People v. McCreery

By the Court, Crockett, J., on petition for rehearing :

Inasmuch as two members of the Court were not on the bench when this cause was decided, we have deemed it proper, on the petition for rehearing, to review carefully the propositions announced in the original opinion.

We shall not attempt to go into a fresh analysis of the various and complicated provisions of the Revenue Laws involved in the case. This duty was laboriously and carefully performed in our former opinion; and we have nothing to add to or subtract from the conclusions announced on that branch of the case.

But to avoid any possible misapprehension in respect to our position on the more important propositions involved in the case, we propose to amplify somewhat the views heretofore expressed.

Counsel have urged with much earnestness that this pre-1 sents a case of double taxation. The argument is, that the j owner of the mortgaged premises is taxed for the full value of the property without any abatement for the mortgage debt, whilst the holder of the mortgage is also taxed for the full amount of the debt.

In other words, it is insisted that if the owner of the ¡ mortgaged property is assessed for its full value, the debt j secured by the mortgage, which is a lien on the property, and to that extent represents the same value, cannot be taxed without creating a case of double taxation. But if that be the result, it is obvious it is only the mortgagor who | can complain. It is his property, if any, which is doubly | taxed and not that of the mortgagee. The question does not j arise in this case whether or not mortgaged property can be assessed at its full value without abating from such value the amount of the mortgage. If we were to attempt to decide that question in this cause we should travel out of the record and decide upon a proposition which is not before us.

The point before us is whether or not a tax on the debt ^ *460seeuved by the mortgage is in any sense double taxation as against the mortgagee. Can he complain that he is twice taxed on the same value ? It is quite obvious that such is not the fact; and it is equally plain that a debt secured by a mortgage is the subject of taxation. The statute specifies, amongst other property to be taxed, “ all money at interest or loaned, whether secured by pledge, mortgage or otherwise,” and “ all solvent debts, exceeding what may be due from such person, corporation, association or firm.”

A solvent debt, therefore, in excess of debts due from the taxpayer, and whether secured by mortgage or not, is within the express letter of the statute; and the tax upon such debt is not double taxation as against the holder of the debt.

But the more important proposition involved in this cause is that arising under section thirteen of Article Eleven of the Constitution, which provides that “ taxation shall be equal and uniform throughout the State. All property in this State shall be taxed in proportion to its value, to be ascertained as directed by law; but Assessors and Collectors of town, county and State taxes shall be elected by the qualified electors of the district, county or town in which the property taxed for State, county or town'purposes is situated.” The Revenue Act exempts certain classes of private property from taxation; and it is insisted that under the foregoing clause of the Constitution there can be no such exemption. In the original opinion in this cause we discussed this question fully and arrived at the conclusion that the Legislature has no constitutional power to exempt from taxation any class of private property whatsoever. We have seen no cause to change our-views on this subject; but inasmuch as the question is of grave importance, we have carefully reconsidered the propositions heretofore announced, and deem it proper to state a few additional reasons in support of our conclusions.

We assume it is an axiom that, in all just systems of government, the burdens of taxation should be distributed as equally as practicable; and though political economists *461have differed .widely as to the most effective methods of attaining this equality, it is now conceded on all sides that it should be the aim of all enlightened Governments to approximate as nearly as possible to a system of perfect equality in the imposition of taxes. We are authorized to assume that the Convention which framed our Constitution had in view this cardinal principle in political economy when it ordained, as a part of the organic law, that “ taxation shall be equal and uniform throughout the State. All property in this State shall be taxed in proportion to its value, to be ascertained as directed by law.”

In construing this clause, no one can doubt that the general object which it was designed to accomplish was equality and uniformity in taxation. But there has been considerable diversity of opinion as to the nature and extent of the equality and uniformity intended to be established. In The People v. Coleman, 4 Cal. 46, the Court held that the Legislature is not prohibited from discriminating between different classes of property or citizens ; nor from exempting entirely from taxation such classes of either as it may see fit, unless it appear that the Legislature imposed a tax designedly operating unequally;” or unless “a want of uniformity in its operations was apparent upon its face,” in which event, it admits, it would be the duty of the Court to pronounce the Act unconstitutional.

With all due respect for our predecessors, we cannot subscribe to this reasoning. We are unable to perceive that it is at all material whether the Act “ designedly ” operates unequally, or whether its want of uniformity in its operation is apparent on its face.

If a tax be grossly unequal or practically devoid of uniformity in its operation, it is wholly immaterial whether it is the result of design, accident or inadvertence. Its validity cannot depend upon the motive which prompted it, nor upon the circumstances attending its enactment. If it be obviously an unequal tax and not uniform in its operation, it *462violates the Constitution, whatever may have been its origin.

Bor can we subscribe to the proposition that the Legislature, at its discretion, may discriminate between different classes of property or citizens in the imposition of taxes. If it can tax one class of property or citizens at a particular rate and another class at a different rate, or omit to tax one or more classes at all, there is no limit whatever to its discretion in these respects. It may impose the whole burden of taxation upon a particular class, to the exclusion of all other classes. It may collect the whole revenue of the State from merchandise alone, or from a particular class of merchandise. It may tax lands or mines and except the capital of banks, trade corporations, and all dealers in money or merchandise. In short, it may establish a system of taxation which would be utterly ruinous to a certain class or classes of citizens, whilst other more favored classes would be partially or wholly exempt.

It is no answer to this argument to say that if the Legislature should so grossly abuse its trust, the remedy is to be found at the ballot box. The same answer would apply with like effect to any other violation of the Constitution by the Legislature. ' The functions of the Courts in respect to unconstitutional legislation are useless if the ballot box is to be appealed to as the only remedy.

Bor are we without some practical illustrations of the value of this constitutional provision. Heretofore the mining interests have predominated in the legislation of this State, and mining claims have consequently hitherto escaped taxation. But it may be that at some early period the agricultural and commercial interests will exert a controlling influence in our legislation; in which event, except for this wise constitutional limitation, the burdens of taxation might be chiefly imposed on the mining interests, to the exoneration of other property justly liable for its share of the taxes. The subjects of taxation would be thus continually shifting as the one or the other interest might predominate in politi*463cal influence, thereby leading to retaliatory legislation on the part of the dominant class against the other.

These considerations doubtless influenced the Convention in framing the Constitution to omit from that instrument the provision contained in the Constitution of Texas, whereby the Legislature is empowered, at its discretion, to exempt from taxation such property as it shall see proper. And it was precisely such possible abuses as those above mentioned that our Constitution was intended to prohibit.

The language of the section we have quoted is so explicit as to leave hut little room for doubt as to its correct interpretation ; hut, if any doubt remained, it is readily solved by reference to the peculiar circumstances under which that section was adopted. The omission to confer upon our Legislature the discretion specially delegated to the Legislature of Texas in respect to the exemption of property from taxation must, under all the circumstances, be presumed to have been intentional, and is equivalent to an express constitutional prohibition to the exercise of the powers thus designedly withheld.

We adhere, therefore, to the proposition hererofore announced, that, under the Constitution, the Legislature has no power to exempt from taxation any private property whatsoever.

If any practical inconvenience shall result from our construction of the clause in question, the remedy will be found in an amendment of the instrument itself. It is our province to expound it as we find it, and not to supply its omissions, if any there be, by forced interpretations.

Rehearing denied.