Court Opinion

ID: 5438942
Source: CourtListenerOpinion
Date Created: 2022-01-08 17:58:43.056503+00
Date Added: 2024-06-11T08:31:56.554845
License: Public Domain

Crockett, J.,
concurring:
I concur in the opinion of Mr. Justice McKinstry; and while it is not to be denied that the proposition that solvent debts are not “property” for the purposes of taxation within the intent of Article XI, section thirteen of the Constitution, it is in conflict with several prior decisions of this Court. I am satisfied, upon more mature deliberation and in the light of the later and more eXhaustive arguments of the questions, that the former rulings on this point cannot be supported. The Constitution being the fundamental law, it is of the utmost consequence to the people that its provisions should be properly construed. This is peculiarly true of those provisions relating to the power of taxation—a power more subject to abuse than any other, and which directly affects the interest of every citizen. Whatever weight may be due to the rule of stare decisis, as applied to other subjects, it ought not, in my opinion, to prevent a return to a proper construction of those provisions of the Constitution which affect the vital question of taxation. No great property rights have grown up under the former construction, which can be injuriously affected by the change in the rule; and *254I discover no sufficient reason for persisting in a construction, the only effect of which, in a large majority of cases, is, to inflict upon the borrowers of money an unjust and oppressive system of double taxation. That this is the necessary result of a tax on debts secured by mortgage for money loaned, is, in my opinion, too plain to admit of debate. In the case of the Savings and Loan Society v. Austin (46 Cal. 415), I have stated at length my reasons for that opinion, and it is unnecessary to repeat them here. I still adhere to that opinion; and in addition to the reasons stated by Mr. Justice McKlnstry why the tax involved in the present case should be set aside, I think that the facts disclosed by this record present a clear case of double taxation of the same subject-matter; and the tax having been paid by the mortgagors, cannot again be collected from the mortgagee.
But while holding that solvent debts are not “property” in the sense of Article XI, Sec. 13, of the Constitution, and therefore are not required to be taxed on the ad valorem principle, it does not follow that the Legislature is for that reason powerless to tax them in some other form. It exercises unquestioned the right to tax avocations, not because an avocation is property, but because the power and mode of taxation are unlimited, except in so far as they are restricted by the Constitution; and Article XI, Sec. 13, prescribes the method only in respect to such subjects of taxation as are “property” in the' sense of that clause. Solvent debts not being “property” in that sense, cannot be taxed as such under that provision, as was attempted to be done in the present case. But it might be competent for the Legislature to require a stamp tax on a mortgage or a promissory note, for the same reason that it may tax the avocation of an auctioneer. In that event it would be a tax on the transaction of making the note or mortgage, and not a tax on the debt as property.
Mr. Justice Bhodes dissented.