Court Opinion

ID: 7192769
Source: CourtListenerOpinion
Date Created: 2022-07-24 16:59:10.861965+00
Date Added: 2024-06-11T16:16:14.236071
License: Public Domain

Dissenting Opinion.
Bermudez, C. J.
The real question at issue is simply : whether the property owned by the relator and represented by bonds, which are promises to pay, is exempt from taxation.
The bonds possess themselves no intrinsic value. They are nothing but paper evidencing an indebtedness on the part of the State and City, a claim of the holder, for the payment of money which is property. If the bonds were destroyed by accident, the right of the owner to recover the money would not perish with them.
The principle is too familiar to necessitate a reference to authorities, that the State and her functionaries vested with delegated authority have the right and power to tax within constitutional limits, where any exist, all properly which is not exempt expressly or impliedly, and that when an exemption from taxation is claimed, the burden of establishing clearly the exoneration rests upon the party averring. See, however, Burroughs on Tax. p. 3; Cooley on Tax. pp. 65, 130, 152; Dillon on Mun. Cor. p. 151 ; 4 Wh. 429, (435).
Exemptions result from provisions to be found in the organic law or in some statute passed with authority conceding the privilege. Exemptions are formal or virtual, express or implied.
There is no pretense here that the property of the relator represented by bonds, within the limits of the City and State, are, in as many words, exempt from taxation, for that pretension could not be established. Whatever constitutional provisions and statutory enactments exist, they are, on the contrary, obnoxious to the pretension, and they challenge the whole power of the relator to show their inapplicability to his case.
The relator relies upon an implied exemption.
No one denies that there are “ tilings,” (that is, property) which are always presumptively exempted from the operation of general laws, because it is assumed that they were not within the grasp of the legislature in adopting them, not, however, because the lawgiver could not tax them.
Those things are nothing but.the property belonging to the State or the City, or to some other functionary, and which constitute the means necessary and used for governmental purposes. They do not consist of property belonging to individuals, within the territorial jurisdiction of the taxing power.
*661It would be frivolous for a State, for a parish, for a city, to tax its own property, hut it has occurred and for reason, too, that a State has taxed the property of its functionaries. The authorities invoiced cover none but public property, which has always been exempt in this State, hnt they cannot he stretched one inch further.
The intangible property which individuals own, is represented in a multitude of ways which have no intrinsic value. It is not the form or shadow, bnt the snbstance, the reality, which forms the object of taxation.
It is claimed that the exemption is to be implied from the fact, that property represented by bonds has never been taxed, and that hence, it is to he irresistibly inferred that the State has willed it tobe exempt, that this abstention is a construction or interpretation which amounts to a formal or express recognition or declaration of exemption. This is a fallacy.
There exist two insuperable objections to the triumph of the proposition, wh ich is incorrect in law and in fact.
The taxing power is vital to the functions of government. It helps to sustain the social compact, and to give it efficacy.
It is intended to promote the general welfare. It reaches the interest of every member of the community. It may be restrained in special cases for public good, when there exists no prohibition ; hnt the exemption must he established, as there is no presumption in its favor. Eyery reasonable doubt is fatal and must be resolved against itr 'Vyhen the exemption is shown it must he rigidly scrutinized, and isrjoever permitted to extend, in scope or duration, beyond what the"'terms of the concession clearly require. It is in derogation of common and public right, and narrows a trust created for the good of all. (In this sense, on the question of exemption under contract, see 22 Wall. 575; 93 U. S. 597.)
Hence, it is, that property represented by State and municipal bonds is considered as proper subjects of taxation, whenever they are found in the same manner, unless it is clearly proved that it does not come within the rule. ■
The present Court has decided after mature deliberation, on a second consideration of the exemption invoked on an identical ground, that the omission of the officers to perform that which it was their duty to do, however long the suspension, could not he considered as justified by law or by the'State, where no law or authority is produced in support of the dereliction. * * * If the inaction of such officers could produce the effect claimed, the legal effect would be the lodging into their hands of the very power of exemption which the State alone can *662wield, and to confer on them effectual authority to amplify restricted immunities conceded by the law giver. 34 An. 958.
It is error also to assume as a fact that bonds eo nomine have never heretofore been expressly announced by law to be liable to taxation. The delaration was not required, as all non-exempt property was taxable.
The Constitutions in force at the various dates at which bonds have been issued by the State or by the City, emphatically required that all property should be taxed. That meant that everything which forms part of the wealth of an individual, and which is found within the territorial jurisdiction of the taxing power, shall be taxed unless it be exempt from taxation.
There cannot be found a revenue act since bonds were issued, which declares that personal property, such as capital, money loaned, credits, etc., shall not be taxed. They are all to the reverse. Our immediate predecessors have held, that bonds are property and are taxable. Even that where capital was invested in part in bonds exempt from taxation, the money invested could be taxed. 30 An. 876.
The previous Charters of the City, after providing that all real and personal property in the City of New Orleans, whether owned by individuals or by corporations, shall be liable to taxation, subject to the exemptions specified, declare that the term “ personal property ” shall be construed to include: capital, debts due, whether on account, contract, note, bond, mortgage, certificate, or any other obligation, * * * any property which is not real.” See Charter 1870, p. 37, Secs. 13 and 14; Amended Charter 1856, p. 146, Secs. 36 and 38.
The argument.to establish exemption has therefore no force, that the bonds of relator do not fall within the intent and meaning of property, as employed in Articles 203 and 207 of the Constitution, or of the same word, or of the words : “ bonds liable to taxation,” in the Revenue Act and in the City Charter. It is manifest, from the very words in the Constitutions and laws in force at the issuance of the bonds and since reiterated more plainly, that it did enter in the legislative intent and grasp to tax bonds. Conventions and legislatures and this Court have considered bonds as property, and included them in that generic term which, unrestricted and amplified as it is, embraces both State and municipal bonds.
The words “ liable to taxation ” are inocuous and practically cumbersome. They neither add to, nor detract from, the character of the bonds in contemplation.
The legislature could order, neither directly nor indirectly, the taxation of bonds which were previously exempt. The words were evi*663dently inserted by inadvertence and are surplusage. They surely afford no just opportunity for a deduction of the exemption claimed.
If it be true that the words are not redundant, but are significant, then the unavoidable inference is that there are bonds which are taxable. As the relator has pointed to no law exempting his bonds, the conclusion would be that they are included among those described as liable to taxation.
If, as claimed, the legislature designed to exempt bonds of the character of those held by the relator, by using the words “ liable to taxation,” the double inquiry at once arises: where does the legislature derive its exempting power and what bonds did the legislature intend to tax Í The Constitution enumerates what property shall be exempt and distinctly announces that no other shall enjoy the immunity. The legislature is powerless to add too, or take an iota or dot from the organic law. To those inquiries, the only answer would be, that the law giver intended to tax judicial and official bonds. But is that in common sense a possibility 9 Assuredly not.
It is worthy of note, that in 1856 and particularly in 1870, the City of New Orleans had an immense amount of bonds outstanding, and that in the City Charter of 1870, in the enumeration of property exempt from taxation, conspicuously figure some of those bonds. P. 38, Secs. 15 and 17. The only bonds which ever were exempt from taxation are the City Railroad and Consolidated Bonds, under Acts of 1856, p. 164, and of 1860, No. 3.
Had not the legislature considered that those bonds, or the property of which they represent the capital, the money invested in them, were as a rule taxable, it must assuredly not have passed those exempting laws. It cannot be pretended that, in so doing, the legislature did a vain thing. The question now at issue is not one altogether novel. It was twice presented to the consideration of courts of last resort in sister States and to the attention of the highest tribunal of the country and the power and right of the State and of her functionaries was formally recognized. Champaign vs. Smith, 7 Ohio St. 42; People vs. Home Ins. Co., 29 Cal. 533.
In a celebrated case which went to the United States Supreme Court, the question was put: “Is property, which consists in the promise of a State or of a municipality of a State, beyond the reach of taxation Í ”
And the answer was: "
“A State may undoubtedly tax any of its creditors within its jurisdiction for the debt due him and regulate the amount of the tax by the rate of interest the debt bears, if its promise be left unchanged. *664A tax thus laid impairs no obligation assumed. It leaves the contract untouched.” Murray vs. Charleston, 96 U. S. 445.
In a more recent case, and no less important and interesting, the same Court said, in alluding to it:
* * * “It is urged that the bonds of every State are property iu the hands of its creditors, and as such that they should bear a due proportion of the public burdens. In the case of Murray vs. Charleston, (96 U. S. 432) there are many pertinent and just observations on this subject, which it is not material to repeat.” * * Hartman vs. Greenhorn, 102 U. S. 683.
It cannot therefore be questioned that the State could herself,-and through her functionary, tax property, the title to which is represented by bonds, and thus subject it to both State aud municipal taxation.
No one here claims that, previous to payment, or at the time of payment, the State or municipal corporation could satisfy the tax levied out of the amount duo and being paid the creditor; but there is no constitutional or other objection to realizing it from the same amount after it has been reduced to possession by the creditor, if it can be reached.
The Constitution in force, and the Revenue Act and City Charter declare what property shall be exempt, and expressly restrict the exemption to the described property and extends it to “no other." In this they only repeat the provisions of previous Constitutions aud laws on the subject.
The property of the relator, consisting in money loaned and invested in bonds within the territorial jurisdiction of the taxing power, is property which was taxable ab initio, when the State and City’issued their bonds for value, or in exchange, and has continued so ti> be.
In claiming an exemption the relator has placed himself within the exception of the rule, and assumed to prove his title to immunity.
He has shown no constitutional provision, no legislative enactment, no judicial adjudication, to support his position. All the authorities, Constitutions, laws and precedents are antagonistical to his pretension and unequivocally subject his property in that form to both State and municipal taxation.
With all due deference to the opinion of the majority of the Court, and uncontrolled by considerations of expediency and of consequences, I feel it my bounden duty to withhold my concurrence, as I consider it to be bold judicial legislation exempting, in the teeth of the Constitution, upwards of ten millions of property, the exemption to last for forty odd years to come.
Against such exemption I, therefore, enter my conscientious and solemn protest.