Court Opinion

ID: 9695488
Source: CourtListenerOpinion
Date Created: 2023-08-25 18:20:53.747164+00
Date Added: 2024-06-11T18:20:13.253562
License: Public Domain

Adams, J.
(dissenting). The line between property and privilege taxes, although visible, is “drawn *182by an unsteady hand.” City of Detroit v. Murray Corporation of America, 355 US 489, 510 (78 S Ct 486, 2 L ed 2d 441, 460). On this appeal we decide upon which side of the line to place PA 1959, No 266.1
The act deems personal property used in connection with a business conducted for profit to be the property of the person using it. Use of property gives rise to the legal concept of “deeming” ownership and to the constitutional objection that Act No 266 creates a tax on the privilege of use. The use is not taxed. The right to use gives rise to the legal concept of ownership. This is the “property” that is taxed.
This is a fine line, but it accords with the facts. Property, as the word is commonly used, denotes an entire object. In its legal sense the object is broken down into various attributes — such as the right to use, the right to mortgage, the right to lease, et cetera. These rights, viewed together, are referred to as the bundle of rights involved in the ownership of property. 1 Powell (1949), Real Property, § 7, pp 9, 10; 1 Thompson (1964 Replacement), Real Property, § 1, p 2. The rights are property since the object has no significance except as it is utilized in the manner which these rights describe. 1 Tiffany, Real Property (3d ed), § 2, p 4.2
*183“It is strongly urged that property rather than being an indivisable entity is instead an aggregate or bundle of rights and powers and that anyone having any of such rights and powers should properly be considered an owner of property.” Keesling, Conflicting Conceptions of Ownership in Taxation, 44 Cal L Rev 866. (Emphasis supplied.)
Act No 266 is nothing more, or less, than a tax on a possessor’s interest. Such taxes have been characterized, unquestioningly, as property taxes. See annotation, 84 ALR 1310; Keesling, supra, p 868. In the usual case the possessor pays rent directly to the owner. But simply because the appellant possessor pays his rent in the form of sales to the owner at reduced prices should not obscure the fact that he possesses, and pays for, something of value.
Here, because of the importance of the right and because of the limited period the tax covers (1 year), *184the law equates the total bundle with possession and use. The tax is not laid upon the privilege of severing the bundle of rights. It is not measured by the fact or amount of use or severance. The law finds ownership in the right to use. In doing so, it pierces to the reality of the situation and attaches the tax to the person who has the beneficial use and enjoyment of property.
The tax, in both method and object, is properly a part of the general property tax law. Act No 266 provides for assessment in the usual method of the general property tax law — by ad valorem property assessment. Its announced object is to reach “personal property not otherwise taxed.” This lends fulfillment to the object expressed in the title of the general property tax law which is “to provide for the assessment of property and the levy and collection of taxes thereon.”
Act No 266 speaks in the historic ad valorem property tax tradition:
“Personal property * * * which is in the possession of any person, firm or corporation using same in connection with a business conducted for profit shall be deemed the property of such person for taxation and assessed to him accordingly.” (Emphasis supplied.)
The legislature has thus characterized Act No 266. While not conclusive, the courts do seek to give effect to the characterization of a tax in a statute. See annotation, 103 ALR 18, 19. That there is a valid basis for such characterization is indicated by the following quoted from 103 ALR 19, citing as authority Society for Savings v. Coite, 6 Wall (73 US) 594 (18 L ed 897):
“An excise and a property tax, when the two approach each other, ordinarily may be distinguished by the respective methods adopted of laying them *185and fixing their amounts. If a tax is imposed directly by the legislature without assessment, and its sum is measured by the amount of business done or the extent to which the conferred privileges have been enjoyed or exercised by the taxpayer, irrespective of the nature or value of the taxpayer’s assets, it is regarded as an excise; but if the tax is computed upon a valuation of property, and assessed by assessors either where it is situated or at the owner’s domicile, although privileges may he included in the valuation, it is considered a property tax.”
• A tax so characterized is not inimical to the Federal Constitution:
“We see no essential difference so far as constitutional tax immunity is concerned between taxing a person for using property he possesses and taxing him for possessing property he uses when in both instances he uses the property for his own private ends.” City of Detroit v. Murray Corporation of America, supra, p 493.
Appellant reasons that some portion of the bundle of rights comprising the sum total must he attributed to the United States, and, if so, uniformity and cash value requirements must be violated by a measure which includes the entire bundle. However, the fairest value that can he placed upon the worth of such a possessory interest, during the period in which that interest is used in a business conducted for profit, is the current value of the property. The single, the most important incident of ownership of industrial goods is possession and the right to use them in a business conducted for profit. That right is coextensive with other forms of ownership if it is borne in mind that the tax covers but a one-year period.
Plaintiff’s dominion over the property — machinery and equipment — for plaintiff’s purposes is as great as if it were the owner. Through its possessory interest it reaps as much benefit as others using like *186property who are owners and pay an identical tax. The observation made in United States v. City of Detroit, 355 US 466, 470 (78 S Ct 474, 2 L ed 2d 424), relative to PA 1953, No 189 (CLS 1961, § 211.181 [Stat Ann 1960 Rev §7.7(5)]), applies here:
“Public Act 189 was apparently designed to equalize the annual tax burden carried by private businesses using exempt property with that of similar businesses using nonexempt property. Other things being the same, it seems obvious enough that use of exempt property is ivorth as much as use of comparable taxed property during the same interval.” (Emphasis supplied.)
Appellant complains that its possession and use of the property could be terminated by the government at will shortly after tax day with the effect that it would not receive the full benefit of its possessory interest. This is a common hazard. A merchant whose entire stock is destroyed by fire or flood shortly after tax day suffers a similar misfortune. So does an owner whose property is repossessed because of his inability to meet mortgage payments. A machine may be ruined by careless operation. The examples could be multiplied. Actually, appellant enjoys some advantages over taxpayers who own their machinery. If Continental loses its contract, its tax liability ceases. An oioner of similar machinery, even though it stands idle, remains subject to the tax.
Pursuant to a rational measure, the appellant’s possessory interest was assessed in uniformity with all other property. Appellant, possessed of the complete beneficial enjoyment of the property, has been deemed the owner for tax purposes. There is nothing unreasonable about such criteria.
Justice Souris concedes that by enacting a distinctively separate tax to reach possessory interests *187in another’s tax-exempt personal property, as was done in PA 1953, No 189, to reach such interests in realty, the result sought here can be achieved; but holds the present tax to be a specific or excise tax and, therefore, inappropriate for the general property tax law. This is tweedle dum and tweedle dee. Tweedle dee, the taxpayer wins; tweedle dum, the township and the school district win. I choose tweedle dum because:
Legislation should be saved from unconstitutionality whenever possible by reasonable and permissible interpretation.
“All doubts must be resolved in favor of the validity of the action of the legislature. In Cady v. City of Detroit, 289 Mich 499, 505, it was said:
“ ‘A statute will be presumed to be constitutional by the courts unless the contrary clearly appears; and in case of doubt every possible presumption not clearly inconsistent with the language and the subject matter is to be made in favor of the constitutionality of legislation. Scott v. Smart’s Executors, 1 Mich 295; Sears v. Cottrell, 5 Mich 251; Thompson v. Auditor General, 261 Mich 624. Every reasonable presumption or intendment must be indulged in favor of the validity of an act, and it is only when invalidity appears so clearly as to leave no room for reasonable doubt that it violates some 'provision of the Constitution that a court will refuse to sustain its validity. A statute is presumed to be constitutional and it will not be declared unconstitutional unless clearly so, or so beyond a reasonable doubt. Attorney General, ex rel. Barbour, v. Lindsay, 178 Mich 524; Bowerman v. Sheehan, 242 Mich 95 (61 ALR 859).’
“The foregoing language was quoted with approval in 1426 Woodward Avenue Corp. v. Wolff, 312 Mich 352, 369, 370. See, also, Naudzius v. Lahr, 253 Mich 216 (74 ALR 1189, 30 NCCA 179); People *188v. Victor, 287 Mich 506 (124 ALR 316); 16 CJS, p 542.” People v. Piasecki, 333 Mich 122, 143.
If it may be construed in two ways, that which is consistent with its constitutionality should be chosen. See People v. Dubina, 304 Mich 363, 369 (145 ALR 1235), and cases therein cited.
The judgment should be affirmed. Costs to appellees.
T. M. Kavanagh, C. J., and Smith, J., concurred with Adams, J.

 PA 1893, No 206. § 14, as amended (CLS 1961, § 211.14 [Stat Ann 1960 Rev § 7.14]). This section has since been amended by PA 1964, No 275 [Stat Ann 1965 Cum Supp § 7.14]), which has no bearing upon this ease except as it may indicate that the legislature has again looked at this statute and has again been content with its characterization of it.

 American Law Institute, Restatement of the Law, ch 1, § 5, comment e:
“Complete property. The totality of these rights, privileges, powers and immunities which it is legally possible for a person to have with regard to a given piece of land or with regard to a thing other than land, that are other than those which all other members of society have as such, constitutes complete property in such land or thing other than land. This totality varies from time to time, and from place to place, either because of changes in the common law, or because of alterations by statute. Thus if the law should come to be that no person could build a five-story building on his land, the totality of *183privileges that every person has who owns land would be correspondingly diminished. So if a zoning ordinance were passed, the totality of interests would be affected, to the extent of the ordinance, for persons owning land within the district to which the ordinance applied. At any one time and place, however, there is a maximum combination of rights, privileges, powers and immunities in the land that is legally possible, and which constitutes complete property in the land, or thing other than land.”
For a discussion of the term “property” by the United States Supreme Court in a condemnation proceeding, see United States v. General Motors Corp., 323 US 373, 377, 378 (65 S Ct 357, 359, 89 L ed 311, 318, 156 ALR 390, 393):
"The critical terms are ‘property/ ‘taken’ and ‘just compensation.’ It is conceivable that the first was used in its vulgar and unteehnieal sense of the physical thing with respect to which the citizen exercises rights recognized by law. On the other hand, it may have been employed in a more accurate sense to denote the group of rights inhering in the citizen’s relation to the physical thing, as the right to possess, use and dispose of it. In point of fact, the construction given the phrase has been the latter. When the sovereign exercises the power of eminent domain it substitutes itself in relation to the physical thing in question in place of him who formerly bore the relation to that thing, which we denominate ownership. In other words, it deals with what lawyers term the individual’s ‘interest’ in the thing in question. That interest may comprise the group of rights for which the shorthand term is ‘a fee simple’ or it may be the interest known as an ‘estate or tenancy for years,’ as in the present instance. The constitutional provision is addressed to every sort of interest the citizen may possess.”