Court Opinion

ID: 9559315
Source: CourtListenerOpinion
Date Created: 2023-08-21 17:26:32.831386+00
Date Added: 2024-06-11T09:10:35.624665
License: Public Domain

TOOZE, J.,
dissenting.
I cannot agree with the court’s holding in this case. I have no fault to find with the rules of statutory construction announced and relied upon by the court, but I deny their applicability to the statute under consideration.
In my opinion, the language of the statute is plain and unambiguous. In such circumstances, a court is never permitted to resort to and apply rules of statutory construction, as the court has done in this case, in order to arrive at a conclusion which it may deem to be desirable. That amounts to judicial legislation. I frankly concede that, if the language used in the statute is, in truth, ambiguous, the court is not only justified, but also compelled, to adopt and apply rules of statutory construction in an endeavor to ascertain the legislative intent.
But it is my firm belief that the court created an *569ambiguity where no ambiguity exists. Having done so, it then proceeded to apply rules of statutory construction in order to support its conclusion respecting the intent of the legislature. This is equivalent to creating a straw man and then proceeding to knock the stuffing out of him.
It is axiomatic that, when the legislature, in adopting an act, makes use of plain, unambiguous, and understandable language, it is presumed to have intended precisely what its words imply. There is no occasion to go beyond those words and their plain meaning to ascertain, by the application of rules of statutory construction, the legislative purpose. The act speaks for itself.
In 59 CJ, Statutes, 952, § 569, it is stated:
“The intention of the legislature is to be obtained primarily from the language used in the statute. * * * Where the language of a statute is plain and unambiguous, there is no occasion for construction, even though other meanings could be found; and the court cannot indulge in speculation as to the probable or possible qualifications which might have been in the mind of the legislature, but the statute must be given effect according to its plain and obvious meaning, and cannot be extended beyond it because of some supposed policy of the law, or because the legislature did not use proper words to express its meaning, or the court would be assuming legislative authority.”
In Fox v. Galloway, 174 Or 339, 347, 148 P2d 922, Mr. Justice Bailey, now retired, stated the following rule as applied to statutes that are unambiguous in the language used:
“If the language used is plain and unambiguous, if it can be given but one meaning, and that meaning does not lead to an impossibility or an absurdity *570such as the legislature could not be supposed to have intended, the court must give effect to that meaning if constitutional, even though the result may be, in the court’s opinion, harsh, unjust or mistaken in policy * *
Inasmuch as it is the public policy of this state to exempt from taxation publically-owned properties, whenever an act is adopted that is contrary to that policy, such act should be and is strictly construed. Under the guise of interpretation, the court should not add to nor subtract from such a statute. Moreover, it is elementary that a statute imposing a tax should always be construed most strongly against the taxing power and in favor of the taxpayer.
It is frankly conceded that, as a general rule, a claim of exemption from taxation by virtue of a statute is construed strictissimi juris. 26 RCL, Taxation, 313, § 274; 61 CJ, Taxation, 392, § 396; 51 Am Jur, Taxation, 526, § 524.
In 51 Am Jur, Taxation, 526, § 524, it is said:
“The fundamental theory of the tax structure of the several states is that all taxable property should bear its fair share of the cost and expense of government ; and while property is taxable only when declared so by legislative enactment, the law does not read into the taxing statutes any implied exemption of particular property or particular property owners unless the intendment of the statute to make an exemption is plain. When the statute purports to grant an exemption from taxation, the universal rule of construction is that the tax exemption provision is to be construed strictly against the one who asserts the claim of exemption # ® *. An exemption from taxation must be clearly defined and founded upon plain language, without doubt or ambiguity. Whenever doubt arises it is to be resolved against the exemption * *
*571But this rule of strict construction applies only to private property, and it has no application to municipally-owned properties. In 51 Am Jur, Taxation, 553, § 562, the rule is stated:
“The rule of strict construction of tax exemption statutes and the general rule that tax exemptions cannot rest on implication have reference to private property, and not to property of municipal corporations, which is generally regarded as exempt from state taxation notwithstanding the absence of any provision either in the state constitution or in the general statutes granting such exemption * * (Italics supplied.)
In the instant case, the exemption is clearly defined and founded upon plain and unambiguous language and, therefore, fully meets the test of strict construction, though that is unnecessary. An exemption from taxation of property owned by a municipal corporation should be liberally, and not strictly, construed.
The first part of § 1 of the 1947 Act effects a change in public policy. Certain publically-owned properties theretofore exempt from taxation are rendered taxable. Section 1 in part provides:
“All real property of this state or any institution or department thereof or of any county or city, town or other municipal corporation or political subdivision of this state, held under lease or rented by any person, corporation or association whose real property, if any, is taxable, shall be subject to assessment and taxation for the true cash value thereof uniformly with real property of non-exempt ownerships; * *
This is an all-inclusive provision. Not only is all property owned by the state, and by its several institutions and departments, and held under lease or rented by any person, corporation or association whose *572real property is taxable, subjected to taxation, bnt also all properties so held and owned by any county, city, town or other municipal corporation or political subdivision of the state. Of necessity, this Act is prospective in operation, not retrospective. But the legislature spoke as of the time the act became effective; that is, as of July 5, 1947, and on that day tax liability under prescribed conditions was definitely fixed. Manifestly, under the plain and unambiguous wording and meaning of this portion of the statute, no tax could be imposed unless at the time of levy the conditions necessary therefor existed. We need not resort to any rules of statutory construction to arrive at that conclusion. But, in that connection, it is interesting to note that, in using the words “held under lease or rented” in this part of the Act, the legislature omitted the words “heretofore executed” as thereafter used. The provision under discussion is absolute in its terms, plain and understandable, and without any qualifying words whatever.
Having thus subjected the properties of the state and all other public and quasi-public corporations to taxation under certain conditions, the legislature could have stopped there. But it did not do so. For reasons presumably satisfactory to itself, it decided to single out cities, towns, dock commissions, and ports for special treatment and consideration. Obviously, the legislature had the power so to do. To those public and quasi-public corporations, it extended freedom from taxation under conditions then existing for two fiscal years. At the end of those two fiscal years, such properties would stand on the same footing as other publicly-owned properties and would be subject to taxation under the conditions set forth in the first portion of § 1, supra. To accomplish its purpose, the legislature *573wrote a proviso immediately following the quoted portion of § 1, supra, using plain and unambiguous words in so doing. That proviso is:
“ # * * provided, however, that real property owned by any city or town, or any dock commission or port, and held under a lease heretofore executed, or rented under an agreement heretofore executed, by any person, corporation or association, whose real property, if any, is taxable, shall not become subject to assessment and taxation for the fiscal year 1947-1948, and for the fiscal year 1948-1949; * * *.” (Italics supplied.)
Emphasis is placed upon the words “and held under a lease heretofore executed, or rented under an agreement hertofore executed.” No argument would seem necessary to establish the proposition that there is a vast difference between the meaning of the phrase “held under lease or rented”, as used in the forepart of § 1, and the phrase “held under a lease heretofore executed”, as used in the proviso. The first phrase is absolute and unqualified; the second is conditional and definitely qualified.
The actual exemption from taxation of city-owned property “held under a lease heretofore executed”, etc., for the fiscal years referred to, is to be found in subd. 3 of 2 of the Act, but the words therein contained are but a repetition of the language used in the proviso, supra, and in conformance therewith.
The property in question in this case was under lease to Pope & Talbot, Inc., continuously from some time prior to January 1, 1947, until the new lease was executed on October 14, 1947. Therefore, at the time the Act of 1947 went into effect, the property was “held under a lease” theretofore executed.
It is a general rule of law, applicable to all statutes, that, where no other time is stated in the statute, the *574legislature is deemed to be making use of its words as of the day the act becomes effective. This general rule is not peculiar to the statute involved in this case. It is a general rule such as the rule applied to all legislation that the legislature intends what it says in plain and unambiguous language. In applying the rule to the statute under consideration, we are neither adding thereto nor subtracting therefrom. State v. Bockelman (Mo), 240 SW 209, 212.
The word “heretofore”, as used in the exemption provision, has a very definite meaning. It refers to something in the past; something that has happened at some time before; it means a preceding time or state. In using the word, it is clear that the legislature had in mind a prior event; it was speaking of something already in existence.
The exemption is clearly expressed and understandable. From taxation for the fiscal years of 1947-1948 and 1948-1949 is specifically exempted all property owned by a city “and held under a lease heretofore executed, or rented under an agreement heretofore executed”; that is to say, all property held under an executed lease or agreement in existence prior to and at the time the legislature spoke — the time the act became effective. In the precise words of the legislature, all such property so held under lease or agreement at that time “shall not become subject to assessment and taxation” for the two fiscal years in question. Could anyone misunderstand those plain words ? The words “shall not become” contemplate the future. What shall not become subject to assessment and taxation? As the late Justice Belt was wont to say, the question answers itself. It would seem to be unnecessary to elucidate the obvious.
The word “held”, to which the court attaches so *575much importance at a sacrifice of the meaning of other plain words involved, when considered in connection with the words “shall not become subject to assessment and taxation” (those being the potent words of the exemption), clearly speaks as of the day the Act became effective. “Held” is the past, not the future, tense of the verb “hold”. As used in the exemption provision, it can be considered as applying to a future state only by first amending the statute, as the court has done, in adding thereto the words “at the time the tax is levied.” This is an example of putting the cart before the horse.
The property in question having been under lease at the time the Act became effective, it was not subject to assessment and taxation for the two fiscal years mentioned. This exemption became definitely fixed on July 5, 1947. No subsequent change in the status of the property, short of a change in ownership, could bring to life its taxability. It is immaterial to our discussion that other statutes provide for taxation of properties upon a change in ownership; for example, § 110-829, OCLA, as amended by ch 357, Oregon Laws 1945. The Act with which we are concerned is complete in itself, and its provisions are not dependent upon any other statute. If we were concerned with a matter of ambiguity and were endeavoring to arrive at the legislative intent by rules of construction, reference to similar acts might be helpful. But that situation is not present here.
To uphold the contention of defendants in this proceeding, and in order to place judicial approval upon the tax sought to be imposed, it has been necessary for the court not only to import into this exemption provision the words “at the time the tax is levied” so as to make the phrase read “held, at the time the tax *576is levied, under a lease heretofore executed”, but also to ignore, in effect, the specific words “shall not become subject to assessment and taxation”, together with their obvious meaning as applied to the subject matter of the exemption.
In effect, the court has rewritten the proviso (and exemption) to read as follows:
“* * * provided, however, that real property owned by any city or town, or any dock commission or port, and held, at the time the tax is levied, under a lease executed prior to July 5, 1947, or rented, at the time the tax is levied, under an agreement executed prior to July 5,1947, by any person, corporation or association, whose real property, if any, is taxable, shall not be subject to assessment and taxation for the fiscal year 1947-1948, and for the fiscal year 1948-1949; * *
Section 2-216, OCLA, in part provides:
“In the construction of a statute * * *, the office of the judge is simply to ascertain and declare what is, in terms or in substance, contained therein, not to insert what has been omitted, or to omit what has been inserted * * *.” (Italics supplied.)
The court in its opinion invites attention to, and relies upon, § 2-217, OCLA, which in part provides:
“In the construction of a statute the intention of the legislature * * * is to be pursued, if possible * *
This is but a legislative declaration of a universal rule of statutory construction, the primary and most important rule. But the rule is applicable only when the court is required to resort to rules of statutory construction because of ambiguous language used in the statute.
To construe this statute according to its plain words *577leads to no absurdity and does not render it unconstitutional. Fox v. Galloway, supra. Tbe legislature had the power to provide any exemption it saw fit. It could have exempted city-owned property from taxation under any and all circumstances. It is immaterial what considerations may have induced it to absolutely exempt from the taxing provisions of the statute for two fiscal years all property held under a lease at the time the act became effective, instead of all such property so held at the time the tax is levied. That was exclusively a legislative matter. Had it desired to exempt from taxation only property held at the time the tax is levied, under a lease executed prior to July 5, 1947, as it did in the amendatory Act of 1949 (subd. 4 of § 2, ch 395, Oregon Laws 1949), it could, and no doubt would, have so expressed itself. This court may be able to write a better bill in the interests of the tax collector than that written by the legislative assembly, but it seems to me it ought to be content with leaving the matter of tax impositions to the legislature, rather than usurping the legislative prerogative in amending the law by adding words thereto. Legislative bodies impose enough taxes without the courts, through indulging in judicial interpretation, increasing the tax burden of the taxpayer.
Because of the fact that final adjournment of the legislature in 1947 was somewhat delayed, so that this statute did not go into effect under the law until July 5,1947, mention of the fiscal year of 1947-1948 became meaningless, because the levy for that fiscal year was made as of July 1, 1947, or at a time when the statute was not in effect. But the history of this legislation indicates quite plainly that the legislature figured the fiscal year of 1947-1948 would be involved. The bill for this Act (House Bill 351) was introduced in the *578legislature and read the first time on February 12, 1947; it passed the House on February 20; it passed the Senate, with amendments, on March 28; on March 28 the House concurred in the Senate amendments and repassed the bill. It was signed by both the president of the Senate and the speaker of the House on March 81, 1947.
It is my opinion that the amendatory Act of 1949, above mentioned, quite clearly indicates that the legislature had placed the same interpretation upon the words contained in the Act of 1947 as is placed thereon in this dissenting opinion. It no doubt felt that the exemption granted in the 1947 Act should be extended beyond the two fiscal years mentioned under certain conditions and specific limitations. By subd. 4 of § 2, ch 395, Oregon Laws 1949, after having listed different properties that should be exempt from taxation, the legislature provided that there should also be exempt the following:
“4. Real property owned by any municipality, or any dock commission or port organized under the laws of this state, to the extent to which such property is either (a) * *, (b) held'under a lease or rental agreement executed for any purpose prior to July 5, 1947, provided that this exemption shall continue only during the term of such lease or rental agreement in effect on said date, or (c) * (Italics supplied.)
The above emphasized proviso makes this exemption conform to the policy established under the provisions of other statutes of this state. A change in the status of the property as to the lease would terminate the exemption, but the exemption would continue throughout the term of the original lease, whether that term was for two years, five years, ten years, or longer. This is a. substantial change in the *579original program as provided in the Act of 1947. Bnt it is manifest that this provision was incorporated into the amendatory act because the legislature knew that it was not included either directly or indirectly within the meaning and terms of the exemption set forth in the 1947 law.
It is hornbook law that there should be placed upon a tax statute a natural and not a strained meaning. Tens of thousands of property owners, virtually the backbone of the state, pay real estate taxes. They are constantly forced to interpret tax statutes in order to determine their obligations. Sometimes the meaning to be attached to a tax statute determines whether or not a contemplated purchase of an item of real property will be profitable or otherwise. Tax statutes should be so phrased that the taxpayer can readily and with certainty ascertain their meaning. We must remember that tax statutes exact severe penalties from any property owner who fails to meet their demands. The circumstances just mentioned caution courts that tax statutes should be given their most natural and apparent meaning. If the natural meaning of the language used is rejected by the courts and something is read into the statute which subjects the property to a tax, the property owner finds himself subjected to an unanticipated liability. In fact, by the time he discovers the unanticipated liability, severe penalties may have substantially augmented the amount of the tax.
The present case is a good example of the difficulty just mentioned. Had anyone interested in this property sought the advice of an attorney concerning the contested statute, who will say that the attorney would have told his client that the property was subject to taxation? Before that question is answered, let us *580take note of the fact that this case was filed in the circuit court on July 26, 1949, and has, therefore, been in the courts for more than three years. The circuit court’s decree was entered February 21, 1951. The appeal was argued in this court on September 9, 1952, and the issues have received extensive attention by the court. The decision which holds that the statute subjects the property to taxation is rendered by a divided court. Thus, anyone who contemplated a transaction concerning the property mentioned in the statute was faced with hazards. I do not believe that the legislature intended that such a hazardous interpretation should be placed upon its enactment. It more likely intended that the most natural and apparent meaning should be attributed to the statute which it wrote. Hidden meanings which can be discovered only after extensive probing in the quietude of judicial chambers should not be given to any tax statute.
The court, in referring to some of plaintiffs’ contentions in this case, classifies them as absurd. In connection with one interpretation of the proviso insisted upon by plaintiffs, the court says it would render the proviso senseless and without purpose. Presumably, plaintiffs represent substantial and intelligent business interests. They are represented in this suit by intelligent and responsible counsel. To make such charges is not only unnecessary, but they are unwarranted. This court is not infallible, and it, like any other human-controlled organization, may, at times, err, and the contentions of those who disagree with it might, in truth, be perfectly logical, rather than absurd and foolish. There is a virtue in maintaining pride of opinion, but it should not be carried to the extent of dosing one’s eyes to the obvious.
It is my opinion that the decree of the trial court *581should be reversed and this cause remanded with directions to enter a decree in favor of plaintiffs, as prayed for in their complaint.
Clark & Clark and C. D. Christensen, of Portland, for the petition.
Dan M. Dibble, Deputy District Attorney for Multnomah County, and John B. McCourt, District Attorney for Multnomah County, of Portland, contra.
BOSSMAN, J., concurs in this dissent.