Arkansas Railroad Commission v. Stout Lumber Co.

McCulloch, C. J. This appeal involves the construction and effect of an amendment to the severance * tax statute enacted by the General Assembly of 1923, approved February 14, 1923, imposing a tax ou the business of severing certain products from the soil for commercial purposes. Acts 1923, General Statutes, p. 67. The statute is designated, and will be hereinafter referred to, as act No. 118. The amendatory statute was approved March 26, 1923 (Acts 1923, General Statutes, p. 578), and designated as act No. 681. Both of these statutes were enacted at the same session The bill for act No. 681 was introduced in the Senate on March 5, 1923, and passed the House of Representatives on March 7, but was not presented to the Governor for approval until after adjournment. Section 4 of act No. 118 provides for the imposition of “a privilege tax amounting to two and one-half per cent, of the gross cash market value of the total production of such natural resources” other than -“the production of 'certain natural resources, the privilege tax upon which is hereinafter specially provided for.” Section 5 of act No. 118 reads as follows: “Section 5. Special rates. “ (a) On bauxite. Every producer of bauxite shall be subject to all of the provisions of this act, except, instead, of a tax of two and one-half (2y2) per cent, of the gross market value of said product, the producer of bauxite shall pay a privilege tax equivalent to twenty-five cents (25c) per ton on the total production of bauxite during the preceding quarterly period, irrespective of the market value thereof. “(b) On coal. Every producer of coal shall be subject to all of the provisions of this act, except that, instead of a tax of two and one-half (2%) per cent, on the gross market value of said products, the producer of coal shall pay a privilege tax equivalent to one cent (lc) per ton on the total production of coal during the preceding quarterly period, irrespective of the market value thereof. “(c) On timber. Every producer of timber shall be .subject to all the provisions of this act, except that, instead of a tax of two and one-half (2%) per cent, of the gross market value of said products, the producer of timber shall pay a privilege tax equivalent to seven cents (7c) per thousand feet, board measure, on the total stumpage covered or cut during the preceding quarterly period, irrespective of the market value thereof.” Act No. 681 (omitting § 2, which is the concluding section declaring an emergency and putting the statute into immediate effect) reads as follows: “Sec. 1. That § 5 of act No. 118 of the Acts of the Legislature of the State of Arkansas, approved February 14, 1923, be amended to read as follows: “ ‘Special rates’ (d). On manganese ore. The provisions of this act shall not apply to the producer of manganese ore, but every shipper of manganese ore shall pay a privilege tax of ten cents per ton, based on the weight at the point of shipment, irrespective of the market value of the said ore. Said tax to be paid as provided in said act. ” The Arkansas Railroad Commission, which is clothed with authority to collect the tax, sought to collect from those producing commodities mentioned in § 5 a tax of two and one-half per cent, on value as prescribed in § 4, claiming authority to do so on the theory that the original § 5 had been repealed by act No. 681. The appellees, each a corporation engaged in the business, respectively, of severing timber and coal from the soil for commercial purposes, disputed this assertion, and claimed the right to pay under § 5 of the original statute as the limit of its taxation. Appellees instituted this' suit in the chancery court of Pulaski County to restrain the Commission from attempting to impose the tax of two and one-half per cent, on valuation of the product. The chancery court granted the relief prayed for by appellees, and the Commission has appealed. The question presented is whether act No. 681 operates as a repeal of the whole of original § 5 by substitution, or whether it merely amends the statute by adding another subdivision to § 5 relating to the tax on production of manganese. The State contends that the later statute operates as a repeal of § 5 by substitution; and the contention of appellees is that it operates merely as an amendment to the original section by adding another subdivision. The rule of interpretation has been firmly established by many decisions of this court, as well as by decisions of other courts of last resort, that the use of the formula, “amended so as to read as follows,” in an amendatory statute, means that the new statute is substituted for and repeals the old statute, or that part of it which is thus referred to. The authorities on this subject are reviewed in the case of State ex rel. v. Trulock, 109 Ark. 556. We decided, however, in that case that the rule was not an inflexible -one, and was not applicable where there were other. controlling and unmistakable indicia found in the statute of a contrary intention on the part of the lawmakers. In the opinion in that case it was said: “But that rule of interpretation is not an absolute or an inflexible one, and is not always arbitrarily applied. It must be considered with other rules equally well settled, and must yield place to others which may, under the language of a statute, be more appropriately and accurately employed. The cardinal rule of interpretation is the ascertainment of the meaning of the lawmakers as expressed in the language which they have used. Not what the lawmakers themselves meant, but what the .language they used means; And all rules of interpretation must yield to this as the paramount one.” Again, it was said in the same opinion: “The words, ‘be amended to read as follows,’ constituted a mere formula, in which there is no magic, except that it ordinarily carries the meaning, when not otherwise limited, that the amendatory statute excludes all omitted provisions of the former law.” The conclusion reached in that case was that, notwithstanding the use of this formula in -the new statute, it did not exclude by repeal the omitted provisions in the former law. In the very recent case of Wallace v. McCartney, 159 Ark. 617, the same question arose in the interpretation of a similar amendatory statute, and we announced the same rule as in the Trulock case, holding that the amendatory statute was not a substitution, but an addition or supplement, to the original statute. In the case just referred to we said that “it is obvious, from a consideration of the whole of the amendatory statute, that the Legislature did not intend to amend the whole of the section named, but had left unimpaired that part of it which covered a subject not treated in the new statute.” In the Trulock case we followed the decision of the New York Court of Appeals in the case of Bank of the Metropolis v. Faber, 150 N. Y. 200, and quoted from it the following: “The effect upon a prior statute of a subsequent amendment, '‘so as to read as follows,’ is not to be determined in all cases by any fixed and absolute rule, but frequently becomes á question of legislative intent to be determined from the nature and language of the amendment, from other acts passed at or about the same time, and from all the circumstances of the case. The duty of the courts is to give effect to the legislative intent rather than the literal terms of the act.” There are other decisions of the same court which might have been referred to, where language was used which has much force in the interpretation of the statute now before us. In the case of Smith v. The People, 47 N. Y. 330, where the court had under consideration a similar question, it was said: “A clause in a statute purporting to repeal other statutes is subject to the same rules of interpretation as other enactments, and the intent must prevail oyer literal interpretation. One part of an act of the Legislature may be referred to in aid of the interpretation of other parts of the same act. So in cases of doubt or uncertainty, ants in pari materia, passed before or after, and whether repealed or unrepealed, may be referred to in order to discern the intent of the Legislature in the use of particular terms; and within the same rule, and the reason of it, contemporaneous legislation, although not precisely in pari materia, may be referred to for. the same purpose. Statutes in pari materia relate to the same subject, the same person or thing, or the same class of persons or things, and are to be read together, for the reason that it is to be implied that a code of statutes relating to one subject is governed by the same spirit, and are intended to be harmonious and consistent. * * * Statutes enacted at the same session of the Legislature should receive a construction, if possible, which will give effect to each. They are within the reason of the rule governing the construction of statutes in pari materia. Each is supposed to speak the mind of the same Legislature, and the words used in each should be qualified and restricted, if necessary, in their construction and effect, so as to give validity and effect to every other act passed at the same session.” In the case of In re Rochester Water Commission, 66 N. Y. 413, where there was involved the effect of a supplemental statute using the formula, “amended so as to read as follows,” the court said: “Ordinarily, and in the absence of any evidence of a legislative intent to the contrary, a substitution of one section for another by an amendment in the form in which this amendment was accomplished would work a repeal of the original section from the time of the amendment, and as affecting all eases thereafter arising. But when, from the language of the statute and of the amendment, a different intent is apparent, such effect will not be given to it; and where other acts of the Legislature, passed at or about the same time, corroborate the evidence of intent, as gathered from the statutes under review, the duty of the courts is to give effect to the intent rather than to the literal terms of the act. The intent must not be conjectured, but must be apparent from all the statutes taken together, and consistent with the whole purpose and object as well of the original statute as of the amendment. This rule of interpretation is of frequent application, and is one of the most important and familiar canons of construction.” It is earnestly contended by learned counsel for the State that the use of the letter “d” in the amendatory statute affords the only evidence of the intention of the framers of the statute to supplement, rather than to repeal by substitution, the original statute, and that this evidence is too slight and uncertain to contravene or overturn the settled interpretation of the formula employed. The use of the letter in the same way that the preceding letters of the alphabet were used in the original statute in designating the different rates of taxation on the several ■ products is undoubtedly of emphatic significance in determining what the real intention of the lawmakers was, but we cannot agree with counsel that this is the only evidence of a contrary intention afforded by the statute itself and the original statute, which had been enacted only a short time before, at the same session of the Legislature. The whole structure and form of the amendatory statute is so identical with the different subdivisions of the original § 5 as to give compelling force to the idea that the addition of another subdivision was intended rather than a substitution for the whole of the original section. The natural and ordinary effect upon the mind ill comparing the new statute with the original section is that an addition to the section was intended, rather than a substitute. It deals solely with taxation of the production of a commodity, manganese, which is of little consequence in this State, compared with the production of the great commodities coal, lumber, and bauxite, mentioned in the original section, and it is scarcely conceivable that the lawmakers intended, in dealing with this commodity, to overturn the carefully laid taxation -scheme prescribed in the recently enacted and yet untried general statute on this subject. The rule announced by the New York court in the cases cited supra is especially applicable in the present controversy, for the two statutes were passed at the same session and closely together in point of time. The statute was a new one, and when the amendatory statute was passed the former one had not gone into effect, and was wholly untried. There had been no experience in the enforcement of the original statute so as to give rise to the belief that material changes had taken place in the legislative mind. It is true that the repeal of the whole of original § 5 would have left a complete scheme for the uniform taxation of the privilege of production of all commodities mentioned at .the rate of two and one half per cent, on valuation, but this is of little force in inducing the conclusion that the lawmakers had undergone a complete change of mind in the scheme of imposing a specific amount upon most of the great commodities to be produced. Again, it is insisted by counsel for appellant that if the later statute be construed to be an addition, and not. a substitution for, original § 5, it is brought in conflict with § 23, art. 5, of the Constitution, which provides that a law shall not be “revived, amended or the provisions thereof extended or conferred by reference to title only,” and that we should give such interpretation to this statute as will make it valid rather than to make it invalid. We are unable to agree with counsel in the argument that, if the later statute be interpreted to mean an addition to § 5, it offends against the provisions of the Constitution above referred to. It will be observed that § 1 of tbe amendatory statute, when read and considered separately and apart from the original statute sought to be amended, distinctly and unequivocally imposes a privilege tax of ten cents per ton on the production of manganese ore. This presents the case of a statute which is “original in form” and which “creates some burden or obligation,” and which merely refers to “some other existing statute for the purpose of pointing out the procedure -in executing the power, enforcing- the right,.or discharging the burden.” See the recent case of Farris v. Wright, 158 Ark. 519, and the authorities there collated. The later statute is therefore not invalid as an attempt to amend or extend the law by reference only to the title. The conclusion now reached is that the effect of the last statute is not to substitute its provisions for the original § 5 in act No. 118, but that it is to add thereto the subdivision set forth in the later statute. The chancery court was correct in its decision, and the de-eree is affirmed. Wood and Humphreys, JJ., dissenting.