year 1921 were accruing during all of the first half of the year, because they had been levied upon all property that was subject to taxation at the beginning and during the first half of the year. We must bear in mind that the new Constitution does not say that credits shall be exempt from assessment for taxes. It says that credits “shall be exempt, from taxation.” And we must not confuse the power of taxation with the process of assessment. The power of taxation was exercised when the taxes for 1921 were levied, notwithstanding the process of assessment had not been completed when the constitutional convention declared “debts due for merchandise or other articles of commerce or for services shall he exempt from taxation.” The declaration was, not that the debts or credits should not be listed or assessed for taxes, but that taxes should not thereafter be levied upon credits. The taxes that had already been levied were then acci’uing. The only question to be decided, therefore, is whether the taxes that had been .levied upon credits, for the year 1921, and that were acertiing when the constitutional convention declared that credits should be exempted from taxation, were reserved to the state, and to the municipalities, parishes, and taxing districts.
In determining when any substantive provision of the Constitution went into effect, we are governed by the schedule, which is article 22; because that article deals especially and only with the subject of the time or date when each and all of the substantive provisions of the new Constitution went into effect.
The purpose of the schedule was, as its preamble says, to carry the Constitution into complete operation without any inconvenience arising therefrom. The thirteenth paragraph of the schedule says that the Constitution went into full force and effect on the 1st day of July, 1921, save and except as otherwise provided in and by the Constitution. The proviso, of course, refers especially to the reservations made in the preceding twelve paragraphs of the schedule. The fourth paragraph is the one that relates1 to taxes - that were “due, owing or accruing” when the Constitution, in other respects, went into effect. The proviso, or reservation, is in this language:
“Fourth. All * * * taxes, * * * due, owing or accruing to the state of Louisiana, or to any parish, city, municipality, board, or other public corporation, * * * except as herein otherwise provided, shall continue and remain unaffected by the adoption of this Constitution.”
It is not disputed that the taxes that had been levied- for the year 1921, on all property that was subject to taxation at the be*1025ginning of the year, including credits due for merchandise or articles of commerce and for services, were “accruing” when the new Constitution went into effect; that is, on the 1st of July, 1921. Therefore, the taxes that had been levied upon credits, for the year 1921, were not remitted, but were expressly reserved to the state and to each municipality, parish and taxing district, unless the reservation was stultified by the proviso, “except as herein otherwise provided.” The attorneys for the plaintiff herein, and the attorneys for several other taxpayers who have appeared as amici curiae, contend that it was “otherwise provided,” with regard to taxes on credits, by the article which exempts them from future taxation. They refer to section 4 of article 10, enumerating all property that “shall be exempt from taxation.” The argument would be sound if section 4 of article 10 declared, in terms, that the exemption should be retroactive in effect, so as to remit the taxes that had already been levied, for 1921, upon the credits that were then and theretofore subject to taxation but thereafter exempt from taxation. But section 4 of article 10 did not say when the exemptions from taxation, therein enumerated, should go into effect. That is the question to be decided now.
The fallacy of the argument of the learned counsel for the plaintiff — we say with great respect — is in their major premise. They start out by taking for their premise a conclusion of fact, upon the very question that is at issue; and then, by pursuing their argument in a circle, by a begging of the question — petitio principii, as the logicians call it — they come back, of course, to their original conclusion. The method of reasoning goes something like this: The question is: When did the exemption granted by section 4 of article 10 go into effect? Of course, if section 4 of article 10 said when the exemption-went into effect, that would be the end of the question. But section 4 of article 10 does not say when the exemption went into effect. Therefore resort must be had to the schedule of the Constitution to see when the exemption granted by section 4 of article 10 went into effect. And there it is found that the Constitution itself went into effect on the 1st of July, 1921, except that the taxes then due or owing or accruing to the state or to any parish or municipality or other subdivision of the state were not affected by the adoption of the Constitution, “except as otherwise provided.” Then the learned counsel say that it is “otherwise provided” in section 4 of article 10, in the statement that credits due for merchandise or articles of commerce or for services “shall be exempt from taxation.” But it is not so “otherwise provided” in section 4 of article 10 in the statement that credits “shall be exempt from taxation,” because that statement is not in conflict with the proviso in the schedule, that the taxes due, owing or accruing when the Constitution was adopted should not be affected by its adoption.
The members of the constitutional convention knew that all taxes for the year 1921 had been levied before the beginning of the calendar year, and that the taxes for that year were actually “accruing” when the new Constitution was about to be adopted. They knew, too, that the state’s appropriations for 1921 had been made' in the session of the Legislature of 1920, and that the budgets of expenditures for all of the parishes and municipalities, for the year 1921, had been made and published at or before the beginning of the year. The members of the convention also knew that the state’s appropriations for 1921, and the municipal and parochial budgets of expenditures for that year, had been made on the basis of revenues to be derived from the taxes that had already been levied, upon all of the property that was subject to taxation at the beginning of the year 1921. The members of the convention also had in mind that the new Constitution *1027would exempt from taxation property that was not theretofore exempt, and might therefore upset all calculations that had been made in the state’s appropriations for the year 1921, and in the budgets that had been made and published by the municipal and parochial authorities throughout the state. To avoid upsetting the state’s appropriations, and the municipal and parochial budgets of expenditures, for the year 1921, the members of the convention said, in the schedule of the new Constitution:
“This Constitution * * * shall be in full force and effect on and after July 1, 1921,” but, in order “that no inconvenience may arise from the adoption of this Constitution, * * * all * * * taxes, * * * due, owing or accruing to the state of Louisiana, or to any parish, city, municipality, board, or other public corporation, * * * shall continue and remain unaffected by the adoption of this Constitution.”
The reservation of taxes “accruing to the state,” etc., would not have served any purpose whatever if it did not apply to taxes levied upon property that would thereafter— except for the reservation — be exempt from taxation. Surely, there was no reason for saying that the taxes that had been levied on property that would not be exempted from taxation by the adoption of the new Constitution should “continue and remain unaffected by the adoption of this Constitution.”
The proviso in the fourth paragraph of the schedule, “except as herein otherwise provided,” does not necessarily mean, or even imply, that it was elsewhere “otherwise provided” with regard to taxes that had been levied and were “accruing” when the new Constitution was adopted. Manifestly, the proviso was inserted merely to avoid any possible conflict with any special provision, elsewhere, on the subject. The proviso refers as well to any other of the obligations mentioned in the fourth paragraph of the schedule as to “taxes due, owing or accruing.” The entire paragraph reads thus:
“All recognizances, obligations and all other instruments, entered into or executed before the adoption of this Constitution, to the state, or to any parish, city, municipality, board, or other public corporation therein, and all fines, taxes, penalties, forfeitures and rights, due, owing or accruing to the state of Louisiana, or to any parish, city, municipality, board, or other public corporation, therein under the Constitution and laws heretofore in force, and all writs, prosecutions, actions, and proceedings, except as herein otherwise provided, shall continue and remain unaffected by the adoption of this Constitution. All indictments and in-formations which shall have been found or filed, or may hereafter be found or filed for any-crime or offense committed before the adoption of this Constitution, may be prosecuted as if no change had been made, except as herein otherwise provided.”
We must bear in mind, ad valorem taxes are levied always for the calendar year, commencing on the 1st day of January and ending on the 31st day of December. See sections 13 and 17 of Act 170 of 1898 (the revenue law that was in force when the new Constitution was adopted). See, also, Home Insurance Co., v. Board of Assessors, 48 La. Ann. 451, 19 South. 280; Southern Insurance Co. v. Board of Assessors, 49 La. Ann. 401, 21 South. 913; Palfrey v. Connely, Tax Collector, 106 La. 699, 31 South. 148. It is certain that the exemptions from taxation, of the various classes of property enumerated in section 4 of article 10, were not intended to go into effect in the middle of the year, so as to leave the property subject to the taxes that had been previously levied and were accruing during the first half of the year, and exempt the property from taxation for the last half of the year. The question, therefore, is, not whether the exemptions from taxation went into effect on the 1st of July, 1921, but whether they had a retroactive effect, as of date the 31st of December, 1920, at midnight. There is not the slightest intimation in the schedule of the new Constitution that any of its provisions should have a retroactive effect, as of date the 31st of December, 1920, at midnight. And the language of sec*1029tion 4 of article 10, viz. “the following property, and no other, shall he exempt from taxation,” forbids the idea that the exemption was intended to be' retroactive in its effect.
[6] Considering that the learned counsel for plaintiff made such a plausible argument on the original hearing of this case that they convinced a majority of the members of the court that the tax exemptions granted in section 4 of article 10 of the new Constitution did have a retroactive effect, it must be conceded that the proviso in the fourth paragraph of the schedule, “except as herein otherwise provided,” did cast a doubt upon the meaning of the reservation in that paragraph, reserving “all taxes due, owing or accruing,” when the Constitution was adopted. The rule of construction, in such case, is that the doubt should not be resolved in favor of, but against, the party who claims the exemption. Carre v. City of New Orleans, 41 La. Ann. 996, 6 South. 893; City of New Orleans v. Robira, 42 La. Ann. 1098, 8 South. 402, 11 L. R. A. 141; Ivens & Sons Machine Co. v. Parker, Tax Collector, 42 La. Ann. 1103, 8 South. 399; Carre v. City of New Orleans, 42 La. Ann. 1119, 8 South. 399; Gast v. Board of Assessors, 43 La. Ann. 1104, 10 South. 184; Succession of Parham, 51 La. Ann. 980, 25 South. 947, 26 South. 700. In the case last mentioned, this court, quoting Wade on Retroactive Laws, §§ 33, 34, and 35, said, with regard to a constitutional exemption or remission of taxes:
“One of the cardinal rules by which courts are governed in interpreting statutes is, they must be construed as prospective in every instance, except when the legislative intent that they shall act retrospectively is expressed in clear and unambiguous terms, or such intent is necessarily implied. * * *
“Every reasonable doubt as to the intention of the lawmaker is resolved against, rather than in favor of the retrospective operation of the statute. * * *
“This principle is not only applicable to legislative acts, but to state Constitutions, and, in fine, to all written law. Being a rule of construction, it may be applied to every conceivable expression of the will of the lawmaking power where there is a doubt whether it was intended to take effect prospectively or retrospectively.”
The attorneys for the plaintiff in this case cite and rely upon the rulings in Stern’s Fertilizer Co. v. City of New Orleans, 40 La. Ann. 697, 4 South. 891; Louisiana & N. O. Ice Co. v. Parker, Tax Collector, 42 La. Ann. 669, 7 South. 898; Gachet v. City of New Orleans, 52 La. Ann. 813, 27 South. 348; and the general rule stated in 37 Cyc. 890, viz.:
“When a constitutional or statutory provision exempting property from taxation goes into operation on a certain day in the year, before the taxes for that year have been assessed, or before the day when by law they become a fixed charge on the property, the exempted property is free from the taxes for the current year; but it is otherwise when the assessment is completed and the tax books closed before the day when the statute takes effect.”
The general rule, stated above, which is in accord with the decisions cited, would be applicable to the case before us if the schedule in the new Constitution did not contain the reservation of all taxes due, owing or accruing, when the Constitution was adopted. In fact, the rule stated might be applicable to this case if the reservation in the schedule of the new Constitution had reserved only the taxes that were actually due and owing when the Constitution was adopted; because the expression, “taxes due and owing,” might be construed to include only taxes that had become a fixed charge on the property. But, to say that the expression, “taxes due, owing or accruing,” refers only to taxes that have become , a fixed charge, would do violence to the English language. It would be the same as to strike out the word “accruing.”
In Gachet v. City of New Orleans, 52 La. Ann. 813, 27 South. 348, the city had bought a lot for a site for an engine house, on the 6th of July, 1885, and constructed the engine house on the lot. The lot was thereafter sold for the taxes of 1885, assessed in the name of the man who had owned it at the *1031beginning of that year. The purchaser at the tax sale sold the lot to Gaehet, and he brought suit against the city for the lot. The court held that the tax sale was null because the taxes for which it had been sold were not “due” or “demandable” or “delinquent” when the title passed from'private to public ownership. The court recognized that the taxes were “accruing” — that there was a “developing liability” — when the city bought the lot, on the 6th of July; but the court was not then dealing with a constitutional or statutory reservation of the state’s right to collect taxes that were merely “accruing.” It was said:
“The moment public ownership of the lot attached — the moment it passed from the hands of Hoxie to the city — developing liability to taxation was arrested, and in point of fact and law the state taxes for 1885 on the lot, under the assessment made in the name of the estate of McOonnell, Hoxie’s vendor, never reached the point of maturity. The tax never became due nor delinquent, and the lot could not be sold for taxes until delinquency had ensued.”
But the case now before us does not depend upon whether the taxes in contest had “reached the point of maturity,” or had “become due or delinquent,” when the new Constitution was adopted. The language of the reservation in the schedule, reserving “all taxes due, owing or accruing” when the Constitution was adopted, makes no distinction between the taxes that were due or owing and those that were only “accruing” when the Constitution was adopted. And we have no authority to make the distinction, or to say that the taxes that were “accruing” when the new Constitution was adopted were not reserved because they were not “due” or “owing,” or because they had not, as in the Cachet Case, “reached the point of maturity,” or “become due or delinquent.” To decide this case according to the ruling in Gaehet’s Case would be, virtually, to rewrite the reservation in the fourth paragraph of the schedule of the Constitution, omitting the word “accruing.” The reservation was not so written ; and we cannot read it so.
Our conclusion is that the exemption of credits from taxation, as granted by section 4 of article 10 of the Constitution of 1021, did not have the effect of releasing or remitting the taxes that had been levied upon such property for that year, and that were accruing when the Constitution was adopted.
The defendant, tax assessor, in his answer to this suit, demands the statutory penalty of 10 per cent, said to be imposed by section 56 of Act 170 of 1898, p. 373, for the attorney’s fee. It may be that the attorney for the tax collector is entitled to the fee; but that is a matter which the relator, tax debtor, must settle with the tax collector, who is not a party to this proceeding. We are not asked to give judgment for the taxes in contest ; and our decree will not affect the question of liability for the tax collector’s attorney’s fee.
The judgment appealed from is annulled, and relator’s demand is rejected, at relator’s cost.
DAWKINS, J., dissents, adhering to the original opinion.
OVERTON, J., dissents, and adheres to original opinion.