Court Opinion

ID: 9810535
Source: CourtListenerOpinion
Date Created: 2023-08-31 21:52:40.176231+00
Date Added: 2024-06-11T13:39:59.478494
License: Public Domain

MereiMON, C. J.
(dissenting): I do not concur in the decision of this case, and, as it is one of moment, I will state some of the grounds of my dissent.
The decision of the question raised by the assignment of error must depend upon the proper interpretation of several important provisions of the Constitution, affecting, as they do materially, the whole subject of taxation. Their true meaning is not entirely free from doubt, .and to settle this is the more embarrassing, as such provisions have come before this Court repeatedly, and its decisions in respect to some aspects, of them are not, as will be seen, in harmony with each other.
Article 5 of the Constitution is entitled, “Revenue and Taxation ,” and is devoted mainly to the designation and classification of the several subjects of taxation, as to the particular kinds and character of them, and the methods of levying taxes. These distinctions and classifications are fundamental, and must be observed, and prevail in all proper connections. Moreover, terms used must be strictly applied in the sense in which they are employed.
The first section of the article just cited provides and declares that, “ the General Assembly shall levy a capitation tax ” as therein prescribed, which shall be equal on each person subject to it, “to the tax on property valued at three hundred dollars in cash,” and “the State and county capitation tax combined shall never exceed two dollars on the head.”
The third section thereof provides that “ Laws shall be passed taxing, by a uniform rule, all moneys, credits, investments in bonds, stocks, joint stock companies, or otherwise; *143and also all real and personal property, according to its true value in money. The General Assembly may also tax trades, professions, franchises, and incomes, provided that no income shall be taxed when the property from which the income is derived is taxed.” These sections are general, leading and controlling as to the subjects of taxation for general purposes, and as to how the same shall, or may be, taxed.
It will be observed that there are four distinct classifications of subjects: First, that of “capitation tax,” which is defined and limited, and the limitation is based on the prescribed valuation of property, classified as such because such property, as we shall presently see, must be taxed according to its value, and thus it has that quality of definiteness. This is important for such purpose, and as tending to show the meaning to be attributed to the term “ property.”
A second classification is that of moneys, credits, investments in bonds, or however made, as such, all of which must be taxed “b}' a uniform rule”- — not necessarily according to their value in money, but each of the subjects so enumerated must be taxed in the same way as the others and in the same measure, whatever this may be. Thus, they may be taxed according to their value, or a fixed per cent., or otherwise, “ by a uniform rule,” in the wise discretion of the General Assembly. It must pass laws taxing such things, but it is left to judge of the expediency of taxing them more or less, and the particular method of taxing them by a uniform rule as indicated. Money, in general, passes rapidly from one person to another. Credits, bonds and investments are very variable and uncertain, and often precarious in their values, and, therefore, considerations of justice and public policy might induce the Legislature to tax them at a greater or less rate as a class of subjects of taxation than other like subjects. Such seems to have been the reasons, or some of them, for such, classification. Any*144how, the Legislature is invested with such power. The classification distinctly appears; the constituent parts of it ase enumerated and must be taxed, and it is particularly prescribed that they must be, “by a uniform rule”; there is no other limitation or restriction on the power of taxation as to them. This classification is distinctly separated from that which next follows it in sense and application by a semicolon, while the succeeding one specifies another subject designated as “real and personal property,” as distinguished from the next preceding one, which must be taxed “ according to its true value in money.” The distinction so prescribed would be unnecessary and nugatory, if the subjects embraced by it were put on the same footing and in the same classification with “real and personal property.” The distinction specified can, and must, mean something— serve some purpose — and it is difficult to see that it means anything else than the clear classification indicated.
A third classification is that of “ all real and personal property ” (with specified exceptions), which must be taxed “ according to its true value in money.” Thus a clear and important fundamental distinction, for the purposes of taxation, is made between “moneys, credits and investments,” as specified, and “ property.” The latter term is used in the limited sense of realty — land — and personalty, tangible things other than such as are specified in the second and fourth classifications prescribed. While the term “property,” in its broadest and most general signification, embraces all kinds of property, including choses in action, rights and credits, and the like things, it is very often and conveniently used in its limited sense, as in the connection under consideration, and this is so notwithstanding the statutory provision (The Code. §3765, par. 6). This provision could not affect the meaning of terms employed in the Constitution; indeed, it purports to apply only to statutes, and to them, when *145the meaning is manifestly otherwise than as therein provided and defined.
“ Real and personal property ” thus classified, is such property as is most durable, less transitory, more uniform and steady in its value, and more generally owned and used by individuals of all classes and conditions than any other. It constitutes, ordinarily, the most certain and leading subject of taxation in every respect. Hence, the Constitution classifies it, and prescribes a just and reasonable rule of taxation as to it, that puts it beyond the control of the Legislature, except as to the measure of the taxes levied. The rule as to it is, in effect, that it must be taxed uniformly and ad valorem, because all lands must be taxed.
A fourth classification is that of “trades, professions, franchises and incomes.” It is not made mandatory upon the General Assembly to pass laws taxing these subjects of taxation. It is left to it to determine when it is just and expedient to do so. There might be reasons of justice and public policy that would render it unwise to impose a tax on them. And, for the like reason, the tax, when levied, is not necessarily to be uniform. It might be wise to tax some trades, professions, franchises and incomes and not others, and at one time and not at another. The subject is intentionally left to the wisdom and discretion of the Legislature.
Thus, the subjects of taxation and the methods of taxing them for the purpose of raising the general revenues of the State are prescribed and established by the Constitution.
In section 6 of the same article of the Constitution, it is provided that “ the taxes levied by the commissioners of the several counties for county purposes, shall be levied in like manner with the State taxes, and shall never exceed the double of the State tax, except for special purposes, and with the special approval of the General Assembly.” The several counties are constituent parts of the State, and are political *146instrumentalities thereof, intended to promote and aid in the administration of the government, particularly in the localities where they are situate. It is in and through them, to a. very large and material extent, that the government is administered and the public revenues necessary for that purpose are correspondingly large. Hence, the provision just recited finds an appropriate place in the article of the Constitution.on the subject of “Revenue and Taxation”; and hence, also, the general revenue laws of the State embrace counties, and the raising of revenue through them for their proper county purposes. Hence, too, the provision in the section last recited, that “the taxes levied for county purposes shall be levied in like manner with State taxes,” implies that they shall be levied “in like manner” in all respects, including the subjects of taxation. Otherwise, the “like manner” would be partial and not to the whole extent as intended.
The article of the Constitution cited above makes no reference to taxation of cities and towns. In another article— that entitled “ Municipal Corporations” — (section 9 thereof) it is provided that “all taxes levied by any county, city, town or township, shall be uniform and ad valorem upon all property in the same except property exempted by this Constitution.” The term'“property” thus employed is used in the same restricted sense, and for the like purpose, that it is in the third class of subjects of taxation already adverted to above. It applies .to the same subjects of taxation, and must be taken in the same sense, nothing to the contrary appearing, and nothing does so appear. By the third classification mentioned, “all real and personal property,” as pointed out above, must, in effect, be taxed uniformly and ad valorem. and thus it likewise appears that the word “ property ” is used in the same sense in both of the sections recited. Indeed, the intention of the last recited section is to exclude the possible inference and conclusion that “ municipal cor*147porations” could levy taxes on “property” — real and personal property — otherwise than as the Legislature might do for the general- purposes of the State, and to prevent the Legislature from allowing them by statute to do so. Moreover, the use of the word “property” in the exceptive provision of the section last recited, also tends to show that it is used in the restricted sense. Such corporations shall not levy taxes'upon “ property ” exempt by the Constitution, and all such “ property” is real and personal, in the restricted sense of that term. (See Art. 5, § 5). Besides, to use the term “ property ” in the last recited section in its broadest sense, would render that section as to counties incompatible with Art. 5, section 6, above recited. This section requires that taxes for county purposes must be levied in “like manner with the State taxes.” It is certainly unreasonable and unwarranted to merely infer, in the face of what so appears to the contrary, that cities and towns may — must—levy taxes uniform and ad valorem upon all “ property” embraced by that term used in its broadest sense. Cities and towns cannot levy taxes at all except as the Legislature may allow them to do so, and when they are allowed to levy taxes on property simply, this implies property in the limited sense, and taxes levied upon the same-must be “ uniform and ad valorem.” They cannot tax one sort of such property and not another, nor can they levy a tax otherwise than ad valorem. The Constitution has fixed the meaning of the term “property” when used in connection with the subject of “ Revenue and Taxation,” and that meaning must be accepted and acted upon. The Legislature can only levy taxes on the subjects of taxation accordingly as classified, and in the way prescribed and allowed by the Constitution.
There is no provision of the Constitution that requires or allows cities and towns, where they already exist, or shall be created, to levy taxes for their purposes on all or any property of any kind whatever within them, nor is there any *148such provision that requires the Legislature to confer upon them power or authority to do so. The single provision as to them in respect to taxation is, that “ all taxes levied by ” them “ shall be uniform and ad valorem upon all property in the same.” This must imply, when they shall be allowed, by appropriate enactment of the Legislature,'to levy taxes on 'property as explained above. The purpose of the provision is to prevent cities and towns from taxing one species of property they may be allowed to tax and not another, and one kind more than another, and likewise to prevent the Legislature from allowing them to do so.
The Constitution does not regulate the subject of taxation in cities and towns otherwise than as just explained. It is left to the Legislature to allow them to tax property, moneys, credits, investments, trades, professions, franchises and incomes as it may deem wise and expedient; but it is not bound to do so, nor is it required to allow them to tax all such subjects of taxation, or none.
Moreover, it is unreasonable and unwarranted to make Art. 5, section 3 of the Constitution apply to cities and towns and not section 1 thereof, in respect to the equation of taxation. What reason can be suggested for such discrimination? Taxation may be unlimited as to towns — it must be limited as to the State and counties!
The power of the Legislature to confer upon cities and towns powers of taxation, grows out of its power to create and invest them with such powers as it may deem proper, not inconsistent with the Constitution. The power to create them implies the power to effectuate the purpose by proper pertinent means.
It is wisely left to the Legislature to determine what powers of taxation they shall exercise, and what subjects thereof they may tax. They are not regular instrumen-talities of government like counties. Their purposes are special in a large degree; they afford the people who live in *149them special advantages, oftentimes varied and peculiar in their nature; they possess more corporate powers and functions than counties, and serve the purpose of the corpora-tors as such much more than the same of the public and government. Hence, what powers of taxation, and what they ought to tax, may depend largely upon their circumstances and conditions, the population, the kinds and character of their business, their industries, the volume of business done by them, their locations and like considerations.
In Pullen v. Raleigh, 68 N. C., 451, it is distinctly held that the power of city authorities to levy a tax upon “debts and securities for money held by the citizens depends upon the charter,” and that they can only levy taxes on such subjects of taxation as are specified therein; and, therefore, the city of Raleigh could not levy a tax upon money and credits of its citizens, as such subjects of taxation were not specified in its charter. The Court say, in respect- to the word “ property,” that the Constitution (Art. V, § 3) does not make it include “money, credits, investments in bonds,” &c., and that “real and personal property” is used in a sense to exclude such “ credits and investments.” The opinion is brief and not very satisfactory, but the case has been cited with approval in numerous cases. Wilson v. Charlotte, 74 N. C., 752; Latta, v. Williams, 87 N. C., 126; State v. Bean, 91 N. C., 554; Winston v. Taylor, 99 N. C., 210. In Vaughan v. Murfreesboro, 96 N. C., 317, a recent case, it is cited and commented on at considerable length and approved as good authority; and it was held in that case — the latest — that where a statute allowed a town to levy a tax upon all persons and property within the same, it did not authorize a tax on solvent credits, moneys or bonds. This case, that of Pallen v. Raleigh, supra, and other like cases, are necessarily overruled by the present one.
In Wilson v. Charlotte, supra, it is strongly suggested that the term “property,” as used in Art. 7, section 9, is not con*150fined “to tangible propertybut this was no more than a suggestion, because, in that case, the charter of the defendant, in terms, expressly allowed it to tax all subjects of taxation. This case is cited in Cobb v. Elizabeth City, 75 N. C., 1, as authority to support the decision therein, that under the Constitution (Art. 7, § 9) all taxes “ must be levied as well on personal as on real property, notwithstanding any contrary provision in the charter. The word ‘property’ includes bonds, stocks, solvent notes,” &c. This is an extreme view, and the Court give no reason for it—it simply so decided.
In Kyle v. Mayor, 75 N. C., 445, it is broadly held, without citing any authority, that inasmuch as the town of Fayette-ville possessed the power of taxation, therefore, perforce of the Constitution (Art. 5, § 3; Art. 7, § 9), the town must tax all the real and personal property, moneys, credits, &c., situate in the town.
In such a state of conflict and confusion of authorities in a respect so important, I deem it the duty of the Court to put an end to doubt and such conflict, as far as practicable, by its decision in this case. It will be observed that I have followed, mainly, Pullen v. Raleigh, supra, and the cases in harmony with it. It seems to me that the interpretation I have given the clauses of the Constitution cited and commented upon is reasonable, as well as necessary to the free and efficient operation of the organic law in respects of serious moment to the people. Moreover, what I have said is sustained in material measure by a line of decisions already cited.
In the present case, the charter of the defendant town allowed it to levy a tax “ on all the real and personal property, not exempt under the State laws, in said town,” &c. As has been seen, such provision did not confer on the defendant power to tax moneys and solvent credits.
It, therefore, ha'd no authority to tax the credits of the plaintiff, as it undertook to do, unless it had such authority *151by virtue of the general statute (The Code, § 3800), which provides, among other things, that the commissioners of towns may “lay taxes for municipal purposes on all persons, property, privileges and subjects within the corporate limits, which are liable to taxation for State and count} purposes.” I think it had no authority thus conferred, because its charter specified particularly the subjects of taxation it might tax, and the same statute (The Code, §3827) provides that “this chapter shall apply to all incorporated cities, towns and villages, where the same shall not be inconsistent with special acts of incorporation, or special laws in reference thereto,” &c. The limited power to tax “ real and personal property” is not consistent with the larger power to tax all subjects of taxation. For some reason the Legislature limited the defendant’s power iu such respect. It is not to be presumed that nothing was intended by such limitation. If the general statute would apply, then the limitation was useless — served no purpose.
I think there is, therefore, error. The judgment ought to be set aside, and judgment entered in favor of the plaintiff in accordance with the stipulation in the controversy submitted.
Per Curiam. ' Judgment affirmed.