Richardson v. State National Bank

Dissenting opinion by

Judge B'arker.

I am unable to concur in the opinion of the court. If my only reasons for dissenting were those given in the dissenting opinion of Hager v. Citizens’ National Bank, 127 Ky. 192, 105 S. W. 403, I should not feel impelled now to dissent, but there are other and vital reasons why I cannot concur in the opinion, which I will state as briefly as I can. The opinion holds that the decision in that case is conclusive, or, at least, that there is no substantial difference between the two cases; and this idea runs through the whole opinion. The two cases are essentially different.

1. In that case the assessment involved was the assessment for the current year. In this case the assessment sought to be made in 1908, for the taxes of 1906, is necessarily a retrospective assessment, governed by different, principles, as I shall presently show.

2. In that case the court held thatjw#s there was no particular time named within which the assessment should be made, it might be made at any time during the current fiscal year. In this case, as the only assessment for local purposes required by the act must be made ‘ ‘ at the same time and manner as prescribed by law for the return of the assessment of personal property therein,” and as it is conceded in the opinion of the court that the time for the assessment of the tax of 1906 for the purposes of cities of the third class (to which Frankfort belongs) had expired “long before the act of 1906 took effect,” the two cases *784differ materially in that respect, and it is an important difference.

3. In that case, as the time for the assessment for the current year had not expired, the court thoiight that the act of 1906 could he made to apply as a remedial statute, without giving it a retroactive operation. In this, as the time has expired, it is necessary to give the-act of 1906 a retroactive effect, and the court does so in the opinion, in which I think the court errs vitally, and I shall presently review the authorities on that question, particularly the decisions of the Supreme Court, since that is the court of final resort on the question of the right to deduct Unitfed States bonds, as well as the question whether the tax rests upon assets or upon shares of stock.

The difference between the cases of an assessment for the current year and a retrospective assessment is that in the former it is the duty of the officers who by the law are charged primarily with the duty of assessing to assess during the current year, and if the law under which their power to assess for the year should be repealed during the current year, and another substituted, which is remedial in nature, then there is much force in the argument that the authority entitled to receive the tax should not be allowed to suffer by the failure to assess before the-repeal, and that now, there being no law in force under which there could be an assessment, except the substituted or remedial statute, the assessment should be made under the latter. This I understand to have been the position of the court in the Hager Case. But, on the other hand, it is well settled by the decisions of this court that a retrospective assessment must be made under the law as it existed as of the time to which the assessment related, which in this instance *785is January 10,1906, when the act of 1904 was in force.

Again, a retrospective assessment has as its necessary basis the failure to assess by the officers primarily charged with the duty; and since the purpose of the law is to supply or correct that failure, it would seem to follow that the person authorized to perform the omitted duty should be governed by the law which would have governed the actions of the officers primarily charged with the duty if they had' not emitted to perform it; and that is the result of the previous decision. If that principle should be applied to this case, the resultant effect would necessarily be an affirmance of the judgement, because it is demonstrable, as well as admitted in the opinion, that “the exclusive right to assess was in the .board of valuation and assessment until the act of 1906 became effective July 11, 1906.” The act of 1906 took the power of assessing for local purposes from the board, and put it in the hands of the local assessors. Therefore the failure of the state board, which possessed the exclusive power to assess for local purposes from March 1, 1906, until July 11, 1906, when the act of 1906 became effective, must necessarily have been under the act of 1904, and therefore, the substituted duty should be performed under the same act; and it is conceded that, if the act of 1906 does not apply, there was the right, in the appellee, under the prior decisions of this court, to have had deducted from the aggregate value of the shares the value of the United States bonds held by it, which, if allowed, would necessarily have resulted in an affirmance of the judgment, because it is conceded of record that the total book value of the shares at the date the assessment should have been made, as well as when it *786was attempted to make it, was $190,870; that of that amount $15,000 was represented in tangible property, upon which the taxes for all purposes had been paid, leaving a balance of book value of shares at $175,870, whereas, the face value of the United States bonds held by the appellee from January, 1906, continuously to the present time, is $187,600. There is nothing-in this record which justified the court in saying: “In point of fact the state board of valuation and assessment had not allowed to any state bank a deduction on account of United States bonds held by it previous to the act of 1906. ’ ’ The record has absolutely nothing-in it on that subject.

The statement that “the state banks were discriminated against under the decision in Marion National Bank v. Burton” is certainly opposed to the decision of that case, which proceeded upon the opposite theory; and the statement “that national banks were thus given an immunity from taxation which the Legislature had not intended to allow” is equally opposed to the Burton Case, because it became the duty of the court in that ease, in construing the statute, to declare the intention of the Legislature, and it declared that the Legislature did intend that the deduction should be made. The court further says in the opinion: “The court in Hager v. Citizens’ National Bank held that, if the state board had made an assessment before the act of 1906, it would have been its duty to make another assessment after the act took effect” — ■ and then proceeding, as I think and shall presently show, from the erroneous premises, the court further says: “When it is settled, as held in Hager v. Citizens’ National Bank, that if the state board had made an assessment for state purposes before the act of 1906 took effect,, it would have been its duty, after *787that act took effect, to make an assessment as provided thereby, it must follow that, if the state board had made an assessment for local purposes before the act of 1906'took effect, it would have been the duty of the local assessing officers, after the act took effect, in like manner to make an assessment pursuant to it.” This last statement, based on the first, which in its turn is based, as I think, on an erroneous conception of the effect of the decision in the Hager Case, -is very radical and in distinct opposition to at least five other cases, decided by this court, three of which have been reported, and another (decided last June) has been marked for publication. Two of these opinions were rendered by Judge O’Rear, two by Judge Hobson, and one by Judge Lassing.

I think the first statement quoted as to the effect of the decision in the Hager Case must have come from a somewhat hasty reading of the opinion in that case, which was rendered by Judge Carroll. What was really said in the Hager Case was this: “Even if the assessment for 1906 had been made before the Legislature met, it could have directed another assessment to be made, and the tax to be paid under it. And so. if the board had made an assessment under the act of 1904, it would have been its duty after June 31,1906, to make an assessment under the act of 1906, and the tax should have been paid under that assessment. ’ ’ This, I take it, must mean that it would have been the duty of the board, if the Legislature had so directed, to have made another assessment, and the constitutional right of the .Legislature to have so ordered may, for the purpose of the argument, be conceded. If it was intended in the opinion to say that the board of its own power, without the special legislative authority referred to, could have made an*788other assessment after' a final assessment, already made and completed, by the lapse of 30 days, without any complaint of the taxpayer, then the court has overruled at least five well-considered cases, without dignifying them by the slightest mention.

The first of these is that of Coulter v. Louisville Bridge Company, 114 Ky. 47, 70 S. W. 29, 24 Ky. Law Rep. 809. In that case, upon the report of the bridge company, duly filed, the board of valuation and assessment, after considering the matter, wrote on the jacket in which the assessment papers are preserved the words “No franchise.” After the members of that board went out of office and different men were elected to fill the place, the board as reorganized, proceeded to consider de novo the question of the assessment upon that report, and reached the conclusion that the company ought to be assessed for a franchise, and valued the franchise at $662,998, and demanded a tax thereon, which, with penalty, amounted to $4,167.89. Thereupon the bridge company filed in the Franklin circuit court its suit in equity, and enjoined the assessment before it became final, and this court, having considered the question, determined that, while there was no- assessment made by the old board, it had determined that'there was nothing upon which to base a franchise assessment, and had therefore written the words “No franchise,” and that that was conclusive both of the state and bridge company. In illustration of that conclusion, the court used the following language: “If the board of 1898 had fixed a valuation of $100,000 on appellee’s franchise, acting under the same circumstances as shown in this case, and appellee had paid the tax, could appellant and his associates, constituting the present board, have ignored that action, and revalued *789and reassessed the franchise? If they conld, then there is no end to this thing. Nor would there be to any assessment or listing of any property for taxation by any assessing board or assessor. We are of the opinion, and hold, that when the proper assessing officers, within the time and substantially the manner prescribed by the statute, have acted in considering and fixing the valuation upon property liable to assessment for taxation, and no relief has been obtained within the time allowed by statute for correcting their action, if erroneous, that action is final. The judgment and action of the assessor based upon the legal evidence then obtainable and at hand, and as fixed by statute, when recorded in the proper tax lists, in the very nature of things should be conclusive upon the state, as well as against the taxpayer. Such being the judgment below, it is affirmed.” That opinion was delivered by Judge 0 ’Rear.

In the case of C., N. O. & T. P. R. R. Co. v. Commonwealth, 115 Ky. 281, 72 S. W. 1119 (opinion by Judge O’Rear), in which the same question arose, it was said: “Under the authority of Coulter, Auditor, v. Louisville Bridge Company, we hold that the action of the board was conclusive, and after the expiration of the time for hearing complaints for reduction is binding alike upon the state and the railroad company. ’ ’

In Commonwealth v. American Tobacco Co., 96 S. W. 466, 29 Ky. Law Rep. 746 (opinion by Judge Hob-son), the Bridge Company Case was again approved; and in the case of Commonwealth v. Ledman, 127 Ky. 621, 106 S. W. 247, 32 Ky. Law Rep. 247 (opinion by Judge L'assing), where the same question was presented, it was said: ‘ ‘ Prom the report as filed by the company and such other information as it may *790possess it (referring to the board) assesses the property at a fair valuation, and when once so assessed the action of the board is' final and conclusive, and no further action can be taken leading to a further assessment or revaluation of the property.”

In the case of Commonwealth v. Southern Pacific, 120 S. W. 311 (decided.last June), marked to be officially reported — opinion by Judge Hobson — the same question was again presented, and Judge Hobson quoted from the Bridge Company Cases the language which is quoted above.

But the opinion of the court in this case goes further, much further, than it is said the opinion in the Hager Case went, because it must be admitted, and I think is substantially admitted in the opinion, that the board of valuation and assessment must have omitted to make an assessment before the local officers, acting in a supplementary way, in other words, performing the substituted duty, could have proceeded at all. And yet it is said that even though the board had made the assessment for local purposes, before the act of 1906 became operative, as it was its clear duty to do — in other words, had not failed or omitted 1o do its duty in respect to the local assessment — still it would have been the duty of the officers charged with the performance of the substitute duty to have ignored the assessment and performed their supposed substitute duty, without the existence of the jurisdictional fact necessary as a basis for the right to proceed, and in so doing should ignore the assessment duly and properly made, and should assume there had been a failure of duty on the part of those officers charged primarily with the duty.

If this can be done, then, in the language of the court, “Where is this thing to. end?” If the con*791elusion of the court is right, then the same thing would be true, even if the taxpayer had paid the taxes due on the assessment. Such a conclusion would be entirely unprecedented and appalling to the profession and to the state. That conclusion of the court is, worked out on the theory that the law of 1906 is retroactive in its operation to such an extent as to make it amount to a legislative command on the local officers to ignore assessments for the year 1906 and to proceed with the assessment without what has universally been conceded to be the necessary .basis for such proceeding. I think it must be admitted that the legislative language be so plain as to exclude all doubt before such a construction could be placed upon it. There should be no possible escape from it.

The most critical examination of the statute fails to disclose a single sentence pointing to the conclusion that the Legislature intended the act to apply to local taxes for the year 1906. But the whole language and spirit of the act is to the contrary — that it was intended to act only prospectively. The Legislature is presumed to have known (and a large majority of the members did know) that even before the act was passed, and certainly long before the act became operative, all of the local assessments had been made for the tax of 1906, and that perhaps 95 per cent, of the tax due thereon had been paid.

Under these circumstances there is not the slightest reason for supposing that the Legislature intended anything but a prospective operation. The only section 'in the act that bears to the slightest extent upon the assessment of local taxes is section 4 of the original act (section 4092c, Carroll’s St. 1909, Russell’s St. See. 6078), and copied in full in the opinion, and certainly there is no language in that section in*792dicating anything bnt a prospective operation. That section provides that the assessment for local pur-poses shall he made “at the same time and manner as prescribed by law for the return of the assessment of personal property therein.” An examination of the statutes upon that question shows that the county assessment must be completed by January 1st. Ky. St. sections 4046-4059 (sections 5937-5951). The assessment in cities of the first class must he completed, and taxe.s are due thereon, by January 3d. Section 2997 (945). In none of the other cities is the assessment delayed longer than May 1st. In cities of the third class the assessment must be completed by March 10th. Under such conditions it seems to me to be absolutely plain that, when the Legislature declared the assessment for local purposes under the act of 1906 should be “at the same time” that other assessments for local purposes were made, it could not have contemplated any other assessment before the next one after the adoption of the act. This proposition seems to me to he so plain that no argument can make it plainer.

The court quotes, as though it should be given a preponderating influence, section 4092 of the Kentucky Statutes, giving the banks until after April 15th to file their reports before the Auditor; but that section of the act became wholly inoperative when the Legislature determined it would not add an emergency clause, but would let the act become operative under the Constitution, 90 days after the adjournment. In the next place, the section has absolutely nothing to do with local assessments, but only state taxes, as the reports for local purposes must he made to the local officers at an entirely different time, and only the reports which are to serve as a basis for *793state taxes are returned to the Auditor. The court says: “The state may provide for the retrospective assessment of property.” That is, of course, conceded; but the question is, Has it done so? Having seen that the language, and the spirit, too, in my judgment, really point unerringly to a strictly prospective construction, I shall now briefly consider what the result of the authorities is.

In Endlich on Interpretation of Statutes, Sec. 271, it is said: “Indeed, the rule to be derived from a comparison of a vast number, of judicial utterances on this subject seems to be that, even in the absence of constitutional obstacles to retroaction, a construction giving to a statute >a prospective operation is always to be preferred, unless a purpose to give it a retrospective force is expressed by clear and positive command, or to be inferred by necessary, unequivocal, and unavoidable implication from the words of the statute taken by themselves, and in connection with the subject-matter and the occasion of the enactment admitting of no reasonable doubt, by precluding all questions as to such intention.”

This court, in the case of Watts v. Commonwealth, 78 Ky. 331, said: “It is a sound rule of construction that a statute shall have a prospective operation only, unless its terms show clearly a legislative intention that it operate retrospectively.” And in Lawrence v. City of Louisville, 96 Ky. 598, 29 S. W. 451, 27 L. R. A. 560, 49 Am. St. Rep. 309, it is said: “In some cases retrospective legislation may be upheld. However, the words of a statute ought not to have a retrospective operation unless they are so clear, strong, and impressive that no other meaning can be annexed to them, or unless the intention of the Legislature cannot be otherwise satisfied.” See, also, the case *794of Ohio Valley Telephone Co. v. City of Louisville, 123 Ky. 193, 94 S. W. 17, 29 Ky. Law Rep. 631, which in some of its aspects is strikingly like this case. In that case we said: “The fiscal year of the city of Louisville, 'then as now, began on the 1st day of September and ended on the 31st day of August in each year. All property was assessed for municipal purposes as of the 1st of September of each year, and the lien of the city for taxes of a given year began on that day; so that when the act of November 11, 1892, authorizing the assessment of corporate franchises for state and municipal taxation, became a law; more than two months of the fiscal year for which the tax bill herein sued on issued had already expired, and, unless the rule against retrospective taxation is to be ignored, there is no legal foundation for it.”

The Supreme Court, in the case of United States v. American Sugar Co., 202 U. S. 577, 26 Sup. Ct. 719, 50 L. Ed. 1149 said: “We are to remember there is a presumption against retrospective operation, and we have said that words in a statute ought not to have such operation ‘unless they are so clear, strong, and imperative that no other meaning can be annexed to them,’ or ‘unless the intention of the Legislature cannot be otherwise satisfied.’ ” In United States v. Burr, 159 U. S. 78, 15 Sup. Ct. 1002, 40 L. Ed. 82, there was under consideration of the United States court a statute which took- effect August 28, 1894, but the first section of which provided as follows: “That on and after the 1st day of August, 1894, unless otherwise specially provided for in this act, there shall be levied, collected and paid upon articles imported from foreign countries or withdrawn ' from consumption and mentioned in the schedules herein contained, the *795rates of duty which are by the schedules and paragraphs respectively prescribed, viz.” It was held that, notwithstanding this language, the act did not apply to transactions completed when the act became a law; that is, to goods which were imported between August 1st and August 28th.

Without burdening this opinion unnecessarily with authorities, it is sufficient to say that both in this court and in the Supreme Court the principle is thoroughly established that a retrospective construction will not be given to a statute unless, in the language of this court in the Watts Case, supra, its terms “show clearly a legislative intention that it operate retrospectively,” and in the Lawrence Case, supra, these terms “must be so clear, strong, and impressive that no other meaning can be annexed to them,” and as stated by the Supreme Court in the Sugar Company Case, “these terms must be so strong, clear, and impressive that no other meaning can be annexed to them.” With the authorities of these two courts being so emphatic upon this proposition, I do not see how it can be legally possible to conclude that the Legislature intended the act of 1906 to be given a retrospective operation, so as to include the tax for 1906, assessable in this instance as of March 10th.

For these reasons, I am constrained to dissent from the opinion "of the majority of the court'.