State ex rel. DaPonte v. Board of Assessors

The opinion of the Court was delivered by Fenner, J. The important question presented in this case is: whether the municipal bonds of the City of New Orleans are subject to taxation by the State and City, or by either. The Constitution of 1879, Art. 203, declares that “ all property shall be taxed in proportion to its value,” and Art. 207 provides: “ The following property shall be exempt from taxation, and no other,” etc., not mentioning municipal bonds, nor State bonds. The Revenue Act No. 96 of 1882 directs, in general terms, all property, not exempted by the Constitution, to be taxed, and then, proceeding to enumerate the objects, mentions, among other things, “rights, credits, bonds liable io taxation, etc." Acting under this authority, the assessors have listed for taxation municipal bonds of the City of New Orleans held by relator. The argument of defendants in snpport of the assessment is reducible to a simple syllogism, in these terms : The Constitution directs that all property, not specially exempted, shall be taxed; municipal bonds are property and are not specially exempted ; ergo they must be taxed. The relator concedes that such bonds are, in a general sense, property ; but he resists their subjection to taxation on various grounds, of which the two following are the most prominent: 1st. That they do not fall within the intent and meaning of the word 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 of 1882. 1 2d. That such taxation would impair the obligation of the contracts evidenced by the bonds, and thus violate the Constitution of the United States. I. This is the first time in the history of Louisiana that, an attempt has . ever been made to subject municipal bonds to taxation. If they are liable to taxation to-day, they have been so liable from the foundation of the State. From 1864 to the present time, our successive Constitutions have contained the mandatory provision: “ ATI property shall be taxed in proportion to its value, to be ascertained as directed by law. The — 654 — general assembly shall have power fco exempt from, taxation property actually used for church, school, or charitable purposes.” Constitution 1864, Article 124; Constitution 1868, Article 118. It was held repeatedly by this Court, that the legislative power of exemption was confined and limited within the cases enumerated. Thus, if municipal bonds were included within the terms, “ all property,” as used in those Articles of the Constitution, it was not merely within the power, but it was the absolute duty of the legislature to tax them. More than this, various revenue laws passed under those Constitutions contained general terms defining the objects of taxation, quite as capable of including such bonds as those-of the existing Act. If these bonds had been included within such terms, it would have been the duty of the assessors to assess them and of the tax collectors to collect taxes on them. Even since the adoption of the Constitution of 1879, under the Revenue Law of 1880, passed immediately after its adoption, which provided for the taxation of " all property situated in the State of Louisiana, except such as is expressly exempted from taxation by the Constitution,” neither the legislative nor executive departments of the government considered that municipal bonds were subjects of taxation or made any attempt to assess them for that purpose. Thus it appears, that from 1864 to 1883, under a state of Constitution and law substantially identical with that prevailing to-day, it has never been considered that municipal bonds were included withiu the subjects of taxation, or withiu the scope of the general constitutional and legal provisions which directed, that “ all property,” not expressly exempted, should be taxed. We find nothing in the Revenue Law of 1882 indicating the legislative intent to tax such bonds, more strongly than was exhibited in the terms of prior legislative Acts. The reference to the enumeration among objeets of taxation of " bonds liable to taxation,” is of no avail; for it is evident that if municipal bonds are not included within the terms of prior revenue laws, taxing" all property, except such as is expressly exempted by the Constitution,” they are not covered by the words, “ bonds liable to taxation.” Indeed, in view of the consistent treatment of such bonds as not “ liable to taxation,” the use of those words might well be construed as intended to exclude them. If, therefore, the defeudant assessors should be permitted, of their own free will, and for the first time in the history of the State, to list municipal bonds for taxation, it may he seriously questioned whether the tax imposed in pursuance thereof would not be essentially a tax — 655 — levied by the assessors, and not one levied by tbe legislative will or in-pursuance of constitutional direction. Is it reasonable oy possible to suppose that the framers of the Constitution of 1879, in directing “ all property ” to be taxed, in terms exactly equivalent to those which had been used in two prior Constitutions, intended or expected that the language should have a broader meaning or receive a different interpretation from that which had been uniformly attached to like words in th e latter ? We think n ot. We are bound to assume that they knew that the legislative and executive departments of the State, under those precedent Constitutions, acting under their solemn oaths to obey them had uniformly construed the mandate, that “ all property shall be taxed,” as not covering the public securities of the City and State, and had always exempted them from taxation. Nor can we avoid the conclusion that, had they intended their own like command to subject such securities to taxation, they would have expressed such intention in special and unequivocal terms. It is obvious that no proposition could have been submitted to the convention which would have excited deeper agitation or would have been more novel, momentous and startling, than an open proposal to tax such securities. Yet we are asked to believe that, without in the slightest degree awakening public attention, and without a word of discussion, the convention has adopted such a measure under the equivocal guise of general provisions touching taxation, repeated substantially in the language of prior Constitutions under which they had never borne any such import. The demand is equally repugnant to common sense and to sound principles of interpretation. No maxim of statutory construction is better settled than this: “ Where terms, or modes of expression, are employed in a new statute, which had acquired a definite meaning and application in a previous statute on the same subject, or one analogous to it, they are generally supposed to be used in the same sense; and in settling the construction of such new Statute, regard should be had to theknown and established interpretation of the former.” Maxims and Rules of Construction, in Blackw'ell on Tax Titles, p. 702; 20 Vermont, 49; 3 Zabriskie, 143. It was a rule of the Roman law, si de interpretations legisquceratur, imprimis inspieiendum est quo jure eivitas retro in ejus-modi easibus usa fuisset; optima enim est legum interpres consuetude. Dig. 13,37. Legis interpretatio legis vim habet. It has been frequently affirmed by this Court, that “ the common interpretation of statutes which has existed for a length of time will be considered, as it generally is, the correct interpretation,” and that — 656 — the usage under a statute, is its best interpreter. Beck vs. Brady, 7 An. 1; Hubgh vs. N. O. & C. R. R., 6 An. 496; Waldo vs. Bell, 13 An. 329. A remarkable, instance of the application of the foregoing rules is found in the construction of the extremely general provision of Art. 2294 of the Code of 1825, declaring, that “ every aet whatever of man that causes damage to another, obliges him by whose fault it occurred to repair it;” but this Court applied to these exhaustive words the limitations which had been imposed on them in prior systems of law from which they were taken, saying: “The dispositions of Art. 2294 are found in the Roman and Spanish laws; so far from being new legislation, that Article embodies a general principle as old as the science of jurisprudence itself, and it must still be understood with the limitations affixed to it by the jurisprudence of Rome and Spain.” Hubgh vs. N. O. & C. R. R., 6 An. 496. Applying these principles to the construction of the Articles of our Constitution under consideration, the conclusion is inevitable that the general terms thereof employed with reference to the known and established interpretation of like terms, as employed in prior Constitutions, as evidenced by the consistent usage of the State in the application thereof, and according to the universal understanding of all concerned therein—which interpretation, usage and common understanding, all concurred in excluding municipal bonds and other public securities of the State from their operation. Nor can it be successfully opposed to this view that the words, “ all property shall be taxed,” are too clear and unambiguous to leave room for construction. On the contrary, sueli general terms and expressions are constantly subjected to construction, and it may be said that they are never allowed their full literal import. To do so would be to extend their intent to subjects which the State has clearly no power to tax, such as bonds of the United States, and other means and instruments for the exercise of the powers delegated to the federal government; and to other subjects, such as the salaries of judges, publie property, (though this is expressly exempted) and the like, which, though it is within the power of the State to tax, are yet considered on fundamental principles to be non-fcaxable. It is, therefore, laid down as a general principle by Judge Cooley, that “ some things are always presumptively exempted from the operation of general tax laws, because it is reasonable to suppose they were not within the intent of the legislature in adopting them. * * * * It is always to be assumed, that the general language of statutes is made use of with reference to taxable subjects.” He concludes, that — 657 — “ the property of municipalities is not, in any proper sense, taxable. It is, therefore, by clear implication, excluded. It is not like government agencies, excluded from the power of tax laws, but it is beyond the grasp of their intent.” Cooley on Taxation, pp. 130, 131; 30 N. J. Eq. Rep. 667. Again, says Cooley, “ it is a general rule, that where the public are to be charged with a burden, the intention of the legislature to impose that burden must be explicitly shown.” Cooley on Tax. p. 201. We quote these passages for the purpose of showing that, however broad and general be the expressions of tax laws, they are to be construed so as to give effect to the intent of the legislator. We consider that the reasons heretofore given establish that municipal bonds have never been considered as properly taxable in this State; that they have always been considered as “ presumptively exempted from the operation of general tax laws,” and that, even if not excluded from thepower of the taxing provisions of the Constitution, they are “ beyond the grasp of their intent.” The Supremo Court of Pennsylvania had occasion to construe the words “ all property ” as used in a tax law. The case was this: “ An Act of 1844 declared that debts due from solvent debtors shall be taxable for State and county purposes ; an Act of 1850 declared that such debts shall not be taxed for borough or township purposes; an Act of 1851 declared that all property subjected to taxation for county purposes shall be for borough purposes.” The Court admitted that the words “ all property ” might include “ debts due from solvent debtors ; ” but, in view of the general exemption in the former Act of such debts from borough taxation, it held, that it would not hold the words “ all property” in the later Act as evidencing the legislative intent to include them, in absence of express designation. Gaepp vs. Bethlehem, 4 Casey (Penn.) 254. And in a later case, the same Court, referring to the above decision, said: “ We need not repeat the argument in support of the construction given to the words all property as found in the Act. Itis sufficient to say that it must have expressed the legislative intent and the will of the people, or the Act, as thus interpreted, would not have remained unchanged for so long a period. The construction given to it has become fixed and settled, and it is now too late to attempt to change it.” Mifflintown vs. Jacobs, 69 Penn. 151. The Supreme Court of Georgia held, that the power granted to a • municipal corporation to tax property generally, could not be considered as including authority to tax State bonds, in absence of “ express — 658 — words so declaring,” even if such taxation were within the legislative power. City of Augusta vs. Dunbar, 50 Ga. 387. The first Article of our Civil Code declares, that “ law is the solemn expression of the legislative wilV This Article, though often and justly citic-ised as a definition of law, nevertheless consecrates the principle that the vital element of statutory or constitutional law is the “ legislative will.” The ascertainment of this will or intention is the sole purpose of judicial interpretation or construction. Rules and maxims of interpretation have no other purpose except as aids to the accomplishment of this prime object. Many of these rules are apparently contradictory of, and inconsistent with each other. We have quoted some which favor and support the construction which we have placed upon the provisions of law under consideration. It would not be difficult to quote others which oppose it. But, after all, the judicial mind reverts to the fundamental question, what is “ the legislative will ” When it has reached a firm, secure, confident conviction on that point, such it must announce to be the law. Thus, although the Revised Code of Practice explicitly provided, that the party applying for an attachment must give bond in & sum “ exceeding one-half that which he claims,” this Court, convinced by the circumstances, history and prior interpretation of the legislation on that subject, that such was the undoubted “ legislative will ” held, that the Article meant “ exceeding by one-half.” Yale vs. Cole, 31 An. 687. The same doctrine was carried by this Court to the very verge of discretion in holding that Article 128 of the Constitution, which conferred upon the Courts of Appeal for the Parish of Orleans jurisdiction where “ the amount in dispute exceeds two hundred dollars, and is less than one thousand dollars,” gave jurisdiction of an amount in dispute of exactly one thousand dollars, being satisfied that such was “the legislative will.” La. Ice Co. vs. State National Bank, 32 An. 597. We cite these cases as extreme examples of the length to which courts will go in giving effect “ to the legislative will,” when fully satisfied thereof. Such examples are, and should be rare. We do not conceive that, in our instant decision, we are adding to their number. On the contrary, our construction of the laws under consideration is natural and supported by sound principles and frequent precedents. At all events, we do not hesitate to declare that our conviction that State and municipal bonds were not within the grasp of the legislative intent, in the general provisions of the laws relative to the taxation of property, is quite as fixed and certain as if they had been expressly excepted. Although it is not necessary for us so to hold, yet, when analyzed, it — 659 — is doubtful whether the values here sought to be taxed do not fall within the express exemption accorded to public property. A bond of the City of New Orleans is negotiable and imports consideration. It represents no intrinsic value except the consideration which passed to the City upon her promise to return a stipulated equivalent. When the value of that consideration passed from private ownership into that of the City, it ceased to be private and became public property, and, therefore, non-taxable. When the City shall return this value or its stipulated equivalent to private ownership, by payment of her bond, it will become again private and taxable property ; but for the City to retain the value and, at the same time, to tax it through the holder of her bond, is certainly shocking to justice and common sense. The same remark is equally applicable to the State, whose creature and agent the City is, and under whose authority and direction the bond was created and issued. These views seem to harmonize substantially with those expressed by the Supreme Court of the United States in Murray vs. Charleston, 96 U. S. Taxation, thus doubtful in power, indefensible in morals, wanting in explicit legislative sanction, irrational in policy, and barren of results, because incapable of practical enforcement, needs a stronger title to judicial recognition than mere quibbling on the literal meaning of words which, by long use and interpretation, have acquired in their present connection a restricted import exclusive of that now sought to be attached to them by mere executive officers of the State. It is a satisfaction to us thus to be able to acquit the convention and the legislature of the design to make this,most insidious and dangerous of all forms of assault upon public credit. Good faith and justice, as they are the ornaments of States, are also indispensable conditions of their prosperity and advancement. To use the famous metaphor of Junius, “ public honor is security; the feather that adorns the royal bird supports his flight; strip him of his plumage and you fix him to the earth.” II. The conclusion above announced relieves us from the duty of determining whether taxation of State or municipal bonds by the State, or by any municipal corporation thereof, would have effect to impair the obligations of the contracts, in violation of the Constitution of the United States. In homely phrase, that is a bridge which we will cross when we come to it. It is, therefore, ordered, adjudged and decreed that the judgment — 660 — appealed from be annulled avoided and reversed, and it is ordered and decreed that alternative writs of mandamus originally issued herein be made peremptory at cost of defendants in both Courts.