February 14, 1905. The opinion of the Court was delivered by This is a controversy without action, submitted under sec. 374, Code of Civil Procedure, upon an agreed statement of facts. The General Assembly, by an act approved February 18th, 1904, 24 Stat., 607, authorized the county of Chester to issue coupon bonds, 4 1/2 per cent. interest, to the amount of $75,000, for the purpose of refunding its bonded indebtedness, incurred under the act of 1874, 15 Stat., 668, in subscription to the capital stock of the Cheraw and Chester Railroad Company. The act of 1904 contained the provision that "said bonds shall be exempt from all State, county and municipal taxes." The county board of commissioners of Chester County were authorized to negotiate and sell said bonds for cash and for not less than par; and pursuant to an advertisement calling for bids, and calling attention to the fact that said bonds were exempt from taxation, the defendants, appellants, bid for the entire issue of said bonds at a premium of $4.26 on each $100 in amount, accompanying said bid with a deposit of $1,000, as required, and their bid has been accepted by the board of county commissioners of Chester County. This bid would not have been made but for the provision as to exemption from taxation, and it is conceded that the provision *Page 444 exempting the bonds from taxation enabled the county officers to sell the bonds at a higher premium and to float them at a lower rate of interest than could have been done without said provision.
The Circuit Court, Hon. George W. Gage, presiding, declared that the provision exempting the bonds from taxation was void, because in conflict with sections 1 and 4, art. X., of the Constitution, and thereupon annulled the contract between the plaintiff and defendants, and ordered a return to defendants of the $1,000 deposit. From this, plaintiff appeals. For a more detailed statement of the facts and issues, reference may be had to the agreed statement of facts, the decree of the Circuit Court and the exceptions thereto, which are to be reported herewith.
We are of the opinion that the decree of the Circuit Court is erroneous and must be reversed. The sections of the Constitution involved are as follows:
"Sec. 1. The General Assembly shall provide by law for a uniform and equal rate of assessment and taxation, and shall prescribe regulations to secure a just valuation for taxation of all property, real, personal and possessory, except mines and mining claims, the products of which alone shall be taxed; and also excepting such property as may be exempted by law for municipal, educational, literary, scientific, religious or charitable purposes: Provided, however, That the General Assembly may impose a capitation tax upon such domestic animals as from their nature and habits are destructive of other property: And Provided, further, That the General Assembly may provide for a graduated tax on incomes, and for a graduated license on occupations and business."
"Sec. 4. There shall be exempted from taxation all county, township and municipal property used exclusively for public purposes and not for revenue, and the property of all schools, colleges and institutions of learning; all charitable institutions in the nature of asylums for the infirm, deaf *Page 445 and dumb, blind, idiotic and indigent persons, except where the profits of such institutions are applied to private uses; all public libraries, churches, parsonages and burying grounds; but property of associations and societies, although connected with charitable objects, shall not be exempt from State, county or municipal taxation: Provided, That as to real estate, this exemption shall not extend beyond the buildings and premises actually occupied by such schools, colleges, institutions of learning, asylums, libraries, churches, parsonages and burial grounds, although connected with charitable objects."
The fundamental error of the Circuit Court is in holding that the phrase, "municipal purposes," used in sec. 1, in conjunction with property, means the same thing as "municipal property," used in sec. 4, and that the exemption might have been omitted from sec. 1, or sec. 4 might have been omitted altogether, and the same meaning accomplished as is compassed by the two sections. This method of construction violates the rule which requires that the language of a Constitution should receive a natural and reasonable construction, and that different portions thereof should, if possible, receive a construction which would give some meaning to each of such provisions. The construction by the Circuit Court would strike from the Constitution the provision in sec. 1, "and also excepting such property as may be exempted by law for municipal, educational, literary, scientific, religious or charitable purposes." The phrase. "as may be exempted by law," does not simply mean, "as may be exempted by sec. 4, art. X., of the Constitution," but clearly includes such exemption as the legislature may lawfully make for the purposes named. This provision of the Constitution implies that the legislature has the power to exempt property from taxation for municipal or other specified purposes, provided the exemption is not expressly or impliedly prohibited by other portions of the Constitution. It is a well established principle that the legislature has all the *Page 446 power not denied it by the Constitution expressly or by necessary implication. Sec. 4, art. X., is mandatory and is self-executing, so that further legislation would not be necessary to exempt from taxation all property falling within the specified classes, and the legislature would have no power to tax what is therein exempt. But this section, in so far as it exempts property, is not a limitation on the power of the legislature to make further exemptions falling within the exceptions contained in sec. 1. Sec. 4 declares that the specified property shall be exempt, while sec. 1 permits legislative discretion in exempting other property not named in sec. 4, provided the exemption is for municipal purposes or other purposes named. The Constitution does not require that all property shall be taxed, but it only requires that all property, not exempt under the Constitution, and not exempt by a valid act of the legislature, shall be taxed. So that whenever the right of the legislature to exempt property from taxation is disputed, the question is, whether such exemption is expressly or impliedly forbidden by the Constitution. If the exemption falls within the classes named in sec. 4, we need go no further. If the exemption does not fall within sec. 4, then we may inquire if it falls within the legislative discretion to make exemptions implied in sec. 1. If the exemption does not fall directly within either of these sections, then the question might still remain, whether the sovereign power of the legislature is so far restricted by the Constitution as not to permit the exemption made — as, for example, wearing apparel, or a limited amount of provisions for the present subsistence of the family.
We limit our inquiry in this case to the question, whether the exemption would be sustained under sec. 1. There is a clear distinction between an exemption of property for municipal purposes, as permitted in sec. 1, and an exemption of municipal property used exclusively for public purposes, as granted in sec. 4. In the latter, the ownership must be in the municipality; in the former, it need not be. In the one, *Page 447 the use of the property must be exclusively for a public purpose; in the other, the exemption must be for a municipal purpose. If an individual owning a house in a town should permit its exclusive and free use by the public authorities for office rooms, or as a school room, or chain-gang quarters, or a pest-house, or any other public or municipal purpose, would it not be competent for the legislature, in view of such use, to exempt the owner from taxation thereon? When the nature of the property exempted in this case and the circumstances are considered, the proposition is even clearer.
In so far as these bonds may be called property before delivery to the purchasers, they are municipal or county property for the exclusive use of the county, and would fall within the non-taxable class named in sec. 4. A delivery of them for the purpose for which they were issued ought not to change them from non-taxable to taxable property, as a sale and delivery of them is the only method by which they can be used. The bonds are to be converted into money for the exclusive use of the county for an admittedly public and corporate purpose. They merely represent the taxes which the county must pay in the future during a series of years, thus relieving the county of the necessity to pay at once by an enormous single tax. The bonds are but the substitute for the public burden discharged by the purchasers' money. If they do not become property until their issue and delivery according to the law which creates them, that same law affixes to them in their creation the quality or characteristic of being non-taxable. To tax them would, as it were, tax the taxes they represent.
The fact that the legislature does not always exempt such bonds from taxation, does not seem to be of any importance. The parties in special charge of the bill may not have asked for it, or desired it, or may have doubted the legality of it, or the circumstances might suggest the advisability of exemption in one case and not in another. But we have nothing to do with the reasons which influenced the legislature. *Page 448 The fact, however, that the legislature does frequently exempt such bonds from taxation is of some importance in showing the legislature's construction of the Constitution as authorizing the exemption. The policy of the legislature is expressed in sec. 266, Code, 1902, where, among other things, it exempts from taxation, "All bonds and stocks of the State. All municipal bonds in this State, which, by the terms of the act under which they are or may be issued,are or may be exempted from taxation." The cases of Garrison v. Laurence, 55 S.C. 554, 33 S.E., 577, and Bank v.Darlington, 50 S.C. 337, 27 S.E., 846, do not aid us in this case, as they merely decide that there is no law authorizing the exemption of cotton mills from taxation by a simple resolution of a city council. We find nothing in the Constitution which forbids the exemption in question.
It must follow, that the bonds, when issued, would be non-taxable in the hands of any holder in this State.
The judgment of the Circuit Court is reversed.