dorn? U IGam Btl^ml Slibtary Cornell University Library KF 6245.G77 Limitations of the taxing power, inciudi 3 1924 018 726 939 Cornell University Library The original of tiiis book is in tine Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31924018726939 LIMITATIOXS OF THE TAXING POWER INCLTJDINa LIMITATIONS WON PUBLIC INDEBTEDNESS TREATISE UPON THE CONSTITUTIONAL LAW GOV- ERNING TAXATION AND THE INCURRENCE OF PUBLIC DEBT IN THE UNITED STATES, IN THE SEVERAL STATES, AND IN THE TERRITORIES BY JAMES M. GRAY SAN FRANCISCO BANCROFT-WHITNEY COMPANY Law Publishers and Law Booksellers 1906 Copyright, 1906, By JAMES M. GRAY. To L. G. PREFACE The scope of this book is fairly shown by the title and the table of contents. The plan of qtioting, as much as is done, from the state con- stitutions was adopted after some hesitation. It was finally chosen because in the study of cases it is often useful to know the exact words of the constitutional provision under discussion. It is not pretended that these quotations are exhaustive ; but they are thought to be fairly complete. The need for such a work as this and its possibilities of use- fulness must be determined by the reader. James M. Geay. 189 Montague St., Beooklyit, March 1, 1906. TABLE OP CONTENTS. (References are to pages.) CHAPTER I. Eqvautt is the Fundamentai, Thought in the Constitutional Law o» Taxation. PAGE. Equality is the basic idea of government 1 Equality most highly developed in constitutional law of taxation 4 Equality in various aspects of taxation 5 Eqjiality leads to- harmony of decision 10 The nature of equality in taxation 11 Influence of the spirit of equality in decisions 14 The moral law leads to equality 22 CHAPTER II. Dbunitions and Scope or Taxing Power, Analysis or Franchise Taxes. Definitions 27 ' Scope of power 29 What may be taxed 30 Taxes on corporations 33 Analysis and classification of franchise taxes 37 Taxes on franchises " tp be " classified 40 Taxes on foreign corporations for the " franchise " of doing business . . 44 Taxes on railway gross receipts classified 45 Franchise taxes as property taxes 47 Special franchises 51 Siunmary 53 Exhausting taxing ^ower 54 CHAPTER III. Territorial Jurisdiction — Situs. The basis of jurisdiction 56 Due process of law 57 Situs of real estate 57 Situs of tangible personalty 58 Situs of cars, rolling stock and car companies 59 Situs of navigable vessels 60 Cases holding that ships may be taxed where employed 63 Situs of credits 66 Situs of credits employed in business 68 Situ^ of real estate mortgages, regarded as estates in the land 70 Situs of bank deposits 72 Situs of choses in action owing by residents to non-residents 75 Situs of corporate stock and property 77 Situs of intangible corporate assets 78 Situs of property held by executors, trustees, guardians and receivers. 86 Situs of partnership property 95 Property temporarily in the state. 96 Territorial jurisdiction in privilege taxation 100 [vii] VIU TABLE OF CONTENTS. FAGE. What is " doing business " in a state. ^^^ Territorial jurisdiction with' respect to succession taxes |^7 Legislative control over situs as between plans in the same state Ill* State constitutional provisions as to situs ^^^ What are " territorial limits " H^ Taxing same property in different jurisdictions ^^^ Territorial jurisdiction in enforcement and collection of taxes 117 Summary of constitutional law of territorial jurisdiction 120 CHAPTER IV. The Purposes op Taxation. Public purpose 12$ IiCgislative determination — how far conclusive 125 What is a public purpose 127 Eminent domain and taxation compared 129 Bounties for private enterprises 132: Highways 136 Railroads 136 Express state constitutional provisions against aid to railroads and pri- vate enterprises 140 Internal improvements 157 Municipal ownership 15S Municipal railroads 15& Municipal fuel yards 160 Municipal gas, light and water works 161 State dispensaries 162 Drainage irrigation, levies and ditches 163 Public health 163-16a Destruction of noxious animals 16S Schools, religious institutions and charities 169 Express state constitutional requirements with respect thereto 16!) Schools under private control 178 Religion in the public sehoools 180 Charitable institutions under private control 183 Appropriations for special classes 187 Sufferers from public calamity IBS Care of inebriates 190 Moral, equitable and honorable obligations 191 Bounties, pensions and monuments to soldiers 195- Pensions to civil employees I97 Expenditures by public officers, de. jure and de facto 199 Reimbursement of public officers for expenses of personal litigations . . . 202: Paying for damages done by mobs 205 Appropriation for heirs or widow of deceased public officer 206 Express state constitutional provisions as to moral obligations, extra pay to employees and contractors and the like 207 Decisions as to extra compensation 214 Legislative audit of private claims 217 Legislative waiver of defenses and interference with judgments 219 Allowance of claims barred by limitations 222 Payment of debts incurred without " express authority of law " 224 Laws increasing cost of public work and supplies — labor laws 225 Expositions, celebrations and junkets 226 CHAPTER V. Taxing Districts. ' Legislative authority 22$ Legislative power has limits 23* TABLE OF CONTEH'TS. IX rAQE. Effect of Federal constitution upon state legislative power to form tax districts 232 When determination of boundaries is delegated to a subordinate body. 233 Eelation of tax districts to political subdivisions , 234 Taxing part of a territory for a purpose germane to the whole 236 EflFeet of requirements of equality upon legislative control over tax districts 239 Express state constitutional provisions as to taxing locality for benefit of larger teritory 241 Taxing a whole territory for the benefit of a part 242 Express state constitutional provisions, forbidding states to assume burdens of localities 243 Expenditure of proceeds of tax outside of taxed district 246 Permitting non-residents of the district to share in the benefits of the tax 248 Annexing territory to municipalities 249 Provisions forbidding retrospective legislation as affecting consolidation of cities 250 Taxation of agricultural lands in city limits 231 Exemption of such lands from city taxes 254, 258 Taxation of unorganized territory 257 Legislative power to divide territory and apportion debts 259 Readjusting indebtedness after division and apportionment 260 Express constitutional provisions as to apportionment of debts of divided territory 261 Cases construing the foregoing provisions 263 Exempting municipalities from county road and other county taxes. . . . 268 CHAPTER VI. Delegation of the Taxing Poweb. Qeneral considerations 271 The Federal Constitution and the delegation of taxing power 272 "What constitutes a, delegation 274 Eeciprocal laws 276 Delegation to the people at large 278 Delegation to municipal subdivisions 281 Municipal authorities to whom power may be delegated 282 Who are " corporate authorities " 284 Municipal bodies to whom power may be delegated 286 Different municipal bodies occupying the same territory 287 Delegation of power to municipal bodies not specified in the constitution 2S9 Constitutions do not usually vest taxing powers by their own force .... 290 Allowing cities to frame their own charters 291 What powers may be delegated 291 Delegation to private persons 293 Constitutions commanding restriction of municipal taxing power 294 Express provisions as to delegation of taxing power 296 CHAPTER Vn. Local Self-government. Local subdivisions as state agencies 306 State control of matters of local police 307 State control of local taxation for streets, highways and bridges 308 State control of local taxation for schools 312 State control of local taxation for public health.... 314 X TABLE OF COJ^^TENTS. PAGE. State power to compel locality to recognize moral obligations, including defective acts and charities „,„ Arguments in favor of local self .government „. Views of courts which regard the state as supreme ^^ State control of taxation for local parks ^^* State control of local water supply ^iz State control of local fire departments ^r' State control of local river and harbor improvements ■ • • • "^° State control of municipal contracts, and conduct of municipal enter- prises, including wages and hours of labor • • ' Constitutional provisions forbidding the legislature to lay taxes for local purposes |^^ Placing local work in the hands of state boards °3° Constitutional provisions forbidding placing local work in the hands of state boards ^^^ Constitutional requirements that local officers shall be locally chosen,. 34** CHAPTER Vni. The Fedeeal Taxing Poweb and its Limitations. The Federal power to tax, its origin and scope 344 Providing for the common defense and general welfare 347 Duties, imposts and excises 350 Uniformity in the Federal Constitution 353 " Throughout the United States " 358 Local taxation in the territories 360 Direct taxes 361 Federal income taxes 365 The income tax law of 1894 366 Apportionment of direct taxes 370 Federal taxing power cannot impede operations of state governments. . 372 Oppressive Federal taxation,, due process of law 377 CHAPTER IX. IMPUED Limitations op the Federal Constitution upon the Tixaa PowEES OF the States; Taxation op Fedebal Agencies. Federal tax takes precedence of state tax 379 State cannot tax Federal agencies 380 State taxation of United States bonds 381 Federal exemption cannot be made instrument of fraud 384 State taxation of Federal property 384 State taxation of Indians 387 State taxation of Federal franchises 387 Summary as to above 392 Miscellaneous 393 State taxation of patents and copyrights 393 State taxation of national banks 396 Taxing real estate of national banks 399 Taxing personalty of national banks 400 State franchise taxes on national banks 401 State taxation of national bank shares 4Q4 What is " other moneyed capital " 4Qg Not all discriminations condemned 4Qg Assessment of national bank shares " at a greater rate etc." 4j() Discrimination in methods of taxation between national and state banks 4j4 State taxing bonds of another state 4jg TABLE OF CONTENTS. X7 CIIAPTEE X. State Taxation in Intkbfebence with Comuebce. PA6B. The commerce clause 418 What is commerce 419 Exclusiveness of Federal control of interstate commerce 423 License or occupation taxes affecting interstate commerce 425 License taxes on peddlers 430 Discriminating laws 432 Delivery of outside goods previously sold by sample 434 Taxes on sales in original packages 430 Buying goods for shipment outside state 433 Taxes on acts of transportation or communication 439 Taxes on ferries 442 The police powers of the states and interstate commerce 444 Tolls for use of improvements in navigable waters 440 Taxes on corporations engaged in interstate commerce 447 Taxes on gross receipts of carriers 449 Summary as to the foregoing 453 Separation of interstate and intrastate business 454 Taxation of property employed in interstate commerce. . .' 459 Taxation of ' franchises of interstate carriers regarded as property.... 461 Taxation of property which is the subject of interstate commerce 464 Taxation of property in transit 467 Some miscellaneous decisions 46S Taxation of commerce with Indians 469 CHAPTER XI. Otheb Federal Eesteictions with Respect to Commeece. Export and import duties 471 State taxes on imports 473 Export duties 474 Inspection laws 476 Tonnage duties 479 Preference of ports 481 CHAPTER XIL Oontbactual Limitations on the Taxing Powers of the States. Federal and state constitutional provisions 483 General discussion 484 What is a contract in the constitutional sense 485 Corporate charter is a contract 487 What kind of action violates the provision 487 Supreme Court decides for itself whether a contract exists 488 Power of states to limit taxing power by contract 489 State Constitutions forbidding the grant of irrepealable privileges .... 492 Exemptions from taxation by contract 495 Exemptions granted by corporate charters 496 Contracts of exemption not contained in corporate charters 499 Payment of consideration for corporate franchise as contract not to tax the franchise 501 Sale of hinds by city as contract not to tax 503 Effect of provisions allowing repeal of charter or legislative act 504 Such constitutional provisions quoted 505 Grants of exemption which are mere gratuities 611 Xll TABLE OF CONTENTS. TA6V. Estoppel, acquiescence and ratification of contracts for exemption 514 ■Contracts by which the exercise of the taxing power is promised ^1' Enforcement of a state's contract to tax ^t' Survival of contract after municipal reorganizations ^^^ Taxation of contracts .;.....;;.;;. "^'■ ■" Impairing the obligation " 522 Laws abridging the remedy 5^"* Transfer or extension of contractual rights of exemption 5:^6 ■Consolidation of corporations as affecting exemptions 529 Statutory transfer of " rights, privileges, immunities, franchises," etc. 531 ^Miscellaneous ^ ■ ■ ■ 533 CHAPTER XIII. Limitations upon Taxing Powee Imposed by Tbeaties. Treaties are the supreme law 535 Inheritance tax cases arising under treaties 535 Treaty with France 536 Treaty with Bavaria 53ll Treaty with Wurtemburg 537, 539 Treaty with Italy 537 Treaty with Spain 538 Duties of detraction 539 Treaty with Germany 549 CHAPTER XIV. The Fotjbteenth Amendment; Pbivtleges and Immunities of Citizens. Its origin and scope 541 The amendment quoted 541 The Fourth Article 541 Federal citizenship 544 Privileges and immunities of citizens of the United States 546 The right of travel 54!> Privileges and immunities of citizens in the several states 551 Discrimination between citizens 551 ■" Persons " in the 14th amendment 553 CHAPTER XV. Due Pbocess or Law — Notice and Heabino, Meaning of due process of law 555 General view of due process in taxation 557 Notice and hearing 5gl When notice is not required ■ 3(5 i Notice and hearing as to water rates 5g»j Notice and hearing as to importers 507 When notice is necessary ggy Notice upon questions of apportionment 5tjjj What notice is sufficient " ' gy ^ At what stage the taxpayer must have notice 575 The nature of the hearing required gyg I^ight of contest must include questions of apportionment arid valuation 578 Eight to hearing must be absolute g^a TABLE OF CONTENTS. XI tl CHAPTER XVI. Due Pbocess of IjAw in the Collection of Taxes and Enfoecement of Tax Laws. PAGE. dustomary remedies 581 Making taxes personal liabilities 582 Forfeiture of lands 584 Notice of sale 590 ■Giving tax liens priority 591 Selling railroad tracks 591 State constitutions with respect to sales and forfeitures 5H2 Taxing property to agent 595 Selling one man's property to pay another's tax 597 Penalties for failure to comply with tax laws 60y Retroactive laws for the collection of taxes 605 Assignment of the state's remedies 606 Exemptions from execution and taxation do not exempt from tax sales. C06 Making special assessments personal liabilities 607 Personal liability denied 610 CHAPTER XVII. Due Process of Law — Cueative Acts. General rules and principles 614 Prospective and retrospective acts 618 State constitutional provisions as to retrospective curative acts 619 Validating bonds 620 Making tax deeds conclusive 625 Statutes of limitation effectuating tax deeds 628 Reassessments 633 Reassessments by subordinate bodies 636 Reassessments of omitted property 637 Reassessments of undervalued property 638 Arrearages acts 640 CHAPTER XVIII. Equality and Uniformity Generally. General considerations 642 Inherent equality not enforced by courts 643 The Federal guaranty of equal protection of the laws 646 Equality in the state constitutions 647 Equality in local assessments 640 Corporations 650 Specific taxes 6.53 Exemptions 655 Commutations COO Tests of the right of exemption G61 Exemptions of public property 664 Interpretation of corporate exemptions 669 Uniformity throughout the tax district 670 " Single tax " theory 671 Property brought into the state after the assessment day 671 CHAPTER XIX. Equality — Double Taxation. ■ Definition and general considerations 674 Direct double taxation 67tf XIV TABLE OF CONTENTS. PAGE. Presumption against double taxation • „_„ Property and privilege taxation with respect to the same article Taxation of debtor and creditor in respect of the same property o°^ Double taxation of corporate property and shares . , Taxation by diflferent jurisdictions „J.. Taxing bank deposits both to bank and depositor ^ ' Property and shares of building and loan associations ^°^ Deductions of debts °^f Penalties ""^ CHAPTER XX. Equalitt and the Police Poweb, in License, Pbivileqe and Occupation Taxes. General considerations °^^ Revenue measures and police measures distinguished 697 Police regulations as aflfected by equality and uniformity 698- Application of requirements of equality to license taxes, regarded as revenue measures 702 License taxes uniform as to classes 702 Classification by occupation or business 703 Classification by population 706 Classification by amount 709 Unreasonable classification 713 Municipal license taxes must be reasonable 715 Definition of reasonableness 71S Illustrations of unreasonable municipal taxes 716- Illustrations of reasonable municipal license taxes 718 Amounts of license fees which municipalities may impose under the police power 720 License fees imposed for restricting business 724 CHAPTER XXI. Equality and Due Process in Methods of Taxation. General principles 725 Assessment of some property by state boards 727 Where different methods result in inequality 729 Allowing appeal or rehearing in some eases and not in others 730 Making taxes payable at different times 730' Distributing railroad property 731 Rule of valuation 731 Federal Constitution allows different rules of valuation 734- Unit method of valuing railroads, telegraph lines, express companies, etc 735 Inclusion of rolling stock in unit assessment 73ft Unit method applied to telegraph and car companies 738 Intangible assets — express companies 739. Limits of the proportional method 745, CHAPTER XXn. Inheritance Taxes — Equality and Due Process. Discriminations based on relationship ,,^ 747 Exemptions of small estates, and progressive rates ^ 749, Exemptions and progressive rates condemned ^ 752 Retrospective succession tax laws 754 Miscellaneous decisions ygg, TABLE OF CONTENTS. XV CHAPTER XXm. State CoNSTrrnnoNS and Decisions as to Unitobmitt, Equality, and Local and Special Laws. PAGE. Alabama 762 Arkansas 765 California 766 Colorado 771 Connecticut 772 Delaware 772 Florida 773 Georgia 774 Idaho 776 Illinois 777 Indiana 782 Iowa 785 Kansas 78* Kentucky 793 Louisiana 797 Maine 804 Maryland 803 Massachusetts 808 Michigan 811 Minnesota 813 Mississippi 817 Missouri 820 Montana 825 Nebraska 827 Nevada 830 New Hampshire 832 New Jersey 833 New York 837 North Carolina 837 North Dakota 840 Ohio 841 Oregon 846 Pennsylvania 840 Rhode Island 854 South Carolina 855 South Dakota 859 Tennessee 861 Texas 864 Utah , 868 Vermont 871 Virginia 871 Washington 877 West Virginia 881 Wisconsin 882 Wyoming 884 Territories 880 CHAPTER XXIV. Peovisions or the State Constitutions Supplementing the Require- ments OP Equality. Requiring corporations to be taxed the same as individuals 888 Local and special laws 890 (jeneral laws 891 Basis of classification 892 XVI TABLE OF CONTENTS. TAGB. Improper classifications ^^^ Laws applying to but one place ^^^ Laws containing exceptions 900 Special laws for assessment and collection of taxes ^^^ Some questions of constitutional construction ^^^ Where a general law can be made applicable ■ • • ■ ^^^ Requirements that laws of general nature shall have uniform operation. . 906 Releasing claims for taxes, express constitutional provisions relating thereto 908 Interpretation of the foregoing provisions 912 CHARTER XXV. Form and Enactment — Some Provisions Respecting the Methods of Enacting Laws. Requirements that bills shall receive a certain number of votes 916 How far the legislative certification is conclusive 917 Entry on legislative journals 918 Requirement of public notice 921 Requirements that laws have but one subject expressed in its title 921 Expression of subject in title 923 Generality in title 924 Repealing acts 927 Amendatory acts 929 JEffect of inclusion of two subjects 931 CHAPTER XXVI. Retrospective Laws. Definition 932 Eoo post facto laws 933 The contract clause as to retrospective legislation 934 Due process of law as to retrospective legislation 935 Discriminatory retrospective legislation 936 Express constitutional provisions forbidding retrospective legislation... 937 Interpretation of such provisions 938 CHAPTER XXVn. Local Assessments. Constitutional requirements which are applicable 940 Application of provisions forbidding taking private property for public use 940 Application of requirement of due process of law 941 General theory of local assessments 941 Definition 942 Departure in South Carolina from general theory 944 Purposes for which local assessments may be laid 94.5 Assessments for replacing, repairing and maintenance 947 Provisions for future repairs in contracts for public improvements 951 Assessments for purposes the propriety of which has been doubted 955 What items may be included in cost 957 Ohio constitution as to deduction of benefits from awards 959 Resisting assessments for defective work gm Assessment should not exceed cost gg.j Iflgislature to judge of necessity of improvement " gg]j Determining the district of assessment ' ' ' gy^ TABLE OF CONTENTS. 'XVll PAGE. Legislature may group or divide improvements 067 Cases of clear abuse of the power of fixing the limits of the district .... 9Bli Property which may be assessed 972 Assessments on railroads 974 Assessments on street railways 982 Compelling street railways to pave or clean streets 984 Lands perpetually dedicated to a restricted use 98H Laying the cost of an improvement upon adjacent property without actual inquiry as to benefits 990 Cases which hold that cost, as distinct from benefit, cannot be made the basis of assessment 992 Methods of apportionment among property-owners 998 The front foot rule 999 Assessments by area or value lOOli Making each lot pay the cost of the improvement in front of it 1009 Assessments under the police power 1010 Compelling property-owners to keep streets free from snow and ice 1012 Cases where various methods of assessment have been held to be inappli- cable and unreasonable 1014 Where the assessment equals or exceeds the value of the property 1017 Estoppel of property-owners to object to unconstitutional assessment.. 1020 MisceUaneoua matters with respect to assessments 1023 CHAPTER XXVm. Limitations on the Rate or Taxation. Nature and scope 1025 Taxes to which they apply 1025-1026 Attempts to evade constitutional limit by state levy of local tax 1029 Application of limitations of rate to taxes to pay debts 1030 Application of limitations to diflfierent bodies occupying the same terri- tory 1034 Effect of exceeding constitutional rate 1035 State constitutional limitations quoted 1039 CHAPTER XXIX. Limitations of Debt Contracting Powee. General considerations 1051 What debts are included 1052 Voluntary and compulsory debts 1053 Necessary current expenses 1059 Current expenses payable out of current revenues 1061 Anticipation of current revenues 1004 Provisions forbidding the incurrence of debt exceeding annual income. . 1065 Annual supplies of water, gas, and the like 1066 Contracts to purchase, by installment payments 1068 Contracts to purchase in the guise of contracts for annual supplies .... 1068 Express constitutional provisions as to annual supplies 1070 Who is to decide in advance whether debts will exceed current revenues. 1071 Liability for torts as an indebtedness 1072 Changing the form of debt; refunding bonds 1073 Bonds and money in sinking funds 1078 Cash on hand and uncollected taxes 1079 Debts to be paid out of a special fund 1080 Special fund created by profits of municipal plant 1085 Hypothecating public property 1087i Miscellaneous forms of obligation 1083 XVlll. TABLE OF CONTENTS. PAGE. Limitations on municipalities arising out of necessity for statutory authority ]090 Municipal power to issue negotiable bonds :J"^° Constitutional requirements of election on questions of debt 1 1 ni Requirements as to modes of enacting bills creating debts ;••■•, Requirements that provision for payment of debt be made at time of incurrence 1103 What is a sufficient provision 1 106 Classes of debts to which sinking fund requirements apply 1108 Municipal bodies coincident in territory HOQ Application of limitations on state to municipalities 1112 Operation of debt limitations llVd Basis of computation 1115 Miscellaneous matters 1118 Ratification of invalid debts 1116 Effect of exceeding the constitutional limit 1117 Resisting tax to pay judgment, because original debt was in excess of limit 1121 Recovery on quantum meruit or in equity, where debt void 1123 Recitals in municipal bonds generally 1124 Defenses which may be estopped by recitals 1130 Public records 1133 Municipal ordinances 1133 Notice of facts on face of bonds j 1134 General and express recitals 1135 Officers whose recitals are effective 1137 Recitals as to conditions subsequent 1139 Estoppel by delivery and registratioii ' 1139 Estoppel by acquiescence 1142 The Confederate debt 1142 Express provisions of the state constitutions, limiting debt-contracting power 1142 TABLE OF CASES. A. I Aachen y. Omaha 336, Abbott V. Frost Abbott V. Lindenbower . . . 614, 620, Abee! v. Clark Aberdeen Bank Chehalls County. 52, 404. 406, Academy of Sacred Heart v. Irey. . 663, Academy of Richmond County v. Bohler 662, Ackley School District v. Hall .... Adams y. Ashland Adams v. Bank of Oxford Adams T. Beale Adams T. Beloit Adams v. Beman Adams v. Colonial, etc., Mortgage Co Adams T. Bast Elver Savings Insti- tution Adams v. Fisher 948, Adams T. Mississippi State Bank. . A dams v. Nashville Adams v. Boanoke 998, Adams T. San Angelo Waterworks Co Adams T. Shelbyvllle 234, 945, 993, 996, 998, Adams t. Tombigbee Mills . . . .819, Adams y. Tonella (see Revenue Agent V. Tonella) Adams v. Tazoo and Mississippi Valley R. R. Co 527, 658, 820, Adams County v. Quincy 782, Adams Express Co. v. Kentucky . . . 48, 80, 463, Adams Express Co. v. Ohio.... 35, 80, 83, 111, 463, 726, 740, 743, Adams Exp. Co. v. Poe...726, 740, Adamson v. Auditor Addlngton v. Canfield Addyston Pipe and Steel Co.- v. Corry 1063, 1072, Adelphia Lodge, Knights of Pythias v. Crawford 663, Adkins V. Richmond Adler v. Whitbeck -astna Life Ins. Co. v. Lyon County. Agens v. Newark (see State v. New- ark) 20, 945, 948, 999, 1004, Aikman v. Edwards Ailman, In re Alabama, etc., Co. v. Bessemer.... Alabama Gold Life Ins. Co. v. Lott. Alameda Macadamizing Co. v. Prln- gle 952, Alberger v. Mayor, etc., of Balti- more 570, Albrecht V. State Alcorn v. City of Philadelphia .... Alcorn v. Hamer 280, Alden V. Springfield Alexander Avenue, Matter of Alexander v. Gordon Alexander v. Mayor, etc., of Balti- more 281, 649, 828 604 625 626 892 37 408 662 830 775 929 1081 820 625 948 791 71 1110 997 820 409 1004 930 966 1023 638 819 889 974 35 726 48 744 742 783 904 1108 824 427 844 1100 1120 1011 928 91 455 681 954 705 951 649 968 975 630 Page. Alexander v. Railroad^ .. .479, 480, 481 Alexandria, etc., Co. v. District of Columbia 35 Alfalfa Irrigation District v. Col- lins 557, 649, 829, Alison V. Louisville, etc., Ry. Co. . Allegheny County v. Gibson ... 849, Allegheny City v. West Penna. By. Co Allen V. Armstrong 590, 625, Allen- V. County Commissioners of Haford Co 681, 947 137 138 206 981 627 807 808 [xix] Alien V. Davenport . .953, 958, 992, 1003 Allen V. Drew . . .33, 566, 610, 612, 946 Allen V. Inhabitants of Jay... 123, 134 Allen V. Intendant of Lafayette... 1091 1093, 1123 Allen V. Labsap 225, 954 Allen V. National State Bank... 71, 116 Allen V. Pioneer Press Co 892 Allen V. Smith 192 Allen V. Woods 961 Allentown v. Gross 850 Alientown v. Henry 946 Allentown v. Western Un. Tel. Co.. 722 Allison v. Corker 235, 236 Almy V. California 468, 475 Altgeld V. City of Antonio 660 Amador County v. Kennedy 708 Ambrosini v. United States 376 American Coal Co. v. Allegheny County Commissioners ..77, 583, 638 American Express Co. v. Iowa. . . . 422 American, etc.. Express Co. v. St. Joseph 702, 704 American Ins. Co. v. Canter 472 American Mutuoscope Co. v. State Board of Assessors 396 American Refrigerator Transit Co. V. Adams 726 American Refrigerator Transit Co. V. Hall 58, 59, 459, 739 American Steel and Wire Co. v. Speed 97, 466 American Surety Co. v. Great White Spirit Co 930 American Tool Co. v. Smith 627 Americus v. Perry 307, 324 Amery v. Keokuk 562 Ames V. People 772 Amesbury Nail Factory v. Weed . . . Ill Amoskeag Mfg. Co. v. Concord 33 Amos Kent, etc., Co. v. St. Helena. . 800 Ampt V. Cincinnati .",3 Amy V. Mayor of Allegheny 137 Anderson v. Hill 158, 1113 Anderson v. Kerns Drainage Co. . . . 123 163, 783, 892, 901 Anderson v. Santa Anna 621, 623 Anderson County v. Beal 1136 Anderson County v. Ninth Nat. Bk.. 1137 Andes Township v. Ely. .1130, 1131, 1139 Anne Arundel County v. Annapolis. 655 Andrew v. Auditor 385 Andrews v. King County 733 Andrews v. People 920 Andrews v. United States 199 Andrus v. Board of Police 1021 XX TABLE OF CASES. Page. Ankeny t. Blakelej 407, 411, 415 AoDiston V. Southern Ry 434, 455 Anthony v. Caswell 90, 94, 95 Antonl T. Greenhow 517, 525 Antoni t. Wright 520 Antonio v. Gould 931 Antwerp, Matter of 634 Anvil V. Laeger 588 App V. Stockton 1021 Appeal Tax Court v. Gill 78, 92 Appeal Tax Court v. Grand Lodge. . 512 Appeal Tax Court t. Patterson . .67, 595 Appeal Tax Court t. Rice 681, 807 Appelgarth v. State 808 Appleton T. Hopkins 582 Appropriations, In re 1035, 1036 Arapahoe Commissioners v. Cutter.. 66 Arbegust v. Louisville 281 Arkadelphia Lumber Co. v. Arka- delphia 720 Arkansas, etc., R. R. Co. v. Berry. . 526 Armington v. Barnet 490 Armour v. Pinney County Commis- sioners 1103 Armour Packing Co. v. Augusta ... 67 68, 70 Armour Packing Co. v. Savannah . . 70 Arms V. Ayer 892 Arndt v. City ol Cullman 1011 Arnold v. Hawkins 1031 Asberry v. City of Roanoke 611, 999 Asher v. Texas 419, 427 Ashley v. Board of Supervisors. . . . 1098 Ashley v. Ryan 34, 41, 101, 448, 846 Ashley Co. v. Bradford 633 Ashuelot Nat, Bank v. School Dist. . 1097 Askew V. Hale County 265 Assessment and Collection of Taxes, In re 658, 693, 861 Astor V. Mayor, etc., of New York. . 841 511, 619 Asylum v. New Orleans 497 Atchison v. Irving 206 Atchison County v. Lucas 199 Atchison, etc., Ry. Co. v. Clark. 790, 791 Atchison, etc., R. R. Co. v. Maquil- kin 615, Atchison, etc., Ry. Co. v. Peterson. . 618 975 979 335 720 Atkin V. Kansas 225, 330, Atkins V. Philips 719, Atkinson v. Great Falls 1081 Atlanta v. First Presb. Charcli.973, 974 Atlanta v. Hamlein 1018 Atlanta etc.. Building and Loan Assn. V. Stewart. 52, 66, 683, 690, 691 Atlanta and Florida R. R. Co. v. Wright 775 Atlantic, etc., Ry. Co. v. Lesueur. . 60 Atlantic and Pacific Telegraph Co. V. Philadelphia 445, 446, 722 Atlas Peed Products Co. v. New Or- leans 801 Attorney-General V. Bank of Char- lotte 501 Attorney-General v. Bay State Min- ing Co 101, 810 Attorney-General v. Fltzjohn 364 Attorney-General v. Gardner 364 Attorney-General v. Gill 364 Attorney-General v. Jochlm 555 Attorney-General v. Massachusetts Pipe Line Gas Co 810 Attorney-General v. Mayor of Nor- wich 199 Attorney-General v. Mlddleton 364 Attorney-General v. Railroad Co... 490 Attorney-General v. Rice 921, 924 Attorney-General v. Supervisors of Sanilac County 681, Attorney-General ex rel. Barbour v. Plngree • ■ ■ • Auburn v. Paul 649, 805, 946, Audrey v. City of Dallas Auffmordt v. Hedden Augusta V. Dunbar • ■ • Augusta V. Kimball 90, Augusta V. McKibben Aurora, The Aurora v. McGannon.679, 680, 705, Aurora v. West Auryanson v. Hackensack Improve- ment Commission 235, Austin v. Austin Gas, etc., Co. .659, Austin V. Cahill 516, 1031, Austin V. Coggeshall Austin V. District Township Austin V. McCall Austin V. Seattle Austin V. State Austin V. Tennessee Austin V. Valle Ayers, Scott & McCabe, In re B Babb V. Reed Babel v. People 924, Backus V. Lebaun Bacon v. Board of State Tax Com- missioners 78, 116, 417. 685, Bacon v. Mulford 836, Bacon v. Savannah 969, 992, Badart, In re Baer v. Choir Bagby v. Bateman Bagwell V. Lawreneeville Bain v. Richmond and Danville Ry. Co Baker v. Baker v Baker v Baker v. Baker v. Baker v Baker v. Baker v. Page, 812: 158 996- 1022 567 66^ 95 1001 275 822 137 834 66(V 1034 220, 1096- 1109- 1081 474 437 1117 517 Cincinnati 720, Kaiser Kelly King County Portland City of Seattle 1073, State Inhabitants of Windham. . Bakewell v. Police Jury Balch v. Beach 1079, Baldwin v. First Parish of Fitch- burg Baldwin v. Fuller 235, Baldwin v. Hewitt Baldwin v. Oswego Baldwin v. Shine Baldwin v. Commissioners of Wash- ington County 86, Ballard v. Hunter Ballentyne v. Wickersham Baltimore v. Allegany County Com- missioners 112, 808, 898, Baltimore v. B. & O. Ry. Co Baltimore v. Canton Co Baltimore v. Cemetery Co 973 Baltimore v. Gill Baltimore v. Howard Baltimore v. Hussey Baltimore v. Johns I-Iopkins Hospi- tal 570, 581, Baltimore v. Johnson Baltimore v. Raymo [][ Baltimore v. Keeley Institute. .19o" Baltimore v. Reitz * ' Baltimore v. Safe'' Deposit and Trust Co Baltimore v. Scharf ' 5V0' Baltimore v. Smith Brick Co ' Baltimore v. State ' ' ' 664 928 490' 813- 901 1003 365 614 1106 930 60- 844 928 627 T32 .=i35 1116- 766- 192 234 HIT 93- 834 583 1081 90- 87 575- 931 905- 501 807 974 1088 58a 67 996- 32 961 316- 326 9» 996 958. 30T TABLE OF CASES. XX r Baltimore, Mayor of v. State ex rel. Board of Police of Baltimore. . . . Baltimore v. Stewart. Page. 272 996 92 973 978 933 1070 134 638 Baltimore v. Stirling 91 Baltimore v. Uhlman 636, 996, 1004 Baltimore County Commissioners t. Maryland Hospital for Insane . . . Baltimore, etc., Ky. Co. v. Belmont County 975, Baltimore, etc., Ry. Co. v. Ketring. 1023 Baltimore, etc., Ry. Co. t. Mayor.. 527 Baltimore, etc., Ry. Co. v. Nesbit. . . Baltimore, etc., Ry. Co. v. People . . Baltimore, etc., R. R. Co. v. Spring. Baltimore, etc., Ry. Co. v. Wicomico Co •. 114, 528, Baltimore Shipbuilding, etc., Co. v. Mayor 385 Banaz v. -Jmith 291, 606, 991, 1003 Bancroft v. Lynnfield 199 Bancroft t. Wicomico County . .500, 527 Barger's Appeal 852 Pangor t. Masonic Lodge .... 655, 664 Bangor, etc.. By. Co. t. Smith 504 Bank Tax Cases 37 Bank v. Supervisors 381, 382 Bank v. Worrell 651 Bank of Chenango v. Brown 280 Bank of California v. San Fran- cisco 34, 53, 415 Bank of Chillicothe v. Ma'J'or 1095 Bank of Commerce f. New York 381 382 408 655 683 791 769 280 295 Bank of Commerce v. Seattle .... Bank of Commerce v. Tennessee . . 674, Bank of Garnett v. Ferris . . . .733, Bank of Mendocino v. Chalfante. . . Bank of Rome v. Village of Rome. 294, ..„ Bank for Savings v. Grace 1078 Bank of Shreveport v. Board of Assessors 383 Bank of Sonoma County v. Fair- banks 326 Bank of Woodland v. Pierce 71 Banks v. Mayor 381, 382 Bannon v. Burnes 625, 626 Banta v. Chicago 702, 703 Barber v. Farr 06 Barber Asphalt Paving Co. v. French 562, 992, 1001 1003 Barber Asphalt Paving Co. v. Gogreve 311, 649. 804, 941, 1026 Barber Asphalt Paving Co. v. Hezel 953 Barber Asphalt Paving Co. v. St. Joseph 310 Barber Asphalt Paving Co. v. Ullman 953 Barber Asphalt Paving Co. y. Watt 613 Barber Asphalt Paving Co. v. Willcox 226 Barbier v. Connolly 554, 646 Barbour v. Louisville Board of Trade 655, 794 Barclay, Matter of 946 Bardwell v. Harlow 1032 Barfield v. Gleason 992, 1007 Barhyte v. Shepherd 577 Barker v. Omaha 569 Barker v. .Southern Construction Co 611 Barksdale v. Sampson County 1033 Barlow v. Tacoma 1021 Barnard v. Knox County 1054 Barnes v. Dyer 999 Barnes v. Lacom 323 Page. Barnes v. Woodbury 99 Barnett v. Denison 334, 1099' Barnett v. Patterson 199' Barnum v. Okolona 1099 Barrett v. Kevane 788 Bartlett V. Carfer 44 Bartlett v. Wilson 604, 61 ."j. Barto V. Himrod 27:;. 278, 279- Barton County v. Walser 623 Barry v. Edmunds 520- Bass V. Columbus 621, 623, lllff Bassett v. r^i j.aso 1104, 1107 Bastle V. Des Moines 1073- Bates V. Boston 94 Bates County v. Winters 1088- Batterman v. City of New York . . 949' Battle V. Mobile 58. 64, 2S1 Bauman v. Eoss 945, 990, 999- Baumgardner v. Fowler 625 Bausman v. County of Lancaster.. Ill Baxter v. Jersey City 1004 Bayle v. New Orleans 226 Beals v. Amador Co 192 Beard v. City of Hopkinsville.1060, 1067 Beatrice v. Edminson 1130' Beatrice v. Brethern Church 974 Beatrice v. Wright 590' Beaumont v. Wilkesbarre City.OoO, 851 Bebb V. People ex rel. Kocher- sperger 286 Beck V. Allen 281 Beck V. Holland 966 Beck V. Obst 573. Becker v. Goddard 1004 Beebe v. Magoun 568, 569, 574 Beecher v. Detroit 972: Beecher v. Supervisors of Webster County 787 Beechwood Ave. Sewer Cases.. 231, 560- 967 Beers v. People 619- Belknap v. Louisville 1101, 1102 Bell V. Farmville Ry. Co 1116. Bell V. Maish 903 Belleville Nail Co. v. People 48 Bellinger v. White 38S Bellows V. Weeks 614, 1024 Bellows Falls Canal Co. v. Rock- ingham 33- Bells' Gap R. R. Co. v, Pennsyl- vania. . .574, 577, 589, 674, 692, 709- 734 Belo V. Commissioners of Forsyth County 52, 68a Belolt V. Morgan 621 Bemis v. Boston 67, 96; Benjamin v. New York 215 Benn v. Chehalis County 73.3- Bennett v. Boggs 15 Bennett v. Buffalo 6IO1 Bennett v. Hunter 590 Berks Street, In re 975 Bernards Township v. Morrison. . . . 1138- Berry v. Baltimore 918- Berry v. Windham 679, .833 Bessemer v. Tennessee, etc., Co. . . . 733- Bessette v. People 708, 716. Bickerdike v. Chicago 971, 983 Biddle v. Oaks 604, 769 Biddle v. Terrell 1109' Bidwell v. Coleman 650, Sl7 Bidwell V. Pittsburgh 1021 Billard v. Board of Education of Topeka 180- Billings V. Illinois 748- Billings y. People 748 Billinghurst v. Spink County 68 Binninger v. City of New York. . . . 98tt Binns v. United States 332, 300, 361 XXll TABLE OF CASES. Page. Birch V. Owensboro T96 Birdseye t. Village of Clyde 1022 Birmingham t. Birmingham Water- worlss Co 650 Birmingham v. Klein 993, 1004, 1026 Bishop V. Tripp 1023 Blssell V. Jeffersonvllle 1117 Blssell T. Spring Valley 1090 Bltzer V. Thoiiipson 718 Black V. Chester 1063, 1066 Black V. McGonlgle 1038 Black V. State 748, 751, 754 Blackmer v. Royal Ins. Co 650 Blaekstone, Matter of 74, 109 Blackstone v. Miller, 74, 75, 77, 89, 99, 109, 110, 116, 121, 533, 686 Blades v. Water Commissioners. . . . 327 Blagge T. Balch 192, 193 Blaiu T. Irby 67 Blair T. Forehand 700 Blake v. McCluug 546 Blaker v. Hood 923 Blanchard v. Benton 1064, 1089 Blanchard v. Bissell 249 Blanding v. Burr 280 Blanks v. Monroe 1066 Blights Estate 751 Bliss' Petition 552 Bloehman t. Spreekels 954 Bloomingdale v. Bourland 427 Bloomingtou v. Chicago, etc.. By. Co 955 Bloomington v. Latham 960 Bloomington v. Eeeyes 894 Bloomington v. Wahl 716 Bloomington Cemetery Association V. People 973, 974 Blount T. Janesvllle 948 Blount v. Munroe Co 474 Bloxham v. Florida Cent. E. E. Co. 637 657, 773 Blueflelds Banana Co. v. Board of Assessors 72 Blue Island v. Fames 947 Blue Jacket v. Johnson County Commissioners 385 Blume V. Bowes 834, 835 Blyth V. GranTille 364 Board y. Day 1095 Board v. State 237 Board of Commissioners v. Bearss. 195 620 Board of Commissioners v. Blake.. 1031 Board of Commissioners v. Citizens' National Bank 400 Board of Commissioners T. Herreli. 649 784 Board of Commissioners v. Platner, 1021 904 913 337 340 904 254 290 964 313 Board of Commissioners v. Smith . Board of Commissibners v. Trustees . Board of Commissioners v. Vaudries. Board of Councilmen v. Scott Board of Directors v. Houston Board of Directors t. Tregea. . . .288, Board of Education v. Kingfisher . . . Board of Education v. McLansbor- ough 199, 200 7'.oard of Education v. Minor 181 Hoard of Education t; Old Domin- ion 583 Board of Education v. State 219. 938 Board of Education v. State Board of Assessors 813 Board of Education v. Winchester. . 1102 Board of Fducatlon of Cortland v. Board of Education 259, 505 Page. Board of Education of Normal School District v. Blodgett. . . . ■■■••.• • ' Board of Education of Woodland v. Board of Trustees. . . . •■••^■^^01 Board of Improvement V. S'cnooi rHqtrict ' Board etc., of Jackson Square v. ^^^ New Orleans ........ • • ■ • • • Voq 702 Board of Regents v. Hamilton .^69 79.J Board of Revenue v. Montgomery ^^^ Boa?d ^of"R?venue " of ' Jefferson ^^^ BoSH? Tjnde"rwrlVers v.- Whipple. 293 ioafd of State Tax Commissioners ^^^ BoardmSrV.Beciwia':::.'.'.:.'614; 786 Soirdman T. Board of Supervisors. 67 Bogert V. Elizabeth -g— ^«»| Bohmer v. HafEen .......-•■ • • • • • 931 Boise City v. Union Bank and Trust qq x±ua Bolles v.' Br'imfield 623 Bolton V. Cleveland ■ • • o^« Bonaparte v. State so. »' Bonaparte v. Tax Court " ' Bond V. Brand's Trustee '«« Bond V. Newark ;,•■•■,! crT Bon Homme County v. Berndt 86I Bonney v. Reed »-» Bonsall v. Mayor ■ • ■ • • • • • l"" Bborum v. Connelly 891, 892, 924 Booth V. Phelps gl Booth V. People - • •_• . ■ ■ • »»» Booth V. Woodbury 19o, 196, 620 Bordages v. Higgins oio Borden's Appeal. 5* Borden v. Trespalacios. ...... .... 9^9 Boston V. Boston, etc., Ey. Co.. 982, 999 Boston V.Shaw 811, 1009 Boston Asylum v. Boston Street Commissioners 97d Boston Mfg. Co. v. Newton 32 Boston, etc., Co. v. State. 651, 670, 833 Botts V. Louisville 95 Bound v. Wisconsin Central Ry. Co. Bounties to Veterans, In re 196 Bourn v. Hart 200 Bowdoinham v. Eichmond 261 Bowles v. Landraff 833 Bowles V. State 234 Bowlin V. Cochran 925, 955 Bowman v. Chicago, etc., Ry. Co. . . 437 Bowman v. Cockrlll 627 Boyd V. Bryant 903 Boyd V. Milwaukee 952 Boyd V. Selma 66 Boye V. CJirardey 802 Boyer's Appeal 410 Boyer v. Boyer 410 Boyer v. Grand Rapids Fire Ins. Co. 928 Boyer v. Jones 604 Boyle V. Brooklyn 1024 Boyles v. Boyles 630 Bozeman v. Cadwell 582 Bradley, Re 1023 Bradley v. Bauder 52, 78, 685 Bradley v. Town Council of Ham- monton 199 Bradley v. Lincoln Co 635 Bradley v. McAtee 281, 511, 514 Bradley v. People 37, 683 Brady v. King 637 BrainSrd v. Colchester 490 Bi^ass V. Eathbone 33, 567 Braun, Ex parte 291 Braun v. Chicago 779 Braybrooke v. Attorney-General .... 364 TABLE OF CASES. XXUl Brazoria County v. Youngstown Bridge Co Brenham t. German-Amei-ican Bank. Brennan v. Brighton Beacli Racing Association Brennan v. Mississippi Home Ins. Co Brennan v. Titusvllle . 427, 428, 429, BreToort t. Detroit Brewer y. Mayor of H^inttngdon . . . Brewer v. Springfield Brewer Bricls Co. v. Inhabitants ol Brewer 292, 660, Brewis v. Dnluth Brewster t. Hough.. 490, 658, 833, Brewton v. Splra Briggs, Trustee v. Town of Eussell- ville Briggs T. Union Drainage District. Briggs V. Whipple 192, Bright V. Chenango County Bright v. McCuliough 654, 670, Brighton v. Wilkinson Bringham v. Bristol Brimmer v. Eetman Briscoe v. Coulter Bristol T. Johnson Bristol V. Washington County. . .57, Bridge Proprietors v. Hohoken Co. . Bridgeport v. Housatonic Ry Bridgeport v. New York, etc., Ey. Co 974, Bridgewater v. Big Beayer Bridge Co Broadfoot v. Fayetteville 517, Broadnax v. Baker Brodnax v. Groom Broad Street, In re 851, Broadway Baptist Church v. Mc- Atee 574, 612, 948, 964, 992, Brocken borough v. Water Commis- sioners of Charlotte Brockway v. Roseburg Brodhead v. Milwaukee 123, Brodle v. McCabe Bronson, Matter of. .31, 75, 77, 108, Bronson v. Klnzie 523, Brooke t. Philadelphia Brookfleld y. Tooey 822, Brooklyn v. vSJtna Life Ins. Co Brooklyn Park Commissioners v. Armstrong Brooks. V. Baltimore Brooks T. Hyde Brooks V. Mangan 717, Brooks V. Schultz 1025, 1027, Brooks V. Tripp Broughton v. Pensacola Brown, Bx parte Brown, In re Brown's Appeal Brown v. Bon Homme County .... Brown v. Corry 1068, Brown t. Denver 569, 903, Brown v. Galveston Brown v. Houston 97, 424, 429, Brown v. Jenks 952, Brown v. Keener 164, Brown v. Levee Commissioners . . . Brown v. Maryland. .419, 423, 425, Brown v. New Jersey Brown v. Orangeburg County Brown v. Providence Brown v. Russi^Il Page. 1123 1097 1098 701 820 445 636 918 1008 804 521 974 1130 254 1023 199 199 783 234 206 477 625 200 69 77 489 137 980 930 521 443 921 1U21 1007 1087 1067 195 515 110 524 1078 1026 1130 326 941 892 718 1029 838 520 928 628 1115 1100 1084 904 325 465 466 954 947 557 437 473 549 206 928 714 Brown v. Selser 802, Browne v. Turner 310, Btownell V. Town of Greenwich . . . Brownsville v. Loague Bruce V. Pittsburgh 853, Bruning v. Chadwick 992, Brunn v. Murphy Brush V. Baker Bryan v. Stephenson Bryant, Matter of Bryant v. Robbins Buchanan v. Litchfield 1115, 1116, 1132, Buchanan v. County Commissioners of Talbot County Buck V. Beach 68, 69, Buck V. Miller 67, 68, 637, Buck V. People Budd V. New York Buell V. Ball 253, Buffalo Cemetery Association v. City of Buffalo Buffalo City Cemetery v. Buffalo.. BuiTalo & S. L. R. E, Co. v. Super- visors of Erie County Bull V. Read Bunch V. Fluvanna County Buncombe v. Payne Bunkie Brick Works v. I?olice Jury. Burch V. Earhart Burch V. Savannah 724, Burcham v. Terry Burd Orphan Asylum v. School District 185, Bureau County v. Chicago, etc., Ry. Co 733, Burgess v. Pue Burlce v. Badiam. . . .676, 683, 687, Burlington v. Beasley Burlington v. Quick 609, Burlington v. Putnam Ins. Co Burlington v. TJnterkircher Burlington Lumber Co. v. Wiilets.. Page. 803 337 1131 1122 1115 1003 626 604 1102 238 1011 1099 1135 806 785 640 619 420 608 973 945 973 234 282 1098 919 556 1116 775 386 664 778 281 759 135 619 720 719 98 468 Burlington, etc., Ry. Co. v. Lan- caster County 829 Burlington, etc., Ry. Co. v. Saunders County 930 Burlington, etc., Ey. Co. v. Spear- man 975 Burlington, etc., E. E. Co. v. York County 655 Burlington Savings Bank v. City of Clinton 1082, 1135 Burlington Water Co. v. Woodward.. 1088 Burmeister, Matter of 945 Burnes v. Atchison 992, 1003 Burnett v. Markley 1055 Burnett V. Sacramento 1008 Burnligm v. Milwaukee 900, 1088 Burns Levee District v. Mialegvich . 1026 Burwell v. Burgess 474 Burr V. Carbondale 239 Busbee v. Commissioners of Wake County 649, 839 Bush V. Indianapolis 930 Bush V. Peoria 950 Bush V. Board of Supervisors of Orange County 196 Bushneli v. Beloit 1113 Butin, Ex parte 434 Butler's Appeal 282 Butler V. Bailey 604 Butler V. Dunham 137 Butler V. Supervisors of Saginaw County 569, 614, 615 XXIV TABLE OF CASES. Page. Butler V. State 920 Butner v. BoileuUet 927 Butte v. School District 949, 989 Butte County v. Merrill 930 Byram v. Detroit , 635, 1021 Cable T. Altoona 1108 Cadillac v. Woonsocket Inst, for Savings 1098 Cahill V. Hogan 927, 931, 1104, 1109 Cahoon v. Coe 569 Cain T. Davie County 840, 947 Cain V. Omaha 997, 1019 Cain V. Wyoming 1066 Cairo v. Zane 1136 Cairo, etc., R. E. v. Parks 625 Calder v. Bull 933 Caldwell v. Cuyahoga County 206 Caldwell v. Justices 137, 280, 282 Caldwell v. Lincoln 717 Caldwell v. North Carolina ...428, 430 435, 436 Calhoun v. Millard 1142 California v. Central Pacific Ry. Co. 391 393, 395 Callahan ■/. Woodbridge 109 Callam v. Saginaw 308 Callanan v. Hurley 626 Cambridge Springs Co.'s Appeal . . . 734 Camden v. Allen 28, 583 Camden v. Camden Village . . . 805, 973 Camden v. Johnson 1006 Cameron v. Burlington 92 Cammersou v. Stephenson 281 Campbell v. Anthony 582 Campbell v. Chicago, etc., Ry. Co.. 420 Campbell v. Cook 923 Canuon v. New Orleans 481 Candva v. State 266 Cape Girardeau v. Campbell 481 Capital City Dairy v. Ohio 549 Capital City Gas Co. v. Des Moines . 488 Capital City Water Co. v. Board of Revenue 764 Carlin v. Cavender 611 Carlisle v. Hetherlngton. .234, 270, 844 Carondelet Canal Co. v. Parker. . . . 446 Carpenter v. Furrey 930 Carpenter v. Pennsylvania. 755, 756, 759 Carr v. Coke 917 Carre v. City of New Orleans 802 Carrier v. Gordon 467 Carroll v. Alsup 727 Carroll v. SatEord 385 Carroll County v. Smith 1102 Carroirton v. Bazette 434 Carron v. Martin 1024 Carson, v. Brockton Sewerage Com- mission 562, 563. 946, 948, 949 Carson v. St. Francis Levee Dis- trict 234, 289, 577, 904 Carson v. State 434 Carstairs v. Cochran 595 Carter v. Dow 700 Carter v. Greenhow 517 Carter County v. Sinton 924 Cartersville Improvement, etc., Co. V. Cartersville 659, 660, 661, 775 Cartersville Waterworks Co. v. Car- tersville 639. 661, 775 Carthage v. First National Bank. . . 399 401 Carthage V. Frederick 717, 1012 Carthage v. Rhodes 700 Cary v. Pekin 253 Case V. Dean 625, 631 Cass County v. Chicago 736 Page. Cass County v. .Johnston. ....••■ • 11^2 Cass County v. Wilbarger County. . IIW Cass Farm Co. v. Detroit. 991,^992, 1001 Cass Township v. Dillon.. 137, 195, ^28^ Cassitt V. Neuscheler 96| Castillo V. McConnlco g'* Castner v. Minneapolis f^» Catlettsburg v. Self -i"»;^ Catlin V. Hull • • • • 1 ii?i Catron v. Lafayette County Ill* Cave V. Houston • • • ■ "»* Cedar Rapids & M. R. Co. v. Car- roll County "0* Cemetery of Mount Auburn v. Cam- bridge * • • 9o.f Centerville v. Fidelity, etc., Co 1066 Central Branch U. P. Ey. Co. v. Smith 134 Central, etc., Co. v. Febring 928 Centrallowa Ry. Co. v. Board of Supervisors 727, 78(> Central Land Co. v. Bayonne 1004 Central Pacific Ey. Co. v. California. 391 Central Pacific Ey. Co. v. Board of Equalization 768 Central Pacific Ry. Co. v. Nevada.. 386 Central R. R. v. Georgia 530 Central R. R. Co. v. State 490 Central R. R. v. Jersey City 58 Central Trust Co. v. Wabash, etc., Ry. Co 392 Chadbourne v. New Castle 206 Chaddock v. Day 717 Chadwick v. Kelly 961 ChatEee County v. Potter 1127, 1128 1130, 1132. 1135, 1138 Chalfant v. Edwards 854 Chaliss V. Eigg 791 Challiss V. Parker 234 Chambe v. Probate Judge 812 Chamberlain, Ex parte 392 Chamberlain v. Taylor 614 Chamberlain v. Walter 732, 859 Chamberlain v. W-oolsey 588 Chance v. City of Portland 961 Chapin v. Worcester 1006, 1023 Chapman, Matter of v. City of New York 202, 203 Chapman v. Douglas County 1123 Chapman v. National Bank of Wel- lington 694, 844 Charity Hospital v. Stickney 701 Charleston v. State ex rel. Hager . . 98 Charleston, etc.. Bridge Co. v. Kan- awha County Court 727 Charlotte v. Shepard 1061 Charlotte Building c& Lonn Assn. v. Commissioners of Mecklenburg County 692 Charlotte, etc., R. R. Co. v. Gibbes. 553 Chai-nock V. Levee Board 649, 804 Chase v. Trout 577 Chatham County v. Seaboard Air Line 979 Chattanooga v. Nashville, etc., R. R. Co 660 Chauvin v. Valiton 602' Cheaney y. Hooser 254, 281 Chehalls Boom Co. v. Chehalis County 43; Chelsea Savings Bank v. Ironwood. 1123 Cheltenham Township Road 853 Chemung Canal Bank v. Supervisors. 1097 Cheney v. Beverly lOOtt Cherokee Tobacco 535 Cherokee v. Fox 701, 7i!> TABLE OF CASES. XXV Page. Chesapeake & Ohio Ry. v. Miller. 526 528 Chesapeake, etc., Ry. Co. v. Virginia, 530 Cheshire v. County Commissioners of Berkshire 809 Cheshire County Telephone Co. v. State 683 Chesney v. McClintock 904 Chester City v. Black 635, 650, 851 Chester City v. Western Union Tel- egraph Co 720, 721 Chester County y. White 858 Cheyenne County v. Commissioners. 266 Chicago V. Baptist Theological Union 782, 973 Chicago V. Blair 169, 949, 950 'Chicago V. Brown H65 Chicago V. Chicago 974 Chicago V. Chicago Union Traction Co 987 Chicago V. Collins 676, 680, 724 Chicago V. Galpin 1067 Chicago V. Law 957 Chicago T. Manhattan Cement Co. . . 206 Chicago V. McDonald 1063, 1080 Chicago T. Netcher 698, 706 Chicago v. O'Brien 1013 Chicago v. People 669 Chicago V. Wilson 945, 965 Chicago etc., Ry. Co.. t. Atchi- son County 733, 791 Chicago, etc., Ry. Co. t. Boone County 733, 778 Chicago, etc.. By. Co. t. Chase County 1099 Chicago, etc., Ry. Co. v. Chicago.. 948 983 Chicago, etc.. By. Co. v. Cuming County 267 Chicago, B. & Q. Ry. Co. v. Cutts. . 709 Chicago, R. I. & P. Ry. Co. v. Davenport 385 Chicago, etc., Ry. Co. v. Elmhurst.. 975 Chicago, etc., Ry. v. Independent District 786, 904 Chicago, B. & Q. Ry. Co. v. Iowa. . 709 Chicago, etc.. By. Co. v. Joliet. . 979 Chicago, B. & Q. R. R. Co. t. Klein. 289 1034 Chicago & Alton R. R. Co. v. Liv- ingston County 778, 733 Chicago, etc., Ry. Co. t. Milwaukee. 592 981 Chicago, etc., By. Co. v. Miller 676 Chicago, etc., Ry. Co. v. Murphy. . . 788 Chicago, etc.. By. Co. v. Nemaha County 1038 Chicago, etc., Ry. Co. v. Ottumwa. 981 Chicago, etc., Ry. Co. v. People. 676, 975 Chicago, etc., Ry. Co. v. Richardson County Ill, 578 Chicago, etc., Ry. Co. v. Seip 782 Chicago, etc., Ry. Co. v. Shea 1113 Chicago, etc., B. R. Co. v. Smith... 138 Chicago, etc., Ry. Co. v. State 448 Chicago Theological Seminary v. Ill- inois 511 Chicago Theological Seminary v. People 662, 781 Chicago Union Traction Co. v. Chi- cago 946, 975 Chicago University v. People 973 Childs V. Anacortes 1115 Childs V. Perry 908 Chiniquy v. People 619 Chippewa County v. Auditor-General. 813 Chivers v. People 442 Choisser v. People 624, 1117 Chrisman V. Brookhaven. .670, 820, 892 Page. Christ Church r. Philadelphia 511 Chrystal v. Macon 436 Church, Matter of 891 Church V. People 962, 969 Chy Lung v. Freeman 468 Cicero v. Green 958 Cincinnati v. Batsche 966 Cincinnati v. Brysom ....446, 719, 720 Cincinnati v. Buckingham 582 Cincinnati v. Connor 843 Cincinnati V. Mauss 1022 Cincinnati, etc., Co. v. Catlettshurg. 457 Cincinnati Gas, etc., Co. v. State.. 844 Cincinnati, etc., Ry. Co. v. City of Cincinnati 295, 959 Cincinnati, etc., Ry. v. Commission- ers 187, 275 Cincinnati, etc., Ry. Co. v. Common- wealth 580, 726, 727, 729 Cincinnati, etc.. By. Co. v. Inter- state Commerce Commission.... 421 Cincinnati, etc., Ry. Co. v. Sullivan. 988 Citizens' of De Soto Parish v. Wil- liams 1103 Citizens' Bank v. Bouny 803 Citizens' Bank v. Terrell 1104, 1108 1120 Citizens' Nat. Bank v. Conn 915 Citizens' By. v. City Ry 488 Citizens' Savings Bank v. Owens- horo 505 Citizens' Savings Bank v. Town of Greenburgh 1131 Citizens' Savings Assn. v. Perry County... 1099, 1101, 1132, 1136, 1142 City of , see name of city ; also see Mayor v. , Com- mon Council V. , and the like. City V. Ernst City V. Schulenherg Co City & Suburban Ry. Co. v. Savan- nah City Council, Ex parte City Item Co-Operative Printing Co. V. New Orleans 913, City National Bank v. Paducah. ... City Water Supply Co. v. Ottumwa. Claiborne County v. Brooks Clapp V. Cedar County Clark V. Adderman Clark V. Braden Clark V. Chicago Clark V. Connor Clark V. Des Moines Clark V. Flnley Clark V. Janesyille '. Clark V. Louisville Water Co.. 666, Clark V. Mead Clark V. Town of Noblesville Clark V, Town of Northampton. . . . Clark V. School District 1092, Clark V. Powell Clark V. State Clark V. Titusville Clark & Murrell v. Port of Mobile. Clarke v. Rochester Clarke v. Tyler Clason v. New Orleans 72, Clay V. Central Ry. Co Clear Lake v. Clear Lake Co Clee v. Sanders Clegg V. Galveston County Clementi v. Jackson 614, 615, Clements v. Casper Clements v. Hale Cleneay v. Norwood 801 481 292 915 400 411 1116 1123 1096 1112 95 535 971 627 1097 891 1095 669 625 784 1142 1095 91 225 710 651 280 520 75 930 206 134 584 618 427 569 906 XXVI TABLE OF CASES. Page. Cleveland v. Clements' Brothers Construction Co 225, 332 Cleveland v. Heisley 845 Cleveland v, Tripp 992, 1003, 1007 Cleveland Library Assn. v. Pelton. . 843 Cleveland, etc., Ry. Co. v. Backus.. 58 60. 80, 110, 111, 462, 726. 727, 784 Cleveland, etc., Ry. Co. v. TJrbana, etc., Ry. Co 900 Cleveland Trust Co. v. Lander.... 845 Clincli, Matter of 109 Clifton V. Wynne 1034 Clinton Ave., Matter of 973 Clinton v. I-Ienry County . .611. 973, 974 Clinton v. Wallilter 614 Clodfelter v. State 201 Coal Ridge Improvement, etc., Co. V. Jennings 727, 849 Coal Run Co. v. Finlen 727, 780 Coats V. Campbell 123 Coatsville Gas Co. v. Cliester County 849. 852, 903 Cobb v. Bord 892 Cobb V. Durham County 682, 839 Cobb V. Elizabeth City 671, 838 Coco V. Thieman 627 Coe V. Brroi 97, 466, 467 Coffman v. Keightly 195 Coggeshall v. Des Moines 1021 Cohn, Ex parte 831 Cohn V. Kingsley 917, 920 Cohn V. Tax Collector 802 Cohn V. People 923 Coit V. Sutton 427 Coite V. Connecticut, etc., Co 35 Colburn v. Railroad 1092, 1097, 1101 Coldwater y. Tucker 247 Cole V. Hall 700, 720, 779 Cole V. La Grange 134, 135 Cole V. People 952, 953 Cole v. Shreveport 1109 Cole V. State 194, 216, 217, 221 Coleman v. Shattuck 627 Coler V. Cleburne 1138 Coler V. Dwight Township. .. 1136, 1138 Colfax Highway Commissioners v. East Lake Pork Special Drainage District 163 Collector v. Day 373, 393 Coloma V. Eaves... 393. 1130. 1138, 1138 Colorado Co. v. Commissioners .... 386 Colorado Seminary v. Arapahoe County 663 Columbia Ave., etc., Co. v. Dawson. 660 1066 Columbia Bottom Levee Co. v. Meier 166 947 Columbus V. Sohi 1021 Columbus Southern Ry. Co. v. Wright ..110, 726, 729, 731, 738, 892 Colusa V. Glenn 768 Comanche County v. Lewis. .. .521, 1139 Comer v. Poisom 195, 620 Comlns V. Eddington 196 Commercial Bank v. Chambers. 58, 407 412, 414, 694, 695 Commercial Bank v. lola 123 Commissioners v. , see names of Counties ; Commissioners, In re 892 Commissioners v. Bolles 1136 Commissioners v. Carter 624 Commissioners v. Colorado Semi- nary 663 Commissioners v. Farmers' National Bank 400 Commissioners v. Lang 569 Commissioners v. Lucas Commissioners v. Patterson Commissioners v. Rocky Mt. News Co 32, Commissioners v. Snuggs Commissioners v. Wilson Commissioner of Highways v. Drainage Commissioners Commissioners of Immigration v. North German Lloyd Commissioners of Revenue v. State. Commissioners of Sinking Fund v. Linden Common Council v. Board of Assess- ors • • ■ Commonwealth v. American Dredg- ing Co Commonwealth v. American Bell Telephone Co Commonwealth v. Anderson Commonwealth v. Bank of Com- merce Commonwealth v. Beech Creek Ry. Co Commonwealth v. Brown. .715, 727, 923, Commonwealth v. Brush Electric Light Co Commonwealth v. Byrne Commonwealth v. Chariotteyille, etc., Co 36, 52, Commonwealth v. Central, etc., Tel- ephone Co 394, Commonwealth v. Citizens' Nat'l Bank Commonwealth v. Clark 711, Commonwealth v. Colton Commonwealth v. Conglomerate Mining Co Commonwealth v. Delaware, etc., Ry. Co 35, 58, 59, 452, 686, Commonwealth v. Delaware Divi- sion Canal Co 711, 727, 849, Commonwealth v. Easton Bank. . . . Commonwealth v. Edison Electric Light Co 394, Commonwealth v. Failbrook Coal Co 52, 679, 683, 684, Commonwealth v. Fayette Commonwealth v. Firemen's Relief Assn Commonwealth v. First National Bank 37, Commonwealth v. Fowler Commonwealth v. Gaines 595, Commonwealth v. Germania Brew- ing Co 658, 711, Commonwealth v. Gilligan Commonwealth v. Hamilton Mfg. Co 43, Commonwealth v. Hayes Commonwealth v. Henderson Bridge Co Commonwealth v. Hillside Cemetery Co Commonwealth v. Jarecki Mfg. Co.. Commonwealth v. Lake Shore, etc' Ry. Co Commonwealth v. Lancaster Sav- ings Bank Commonwealth v. Lay '.,'_ Commonwealth v. Lehigh Coal" & Navigation Co 52, 684 Commonwealth v. Lehigh Valley Ry' Co 562, 727 Commonwealth v. Louisville Water Co Page. 93+ 282 648. 91 » 772 94T 468: 324 32» 591 670 66- 102 854 79S 4S 730^ gsO' SoO' 581 683r 39S 604 sso. 701 102 852 85(> 501 39J 852 504 197" 404 797 596- 851 854 810> 66 889' est 852 734 44 GOT 852 848 79S TABLE OF CASES. XXV] r Page. Commonwealth v. Maklbben .... 657, 661 667, 794 Commonwealth v. Martin 850 Commonwealth v. Masonic Temple Co 527 Commonwealth v. McWllllams 280 Commonwealth v. Meier 433 Commonwealth v. Mlddleton 901 Commonwealth v. Mill Creek Coal Co 648 Commonwealth v. Milton 101, 653 Commonwealth v. Moir. ..854, 898, 927 Commonwealth v. Myer 552 Commonwealth v. Newhuryport . . . 311 Commonwealth v. New York . . .734, 849 Commonwealth v. New York, etc., Ry. Co. . . : 36, 48, 425, 852 Commonwealth v. Ontario, etc., Ey. Co 35 Commonwealth v. Patch 719 Commonwealth v. Pennsylvania Coal Co 59 Commonwealth v. People's Five-Cent Savings Bank 35, 44, 651, 810 Commonwealth v. Pittsburgh 1098 Commonwealth v. Plaisted 307 Commonwealth V. Eeynolds. . . .901, 858 Commonwealth v. Sharon Coal Co. . 709 712, 850 Commonwealth v. Smith 441, 756 Commonwealth y. Standard Oil Co. . 36 102, 103 Commonwealth v. Taylor. 727, 728, 730 796 Commonwealth v. Thomas 795 Commonwealth y. Union Refrigera- tor Transit Co Ill Commonwealth v. Walker 582 Commonwealth v. Walton 197 Commonwealth v. Weller 520 Commonwealth v. Westinghouse Air Brake Co 395 Commonwealth y. Westinghouse Electric, etc., Co 394, 395 Commonwealth y. Williams 92, 628 Commonwealth y. Wyoming Valley Canal Co 603 Commonwealth v. Y. M. C. A 795 Commonwealth ex rel. McKirdy v. Macf erron 853, 854 Comstoek v. Judge of Superior Court 930 Concord v. Robinson 1096 Conde v. Schenectady. .1001, 1003, 1021 Cone y. Hartford 946 Congregation of St. Vincent ae Paul v. Brakely 663 Conklln v. El Paso 1108 Connecticut Mutual Life Ins. Co. v. Commonwealth 651, 810 Connecticut Valley Lumber Co. v. Monroe 833 Consolidated National Bank v. Pima County 408 Construction of Revenue Laws, In re 694, 861 Conway v. Cable 615, 935 Conway v. Taylor 79, 444 Cook V. Ansonia 1073 Cook V. Burlington 787 Cook V. Marshall County. 437, 438, 713 787, 931 Cook T. Pennington 627 Cook V. Port of Portland. 239, 328, 848 Cook V. Slocum 945 Cook V. South Park Commissioners.. d47 Cook County v. Chicago 666 Page. Cook County v. Chicago Industrial School for Girls 179 Cook Farm Co. y. Detroit 327 Cooley V. Port Wardens of Phil- adelphia 424, 425 Cooper, Ex parte 700 Cooper y. Ash 268, 269, 657, 781 Cooper V. Board of Review 32 Cooper y. Shelbyville 928 Cooper V. The Wadsworth Board of Works 579 Co-Operative, etc., Assn. v. State.. 690 784 Cooper Hospital v. Birdsall 663 Cooper Hospital v. Camden 497, 903. Copcutt V. Yonkers 234- Cope's Estate 751, 851 Copeland v. St. Joseph '. . .254, 824 Coquard y. Oquawka 1097, 1098 Corbett y. Portland 1025, 1031, 103* Corbin v. Hill 625 Corfleld v. Coryell 547 Cormick v. Pitch 604 Cornell v. Coyne 352, 475. Cornell v. Crosby 108, 754 Corning v. Masonyille 99" Cornwell v. Todd 91 Corrigan v. Gage 964 Corry v. Baltimore. . .77, 112, 575, 58S 597 Corson v. Maryland 419 Cosier y. McMillan 469 Cdtton v. County Commissioners... 137 280 Coulson V. Portland 1068 Coulter V. Louisville 647 Coulter V. Louisville, etc., Ry. Co.. 732 Coulter V. Staflford 934 Coulter V. Weir 85 Council Bluffs V. Stewart 1054 Counterman v. Dublin Townhip . . . 160 247 Courtney v. Louisville 253 Courtney v. Missoula County 826 Coutieri v. Mayor of New Bruns- wick 90O Covington v. Commonwealth 794 Covington v. Dressman 953 Covington v. First National Bank. 414 Covington v. Kentucky 50& Covington v. Nadaud 1021 Covington v. Southgate 254 Covington y. Woods 797 Covington, etc., Bridge Co. v. Ken- tucky 444 Covington City Bank v. Covington. 399' 401, 402 Covington Gas Light Co. v. Coving- ton 35 Covington & Lexington Turnpike Co. V. Sandford 526, 55* Cowart V. City Council of Green- ville 859 Cowell V. Hopkinson 620 Cowgill V. Long 615 Cowley y. Spokane lOOl Coyle y. Mclntyre . . .324, 326, 327, 337 Coxe y. State 224 Crafts V. Ray 855 Craig y. Town of Andes 1099, 1131 Craig School Township v. Scott... 1092 Cram v. Chicago 948 Crandall v. Nevada. 393, 468, 547, 548 549 Crane v. West Chicago Park Com- missioners 778, 950 Craw v. Tolono.610, 649, 778, 940, 994 995 XXVlll TABLE OF CASES. Crawford v. Lathrop Crawford t. Linn County.. 71, 657, Crawfordsville v. Braderi ■Creighton v. Scott Creston Waterworks Co. v. Creston. Crisman v. Johnson 590, Crismon v. Reich Crocker v. Shaw ■Crogster v. Bayfield County . . 1079, Cromwell v. McLean. 614, 616, 617, Cronin v. Jersey City Crookston v. County Commissioners. Cross V. Harrison 358, Crotty V. People Crow T. Oxford 1137, ■Crowder v. Sullivan Crowell V. Hopkinton ■Crowley Y. Christensen 699, Crowley v. Fulton Crown Cork & Seal Co. V. State. . . . 37, Croy v. Obion County Crozer v. People 648, 778, Crutcher v. Kentucky. .. .440, 446, Culbertson t. Fulton lll.T, Cullen T. Town of Carthage ... 199, ■Culver V. Jersey City 834, Cumberland, etc., Ry. Co. v. State. . Cuming v. Grand Rapids Cummings v. Fitch ■Cummings v. Hyatt Cummings v. Missouri •Cummings v. National Bank (Jummings v. National Bank Cummings v. West Chicago Park Commissioners Cunningham v. Moody, Currrin v. Arkansas Currie v. Southern Pacific Ry. Co.. Curry v. Spencer 748, Curtis V. Whipple 123, 128, ■Curtis V. Androscoggin Lodge. .663, Curtis V. Whitney 933, ■Custer County v. Yellowstone County Cypress Pond Draining Co. v. Hooper D. Daggett V. Colgan 226, Daggett V. Everett Daily v. Swope 166, 649, 820, Dalton, In re 22.5, Daly V. Morgan 256, 670, Dancer v. Town of Mannington . , Danforth v. Robinson Daniel Ball, The 421, Daniel v. Columbus 240, Daniells v. Watertown Township.. Daniels v. Nelson Danville Borough v. Weaver Danville Banking and Trust Co. v. Parks 52, 683, Danville Lumber and Manufactur- ing Co. V. Parks Darling v. Gunn 569, 733, Darling v. Rodgers Darlington v. Mayor, etc., of New York Darst v. GrifBn Dartmouth College v. Woodward . . 487, Darrance Street, Matter of Darrow v. People Dasey v. Skinner Page. 772 847 161 1008 1066 1067 628 583 810 1119 626 1011 924 472 779 1141 1066 195 700 1032 36 395 435 933 455 1120 200 997 46 453 968 609 166 934 415 845 635 912 37 918 832 179 805 934 266 123 247 582 1007 333 808 992 1003 486 422 842 614 602 850 780 779 778 789 200 289 318 553 855 892 33 of Balti- 609, Dashiell v. Mayor, etc. more Dassler, In re Daughrill v. Insurance Co. .....-.■ Davenport v. Chicago, etc., Ry. co. . Davenport v. Kleinschmidt. . .1060, Davenport v. Mississippi, etc., Ky. Davenport Bank V. Davenport Board of Equalization ■ • • .414, David V. Portland Water Commlt- ^gg 326, Davidson V. County Commissioners. Davidson v. New Orleans. .555, 561, 573, 575, 576, 607, 647, Davidson v. Von Detten Davies v. Los Angeles .... 291, 339, Davies v. Saginaw County Daviess County v. Dickinson .. 1099, 1118, Davis V. Cincinnati Camp Meeting Davis V. Clark 854, Davis V. County Court Davis V. Des Moines Davis V. Elmira Savings Bank . 398, Davis V. Fremont Davis V. Gaines 123, 289, 904, Davis V. Gray Davis V. Litchfield 969, 1010, Davis V. Macy Davis V. Macon Davis V. Minge Davis V. Newark 958, Davock V. Moore Dawes County v. Furay Day V. Collector Day V. Lawrence 6i8, Day V. Roberts 269, Dayton v. Bauman Dayton v. Board of Elquaiization . . Dayton v. Multnomah County. 732, Deady v. Village of Lyons Deal V. Mississippi Dean v. Borchsenius 614, Dean v. Charlton Deane v. Indiana Dearing v. Bank of Charleston .... De Arman v. Williams . . .680, 686, Debardelaben v. State De Baun v. Smith De Both V. Rich Hill Deeds V. Sanborn Deering v. Peterson Defiance v. Schmidt 1130, Deimon v. Fort Madison De Koven v. Lakeview Delafleld v. State of Illinois Delano, Matter of Delaplaine v. Cook Delaware Railroad Tax 450, Delaware Institute of Science v. Delaware County Delaware and Hudson Canal Co. v. Buffalo Delaware and Hudson Canal Co. v. Commonwealth Delaware and Hudson Canal Co. v. Pennsylvania 500 Delaware, etc., Ry. Co. v. Pennsyl- vania 35, 59 (36 De Lima v. Bidwell 371 Denison v. Poster .' Dennehy v. Chicago Denniston v. Terry. . .657, 689 690 Dent v. West Virginia [ ' Denver v. Hubbard ' Page. 958 582 660 788 889 1067 66 416 930 247 572 947 892 578 1029 1101 1138 843 900 1063 1081 399 1060 1008 487 1023 91 679 625 984 314 583 393 809 270 959 848 848 238 135 635 635 730 272 822 701 78 930 . 253 189 1137 253 1007 1090 759 . 627 501 664 957 452 522 852 472 1108 724 784 447 1066 TABLE OF CASES. XXIX Page. T)onver v. Kennedy 577 Denver t. Knowles. .772, 943, 945, 992 1003 Denver, etc., Ry. Co. v. Cburcli .... 60 Denver City R. R. Co. v. Denver . . 582 680, 702, 719, 772 ."De Pauw v. New Albany 934 Depue V. Bellevue 259 Desmond v. Dunn 900 De Trevllle v. Smalls 603, 604, 626 Detroit V. Chaffee 1013 .Hetroit V. Chapln 996 Detroit v. Detroit, etc., Ry. Co.. 500, 924 1 )etroit V. Jepp 583 -Detroit v. Lewis 91 Detroit V. Parker 1002 Detroit Common Council v. Board of Assessors (Rentz)..71, 600, 681, 687 812, 921 ■Detroit Citizens' Street Ry. Co. v. Common Council.. 35, 40, 48, 52, 500 Detroit, etc., Ry. Co. v. Grand Rapids 980 Detroit, etc., Ey. Co. v. Powers. . . . 530 Devine v. Board of Commissioners. 899 Dewey v. Des Moines. 57, 117, 118, 560 607, 609 De Witt V. Mayor, etc., of Ruther- ford 960 Dexter v. Boston. . .811, 993, 1005, 1015 iDiamond v. Kain 307 Diamond v. Mankato 964 Diamond Match Co. v. Ontonagon. 97 466 Diana Shooting Club v. Lamoreux. 924 Dibble v. Lephart 93 Dickerson v. Acosta 627 Dickerson v. Franklin 972 Dickinson v. Hudson County 901 Dickinson County v. Baldwin 792 Dickson v. Burckmeyer 857 Dickson v. Racine 956 Dietrich v. Mason 619 Dikeman v. Dikeman 935 Dill V. Roberts 635 Dime Deposit, etc., Bank v. Scran- ton 1073, 1082 Dingey v. Paxton 625 Dixon V. Detroit 961 Dixon V. Mayor, etc., of Jersey City. 933 934, 937 Dixon V. Ricketts 748 Dixon County v. Field 1114, 1115 1129, 1131, 1132, 1133, 1134, 1136 Dixon County v. Halstead 384 Dobbins v. Erie County 393 Dobbins v. Long Branch Commis- sioners 896 Dodge V. Township of Mission.... 135 Dodge V. Woolsey 490, 500 Dodge County v. Acom 289, 964 Donahoe v. Richards 180 Donald v, Clark.. 1064, 1065, 1070, 1088 Donley v. Pittsburgh 635 Donnersberger v. Prendergast 924 Douohugh V. Library Co 664 Donovan v. Insurance Co 604 Donovan v. Oswego 958 J>ool V. Cassapolis 569 Dooley v. United States. . .358, 371, 471 472 Dooling V. Ocean City 1004 Doon Township v. Cummins. .1053, 1074 1075, 1076, 1077 Porathy v. Chicago 963 Dorgan v. Boston. . .649, 811, 999, 1006 1008 Dorn V. Pox Ill Dorr V. Boston 94 Page. Dorton v. Hearn 181 Doty v. Ellsbree 1098 Doughty V. Hope 627 Douglas, In re 625, 626 Douglas V. Kentucky 489 Douglas County v. Bolles 1130 Dow V. Beidleman 700 Downer v. Boston 1006, 1008 Downes v. Bidwell. .358, 359, 371, 372 472 Dows, Matter of 533 (See Orr v. Oilman.) Doyle V. Austin 768 Drake v. Northampton 833 Dred Scott v. Sandford 545 Drew v. Morrill 681, 833 Drew V. TifEt 752, 817 Drexel y. Commonwealth 603 Duanesburgh v. Jenkins 325, 021 Dubose V. Levee Commissioners. . . . 166 Dubuque v. Illinois Central Ry. Co. . 584 660, 788. 889, 913 Dubuque County v. Dubuque & Pa- cific R. R. Co 139, 1112 Dubuque, etc.. R. R. Co. v. Webster County 788 Ducat V. Chicago 44, 101, 779 Dudley v. Lake County 1133 Duke V. County of Williamsburgh . 1092 1116 Duker v. Barber Asphalt Paving Co.. 973 Duluth V. Krupp 724 Duncan v. Ramish 966 Dundee Mortgage, etc., Co. v. School DisU-ict 847 Dunham v. People 286 Dunham v. Rochester 717 Dupont V. Pittsburgh 1115 Dupree v. Stanley County 258 . Durach's Appeal 8-50 Durant v. Kaufman 253 Durham v. Hussman 788 Durham v. State 384 Durkee v. Greenwood County 792 Durkee v. Janesville 027 Duryee v. Friars 1057, 1058 Duval County Commissioners v. Jacksonville :''2.5 Dwight V. Mayor 78, 68.'^ Dwyer v. Brenham 1108 Dyer v. Farmington.569, 660, 670, 805 955 Dyer v. Newport 1026 Dyer v. Osborne 78 Dyber Meadow Land, etc., Co. v. Cook 930 Eagle v. Kohn '. 1101 Fames v. Savage 5.^5 Earle v. Commonwealth 194 Earles v. Wells 1069 East Granby v. Hartford Electric Light Co 33 East Hartford v. Bridge Co 487 Bast Oakland v. Skinner 1137 Bast Portland v. County of Jlultno- mah 209, 670, 847 East Saginaw Salt Co. v. East Sag- iraw 490 East St. Louis v. Amy 1107 Bast St. Louis v. East St. Louis, etc.. Co 1066 Bast St. Louis v. People 1107 Bast St. Louis v. United States. . . . 1032 Bast St. Louis v. Wehring. . . . 708, 779 Bast St. Louis v. Witts 323 Baston Bank v. Commonwealth.... 511 Eaton V. Mimnaugh 1056 XXX TABLE OF CASES. Page. Bdenton T. Capeheart 724 Edgar Collegiate Institution v. People T80 Bdgerton v. Goldsboro Water Co. . . 1061 Edgerton v. School Township 973 Edison Electric Illuminating Co. T. Spokane County 732 Edmonds t. Herbrandson 904 Edmonston v. Board of Education of Memphis 249 Edmundson v. Independent School District 1121 Edwards v. Chicago 971 Edwards v. Fairex 617 Edwards v. Jasper County 974 Edwards T. Kearzey 487 Edwards v. Panama 42.5 ■ Edwards v. People 619 Edwards v. Williamson 516 Edye v. Robertson 535 Egan V. Charles County Court.... 808 Egyptian Levee Co. v. Hardin. 166, 947 1007 Eldridge v. Trezevant 166 El Dorado County v. Meiss 292 Blli V. Wilkins 546 Elliott V. Louisville 796 Ellis V. Frazier.634, 680, 695, 847, 848 898 Ellis V. Lincke 844, 889 Ellis V. Louisville, etc., R. R. Co. . . 660 Blma V. Carney 1024 Eisner, Matter of 610 Elston v. Chicago 956 Biting V. Hickman 310, 670, 822 Blyton Land Co. v. Birmingham . . . 733 Emerson v. I-Iall 1'93 Emert v. Missouri 430, 432 Emery v. Bradford 961 Emery v. San Francisco Gas Co. . 769, 974 Emporia v. Norton 614, 635 Bndom v. Monroe 1033 English V. Wilmington 992, 1003 English, etc., Co. v. Hardy 930 Engstad v. Grand Forks County . . . 841 Eno V. Mayor 615, 619 Enos V. Springfield 945 Enrigh v. People 619 Ensign v. Barse 616, 627, 629 Enyart v. Trustees 1102 Eppig V. Columbus 1089 Erie, Appeal of 10€3, 1071, 1084 Erie v. Erie Canal Co 311 Erie Ey. Co. v. Paterson 982 Brie Ey. Co. v. Pennsylvania . . 451, 490 Ervin v. Hubbard 694, 777 Essex Public Road Board v. Sliinkle. 934 Eureka District Gold Mining Co. v. Ferry County 727, 732 Evening Journal Assn. v. State Board of Assessors 42 Evans v. Browne 917 Evans v. Phillipl 852, 853, 891 901, 903 Evansville v. Dennett 1127, 1130 1134, 1136, 1137 Evansville v. State 904 Evansville, etc., Ry. Co. v. Common- wealth 733 Evansville, etc., Ry. v. Evansville.. 1098 Evansville, etc., Ey. Co. v. Terre Haute 899 Evansville Nat. Bank v. Britton... 411 Everett v. Smith 1102 Evers v. Mayfield 797 Eversole v. Cook .'>8 Ewart V. Davis 62.5 Ewart V. Western Springs 945 Ewry'a Executors v. State 754 Page. "^Green' '"'''"""^ '^?66"fio'' SoI] 972 Exchange National Bank v. M'"|^-^- |°| Eyre v. Jacob ^"7, 748 F. Fagan, In re ■ ■ ■■ ■ ■•■ ^^0 Fagan v. Chicago 38.., i8., 9(i Pahey v. State 670, 70o, 922 Pair, Estate of ....•■•■•• -91. 682, 769 Fairbank v. United States 471, 47.. Fairchild v. St. Paul . ■ • ■>■''* Fairfax's Devisee v. Hunter's Lessee. .590 Fairfield v. Rural, etc.. District . . . 1131 1134 ^ Fairhaven, etc., Ry. Co. v. New Haven • ■ '^**-^ Falconer v. Buffalo & Jamestown R. jt, Co 1^' Falconer v. Campbell 933 Falk. Ex parte 907 Fallbrook Irrigation District v. Bradley 166, 229, 232, 233, 234 567. 57.-.. .-.77, 945, 947 904. 966. 'I6'\ 970, 1008 Fall River v. County Commrs ... 32, 809. Fallon, Matter of 202 Fanning v, Gregoire 444 Fanning v. Schammel 637 Fargo V. Auditor-General 451 Fargo V. Hart 83, 85, 74& Fargo V. Michigan 46, 451, 453 Faribault v. Wilson 700- Farm Investment Co. v. Carpenter. 924 Farmers' Bank v. Deering 398 Farmers', etc., Co. v. Agricultural Ditch Co 923, 928, 929' Farmers' Loan and Trust Co. v. Ansonia 984 Farmville v. Walker 163 Farnsworth Co. v. Lisbon 660 Farnsworth Co. v. Rand 619, 620- Farquaharson v. Yeargin 1057 Farr v. Grand Rapids 1093 Farr v. West Chicago Park Com- missioners 960. Farrar v. St. Louis 948 Farrell v. West Chicago Park Com- missioners 1002 Farrelly v. Cole 904 Farrington v. Tennessee 36, 52 490, 497 Farris v. Vannier 231, 2.58 Farwell y. Des Moines Brick Mfg. Co 609, 787, 973, 974 Fatjo V. Pflster 336, 753, 760 Faulkner v. Seattle 1086 Faust V. Twenty-third German- American Building Assn 71 Pawcett V. Mt. Airy 162, lOeO' Pay V. Springfield 1001 Fayette County v. People's and Dro- vers' Bank 692, 693, 844 Fayetteville v. Carter 720- Fecheimer v. Louisville 552 Peek V. Bloomingdale 923 ITehler v. Gosnell 950, 954 Pehr V. State / 930 Feldman v. City Council of Charies- ^ t?° • ■•■ 189. Felix V. Wagner Qfj Feller v. Clark 1 1| ] g3o, Fellows' Assn. v. Dayton !.'!!' 732 Ferguson v. Landram '.'.*.'"*' lO'*'^ Ferguson v. Ross !!!!!' 89J Ferguson v. Snohomish ! ! ! ' ' 25S TABLE OP CASES. XXXI Ferguson v. Stamford Pernald v. Oilman 1123, Ferry v. Campbell 571, Ferry v. Tacoma Ficklen v. Shelby County Taxing District 433, Fidelity Trust, etc., Co. v. Fowler Water Co Fidelity Co. v. Loughlin 679, Fidelity, etc., Co. v. Seattle Field T. Chicago Field T. Clark 275, Field v. Western Springs Fielders v. North Jersey St. Ry. Co. Fields V. Commissioners of High- land County 269, 843, Figg V. Louisville, etc., Ry. Co ... . Figg v. Thompson Files V. State Findley v. Frey Finnegau v. Fernandina Fire Department T. Helfenstein. . . . Fire Department of the City of New York v. Noble Fire Department T. Wright Firemen's, etc., Assn. t. Lounsberry. 197, Firemen's Fund y. Eoome. . 192, 197, Firemen's, etc., Ins. Co. v. Common- wealth First Christian Church t. Beatrice. First Nat. Bank v. Albion 411, First Nat. Bank v. Chehalis County. First Nat. Bank v. Commonwealth. First Nat. Bank v. Doon Township. First Nat. Bank v. Douglas County. First Nat. Bank v. Farwell First Nat. Bank v. Independence . . . First Nat. Bank v. Isaacs First Nat. Bank v. Lampasas First Nat. Bank v. Lindsay First Nat. Bank v. Peterborough . . . First Nat. Bank y. Richmond First Nat. Bank v. Smith First Nat. Bank v. Stone First Nat. Bank v. Waters First Nat. Bank of Garnett v. Ayers. 414, First Nat. Bank of Louisyille v. Kentucky First Nat. Bank of Mendota v. Smith First Nat. Bank of Wellington v. Chapman 406, 407, 409, 414, 416, 694, First Presbyterian Church y. Port Wayne Fish v. Branin 52, Fish V. Stockdale Fisher v. Chicago Fisher v. Commissioners 66, Fishkill V. Fishkill, etc., Co Fisk v. Jefferson Police Jury. . .486, Fitch, Matter of 108, Pitch V. Board of Auditors Fitch V. Madison Fithian v. Wheeler Pitterer y. Crawford. .655, 662, 664, Pitts V. Atlanta Fitzgerald v. New Brunswick Fitzgerald v. Walker Flanagan t. Plainfleld Fleetwood v. Head Fleming v. Page 358, Fleming v. Trowsdale Fletcher v, Oliyer 268, 269, 766, Fletcher v. Peck 15, 487, 522, Flogg v. School District Page. 992 1137 615 1115 434 1066 852 476 950 917 965 844 979 718 655 969 934 101 197 197 101 925 837 77 662 830 414 597 597 1132 404 411 383 615 401 383 402 411 404 409 406 406 416 381 77 412 844 974 676 930 946 67 927 488 110 219 475 641 824 930 892 958 695 702 472 1122 770 934 1139 Page. Florer v. Sheridan 692 Florida Central, etc., R. R. Co. v. Reynolds 637 Floyd V. Perrlu 925 Poland V. Frankton 1068 Polmsbee v. Amsterdam 963, 1023 Polsom, Ex parte 521 Folsom y. Greenwood County 516 Polsom Y. New Orleans 206 Polsom V. School Directors 1096 Fond du Lac Water Co. v. Fond du Lac 35 Ford, Matter of 569 Ford V. McGregor 99 Porsman v. Byrnes 66 Forster v. Porster 614. 618, 029 Porsythe v. Hammond 2.", 252, 274 Port Edward v. Fish 1090 Fort Dodge, etc., Co. v. Port Dodge. 1073 1081 Fort Madison v. Port Madison Water Co 516 Port Smith, Ex parte 734 Fort Smith v, Scruggs 680, 766 Foster v. Commissioners 470 Foster y. Boston Park Commrs .... 947 Poster V. Davenport 446 Poster V. Kenosha 294 Poster V. Nelson 535 Poster V. Pryor 258, 470 Poster V. Stevens 084 Poster-Cheney Co. v. Cashey 80 Fourteen Diamond Rings. Bmil Pepke, Claimant v. United States.. 350, 472 Fourth Nat. Bank v, Dallas 1109 Fowler, In re 964 Fowler v. Superior 1082 Pox's Appeal 657, 692. 851 Pox V. Kendall 308. 315 Pox y. Middleborough 1022 Fox V. Mohawk, etc.. Humane Soe. . 294 Pox V. Rockford 208, 781 Foxcroft V. Piscataquis Camp Meet- ing Association 583 Francis v. Atchison Ry. Co. . . .258, 903 Francis v. Howard County ... 1120. 11.36 Francis v. Railroad Co 79ii, 792 Frank, Ex parte 710, 717, 768 Frankfort v. Commonwealth. . .668, 795 Prank/ort v. Fidelity, etc.. Trust Co 71, 91 Frankfort y. Winterport 259 Franklin v. Hancock 608, 010 Franklin County v. Railroad Co. . . . 110 Franklin County Commissioners v. Ottawa 974 Franklin Square House v. Boston. . 809 Prantz v. Dobson 655 Praser v. McConway 713 Frazer v. Seiborn 383 Frederickson v. Louisiana 537 Freeholders of Hudson County v. Buck 900 Freeland v. Hastings 19."» Freeland v. Williams 48G Prellsen v. Mahan 933 French v. Barber Asphalt Paving Co 562, 991, 1002, 1014 French v. Burlington 1068, 1079 French v. Deane 934 French v. New Hanover County . . . 1034 French v. State 4.34 Fretwell v. Troy 790 Frevert v. Bayonne 998, 1019 Friend y. Gilbert 214 Frommer v, Richmond 446 Frost V. Pf eitfer 928 Frothiugham v. Shaw 67, 108 Puller v. Inhabitants of Groton .... 199 XXXll TABLE OF CASES. Page. Fullllove V. Police Jury 930 I'ulkerson t. Bristol 678, 679 Fnlton T. Davenport 253 Fulton V. Rlvertwn 1138 Furman y. Niehol 523 G. Gaare v. Clay County 926 Gaddis v. Richland County .. .1099, 1117 Gage V. Bailey 619 Gage V. Chicago 958 Gage V. People ex rel. Raymond... 962 Gage V. Stewart 935 Gager v. Prout 939 Gaines v. Buford 585 Galena v. Amy 515, 516 Gallup V. Schmidt 86, 88, 638, 640 Gallup's Appeal 108 Galveston, etc., Ry. Co. v. Galves- ton 603, 604 Gamble v. Rural, etc., District 1131 Gardenhire v. Mitchell 627 Garrett v. Green 166 Garrison v. Laurens 858 Garrison v. New York 934 Garvin v. Daussman 577 Gast y. Board of Assessors 801 Gates, Town of. Matter of 982 Gate City Guards v. Atlanta 668 Gatlin v. Tarboro 713, 838 Gatling v. Commissioners of Car- teret County 583 Gause v. Clarksville. . . .1095, 1096, 1123 Gavin v. Commissioners of Wells County 785 Geary County v. Missouri; etc., Ry. Co 790 Geebrick v. State 279 Geer v. Commissioners of Ouray County 928, 1122 Geer v. School District 1134, 1136 Gelpcke v. Dubuque 137, 488, 620 Genet v. Brooklyn 229 Genther v. Fuller 619, 627 Gentile v. State 904 Gentry v. Purcell 607 George y. St. Louis, etc.. Cable Co.. 392 Georgia Midland, etc., Ry. Co. v. State 73J Georgia Packin,-; Co. v. Mayor 477 Georgia State, etc., Assn. v. Mayor, etc., of Savannah 691 Georgia State Building, etc., Assn. V. Stewart 66'.) (Gerard v. Duncan 678 Gerke v. Purcell 186, 187, 843 German Sayings Bank v. Franklin County 1101, 1141 German Gymnastic Assn. v. Louis- ville 663, 795 German Trust Co. y. Board of Equalization 595 German Washington Fire Ins, Assn. v. City of Louisville 682, 727, 797 Germania v. State 701, 808 Germania Ins. Co, v. Common- wealth 711, 850 Germania Sayings Bank y. Suspen- sion Bridge 755 Germania Trust Co. v. San Fran- cisco 676, 679, 681, 682, 683 686, 693, 769 Gest y. Cincinnati 609, 612 fMbbes. Matter of 109 Gibbons v. Dist. of Columbia. . .360, 301 Gibbons V. Mobile, etc., Ry 136, 1089 Gibbons v. Ogden 41D, 423, 446 Glbbs V. Green 510 Paoie. Gibbs v. School District IJ?^ Gibson v. Chicago ;2^° Gibson y. Harrison • ■ • ' onV Gibson v. Mason 581. 831, 901 Gibson County v. Pullman Southern Car Co . . ^^^ Gilbert Bl. Ry., Matter of 837 Gilbert v. Foote IJjS Gilbert v. Moody ■J«9 Gillespie v. Palmer 110^ Gillis y. Clevland ■■_■ 612 Oilman y. Sheboygan li i , 511 Oilman v. Tucker 561 Gilmore V. Hentig 5i8, 1008 Gilson y. Dayton ■ ■ . ■ 1137 Gilson V. Rush County ... .234, 311, i83 Giozza y. Tiernan 699 Girkin v. Simm 1021 Given v. Wright 490 Givens v. Hillsborough County.... 899 Givens v. People 1021 Gladwin y. Ames 1037 Glaser y. Cincinnati 717 Glasgow V. Rowse 28 Oleason v. McKay 811 Gleason y. Waukesha County 1001 Glendenning, Matter of 32 Glenn y. Dodge 52 Glidden y. Harrington 91 Glidwell V. Martin 917 Globe Lumber Co. y. Lockett 678 Gloucester Ferry Co. v. Pennsyl- vania 419, 423, 442. 444 Goddard, In re 1012 Godden v. Crump 137. 282 Godfrey y. Bennington Water Co. . . 614 Goeneu v. Schroeder 935 Golden v. Prince 15 Goldgart v. People 681 Goldsmith v. . City 702 Goldsmith v. Huntsville 764 Goldsmith y. San Francisco 1059 Gooch y. Exeter 307 Goodale v. Fennell 516 Goodell Mfg. Co. v. Trask Ill Goodnow V. Ramsey Couutv 1097 Goodnow V. Wells 788 Goodrich v. Detroit 563, 564 Goodrich v. Omaha 960 Goodrich v. Turnpike Co 311, 783 Goodwin v. Bast Hartford 1093 Goodykoontz v. People 1038 Gordon y. Appeal Tax Court. . .490, 499 501 Gordon v. Cornes 237, 324 Gordon's Executors v. Baltimore. . . 679 Goshen v. Richmond 62S Gould V, Paris 1032 Gould V. Raymond 833 Gould V. Sterling 1099 Gould V. Thompson 627 Goulding Fertilizer Co. v. Driver.. 478 Gove y. Tacoma 733 GrafCy y. Rushville 552 Graham v. Chautauqua County. 072 791 Graham V. Conger 231, 955 Graham v. Spokane 1079 Graham y. Township of St. Joseph . 67 Grand Chute v. Winegar 1130 Grand Gulf Co. v. Buck ' 490 Grand Island, etc., Ry. Co. v. Baker 1031 1051, 1054, Grand Lodge y. New Orleans. .511 Grand Rapids v. Lake Shore etc Ry. Co '....'. Grand Rapids v. Supervisors of Me oosta County 973 Grand Rapids, etc., Ry. Co. v. Grand Rapids 8j^2 1122 512 606 TABLE OF CASES. XXXUI Page. Granger v. BufCalo 21 Grant v. Berrisford 291 Grant v. Courier 137 Grant V. Davenport. 660, 788. 1063, 1067 Grant v. Jones 67, 91 Grant County v. Lake County 1055 Gray v. Board 1011 Gray V. Tax Collector 1104, 1109 Green, In re 315 Green v. Hotallng 973 Green v. Mumlord 91 Green v. Ward 608, 650 Green Bay Lodge v. Green Bay .... 664 Greencastle, etc. v. Black 783 Greencastle, etc., Co. v. State 930 Green County Commissioners v. Lenoir County Commissioners... 947 Greene. Matter of 222, 315 Greenleaf v. Board of Review of Morgan Co 78, 116, 608, 650, 683 685, 780 Greenwood v. Louisville 668 Greer, In re 928 Gregory, Ex parte 695 Gregory y. Bridgeport 201 Grenada County Supervisors v. Brogden 623, 1116 Greves v. Shaw 108, 109 Gridley v. Bioomington 1013 Griffin v. Board of Review of La Salle County 681 Griffin v. Inmau 1098 Griffin v. Mixon 577, 584 Griffith V. Pence 964 Griggsby Construction Co. v. Free- man 98, 686, 803 Grim v. Weissenberg School District. 123 195, 624, 625 Grimmell v. Des Moines 968, 1007 Griswold College v. State 787 Groesheck v. Seeley 625, 631 Groesch v. State 892 GrotE V. Frederick 941 Gross V. People 958 Grundy County v. Coal Co 681 Grunewald v. Cedar Rapids. . .968, 1081 Guaranty, etc., Assn. v. Ascherman. 930 Guernsey v. Burlington Township. . 135 Guild V. Chicago 960, 994, 995 Guilford v. Supervisors of Chenango County 192, 315 Guilford v. Cornell 927 Gulf, Colorado & Santa Fe Ry. Co. V. Ellis 553 Gulf R. R. Co. V. Morris 727, 789 Gulf & Ship Island Ry. Co. v. Hewes 49 Gunnison County v. Owen . 268, 269, 766 770 Gunnison County v. Rollins. .1128, 1130 1132, 1135, 1138 Gunther v. Baltimore 481 Guthrie v. New Vienna Bank 1115 Guthrie v. Pittsburgh, etc., Ry. Co.. 91 Guthrie Nat. Bank v. Guthrie. 192, 314 315, 903, 904 Guy V. Baltimore 447 H. Hacker v. Howe 578 Hackett, In re 581 Hackett v. Ottawa 1130, 1134 Hackettstown v. Swackhamer 112^ Hackworth v. Ottumwa 992, 1003 Hadley v. Dague 991, 1001, 1003 Hadsell v. Inhabitants of Hancock. 199 Hagar y. Reclamation District. 164, 232 274, u65, 571,^574, 575, 577, 947, 1008 iii Page. Hagar v. Yolo County. 163, 164, 649, 769 947 Hager v. Gast 894, 1090 Hager v. Kentucky Children's Home. 89] I-Iagerstown v. Sehner 206 Hagerty v. State 754, 843 Haight, Matter of 91 Hale V. Kenosha . : 957, 974 Haley v. Alton 061 Haley v. Butte County 591 Hall V. American Refrigerator Tran- sit Co 58, 59 Hall V. Commonwealth 796 Hall V. Cedar Rapids 1069 I-Iall V. Stabaugh 1021 Hall V. Steele 920 Hall V. Street Commissioners 1024 Haller v. Blaco 627 Hallock V. HolliDgsworth 900 Halstead v. Mayor, etc., of New York 202 Hamilton v. Fond du Lac 620 Hamilton v. Wilson 791 Hamilton County v. Mighels 265 Hamilton County v. Rosche. . . .908, 939 Hamilton Gas Light Co. v. Hamilton. 488 Hamlin v. Meadville 927 Hammett v. Philadelphia. 231, 940, 951 999 Hammond v. Place 517 Hampshire, In re Commissioners of. 958 975 Hampshire v. Franklin 261 Hancock v. Singer Mfg. Co 835 Hand v. Ballou 027 Hand v. Elizabeth 1004 Handy v. Collins 609 Hannibal, etc., Ry. Co. v. Marion County 1117 Hanscom v. Omaha 97], 995, 997 Hanson v. Vernon 28. 130, 139 Hanson v. Gray 583, 584 Harbor Commissioners v. Pashley. 480 Hardenburgh v. Kidd 272 Harding Township v. Funk 135 Hardy v. Yarmouth 92 Hare v. Kennerly 1025 Harman v. Chicago 446 Harn v. Woodard 689, 784 Harper v. McKeehan ; 619 Harper v. Commissioners of New Hanover County 671, 838, 840 Harper v. Rowe 614, 618 Harper v. State 930 Harper County v. Rose 1139, 1141 Harriman v. Yonkers 234 Harrington v. Glidden 91 Harriott Avenue, In re 984 Harris v. Ansonia 618 Harris County v. Boyd 650, 973 Harris v. Chickasaw County 190 Harrisburgh v. McCormick 635, 1020 Harrisburg V. McPherran . 992, 1001, 100."* Harrison v. Gordy 921 Harrison v. Vicksburg 281 Harrodsburg v. Benf ro 708 Harshman v. Bates County 1112 Harshman v. Knox County 1121 Hart V. Henderson 614 Hart V. Orleans Levee Commis- sioners 166 Hart V. Smith 31, 627, 648 Hartford v. West Middle District. . 973 Hartman v. Greenhow 519 Harwood v. North Brookfleld 637 Harwood v. St. Clair Drainage Com- missioners 28.> Hasbrouck v. Milwaukee. .322, 328, 1099 1117 XXXIV TABLE OF CASES. Haskel t. Burlington 786, Haskell, Ex parte Hassan v. Rochester Hatfield- V. King Hathaway v. Fish Hatner v. WiUiamsport Hatzung v. Syracuse Hawes Mfg. C'o.'s Appeal 658, Hawes v. Chicago Hawkeye Ins. Co. v. French Hawkeye Ins. Co. v. Webster County. Hawkins v. Carroll County Hayes v. Douglas County. .227, 966, Ilays V. Camden Hays V. Commonwealth Hays V. PaciiSc Mail Steamship Co.. 62, Hayward v. People 254, Hazlitt V. Mt. Vernon Hazzard v. Heacock Head Money Cases.. 346, 350, 351, Head v. Amoskeag Mfg. Co. ...164, Hearn, In re Hebard v. Ashland County Hedges v. Dixon County. 1118, 1120, Heffner v. Cass and Morgan Coun- ties 163, 309, Heft V. Gephardt Heinl v. Terre Haute Heins v. Lincoln Helena v. United States Helena Consolidated Water Co. v. Steele 285, 326, 327, Helgenberg v. Wilson Heman v. Allen Heman v. Gilliam 992. Hempstead County v. Howard County Henderson's Distilled Spirits Henderson v. Mayor of New York. . 423, Henderson v. London, etc., Ins. Co.. 783, Henderson v. Pierce County Henderson v. Strangers Kest Lodge. Henderson Bridge Co. v. Common- wealth 74.", Henderson Bridge Co, v. Kentucky. 403. 443, Henderson County v. Travellers' Ins. Co HendJ-ie v. Kalthoff Henker v. Fond du Lac Henkle v. Keota Henneberger, Matter of Hennepin County v. Brotherhood of Gethsemane 186, 187, Hennepin County v. Grace .... 662, Henry v. Cohen Henry v. Ward Hensley Township v. People Hepburn v, Curts Hepburn v. School Directors. .409, Herman v. Oconto Herman t. Phalen Herrick v. Randolph 490. Hereee v. Porter 598, Hetland v, Norman County Hewes v. Glos Hewitt, Appeal of Heylman, Ex parte Hibbard v. Clark HUiernian Benevolent Society v. Kelly 515, 664, High V, Shoemaker 603, Page. 892 705 577 589 94 705 614 851 964 889 788 1102 1024 588 796 61 66 781 659 609 354 468 560 947 619 1054 1123 1132 336 619 1110 1100 1122 938 686 1001 1003 267 581 419 468 197 925 734 795 796 80 463 1136 700 1013 77 900 664 815 183 930 239 615 416 1120 485 511 599 896 946 614 705 583 847 768 Page. High School District T. Laneas'-er County ^^9' SJ» Higgins V. Ausmuss Vii Higgins V. Casks of Lime • ■ ■ • *' ' Higgins V. Chicago -666, 782 Higgins V. San Diego 106o, lObb Hill T. Abbeville °°% Hill V. Commissioners " ' Hill V. Easthampton •••■■-■■ WoV Ht Hill V. Hidgon 282, 294, 609 Hill V. Kahoka g^J Hill V. Kricke • • • ■ 631 Hill V. Memphis 334, 1096 Hill V. Swingley • • ■ ■ 1001 Hilliard V. Asheville 649, 839, 969 aa2if 1003 Hiner v. Pond du Lac 1013 nines V. Leavenworth 649, 670, 789 790 Hingham v. Norfolk County 311 Hinkhouse T. Wilton 93 Hirshfleld v. Dallas 717 Hinson v. Lott 438 Hinze v. People 285 Hoag v. Town of Greenwich 1123 Hobart v. Supervisors of Butte County 280 Hobson V. Dutton 627 Hodge V. Muscatine County. . .438, 566 577. 578, 582 Hodgon V. Burleigh 386 Hoertz v. Jefferson, etc.. Drainage Co 164, 793 Hoey v. Ocean Township 235 Hoffield V. Buffalo 1008 Hoffman v. Bell 619 Hogg V. Mackay. 660, 661, 848 Holcomb V. Davis 1102 Holcomb V. Keliher 99 Holden v. Hardy 544, 561 Holland v. Board of Commissioners. 67 71 Holland v. Mayor, etc., of Baltimore. 1024 HoUiday v. Sweet Grass County. . . 267 Hollingsworth v. Thompson 918 Hollister, Matter of 636, 958, 1024 Holly River Coal Co. v. Howell .... 588 Holly Springs Savings, etc., Co. v. Marshall County 36, 384 Hoist V. Roe 844 Holt V. Johnson 599 Holt V. Somerville 947 Holt County v. National Life Ins. Co 1122 Holton V. Mecklenburg County 839 Holton V. Milwaukee 957 Holyoke Co. v. Lyman 505 Holzhauer v. Newport 649, 797 Home Ins. Co. v. New York. 35, 41, 43 49, 381. 382, 396, 674 Home Ins. Co. v. Swigert.277, 650, 651 779 Home of the Friendless v. Rouse. 496 660 Home Sayings Bank v. Boston.... 583 Honduras Commercial Cable Co. v. State Board of Asses.surs. . . .42^ 448 Hood V. .Tudkins .' 99 Hood V. Mayor 2^6 Hooper v. California " ' ' ' 4iq Hooper y. State \'] ;^,s.. Hoover V. Peabody ' " ' qq7 Hope V, Deaderick ■ ■ ■ . . Hope V. Gainesville ' ' ' " qoS Hopkins V. Baker qj. Hopkins V. Mason ' o?? Hopkins, Receiver v. Taylor "i? Hopkins V. Van WycU .... igg TABLE OF CASES. XXXV Horn Silver Mining Co. v. New Yorli 41, 44, 50, 101, Horner v. United States Horton v. Town of TIaompsou. .621, tlosliins V. Crabtree Hospes T. O'Brien HotcliMss V. Marion 930, Hot Springs Electric Liglit Co. v. Hot Springs 503, Houdayer, Matter of 74, 89, Hougliton V. Austin Hougliton T. Jones County. ....... House, In re House Bill, In re Houston V. Stewart Howard v. Bugbee Howard v. Houston Howard v.'Huron Howard v. Kiowa County Howard v. Lancaster Howard v. Moot Howard v. Smith Howard Savings Inst. v. Newarli. . . Howe V. Cambridge Howe Machine Co. v. Gage... 429, Howell V. Buffalo 229, 561, 941, Howell V. Millville Howell V. Richards Howell V. Tacoma Howells V. State Howes V. Barrett Howes V. Racine Howland v. San Joaquin County.. Hoyt v. Commissioners of Taxes. . Hronek v. People Hubbard v. Brush 603, Hubbard v. Fitzsimmons 240, Hubbard v. Supervisors Hubbard v. Taunton Huck V. Chicago, etc., Ry. Co. . . 35, Huff V. Cook Hughes V. Cairo 653, Hughes T. Bwing 259, 287, Btughes V. Momence Hughes V. Staunton Hughey's Lessee v. Horrel Huidekoper v. Meadville 650, ■ Hull v. Ames Hull V. Marshall County Humboldt Township v. Long. .11.30, Humphrey v. Pegues.490, 491, 498, Humphreys v. State Humphries v. Little Sisters of the Poor 186, 662, Hunsaker v. Wright 660, 661, Hunt V. Perry Hunt V. Rahway Co Hunt V. State Hunt V. Wright Hunter v. Page County Huntington v. C. P. R. R. Co Plurford v. Omaha Hurford v. State Hurl, Ex parte Hurley v. Powell 500, Huron v. Second Ward Savings Bank 1078, 1098, 1131, Hurt V. Bristol 90, Hurtado v. California Huse V. Glover Hussman v. Durham Hutcheson v. Storrie. . .997, 1001, Hutchison v. Board of Equalization . Hutchinson v. Board ' Hutchinson, Ex parte Hutchinson v. Leinbach Page. 449 535 1117 930 476 1100 723 109 274 1034 190 266 1109 523 584 1122 1098 627 628 1109 635 1006 431 933 236 834 1016 66 604 636 1105 67 595 923 842 383 226 281 614 779 291 946 90 111 851 1057 1101 1136 532 660 653 843 781 94 1004 920 917 66 626 281 427 705 627 1136 93 556 446 788 1004 1021 68 596 718 272 Page. Hutchinson v. Omaha 1021 Hutchinson v. Ozark Land Co 270 Hutchison, etc., Ry. Co. v. Board of Commissioners 1021, 11.30 Hutson V. Woodbridge 569 Hyde v. Ewart 1110 Hyde Park v. Spencer 950 Hyland v. Brazil Block Co 648 Hylton V. United States. . .21, 346, 352 361, 362 Hysong v. Gallitzin Borough School District 181, 182 I. llinois, State of, v. Delafleld 1090 llinois Central Ry. Co. v. Decatur. 974 llinois Central Ry. Co. v. East Lake Fork Drainage Commission- ers 592, 979, llinois Central R. R. Co. v. Mc- Lean 660, 661, 780, llinois Central Ry. Co. v. People. . llinois. etc., Co. v. Irvin llinois Industrial University v. Champaign County llinois Nat. Bank v. Kinsella.683, mmegart v. Gorgas ^dependence v. Gates ndependent School District v. Rew. ndiana County v. Agricultural Society 852, ndianapolis v. Grand Master of the Lodge nge V. Board of Public Works. . . . ugraham. Matter of ngram v. Colgan ngram v. Cowles inhabitants of, , see name of place, nmau Steamship Co. v. Tinker. . . . nsuiar Tariff Cases (See Dooley v. U. S. ; De Lima v. Bidwell ; Downes v. Bidwell.) nsurance Co. v. Bruce ntendant v. Chandler nternational, etc.. Co. v. Haigbt. . owa Cent. R. R. Co. v. Iowa owa City v. Newell owa Homestead Co. v. Webster County 788, owa, etc.. Land Co. v. Soper..614, 892, owa Pipe, etc., Co. v. Callanan. . . . owa Railroad Land Co. v. Carroll County 786, 892, reland v. Rochester 569, rvin V. Gregory thaca V. Babcock vanhoe v. Enterprise 608, Vinson v. Hance J. Jackson, Ex parte 695, Jackson v. Corporation Commission . Jackson v. Newman Jacksonville v. Ledwith. .716. 719. Jacksonville, etc., Co. v. Jackson- ville Jacobs, Matter of Jacoby v. Dallis Janesville v. Markoe ; . . . , January v. January Jefferson, In re .letCerson Branch Bank v. Skelly. . . 489, Jefferson County y. Lewis 610 781 610 511 782 780 625 1010 1131 1136 903 664 993 968 168 99 480 350 1131 281 48 561 717 889 786 893 1016 893 577 1021 610 611 386 769 839 720 720 161 123 1089 254 935 68 488 501 1097 TABLE OF CASES. Page. Jefferson County v. Watertown. . . . 515 Jefferson County Savings Bank v. Hewitt 52, 683 Jeffrey v. Brokaw 619, 627 Jenkins v. Andover 123, 179 Jenkins t. McTague 626 Jennings t. Coal Eidge Improvement & Coal Co 735 Jensen, Matter of 202, 204 Jeves V. Shadwell 365 Job V. Alton 945, 994 Joestlng V. Baltimore 249, 514 .Tohn V. Connell 997, 1005 John M. Welch, The 447 Johnson's Estate 748 Johnson v. Asbury Park 892 Johnson v. Board of Commissioners. 937 1065 Johnson v Campbell 196 Johnson v. Chicago, etc.. Elevator Co 481 Johnson v. De Bary-Baya Mer- chants' Line 62, 63, 481 Johnson v. Blwood 627 Johnson v. Harrison 923 Johnson v. Howard 934 Johnson v. Hunter 573 Johnson v. Lewis 949 Johnson v. Loper 469 Johnson v. Louisville 795 Johnson v. Milwaukee 894, 957 Johnson v. Rich 278 Johnson v. San Diego 259, 260 Johnson v. Stack 280 Johnson V. Stark County 137, 1112 Johnson v. Trenton 1004 Johnston v. Macon 680, 776 Johnston v. Spicer 927 Joliet v. Alexander 1086, 1087 Jones V. Camden 1130 Jones V. Commissioners 828 Jones V. Hurlbut 1089 Jones V. Memphis 254, 259 Jones V. Robbins 555 Jones V. Seward County 384 Jones V. Winthrop Savings Bank... 44 Jonesboro City v. Cairo 924 Joplin Consolidated, etc., Co. v. Joplin 964 Jordan v. Hyatt 577 Jordan v. Overseers of Dayton.... 394 Joseph V. Milledgeville 776 Joseph V. Randolph 550 Joseph V. TruckenmiUer 573 Joslyn V. Rockwell 627, 629, 631 .Tost V. Jost 535 Jourdan v. Evansville 547 Judson V. Bessemer 925, 928, 1099 Judge V. Spencer 658, 681 Junction Ry. Co. v. Philadelphia.. 981 Juniata Limestone Co. v. Fagley. . 713 K. Kadderly v. Portland 295, 649, 848 Kaehler v. Dohberpuhl. . . .614, 615, 637 Kahn v. Supervisors 1099 Kaiser v. Campbell 893 Kalamazoo v. Francoise 992 Kansas City v. Askew 962 Kansas City v. Bacon 1026 Kansas City v. Hannibal, etc., Ry. Co 913 Kansas City v. Hansen 952, 95.S Kansas City v. Johnson 822 Kansas City v. O'Connor 949 Kansas City v. Overton 710, 790 Kansas City v. Ward 1008, 1081 Kansas City v. Whipple 822 Page- Kansas City, etc.. Park v. Kansas /lifTT o.i*, •yi'*- *-ity ^RT Kansas Indians A" ' ' ' U' Qai. Kansas Pacific Ry. Co. v. Prescott. d»a- Katzenberger v. Aberdeen i^o»: Kay V. Monroe tij Kearney v. Taylor ^X: Keel V. Board "xl Keeler v. State ™0- Keely v. Sanders •■■.■_• in,?' Keese v. Denver • . ■ • . • 1007, 1021 Kehrer v. Stewart. .434, 436, 4od, 46» Keith V. Boston lOOb- Keith V. Clark 523 Keith V. Dn Quoin 1120 Keith V. State • • ■ • 474 Keithsburg v. Prick .137, 1116. Keller v. Scranton 1010, 1073 Kelley v. Mayor 1097 Kelley v. Milan 1096- Kelley v. Rhoads.97, 407, 648. 073, 686- Kelley v. State 907 Kellogg V. Oshkosh 636- Kelly V. Chadwick 992, 1001, 1003 Kelly V. Minneapolis. 564, 930, 958, 966 1081, ins- Kelly V. Herrall 625- Kelly V. Luning 637 Kelly V. Pittsburgh 251, 559 Kemmler, In re 548, 549' Kendall v. Kingston 628 Kendig v. Knight 968 Kenicott v. Wayne County 1130 Kennard v, Manchester 677, 678 Kennebec Water District v. Water- ville 1110 Kenney v. Harwell 77.S Kent V. Town of Kentland 784, 892 Kentucky Cent. B. R. Co. v. Com- monwealth 527 Kentucky Female Orphan School v. Louisville 795- Kentueky Live Stock Breeders' Assn. V. Hager 227 Kentucky Railroad Tax Cases. 577, 709- 726, 727, 729, 730- Kentz V. Mobile 680^ Keokuk, etc.. Bridge Co. v. People. 48- Keoknk & Hamilton Bridge Co. v. Illinois 464 Keokuk & Western R. R. Co. T. Missouri 526, 531 Kerr v. Perry School Twp 783 Kersey v. Terre Haute. . . .724, 785, 901 Ketcham v. Buffalo 1092, 1093, 1095 Kettle V. Dallas 229, 998- Keymer, Matter of 714 Kidd V. Alabama 687 Kidd V. Flagler 472" Kiehl V. South Bend 1067 Kiichli V. Minnesota Brush Electric Co 1065- Kilgore v. Magee. . .854, 898, 899, 917 Kimball v. Grantsville 25S Kimball v. Mi!fO'-d.676. 679- 683, 685 833 Kimball v. Mobile County 328- Kimball v. Rosendale 902, 1116- Kimmel y. State 435 Kimmell, In re 427 King V, Dundee, etc., Co 847 King V. Hatwell sgfr King V. Inhabitants of Essex . . 199 King V. Mullins.."i.")9, 586, ."188, 589, 590 King V. Portland .lO:!. ,-,77 gSO, 848 946, 997. 1001, 1005, 1006 1010' King V. Superior 1130 nsX. Kingman, In re 314^ ggj TABLE OF CASES, XXXVll Pase. Kingmac v. Brockton 196 Kingman County v. Leonard 76 Kingsley t. Merrill 32, 681 Kinney v. Zimpleman 282 Kinsley v. Chicago 719 Kinyon T. Duciiene 947 Kiowa County Commissioners v. Dunn 654 Kipp V. Dawson 617 Kipp V. Fernhold 630 ICipp V. Paterson 718 Kirby v. Shaw 237, 308 Kiikland v. Inhabitants of Whately. 93 Kirkpatrick v. Commissioners 1011 KIrkpatrick v. State 434 Kirkpatrick v. Taylor 949 Kirkwood v. Newbury 311 Kirtland v. Hotchkiss 66, 72 Kitson v. Ann Arbor 702, 724, 812 Kittenger v. Buffalo Traction Co.. 899 Klamath Palls v. Sachs 1008, 1134 Klock, Matter of 972 Knapp V. Grant 623, 1116 Knapp V. King County 733 Knaust, Matter of 924 Kneeland v. Pittsburgh 701 Knisely v. Cotterel 850 Knoop V. Piqua Bank 490 Knopf V. People 899, 902 Knowles v. New York 226 Ivnowlton V. Moore... 31, lOT, 346, 350 352, 355, 357, 374, 377, 750 Knowlton V. Supervisors of Rock County 28, 230, 254, 255, 670 Knowlton v. Williams 326 Knox V. Commissioners of Shawnee County 687 Knox County v. A^inwall . . . 1125, 1126 1130, 1136, 1138 Fnox Comity t. United States.... 1109 KnoxvIIIe & O. Ry. Co. v. Harris. 729 Knoxvllle Traction Co. v. Mc- Millan 597, 602 Kochersperger v. Drake 750, 751 Koeliler v. Hill 917, 921 Koester v. Atchison County Com- missioners 313, 789, 892 Kohler v. Guttenherg 1004 Kronsbein v. Rochester. .226, 1081, 1115 Kuback, Ex parte 225, 713 Kuehner v. Freeport 983 Kunkle v. Town of Franklin 195 Kyes V. St. Croix County 1104 L. Labrake, Matter of 202 Lacey v. Davis 627 Lacey v. Palmer 923, 927, 931 Lackawanna Township, Harris' Ap- peal 853 Ladd V. Portland 514, 948 Ladd V. Gambell 650, 848, 849 Lafayette v. Fowler 945, 948, 1021 Lafayette v. Jennerg 783, 892, 901 Lafayette v. Male Orphan Asylum. 974 Lafayette, etc., B. B. Co. v. Geiger. 272 280, 670, 783 Lafferty v. Huffman 917, 920 Laflin v. Chicago 960 ijaird v. Cincinnati 610, 612 Laird v. De Soto 521 Lake County v. Graham. 1126, 1133, 1134 1135 Lake County v. Piatt 1100, 1122 Lake County v. Rollins 1053, 1054 Lake County v. Standley 1118 Lake County, etc., Co. v. Walsh 161 Lake Drummond, etc., Co. v. Com- monwealth Lake Erie, etc., Ry. Co. v. Bowker. Lake Levee District v. Dawson. . . . Lake Shore, etc., By. Co. v. Grand Rapids 592, Lake Shore R. R. Co. v. Roach .... Lake View v. Rose Hill Cemetery Co Lamar v. Palmer 681, Lamar Water, etc., Co. v. Lamar . . 1065, Lamb v. Connolly Lamb v. Gillett Lambert v. Smith Lancaster School District v. Robin- son-Humphrey Co 1110, Lander v. Mercantile Bank . . . .575, Landon v. Litchfield Lands in Town of Flatbush, Matter of Lanesborough v. County Commrs. . . Lang V. Kiendl Langley v. Augusta Langlois v. Cameron Langworthy v. Dubuque Lansing, Matter of Lansing y. Lincoln La Porte v. Gamewell Fire Alarm Telegraph Co. . .1053, 1059, 1063, Laramie County v. Commissioners of Albany County I^rsen v. Dickey 619, 625, 626, Lasher v. People 704, Latham v. Wllmette 952, Lathrop v. Racine Latimer v. Morgan 844, Latrobe v. Baltimore 67, Lauderdale County v. Fargason .... Laurens v. Elmore 427, Law V. People Lawson v. Milwaukee Laycock v. Baton Eouge 1034, Layman v. Iowa Telephone Co. .112, Layton v. New Orleans 259, League v. De Young League v. Texas 603, 605, 933, 936, Leavell v. Western Union Telegraph Co Leavenworth v. Booth. .. .695, 724, Leavenworth County Commission- ers V. Miller 137, 789, 892, Leavltt V. Lovering Le Dae v. Hastings 657, Lee V. Jeddo Coal Co Leep V. St. Louis, etc., Ry. Co Lef evre v. Detroit Lefflngwell v. Warren Legal Tender Cases Legg v. Annapolis Lehigh Iron Co. v. Lower Maeungle Township Lehigh Valley Ry. Co. v. Pennsyl- vania Lehman v. Robinson Leigh V. Green 582, 591, Leisy v. Hardin 419, 423, Leitch V. La Grange Leloup V. Port of Mobile 441, Lembeck v. Jersey City Lemon, In re Lemont v. Jenks 610, 695, 778, Lent V. Tillson.229, 232, 339, 573, Page. 328. 608- 166- 974 59a Lentz V. Dallas Leominster v. Conant. 69» 773. 1032 1066- 641 .626 918- 1113. 577 490' 33S 67 635 247 574 253. 758 966- 1117 25» 627 707 953 1010- 889 91 337 430. 1093 140 1067 788 260- 485- 934 937 420. 790- 1113 486 81S 627 15 97a 631 485- 718. 849- 420- 569 606. 437 972 455 630 719- 949 577 945 998 looe xxxvm TABLE OF CASES. Page. Leon Loan, etc., Co. v. Equaliza- tion Board 31 Le Tourneau v. Hugo 893 Levasser v. Wasliburn 586 Levi V. Louisville 682, 706, 797 Levy, Succession of fl24 Levy V. State 719, 785 Lewis V. Bourbon County 1101 Lewis V. Chester County 86, 89 Lewis V. Commissioners 1139, 1141 Lewis V. Colgan 224 Lewis V. Bastford 614 Lewis V. Freeholders of Hudson County 199 Lewis V. Mayor i 99 Lewis V. rima County 622 Lewis V. State 930 Lewis V. Symes 1021 Lewis V. Widber 1055 Lewis County v. Gordon 164, 192 Lexington v. Butler 1130 Lexington v. Fishback's Trustee... 95 Lexington v. McOuillan's Heirs.... 230 649, 797, 992, 1003, 1010 Lexington v. Milton 653 Lexington v. Thompson 322, ,328 L'Hote V. Milf ord 897 L'Hote V. New Orleans 701 License Tax Cases 346 Llcht V. Burlington 787 Lick V. Austin 768 Lien v. Norman County 164 Life Association of America v. Assessors of St. Louis County. 660, 824 Llghtner v. Peoria 969, 995 Lima v. Cemetery Association. 649, 845 074 Limestone County v. Rather 516 Lincoln v. Boston Street Commis- sioners 968 Lincoln v. Hangan 918 Lincoln v. Janesch 1011, 1013 Lincoln v. Lincoln St. Ry. Co 986 Lincoli. V. United States. 358, 359, 472 Lines' Estate 67 Lines v. Otego 1114 Linton V. Lucy Cobb Institute. . . . 775 Lionberger v. Rouse 399, 409 Litchfield v. Ballou 10."i3, 1123 Litchfield v. McComber 234, 583 Litchfield v, Vernon 229, 941 Little V. Oliver 834 Little V. Portland 1073, 1081 Little V. State 924 Little V. Watson 535 Little Falls Electric, etc., Co. v Little Falls 660 Littlefleld v. State 701, 717, 719 Little Rock v. Katzenstein 966 Little Rock v. North Little Rock . . . 897 Little Rock v. Parish 903 Little Rock V. Prather 679, 766 Little Rock, etc., Ry. v. Worthen. . . 657 765 Litz V. .Johnson 663 Liverpool, etc., Ins. Co. v. Board of Assessors 60, 75, 76 Liverpool, etc. Ins. Co. v. Massa- chusetts 44, 546 Tjivingston, Ex parte 924 Livingston, Matter of 961 Livingston v. Mayor, etc., of New York 941 Livingston v. Paducah 681 Livingston County v. Darlington .... 239 Livingston County v. Welder.. . .239, 670 778 Llano Cattle Co. v. Faught 258 Pa§e. Loan Association v. Topeka . 18, 123, 1 24 Locke's Appeal 5IR Locke V. New Orleans °|° Lockhart y. Harrington ^°g Lockwood V. St. Louis 77 Lockwood V. Weston ^ J Loeb y. Columbia Township lOUl Loftin V. Citizens' National Bank. . 400 670, 783 Logan V. Carnahan 594 Logan V. Commissioners of Clark County 792 Logansport v. Dykman 1063 Lombard v. West Chicago Park Com- missioners 635, 933, 947 London v. Bralnard 226 London v. Hope 77, 112, 637 London v. Wilmington 671, 838 London, etc., Bank v. Block 75 Long V. Burnett 627 Long V. Culp 386 Long Branch Commission v. Dobbins. 1004 Longview v. Crawf ordsville 897 Longworth v. Cincinnati 958 Lord V. Bayonne 635 Lord V. Litchfield 511 Lorden v. Coffey 811, 993, 998 Los Angeles v. Hance 1114 Los Angeles v. Teed 1078 Los Angeies County v. Orange County 259, 267 Los Angeles County v. Spencer .... 923 926 Lott V. Hubbard 678 Lott V. Mobile Trade Co 64 Lott V. Morgan 480 Lott y. Waycross 1066 Loughborough v. Blake... .360, 361, 371 372, 472 Louisana v. Jumel 515, 517 Louisana v. Mayor of New Orleans. 486 Louisana v. Pillsbury 516, 524 Louisana v. Wood 1123 Louisana Cotton Mfg. Co. v. New Orleans 657, 800 Louisana Liquidation Commissioners V. Marrero 603 Louisana & Northwestern R. R. Co. V. State Board of Appraisers. . . . 800 Louisiana State Lottery Co. v. New Orleans 800 Louisville y. Bltzer 1019 Louisville v. Board of Trade 794 Louisville v. Board of Trustees 795 Louisville v. Button 949 Louisville V. Commonwealth ..'..! ! 668 Louisville v. LouisTille Public Ware- house Co 727 708 796 Louisville v. Henderson ...".'.. ~ ' 953 Louisville v. Louisville Ry. Co..912 913 915 Louisville v. Murphy . . . 07.) Louisville V. Rolling Mill Co' 940 Louisville V. Shirley qq Louisville V. Southern Baptist Theo- logical Seminary ... -nr: Louisville V. Tatum . np Louisville Bridge Co. v. 'LoulRvino' 9^2 Louisville College of Pharmacy V Louisville ii-y v. Louisville & Jefferson Ferrv 'rA' V Commonwealth ... "•>'"-<'• v. Louisville, etc.. Perry Co." v' 'ken LouTsvflle,- e-tc.; " Ry.'^Co"; ^^Barb"; '"^ Asphalt Paving Co. . "*iS?.' „.,„ Louisville, etc., Ry. Co. vVlSehimp;.' ?Z? Louisville Ry. Co. v. Commonwealth. 796 TABLE OF CASES. XXXIX Page. .oulsvlUe, etc., E. R. Co. v. David- son County 280, 1102 jouisville, etc., Ry. Co. v. Bast bt. Louis 946, 96.J, 966 .ouisville & Nashville R. U. v. Palmes 488 ;0uisville, etc., Ry. Co. v. State. . . 592 6'14, 608. 638, 979 rouisville Tobacco Warehouse Co. v. Commonwealth 796, 797 jouisville Water Co. v. Clarke.... 505 iouisville Water Co. v. Common- wealth 58,? ioving, Ex parte 316, 336 jovingston v. Board of Trustees . . 700 779 iOvington v. Wider 323 iOW v. Austin 473 iOwell V. Boston 123, 180 ;OweII V. Hadley 945 iOwell V. Middlesex County Com- missioners 32, 733, 913 ,owell V. Oliver 19.3, 620 jowell V. Wentworth 569 iUdington Water Supply C«. v. Lud- Ington 1060 judlow V. Cincinnati 592 iUftin V. Galveston 626, 1033 jumherville Delaware Bridge Co. v. State Board of Assessors. .35, 42, 51 jund V. Chippewa County 239 jussen V. Sanitary District 1105 jux & Talbott Stone Co. v. Donald- son 948 .yall V. Lyail 365 jycoming County v. Union County. 192 259 jydecker v. Bnglewood Township Drainage and Water Commission- ers 2:i5, 236 jyle V. Jacques 619 jynch. Ex parte 604 jynch V. Hubbard 1013 jynde v. Winnebago County 1130 jyng V. Michigan 427, 437 jyon V. Tonawanda 1001 jyons V. Cooper 717, 718 jytle V. Lansing 1098 M. Machine Co. v. Gage 429, 431 lack V. Jones 6S9 lackay v. San Francisco. . .90, 92, 686 768, 769 ilacklot V. Davenport '. .693, 787 lacnaughton Co. v. McGirl 438 lacon V. Hughes 928 'lacon V. Jones 522 lacon V. Patty ....611, 964, 974, 999 1011 lacon County v. Huidekoper 1035 laddox V. Graham 137 (laddux V. Newport 649, 797 ladera Irrigation District, In re.. 166 287, 288, 578, 947, 1008, 1112 ladry v. Cox 249, 250 lager v. Grima 31, 107, 468 lagneau v. Fremont 292, 705 lagnes' Estate 750, 1026 lagoun V. Illinois Trust & Savings Bank.107, 646, 656, 711, 747, 749, 750 lahomet v. Quackenbush 925 lahon. Matter of 198 lahoney's Estate 748 laiden v. Ingersoli 535 laine v. Grand Trunk Ry. Co 45, 46 101, 452, 805 Maine Water Co. v. Waterviile 661, Maish V. Arizona Maize v. State iMa.ior V. Aldan Maloy y. Marietta Maltby v. Tautges 670, Manhattan v. Ironwood Manhattan, etc., Ry. Co. v. Bur- goyne Manning v. Den Manning v. Devils Lake 136, Manning v. Klippel Maplewood Coal Co., In re Marcy v. Township of Oswego . 1108, Margolies v. Atlantic City 718, Maricopa & Phenix Ry. Co. v. Arizona Marietta Chair Co. v. Henderson.. Marion County v. Clark Marion County v. Coier Marion County Commissioners v. Harvey County Commissioners . . Marion County v. Lear Marion County v. Louisville Marion County v. Marion Trust Co. . Marion County v. Winkley Marion & McPherson Ry. Co. v. Champlin Marks v. Trustees of Purdue TTni- versity 239, 783, 892, Mariin v. Green Marr v. Enloe Marsden v. State Board of As.'sess- ors 42, Marsh v. Chestnutt Marsh v. Fulton County 1101, Marshall, Ex parte 700, Marshall V. Gill Marshall v. McDaniei JIarshali v. Silliman 323, Marshall County v. Cook Marshall County v. Knoll Marshall County v, Schneck Marshalltown y. Blum 432, Marshalltown Light, etc., Co. v. Marshalltown Martin v. Cole Alartin v. Hunger Jfartin v. New Orleans Martin v. Stoddard Martin v. Tyler Marx V. Hanthorn. . .619, 625, 626, Marye v. Baltimore, etc., Ry. Co. . . Marye v. Parsons Mason v. Des Moines Mason v. Spencer Mason v, Sioux Falls Mason v. Thurber Mason v. Trustees 700, Massachusetts v. Western Union Telegraph Co... 80. 390. 392, 462, Massachusetts, etc., Ins. Co. v. Col- orado Massenberg v. Grand Lodge. . .662, Masters v. Portland 630, Matheny v. Golden Mathews v. .Tensen Mathis V. State Matter of , see , Matter of. Matthews v. Kimball 947, Mattlngly v. District of Columbia. 614, 624, Matzenbaugh v. People 67, Mauldin v. Greenville. .. .162, 241, 859, 944, 1011, Maule, etc., Co. v. Partenheimer. . Page. 660 804 386 279 1101 294 817 1099 791 612 248 847 31 1130 724 470 311 1131 1107 ]100 308 614 690 1103 791 901 607 282 396 614 1142 707 964 584 1112 11199 584 1130 505 625 535 802 641 926 627 628 60 461 517 962 1008 1023 93 702 738 920 775 848 533 716 920 967 360 946 68 650 1012 xl TABLE OF CASES. Page. Manrer v. Cliff 09 Mails V. Logansport 582 May V. Gloucester 1120 May V. Holdridge 63i> May V. New Orleans 473 Mayberry v. Mayor 1011 Maydwell y. LouisylUe 169 Mayo V. Dover & Foxcraft Villi.ge Fire Co SOn Mavo V. Washington 1061 Mayor. Matter of 28. 946 Mayor v. . see name of city. Mayor v. Alexander 92 Mayor v. Beas.ey 717 Mayor v. Broadway Ey. Co 502 Mayor v. McWilliams 702 Mayor v. Eay 1003, 1094. 1096 Mayor v. Second Ave, H. K. Co. . 502. 503 Mayor v. Third Ave. R, K. Co 502 Mayor, etc. v. Colgate 610 Mayor, etc. v. Drydock, etc., Ey. Co 718 Mayor, etc. v. Eden Musee Co 701 Mayor, etc. v. Mayberry 1013 Mayor, etc. v. McKee 583 Mayor, etc. v. State 615 Mayor, etc., v. Territory 521 Mayor, etc. v. Voorhies 1034 Mayor, etc. v. Winter 280 Maxwell v. People 90 Maxwell v. State 272 McAdeu V. Board of Commissioners. 411 McAllister v. Tacoma 952 McAreuwich v. M. & M. R. R. Co. . . 891 McArthur v. Nelson 337 McBean v. Fresno 1065, 1066 McBryde v. Montesano 623, 1117 McCabe y. Carpenter 278 McCall V. California 441 McCalmont v. Allegheny County... 199 McCarthy v. Commonwealth 900 McCaskell v. State 582, 764 McChesney v. Chicago 971 MeChesney v. Hyde Park 950 McClave v. Newark 997 McCIellan v. Pettigrew. . .427, 705, 803 McClelland's Case 427 McClelland v. State 903 McCless V. Meekins 516 McCloskey v. Chamberlin 235 McClure v. Maitland 588 McClure v. Mawperture 588 McClure v. Oxford 1098, 1099, 1134 McClure v. Owen 139 McConnell v. Hamm 134 McConville v. St. Paul 963 MeCord v. Bergantz 619 McCord V. Sullivan 617 McCormick v. Burt 180 McCormick v. Omaha 966 McCormick v. Patchen 948, 099 McCormick v. Eusch 891 MeCray v. United States. .348, 352, 375 378 McCreedy v. Sexton 625, 627 McCrowell v. Bristol 608 McCulloch V. Maryland. . .30, 118, 272 379, 380, 389, 390, 393, 396, 548 McCulloch V. State 020, 921 McCulIough V. Board of Review.. 782 McCullough y. Virginia. .488, 489, 519 523 McDonald v. Mayor, etc., of New i'ork 1100 McFarlane v. Chicago 965 McGahey v. Virginia. 489, 519, 523, 526 McGee v. Mathis 500 McGhee's Estate, In re 748, 787 Page- McGillivray v. Joint SrtiJOl D'^'^'g'^]^; Jj|!J McGonigle v. Allegheny ®1* McGoon V. Scales ; 'tA:; McGowan v. Savannah Mutual Man ^^^ McGrathv.' Newton '^IT, 790- McGregor v. Cone ^^>' McGregor v. Montgomery ••■'■> McGuire v. Board of Revenue..... 414 McGuire v. District of Columbia. . 1013 McGuire V. Parker ■■■■■■■■■■ ■■^w ^?S McHenry v. Downer. .300, 411, 416, 648 McKee v. Christian .... . ■ ■ . • ■ 607 McKeesport Borough v. Fidler.583, 608- McKeesport v. Soles .......... ... i)i_f McKeen v. Northampton County. 30, (8- MacKenzie v. Wooley 13.5 McKinnon v. Cotner 917, 92(> McLaren v. Grand Forks 1022 McLaughlin v. Miller -^67 McLean v. Myers 8»4 McLean County v. Bloomington 782: 974, 99o McLoughlin v. South Bend 427 McMahan v. Morrison 531 McMahon v. Palmer 41W (See Palmer v. McMahon.) McManus v. Hornaday 619- McMeans v. Finley 928 McMillan v. Anderson. .. .559, 565, 57& McMillan v. Butte 992 McMillen v. Boyles 620' McMillen v. The County Judge and Treasurer of Lee County 620 McMorran v. Great Hive 928. McNair v. Ostrander 945 McNally, Ex parte 724 McNamara v. Estes 945- McPhail v. Burris 62r McPherson, Matter of 31, 571 McPherson v. Foster 1120- McRae, In re 949- McReynolds v. Smallhouse 446- McTwiggan v. Hunter 605, 855 Mead v. Acton 196 Mechanics' Bank t. Debolt 500' Mechanics' Nat. Bank v. Baker. 727, 834 Mechanics & Traders' Bank T. Thomas 490' Mechanicville v. Stillwater, etc., Ey. Co 986: Medland v. Linton 997, 1005 Meggett V. Eau Claire 992, 1003- Meier v. St. Louis. . .291, 562, 640, 824- Meigs V. Roberts 628, 630, 631 Melcher v. Boston 393: Mellen v. Pittsburgh 339- Mellor v. Pittsburg 1068, 1084 Melvin v. Weare 569' Memphis v. Bank 683- Memphis V. Battaile 724 Memphis v. Brown 523; Memphis v. Ensley 52" Memphis v. Farrington 52: Memphis v. Hastings 924 Memphis v. United States 52.3: Memphis, etc., E. R. Co. v. Berry.. 526; Memphis, etc., E. R. Co. v. Gaines. . 488 660- Memphis R. R. v. Commissioners .. 526- 528- Memphis Gas Co. v. Shelby County. 488. Mendenhall v. Burton 254 792" Mercantile Bank v. New York. .373' 40?" Mercantile Nat. Bank v. Shields ' 407" 41L TABLE OF CASES. xli Pa?p Mercantile Bank v. Tennessee. .526, 528 Mercer v. Floyd 200 Mercer County v. Hackett 1136 Merchants & Traders' Bank v. Debolt 490 Merchants' Bank t. Pennsylvania.. 416 575, 577, 647 Merchants' Nat. Bank v. Bast Grand Forks 314 Merchants' Ins. Co. v. Newark. .48, 658 835 Mercier, Succession of 583 Meriam t. City 702 iUei'iv/ether v. fiarrett 272, 521 Merriam, Matter of 31, 107 Merrick v. Amherst 239. 809 Merrill v. Bearing 935 Merrill v. Lumber Co 596 Merrill v. Monticello. . .1092, 1096, 1097 1099, 1100 Merrill Ky., etc., Co. v. Merrill 1066 Merritt v. Port Chester 1024 Merryhach v. New York 215 Messinger v. Germain 627 Metcalfe v. Seattle 1103 Metropolitan Board of Excise v. Barrie 341 Metropolitan Board of Health v. Heister 314. 341 Metropolitan Gas Light Co., Matter of 931, 961 Metropolitan Street Ky. Co. v. New York 647 (See People ex rel. Met. St. By. Co.) Meyer v. Covington 611 Meyer v. Pleasant 66, 75, 76 Metz V. Haggerty 844 Michigan Railroad Tax Cases. .728, 732 Michigan Sanitarium, etc., Assn. v. Battle Creek 813 Michigan Sugar Co. v. Dix . . . .135, 194 Middleton v. Allegheny Co 1098 Middleton v. Augustine. . .615, 620, 621 Middletown National Bank v. Mid- dletown 400, 772 Midland Elevator Co. v. Stewart.. 670 780, 904. 907 Midland Township v. Roscommon Township 258 Milan v. Tennessee, etc., Co 1099 Milan, etc.. Co. V. Husted 490 Miller v. Anheuser 964 Miller v. Board 1095 Miller V. Dunn 194 Miller v. First National Bank 404 Miller v. Graham .*. 613 Miller v. Hale 618 Miller v. Heilbron 401, 414 Miller v. Hurford 930 Miller v. County of Kern. 269. 626, 766 Miller v. Mayor, etc., of Mobile. . . 1024 Miller v. School District 1100 Miller v. State 505, 918, 920, 922 Miller v, Texas 549 Milliken v. Patterson 627 Mills v. Charlton 635, 1024 Mills V. Gleason 1095 Millsaps V. Jackson 91 Mills County v. Brown County. 266, 267 Milwaukee v. Helfenstein 197 Mineralized Rubber Co. v. Cleburne. 1109 Minneapolis & Northern Elevator Co. V. Traill County 595, 727, 841 891 Minneapolis, etc., Ry. Co. v. Beck- with 553 Minneapolis, etc., Ry. Co. v: Lind- quist 979, 992, 1003 Page. .Minnesota v. Barber 477 Minot V. Winthrop 747, 750, 810 Mintum v. Hays 64, 116, 768 Mirande, Ex parte 292, 69.". Mississippi Mills v. Cook. .fi'.S. 819, sso Missouri, etc., Ry. Co. v. Cairbarn . . 947 Missouri Valley, etc., Ry. Co. v. Harbison 727 Missouri Valley, etc., Ry. Co. v. Harrison County 727, 787 Missouri, etc., Ry. Co. v. Miami County 603 Mitchell, In re 427 Mitchell V. Burlington 1097 Mitchell V. Clark 485 Mitchell V. Treasurer of Franklin County 664 Mitchell V. Leavenworth County. .. 384 Mitchell V. Negaunee 161, 163, 253 Mitchell V. State 163 Mitchell County v. Bank of Padu- cah 1105, 1106, 1107 Mitchell V. Williams 700 Mix V. People 913 Moale et al. v. Mavor. etc., of Balti- more 570, 609, 612, 941, 996 Moherley v. Hogan 606 Mobile County v. Kimball 237, 424 Mobile V. Stonewall Ins. Co 657, 764 889 Mobile V. Watson 516, 520 Mobile V. Yuille 720 Mobile, etc., R. R. Co. v. Kentucky. 764 Mobile, etc.. Co. v. Tennessee 497 Mode V. Beasley 904 Modesto Irrigation District v. Tre- gea 288, 964 Mogg V. Hall 605 Monaghan v. Lewis 511, 773, 903 Monroe v. Greenhoe 99 Monroe County Savings Bank v. Rochester 44, 48 Montague v. State 808 Montana Catholic Missions v. County of Lewis and Clarke. 662, 826 Montclair v. Ramsdell 926 Montezuma Valley Water Supply Co. V. Bell 583 Montgomery v. Birdsong 993, 1004 Montgomery v. Foster 993, 1024 Montgomery v. Moore . . . .924, 991, 993 1004 Montgomery v. Shoemaker 455 Montgomery Beer Bottling Works V. Gaston 917. 919, 921 Montgomery County Fiscal Court v. Trimble 1102 Monticello v. Banks 1008 Monticello Distilling Co. v. Balti- more 679 Moody V. Chadwick 613 Moody V. Shaw 108, 109 Moody V. Spotorno 229 Moog V. Randolph 917 Moore v. Beason 469 Moore v. Eufala 4.55 Moore v. Gordon 571 Moore v. Marsh 599 Moore v. Monroe 180 Moore V. People 649, 778 Moore v. Police .Jury 931 Moore v. Walla Walla 1099 Moorehead v. Murphy 199 Moran v. Long Island City 837 Moran v. New Orleans 446 Morewood Avenue 951, 967 Morey v. Brown 700 Morford v. Unger 253 Morgan, Matter of 109 xlii TABLE OF CASES. Page. Morgan v. Beloit 515 Morgan v. Carter 590 Morgan v. Elizabeth 236, 834 Morgan t. Louisiana 481, 526, 527 Morgan v. Parham 61, 62, f" Morgan Paris v. Wiswall 947 Moriarty v. Boone County 3»B Morley v. Lake Shore & Michigan Southern Ry.' Co 486 Morning Star Lodge T. Hayslip.... 664 Morrill v. Douglas 627 Morris v. Bayonne 1004 Morris v. Lalaurie 934 Morris v. Lone Star Chapter 655 Morris y. Taylor 1098 Morris & Essex Ey. Co. v. Jersey City 975 Morrison v. Hershire 945 Morrison V. Manchester 681, 833 Morrison v. Morey 166 Morrow v. Dows 599 Morse v. Omaha 1004 Mortland v. Christian 724 Morton v. East St. Louis 1054 Morton v. Nevada 1123 Morton v. Smith 1013 Mosely y. State 382 Moss V. Shear 627 Mott V. Hubbard 843, 1021 Mott V. Pennsylvania R. R. Co.. 490, 491 Motz V. Detroit 649, 813, 992, 1010 Mound City Land & Stock Co. v. Miller 164. 229, 947, 1023 Mount Pleasant v. Beckwith 260 334, 520 Mount Pleasant v. B. & 0. Ey. Co. . 975 981 Mount Vernon, In re 782 Mowry v. Blandin 618 Mublenbrinck v. Commissioners. . . . 720 Muir y. Bardstown 638 Mullan y. State 224 Mulligan v. Smith 1099 Multnomah County T, Slker. . 269, 847 Mumford y. Sewell 71, 657, 847 Mundy v. Van Hoose 669 Municipal Trust Co. v. .Johnson City 1131 Municipality y. Dunn 948 Municipality v. Guillotte 649, 804 Municipality v. Wheeler 933 Municipality Security Company v. Baker County 1059 Munn T. Illinois 420, 481 Munson y. Board of Commissioners. 1007 Murdock y. Cincinnati 578 Murray y. Board of County Commis- sioners 190, 897 Murray y. Charleston 66, 488, 522 Murray y. Hoboken, etc., Land ,,Co 5.55, 557, 581 Murray y. Lehman 820 Muskego y. DrainaRe Commission.. 1011 Muskegon v. Mayor 1098 Musselman v. Logansport 614 Mutual Reserve Fund Life Assn. y. Augusta 705 Myers y. Chicago 964 Myers v. Baltimore County 97, 465 Myers v. Jeifersonville 1098, 1114 Myrick v. La Crosse r. . . . 636 N. Nance v. ' Stuart 1035 Napa Valley Ry. y. Napa County. . . 137 Narragang v. Brown County 917 Nashua Say. Bank v. Nashua. .683, 833 Nashville v. Althorpe 717 Page. Nashville, etc., Ey. Co. v. Alabama. 701 Nashville, etc., Ry. Co. v. West Vir- ginia Ifii Nathan v. Louisiana • • ■ • '"? Nathan v. Spokane County ■ • ■ •°72, 68b National Albany Exchange Bank v. "^ellg *.^.*- National Bank v. Commonwealth^.^. ^37 National Bank v. Fisher .....' .404^ 411 National Bank v. lola ........ l^i National Bank v. Yankton County. . 622 National Bank of Chattanooga v. Mayor ■ ■ ■ • *"I National Bank of Commerce v. New Bedford ■ • 578 National Commercial Bank v. Mayor. 399 404 National State Bank v. Toung. .399, 401 National, etc., Co. v. Detroit 813 National Council of the Knights and Ladies of Security v. Phillips. .. 792 National Dredging Co. T. State .... 64 65, 98 National Fire Ins. Co. v. Hanberg. . 779 National Life Ins. Co. v. Huron. . . . 1133 National Life Ins. Co. v. Mead 1077 1098, 1110, 1133 Neely v. Henkel 472 Neenan v. Smith 608, 611, lOlO Nehasane Park Assn. v. Lloyd 631 Neilson v. Garza 476, 477, 478 Nelson v. Milford 199 Nelson v. St. Martin's Parish 51ft Nelson Lumber Co. v. Loraine 99 Nelson Lumber Co. v. McKinnon. . . 581 Nettleton's Appeal 748, 751, 772 Nevada City v. Eddy 975 Nevada National Bank v. Dodge . . . 414 Nevil V. Clifford 902 New Albany v. Meekin 66 Newago Portland Cement Co. v. Sheridan Township 619 New Amsterdam, Matter of 966 Newark Bank v. Fourth Ward As- sessors 48 Newark v. Mount Pleasant 926 Newark & South Orange E. E. Co. V. Clark 660. 834, 835, 963 New Brunswick Eubbei; Co. y. The Commrs. of Streets and Sewers.. 1004 Newcastle v. Jackson 851 Newell V. People 25 Newgass v. New Orleans 1097 New Hampshire v. Louisiana . .517, 518 New Haven v. Fair Haven, etc., Ry. Co 983 New Jersey, etc., Ey. Co. v. Eliza- beth 972 982 New Jersey v. Wilson i-OS New Jersey v. Yard. .488. 490. 498, .'jOO New Jersey Zinc Co. v. Sussex County 272 Newman v. Emporia 649. 790, 1008 New Orleans v. Asylum 504 New Orleans v. Bayley 801 New Orleans v. Canal, etc., Co 803 New Orleans v. Cazelar 253 New Orleans v. Clark 192' 315 New Orleans v. Davidson ' goo New Orleans v. Day '.'.'.[ 582 New Orleans v. Fouchy .... ^^^ New Orleans v. Grafflna ......'' 720 New Orleans v. Great Southern, etc' Telephone Co ' _ ^ *' 28 New Orleans v. Kaufman 705 New Orleans v. Lafayette Ins. Co!! 660 TABLE OF CASES. xliii Page. New Orleans v. Lagman 801 New Orleans v. Leibe 801 New Orleans v. Manassler 801 New Orleans T. New Orleans City & L. Ey. Co 503 New Orleans v. New Orleans CofEee Co 801 New Orleans v. New Orleans Suffar Shed Co 660, 800, 913 New Orleans v. New Orleans Wa er- works 487, 660, 800 New Orleans v. Orleans R. K. Co. . . 501 R03 New Orleans v. Pohlman 801 New Orleans y. Ponchartraln R. E. Co 802, 803 New Orleans v. Poutz 933 New Orleans y. Railway Co 939 New Orleans v. Eobira 801 New Orleans v. Stempel. .67. 68, 73, 77 New Orleans v. St. Charles, etc., Co. 659 660, 800 New Orleans y. Turpin 281 New Orleans y. Wilmot 447 New Orleans y. Wire 610 New Orleans Drainage Co., Praying, etc 649, 804 New Orleans Draining Co., In re. . . 947 New Orleans Gas Light Co. y. Board of Assessors 36, 48 New Orleans Gas Light Co. t. Louis- iana Light, etc., Co 490 New Orleans, etc., E. E. Co. v. New Orleans 501, 503 New Orleans \Yaterworks Co. y. Louisiana Sugar Refining Co 488 Newport y. Commonwealth. G67, 668, 794 Newport v. Horton 307 Newport v. Masonic Temple Assn. . . 664 Newport y. Mudgett 411, 414 Newport News Eailway & Electric Co. V. Newport News 680 Newton v. Atchison 294, 702, 790 Newton v. Comnjissioners 487 Newton y. McKay 578 New Whatcom v. Improyemeut Co. . 1010 New York Bridge Co., Matter ol. . . 918 New York Elevated E. E. Co., Mat- ter of 891, 906 New York Indians 387 New York Juvenile Asylum, Matter of 185 New York Protestant Episcopal Pub- lic School Trustees, Matter of . . . 569 New York v. Barker 732 New York y. Commrs. of Taxes. . . . 381 New York v. Knight 421, 422 New York v. McLean 57. 119 New York y. New England Transfer Co 444 New York y. Roberts 101, 448 New Y'ork v. Starin 443 New York v. State Board of Tax Commissioners 37, 51, 52, 342 502, 680 New York,- Lake Erie & Western R. E. Co. V. Pennsylvania 120, 500 522, 849 New York Life Ins. Co. v. Priest. . . 949 New York, etc., I!y. Co. v. Mont- clair 930 New York, etc., Ry. Co. v. Morris- anla 592 New York, etc., Ry. Co. v. New Britain 976 New York, etc., Ry. Co. v. New Haven 976, 989 New York, etc., R. R. Co. v. Sabin. . 501 Nichol v. Mayor 137 page. Nichols y. Bridgeport 610, 941 Nichols y. New Haven, etc., Ry. Co 35, 48 Nichols V. School Directors 182 Nichols y. State 215, 216, 930 Nichols y. Walter 892 Nlcol v. Ames 352 Nlles V. Shaw 694 Niles Waterworks y. Niles 1067 Noble V. Amoretti 469 Noel V. San Antonio 1109 Nolan County y. State 1097, 11 'JO Norfolk y. Ellis 650 Norfolk y. Young 573, 574, 998, 1004 Norfolk, etc., E. R. Co. v. Board of Public Works 64 Norfolk & Western Ry. Co. v. Penn- sylvania 441, 448, 526, 546 Norfolk & Western Ry. Co. v. Sims. 435 Norman v. Kentucky Board of Man- agers 226, 247, 917 Northampton v. County Commrs. of Hampshire 239, 809 North Beach, etc., Ey. Co., Appeal of 983 Northern Counties Investment Trust V. Sears 847, 924, 928, 929 Northern Indiana Ry. Co. v. Con- nolly 592, 978 Northern Pacific Ry. Co. y. Patter- son 385 Northern Pacific Ry. Co. v. Raymond. 452 Northern Pacific Ry. Co. v. Traill County 385 North Hudson County Ry. Co. v. Mayor, etc., of Hoboken 988 North Missouri, etc., Co. v. Maguire. 511 North Ward Bank v. Newark 834 Northwestern Lumber Co. v. Che- halis County 65 Northwestern Mut. Life Ins. Co. v. Lewis and Clarke County. . . .661, 682 Northwestern, etc.. Packet Co. y. St. Paul 480 Northwestern Telephone Exchange Co. V. Chicago, etc., Ey. Co 158 Northwestern University v. People. . 657 662, 781 North Yarmouth v. Sklllings 259 Norton v. Dyersburg 1096, 1099 Norwich V. Hampshire County Com- missioners 234 Norwood V. Baker 232, 940, 941 990. 991. 997, 999, 1006, 1014 Norwood v. New York & N. E. R. Co 999 Norwood v. King County 732 Nottage y, Portland 635, 928, 937 Nugent T. Jackson IQH O. Oak Cliff v. Etheridge 1108 Oak Cliff V. State 926 Oakland v. Whipple 582 O'Brien v. Wheelock 1021, 1023 O'Bryan v. Owensboro 1063 O'Connor v. Fond dii Lac 307 Oconto City Water Supply Co. v. Oconto 294 Odd Fellows' Hall Assn. v. Daj'ton. 796 O'Dea V. Mitchell 591 O'Donnell v. Bailey 490 Ogden V. St. Joseph 78 Ogden City v. Grossman 455 Ogilyie y. Crawford County 467 O'Grady v. Barnishel 626 O'llara y. State 217, 218, 221, 222 O'Hare y. Dubuque 253 xliv TABLE OF CASE3. Page. Ohio Life & Trust Co. v. De Bolt. . 488 490 780 488 968 716 268 'Ohio & Mississippi Ry. Co. v. Lackey. Ohio, etc., Co. V. McClure Oil City V. Oil City Boiler Works . . Oil City T. Oil City Trust Co. .700, •O'Kane v. Treat •Old Dominion Steamship Co. v. Com- monwealth •Old Dominion Steamship Co. v. Vir- ginia 64, •Oldtown V. Blake 'O'Leary v. Sloo 649, Oleson V. Green Bay Oliver v. Memphis, etc., R. R. Co. . . Oliver V. Monona County Oliver v. Robinson Oliver v. Washington Mills ■Oliver v. White Ollivier v. Houston 912, OIney Loan & Building Assn. v. Parker Olsen V. Smith Omaha v. City Omaha v. State •Omaha Medical College v. Rush . 6P>2, O'Mahoney v. Bullock 649, O'Malley v. Olyphant Borough O'Neill V. Hoboken O'Neil V. Vermont -Opensha'w v. Halpin Opililta V. Daniel Opinions of Justices 161, 196, 832, 918, Orchard v. School District ■Orcutt's Appeal 67, Oregon v. Jennings 1130, Oregon City v. Moore. 269, 846, 847, Oregon, etc., R. R. Co. v. Jackson County 733, ■Oregon, etc., Ry. Co. v. Portland.. ■Oren v. Pingree . Orient Ins. Co. v Orlget V. Hedden Orkney Street ■Orono V. Veazie Orphans' Asylum of Pittsburgh, Appeal of Orr V. Brooklyn Orr V. Oilman 533, 756, 759, Orr V. State Board of Equalization. Orth V. Park Orton V. Brown Orvis V. Park Commissioners Osborn v. Bank of United States. Osborne v. Florida 454, Osborne v. Humphreys Osborne v. Mobile 281, 441, Osborne v. New York ■Osborne v. State 727, Osburn v. Lyons Osburn v. Staley 91S, Oswalt V. Hallowell 386, ■Oteri V. Parker Otis Co. V. Ware Otoe County v. Baldwin Ottawa V. Barney 649, Ottawa County v. Nelson. 670, 671, 780, 790, Ottawa (las Light, etc., Co. v. Downey 727, ■Ottawa Glass Co. v. McCaleb ■Ottawa University v. Franklin County 632, Ottumwa V. City Water Supply Co.. •Ottumwa V. Zekind 718, Ouachita Packet Co. v. Aiken.. 447, 65 65 111 804 140 497 964 625 811 607 913 780 425 1120 613 829 797 1081 314 549 905 137 207 1100 1098 108 1131 901 848 997 1005 1113 546 567 967 627 951 206 760 777 979 701 1111 390 707 490 708 679 773 953 919 792 481 605 621 790 727 792 780 682 779 791 1083 1084 786 480 Oubre v. Town of Donaldsonville. OuUahan v. Sweeney Overall v. Buenzi Overing v. Foote • ■ ■ ■ • • • ■ Owensboro v. Commonwealth, .bbs, Owensboro National Bank v- Owens- boro 398, 399, 401, 403, Owings V. Speed ■■■■■■ • ■ ,•,• Owners of Ground v. Mayor of Al- bany ■ Owners of Land V. People Oxnard Beet Sugar Co. v. State.. Pase. 1104 110!) 934 1034 569 795 485 947 904 931 P. Pace V. Burgess 474 Pacific Bridge Co. v. Kirkham 1.36 Pacific Coast Ry. Co. v. Ramage 677 Pacific Coast Savings Society v. San Francisco 66 Pacific Express Co. v. Seibert.454, 647 648, 709 Pacific Hotel Co. v. Lieb 779 Pacific Imp. Co. v. Ciarksdale. . . . 521 Pacific Insurance Co. v. Soule. . . . 346 352, 362. 364, 369, 370 Pacific .Junction v. Dyer 786 Pacific Nat. Bank v. Pierce County. 676 684 Pacific Ry. Co. v. Cass County.... 569 Pacific R. R. Co. v. Governor 917 Pacific B. R. Co. v. Maguire. . .490, 499 Pacific Undertakers v. Widber.... 1059 Packard v. Tisdale 583 Packet Co. v. Keokuk 480 Packet Co. v. St. Louis 480 Paducah Street Ry. Co. v. County of McCracken 727, 733, 796 Page, In re 791 Paige V. Gross Pointe Twp 926 Palfrey v. Connely 677, 679, 804 Palmer v. Corwlth 596 Palmer v. Danrlllc^ 946, 1010 Palmer v. Helena 1100 Palmer v. McMahon.406, 559, 574, 575 577 Palmer v. Schenck 783 Palmer v. Stumph 649, 784 Pangborn v. Young 917 Parish v. East Coast Cedar Co. . . 586 Parish of Morehouse v. Brigham. . 803 Park Avenue Sewers 965. 967 Parker v. Challiss 992. 1003 Parker v. Commonwealth of Penn- sylvania 272, 278, 279 Parker v. Detroit 1001 Parker v. North British, etc., Ry. Co 12 Parker v. Saratoga County 1093 Parker v. Siebern 404 Parker v. Strauss 73 Parker v. Winsor 385 Parkland. Town of v. Gaines 2.~)4 Parkersburg v. Brown 135 Parkersburg v. Tavenner.6.jO. 946, 992 1003 Parks V. Board of Commissioners. . 284 Parks V. Soldiers and Sailors' Home 1035 Parmalee v. Chicago PS3 Parmenter v. State 223 Parrott. In re .P535 Parsons, Ex parte *..... 516 Parsons v. District of Columbia hV 2*^9 562, 564. 946, 9 40, 906' 901 Parsons v. Inhabitants of Mon- mouth 1093 Parsons v. People 7Q0 772 TABLE OF CASES. xlv Paef rarsons v. Van Wyck 190 I'assaic Water Co. v. raterson. ... 3.5 I'assavant v. United States oBi Passenger Cases 46S Fatapsco Guano Co. v. North Car- olina 425, 477, 478 Paterson v. Society, etc 974 Paterson, etc., Ey. Co. v. City t.£ I'assaic 982 Patten t. Green 569 Patterson v. Kentucky 394 Patterson v. MacomT) 894 Pattison v. Supervisors of Yuba County 137, 1112 Fatten V. Brady 54, 352 Patty V. Colgan 188 I'aul V. Gloucester County Cir- cuit Judge 707 Paul V. Virginia 546 Paulsen v. Portland 577, 580, 999 Pawlet v. Clarke 318 Paxon T. Sweet lOJ 3 Paxton, etc.. Land Co. v. Farmers', etc., Land Co 923 Pavne v. Village of South Spring- field 946 Payson v. Tufts 93 Peacock v. Pratt 659 Peart t. Meeker 166 Pease t. Whitney Ill, 1021 Peay v. Little Rock 1008 Peck V. Raritan Township 236 Peck v. Weddell 276 Peete v. Morgan 4S0 Peirce v. Boston 934 Pell, Matter of.. 755, 758, 760, 761, 936 Pell V. Newark 904 Pelton V. National Bank 415 Pembina, etc., Co. v. Pennsylvania. 448 546 Pence v. Frankfort 254 Pennock v. Commissioners 387 Pennsylvania Telephone Co., In re. 419 Pennsylvania Co. v. State 903 Penobscot Chemical Fibre Co. v. Bradley 32 People V. Alameda County ...... 259, 260 People V. Albertson 341 People V. American Bell Telephone Co 102, 104 People V. Ames ^ 1026 People V. Auditor-General 813 People T. Badlam 596 People V. Batchellor 325 People V. Berkeley 1102 People V, Black Diamond Co 769 Peop'e V. Board of Assessors 973 People V. Board of Equalization... 676 1036 People V. Bo wen 903 People V. Bradley 383 People V. Briggs 931 People V.Brooklyn. 14, 15, 229, 232, 561 610, 618, 643, 644, 941 People V. Brown 1102 People V. Burch 918 People V. Burr 192 People V. Burt 917 People V. Caldwell 99 People V. Carty 323 People V. Central Pac. K. E. Co.234, 583 726, 768 People V. Chicago.322, 326. 666, 667, 1113 People V. Supervisors of Chenango.. 918 People V. Coffey 1021 People V. Cohen 386 People V. Coleman 30, 702, 768 People V. Collins 272 People-T. Commissioners 37, 287, 383 511, 512, 918 Page. People V. Commissioners of Taxes.. 62 67, 416 People V. Compagnie G6n6rale Trans- Atlantique 468, 476 People V. Cooper 892 People V. Devlin 918 People V. Donnelly 386 People V. Dunn 899, 920, 923 People V. Du Puyt 281 People V. Eastman 66 People V.Eddy 657, 768 People V. Equitable Trust Co 44, 50 People V. Fallon 701 People V. Fire Association of Phila- delphia 44, 274, 277, 651 People V. Fisher 25 People V. Flagg 138, 311, 341 People V. Francisco 628 People V. Geneva 1061 People V. Gerke 768 People V. Gold & Stock Telegraph Co. 50 People V. Goldtree 614 People V. Havemyer 311 People V. Henderson 648, 727 People V. Hibernia Bank 769 People V. Highway Commissioners . . 289 People V. Home Ins. Co.. 35, 41, 43, 49 101, 675 People V. Horn Silver Mining Co. . . 44 50, 101, 105 People V. Supervisors of Ingham County 614, 289 People V. Jarvis 718, 720, 724 People V. Judge 892 People V. Kelsey 281 People V. Kirk 926 People V. Knopf 286, 899 People V. Lardner 596 People V. Latham 994 People V. Lawrenpe 205, 946 People V. Lodi High School District. 277 People V. Lynch 637, 972 People V. Macomb Supervisors 314 People V. Mahaney 294, 307 People V. Martin 292 People V. May 1053, 1054 People V. McCreery 6.T7, 670, 768 People V. AIcElroy 918 People V, McFadden 904 People V, Mining Co 386 People V, Mitchell 137, 621 People V. Monroe County 199 i'eople V. Morgan 285 People V. MulhoUand 719 People V, Muliender 904 People V. Naglee 713, 768 People V. National Bank 401 People V. Niles 58 People V. O'Brien 891, 1012 People V. Trustees, etc., of Ogdens- burgh 67, 70, 595 People V. Orange County Road Con- struction Co 226, 332 People V. Owhyee Mining Co 777 People V. Pacific Mills Co 481 People V. Parks 135 People V. Parvin 930 People V. Pinckney 341 People V. Purdy 918 People V. Raymond 342 People T. Rhoads 681 People V. Roper 491, 513 People V. Supervisors of Richmond County 237 People V. Russell 717 People V. Eyan 782 People V. Saginaw Co 136 People V. Saiem 123, li'!). 14(J People V. Salomon 28B, 287, 326 People V. Scott 1028 xlv TABLE OF CASES. Page. People T. Sewer Commission 311 People V. Shearer 386 People V. Smith 67 People y. Starne 917 People v. State Board of Equaliza- tion 110, 111, 116, 779 People V. State Insurance Co 924 People V. Supervisor 200 People y. Thompson 904 People y. Thurber 779 People y. Townsend 673, 679, 770 People y. Trustees of Schools 281 People y. Turner 627, 629 People y. Superyisors of Ulster County 259 People y. United States 385 People y. Weayer 411 People y. Whartenby 768, 769 People V. Whyler 649, 770 People y., Wiant 1102 People V. Wilson Ill, 618 People y. Worthington 681 People y. Zoeller 734 People ex rel. Adelphl y. Wells.. 662 People ex rel. Armstrong Cork Co. y. Barker 77, 105 People ex rel. Badische Fabrlk y. Roberts 96, 103, 105 People ex rel. Barnard y. Wemple. 618 638 People ex rel. Bay City y. State Treasurer 1113 People ex rel. Beaman y. Feltner. . . 90 92, 93 People ex rel. Bijur y. Barker 473 People ex rel. Blair y. Grout. . .196, 205 People ex rel. Brooklyn City E. E. Co. y. The Board of Assessors of Brooklyn 637 People ex rel. Brown y. Superyisors of Onondaga County 203 People ex rel. Bull y. Buffalo. 948, 952 People ex rel. Campbell y. Commis- sioners 91 People ex rel. Canajoharie Nat. Bank y. Montgomery County.... 512 People ex rel. Cayadutta Plank Eoad Co. y. Cummings 983 People ex rel. Chicago Junction Co. V. Roberts 107 People ex rel. Commissioners y. Oneida County 308, 341 People ex rel. Clearing House, etc., Co. V. Barker 733 People ex rel. Connecting Terminal Co. y. Miller 420, 421, 452, 465 People ex rel. Cook v. Nearing. . . . 165 People ex rel. Cooper y. Registrar of Arrears 632 People ex rel. Cornell Steamboat Co. y. Dederick 31, 36 People ex rel. Corscadden y. Howe. 931 People ex rel. Cossey y. Grout 332 People ex rel. Crane Co. y. Feltner. . 105 People ex rel. Crowell y. I^awrence.. 232 People ex rel. Darrow y. Coleman. . . 93 People ex rel. Davidson y. Gilon.983, 984 People ex rel. Day y. Barker 93 People ex rel. Dillon v. Gilon 983 People ex rel. Dives Pelican Mining Co. y. Feltner 104 People ex rel. Dufour y. Wella.... 96 People ex rel. Dunkirk, etc., Ry. Co. V. Batchelor 138 People ex rel. Edison Electric Light Co. V. Campbell 395, 396 People ex rel. Edison Illuminating Co. v. Board of Assessors 396 People ex rel. Edison Co. v. Kelsey. 105 People ex rel. Essex County y. Miller. 222 Page- People ex rel. Farcy v. Wells 104 People ex rel. Farmers', etc., Co. v. "WTeiig y-'v People ex rei. Fiske v. Feltner 733 People ex rel. Fort George Realty Co. y. Miller 102, 104 People ex rel. Goetz Silk, etc., Co. y. Wells • 10* People ex rel. Griffing v. Mayor of Brooklyn. ( See People v. Brooklyn.) People ex rel. Harlan & HoIIings- worth Co. V. Campbell 104, lOft People ex rel. Howlett v. Mayor. . . 989 People ex rel. Huck v. Western Sea- mans' Friend Society 782 People ex rel. Inebriates' Home v. Comptroller of Brooklyn 185 People ex rel. Institution for the Blind y. Fitch 185 People ex rel, Johnson Co. v. Eoberts 396 People ex rel. Kellogg v. Wells. ... 93 People ex rel. Kellogg Newspaper Co. y. Roberts 104 People ex rel. Kilmer y. McDonald. 311 341 People ex rel. Kochersperger v. Bap- tist Theological Union 782 People ex rel. Kochersperger y. Chi- cago Theological Seminary. . .655, 662 781 People ex rel. Lembeck & Betz Eagle Brewing Co. v. Eoberts 104 People ex rel. Lemmon y. Feltner. . . 32 People ex rel. Le Roy y. Hurlbut. . 17 126, 281, 318 People ex rel. Manhattan Fire Ins. Co. y. Commissioners 522 People ex rel. Matheson v. Eoberts. 473 People ex rel. McCormack v. Mc- Wethy 963 People ex rel. McHarg v. Gaus. . . . 93 People ex rel. McMullen v. Shepard. 341 People ex rel. Metropolitan Ry. v. State Board of Tax Commission- ere 35. 39. 48, 51, 52, 342, 302 People ex rel. Mt. Pleasant Academy V. Mezger 663 People ex rel. Murphy y. Kelly. 159, 247 People ex rel. Newburgh Sayings Bank v. Peck 6,55 People ex rel. New London Sayings Bank v. Coleman 679 People ex rel. N. Y. Cent. Ry. Co. y. Knight 50 People ex rel. N. Y. Cent. Ry. Co. y. Morgan 391, 453, 455 People ex rel. N. T. C., etc. E R Co. y. Eoberts 675, 679 People ex rel. New York, etc.. Ferry Co. V. Roberts 50 People ex rel. New York Elevated R. R. Co. V. Squire 899 People ex rel. North v, Feather- stonhaugh 9.53, 954. .,)64 People ex rel. Park Commissioners V. Common Council of Detroit.. 138 „ , , „ 283, 322, 325, 560 People ex rel. Parke, etc. v. Eoberts! 101 People ex rel. Parker Mills v Com- missioners of Taxes io5 People ex rel. Penn. Ry Qq ' V Knight koi' 422 People ex rel. Penn. Ry 'qq „' Wemple 'go •422' 444 People ex rel. Raymond v. Whi'dden! 961 People ex rel. Reynolds v. Buffalo 517 People ex rel. Rochester y, Briggs: '. 924 930 TABLE OF CASES. xlvli Page. People ex rel. Rodgers v. Coler..225, 329 331, 332, 335 People ei rel. Richmond v. Grout. . 192 People ex rel. Scott v. Pitt... 562, 564 946, 992, 1003 People ex rel. Sherwln, etc., Co. v. Barker 104 People ex rel. Sherwin-Williams Co. V. Feitner 105 People ex rel. Simpson v. Wells. . . . 578 580 People ex rel. Singer Mfg. Co. v. Wemple 102, 104 People ex rel. H. B. Smith Co. v. Roberts 104 People ex rel. Southern Cotton Oil Co. V. Wemple 105 People ex rel. Southern Oil Co. v. Roberts 104 People ex rel. Stewart v. Peitner. . . 732 People ex rel. Tower Co. v. Wells. . . 104 People ex rel. Treat v. Coler. . .225, 332 People ex rel. Union Trust Co. v. Coleman 36 People ex rel. United Verde Copper Co. T. Roberts 50 People ex rel. Van Nest v. Commis- sioners of Taxes 400 People ex rel. Waddy t. Partridge. 198 206 People ex rel. Wall, etc., Co. t. Miller 104 People ex rel. Washington Mills Co. T. Roberts 104 People ex rel. Western Railroad Co. y. Assessors of Albany 91 People ex rel. Wood v. Draper. 234, 307 341 People's Bank, Re 384, 782 People's Bank v. Scholl District. . 1099 People's Loan & Homestead Assn. V. Keith 691, 912 People's Loan & Savings Institution of Joliet V. Keith 657, 781 People's Savings Bank v. Layman . 36 383 Peoria v. Kidder 1021 Peoria, etc., Ry. v. People 516 Pepin V. Sage 896 Pepper v. Philadelphia 962 Perkins v. Hayward 964 Perkins v. Heert 923, 928 Perkins v. Lewis 137, 1112 Perkins v. Philadelphia ..338, 340, 854 Perkins v. Slack 337 Perry v. Big Rapids 32 Perry v. Washburn 28, 934 Perry County v. Conway County. . . 260 Perry County v. Lindeman 924 Perry County v. Railroad Co. . . 764, 889 Peru, etc., Ry. Co. v. Hanna 979 Petersburg v. Petersburg Benevo- lent Assn 664 Peterson v. Klttredge 1033, 1038 Pettibone v. West Chicago Park Commissioners 1104, 1105, 1107 Pettit V. Duke 949 Petty V. Meyers 137, 138 Pfeiffer v. Board of Education 181 Pfeiffer v. People 994 Pflrrman, Ex parte 291 Philadelphia v. Electric Traction Co. 851 Philadelphia v. Field 311 Philadelphia v. Fox 272 Philadelphia v. Masonic Home. .185, 186 664 Philadelphia v. Miller 569 Philadelphia v. Pennsylvania Hos- pital 655, 973 Philadelphia v. Pemberton 952 Page. Philadelphia v. Philadelphia, etc., Ry. Co 592, 975, 980 Philadelphia v. Postal Telegraph Cable Co 722 Philadelphia V. Ridge, etc., Ry. Co. 930 Philadelphia v. Sheridan 973 Philadelphia v. Tryon 946 Philadelphia v. Union Burial Ground Society 851, 973, 974 Philadelphia v. Western Union Tel. Co 723 Philadelphia Association v. Wood.28, 123 Philadelphia Company's Petition.. . 853 924 Philadelphia Fire Assn. v. People of New York 44, 546 Philadelphia, etc., R. R. Co. v. Maryland 529 Philadelphia, etc.. Steamship Co. v. Pennsylvania 46, 451, 452 Philbrook v. Kennebec Co 136 Phillips, Matter of 948 Phillips V. Earnhardt 927 Phillips V. Covington 925 Phillips V. Missouri Pacific R. R. Co 892 Phillips Academy v. Andover. . . 169, 949 Phillips Exeter Academy v. Andover. 655 Phoenix Assur. Co. v. Fire Depart- ment of Montgomery 197, 651 Phoenix Carpet Co. v. State. 35, 651, 702 76,'S Phoenix Ins. Co. v. Tennessee 526, 532 Phoenix Ins. Co. v. Welch. 277, 651, 790 Piehoir, Estate of 682 Piekard v. East Tennessee, etc., Co. 52(> 528 Piekard v. Pullman Southern Car Co 440, 455 Plcton V. Cass County 276 Pierpont v. Crouch 922 Pike V. City of Chicago 948 Pilgrim, etc.. Mining Co. v. Teller County 772 Pillow V. Roberts 626 Pim V. Nicholson 922 Pine Grove Township v. Talcott. . . 1112 Pingree v. Auditor-General. .. .652, 812 Pioneer Irrigation District v. Brad- ley 923, 924, 974, 992 Piper, Appeal of 941 Piqua Branch Bank v. Knoop. . , . 50:) Pittsburgh V. Coyle 711 Pittsburgh v. First National Bank. 399 401 Pittsburgh V. Sterrett Subdistrict School 851, 973 Pittsburgh, etc.. Coal Co. v. Bates. 97 4G3 Pittsburgh & Southern Coal Co. v. Louisiana 471 Pittsburgh, etc., Ry. Co. v. Backus. . 58 80, 83, 84, 111, 574, 670, 726, 784 Pittsburgh, etc.. By. Co. v. Fish . . . 592 608, 958 Pittsburgh, etc., Ry. Co. v. Mont- gomery 924 Pittsburgh, etc., Ry. Co. v. Pitts- burgh 654, 723, 851 Pittsburgh, etc., Ry. Co. v. State.. 6.14 Plainfield v. Sage 99 Pleasant v. Kost 268, 781 Pleasant Hill v. Dasher 611 Pleuler v. State 699, 828 Plumb V. Christie 163 Plumer v. Supervisors 635, 630 Plummer v. Borsheim 841 Plummer v. Coler 31, 107, 374, 383 Plumley v, Massachusetts 47« Poe V. Jones 726 xlviii TABLE OF CASES. Page. Poillon T. Rutherford 1005 I'oindextei- v. Greenhow 519 Poindexter v. Virginia 525 Police Commissioners v. Louisville. 307 Police .Tury v, Britton 1096 Police Jury v. Succession of Mc- Donough 137, 280 Pollard Y. State 414 Pollock V. Farmers' Loan & Trust Co. ..30, 346. 350. 352. 355. 3."7, 305 300. 367, 370. 373, 374. 376, 377, 677 Poppleton T. Yamhill County... 67, 68 381. 657, 847 Porter y. County Commissioners... 605 Porter v. Milwaukee 105 Porter y. Rockford, etc.. Co.. 48, 653, 682 685, 727. 779, 780 Portland v. Portland Bituminous, etc., Co 952, 954 Portland v. Portland Water Co. . . 660 661, 804 Portland y. Tick 917, 920 Portland Bank y. Apthorp 651, 810 Portland Sav. Bank v. Evansville. . 1098 Port Royal Mining Co. y. Hagood. 276 Portsmouth Sav. Bank y. Village of Ashley 1100, 1134 Portuondo's Estate 751 Post V. Pulaski County 1117 Postal Telegraph Cable Co. y. Adams 447 Postal Telegraph Co. y. City Council of Charleston 455 Postal Telegraph Cable Co. v. Nor- folk 722 Postal Telegraph Cable Co. y. Taylor 445 Potter Y. Douglas County 1054 Potter Y. Orange Ill Poughkeepsie y. Quintard 1077 Powell Y. nurden 904 Powell Y. Madison 468. 1100. 1114 Powell Y. Newburgh 199 Power v. Detroit 966 Power Y. Kitching 924 Powers Y. Dougherty County 280 Powers Y. Fuller 625. 626 Powers Y. Inferior Court of Dough- erty County 137 Powers Y. Penny 627 Powers Y. Wood County Commis- sioners 249 Prairie Cattle Co. y. Williamson. . 673 688 Pratt Institute y. New York 505 Prescott Y. Canal Trustees 917 Prescott Irrigation Co. v. Flathers.. 166 President of College v. Schaefer. . . 497 Preston y. Boston 94 Preston y. Roberts 254, 573 Preston y. Rudd 1018 Prettyman v. Superyisors of Taze- well County 137, 1112 PreYost V. Gremoux 536 Price V. Hunter 91 Price V. Moundsville 920 Price Y. People 434, 698 Pickett Y. Mareelina 1113, 1118 Primghar State Bank v. Rerick.727. 787 Prince, In re 501 Prince y. Crocker 159, 310, 337 Prince v. Quincy.1054, 1059, 1063, 1067 Prince George's County y. Commis- sioners of Laurel 807 Prindle y. Campbell 619 Prltz, Ex parte 904 Proprietors of Mount Auburn Ceme- tery Y. Cambridge 999 Protestant Episcopal Church of St. Philip Y. Prlolieu 858 ProYidence Bank v. Billings ProYidence Retreat v. Buffalo ProYident Institution v. Allen..... ProYident Institution v. Jersey City. Provident Institution v. Massachu- gettg 44. 101, Provident " Trust Co. Y. Mercer County ■ Pruitt v. Gaston County Commrs. . . Pueblo v. Robinson ■■■■ Pueblo County v. Wilson 672, Pullen V. Commrs. of Wake County. Pullman Company v. Adams Pullmans Palace Car Co. v. Penn- sylvania 60, 80, 460, Pump Y. Lucas County 843, Pumphrey v. Mayor, etc., of Balti- more Purdy Y. Drake Purnell v. Page I'urrington v. People Pursley v. Hayes Putnam v. Grand Rapids Putnam County v. Krauss Putney v. Passaic Pyle V. Brenneman Q- Quaker City National Bank v. Nolan County 624 Quarles v. Sparta 927 Queen v. Arnoud 37 Quigg Y. Evans 239 tjuill Y. Indianapolis 1021, 1081 Quincy v. Lawrence 386 Quincy, etc.. Ry. Co. v. Morris 1112 Quinlon v. Rogers 625 Page. 511 971 997 567 591 381 1140 702 946 772 748 458 462 908 311 961 393 619 630 1070 961 1004 72 Racine Iron Co. v. McCommons. . , , RadcllfCe v. Scruggs Railey v. Board of Assessors Railroad, etc., Co. v. Bd. of Equali- zation Railroad Co. v. County of Otoe. . . . Railroad Co. v. Gaines Georgia Harris Husen Loftin Maine 505, Maryland Parcher Peniston. .389. 392, Western Railroad Co. Railroad Co. v. Railroad Co. v. Railroad Co. v. Railroad Co. v. Railroad Co. v. Railroad Co. v. Railroad Co. v Railroad Commission Union Telegraph Co. Railway Co. v. Philadelphia Railway Co. v. State Rainsburgh Borough v. Fyan Raleigh v. Peace 294, 611, 649, Raleigh & Gaston R. R. Co. v. Reid. Raleigh, etc.. R. R. Co. v. Reid.... Raley v. Guinn Ralls County Ct. v. United States.! Rambo v. Larrabee Ramsey v. Shelbyville ,', Ramsey County v. Church of the Good Shepherd 662 Ramsey County v. McAlester Col- lege C62 Rand v. Pittsfleld Randall v. BIwell '.'.'." Randolph v. Bayne !!!.'*' Rankin v. Love !'.'*'' Ratterman v. Western Union TelV graph Co Rathbone v. Board of Commrs. . ' Rathbone v. Wlrth ' ' ' 435 630 67 734 247 660 531 455 423 500 531 421 529 393 420 501 846 1106 839 497 490 627 516 907 1090 815 815 91 582 612 834 4.->7 9(14 280 TABLE OF CASES. xlix Page. Ratliff V. Beale 607 Rauch T. Chapman 1056, 1057 Ray V. .Tetfersonville 966 Raymond v. Hartford Fire Ins. Co. . 657 667, 780, 781 Raymond v. Rutherford 1004 Read v. Plattsmouth 621, 623 Reading v. Savage 853, 891 Reclamation District v. Evans 577 Reclamation District v. Phillips . . . 562 Reclamation District v. County of Sacramento 770 Redmond v. Commissioners 70 Red River Furnace Co. v. Tennessee, etc., Ry. Co 923, 1116 Redwood County v. Winona & St. Peter Land Co 637 Reed v. Thompson 625, 626 Reelfoot Lake Levee District v. Dawson 234, 290, 650, 670 Rees v. Watertown 515, 521 Reeves v. Philadelphia Traction Co. 854 Reeves v. Treasurer of Wood County. 123 649, 845 Regina v. Lichfield 199 Reineman v. Covington 1114 Reinboth v. Pittsburgh 1098 Reinken v. Fuehring 169, 949 Remsen v. Wheeler 33, 5G6, 569 Renwick V. Davenport, etc., Ry. Co. 1113 Republic Life Ins. Co. v. Pollak 779 Rettew V. St, Patrick's Church 773 Revell V. Annapolis 313 Revenue Agent v. Tonella. (See Adams v. Tonella.) Revenue Commissioners v. State . . . 239 Reynolds v. Florida Cent. R. R. Co. 637 Reynolds v. Lyon County 1120 Reynolds v. Waterville. .1067. 107(i. 1111 Reynolds, etc., Co. v. Police Jury . . 661 Rhodes v. Iowa 422 Rhode Island, etc., Co. v. Arming- ton 382 Rice V. Poster 279 Rice y. Milwaukee 1066, 107* Rice V. State 892 Rice County v. Seabury Mission .... 815 Rich V. Flanders 628 Rich V. Mentz 1139 Rich V. Packard National Bank .... 390 Richards v. Commissioners of Clay County 583 Richards v. Raymond 313 Richards v. Rock Rapids 411 Richland County v. Lawrence County. 260 Richman v. Supervisors of Muscatine County 635, 636, 786, 904, 922 Richmond v. Scott 670, 783 Richmond, etc., R. R. Co. v. Com- missioners 624 Richmond, etc., R. R. Co. v. Lynch- burg 650, 1008 Ricketts v. Spraker 1021 Ridpath v. Spokane County 679, 684 Riebllng v. People 947 Rieman v. Shepard 468 Riggs V. Johnson County 515, 516 Riley v. Charleston Union Station Co. 925 Riley v. Western Union Tel. Co. . . . 648 Rima v. Cowan 627 Ring V. Williams 607 Rippe V. Becker 158 Ritchie v. Franklin County 623 Ritchie v. People 699, 931 River Forest v. Chicago, etc., Ry. Co 979 Rivers v. New Orleans 583 Riverside Park, Matter of 580, 958 Robbins T. Shelby Taxing District. . 419 424, 426, 428, 429 iv Page. Roberts, Matter of 284. 917 Roberts v. Bolles 1130 Roberts v. Charlevoix Township. 62, 63 Robertson v. Commonwealth 469 Robertson v. McGough 470 Robertson v. Omaha 933, 954 Robertson v. People 917 Robertson v. Preston 270, 670, 1035 Robertson v. Rockford 137. 1112 Robertson v. Staunton 1113, 1114 Robinson, Ex parte 702, 831 Robinson v. Bidwell 137 Robinson v. Dunn 215 Robinson v. First Nat. Bank. . .620, 027 Robinson v. Howe 935 Robinson v. Library Trustees of Ala- meda 1111 Robinson v. Longley 98 Robinson v. Perry 900 Robinson v. Schenck 783 Robson V. Dubose Ill Roeheblave Market Co. v. New Or- leans 732, 803 Rochester v. Glenchauf 583 Rochester v. Upman 699 Rochester v. Rochester Ry. Co. .490, 514 Rock County v. Edgerton 700 Rode V. Phelps 918 Rode V. Siebe 731 Rodman v. Town of Washington . . . 919 Rogan V. Watertown 140, 1113 Rogers, In re 930 Rogers v. Burlington 334, 1097 Rogers v. Le Sueur County .. .1065, 1097 Rogers v. McCoy 427, 432 Rogers v. Rochester, etc., Ry. Co. . . 1116 Rohr V. Gray 808 Rollins V. Gunnison County Commis- sioners 1100 Rolph V. Fargo.. 649, 841, 043. 992, 1003 Roosevelt Hospital v. Mayor, etc.. of New York 973, 974 Root V. Board of Education . . .248, 842 Roper V. Elizabeth City Lumber Co. 586 Rose V. Beaver County 901 Rose V. Low 226 Rosenblatt v. Johnson 401 Rosenbloom v. State 582 Rosetta, etc., Co. v. Jollisaint. .649, 804 Ross V. Chosen Freeholders 894 Ross V. Davis 16 + , 026 Ross V. Kendall 992 Rothermel v, Myerle 439 liounc'.enbush v. Mitchell !'49 Roundtroe v. Galveston 030, 941 Roup's Case 850 Rowan v. State 555 Royall V. Virginia 520 Royster Guano Co. v. Tarboro H?,9 Rozell, In re 427 Ruggles V. Pond du Lac 411, 414 Rumsey v. New York, etc., Ry. Co. . 918 Rushville Gas Co. v. Rushville 101 Russ v. Commonwealth 227 Russell V. Akley Lumber Co 590 Rutgers v. Mayor, etc., of New Brunswick 891, 899 Ruth's Appeal 84'J Ryan v. City of New York 225, 330 Ryers, Matter of 165 Ryerson v. Uttley 158, 927 S. Sackett, Matter of 624 Sackett v. New Albany 1054, 1059 Saco Water Power Co. v. Buxton ... 32 Sacramento v. Crocker 702, 712, 768 Sacramento v. Stage Co 702 TABLE OF CASES. Page. Saginaw v. Saginaw Circuit Judge. 716 Saks V. Birmingham 765 Salem, etc., Co. v. Essex County. . . 234 311 Salem Iron Factory v. Danvers .... Ill Salem Water Co. v. Salem 1067 Saleno v. Neosho 106.5, 1066 Saloy V. New Orleans 516 Salt Co. T. Bast Saginaw 511, 512 Salt Lake City y. Wagner 717 Salt Lake City National Bank v. Golding 383, 404 Sams V, King 627 San Antonio v. Jones 137, 280 San Antonio v. Lane 137 Sanborn v. Rice County 815 San Diego v. Linda Vista Irrigation District 649, 662, 770, 974 Sands v. Richmond 650 Sanford v. Poe 726, 740, 742 >San Francisco v. Anderson 32, 684 San Francisco v. Broderick 340 San Francisco y. Fry 769 San Francisco v. La Societg Fran- caise 769 San Francisco v. Liverpool, etc., Ins. Co 197, 336 San Francisco v. Luy 91 San Francisco v. Spring Valley Water Works 670, 769 San Francisco Gas Co. v. Brick- wedel 1072 San Francisco Gas Light Co. v. Schlotter 768 San Francisco Nat. Bank t. Dodge. 414 415 San Francisco Paving Co. v. Bates. 992 1003 San Francisco, etc., Ry. Co. v. State Board of Equalization Y26 Sangamon, etc., R. R. Co. v. Morgan County 234 Sanitary District of Chicago v. Mar- tin 666, 667, 668, T82 Sanitary District of Chicago v, Ray. 904 San JosS v. San Jos6 503 San Jos6 Gas Co. v. January . .415, 768 San Mateo County v. Southern Pa- cific Ry. Co P19 San Ohispo v. Pettit 596 Santa Clara County v. Southern Pa- cific R. R. Co 553, 574 Saranac Lake & Timber Co. v. Comp- troller 628, 630 Sargent v. Bean 610, 020 Satterlee v. Mathewson 15 Sauer v. Gillett 1134 Saulsbury v. State 431, 434 Savannah v. Solomon's Lodge 664 Savannah, etc., Ry. v. Savannah. . . 490 647 Savings Bank v. New fjondon 673 Savings & Loan Society v. Mult- nomah County 71 Saw-mill Hun Bridge, In re 956 Sawyer v. Dooley 581, 727, 831 Sawyer v. Metropolitan Water Bd. . 194 Sswyer v. Viles 486 Sayre v. Phillips 433, 718 Schenley v. Commonwealth ... .615, 933 945, 961, 969 Schiller v. State 'J24 Schley, In re 924 Schmalz v. Woolley IMo Schmidt v. Failey 8<;. SS Schmitz V. Zeh 1120, 1142 Schneck v. JeffersouvlUe. .229, 2:17, 1117 Schneewind v. Niles 1033 Schneider v. Menasha 247 Scholey v. Rew 346, 352, 364, 309 Pagt 43i 478 Schollenberger v. Pennsylvania . . . School aty of Rushville v. Hayes. 900 School District v. Bowman. ..•• •• • ^° School District v. School District.. 930 School District v. Stone 1136, 1138 Schoolfield v. Lynchburg . • '*» School Town of Winamac v Hess. . 1120 Schroeder v. Overman . . .997, 1001, 1005 Schultes V. Bberly . ■ • ^»J Schum V. Mayor, etc., of Newark. . . 997 Schumaker v. Toberman b.« Schuyler Co. v. People 92d Schwartz v. Dover »oi Schwartz v. Wilson v:." ' •.• 1 -"-"'^ Schweiss V. First Judicial District Circuit o^l Scofield V. Lansing 2(2 Scofleld V. School District 181 Scott V. Society of Russian Israel- ites 6C2, 830 Scott V. Toledo 574, 578 Scott County v. Hinds 945 Scottish TTnion, etc., Ins. Co. v. Bowlands 67, 38.3, 582, 607 Scottish Union, etc., Ins. Co. v. Herriott. . .44, 46, 101, 651, 653,. 787 Scoville V. Cleveland 941 Scully V. People 676, 677 Scranton v. Bush 962 Scranton v. Koehler 992, 1003 Scranton v. Silkman 854. 900 Scranton School District, Appeal of. 853 854 Scripps V. Board of Review 66, 75 Seaboard Nat. Bank v. Woesten. . . . 953 Seanor v. County Coramrs 311. 974 Sears v. Board of Street Commis- sioners of Boston.. 160, 169. 57S, 811 945, 949. 967, 968, 970, 1001, 1005 Sears v. Cottrell 600 Seattle v. De Wolfe 612 Seattle v. Hill 1021 Seattle v. Kelleher 933. 969, 1024 Seattle, etc., Co. v. Seattle, etc., Dock Co 928. 957, 1081 Seattle v. Smyth 225 Seattle v. Yesler 612 Second Ave. Church, JIatter of 618 Second Nat. Bank v. Caldwell. .400, 401 Second Universalist Society v. Provi- dence 973, 974 Security Savings, etc., Co. v. Hin- ton 291 Security Savings Bank v. San Fran- cisco 769 Sedgwick County v. Brinker 790 Seeley v. Pittsburgh 955 Seibert v. Copp Oil Selleck v. Tallman 101 a Selma & Gulf Ry.. Ex parte 136 Senate Resolution, In re 158 Sessions v. Crunkilton 947 Seward v. Liberty 1066 Seward v. Rising Sun 78, 116 Sewickley M. B. Church's Appeal . . , .851 Sewlckley School District v. Osburn School District 714 Shank v. Smith 945, 952, 953, 1021 Shapleigh v. St. Angelo 521 Sharp V. Johnson 1024 Sharpless v. Philadelphia 15 123 124, 125, 130, 137, 230, 247', 280 Shattuck v. Smith 732! 841 Shaw V. Dennis '2:^4, 561 Shaw V. Independent School Dist. . .' 1136 Shaw V. Statler 1072 Shawler v. Johnson [[ q2j Shawnee County v. Carter ]', xil7 TABLE OF CASES. Page. Sheehan v. Good Samaritan Hospi- tal 973 Sheehan v. Long Island City 1114 ShefHeia v. Parsons 479 Sheffield School Township v. Andress. 1092 Sheibley v. Rome 677 Shelby County v. Exposition Co. . . . 226 IShelby County v. Miss. & Y. R. Co. . 637 Shelby County v. Union & Planters' Bank 52 Shelby County Judge t. Shelby R. R. Co 234 S^'ieldon v. Van Buskirk .598 fbeley v. Detroit 948, 992 Pnelley v. Towle 627 Ki'.epard t. Barron 1021 Shepherd's Fold of the Protestant Church V. Mayor, etc., of N. Y. . . 183 Sheppard v. County Commrs. . .550, 706 >"''erman v. Carr 192 ■f-'herraan v. Story 917 i-'herry v. McKinley 626 ■Shields v. Ohio 531 Shimmons v. Saginaw 948, 964 Shoemaker v. Cincinnati 997, 1005 Shoemaker v. United States 947 •Short's Estate 67 fJhort T. State 806 Shotwell V. Moore 384, 727, 845 fihi-ack V. Covalt 961 ■f-'hreveport v. Coast Line 481 ■Shreveport v. Jones 281 ■Shreveport v. Prescott 983 Shrevcport v. Shreveport City Ry. Co 983 Shuck V. Lebanon 254 Shumate v. Fleman 1002 Sibley v. Bullis 619 Sibley t. Mobile : 515 Sibley v. Smith : 627 Sidway v. Lawson 615 Sierra County v. Dona Ana County. 266 Sigler V. Fuller 1004 Silkman v. Water Commissioners of Yonkers 33 567 Silver Bow County v. Davis 683 Simon v. Northrup 311, 846, 901 902, 923 Simmons v. Aldrich 638 Simpson v. Hopkins 806, 807 Simpson v. Kansas City 229 Simpson v. Lauderdale County .... 1093 Simrall v. Covington 78 Sims V. Parish of Jackson 654, 803 Sinclair v. Learned 614, 615 Sinclair v. State 552 Singer Mfg. Co. v. Heppenheimer . . 42 Singer Mfg. Co. v. Wright 704 Sioux City v. Independent School District 787, 1114 Sipe, In re (Sipe v. Murphy) 711 Sisk V. Cargile 902 Sisson V. Supervisors of Buena Vista County 924 Sisters of St. Elizabeth v. Chatham. 658 663, 803, 934 Skinner v. Santa Rosa 1099, 1101 Slack V. Maysville, etc., Ry. Co.... 137 1112 Slatmyer v. Springborn 900 Slaughter v. Commonwealth 705 Slaughter v. Mobile County 516 Slaughter House Cases 542. 544 545, 546, 547 Slauson v. Racine 254 Sleeper v. Bullen 1021 Sleight V. People 670, 778 Sloan T. State ; 158 Sl>>comb V. Fayetteville 162 Kmall's Estate 70 Page. Smith V. Aberdeen 281 Smith V. Alabama 447, 701, 720 Smith V. Americus 254, 775 Smith V. Bengley 683 Smith V. Broderick 1072, 1123 Smith V. Burley 676, 679, 833 Smith V. Byers 91 Smith V. County Commissioners. . . . 654 Smith V. Dedham 1066, 1067 Smith V. Dunn 215 Smith V. Grayson County ? 904 Smith V. Hard 615 Smith V. Indiana 693 Smith V. Jackson 439 Smith V. Kelly 732, 848 Smith V. Kipp 630 Smith V. Maryland 590 Smith V. Omaha 997, 1005 Smith V. Ormsby 1122 Smith V. Proctor 1103 Smith v. Scruggs 724 Smith V. State 474 Smith V. Stephen 1116 Smith V. St. Joseph 1073 Smith V. Tharp 587 Smith T. York County 599 Smith V. Worcester 562, 991, 1008 Smith's Lessee v. Chapman 586 Smyth V. International Life Assur- ance Co 105 Snipe V. Shrlner 583 Snow V. Fitchburg 1006, 1008 Snyder v. Bettman 374 Snyder v. Poster 136 Society for Savings v. Coite . . 35, 44 101, 382 Soens V. Racine 123, 957 Solomon v. Tarber 164 Solon V. WlUiamsburgh Sav. Bank. 1131 Sommers v. Boyd 67, 90 South Bend v. Martin 431, 432 South Bend v. Reynolds 1066 South Cambria, The 425 South Carolina v. Gaillard 525 South Carolina v. United Siales. . . 376 South Covington, etc.. Street Ry. Co. V. Bellevue 35, 682, 795, 797 South Dakota v. North Carolina... 518 Southern Building & Loan Assn. V. Norman. .46, 101, 651, 653. 683, 797 Southern California Ry. Co. v. Work- man 984 Southern Express Co. v. Mobile. . . . 455 708 Southern Gum Co. v. Laylin. . . .51, 651 682, 846 Southern Ry. Co. v. St. Clair County. 290 South Nashville St. Ry. Co. v. Mor- row. .36, 52, 67, 75, 77, 637, 637, 683 939 South Platte Land Co. v. Buffalo County 569 South Portland v. Cape Elizabeth . . 259 Southwestern Telegraph Co. v. San Antonio 35 Spain, In re 435 Spalding v. Commonwealth. .86. 90, 92 Spangler v. Jacoby 917, 919 Spanish River Lumber Co. v. Bay City 596 Spaulding v. Peabody 162 Speed's Estate, In re 653, 748, 780 Speer v. Athens 921, 992, 1003, 1011 Speer v. School Directors 195 Speir V. New Utrecht 1021 Spencer v. Joint School District. . . . 181 Spencer v. McCowen 599 Spencer v. Merchant 229, 232, 233 562, 575, 633, 636, 933, 935, 966, 969 991 Hi TABLE OF CASES. Sperry t. Flygare 231, Spier V. Baker Spies V. Illinois 548, Spiller V. Inhabitants of Woburn . . Spilman v. Parkersburgh 1054, Spinney v. Lynn Spitzer v. Blanchard Spreckels Sugar Refining Co. v. McClain Springer v. United States 346, 369, 370, 559, Springffeia y. Baker Springfield v. Edwards 1063, Springfield v. Gay 164, 1006, Springfield y. Green 968, Springfield y. Sale Springfield y. Smith 503, 679, Springfield y. Springfield Street. . . . Springfield Fire, etc., Co. y. Kees- yille Springfield Safe Deposit Co. y. At- tica Spring Valley Coal Co. y. People . . . Spring Valley Waterworks v. Schot- tler 35, 415, St. Alhans y. National Car Co St. Charles y. Nolle St. Clair County y. Interstate, etc.. Transfer Co St. Joseph y. Ernst 679, St. Joseph y. O'Donogbue St. Joseph Township y. Rosters. . . . 624. 1102, St. Joseph, etc., Ry. y. Buchanan County Court St. Louis y. Alexander 137, St. Louis y. Allen St. Louis V. Boatmen's, etc., Co. . . . St. Louis V. Brown St. Louis y. Clemens St. Louis V. Consolidated Coal Co. . . St. Louis y. Green St. Louis y. Laughlin St. Louis y. Spiegel St. Louis y. Sternberg St. Louis y. Tiefel St. Louis y. Weber St. Louis y. Western Union Tel. Co. St. Louis County Court y. Griswold. St. Louis, etc., Co. v. Board of As- sessors of St. Louis County St. Louis Loan & Investment Co., In re 683, 691, 780, St. Louis Mutual Life Ins. Co. y. As- sessors of St. Louis County St. Louis, etc., Ry. y. Alexander... St. Louis, etc., Ry. y. Berry St. Louis, etc., Ry. Co. y. Dayis. . . St. Louis Southwestern Ry. Co. y. Grayson St. Louis, etc., B. R. Co. y. Loftin. . St. Louis, etc., Ry. Co. y. Worthen. 726, St. Mary's College y. Crowe... 662, St. Paul y. Dow St. Paul y. Merritt St. Paul y. Mullen St. Peter's Church v. County of Scott Staats' Lessee- y. Board Stafford County Commissioners y. First Nat. Bank Stahl y. Kansas Educational Asso- ciation 662, Stanbery y. Sillon Page. 955 927 560 180 1070 . 96 1138 352 365 581 941 1064 1008 994 995 719 312 33 621 732 768 77 724 443 682 941 621 1130 137 280 611 . 720 611 933 446 680 281 822 582 927 716 447 723 947 681 781 824 486 531 574 647 906 490 511 574 731 663 792 701 67 2, 815 583 792 627 Page. Standard Life & Accident Ins. Co. y. Board of Assessors of DetroU^. b|| Standard Oil Co. y. Bachelor 467 Standard Oil Co. v. Combs • ■ • ■ *5» Standard Oil Co. y. Commonwealth . bo4 Standard Oil Co. y. Spartanburg. . . 85S Standard Underground Cable Co v. Attorney-General ^-' ||| 917 Stanford v. San Francisco. .... .77, 91 Stanley County v. Coler.1131, 1136, 1138 Stapylton y. Thaggard o9J Starin v. Town of Genoa 280, 109» Starnes y. Mutual, etc., Co 92.S State y. Abbott ' ^ State y. Addison ■•ia . State y. Adler si? State y. Agee ■ • ■ ■ Hi. State y. Aitken 670, 828 State y. Alabama Bible Society.4 97, 765 State y. Allen 120. 823, 923 State y. Alston 748, 751 State y. American Biscuit Mfg. Co.. 801 State y. American Sugar Refining Co 801 State V. Armstrong 915 State y. Anaconda 930' State y. Anderson 899 State y. Angelo 698 State y. Algood 920' State y. Apgar 605 State V. Applegarth 438, 715 State y. Assessor 384 State y. Atkin 335 State y. Austin, etc., Ry. Co 35 State y. Babcock 1095, 1097 State y. Back 578 State y. Bacon . . . . : 917 State y. Bank of Smyrna 501 State y. Bazille 753: State y. Bean 695, 71T State y. Bell 604 State y. Bengsch 654, 6.37, 695, 698 700, 823 State y. Bentley 835 State V. Bergen 1004 State y. Bixman 608, 721, 823- State y. Board of Assessors. . .473, 474 522, 655, 669- State y. Board of Liquidation 1031 State y. Board of Trustees . . . 892, 899^ State y. Bockstruck 924 State y. Bowers 924 State y. Boyd 240. 383, 900^ State y. Branin 37, 67, 835 State y. Bristol 1122 State y. Brown 924, 930- State y. Browning 432 State y. Brown Tobacco Co 686 State y. Burgdoerfer 928 State y. Cage 166- State y. California Mining Co.. 831, 895 State y. Camp Sing 826- State y. Canadian Pacific Ry. Co.. 73& State y. Cauda Cattle Car Co. .648, 816- State y. Canal & Claiborne R. Co.. 988 State y. Carrigan 468 State y. Carson 891 State y. Carson Savings Bank. 657, 681 831 State y. Carter gsj State v. Case 928 State v. Cassiday 190, 699 9?^ State y. Central Pacific Ry. Co....' 913: State V. Central Savings Banli of Baltimore 44 ggg. State V. Certain Lands in Redwood County Q37 TABLE OF CASES. liii Page. State T. Chapman 802, 803 State T. Charleston 137, 247 State V. Cheraw & Darlington R. R. Co 858 State V. Chicago 527 State V. Chicago, etc., Ry. Co 701 State V. Cheetham 215 State V. Citizens' Bank of Louisana. 700 State T. City Council 944 State V. Clarke 701, 748 State T. Clay County 135 State T. Coffin 928 State V. Collector 91, 92 State y. Columbia 859, 1032 State V. Commissioners 512, 569 State V. Common Council 1095 State T. Consolidated Virginia Min- ing Co 831, 805 Slate V. Cooper 724, 839 State V. Cork 77 State v. Cornell 123, 126, 226, 930 State T. County Court 899, 902 State V. CoTington 307, 922 State y. Crawford 215 State V. Croshy 272 State T. Cumberland 654, 808 State T. Cumberland, etc., Ey. Co.. 442 71 State y. Dalrymple 31. 107, 110 State y. Darcy 67 State V. Davidson 719 State y. Debar 701 State V. Des Moines. 272, 560, 899, 902 State V. Dickerman 9.iJS State y. District Court 948 State y. District Court of Ramsey County 956, 968, 983 State y. Doherty 707, 777 State V. Drake 569 State y. Duluth Gas & Water Co. . . 694 State y. Dupr6 801 State y. Durein 547 State y. Earl 67 State y. Echols 1103 State V. Eckendorf 801 State V. Bdgerton School District. 180 State T. Eldredge Ill State y. Ellett 892, 899, 906, 907 State y. Ensign 956 State y. Estabrook 831 State y. Exptass Companies. . .727, 784 State y. Palklnburge 99 State y. Hannibal, etc., State y. State y. State V. State y. State y. State y. State T. State y. State y. State V. State y. State V. State Ferguson 931 Ferris 591, 753, 843 Fidelity, etc., Co 67, 687 Field 308, 1030 Fleming 455 Foley 123 Foraker 1102 Forcier 720 Fosdick 651 Fox 930 Francis 920 Frank 918 Freeholders of Hudson County 900 State y. Freeman 701 State V. French 434, 712 State y. Garroute 1101 State y. Gaylord 67 State y. Goetze 438 State y. Gorbroski 714 State y. Gorham 436 State V. Gouss 786 State V. Graham 827, 912 State y. Gullbert 751, 754 State y. Hagood 917 State y. Haight 66, 383 State V. Hamlin 74S, 7.:i, 805 State y. Hannibal 913 Page. R. K. Co.. 6.59 660, 824 State y. Harrington 701 State y. Harrison 931 State y. Ilarrub 924 State y. Hart 383 State y. Hartford 973 State y. Harstendick 923 State v. Hawes 1053 State y. Hay 701 State y. Heineman 701, 720 State y. Helms 486 State y. Heman 939 State y. Henry 1023 State y. Hermann 899 State y. Herron 625 State y. Higgins 004 State y. Hirn 801 State V. Hitchcock 903, 904 State y. Hoboken 718, 961, 999 State y. Horner 638 State y. Houser 193 State y. Hudson 1004 State y. HufEaker 603 State T. Hunt 469, 550, 705, 83g State y. Hunter 307 State v. Indiana, etc., Co 419 State V. Indianapolis 657, 784 State y. Insurance Co 650' State V. Insurance Co. of North America 277, 660, State V. Irvin State y. Jackman 679, 832, State y. Jacksonville, etc., Co State V. Jersey City. .33, 566, 577, State y. Jewell State y. Jones... 92, 680. 681, 727, 777, 839, 845, State V. Kalsem 307, State y. Kansas City, etc., Ry. Co... State V. Karstendick State y. Kennedy State V. Kidd 77, State V. Kieswetter State V. Klectzen 702, State V. Klein State y. Kruttschmidt State y. Lakeside Land Co.... 654, State y. Lancaster County. 289, 552, State y. Lathrop State V. Leavenworth County State V. L'Engle State y. Liyandias State v. Liverpool, London & Globe Ins. Co 802, State V. Llewelling State V. Long State V. Luther State V. MacAlester College State y. Madison State y. Maine, etc., Ry. Co. .35. 51, 527, 651, State y. Manhattan Silver Mining Co State y. Marion County Court. . . . State V. Mason State V. Mathews State y. Mayhew State v. Mayor State y. McClelland State V. McCracken 030, State y. McMahon State V. McNally State y. Medbur.v State V. Memphis, etc., R. R. Co... State V. Meyer State V. Mickey State v. Missouri, etc., Ry. Co 82» 838 loia 928 1004 111 731 9ir 904 1035- 928 473 687 918 841 699 831 660 810- 927 1102 705 790> 1033. 425 803 904 930 816- 973 1097 512' 80» 831 0.30 1030 92 281 1034 918. 931 1013 801 loer 584 58.t 91S 1035- Jiv TABLE OF CASES. Page. State T. Mitchell 1021 State V. Mofeett 692, 817 State T. Montclair, etc., Ry. Co. . . 619 620 State T. Montgomery 433, 713 State V. Moore. .469, 550, 702, 705, 708 838 ■State V. Morristown 577 State v. Namias 719 State V. Napier 858 State T. Nashville Sav. Bank 638 State T. Nelson 189 State T. Nemaha County 789, 892 State V. Newark 20, 514 (See Agens v. Newark.) State T. New England Mutual Ins. Co 103, 802 State T. New Orleans 313, 516, 1032 State V. N. Y., N. H. & H. Ry. Co. . 583 State v. Nomland 923, 931 State V. Northampton Township . . . 900 State T. Northern Belle Mill & Min- ing Co 638 State V. Northern Central By. Co.. 808 State v. Northern Pacific Express Co 456, 692, 817 State V. Noyes 281 State T. O'Connor 427 State V. O'Hara 707, 802 State T. Osawkee 189 State V. Oshorne 670, 734 State V. Parsons 474 State V. Pearson 67 State T. Pennoyer 833 State V. Peterson 918, 920 State T. Philadelphia, etc.. By. Co.. 35 46, 651, 806, 808 State V. Pierce County 930 State V. Pioneer Savings & Loan Co 691, 816 State V. Piatt 917 State V. Portage 1007, 1010 State V. Powell 713 State V. Powers 835, 907 State V. Poydras 705 State V. Poynter 657, 660, 827, 828 State V. Pratt 432 State V. Price 903 State V. Pugh 899 State V. Rahway 272 State V. Railroad Co 467 State V. Railroad Corporations .... 654 859 State V. Rankin 427 State V. Redwood Falls Building & Loan Assn 692 State V. Reed 930, 931 State V. Reis 169, 949 State V. Richards 434 State V. Richland Township 196 State V. Robert P. Lewis Co. ..992, 1003 State V. Robertson 918 State v. Robinson 930 State v. Roby 701 State V. Rocky Mount Bell Tele- phone Co 455 State V. Rogers 898, 920 State V. Rolle 707 State V. Royse 1030 State V. Runnels 930 State V. Runyon 71 State V. Sanders 903 State V. Scampini 276, 279 State V. Scheve 180 State V. Schlier 707 State V. Schonhausen ...,701, 707, 802 State V. Scott 427, 899 State V. Seabury Mission 815 State V. Severance. . .110, 583, 728, 736 State T. Shapleigh 473 State T. Shawnee County Commis sioners State V. Shearer State V. Simmons. . .35, 36, 48, 52, 685, Sloan 923, Smith 785, Smithson Southern, etc.. By. Co. . . . 1027, 1028, State V. Spaude State V. Speed Spellmire Sponaugle 585, St. Louis, etc., Ry. Co. . . St. Paul Union Depot Co.. Stanford 285, Stephens (see State ex rel. Armour Packing Co. v. Stephens) State V. Sterling 44, 679, 687, State V. Stevenson. .434, 704, 712, State V. State V. State V. State V. State V. State V. State V. State V. State V. State Page. 311 906 679 890 927 918 434 931 1029 892 898 904 604 484 684 286 State State State State State State State State State State State State State State State State State State State State State Co. State State State State State State State Co. State State State State State State State State State State State State State State Co. State State State State State State State State, State, per 1 State Stewart Stonewall Ins. Co 36, Street Sullivan Swan 918, 919, Swift Switzler 123, 187, 753, Tappan Tax Collector Thompson 701, Tibhets 924, 930, Toledo Tonella Topeka Traders' Bank Travelers' Ins. Co. . 15, 77, 645, Trenton Trustees Tucker 858, 903, Union Tank Line Co U. S. & Canada Express 670, 702, 832, Vanderbilt 619, Wall Wapello County 139, Weir Welch Wendler Western Union Telegraph 651, 733, Westminster College. .824, Weyerhauser 638, 727, Wheelock 431, Whitesides Whitworth Wiggin Wilbert's Sons Co Willard Williams WiUingham Wilson Windle . Winkelmeir Winona & St. Peter Land V. Winters V. Wise V. Woodruff, etc.. Coach Co. . V. i'ardley V. Young 272, V. Ziegenhelm .' V. Zophy . . etc. V. Guttenburg Baraboo v. Sauk County Su- visors ex rel. Abbot v. Dodge County 807 777 839 1011 48 1025 196 920 917 823 195 1021 789 931 162 819 790 802 643 772 719 137 904 60 833 620 166 1113 1032 604 918 805 903 817 701 1116 637 433 801 91 234 705 224 1095 1102 637 474 619 452 928 516 198 427 958 240 289 lABLE OF CASKS. Iv Page. StQte ei rel. American Savings Union v. Wliittlesey 933 State ex rel. Armour Packing Co. v. Stephens 60, 461, 652, 739, 1026 State ex rel. Baldwin v. Insurance Co. of Nortli America 277 State ex rel. Bartzell v. Stewart . . . 964 State ex rel. Bartless v. Beaufort.. 858 State ex rel. Beck v. Wagener 455 State ex rel. Bee Building Co. y. Savage 829 State ex rel. Bertel v. Board of A.ss6Ssoi*s . . ■ 664 state ex rel.Buikley v. wiliiams! '. 311 956 State ex rel. Canton v. Allen.. 162, 823 923 Stale ex rel. Chllds v. Mlnnetonka. 253 State ex rel. Clark y. Haworth 313 State ex rel. Clarke v. Irwin 904 State ex rel. Cleveland v. Jersey City Board 315 State ex rel. Columbia v. Allen. . . . 1105 1108 State ex Tel. v. County Court of St. Louis County 307 State ex rel. Crow v. St. Louis. . . . 199 200 State ex rel. Davidson v. Gorman. . 752 817 State ex rel. Davis & Starr Lumber Co. V. Pors 637, 638 State ex rel. Ferguson v. Mayor . . 161 State ex rel. Fields v. Williams.. 215 State ex rel. Garrett v. Arnold. 893, 898 State ex rel. Garnett v. Froelich . . 190 194 State ex rel. Gelsthorpe v. Furnell. 751 826 State ex rel George v. Aiken 163 State ex rel. Grigsby v. Buechler.. 861 State ex rel. Hammer v. Vogelsang. 939 State ex rel. Hawes v. Mason. .307. 336 State ex rel. Helena Waterworks Co. V. Helena 1060. 1067 State ex rel. Hill v. Judges 649, 804 State ex rel. Hoelbeck v. City Council 859 State .X rel. Holt v. Denny . . .322, 328 State ex rel. Hoover v. Chester. . . . 917 State ex rel. Jones v. Froelich. .158, 168 1113 State ex rel Krifegbaum, et al v. Commissioners 240, 842 State ex rel. Lewis v. Smith 693 State ex rel. Marr v. Stearns.... 810 State ex rel. Marchand v. New Or- leans 1034 State ex rel. McCausland v. Free- man 313 State ex rel. McKune v. District Court of Ramsey County 970 State ex rel. Mllford v. Brock 906 State ex rel. Milton v. Dickenson . . 240 State ex rel. Milwaukee Street Ey. Co. V. Anderson 35, 48, 52 State ex rel. Minnesota Transfer Co. V. District Court of Ramsey County 975 State ex rel. Moody v. Wardell .... 254 824 State ex rel. Morgan v. Working- man's Building, etc., 4ssn. ...657, 689 784 State ex rel. Musser v. Birch 824 State ex rel. New Richmond v. Davidson 189 State ex rel. Poe v. .Jones 574, 742 State ex rel. Realty Co. v. Cooley. . 657 669, 816 Page. State ex rel. Richards t. Cincinnati. 249 State ex rel. Ross v. Kelly 858 State ex rel. Sanderson v. Mann.. 754 898 State ex rel. Schriver v. Karr.632, 694 829 State ex rel. Smyth v. Moore.. 307, 322 328 State ex rel. Stockton v. Mayor of Somers Point 896 State ex rel. Taylor v. Eidson 253 State ex rel. Thorn v. New Orleans. 1034 State ex rel.Tol v. French. 702, 719, 826 State ex rel. Turner v. Bell 902 State ex rel. Utick v. Commissioners of Polk County 164, 964 State ex rel. Vaughn v. Mayor, etc., of Ashland 956 State ex rel. Ward v. Hubbard 908 State ex rel. Wheeler v. District Court of Ramsey County. . . .946, 953 State ex rel. White v. Barker. .322, 327 State ex rel. Wood v. Sehwelckardt. 326 State ex rel. Woulfe v. St. Paul . . . 1083 State ex rel. Wyatt v. Ashbrook. . . 272 274, 285, 698, 706, 729 State ex rel. Xoung v. Osborn 828 State ex rel. v. Yoxall 521 State ex rel. Zlegenheim v. Burr. . . 93 State ex rel. Zlegenheim v. Titman. 583 State Auditor v. Jackson County . . . 764 889 State Bank v. Richmond 36, 67 State Bank of Ohio v. Knoop. .334, 490 State Board v. Central Ry, Co 652 727, 835, 892 State Board v. Fowler 928 State Board v. Paterson 512, 655 State Board of Assessors v. Comp- tolr National D'Escompte. . . .69, 76 State Board of Education v. Aber- deen 313 State Board of Equalization, In re. 1028 State Board of Equalization v. Gog- gin 48 State Board of Tax Commissioners V. Holliday 648, 785 State Council of Catholic Knights v. Board of Review 782 State Freight Tax 47, 428, 441. 456 State Railroad Tax Cases 648, 653 682, 726, 729. 731, 736, 737, 779 State Taxation, In re 670, 805 State Tax Commissioners v. Board of Assessors 727, 813 State Tax on Foreign Held Bonds. . 67 75, 552 State Tax on Railway Gross Re- ceipts 46,449,451, 453 State Tonnage Tax Cases 479, 480 Staunton v. Stout's Executors 92 Steadman v. Planters' Bank 625 Steamer Block v. Richland 431 Steamship Co. v. Port Wardens. . . . 479 Stearns v. Minnesota. 489, 515, 033, 816 Stedman y. Berlin 1066 Stehmeyer v. City Council of Charleston 241, 630, 859 Stein v. Mobile 136, 655 Stelner v. Roy 477 Steiner v. Sullivan 239 Stelnes v. Franklin County. .. .623, 1101 1116 Stemmler v. Mayor, etc., of New York 19,5, 205 Stephen v. Daniels 618, 619 Stephens v. Booneville 91 Sterling v. Gait 995 Sterling Gas Co. v. Higby..653, 727, 780 Stetson v. Bangor 404 Ivi TABLE or CASES. Page. Stetson V. Kempton 126, 238 Stevens v. Stevens 52, 79 Stevens County v. Railway Co 529 Stevenson v. Colgan 194 Steward v. Jefferson 281 Stewart v. Crysler 627 Stewart T. Supervisors of Polk County 130, 1113 Stewart v. Potts 819 Stewart v. Wyandotte County 1021 Stinson v. Smitli 630, 817 Stockard v. Morgan 427, 428 Stockdale v. School District 1120 Stokes v. Dept. of Agriculture 477 Stone V. Cliicago. .1064, 1072, 1079, 1081 Stone V. Mississippi 4S7 Stone V. Wilson 796 Stoner v. Flournoy 253 Storrs V. Chicago 968 Stoudenmire v. Brown 625 Stoutenbrugh v. Hennick 427 Strafford National Bank v. Dover. . 402 Stratford v. Montgomery 427 Stratton v. Collins 670, 732, 834 835, S36 Strauss, Matter of 202 Street v. Craven County 1034 Street v. New Orleans 206 Street v. Varney Electrical Supply Co 225, 330, 333 Strickland v. Stillwater 963 Striet V. Cox 1081 Strobel, Matter of 539 Strode v. Commonwealth 107 Stroh V. Detroit 52, 684 Strong V. Dignan 899 Stroud V. Philadelphia 941, 946 Strout V. Portland 1022 Strowbridge v. Portland 1008 Stuart v. Kirby 861, 904 Stuart V. Palmer 561, 562, 567 569 575, 579, 633 Stull V. De Mattos 702, 705, 724 Sturges V. Carter 933, 939 Sturges V. Crowninshield 522 Sumner County v, Wellington 658 668, 792 Sun Printing & Publishing Assn. v. Mayor, etc., of New York. . . .160, 248 338, 899 Sunset, etc., Co. v. Medford 723 Supervisors v. Rogers 521 Supervisors v. Stanley. . . .411, 416, 733 Sutliffe V. Lake County. . 1128, 1132, 1133 Sutro V. Pettit 1098, 1099 Swackhamer v. Town of Hacketts- town 1093 (See Hackettstown v. Swackhamer.) Swain v. Fulmer 1007 Swanson v. Ottumwa 1084, 1087 Sweat V. Boston, etc., Ry. Co 393 Sweeley, Matter of 714 Sweeney v. Otis 447 Sweet V. Syracuse 1109 Swift, Matter of 107, 108 Swift's Executors v. Beneficial So- ciety of Easton 664 Swigert, Matter of 660, 667, 782 Synod of South Dakota v. State. 179, 180 T. Taber v. Grafmiller 973 Taddls V. Richland Co 624 Talbot V. Dent 137 Talbot V. Iberville 1063 Talbot County v. Queen Anne County. 265 Talbott V. Silver Bow County.. 406, 408 •^ Page. Talbutt v. State • •, A?l Talcott V. Pine Grove Township... 1112 Tallman v. White "f ' Tampa v. Kaunitz ;,•■■,■ W jVo Tappan v. Merchants' Nat. Bank .77, 416 Tash V. Adams ^^o. 1>'^1 Tatham v. Philadelphia ^^B Taylor v. Board of Health .... 314 Taylor v. Chandler 670, 1011 Taylor v. Commissioners of Ross County .160, 247 Taylor v. Louisville 733, 734 Taylor v. Miles 627 Taylor v. Newberne ■^ss Taylor v. Palmer 612, 63T Taylor v. Smith 8.34 Taylor v. Thompson 620 Taylor Borough v. Telegraph Co... 721 Tebo V. Brooklyn Ill Tebbetts v. Charleston 588 Telegraph Co. v. Texas 390, 392 440, 457 Templeton v. Pierce County 732 Templeton v. Tekamah 292 Tennessee v. Sneed 523, 525 Tennessee v. Whitworth 530, 532 674, 679 Tenney v. Lenz 700, 720, 724 Teralta Land & Water Co. v. Shaffer. 935 Terre Haute v. Kersey 698, 702, 724 Terre Haute, etc., B. R. Co. v. Cox. 903 Terrel v. Wheeler 284, 641 Terrell v. Dessaint 1063, 1109 Terrett v. Taylor 318 Territory v. O'Connor 920 Territory v. Persons 386 Terry v. Anderson 628 Texas Banking & Ins. Co. v. State. . 705 707 Thames Bank v. Lovell 446 Thatcher v. People 619 Thayer v. Grand Rapids 958 Theobalds v. Conner SOI Third National Bank of Louisville V. Stone 401 Thomas v. Board of Commissioners. 904 Thomas v. Burlington 1073 Thomas v. Gain .'■>69. 999, 1016 Thomas v. Gay 258, 470, 535 Thomas v. Highland Park 945 Thomas v. Leland 237, 311 Thomas v. Mason County Court. . . 66 Thomas v. Moultrieville 654, 858 Thomas v. St. Cloud 896 Thomas v. Sneed 656 Thomas v. State 930 Thomas v. Wood County 649 Thomas v. United States 352 Thomasson v. State 700 Thompson v. Allen County 521 Thompson v. Darden 425 Thompson v. Floyd 282 Thompson v. Jlerriam 627 Thompson v. Perrine 621, 624 Thompson-Houston, etc., Co v. New- ton 162 Thomson V. Pacific Ry. Co. .389, 390, 392 Thorington v. Montgomery .... 549 560 Thornburgh v. School District 1119 1130, 1133 Thornton, Ex parte 552 Thorpe V. Railroad Co 490 Thweat V. Black ' g9g; Tide Water Co. v. Coster 'I'e's 947 Tide Water Pipe Co. v. State Board of Assessors -tno Tiernan v. Renker '.'.'.'..'" 43I Tifft V. Buffalo. 616 Timm v. Harrison " ' * "7^7* ^ofv Tlppett V. MtGrath ".■.■.■...' S35 TABLE OF CASES. ivii Page. Tipton. Ei parte 917 Titusville v. Brennan 427, 42S. 710 Todd V. Laurens 858, 1110 Toledo V. Board of Education 973 Toledo Bank v. Bond 490 Tomlinson v. Brancb 529 Tomllnson v. Indianapolis 724 Tomlinson v. Jessupp 498, 503 Tonawanda v. Lyon 1002 Tone V. Columbus 1021 Toney v. Mayor, etc., of Macon .... 249 Tonev v. Marion 770 Topeka v. Gillett 899 Touchman, Ex parte 552 Toutloff y. Green Bay 101.S Towgalin v. Omaha 927 Towne v. Newton 1021 Towns V. Klamath County 578 Townsend t. Wilson 614, 615 Tracy v. Reed 628 Transportation Co. v. Parkersburg. 447 479 Transportation Co. v. Wheeling. . . . 481 Trapp V. White 701 Travelers' Ins. Co. v. Connecticut.. 77 553 Travelers' Ins. Co. v. Township of Oswego 904 Traver v. Merrick Co 135 Treat v. White 352 Tregea v. Modesto Irrl.gatlon Dist. . 160 Trenton Iron Co. v. Yard 727, S33 Trenton Savings Fund v. Richards, fi'il 658, 660, 835 Trigally v. Memphis 282 Tripp V. Yankton ... 861, 092. 1003, 1011 Trowbridge v. Schmidt 224 Troy Fertilizer Co. v. State 682 Trull V. Madison County 1034 Trumble v. Trumble 930 Trustees, etc. v. Augusta 91, 92 Trustees v. McConnell 782 Trustees of Public Schools v. Tren- ton 83G Tucker v. Ferguson 511, 512 Tucker v. Justices 624 Tukey v. Omaha 1101 Tulare County v. Kings County. 259, 266 Tulare County v. May 340 Tunbridge v. Smith 624 Turley v. County of Logan 917 Turlock Irrigation District v. Wil- liams 770 Turner v. Althaus 828 Turner v. Hand County 860 Turner v. Maryland 478 Turner v. New York 628, 629 Turney v. Yeoman 627 Turnpike Cases 729 Turpin v. Burgess 474 Tuthill, Matter of 165 Tuttle, Ex parte 701 Tuttle T. Polk 614, 1081 Twiggs V. Chevallie 587 Tyler v. Hardwick 619, 620 Tyler y. Jester 1066, 1108. 1109 Tyler v. Tyler Building, etc., Assn.. 1122 Tyson v. State 748, 808 U. Ulman v. Mayor, etc., of Baltimore. 570 996 "Union Bank v. Commissioners of Town of Oxford 910 Union Bank v. State 37. 52, 497 Union College, Matter of 38 Union Ferry Co., Matter of 837 Union, etc., Ins. Co. v. Durfee 650 I Page. lUnton on Co. v. Marrero 801 tTnlon Pacific Ey. Co. y. Cheyenne. . 737 Union Pacific Ry. Co. v. Howard County 1038 Union Pacific Ry. Co. v. McShane.. 385 386 Union Pacific R. R. Co. v. Saunders County 657, 828 Union Refrigerator Transit Co. v. Lynch 59, 460, 739 Union School District v. Bishop.... 597 Union Sewer Pipe Co. v. Connelly. . 905 Union Tank Line Co., In re 60, 66 75, 739 Union Trust Co. v. Probate Judge . . 571 812 Union Water Power Co. v. Auburn. 33 United States v, American Bell Telephone Co 102 United States v. Clark County 1109 United States v. County Treasurer. 516 United States v. Fisher 379 United States v. Flanders 199 United States v. Goldback 474 United States v. Hall 196 United States v. Jefferson County. . 515 United States v. Judges 516 United States v. Macon County. . . . 1109 United States v. Martin 225 United States v. New Orleans 272 515, 516 United States v. Perkins. 31, 89, 107, 383 United States v. Price 193 United States v. Railroad Co. . .334, 373 United States v. Realty Co 192, 193 United States v. Repentigny 590 United States v. Riekert 387 United States v. Singer 346 United States v. Smith 199 United States v. Stowe 199 United States v. Wong Kim Ark. . . 543 United States Distilling Co. v. Chi- cago 779 United States Electric Power, etc., Co. V. State 36, 37, 46. 52, 393 682, 807 United States Express Co. v. Elly- son 727, 786 United States Trust Co. v. Terri- tory 1122 University v. Illinois 490 University v. People 488, 498 University of Chicago v. People ex rel. Seip 782 Updike V. Wright 285. 290 Usher's Heirs v. Pride 387 Utah & Northern Ry. Co. v. Fisher. 470 Utica V. Churchill 383, 404 Utica Water Works Co. v. Utica. . . 1063 1066 Utter T. Franklin 622, 623 V. Vail V. Beach 662, 791 Vail V. Runyon 834 Valparaiso v. Gardner 1066. 1067 Valverde v. Shattuck 249, 938 Van Allen v. The Assessors 36, 383 399, 404, 683 Van Antwerp, Matter of 931 Van Baalen v. People .■ . . "720 Van Benthuysen v. Sawyer 632 Van Brocklln v. Tennessee 383 Vance v. Vandercook 437 Vanceburg, etc., Co. v. Mayville, etc.. Co 671, 707 Van Cleye v. Passaic Valley Sewer- age Commissioners 229, 236, 276 836, 1113 Iviii TABLE OF CASES. Page. Vanderbeek v. Jersey City 961 Vanderberg, In re 917 Vanderbilt, Matter of 755, 759 Vandwenter v. Long Island City. . . 614 Van Hooli v. Seima 718, 719, 720 Van Horn v. People 700 Vanini v. Paine 395 Vanmeter v. Spurrier 478 Van Riper v. Parsons. 891, 892, 899, 906 Van Sant v. Harlem Stage Co 695 Van Slyke v. State 416 Van SoliKen v. Harrison 1004 Van Tassel v. Mayor, etc., of Jersey City 1010, 1011 Van Vorst v. Jersey City 964 Vasser v. George 649, 820 Vaughn v. Boston Street Commrs. . 92 Vaugbn v. Swayzie 615 Veazie Banlc v. Penno . . . .346, 349, 352 362, 369, 376, 398 Venice v. Murdock 1130 Verdery v. Village of Summervilie. . 670 671, 775 Verdin v. St. Louis 952 Vermont & Canada Ry. Co. v. Ver- mont Central Ry. Co 452 Vermont Loan & Trust Co. v. Whit- I bed 841, 891 ,Vestal V. Little Rock 253 Vickery v. Chase 904 Vicksburg v. Tobin 481 V!cksburg Bank v. Worrell 820 Vicksburg, etc., B. R. v. Dennis. 488, 515 Vicksburg, etc., Ry. Co. v. Good- enough 1034 Vines V. State 432 Vink V. Work 785 Violett V. Alexandria 569, 575, 578 579, 998, 1004, 1024 Virden v. Bowers 625 Virginia City v. Hall 610 Virginia Coupon Cases 519 Virginia Coal Co. v. Thomas 628 Vogel V. Pekoe 15 Voight T. Detroit 563, 564 Voight T. Wright 477 Von Hoffman v. Quincy. . .515, 516, 523 Von Hostrup v. Madison 1130 Voorhies v. Mayor, etc., of Houston. 1034 Voss T. Waterloo Water Co 1067 1070, 1083 Vveeland v. Bayonne 972, 1004 Vreeland v. Jersey City 33, 834 Vreeland t. O'Neill 33, 567 W. Wabash, etc., Ry. Co. y. East Lake Fork, etc.. District 591 Wabash, etc., Ry. Co. v. Illinois . . . 424 Wabash, etc., Ry. Co. v. McCleave. . 1034 Wade V. Oakmont Borough 1063 1071, 1084 Wade V. State 474 Wade T. Travis County 1105, 1107 Wadleigh v. Newhall 546 Wagner v. Milwaukee County 898 Wagner v. Rock Island 33, 567 Wagoner v. Evans 470 Wagoner v. Loomis 727, 845 Waite V. Dowley 37, 404 Waite V. Santa Cruz.. 1118, 1128, 1130 1134, 1136, 1138 Wakeley v. Omaba 1022 Walcott V. People 702, 812 Waldeu V. Whigham 668 Waldo V. Portland 195 Walker v. Aurora 995 Page. Walker v. Cincinnati -^^'leo' 247 Walker v. Griffith • ■ • ' ^i2 Walker v. Morgan Park 94o, 96g Walker v. Oswald '■'-'J^ Walker v People 968 wtiker y. Springfield 682, 702, 779 Walker v. Whitehead 523, 524 Wall, Ex parte £'■> Wall V. Wail • • 61» Wallace v. Board of Revenue of Jefferson County • • • • 921 Wallace v. International Paper Co.. b2t> 633 Wallace v. McBcberon 633 Wallace v. Shelton 649, 804, 1008 Walla Walla v. Moore 91, 92 Walla Walla v. Walla Walla Water Co 1066 Walling V. Michigan. 419, 424, 432, 437 Wally V. Kennedy 555 Walnut V. Wade 1130- Walsh V. Barron.. .997, 999. 1005, 1019 Walston V. Nevin 232. .i73, 577, 1008 Walters v. Duke, Tax Collector. . . . 802 Walters v. Western, etc., Ry. Co. . . 392 Walton V. Westwood 467, 59i> Walton Co. v. Morgan Co 112 Wanser v. Hoos 891 Wantlau v. White 625 Wan Yin, In re 723 Ward v. Board of Equalization 930 Ward V. Maryland . . .433, 547, 549, 552 Warden v. Supervisors 636 Wardens of St. Mark's Church v. Mayor 662, 775 Warder v. Commissioners 843 Ware v. Hylton 535 Ware v. Little 619, 627 Waring v. The Mayor 473 Warner v. Curran 784 Warren v. Boston. . . .614, 635, 933, 1024 Warren v. Geer 705 Warren v. Henly lOlO Warren v. Russell 945 Washburn v. Oshkosh 253 Washburn Memorial Orphan Asylum V. State 973, 974 Washburne College v. Commission- ers of Shawnee County 662, 791 Washer v. Bullitt County 265 Washington v. Mayor 1013 Washington v. Page 92'i Washington v. State 281, 701, 766 Washington County Supervisors v. Saltville Land Co 270, 670 Washington Avenue, Re 230, 955 967, 1017 Washington County v. Weld County. 26T Washington State Bank v. Baillio. . 1034 Washington University v. Rouse... 49(^ 497 Washingtonian Plome of Chicago v. Chicago 191 Wasson v. Commissioners 241, 842 Wasson v. First Nat. Bank.... 411, 414 Waters v. Leech 723 Waterville v. Kennebec County.... 311 Wathln V. Young 727, 728, 796 Watkins v. Bigelow 931 Watklns v. Griffith 1022 Watkins v. Milwaukee 1013 Watson, In re 532, 705, 861 Watson V. Atwood 627 Watson V. Chicago 968, Watson V. Pamlico County Commrs 267 Weaver v. State 571 Webb V. Dunn .'!!!! 480 Webber v. Virginia .394 43i TABLE OF CASES. lix Page. Webb Granite, etc., Co. v. i\'orces- ter 1089 Weber v. Relnhard 555 Weber v. San Francisco 1021 Webster v. Bell 455, 456 Webster v. Fargo . . . 968. 992. 1002, 1003 Webster v. Town of Harwinton .... 196 Webster v. Little Eock . . . . ; 917 Webster 7. Wbite Plains 1101 Weed V. Boston 578, 946, 1005, 1015 Weed V. Goodwin 929 Weeks v. Gilmanton 112 Weeks v. Milwaukee 134, 945, 1010 Weeks v. Smith 917 Weill V. Kenfleld 922 Weimar v. Bunbury 581 Weismar v. Village of Douglas.... 123 129 134 Weister t. Hade 195| 196 Welch V. Cook 512 Welch V. Hotchkiss 701 Welch V. Ste. Genevieve 516, 521 Weller v. St. Paul 1010 Wells, Ex parte 892 Wells V. Boston Street Commrs 968 Wells V. Hyattsville 671, 807 Wells V. Salina 1093, 1094 Wells V. Savannah 504, 515 Wells v. Sioux Falls 1114 Wells, Fargo, etc. v. Crawford County 726, 766 Wei ton V. Missouri 432, 822 Wendover v. Lexington 701 West y. Chehalis 623, 1116, 1117 Westchester School District v. Dar- lington 93 West Chicago Park Commissioners v. Farber 286, 635, 927, 994, 995 West Chicago Park Commissioners V. Sweet 286, 927 West Chicago St. Ry. Co. v. Chicago.. 983 Western Assurance Co. v. Halliday. 682 Western Union Telegraph Co. v. Alabama State Board 457 Western Union Telegraph Co. V. Fremont 455 Western Union Telegraph Co. v. Gottlieb 80, 390, 462, 738, 745 Western Union Telegraph Co. v. Indiana 603, 604, 709 Western Union Telegraph Co. v. Massachusetts. .58, 80, 390, 392, 446 462, 738 Western Union Telegraph Co. v. Mayor 46, 651, 653, 846 Western Union Telegraph Co. v. New Hope 445, 446, 722 Western Union Telegraph Co. v. Norman 726, 744 Western Union Telegraph Co. v. Pendleton 419 Western Union Telegraph Co. v. Philadelphia 722 Western Union Telegraph Co. v. Poe 726, 738, 740, 741 Western Union Telegraph Co. v. Richmond 385 Western Union Telegraph Co. v. State 784 Western Union Telegraph Co. v. State Board of Assessment 764 Western Union Telegraph Co. v. Taggart 80, 84, 111, 462, 727 738, 784, 917 Westhampton v. Searle 619, 620 West Hartford v. Water Commrs. . . 385 Weston V. Charleston 381 Weston V. Manchester 411 West Plains Township v. Sage .... 1098 Westport v. McGee 234, 824 Page. West Portland Park v. Kelly.. 732, 848 West Wisconsin, etc., R. R. Co. v. Supervisors 490, 511, 512 Wetherbee v. Dunn 62S Wetherell v. Devine 310 Wetmore v. Multnomah County. . . . 093 Wetumpka v. Wetumpka Wharf Co. 1093 Weyand v. Stover 918 Weyerhauser V. Minnesota 638, 817 Whaley v. Galllard 525 Whatcom v. Bellingham, etc., Co... 1022 Whatcom County v. Fairhaven Land Co 733 Wheeler v. County Commissioners. . 683 Wheeler v. .Tackson 934 Wheeler y. Philadelphia 853, 893 Wheeler v. State 220, 928 Wheeling v. Hawley 637 Whitaker v. Brooks 083- Whitbeck v. Mercantile Nat. Bank. 411 415 White, In re 930 White V. Plynn 625 White V. Gove 811, 943, 993 White V. Hart 485 White V. Hinton 921 White V. Inebriates' Home 190 White V. Mayor 1013 White V. People 649, 778, 945 White V. Thomas 591 White V. White 165 Whiteford v. Probate Judge 569 Whitewater Valley Canal Co. v. Vallette 621 Whiting, Matter of 109 Whiting V. The Sheboygan & Fond du Lac R. B. Co 140 Whiting V. West Point 659 Whitney v. Pittsburgh 635, 854 Whitney National Bank v. I^arker . . 404 410, 411 Wiant V. Hays 588 Wichita v. Burleigh 903 Wichita v. Skeen IIUS Wight V. Davidson 576, 990, 1021 Wiggins V. Chicago 292 Wiggins Ferry Co. v. Bast St. Louis. 442 702, 779 Wilbur V. Springfield 649, 778 968, 994 Wilcox V. Deer Lodge County 311 Wilcox V. Ellis 67 Wilcox V. Paddock 158 Wilcox V. People 67 Wilcox V. Smith 364 Wilder v. Daniels 240, 842 Wild's Lessee v. Serpell 586 Wiley V. Commissioners 77 Wiley V. Owens 700, 707 Wiley V. Silliman 323, 1099 Wilhelm v. Defiance 1011 Wilkes County v. Call 919, 113T Wilkes County v. Coler 919, 1137 Wilkie V. Chicago 698, 718 Wilklns V. Waynesboro. 1104, 1105, 1108 Wilkinson v. Cheatham 193 Willamette University v. Knight... 848 Willard v. Pike 663 Willard v. Presbury 945, 948, 964 Willard v. Willard 948 Will County v. People ex rel. High- way Commissioners 310 Williams, Ex parte 705 Williams v. Bettle 836 Williams V. Board of Supervisors.. 67 Williams v. Bruffy 485, 488 Williams v. Cammack 166, 1007 Williams v. Detroit. .941, 948, 992, 1003 Williams V. Duanesburgh 621, 622 k TABLE OF CASES. Williams v. Eggleston 229, 232, 237, 334, 5G1, D02, Williams v. Fears... 469, 530, 705, Williams v. Heard 192, Willian.s v. Kirtland Williams v. New Orleans Williams v. People Williams v. Pittock Williams v. Rees Williams v. Taylor Williams v. Weaver Williamsport v. Beck Williamsport v. Coramonwealtli ... Williamsport v. Stearns Williamsport v. Wenner Willis V. Mabon Williston Seminary v. County Com- missioners Wilmerding, In re W^ilming-ton v. Cronly Wilmin.^ton v. Roby Wilmington v. Sprunt Wimington, etc., R. R. v. Alsbrook. Wilmington, etc., R. R. Co. v. Board of Commissioners 6S2, Wilmington R. R. v. Reid..49, 490, Wilmington Underwriters' Insurance Co. V. Stedman 682, Wilson V. Board of Trustees, etc. . . Wilson T. Chilcott 943, Wilson T, Gainea 526, Wilson V. Ohio, etc., Ry. Co Wilson V. Phillippi Wilson V. Salamanca Township Wilson V. Salem 997, 1005, Wilson T. Sanitary District Wilson V. Sutter County Supervisors. 768, 913, Wilson V. Trenton 952, 998, Winans v. School District Windham v. Portland Windsor v. Des Moines. . .615, 620, 1059, 1083, Wingate v. Parker Win^ate v. Sluder Wingate v. Tacoma Winkley. v. Newton Winnebago, etc., Co. v. Fond du Lac County "Winnimisset Co. v. Chelsea Winnipisogee Lake, etc., Co. v. Gil- ford Winona v. School District Winona, etc.. Ry. Co. v. Watertown. Winona & St. Peter R. R. Co. v. Minnesota 533, 537, 577, "Winslow V. Cincinnati Winston V, Salem Winston v. Spokane Winters V. Duluth Winconsin, etc., Ry. Co. v. Manson. Wisconsin, etc., Ry. Co. v. Powers. Wisconsin Central Ry. Co. v. Price Count.v Wisconsin Central Ry. v. Taylor County 254, Wisconsin Industrial School v. Clark County Wisconsin Keoley Institute Co. v. Milwaukee County Wise V. Biggar Wishmier v. State 163, Wistar V. Philadelphia Wiswall V. Kunz Witter V. School District Wolff V. Baltimore Wolff V. Denver 066*, Wolff V. New Orleans 515] Wolters, Ex parte .' Page. 234 950 706 193 626 206 1099 573 779 917 577 931 1096 850 850 930 94 748 939 282 607 532 839 497 839 1110 945 528 933 630 1130 1021 310 659 915 999 259 259 621 1068 837 282 1021 680 .1021 604 33 930 974 637 946 96 1085 923 446 514 515 385 385 183 190 918 026 1024 .32 973 609 992 517 292 : Page. Wood V. Dummer ^l Woodbridge v. Detroit ^^'^ Woodman v. Auditor-General . .... SbJ Woodrough v. Douglas County. 276, 573 Woodruff v. Depew °g° Woodruff V. Mississippi lUJ J Woodruff V. Okolona . . • ■ 1099 Woodruff V. Oswego Starch Co. .... 678 Woodruff v.Parham.. 438, 471, 4(3, 47o Woodward v. Boscobel 1013 Woodward v. Ellsworth ........... 401 Woodward v. Fruitvale Sanitary District ^88, 338 Woodward v. Sloan 627 WooHork V. Buckner 630 Woolaey, Matter of 311 Wcclf V. Chalker 700 Worcester v. Worcester Consolidated Street Ry. Co 312, 335, 514 Worcester Agricultural Socioiy v. Mayor, etc., of Worcester. . .973, 974 Workman v. Worcester 1006, 1008 Wormley v. District of Columbia.. 1002 Worsley v. Second Municipality. . . . 447 Worth V. Commissioners 78 Worth T. Wilmington 702 Wray v. Knoxville, etc., Ry. Co 861 Wray v. Pittsburgh 945, 1021 Wren, Ex parte 917 Wright T. Boston 164, 999, 1006, 1008 Wright V. Cradlebaugh 625 Wright V. Nagle 489 Wright V. Slingluff 599 Wright V. Stinson 672, 727 Wright T. Wabash, etc., Ry. Co 1029 Wright T. Thomas 1021 Wrought Iron Bridge Co. v. Attica. 219 221, 313 Wrought Iron Range Co. v. Carver. 434 Wrought Iron Range Co. v. Johnson. 427 Wulzen V. Supervisors. .. .355, 563, 373 574 Wurtz V. Hoagland 166, 576 Wyandotte v. Corrigan 503 Wyandotte County v. Abbott 972 Wyckoff V. Queens County Ferry Co.. 444 Wyscover v. Atkinson 160, 247 T. Yazoo & Mississippi Valley Ry. Co. V. Adams 531 Yazoo, etc., R. R. Co. v. Levee Com- missioners 889 Yeaker's Heirs v. Yeaker's Heirs.. 535 Yeatman v. Crandall 649, 804 Yick Wo V. Hopkins. .544, 346, 534, 709 Yolo County v. Colgan 917, 920 York V. Chicago, etc., Ry. Co-. ..292, 455 Young V. Board of Commissioners.. 904 Young V. Kansas City 308 Young V. Lane 1032 Young V. Tacoma 932 Younghlood v. Sexton 700 I'oung Men's Christian Assn. of Omaha v. Douglass County.. 662, 830 Young Men's Protestant, etc.. So- ciety V. Fall River 664 Youtsey v. Commonwealth 86 Z. Zahel V. Louisville Baptist Orphan's Home 795 Q--. gyj Zane v. Hamilton County . . ' ' ^^a^ ZlNorowski, Matter of . . . . "54 Zigler V. Menges 123. 103,' 164 947 Zuuraerman v. Oaniiold . . ori4 Zimmerman v. Savage ;)49 Limitations of the Taxing Power. CHAPTEB, I. EQUALITY IS THE FUNDAMENTAL THOUGHT IN THE CONSTITUTIONAL LAW OF TAXATION. Equality is the basic idea of government. 1. In the physical world each forward step of science discloses «ome hitherto unperceived unity of cause in the production of phenomena apparently dissimilar. Smoke rising in the air, a missile describing a paraholic course, a plummet sinking into the water, a tide dashing on a rocky coast, all these manifestations of motion, seemingly unlike each other, are known by the instructed mind to be governed by the one law of gravitation. The numerous distinct elements of matter which were recognized by empiric knowledge are perceived by science to be but forms of the essential substance, whether that substance consists in the last analysis of innumerable atoms or of one infinitely divisible mass; the forces which are manifested in action, as heat and electricity, appear to be modes in which some elemental principle of motion operates; and, ascending a step, both matter and motion are con- ceived to be simply the aspects in which the unknowable energj' is manifested to consciousness. In organic life these physical unities are equally discernible. The man and the ape, the vertebrate and the crustacean, the vege- table and the animal, are understood in the advance of knowledge to have, in some degree, the same laws of life and to derive their origin from the operation of the same forces. In those realms of knowledge which deal with human relations, like unities appear. The institutions of the most despotic government and of the most free republic have for their common object the preservation of public order; the proportions of the ingredients of force and freedom vary as the needs and nature of the peoples vary; but the object of public order is the same in both, and the institutions are roughly and imperfectly uuder- [1] ^ CONSTITUTIONAL LAW OF TAXATION. stood to work out the same ends according to the same general laws. 2. That order is usually regarded as the prime object of govern- ments will not be denied. The means of enforcing order differ in different communities ; and it is reasonably plain, other things being equal, that the best government for enforcing order is the government which is able, without check of any sort, to impose its restraints upon the individual — -that is, a despotic government. "Why then, if order is the first object, and a despotic govern- ment is the best means of enforcing order, are not all governments- despotic? Because " all men are born equal," because every man bom on the earth has the same right to use the earth, as every other man. Thus it is perceived that this order, which is the object of government, is not the ultimate end of government, but is- merely a means whereby the equality to which men are born may be enjoyed. If this be true the ultimate principle upon which governments depend is equality, and the law of unity which regulates the operation and the organization of governments i:? the law of equality. 3. An examination of governments shows that this is, in fact, the case, that in every society equality (the nature of which will be referred to) is the fundamental rule^ and that such exceptions as exist to the rule of equality are exceptions which derive their sanction from the necessity of order, and which bear some real or supposed relation to the enforcement of order. In the most despotic governments and in the most free governments the law of equality clearly appears. In a despotism the ruler is above his subjects, in him sovereignty reposes, and between him and his- subjects there is no equ'ality. His status is the exception to the rule of equality, which exception is made for the sake of order. But all his subjects — in their relation to the sovereign — are equal. The lowest and the highest are alike subject to his commands. Whatever may be the injustice done by the ruling agencies to the subjects, it is the injustice of the sovereign; a& between subject and subject, whatever their respective conditions- in life, there is equality before the law, if that law be contem- plated at its beginnings. In those governments where authority is borne by privileged orders, the principle of equality is more difiicult to perceive, yet it is perceptible. In so far as the privileges of those orders come in theory from the sovereign grant, it might be said that the J, EQUALITY THE FUNDAMENTAL THOUGHT. 6 privileged classes are merely agents of the sovereign, that excep- tions in their favor to the rule of equality are only extensions of the original exception which results from vesting the sovereign authority in an individual. And, whatever be the origin of the privileges of such classes, those privileges are to be regarded as exceptions to equality made for the sake of order, in their relations to each other the members of each class are to be regarded as equal, and the members of each class are equal in their respective relations to the members of the various other classes. In the governments which are spoken of as free constitutional governments, the principle of equality is seen in its widest appli- cation. Here, in the broad sense, there are no classes, not only is there equality before the law as between noble and noble, citizen and citizen, but there are no excepted classes or indi- viduals. 4. Accompanying the development of the principle of equality in government is a development of the forais of law through which government operates. An analogy to this relation is found in the relation between thought and language. As the mind becomes more capable of complex thought the language in which thought is expressed becomes more exact and definite. The child expresses his simple wants in few words, the same word fre- quently is used to express different ideas, the noun is used for the verb and the verb for the noun indifferently, but the grown man, and in a greater degree the educated man, the professional man and the scientist use words in exact senses, distinguishing between the meanings conveyed by various inflections, terminations and grammatical forms. So in government as the thought of equality becomes more clearly developed, forms and definite rules of gov- ernmental procedure come into existence, the observance of which tends more certainly to equal results. In a despotic government where the will of the sovereign is the only law, while theoretically his subjects are equal among themselves, yet the operations of the sovereign will may often produce gross inequalities because there are but few fixed and invariable channels and recognized con- stitutional forms through which the sovereign may express his will with respect to his subjects. In such a constitutional govern- ment as the English such constitutional forms of expression and methods of action are well developed and operate as effectual, practical restraints although not embodied in a written constitu- tion. And in the states where the rule of equality receives its 1 CONSTITUTIONAL LAW OF TAXATION. Avidest recognition, the workings of government are directed by written constitutions wherein that rule is given exact applica- tion, the rights of the citizen are precisely defined, and the ma- chinery of the courts may be invoked by the citizen against the government, so that equality is — as it were — organized, as well as theoretically regarded. Equality is most highly developed in the constitutional law of taxation. 5. Equality is a mathematical term, and in those operations of government which are capable of being considered with re- spect to mathematical science we should naturally expect to find the rule of equality in government most highly developed. In fact, such is the case. Many of the matters in which the equal rights of citizens are subjects of consideration are of such a nature that the mathematical tests of quantitative equality cannot be applied to them. In such matters, the rules of equality must necesearily be vague and general. Every citizen, for instance, is equally bound to serve the state in war to the extent of his physical ability, and it is a denial of equality to compel a man to fight when others physically better able than he are exempt. But there is no way by which physical ability of this sort can be mathematically estimated, and the state fixes certain ages at which men shall be exempt from military service, and such enactments are valid although there may be many men in the exempt class better able to serve than some who are not exempt. 6. But taxation is a question of money. It is not possible to determine accurately whether a man tried for crime has had a fairer or less fair trial than some other man tried, perhaps in the same court, for the same offense. It is not possible to apply any mathematical test to ascertain whether the operations of a police regulation bear more hardly upon some individuals than upon others. ISTo one can say exactly whether a law, which, for instance, requires children to be vaccinated, is a greater invasion of the rights of the individual than is warranted by the consti- tutional principles which govern the exercise of the police power. But it can be ascertained mathematically (not of course with literal, but with approximate exactness) whether a man is taxed at a greater rate than his neighbor, or whether the valuation of his property is proportionately greater or less than his neighbor's. As a result of this capacity for mathematical tests, the con- EQUALITY THE FUNDAMENTAL THOUGHT. stitutional law of taxation, both in enactment and interpretation, is more precisely defined than the constitutional principles which protect the rights of the individual in other respects. The exer- cise of the police power is governed by general phrases such as " due process of law," the " law of the land," and the like; many of the principles which regulate that power have no other sanc- tions than those which the courts have derived by argument from the inherent nature of government and of legislative authority. On the other hand nearly all the principles which rule the exer- cise of the taxing power have passed beyond the stage where they rest solely upon inherent limitations, and in most states are em- bodied in written constitutional provisions, often quite minute. 7. Much of this definiteness of restriction on legislative power is a development of comparatively recent years. I'ifty years ago the express restrictions on the taxing power were few; and in most states they did not exist. Expressions requiring proportional and reasonable taxation, and the like, were occasionally found in the state constitutions. To-day, not only are provisions commanding equality and uniformity found in nearly all the state constitutions; but pro- hibitions on the passage of local and special laws, regulations respecting exemptions, and the like, are frequent, while in some of the latest constitutions the subject of taxation is regulated in some of the minute details of law and procedure. How the principle of equality is apparent in the various aspects of the constitutional law of taxation. 8; What has been said amounts, then, to this : The fundamental idea of governmerlt is orderly equality ; in free constitutional gov- ernments equality is secured by expressed rules of governmental action which in their practical operation guard all citizens against iiiequality; with respect to taxation the principle of equality is capable of and has received more definiteness of expression in constitutional ordinances than is the ease with respect to some of the other powers of government. It is now proposed to show briefly how equality underlies the various limitations which bind legislatures in the exercise of the taxing power and that all these limitations are merely forms of expression in which the principle of equality is manifested in different aspects. 9. The maxim that taxes can only be laid for public purposes, which is embodied in every state constitution, and is enforced by b CONSTITUTIONAL LAW OF TAXATION. the due process of law clause of the national constitution, is an expression of the idea of equality so far as expenditure is con- cerned. The purposes which are defined as " public " are those which inure to the benefit of the whole community. That money raised by taxes upon the community shall be expended for the good of all is obviously a requirement of equality. 10. The principles which limit expenditures of the proceeds of taxation to the welfare of the particular community or territory taxed are merely forms of the same equality. 11. In the principles and written constitutional ordinances which limit the legislature in the delegation of the taxing power ■the. idea of equality is manifest. The general rule that the power cannot be delegated is a guaranty of equality, for so much is left to the discretion of the legislative power that the surest way for the people to guard against the abuse of that discretion is to see that it is not exercised by anyone except their own elected repre- sentatives. The exception to the general rale, which allows that the taxing power may be delegated to local governing bodies, is an exception which tends to the preservation of equality; for when persons outside of a locality are admitted to share in the government of its local affairs, as is the case where a state legisla- ture lays taxes on a small community for local objects, the rule of equality is violated as between the members of the community and those who are not members. 12. The express constitutional provisions and the unwritten principles which limit states and governments, in their taxing jurisdiction, to persons subject, either by citizenship or by terri- torial relation, to their own authority, are, perhaps, more ex- pressive of the principle of order than of that of equality, but the orderly rule thus obtained has some equality for its final result. 13. In the decisions, statutes, and constitutional enactments which lay dovrai the law with respect to local assessments for special benefits is clearly seen the conflict between the principle of equality and the principle of order. Time and space forbid a historical discussion which might be philosophically interesting, if not of use in practice. Suffice it to say that such a discussion would begin at a time not more than some forty years ago, when the power of the legislature to lay the whole cost of a local im- provement on the neighborhood, without any inquiry as to actual benefits, was practically unquestioned. Along with this went the power to apportion the cost by an iron rule, such as the front foot method, or by making each piece of property bear the cost EQUALITY THE FUNDAMENTAL THOUGHT. i of the improvement in front. Here was seen the principle of order practically supreme, for while the theory that special bene- :fits are the basis of special assessments was recognized, it did not receive anything more than theoretical recognition. The system •of assessing eosi on the neighborhood, and of assessment by arbitrary rule, was so firmly intrenched as a convenient though illogical method, that the courts generally refused to disturb it, basing their refusal on the propositions that the choice of methods Avas in the legislative discretion, that the assessment of cost was & legislative determination of the fact of benefit, and finally, that the practice was sanctioned by long-established custom. 1 3a. The extent to which these rules have been modified by the spirit of equality, asserted in the rules that special assessments must not exceed henejits, is one of the most interesting results of recent forensic discussion. Beginning, I think, with the courts of New Jersey, state after state held that, in cases of assessment by subordinate tribunals at least, it must be found as a fact that the benefits were equal to the assessment; that the legislature could not, in laying down a general rule for future action, make a finding that in all cases the benefits equaled the cost of the im- provement; that the general rule of assessment by making each lot bear the cost of improvement in front was a denial of due proc- ess of law. Even the Supreme Court of the United States took some such position as this, although it has since receded somewhat from it. To-day there are but few states where the legislative power in this respect is unrestrained as of old; in some state ■constitutions the rule that assessments can only equal benefits is expressly ordained; in a number of states the courts hold, xinder the due process of law clause, that the property owner must be heard on the question of fact whether the assessment ■equals the benefits ; and in many of the remaining states the legislative power to establish an arbitrary rule of apportionment and assess the whole cost of an improvement on a designated dis- trict is strictly confined to the particular classes of improvements in which the practice is sanctioned by a long line of decisions. 1 4. In provisions for the collection of taxes one would naturally •expect the principle of order to be more apparent than that of ■equality. Yet reflection will show how far equality has here modified the practices of arbitrary power. Instead of the cruel methods of extortion practiced by farmers of the revenue under ■despotic systems, instead of favoritism in method, we find uni- form laws applicable to all alike in the same situation; and rules 8 CONSTITUTIONAL LAW OF TAXATION. of equality in most constitutions which compel that such shall be the application of revenue laws. We find that in many if not. most state constitutions the power of discrimination is further taken away from the legislature by provisions forbidding tho enactment of local or special laws for the assessment and collec- tion of taxes. In some constitutions laws extending the time for the payment of taxes are forbidden. The decisions in certain states which deny the power of the legislature to make a local assessment a personal liability of the owner of the property may be logically said to follow from the principle that assessments must not exceed benefits. The decisions which deny the power of the legislature to declare lands forfeited to the state without " oifice found " or its equivalent, show how far the principle of equality has narrowed the powers of governments in this direction. 15. Those provisions of state constitutions which limit the amount of debt which communities may incur are sometimes spoken of as arbitrary restrictions, based wholly on practical expediency. ^Nevertheless it is true that they embody the rule of equality in some of its broadest aspects. The principle of pay as you go is a good rule for an individual because the individual is the same person throughout life, and if he runs in debt he is the one who will suffer for it. But it has no force as a deterrent to communities because the people who incur the debt and get the benefit are not the ones upon whom, in future years, the burden of payment falls. And under our system of universal suffrage those who vote the debt' are not always those who im- mediately begin to pay it.^ These constitutional debt limits, then, embody the principle of equality as between those who incur the debt and those who are to pay it in the future, by preventing one generation from enjoy- ing great public benefits wholly at the expense of future genera- tions, and by preventing those elements in every community • which will gain a temporary profit by the prosecution of public works, from gaining that profit by voting public debts which the property owners must pay, thus tending to preserve equality as between the members of the present generation. In the detailed discussions of this work the principle of equality is applied as a 1 In this statement I disregard ques- taxation, which have not been satis- tions as to the ultimate incidence of factorily solved by anyone. EQUALITY THE FUNDAMENTAX. THOUGHT. 9 guiding rule to some questions which have arisen under these debt limitations, as to which the courts are in conflict. 1 6. The thought of equality is everywhere manifest in the con- stitutional regulations which determine the relations between the Federal and state governments, and in the decisions which have interpreted those regulations and defined those relations in detail. In the limitation on the powers of the states with respect to commerce, the idea of equality does not seen as prominent as the idea of order; but a brief consideration of the subject will show that here, as elsewhere, equality and uniformity are the dominant notes. That the exclusive jurisdiction of the Federal government tends to uniformity, exercised, as it is, uniformly throughout the United States, is apparent. In its application to state taxation the essential equality of its results is seen. Any state tax which is imposed on interstate commerce is in some degree a burden on persons outside the state; the money which is gained by such a tax comes, to a greater or less extent, out of the pockets of persons outside the state, and to that ex- tent is taxation of those persons for the support of a state from which they receive no governmental benefit. An extreme in- stance of such unequal taxation would be afforded if the state of New Jersey should lay a tax on all commerce passing through its borders — thus taking toll from all the traffic of the railroads which pass through New Jersey to New York; or if the state of Pennsylvania should lay an export duty on coal, taxing every con- sumer, or if the seaboard states should raise their governmental expenses by taxing the foreign imports which enter the country through their ports. The vexatious and commerce-hampering effect of such a state of things is the most prominent feature of such illustrations, but take others. Is not inequality plainly seen when a state taxes the occupa- tion of a commercial traveler selling goods which come from another state ? Some one pays the tax. If it comes out of the pocket of the seller of the foreign goods he is taxed for the support of a state in which he dges not live. If it comes ulti- mately out of the pockets of the buyers of the goods they are in that respect taxed unequally as between them and the purchasers of home-made goods, or, if the effect of the tax be to restrict com- petition in sales and raise the prices of domestic goods, then all the purchasers of such goods are taxed for the benefit of the makers. 10 CONSTITUTIONAL LAW OF TAXATION. If this thought of equality be kept in mind the decisions upon the subject of interstate commerce become more clear. 1 7. In the requirements that duties, imposts, and excises shall be uniform throughout the United States, and that citizens of each state shall be entitled in the several states to the privileges and immunities of citizens, in the guaranties of due process of law and the equal protection of the laws, the idea of equality is expressed in terms. Where equality is most clearly recognized, judicial decisions are most harmonious. 18. In the preceding paragraphs an attempt is made to show that equality is the basic thought in our constitutional system, and to point out roughly how that thought appears and reappears in many aspects in those parts of that system which deal with the power of taxation. More clearly is this perceived by noting that in those parts of our constitutional system where equality is least clearly manifest, there is most confusion of tho.ught and conflict of decision — and that in those parts where the principle of equality is most clearly defined, hai-mony of decision is the rule. A treatise might be written upon this thesis alone. Here a few general illustrations must suifice. The parts of our written constitutional law in which the princi- ples of equality are most definitely expressed are, of course, the provisions which in terms command equality and uniformity in taxation. Note that in nearly all the states the decisions under these requirements are practically uniform. The language of these enactments left the courts in no doubt as to what was their underlying spirit and purpose. Consequently we find that in all the states where they exist, they are interpreted practically alike, For instance — in all but one they are held not to forbid special assessments — in all but one of the remaining states they do not prevent assessments according to benefits — in all they are held not to require uniformity of method — in all they compel only uni- foi-mity in the same taxing district and not as between different taxing districts — in nearly all they are construed to forbid ex- emptions and commutations except as expressly allowed — in nearly all they are not applied to privilege taxes — and where thev are so applied it is by virtue of some peculiarity of language. At the moment of writing the ■\\Titer does not recall any point upon EQUALITY THE FUNDAMENTAL THOUGHT. 11 ■which there is any great and decided difference between the de- cisions under these provisions in various states, except as indicated. 19. On the other hand, observe that in the decisions with re- spect to limitations on the dfebt-contracting power, a class of cases in which the rule of equality has not been so clearly perceived to be applicable, there is great discord. Whether involuntary obliga- tions are to be included, whether debts for current expenses are included, M'hether a " special fund " may be created to avoid such limitations, are questions upon which there is dissension. It seems to the writer that if these limitations had invariably been interpreted with the idea in mind that they are expressions of the Tule of equality, there would have been substantial uniformity of ■decision. 20. In the cases involving the constitutionality of the " front ioot rule " in special assessments, there has been almost inextricable ■confusion. Most, if not all, of this confusion has resulted from the fact that the courts have refused literally to enforce the rule that assessments may not exceed benefits, and have allowed the .arguments derived from convenience and custom to outweigh the arguments in favor of real equality. The order and uniformity of •decision which are now beginning to appear in the decisions on this subject are due to the fact that the courts generally are recog- nizing equality as the dominant idea in the constitutional law of •special assessments. The nature of equality in taxation. 20a. What is this equality which is thus seen to be inherent in the spirit of the constitutional law of taxation ? In what does it •consist, and what are the tests by which its presence or absence is to be determined? It is plain that equality does not necessarily consist in mere ■equality of contribution. For every man, rich or poor, to pay the ■same, would be the greatest inequality. Whether it consists in proportionate contribution according tO' property, is a question "which has been much discussed. In the common forms of property taxation, this is the method in which the courts have usually found that sufficient equality inheres. A great economist has said that equality in taxation consists of eqvMity of sacrifice. The courts have usually measured equality in taxation by refer- 12 CONSTITUTIONAL LAW OF TAXATION. ence to the amount of benefits received, rather than by considering the sacrifice of the taxpayer. The economists of the present day seem to prefer the idea of equality of sacrifice. A glance at the two chief economic theories of taxation shows the distinction between the equality based on proportionate contribution and equality of sacrifice. 21 . The theory by which the older economists — in the early part of the nineteenth and in the eighteenth century — justified taxation, was that the citizen paid taxes as a price and a considera- tion for the benefits rendered to him by the state. This theory is known in political economy as the " benefit " theory. It has the merit of simplicity — it regards the state in the light of an insur- ance company, to which the citizen pays his tax and receives in return a certain quantity of law, order, justice, and protection to person and property. This theory — certainly the most obvious and simple one — was taken by the courts and law writers from those early economists, and with a natural devotion, to precedent, has prevailed in the courts to the present day. Nearly all judicial decisions which dis- cuss the nature of the taxing power refer to it and make the benefit the citizen receives the measure of his liability to taxation. 22. The fallacies of the " benefit " theory are now generally recognized by economists. They point out that if taxes are to be laid upon the theory of benefits conferred and a consideration paid in return therefor, the poor and weak, who benefit most from the institution of government (the rich and strong being able to pro- tect themselves under any system of society) would pay the most taxes, while the rich, who receive comparatively little good from public charities, schools, etc., would largely escape, especially those Avhose property is in such fonn as to require little or no protection from the police power. The vital interests of all, it is argued, are so bound up in and dependent upon the existence of the state that each is bound, if necessary, to contribute all his resources of life, service and property to the support of the state, regardless of the measure of good he receives from it. The tax-contribution to the support of the state is regarded in the same light and as based on the same principles as the contributions of the various members of a family to its support — each contributing according to his ability. This theory of taxation is knoA\'Ti as the " faculty " theory, each person paying in accordance with his ability to pay, or facultv, and not in proportion to benefits received. It is the accepted theory EQUALITY THE FUNDAMENTAL THOUGHT. 13 of modem economic thought. It is the theory which justifies, not only the ordinary forms of taxation, but graduated taxation of all sorts, income taxes and inheritance taxes. Although it is now generally received, it has not yet been accepted in law books and judicial decisions, principally because these derive their reasoning so largely from authorities and precedents which follow the thought of a discarded economic school. 23. Quotations from two eminent economists explain the two theories. The subjects of every state ought to contribute to the sup- port of the government, as nearly as possible in proportion to their respective abilities: that is, in proportion to the revenue which they respectivelj' enjoy under the protection of the stat'^. In the observation or neglect of this maxim consist-"^ what is called the equality or inequality of taxation. i" ' For what reason ought equality to be the rule in matters of I taxation? For the reason that it ought to be so in all affairs of government. As a government ought to make no distinction I of persons or classes in the strength of their claims on it, what- ever sacrifices it requires from them should be made to bear as nearly as possible with the same pressure upon all, which, it must be observed, is the mode by which least sacrifice is I occasioned on the whole. If anyone bears less than his fair share of the burthen, some other person must suffer more than his share, and the alleviation to the one is not, on the average, so great a good to him, as the increased pressure upon the other is an evil. Equality of taxation, therefore, as a maxim of poli- tics, means equality of sacrifice. It means apportioning the contribution of each person toward the expenses of government, so that he shall feel neither more nor less inconvenience from his share of the payment than everv other person experiences from his. This standard, like other standards of perfection, cannot be completely realized ; but the first object in every prac- tical discussion should be to know what perfection is.^ In most cases involving taxation which come before the courts, the theory upon which the power to tax is justified has little or no practical weight, for the existence of the power is undoubted, whatever its justification, and centuries of governmental usage have cleared many paths for its exercise. But when it happens that the power itself is challenged in its application to any par- ticular case, the ecoiaomic justification of the power may well have weight and should be kn(nvn clearly. la Smith, Wealth of Nations, book 5, 2 Mill, Political Economy, book V, chap. 2. chap. 2, § 2. 14 CONSTITTJTIONAL LAW OF TAXATION. How far does the " spirit " of equality influence decision? 24. Inquire now, briefly, how far the "spirit" of constitutional requirements, as distinguished from the letter, is allowed to in- fluence actual decisions. In a nation which, as a whole and in it» divisions, is governed by a system of written constitutions, the- tendency of thought and decision, in determining the limits of legislative power, is to look for those limits to the written con- stitution alone. Appeals to the spirit of institutions, to the un- written consensus of thought, to abstract concepts of justice, are met with the question, " Is it so written? " Acts of apparent or real legislative oppression, attacked as unwarranted invasions of private right, are upheld imless they violate some written pro- hibition of the fundamental law. To all such appeals the answer of the courts is, " The legislative department is a co-ordinate branch of the government. Address yourselves to it. The peo- ple have made a constitution. It is not the function of the courts to add to it, or to read into it limitations which are not there but are conceived to be in accord with the general spirit of the instrument." This doctrine, formulated in numerous cases, is expressed, with reference to taxation, by the Court of Appeals of New York in the following language : It must be conceded that the power of taxation and of appor- tioning taxation, or of assigning to each individual his share of the burden, is vested exclusively in the legislature, unless this power is limited or restrained by some constitutional pro- vision. The power of taxing and the power of apportioning taxation are identical and inseparable. Taxes cannot be laid without apportionment : and the power of apportionment is therefore unlimited, unless it be restrained as a part of the- power of taxation. ... In the case of The People v. Brooh- hjn^^ it was said that a tax to be valid must be apportioned " upon principles of just equality," and upon all the property in the same political district; and that this is a fundamental principle of free government, which, although not contained in the constitution, limits and controls the power of the legis- lature. This is new and it seems to me to be dangerous doctrine. It clothes the judicial tribunals with the power of trying the validity of a tax by a test neither prescribed nor defined by the constitution. If by this test we may condemn an assessment apportioned according to the relation between burthen and benefit, we may with far better reason con- demn a capitation tax on the ground that numerical equality is 2a A case in a lower court. EQUALITY THE FUNDAMENTAL THOUGHT. 15 not just equality;- or a general property tax, for a local object, because it compels one portion of tne community to pay more than their Just share for the benefit of another portion. All discriminations in the taxation of property and all exemptions on the ground of public policy would fall by the application of this test. If this doctrine prevails it places the power of the courts above that of the legislature in a matter affecting not only the vital interests, but the very existence of the government. It assumes that the apportionment of taxation is to be regu- lated by Judicial and not by legislative discretion. It obstructs- the exercise of powers which belong to and are inherent in the legislative department, and restrains the action of that branch of the government in cases in which the constitution has left it free to act.^ We are urged, however, to go further than this, and to hold that a law, though not prohibited, is void if it violates the spirit of our institutions, or impairs any of those rights which it is- the object of a free government to protect, and to declare it unconstitutional if it be wrong and unjust. But we cannot dO' this. It would be assuming a right to change the constitution. to supply what we might conceive to be its defects, to fill up every casus omissus, and interpolate into it ■ whatever, in our opinion, ought to have been put there by its framers. The con- stitution has given us a list of the things which the legislature may not do. If we extend that list we alter the instrument, we- become ourselves the aggressors and violate both the letter and spirit of the organic law as grossly as the legislature possibly could. If we can add to the reserved rights of the people, we can take them away; if we can amend, we can mar; if we can remove the landmarks which we find established, we can obliterate ' them; if we can change the constitution in any particular, there is nothing but our own will to prevent us from demolishing it entirely. ... I am thoroughly convinced that the words of the constitution furnish the only test to determine the validity of a statute, and that all arguments, based on general principles outside of the constitution, must be addressed to the people, and not to us.* This doctrine has been reiterated in a vast number of cases, of ■which but a few are cited.® 3 People V. Mayor, etc., of Brooklyn, Cincinnati, 21 Ohio St. 41, 14 Am. 4 N. Y. 419, 55 Am. Dec. 266. Hep. 24 ; Vogel v. Pekoe, 157 111. 339, 4Sharpless v. Mayor of Philadel- 42 N. E. Rep. 386, 30 L. R. A. 491; phia, 21 Pa. St. 147, 59 Am. Dec. 759. Leep v. St. Louis, etc., Ry. Co., 5S sSatterlee v. Matthewson, 2 Pet. Ark. 407, 41 Am. St. Rep. 109, 25 380, 7 L. ed. 458; Fletcher v. Peck, S. W. Rep. 75, 23 L. R. A. 264; State Cranch 87, 3 L. ed. 162; Golden v. v. Travelers' Ins. Co., 73 Conn. 255, Prince, 3 Wash. C. C. 313, Fed. Cas. 47 Atl. Rep. 299, 57 L. R. A. 481, 70 No. 5,509 ; Bennett v. Bogg.s, 1 Baldw. Conn. 590, 66 Am. St. Rep. 138, 40 74, Fed. Cas. No. 1,320; Walker v. Atl. Rep. 465. 16 CONSTITUTIONAL LAW OF TAXATION, 25. But the courts which have enunciated this doctrine in the strongest language have, nevertheless, recognized that there are, in fact, limits to the power of the legislature in matters of taxa- tion, not directly imposed by written constitutions. All the courts agree, for instance, that a tax must be for a public purpose, and that a tax laid for a private purpose is void, regardless of the existence or nonexistence of express restrictions of this nature in the written constitution. They reach this conclusion and har- monize it with their view of the uncontrolled authority of the legislature by a course of reasoning somewhat as follows : All legislative power is confided to the legislatures by the people in their -written constitutions. The power of taxation is a legis- lative power, hence is reposed in the legislature. But a law im- posing taxes for a private purpose is not a law at all but robbery under the forms of law. Such power is not legislative, hence the power to enact such a decree does not pass to the legislature under the constitutional grant of legislative power. Hence taxation for private purposes is void.® The difficulty with this reasoning is that it proves too much. It would be possible to show by such reasoning that an unequal tax was void, or that a tax inequitably apportioned was void. Con- fronted on the one hand with the undoubtedly sound position, that the courts cannot read into the written constitution restraints which the people have not put there, and with the well sustained and equally sound doctrine that a tax for private purposes is void, this subtle, reasoning has been adopted to meet the inconsistency. 26. It is not necessary to resort to such subtleties. !N^o one will affirm that the courts have the right to read into the constitution things which are not there. IsTo lawyer will argue that vague principles of supposed abstract justice or liberty are rules to be applied in deciding the constitutionality of statutes. But American constitutions, especially the state constitutions, are not documents which created the governments which they con- trol. The constitution of an American state is not the all -compre- hensive plan upon which the public institutions have been built up. In all the older states the institutions came first and the constitu- tions afterward. The states grew from settlements and colonies, their systems of local and general government were well estalv lished, the boundaries of their respective governmental jurisdic- tions well marked, the customs of the country as to the limits of 8 See post, chapter IV, and oases cited. EQUAIITY THE FUNDAMENTAL THOUGHT. 17 legislative, executive, and judicial authority were well understood as they now persist, before a single written constitution of an American state or nation came into existence. And when those constitutions did come into existence they came, not wiping out custom, but merely defining more carefully its most prominent features. When a statute is enacted on a matter included in the common law, it does not destroy that part of the common law (custom) not included in the statute. So when a constitution is •established it is superposed upon a great mass of existing customs, limitations, and institutions, and is to be construed along with them and not to their utter exclusion. To look at the written word ;alone, paying no heed to the established customs and governmental systems which surroimd it and mingle with it would be to exalt the paper above the fact — to separate law from history. To have regard to these surroundings of legislative habit, these long under- stood bounds of legislative prerogative, is not to add to the con- stitution but merely to recognize that no written constitution does •or can comprehend the whole organic life of a state. 27. This view of the nature of constitutional restrictions is set forth with great vigor in an opinion of Judge Cooley, in a case where the question was as to the absolute right of the legislature in matters of local government, in the absence of express constitu- tional restrictions.^ It was contended on the one hand that the power of the legislature in the premises was uncontrolled, because the state constitution contained no restrictions upon it ; and on the other hand that there were certain rights of local self-government, well recognized, which the legislature could not infringe and which needed no written constitutional bulwark. Upon this point Judge Cooley said : We must assume either an intention that the legislative con- trol should be constant and absolute, or, on the other hand, that there- are certain fundamental principles in our general frameworh of government^ which are within the contemplation of the people when they agree upon the written charter, subject to which the delegations of authority to the several departments have teen made. That this last is the case, appears to me too plain for serious controversy. The implied restrictions upon the power of the legislature, as regards local government, though their limits may not be so plainly defined as express provisions might have made them, are nevertheless equally im- perative in character, and whenever we find ourselves clearly 7 People ex rel. Le Roy v. Huribut, 24 Mich. 44, 9 Am. Eep. 103. 2 18 CONSTITUTIONAL LAW OF TAXATION. f •within them, we have no alternative but to bow to their author- ity. The constitution has been framed with these restrictions in view, and we should fall into the grossest absurdities if we- ■■''' undertook to construe that instrument on a critical examination of the terms employed, while shutting our eyes to all other considerations. The circumstances from which these implications arise arer First, that the constitution has been adopted in view of a sys- tem of local government, well understood and tolerably uniform in character, existing from the very earliest settlement of the country, never for a moment suspended or displaced, and thfc continued existence of which is assumed; and, second, that the liberties of the people have generally been (-.upposed to spring: from, and be dependent upon, that system. The opinion then goes on to recite in. some detail the history of local government in the United States, citing numerous- authorities. 28. The Supreme Court of the United States, in a case involv- ing the principles of taxation,® has adopted the same Yiew. Their assent to that view is emphasized by the dissenting opinion of one of the justices, upholding the theory that the legislature is- absolute except as restrained by constitutional provisions. The question was as to the validity of a state statute authorizing a tax for a private purpose. The court referred to the cases discussing- the validity of taxation in aid of railroads and said : We have referred to this history of the contest over aid to- railways by taxation, to show that the strongest advocates for the validity of those laws never placed it on the ground of the unlimited power in the state legislature to tax the people, but conceded that where the purpose for which the tax was to be issued could no longer be Justly claimed to have this public character, but was purely in aid of private or personal objects, the law authorizing it was beyond the legislative power, and was an unauthorized invasion of private right. It must he conceded that there are such rights in every free government heyond the control of the state. A government ' ■wrhich recognized no such rights, which held the lives, the liberty and the property of its citizens subject at all times to the abso- lute disposition and unlimited control of even the most demo- cratic depositary of power, is after all but a despotism. It is true it is a despotism of the many, of the majority if you choose to call it so, but it is none the less a despotism. It may well , be doubted if a man is to hold all that he is accustomed to call 8 Loan Association v. Topeka, 20 Wall. 655, 22 L. ed. 455. EQUALITY THE FUNDAMENTAL THOUGHT. 19 his own, all in whieh he has placed his happiness, and the security of which is essential to that happiness, under the un- limited dominion of others, whether it is not wiser that this power should be exercised by one man than by many. The theory of our governments, state and national, is opposed to the deposit of unlimited power anywhere. The executive, the legislative, the judicial branches of these governments are all of limited and defined powers. There are limitations on such power which grow out of the essential nature of all free governments. Implied reservations of individual rights, without which the social compact could not exist, and which are respected by all governments entitled to the name. 29. In a case in New Jersey, vs^here the question was as to the right of the legislature to lay an assessment on lands regardless of benefit, the Court of Errors and Appeals said : There is nothing in the constitution of this state that requires that all property in the state, or in any particular subdivision of the state, must be embraced in the operation of every law levying a tax. That the effect of such laws may not extend be- yond certain prescribed limits, is perfectly indisputable. It is upon this principle that taxes raised in counties, townships, and cities are vindicated. But while it is thus clear that the burthen of a particular tax may be placed on any political district to whose benefit such tax is to enure, it seems to me it is equally clear that, when such burden is sought to be imposed on par- ticular lands, not in themselves constituting a political sub- division of the state, we at once auuroach the line which is the boundary between acts of taxation and acts of confiscation. I think it impossible to assert, with the least show of reason, that the legislative right to select the subject of taxation is not a limited right. For it would seem much more in accordance with correct theory to maintain that the power of selection of the property to be taxed cannot be contracted to a narrower bound than the political district within which it is to operate, than that such power is entirely illimitable. If such prerogative has no trammel or circumspection, then it follows that the entire burden of one of these public improvements can be placed, by the force of the legislative will, on the property of a few enumer- ated citizens, or even on that of a single citizen. In a govern- ment in which the legislative power is not omnipotent, and in which it is a fundamental axiom that private property cannot be taken without Just compensation, the existence of an unlim- ited right in the lawmaking power to concentrate the burthen of a tax upon specified property, does not exist. If a statute should direct a certain street in a city to be paved, and the ex- pense of such paving to be assessed on the houses standing at the four corners of such street, this would not be an act of taxa- 20 CONSTITUTIONAL LAW OF TAXATION. tion, and it is presumed that no one would assert it to be such. If this cannot be maintained then it follows that it is conceded {hat the legislative power in question is not completely arbitrary. It has its limit; and the only inquiry is, where that limit is to be placed.^ 30. From the facts that so many eminent courts and judges have asserted the existence of some inherent limits of equality upon the legislative power of taxation, however vague and ill- defined those limits may be; and that the courts which deny in terms the existence of such limits nevertheless do find means to nullify legislative acts which are not expressly violative of written constitutions/" the conclusion must be drawn that there are in fact such limitations, that somewhere there are boundaries be- yond which a legislature, held back by the force of its inherent disabilities, cannot go. 31. These limits have, in fact, been incorporated roughly into the written law. The governmental habits, which existed in American and English communities before our state and national constitutions were born, have been made a part of our written constitutional law by the guaranty, in all our written constitutions, of due proc- ess of law. The nature and effect of this guaranty are dis- cussed in other parts of this book. But whenever a tax law is passed so unequal in its operation, so violative of all customary forms of procedure, as to amount to spoliation of the citizen, this guaranty of due process of law is the written limitation which enables the courts to apply what are sometimes spoken of as the inherent limitations growing out of our past laws and customs, or based on the fundamental rules of right and justice.-"^^ It is to this guaranty that those must look who seek to enforce the spirit of equality in cases of flagrant injustice. 32. "Where such a clear case of injustice as to invoke the power of the courts to protect against spoliation is not presented, the spirit of equality which pervades the constitutional law of taxa- tion may nevertheless be invoked as a guide to the interpretation of law and constitutional provisions. In this way the idea of equality has its most effective influence. It is said — I think by Sir Henry Maine — that the civil law of the Roman empire did not become the guiding standard of justice in the courts of 9 State V. Newark, 37 N. J. L. 415, denying the right of the legislature to 18 Am. Rep. 729. impose taxation for private purposes. 10 Reference is made to the cases n See chapters IV, and EQUALITY THE FUNDAMENTAL THOUGHT. 21 mediaeval Europe by the enactment of the canons of that law in the form of statutes; but by reason of the fact that the principles of that system were received, as a body of doctrine, into the minds of all who studied jurisprudence in the schools and courts of those ages and communities. In like manner it may be said that the doctrine of proportionate equality in taxation has been received by American students of constitutional law, so that in cases involving the interpretation of tax laws and constitutional pro- visions the idea of equality is constantly present; and that con- struction is favored which tends toward equality. 33. Instances are frequent in which the courts have appealed to the natural principles of equality in the expounding of statutes. In the case of Hylton v. The United States,^^ the question was whether a tax on carriages was a direct tax within the meaning of the constitutional rule requiring direct taxes to be apportioned among the states. It was held that while in the meaning of the words as commonly used a tax on carriages was a direct tax — yet as the tax on carriages could not be apportioned among the states, without the grossest inequality and injustice — such a result could not have been contemplated by the constitution and the tax was, therefore, not a direct tax within the meaning of the constitution. Here the argument from the principles of natural justice was suiRcient entirely to avoid the ordinary and usual meaning of the term " direct taxes." 34. In Granger v. City of Buffalo^^ the city of Buffalo, under its charter, had begun certain proceedings to grade a street, had let the contract for doing so, and the work had been partly done. Then, in an injunction proceeding, the proceeding to grade the street was held illegal and void and the assessment laid to pay for the work was enjoined. Thereupon the legislature passed an act authorizing the city to order that street graded without the pre- liminary proceedings provided by the charter. The city did so, objections were made to the assessment, but the objections were not laid before the council as provided by the charter. Action was brought by the taxpayers to declare the assessment void. The court held that the taxpayers should have been heard, and reversed on that ground. Then the court went further and said : But I assert that not only was the enactment unconstitutional and void, in not providing for due process of law before the 12 3 Ball. 171, 1 L. ed. 556. 13 6 Abbott's New Cases (N. Y.), 238. 22 CONSTITUTIONAL LAW OF TAXATION. property of the citizen could be taken or charged or incnmbered, but that it is incompetent for the legislature, in the exercise of the power of taxation, to charge the property of one citizen by a course of proceeding unknown to the common law, and differ- ing from that by which the property of all other citizens is taxed or charged. The charter of the city of Buffalo provides certain proceedings and safeguards to be observed in and about all pro- ceedings of the nature and kind under consideration. They apply to all streets and to all residents; an equal burden, self- imposed, for the government and improvement of the municipal- ity. This charter, delegating to the people of Buffalo the right of self-government, is, and was intended to be, equal in degree for all, or it would never have been accepted. Each and every provision enures to the benefit of every citizen equally, protecting and burdening all equally ;- and were it known that the rights or property of a single citizen were subject to a higher or less degree of immunity than his fellows, a proper sense of justice would correct the error. To say that one man's property can, by special law, be taken or incumbered in a manner or by pro- ceedings that do not apply to all, is tyranny, and revolting to the theory and sentiment of republican equalitv. If it is com- petent for the legislature thus to express its will in regard to property situated upon the line of one of our highways, why is it not competent for it to prescribe laws differing from the gen- eral laws, governing the rest of society, as to the personal privi- leges and liberties of those who own that same property, and wherein would then consist the assured safety and permanence of the constitutional rights of property or liberty? Such an enactment is more like revolution than the administration of just and equal laws, and has no warrant in the law, or in the customs of our fathers. The moral law leads to equality. 35. In considering how far the spirit of equality should govern in interpretation, reference may briefly be made to what some eminent jurists have said, to the effect that the moral law, the fundamental ideas of right and wrong which have developed in human consciousness, are to be regarded as the basis of all written law, the standard of all interpretation. These jurists assert, what seems to be plain, that the greatest, the highest, the most binding limitation upon all power, whether executive, legislative, or judicial, is the rule of right reason and justice, for lawful power exists among men only in order that right and justice may be done. This - — and this alone — is the justification for the existence of government. In so far as governments, legis- latures, and courts fail in this, they violate the primary law of their life; and all enactments derive their warrant of authority EQUALITY THE FUNDAMENTAL THOUGHT. 23 from the fact that they are deemed to be expressions of this justice as applied to the practical affairs of men. There are in nature certain fountains of justice, whence all civil laws are derived but as streams, and like as waters do take tinctures and tastes from the soils through which they run,, so do civil laws vary according to the regions and governments where they are planted, though they proceed from the same fountain.^* This law of nature being coeval with mankind and dictated by God himself, is, of course^ superior to any other. It is bind- • ing over the globe, in all countries and at all times; no human laws are of any validity if contrary to this, and such of them as are valid derive all their force and all their authority, medi- ately or immediately, from this original. i" This, the law of nature, is, indeed, the foundation, not only of international law, but it is the foundation of all law, munici- pal as well. All municipal codes are but attempts on the part of particular societies of men to draw precepts and rules from the law of nature and re-enact them for the guidance of its individual members; and in those countries which are not gov- erned wholly by codes or by statutory enactments; in those countries like England and America, where the great body of jurisprudence is unwritten, still the decisions of the tribunals which constitute the sources and the evidence from which the law is ascertained, are derived in great part from the law of nature. . . . This law of nature, as it is styled, is some- times designated by different terms. Sometimes as natural law, sometimes as natural justice, sometimes as the dictates of right reason ; but by whatever name it is described, the same thing is always intended; and it means in short, those rules and prin- ciples of right and wrong, implanted in every human breast, and which men recognize in their intercourse with each other because they are men, having a moral nature, and are brought into relations with each other which compel the application of moral rules.^® 36. It is commonly said, when this moral law is sought to be applied to any of the practical affairs of litigation; and especially where it is referred to in opposition to some act of legislation, that these principles are too vague, too general, too much open to dispute both as to their existence and their effect in the particular case, to be relied on as rules of jurisprudence. This is largely so; but it is not altogether so. 14 Bacon, De Augmentis Scien- 18 Argument of James C. Carter, tiarum. Esq., Fur Seal Arbitration Proceed- 15 Blackstone Comm., book I, p. 4L ings, Vol. 12, po. 80-81. 24 CONSTITUTIONAL LAW OF TAXATION. Although there is no final arbiter and no authoritative voice to determine just what these rules of natural justice are; and although men may and do differ about them in many instances; yet there are some fundamental ideas of right and wrong, justice and injustice, liberty and tyranny, equality and unfair- ness, upon which all thoughtful men must be in substantial agree- ment. To prove this assertion to an unassenting intelligence would probably be impossible; to state what those fundamental ideas are in such a way as to include all the concepts which should be included, at the same time excluding all which should be excluded, is not possible. Their existence and their nature must both rest for proof upon the common consciousness which is the basis of all government. The moral law is not less the supreme law because there i& no tribunal to declare void legislative violations of it, and it is not absolutely ^vithout sanction because there is no physical force which can restrain the legislative power from its violation. The precepts of all law derive their primary and real force, not from the adjudications of courts, but from their compliance in the minds of just men with the doctrines of the moral law; that higher law is as binding on the consciences of legislators as it is on those of judges; and the rebukes and restraints of public opinion will generally prove sufficient to prevent flagrant legis- lative violations of moral obligations. 37. To this moral law — the natural sense of justice and right among mankind — we must look for the final determination of all questions of true law; for all our codes, statutes and decisions are but attempts to formulate the precepts of the moral law and to apply them in concrete cases. The moral law, however, to which appeal is made, is not the mere individual moral sentiment of any judge or legislator. It is a broader and higher rule — based on the consensus of thought of civilized mankind; and, in endeavoring to apply the moral law and to expound and enact statutes and rules in harmony with it courts and legislators should look not to their own personal ideas of right and wrong, but to the ideas of right and wrong which prevail generally among civilized men and these latter ideas rather than their own ideas should be accepted as the tests of what the moral law is. And, in determining what the moral law is, the hardship or inconvenience which may occur to particular individuals is not to be regarded as controlling. EQUALITY THE FUNDAMENTAL THOUGHT. 25 38. What, then, is the justice which is the end and aim of the moral law? What is the primary principle of dealing among men which forms the rule of government? Without entering into the elaborate definitions of justice which have occupied moral philosophers from the time of Plato, the rule of justice which should control all the dealings of government is best stated in the concise words of the Declaration of Independence : All men are born equal. Equality before the law is the real standard by which the justice or injustice of all governmental acts is to be measured. If the statute law is in accord with this principle — if no class is favored or oppressed — the law is, roughly speaking, in accordance with the moral law, no matter how harshly its operations may bear on individuals ; and conversely if there is any class, however few its members, the individuals of which are at a disadvantage as compared with the rest of the community, the law is a violation of the rule of justice, no matter how expedient it may be to the ends of the state or how beneficial it may be to the public at large. With respect to the power of taxation the moral idea which at once presents itself to consciousness is the idea of propor- tionate equality. If there be any limitation upon legislative power, inherent in its nature, with respect to taxation, that limi- tation must be in the necessity of some equality, l^ot an exact equality, not even a reasonably exact equality, such as is enforce- able when the rule of equality is written in the constitution; but approximation to some rough, necessarily imperfect, equality, must be the test whether a given piece of legislation conforms to the moral law. 39. This appeal to natural justice, however, is limited, so far as the courts are concerned, to interpretation. In dealing with constitutions and statutes they will strain every device of lan- guage to avoid a manifestly unjust result; but ha^dng done this, their power is exhausted. When the language of constitutions and laws is so plain that interpretation cannot prevent a harsh result, the power of the courts is at an end. The general spirit of our institutions, or what may be conceived to be such, will not be invoked to set aside the plain provisions of a statute." Courts cannot, in our judgment, nullify an act of legislation ITForsythe v. Hammond, 68 Fed. (N. Y.) 215; Walker v. Cincinnati. Rep. 777 ; Newell v. People, 7 N. Y. 21 Ohio St. 43, 8 Am. Rep. 24. 101; People v. Fisher, 24 Wend. 26 CONSTITUTIONAL LAW OF TAXATION. on the vague ground that they think it opposed to a general "latent spirit," supposed to pervade or underlie the constitution, but which neither its terms nor its implications clearly disclose in any of its parts. To do so would be to arrogate the power of making the constitution what the court may think it ought to be, instead of simply declaring what it is. The exercise of such a power would make the court sovereign over both constitution and people, and convert the government into a judicial despotism.^* 40. The foregoing discussion, necessarily general in its nature, does not deal with the application of the rule of equality, as ex- pressed in various constitutional limitations, to particular subjects and concrete facts. Those purely professional aspects of me topic are treated in chapters 19 to 24 of this work, , and generally throughout the book. 18 Walker v. City of Cincinnati, 21 Ohio St. 14, 8 Am. Rep. 24. CHAPTER n. DEFINITIONS; SCOPE OF THE TAXING POWER; ANALYSIS OF FRANCHISE TAXES. Definitions and economic theories. 41. The value of definitions is small; yet they have some value, for in definitions are often found the germs of essential principles. The following definitions of taxes are those of eminent economists. It will be useful to compare them with the definitions of courts and lawyers. Professor Bastable says : "A tax is a compulsory contribution of the wealth of a person or body of persons for the service of the public powers." ^ In explaining this definition he says: 1. A tax must be compulsory, that is, the will of the payor is legally immaterial and payment can be enforced. 2. It is a contribution — it involves some payment or sacrifice on the part of the payor. 3. Wealth is to be understood in the widest sense, including services as well as commodities. 4. All taxation is imposed on persons — never in reality upon Xjroperty. There is always some person who ultimately pays a tax ostensibly imposed on property only. 5. Taxes are levied for some service or benefit — that is for some real requirement of the taxing authority. 6. A tax is for the use of the public powers — it is productive of some gain or supposed gain to the state. Other definitions are those of De Parien^' who says, "A tax is the charge levied by the state on the property or labor of the citizens, in order to provide for the public expenses;" and of Cossa," who defines a tax as " that part of the wealth of private individuals which the authority of the state, province, or munic- ipality appropriates in order to provide for the public expenses incurred for the advantage of the general body of taxpayers." It is essential to note in all these definitions the public character of a tax, " for the use of the public powers " — " to provide for IBastable's Public Finance, 243. lb 50. la I, 5. [27] 28 CONSTITUTIONAL LAW OF TAXATION. the puhlic expenses " — " for the advantage of the general lodij of taxpayers." 42. The definitions of taxes already given have been those of pure economic science. The following definitions are those of legal scholars and of courts, given in the practical, every-day ad- ministration of justice and the application of these theoretic definitions to actual litigated cases. They express, in substance,, the same essential ideas. Taxes are the enforced proportional contributions from per- sons and property', levied by the state, by virtue of its sover- eignty, for the support of government and for all public needs.^ Taxes are burdens or charges imposed by the legislature upon persons or property to raise money for public purposes, or tO' accomplish some governmental end.^ A tax is a charge upon persons or property to raise money for public purposes.* A tax is an imposition for the supply of the public treasury,, and not for the supply of individuals or private corporations,, however benevolent they may be.^' The word " taxes " means burdens, charges, or impositions, put or set upon persons or property for public uses.* 43. Although it is customary, and f ormany purposes convenient to speak of taxes on property, taxes on occupations, duties on im- ported goods, taxes on successions, excise taxes on tobacco and spirits, stamp taxes on deeds, etc., it must always be remembered in any process of scientific thought or discussion, that these are not accurate terms. Taxes are contributions from persons. All taxes are taxes upon persons. The amount of their property, the nature of their occupations, the privileges they enjoy, are but the measures by which the amounts they should respectively contribute are measured. Thus what is commonly called a tax on land is a tax on the owners of land, the amount of which, in each case, is deter- mined by the value of the land owned ; a duty on imported goods 2Cooley on Taxation (2nington v. Tennessee, 95 U. S. 679- Rep. 7.33. fiSfl. 24 L. ed. 558; Peoples Sivings 38 Holly Springs Savings, etc., Co. Bank v. Layman, 134 Fed. Rep. 635. CLASSIFICATION OF FRANCHISE TAXES. 37 property. If the corporation fail, equity may lay hold of it, administer it, pay the debts, and give the residuum, if there be any, to the stockholders. If the corporation be dissolved by operation of law equity may interpose and perform the same functions.*** The shares of the capital stock are usually represented by cer- tificates. Every holder is a cestui que trust to the extent of his ovynership. The shares are held and may be bought and sold and taxed like other property. Each share represents an aliquot part of the capital stock. But the holder cannot touch a dollar of the principal. He is entitled only to share in the dividends and profits. Upon the dissolution of the institution, each share- holder is entitled to a proportionate share of the residuum after satisfying all liabilities. The liens of all creditors are prior to his. The corporation, though holding and owning the capital stock, cannot vote upon it. It is the right and duty of the share- holders to vote. They in this way give continuity to the life of the coi-poration, and may thus control and direct its management and operations. The capital stock and the shares may both be taxed, and it is not double taxation.**^ The tax may be collected from the corporation instead of from the individual shareholders, the corporation being made the agent of the taxing authority for that purpose. The fact that this is done does not make the tax one on capital stock. *^ Analysis and classification of franchise taxes. 50. It is frequently necessary to determine whether a tax upon a corporation is a privilege tax, or a tax on property. The ques- tion is material in many aspects — a tax on property may be free from the Eederal restraints as to interstate commerce taxation — a tax which, if imposed on property, would be invalid because the 40 Wood V. Dummer, 3 Mass. 308 ; 42 Aberdeen Bank v. Chehalis Curran v. Arkansas, 15 How. 319, 14 County, 166 U. S. 440, 41 L. ed. 1069, L. ed. 705; Gordon v. The Appeal Tax 17 Sup. Ct. Rep. 629; National Bank Court, 3 How. 133, 11 L. ed. 529; v. Commonwealth, 9 Wall. 353, 19 People V. The Commissioners, 4 Wall. L. ed. 701; Waite v. Dowley, 94 U. S. 244, 18 L. ed. 344; Banl^ Tax Cases, 2 527, 24 L. ed. 181; Commonwealth v. Wall. 200, 17 L. ed. 793; Queen v. First Nat. Bank, 4 Bush, 98, 96 Am. Arnoud, 9 Ad. & E., N. S., 806. Dec. 285; United States Electric 41 Union Bank v. State, 9 Yerg. Power, etc., Co. v. State, 79 Md. 63, 28 (Tenn.) 490; Bradley v. People, 4 Atl. Rep. 768; Crown Cork and Seal Wall. 459, 18 L. ed. 433; National Co. v. State, 87 Md. 687, 67 Am. St. Bank v. Commonwealth, 9 Wall. 353, Rep. 371, 40 Atl. Rep. 1074, 53 L. 19 L. ed. 701: State v. Bramin, 3 R. A. 417. And see §§ 801-1200. Zab. (23 N. J. L.) 484. 38 CONSTITUTIONAL LAW OF TAXATION.- property is exempt from state taxation, is valid if regarded as an excise or privilege tax; a tax which, if on property, would be void for lack of equality and uniformity under state constitutions, is freed from such restrictions if viewed as a license fee. Such are a few of the cases in which the distinction becomes important. The student of the subject, after reading the eases, is likely to come to the view that the value of the distinction, in attacking a law, is more apparent than real; that if the courts find that any particular law, viewed as imposing a privilege tax, is invalid — they will probably uphold the law by deciding that although in form it may impose a privilege tax, yet in effect it lays a prop- erty tax, hence is valid; and, vice versa, if they find the law invalid considered as a property tax law, they are likely to find that it really refers to property, not as a subject of taxation, but merely as a convenient means of measuring the value of the cor- porate privileges. The lawyer who is charged with the duty of defending a tax law, however, finds the distinction between prop- erty taxes and privilege taxes very helpful to him, since it gives him in most cases two theories to choose between, and he can argue in support of the law on whichever theory he thinks more useful to him. This, in the main, is as it should be. The legislature, in framing a tax law, has a wide discretion, and is not supposed to violate the constitution if any other supposition can be adopted. The courts, upon well-known principles, should make every presumption in favor of the constitutionality of laws. With respect to this matter of corporate taxation, it cannot be denied that they have vigorously adhered to this canon of their duty. In this discussion the distinctions between these kinds of fran- chises are discussed without reference to any particular con- stitutional limitation. Some principles are stated and some illustrative cases cited, because in applying various constitutional limitations to laws taxing corporate franchises, the character of the franchise taxed and the nature of the tax imposed are the elements upon which the operation of the constitutional restric- tion depends; and it is thought that this brief discussion may aid to an understanding of those elements. 51. As noted elsewhere, much of the confusion in the decisions on this topic has arisen from the loose use of the word " fran- chise." The word has come to have — with respect to corporate action and taxation — at least three different meanings. Judges have used language in talking about one kind of franchises which CLASSIFICATION OF FRANCHISE TAXES. 39 made nonsense if quoted with respect to another kind. It is ■only in later years that care has been taken to distinguish in this respect. A recent classification has been of franchises to he and franchises to do; but this while good is not complete. (1.) There is first — the " franchise " to he, that is the grant of ■corporate life from the state. (2.) There is next, one form of " franchise " to do, which is the grant of corporate power from the state to carry on some busi- ness, such as to operate a railroad, to carry on business as a building and loan association. (3.) There is next another form of " franchise " to do, which ■arises by some special gift or grant, such as the grant to a street railway corporation, already in existence and having authority to operate a street railway, of the right to lay tracks in a street. These are called special franchises by the New York law and are here so classified.** The distinction between class (1) and class (2) above set forth is illustrated by reference to the case of a tax on a foreign insur- ance corporation. It has no grant of corporate life from the state, as in class (1), yet it has the privilege of carrying on its •corporate purposes in the state, which is a franchise of class (2) .and it is taxed for the exercise of that franchise. An illustration, clearly showing all three of these classes of franchises in one corporate grasp, would be found in the case of a street railway company organized in one state, doing business in some other state and laying tracks in a city in the latter state by municipal permission. The franchise (1) to be, would be ■derived from the state of organization; (2) the right to do busi- ness in the foreign state would be derived from that state; and (3) the right to lay tracks in and use the streets of the city would be derived from the municipal authorities acting under their power delegated from the state. 52. A classification of franchises substantially like this, but ■differing in detail, was recently stated by the Supreme Court of Michigan. In discussing the question of franchise taxation of street rail- ways, the court said: For the purpose of the discussion of the question before us we will treat franchises as of three classes: Firstj the right to 43 People V. state Board of Tax State Board of Tax Commissioners, 199 Commissioners, 174 N. Y. 417, 67 N. U. S. 48, — L. ed. —, 25 Sup. Ct. Rep. E. Rep. 69; affirmed, New York v. 705. 40 CONSTITUTIONAL LAW OF TAXATION. organize and exist as a corporation; second, the right to act gen- erally as a corporation; third, the special privileges granted to> it which are not possessed by the individual under general laws. The first of these is enjoyed by all corporations legally formed^ and also by all assuming to be corporations through user. This right to exist as a corporation is not transferable, and therefore cannot he said to have a cash value in the sense of our statute. . . . Again, franchises of the second class are incident to all corporations, and are manifestly of no more value than the right to exist ; for they naturally and impliedly go with it, and are not transferable. Every corporation has, by implication, authority to acquire and dispose of property, and to carry on business as a private person would do, for the purposes for which the cor- poration is organized. The third class consists of exceptional privileges — usually, if not always, connected with property ■ — which the citizens gen- erally do not enjoy, and these are frequently of much value. To apply what has been said to the relator • — any number of street-railway companies might be organized under the statute, and they would have the right to exist as lawfully constituted corporations with the corporate capacity to build and operate street railways anywhere in the state. But the right to build would have to be acquired. Until such a corporation should be able to obtain an easement in some highwav, — which the statute- does not, of itself, effectuate — its privileges would be of little, ■I if any, value. But when it should have acquired possession of an easement in a designated highway, for the purposes of a street railway, and constructed and put in operation a railway thereon,, the easement and railroad would constitute property.** 53. Another way in which the word " franchise " has been loosely used is, as an adjective, as when a court says of a certain tax — it is not a property tax but a " franchise " tax. Here th& word is undoubtedly used in the sense of privilege, and the meaning is plain enough; but this use of the term is apt to cause confusion- when cases arise where franchises are taxed as property. Taxes on franchises " to be," classified. 54. Beginning with the simplest forms in which the distinc- tions between franchises are shown, it is plain that a fee or charge imposed upon a domestic corporation by way of an organization tax, a fee paid to the state, as a condition or for the privilege of 44 Detroit Citizens' Street Ry. Co. v. G73, 85 N. W. Eep. 84 Am. St. Rep„ Common Council of Detroit, 125 Micli. 589. CLASSIFICATION OP FRANCHISE TAXES. 41 becoming a corporation, is not a property tax, although the amount of the sum paid may be determined by reference to the capital stock of the company.*^ Such a charge is not properly a tax at all, but a pure license fee, like a marriage license fee or the fee for recording a deed. Corporate life is a creation of the state, and can be bestowed by the state upon such conditions as it chooses. Whether the amount of the fee be a fixed sum, or a uniform percentage of the amount of the capital, or a sum fixed for classes of corporations and differing for each class, the payment of such fee as one of the conditions of corporate existence cannot be called in any sense a tax on the corporate property. Indeed it is usually paid before the corporation has any existence or owns any property. It is competent for the legislature to lay such a tax.''® A charge for the consolidation of corporations is subject to the same principles.*^ 55. Where a tax is imposed in the shape of an annual charge or excise upon the right to continued corporate existence that also is not a property tax, but a privilege or license tax, just as is an organization tax. The problem, of course, is to determine when the tax is an excise upon the right to continued existence in a corporate form. The examination of some illustrative cases will be mor5 helpful in solving this problem than any attempt at the enunciation of general rules, to which everybody would agree ; but which would be useless to anybody who should attempt to apply them in a particular case. In ]^ew Jersey a tax was imposed in the following language : "All other cor- porations incorporated under the laws of this State, and not hereinbefore provided for, shall pay a yearly license fee or tax of one-tenth of one per cent, on the amount of the capital stock of such corporations." The Supreme Court of Xew Jersey, dis- *5 See § 66, contra. guage does not appear to be accurate. 4fl Home Ins. Co. v. New York, 134 IL is true that certain franchises are U. S. 594, 33 L. ed. 1025, 10 Sup. Ct. deemed personal property — and it is Rep. 593; 119 U. S. 129, 30 L. ed. true that the franchise to be a corpo- 350, 8 Sup. Ct. Rep. 1385 ; reported ration is subject to separate taxation below sub nom. People v. Home Ins. — but that taxation is privilege and Co., 92 N. Y. 328. It is said in Horn not property taxation ; and the fran- Silver Mining Co. v. New York, 143 chises which are taxed as personal U. S. 305-312, 36 L. ed. 164, 12 Sup. property are generally franchises to Ct. Rep. 403, that '" according to the do. law of most states this franchise or 47 Ashley v. Ryan, 153 U. S. 436, privilege of being a corporation is 38 L. ed. 773, 14 Sup. Ct. Rep. 865, deemed personal property and is sub- reported below, 49 Ohio St. 7, 31 N. E. jeet to separate taxation." This Ian- Rep. 721. 42 ■ CONSTITUTIONAL LAW OF TAXATION. cussing whether this was a tax on a franchise as property or a license tax, said: The franchise that is taxed as property is the privilege enjoyed by a corporation of exercising certain powers derived from the state, whereas the franchise with which we have to do is the right to exist in corporate form, without reference to the powers that, under such form, the company may exercise. ... In this state we tax each of these so-called franchises. The former, as in the case of the right to own and operate a railroad, is taxed at its true value, which is the duty of the state board to ascer- tain for the purposes of constitutional assessment. On the other hand, the naked right of existing in corporate form is taxed, as in the case before us, not at its true value, as it would have to be if it were property, hut at a sum arbitrarily imposed by the legislature as an annual fee, the amount of which is to be com- puted by reference to the capital of the company as a criterion. It is, in short, a poll tax levied upon domestic corporations for the right to he. Such a tax is not upon property or assets, and does not in any way concern the nature of the business the com- pany may be authorized to carry on.** Note that in this case the statute expressly called the charge " a yearly license fee or tax." The statutory designation, while not absolutely controlling, is generally an important element in determining what kind of tax the statute imposes.*' A substan- tially similar tax, which was not called a " license " in the stat- ute was held to impose a privilege tax.^* 56. Much like this New Jersey tax just discussed was a New York tax which was defined as a privilege tax by both the New York Court of Appeals and the United vStates Supreme Court. The law provided for a tax upon the " corporate fran- chise or business " to be computed as follows : If its dividends during the year amounted to six per cent, or more, then the tax to be at the rate of one-quarter mill upon the stock for each one per cent, of dividends. Less rates were provided where there was less dividend or no dividend, and a different rate for different ■48 Lumberville Delaware Bridge Co. Board of Assessors, 47 M. J. L. 36, 54 V. State Board of Assessors, 55 N. J. Am. Rep. 114; Honduras Commercial L. 529, 26 Atl. Rep. 711, 25 L. R. A. Cable Co. v. State Board of Assessors, 134. 54 N. J. L. 278, 23 Atl. Rep. 668; 49 See, also, construing this New Standard Underground Cable Co. v. Jersey tax to be a privilege tax on State Board of Assessors, 46 N. J. Eq. the right to exist as a corporation, 270, 19 Am. St. Rep. 394, 19 Atl. Rep. Marsden Co. v. State Board of As- 733. sessors, 61 N. J. L. 461, 39 Atl. Rep. BO Singer Mfg. Co. v. Heppenheimer, 638; Evening Journ. Assn. v. State 54 N. J. L. 439, 24 Atl. Rep. 446. CLASSIFICATION OF FKANCHISE TAXES. 43 Mnds of capital stock. Said the Supreme Court of tlie United States : By the term " corporate franchise or business," as here used, we understand is meant (not referring to corporations sole, which are not usually created for commercial business) the right or privilege given by the state to two or more persons of ieing a corporation, that is, of doing husiness in a corporate capacity, and not the privilege or franchise which, when incorporated, the company may exercise. . . . The granting of such right or privilege rests entirely in the discretion of the state, and, of course, when granted, may be accompanied with such conditions as its legislature may judge most befitting to its interest and policy. It may require, as a condition of the grant of the fran- chise, and also of its continued exercise, that the corporation pay a specific sum to the state each year, or month, or a specific por- tion of its gross receipts, or of the profits of its business, or a sum to be ascertained in any convenient mode which it may pre- scribe. The validity of the tax can in no way be dependent upon the mode which the state may deem fit to adopt in fixing the amount for any year which it will exact for the franchise. No constitutional objection lies in the way of a legislative body prescribing any mode of measurement to determine the amount it will charge for the privileges it bestows.^^ In the same case belov? the ISTew York Court of Appeals held the tax to be a franchise or privilege tax, without clearly dis- tinguishing between the privilege of corporate existence and ■continuance, and the powers which a corporation exercises under the corporate form.^^ Other charges which have been said to be merely privilege taxes upon the franchise of existence were, a tax on the excess of market value of the stock of corporations over the value of their real estate and machinery ;°^ and an annual license fee of ten ■dollars on corporations generally.^* Taxes on banks and savings banks, measured by the amount ■of their deposit-s, have generally been held to be privilege taxes, 51 Home Ins. Co. v. New York, 134 strikingly like the taxes on corporate U. S. 594, 599, 600, 33 L. cd. 1029, 10 franchises generally considered to be Sup. Ct. Rep. 593. property taxes. 52 People V. Home Ins. Co., 92 N. Y. 5* Chehalis Boom Co. v. Chehalis 328. County, 24 Wash. 135, 63 Pac. Rep. 53 Commonwealth v. Hamilton Mfg. 1123. This county of Chehalis seems Co., 12 Allen, 298. Following the to have been the birthplace of more language of the Massachusetts eonsti- litigation involving the constitutional tution this tax was said to be an law of taxation than most counties of ■" excise." In many particulars it was the same relative importance. 44 CONSTITUTIONAL LAW OF TAXATION. imposed on the privilege of doing business as a banking corporation.^' Taxes on foreign corporations for the " franchise " of doing busi- ness in the state. 57. Another proposition is, that a tax imposed on a foreign cor- poration as a condition of doing business generally in the state, and not connected with the grant of any special privilege such as the use of streets, etc., is a license or privilege tax and not a property tax, although the amount of it may be determined by reference to the profits or income of the company, or to its whole property, or to its dividends, or to its capital stock, or to its property invested in the state. The principle is : A foreign cor- poration can only come into a state and do business -there by con- sent of the state; and the charge imposed by the state as a condition of that consent is not, ordinarily, a tax on property; although it is conceivable, of course, that some tax on property might be imposed as such a condition.^® Taxes on foreign insurance companies, measured by reference to the amount of their gross premiums collected within the state, are held to be excise or privilege taxes upon this principle.'^ In most of the cases where franchise taxes have been held to be privilege or excise taxes it does not appear that any distinction was made between the franchise to he and the franchise to do. Most of the cases already cited do not make this distinction, 55 Society for Savings v. Coite, 6 365, such a, tax was held to be on the Wall. 594, 18 L. ed. 897 ; Provident franchise as personal property because Institution v. Massachusetts, 6 Wall, made so by statute. 611, 18 L. ed. 907; Commonwealth v. -WHorn Silver Mining Co. v. New People's Five Cent Bank, 5 Allen, 428; York, 143 U. S. 305, SB^L. ed. 164, 12 Commonwealth v. Lancaster Savings Sup. Ct. Rep. 403; reported below. Bank, 123 Mass. 493 ; Jones v. sub nom. People v. Horn Silver Min- Winthrop Savings Bank, 66 Me. 242. ing Co., 105 N. Y. 76, 11 N. E. Rep. In State v. Central Savings Bank of 155 ; People v. Equitable Trust Co., Baltimore, 67 Md. 290, 10 Atl. Rep. 96 N. Y. 387; Fire Association of 290, 11 Atl. Rep. 357, the highest Philadelphia v. New York, 119 U. S. coui't of Maryland construed such a 110, 30 L. ed. 342, 7 Sup. Ct. Rep. tax to be one on the privilege, but in- 108 ; reported below, sub nom. People asmuch as the legislature had enacted v. Fire Association of Philadelphia,, the law after the previous case of 92 N. Y. 311, 44 Am. Rep. 380. State V. Sterling, 20 Md. 502, had held B7 Scottish Union and National Ins. otherwise, the court felt bound to Co. v. Herriott, 109 Iowa, 606, 77 Am. interpret the law in accordance with St. Rep. 548, 80 N. W. Rep. 665 ; State V. Sterling, despite its own view Ducat v. Chicago, 10 Wall. 410, 19 to the contrary. In Bartlett v. Carter, L. ed. 972; Liverpool, etc., Ins. Co. v. 59 N. H. 105, such a tax was held to Jlassachusetts, 10 Wall. 566, 19 L. ed. be one on property. In Monroe County 1029; reported below, 100 Mass. 531. Savings Bank v. Rochester, 37 N. Y. CLASSIFICATION OF FKANCHISB TAXES. 45 and in fact, in most of the cases where franchises are taxed as privileges, it has not been necessary for the courts to make it and the legislatures have probably not intended that it should be made. It generally becomes an important distinction in cases where the franchise is sought to be taxed as property. Taxes on railway gross receipts — whether privilege or property taxes. 58. Taxes on railway, transportation, telegraph, and other companies, measured by reference to their gross receipts, have generally been held to be excise or privilege taxes upon the exercise of the corporate franchises. Although in most of the cases no distinction was made or was necessary to be made be- tween the mere franchise of corporate existence and the fran- chises for the exercise of corporate powers and the conduct of the corporate business; yet it appears from most of the opinions that the franchises which the courts had in mind in these case? were the latter class — the franchises to do. A good example of this class of cases is Maine v. Grand Trunk Railway Co.^^ In this case the Maine statute expressly directed that railroads should pay " an annual excise tax for the privilege of exercising their franchises," and provided for reference to the average gross receipts per mile to ascertain the amount of the tax. The argu- ment of the counseP" in favor of the tax, rather indicates the view that the tax was on the franchise considered as property. The vital question in the case was whether the tax was on inter- state commerce, and the argument that the tax was on the fran- chise as property certainly seems to have been the best argument to avoid the ban of the " commerce clause," since it has long been established that property employed in interstate commerce may be taxed by the states. The counsel against the tax argued that to tax the privilege of carrying on interstate commerce was to place a burden on such commerce, and that the tax was one on the privilege. The court, however, said that the tax was one " on the privilege of exercising the corporate franchises in the state " and at the same time held that it was not a burden on commerce. The case is treated elsewhere as respects interstate commerce;"* it is here referred to as an example of a privilege tax on a railroad franchise. The tax was not on the receipts them- 58 142 U. S. 217, 35 L. ed. 994, 12 59 Mr. Charles E. Littlefield. Sup. Ct. Rep. 121, 163. eo See § 895. 46 CONSTITUTIONAL LAW OF TAXATION. selves, said the court, the " resort to those receipts was simply to ascertain the value of the business done by the corporation,, and thus obtain a guide to a reasonable conclusion as to the amount of the excise tax which should be levied." In the earlier case of State Tax on Railway Gross Receipts^^ the decision did not require an inquiry into the question of franchise taxation, but, with respect to a tax much like that dis- cussed in Maine v. Grand Trunk Railway"^ except that it was- not expressed to be a privilege tax, the Supreme Court said: It is not to be questioned that the states may tax the fran- chises of companies created by them, and that the tax may be proportioned either to the value of a franchise granted or to the- extent of its exercise; nor is it deniable that gross receipts may be a measure of proximate value, or, if not, at least of the extent of enjoyment. In Fargo v. Michigan,^ the court did not say whether the tax there levied on the gross receipts of a transportation company was a privilege tax or not, but the inference of the opinion is that it was- a tax imposed on a foreign corporation, as a condition of doing- business in the state. In Philadelphia, etc.. Steamship Go. v. Pennsylvania,'^ it Avas said that a tax " upon the gross receipts "" of railroad, steamship, and other companies doing business in the state, was not a tax " on the corporate franchise," because by the terms of the act it applied to both foreign and domestic corpora- tions. " Corporate franchise " as here used seems to mean the franchise of existence. It was conceded that the tax might be one " on the franchise of doing business," but this inquiry was- not pursued. Other cases holding or indicating that taxes on gross receipts are privilege taxes on the exercise of the coi-porate franchises are cited in the note.®^ 59. In an early case — early in view of the recent rapid de- velopment of the. rules governing corporate taxation — a law,, 61 15 Wall. 284, 21 L. ed. 164. States Electric Power and Light Co. 62 Supra. V. State, 79 Md. 63, 28 Atl. Rep. 768 ; 63 121 U. S. 230, 30 L. ed. 888, 7 Western Union Telegraph Co. v. Sup. Ct. Rep. 857. Mayer, 28 Ohio St. 537 ; Southern 64 122 U. S. 326, 30 L. ed. 1200, 7 Building and Loan Assn. v. Norman,. Sup. Ct. Rep. 1118. 98 Ky. 294, 32 S. W. Rep. 952, 56 Am. 65 State V. Philadelphia, etc., Ry. St. Rep. 367, 31 L. R. A. 41 ; Scottish Co., 45 Md. 361, 24 Am. Rep. 5li; Union and Nat. Ins. Co. v. Herriott, Cumberland, etc., Ry. Co. v. State, 92 109 Iowa, 606, 77 Am. St. Rep. 548^ Md. 668, 48 Atl. Rep. 903; United 80 N. W. Rep. 665. CLASSIFICATION OF FRANCHISE TAXES. 47 laying " on each two thousand pounds of freight "... " carried over, through or upon " the railroads of the state, " tax at the following rates," etc., was sought to be justified iu argument as a " tax on the corporation, graded by the amount of business it transacts in its province of transporter," and said the counsel, " if the term ' tonnage tax ' implies that it is a tax on a ton, it is erroneous, the 2,000 pounds which go to make up a ton being merely a convenient standard whereby to measure the business done by the corporation." The United States Su- preme Court, however, held that the tax was on the freight carried and not on the franchise, saying : Where does the substantial burden rest. Very plainly it was not intended to be, nor is it in fact, a tax upon the franchise of the carrying companies, or upon their property, or upon their business measured by the number of tons of freight carried. On the contrary, it is expressly laid upon the freight carried. The companies are required to pay to the state treasurer, for the use of the commonwealth, " on each 2,000 pounds of freight so car- ried," a tax at the specified rates. And this tax is not propor- tioned to the business done in transportation. It is the same whether the freight be moved one mile or three hundred. If freight be put upon a road and carried at all, tax is to be paid upon it, the amount of the tax being determined by the character of the freight. And when it is observed that the act provides " where the same freight shall be carried over and upon different but continuous lines, said freight shall be chargeable with tax as if it had been carried upon one line, and the tax shall be paid by such one of the companies as the state treasurer may select and notify thereof," no room is left for doubt. This provision demonstrates that the tax has no reference to the business of the companies. Other provisions of the law were referred to, supporting the same conclusion.®® Franchise taxes regarded as taxes on property ; taxes on capital stock. 60. When "franchises" are taxed as property, the franchises so taxed have usually been those called franchises to do — being the valuable powers which the corporation has from the state, not including the grant of corporate existence, or the privilege of continued corporate life. It is this class of franchises which 66 Case of the State Freight Tax, 15 Wall. 232, 21 L. ed. 146. 48 CONSTITUTIONAL LAW OF TAXATION. are described in the numerous cases where railroad, telegraph, and other properties of a similar nature have been taxed as a " unit-profit-producing plant," and, to avoid repetition, reference is here made to the chapters of this work where that aspect of corporate taxation is considered."' Here are discussed cases where the franchise has been taxed as property apart from that form of taxation. Included in the franchises to he which are so taxed, are the " special franchises," such as the right to use city streets and the like, which have been the subject of recent legislation. The simplest class of cases of franchise taxation as prop- erty are those cases where the legislature in so many words has declared corporate franchises to be property. The legislative power is competent to do this.*^* 61. Where taxes are laid upon corporations by reference to the amount or value of their capital stock, the taxes are quite often regarded as being upon property. Such taxes usually pro- vide for a deduction of the value of the realty from the total valuation, and the assessment of the remainder as personalty, or for a deduction of the total value of the real and personal tangible property and the valuation of the remainder. The franchises taxed in such ^a case are taxed as a part of the " imit- profit-producing j)lant," to use a phrase recently come into vogue, and are regarded as a part of the property which goes to make up the value represented by the capital stock. "^^ ti7 Chapters 21, 3, and 10. tucky, 166 U. S. 171, 41 L. ed. 960. 08 Monroe County Savings Bank v. 17 Sup. Ct. Eep. 527 ; State v. Stone- City of Rochester, 37. N. Y. 305; De- wall Ins. Co., 89 Ala. 335, 7 So. Eep. troit Citizens' Street Ey. Co. v. Com- 753; Nichols v. New Haven, etc., Ey. mon Council of Detroit, 125 Mich. 673, Co., 42 Conn. 103 ; New Orleans, etc., 85 N. W. Rep. 96, 84 Am. St. Rep. Gas Light Co. v. Assessors, 31 La. 58fl. See People ex rel. Metropolitan Ann. 475; Keokuk, etc.. Bridge Co. v. Street Ey. Co. v. State Board of Tax People, 161 111. 132, 43 N. E. Rep. Commissioners, 174 N. Y. 417, 67 091; Porter v. Roekford, etc., Co., 76 ^J. E. Eep. 69, 79 App. Div. 183, 80 111. 561; State Board of Equalization X. Y. Supp. 85; affirmed, 199 U. S. v. Goggin, 191 111. 528, 58 L. R. A. 48, — L. ed. — , 25 Sup. Ct. Eep. 705; 513, 61 N. E. Eep. 339; State v. Sim- Bclleville Nail Co. v. People, 98 111. mons, 70 Miss. 485, 12 So. Rep. 477; 399 ; State ex rel. Milwaukee Street Newark Bank v. Fourth Ward As- E. E. Co. V. Anderson, 90 Wis. 550, sessors, 30 N. J. L. 13; International, 03 N. W. Eep. 746. etc., Co. v. Haight, 35 N. .T. L. 270; 69 See chaps. .3-21, discussing in Merchants' Ins. Co. v. Newark, 54 detail this method of valuing intestate N. J. L. 138, 23 Atl. Rep. 30.5 ; Corn- properties ; Adams Express Co. v. monwealth v. New York, P. & O R Ohio, 165 U. S. 194, 41 L. ed. 683, 17 E. Co., 188 Pa. St. 169, 41 Atl. Rep. Sup. Ct. Eep. 305; reargument, 166 fir!4; Commonwealth v. Beech Creek TT. S. 185, 41 L. ed. 965, 17 Sup. Ct. Ey. Co., 188 Pa. St. 203, 41 Atl. Rep. Rep. 004; Adams Express Co. v. Ken- 605. CLASSIFICATION OF FRANCHISE TAXES. 49 61a. A recent decision of the United States Supreme Court contains language which, increases the confusion of thought in the decisions with respect to " franchise " taxes. The question in the case was whether a state constitutional provision which, as construed, authorized exemptions from property taxation, but made all such exemptions repealable, applied to privilege taxes on corporations. The Supreme Court, in holding that exemp- tions from privilege taxes, as well as from property taxes, were repealable, used the following language, after quoting from Wilmington Railroad v. Beid™ to the effect that an exemption of a railroad from taxes on its property and shares was an exemp- tion from franchise taxation : " It follows, then, that privi- lege taxes hein^ taxes upon property are subject to the consti- tutional limitations of 1869, and their exemption was equally repealable as that of ad valorem taxes." " If it is meant that all privilege taxes on corporations are property taxes, a radical departure from prevailing ideas is apparent. If it is meant that in the particular case the privileges taxed were taxed as property, the meaning might have been stated more clearly. 62. The 'New York and New Jersey laws imposing privilege taxes on corporations have already been referred to''^ for the pur- pose of illustrating the different classes of taxable corporate fran- chises. They are here considered as affording illustrations of taxes, measured by reference to capital stock, which are not prop- erty taxes but privilege taxes. The New York law in terms imposed a tax " on the corporate franchise or business." The dividends declared in any year fixed the rate of tax; if no dividend was declared, an arbitrary rate was fixed. At this rate the tax was computed upon every dollar of the capital stock. This tax is held to be a privilege tax.''^ One of the elements which indicated that it was a privilege tax was that the language of the statute called for no valuation of the capital stock as property, but merely referred to it as a means of estimating the amount of the tax. In the form in which the law stood when most of the decisions declaring it to be a fran- 70 13 Wall. 264, 20 L. ed. 568. 73 Home Ins. Co. v. New York, 134 n Gulf and Ship Island Ky. Co. v. U. S. 594, 33 L. ed. 1025, 10 Sup. Ct. Hewea, 183 U. S. 66, 46 L. ed. 86, 22 Eep. 593; «eport€d below, People t. Sup. Ct. Rep. 26. Home Ins. Co., 92 N. Y. 328. T2See {§ 55, 56. 4 50 CONSTITUTIONAL LAW OF TAXATION. chise tax were made, the tax was expressly declared, as noted above, to be upon " the corporate franchise ot business." This was declared, as to domestic corporations to be a tax on the " franchise " and as to foreign corporations to be a tax on ^' business.'"* The language of these decisions indicates that the New York Court of Appeals used the word " franchise " as meaning only the grant of corporate life and powers; and a tax on " business " of foreign corporations as a condition imposed for the privilege of coming into the state. In the general nomenclature of franchise taxation this tax on " business " might be regarded as a tax on the franchise frequently spoken of as the franchise " to do " — but the difference is one of words and not of ideas. This New York law, it will be observed, provided for the com- putation of the tax by reference to the whole capital stock of the corporation, foreign or domestic, whether employed in the state or not.'" This provision was clearly a feature supporting the view that the tax was a privilege tax, since a property tax could only have been laid on property in the state. The law was afterward changed so as to provide for estimating the amount of the tax by reference only to the capital employed within the state.'* This made it more like a property tax, but it was still held to be on franchise or business." Recent decisions which hold that the capital stock is to be appraised for the purpose of the computation at its actual and not its par value, still further liken the tax to a property tax,'* although it is regarded in fact as a privilege tax. The features of the present tax, as thus interpreted, which can be regarded as indicating that it is a privilege rather than a property tax, are that it is imposed at a rate derived from a fixed method of calculation by reference to dividends, that the law pro- vides for no deductions of debts from capital in estimating the amount employed, as is done in the case of property taxation, and T4 People V. Equitable Trust Co., 96 Wemple, 138 N. Y. 1, 33 N. E. Rep. K. Y. 387; People v. Gold and Stock 720, 19 L. R. A. 694; People ex rel. Tel. Co., 98 N. Y. 67 ; People v. Horn United Verde Copper Co. v. Roberts, Silver Mining Co., 105 N. Y. 76, 11 156 N. Y. 585, 51 N. E. Rep. 293. N. E. Rep. 105 ; affirmed, Horn Silver 78 People ex rel. New York and East Mining Co. v. New York, 143 U. S. River Ferry Co. v. Roberts, 168 N. Y. 305, 36 L. ed. 164, 12 Sup. Ct. Rep. 14, 60 N. E. Rep. 1043; People ex rel. 403. New York Cent., etc., R. ,R. Co. v. 75 See cases cited supra. Knight, 173 N. Y. 255, 65 N. E. Rep. 76 Chapter 501, Laws 1885. 1102. 77 People ex rel. Penn. R. R. Co. v. CI-ASSiriCATION OF FRANCHISE TAXES. 51 that the language of the statute in the case of foreign corpora- tions declares the tax to be on the privilege of exercising its franchises and carrying on its corporate business in the state. 63. In ISTcw Jersey a law was held to lay a privilege tax, although the amount of the tax was measured by reference to the capital stock.™ In Maine a tax on railroads determined by ref- erence to the value of their property was held to be a " franchise " tax, " franchise " being used in the sense of privilege.^" In Ohio a l^w of the same general class as the New York and ISTew Jersey laws discussed, which exacted from corporations an annual fee of one-tenth of one per cent, of the capital stock was held to be a privilege tax on the right of corporate existence with its^ accompanying powers.*^ " Special " franchises. 64. The class of franchises heretofore spoken of as " special " franchises, being grants of some particular right from the public, wholly independent of the right of corporate existence and distinct from the right to exercise corporate privileges, are generally classed as property. In ]Srew York the statute classifies as real property all such special franchises, and defines a special franchise in substance as the right, authority, or permission to maintain or operate some steucture for public use in streets, high- ways, or public places, and includes the tangible property used in connection with the special franchise.*" A fair test — though not a complete test — of whether a franchise held by a corpora- tion is a special franchise of this sort, is the inquiry whether the privilege is one which might as easily have been conferred on an. individual. The franchises which at common law were called incorporeal hereditaments, such as the right to make a toll road or keep a ferry, are of this nature, they are regarded as property,** and havealocal situs for taxation in the place where they are exer- cised.** The assessment of these frandiises, as property, in con- 79 Lumberville etc. Bridge Co. v. &2 Laws 1899, chap. 712; People ex State Board of Assessors, 55 N. J. L. rel. Metropolitan Street Ry. v. State 529, 26 Atl. Rep. 711, 25 L. R. A. 134. Board of Tax Commissioners, 174 N. 80 State V. Maine Central R. R. Co., Y. 417, 67 N. E. Rep. 69; affirmed, 74 Me. 376. New York v. State Board of Tax Com- 81 Southern Giim Co. t. Laylin, 66 missioners, 199 U. S. 48, — L. ed. Ohio St. 597, 64 N. E. Rep. 564. As — , 25 Hup. Ct. Rep. 705. to the taxation of franchises as prop- 83 Kent Comm., Ill, p. 458. erty in Ohio, see §§ 1464 et seq., 912 8* See §§ 72-102, and Louisville, etc., et seq., and indei. Ferry Co. v. Kentucky, 188 U. S. 3S5, 5- CONSTITUTIONAL LAW OF TAXATION. nection with the tangible property incidental to their use, is done under the New York statute just referred to, and in some other states in substantially the same way.** 65. The distinction between a tax on the shares of a corpora- tion and a tax on its capital stock or upon the corporation itself is set forth in various parts of thi?. work.*" It is sufficient to say here that generally a tax on the shares — that is upon the shares as property in the hands of the individual stockholders — is not a tax on the corporation at all, either in respect of its property or of its corporate or special privileges; and this is so even though the tax be collected in one sum from the corporation itself, in which case the corporation merely becomes the agent of the state for the collection of the tax.*^ In the cases where this has been doubted, the question has not been whether the tax was on franchises either as property or privileges; but has been whether the statutes should be construed as taxing both the shares and the capital, or whether such taxation of both was double taxation.*** 66. In a recent California case the mere franchise of existence of a banking corporation was held to be taxable as property; and it was held to be in the power of the legislature to tax it 47 L. ed. 513, 23 Sup. Ct. Rep. 463; 287; Atlanta, etc., Building and Loan reported below, 108 Ky. 717, 57 S. W. Assn. v. Stewart, 109 Ga. 80, 35 S. E. Rep. 624; Stevens v. Stevens, 3 Dana Rep. 73; Danville, etc., Co. v. Parks, (Ky.) 371. 88 111. 170; Fish v. Branin, 23 N. J. 86 Detroit Citizens' Street Ry. Co. L. 485 ; Belo v. Commissioners of V. Common Council of Detroit, 125 Forsytli County, 82 N. C. 415, 33 Am. Mich. 673, 85 N. W. Rep. 86, 84 Am. Rep. 688; Bradley v. Bauder, 36 Ohio St. Rep. 589; People v. State Board of St. 28, 38 Am. Rep. 546; Union Bank Tax Commissioners, 174 N. Y. 417, v. State, 9 Yerg. (Tenn.) 490; City 67 N. E. Rep. 69; affirmed, 199 U. S. of Memphis v. Ensley, 6 Baxt. (Tenn.) 48, — L. ed. — . 25 Sup. Ct. Rep. 553, 32 Am. Rep. 532; City of Mem- 705; State ex rel. Milwaukee Street phis a-, Farrington, 8 Baxt. (Tenn.) Ey. Co. v. Anderson, 90 Wis. 550, 63 539; South Nashville Street Ry. Co. N. W. Rep. 746. v. Morrow, 87 Tenn. (3 Pick.) 406, 86 See §§ 49, 801. 11 S. W. Rep. 348, 2 L. R. A. 853; 8T Aberdeen Bank v. Chehalis Common'vealth v. Charlottesville Per- County, 166 U. S. 440, 41 L. ed. 1069, petual Building and Loan Co., 90 Va. 17 Sup. Ct. Rep. 629 ; reported below, 790, 44 Am. St. Rep. 950, 20 S. E. Rep. 6 Wash. 64, 32 Pac. Rep. 1051; Shelby 364. County V. Union and Planters' Bank, 88 See index, " double taxation," 161 U. S. 149, 40 L. ed. 650, 16 Sup. and Stroh v. City of Detroit, 131 Ct. Rep. 558; Farrington v. Tennessee, Mich. 109, 90 N. W. Rep. 1029; Com- 95 U. S. 679, 24 L. ed. 558; Jefferson monwealth v. Fall Brook Coal Co., County Savings Bank v. Hewitt, 112 156 Pa. St. 488, 26 Atl. Rep. 1071; Ala. 546, 30 So. Rep. 926; United Commonwealth v. Lehigh Coal, etc., States Electric Power and Light Co. Co., 162 Pa. St. 603^ 29 Atl. Rep. 664; V. State, 79 Md. 63, 28 Atl. Rep. 768; State v. Simmons, 70 Miss. 485, 12 So. Glenn v. Dodge, 3 Cent. Rep. (D. C.) Rep. 477. CLASSIFICATION- OP FRANCHISE TAXES. 53 as such.*" The eases relied upon in support of the decision are chiefly those in which the unit-method of valuation was applied to the franchises of express and railroad companies.®" These cases, however, were distinctly cases where the franchises taxed were the franchises to do and not the franchises to he. The court does not seem to have made any distinction between the various classes of franchises. The effect of the decision would have been the same if the court had regarded the tax as being on the right to conduct the business of banking, said right being property.*^ Summary. 67. The following summary seems to be fairly expressive of the present state of the law with respect to the classification of taxes on corporations : A tax on an occupation or business act generally, which might be carried on either by a corporation or by an individual, is a simple privilege tax, although as a matter of fact none but cor- porations engage in that occupation; and although the corpora- tion is formed for the purpose of carrying it on. A specific tax on a domestic corporation, or one measured by the amount of earnings, or dividends, or business done, is generally a privilege tax, and the privileges or franchises thus taxed may be both the privilege of continued corporate existence and the privilege of doing the business for which the corporation is organized, or either. A specific tax on a foreign corporation, measured by the amount of business done, or by the amount of receipts, or earnings, or dividends, is generally a tax on the privilege of doing business in the state. A tax on a domestic or foreign corporation which involves a valuation of property by reference to the amount of capital stock, and an assessment upon such valuation, is generally a property tax, and the excess of such valuation over the value of tangible property is the value of the privileges and franchises " to do " of the corporation, considered as property. Especially is this so when the law provides no fixed rate of assessment; but requires the assessment to be at the same rate as the assessment of other property in the state. 89 Bank of California v. San Fran- 90 See §§ 103 et seq., 1461, 14C2, Cisco, 142 Cal. 276, 100 Am. St. Rep. 1463, 1464 et seq. 130, 75 Pac. Rep. 832. 91 See § 54 and cases cited. 54 CONSTITUTIONAL LAW OF TAXATION. A tax on a corporation measured by capital stock, its amount or value, may be a privilege tax — especially if the law m terms declares it to be such. Another element which may influence its character is — -if the tax is imposed at a specific rate it is more likely to be regarded as a privilege tax than if the same general rate is imposed as governs in the taxation of other property. The language of the legislature, characterizing a tax as being for a privilege or on property, is entitled to great — though not absolutely controlling — weight. Exhausting taxing power. 68. Is there any limitation upon the taxing power arising out of the fact of its exercise? Is there any tax, which, having been laid once, cannot be laid again? Are there any circumstances under which the taxing power exhausts itself before it has ex- hausted the subject? These questions must be answered " ISTo." The taxing power has no limit in extent of operation or frequency of exercise. A tax, valid otherwise, cannot be resisted upon the ground that the article or person taxed has already been taxed sufficiently, or that he has been taxed recently, it being understood of course that others in like situation are taxed in the same way. The state acknowledges no limit as to amount save its own necessities. As to property taxes it is probable that no such question could arise ; because the proposition seems too plain. But as to excise t-axes — which are taxes on privileges — it has been contended that to tax the particular privilege once exhausts the power, and that tlie state may not tax the same person in respect to the same privilege more than once. In the case®^ in which this contention was made. Congress had increased the excise taxes on manu- factured tobacco by act of June 13, 1898, and had enacted that all tobacco which had been removed from the factory since April 14, 1898, and was still held for sale, should pay an additional tax, although the excise taxes existing at the time of removal and manufacture had already been paid. The act thus laid an ad- ditional excise tax upon the manufacture of tobacco, for which manufacture the tax due at the time of the manufacturing had been paid. The contention of counsel for the complaining parties was " that Congress may excise an article as it pleases, so that the 92Patton V. Brady, 184 U. S. 608, 46 L. ed. 713, 22 Sup. Ct. Eep. 493. EXHAUSTING TAXING POWER. 55 ■excise does not amount to spoliation or confiscation. But that, having excised it, it has excised it, and the power is exhausted. It cannot excise a second time." To this the court replied that " taxes are not debts in the sense that having been once estab- lished and paid all further liability of the individual to the government has ceased. . . . The obligation of the indi- vidual to the state is continuous and proportioned to the extent of the public wants." It was held that the act of Congress was valid."* 93 See §§ 1848 et seq., as to assess- ing such improvements, after property ing for cost of maintenance of local has been originally assessed for con- improvements, and for cost of replac- struction. CHAPTER m. TERRITORIAL JURISDICTION FOR TAXING PUR- POSES OVER PERSONS AND PROPERTY. 69. In the political systems of modem times the basis of juris- diction is territorial. The state is conceived as an entity having exclusive jurisdiction over certain territory, and having jurisdic- tion over persons and property within that territory by reason of their being therein. By means of certain fictions this theory is applied to some persons and property not actually in the territory, but deemed to be so, as in the cases of ships, and citi- zens abroad, and even in those cases a certain jurisdiction exists in the country of actual residence. So accustomed are we to this^ theory of governmental authority that it is only by a mental effort that we conceive some other basis of authority or allegiance. Still, in the middle ages and before, the theory of allegiance was not territorial but personal. Birth, ecclesiastical relations, race, all determined jurisdiction ; and some traces of this idea stiU remain, as for instance, in the case of the claim of the Czar of Russia to be the protector of certain Greek Christians in the Turkish Empire.^ The consular courts in certain Asiatic countries exercise a jurisdiction which has not a piirely territorial basis. But, generally speaking, the basis of government is now terri- torial, and in the United States (excepting as to certain Indians) is exclusively so. The taxing power is thus confined within territorial limits; and an examination of the questions which have arisen with respect to those limits is necessary. 70. Questions as to the place of taxation — the situs of prop- erty for taxing purposes — are seldom decided on purely con- stitutional grounds. The question in most cases is not — -what has the legislature power to do ? — but — what is the general vwla of law, and how far has it been modified by statute ? The result of this state of facts is that in reading decisions on questions of situs it is sometimes impossible to determine whether- the decision is one of constitutional or statutory interpretation. 1 Burgess, Political Science, Vol. I, p. 51. [56] TBEEITOEIAL JUEISDICTION. 57 This work is concerned mainly with questions of constitutional poM'er. Decisions which appear plainly to be based on no con- stitutional grounds are only incidentally referred to. Those which clearly deal with constitutional interpretations are dis- cussed fully. The intermediate class of cases, in which constitu- tional and statutory questions are mingled, are referred to suffi- ciently to show their constitutional bearings. 71. Any attempt by a state to tax property which has no tax- able sitiis in that state is a deprivation of property without due process of law.'' So also any attempt by a state to tax persons over whom it has no jurisdiction is a deprivation of property without due proc- ess of law.^ Situs of real estate. 72. Real property, including incorporeal hereditaments (ferry franchises), can only be taxed in the state where it is situated, and any attempt by any other state to impose a tax on the owner in respect to such property is a taking of property without due process of law.* Following are a few decisions involving questions \vith respect to situs of realty. An appraisal of the track and right of way of interstate rail- roads, by ascertaining the value of the whole line as a unit, then taking a part of the whole value, proportioned to the mile- age within the state, as the value of the track and right of way within the state, is not a taxation of property outside the state, there being no special circumstances — • such as terminal facili- ties of enormous value outside the taxing state — which dis- tinguish the value of the part of the road outside the state from the value of that part inside the state. Where it is made to appear that such terminal facilities, or other special circumstances enhancing the value of the road outside the state, exist, this proof alone is not sufficient to invalidate an assessment apparently made on the mileage basis, unless if affirmatively appears also that the assessing board, in making the 2 Louisville etc. Ferry Co. v. Ken- 379; City of New York v. McLean, tucky, 188 U. S. 385, 47 L. ed. .513, 170 X. Y. 3T4, 63 N. E. Rep. 380, 23 Sup. Ct. Eep. 463; Bristol v. Wash- affirming 57 App. Div. 601, 08 N. Y. ington County, 177 U. S. 133-140, 44 .Supp. 606. L. ed. 701, 20 Sup. Ct. Rep. 585. 4 Louisville etc. Ferry Co. v. Ken- 3 Dewey v. Des Moines, 173 U. S. tucky, 188 U. S. 38,5, 47 L. ed. 513, 193 43 L. ed. 665, 19 Sup. Ct. Rep. 23 Sup. Ct. Rep. 4G3. 58 CONSTITUTIOSTAL LAW OF TAXATION. assessment failed to take such special circumstances into con- sideration. It is intimated that a law which should absolutely compel the assessing board to make the assessment on a mileage basis, giving them no discretion to take special circumstances into consideration, would be unconstitutional.^ In Western Union Telegraph Company v. Massachusetts, a tax was laid on the capital stock of a foreign telegraph company based on an assessment of such a proportion of the value of all its property as the mileage of lines within the state bore to its whole mileage. It was held that the tax was valid, although the value of the real estate owned by the company outside the state was not deducted from the valuation of the whole property. The value of real estate owned by a national bank (or other corporation) outside the state of its domicile need not be deducted from the value of the property of the bank, in estimating the value of its shares for assessment, as the property of the cor- poration and its shares are not the same property.^ Failure to make such deduction does not amount to taxation of real prop- erty outside the state. Lands under water between New York and i^Tew Jersey, on the New Jersey side of the line, may be taxed by New Jersey.* Situs of tangible personalty. 73. Tangible personal property is usually taxed at the place where it is found, unless its situation is merely transitory; and 'he legislative power to tax such property at the place where found, regardless of the owner's domicile, is very well settled. It is use- less to cite a mass of authorities for this proposition; but if any^ one wants authority for it, a few cases are cited in the note.* Possibly the state where the owner of tangible personalty resides has jurisdiction by virtue of its power over his person to 5 Pittsburgh etc. Ry. Co. v. Backus, 9 American Refrigerator Transit 154 U. S. 421, 38 L. ed. 1031, 14 Sup. Co. v. Hall, 174 U. S. 70, 43 L. ed. Ct. Rep. 1114; Cleveland etc. Ry. Co. 899, 19 Sup. Ct. Rep. 599; Battle v. V. Backus, 1.54 U. S. 439, 38 L. ed. Mobile, 9 Ala. 234, 44 Am. Dec. 438; 1041, 14 Sup. Ct. Rep. 1122. Hall v. American Refrigerator Tran- 6 125 U. S. 530, 31 L. ed. 790, 8 sit Co., 24 Colo. 291, 65 Am. St. Rep. Sup. Ct. Rep. 961. 223, 51 Pac. Rep. 421, 56 L. R. A. 89; 7 Commercial Bank v. Chambers, People v. Niles, 35 Cal. 282; Eversole 182 U. S. 556, 47 L. ed. 1227, 21 Sup. v. Cook, 92 Ind. 222 ; Commonwealth Ct. Rep. 863, affirming 21 Utah, 324, v. D., L. & W. R. R. Co., 145 Pa. St. 61 Pac. Rep. 530, 56 L. R. A. 346. 96, 22 Atl. Rep. 157- 8 Central Ry. v. Jersey City, 70 N. J. L. 81, 56 Atl. Rep. 239. TEKBITOEIAI; JTJEISDICTIOIT. 59 tax him in respect of his tangible personalty permanently situated out of the state ;^'' but the custom of taxing such property where it is found is so general, that to tax a resident in respect of such property outside the state would be unjust, and the presumptions are against such intent on the part of the legislature." Situs of cars and car companies. 74. Closely allied to the methods of giving a situs to intangible corporate assets by means of proportional calculations, elsewhere discussed in this work, are the methods which have been pur- sued by states through which cars, and rolling stock of rail- roads, and transit and sleeping car companies, are operated in, giving a situs to such movable property although it runs both within and without the state.^^ Regardless of the domicile of the owner, it is competent for anv state through which lines of cars are operated, to tax those cars directly, although no particular car has a permanent situs in the state, by ascertain- ing the average number of cars within the state, and attributing a situs in the state to such a number. It having been settled, as we have seen, that where a corpora- tion of one state brings into another, to use and employ, a portion of its movable personal property, it is legitimate for the latter to impose upon such property, thus used and employed, its fair share of the burdens of taxation imposed upon similar property used in like way by its own citizens, we think that such a tax may be properly assessed and collected, in cases like the present, where the specific and individual items of property so used and employed were not continuously the same, but were constantly changing, according to the exigencies of the business, and that the tax may be fixed by an appraisement and valuation of the average amount of the property thus habitually used and employed.'^ 10 Commonwealth v. Pennsylvania n Comm.Gn wealth v. D., L. &, \7. R. Coal Co., 197 Pa. St. .^.i!, 47 Atl. Rep. R. Co., U") Pa. St. 96, 22 Atl. Rep. 740, where a domestic corporation was ITi". taxed on C09.I which had been shipped 1^ See Is 103, 104 et seq. •outside the state for sale. Since the 13 American Refrigerator Transit above sentence was written the decision Co. v. Hall, 174 U S. 70, 43 L. ed. of the United States Supreme Court 899, 19 Sup. Ct. Rep. 599, affirming in Delaware etc. Rv. Co. v. Pennsyl- Hall v. American Refrigerator Tran- vania, 198 U. S. 341, L. ed. , sit Co., 24 Colo. 291, 6.5 Am. St. Rep. 25 Sup. Ct. Rep. 669, has held that 223, 51 Pac. Rep. 421, 56 L. R. A, 89; a state cannot tax tannjible personalty Union Refrigerator Transit Co. v. situated permanently outside its bor- Lynch, 177 U. S.' 149, 44 L. ed. 708, 20 ders, although belonging to a domestic Sup. Ct. Rep. 631, affirming 18 Utah, corporation. 378, 55 Pac. Rep. 639, 48 L, R, A, 790; 60 CONSTITUTIONAL LAW OP TAXATION. 75. Two decisions appear to be out of harmony with the weight of authority. In a case in Missouri it appeared that refrigerator cars which were taxed belonged to an Illinois corporation, which had a place of business in Kansas where it packed meats. The cars were used for transporting the meats from Kansas to the various states of the Union, including counties in Missouri, and many of the cars passed through Missouri. The state laid a property tax on the average number of cars in the state. The Supreme Court of Missouri held the law imposing the tax unconstitutional, on the ground — among others — that the cars had no situs in the state and could not be taxed there — but only had a situs in Kansas.*^ In Illinois cars of a foreign tank-line corporation, which shipped oil in cars to points in Illinois and also through Illinois to points in other states, and which had an office in Illinois, were held to have no situs in the state, and to be exempt from taxa- tion. It does not appear from the opinion what method was used to ascertain the number of cars in the state, nor does it appear whether or not the legislature had specifically declared such cars taxable, so that the case cannot be regarded as a constitutional authority.-'^ Situs of Navigable Vessels. 76. Questions of the situs of ves-els for taxing purposes are complicated by the nature of the subject-matter since ships neces- sarily move about in different jurisdictions — and by the provi- Denver, etc., Ry. Co. v. Church, 17 specific legislative direction to that ef- Colo. 1, 28 Pac. Rep. 468, 31 Am. St. feet, and some rule for ascertaining Rep. 252; Pullman Palace Car Co. v. the average number, laid down by the Pennsylvania, 141 U. S. 18, 35 L. ed. legislature. Cars temporarily in the 613, 11 Sup. Ct. Rep. 876; Marye v. state cannot be given a situs there by Baltimore and Ohio Ry. Co., 127 U. S. taxing aflSrmed. under general tax 117, 32 L. ed. 94, 8 Sup. Ct. Rep. laws. See State v. Union Tank Lin? 1037; Cleveland, etc., Ry. Co. v. Co., Minn. , 102 N. W. Rep. Backus, 133 Ind. 513, 33 N. E. Rep. 721. 421, 18 L. R. A. 729; Atlantic, etc., 1* State ex rel. Armour Packinff Co. Ry. Co. V. Lesueur, 2 Ariz. 428, 1 v. Stephens. 146 JIo. 602, 69 Am. St. L. R. A. 244, 19 Pac. Rep. 157. Bain v. Rep. 625, 48 S. W. Rep. 92!). The Richmond and Danville Ry. Co., 105 law was also held to be unconstitu- N. C. 303, 18 Am. St. Rep. 912, 11 tional as a regulation of commerce, S. E. Rep. 311, 8 L. R. A. 299, must -see §§ 911, 809: and as imposing a be regarded as overruled by the Fed- greater tax rate than was allowed by eral cases cited, as that case was de- the state constitution, cided on Federal grounds. In order 15 Tn re Union Tank Line Co. of that cars temporarily within a state Xew .Jersey. 204 HI. 347, 68 N. E. may be taxed there ought to be some Rep. 504, 98 Am. St. Rep. 221. TBRRITOKIAL JURISDICTION. 61 eions of the Federal constitution regarding commerce, and the Federal statutes governing registry and enrollment. The statutes most directly in point are : Every vessel, except as is hereinafter provided, shall be regis- tered by the collector of that collection district which includes the port to which such vessel shall belong at the time of her registry; which port shall be deemed to be that at, or nearest to which the owner, if there be but one, or, if more than one, the husband or acting and managing owner of such vessel, usually resides.^® The name of every registered vessel, and of the port to which she shall belong, shall be painted on her stern, on a black ground, in white letters, of not less than three inches in length." The same requirements are in force in the case of vessels en- rolled for the coasting trade.^* The collectors of the several districts may enroll and license any vessel that may be registered, upon such registry being given up, or may register any vessel that may be enrolled, upon such enrollment and license being given up.^* When any vessel shall be in any other district than the one to which she belongs, the collector of such district, on the appli- cation of the master thereof, and upon his taking an oath that, according to his best knowledge and belief, the property remains as expressed in the register or enrollment proposed to be given up, and upon his giving the bonds required for granting regis- ters, shall make the exchange of an enrollment for a register or a register for an enrollment; but in every such case the col- lector to whom the register or enrollment and license may be given up shall transmit the same to the register of the treasury; and the register, or enrollment and license, granted in lieu thereof, shall, within ten days after the arrival of such vessel within the district to which she belongs, be delivered to the col- lector of the district, and be by him canceled.^ 77. There are authorities which hold that registered or en- rolled vessels have a situs for taxation only in their home ports; they are taxable there and not elsewhere no matter where they are employed."^ 16 U. S. R. S., § 4141, Act of Deo. WU. S. R. S., S 4322, Act of Feb. 31, 1702. 18, 1793. 17 U. S. R. S., § 4178, Act of Dec. 20 U. S. R. S., § 4323, Act of Feb. 31, 1792. 18, 1793. 18 U. S. R. S., §§ 4312-4334, Act 21 Hays v. Pacific Mail Steamship of Feb. 18, 1793. Co., 17 How. 596, 15 L. ed. 254; Mor- 62 COKSTITUTIONAL LAW OF TAXATION. That a registered vessel is taxable at its home port, no matter where employed or how long away, is held in one of the cases cited, where vessels, built in ISTew York and registered there, were-- sent to the Paciiic coast and permanently employed there, not returning to ^ew York. The owner, being assessed in New York at a valuation which included these vessels, sought to have their value deducted from the assessment, on the ground that they had no situs in ISTew York. The assessment was upheld. " Ships at sea," said the court, " if registered at a port within the state, have no situs elsewhere, and are to be assessed in the state. It is true, ships at sea are mentioned, but the being at sea is, obviousl]', not the essence of the matter ; it is the having a situs where registered, and not elsewhere, that is the controlling consideration. Otherwise, their situs becomes wholly uncertain, for they are either at sea, or in port preparatory to going to sea, and to enable them to be at sea. Being in port is only a neces- sary incident in their proper employment. They are not built to be in port, but upon the sea. To determine their situs, for purposes of taxation, by their longer or shorter stay in a par- ticular port, or by their more or less frequent resort to it, would introduce perpetual uncertainty, it would, practically, subject them to taxation in every port, or exempt them in all.^^ 78. The converse proposition, that registered vessels are not taxable elsewhere than in their home ports, although employed elsewhere, is illustrated in several cases. In Morgan v. Parham^ the vessel upon which a tax was claimed in Mobile, Alabama, was o^vned and registered in ISTew York. It was, however, enrolled in Mobile, and had a coasting license there. It plied between Mobile and ISTew Orleans, making tri-weekly trips. This had continued for some years. It was held that the vessel was not subject to tax at Mobile. The enrollment at Mobile, it was said, showed that the vessel was only temporarily at that port. In Hays V. Pacific Mail Steamship Co.,^ the vessel in question was a steamer plying between San Francisco, Panama, and Oregon, remaining in San Francisco long enough to receive and discharge cargo and passengers, and remaining in Benicia, Cali- fornia, about ten or twelve days after each trip in order to repair gan V. Parham, 16 Wall. 471, 21 L. ed. Commonwealth v. Ayer, 25 K7. L. 303; Johnson v. De Bary-Baya Mer- Rep. 1068, 77 S. W. Eep. G86. chants' Line, 37 Fla. 499, 19 So. E«p. 32 People v. Commissioners of Taxes, 640, 37 L. R. A. 518; People v. Com- etc., 58 N. Y. 242. miasioners of Taxes, etc., 58 N. Y. 23 16 Wall. 471, 21 L. ed. 303. 242; Roberts v. Charlevoix Township, 2*17 How. 596, 15 L. ed. 254. 60 Mich. 197, 26 N. W. Rep. 878. See TERRITORIAL JURISDICTION. 63 and refit. She was registered in New York. It was held that she cauld not be taxed in California. The Supreme Court said : Whether the vessel, leaving her home port for trade and com- merce visits, in the course of her voyage or business, several ports, or confines her operations in the carrying trade to one, are ques- tions that will depend upon the profitable returns of the business, and will furnish no more evidence that she has become a part of the personal property within the state and liable to taxation at one port, than at the others. She is within the jurisdiction of all or any one of them temporarily, and for a purpose wholly excluding the idea of permanently abiding in the state or changing her home port. Our merchant vessels are not unfre- quently absent for years, in the foreign carrying trade, seeking cargo, carrying and unloading it from port to port, during all the time absent, but they neither lose their national character nor their home port, as inscribed upon their stern. In Johnson v. De Bary-Baya Merchant's Line,^ ships which were registered in New York, but which, for a period of years, had been engaged in traffic in Florida waters for a part of each year, and in some years for the entire year, were held not to be taxable in Florida. In Roberts v. Charlevoix Township,^ it was held that an enrolled vessel could not be taxed except at its home port, al- though exclusively employed elsewhere. Cases holding that ships may be taxed where employed. 79. There is a line of cases, however, which hold that a reg- istered vessel which is exclusively and permanently employed in a state other than that of her home port gains a sitiLS and may be taxed in the state where she is thus employed. These cases must be regarded as more in accord with the present state of the law of situs than the decisions which follow Morgan v. Parham.^^ Since rolling stock, Pullman cars, and refrigerator cars passing regularly through a state may be given a situs there and taxed on the basis of the average number in the state,^ there is no reason why ships may not be similarly taxed. And it seems more than probable, in view of the decisions in the class of cases re- ferred to, that the Supreme Court would now limit Morgan v. Parham to its own facts, and would now uphold taxes similar to those which were there condemned. Since these last lines were 25 37 Fla. 499, 19 So. Eep. 640, 37 27 16 Wall. 471, 21 L. ed. 303. L. R. A. 518. 2S§ 74ei seq. 26 eo Mich. 197, 26 N. ^Y. Rep. 878. 64 CO^rSTITUTIONAL LAW OP TAXATION. ■written the Supreme Court has expressly held that where vessels are employed wholly within the limits of a state they are subject to taxation in that state, although registered or enrolled at a port outside its limits.^" 80. In an Alabama case, the facts were that a seagoing tug- boat, owned by a Delaware corporation, registered at Wilming- ton, Delaware, was employed for a long time in the bay of Mobile, Alabama, engaged in dredging, in connection with scows and machinery belonging to the same owner. The dredging was being done under a contract with the United States. The tug was held to be taxable in Alabama. The court said : A special consideration is advanced in support of its non- taxability. It is a seagoing vessel, propelled by steam, and is entitled to registry under statutes of the TTnited States at the port of its owner's domicile. As a matter of fact it is registered at the custom-house in the city of Wilmington, Delaware. On this the contention is, that being taxable at home, it cannot be taxed elsewhere. There are many cases which hold that such vessel, engaged in commerce between the port of registry and others, or even wholly between other ports than that of its regis- try, can be taxed only at tlie port of registry. It is not our purpose to question these decisions — it is not necessary that we should. They all proceed upon the theory that vessels thus engaged are never in foreign Jurisdiction except tem- porarily, and as an incident to the commerce to which they are devoted, and hence that they do not and cannot acquire a sitiis in foreign ports for the purposes of taxation; they do not become incorporated with the property of other states and territories which they touch intermittently, are never indefinitely there, and their business, the work they perform, the uses to which they are put, are not done and performed within, and are not local to, the foreign state or country. And the court concludes: The question, indeed, is at last one of situs in fact, and where this is shown neither foreign registry or foreign ownership is of any consequence.^^ 81. In California it was early held that a vessel owned in 'New York and taxed there, but employed in navigating California waters, was taxable in California.^* 28a Old Dominion Steamship Co. v. 234, 44 Am. Dec. 438 ; Lett v. Mobile Virginia, 198 U. S. 299, L. ed. Trade Co., 43 Ala. 578; Norfolk, etc., , 25 Sup. Ct. Rep. . R. R. Co. v. Board of Public Works' 29 National Dredging Co. v. State, 97 Va. 23, 32 S. E. Rep. 779. 99 Ala. 462, 12 So. Rep. 720; to simi- soMinturn v. Hays, 2 Cal. 590, 56 lar effect are Battle v. Mobile, 9 Ala. Am. Dec. 366. TEBBITORIAL JUBISDICTION. 65 In Virginia it is held that steamboats owned by a foreign cor- poration and enrolled in another state, but which are employed principally in carrying goods and passengers from points in the state to the coast, where sucn goods and passengers are trans- ferred to ocean-going vessels for transportation out of the state, have a taxable situs in Virginia and are properly taxed there. The same is held of a tng enrolled and owned outside the state but principally employed in its harbors. ^^ 82. In a case in Washington, three ocean-going steam tugs, owned by a 'foreign corporation and registered at the port of San Francisco, which had been from four to seven years em- ployed in harbor waters of the state of Washington, used as appurtenant to the owner's lumber busine^ in the latter state, were held to be taxable in Washington. Said the Washington court : Sound reasons exist for the right of the state to tax these vessels that are permanently here transacting local business. They receive the full protection of the local government, and, if mere registry in another port is conclusive against the right to tax here, a doat can operate in our local waters, confined entirely to local business, and, if oivned elsewhere, may evade all taxa- tion in this state. Such construction should not be adopted unless imperatively demanded by superior authority .^^ 83. Vessels which are neither registered nor enrolled, like tangible personal property in general may be taxed where found, regardless of the domicile of the owner, if they have been there for a sufficient time, and under such circumstances, as to indicate that they have become a part of the general stock of property in the community. Thus unregistered scows and a floating dredge owned by a Delaware corporation, brought into a harbor in Ala- bama shortly before the annual assessment was made, and in- tended to be employed in executing a government dredging con- tract, wholly in Alabama, for an indefinite time, not less than a year and a half, were held to be taxable in Alabama.^^ Such unregistered vessels may also be taxed at the domicile of the owner, and this is their proper situs for taxation unless it appears that they have gained a situs in another state. In 31 Old Dominion Steamship Co. v. Chelialis County, 54 L. E. A. 212, 25 Commonwealth, 102 Va. 576, 102 Am. Wash. 95, 87 Am. St. Rep. 747, 64 St. Rep. 855, 46 S. E. Rep. 783 ; af- Pae. R&p. 909. firmed, 198 U. S. 299, L. ed. , 33 National Dredging Co. v. State, 25 Sup. Ct. Rep. . 99 Ala. 462, 12 So. Rep. 720. 32 Jvorthwestern Lumber Co. v. 5 66 COXSTITUTIONAL LAW OF TAXATION. Pennsylvania upon this principle, a tax upon the capital stock of a domestic corporation, invested in scows, dredges, and a tug, none of which were in the state and some of which had never been in the state, was upheld.^* 84. The general rule is that a vessel is not taxable in a place whex-e she merely stops as an incident to her journey, whether her stops there be regular or not.^* Under the statutes quoted,^* the state of the home port of a registered vessel is usually the state where her owner is domiciled. Where the OAvner is domiciled in a state which is not the state of the home port of tlie vessel, and the vessel is not wholly employed in the state of the owner's domicile, the vessel is not taxable in that state except by express provisions of law, although the state probably has authority to impose such taxation by reason of its personal jurisdiction over the owner. ^^ Situs of credits. 85. That all credits, bonds, mortgages, choses in action, notes, monej in bank, may be taxed in the state where the owner resides, by virtue of the state's personal jurisdiction over the owner ; and, in the absence of statute evincing a contrary intention, are taxable Ihere, regardless of the residence of the debtors, is not open to doubt."* 3* Commonwealth v. American ings Society v. City, etc., of San Fran- Dredging Co., 122 Pa. St. 386, 9 Am. eisco, 133 Cal. 14, 05 Pae. Rep. 16; St. Rep. 116, 15 Atl. Rep. 443, 1 People ,'. Eastman, 25 Gal. 601; At- L. R. A. 237. The recent case of Dela- lanta, etc.. Association v. Stewart, ware etc. Ry. Co. v. Pennsylvania, 198 109 Ga. 80, 35 S. E. Rep. 73; City U. S. 341, L. ed. , 25 Sup. Gt. Council of Augusta v. Dunbar, 50 Rep. 669, upholds this case on the Ga. 387 ; Arapahoe Commissioners ground that the property "was liable v. Cutter, 3 Colo. 349; Goldgart to return to the state at any time." v. People, 106 111. 25 ; Borden's 35 Hays V. Pacific Mail Steamship Appeal, 208 111. 369, 70 N. E. Rep. Co., 17 How. 596, 15 L. ed. 254; City 310; Seripps v. Board of Review, of New Albany v. Meekin, 3 Ind. 481, 183 111. 278, 55 N. E. Rep. 700; .')6 Am. Dec. 522; State v. Haight, 30 In re Union Tank Line of New Jersey, N. J. L. 428. 204 111. 347, 68 N. E. Rep. 504, 9S 36 § 76. Am. St. Rep. 221 ; Davenport v. Missis 37 City of New Albany v. Meekin, sippi, etc., R. R. Co., 12 Iowa, 539; 3 Ind. 481, 56 Am. Dec. 522; Howells Hunter v. Supervisors of Page Co. V. State, 3 Gill (Md.), 14. 33 Iowa, 376, 11 Am. Rep. 132; Bar SSKirtland v. Hotchkiss, 100 U. S. ber v. Farr, 54 Iowa, 57, 6 N. W. Rep 491, 25 L. ed. 558; s. c, 42 Conn. 426, 134; Forsman v. Byrnes, 08 Ind. 247; 19 Am. Rep. 546 ; JIurray v. Charles- Fisher v. Commissioners, 19 Kans ton, 96 U. S. 432, 24 L. ed. 760; Boyd 414; Commonwealth v. Hays, 8 B v. Sclraa, 96 Ala. 144, 11 So. Rep. 393, Mon. 1; Thomas v. Mason County 16 L. R, A. 729; Pacific Coast Sav- Court, 4 Bush, 135; Liverpool, etc TEERITORIAL JURISDICTION. 67 86. Credits which consist of public securities, state and munic- ipal bonds, and bank notes, may be separated by tlie legislature from the domicile of the owner, and may be taxed as property in the place where they actually are.^® The same is true of all credits which have assumed what may be called a concrete form — that is, are evidenced in a manner which gives to the evidence some physical characteristic of prop- erty, such as bonds, mortgages, promissory notes, and the like. The legislature may tax these at the place where they are found. The most common form of such taxation is where such property of a nonresident is taxed in the hands of a resident agent.** Some of the cases seem to regard notes, morti'^ages, and the like, as property in themselves to the extent that, in the absence of express statutory direction, their taxable situs is. the place where they are found, and not the domicile of their owner.*^ Ins. Co. V. Board of Assessors, 51 La. Ann. 1028, 72 Am. St. Rep. 483, 25 So. Rep. 970, 45 L. R. A. 524; Meyer V. Pleasant, 41 La. Ann. 045, 6 So. Rep. 258; Appeal Tax Court v. Pat- terson, 50 Md. 354; Latrobe v. Balti- more, 19 Md. 13 ; Mayor, etc., of Balti- more V. Hussey, C7 :\ld. 112, Atl. Rep. 19; Bemis v. Boston, 14 Allen, 366 ; Lanesborough v. County Commis- sioners, 131 Mass. 424; Frothingham V. Shaw, 175 Mass. 59, 78 Am. St. Rep. 475, 55 N. E. Rep. 623; Graham v. Township of St. Joseph, 07 Mich. 652, 35 N. W. Rep. 808; Holland v. Board of Commissioners, 15 Mont. 460, 39 Pac. Rep. 575, 27 L. R. A. 797; St. Paul V. Merritt, 7 Minn. 258; State V. Earl, 1 Nev. 394; State v. Branin, 23 N. J. L. 484-496; State v. Darcy, 51 N. J. L. 140, 16 Atl. Rep. 100, 2 L. R. A. 350; State v. Pearson, 24 N. J. L. 254; Hoyt v. Commissioners of Taxes, 23 N. Y. 224; People v. Commissioners of Taxes, 58 N. Y. 242 ; Grant v. Jones, 39 Ohio St. 50(1 ; Som- raers v. Boyd, 48 Ohio St. 048, 29 N E. Rep. 497 ; Lines' Estate, 155 Pa. St. 378, 26 Atl. Rep. 728; Short's Estate, 16 Pa. St. 63; South Nash- ville Street Ry. Co. v. Morrow, 87 Tenn. (3 Pick.) 400, 11 S. W. Rep. 348 2 L. R. A. 853 ; State v. Gaylord, 73 Wis. 316-325, 41 N. \V. Rep. 521. 39 State Tax on Foreign Held Bonds, 16 Wall. 300-324, 21 L. ed. 179; Scottish Union, etc., Ins. Co. v. Bow- land, 196 U. S. 611, 49 L. ed. — , 25 Sup. Ct. Rep. 345; State v. Fidelity etc. Co., Tex. Civ. App. , 80 S. W. Rep. 544. Contra, Oreutt's Ap- peal, 97 Pa. St. 179. « New Orleans v. Stempel, 175 U. S. 309, 44 L. ed. 174, 20 Sup. Ct. Rep. 110; Buck V. Miller, 147 Ind. 586, 62 Am. St. Rep. 436, 37 L. R. A. 384, 45 N. E. Rep. 647, 47 N. E. Rep. S : Armour Packing Co. v. Augusta, 118 Ga. 552, 98 Am. St. Rep. 128, 45 S. E. Rep. 424 ; Matzenbaugh v. People, 194 111. 108, 88 Am. St. Rep. 134, 62 N. E. Rep. 146; Railey v. Board of As- sessors, 44 La. Ann. 765-770, 11 So. Rep. 93; Wilcox v. People, 14 Kans. 588, 19 Am. Rep. 107; Fisher v. Com- missioners of Rush County, 19 Kans. 414; Blain v. Irby, 29 Kans. 499-501; People V. Trustees of Ogdensburgh, 48 N. Y. 390; Williams v. Board of Supervisors, 79 N. Y. 561 ; Boardman V. Board of Supervisors, 85 N. Y. 359 ; People v. Smith, 88 N. Y. 576 ; Cat- lin V. Hull, 21 Vt. 152; State Bank V. Richmond, 79 Va. 113. 41 Wilcox V. Ellis, 14 Kans. 588, 10 Am. Rep. 107; Fisher v. Commission- ers of Rush County, 19 Kan. 414; Blain v. Irby, 25 Kans. 499; People ex rel. Jefferson v. Smith, 88 N. Y. 570; Poppleton v. Yamhill, 18 Orcfr. 377, 23 Pae. Rep. 253, 7 L. R. A. 449. Contra, Lines' Estate, 155 Pa. St. 378, 26 Atl. Rep. 728. 68 COXSTITUTIOSTAL LAW OF TAXATION. Credits employed in business. 87. In many of the cases where notes and mortgages have been held taxable in the state where they actually were, independ- ent of the domicile of the owner, it has appeared that such notes and mortgages were in fact part of and incident to a business, such as loaning and investing money, trading, and the like, and this fact has been referred to as an element of the taxing jurisdic- tion. So far as this element goes it assimilates such taxes to privilege or license taxes for the privilege of doing business; although the taxes are property taxes, and, until recently at least, the actual presence of the evidences of indebtedness in the taxing state has been the main feature of jurisdieti'jn ; the nature of the l»asiness carried on being regarded mainly as evidence of the -j^ermanent situs of the property in the state, and as a cireum- .^tauce showing the abstract justice of such taxation.*^ A Federal case goes quite far in sustaining the jurisdiction of the state over the credits of nonresidents employed in business in the state. A nonresident kept money invested in a state, in notes secured by mortgages, the mortgages being in the hands of an agent, who collected the interest and principal, reinvested the proceeds of collections, and paid the interest to the nonresident principal. llie notes were at first Tcept in the hands of the resident agent, hut afterward and for a nuviber of years , they were sent to the principal, who kept them, returning them to the agent when neccs.tnry for collection or renewal. For a part of the period in question the agent had a power of attorney to satisfy mortgages — later this was revoked. It was held that taxes were lawfully imposed upon the non- resident principal in respect of the credits evidenced by the notes and mortgages, although the notes were not in the state. The fact that the property was in effect a " stoclx -in-trade " of a business done in the state was apparently the dominant feature in the -mind of the court, which said: ■12 New Orleans v. Stempel, 175 U. S. E. Rep. 424; Hutchinson v. Board S. 309, 44 L. ed. 174, 20 Sup. Ct. Rep, of Equalization, 66 Iowa, 35, 23 N. W. 110; Matzenbaugh v. People, 194 111. Rep. 249; In re Jefferson, 35 Minn. 108, 88 Am. St. Rep. 134, 62 X, E. 215, 28 X. W. Rep. 256; People ex rel. IRep. 546; Buck v. Miller, 147 Ind. 586, Jefferson v. Smith, 88 N. Y. 577; Pop- 62 Am. St. Rep. 436, 45 N. E. Rep. 647, pleton v. Yamhill, 18 Oreg. 377. 23 47 N. E. Rep. 8, 37 L. R. A. 384; Buck Pac. Rep. 253, 7 L. R. A. 449; Billing- V. Beach, Ind. , 71 N. E. Rep. hurst v. Spink County, 5 S. D. 84, 58 ^63 ; Armour Packing Co. v. Augusta, X^. W. Rep. 272. 118 Ga. 552, 98- .Am. St. Rep. 128, 45 TEEEITOEIAL JURISDICTION. 69 Persons are not permitted to avail themselves for their own benefit of the laws of a state in the conduct of business within its limits, and then to escape their due contribution to the public needs through action of this sort (sending the notes out of the state), whether taken for convenience or by design.*^ 88. In a quite recent decision the United States Supreme Court has upheld a tax levied on credits of a nonresident engaged in business under the following circumstances. The creditor was a foreign corporation, its business in Louisiana was in the hands of an agent; it furnished to its cus- tomer a sum of money and took from him a collateral security; for reasons satisfactory to the parties, instead of taking the ordinary evidence of indebtedness, the customer drew a, check, never intended to be -paid in the ordinary way, but intended by the parties to be held as evidence of the amount of money actually loaned; this loan could be satisfied by partial payments from time to time, interest being charged upon the outstanding- amounts, and if not paid at maturity the collateral was subject to sale; when paid, the money might be again loaned by the agent to other parties, or remitted to the home ofiice ; and the business was continuing in character. The money to be paid to the customer was generally obtained by drawing a draft upon a city in another state, or upon the home office, and a large part of the business was in selling foreign exchange. It was held that " these checks, secured in the manner stated, and given for the purpose of evidencing an interest-bearing debt, were the evidences of credits for money loaned, localized in Louisiana, protected by its laws, and properly taxable there. ^^ Where the creditor conducted the business in tbe manner described in the case just cited, except that nonnegotiable note? were taken instead of the checks above described, the notes being- kept by the agent, the property invested was deemed taxable.*^ In a Pennsylvania case, the fact that the property was employed in business in the state was regarded as the controlling feature of jurisdiction. There the interest of a deceased nonresident 43 Bristol V. Washington County, Buck v. Beach, Ind. , 71 N. E. 177 U. S. 133, 44 L. ed. 701, 20 Sup. Rep. 963. Ct. Rep. 585. Where notes owed by a ''* State Board of Assessors v. Comp- nonrcsident and held by a resident toir Nat. D'Eseompte, 191 U. S. 38^, agent are sent out of the state for 48 L. ed. 232, 24 Sup. Ct. Rep. KKi, a few days each year to escape taxa- 45 Comptoir Nat. D'Kscompte v. tion, they are taxable in the state. Board of Assessors, 52 La. Ann. 1319, 27 So. Rep. 801. 70 CONSTITUTIONAL LAW OF TAXATION. member of a domestic limited partnership, evidenced by " shares of the partnership, the partnership property and business being in Pennsylvania, v/ere held subject to inheritance tax in Pennsyl- 4B vania. 89. Executory contracts in writing for the sale of lands, owned by a nonresident but kept in the hands of an agent, are credits in such a concrete form as to render them taxable in the state in which they actually are found. ^' In other recent cases it has been held that credits in the foi-m of notes, choses in action, and book accounts, belonging to a foreign corporation doing business in the taxing state, which credits resulted from its business operations in the state are taxable.** Situs of real estate mortgages, considered as estates in the land. 90. A mortgage upon lands, being the equitable estate or interest of the mortgagee in the lands, entirely separate from the debt secured, may be taxed by the state in which, and at the place where, the lands are, regardless of the residence of either mortgagee or mortgagor, or the actual siti^s of the written instrument. The state may tax real estate mortgag:ed, as it may all other property within its jurisdiction, at its full value. It may do this, either by taxing the whole to the mortgagor, or by taxing to the mortgagee the interest therein represented by the mortgage, and to the mortgagor the remaining interest in the land. And it may, for the purposes of taxation, either treat the mortgage debt as personal property, to be taxed, like other choses in action, to the creditor at his domicile, or treat the mortgagee's interest in the land as real estate, to be taxed to him, like other real prop- erty, at its situs. . . . The statute of Oregon, the constitu- tionality of which is now drawn in question, expressly forbids any taxation of the promissory note, or other instrument of writing, which is the evidence of the debt secured by the mort- gage; and, with equal distinctness, provides for the taxation, as real estate, of the mortgage interest in the land. Although the right which the mortgage transfers in the land covered thereby wSmall'a Estate, 151 Pa. St. 1, 25 ^^ Armour Packing Co. v. City Coun- Atl. Rep. 23. cil of Augusta, 118 Ga. 552, DS Am. *7 People V. Trustees of Ogdens- St. Eep. 128, 45 S. E. Rep. 424; Ar- burgh, 48 N". Y. 390 ; Redmond v. mour Packing Co. v. Savannah, 115 Commissioners, 87 N. C. 122; see State Ga. 140, 41 S. E. Rep. 237. V. Nortliern Pacific Ry. Co., Minn. , 103 N. W. Hop. 731. TEKRITOKIAL JURISDICTION. 71 is not a legal title, but only an equitable interest and by way of security for the debt, it appears to us to be clear upon prin- ciple, and in accordance with the weight of authority, that this interest, like any other interest, legal or equitable, may be taxed to its owner (whether resident or nonresident) in the state where the land is situated, without contravening any provision of the Constitution of the United States.*® In the state courts the power to tax mortgages as interests in realty at the place where the realty is, regardless of the domicile of the mortgagee, has been upheld."'''' In Montana a tax on a nonresident mortgagee was held to be void, as the situs of mortgages had not been fixed by the legis- lature at the place where the land lay.°^ In Kentucky it has been recently held that a mortgage on real ■estate in the state, the beneficial owners of the mortgage being nonresidents, could not be taxed in the absence of an express statute fixing the situs of such mortgages in the state, although the trustee named in the mortgage was a nonresident.^^ In California and Maryland the constitutions provide for the taxation of mortgages as interests in land.*^ 90a. AA'here a debt secured by mortgage is taxed — as a deht^ ■and not as an interest in lands — it may be taxed at the ovsmer's 49 Savings and Loan Society v. Am. St. Eep. 632, 34 So. Rep. 482, Multnomah County, 169 U. S. 421, 42 it was held that, under the existing Xi. ed. 803, 18 Sup. Ct. Rep. 392. statutes of Mississippi, mortgages 50 Allen v. National State Bank, 92 owned by a foreign corporation hav- Md. 509, 48 Atl. Eep. 78, 84 Am. St. ing no agent in the state, the mort- Rep. 517, 52 L. R. A. 760 ; Mumford gages and evidences of indebtedness V. Sewell, 11 Oreg. 67, 4 Pac. Rep. being physically out of the state, had 585, 50 Am. Rep. 462 ; Crawford v. no siUis in the state for taxation as Linn County, 11 Oreg. 482, 5 Pac. personalty, and could not be taxed as Rep. 738 ; Common Council of De- interests in the lands upon which they troit V. Rentz, 91 Mich. 78, 51 N. W. were secured, although those lands Eep. 787, 16 L. R. A. 59. were situated in the state. It was In other cases laws taxing the mort- intimated, however, that the legis- gage against the mortgagee at the lature might tax them as personalty place where the mortgaged property by express enactment; and it was is have been upheld; but the question plainly asserted that a law, taxing of jurisdiction over nonresident mort- them as interests in the lands, would gagees does not seem to have been be constitutional. especially considered. Faust v. 52 Board, etc., of Frankfort v. Fidel- Twenty-third German-American Build- ity Trust and Safetv Vault Co., Ill ing Assn., 84 Md. 186, 35 Atl. Rep. Ky. 667, 64 S. W. Rep. 470'. The legis- 890; Firemen's, etc., Ins. Co. v. Com- lative power to tax such mortgages monwealth, 137 Mass. 80; State v. was not denied. Runyon, 41 N. J. L. 98. 5.'! §§ 151-153 of this work. The 51 Holland v. Commissioners of Sil- California constitution in this re- ver Bow County, 15 Mont. 460, 39 Pac. spect applies only to liens on real Rep. 575, 27 L. R. A. 797. estate. Bank of Woodland v. Pierce, In Adams v. Colonial and United 144 Cal. 434, 77 Pac. Rep. 1012. .States Mortgage Co., 82 Miss. 263, 100 72 CONSTITUTIONAL LAW OP TAXATION. domicile, regardless of the fact that the property mortgaged in situated in another state. " The right of the creditor to proceed against the property mortgaged, upon a given contingency, to en- force by its sale the payment of his demand, . . . has no locality independent of the party in whom it resides. It may imdoubtedly be taxed by the state, \\'hen held by a resident therein." " Situs of bank deposits. 91. Deposits in bank are, of course, taxable to the depositor at his domicile.'^ For some years the current of decision has been in favor of the view that deposits made by a nonresident, in a bank, are sub- ject to taxation, against the nonresident, in the state where the bank is. The ground on which this has sometimes been done is that the money, deposited in a bank, has been regarded as incident to the business of the nonresident, carried on in the state. As was said in one case where taxation of bank deposits owned by a Qonresident was sustained: The foreign corporation had an agent here, where it received and where it sold fruit and received the price for the same. Part of the proceeds were withheld in the hands of the agents for purposes incidental to the prosecution of its business, and part deposited to the credit of the company, subject to the check of its local agent. Also for the prosecution of its business here, and for such other purposes as the company might direct it to be applied to. The company transacted business in Xew Orleans precisely as did resident business men and firms. It received all the advantages to be derived from the state and city govern- ments which residents received, and we see no reason -ivh^- it should not be taxed, as claimed in this proceeding, unless there be insuperable legal objections in the way. We find a statute of the state, which by its terms brings them under the operation of state and city taxation, and we are bound to give effect to its provisions unless they be in derogation of the constitution. The unconstitutionality of the act is not pleaded, and we, of ourselves, see no unconstitutional features in it.^* B^Kirtland v. Hotohkiss, 100 U. S. 1, 14 So. Kep. 306, where it had beeit 491, 25 L. ed. 558, affirming 42 Conn, held that a bank deposit to the credit 426, 19 Am. Eep. 546. of a nonresident was not taxable, bv 55 Pyle V. Brenneman, 122 Fed. pointing out that in such former ease Eep. 787. the decision really rested on the seBlueflelds Banana Co. v. Board special facts of the ease; that tliere of Assessors, 49 La. Ann. 43, 21 So. was really no general deposit, but tliat Eep. 627, qualifying a former case, the local bank was simply a medium, Clason V. New Oi'leans, 46 La. Ann. through \\ hich the funds" of the non- TEREITORIAl, JURISDICTION. to Similar ground was taken by the United States Supreme Court in holding that moneys collected as interest and principal of notes, mortgages, and other securities kept -within a state, and deposited — to the credit of the nonresident o^wner — in one of the banks of the state for use or reinvestment, \\'ere taxable by the state. " They are property arising from business done in the state, they were tangible property when received by the agent of the plain- tiffs, and as such subject to taxation, and their taxability was not . . . . lost by their mere deposit in a bank." " . 92. Other cases regard the deposit in, bank as'property, almost as if it were so much specie kept by the nonresident in a vault in the bank. Said the Louisiana Supreme Court: The revenue act, in entire accordance with the conceded taxing power, taxes the movable property of a foreigner. We cannot hold that cash thus liable to taxation is exempted, because for. convenience it is deposited in a bank and checked on by the owner. It would be a strain to apply to the deposited casli the exemption from taxation accorded to debts in their ordinary significance, due to the foreign creditor.^* 93. In a Xew York case the question was whether an inherit- ance tax could be imposed by Ifew York on the succession to a deposit in a Xe\v York bank, to the credit of a nonresident who had died. The statute provided for the taxation of succes- sions to " all property ... . whether within or without this .state, over v-hich this state has any jurisdiction for the purposes of taxation." The question of jurisdiction over the deposit was thus fairly presented. It was held that the deposit was taxable. Said the Court of Api^eals in part: What was the real thing, the essence of the transaction, that gives rise to this controversy? The decedent brought his monev into this state, depo-ited it in a bank here, and left it here until it should suit his convenience to come back and get it. While the commingling of funds may complicate administration, it does not change the facts as thus stated. If he had deposited in specie, to he returned in specie, there can be no doubt that tJie money would be property in this state subject to taxation. But, instead, he did as business men gcuerally do, deposited his money resident, lept at the place of liis resi- 07 New Orleans v. Stempel, 175 U. dence, were drawn against for the S. 309, 44 L. ed. 174, 20 Sup. Ct. Rep. purpose of making payments in Louis- 110 lana. 58 Parker v. Strauss, 4!) La. Ann. 1173^117.5, -22 So. Itep. 32!l. 74 CONSTITUTIONAL LAW OF TAXATION. in the usual way, knowing that, not the same, but the equivalent, would be returned to him on demand. }YJiilp the relation of debtor and creditor technically existed, practically he had his money in the bank and could come and get it when he wanted it. It was an investment in this state subject to attachment by creditors. If not voluntarily repaid, he could compel payment through the courts of this state. The depositary was a resident corporation, and the receiving and retaining of the money were corporate acts in this state. Its repayment would be a corporate act in this state. Every right springing from the deposit was created by the laws of this state. Every act out of which those rights arose 'was done in this state. In order to enforce those rights it was necessary for him to come into this state. Con- ceding that the deposit was a debt; conceding that it was intangible, still it was property in this state for all practical purposes, and in every reasonable sense within the meaning of the transfer tax act.^* 94. In sustaining the position taken as above stated by the iSTew York courts with respect to the taxation of deposits in bank to the credit of nonresidents, under the New York transfer tax acts, the Supreme Court of the United States has recently as- bcrted a proposition which carries the jurisdiction of a state over debts due nonresidents to the farthest limits, to wit — That power over the person of the debtor confers taxing jurisdiction over the debt. The decision in question bases the right to tax expressly upon the ground that the power to collect the debt from the resident debtor — the obligation of the debtor to pay — comes from the law of the state of the debtor's residejice.®' The effect of this proposition, if carried to its logical extent, is to make the jurisdiction of the state over credits held by nonresidents practically unlimited. If power over the person of the debtor is the test of jurisdiction, then the distinction between credits which have been reduced to a concrete form, and those which have not, is useless, all are alike taxable. If this be so, it is no longer necessary, in taxing bonds, notes, or mortgages, that some or any of them should be in the state at any time — the tax may be laid if the debtor is there. BOMat.trv of Houdayer, 150 N. Y. eo Blaekstone v. Miller, 188 U. S. 37, 44 X. E. Rep. 718, .55 Am. St. 189, 47 L. ed. 439, 23 Sup. Ct. Rep. Rep. 64i, 34 L. R. A. 235, reversing 277, affirming- Matter of Blackstone, 3 App. Uiv. 474. 171 N. Y. 682, 04 X. E. Rep. 1118, 69 App. Div. 127, 74 N. Y. Supp. 507. TEERITOKIAL, JURISDICTION. 75 ■UTiere bonds and notes owned by a nonresident are outside the state. 95. Wliere bonds, notes, and other evidences of indebtedness are not within the state, and the owner is a nonresident, the direct authorities up to the present time are to tlie effect that there is no taxing jurisdiction over thcni, although such bonds and notes are made by residents of the state or by domestic cor- porations.'*^ In one of the cases cited the question was — whether bonds of IsTew York corporations, ow^ned by a nonresident decedent, which "were in his possession at his foreign domicile at the time of his death, were '' property over which this state (New York) has any jurisdiction for the purposes of taxation." It was held that the state of New York had no taxing jurisdiction. Said tlie Court of Appeals : ^ Whatever may be argued in support of the right to subject the bonds of domestic corporations to appraisement for taxation purposes under this act, when physically within the state, upon some theory that they are something more than the evidences of a debt and constitute a peculiar and, appreciable species of prop- erty, within the recognition of the law as well as of the business community, such argument is certainly unavailing in this case; where the bonds themselves were at their owner's foreign domicile.®" 96. Credits which have not been reduced to any concrete form, iiccording to the weight of direct opinion \\p to the present time, may only be taxed at the domicile of the creditor.** y the state. The sovereign power which creates the corporation gives the shares a being, and may sttach such conditions as it pleases to their existence. ^^ 100. Shares of stock in a foreign corporation, owned by resi- dents of a state, niay be taxed by the state regardless of whether ihe capital of the corporation is taxed in the state of its creation. The power to tax is the same whether the capital of the corpora- tion is taxed at home or not. Any other rule would make the power of taxation depend upon the operation of the laws of a foreign jurisdiction.^* 69 Bristol V. Washington County, Conn. 211-218, 23 Atl. Rep. 9; Mat- 177 U. S. 133, 44 L. ed. 701, 20 Sup. ter of Bronson, 150 X. Y. 1, 55 Am. Ct. Rep. 585. St. Rep. G32, 44 N. E. Kep. 707, 34 70 New Orleans v. Stempcl. 175 U. L. R. A. 238; First Nat. Bank of >^. 309, 44 L. ed. 174, 20 Sup. Ct. Rfp. Mendota v. Smith, 65 111. 44; Ameri- 110. can Coal Co. v. Allegheny County "1 People ex rel. Armstrong Cork Commissioners, 59 Md. 185 ; State A'. Co. V, Barker, 157 N". Y. 159. .'jI X. E. f ook, 32 N. J. L. 347; Wiley v. Corn- Rep. 1043. iiiissioners, 111 N. C. 397, 11 S. E. T2Blackstone v. Miller, 188 V. S. Rep. 542; South Nashville Street Ry. 189, 47 L. ed. 439, 23 Sup. Ct. Rep. Co. v. Morrow, 87 Tenti. (3 Pick.) 277. 406, 11 S. E. Rep. 348, 2 L. R. A. T3 Tappan v. Merchants' Nat. Bank, 853 : St. Albans v. National Car Co., 19 Wall. 490, 2-2 L. ed. 189; Corrv v. r-'i Vt. 81; see London v. Hope, 26 Ky. Baltimore, 190 U. S. 466. 49 L." ed. Law Rep. 112, 80 S. W. Rep. 917. , 25 Sup. Ct, Rep. 297. affirming 74 .State v. Kidd, 125 Ala. 413, 28 96 Md. 310, 53 Atl. Rep. 942; State So. Rep. 480; Stanford v. City of V. Travelers' Ins. Co.. 70 Conn. 590, San Francisco, 131 Cal. 34, 63 Pac. 66 Am. St. Rep. 138, 40 Atl. Rep. 465; Rep. 145; Greenleaf v. Board of Re- Travelers' Ins. Co. V. Connecticut, 185 view of Morgan County, 184 III. 226, U. S. 364, 46 L. ed. 949, 22 Sup. Ct. 75 Am. St. Rep. 168, 56 N. E. Rep. Rep. 673; Lockwood r. Weston, 61 295; Henkle v. Keota, 68 Iowa, 334, to CONSTITUTIONAL LAW OF TAXATION. And even thoiigli the same shares have been taxed in the- I'oreign state of tlie corporation's domici]r% they may still be taxed in the hands of the rc-ident holder.'" In a Michigan case it was held that the provision of the Federal constitution that " fnll faith and credit shall be given to the pub- lic acts," etc., of every other state, does not forbid a state to tax shares held by residents in foreign corporations, although the property is taxed in the state of tlie corporation's domicile. '"^ Situs of intangible corporate assets. 101. The situs of intangible assets of corporations — their " franchises " considered as property, is, in the absence of legis- lative direction to the contrary, at the home office of the corpora- tion, and the state of domicile probably has power to tax the whole body of " f ra^nchises " or intangible assets, good-will, and the like, regardless of where the properties are situated, the use of which creates the value of the intangible assets.'""' This projv osition is limited, however, to cases where the " franchise " may be regarded in some degree as personalty. 102. The case of Louisville, .etc., Ferry Co. v. Kentucl-y," is one which might be regarded as a distinct step in the develop- ment of the constitutional law of situs if the opinion did not carefully limit the decision to the facts of the particular case. There it was held that a Kentucky corporation, operating a ferry hetiveen Kentucky and Indiana, across the Ohio Biver, could not he taxed upon the value of the franchises or privileges — con- sidered as property — to operate a ferry, which it had received from the State of Indiana, that such taxation would he the taxa' 27 N. W. Rep. 250; Appeal Tax Court matter of express statutory regula- V. Gill, 50 Md. 377; Bacon v. Board tion. It is not denied that the state of State Tax Commissioners, 126 Mich, has power to tax such shares. De 22, 86 Am. St. Rep. 524, 85 N. W. Baun v. Smith, 55 X. J. L. 110. 25 Rep. 307, 60 L. R. A. 321; Ogden v. Atl. Rep. 277. St. Joseph, 90 Mo. 522, 3 S. W. Rep. 76 Bacon v. Board of State Tax Com- 25 ; Worth V. Commissioners, 82 N. C. raissioners, 126 Mich. 22, 85 N. ^V. 420, 33 Am. Rep. 692; Bradley v. Rep. 307, 86 Am. St. Rep. 524, 60 Bauder, 36 Ohio St. 28, 38 Am. Rep. L. R. A. 321. 547; McKeen v. County of Northamp- 76a But see Delaware etc. Ry. Co. v. ton, 49 Pa. St. 519, 88 Am. Dee. 515; Pennsylvania, 198 U. S. 341. L. Dwight V. Mayor, 12 Allen, 316, 90 ed. " , 25 Sup. Ct. Rep. 669, casting Am. Dec. 149. some doubt on this proposition. 76 Dyer v. Osborne, 11 R. I. 321, 23 '' 188 U. S. 385, 47 L. ed. 513, 23 Am. Rep. 460; Seward v. Rising Sun, Sup. Ct. Rep. 463, reversing 108 Kv. 79Ind. 351. In New Jersey such taxa- 717, 22 Ky. L. Rep. 446, 57 S. W. tion is held to be unlawful — as a Rep. 624. TEKEITORIAL JURISDICTION". 79 Hon hy Kentucky of property which had its sole situs in Indiana, and would amount to a deprivation of due process of Jaw. If ferry franchises were like other franchises, or if the court had not limited its decision so carefully, this decision would be an authority for the general proposition that intangible assets in the nature of franchises and privileges cannot be taxed at their owner's domicile, regardless of where the privileges are exercised ; but can only be taxed in the place where the franchises are em- ployed. There is language in the opinion tending to sustain this view. But the court held that a ferry franchise is an incorporeal hereditament, that is to say, a form of real property ^^ that such a franchise has its sole situs in the state from which it is derived. The taxation of that franchise or incorporeal hereditament by Kentucky is, in our opinion, a deprivation by that state of the property of the ferry company without due process of law, in violation of the fourteenth amendment of the constitution of the United States, as much so as if the state taxed the real estate owned hy that company in Indiana. This view is not met by the suggestion that Kentucky can make it a condition of the exercise of corporate powers under its authority that the tax upon the franchise granted by it shall be measured by the value of all its property, wherever situated, of whatever nature, and from whatevw- source derived. It is a sufficient answer to this suggestion to say that no such condition was prescribed in the charter of the ferry company when it was granted and accepted. Nor does the taxing statute in question make it a condition of the ferry company's continuing to exercise its powers that it shall pay a tax for its property having a situs in another state.'^^ There is no suggestion in the company's charter that the state would ever, in any form, tax its property having a situs in another state. We express no opinion as to the valid- ity of such a conrlition if it had been inserted in the company's charter, or if it were now, in terms, prescribed by any statute. ^Ye decide nothing more than it is not competent for Kentucky, under the charter granted by it and under the constitution of the United States, to tax the franchise which its corporation, 78 Citing 3 Kent Conim. 459; 2 L. ed. 191 ; Stevens v. Stevens, 3 Dana, Washburn on Real Property, §§ 1212- 371. 1215 (6th ed.) ; 1 Cooley's Black- T9 Is not the fact that the tax as stone, book II, pp. 21-36 ; Conway v. laid was upheld by the highest state Taylor's Executor, 1 Black, 603, 17 court, construing the statute, a suffi- 80 CONSTITUTIONAL LAW OF TAXATION. the ferry company, lawfully acquired from Indiana, and which franchise, or incorporeal hereditament has iV.y situs, for purposes of taxation, in Indiana. 103. In the case of foreign corporations, it is not possible to state just how far legislative control over the situs of intangible assets may go. Perhaps the following statement of what may be done fairly represents the result of the decisions. A state in which a corporation carries on business, from the operations of which business a value in the nature of good-will accrues to the corporation, or in which state ai-e situated part of the physical properties from the use of which some value in the nature of good-will accrues to the corporation, may give to that part of the. intangible assets or got>d-will which is derived fiom the business in the state, or from the use of the physical j'roperties in the state, a taxable situs in the state. In determining what part of the intangible assets is due to the operations of the corporation in the state, any reasonable method of calculation may be adopted. ISTo general rule can be given for determining what is a reasonable method. The vai'ious methods of valuation of such properties by pro- portional calculations, which are described in other parts of this work*" have been upheld as proper means of ascertaining the pro- portion of intangible assets to which a legislature may give a sitv^ in the state, regardless of the corporate domicile. In the note are cited some of the jDrincipal cases in which laws giving situs to intangible corporate assets have been upheld.*^ 80 See § 912 ct seg., chap. 21, cspe- Co., 141 U. S. 40, 35 L. ed. 628, 11 cially § 1464 ei set/. Svip. Ct. Rep. 889; palace car com- 81 Railroad companies, Cleveland, panics, Pullman's Palace Car Co. v. etc., Ry. Co. v. Backus, 154 U. S. 439, Pennsylvania, 141 U. S. 18, 35 L. ed. 39 L. ed. 1041, 14 Sup. Ct. Rep. 1122; 613, 11 Sup. Ct. Rep. 876; express Pittsburgh, etc., Ry. Co. v. Backus, companies, Adams E.xpress Co. v. Ohio, 1.54 U. S. 421, 38 L. ed. 1031, 14 Sup. 165 U. S. 194. 41 L. ed. 683, 17 Sup. C!t. Rep. 1114; telegraph companies, Ct. Rep. 305; 166 U. S. 185, 41 L. ed. Western Union Telegraph Co. v. Tag- 965, 17 Sup. Ct. Rep. 604; Adams gart, 163 U. S. 1, 41 L. ed. 49, 16 Express Co. v. Kentuokv, 166 U. S. Sup. Ct. Rep. 1054; Western Union .171, 41 L. ed. 960, 17 Sup. Ct. Rep. Telegraph Co. v. Gottlieb, 190 U. vS. 527 ; where the tixed carrier was a 412, 47 L. ed. 1116, 23 Sup. Ct. Rep. copartnership; bridge companies, Hen- 730; Western Union Telegraph Co. v. derson Bridge Co. v. Kentucky, 166 Massaclmsetts, 125 U. S. 530, 31 L. U. R. 150, 41 L. ed. 955, 17 Sup. Ct. ed. 790, 8 Sup. Ct. Kep. 901 ; Massa- Rep. 532. In Foster-Cheney Co. v. chusetts V. Western Union Telegraph Cashey (66 Kans. 600. 72 Pac. Rep. TERRITOBIAL JURISDICTION. 81 104. The reasoning upon which the legislative power tlin* to attribute a situs to intangible assets is based, is the kind which Alexander might have used in justifying himself for cutting the (.Tordian knot instead of untying it. It appears most clearly in the Adams Express Company cases. There the tangible property of the company in Ohio amounted to a small fraction of the sum for which its intangible property was assessed. The value of the intangible property was reached, roughly speaking, by taking such a proportion of the value of all the stocks and bonds of the company as the value of the tangible ii.^-ets in the state bore to the value of the tangible assets every- where. This was taken to be the value of all the property in Ohio, and by deducting from this sum the value of the tangible property in Ohio, the remainder was deemed to be the value of the tangible property in Ohio, and Avas taxed. It was -strenuously ai'gued against this law that it amounted in effect to taxation of property outside the state, that all the prop- erty of the company in the state was the tangible property. 105. Said the Supreme Court, after asserting that the good- will or " franchises " of a corporation are property, the value of which is represented in the value of its stocks and bonds : But where is the situs of this intangible property? The Adams Express Company has, according to its showing, in round nnumbers $4,000,000 of tangible property scattered through dif- ferent states, and with that tangible property thus scattered transacts its business. By the business which it transacts, by combining into a single use all these separate pieces and articles of tangible property, by the contracts, franchises, and privileges which it has acquired and possesses, it has created a corporate property of the actual value of $16,000,000. Thus, according to its figures, this intangible property, its franchises, privileges, etc., is of the value of $12,000,000, and its tangible property of only $4,000,000. Whereis the situs of this intangible property? Is it simply where its home office is, where is found the central direct- ing thought which controls the workings of the great machine, or in the state which gave it its corporate franchise; or is that intangible property distributed wherever its tangible property is located and its work is done? Clearly, as we think, the latter. Every state within which it is transacting business and where it has its property, more or less, may rightfully say that the 268), it is held that the capital stock that its principal business is conducted of a corporation is taxable only in the in another state, state of its domicile, notwithstanding 82 CONSTITUTION-AL LAW OF TAXATION. $16,000,000 of value which it possesses springs not merely from the original grant of power by the state which incorporated it, or from the mere ownership of the tangible property, but it springs from the fact that that tangible property it has com- bined with contracts, franchises, and privileges into a single unit of property, and this state contributes to that aggregate value not merely the separate value of such tangible property as is within its limits, but its proportionate share of the value of the entire property. That this is true is obvious from the result that would follow if all the states other than the one which created the corporation could and should withhold from it the right to transact express business within their limits. It might continue to own all its tangible property within each of those .states, but unable to transact the express business within their limits, that $12,000,000 of value attributable to its intangible property would shrivel to a mere trifle. 106. It may be true that the principal ofSce of the corporation is in New York, and that for certain purposes the maxim of the common law was " mobilia personam sequuntur" but that maxim was never of universal application, and seldom interfered with the right of taxation. It would certainly seem a misapplication of the doctrine expressed in that maxim to hold that by merely transferring its principal ofBee across the river to Jersey CMty the sitvs of $18,000,000 of intangible property was changed from the state of Few York to that of New Jersey. 107. It is also true that a corporation is, for purposes of jurisdic- tion in the Federal courts, conclusively presumed to be a citizen of the state which created it, but it does not follow therefrom that its franchise " to be " is for all purposes to be regarded as- confined to that state. For the transaction of its business it goes into various states, and wherever it goes as a corporation it carries with it that franchise "to be." But the franchise "to be" is only one of the franchises of a corporation. The franchise " to do " is an independent franchise, or rather a com- bination of franchises, embracing all things which the corpora- tion is given power to do, and this power to do is as much a thing of value and a part of the intangible property of the cor- poration as the franchise " to be." Franchises " to do " go wherever the worh is done. The Southern Pacific Eailway Com- pany is a corporation chartered by the state of Kentuclry, 3^et within the limits of that state it is said to have no tangible property and no office for the transaction of business. The vast amount of tangible property which by lease or otherwise it holds and operates, and all the franchises " to do " which it exercises, exist and are exercised in the states and territories on the Pacific slope. Do not these intangible pro'perties ■ — these fran- chises " to do " — exercised in connection with the tangible prop- TEEBITOKIAL JXJKISDICTION. 83 erty which it holds, create a substantive matter of taxation to he asserted hy every state in which that tangible property is found? 108. It is said that the views thus expressed open the door to possi- bilities of gross injustice to these corporations, through the con- flicting action of the different states in matters of taxation. That may be so, and the courts may be called upon to relieve against such abuses. But such possibilities do not equal the wrong which sustaining the contention of the appellant would at once do. In the city of New York are located the headquarters of a corporation, whose corporate property is confessedly of the value of $16,000,000 — a value which can be realized by its stockholders at any moment they see fit. Its tangible property and its business is scattered through many states, all whose powers are invoked to protect its property from trespass and secure it in the peaceful transaction of its widely dispersed busi- ness. Yet because that tangible property is only $4,000,000 we are told that is the limit of the taxing power of these states. In other words, it asks these states to protect property which to it is of the value of $16,000,000, but is willing to pay taxes only on the basis of a valuation of $4,000,000. The injustice of this spealcs for itself. In conclusion, let us say that this is eminently a practical age; that courts must recognize things as they are and as possessing a value ivhich is accorded to them in the markets of the world, and that no fine-spun theories about situs should interfere to enable these large corporations, whose business is carried on through many states, to escape from bearing in each state such burden of taxation as a fair distribution of the actual value of their property among those states requires.^" 108a. Where a foreign corporation is taxed upon its intangible assets in a state, the amount of such assets being ascertained by some proportional rule, the whole corporate business being re- garded as a unit; the value of assets of the corporation, outside the state, which are not used as a part of the corporate enterprise, cannot be taken into consideration in ascertaining the value of the intangible assets. To hold othenvise would be to allow a state to tax property over which it had no territorial jurisdiction of any sort. This proposition was foreshadowed in Pittsburgh, etc., By. Go. v. Backus,^ and was expressly held in the later case of Fargo v. Hart.^ In Fargo v. Hart, the state of Indiana 82 Adams Express Co. v. Ohio, 166 83 154 U. S. 421, .'i8 L. ed. 1031, 14 U. S. 185, 223, 224, 225, 41 L. ed. Sup. Ct. Eep. 1114. 965, 17 Sup. Ct. Kep. 604. s* 193 U. S. 490, 48 L. ed. 701, 24 Sup. Ct. Rep. 498. 84 COXSTITUTIOXAi LAW OF TAXATION. taxed a foreign express company for its intangible assets in tlie state, and ascertained the value of those assets by taking a pro- pordonal part of all the assets of the company, including personal property — securities — worth $15,500,000, which were in New Yorl\ and which the company's return to the taxing officers showed uerc not used in its business. The company sought to enjoin the assessment. The state officers answered that the said snui of $15,500,000 was used by the company " as a part of the necessary capital of its business," hence they argued that the said sum, wherever situated, was a part of the " profit-producing plant," and should be included in the assets which were propor- tionately divided. 1086. The Supreme Court held that the effect of the state's action was to tax property outside the state ; and that an injunc- tion should be granted. Said the court, among other things, after referring to the cases where various corporate enterprises were held to be properly taxed as units : It is obvious, however, that this notion of organic unity may be made a means of unlawfully taxing the privilege, or property outside the state, under the name of enhanced value or good-will, if it is not closely confined to its true meaning. So long as it fairly may be assumed that the different parts of a line are about equal in value a division by mileage is justifiable. But it is recognized in the cases that if, for instance, a railroad com- pany had terminals in one state equal in value to all the rest of the line through anotlier, the latter state could not make use of the unity of the road to equalize the value of every mile. That would be taxing property outside of the state under a pretense.^^ . . . We come back to the question whether the taking of personal property outside the state into the assess- ment can he justified on the ground that it gives credit necessary for the business in the state. The testimony was that the prop- erty was not necessary for that purpose and in fact was not used. We may assume that the board was of a different opinion, so far as that was concerned, and still we may hold its action un- justified. It will be seen that we are dealing with much more attenuated relations than when there is a physical line of rails or wires to be valued, every mile of which is a necessary condi- tion of the use of the rest of the lines beyond, and therefore a reflex condition of the value of the line behind it. The case is 85 Citing Pittsburgh, etc., Ev. Co. v. Telegraph Co. v. Taggart. 163 U S Backus, 1.54 U. S. 421. 38 L. ed. 1031, I, 41 L. ed. 49, 16 Sup. Ct. Rep. 1054 14 Sup. Ct. Rep. 1114; Western Union TEKEITORIAL JUEISDICTIOK. 85 stronger even than one of terminals having a large value as real estate independent of their use to the road. The express husi- ness added nothing to the value of the bonds in New York. Conversely, the utmost extent to which those bonds entered into the value of property in Indiana was in so far as they helped to make the public believe that the express company could be trusted and therefore increased its good-will. That they made a part of the public more willing to buy interests in the company because they were an assurance against personal liability was no concern of Indiana. But it is obvious that merely from the point of view that the express company could be trusted by the public with the carriage of goods or money the good-will could not be measured by assets. In the first place tlie public knew nothing of the amount. This appears as to even the more instructed portion of the public which bought interests in the concern, and a fortiori as to the general run of shippers. For even if the buyers of the stock of the company would pay only in the neighborhood of the value of the intangible assets it is apparent either that they did not know what the assets were, as stated by the appellant's counsel, or else that the good-will taxed was worth nothing, and either view is equally fatal to the grounds for the tax. 108c. But- again, suppose that the state of the assets had been pub- lished in every newspaper in Indiana, can it be imagined that it would have had an appreciable effect upon the company's busi- ness? Certainly it is absurd to say that the business of such companies will bear an exact or any proportion to the stock and bonds which they may own. Unless we are much mislEken. most people who want to send things by express employ a company simply because it is there, and they see its sign is out. The only effect that knowledge of the capital of the compr.ny could have would be to produce the conviction that the company was safe to employ. Assume that something is to be added to the good-will of a company because it is safe, and that the good- will, or a part of it, of the express business in Indiana may be considered in assessing its property there, this is vc-ry diiferent from measuring the good-will by the capital, when the facts appear as they do in this case. The difference is not a mere difference in valuation, it is a difference in principle, and in our judgment the principle adopted by the board was wrong. It involved an attempt to tax property bevond the jurisdiction of the state, and to throw an unconstitutional burden on com- merce among the states.*^ M Fargo V. Hart, 193 U. S. 490, 499, v. Weir, 127 Fed. R«p. SS;. ti2 C. C. A. 500, 501, 502, 48 L. ed. 761, 24 Sup. 427. Ct. Rep. 498. To same effect, Coulter 86 CONSTITUTIONAL LAW OP TAXATION. Situs of personalty in the hands of executors, trustees, guardians, and receivers. 109. The weight of authority is in favor of the proposition that personal property Avhich is held under authority of a court by an officer of the court or one who is under its control, such as a receiver, guardian, executor, or trustee, is taxable by the state out of whose courts the officer's authority issued, and at the place where he is accountable, regardless of the officer's residence, or of the residence of those beneficially interested, or of the actual location of the property.*^ 110. This was directly held in Maryland, in a case which pre- sented the proposition in an extreme form. The facts were that the guardian was a resident of New York and had not been a resi- dent of Maryland for six years at the time -v^rhen the tax in question was levied — the ward was a resident of 'New York and had not been a resident of Maryland for twenty years at the time the tax was levied — the property consisted entirely of stocks and bonds of corporations organized and located outside the state of Maryland; and no part of this property was physically located in Maryland. The property had been bequeathed and distributed to the ward by a testator and an intestate whose estates had been settled in the Orphans' Court of Washington County, Maryland, many years before. The guardian in question had been appointed by the Orphans' Court of Washington County as successor to former guardians appointed by the same court. The trust had been administered continuously in the same court for fourteen years prior to the levy of the disputed taxes. The register of wills of Washington County reported the property as " property in a guardian's hands liable for taxation " pursuant to the laws of Maryland, and the property was taxed pursiiant to statute. The guardian filed a bill in equity to restrain the collection of the taxes. The argument for the guardian was that the state had no 87 Baldwin v. County Commission- 183 U. S. 300, 46 L. ed. 207, 22 Sup. ers of Washington County, 85 Md. Ct. Rep. 162; Youtsey v. Common- 145, 36 Atl. Rep. 764; Bonaparte v. wealth, 110 Ky. 555, 62 S. W. Rep. State, 63 Md. 465 ; Schmidt v. Failey, 262 ; Spalding v. Commonwealth, 88 148 Ind. 150, 47 N. E. Rep. 326, 37 Ky. 135, 10 S. W. Rep. 420; Lewis v. L. R. A. 442; Gallup v. Schmidt, 154 Chester County, 60 Pa. St. ,325. Ind. 196, 56 N. E. R«p. 443; affirmed. TERRITOEIAL JURISDICTIOK. 87 jurisdiction to tax, because neither the guardian nor the ward nor the property was within the state. n 1 . The Court of Appeals of Maryland held that the tax was properly laid, and the decree of the lower court, dismissing the bill on an agreed statement of the facts above set forth, was affirmed. Said the court in part, after referring to the Mary- land statute fixing the domicile of the guardian in the county where his letters issued: In contemplation of our statute, the officer of the law Icnown as the guardian of Golumhus G. Baldwin, is in Washington County for the purpose of dealing with, accounting for, and hold- ing the property of his ward. The individual holding that office may be domiciled in New York, but the law does not concern itself about that. . . . When for convenience or other causes a guardian is appointed in this state for a nonresident infant, who may thereby have the protection and care of one of our Orphans' Courts from year to year during his minority, it is certainly no hardship to require his estate to pay taxes on such property as the guardian of a resident ward must pay. So if we view this case merely from an equitable standpoint, we fail to find any good reason why guardians of nonresident infants should occupy the time of our Orphans' Courts, at the expense of the public, and yet not pay such taxes as the guardians of resident infants must pay.^* 112. In an earlier Maryland case, where the question was between residents of different counties, and not of different states, it was held that an executor was taxable in respect of his decedent's estate, in the county where the letters testamen- tary had been granted and not in the county of his domicile, although the constitution of Maryland^^ provided for the tax- ation of the property of all residents of the state in the county '" where the resident resides for the greater part of the year." The Court of Appeals said, in answer to the suggestion of the executor, that he was taxable in the county of his residence because he held the legal title : " that he held such legal title is true; hut he held it in the special character of an officer of the law for the specific and temporary purpose of the administration of the property under the supervision and direction of the court from luhich he received letters testamentary.^ 88 Baldwin v. County Comniission- 89 Art. 3, § 51, quoted in full in era of Washington County, 85 Md. § 153 of this work. 145, 36 Atl. Rep. 764. 90 Bonaparte v. State, 63 Md. 465. 88 CONSTITUTIONAL LAW OF TAXATION. 113. In an Indiana opinion where it was held that the state had taxing jurisdiction with respect to funds in the hands of a receiver of a corporation, appointed by the courts of the state, the following language was used : The simple question left, then, is whether the property in the hands of the receiver is within the jurisdiction of this state. That it is in the hands of a receiver in this state, and subject to distribution by him, on order of the court of which he is an officer, would seem to malce it clear thai it must be within the jurisdiction of the state. Even if the receiver were not tech- nically the owner of the property for many purposes, including the purpose of taxation, still that circumstance would not be controlling. . . .• And the fact that nonresidents might have claim to some distributive share of the property, on final settle- ment, whether that property were in the hands of an adminis- trator, a receiver, or other trustee, could not deprive the state of right to tax the property before distribution, and while stUl in the custody of an official of the court having control of such distribution.^^ 114. That the "official residence," for taxing purposes, of an executor is in the state and county where his letters were issued, and where he is accountable, was held in another Indiana case, where an executor was taxed under a statute which pro- vided for notice only to residents of the county. Inasmuch as he was a resident of another state, he contended that the stat- ute — which only provided for notice to resiileuts of the county — was void as to him because it did not provide for notice. The Supreme Court of Indiana disposed of this contention by hold- ing that the executor, although not in fact a resident of the State, " was an official resident of Marion county at the time the proceeding . . . was begun, and therefore within the express terms " of the statute.®^ 115. In a Pennsylvania case a resident of ISTew York be- came executrix and trustee of the estate of a New York decedent in the Surrogate's Court of that state. She settled hei final account as executrix, but no decree of distribution was made and she was not discharged as executrix. She was directed to retain and invest the remainder until distribution should be ni Schmidt v. Failev, 148 Ind. 1.50, 162, upon the ground that the con- 47 N. E. Rep. 326, 37 L. R. A. 442. struction placed by the Indiana court 92 Gallup V. Schmidt, 154 Ind. 196, upon the Indiana statute was bindin" .56 N. E. Rep. 443 ; affirmed, 183 U. S. upon the Supreme Court " 300, 46 L. ed. 207, 22 Sup. Ct. Rep. TEBEITOEIAL JURISDICTION. 89 ordered. Before distribution she removed to Pennsylvania and invested part of the estate in mortgages upon lands there. It ^vas held that, under the Pennsylvania statute, she could be taxed there for those mortgages, but also held that the statute did not "warrant taxing her in respect of property in other states. The assumption of the decision was that, as to the other property, she was only taxable in the state out of whose courts her letters had issued.®^ 116. Supporting the view that the state from which the ofhcer's authority is derived has taxing jurisdiction, is the reason- ing by which the Supreme Court of the United States and the Xew York Court of Appeals uphold the taxation of bank de- posits belonging to a nonresident; and succession taxes gen- erally. Every right springing from the deposit wa^ created hy the laivs of this state. Every act out of which those rights arose was done in this state. In order to enforce those rights it was necessary for him to come into this state.^* // the transfer of the deposit necessarily depends upon and involves the law of iSlew York for its exercise, or, in other words, if the transfer is subject to the power of the state of New York, then New York may subject the transfer to a tax.®'^ The cases which uphold succession taxes on the ground that the state may attach such conditions as it pleases to the transfer of property which takes place by virtue of its laws, uphold this principle.^ 117. There are some cases which do not coincide with the prevailing views just considered. The fact that a nonresident trustee derives his appointment from a court within the state is held in Maine not to be suffi- cient to give taxing jurisdiction over him, in respect to property fiutside the state, although beneficiaries reside in the state. The estate was that of a resident decedent which had been dis- tributed, and the trustees held solely as trustees and not as executors. The reasoning of the opinion indicates that the court regarded the trustees as outside the taxing \ .er of the state, 93 Lewis V. Chester County, 60 Pa. ns Blaekstone v. Miller. ISS U. S. St. 32r,. ■ 189-205, 47 L. ed. 439, 23 Sup. Ct. 94 Matter of Houdayer, loO N. Y. Rep. 277. 37-40, 44 N. E. Rep. 718, 55 Am. St. 96 See § 141; United States v. Per- Rep. 642, 34 L. R. A. 235. kins, 163 U. S. 625, 41 L. ed. 287, 16 Sup. Ct. Rep. 1073. £0 CONSTITUTIONAL LAW OF TAXATION. although the exact decision was to the effect that the statute did not warrant such taxation.®^ In CaUfornia, also, where the constitution provided that " all property in the state . . . shall be taxed," it was held that where one of two trustees under a will proved in California was a resident of California, and the other a resident of New York, the property being in New York, the nonresident trustee could not be taxed with respect to his undivided half of the trust property ■ — although the California courts had jurisdic- tion over the nonresident trustee for the purpose of settling his accounts. The case proceeded upon constitutional grounds and it was held that the interest of the trustee was not property in the state within the meaning of the constitution.®® 118. In Illinois it was held, Avithout discussion of this con- stitutional question, that a nonresident guardian of a nonresident ward was not taxable in Illinois, although the guardian had been appointed by the Illinois court.*® In Virginia it was held that where a guardian and ward had removed from the county where the guardian had qualified and where his ex parte ac- counts were settled, to another county in the same state, the trust property should be taxed in the county where the guardian and ward lived, and not where the guardian had qualified.^ 119. There can be no doubt that personalty generally be- longing to estates of decedents, funds in the hands of receivers, and trust funds of all kinds, may be taxed by the state where the property actually is found.^ 120. Executors, receivers, or other trustees may be taxed in respect of the trust estate by the state in which they reside, by virtue of the state's personal jurisdiction over them, although the beneficiaries reside in another state and the property is physically sitiiated in another state.^ 9T City of Augusta v. Kimball, 91 general effect see Hurt v. City of Bris- Me. 605', 40 Atl. Kep. 666, 41 L. K. A. tol, Va. , 51 S. B. Eep. 223. 475. Anthony v. Caswell, 15 R. I. 2 §§ 72, 86, 89, 91, 92, 93, 94, 95, 159, 1 Atl. Rep. 290, is cited as sup- and cases cited. porting this view ; but in that case it 3 People ex rel. Beaman v. Feitner, does not appear affirmatively whether 168 N. Y. 360, 61 N. E. Rep. 280, re- the trustee's powers were derived from versing 63 App. Div. 174 ; Mackay v. a Rhode Island court. San Francisco, 128 Cal. 678, 61 Pac. 98 Mackay V. San Francisco, 128 Cal. Rep. 382; Spalding v. Commonwealth, 678, 61 Pac. Rep. 382. 88 Ky. 141, 10 S. W. Rep. 420 (a 99 Maxwell v. People, 189 111. 603, receiver); Baldwin v. Shine, 84 Ky. 59 N. E. Rep. 1098. 502, 2 S. W. Rep. 141 (an adminis- 1 Hughes V. City of Staunton, 97 trator) ; Sommers v. Boyd; 48 Ohio Va. 518, 34 S. E. Rep. 450; to same St. 648, 29 N. E. Rep. 497 (an ad- TEKRITOKIAL JURISDICTION. 91 This is held with respect to shares of stock in a foreign cor- poration/ funds held in trust for nonresidents by resident trus- tees,° credits held in trust by residents for nonresidents,® mort- gages held by a resident trustee for a nonresident beneficiary,'' notes and accounts,* a sinking fund, created and owned by a foreign corporation and held for it by resident trustees.^ Other cases where trust property was held to be taxable at the trustee's domicile are cited in the note; and the general rule seems to be that in the absence of special statutory direction trust property is taxable there.-"* 121. A number of cases hold or say that the legal presump- tion is that the personal property of a decedent, for purposes of taxation, during the settlement of his estate, is at the place where he lived, unless the contrary affirmatively appears.^^ In ministrator) ; Guthrie v. Pittsburgh, etc., Ry., 158 Pa. St. 433, 27 Atl. Rep. 1052; In re Ailman, 17 R. I. 362, 22 Atl. Rep. 279; Price v. Hun- ter, 34 Fed. Rep. 355. In Board, etc., of Frankfort v. Fidelity Trust :ind Safety- Vault Co., Ill Ky. 667, 64 S. W. Rep. 470, it was held that a mortgage on real estate in the state, the beneficial owners of which mort- gage resided out of the state, could not be taxed in the state, although the trustee of the mortgage was a lesidcnt, in the absence of statutory direction. Xo question of legislative power was raised. 4Glidden v. Harrington, 189 U. S. 255, 47 L. ed. 798, 23 Sup. Gt. Rep. .!;74, affirming Harrington v. Glidden, 179 Mass. 486, 61 N. E. Rep. 54, 94 Am. St. Rep. 613. The point at is- sue in this case was whether the as- sessors had authority to make the determination that the plaintiff was taxable as trustee, upon the evidence before them. The decision that they had jurisdiction necessarily involves the proposition stated in the text. The question of due process of law was directly rnised and passed on. 5 Davis V. Macy, 124 Mass. 193. 6 City of Detroit v. Lewis, 109 Mich. 155, 86 X. W. Rep. 958, 32 L. R. A. 439; Grant v. Jones, 39 Ohio St. 506. 7 Price V. Hunter, 34 Fed. Rep. 355 ; Latrobe v. Baltimore, 19 Md. 13; Baltimore v. Stirling, 29 Md. 48. In the two latter cases the question arose as between residents of the sama state, and different counties. 8 Trustees, etc. v. City Council of Augusta, 90 Ga. 634, 17 S. E. Rep, 61, 20 L. R. A. 151. 9 People ex rel. Western Railroad Corporation v. Assessors of Albany, 40 N. Y. 154. 10 Smith v. Byera, 43 Ga. 191 ; State V. Collector, 39 N. J. h. 79; Guthrie V. Pittsburgh, C. & St. L. Ry., 158 Pa. St. 433, 27 Atl. Rep. 1052 ; Greene V. Mumford, 4 R. I. 313; Re Ailman, 17 R. I. 362, 22 Atl. Rep. 279; Clark V. Powell, 62 Vt. 442, 20 Atl. Rep. 597 : Walla Walla v. Moore, 16 Wash. 339, 58 Am. St. Rep. 31, 47 Pac. Rep. 753: State v. Willard, 77 Minn. 190, 79 X. W. Rep. 829. 11 People ex rel. Campbell v. Com- missioners of Taxes and Assessments, 38 Hun (N. Y.). 536; Matter of Haieht, 32 App. Div. (N. Y.) 496, 87 N. Y. St. Rep. 226, 53 N. Y. Supp. ■22(i: San Francisco v. Lux, 64 Cal. 481, 2 Pac. Rep. 254; Estate of Fair, 128 Cal. 607, 61 Pac. Rep. 184; Stan- ford V. San Francisco, 131 Cal. 34, 63 Pac. Rep. 145; Corn well v. Todd, 38 Conn. 447 ; Millsaps v. City of Jack- son, 78 Miss. 537, 30 So. Rep. 756; Stephens v. Mayor of Booneville, 34 Mo. 323 ; Rand v. Pittsfield, 70 N. H. 530, 49 Atl. Rep. 88, holding that where the personal estate of an in- testate has been rightfully taxed in another state where decedent lived, it will not be taxed to the administrator 92 CONSTITUTIONAL LAW OF TAXATION. other more logical cases tlie presumption is said to be that the estate is taxable to the owners of the legal title (the executors) where they reside, and any rule taxing it in the place where the decedent last lived is regarded as a statutory exception.^^ Other cases are cited, where, as between dift'erent jurisdiction- in the same state, executors have been held to be taxable in respect of their trusts at their places of residence, regardless of the residence of their decedent or the actual location of the property.*^ Statutes sometimes make each trustee of ^evcral taxable in the state or district where he lives for a proportionate part of the whole trust estate; and the presumption^, in construing stat- utes, or in the absence of statutes, are in favor of this method, which seems to be a fair one.^^ In California it is held on constitutional grounds that where the beneficiaries and some of the trustees are nonre-idents, and the property is physically without the state, the trustees v/ithin ihe state may be taxed for their pro rata >hare of trust property, but the trustee without the state cannot be a-sessed ; and that the situs of a pro rata share of the trust property is at the domicile of the nonresident trustees.^" Other cases where statutes have been construed are as fol- lows : It was held in ISTew York that a statute which provided that all debts and obligations due to persons in the state should be deemed personal property within the state and shrmld be taxed there " to the owners," did not warrant the taxation of bonds, mortgages, and other securities belonging to a trust fund, the beneficiaries and two of the trustees being residents of the state, and the securities being in the physical possession in New Hampshire; City of Staunton 39 N. J. L. 79; MaTor v. Alexander, V. Stout's Executors, S6 Va, 321, 10 10 Lea, 475. S. E. Rep. .5. See Spalding v. Com- w People ex rel. Beaman v. Feitner, monwealth, 88 Ky. 135, 10 S. W. 168 X. Y. 360, 61 N. E. Rep. 280, Rep. 420. " reversing 63 App. Div. 174. 71 N. Y. 12 Hardy v. Yarmouth, 6 Allen, 277; Supp. 261; Trustees, etc. v. City Coun- Vaughan v. Street Commissioners of oil of Augusta, 90 Ga. 634, 17 S. E. Boston, 154 Mass. 143, 28 N. E. Rep. Rep. 61, 20 L. R. A. 151; Baltimore 144; Commonwealth v. Williams, 102 v. Stirling, 29 Md. 48; Appeal Tax Va. 778, 47 S. E. Rep. 867. Court v. Gill. 50 Md. 354; State v. 13 Walla Walla v. Moore, 10 Wash. Mathews, 10 Ohio St. 431; Hardy v. 339, 58 Am. St. Rep. 31, 47 Pac. Rep. Yarmouth. 6 Allen, 278. 753; Cameron V. Burlington, 56 Iowa, 15 Maekay v. San Francisco, 128 320, 9 N. W. Rep. 239 ; State v. Jones, Cal. 678, 61 Pac. Rep. 382. 39 N. J. L. 650; State v. Collector, TEKBITOEIAL JURISDICTION. 93 of the third, a nonresident.^" It makes no difference that some of the securities are mortgages \ipon real estate in New York; nor that securities were not in the actual possession of either the resident or nonresident trustees." Under the present tax law^^ u'here the ]n-oportY is outside the state and the beneficiaries and some of the trustees are nonresident, each resident trustee is assessed for his pro rata share of the assets of the trust in the taxing district where he lives. ^^ But all the assets in the state arc to be taxed, and where only a small part of them are in the possession of a nonresident trustee, and the rest are in the hands of the residents, the resident trustees are to be taxed for the full amount in their hands, although greater than their aliquot share.^" 121a. Tlie state where a guardian resides may tax him in respect of the ward's personal property, although the ward is a nonresident.^-' Some cases with respect to property in the hands of guardians, involving only the" interpretation of statutes, are cited. In sonic cases it is held that the property of the ward is to be tiixed in the place where the guardian resides.^ In other case; the residence of the ward is held to be the place of taxation.'" 122. Whether property held in trust by nonresident trus- i«Bs for resident beneficiaries can be taxeil in the state where the beneficiaries reside is a question of more difficulty, because 16 People ex rel. Dairow V. Coleman, taxed to the guardian; Baldwin v. 119 N. V. 137, 23 X. E. Eep. 488, 7 First Parish of Fitchburg, 8 Pick. L. E. A. 407. 404; State ex rel. Ziegenheim v. Burr, " People ex rel. Day v. Barker, 135 143 Mo. 209, 44 S. W. R«p. 1045, N. Y. 656, 32 X. E. Rep. 2.52. where there was no question of resi- 18 Laws 1806, chap. 308. dence, but it was held that under the 19 People ex rel. Beamau v. Feit- statutes the estate of a minor might ner, 168 X. Y. 360, 61 X. E. Rep. 280; be assessed to his curator, and the People ex rel. Kellogg v. Wells, 182 power of the legislature so to enact X. Y. 314, 74 N. E. Rep. 878. was conceded; Hurt v. City of Bristol, 20 People ex rel. McHarg v. Gaus, Va. , 51 S. E. Rep. 223. Ui9 N. Y. 19, 61 X. E. Rep. 987; 2- City of Louisville v. Shirley, SO People ex rel. Farmers Loan and Trust K\-. 71 ; Kirkland v. Inhabitants of Co. V. Wells. 94 App. Div. 463, 87 \Aiiately, 4 Allen, 462, where a minor N. Y. Supp. 745. was held to have acquired a domicile 21 Westchester School District v. for taxation separate from that of his Darlington, 38 Pa. St. 157. guardian; Westchester School Dis- 22 Hinkhouse v. Town of Wilton, trict v. Darlington, 38 Pa. St. 157 ; 94 Iowa, 254. 62 X. S\. Rep. 782; see Mason v. Thurber, 1 R. I. 481, wliere Dibble v. Leppert, 47 La. Ann. 792, a guardian was held to have power to 17 So. Rep. .3O9 ; Payson v. Tufts, change the residence, for taxation, of 13 Mass. 493, where property of the his lunatic ward. ward in the guardian's possession was 9J- CONSTITUTIONAL LAW OF TAXATION. the eases which hold against such taxation are not clear as ta- whether the grounds of decision are constitutional. As a gen- eral rule it may be stated that such property will not be taxed at the domicile of the beneficiary unless by express statutory direction.^ In Massachusetts a statute providing that " when the trustee is not an inhabitant of this state (personal property held in trust) shall be assessable to the person to whom the income is payable at the place where he resides," has been held constitu- tional in a case where the trust was created by the will of a nonresident decedent, proved without the state and not proved within the state. The beneficiaries lived in tho state and were taxed under the statute. None of the trust property was in the state. In answer to the objection that the tax was unconstitu- tional, because the trustees in whom was the legal title were nonresidents, and because the trust property was not in the state, the Supreme Judicial Court said : The statute under consideration rests on the ground that the cestuis que trust residing here have a beneficial interest in the trust fund which is valuable, and that they are in effect the equitable owners thereof. An interest of this kind is property, which the legislature may subject to taxation.^^ . . . The defendants contend that this statute, if such is its true construc- tion, is unconstitutional. This argument rests on the ground that the property is situated out of the state; that the beneficial interest of a cestui que trust is noAvhere else made taxable ; and that this statute selects for taxation a kind of interest not other- wise taxable, and so imposes a tax which is disproportionate, this argument, however, is met by the suggestions already made^ that the cestui que trust is here, and hig oicnership or title is here, namely, the right to the income of the trust fund. The fact that the corpus of the trust fund is held by trustees who' live elsewhere, and who hold under a will proved and allowed elsewhere, does not take away the power of the legislature to sub- ject the interest of tho cestuis que trust to taxation here if they live here. There is no more reason for holding this to be beyond the power of the legislature than there would be for holding the taxation of cattle and sheep, of manufactured goods, or of shares in corporations untaxable {sic ) here because situated out of the state.28 24 Dorr V. Boston, 6 Gray, 131; listen Seminary v. County Comrais- Anthony v. Caswell, 15 R. I. 159, 1 sioners, 147 Mass. 427, 18 N. E. Rep. kt\. Rep. 290; Preston v. Boston, 12 210; Hathaway v. Fish, 13 Allen, 267. Pick. 7. 26 Hunt v. 'Perrv, 165 Mass. 287. as Bates V. Boston, 5 Gush. 93; Wil- 43 N. E. Rep. K);!. TERRITOEIAX/ JURISDICTION. 95 Other cases applying the same principle as between different jurisdictions' in the same state, and holding that the beneficiary may be taxed for his interest in the district where he resides, although the trustee lives in another district, are cited. ^'^ 123. It has sometimes been held in construing statutes, that the residence of the beneficiaries does not give jurisdiction to tax the estate to nonresident trustees, no other elements of jurisdic- tion being present. In Maine, a tax on nonresident trustees in respect of property not within the state, held by them in trust for residents of the state, was held to be one Avhich the state had no power to levy, although the trust was created by the will of a testator domi- ciled in Maine. The tax was laid directly on the trustees. The court said, however : " We do not hold that the assessors of Au- gusta cannot assess a tax directly against the annuitants resident in Augusta for their annuities or other interests arising out of the property or trust." ^* In Rhode Island, under a similar statute, it was held that a nonresident trustee for resident beneficiaries could not be taxed in respect of the property, which was without the state, and that the statute only extended to persons and things within the 8tate.2» Inasmuch as the interest of a beneficiary in a trust is prop- erty, there seems to be no doubt that it is taxable in the state of his domicile. And if the interest is taxable at all, it cannot make any sub- stantial difference whether it is taxed to the trustee or the bene- ficiary, although, of course, no personal liability could be im- posed on a nonresident trustee. Situs of partnership property. 124. The general rule is that the property of a partnership is to be taxed at the place where the business of the partnership is carried on, regardless of the residences of the partners. The 27 City of Lexington v. Fishback's S. W. Rep. 241 ; Clark v. Addemaii, Trustee, 109 Ky. 770, 60 S. W. Rep. 26 R. I. 168, 58 Atl. Rep. 623. 727; Mayor, etc., of Baltimore v. Safe 28 City of Augusta v. Kimball, 91 Deposit and Trust Co.. 97 lid. 659, Me. 605, 40 Atl. Rep. 666, 41 L. R. A. 55 Atl. Rep. 316. See § 153 of 475. This ease was decided under a this work for Maryland constitutional statute quite like the one in Massa- provision as to this topic; Botts v. chusetts previously quoted. Louisville, 25 Ky. L. Rep. 1918, 79 29 Anthony v. Caswell, 15 R. I. 159, 1 Atl. Rep. 290. 96 CONSTITUTIONAL LAW OF TAXATION. partnership is generally regarded, for purposes of taxation, as a distinct entity. There can be no doubt of the power of the state to tax partnership property in this manner, whether the jjartners are residents of different states or of different taxing districts in the same state.'" The intangible assets of a copartnership formed under the laws of a foreign state may be taxed in the state where the copartnership does business, in like manner as the intangible assets of a corporation, the value of the assets in the state being ascertained by valuing the whole assets as a unit, and taking a proportionate part to be the value in the state. ^^ The individual partners may be taxed by the state at the places where they reside, in respect to their interests in the part- nership property, as with respect to other property.'* Property temporarily in the state. 125. The general rule of law is that property which is only temporarily in a state, or is in transit through it, does not acquire a taxable situs in such state. In so far as it concerns property Avhich is the subject of interstate commerce, this rule is undoubt- edly a rule of constitutional law, and the power of a state legis- lature does not extend to the taxation of such property. This aspect of the rule is elsewhere discussed.'' As to property which is not concerned in interstate commerce, it is diiRcult to say how far the rule as to transiti-)ry situs is a 30 City of Louisville v. Tatum, 111 poses, within the meaning of the Mary- Ky. 747, 64 S. W. Hep. 836 (different land constitution, at the place where districts in same state) ; People ex the partnership does business, al- rel. Badiscli Fabrik v. Roberts, 153 though the partners live elsewhere; N. Y. 59, 46 N. E. Eep. 161, 36 L. R. City of Winston v. City of Salem, 131 A. 75fi, affirming 11 App. Div. 310, 42 N. C. 404, 42 S. E. Eep. 889: School N. Y. Supp. 502, where a franchise tax. District v. Bowman, 178 ilo. 654, 77 measured by capital stock employed S. W. Rep. 880; People ex rel. Dufour in the state, Avas laid upon a foreign v. Wells, 85 App. Div. 440, 83 N. Y*. corporation which was a special part- Supp. 387; affirmed, 177 N. Y. 586, 70 ner in a domestic limited partnership; X. E. Rep. 1106. Spinncv v. City of Lynn, 172 Mass. 31 Adams Express Co. v. Kentucky, 464, 52 N". E. Rep. 523, where the 166 U. S. 171-184, 41 L. ed. 060, 17 partners lived in Lynn, Massachusetts, Sup. Ct. Rep. 527. and (lid business in Boston; they sa Bemis v. Boston, 14 Allen, 366, were held to be properly taxable in Bos- where a firm had goods in Boston, but ton and not in Lynn. The property had its place of business in another taxed here was outside the state ; Hop- state. One of the partners resided in kins V. Baker, 78 Md. 363, 28 Atl. Rep. Boston, and his interest in the firm 284, 22 L. R. A. 477, where it was held was held to be properly taxable in that partnership property is " per- Boston, nianently located," for taxing pur- 33 See § 918 et seq. TEKRITOKIAL JUEISDICTION. 97 constitutional one. In the case of money in bank, for instance, no doubt a merely temporary deposit owned by a nonresident would not be taxable unless by an express statute admitting of no other construction. But the power over the person of the debtor which, in the language of the Supreme Court, " confers jurisdiction," exists just as much where the deposit is for one day as for a year, and if this is so, why would not a statute tax- ing temporary deposits be constitutional? 126. The illustration given shows how questions of construc- tion and of constitutional power are here blended. Probably a statute which should attempt to tax property, the presence of v.hich in the state was purely and dbsolviely transitory, would be regarded as such a radical departure from established modes of procedure and fiscal custom as to amount to a denial of due process of law. On the other hand, there can be no doubt that the power of the state to declare what circumstances shall constitute taxable situs is considerable; and that it may go to great lengths in asserting jurisdiction over property temporarily in the state. Such statements as this are, of course, unproductive of any concrete result. But nothing more in the way of a general rule can be indicated — and even these vague generalities may be useful as guides to thought — as starting points of inquiry. 127. That property which is temporarily within the state or in transit through it, as a part of interstate commerce, cannot be taxed, is well established.** Property which is intended for shipment out of the state retains its situs up to the time it is actually delivered to the carrier or starts on its journey.*^ Prop- erty which is brought into a state for sale and shipment out of the state again may gain a taxable situs.^'^ 128. A circumstance which has been frequently regarded as determinative of the question of situs in the taxing jurisdiction is, 34 See §§ 918 et seq., where the eases Co. v. Ontonagon, 188 U. S. 82, 47 L. are discussed; Coe v. Errol, 116 U. S. ed. 394, 23 Sup. Ct. Rep. 266, logs. 517, 29 L. ed. 715, 6 Sup. Ct. Rep. 36 See §§ 918, 919, and cases cited; 475, logs; Kelley V. Rhoads, 188 U. S. Brown v. Houston, supra; Pitta- 1, 47 L. ed. 359, 23 Sup. Ct. Rep. 259, burgh, etc., Coal Co. v. Bates, 156 reversing 7 Wyo. 237, 75 Am. St. Rep. U. S. 577, 39 L. ed. 538, 15 Sup. Ct. 904, 51 Pac. Rep. 593, 39 L. R. A. 594, Rep. 415, coal; Myers v. County Corn- migratory live stock. missioners of Baltimore County, 83 35 § 921 and cases cited; Coe Md. 385, 34 L. R. A. 309, 55 Am. St. V. Errol, supra; Brown v. Houston, Rep. 349, 35 Atl. Rep. 145, cattle; 114 U S 622, 29 L. ed. 257, 5 Sup. American Steel and Wire Co. v. Speed, Ct. Rep. 109, coal; Diamond Match 192 U. S. 500, 48 L. ed. 538, 24 Sup. Ct. Rep. 365, steel products. 7 98 CONSTITUTIONAL LAW OF TAXATION. that the property taxed, although not permanently in the state, has been brought there for some use — for employment on some work in the state — and the proposition, that this fact estab- lishes situs, is one that commends itself to reason and sound sense. Thus in an old case, where, it is true, there was no con- flict of jurisdiction between states, but only between places in the same state, a master lived outside the city of Charleston, but had his place of business in the city, and to attend to his business went daily into the city with his carriage and slave coachman. He also had a slave whom he sent every day into the city to do jobs wherever employment could be found for him. Under the city regulations this slave had to wear a badge which was furnished by the city. The slave coachman, the horses, and the carriage were held not to be taxable in the city, but the other slave was held to be taxable. ^^ In a recent case in Louisiana, it was held that a contractor's outiit of mules, scra- pers, wagons, tools, and the like, which had been brought into the state by a nonresident contractor .for use in grading work upon a railroad in the state, and which had been in the jurisdiction for about two months when the assessment Avas made, were taxable.^* In Alabama vessels, scows, and dredges belonging to a foreign owner, employed on work in the state, were held to have gained a taxable situs?^ The cases which uphold the taxation of credits employed in business in the taxing state, though O'wned by a nonresident, also support this principle.*" In a Nevada case a traveling circus, giving shows in tlie state, was held not taxable.*^ 129. Other decisions as to tangible property in traii-it or temporarily in the state, involving questions of statutory con- struction and not of constitutional power, are : Logs left on the Illinois side of the Mississippi river for safe-keeping, belonging to an Iowa corporation, are taxable in Illinois.*^ Lumber at a railway station for transit merely, kept there in piles for con- venience in shipment, is not taxable there as property in stor- 37 Charleston v. State ex rel. Adger, 40 See §§ 87 et seq. 2 Speer's L. 719. 41 Roliinson v. Longley, 18 Xev. 71, 3s Griggsby Construction Co. v. 1 Pac. Rep. 377. Freeman, 108 La. 435, 32 So. Rep. 42 Burlington Lumber Co. v. Wil- 399, 58 L. R. A. 349. letta, 118 111. 559, 9 N. E. Rep. 254. 39 National Dredging Co. v. State, 99 Ala. 462, 12 So. Rep. 720. TEEBITOEIAL JURISDICTION. 99 age.^^ Logs and lumber piled along a railroad track awaiting the convenience of the owner are not in transit.** Logs pile. Shaw, supra. 173 Mass. 375, 53 X. E, Rep. 891. TEREITOKIAL JURISDICTION. 109 setts charier, so long can Massachusetts prescrihe the payment of this tax as a condition of the right to succeed to stoch issued under that charter."^ In another case the succession to shares of stock in Massachusetts corporations and in national bank? located in Massachusetts, belonging to the estate of a nonresi- dent decedent, the certificates being out of the state at the time of decedent's death, was held to be taxable in Massa- chusetts. It appeared that the will of the decedent had been proved in Massachusetts ; also that an inheritance tax had been paid on the succession to the same property in the state of de- •ccdent's domicile ; and that her executor had transferred the prop- erty under his appointment in that state, before proving the will in Massachusetts.** 1 45. The privilege of succession to property which — or the ■written evidence of which — is physically within a state, al- though the owner is a nonresident, may be taxed by that state by virtue of its physical dominion over the property. This is held with respect to bonds of domestic and foreign cor- porations,*' cash,** bonds of foreign states and cities,*® and of Ihe United States,^ and deposits in banks in the state, which are regarded as property in a concrete form.®^ 1 46. A distinction has been made between the bonds and stocks of a domestic corporation, when they are part of the estate of a nonresident decedent, and are physically out of the state. In such a case the succession to the bonds of a domestic cor- se Moody v. Shaw, supra. ter of Daly, 100 App. Div. 373, 91 MGreves v. Shaw, 173 Mass. 205, N. Y. Supp. 858. In Blackstone v. 53 N. E. Rep. 372. Miller, 188 U. S. 189, 47 L. ed. 439, 87 Callahan v. Woodbridge, 171 23 Sup. Ct. Rep. 277, affirming Mat- Mass. 595, 51 N. E. Rep. 176; Matter ter of Blackstone, 171 N. Y. 682, of Whiting, 150 N^. Y. 27, 55 Am. St. 64 N. E. Rep. 1118, affirming 69 Rep. 640, 44 N. E. Rep. 715, 34 L. R. App. Div. 127, 74 N. Y. Supp. 508, A. 232; Matter of Morgan, 150 X. Y. the Supreme Court regarded the de- 35, 44 N. E. Rep. 1126. In Matter of posit as a debt, but held that, power Gibbes, 84 App. Div. 510, 83 N. Y. over the person of the debtor gave Supp. 53; affirmed, 176 N. Y. 562, 68 jurisdiction to tax the debt, or its Sue- 's. 'E. 'Rep. 1117, it was held that bonds cession. See §§ 94 et seq. for a dis- of foreign corporations, owned by a cussion of this case. A share of a nonresident who died in 1888, passing residuary estate bequeathed to a non- to nonresidents, were not taxable un- resident by a will proved in the state, der statutes in force at that time. which passes to the executors of such 88 Callahan v. Woodbridge, supra. nonresident who dies before payment 89 Ibid. of said bequest to him, is subject to 90 Ibid. succession tax in the state, the will 91 Matter of Houdayer, 150 N. Y. 37, of the nonresident being proved in the 55 Am. St. Rep. 642, 44 N. E. Rep. state. Matter of Clinch, 180 N. Y. 7J8, 34 L. R. A. 235, reversing 3 App. 300, 73 N. E. Rep. 35. Div. 474, 38 N. Y. Supp. 323; Mat- 110 CONSTITUTIONAL LAW OF TAXATION. poration cannot be taxed by the state, since it neither has physi- cal jurisdiction over the bonds nor had any personal jurisdiction over the decedent. The bonds are not regarded — as the stock is- — as representing the property of the corporation. 147. The residence of the person who takes the property seems to be immaterial. Where the state has jurisdiction of the property, or where the decedent was domiciled in the state, the jurisdiction to tax the succession exists, though the persons who take are non- residents.'^ Legislative control over situs as between places in the same state. 1 48. The situs of property within the limits of a state — as between various places and taxing districts in the same state — is largely in the control of the legislature. What it may not da in the distribution of property and persons for taxation is diffi- cult to say. Of course the legislature may not arbitrarily and wholly depart from recognized methods ; for instance, a law which should make property taxable in a district where neither the property nor the owner had any kind of location would be ob- noxious to the constitution in many aspects; but such laws are not likely to be passed, and, within the limits of reason, legisla- tive control over matters of situs is supreme. Illustrating this control: laws which distribute the rolling stock of railroads for taxation among the counties on the line of the roads, in proportion to the length of road in such counties, to be taxed at the various rates prevailing in the counties, instead of taxing the whole rolling stock in the counties where the roads have their respective principal places of business, have been upheld against objections of inequality and deprivation of due process of law.'* 92 Matter of Bronson, 150 N. Y. 1, 14 Sup. Ct. Rep. 396, affirming 89 55 Am. St. Rep. 632, 44 N. E. Rep. Ga. 574, 15 S. E. Rep. 293; State Rail- 707, 34 L. E. A. 238. If the reason- road Tax Cases, 92 U. S. 575-607, 23 inff of Blackstone v. Miller, 188 U. S. L. ed. 663; Cleveland, etc., Ry. Co. v. 189, 47 L. ed. 439, 23 Sup. Ct. Rep. Backus, 154 U. S. 439, 38 L. ed. 1041, 277, be followed, the succession to such 14 Sup. Ct. Rep. 1122, affirming 133 bonds should be taxed, because the Ind. 513, 33 N. E. Rep. 421, 18 L. R. state has personal jurisdiction over A. 729; People v. i-^tate Board of the debtor. Equalization, 205 111. 296, 68 N. E. 93 State V. Dalrymple, 70 Md. 294, Rep. 943; State v. Severance, 55 Mo. 17 Atl. Rep. 82, 3 L. R. A. 372; Mat- 378-388; Franklin County v. Railroad ter of Fitch, 160 N. Y. 87, 54 N. E. Co., 12 .Lea (Tenn.) 521. Some such Rep. 701. systems of distribution prevail and are 94 Columbus Southern Ry. Co. v. upheld in nearly all of the states. V/right, 151 U. S. 470, 38 L. ed. 238, TERRITORIAL JURISDICTION. Ill 149. The intangible assets of a telegraph company may be apportioned among the counties and townships through which its lines run in proportion to mileage,®^ and the intangible assets of an express company may be apportioned among the counties in which it does business in proportion to the gross receipts in such counties, ®® the valuation in the whole state being made as of a unit. The value of the railroad track and right of way in the state may likewise be ascertained as a " unit/' and distributed for taxation among the several counties in which the road is located, in proportion to mileage, although the value of the track in some counties per mile, separately considered, is greater than the value of the track in other counties.®'^ This method of distribution does not conflict with the constitu- tional provision that property must be taxed within the limits of the municipality where it is situated.®* But it is held in Utah that to give to a state board the right to assess property lying wholly in one county is to infringe the right of local self-government.*® 150. Where a tract of real estate lies in more than one county or taxing district, the legislature has frequently provided that it be assessed to the owner in the district where he resides.-' Un- occupied lands are sometimes assessed to the owner at his resi- dence in any county in the state.^ The cases cited in support of these propositions enforce and explain such laws, but their consti- 95 Western Union Telegraph Co. v. See Commonwealth v. Union Refrig- Taggart, 163 U. S. 1, 41 L. ed. 49, 16 erator Transit Co., 26 Ky. Law Rep. Sup. Ct. Rep. 1054, affirming 141 Ind. 23, 80 S. W. Rep. 490. 281, 40 N. E. Rep. 1051, 60 L. R. A. 99 State v. Eldredge, 27 Utah, 477, 671. 76 Pac. Rep. 337. 96 Adams Express Co. v. Ohio, 165 l State v. Jewell, 34 N. J. L. 259 ; U. S. 194, 41 L. ed. 683, 17 Sup. Ct. State v. Abbott, 42 N. J. L, 111; Pot- Rep. 305. ter v. City of Orange, 62 N. J. L. 192, 97 Cleveland, etc., Ry. Co. v. Backus, 40 Atl. Rep. 647 ; Robson v. Du- 154 U. S. 439, 38 L. ed. 1041, 14 Sup. bose, 79 Ga. 721, 4 S. E. Rep. Ct. Rep. 1122, affirming 133 Ind. 513, 329; Corn v. Fox, 61 N. Y. 264; 33 N. E. Rep. 421, 18 L. R. A. 729; People v. Wilson, 125 N. y. 367, 26 Pittsburgh, etc., Ry. Co. v. Backus, X. E. Rep. 454; Tebo v. Brooklyn, 134 154 U. S. 421, 38 L. ed. 1031, 14 Sup. N. Y. 341, 31 N. E. Rep. 984; Ct. Rep. 1114, affirming 133 Ind. 625, Hughey's Lessee v. Horrel, 2 Ohio, 231; 33 N. E Rep. 432 ; State Railroad Bausman v. County of Lancaster, 50 Tax Cases, 92 U. S. 575, 23 L. ed. Pa. St. 208. 663; State v. Back, Neb. , 2 Inhabitants of Oldtown v. Blake, 100 N". W. Rep. 952; Chicago, etc., Ry. 74 Me. 280; Pease v. Whitney, 5 Mass. Co. V. Richardson County, Neb. 380; Salem Iron Factory v. Danvers, 100 N. W. Rep. 950. 10 Mass. 514; Amesbury Nail Factory 98 People V. State Board of Equaliza- v. Weed, 17 Mass. 53; Goodell Mfg. tion, 205 111. 296, 68 N. E. Rep. 943. Co. v. Trask, 11 Pick. 514. 112 CONSTITUTIONAL LAW OF TAXATION. tutionality seems to have been taken for granted. Under con- stitutions providing for equality and uniformity, however, it seems, on principle, that such laws could not be upheld, as the resiilt would be that part of the land in a taxing district might be taxed at the rate prevailing in the nonresident owner's domicile, which rate might be higher or lower than the rate prevailing in the taxing district. And this is expressly held in New Hamp- shire, where taxation of lands, lying in two taxing districts, in the district where the owner resided, was condemned.^ A recent Georgia case, however, upholds taxation of tracts of lands lying in more than one district, in one of the districts, on the sensible ground that such cases are " exceptional cases " and are to be dealt with practically, in the manner sanctioned by custom, despite a literal intei-pretation of the rule of uniformity.*^ The state may estab- lish the situs of shares of corporate stock, for purposes of taxation, at the place in the state where the principal office of the cor- poration is located, whether the shareholders are residents oi nonresidents of that place.* A statute, however, which requires corporations to pay taxes on shares of stock of both residents and nonresidents, at the place where the principal oflSce of the cor- poration is, has been held violative of the Maryland constitution.' Some express constitutional requirements with respect to situs. There are constitutional provisions in some states expressly relating to the subject of situs, and legislative control thereof within the state. Such are, for instance: 151. California, All property, except as hereinafter in this section provided, shall be assessed in the county, city, city and county, town, town- ship, or district in which it is situated, in the manner prescribed by law. The franchise, roadway, roadbed, rails, and rolling stock of all railroads operated in more than one county in this state shall be assessed by the State board of Equalization at their actual value, and the same shall be apportioned to the counties, 3 Weeks v. Gilmanton, 60 N. H. 500. Iowa, 591, 99 N. W. Rep. 205; London 3a Walton County v. Morgan County, v. Hope, 26 Ky. Law Rep. 112, 80 S. 120 Ga. 548, 48 S. E. Rep. 243. W. Rep. 817. 4 Corry v. Baltimore, 196 U. S. 466, 5 City of Baltimore v. Allegheny 49 L. ed. 556, 25 Sup. Gt. Rep. 297; County, 99 Md. 1, 57 Atl. Rep. 632. Layman v. Iowa Telephone Co., 123 See constitution, § 153 of this work. TEEKITOKIAL JURISDICTION. 113 cities and counties, cities, towns, townships, and districts in which such railroads are located, in proportion to the niimber of miles of railway laid in such counties, cities and counties, cities, towns, townships, and districts.^ A mortgage, deed of trust, contract, or other obligation by "which a debt is secured, shall, for the purposes of assessment and taxation, be deemed and treated as an interest in the prop- erty afEected thereby. Except as to railroad and other quasi- public corporations, in case of debt so secured, the value of the property affected by such mortgage, deed of trust, contract, or obligation, less the value of such security, shall be assessed and taxed to the owner of the property, and the value of such security shall be assessed and taxed to the owner thereof, in the county, city, or district in which the property affected thereby is situate. The taxes so levied shall be a lien upon the property and security, and may be paid by either party to such security ; if paid by the owner of the security, the tax so levied upon the property affected thereby shall become a part of the debt so secured; if the owner of the property shall pay the t-ax so levied on such security, it shall constitute a payment thereon, and to the extent of such pay- ment, a full discharge thereof ; provided, that if any such security or indebtedness shall be paid by any such debtor or debtors, after ■1 assessment and before the tax levy, the amount of such levy may likewise be retained by such debtor or debtors, and shall be com- puted according to the tax levy for the preceding yearJ 1 52. Kentucky. The legislature is expressly left free to assess railroad property in any manner it sees fit.* 152a. Louisiana. The constitution provides for the assess- ment of railway, telegraph, telephone, sleeping car and express properties, by a state board.® 153. Maryland. The personal property of residents in this state shall be sub- ject to taxation in the county or city where the resident bona fide resides for the greater part of the year for which the tax may or shall be levied, and not elsewhere, except goods and chattels permanently located, which shall be taxed in the city or county where they are so located, but the general assembly may by law provide for the taxation of mortgages upon property in this state and the debts secured thereby in the county or city where such property is situated.-^" « Art. XIII, § 10. 9 Art. 226. TArt. XIII, § 4. 10 Art. 3, § 51. «§ 182. 8 114 CONSTITUTIONAL LAW OF TAXATION. This provision does not apply to property of corporations. 154. Michigan. See section 1586 of this work, where the con- stitutional provisions^'* are quoted, with respect to taxation of corporate property by a state board. 155. Mississippi. The legislature may provide special methods of assessment for particular species of property not situ- ated wholly in one county • — but no county is to be deprived of the right to levy taxes on such assessment.^" 156. Montana. Railroads are to be assessed as a unit by a state board, and the value distributed for taxation among the taxing districts in which the roads lie, in proportion to mileage.^* 157. North Dakota. All property, except as hereinafter in this section provided, shall be assessed in the county, city, township, village or district in which it is situated, in the manner prescribed by law. The franchise, roadway, roadbed, rails and rolling stock of all railroads, and the franchise and all other property of all express companies, freight line companies, car equipment com- panies, sleeping car companies, dining ear companies, telegraph or telephone companies or corporations operated in this state and used directly or indirectly in the carrying of persons, prop- erty or messages, shall be assessed by the state board of equal- ization at their actual value, and such assessed value shall be apportioned to the counties, cities, towns, villages, townships and districts in which such railroad companies, express companies, sleeping car companies, dining car companies, telegraph and telephone companies are located, or through which they are operated, as a basis for the taxation of such property, in propor- tion to the number of miles of such property, within such coun- ties, cities, toTvus, villages, townships and districts, or over which any part of such property is used or operated within such coun- ties, towns, villages, townships and districts. But should any railroad allow any portion of its roadway to be used for any piirpose other than the operation of a railroad thereon, such por- tion of its roadway, while so used, shall be assessed in the manner provided for the assessment of other real property.!^ 158. South Carolina. The constitution fixes the situs of all bank and corporate shares in the district where the bank is situated.-" 11 Baltimore, etc., Ry. Co. v. County i* Art. XII, § 16, quoted in full in Commissioners of Wicomico County, § 1611 of this work. 93 Md. 113. 48 Atl. Rep. 853. 16 § 179, amended by Art. IV. 12 Art. XIV, §§ 10, II. 10 Art. X, § 5, quoted in full in 13 § 112, quoted in full in § 1597 of § 1675 of this work, this work. TEREITOEIAL JURISDICTION. 115 159. Texas. All property, of railroad companies shall be assessed, and the taxes collected, in the several counties in which said property is situated, including so much of the roadbed and fixtures as shall be in each county. The rolling stock may be assessed in gross in the county where the principal office of the company is located, and the county tax paid upon it shall be apportioned by the comptroller, in proportion to the distance such road may run through any such county, among the several counties through which the road passes, as a part of their tax assets. i''' All property, whether owned by persons or corporations, shall be assessed for taxation and the taxes paid in the county where situated, but the legislature may, by a two-thirds vote, authorize the payment of taxes of nonresidents of counties to be made at the office of the comptroller of public accounts. And all lands and other property not rendered for taxation by the owner thereof shall be assessed at its fair value by the proper officer.** All property subject to taxation in, and owned by residents of unorganized counties, shall be assessed and the taxe? thereon paid in the counties to which such unorganized counties shall be at- tached for judicial purposes; and lands lying in and owned by nonresidents of unorganized counties, and lands lying in the territory not laid off into counties, shall be assessed and the taxes thereon collected at the office of the comptroller of the state. ** 160. Virginia. The State Corporation Commission shall annually ascertain and assess, at the time hereinafter mentioned, and in the manner required of the Board of Public Works, by the law in force on January the first, nineteen hundred and itwo, the value of the roadbed, and other real estate, rolling stock, and all other per- sonal property whatsoever (except its franchise and the non- taxable shares of stock issued by other corporations) in this state, of each railway corporation, whatever its motive power, now or hereafter liable for taxation upon such property; the canal bed and other real estate, the boats and all other personal property whatsoever (except its franchise and the nontaxable shares of stock issued by other corporations) in this state, of each canal corporation, empowered to conduct transportation; and such property shall be taxed for state, county, city, 'town, and district purposes in the same manner as authorized by said law, at such rates of taxation as may be imposed by them respec- tively, from time to time, vipon the real estate and personal prop- -erty of natural persons ; provided, that no tax shall be laid upon the net income of such corporations.^" 17 Art. VIII, 5 8. 19 Art. VIII, § 12. 18 Art. VIII, § 11. 20 § 177. 116 CONSTITUTIONAL LAW OF TAXATION. A tax of 1 per cent, on gross receipts of interstate roads and canals, calculated upon proportion of mileage in the state to the whole mileage, is ordained — provision being made for a deduc- tion, from the sum so ascertained, for " any excess of value of the terminal facilities or other similar advantages in other state? over similar facilities and advantages in this state.^^ 161. M'yoming. Eoadway, roadbed, rails, and rolling stock of railroads, and other property of common carriers, are to be assessed by a state board and the valuation apportioned to the counties.^ 1 62. Constitutional provisions of uniformity and equality fre- quently contain requirements that all property within the " terri- torial limits " of taxing districts shall be taxed; and those provisions which relate to delegation of power to municipalities, authorize the municipalities to exercise taxing power within their " territorial limits." Eeference is made to the chapters of this work which deal with those subjects for quotation of such pro- visions.^* In a recent case it was held that a provision of the constitution which limited municipal taxation to the territorial limits of mu- nicipalities, was not violated by the taxation of railroad property as a unit, and its distribution to the localities for taxation.^ Taxation of the same property in different jurisdictions. 163. Inasmuch as the domicile of the owner, or the actual situs of the property, or the place where property or credits are employed in business, or the residence of debtors, are all held to confer taxing juiisdiction, it is plain that double taxation of the same property must often result. This fact makes no difference, so far as constitiitional power is concerned; and the fact that property has already been taxed in another state does not prevent a state which, by any theory, has jurisdiction over it, from taxing it again.^ 21 § 178. Bank, 92 Md. 509, 48 Atl. Kep. 78, 84 2a Art. XV, § 10, quoted in full in Am. St. Rep. 517, 52 L. R. A. 760; § 1719 of this work. ^c'^val■d v. ±iiMng bun, 79 Ind. 351; 23 See chaps. 6-22. Greenleaf v. Board of Review of Mor- al People V. State Board of Equali- gan County, 184 111. 22fi, 75 Am. St. zation, 205 111. 296, 68 jST. E. Rep. 943. Rep. 168, 56 N. E. Rep. 295 ; Baxjon 2B Blackstone v. Miller, 188 U. S. v. Board of State Tax Commissioners, 189, 47 L. ed. 439, 23 Sup. Ct. Rep. 126 Mich. 22, 86 Am. St. Rep. 524, 85 277; Minturn v. Hays, 2 Cal. 590, 56 N. W. Rep. 307, 60 L. R. A. 321. And Am. Dec. 366; Allen v. National State see §§ 1377 et seq. and cases cited. TEBRITOEIAL JURISDICTION. 117 Perhaps there is less equality in this aspect of our eonstitn- tional law of taxation than in any other — and to some extent the inequalities which are possible in theory are doubtless realized in practice. But it is probable that instances of double taxation by reason of harsh applications of the law of situs are but few, in comparison with the number of cases in which taxation is eluded altogether by taking advantage of technical rules of domicile and residence, and of the strict interpretation of statutes. Territorial jurisdiction in the enforcement and collection of tcixes. 164. The jurisdiction of the state, in the enforcement and collection of taxes, is likewise bounded by territorial limitations. Where taxes or assessments are levied upon the property of a nonresident in the state, they must be satisfied out of the prop- erty taxed and cannot be made a personal charge against him. To render a personal judgment for taxes against a nonresident is a deprivation of property without due process of law. This was held in a case where personal judgment for a local assessment on real property had been rendered against the nonresident, under authority of a state statute. The nonresident brougLt suit, among other things, to set aside the personal judgments. Said the Supreme Court: There is no course of reasoning as to the character of an assess- ment upon lots for a local improvement by which it can be shown that any jurisdiction to collect the assessment personally from a nonresident can exist. The state may provide for the sale of the property upon which the assessment is laid, but it cannot under any guise or pretense proceed farther and impose a per- sonal liability upon a nonresident to pay the assessment or any part of it. To enforce an assessment of siich a nature against a nonresident, so far as his personal liability is concerned, would amount to the taking of property without due process of law, and would be a violation of the Federal constitution.^® 165. The case from which the foregoing is quoted is limited in its facts to assessments for local improvements — but its reasoning applies with equal force to ordinary taxes on property. And, as to taxes on property, it is held in 'New York, upon the authority of the case just cited, that the state has no jurisdiction M Dewey v. Des Moines, 173 U. S. 193, 43 L. ed. 665, 19 Sup. Ct. Rep. 379. 118 - CONSTITUTIONAL LAW OP TAXATION. to impose a personal liability on nonresidents in respect of taxes on property within the state. The power of the state in this regard is limited to the collection of the tax out of the prop- erty. The ease in which this was held was as follows : A non- I'esident of the state was assessed for taxes on his shares of stock in a national bank located in the city of ISTew York. Statutes^ gave to the city the right to bring an action and recover judgment for unpaid taxes on personal property. Under the statutes the city brought suit against the nonresident. These statutes, and the various other statutes which imposed the tax, were construed not to warrant the bringing of a personal action for taxes against a nonresident. Referring to the statute the Court of Appeals said : But if that provision must be so construed as to authorize the bringing of an action upon such a tax, thereby enforcing a per- sonal liability against a nonresident, then, as we shall see later, it is clearly invalid, as the legislature possessed no power to enact a statute by which a personal lialility might ie enforced against a nonresident for a tax which could only lawfully he assessed against property within the state. . . . While it is admitted that the court obtained jurisdiction of the person of the defendant in this action, yet as the assessment was against property only, and not against the defendant personally, that fact renders it obvious that no personal liability arose by reason thereof, and, hence, no such liability can be enforced by this action. ... As has already been suggested, the statutes and authority of the legislature are not extra-territorial, but are con- fined to the limits and boundaries of the state. 1 66. The court then referred to McCulloch v. Maryland,^ and quoted Dewey v. Des Moines,'^ as decisive of the constitutional question, and added: Thus it becomes manifest that, even if the statutes of this state were intended to confer upon the oflficers of the plaintiff authority to maintain an action against the defendant, and to impose upon him a personal liability for the tax assessed upon his shares of stock, yet, so far as they attempted to confer that right they were beyond the power of the legislature to enact, and to that extent are invalid. This conclusion is not only fully sustained by authority, but is also just and in accordance with the principles which lie at the basis of the right of taxation. Taxes, unlike debts, are not contractual, but are enforced contri- butions levied by the authority of the state for the support of 27 § 036 of the Greater New York 28 4 Wheat. 316, 4 L. ed. 579. Charter and § 314 of the Banking 29173 u. S. 193, 43 L. ed. 665, 19 Law. Sup. Ct. Rep. 379, quoted supra, § 164. TERRITORIAL JURISDICTION". 119 its eovernment and other public needs. The Justification for their demand is based upOn the reciprocal duties of protection and support, and the exclusive sovereignty and jurisdiction of the state over person and property within its territory. The citizen owes to the government the duty to pay taxes, so that the latter may be enabled to perform its functions, and he thus receives his proper compensation in the protection which the government affords to his life, liberty and property. This pro- tection may be either to the rights of persons or the rights of property, and taxes may, consequently, be imposed upon either when within the jurisdiction of the state. But a personal tax cannot be assessed against a nonresident, nor can a tax be assessed against his property, unless it has an actual situs within the state and thus is under the protection of its laws.*" 167. A case somewhat diiScult to classify, bearing upon the territorial jurisdiction of the state in the collection of taxes, was as follows : Pennsylvania had taxed the bonds of foreign cor- p'orations, held by residents of Pennsylvania,^^ and had enacted that each foreign corporation, doing business in Pennsylvania, should ascertain and report to the state the amount of debts owed by the corporation to residents of the state, should deduct the amount of the tax from the interest paid on the debts, and pay (he amount of such tax to the state. A New York railroad cor- poration, which had part of its line in Pennsylvania, but r/hich paid the interest on its debt in New York, refused to deduct the tax from the interest, as ordained ; and the state brought suit against the railway company for the amount. The debts of the company had all been created by authority of the legislature of N^ew York, and the interest was payable, according to the tenor of the bonds, in New York and London. There were questions of contract and commerce in the case; but upon the question of territorial jurisdiction it was held that Pennsylvania could not compel the company, when paying interest in New YorTc, to de- duct the amount of the tax assessed against the bonds held by residents of Pennsylvania. 168. In answer to the argument that the state might law- fully compel the company to make the deduction, as a condition of doing business in the state: If Pennsylvania, in order to collect taxes assessed upon bonds issued by its own corporations and held by its resident citizens, 30 City of New York v. McLean, 170 3i There is no doubt of the power of y. Y. 374, 63 N. E. Rep. 380, affirming the state to do this. See § 85, 57 App. Div. 601, 68 N. Y. Supp. 606. 120 CONSTITUTIONAL LAW OF TAXATION. could require those corporations to deduct tlie required amount from the interest when the coupons are presented by holders known at the time by the corporation paying the interest to be residents of that state — and it mav be admitted, in this case, that the state, if not restrained by a valid contract to which it was a party, could establish such a regulation — it does not fol- low that the state may impose upon foreign corporations, because of their doing business in that state with its permission given for a valuable consideration, any duty in respect to the mode in which they shall perform their obliffations in other states. The New York, Lake Erie and Western Eailroad Company is not subject to regulations established by Pennsylvania in respect to the mode in which it shall transact its business in the state of New York. The money in the hands of the company in New York to be applied by it in the payment of interest, which by the terms of the contract is payable in New York, and not elsewhere, is property beyond the Jurisdiction of Pennsylvania, and Penn- sylvania is without power to say how the corporation holding such money, in another state, shall apply it, and to inflict ^a penalty upon it for not applying it as directed by its statutes; especially may not Pennsylvania, directly or indirectly, interpose between the corporation and its creditors, and forbid it to per- form its contract with creditors according to its terms and accord- ing to the law of the place of performance. Xo principle is better settled than that the power of a state, even its power of taxation, in respect to property, is limited to such as is within its jurisdiction.*^ Summary of the constitutional law of territorial jurisdiction. 168a. The result of the cases is that there are many circum- stance in which property or persons may be placed, in relation to the state, any one of which is sufficient to give taxing jurisdic- tion ; and the natural inquiry is whether all these various proposi- tions which the courts have laid down, as rules for testing jurisdiction, are capable of being reduced to one general rule. If, on examination, it shall appear that all these rules have some one element in common, that element may be regarded as the one essential element of jurisdiction — the presence or absence of which is the ultimate test. The element which seems to be common to every set of facts which are held to give jurisdiction is not the presence of the tf:xed person in the state, for there are many instances where 32 New York, Lake Erie and West- S. 628, 38 L. ed. 846, 14 Sup. Ct. Eep. ern R. R. Co. v. Pennsylvania, 153 U. 952. TEERITOKIAL JURISDICTION. 121 lie person who bears the tax is outside the taxing jurisdiction. It is not the presence of the taxed property in the state, for there are instances where the property in respect of which the tax is laid is without the state. In the case of privilege taxation an invariable rule of jurisdic- tion comes more plainly into view, for the only privileges which the state can tax are those exercised in its territory, although when privileges are regarded as property and taxed as a part of a " unit plant," even that rule becomes uncertain. But, generally speaking, the rule is that the state to whose laws one who exer- cises a privilege must look for protection in its exercise, is the state which has jurisdiction to tax the exercise of the privilege. This proposition is the key to the whole law of situs. For all property is owned by virtue of law, all privileges are exercised by virtue of law, and every right of person or property is held by virtue of law. So that all taxation, in the view of these deci- sions, is at bottom a kind of privilege taxation, a price paid for the privilege of owning' property, and of peaceful residence. Then since the state — the giver of the privilege, the source of the pro- tection — may set conditions on its grant, the proposition results that wherever any person^ resident or nonresident, must look to the law of the state for the protection of person or property or privileges, or the enforcement of rights, the state may tax that person in respect of the subject-matter to u'hich protection is given. Viewed in this aspect, residence of persons and location of prop- erty are mere incidental inquiries; the basic inquiry being, m.ay the person who is taxed, either in respect of person or property, or rights or privileges, call upon the state ivhich has laid the tax, to perform some duty or extend some protection? If the taxing state may be called upon to protect the person of the taxed indi- vidual, that is to say, if he is a resident, the jurisdiction over him is complete. If it can be called upon to enforce any of his rights with respect to property or privileges, the taxing jurisdiction is coincident with the extent of the protection afforded.^* Two queries present themselves. If this theory be correct — 1. Why may not the state tax the real estate of a resident, situated in another state- — -or rather, why may it not tax him in respect of such real estate ? 33 See Blackstone v. Miller, 188 U. economic theories, but is nevertheless S. 189, 47 L. ed. 439, 23 Sup. Ct. Eep. the result of the adjudications. See 277. This is not in accord with recent sec. 22. 322 CONSTITUTIONAL LAW OF TAXATION. Logically there is no reason why, in taxing its residents, the state may not measure such tax by reference to their realty out- side the state, as well as by any other method. The reason it cannot be done in* fact is that such taxation would be so contrary to the settled habits of our governments and peoples as to be a denial of due process of law. 2. Why may not a state tax persons and property transiently present, since protection may be demanded by such transients? If it were not for the commerce clause of the Federal consti- tution, and the clauses with respect to the privileges and immu- nities of citizens, probably the state might tax: transients at will. CHAPTER IV. THE PURPOSES OF TAXATION. Public Purpose. 169. In all the definitions of taxation and taxes, one element =) appears most prominently, to wit: the necessity for a public pur- pose to justify the exercise of the taxing power. No principle of law is better established than this : that taxes can only be laid for public purposes; and that a tax laid for a private purpose or to bestow some private benefit upon some individual or individuals is void, regardless o:^ the absence of express constitutional pro- hibitions. A few of the many cases to this effect are cited.^ 1 70. This limitation upon the taxing power is based upon and derived from the inherent purposes of the state as a social organi- sation. The state exists for the benefit of all; any devotion of its powers to merely private ends is such a perversion of its pur- poses and duties as to be utterly void; and it is the duty of the judicial agents of the state to protect the community from such a perversion. To lay with one hand the power of the government on the property of the citizen and with the other to bestow it upon favored individuals to aid private enterprises and build up pri- vate fortunes, is none the less a robbery because it is done under 1 Loan Association v. Topeka, 20 143 Mo. 287, 65 Am. St. Eep. 653, 45 Wall. 655, 22 L. ed. 455; Davis v. N. E. Rep. 245, 40 L. R. A. 280; Gaines, 48 Ark. 370, 3 S. W. Rep. Weismer v. Village of Douglas, 64 N. 184; Anderson V. Kerns Draining Co., Y. 91, 21 Am. Rep. 586; Matter of 14 Ind. 199, 77 Am. Dee. 63; Zigler Jacobs, 98 N. Y. 98, 50 Am. Rep. 636; V. Menges, 121 Ind. 99, 16^ Am. St. Reeves v. Treasurer of Wood County, E«p. 357, and note, 22 N. E. Rep. 782; 8 Ohio St. 333; Sharpless v. Mayor of National Bank v. City of lola, 9 Kans. Philadelphia, 21 Pa. St. 147, 59 Am. <)89 ; Cypress Pond Draining Co. v. Dee. 759 ; Grim v. Weissenberg School Hooper, 2 Mete. (Ky.) 342; Opinion District, 57 Pa. St. 433, 98 Am. Dec. of Judges, 58 Me. 591; Allen v. In- 237 ; Philadelphia Association v. Wood, habitants of Jay, 60 Me. 124, 11 Am. 39 Pa. St. 73; Soens v. City of Racine, Rep. 185; Jenkins v. Andover, 103 10 Wis. 271; Brodhead v. Milwaukee, Mass. 94; Lowell v. City of Boston, 19 Wis. 624, 88 Am. Dec. 711; Curtis 111 Mass. 454, 15 Am. Rep. 39; People v. Whipple, 24 Wis. 350, 1 Am. Rep. V. To^vnship Board of Salem, 20 Mich. 187 ; Commercial Bank v. City of lola, 452, 4 Am. Rep. 400; State v. Foley, 2 Dill. 353, Ffed. Cas. No. 3,061; State 30 Minn. 350, 15 N. W. Rep. 375; v. Cornell, 53 Neb. 556, 68 Am. St. Coates V. Campbell, 37 Minn. 498, 35 Rep. 629, 74 N. W. Eep. 59, 39 L. R. A. N. W. Rep. 366; State v. Switzler, 513. [123] 12-i CONSTITUTIONAL LAW" OF TAXATION. the forms of law and is called taxation. This is not legislation. It is a decree nnder legislative forms.^ Neither has the legislature any constitutional right to create a public debt, or to lay a tax, or to authorize any municipal cor- poration to do it, in order to raise funds for a mere private pur- pose. No such authority passed to the assembly by the general grant of legislative poiver. This would not be legislation. Tax- ation is a mode of raising revenue for public purposes. When it is prostituted to objects in no way connected with the public interests or welfare, it ceases to be taxation and becomess plunder.^ 171. Public communities, whether nations, states or municipal divisions, rely on taxation for the moneys by which their expendi- tures are met. Even where a municipality own^ revenue yield- ing property, that property has usually been secured by taxation in the first instance, and, broadly speaking, in all appropriations of public funds or credit, taxation is contemplated as the means by which those appropriations shall be satisfied. Every appro- priation, therefore, of public money or credit for any purpose involves the laying of taxes for that purpose (unless the act ex- pressly negatives that mode of satisfying its provisions), and the validity of the appropriation depends upon whether or not that purpose is one for which taxes may properly be laid.* 172. There has been considerable discussion, in the works of various text-writers and commentators, upon the question whether taxation imposed avowedly for purposes other than revenue, such as tariff duties for the encouragement of manufactures, or license fees upon certain occupations, with a view to regulation, is taxation for a public purjoose. In such cases a clear distinc- tion should be made between the purpose of the taxation and the motive of the legislature, in imposing the tax. The question whether the tax is or is not for a public purpose should be determined in every case, by inquiring what disposition is to he made of the proceeds? If the money to be raised is to go for the general support of the government, or for any of the recognized objects of government, the tax must be considered to be for a public purpose, however blameworthy the motive of tha 2 Loan Association v. Topeka, 20 * Loan Association v. Topeka, 20 WalL 655, 22 L. ed. 455. Wall. 655, 22 L. ed. 455. 3 Sharpiess v. Mayor of Philadel- phia, 21 Pa. St. 147, 59 Am. Dec. 759. IHE PUEPOSES OP TAXATION. 125 legislature in imposing it ; and, if tlie proceeds of the tax are not to be used for some such object it is not a tax for a public purpose. The right to tax depends upon the ultimate use, purpose, and object for which the fund is raised.^ If there be any ground of legal attack upon such legislation it must be found in the written constitutional restraints upon the legislative authority, or in the theory that such legislation tran- scends the legislative authority in some way other than by over- stepping the inherent limits of the taxing power. 1 73. The levy of a tax and the disposition of the proceeds of it belong exclusively to the legislative department, which is the •department peculiarly representative of the people who pay the tax. Such a levy is itself a determination by the legislature that the tax is for a public purpose. There is no doubt that such a ■determination must, within certain limits, be recognized and re- spected by all the departments of government. It is absolutely binding on the executive, being a legislative determination of a peculiarly legislative matter. It is binding on the judiciary to the extent that the courts may not, we think, interfere at all be- tween tlie executive and the legislative departments; and to the further extent that, when the question comes before the judiciary at the suit of the citizen, the legislative determination is entitled to every presumption in its favor. It is binding on the citizen in that he must respect it; that he may not disregard it depending on his belief in its nullity. It is sufScient to start the processes of collection and disposition of the proceeds. But the legislative determination is not so conclusive as to pre- vent the citizen from defending his property — which it seeks to take from him — by appealing to the courts. The judiciary, as well as the legislative department, is the representative of the people; and one of the functions of its existence is to decide, in proper cases, whether the legislature has exceeded its dele- gated authority. The power of taxation is a legislative power; but to take the property of the citizen for private purposes, under the name of " taxation," is not taxation but plunder, and " no such power passes to the legislature by the general grant of legislative authority." ® The question of whether a tax is for a public B Sharpless v. Philadelphia, 21 Pa. 6 Sharpless v. City of Philsidelphia, St. 147, 59 Am. Dec. 759. 21 Pa. St. 147, 50 Am. Dec. 730. 126 CONSTITUTIONAL LAW OP TAXATION. purpose is, therefore, a judicial question ultimately, or rather the legislative determination is subject to judicial review, with every presumption in its favor.'' 174. The people of the United States have not delegated the duties of government to any one governmental agency; but live under a system of governments to each of which they have con- fided a certain share of power. The national government and the state government have each its well-defined purposes and sphere of action. The local governments, townships and munic- ipalities, although they generally owe their powers to state legis- lation, are often regarded as mere agencies of the state, and are limited in their powers and scope by the laws of the state ; they" are nevertheless governments, are parts of " a system of local government, well understood and tolerably uniform in character, existing from the earliest settlement of the country, never for a moment suspended or displaced, the continued existence of which is assumed." ..." The liberties of the people have been generally supposed to spring from, and be dependent upon, that system." * 175. The purposes for which these various governments exist are generally well understood, and it is a universally conceded principle that each is limited in taxation to the furtherance of its appropriate purposes, so that however public the purpose, un- less it be one for which the taxing government exists, the tax is invalid. This principle is illustrated in a comparatively early case in Massachusetts" where it was held that a tax laid by a town to provide extra pay for the militia at a time when the public enemy actually was threatening the town, was an invalid tax. The case rests chiefly on the point that the taxing powers of municipal corporations are such as are expressly delegated by statute; and it is probable that if the authority which levied the tax had been possessed of the wide discretionary powers which a sovereign legislature possesses, in the determination of what constitutes a public purpose, the tax would have been upheld. The opinion, however, quite clearly illustrates the proposition. i State V. Cornell, 53 Neb. 556, 68 8 People ex rel. Le Roy v. Hurlbut, Am. St. Rep. 629, 74 N. W. Rep. 59, 24 Mich. 44, 9 Am. Rep. 103. 39 L. K. A. 513. 9 Stetson v. Kenipton, 13 Mass. 272, 7 Am. Dee. 145. THE PURPOSES OF TAXATION. 127 The court said, construing the statute which enabled the town to levy taxes to pay " a necessary town charge :" With respect to the defense of any town against the incursions of an enemy in time of war, it is difficult to see any principle upon which that can become a necessary town charge. It is not a corporate duty to defend the town against an enemy. This is properly the business of the state or government, and is the most essential consideration for the obligation of the citizen to contribute to the general treasury. The government is to pro- tect and the citizen is to pay. By the constitution of the TJnited States, this duty is devolved upon the national government ; and although it may be impracticable, in so extensive a territory, to furnish competent security to every section or point, yet it does not follow that corporations of limited powers, like towns, can take upon themselves the duty, and exact money of their citizens for the execution of it.^" Reference is made to the discussion of this subject in Chapter V of this work. What is a public purpose? 176. It is not possible to lay down any hard-and-fast rule by which to determine which purposes are public and which private. Hardly any project of public benefit is without some element of peculiar personal profit to individuals, hardly any private attempt to use the taxing power is without some colorable pretext of pub- lic good. Each case must be judged on its own facts, and any attempt at fixed definition must result in confusion and contra- dictions. The custom of the government and the community is, perhaps, as definite a guide as can be indicated. Upon this point the language of Mr. Justice Miller, in Loan Association v. Topeha,^^ is valuable. We have established, we think, beyond cavil, that there can be no lawful tax which is not laid for a public purpose. It may 10 This case — excellent as an illus- ger the tax would be invalid. The in- tration — is probably too extreme in eident occurred during the war of Its application of the principle. The 1812, a war to which the Federal defense of the local territory from party, dominant in Massachusetts, was actually threatened invasion would violently opposed, and the state of seem to be a legitimately public pur- public feeling as to the war may pos- pose, for which the town might tax sibly be reflected in the opinion, itself, although in the absence of the n 20 Wall. 664, 22 L. ed. 455. element of imminently threatened dan- 128 CONSTITUTIONAL LAW OF TAXATION. not be easy to draw the line in all cases so as to decide what is a public purpose and what is not. It is undoubtedly the duty of the legislature which imposes or authorizes municipalities to im- pose a tax to see that it is not used for purposes of private interest instead of a public use, and the courts can only be justified in interposing when a violation of this principle is clear and the reason for interference cogent. And in deciding whether, in the given case, the object for which the taxes are assessed falls upon the one side or the other of this line, they must be governed mainly by the course and usage of the government, the objects for which taxes have been customarily and by long course of legislation levied, what objects or purposes have been considered necessary to the sujoport and for the proper use of the govern- ment, wlietlier state or municipal. Whatever lawfully pertains to this, and is sanctioned by time and the acquiescence of the people, may well be held to belong to the public use, and proper for the maintenance of good government, though this may not be the only criterion of rightful taxation. 177. In Curtis v. Whipple,^^ the court sought to deduce from the cases some general principle of separation between public and private benefits. The result of this inquiry was expressed in the following language : If we turn to the eases where taxation has been sustained as in pursuance of the power, we shall find in every one of them that there was some direct advantage accruing to the public from the outlay, either by its being the owner or part owner of the property or thing to be created with the money, or the party immediately interested in and benefited by the work to be per- formed, the same being matters of public concern ; or because the proceeds of the tax were to be expended in defraying the legiti- mate expenses of government, and in promoting the peace, good order and welfare of societj'. Any direct public benefit or interest of this nature, no matter how slight, as distinguished from those public benefits or interests incidentally arising from the employ- ment or business of private individuals or corporations, will undoubtedly sustain a tax. 178. The courts do not intei-pret this rule of limitation in any narrow sense. The necessities of government and the importance of its being carried on with as little interference as is consistent with a due regard to the rights of the citizen render them reluctant to declare that the limitation has been transgressed in any given case, As the legislature is the primary judge of what is a proper purpose for the application of money to be raised by 12 24 Wis. 350, 1 Am. Rep. 187. THE PURPOSES OF TAXATION. 129 taxation, and is a co-ordinate branch of the government especially charged with that duty, its excess of its rightful authority must he quite clear, the case must plainly be one in which the legisla- tive department has overstepped its legitimate boundaries, before the judicial department will undertake to nullify its acts.^^ I do not understand that the word " public" when employed in reference to this power, is to be construed or applied in any narrow or illiberal sense, or in any sense which would preclude the legislature from taking broad views of state interest, neces- sity or policy, or from giving those views effect by means of the public revenues. Keeessity alone is not the test by which the limits of state authority in this direction are to be defined, but a wise statesmanship must look beyond the expenditures which are absolutely needful to the continued existence of organized government, and embrace others which may tend to make that government subserve the general well-being of society, and ad- vance the present and prospective happiness of the people. To erect the public buildings, to compensate the public officers and to discharge the public debts, are not the sole purposes to which the public revenues may be applied, but, on the contrary, con- siderations of natural equity, gratitude and charity are never out of place when the the general good of the whole people is in ques- tion, and may be kept in view in the imposition of the public burdens." Eminent domain and taxation compared. 179. In many of the cases where tax laws have been at- tacked on the ground that they involved taxation for private pur- poses, it has appeared that the proposed objeet of the tax was one for which the power of eminent domain might be exercised; and the public use or benefit necessarily implied by the existence of this power of eminent domain has been made an argument in favor of the tax. The proposition briefly stated has been : Taxes can only be laid for public purposes. The right of eminent domain can ■only be exercised for a public purpose. It is admitted that the object for which the tax is proposed to be levied is an object in favor of which the power of eminent domain may be exercised; hence it is an object which involves a public purpose; hence a tax may be levied for that object. This argumeni has appeared in many cases, especially those 13 Weismer v. Village of Douglas, 64 l* Judge Cooley in The People v. The .]Sr. Y. 91, 21 Am. Rep. 586. Town of Salem, 20 Mich. 452, i Am. Eep. 400. 9 130 CONSTITUTIONAL LAW OF TAXATION. where the question was as to the validity of taxes in aid of rail- roads. In some of these cases the courts have rehed upon the argument,^^ in other cases they have expressly opposed it.^^ It seems proper, therefore, to^ discuss briefly the distinctions between the power of taxation and the power of eminent domain, not especially with reference to railroads, but generally. 180. The power of eminent domain is the power which the state has, by virtue of its inherent sovereignty, to appropriate for public uses the property of individual citizens, divesting the title of the private owner if need be. The primary reason of its existence is public necessity. It is not a burden imposed on the individual, but relates to the property. The need of the public for the particular piece of property in question is the element which sets the power of eminent domain in motion. Its owner ship, its character of realty or personalty, the inconvenience to the owner as compared with the owners of other property, these are absolutely immaterial considerations. The question in emi- nent domain is: Does the state need this pa/rticular property for a public use? 1 81 . The element of necessity is a much more vital element in the power of eminent domain than in the power of taxation. Generally speaking, the element of necessity or great public con- venience must be present to warrant the exercise of eminent domain; and it is also true that any public necessity or great public convenience will warrant its exercise. It has been com- pared to the police power in the abatement of nuisances. A butcher may have his slaughter-house in a lonesome place; a village may grow up around it and the public health may require its removal. So on the other hand, acting by appropriation and not by prohibition, the public defense may require the spot as a site for a fort, and the owner, whether willing or not, must part with it, the state taking by eminent domain. In both cases the rule is the same — the convenience of the public is greater than the convenience of the individual. The particular property, and not the right or duty of the owner, is the thing considered. 182. In the exercise of the power of taxation, on the othei- hand, the need of the state for the particular piece of property — IB Sharpless v. Mayor of Philadel- 16 Hanson v. Vernon, 27 Iowa, 28, 1 phia, 21 Pa. St. 147, 59 Am. Dec. 759; Am. Rep. 215. Stewart v. Supervisors of Polk County, 30 Iowa, 9, 1 Am. Rep. 238. THE PUBPOSES OP TAXATION, 131 Ihe public convenience to be served by the taking of the particular property for the use of the public — do not exist as necessary ele- ments. In matters involving taxation the individual is not con- sidered as an owner of property, against whose private rights the public asserts itself; but he is considered as a member of the community, as one of the public, who is called upon to bear his share of the public burden. In the exercise of eminent domair, the individual owner of property stands on one side and on the other side stands the public, his strong antagonist, by virtue of its strength compelling the individual owner to yield his right. But in taxation the relations of the individual and the public are not antagonistic. The individual is a member of the public, he bears a portion of the burden which the public has laid upon itself. The fact that his share of the burden is measured by the amount of property he may possess is incidental. The public takes a share of his property by taxation, not by virtue of any su- periority of right or strength over him as an individual; but because he himself, speaking through his duly constituted repre- sentatives in government, has decreed that such a share shall be taken, and has thus consented to its taking. The question to be asked where an exercise of the power of eminent domain is to be considered is this : Is the public neces sity or convenience to be served sufficiently great to warrant the public in exercising its strength to override the private right of the individual? And where the propriety of an exercise of the power of taxa- tion is concerned the ultimate question is : Has the individual ^ as a member of the public, consented that this burden shall be pu*" upon him? The consent here spoken of is, of course, that consent which every member of the public is presumed to give to every act of the public authorities, acting within their recognized powers, whether or not he participated in their selection and although he may not individually approve their acts. 183. From these considerations it follows that, while many public uses which justify the exercise of the power of eminent domain also justify the exercise of the taxing power, there are many uses for which eminent domain may be employed which do not warrant taxation. For the employment of eminent domain it is enough that there be a public need to be satisfied ; to warrant taxation there must 132 CONSTITUTIONAL LAW OF TAXATION. be not only a public need to be satisfied, but in addition that public need must be a need for something wliicli tends to pro- mote the general objects of government. To ilhihfnite : There may be in a community a public need for a gristmill, and some individual may own the only eligible site. The exerci.^o of the power of eminent domain to condemn the site is proper. On the other hand taxation to aid individuals to build the mill would be unwarrantable, because, although the mill would be a public necessity, it is not one of those public objects of govern- ment, for the support of which the individuals of the community by custom and by law have consented to be taxed." 1 84. Otlier distinctions between these two powers of govern- ment, resting upon the principles already discussed, appear upon further examination. The money or property taken from the taxpayer is taken proportionately; the property taken by the power of eminent domain is taken regardless of proportion, and indeed the exercise of the power involves the admission that the owner is forced to give up to the public more than a proportional share of his property. The citizen receives no compensation for his contributions in taxes except the political benefit derived from government; the owner of property taken by eminent domain receives compen- sation for the property taken (although the giving of compensa- tion is an incidental and not a necessary condition to the existence and exercise of the power, the compensation being only secured by exjDress constitutional enactments). Bounties for encouragement of private enterprises. 185. Are bounties paid to private persons for the encourage- ment of some particular industry appropriations for private purposes? In reason and practice the answer to this question probably depends on the grade and purposes of the taxing government whicli bestows the bounty, and upon the nature of the industry to promote wliich it is bestowed. There is some difference in public aspect, though not in effect upon the prosperity of the industry, between duties and taxes laid with the motive of foster- ing a private industry and bounties paid out of the public treas- 1" There have been cases of taxation for gristmills but they arose out of peculiar circumstances. THE PUKPOSES OF TAXATION. 133 nry for that purpose. In the case of duties and taxes imposed, the tax must be deemed to be for a public purpose so long as its proceeds go into the treasury, and the molive of the legislature in laying the tax cannot be inquired into. In the case of bounties l^aid the question at once arises whether the object of the appro- priation is a proper object for the expenditure of public moneys raised by taxation, and this definite question is one which the courts may inquire into.'* As to taxation in order to foster industries and promote par- ticular manufactures and commerce and bounties — the proceeds of taxation being appropriated for that piirposc — it would seem in principle that only the highest grade of go-\-crnment — a govern- ment possessing all and not a part of the attributes of sover- eignty — could levy taxes for such a purpose; because the general interests of commerce are so far-reaching — so all-embracing, so interwoven with the highest interests of national life, that no local government or government of a part of the national terri- tory could be considered to exist for purposes to which such taxation -would be germane. Especially would this be so in America where the care of commerce is specifically given to the general government. 186. In order that bounties may properly be given, even by the general government, the indiistry to l)e beneficial should be one of such magnitude or promise that its prosperity constitutes a substantial element of the public welfare, or it should be of a character which renders it important to the public defense or the national interest. Upon this point the determination of the national legislature is doubtless controlling. 187. Appropriations by the states or their subordinate bodies in aid of private enterprises are generally invalid. Loan Association r. To-peJco;^^ already referred to, is a leading case. There a state legislature had authorized a municipality to issue and sell bonds in aid of a manufacturing corporation. It was claimed that the benefit conferred on the commerce and industry of the town was a sufficiently public benefit to warrant the imposition of taxes. The court said in answer to this: If it be said that a benefit results to the local public of a town by establishing manufactories, the same may be said of any other business or pursuit which employs cajntal or ;Hbor. The merchant, the mechanic, the innkeeper, the banker, the builclcr, 18 See §§ 172, 173. 10 20 Wall, (i.lo, 22 L. ed. 455. loJ: CONSTITUTIONAL LAW OF TAXATION. the steamboat owner are equally promoters of the public good and equally deserving the aid of the citizens by enforced contribu- tions. No line can be drawn in favor of the manufacturer which would not open the public treasury to the importunities of two- thirds of the business men of the city or town. The act was held to be void. In Allen v. Inhabitants of Jay^^ a tax in aid of a sawmill, gristmill, and box factory was held invalid upon similar grounda.^^ 188. After a railroad had been constructed and after the company which owned it had become insolvent and passed into a receiver's hands, the legislature passed an act allowing the com- missioners of a certain county to issue bonds " to pay a subscrip- tion " of the county to the bonds of the company. The act provided that the proceeds of the bonds should be first used to pay' the debts of the company to residents of the county. The county had not made any subscription to the bonds of the county, although it had attempted to do so by acts which were invalid, through defects in the proceedings. It was held that the act was in effect merely an appropriation of the county's money to pay the debts of the company to individual residents of the county, and on that account was void as an appropriation of pub- lic money for a private purpose.^^ 189. In Weismar v. Village of Douglas^ the legislature had granted to a corporation the right to build a dam across the Delaware river at the village of Douglas. The corporation was incorporated under the general law for the purpose of construct- ing and improving a water privilege on said river and manufac- turing lumber. The legislature passed an act authorizing the village to take stock in the corporation, to issue and sell bonds from the proceeds of which the stock should be paid for and to levy taxes to pay the bonds. The bonds were issued and sold, and an action was brought against the village to collect the inter- est on the bonds. The question in the case was whether the legislature had power to pass the act which authorized the issue of the bonds. The New York Court of Appeals held that there were limits 20 60 Me. 124, 11 Am. Rep. 185. Central Branch U. P. Ry. Co. v. Smith, 21 To the same effect, see Com- 23 Kans. 745; Clee v. Sanders, 74 mercial Bank v. City of lola, 2 Dill. Mich. 692, 42 N. W. Rep. 154. S53, Fed. Cas. No. 3,061; Cole v. 22 Baltimore, etc., R. R. Co. v. City of La Grange, 19 Fed. Rep. 871 ; Spring, 80 Md. 510, 31 Atl. Rep. 208, MeConncll v. Hamm, 16 Kans. 22S ; 27 L. R. A. 72. Weeks v. Milwaukee, 10 Wis. 242; 23 64 N. Y. 91, 21 Am. Rep. 586. THE PUBPOSES OF TAXATION. 135 to the legislative power of taxation as regards the purposes for which taxes could be laid, inherent in the nature of the taxing power and not dependent on constitutional prohibitions; that the fact that the improvement contemplated was carried on by a corporation owing its existence to the state did not differentiate the case from one where the enterprise was to be carried on by an individual; that the purposes of the corporation and the objects of the improvement were essentially private purposes and objects; that the incidental benefits to the commerce and industry of the community which would result from the improvement were not such public benefits as would authorize the exercise of the taxing power; and that the bonds were invalid. 190. Other state laws appropriating public money to aid pri- vate enterprises which have been held void are: A state law granting a bounty to beet-sugar manufacturers;^* granting aid to build a cotton compress ;^° granting bounties to private individ- uals for growing trees on their own land;^ authorizing cities and townships to take stock in private corporations organized for the purpose of erecting mills for the manufacture of sorghum sugar and syrup ;^'^ authorizing cities to .subscribe for stock in manu- facturing corporations and to issue bonds to pay such subscrip- tions;^* authorizing a city to lend its bonds to manufacturers;^ delegating the taxing power to be employed in the storage and control of debris from mining operations.^* 191. There have been some cases to the effect that gristmills, owned by private parties, the tolls of which the legislature has power to regulate, are so far public as to warrant taxation and appropriation of public money for their benefit. ^^ These decisions, which were made in the early days of frontier settlement, are the outgrowth of a more primitive state of society than now exists, when there were no railroads and but few good highways, and when customs gristmills in the immediate neighborhood of ai Michigan Sugar Co. v. Dix, 124 29 Parkersburg v. Brown, 106 U. S Mich. 674, 83 N. W. Rep. 625, 83 487, 27 L. ed. 238, 1 Sup. Ct. Rep. 442, Am. St. Rep. 354, 56 L. R. A. 329. 30 People v. Parks, 58 Cal. 624. 25 MacKenzie v. Wooley, 39 La. Ann. 31 Township of Burlington v. Beas 944, 3 So. Rep. 128. ley, 94 U. S. 310, 24 L. ed. 161; Guern 28 Deal V. Mississippi Co., 107 Mo. sey v. Burlington Township, 4 Dill, 464, 18 S. W. Rep. 24, 14 L. R. A. 622. 375, Fed. Cas. ISTo. 5,855; Harding 27 Dodge V. Township of Mission, 46 Township v. Funk, 8 Kans. 315; C. C. A. 661, 107 Fed. Rep. 827, 54 Traver V. Merrick County, 14 Neb, L. R. A. 242. 327, 45 Am. Rep. Ill, 15 N. W. Rep, 28 Cole V. La Grange, 113 U. S. 1, 690; State .v. Clay County, 20 Neb. ■28 L. ed. 896, 5 Sup. Ct. Rep. 416. 452, 30 N. W. Rep. 528. 136 CONSTITUTIONAL LAW OF TAXATION. producth-e fields, to grind grain for bread for the people and food for the cattle, were a public necessity. At present these decisions cannot be regarded as expressing the law. Appropriations in aid of highways, generally. 192. The general power of the state and of its municipalities to establish and maintain public roads, highways, and bridges, and to levy taxation for these purposes, is nowhere denied. Ques- tions have frequently arisen, however, as to the right to devote the public money or credit, whether in the form of investment, gift, or loan, to the aid of private corporations engaged in the construction and operation of railroads, turnpike roads, toll bridges, and the like, for private profit. In most of the states, as is shown in detail in subsequent sections of this work, these questions are now purely academic, as such vises of public money are prohibited by express constitutional provisions. ^^ A brief review of the state of the law in the absence of such provisions is, however, desirable. 1 93. To authorize an expenditure of piiblic — or at least of municipal — funds for highways, the road, or bridge constructed, must generally be a legal highway. Where the proposed road or bridge has not been legally laid out and where the lands upon which the money is to be expended are private property, and would remain such after the expenditure, such expenditure is for a private purpose. ^^ Taxes in aid of railroads. 194. Are laws authorizing taxation to pay for railroad stock or for bounties to railroads valid (in the absence of express consti- tutional restriction), or are they void as atteni]its to exercise the taxing power for private purposes' This question, at one time doubtful, is now well settled. Such taxes are valid. It is now held that the construction of a railroad is such a public enterprise as warrants the use of the taxing power. The public at large is held to be benefited by the railway as a public highway, a means of transportation and commerce.^* 32 See §§ 200-239a. Kirkliam, 54 Cal. 558; Snyder v. 33 Manning v. Devils Lake, N. D. Foster, 77 Iowa, 638, 42 N W Hep , 99 N. W. Rep. 51, 65 L. R. A. 506. 187; Philbrook v. Kennebec County, 34 Stein v. Mayor of Mobile, 24 Ala. 17 Me. 196; People V. Saginaw County, 591; Gibbons v. Mobile, etc., Rv , 26 Mich. 22; Pacific Bridge Co. v. 3G Ala. 410 ; 7? j- porfe Selma and Gulf THE PURPOSES OF TAXATION. 137 195. The opinion of Chief Justice Black in Sharpless v. Mayor of Philadelphia'*^ is one of the clearest expositions of the prin- ciples which sustain such a use of the taxing power. The legis- latui'e of Pennsylvania passed an act authorizing the city of Philadelphia to take stock in certain railroad companies and to raise the money to pay for the stock by a loan on the credit of the city. The action was brought in equity to restrain the city authorities from subscribing for the stock. The only question was whether the legislatui'e had authority to pass the act. The opinion first disposes of certain objections raised under the constitution of Pennsylvania. The right of the legislature to use the taxing power for such a purpose, in the absence of express constitutional restrictions, is then taken up. It is shown that no restrictions upon the legislative power can be implied from the spirit of our institutions or from anything not expressed in the constitution itself, and that the whole legislative power of the state is vested in the legislature. The whole matter of taxation is asserted to be in the uncontrolled discretion of the legislature. It is conceded that taxation for a private purpose would not be within the legislative power because such taxation would not really be an exercise of legislative authority, but an act of plunder. Railroads are then declared to be public im- provements, and not private affairs; as such they are proper sub- jects of state aid, and taxation for their benefit is lawful. Ry., 45 Ala. 696, 6 Am. Rep. 722; Donough, 8 La. Ann. 341; St. Louis Opelika v. Daniel, 59 Ala. 211; Pat- v. Alexander, 23 Mo. 483: St. Joseph, tison V. Supervisors of Yuba County, etc., Ry. v. Buchanan Countv Court, 13 Gal. 175; Robinson v. Bidwell, 22 39 Mo. 485; Grant v. Courter,'24 Barb. Cal. 379; Napa Valley Ry. v. Napa 232; People v. Mitchell, 35 N. Y. ool ; County, 30 CaL 435; Bridgeport v. Caldwell v. Justices, 4 Jones Eq. (57 Housa'tonic Ey., 15 Conn. 475; Powers N. C.) 323; Hill v'. Commissioners, G7 V. Inferior Coiirt of Dougherty County, N. C. 367 ; Cincinnati, etc., Ry. v. 23 Ga. 65; Cotton v. County Commis- Commissioners, 1 Ohio St. 77; Cass v. sioneis, 6 Fla. 610; Prettyman v. Dillon, 2 Ohio St. 607; State v. Trus- Supervisors, 19 111. 406, 71 Am. Dec. tees, 8 Ohio St. 394; Sharpless v. 230; Robertson v. Rockford, 21 111. Mayor of Philadelphia, 21 Pa. St. 147, 451; Johnson v. County of Stark, 24 59 Am. Dec. 759; State v. Mayor, etc., HI. 75; Perkins v. Lewis, 24 111. 208; of Charleston, 10 Rich. L. 49 1"; Nichol Butler V. Dunham, 27 111. 474; Keiths- v. Mayor, 9 Humphr. 252; Lauderdale burg V. Friek, 34 111. 405 ; Aurora y. County v. Fargason, 7 Lea, 153 ; San We,st, 9 Ind. 74, 22 Ind. 88, 85 Am. Antonio v. Jones, 28 Tex. 19; San Dee. '413: Petty v. Myers, 49 Ind. 1; Antonio v. Lane, 32 Tex. 405; Amey Commissioners v. Miller, 7 Kans. 479, v. Mayor of Allegheny, 24 How. 364, 12 Am. Rep. 425; Talbot v. Dent, 9 16 L. ed. 614; Gilman v. Sheboygan, 1!. Mon. 526; Slack v. Maysville, etc., 2 Black, 510, 17 L. ed. 305; Gelpeke v. R. R., 13 B. Mon. 1; Maddox v. Dubuque, 1 Wall. 175, 17 L. ed. 520; Graham, 3 Mete. (Ky.) 56-86; Alison Goddin v. Crump, 8 Leigh, 120. V. Louisville, etc.. Ry., 10 Bush, 1; 35 21 Pa. St. 147, 59 Am. Dee. 759. Police Jury v. Succession of Mc- 138 CONSTITUTIONAL LAW OF TAXATION. The same principles are applied to donations of money or credit tn railroad corporations, and such donations are held to be valid applications of moneys raised by taxation, and proper objects for the exercise of the taxing power. ^* 196. In People ex rel. Dunkirk, etc.. Railroad Co. v. Batche- lor^'' the question arose whether the legislature had power to compel a municipality to issue bonds and lay taxes in aid of a railroad. The court held that it could not. It was argued in favor of the attempt that a railroad is a public highway, and therefore the case lay within the rule of the cases which hold that the state may compel a municipality to make and repair the public roads and to tax itself for that purpose. ^^ Such cases proceed on the theory that the making and improving of public highways are proper subjects of legislation and that the munici- palities are the agents of the state for that purpose. But the court said that railroads are not public highways in the same sense as common roads ; that the element of private ownership and profit constitutes a inaterial distinction between railroads and common roads, and that the presence of this element rendered the acts in question void.^^ The contrary is held in Allison v. Louisville, etc., By.^ It is hard to see why if the legislature may authorize it may not compel, since the difference between authorization and compul- sion is only a diiference in the degree of exercise of the legislative power ; and the subject of the jDOwer is the same in both cases. And if a railroad is a public highway to the extent that the act of the municipality — under the permission of the legislature — in imposing taxes is a valid exercise of the taxing power, why is it not a public highway to the extent that the same act under compulsion of the legislature is an equally valid use of the power ? Former different rule as to railroads in some jurisdictions. 197. The decisions in Iowa, Michigan, and Wisconsin, whereby it was held that taxation in aid of railroads was void, because such taxation was for a private purpose, have now chiefly historical and scholarly interest, since in two at least of those 30 Chicago, etc., E. R. Co. v. Smith, 39 See also People v. Detroit, 28 62 111. 268, 14 Am. Rep. 99; Petty v. Mich. 228, 15 Am. Rep. 202, to same Myers, 49 Ind. 1. See § 194 supra. general effect. 37.53 N. y. 128, 13 Am. Rep. 480. « IQ Bush, 1; Napa Valley R. R. 38 The People v. Flagg, 46 N. Y. Co. v. Napa County, 30 Cal. 435. 401. THE PURPOSES OF TAXATION. 139 jurisdictions those decisions have been overruled and the else- where prevalent view accepted. An examination of. the reason- ing of such decisions may, however, interest the student. In Dubuque County v. The Dubuque and Pacific Railroad Com- pant/^ the Supreme Court of Iowa held that counties and cities might subscribe to the stock of railways. This view was after- ward overruled.*^ In 1868 the legislature of Iowa passed an act authorizing municipalities to tax themselves and to pay the proceeds of such taxes to railroad companies to aid in the construction of their railroads within the municipalities taxed. In Hanson v. Vernon*^ the question of the validity of this act was presented to the Supreme Court of Iowa in a taxpayer's action to enjoin the collection of taxes imposed under the act. 1 98. Chief Justice Dillon, in the opinion of the court, held the act unconstitutional, saying that because it appropriated private property to private purposes it was not in the nature of a law. A railroad coi-poration was held to be a private corporation, organized and existing for private profit. Its public uses were asserted to be merely incidental to the ends of private profit. In reply to the argument that a railway is a public highway it was said: The ordinary highway is the common property of all, for the common use of all, and the jurisdiction and control over it on the part of the legislature, as the representative of the public, is absolute and unlimited. In all of these respects a railway is different. In 1870 the legislature of Iowa passed an act similar to the one declared unconstitutional in Hanson v. Vernopri. It came before the Supreme Court in Stewart v. Supervisors of Polk county.*' The court, Mr. Justice Miller writing the opinion, overruled Hanson v. Vernon and held the act valid. The rule that acts of the legislature should not be declared unconstitutional unless palpably so was appealed to and the question was asked : Is this act palpably unconstitutional? The court then based the proposi- tion that a railroad is a public enterprise on the acknowledged power of the railroad corporation to exercise the right of eminent domain, and accordingly held the act to be constitutional. «4 G. Greene. 1. ■*3 27 Iowa, 28, 1 Am. Rep. 215. *2 The State, etc. v. Wapello County, ** 30 Iowa, 9, 1 Am. Rep. 238 ; fol- 13 Iowa, 38^; MeClure v. Owen, 26 lowed in Renwick v. Davenport, etc., Iowa, 243. ' R.V.. 47 Iowa, .511. 140 CONSTITUTIONAL LAW OF TAXATION. The decision, under the circumstances, ?eems to have been in reality a response of the court to the pressure of public opinion and practical necessity. 199. In Wisconsin Chief Justice Dixon wrote the opinion of the Supreme Court denying the validity of taxation in aid of railroads owned by private individuals.*® Afterward, in Eogan V. Watertoivn,''^ a provision of the Wisconsin constitution was held to authorize acts permitting municipalities to loan their credit for the construction of a railway. And later Wisconsin decisions recognize the general rule prevalent rdsewhere, that municipal aid may be extended to railways.*' In Michigan the right of the legislature to authorize taxation in aid of railways is denied.*^ Express constitutional restrictions against aid to railroads and private enterprises. 200. The preceding sections state the " case law " as it is in the absence of express constitutional restrictions on the use of the public money or credit for so-called works of internal im- provement, that is to say, as it was formerly. At the present time most of the state constitutions contain such express restric- tions. Much in these constitutional provisions is merely declara- tory of the general principle — that taxation must be for a public purpose - — but there are a great many restrictions which limit the legislative power to a far greater extent, so that it may now be said to be the ])revailing law in the American states, that the public money cannot be given, or the public credit loaned, or taxation imposed in aid of any private commercial enterprise, ho-wevev prominent in the enterprise may be the feature of the public benefit. Such constitutional provisions are the following: 201. Arkansas. Neither the state nor any city, county, town or other munici- pality in this state shall ever loan its credit for any purpose whatever; nor shall any county, city, town or municipality ever issue any interest-bearing evidences of indebtedness, except such bonds as may be authorized by law to provide for and secure the « Whiting V. The Sheboygan and 30 Wis. .397 ; Oleson v. Green Bay etc.. Fond du Lae R. R. Co., 25 Wis. 167, Ry., 36 Wis. 383. 3 Am. Rep. 30. 48 People v. Salem, 20 Mich. 452, 4 *e 30 Wis. 259. Am. Rep. 400. 47 Lawsnn v. Milwaukee, etc., Ry., THE PURPOSES OF TAXATION. 141 payment of the present existing indebtedness, and the state shall never issue any interest-bearing- treasury warrants or scrip.'"' No county, city, town or other municipal corporation shall become a stockholder in any company, association or corporation, or obtain or appropriate money for, ■ or loan its credit to, any cor- poration, association, institution or individual.'''' 202. Alabama. The state shall not engage in works of internal improvement, nor lend money or its credit in aid of such; nor shall the state be interested in any private or corporate enterprise, or lend money or its credit to any individual, association or corporation. "^ The legislature shall not have power to authorize any county, city, town, or other subdivision of this state to lend its credit, or to grant public money or thing of value in aid of, or to, any individual, association, or corporation whatsoever, or to become a stockholder in any such corporation, association, or company by issuing bonds or otherwise.^^ 203. California. The legislature shall have no power to give or to lend, or to authorize the giving or lending, of the credit of the state, or of any county, city and county, city, township, or other political corporation or subdivision of the state now existing, or that may be hereafter established, in aid of or to any person, association, or corporation, whether municipal or otherwise, or to pledge the credit thereof in any manner whatever, for the payment of the liabilities of any individual, association, municipal or other cor- poration whatever ; nor shall it have power to make any gift, or authorize the making of any gift, of any public money or thing - of value, to any individual, municipal, or other corporation what- ever; provided, that nothing in this section shall prevent the legislature granting aid pursuant to section twenty-two of this article ; and it shall not have power to authorize the state, or any political subdivision thereof, to subscribe for stock, or to become a stockholder in any corporation whatever."-" The state shall not, in any manner, loan its credit, nor shall it subscribe to or be interested in the stock of any company, association, or corporation." 204. Colorado. Keither the state, nor any county, city, town, township or school district shall lend or pledge the credit or faith thereof, 49 4rt XVI, § 1. 52 Art. IV, § 94. BO Art. XI [. S 5. 63 Art. IV. § .31. 51 Art. IV, § 93. 6* Art. XII, § 13. 142 CONSTITUTIONAL LAW OF TAXATION. directly or indirectly, in any manner to, or in aid of, any person, company, or corporation, public or private, for any amount or for any purpose whatever, or become responsible for any debt, con- tract, or liability of any person, company, or corporation, public or private, in or out of the state.^^ Neither the state nor any county, city, town, township, or school district shall make any donation or grant to, or in aid of, or become a subscriber to, or shareholder in, any corporation or company, or a joint owner with any person, company, or corpora- tion, public or private, in or out of the state, except as to such ownership as may accrue to the state by escheat, or by forfeiture, by operation or provision of law ; and except as to such ownership as may accrue to the state, or to anv county, city, town, township^ or school district, or to either or any of them, jointly with any person, company, or corporation, by forfeiture or sale of real estate for nonpayment of taxes, or by donation or devise for public use, or by purchase by or on behalf of any or either of them, jointly with any or either of them, under execution in eases of fines, penalties or forfeiture of recognizance, breach of condition of official bond, or of bond to secure public moneys, or the performance of any contract in which they or any of them may be jointly or severally interested.^® 205. Connecticut. No county, city, town, borough, or other municipality shall ever subscribe to the capital stock of any railroad corporation, or become a purchaser of the bonds, or make donation to, or loan its credit, directly or indirectly, in aid of any such corporation; but nothing herein contained shall aSect the validity of any bonds or debts incurred under existing laws, nor be construed to prohibit the general assembly from authorizing any town or city to protect, by additional appropriations of money or credit, any railroad debt contracted prior to the adoption of this amend- ment.^''' 206. Delaware. No county, city, town or other municipality shall lend its credit or appropriate money to, or assume the debt of, or become a shareholder or joint owner in or with any private corporation or any person or company whatever.^® 207. Florida. No tax shall be levied for the benefit of any chartered company of the state, nor for paying interest on any bonds issued by such 55 Art. XT, § 1. 57 Art. XXV, Amendment 1877. B6 Art. XT, § 2. 58 Art. VIII, § 8. THii PU EPOSES OP TAXATION. 143 chartered eoBipanies, or by counties, or by corporations, for tlie above-mentioned purpose.^^ The credit of the state shall not be pledged or loaned to any individual, company, corporation or association; nor shall the state become a joint owner or stockholder in anv company, asso- ciation or corporation. The legislature shall not authorize any county, city, borough, township or incorporated district to become a stockholder in any company, association or corporation, or to obtain or appropriate money for, or to loan its credit to, any cor- poration, association, institution or individual.** 208. Georgia. The General Assembly shall not, by vote, resolution or order, grant any donation, or gratuity, in favor of any person, corpora- tion, or association,^! Paragraph 1. The General Assembly shall have no authority to appropriate money, either directly or indirectly, to pay the whole or any part of the principal or interest of the bonds, or other obligations, which have been pronounced illegal, null and void by the General Assembly, and the constitutional amendments ratified by a vote of the people on the first day of May, 1877 ; nor shall the General Assembly have authority to pay any of the obligations created by the state under laws passed during the late war between the states, nor anv of the bonds, notes or obliga- tions made and entered into during the existence of said war, the time for the payment of which was fixed after the ratification of a treaty of peace between the United States and the Confed- erate States; nor shall the General Assembly pass any law, or the Governor, or other state ofiicial enter into any contract or agree- ment, whereby the state shall be made a party to any suit in any court of this state, or of the United States, instituted to test the validity of any such bonds or obligations.*^ I. The powers of taxation over the whole state shall be exer- cised by the General Assembly for the following purposes only: For the support of the state government and the public insti- tutions. For educational purposes, in instructing children in the ele- mentary branches of an English education only. To pay the interest on the public debt. To pay the principal of the public debt. To suppress insurrection, to repel invasion, and defend the state in time of war. To supply the soldiers who lost a limb, or limbs, in the mili- tary service of the Confederate States with substantial artificial «» Art. IX, § 7. 61 Art. VII, § 16, par. 1. eoArt. IX, § 10. eaAit, VII, § XI. 144 CONSTITUTIONAL LAW OF TAXATION. limbs during life; and to make suitable provisions for such Ton- federate soldiers as may have otherwiso l)een disal)led or per- manently injured in such service, or who by reason of age and poverty, or infirmity and poverty, or blindness and poverty, are unable to provide a living for themselves ; and for the widows of such Confederate soldiers as may have died in the service of the Confederate States, or since from wounds received therein, or disease contracted in the service : Provided, that the act shall only apply to such widows as were married at the time of such service and have remained unmarried since the death of such soldier husband.^ The credit of the state shall not be pledged or loaned to any individual, company, corporation or association, and the state shall not become a joint owner or stockholder in any company, association or corporation.''^ The General Assembly shall not authorize any county, municipal corporation or political division of this state to become a stockholder in any company, corporation or association or to appropriate money for, or to loan its credit to any corporation, company, association, institution or individual, except for purely charitable purposes. This restriction shall not operate to pre- vent the support of schools by municipal corporations within their respective limits. Provided, that if any municipal corpo- ration shall offer to the state any property for locating or build- ing a capitol, and the state accepts such offer, the corporation may comply with such offer.^ 209. Idaho. The credit of the state shall not, in any manner, be given or loaned to, or in aid of, any individual, association, municipality or corporation; nor shall the state, directly or indirectly, become a stockholder in any association or corporation.*^ jSTo county, city, town, township board of education, or school district, or other subdivision, shall lend, or pledge the credit or faith thereof directly or indirectly, in any manner, to, or in aid of any individual, association or corporation, for any amount or for any purpose whatever, or become responsible for any debt, contract or liability of any individual, association or corporation in or out of this state.*^ No eoimty, town, city or other municipal corporation, by vote of its citizens or otherwise, shall ever become a stockholder in any joint-stock company, corporation or association whatever, or 63 Art. VII, § I, par. I. 66 Art. VIII, § 2. 64 Art. VII, S V. 6TArt. VIII, § i. 65 Art. VII, § VI, par. I. THE PXJKPOSES OF TAXATION. 145 Taise money for, or make donation or loan its credit to, or in aid of, any such company or association: Provided, that cities and towns may contract indebtedness for school, water, sanitary and illuminating purposes : Provided, that any city or town con- tracting such indebtedness shall own its own proportion of the property thus created, and receive from any income arising there- from its proportion to the whole amount so invested.^ 210. Illinois. No county, city, town, township, or other municipality, shall ever become subscriber to the capital stock of any railroad or private corporation, or make donation to or loan its credit in . aid of such corporation: Provided, however, that the adoption of this article shall not be construed as afEecting the right of any such municipality to make such subscriptions where the same have been authorized, under existing laws, by a vote of the people of such municipalities prior to such adoption. The Illinois and Michigan canal shall never be sold or leased until the specific proposition for the sale or lease thereof shall first have been submitted to a vote of the people of the state, at a general election, and have been approved by a majority of all the votes polled at such election. The General Assembly shall never loan the credit of the state, or make appropriations from the treasury thereof, in aid of railroads or canals : Provided, that any siirplus earnings of any canal may be appropriated for its enlargement or extension.®^ 211. Indiana. No county shall subscribe for stock in any incorporated com- pany, unless the same be paid for at the time of such subscrip- tion; nor shall any county loan its credit to any incorporated company, nor borrow money for the purpose of taking stock in any such company; nor shall the General Assembly ever, on behalf of the state, assume the debts of any county, city, town or township, nor of any corporation whatever.™ No law or resolution shall ever be passed by the General Assem- bly of the state of Indiana that shall recognize any liability of this state to pay or redeem any certificate of stock issued in pur- suance of an act entitled "An act to provide for the funded debt of the state of Indiana, and for the completion of the Wabash and Erie Canal to Evansville," passed January 19, 1846, and an act supplemental to said act, passed January 29, 1847, which by the provisions of the said acts, or either of them, shall be pay- able exclusively from the proceeds of the canal lands, and the tolls «8 Art. XII, § 4. TO Art. X, § 6. ® Sections separately adopted. 10 146 CONSTITUTIONAL LAW OF TAXATION. and revemies of the canal in said acts mentioned; and no such certificates of stocks shall ever be paid by this state.'^^ 212. Iowa. The credit of the state shall not, in any manner, be given or loaned to, or in aid of, any individual, association, or corporation ; and the state shall never assume, or become responsible for the debts or liabilities of any individual, association, or corporation, unless incurred in time of war for the benefit of the state.''^ The state shall not become a stockholder in any corporation, nor shall it assume or pay the debt or liability of an\- corporation, unless incurred in time of war for the benefit of the state J^ No political or municipal corporation shall become a stock- holder in any banlving corporation, directly or indirectlyJ* 213.- Kansas. The state shall never be a party in carrying on any works of internal improvement/* 214. Kentucky. Taxes shall be levied and collected for public purposes only J* The General Assembly shall not authorize any county or sub- division thereof, city, town, or incorporated district, to become a stockholder in any company, association or corporation, or to obtain or appropriate money for, or to loan its credit to, any corporation, association or individual, except for the purpose of constructing or maintaining bridges, turnpike roads, or gravel roads: Provided, if any municipal corporation shall oifer to the Commonwealth any property or money for locating or building a eapitol, and the Commonwealth accepts such offer, the corpora- tion may comply with the offer." The credit of the Commonwealth shall not be given, pledged or loaned to any individual, company, corporation or association, municipality, or political subdivision of the state; nor shall the Commonwealth become an owner or stockholder in, nor make donation to, any company, association or corporation; nor shall the Commonwealth construct a railroad or other highway.™ 215. Louisiana. The funds, credit, property or things of value of the state, or of any political corporation thereof, shall not be loaned, pledged 71 Art. X, § 7. 75 Art. 11, § 8. 72 Art. VII, § I. 78 § 171. 73 Art. VII, § 3. 77 § 179. 74 Art. VII, § 4. 78 § 177. THE PUKPOSES OF TAXATION. 147 ' or granted to or for any person or persons, association or corpo- ration, public or private ; nor shall the state, or any political corporation, purchase or subscribe to the capital or stock of any corporation or association whatever, or for any private enterprise. Nor shall the state, nor anv political corporation thereof, assume the liabilities of any political, municipal, parochial, private or other corporation whatsoever; nor shall the state undertake to carry on the business of any such corporation or association, or become a part owner therein; provided, the state, through the General Assembly, shall have power to grant the right of way through its public lands to any railroad or canal; and provided, police juries and municipal corporations may, in providing for destitute persons, utilize any charitable institutions within their corporate limits for the care, maintenance and asylum of such persons; and all appropriations made to such institutions for the purpose aforesaid shall be accounted for by them in the manner required of officials entrusted with public fundsJ® The General Assembly shall have power to enact general laws authorizing the parochial, ward and municipal authorities of the state, by a vote of the majority of the property taxpayers, in number entitled to vote under the provisions of this constitu- tion and in value, to levy special taxes in aid of public improve- ments or railway enterprises; provided, that such tax shall not exceed the rate of five mills per annum, nor extend for a longer period than ten years; and provided further, that no taxpayer shall be permitted to vote at such election unless he shall have been assessed in the parish, ward or municipality to be affect 1 for property the year previous.^" 216. Maine. The credit of the state may not be loaned directly or indirectly in any case.^^ 217. Maryland. The credit or money of the state or counties cannot be used for any private purpose or work of internal im- provement. 218. Michigan. The credit of the state shall not be granted to or in aid of, any person, association or corporation.*^ The state shall not subscribe to, or be interested in, the stock of any company, association or corporation.^ The state shall not be a party to, or interested in, any work or internal improvement, nor engaged in carrying on any such TO Art. 58. 82 Art. XIV, § 6. 80 Art. 270. 83 Art. XIV, § 8. 81 Art. IX, i 14, 148 CONSTITUTIONAL LAW OF TAXATION. work, except in the expenditure of grants to the state of land or other property: Provided, liowever, that the legislature of the state, by appropriate legislation, may authorize the city of Grand IJapids to issue its bonds for the improvement of the navigation of Grand river.^* 219. Mississippi. No county, city, town or other municipal corporation shall hereafter become a subscriber to the capital stock of any rail- road or other corporation or association, or make appropriation, or loan its credit in aid of such corporation or association. All authority heretofore conferred for any of the purposes aforesaid by the legislature or by the charter of any corporation, is hereby repealed. ISTothing in this section contained shall affect the right of any such corporation, municipality or county to make such subscription where the same has been authorized under laws existing at the time of the adoption of this constitution, and by a vote of the people thereof, had prior to its adoption, and where the terms of submission and subscription have been or shall be complied with, or to prevent the issue of renewal bonds, or the use of such other means as are or may be prescribed by law for the payment or liquidation of such subscription, or of any exist- ing indebtedness.®^ The credit of the state shall not be pledged or loaned in aid of any person, association or corporation ; and the state shall not become a stockholder in any corporation or association, nor assume, redeem, secure or pay any indebtedness or pretended indebtedness alleged to be due by the state of Mississippi, to any person, association or corporation whatsoever, claiming the same as owners, holders or assignees of any bond or bonds, now gen- erally known as " Union Bank " bonds and " Planters' Bank '" bonds.®® 220. Minnesota. The credit of the state shall never be given or loaned in aid of any individual, association or corporation. (Nor shall there be any further issue of bonds denominated Minnesota State Eail- road bonds, etc.)®'' 221. Missouri. Taxes shall be levied and collected for public purposes only.®* The General Assembly shall have no power to make any appro- priation of money, or to issue any bonds or other evidences of 84 Art. XIV, § 9. STArt. IX, § 10. SSArt. VII, § 183. 88 Art. X, § 3. 8fi Art. XIV, § 258. THE PURPOSES OF TAXATION. 149 indebtedness for the payment, or on account of or in recognition of an}^ claims audited or that may hereafter be audited by virtue of an act entitled ''An act to audit and adjust the war debt of the state," approved March 19, 1874, or any act of a similar nature, until after the claims so audited shall have been presented to and paid by the government of the United States to the state of Missouri.^ The General Assembly shall have no power to give or to lend, or to authorize the giving or lending of the credit of the statt in aid of or to any person, association or corporation, whether municipal or other, or to pledge the credit of the state in any manner whatsoever, for the payment of the liabilities, present or prospective, of any individual, association of individuals, munici- pal or other corporation whatsoever : Provided, that the General Assembly shall have the power to appropriate from funds in the state sinking fund, being the proceeds of the tax authorized under section 14 of article X of the constitution, to an amount not exceeding one million dollars for the exhibition of the re- sources, products and industries of the state in the centennial celebration of the Louisiana purchase in the city of St. Louis. "^ The General Assembly shall liave no power to make any grant, or to authorize the making of any grant of public money or thing of value to any individual, association of individuals, municipal or other corporation whatsoever : Provided, that this shall not be so construed as to prevent the grant of aid in a case of public calamity.®^ The General Assembly shall have no power to authorize any county, city, town or township, or other political corporation or subdivision of the state now existing, or that may be hereafter established, to lend its credit, or to grant public money or thing of value in aid of or to any individual, association or corporation whatsoever, or to become a stockholder in such corporation, asso- ciation or company: Provided, that this shall not be so con- strued as to prohibit the General Assembly from providing by law for authorizing the creation, maintenance and management of a fund for the pensioning of crippled and disabled firemt-n, and for the relief of the widows and minor children of deceased firemen.^ by such cities, villages or incorporated towns as may have an organized fire department — said fund to be taken frc'in the municipal revenue of such cities, villages or incorporated towns.^^ The General Assembly shall have no power hereafter to sub- scribe or authorize the subscription of stock on behalf of the state, in any corporation or association, except for the purpose «9 Art. IV, § 52. 91 Art. IV, § 46. 90 Art. IV, § 45. 92 Art. IV, § 47. 150 CONSTITUTIONAL LAW OF TAXATION. of securing loans heretofore extended to certain railroad corpora- tions by the state."^ No county, township, city or other municipality shall hereafter become a subscriber to the capital stock of any railroad or other corporation or association, or make appropriation or donation, or loan its credit to or in -aid of any such corporation or association, or to or in aid of any college or institution of learning or other institution, whether created for or to be controlled by the state or others. All authority heretofore conferred for any of the pur- poses aforesaid by the General Assembly, or by the charter of any corporation, is hereby repealed: Provided, however, that nothing in this constitution contained shall affect the right of any such municipality to make such subscription, where the same has been authorized under existing laws by a vote of the people of such municipality prior to its adoption, or to prevent the issue of renewal bonds, or the use of such other means as are or may' be prescribed by law for the liquidation or payment of such sub- scription, or of any existing indebtedness.®* 222, Montana. Taxes shall be levied and collected by general laws and for public purposes only.®^ Neither the state, nor any countv. city, town, municipality, nor other subdivision of the state shall ever give or loan its credit in aid of, or make any donation or grant, by subsidy or otherwise, to any individual, association or corporation, or be- come a subscriber to, or a shareholder in, any company or corpo- ration, or joint owner with any person, company or corpora- tion, except as to such ownership as may accrue to the state by operation or provision of law.®® The Legislative Assembly shall have no power to pass any law authorizing the state, or any county in the state, to contract any debt or obligation in the construction of any railroad, nor give or loan its credit to or in aid of the construction of the same.*^ 223. Nebrasha. No city, county, town, precinct, municipality, or other subdivi- sion of the state, shall ever become a subscriber to the capital stock, or owner of such stock, or any portion or interest therein of any railroad, or private corporation, or association.®® No city, county, town, precinct, municipality, or other sub- division of the state, shall ever make donations to any railroad, 93 Art. IV, § 49. 96 Art. XIII, § 1. 94 Art. IV, § 6. »7 Art. V, § 38. »SArt. XII, i 11. 88 Art. XIa. THE PTJKPOSES OF TAXATION. 151 or other works of internal improvement, unless a proposition so to do, shall have been first submitted to the qualified electors thereof, at an election by authority of law, provided, that such donations of a county with the donations of such subdivisions in the aggregate shall not exceed ten per cent of the assessed valu- ation of such county, provided further, that any city or county may, by a two-thirds vote, increase such indebtedness five per cent in addition to such ten per cent; and no bonds or evidences of indebtedness so issued shall be valid, unless the same shall have endorsed thereon a certificate signed by the secretary and auditor of state, showing that the same is issued pursuant to law.®' The credit of the state' shall never be given or loaned in aid of any individual, association, or corporation.^ 224. Nevada. The state shall not donate or loan money or its credit, sub- scribe to or be interested in the stock of any company, associa- tion, or corporation, except corporations formed for educational, or charitable purposes.^ No county, city, town, or other municipal corporation shall become a stockholder in any joint stock company, corporation, or association whatever, or loan its credit in aid of any such company, corporation, or association, except railroad corpora- tions, companies, or associations.* 225. Neiv Jersey. 'No county, city, borough, town, township or village shall here- after give any money or property, or loan its money or credit, to or in aid of any individual, association or corporation, or be- come security for or be directly or indirectly the owner of any stock or bonds of any association or corporation.* No donation of land or appropriation of money shall be made by the state or any municipal cornoration to or for the use of any society, association or corporation whatever.^ The credit of the state shall not be directly or indirecfly loaned in any ease.* 226. New Hampshire. The general court shall not authorize any town to loan or give its money or credit, directly or indirectly, for the benefit of any corporation having for its object a dividend of profits, or in any way aid the same by taking its stock or bonds.'' S9Art. XII, § 2. *Art. I, § 19. lArt. Xn, § 3. SArt. I, § 20. 2 Art. VIII, § 9. «Art. IV, § VT, subd. 3. 3 Art. V'lII, § 10. TPart II, art. 5. 152 CONSTITUTIONAL LAW OF TAXATION. 227. New York. The credit of the state shall not in any manner he given or loaned to or in aid of any individual, association or corporation.® The assent of two-thirds of the memhers elected to each branch of the legislature shall he requisite to every bill appropriating the public moneys or property for local or private purposes.® Neither the credit nor the money of the state shall be given or loaned to or in aid of any association, corporation or private undertaking. This section shall not, however, prevent the legis- lature from making such provision for the education and support of the blind, the deaf and dumb, and juvenile delinquents, as to it may seem proper. Nor shall it apply to any fund or property now held, or which may hereafter be held, by the state for edu- cational purposes.^" No county, city, town or village shall hereafter give any mone)' or property, or loan its money or credit to or in aid of any individual, association or corporation, or become directly or indi- rectly the owner of stock in, or bonds of, any association or cor- poration. . . . This section shall not prevent any such county, city, town or village from making such provision for the support of its poor as may be authorized by law.^^ 228. Norfh Dakota. Neither the state nor any county, citv. township, town, school district or any other political subdivision, shall loan or give its credit or make donations to or in aid of any individual, associa- tion or corporation, except for necessary support of the poor, nor subscribe to or become the owner of the capital stock of any association or corporation, nor shall the state engage in any work of internal improvement unless authorized by a two-thirds vote of the people.-'^ 229. Ohio. The credit of the state shall not, in any manner, be given or loaned to, or in aid of, any Individual, association or corporation whatever; nor shall the state ever hereafter become a joint owner, or stockholder in any company or association in this state, or elsewhere, formed for any purpose whatever.^^ The General Assembly shall never authorize any county, cit\ , to-wn or township, by vote of its citizens or otherwise, to become a stockholder in any joint stock company, corporation, or associa- 8 Art. VII, § 1. 11 Art. VIII, § 10. 9 Art. Ill, § 20. 12 Art. XII, § 185. 10 Art. VIII, § 9. 13 Art. VIII, § 4. THE PUKPOSES OF TAXATION. lod tion whatever; or to raise money for, or loan its credit to, or in aid of, any such company, corporation, or association.'* 230. Oregon. No county, city, town, or other municipal corporation, by vote of its citizens or otherwise, shall become a stockholder in imy joint stock company, corporation or association whatever, to raise money for, or loan its credit to or in aid of any such company, corporation or association.'* The legislature shall not loan the credit of the state.'^ 231. Pennsylvania. The credit of the commonwealth shall not be pledged or loaned to any individual, company, corporation or association, nor shall the commonwealth become a joint owner or stockholder in any company, association or corporation.'^ The General Assembly shall not authorize any county, city, borough, township or incorporated district to become a stock- holder in any company, association or corporation, or to obtain or appropriate money for, or to loan its credit to, any corpora- tion, association, institution or individual.'* 232. South Carolina. The credit of the state shall not be pledged or loaned for the benefit of any individual, company, association or corporation; and the state shall not become a joint owner of or stockholder in any company, association or corporation. The General Assijm- bly shall not have power to authorize any county or township to levy a tax or issue bonds for any purpose except for educational purposes, to build and repair pulalic roads, buildings and bridges, to maintain and support prisoners, pay jurors, county officers, and for litigation, quarantine and court expenses, and for ordi- nary county purposes, to support paupers, and pay past indebt- edness.'* 233. South Dakota. Neither the state nor any county, township or municipality shall loan or give its credit or make donations to or in aid of any individual, association or corporation except for the neces- sary support of the poor, nor suljseribe to or become the owner of the capital stock of any association or corporation, nor pay or become responsible for the debt or liability of any individual, 1* Art. VIII, § 6. " Art. IX, § 6. 15 Art. XI, § 9. 18 Art. IX, § 7.. 16 Art. XT, § 7. 19 Art. X, § 6. 154 CONSTITUTIONAL LAW OF TAXATION. association or corporation; provided, that the state may assinne or pay sneh debt or liability when incurred in time of war for the defense of the state. Xor shall the state engage in any work of internal improvement.^" 234. Tennessee. The General Assembly shall have power to authorize the several counties and incorporated towns in this state to impose taxes for county and corporation purposes respectively, in such man- ner as shall be prescribed by law; and all property shall be taxed according to its vahie, upon the principles established in regard to state taxation. But the credit of no county, city, or town shall be given or loaned to or in aid of any person, company, association, or cor- poration, except upon an election to be first held by the qualified voters of such county, city, or town, and the assent of three- fourths of the votes east at said election. Nor shall any county, city, or town become a stockholder with others in any company, association, or corporation, except upon a like election and the assent of a like majority. But the counties of Grainger, Hawkins, Hancock, Union, Campbell, Scott, Morgan, Grundy, Sumner, Smith, Fentress, Van Buren, and the new county hertin authorized to be established out of fractions of Sumner, Macon, and Smith counties, White, Putnam, Overton, Jackson, Cumberland, Anderson, Henderson, Wayne, Cocke, Coffee, Macon, Marshall, and Eoane, shall be excepted out of the pro- visions of this section, so far that the assent of a majority of the qualified voters of either of said counties voting on the ques- tion shall be sufficient, when the credit of such county is given or loaned to any person, association, or corporation; provided, that the exception of the counties above named shall not be in force beyond the year one thousand eight hundred and eighty, and after that period they shall be subject to the three-fourths majority applicable to the other counties of the state.^^ The credit of this state shall not be hereafter loaned or given to or in aid of any person, association, company, corporation, or municipalitv ; nor shall the state become the owner, in whole or in part, of any bank, or a stockholder with others in any association, company, corporation, or municipality.^- A well-regulated system of internal improvement is calculated to develop the resources of the state, and promote the happiness and prosperity of her citizens; therefore it ought to be encour- aged by the General Assembly .^^ 20 Art. XIII, § 1, 22 Art. II, § 31. 21 Art. II, § 29. aaArt. XI, § 10. THE PUKPOSES OF TAXATION. 155 235. Texas. The legislature shall have no power to give or to lend, or to authorize the giving or lending, of the credit of the state in aid of, or to any person, association or corporation, whether municipal or other; or to pledge the credit of the state, in any manner whatsoever, for the payment of the liabilities, present or prospective, of any individual, association of individuals, nfunicipal or other corporation whatsoever.^* The legislature shall have no power to make any grant, or authorize the making of any grant, of public money to any indi- vidual, association of individuals, municipal or other corporation whatsoever; provided, that this shall not be so construed as to prevent the grant of aid in ease of public calamity.^' The legislature shall have no power to authorize any county, ■city, town, or other political corporation or subdivision of the state to lend its credit or to grant public monev or thing of value, in aid of or to any individual, association or corporation "whatsoever, or to become a stockholder in such corporation, asso- ciation or company.^® No county, city, or other municipal corporation shall hereafter (1875) become a subscriber to the capital of any private cor- poration or association, or make any appropriation or donation to the same, or in any wise loan its credit; but this shall not he construed to in any way affect any obligation heretofore (1875) undertaken pursuant to law.^^ 236. Virginid. Neither the credit of the state, nor of any county, city, or town, shall be, directly or indirectly, under any device or pre- tence whatsoever, granted to or in aid of any person, association, or corporation; nor shall the state, or any county, city, or town subscribe to or become interested in the stock or obligations of anv company, association, or corporation, for the purpose of aiding in the construction or maintenance of its work; nor shall the state become a party to or become interested in any work of internal improvement, except public roads, or engaged in carrying on any such work; nor assume any indebtedness of any county, city or town, nor lend its credit to the same; but this section shall not prevent a county, city or town from perfecting a subscription to the capital stock of a railroad company author- ized by existing charter conditioned upon the affirmative vote of the voters and freeholders of such county, city or town in favor a* Art. VII, § 50. 2« Art. Ill, § 52. MArt. Ill, ! 51. 27 Art. XI, § 3. 156 CONSTITUTIONAL LAW OF TAXATION. of such subscription: provided, that such vote be had prior to July first, nineteen hundred and three.^* The state and its subdivisions are forbidden to pay any part of the Confederate debt.^^ 237. Washington. The credit of the state shall not, in any manner, be, given or loaned to, or in aid of, any individual, association, company, or corporation.^" No county, city, town, or other municipal corporation shall hereafter give any money or property, or loan its money or credit, to or in aid of any individual, association, company, or corpora- tion, except for the necessary support of the poor and infirm, or become directly or indirectly the owner of any stock in or bonds of any association, company, or corporation.^^ The state shall not in any manner loan its credit, nor shall it subscribe to, or be interested in, the stock of any company, association, or corporation.^^ 237o. West Virginia. See § 473. 238. Wisconsin. The credit of the state shall never be given, or loaned, in aid of any individual, association, or corporation. ^^ 239. Wyoming. The legislature shall have no power to pass any law author- izing the state or any county in the state to contract any debt or obligation in the construction of any railroad, or give or loan its credit to or in aid of the construction of the same.^* Neither the state, nor any county, township, school district, or municipality shall loan or give its credit or make donations to or in aid of any railroad or telegraph line; provided, that this section shall not apply to obligations of any county, city, township, or school district, contracted prior to the adoption of this constitution.^^ Neither the state nor any county, city, township, town, school district, or any other political subdivision, shall loan or give its credit or make donations to or in aid of any individual, associa- tion or corporation, except for necessary support of the poor, 28 Art. XIII, § 185. 32 Art. XII, § 9. 29 Art. XIII, § 186. 33 Art. VIll, § 3. 30 Art. VIII, § 5. 34 Art. Ill, § 39. 31 Art. VIII, § 7. 35 1889, art. X, Railroads, § 5. THE PURPOSES OF TAXATION. 157 nor subscribe to or become the owner of the capital stock of any association or corporation. The state shall not engage in any work of internal improvement unless authorized by a two-thirds vote of the people.^® 239a. Territories of the United States. That no territory of the United States, now or hereafter to be organized, or any political or municipal corporation or sub- division of any such territory, shall hereafter make any sub- scription to the capital stock of any incorporated company, or company or association having corporate powers, or in any man- ner loan its credit to or use it for the benefit of any such com- pany or association, or borrow any money for the use of any such company or association.^^ 240. Provisions which forbid the loan or gift of public money or credit to private enterprises, being prohibitory in their nature, are self-executing. After they take effect all previous action, uncompleted, looking tovyard the gift or loan of public credit, i& void, unless, by operation of law or by a valid contract, a per- fected right has arisen to have the loan or gift completed.^ Internal improvements. 241 . Several of the state constitutions which have been quoted c(.ntain provisions forbidding the state to engage in works of '' internal improvement." There are some decisions indicating the scope of this prohibition. Of course the words themselves are capable of including substantially every act which changes or modifies physical conditions, but no one thinks they are meant so broadly. On the other hand they do limit, to some extent, the power of the government to expend the proceeds of taxation ; and their limitation is something more than is contained in the provisions which forbid the use of the funds of the state 'in aid of private undertakings. Their meaning is stated in a recent case as follows : There can be no doubt that this quarter century of vehement discussion had produced a fairly definite conception of what had come to be designated " internal improvements." . . . We think it clear that such conception included those things which 36 Art. XVI, § 6. 38 Falconer v. Buflfalo and James- 37 Act of Congress, July 30, 1886, town R. R. Co., 69 N. Y. 491. § 2; 24 Stat. L. 170, Supplement to R. S. U. S., Vol. I (2d ed.), 504. 158 CONSTITUTIONAL LAW OF TAXATION. ordinarily might, in hnman experience, be expected to be under- taken for profit or benefit to the property interests of private- promoters, as distinguished from those other things which primarily and preponderantly merely facilitate the essential functions of government. Of course this line of classification does not exclude possibility that the dominant characteristics of one class may be present in illustrations of the other. A toll- gathering canal, vrhich gathers spreading waters withfei its banks, may promote public health, as may also a drainage system under- taken for improvement of the lands of those who construct it. Improvement of the grounds of a state institution may improve access to, and enhance the value of, neighboring property. But in each case the dominant purpose is obvious, and therefore the classification along the line of distinction above stated.^* Following these principles it was held that under a constitution forbidding the state to engage in works of internal improvement, state money might not be appropriated to strengthen a levee sys- tem already in existence,*" Other works which the state may not appropriate monej- to aid or construct, under such a consti- tutional prohibition, have been held to be : Dredging sand flats from a river, *^ deepening and straightening a river, *^ constructing or operating street railways,*^ constructing- telephone or telegraph lines,** constructing elevators,*^ and con- structing irrigation resen^oirs.**^ As to. whether these prohibitions apply to the state alone or to its municipalities as well, see §§ 2154, 2155 of this work. Power of municipalities to own and construct works directly- owned by them for the benefit of the citizens. 242. Xeither the general principles of constitutional law nor those express provisions which prohibit the use of public money for other than a public purpose, and which forbid the loan or gift of the public money or credit to private corporations or indi- viduals, or the investment of the public money in private enter- 39 state ex rel. Jones v. Froelich, *3 Attornev-General ex rel. Barbour 115 Wis. 32, 91 N. W. Rep. 115, 95 v. Pingree, 'l20 Mich. 550, 79 N. W. Am. St. Eep. 894, 58 L. R. A. 757. Rep. 814. 46 L. R. A. 407. ■*o State ex rel. Jones v. Froelich, ^ Xorthwestern Telephone Exchange supra; Alcorn r. Hamer, 38 Miss. 652 ; Co. v. Chicago, etc., Rv. Co., 76 Minn, see State v. Hastings, 11 Wis. 448. 334, 79 X. W. Rep. 315. -*iRyerson v. Uttley, 16 ilich. 269. ^/SRippe v. Becker, 56 Minn. 100, 42 Anderson v. Hill, 54 Mich. 477, 57 N. W. Rep. 331, 22 L. R. A. 857. 20 N. W. Rep. 549; Sloan v. State, 51 *a Re Senate Resolution, 12 Colo. Wis. 623, 8 N. W. Rep. 393; Wilcox 287, 21 Pac. Rep. 484. V. Paddock, 65 Mich. 23, 31 N. W. Rep. 009. THE PURPOSES OF TAXATION. 159 l)Tises, operate to prevent municipalities (or states) from directly constructing railroads or bridges for the use of their citizens, provided that such railroads or bridges are owned wholly by the public; and it is held that the public may acquire such enterprises by purchase of the stock of a private corporation so long as there is left no element of private ownership or control in the per- manent enterprise. This was held in a New York case where a bridge, between two cities, was o^vned by a private corporation, and the legislature, after the enactment of a constitutional amend- ment prohibiting the investment of public money in private cor- porations,*^ enacted that the cities might acquire the stock of the coi-poration, and that thereupon the corporation should be dissolved and the construction of the bridge continued by the two cities, as owners, through the medium of trustees. This act was upheld.** 243. In Massachusetts and New York the question has arisen whether acts which provided for the construction of an under- ground railway through a city, at the expense of the city, and for either its operation by the city or by private parties to whom the road should be leased, were valid. In Massachusetts such an act was upheld on general constitutional principles, no express constitutional provisions preventing.*^ In Xew York the act provided for the expense of constructing the road by the issue of city bonds, permitted either the operation of the road by the city or its lease to private parties, for not less than thirty-five or I'lore than fifty years, at a rental for which a minimum rate was fixed, and provided that the lease might be renewed from time to time on such terms as should be agreed upon, and that the absolute ownership of the road should always remain in the city. It was held that this act was constitutional, that it violated neither the constitutional prohibition against municipal indebtedness except for municipal purposes,"" nor that provision which forbids a city to give or loan money or credit to any private individual or enterprise.^^ It was contended in opposition that the provisions of the act with respect to leasing amounted in effect to a permis- sion to let in perpetuity and that such a lease would be equivalent 4T Quoted in full in § 227 of this so Quoted in full in § 2250 of this flork. work. 48 People ex rel. Murphy v. Kelly, 5i Quoted in full in § 227 of this 76 N. Y. 475. work. 49 Prince v. Crocker, 166 Mass. 347, 44 N. E. Rep. 446, 32 L. E. A. 610. 160 CONSTITUTIONAL LAW OF TAXATION. to private ownership, but the courts refused to sanction such a construction of the act.^^ 244. In Ohio it was held to be within the legitimate scope of legislative power to authorize a city to construct railroads or other public improvements and to levy taxes for that purpose. ' But an act which authorized a town to construct a railroad and to levy taxes for the purpose of building so much of the road in the town as could be built for the amoimt raised, and provided for issuing bonds to complete the same, the road to be connected with another to be constructed through an adjoining town, was held to be an attempt to evade the constitutional provision which prohibits the use of piiblic money or credit for private purposes,^ and therefore void.*' 245. In a recent Massachusetts case it is held that the widen- ing and improvement of streets by a city, in order to make ac- cessible a union passenger railroad station „ to be built and owned by a private corporation, is a sufficiently public use to warrant the imposition of a special assessment on neighboring property to pay for the improvement ; and it is said that the nature of the im- provement is " sufficiently public to authorize the exercise of the power of eminent domain or of general taxation." ®® Municipal fuel yards. 246. In Massachusetts the Supreme Judicial Court, in answer to questions certified to it by the legislature, has given its opinion that it is not within the constitutional power of the legislature to enact a law conferring upon cities or towns authority to estab- lish and maintain municipal fuel or coal yards, or to purchase coal and wood for the purpose of selling it generally to their inhabit- ants or others at cost, at less than cost, or at a profit. " The busi- ness of selling fuel can be conducted easily by individuals in competition. It does not require the exercise of any govern- mental function, as does the distribution of water, gas, and 52 Sun Printing and Publishing 56 Taylor v. Commissioners of Ross Assn. V. Mayor, etc., of New York, 152 Countv, 23 Ohio St. 22. To the same N. Y. 257, 46 N. E. Rep. 499, 37 L. effect "see Wyscover v. Atkinson, 37 R. A. 788, affirming 8 App. Div. 230, Ohio St. 80; Counterman v Dublin 40 N. Y. Supp. 607. Township, 38 Ohio St. 515. 53 Walker v. City of Cincinnati, 21 56 Sears v. Board of Street Commis- Ohio St. 14, 8 Am. Rep. 24. sioners of the City of Boston, 180 5* Quoted in full in § 229 of this Mass. 274, 62 N. B. Rep. 397. work. THE PURPOSES OF TAXATIOIT. 161 electricity, which involves the use of the streets and the exercise of the power of eminent domain." It was said that the mere increase in the cost of coal to those able to buy would not render the purpose a public one. The possibility " of an absolute famine in fuel because of the lack of a supply and the impossibility of obtaining a sufficient quantity reasonably to satisfy the needs of the community," would be a condition, it was said, which would warrant the legislature in authorizing the expenditure of the public money for relief. But the court said it was difficult to see how the establishment of municipal fuel or coal yards would give relief in such a case, as such yards could not create fuel. 247. It was said, however, with respect to " a condition in which the supply of fuel would be so small, and the difficulty of obtaining it so great, that persons desiring to purchase it would be unable to supply themselves through private enterprise, it is con- ceivable that agencies of government might be able to obtain fuel when citizens generally could not. Under these circum- stances we are of opinion that the government might constitute itself an agent for the relief of the community, and that money expended for the purpose would be expended for a public use." The support of paupers, it was said, might be provided for in any reasonable way.^^ Municipal gas, electric light and water works. 247a. The power of the legislature to authorize municipalities to establish water works to furnish water to the inhabitants, and for public uses, has long been exercised and cannot be questioned. The establishment of municipal gas or electric light works is such a public purpose as warrants municipal taxation, even though the municipality, in connection with its public service, sells gas or electricity to private consumers. Such taxation is justified under the police power, as necessary to protect the lives and property of citizens, and to check immorality.** 57 Opinions of Justices, 182 Mass. St. Rep. 388, 23 N. E. Rep. 72, 6 L. R. 605, 66 N. E. Rep. 25. A. 315; Lake County, etc., Co. v. 58 Jacksonville, etc., Co. v. Jackson- Walsh, 160 Ind. 32, 98 Am. St. Rep. ville, 36 Fla. 229, 51 Am. St. Rep. 24, 264, 65 N. E. Rep. 520; State ex rel. 18 So. Rep. 677, 30 L. R. A. 540; Ferguson v. Mayor, 49 La. Ann. 1748, Crawfordsville V. Braden, 130 Ind. 149, 22 So. Rep. 756, 1008; Opinion of 30 Am. St. Rep. 214, 28 N. E. Rep. Justices, 150 Mass. 592, 24 N. E. Rep. S49, 14 L. R. A. 268; Rushville Gas 1084, 8 L. R. A. 487; Mitchell v. Co. V. Rushville, 121 Ind. 206, 16 Am. Negaunee, 113 Mich. 359, 67 Am. St. 11 162 CONSTITUTIONAL LAW OP TAXATION. 2476. The power of municipal bodies to acquire water or light plants, or both, is expressly recognized in the constitutions of some states. Provisions to this effect are found in the constitu- tions of Alabama,^^ Colorado,^ Idaho," New York,^ Worth Dakota,®^ South Carolina, in which state the provision is as follows : Cities and towns may acquire, by construction or purchase, and may operate, water works systems and plants for furnishing lights, and may furnish water and lights to individuals, firms and private corporations for reasonable compensation: provided, that no such construction or purchase shall be made except upon a majority vote of the electors in said cities or towns who are qualified to vote on the bonded indebtedness of said cities or towns.®* South Dakota,*^ Utah, where the provision is as follows: No municipal corporation shall directly or indirectly, lease, sell, alien or dispose of any water works, water rights, or sources of water supply now, or hereafter to be owned or controlled by it; but all such water works, water rights and sources of water supply now owned or hereafter to be acquired by any municipal corporation, shall be preserved, maintained and operated by it for supplying its inhabitants with water at reasonable charges : provided, that nothing herein contained shall be construed to prevent any such municipal corporation from exchanging water rights, or sources of water supply, for other water rights or sources of water supply of equal value, and to be devoted in like manner to the public supply of its inhabitants.^ Washington,®^ and Wyoming.®* State dispensaries. 247c. Acts which permit the investment of the public moneys in state dispensaries for the sale of intoxicating liquors are up- Rep. 468, 71 N. W. Eep. 640, 38 L. R. 434, 8 L. R. A. 291, the power of a A. 157; State v. Allen, 178 Mo. 555, city to furnish light to individuals 77 S. W. Rep. 868; Slocomb v. Fay- was denied. etteville, 125 N. C. 362, 34 S. E. Rep. 59 Quoted in § 2213 of this work. 436 ; Fawcett v. Mt. Airy, N. C. «> Quoted in § 2220 of this work , 45 S. E. Rep. 1029, 63 L. R. A. 61 Quoted in § 209 of this work 870; State v. Toledo, 48 Ohio St. 112, 62 Quoted in § 2250 of this work 26 N. E. Rep. 1061, 11 L. R. A. 729; 63 Quoted in § 2252 of this work! Thompson-Houston, etc., Co. v. New- 6* Art. VIII, § 5. ton, 42 Fed. Rep. 723. See Spaulding 65 Quoted in § 2258 of this work v. Peabody, 153 Mass. 129, 26 N. E. 66 Art. XI, § 6. Rep. 421, 10 L. R. A. 397. In Mauldin 67 Quoted in § 2263a of this work. V. Greenville, 33 S. C. 1, 11 S. E. Rep. 68 Quoted in § 2268 of this work. THE PURPOSES OF TAXATION. 163 held. Inasmuch as the regulation of the liquor traffic is a recog- nized part of the police power, such a use is a public use, Ja carrying on the operations of government.®* The South Carolina and Virginia cases cited do not depend glone on general principles, for the constitutions of those states provide : Soutli Carolina: The General Assembly may prohibit the manufacture and sale and retail of alcoholic liquors and beverages, within the state, and may authorize and empower state, county and municipal officers, all or either, under the authority and in the name of the state, to buy in any market and retail within the state liquors and beverages in such packag'cs and quantities, undei such rules and regulations, as it deems expedient.™ Virginia : The General Assembly shall have full power to enact local option or dispensary laws, or any other laws controlling, regu- lating, or prohibiting the manufacture or sale of intoxicating liquors.'^ Taxation for drainage, irrigation, levees, and dikes. 248. The enforcement of such sanitary regulations and tie employment of such sanitary methods as are necessary or con- ducive to the general health of the community are public purposes which are justifiable under the police power of the state, and the power of taxation may properly be used in furtherance of such purposes. The danger to the public health and the public incon- venience which arise from wet lands, marshes, ponds, and swamps, are well-known ; consequently the drainage of such lands, marshes, and swamps is of public utility, and taxes or special assessments may be levied to perform such work.^^ 69 State ex rel. George v. Aiken, 42 71 Art. IV, § 62. S. C. 222, 20 S. E. Rep. 221, 26 L. R. 72 Hager v. Yolo County, 47 Cal. A. 34.5; Plumb v. Christie, 103 Ga. 222; Zigler v. Menges, 121 Ind. 99, 686, 30 S. E. Rep. 759, 42 L. R. A. 16 Am. .St. Rep. 357, 22 N. E. Rep. 181; Farnnille v. Walker, 101 Va. 782; Anderson v. Kerns Drainage Cc, 323, 43 S. E. Rep. 558, 99 Am. St. 14 Ind. 199, 77 Am. Dec. 63; Wisli- Rep. 870, 61 L. R. A. 125. A dis- mier v. State, 97 Ind. 160; Heffner pensary law was held void in Alabama v. Cass and Morgan Counties, 193 111. as am invalid delegation of police 439, 62 N. E. Rep. 201, 58 L. R. A. power. Mitchell v. State, 134 Ala. 392, 353; Tidewater Co. v. Coster, 18 N. J. 32 So. Rep. 687. Eq. 54, 90 Am. Dec. 634; Colfax Higb- 70 Art. VIII, § 11. way Commissioners v. East Lake Fork 164 CONSTITUTIONAL LAW OF TAXATION. In order that tlie use may be regarded as public, it is not neces- sary that the whole community, or any large portion of it, may participate in it. If the drain be of public benefit, the fact that some individuals may be specially benefited will not deprive it of it.~ public character.'" 249. The pqwer to drain swamp lands has frequently been re- ferred to the police power, such drainage being regarded as neces- sary to the public health. The preservation of the public health, however, is not the sole justification of such taxation. The pub- lic good to be attained by the reclamation of the lands from use- lessness is a sufficient basis.''* Such taxes are often imposed by way of special assessment on the lands benefited. The principles applicable to such assess- ments are discussed in another place.'^ Oieuerally speaking any means necessary and proper to prevent the spread of disease is a purpose for which taxation may be em- ployed. Thus money may be raised by taxation for preventing the spread of smallpox."' 250. In Illinois the constitution expressly provides for the creation of drainage districts as follows : The General Assembly may pass laws permitting the owners of land to construct drains, ditches and levees for agricultural, sanitary or mining purposes, across the lands of others, and provide for the organization of drainage districts, and vest the corporate authorities thereof with power to construct and main- tain levees, drains and ditches, and to keep in repair all drains, ditches and levees heretofore constructed under the laws of this state, by special assessments upon the property benefited thereby.'' 251. Prior to 1895, the drainage of private agricultural lands was hold in New York to be a private purpose for which the Special Drainage District, 127 111. 581, Rep. 663; Head v. Amoskeag Mfg. Co., 21 X. E. Rep. 206; Hoertz v. Jef- 113 U. S. 9-^22, 28 L. ed. 889, 5 Sup. Ct. fcrsnn. etc., Co., Kv. , 84 S. Rep. 441; Hagav v. Yolo County, 47 W. Rpp. 1041; Springfield v. Gay, Cal. 222; Zigler v. Menges, 121 Ind. 99, 12 Allen, 612; Wright v. Boston, 9 22 N. E. Rep. 782, 16 Am. St. Rep. Cusli. 233; Hagar v. Reclamation Dis- 357; State ex rel. Utiek v. Commis- trict. Ill U. S. 701, 28 L. ed. 569, 4 sioners of Polk County, 87 Minn. 325, Sup. Ct. Rep. 663; Mound City Land 92 N. W. Rep. 216, 00 L. R. A. 161; and Stock Co. v. Miller, 170 Mo, 240, Lien v. Norman Countv, 80 Minn. 58, 70 S. \V. Rep. 721, 94 Am. St. Rep. 82 N. W. Rep. 1094; BioAvn v. Keener, 721. 60 L. R. A. 190. 74 N. C. 714; Lewis County v. Gordon, T'- Ross V. Davis, 97 Ind. 70. 20 Wash. 80, 54 Pac. Rep. 779. 'i Hagar v. Reclamation District, "^5 See chap. 26. Ill U. S. 701, 28 L. ed. 569, 4 Sup. Ct. 76 Solomon v. Tarber, 52 Oa. 405. "Art. IV, § 31. THE PUEPOSES OF TAXATION. 165 power of taxation or that of eminent domain could not be ex- ercised.™ Laws for the drainage of swamp lands for the protec- tion of the public health, were upheld.™ In 1894 the constitution of l^ew York was amended by adding to the section which ordained the method of assessing damages for private property taken for public use the following clause : General laws may be passed permitting the owners or occu- pants of agricultural lands to construct and maintain for the drainage thereof, necessary drains, ditches and dykes upon the lands of others, under proper restrictions and with just com- pensation, but no special laws shall be enacted for such purposes.*" 252. Under this section the New York legislature enacted that an owner of agricultural lands might institute proceedings for the drainage, or protection from overflow, of such lands, by the construction of drains or dykes on the lands of others. The procedure was by a petition to the courts, setting forth the facts, the appointment of commissioners, notice to, and hearing of persons interested, the construction of the drains or dykes and an apportionment of the damage and assessment for benefit upon all lands deemed to be benefited. Judgments for assessments were made a lien on the lands benefited. It was held that this act was unconstitutional; that the con- stitutional provision quoted Avas " not susceptible, hy any fair reading, of a construction which warrants the assessment upon the landowner proceeded against, of a proportionate share of the damages and expenses." The amendment, it was said, " only authorizes laws which will enable an agricultural landovsmer, desirous of draining his lands, to exercise the right of eminent domain, and thereunder to appropriate another's lands for the purpose, under such restrictions as shall be deemed proper to be m^ade and upon his making due compensation. No right is con- ferred, or implied, to assess a portion of the cost and expense upon the other landowners." *^ 78 Gilbert v. Foote, not reported, but opinion in this case, that of Judg;e cited in White v. White, 5 Barb. 483 ; Gray, is largely devoted to an effort referred to in Matter of Ryers, 72 N. to show that the drainage of private Y. 1, 28 Am. Rep. 88. agricultural lands is such a privatjC 79 Matter of Ryers, 72 N. Y. 1, 28 purpose that the provision of the state Am. Rep. 88 ; People ex rel. Cook v. constitution which authorized the es- Nearing, 27 N. Y. 308. tablishment of drains over the lands of 80 Art. I, § 7. others was in violaMon of the due 81 Matter of Tuthill, 163 N. Y. 133, process of law clause of the Federal 57 N. E. Rep. 303, 79 Am. St. Rep. constitution. But the other judges did 574, 49 L. R. A. 781. The principal not concur in this view; and, in view 166 CONSTITUTIONAL LAW OF TAXATION. 253. The principles which justify the drainage of swamp lands justify also the irrigation of arid lands, although the public benefit ia not so much a matter of health as of profit. If it be essential or material to the prosperity of the c'^mmunity, the lands may be irrigated at the public expense j and if the improvement be one in which all the landowners of a district have to a certain extent a common interest, it may be made at their joint expense by way of special assessment; and the questions of the public utility and the common benefit are both generally within the discretion of ^ the legislature. It is settled that " the irrigation of really arid lands is a public purpose, and the water thus used is put to a public use." ^^ 254. In districts which are exposed to inundation from the overflow of rivers, the construction of levees and dikes to pro- tect the country from such inundation is a public purpose justi- fying taxation.*^ Taxes and assessments levied for levee pur- poses do not violate the requirements of due process of law.** In Louisiana the constitution expressly provides that : A levee system shall be maintained in the state, and .a tax ^not to exceed one mill may be levied annually on all property subject to taxation, and shall be applied exclusively to the main- tenance and repair of levees.*^ of the decisions in Fallbrook Irriga- Ann. 506; Egyptian Levee Co. v. Har- tion District V. Bradley, 164 U. S. 112, din, 27 Mo. 495, 72 Am. Dec. 276; 41 L. ed. 369, 17 Sup. Ct. Eep. 56, Columbia Bottom Levee Co. v. Meier, and Wurtz v. Hoagland, 114 U. S. 39 Mo. 53; Morrison v. Morey, 146 606, 29 L. ed. 229, 5 Sup. Ct. Rep. Mo. 543, 48 S. VV. Rep. 629; State v. 1086, it is difBeult to perceive much Wall, 153 Mo. 220, 54 S. W. Rep. 465 ; force in the theory. See Hoertz v. Garrett v. Green, 3 Pennyp. 370; Red- Jefferson Southern Pond Drainage Co., foot Lake Levee District v. Dawson, Ky. , 84 S. W. Rep. 1141. 97 Tenn. 151, 36 S. W. Rep. 1041, 34 82 Fallbrook Irrigation District v. L. R. A. 725. See Morrison v. Morey, Bradley, 164 U. S. 112, 41 L. ed. 369, 146 Mo. 543, 48 S. W. Rep. 629. See 17 Sup. Ct. Rep. 56 ; Tregea v. Modesto upholding exercise of police power for Irrigation Dis'trict, 164 U. S. 179, 41 levee construction, Dubose v. Levee L. ed. 395, 17 Sup. Ct. Rep. 52; In re Commissioners, 11 La. Ann. 165; Madera Irrigation District, 92 Cal. Peart v. Meeker, 45 La. Ann. 421, 12 296, 27 Am. St. Rep. 106, 28 Pac. So. Rep. 490; Eldridge v. Trezevant, Rep. 272, 675, 14 L. R. A. 755 ; Elling- 160 U. S. 452, 40 L. ed. 490, 16 Sup. house V. Taylor, 19 Mont. 462, 48 Pac. Ct. Rep. 345. See also Hart v. Or- Eep. 757 ; Prescott Irrigation Co. v. leans Levee Commissioners, 54 Fed. Flathers, 20 Wash. 454, 55 Pac. Rep. Rep. 559. 635 ; Cummings v. Hyatt, 54 Neb. 35, 84 Excelsior Planting and Mfg. Co. 74 N. W. Rep. 411. v. Green, 39 La. Ann. 455, 1 So. Rep. 83 Williams v. Cammack, 27 Miss. 873. 209, 61 Am. Dec. 508; Daily v. Swope, 85 Art. 238. 47 Miss. 377; State v. Cage, 34 La. THE PXTKPOSES OF TAXATION. 167 255. In Texas the constitution declares that: All coimties and cities bordering on the coast of the Gulf of Mexico are hereby authorized, upon a vote of two-thirds of the taxpayers therein (to be ascertained as may be provided by law), to levy and collect such tax for construction of sea walls, break- waters or sanitary purposes, as may be authorized by law, and may create a debt for such works and issue bonds in evidence thereof. But no debt for any purpose shall ever be incurred in any manner by any city or county unless provision is made, at the time of creating the same, for levying and collecting a suffi- cient tax to pay the interest thereon and provide at least two per cent as a sinking fund; and the condemnation of the right of way for the erection of such works shall be fully pro- vided for.^^ The counties and cities on the gulf coast being subject to calamitous overflows, and a very large proportion of the general revenue being derived from those otherwise prosperous localities, the legislature is especially authorized to aid, by donation of such portion of the public domain as may be deemed proper, and in such mode as may be provided by law, the construction of sea walls, or breakwaters, such aid to be proportioned to the extent and value of the works constructed or to be constructed in any locality.^'' 256. In Mississippi the constitution provides for a levee ystem,^ and declares that : The legislature shall impose for levee purposes, in addition to the levee taxes heretofore levied or authorized by law, a uni- form tax of not less than two nor more than five cents an acre, per annum, upon every acre of land now, or hereafter, embraced within the limits of either, or both, of said levee districts. The taxes so derived shall be paid into the treasury of the levee board of the district in which the land charged with the same is situ- ated; and the legislature, by the act imposing said tax, shall authorize said levee boards to fix the annual rate of taxation per acre within the limits aforesaid, and thereby require said levee boards, whenever a reduction is made by them in their other taxes, to make a proportionate reduction in the acreage tax hereinbefore mentioned; but said acreage tax shall ncrt be reduced below two cents an acre per annum; and all reductions in such taxations shall be uniform in each of said districts; but the rate of taxation need not be the same in both of them; and such specific taxes shall be assessed on the same assessment roll, and collected under the same penalties as the ad valorem taxes seArt. XI, § 7. 88 Art. XI. STArt. XI, § 8. 168 CONSTITUTIONAL LAW OF TAXATION. for levee purposes, and shall be paid at the game time with the latter. And no lovee hoard shall ever be permitted to buy lands when sold for taxes; but the state shall have a prior lien for the taxes due thereto. The legislature may provide for the discon- tinuance of the tax on cotton, but not in such manner as to affect outstanding bonds based on it, and on the discontinuance of the tax on cotton, shall impose another tax in lieu thereof, but the legislature may repeal the acreage tax required to be levied hereby, after the first day of January, A. D. 1895.** The legislature shall have full power to provide such system of taxation for said levee districts as it shall from time to time deem wise and proper."* ISTo property situated between the levee and the Mississippi river shall be taxed for levee purposes, nor shall damage be paid to any owner of land so situated because of it being left outside a levee.*^ 257. In Illinois the constitution provides for the creation of levee districts.*^ 258. There are some decisions, cited elsewhere,"'* which hold that constitutional provisions forbidding the state to engage in works of " internal improvement," forbid the state to construct levees.** Other taxes for public health. 258a. Bounties for the destruction of noxious animals stand on the same footing as appropriations for the protection of the public health. In both cases the purpose to be accomplished is the conservation of the public welfare by the exercise of the legitimate police power of the state; and the proceeds of taxation may be devoted for the purpose.*^ An act granting such bounties is not in violation of the con- stitutional provision, elsewhere quoted,*® which prohibits the gift of public money. Such a bounty is not a gift, for it rests on the consideration of services rendered.*^ Sprinkling streets is a public purpose, for the protection of health, which may be carried 89 Art. XI, § 236. 115 Wis. 32, 91 N. W. Rep. 115, 95 90 Art. XI, § 237. Am. St. Rep. 894, 58 L. R. A. 757. 91 Art. XI, § 238. 95 Ingram v. Colgan, 106 Cftl. 113, 92 See provision quoted in full in 46 Am. St. Rep. 221, 38 Pac. Rep. 315, § 250 of this work. 39 Pac. Rep. 437, 28 L. R. A. 187. 93 See § 241. 99 See § 203 of this work. 9'l state ex rel. Jones v. Froelich, 97 Ingram v. Colgan, supra. THE PURPOSES OF TAXATION. 169 out by general taxation/* or by special assessments.*® Special assessments may be laid for street sweeping.-' Schools, religious institutions and charities. 259. The relations ■which so frequently exist between re- ligious, charitable, and educational enterprises, and the fact that the same constitutional provisions often refer to some or all of these objects, make it desirable to discuss these topics together. For a starting point, three propositions may be asserted with- out citation of authority. 1. The state or its political subdivisions (with proper statu- tory authority) may levy taxes for public schools, under the con- trol of the public authorities, for the benefit of the public generally. 2. The state or its political subdivisions (with proper statu- tory authority) may levy taxes for the support of the poor, or for public hospitals, almshouses, reformatories, and the like, maintained by the public, open to the public, and under the con- trol of the public authorities. .3. Taxes may not be levied or public money appropriated, for the support of churches, or purely religious institutions of any kind. 260. In all, or nearly all, the states, the legislature is ex- pressly restricted in these respects. Some of these restrictions, forbidding the gift or loan of the public money or credit in aid of private enterprises, have been already quoted ; and the student should examine these provisions in connection with this topic. Some specific restrictions on taxation in aid of sectarian enter- prises are as follows: 261. Alabama. E"© one shall be compelled to pay taxes " for building or repairing any place of worship.'* 262. California. Neither the legislature, nor any county, city and county, town- ship, school district, or other municipal corporation, shall ever 98Maydwell v. City of Louisville, the publicity of the purpose is not Ky. , 76 S. W. Rep. 1091, 63 denied, the power to lay special as- L. R. A. 655. sessments for such purpose is denied. 99 Sears v. Boston, 173 Mass. 71, 53 City of Chicago v. Blair, 149 111. 310, N. E. Rep. 138, 43 L. R. A. 834; 36 N. E. Rep. 829, 24 L. R. A. 412. Pliillips Academy v. Andover, 175 l Reinken v. Fuehring, 130 Ind. 382, Mass. 118, 55 N. E. Rep. 841, 48 L. R. 30 N. E. Rep. 414, 30 Am. St. Rep. A. 550; State v. Reis, 38 Minn. 371, 247, 15 L. R. A. 624. 38 N. W. Rep. 97. In Illinois while 2 Art. I, § 3. 170 CONSTITUTIONAL LAW OF TAXATION. make an appropriation, or pay from any public fund whatever, or grant anything to or in aid of any religious sect, church, creed, or sectarian purpose, or help to support or sustain any school, college, university, hospital, or other institution con- trolled by any religious creed, church, or sectarian denomina- tion whatever; nor shall any grant or donation of personal prop- erty or real estate ever be made bv the state, or any city, city and county, town, or other municipal corporation, for any religious creed, church, or sectarian purpose whatever; provided, that nothing in this section shall prevent the legislature granting aid pursuant to section twenty-two of this article.^ Ko public money shall ever be appropriated for the support of any sectarian or denominational school, or any school not under the exclusive control of the officers of the public schools; nor shall any sectarian or denominational doctrine be taught, or instruction thereon be permitted, directly or indirectly, in any of the common schools of this state.* No money shall be drawn from the treasury but in consequence of appropriations made by law, and upon warrants duly drawn thereon by the controller; and no money shall ever be appropri- ated or drawn from the state treasury for the use or benefit of any corporation, association, asylum, hospital, or any other insti- tution not under the exclusive management and control of the state as a state institution, nor shall any grant or donation of property ever be made thereto by the state; provided, that notwithstanding anything contained in this or any other section of this constitution, the legislature shall have the power to grant aid to institutions conducted for the support and maintenance of minor orphans, or half-orphans, or abandoned children, or aged persons in indigent circumstances — such aid to be granted by a uniform rule, and proportioned to the number of inmates of such respective institutions; provided further, that the state shall have at any time the right to inquire into the management of such institution; provided further, that whenever any county, or city and county, or city, or town shall provide for the support of minor orphans, half-orphans, or abandoned children, or aged persons in indigent circumstances, such county, city and county, city, or town shall be entitled to receive the same pro rata appro- priations as may be granted to such institutions under church or other control. An accurate statement of the receipts and ex- penditures of public moneys shall be attached to and published with the laws at every regular session of the legislature.^ 263. Colorado. No appropriation shall be made for charitable, industrial, edu- cational or benevolent purposes, to any person, corporation or 3 Act. IV, § 30. 6 Art. IV, § 22. *Art. IX, § 8. THE PURPOSES OP TAXATION. 171 cominunity not under the absolute control of the state, nor to any denominational or sectarian institution or association.® 264. Delaware. No man shall or ought to be compelled to attend any religious worship, to contribute to the erection or support of any place of worship, or to the maintenance of any ministry, against his own free will and consent.'' jSTo portion of any fund now existing, or which may hereafter be appropriated, or raised by tax, for educational purposes, shall be appropriated to, or used by, or in aid of any sectarian, church or denominational school; provided, that all real or personal property used for school purposes, where the tuition is free, shall be exempt from taxation and assessment for public purposes.^ 265. Florida. No preference shall be given by law to any church, sect or mode of worship, and no money shall ever be taken from the public treasury directly or indirectly in aid of any church, sect or religious denomination, or in aid of any sectarian institution.^ 266. Georgia. No money shall ever be taken from the public treasury, directly or indirectly, in aid of any church, sect or denomination of religionists, or of any sectarian institution. ^'^ 267. Idaho. No person shall be required to attend or support any ministry or place of worship, religious sect or denomination or pay tithes, against his consent.^^ Neither the legislature nor any county, city, town, township, school district or other public corporation, shall ever make any appropriation or pay from any pui)lic fund or moneys whatever, anything in aid of any church or sectarian or religious society, or "for any sectarian or religious purpose, or to help support or sustain any school, academy, seminary, college, university or other literary or scientific institution, controlled by any church, sectarian or religious denomination whatsoever; nor shall any grant or donation of land, money or other personal property ever be made by the state or any such public corporation, to any church or for any sectarian or religious purpose.^ «Art. V, § 34. 10 Art. I, par. XIV. TArt. I, § 1. 11 Art. I, § 4. 8 Art. X, § 3. 12 Art. IX, § 5. 9 Declaration of Rights, § 6. 172 CONSTITUTIOSrAL LAW OF TAXATION. 268. Illinois. Neither the general assembly nor any county, city, town, town- ship, school district or other public corporation shall ever make any appropriation or pay from any public fund whatever, any- thing in aid of any church or sectarian purpose, or to help sup- port or sustain any school, academy, seminary, college, university or other literary or scientific institution, controlled by any church or sectarian denomination whatever ; nor ehall any grant or donation of land, money or other pen^onal property ever be made by the state or .my such public corporation to any church or for any sectarian purpose. '^^ 269. Indiana. No money shall be drawn from the treasury for the benefit of any religious or theological institution.'* 269a. Iowa. No person shall be compelled to. pay taxes for the support of religion-*^® 270. Kansas. No religious sect or sects shall ever control any part of the common school or university funds of the state.'* Nor shall any person be compelled to . . . support any form of worship.'^ 271. Louisiana. No money shall ever be taken from the public treasury, directly or indirectly, in aid of any church, sect or denomination of religion, or in aid of any priest, preacher, minister or teacher thereof, as such, and no preference shall ever be given to, nor any discrimination made against, any church, sect or creed of religion, or any form of religious faith or worship ; nor shall any appropriation be made for private, charitable or benevolent pur- poses to any person or community ; provided, this' shall not apply to the State Asylum for the Insane and State Institution for the Deaf and Dumb, and State Institution for the Instruction of the Blind, and the charity hospitals and public charitable institu- tions conducted under state authority.'* No educational or charitable institution, other than the state institutions now existing, or expressly provided for in this con- stitution, shall be established by the state, except upon a vote of two-thirds of the members elected to each house of the General Assembly." 15 Art. VIII, § 3. IT Bill of Rights, § 7. MArt. I, § 6. 18 Art. 53. 16 Art. I, § 3. 19 Art. CO. WArt. VI, § 8. THE PUKPOSES OF TAXATION. 173 N"o funds raised for the support of the public schools of the state shall be appropriated to or used for the support of any private or sectarian schools.^" ■272. Maryland. Kor ought any person to be compelled to frequent, or maintain, or contribute, unless on contract, to maintain any place of worship or any ministry.'*^ 273. Massachusetts. All moneys raised by taxation in the towns and cities for the suiiDort of public schools, and all moneys which may be appro- priated by the state for the support of common schools, shall be applied to, and expended in, no other schools than those which are conducted according to law, under the order and superin- tendence of the authorities of the town or city in which the money is to be expended; and such moneys shall never be appro- priated to an)- religious sect for the maintenance, exclusively, of its own school. -- 274. Michigan. The legislature shall pass no law to compel any person to attend, erect or support any place of religious worship, or to pay tithes, taxes or other rates for the support of any minister of the gospel or teacher of religion.^^ No money shall be appropriated or drawn from the treasury for the benefit of any religious sect or society, theological or religious seminary, nor shall property belonging to the state be appropriated for any such purposes.^* 275. Mississippi. Religious freedom is gu.aranteed.^* No religious or other sect, or sects, shall ever control any part of the school or other educational funds of this state; nor shall any funds be appropriated towards the support of any sectarian school ; or to any school that at the time of receiving such appro- priation is not conducted as a free school.^® 276. Minnesota. Xor shall any man be compelled to attend, erect or support any place of worship, or to maintain any religious or ecclesi- astical establishment against his consent . . . nor shall any jnoney be drawn from the treasury for the benefit of any religious societies, or religious or theological seminaries.^'' 20 Art. 25.-!. 35 Art. Til, § 18. 21 Declaration of Rights, § 36. 28 Art. VIII, § 208. See § 366 of 22 Amendments, art. XVIII. this work. 23 Art. IV. § 39. 27 Art. I, § 16. ^Art. IV, § 40. 174 CONSTITUTIONAli LAW OF TAXATION. . . . But in no case shall the moneys derived as aforesaid (by taxation or otherwise) or any portion thereof, or any public moneys or property, be appropriated or used for the support of schools -wherein the distinctive doctrines, creed or tenets of any particular Christian or other religious sect are promulgated or taught.^ 277. Missouri. That no money shall ever be taken from the public treasury, directly or indirectly, in aid of any church, sect or denomina- tion of religion, or in aid of any priest, preacher, minister or teacher thereof, as such ; and that no preference shall be given to nor any discrimination made against any church, sect, or creed of religion, or any form of religious faith or worship.*® 278. Montana. No appropriation shall be made for charitable, industrial, edu- cational or benevolent purposes to any person, corporation or community not under the absolute control of the state, nor to any denominational or sectarian institution or association.^" 279. Nebraska. Xo person shall be compelled to attend, erect, or support any place of worship against his consent.^^ 280. Nevada. ISTo sectarian instruction shall be imparted or tolerated in any school or university that may be established under this consti- tution.^2 No public funds of any kind or character- whatever, state, county, or municipal, shall be used for sectarian purposes.^^ 281. New York. Neither the state nor any subdivision thereof, shall use its property or credit or any public money, or authorize or permit either to be used, directly or indirectly, in aid or maintenance, other than for examination or inspection, of any school or insti- tution of learning wholly or in part under the control or direc- tion of any religious denomination, or in which any denomina- tional teneit or doctrine is taught.^* 28 Art. VIII, § 3. 32 Art. XI, § 9. 29 Art. 11, § 7. 33 Art. XI, § 10. 30 Alt. V, § 35. 84 Art. IX, § 4. 31 Art. I, § 4. THE PUEPOSES OF TAXATION. 175 282. New Jersey. Nor shall any person be obliged to pay tithes, taxes or other rates for building or repairing any church or churches, place or places of worship, or for the maintenance of any minister or ministry, contrary to what he believes to be right, or has delib- erately and voluntarily engaged to perform.^* 283. Ohio. No person shall be compelled to attend, erect or support any place of worship, or maintain any form of worship, against his consent.^® 284. Oregon. No money shall be drawn from the treasury for the benefit of any religious or theological institution, nor shall any money be appropriated for the payment of any religious services in either house of the legislative assembly.^^ 285. Pennsylvania. No appropriation shall be made to any charitable or educa- tional institution not under the absolute control of the common- wealth, other than normal schools established by law for the professional training of teachers for the public schools of the state, except by a vote of two-thirds of all the members elected to each house.^* No appropriations, except for pensions or gratuities for mili- tary services, shall be made for charitable, educational or benevo- lent purposes, to any person or community, nor to any denomina- tional or sectarian institution, corporation or association.^^ The General Assembly may make appropriations of money to institutions wherein the widows of soldiers are supported or assisted, or the orphans of soldiers are maintained and educated; but such appropriation shall be applied exclusively to the sup- port of such widows and orphans.*" 286. Bhode Island. No man shall be compelled to frequent or to support any religious worship, place or ministry whatever, except in fulfill- ment of his own voluntary contract.*^ 3B Art. I, § 3. 39 Art. Ill, § 18. 36 Art. I, § 7. 40 Art. Ill, § 19, sTArt. I, § 5. ■llArt. I, § 3. 38 Art. in, § 17. 176 CONSTITUTIONAL LAW OF TAXATION. 287. Smith Carolina. The property or credit of the state of South Carolina, or of any county, city, town, township, school district, or other subdivision of the said state, or any public money, from what- ever source derived, shall not, by gift, donation, loan, contract, appropriation, or otherwise, be used, directly or indirectly, in aid or maintenance of any college, school, hospital, orphan house, or other institution, society or organization, of whatever kind, which is wholly or in part under the direction or control of any church or of any religious or sectarian denomination, society or organization.*^ 288. South Dakota. Xo money or property of the state shall be given or appropri- ated for the benefit of any sectarian or religious society or insti- tution.^2 289. Tennessee. That all men have a natural and indefeasible right to worship Almighty God according to the dictates of their own conscience; that no man can, of right, be compelled to attend, erect, or sup- port any place of worship, or to maintain any minister, against his consent ; that no human authority can, in any case whatever, control or interfere with the rights of conscience ; and that no preference shall ever be given, by law, to any religious establish- mont or mode of worship.** 290. Texas. No man shall be compelled to attend, erect or support any place of worship, or to maintain any ministry against his consent.*^ No money shall be appropriated or drawn from the treasirry for the benefit of any sect or religious society, theological or religious seminary ; nor shall property belonging to the state be appropriated for any such purposes.** 291. Utah. Xo public money or property shall be appropriated for or ap- plied to any religious worship, exercise or instruction, or for the support of any ecclesiastical establishment.*'' The legislature shall make laws for the establishment and maintenance of a system of public schools, which shall be open «Art. XI, § 9. «Art. I, § 6. «Art. VI, § 3. *OAit. I, § 7. ** Art. I, i 3. « Art. I, § 4. THE PUKPOSES OF TAXATION. 177 to all the cliildren of the state and be free from sectarian control.** Xeither the legislature nor any county, city, town, school dis- trict or other pnBlic corporation, shall make any appropriation to aid in the support of any school, seminary, academy, college, university or other institution, controlled in whole, or in part by any church, sect or denomination whatever.*® 292. Yermont. . No man ought to or of right can be compelled to . . . erect or support any place of worship or support any minister, contrary to the dictates of his conscience.^" 293. Virginia. No tax shall be levied for the erection or repair of any house of public worship, or for the support of any church or ministry.^! The General Assembly shall not make any appropriation of public funds, of personal property, or of any real estate, to any church, or sectarian society, association, or institution of any kind whatever, which is entirely or partly, directly or indirectly, controlled by any church or sectarian society; nor shall the General Assembly make any like appropriation to any charitable institution, which is not owned or controlled by the state; ex- cept that it may, in its discretion, make appropriations to non- sectarian institutions for the reform of youthful criminals; but nothing herein contained shall prohibit the General Assembly from authorizing counties, cities, or towns to make such appro- priations to any charitable institution or association.^^ No appropriation of piiblic funds shall be made to any school or institution of learning not owned or exclusively controlled by the state or some political subdivision thereof: provided, first that the General Assembly may, in its discretion, continue the appropriations to the College of William and Mary; second, that this section shall not be construed as requiring or prohibiting the continuance or discontinuance by the General Assembly of the payment of interest on certain bonds held by certain schools and colleges as provided by an act of the General Assembly, ap- proved February twenty-third, eighteen hundred and ninety-two, relating to bonds held by schools and colleges; third, that counties, cities, towns, and districts may make appropriations to nonsectarian schools of manual, industrial, or technical train- ing, and also to any school or institution of learning owned or 48 Art. Ill, § 4. Bl Art. IV, § 58. «Art. X, § 13. B2Art. IV, § 67. 50 Chap. I, art. 3. 12 178 CONSTITUTIONAL LAW OF TAXATION. exclusively controlled by such county, city, town, or school district.^^ 294. Washington. ISO public money or property shall be appropriated for or ap- plied to . any religious worship, exercise or instruction, or the support of any religious establishment.^* 295. Wisconsin. Nor shall any money be drawn from the treasury for the bene- fit of religious societies, or religious or theological seminaries.''^ 296. West Virginia. The legislature shall not pass any law requiring or authorizing any religious society, or the people of any district within this state, to levy on themselves, or others, any tax for the erection or repair of any house for public worship, or for the support of any church or ministry.^^ No appropriation shall hereafter be made to any state normal school, or branch thereof, except to those already established and in operation, or now chartered.^'' 297. Wyoming. No monev of the state shall ever be_given or appropriated to any sectarian or religious society or institution.^^ No appropriation shall be made for charitable, industrial, edu- cational or benevolent purposes to any person, corporation or community not under the absolute control of the state, nor to any denominational or sectarian institution or association.^* Schools not under public control. 298. The tendency of the courts, iinder the constitutional provisions just quoted, and those previously quoted v^hich forbid the gift or loan of the public money or credit to private enter- prises,^" is to hold that no money may be appropriated in any form for education in schools which are not under the public control. 299. Thus, although the trustees of a free school, maintained as a charity in a town, are elected by the town, a condition, or- es Art. IX, § 141. 67 Art. XII, § 25. B4Art. I, § II. BSArt. I, § 19. 55 Art. I, § 18. 59 Art. Ill, § 36. BSArt. Ill, § 15. 60 See §§ 201-239a, THE PTJEPOSBS OF TAXATION. 179 dained by the founder of the charity, that the trustees shall be members of certain religious societies, operates in Massachusetts to prevent the school from receiving moneys raised by taxation, imder a constitutional provision that such moneys shall never be appropriated to any religious sect for the maintenance exclu- sively of its own school.®-"^ In Wisconsin a law which authorized a town to raise money by taxation to aid in the erection of build- ings for a private academy in such town, was held void, the court saying : " Nor will the location of the institution at Jefferson, and the incidental benefits which may thereby arise to the people of the town, sustain the tax." ®^ 300. It has been argued that the appropriation of money to such schools, in payment for instruction or care given to pupils or inmates, at the instance and on behalf of the state or munic- ipality, is not state " aid," because the money is appropriated in pajTnent for service rendered and not as a gratuity. But this makes no difference ; the payment is regarded as an aid whether it be a gratuity or not, for it helps to maintain the school. ^^ 301. In Illinois a device whereby it was sought indirectly to obtain public aid for sectarian institutions was condemned by the courts. There, to evade the constitutional provisions, a cor- poration was oi'ganized nominally for charitable and educational purposes, and children were committed to its care for support, restraint, and education by the courts, and it presented bills for their maintenance. It appeared that the corporation was, in fact, a " paper " one ; that it owned no school or reformatory, and that it kept all children committed to it in two schools which were maintained and controlled by a religious body. It was held that this method was merely an attempt to evade the constitu- tion, and mandamus to compel the payment of the bills was refused.** 30Z An ilhistration of how far the courts go in refusing to sanction such appropriations is found in one of the cases citeJ. where the state had made a contract with a sectarian school whereby the school educated certain pupils at the state expense, following a course of instruction prescribed by the state authori- al Jenkins v. Andover, 103 Mass. 94. Industrial School for Girls, 125 111. 62 Curtis V. Whipple, 24 Wis. 3S0, 540, 18 N. E. Rep. 183, 8 Am. St. Rep. 1 Am. Rep. 186. 386, 1 L. R. A. 437. 63 Synod of South Dakota v. State, 64 Cook County v. Chicago Industrial 2 S. b. 366, 50' N. W. Rep. 632, 14 School for Girls, 125 111. 540, 18 N. E. li. E. A. 418; Cook County v. Chicago Rop. 183, 8 Am.. St. Rep. 386. 180 CONSTITUTIONAL LAW OF TAJCATION. ties, and excusing the students from attendance on sectarian exercises. Under a constitutional provision forbidding state aid to sectarian institutions, the contract was held void and pay- ment enjoined. ^° Religion in the public schools. 303. The prohibitions of the use of public money for religious purposes operate to forbid sectarian teaching in the public schools, although, doubtless, reliance need not be had upon any express ^ provisions to prevent such teaching. Of course the teaching of distinctively sectarian tenets in a public school would violate this rule. The question has most frequently been presented in cases where parties have sought to restrain the reading of the Bible and the singing of some hymn or the offering of prayer in the opening exercises of the schools. In several states the reading of the Bible, without note or comment, has been held not to be sectarian teaching.^f In Wisconsin it is held that the reading of the Bible is sectarian teaching and should be enjoined, even though children are not compelled to remain in the room during such reading.*' 304. A recent ISTebraska case holds that the reading of the Bible, unaccompanied by note or comment, is not sectarian in- struction, but that " exercises by a teacher in a public school in a school building, in school hours, and in the presence of the pupils, consisting of the reading of passages from the Bible, and in the singing of songs and hymns, and offering prayer to the Deity, in accordance with the doctrines, beliefs, customs, or usages of sectarian churches or religious organizations " are for- bidden.^ In Michigan it is held that the reading of the Bible, emphasizing the moral precepts of the ten commandments, as a supplemental text-book, at the close of school sessions, from which exercise any pupil may be excused on the application of parents or guardians, is not sectarian instruction, and does not violate the constitutional prohibition of the use of public money for the 65 Synod of South Dakota v. State, Kans. 53, 76 Pac. Rep. 422, 06 L. R. 2 S. D. 306, 50 N. W. Rep. 632, 14 L. A. 166; McCormick v. Burt, 95 111. R. A. 418. 263, 35 Am. Rep. 103. 66 Spilkr V. Inhabitants of Woburn, 67 State v. Edgerton School District, 12 Allen, 127; Moore v. Monroe, 04 76 Wis. 177, 44 N. W. Rep. 967, 20 Iowa, 367, 53 Am. Rep. 444, 20 N. W. Am. St. Rep. 41, 7 L. R. A. 330. Kep. 475; Donahoe v. Richards, 38 68 State v. Scheve, Neb. ,93 Me. 379, 61 Am. Dec. 256 ; Billard v. N. W. Rep. 169, 59 L. R. A. 927. Board of Education of Topeka, 69 THE PURPOSES OP TAXATION. 181 benefit of religious sects.*® In Ohio it is held that a school board may exclude such exercises.™ The people who go to law about such tilings, whether they are right or wrong, show more zeal than sense. It is to be doubted whether any child ever departed from the faith he learned at home or out of school by reason of the ordinary religious exercises of a public school. 305. In Mississippi the constitution expressly provides that the provisions with respect to religious freedom " shall not be construed ... to exclude the Holy Bible from use in any pub- lic school of this state." '^ 306. While the use of public schoolhouses for religious ser- vices and other exercises of a nature in M'hich the whole commu- nity has no interest, such as the meetings of literary societies, lodges, and ^e like, is common in many parts of the country, very few people have had so little to do as to deem themselves wisely employed in bringing actions to restrain such use. In a case in Pennsylvania there was indeed such a gross abuse of the general good nature which winks at reasonable uses of this char- acter as to warrant those who felt themselves aggrieved in appeal- ing to the courts. There the teachers of a public school, wlio were also members of a religious order, used the schoolroom after school hours for giving sectarian instruction to children whose parents consented. This was enjoined. ^^ An early case in Kansas, in which the opinion was written by a judge since become eminent, went further, and enjoined the use of school- houses (after school hours) for holding meetings of various societies and gatherings, despite the fact that in many parts of that state at that time the schoolhouses were the only places where the people could assemble.''^ Some other cases holding the same thing seem to be based on the absence of statutory permis- sion to tlie local authorities to allow such uses, rather than on the lack of constitutional authority in the legislature.'* 307. In Illinois, on the other hand, the question has been presented to the courts under express constitutional provisions, aapfeiffer v. Board of Education, Atl. Rep. 482, 44 Am. St. Rep. 632. 118 Mich. 560, 77 X. W, Rep. 2.50, 42 20 L. R. A. 203. L. R. A. ,536. "•' Spencer v. Joint School District, 70 Board of Education v. :\Iinor, 23 1.5 Kans. 259, 22 Am. Rep. 269. Ohio St. 211, 13 Am. Rep. 233. 74 Scofield v. School District, 27 71 Art. Ill, § 18. Conn. 499; Dorton v. Hearn, 67 Mo. 72Hysong v. Gallitzin Borono;h 301. School District, 164 Pa. St. 629, 30 182 COXSTITUTIONAL LAW OF TAXATION. and it has been held that a statute authorizing school directors to grant " the temporary use of schoolhouses, when not occupied bv schools, for religious meetings and Sunday schools, for evening schools and for literary societies, and for such other meetings as the directors may deem proper," is valid, although the constitu- tion exi^ressly provides that public funds shall not be appro- priated iov sectarian or private purposes.''^ 308. The court said, quite correctly as it seems to the writer: In what manner, from the holding of religious meetings in the schoolhouse, complainant is going to be compelled to aid in furnishing a house of religious worship, and for holding religious meetings, as he complains in his bill, he does not show. "We can only imagine that possibly, at some future time, he might as a taxpa^'er be made to contribute to the expense of repairs rendered necessary from wear and use of the building in the holding of religious meetings. A single holding of a religious meeting in the schoolhouse, might, in that wav, cause damage in some degree to the building, upon the idea that continual dropping wears away stone, but the injury woidd be inappreci- able. As respects any individual pecuniary expense which might be in this way involved, we think that consideration may be properly disposed of iinder the maxim de minimis^ etc. Eeligion and religious worshin are not so placed under the ban of the constitution that they may not be allowed to become the recipient of any incidental benefit whatsoever from the pub- lic bodies or authorities of the state. That instrument itself contains a provision authorizing the legislature to exempt prop- erty used for religious purposes from taxation, and thereby, the same as is complained of here, there might be indirectly im- posed upon the taxpayer the burden of increased taxation, and in that manner the indirect supnorting of places of worship. In the respect of the possibility of enhanced taxation therefrom, this provision of the constitution itself is even more obnoxious to objection than this permission given by the school directors to hold religious meetings in the schoolhouse. There is no pretense that it is in any way an interference with the occupa- tion of the building for school purposes.'^® 3C9. The fact that the teachers in a public school wear the distinctive garb of a sectarian order to M-hich they belong does not violate constitutional provisions against sectarianism in the public schools, and such acts cannot be enjoined." 75 Seo constitution quoted in § 268 '''i Hysong v. Gallitzin Borough of this work. School District, 164 Pa. St. 629, 30 7iJ Nichols V. School Directors, 93 Atl. Eep. 482, 44 Am St Rep 632 111. 61, 34 Am. Rep. 160. 26 L. R. A. 203. THE PURPOSES OF TAXATION. 183 While a scliool board might doubtless prescribe a nniforin garb for teachers, if any good reason for doing so apjoeared, and could not prescribe any garb of a sectarian kind, there can be no doubt that in the absence of such regulations a teacher may wear any clQthes she pleases. Charitable institutions under private control. 310. The tendency of the <;ourts with respect to appropriations for charitable institutions wholly or partly under private con- trol is to uphold such appropriations where they can do so. The argument in favor of such appropriations is, that it is primarily the duty of the state to support the poor and the indigent sick, and to provide homes and reformatories for children and others who are in need of care, and that, if private or semi-public insti- tutions do this work which the state or its municipalities other- wise would have to do, the public moneys may properly be appro- priated wholly or partially in repayment.^* 311. The subject was discussed in a ISFew York case.™ The Shepherd's Fold was a corporation whose objects were the sup- port and education of orphan or friendless children ; also the train- ing and education of the children of poor clergymen. The magis- trates of Xew York were authorized to commit orphans and friendless children to its charge. The municipal authorities were required by law to levy a tax and pay the proceeds to it for the purposes of the corporation. The corporation brought suit to compel payment to it of the proceeds of the tax. Payment was resisted upon two grounds : (1) That the money was state money, hence the law violated a constitutional provision of New York, that the money of the state should not be used in aid of a private undertaking; or (2) If the money was not state money it was city money, and the law was hence obnoxious to another consti- tutional provision, which forbade that city money should be paid for charitable purposes, except for the support of city or county poor. Both these provisions are frequently found in other state xionstitutions, and they embody general principles, so that the decision may be helpful for guidance. 312. The court held that the money was not state money, so that (1) did not apply. As to (2) the corporation coimsel con- 78 Henry v. Cohen, 66 Ala. 382; 79 The Shepherd's Fold of the Pro- Wisconsin Industrial School v. Clark testant Church v. The Mayor, etc., of County, 103 Wis. 661, 79 N. W. Kep. New York, 96 N. Y. 137. 422. 184 CONSTITUTIONAL LAW OF TAXATION. tended that the appropriation in question was not a provision for the support of city or county poor, because the money "was given " to he applied to the purposes and objects of said corporation," and these included other purposes besides the support of city or county poor, viz., the education of the children of i:)oor clergy- men and other children whom the trustees might deem it expe- dient to receive. To this the court said : We do not think this objection necessarily fatal. The main corporate purpose was to support orphans and other friendless children, and by the act of 1868 the magistrates and commis- sioners of charities of the city were empowered to place destitute children in the care of the plaintifE, and we think that the legis- lature had power to authorize the city to provide for the burden assumed by the plaintifE and that which might be cast upon it under the act of 1868 I)}' the payment of a gross annual sum, instead of keeping a separate accoimt of the expense of support- ing each child who might be committed or transferred under that act, or of each destitute child, living in the city, who might be received by the plaintifE, and who otherwise would have become a county charge. It was a matter of legislative discretion to determine how the expense of these children should be provided for, or hoii' the plaintiff should he compensated for hearing the part of the public hurden which it assumed. The gross com- pensation, when paid to the plaintiff, would necessarily become its property and applicable to its general corporate purposes, and we do not think it essential to the validity of such an appropri- ation of city money, that the corporation to whom the payment is authorized should be one whose corporate powers are restricted to the receipt and support of city or county poor. 313. In a recent case in ISTew York, the effect of the provi- sion of the constitution of 1895, permitting appropriations to be made to asylums, etc., was considered. This provision is: ITothing in this constitution contained shall prevent the legis- lature from making such provision and support of the blind, the deaf and dumb, and juvenile delinquents, as to it may seem proper; or prevent any county, city, town or village from pro- viding for the care, support, maintenance and secular education of inmates of orphan asylums, homes for dependent children or correctional institiTtions, whether under public or private control. Payments by counties, cities, towns and villages to charitable, eleemosynary, correctional and reformatory institutions, wholly or partly under private control, for care, support and mainte- nance, may be authorized, but shall not be required bv the legis- lature. No such payments shall be made for any inmate of such institutions who is not received and retained therein pursuant to THE PURPOSES OF TAXATION. 185 rules established by the state board of charities. Such rules shall be subject to the control of the legislature by general laws.^** 314. The action was brought by a taxpayer to restrain a munic- ipal board of education from paying the salaries of four teachers, who were members of a religious order, and who gave both secular and religious instruction (at different hours) to the inmates of an incorporated orphan asylum, which was controlled by a reli- gious denomination. The question was whether the piiblic money might be used for the secular education of children in such ait asylum. Under the constitutional provision quoted it was held that the statutes authorizing the payment were constitutional.** 315. The question has often arisen in another form, to wit: under laws exempting charitable institutions from taxation and constitutional provisions, prohibiting such exemptions except to public charities. The subject is more fully discussed in the chapters of this work which relate to exemptions, and to equality and uniformity in taxation f*" but inasmuch as the question in the class of cases referred to is, what is a public charity? and inasmuch also as the constitutional provisions discussed are only expressions of the inherent jDrinciples of taxation, it seems proper to examine them in this connection, as illustrative of the limitations which confine the application of the taxing power in aid of charitable institutions. It should be remem- bered that the exemption of any institution from taxation is really taxation of persons and property not exempted, in aid of the institution so exempted. In Philadelphia v. Masonic Home^^ the defendant -was an in- corporated home for the relief of aged and indigent Mason?, supported by voluntary contributions. The question was whether the defendant ^vas a public charity under laws exemjDting purely public charities from taxation. The court held that inasmuch as admission to the home was restricted to a particular class of men, to wit, Masons, it was not a public charity, hence not en- 80 Art. Vin, § 14. No money can biiates' Home v. Comptroller of Brook- be pa,id to any institution under this lyn, 152 N. Y. 399, 46 N. E. Rep. 852. provision, for any inmates who are si Sargent v. Board of Education of received in contravention of the rules Eoehester, 177 N. Y. 317, 69 N, E. of the state board of charities. >Iit- Eei). 722. ter of N. Y. Juvenile Asylum, 172 N. 8la ,See index. Y. 50; People ex rel. Institution for 82 160 Pa. St. 572, 28 Atl. Rep. 954, the Blind v. Fitch, 154 N. Y. 14, 47 40 Am. St. Rep. 736, 23 L. R. A. 545, N. E. Rep. 983. This provision does apparently overruling Burd Orphan not nullify laws existing at the time Asylum v. School District, 90 Pa. St. of its adoption. People ex rel. Ine- 21. 186 CONSTITUTIONAL LAW OP TAXATION. titled to the exemption. It was contended that, since the home, by supporting Masons who wonld otherwise be supported by th; public, relieved the public to that extent, it was a public charity. To this the court said: Nor does the argument that, to the extent it benefits Masons, it necessarily relieves the public burden, affect the question; there is no public burden for the relief of aged and indigent Masons; there is the public burden of caring for and relieving aged and indigent men, whether they be Masons or anti-Masons ; but age and indigence concern the public no further than the fact of them; it makes no inquiry into the social relations of the subjects of them. 316. In a case in Minnesota,** under a similar constitutional provision, exempting purely public charities from taxation, it was held that the property of a hosj)ital, free to all who were not able to pay, and which charged a small fee to those who were able to pay, was exempt. The essential difference between this case and the one just discussed is that in the Pennsylvania case the charity was confined to Masons, while in the Minnesota case it was open to all. The test is, said the Minnesota court : If the institution is one the benefits of which the public gen- erally are entitled to enjoy it is then a purely public charity — puldie, because, although not owned by the public, its uses and objects are public; purely public, because its uses and objects are wholly public and for the benefit of the public generally, and in no sense private as being limited to particular indi- viduals.** 317. A charity may still be public, however, although it re- stricts its admissions to a class of humanity, such as the blind, the deaf, those suffering under special diseases, the aged, the infants, men or women, so long as the classification is determined by some distinction which affects or may affect any of the whole people, although a small n\imber only may be directly benefited. Buc when tlie right to relief depends on the fact of voluntary affilia- tion with some particular society, then a distinction is made which does not concern the general public.^ S3 County of Hennepin v. Brother- Humphries v. Little Sisters of the hood of Gethsemane, 27 Minn. 460, 38 Poor, 29 Ohio St. 221 ; Donohuo-h's Am. Rep. 29S, 8 N. W. Rep. 595. Appeal, 86 Pa. St. 306. ° 8-4 To the same general eiTect are ss Philadelphia v. Masonic Home Gerke v. Pureell, 2.) Ohio St. 229 (a 160 Pa. St. 572, 40 Am. St. Rep. 736i Roman Catholic parochial school) ; 28 Atl. 954, 23 L. R. A. 545. THE PURPOSES OP TAXATIOK. 187 The fact that a charge is made to those able to pay does not destroy the public character of the charity, if it is free to those unable to pay without distinction of class.^ 318. In Mississippi the constitution expressly provides that: It sliall be the duty of the legislature to provide by law for the treatment and care of the insane; and the legislature may provide for the care of the indigent sick in the hospitals in the state.*'^ The board of supervisors shall have power to provide homes or farms as asylums for those persons, who, by reason of age, infirmity or misfortune, niav have claims upon the sympathy and aid of society; and the legislature shall enact suitable laws to prevent abuses by those having the care of such persons.®^ Appropriations for special classes. 319. Even for purposes which are in themselves public, the public money cannot be appropriated for the benefit of a special class, to the exclusion of others.** This is illustrated by a Mis- souri case.'"' The legislature had passeArt. Ill, § 53. 214 CONSTITUTIONAL LAW OF TAXATION. after service has been rendered or a contract has been entered into and performed in whole or in part, nor pay or authorize the payment of any claim hereafter created against the state, or any county or municipality of the state, under any agreement or con- iract made without authority of law: Provided, that this section shall not apply to claims incurred by public officers in the execu- tion of the laws of the state."- 377. Washington. The legislature shall never grant any extra compensation to any public officer, agent, servant, or contractor after the services shall have been rendered or the contract entered into, nor shall the compensation of any public officer be increased or diminished during his term of office.^ 378. West Virginia. J>[o extra compensation shall be granted or allowed to any pub- lic officer, agent, servant or contractor, after the services shall have been rendered or the contract made ; nor shall any legislature authorize the payment of any claim or part thereof, hereafter •created against the state, under any agreement or contract made, •without express authority of law; and all such unauthorized agreements shall be null and void. Nor shall the salary of any public officer be increased or diminished during his term of office, nor shall any such officer, or his or their sureties be released from any debt or liability due to the state; Provided, the legislature may make appropriations for expenditures hereafter incurred in suppressing insurrection^ or repelling invasion.* Extra compensation. 379. The rule allowing the recognition of moral or equitable obligations, of course warrants the grant of extra compensation for extra-contractual service rendered to the public by one who has no strictly legal claim. Thus it has been held that a town may levy a tax to pay extra compensation to a contractor for building a public edifice, although the town is under no legal liability.* Some of the express constitutional provisions, just quoted, pro- hibit the grant of such compensation; and some decisions con- struing these restrictions follow. 379a. An appropriation to the employees of a legislative body, ■whose salaries are fixed by law at a per diem rate of compensa- lArt. VI, § 30. 3 Art. VI, § 38. :2Art. II, § 25. 4 Friend v. Gilbert, 108 Mass. 408. THE PURPOSES OF TAXATIOST. 215 tion In addition to tlieir salaries, violates a constitutional provi- sion forbidding extra compensation to any public officer. It makes no difference that the appropriation is intended to be com- pensation for " extra time." The employees, being paid by the day, are bound to work as long as the legislature chooses to remain in session each day.® 380. But v^here the employees perform duties different in character from their ordinary duties, in addition to their ordinary duties, they may receive additional compensation for their special duties.^ So a notary public, employed in a public office, may receive fees as a notary in addition to his official salary.®^ It was said in a Texas case that a provision against extra com- pensation " evidently means that where compensation is agreed upon or fixed for certain services, no extra compensation will be allowed for the same service. It was not intended to embrace claims that arose out of extra service. If extra service was ren- dered by proper authority compensation could be made." '' It was argued in one case that the prohibition was " against the legislature and not against either branch of the legislature." This argument was dismissed as " scarcely worthy of comment." * 381. An appropriation by the legislature of moneys to pay the salary of a state officer during a certain period before his salary had been fixed is not a grant of extra compensation.® Where provision for the payment of a lawful claim has been previously made by law, under which law no payment has ever been made, the prohibition does not apply. ■'*' 382. A constitutional provision, prohibiting the payment of extra compensation to a public officer or contractor, does not pre- vent a board of claims from allowing and the legislature from paying a claim based upon actual service rendered. Thus where public officers nad actually performed their duties but the statute which provided for their compensation had been held unconstitu- tional, a law which referred their claims for compensation to a 6 Robinson v. Dunn, 77 Cal. 473, 19 App. Div. 62; Knox v. Xew York, 78 Pac. Rep. 878, 11 Am. St. Rep. 297; App. Div. 368. State V. Cheetham, 21 Wash. 437, 58 7 Nichols v. State, 11 Tex. Civ. App. Pac. Rep. 771; State ex rel. Fields v. 327, 32 S. W. Rep. 452. Williams, 34 Ohio St. 218. 8 State v. Oheetham, supra. 6 State V. Cheetham, 21 Wash. 437, » Smith v. Dunn, 64 Cal. 164, 28 58 Pac Rep 771 P^^'- ^^P- 2^2- 6a Merzbach v. New York, 163 N. Y. 10 State v. Crawford, 35 Ark. 242. 16; see Benjamin v. New York, 77 216 CONSTITUTIONAL LAW OF TAXATION. board of claims " to hear and determine " was upheld. The- court said of the act : It grants no extra compensation. It merely gives jurisdiction to hear and determine a claim for reasonable compensation for services rendered in a case where the compensation attempted to be provided by law failed by reason of the invalidity, under the constitution of the United States, of the provision for such com- pensation, and the claimants had consequently rendered bene- ficial services, accepted and ratified by the legislature, without any valid provision for their compensation. It does not come within the evils at which the constitutional prohibition was aimed.^i 383. In a Texas case, a constitutional provision forbidding' extra compensation to contractors and forbidding the payment of claims against the state, not authorized by pre-existing law,^^ wa,s construed with reference to a claim for payment for extra work upon a public building, in addition to the contract price. The legislature had authorized the construction of the building, and in express terms limited its cost to $40,000. The contract was let for $39,663. After the work was begun alterations and addi- tions were made under a subsequent contract between the com- missioners in charge and the contractor, which increased the cost about $12,000, upon the promise that the contractor would look to the state for the additional sum, and that the commissioners Avould recommend its appropriation to the next legislature. TIig next legislature did not make the appropriation. The state re- ceived and used the building, and paid the sum due under the original contract. Afterward the legislature passed an act al- lowing the representative of the contractor to sue the state upon the claim for extra work, and providing that any final judgment in favor of the claimant should be paid by the state. In the suit brought by the claimant imder this act judgment was finally rendered against her on the ground that the legislature had no authority to pay the claim. It was held that, as the cost of the building was limited by law, any contract in excess of the limit was void, and that there could be no ratification while the original law existed.-'* n Cole V. State, 102 N. Y. 48-59, 6 is Nichols v. State, 11 Tex. Civ. App. N. E. Eep. 277. 327, 32 S. W. Rep. 452. 12 See § 375 of this work. THE PUKPOSES OF TAXATION. 217 This case should be distinguished from the cases in which it was held that the state officers had implied authority to make the contracts under which claims were allowed. Legislative audit of private claims. 384. The provision of the JSTew York constitiftion which forbids the legislature to audit or allow a private claim against the state, but allows it to appropriate money to pay such claims when audited/* does not prevent the legislature from referring such claims to a board of claims for judicial hearing and determina- tion.'^ The language of the constitution, indeed, contemplates an adjudication of such claims by an appropriate tribunal. 385. In one of the cases cited it was contended that the pro- vision was intended, not only to prevent the legislature from act- ing judicially in passing upon private claims, but from passing any law under which a private claim could be established against the state, however just and equitable it might be, unless it was founded on a legal liability which could be enforced by the courts of justice against an individual or a corporation. This contention was rejected, and it was held that : We are unable to find in the constitution anything which deprives the legislature of the power of giving to the board of claims, or any other proper tribunal, jurisdiction to hear and determine claims against the state which are founded in right and justice, solely for the reason that they could not be enforced against an individual in the courts. . . . Where the creation of a particiilar class of liabilities is prohibited by the constitution, it would of course be an infraction of that instrument to pass any law authorizing their enforcement, but in the absence of any such prohibition there is no good reason why the state should be powerless to do justice, or to recognize obligations which are meritorious or honorary and to provide tribunals to pass upon them.i* 386. In another case the claimant had rendered services and furnished materials, at the request of the state quarantine officers, in repairing and fitting up vessels and property used in quarantine w Quoted in § 370 of this work. N. Y. 146, 8 Am. St. Rep. 726, 19 16 Cole V. State, 102 N. Y. 48, 6 N. N. E. Rep. 655, 2 L. R. A. 003. E Ren 277: CHara v. State, 112 "Cole v. State, 102 N. Y. 48, 53, *^ 54, 6 N. E. Rep. 277. 218 CONSTITUTIONAL LAW OF TAXATION. affairs. The claimant sued the state health officer in the courts, but was defeated on the ground that the state, and not the health officer, was liable. He then presented his claim to a state " Board of Audit," but the claim was rejected on the ground that the state was not liable; and that the health officer was liable. The legislature then authorized the state " Board of Claims " to " rehear, audit, and determine," the claim, and to award to them " such sums as upon due proof before said board shall be a reason- able compensation therefor." The Board of Claims, under au- thority of this act, heard the proofs and made an award against the state. On appeal from the award the state contended that the act which referred the claim to the Board of Claims con- travened the constitutional provision under discussion. The award was sustained, the Court of Appeals saying: 387. It cannot be questioned, we think, but that when individuals voluntarily furnish property or render valuable services to the state, at the request of state officers for state purposes, but with the expectation of payment for the same, the legislature may ratify the acts of such officers, though previously unauthorized, and create a legal liability on the part of the state to pay for such property and services, enforceable in its tribunals. The act of tlie legislature in supplying defects or omissions in pre- existing legislation whereon a liability may be predicated against the state, is clearly not the audit of a claim; neither is it an allowance thereof. The power of auditing and allowing is ex- pressly referred to the tribunal authorized to hear and determine such claims, and they may allow or reject them as in their judg- ment seems just. ... It cannot, we think, be said that the constitutional provision was intended to disable the state from paying for property or valuable services received by it from indi- viduals, because they were furnished under the stress of an immi- nent necessity, without previous authority of law. Although such acts constituted no legal claim against the state^ and could not be enforced in an action of law, they formed, in justice and right, irresistible claims upon its honor, and are, we think, within the power of the legislature to legalize, and, when authorized and approved by legal tribunals, within its power to provide for and pay." 388. Likewise it has been held that where a bridge was erected under a contract with a town, which contract was adjudged to be void for lack of authority, an act of the legislature is valid which nO'Hara v. State, 112 N. Y. 146, 151, 152, 153, 8 Am. St. Rep. 726, 19 N. E. Rep. 659, 2 L. R. A. 603. THE PUKPOSES OF TAXATION. 219 legalizes the acts of the town in making the contract, and pro- vides that the act shall not be so construed as to require the to\'.ii to pay the amount audited by the town board or the contracr price of the work, but that the contractor may bring suit against the toMTi to recover a fair and reasonable compensation for his work and materials.^^ 389. In Ohio, upon general grounds, it was held that the legis- lature had no power to enact a law commanding a local board of education to levy a tax to pay a claim asserted against it by a private individual. The claim was for reimbursement to the individual of public moneys with which he was charged, and which, being lost, he had been obliged to pay to his successor in public office. It Avas held that the act was in effect a legislative audit of a private claim.^^ Likewise in Michigan, under a con- stitution forbidding the legislature to audit private claims, the legislative authority to audit and compel a municipality to pay a private claim is denied.^" Legislative waiver of defenses and interference with judgments. 390. The principle that the legislature may recognize moral obligations was applied in a recent case in New York. One who had taken a deed of lands from the state, paying a valuable con- sideration therefor, was evicted by reason of a defect in the title which the state gave him. The deed from the state expressly provided that the conveyance should " in no wise operate as a warranty of title." The legislature enacted a law, referring his claim for damages on account of the eviction, to the Court of Claims, with authority to determine the claim and render judgiiient. The act was upheld against the contention that it was uncon- stitutional, in that it amounted to a waiver of the state's defense, based on the absence of warranty ; hence that it was in effect the audit of a private claim and amounted to a gift of public money. It appeared that there were strong equities in favor of the claim- ant. The defense of lack of warranty, it was- held, was a tech- 18 Wrought Iron Bridge Co. v. Town Ohio St. 531, 46 Am. St. Rep. 588, 38 of Attica, 119 N. Y. 204, 23 N. E. N. E. Rep. 614, 25 L. R. A. 770. Rep. 542. ^ Fitch v. Board of Auditors, 133 19 Board of Education v. State, 51 Mich. 178, 94 N. \V. Rep. 952. 220 CONSTITUTIONAL LAW OF TAXATION. nical defense not going to the merits, and as such the legislature could waive it.^^ 391. In an action between individuals it is well settled that the legislature cannot grant a new trial after the litigation is closed by final judgment. But with respect to actions between individuals and municipal corporations the case is different. Individuals not under legal disability can wage their litigations^ upon equal terms as to their liability for their acts, omissions, contracts, and representations; but the liability of municipal corporations or their officers is often so dependent upon the power given them by statute that the limitations upon that power some times compel a judgment against the individual contrary to the merits. In the absence of express constitutional provisions limit- ing the power, it seems that the legislature can direct the levy of a tax upon the taxable property of a subordinate political subdi- vision, and appropriate the same to the payment of the claim of an individual who has been defeated in an action brought by him to recover the same claim, where there is some foundation of justice and equity for the claim; and it seems that this can be done against the will of the locality which must pay the tax. , 392. Where the commissioners of a town had brought an action in their official capacity, hj direction of the voters of the town, and had been defeated and obliged to pay costs, they sued the town for the amount of the costs. They were defeated, the court of last resort holding that they had no legal remedy. They then procured a legislative ac(i authorizing the voters of the town to determine whether or not the claim should be paid. The voters decided not to pay it. The legislature then enacted that the county commissioners should hear and determine the claim, and to levy the amount awarded on the taxable property of the town. It Avas held that this act was constitutional.^^ 393. Where the constitution, however, expressly forbids mak- ing gifts or loans of the public money, a different question is presented, and it is held in ISTew York that while the legislature may grant a new trial in cases of claims against the state or its municipalities where judgment has gone against the claimant merely by reason of some formal defect in the steps by which 21 Wheeler v. State, 97 App. Div. the Court of Appeals and should be 276, 90 N. Y. Supp. 18. The Appellate looked for in late New York reports. Division was divided, two judges dis- 22 Town of Guilford v. Supervisors senting. The case may probably go to of Chenango County, 13 N. Y. 143. THE PURPOSES OF TAXATION. 221 the claim was created, it cannot do so where the judgment has gone against the claimant on the merits.^ 394. Thus where the receiver of a hank sued a county, the question in the case being whether the bank or the county was equitably entitled to [he proceeds of a certain note and draft, and the judgment on the merits was against the receiver, tlie receiver then procured an act of the legislature vacating the judgment and granting a new trial before a referee to be speci- ally appointed for the purpose. This act was held to be uncon- stitutional. Said the Court of Appeals: The distinction between the gratuity which the constitution now forbids, and the meritorious claim which it permits munici- pal bodies to satisfy, notwithstanding judgment adverse to the claimant, is apparent. Where such final judgment is upon the merits, for thf legislature to vacate or disregard it and direct the levy of a ta.r to pay i/, either without a new trial or with judg- ment upon it, would he the hestowal of a gratuity. But where such judgment is not upon the merits, but because of some defect in the authority of the officers to bind the municipal body, for which they assume to act, and thus in good conscience is not decisive against the justice of the claim, the legislature may, in order that justice shall prevail, direct its re-examination and determination, and, if found to be just, direct that it be provided for by taxation. The limitation which the law wisely imposes upon the powers of public oSicers and their methods of exercising them may sometimes result in vesting in the municipal body, without am- fault of the individual, his money or labor or their products beyond remedy or recall, except by special legislative action. The legislature may ratify what it might originally have authorized, and it seems to be right that it should have the power to relieve against the special injustice which may some- times result from the limitations it has imposed upon the author- ity of the officers which it has empowered with the administration of its municipal creations. Whether in a given ease the legisla- ture has kept within its power or has exceeded it is, of course, a judicial question. Tested by this rule this act must fail, for the judgment, which it seeks to relieve against, passed against the receiver upon a full examination of the merits, and not be- cause of any disability of the county to do right, or lack of liability to respond, as the merits might require. If the receiver had recovered final judgment against the county in the former 23 Wrought Iron Bridge Co. v. Town N. E. Rep. 659, 2 L. R. A. 603. These of Attica, 119 N. Y. 204, 23 S. E. Rep. cases are discussed in § 384 et seq. of 542. See Cole v. State. 102 X. Y. this work. They turned upon a, dif- 48, 6 N". E. Rep. 277 ; O'Hara v. State, ferent constitutional provision but 112 N. Y. 140. S Am. St. Rep. 726, 19 they support the text. 222 CONSTITUTIONAL LAW OF TAXATION. action, it is plain that the legislature could not have reopened the ease in favlsr of the county ; the judgment awarded the county affirmative relief because of its rights, not negative relief because of its disability, and, therefore, the judsrment in its favor is as much above legislative invasion as if it had been in favor of the receiver.^* Claims barred by limitations. 395. Another constitutional provision which has received judi- cial attention in Nev? York is one which forbids the legislature or any persons acting on behalf of the state to audit, allow, or pay any claim " which, as between citizens of the state, would be barred by lapse of time." ^ This is a substantial limitation, for there can be no doubt that the general rule allows the legis- lature to recognize claims which, as between citizens, would be barred by lapse of time. But the provision is somewhat difficult of interpretation, for, as is said in one case, " there is but little analogy between the position of a state in reference to the prose- cution of claims against it and the condition of a citizen, subject at all times and in numerous tribunals to be brought into court imd prosecuted for his liabilities. The state can be prosecuted, in a legal sense, only by its own consent, and after it has created a tribunal to hear and decide claims against it." ^^ 396. It is held that the provision does not prevent the legis- lature from referring to the state board of claims — or the state board of claims from allowing — a claim which, up to the time of the legislative act in question, could not be enforced against the state because there was no tribunal in existence ia which it could be determined. In other words, it is held that the period of limitation does not begin to run until the claim becomes a valid and enforceable one.^^ And where the claim was based on a moral obligation to pay for work done or services rendered, without authority of law, the period of liimtation does not run from the time the work is done or the services ren- 24 Matter of Greene, 166 N. Y. 485, as it was decided while this book was 60 N. E. Rep. 183. passing through the press. 25 Provision quoted in full in § .370 26 O'Hara v. State, 112 N. Y. 146- of thi.s work. People ex rel. Kssex 154, 8 Am. St. Rep. 726, 19 N. E. Rep. County V. Miller, 181 N. Y. 438, 74 0.59, 2 L. R. A. 603. N. E. Rep. 477, is a ease construing 27 O'Hara v. State, 112 N. Y. 146, this limitation in a suit between a 8 Am. St. Rep. 726, 19 N. E. Rep. 659, county and a state. The case deserves 2 L. R. A. 603. attention which it cannot receive liere, THE PURPOSES OF TAXATION. 223 dered, but from the time when the legislature, by ratifying the hnplied contract thus created, and providing a tribunal for its enforcement, perfects the obligation which formerly was im- perfect.^ 397. And when there is a tribunal in which a claimant may have his claim determined, which tribunal is abolished before the time when the existing statutes of limitations would have barred the claim as between private citizens, the time which elapses from the date of the abolition of such tribunal to the date of an act which authorizes the claim to be heard by another tribunal is to be excluded from the computation of time in de- termining whether the claim is barred by the constitutional pro- vision under consideration.^ 398. In the case cited the claim, based on a contract with the state, would have been barred within six years from the time the state became liable under the contract, which was in November, 1879. From November, 1879, to May 30, 1883, there was in existence a state board of audit which had jurisdiction tn hear and determine the claim. On April 7, 1883, the legislature passed an act creating the state board of claims and abolishing the state board of audit, to take effect May 30, 1883. The new state board of claims had jurisdiction to hear and determine : (1) All claims accruing within two years next before its creation. The claim in question could not have been heard under this provision. (2) All claims pending before the board of audit on May 31, 1883. The only remedy thus left to the claimant was to file his claim with the board of audit between April 7, 1883, and May 31, 1883. The right to file his claim with the board of audit was thus cut down to a period of seven weeks and five days from the passage of the act of April 7, 1883, although before its pas- sage the right was not limited to any period of time. The claim- ant did not file his claim with the board of audit. It was held that this act of April 7, 1883, and a subsequent act of March 25, 1884, allowing claims to be filed with the board of claims until July 1, 1884, did not give a reasonable time to the claimant within which to file his claim, hence those acts did not operate as statutes of limitation to bar the claim under the constitutional provision.*"" 28 Ibid '"' Parmenter v. State, 135 N. Y. asParmenter v. State, 1.35 N. Y. 154, 154, 31 N. E. Rep. 1035. 31 N. E. Rep. 1035. 224 CONSTITUTIONAL LAW OF TAXATION. In another case it was held that the filing of a claim with state officers pursuant to an act of the legislature was equivalent to the coniraencement of an action between individuals, and suspended the operation of statutes of limitation.^' 398(1. In Mississippi an appropriation of money to pay a claim against a municipality, against which the statute of limitations had run, was held to be a gift for a private purpose.^^ Legislative audit of claim for debt incurred without express authority of law. 399. -A. constitutional requirement forbidding the legislature to pay any claim accruing under any agreement made without express authority of law has received judicial interpretation in California. It was held that this provision did not prevent the legislature from appropriating money to pay the salary of an expert employed by a state board of examiners, whose employ- ment was not expressly authorized by law. It was said that the board had implied poiver to hire such employees as were reason- ably necessary to carry on its work.** "Authority of law," it is held, means authority conferred by bill regularly passed and ap- proved hy the governor. Where a governor appointed an agent to represent the state at Washington, respecting the reimburse- ment of the state for expenditures incurred by it in the suppres- sion of Indian hostilities, and recommended that the legislature confirm the appointment and provide for the compensation of the emplo;)ee, and the legislature ::ttempted to confirm the ap- pointment and to fix the compensation by joint resolution, such proceedings, it was held, did not constitute authority of law, and the legislation fixing the compensation conferred no authority for paying it.** 400. The provision in the Texas constitution*® forbidding the legislature to appropriate money for tlie payment of any claim not provided for by pre-existing law is held to forbid the state to make good the loss of one who, having a valid warrant drawn against the state treasury, sells it for less than its face value (jecause there is no money in the state treasury to pay it.*^ 31 Coxe V. State, 144 N. Y. 396, 39 ::* MuIIan v. State, 114 Cal. 378, 46 N. E. Rep. 400. Pac. Rep. 670, 34 L. R. A. 202. 32 Trowbridge v. Schmidt, 82 Mias. 35 Quoted in full in § 375 of this 47.5, 34 So. Eep. 84. work. 33 Lewis V. Colgan, 115 Cal. 529, 47 36 State v. Wilson, 71 Tex. 291, 9 Pac. Rep. 357. S. W. Rep. 155. THE PURPOSES OF TAXATION. 225 Laws increasing cost of public supplies. 401. Laws fixing the hours of labor and the rate of pay for labor on public works have been condemned as appropriations of public money to private use, by compelling the public to pay more for such labor than it otherwise would. Such laws aro discussed elsewhere with respect to the legislative power to exer- cise compulsion over municipalities.^^ In so far as they pre- scribe the rate of wages or hours of labor for persons directly employed by the state, they have been upheld.^* In several states laws regulating the hours of labor or the rate of pay on munic- ipal work, whether done directly or by contract, have been con- demned on the ground, among others, that they amoimt to appro- priations of public money for other than public purposes.** The same is held of laws compelling a municipality to use some par- ticular class of materials in its work.*" On the other hand laws regulating hours of labor on municijial work are upheld by high authority.*-' 402, In New York laws regulating the wages of persons di- rectly employed by a municipality are upheld,*^ while laws regu- lating the wages to be paid by municipal contractors are void.*^ In New York, AVashington and in California municipal ordi- nances and laws which made it unlawful for any contractor on any public work to require or permit any laborer to work more than eight hours a day were held unconstitutional as being inter- ference with freedom of contract.** 37 See §§ 666 et seq. 4S L. ed. 148, 24 Sup. Ct. Rep. 124, 38 United States v. Martin, 94 U. S. affirming State v. Atkin, 64 Kans. 174, 400, 24 L. ed. 128 ; Clark v. State, 142 97 Am. St. Rep. 343, 67 Pac. Rep. N. Y. 101, 36 N. E. Rep. 817; In re 519; Re Dalton, 61 Kiins. 257, 59 Pac. Dalton, 61 Kans. 257, 59 Pac. Rep. Rep. 336, 47 L. R. A. 380. A mu- 336, 47 L. R. A. 380. nicipal ordinance that all city con- 39 City of Cleveland v. Clements tracts shall provide for the use of Brothers Construction Co., 67 Ohio stone to be dressed in the state has St. 197, 93 Am. St. Rep. 670, 65 N. E. been upheld in Missouri. Allen v. Rep. 885, 59 L. R. A. 775; Street v. Labsap, Mo. , 87 S. W. Rep. Varney Electrical Supply Co., 160 Ind. 926. 338, 98 Am.. St. Rep. 325, 66 N. E. « Ryan v. City of New York, 177 Rep. 895, 61 L. R. A. 154. In all N. Y. 271, 69 N. E. Rep. 599. these cases a strong- element of de- « People ex rel. Rodgers v. Coler, cision was the proposition that the 166 N. Y. 1, 82 Am. St. Rep. 605, 59 legislature may not exercise compul- N. E. Rep. 716, 52 L. R. A. 814. See sion over a city in such matters. See §§ 670 et seq. of this work for a fuller §§ 666 et seq. discussion of these cases. 40 People ex rel. Treat v. Coler, 166 44 Seattle v. Smyth, 22 Wash. 327, N. Y. 144, 59 N. E. Rep. 770. See 79 Am. St. Rep. 939, 60 Pac. Rep. § 672 1120; Ex parte Kuback, 85 Gal. 274, 41 Atkin V. Kansas, 191 U. S. 207, 24 Pac. Rep. 737, 20 Am. St. Rep. 226, 15 226 CONSTITUTIONAL LAW OF TAXATION. 403. A provision in a contract for a street improvement, to be paid for by local assessments, whereby the contractor agrees to wait for his pay until the assessment is collected, does not violate the prohibition of the loan of the city's credit in aid of private individuals.^® Eeference is made to §§ 1858 c4 seq. of this work, with respect to provisions in contracts for public improvements ■which tend unduly to increase the cost of such improvements.*®" Expositions, celebrations, and junkets. 404. Appropriations by states for the erection and mainte- - nance of state buildings at national, sectional, and international exhibitions have been iipheld. It is held to be a matter of policy within the power of the legislature to determine whether a state shall join in such celebrations. The general good to the commu- nity by reason of the celebrations is deemed to be a sufficiently public purpose.*^ Legislation authorizing counties to tax themselves in order to take part in such expositions is also upheld.*^ 405. There are cases denying to municipalities the right to appropriate moneys for the celebration of public events. These cases depend on the question whether the appropriation was within the powers granted by the corporate charter, and do not deny that the purpose of such celebrations may be public.*^ Where the corporate charter is broad enough to permit, or where in any other manner the legislature has authorized such appropriation s» they are upheld.*" 9 L. R. A. 482; People v. Orange Am. St. Rep. 629, 74 N. W. Rep. 59, County Road Construction Co., 175 39 L. R. A. 513 ; ; Shelby County v. Ex- X. Y. 84, 07 N. E. Rep. 129. position Co., 96 Tenn. 653, 36 S. W. 45Kronsbein v. City of Rochester, Rep. 694, 33 L. R. A. 717. In both of 76 App. Div. 494, 78 N. Y. Supp. 813. these cases the exposition was one «a See Knowles V. City of New York, held within the state; but the rea- 176 N. Y. 430, 68 N. E. Rep. 860; soning of the cases would have sus- Kay V. Monroe, 93 App. Div. 484, 87 tained the appropriations regardless X. 'Y. Supp. 831; Barber Asphalt Pav- of this fact. ing Co. v. Willeox, 90 App. Div. 245, « Hood v. Mavor, 1 Allen, 103; 86 N. Y. Supp. 69; Rose v. Low, 85 Tash v. Adams, 10 Cush. 252; New App. Div. 461, 83 N. Y. Supp. 598, London v. Brainard, 22 Conn. 552; for interpretation of statutes as to Bayle v. New Orleans, 23 Fed. Rep. increasing cost of public work by lim- 843. It has been held that a city has ited specifications. no power to appropriate money to pay 46 Daggett V. Colgan, 92 Cal. 53, 27 for entertaining the officers of a visit- Am. St. Rep. 95, 28 Pae. Rep. 51. 14 ing fleet. Austin v. Coggeshall, 12 R. L. R. A. 474; X'orman v. Kentucky 1.329. Board of Managers, 93 Kv. 537, 20 « Tatham v. Philadelphia, 11 Phila. S. «'. Rep. 901, 18 L. R. A. r^oi^. 270; Hill v. Easthampton, 140 Mass. 47 State A. Cornell, 53 Neb. 556, 68 381, 4 N. E. Rep. 811; Hubbard v. THE PURPOSES OP TAXATION. 227 An act of the legislature of Kentucky provided for the estab- ■ lishment and maintenance of a state fair, to be under the contr(jl and management of a live stock breeders' association, an existing cor2:)oration, for the development of live stock, agricultural and kindred interests of the state, and appropriated $15,000 annvi- ally, to be expended for the payment of premiums. It was held that the appropriation was for a public purpose, and within the power of the legislature.^" 406. The Supreme Court of Pennsylvania recently sanctioned, as a proper public charge, a bill of several thousand dollars for the expenses of the legislature in attending the dedication of the monument of General Grant, in ~New York. In order that it may clearly appear just what the Supreme Court and the legis- lature of Pennsylvania regard as proper public charges, the bill is set forth in detail in the note. Two of the justices dissented from the decision.®^ Taunton, 140 Mass. 467, 5 N. E. Rep. 157. In Hayes v. Douglas County, 92 Wis. 429, 53 Am. St. Rep. 926, 05 N. W. Rep. 482, 31 L. R. A. 213, a tax levied by a county to pay for placing stones in the state building at the World's Fair was held " unauthorized and void," but the grounds of the de- cision are not stated. 50 Kentucky Livestock Breeders' Assn. V. Hager, Ky. , 85 S. W. Rep. 738. 51 Russ V. Commonwealth, Pa. St. , 60 Atl. Rep. 168. The fol- lowing quotation is from the dissent- ing opinion: " That there may be no doubt as to the claim for which this action was instituted, and the items of whicli the majority of this court says are charge- able against the Commonwealth of Pennsylvania, we state the claim in the language of the plaintiff himself, as found in his statement, as follows: '' Legislature of Pennsylvania. Ex- cursion to New York City, General Grant Monument Dedication. To James Russ, Dr. 1897, April 27. To table supplies. $1,678 36 To wines and liq- uors 3,026 60 To supper at Doon- cr's for com $61 90 To J. H. Riebel, cigars 450 00 To hire of china and breakage . . 187 53 To employees' serv- ices 240 00 To car fare 202 50 To purchase of stoves 70 00 To freight charges. 8 75 To James Russ, incidental e x - penses 175 00 i Or. By liquors re- turned $157 00 By sale of stoves. 32 00 1,100 IS 189 00 $5,911 16 " The edibles and drink were fur- nished as 11 lunch and dinner; both meals being served between the hours of 11:30 a. m. and 6 p. m., on the boat which carried the legislative ex- cur'iionists on the Hudson river from Jersey City to a point opposite the Grant monviment, a distance of ten miles or less, and back. There were 425 persons, of which number 253 were members of the legislature." CHAPTER V. TAXING DISTRICTS — THE RELATION BETWEEN THE TAXING DISTRICT AND THE PURPOSE OF THE TAX— THE LEGISLATIVE POWER IN THE CREATION OF TAXING DISTRICTS. 407. In no aspect of the constitutional law of taxation does the principle of equality more clearly appear than in the rules — largely theoretic to be sure — which limit taxation of any par- ticular community to purposes in which that community has an interest. It needs no argument to show that there is inequality where one community is taxed for purposes in which it has no interest, or where burdens which properly belong to a whole state or to the general public are laid on some smaller community. Conversely it is plain that when each community is taxed alone for purposes which pertain to it, to that extent equality is at- tained. Yet in the rules of actual decision which govern the formation of taxing districts and the apportionment of burdens among them, the reign of equality has not yet fairly begun. The principle of order, the tendency toward obedience of central authority, here intervene. The general rules of decision leave so much to the legislative discretion, making the legislature in most cases the sole judge of the existence of the necessary relation be- tween the purpose of the tax and the district taxed that except in the most flagrant cases the rule of equality is little more than a rule of interpretation. 408. In the clearer cases controversy seldom arises, for legis- latures rarely or never impose a tax on the members of one community which is plainly and absolutely for the sole benefit of another. A city is never taxed to pay the cost of a city hall in another city witli ^\hich it has no connection. A school district is never taxed solely to pay for a schoolhouse in a distant territory. When legislation is enacted which becomes the subject of judicial examination with respect to the matters here discussed, there is generally some reason for saying that the questionable tax is laid for a purpose beneficial to the taxed district. For instance, where a county is permitted to tax itself to secure the location therein of 1228] FOEMATION OF TAX DISTRICTS. 229 a state institution, it may be said that peculiar benefits will accrue to that county which will not be shared by the other parts of the state, and where the owners of property abutting on a street are assessed for the cost of paving the street, the assess- ments are laid upon the theory that the o-wners of property thus assessed receive a peculiar benefit in addition to that which they receive as members of the general public. In these cases the question whether the local taxing district should jiay a part of the cost becomes one of fact, as does also the question of the proportions in which the cost of the work shall be apportioned between the general public and the locality. Where the consti- tution does not expressly command otherwise this question of fact is left to the determination of the legislature, and the cases aro practically unanimous to the effect that its determination in these respects is conclusive in the absence of express constitutional restrictions.^ 409. The language of an oft-quoted decision states the general rule in this respect, the case involving the legislative power to create a taxing district for local improvements: In the absence of any more specific constitutional restriction than the general prohibition against taking property without due process of law, the legislature of the state, having the power to fix the sum necessary to be levied for the expense of a public improvement, and to order it to be assessed, either, like other taxes, upon property generally, or only upon the lands benefited by the improvement, is authorized to determine both the amount of the whole tax, and the class of lands which will receive the benefit and should therefore bear the burden, although it may, if it sees fit, commit the ascertainment of either or both of these facts to the judgment of commissioners.^ iFallbrook Irrigation District v. 35 L. ed. 410, 11 Sup. Ct. Rep. 825; Bradley, 164 U. S. 112, 41 L. ed. 369, Simpson v. Kansas City, 46 Kans. 438, 17 Sup. Ct. Rep. 56; Parsons v. Dis- 26 Pac. Rep. 721; Mound City Land trict of Columbia, 170 U. S. 45, 42 and Stock Co. v. Miller, 170 Mo. 240. L. ed. 943, 18 Sup. Ct. Rep. 521; Wil- 70 S. W. Rep. 721, 94 Am. St. Rep. liams V. Eggleston, 170 U. S. 304, 42 727, 60 L. R. A. 190; Schneck v. Jef- L. ed. 1047, 18 Sup. Ct. Rep. 617; fersonville, 152 Ind. 204, 52 N. E. Rep. People V. Brooklyn, 4 N. Y. 419, 55 212; Moody v. Spotorno, 112 La. 1008, Am. Dec. 266; Litchfield v. Vernon, 36 So. Rep. 836; Kettle v. Dallas, 41 N. Y. 123 ; Genet v. City of Brook- Tex. Civ. App. , 80 S. W. Rep. 874 , lyn, 99 N. Y. 296, 1 N. E. Rep. 777; 2 Spencer v. Merchant, 125 U. S. 345, Howell V. City of Buffalo, 37 N. Y. 31 L. ed. 763, 8 Sup. Ct. Rep. 921, 267; Lent v. Tillson, 72 Cal. 404, 14 affirming 100 N. Y. 585, 3 N. E. Rep. Pac. Rep. 71; affirmed, 140 U. S. 316, 682. 230 CONSTITUTIONAL LAW OF TAXATION. The legislative power in forming tax districts is not unlimited, 410. There are cases wliieh say that the conclusiveness of the legislative determination in this regard is subject to one inherent limitation aside from express constitutional restrictions, to wit: The legislature cannot arbitrarily determine that a community has an interest which justifies taxation when there is in fact no shadow or vestige of interest. If there exists the remotest inter- est • — for the taxed community — in the purpose of the tax, the determination of the legislature that such interest is sufficient to justify taxation is final and conclusive — not the subject of re- view by the courts. But if it appears plainly that the community taxed has no possible interest in the purpose of the tax, the legislative assertion that such an interest exists is not a proper legislative act, and .the judicial authority will disregard it. An act of the legislature authorizing contributions to be levied . . . for a purpose which, though it be public, is one in which the people from whom they are exacted have no interest, would not be a law, but a sentence commanding the periodical payment of a certain sum by one portion or class of people to another. The power to make such an order is not legislative, but judicial, and was not given to the assembly by the general grant of legis- lative authority. But to make a tax law unconstitutional on this ground, it must be apparent at first blush that the community taxed can have no possible interest in the purpose to which their money is to he applied. And this is more especially true if it be a local tax, and if the local authorities have themselves laid the tax in pur- suance of an act of assembly.^ 41 1 . In Pennsylvania, where the doctrine that the legislature is absolute in such matters has been pushed very far, this limi- tation has been enforced in a case of taxation by way of assess- ment for alleged local improvements.* There the legislature had established a road seven miles long, partly in the suburbs of a city and partly in the country, passing through seven townships ; and had created a special tax district, including all the lands on either side within one mile, which were assessed a specified sum per 3 Sharpless v. Mayor of Philadel- 159; Knowlton v. Rock County, 9 Wis. phia, 21 Pa. St. 147, 59 Am. Dec. 759; 410. J?e Washington Avenue, 69 Pa. St. 352, * Washington Avenue, 69 Pa. St. 8 Am. Rep. 255 ; Lexington v. McQuil- 352, S Am. Rep. 255. lan's Heirs, 9 Dana, 513, 35 Am. Dec. FOEMATION OF TAX DISTRICTS. 231 acre to pay for the construction of the road. In an action to restrain the collection of the tax it was held that the road was a general public benefit, and that to lay its cost upon only a part of the community thus arbitrarily selected was an unwarrantable and void abuse of the taxing power. The injunction was, there- fore, granted. The same has been held in Minnesota^ and Ken- tucky.^ In another case in Pennsylvania'^ an act authorizing a street already laid out and paved to be improved for a public driveway, and the cost to be assessed on the adjoining prop- erty, was held void as an attempt to impose taxation on a limited district for a general public benefit. 412. These cases, however, were cases of assessments laid sup- posedly on the principle of special benefits. The limitations of the legislative power in this respect are more fully discussed elsewhere.® Illustrating the same principles, it was held in a recent Pennsylvania case that property abutting on lateral sew- ers, connecting with a main sewer which was formed by turning a creek, which formerly furnished open drainage, into a closed sewer, cannot be specially assessed for the cost of changing the open creek into a closed sewer, for the only benefit which the owners of such property obtain is the purification of the air by confining the odor of sewage. This benefit, it was held, is com- mon to the whole city, and the property owners in the sewer district cannot be made to pay for it.® 413. A case in which general property taxes were held void upon the sole ground that they were levied for purposes public in their nature, in which the district taxed had no interest, arose in Dakota, where the legislature had attached an unorganized county to an organized county for purposes of taxation, and the organized county had levied county taxes in the unorganized territory. The proceeds of these taxes were to be expended in the organized county for its own benefit. -"^ It is seldom that so clear a case as this is presented. 5 Sperry v. Flygare, 80 Minn. 325, 9 Beechwood Avenue Sewer Cases, 81 Am. St. Rep. 261, 83_ N. W. Rep. 179 Pa. St. 490, 36 Atl. Rep. 209. This 177. case depends somewhat on the rule, 6 Graham v. Conger, 85 Ky. 582, 4 peculiar to Pennsylvania, that only S. W. Kep. 327. abutting property can be assessed for THammett v. Philadelphia, 65 Pa. local improvements. St. 146, 3 Am. Rep. 615. 10 Farris v. Vannier, 6 Dak. 186, 3 8 See index. L. R. A. 713, 42 N. W. Rep. 31. 232 CONSTITUTIONAL LAW OF TAXATION. The effect of the Federal guaranties of due process of law and equal protection of the laws upon the legislative power to form tax districts. 414. The guaranties of the eqiial protection of the laws and of due process of law contained in the Fourteenth Amendment, as it has been construed by repeated decisions of the Supreme Court, cannot be regarded as limiting the discretion of the statu' legislatures in the formation of taxing districts, excepting, of course, in some one of those elusive instances of gross injustice which the Supreme Court frequently excepts from the sweeping statement that the Fourteenth Amendment was not designed to interfere mth the tax system of the states. Inasmuch as such an instance of injustice in the formation of a taxing district, sufficiently gross to induce the Supreme Court to apply the amend- ment, seems never to have been presented to that tribunal, except in one case,^'- and as the effect of that one case has been greatly impaired, if not destroyed, by decisions which almost immediately followed it, the value of this exception in the interpretation of the amendment is not great. 41 5. The rule may be stated, therefore, that — except where a case of the grossest and most flagrant injustice is clearly made out — and, under the decisions, it is hard to imagine a possible instance in which the Supreme Court would hold that such a ease had been clearly made out — the guaranties of the equal pro- tection of the laws and of due process of law do not restrain the state legislatures in the exercise of their discretion in the creation of taxing districts.''^ •416. Two of the cases cited show quite clearly the extremes to which state legislatures may go in this particular without violat- ing the Fourteenth Amendment, as construed. In one case the legislature of California had passed a law jDroviding for the for- mation of irrigation districts for irrigating arid lands, and the law as interpreted permitted the inclusion within such district? n Norwood v. Baker, 172 U. S. 209, U. S. 578, 32 L. ed. 544, 9 Sup. 43 L. ed. 443, 19 Sup. Ct. Rep. Ct. Rep. 192; Lent v. Tillson, 140 187. See the chapter of this work U. S. 316, 35 L. ed. 419, 11 Sup. which deals with local assessinents for Ct. Rep. 825 ; Fallbrook Irrigation Dis- a discussion of this case and of the trict v. Bradley, 1(J4 U. S. 112, 41 subsequeiit decisions which have quali- L. ed. 369, 17 Sup. Ct. Rep. 56 ; Hagar fied its force. v. Reclamation District, HI U. S. 701, 12 Spencer v. Merchant, 125 U. S. 28 L. ed. 569, 4 Sup. Ct. Rep. 663; 345, 31 L. ed. 763, 8 Sup. Ct. Rep. Williams v. Eggleston, 170 U. S. 304, 921. See language quoted supra, 43. L. ed. 1047, 18 Sup. Ct. Rep. G17. § 409, and see \Valston v. Nevin, 128 FORMATION OF TAX DISTRICTS. S6& of cities and towns regardless of the fact that the uses to which the lots in those cities and towns were put, and the buildings erected on them, made irrigation useless to those lots, such lots being assessed for the expense of irrigation like other property. It was held that, under the Fourteenth Amendment, the legis- lative power extended to the creation of such districts and the inclusion of such property within their limits. The opinion contained some general expressions to the effect that the legis- lative power in this regard is subject to the scrutiny of the courts to the extent that it must appear that the use intended is a public use.^* 417. In another ease an assessment for a local improvement had been laid on certain lands. Part of the owners had paid and part had not. The assessment had been held invalid for lack of notice and hearing. Afterward the legislature reassessed a sum equal to the unpaid portion of the void assessment upon the lands included in the former assessment district as to which the former assessment had not been paid. The taxing district thus created consisted of isolated parcels, not contiguous, and some of them not fronting on the street for the improvement of which the assessment was laid. It was held that this also was within the legislative discretion, and that nothing in the Federal constitu- tion prevented the legislature from such action.-^* The subject of due process of law, with respect to this topic, is further discussed in other parts of this work.^^ Where the duty of determining the bounds of the tax district is delegated to a subordinate body. 41 8. Where the legislature delegates to a subordinate body the power to determine the limits of a taxing district, almost the same conclusiveness is attached to the determination of the sub- ordinate body as is given to the determination of the legislature itself."^ Such a subordinate body is, of course, limited by the terms of the law which creates it, and by the requirements of notice and hearing; although in a case where such a subordinate iS-Fallbrook Irrigation District v. 15 See §§ 1S88 ef set?. Bradley, 164, U. S. 112-166, 41 L. ed. le People v. Brooklyn, 4 N. Y. 419, 369, 17 Sup. Ct. Rep. 56. 55 Am. Dee. 266; People ex rel. 1* Spencer v. Merchant, 125 U. S. Crowell v. Lawrence, 41 N. Y. 137 ; 345, 31 L. ed. 763, 8 Sup. Ct. Rep. 921, Fallbrook Irrigation District v. Brad- affirming 100 N. y. 585, 3 N. B. Rep. ley, 164 U. S. 112, 41 L. ed. 369, 17 682. Sup. Ct. Rep. 56. 234 CONSTITUTIONAL LAW OF TAXATION. body has clearly included in the taxing district territory which has no relation to the purpose of the tax the courts will regard such inclusion as a taking of property without due process of law." Where a subordinate body acts in bad faith, the courts may, of course, review the action of the subordinate body in fixing the bounds of the taxing district. Equally obvious is the proposition that bad faith must be clearly shown. ^* Relation of taxing districts to political subdivisions. 419. Generally speaking, it is not at all necessary that a tax- ing district shall be coincident in territory with any of the pre- viously established political divisions of the state. The purpose of the tax determines the bounds of the territory to be taxed ; the legislature is the judge of the extent of benefit, and if it decides that the territory included in a part or parts, or several, of the political subdivisions is to be benefited by a proposed tax, it has undoubted authority to include in the tax district the territory to be benefited, without regard to political boundaries.-'® 420. There are cases which hold that where the power of tax- ation is delegated instead of being exercised directly by the legis- lature, it can only be delegated to the political subdivisions of the stat©;^ but the discretion of the legislature is sovereign in the I'See §§ 1896 et seq. Co. v. Supervisors of Erie County, 48 iSHarriman v. Yonkers, 82 N. Y. N. Y. 93; Litchfield v. McComber, 42 App. Div. 408, 81 N. Y. Supp. 82.3; Barb. 288 ; State v. Williams, 68 Conn. Copcutt v. Yonkers, 83 Hun, 178, 31 131, 3,5 Atl. Eep. 24, 421, 48 L. E. A. N. Y. Supp. 659. 46.5; Shaw v. Dennis, 10 111. 405; 19 Williams v. Eggleston, 170 U. S. Sangamon, etc., R. R. Co. v. Morgan 304, 42 L. ed. 1047, 18 Sup. Ct. Rep. County, 14 111. 163, 56 Am. Dec. 497; 617; Fallbrook Irrigation District v. Bakewell v. Police Jury, 20 La. Ann. Bradley, 164 U. S. 112, 41 L. ed. 369, 334; Norwich v. Hampshire County 17 Sup. Ct. Rep. 56; People v. Central Commissioners, 13 Pick. 60; Brighton Pac. R. R. Co., 43 Cal. 398; Adams v. v. Wilkinson, 2 Allen, 27; Salem Turn- City of Shelbyville, 154 Ind. 467, 57 pike and C. Bridge Corp. v. Essex jST. E. Rep. 114, 77 Am. St. Rep. 467, County, 100 Mass. 282; Carlisle v. 49 L. R. A. 797; Gilson v. Commis- Hctherington, 47 Ohio St. 235, 24 N. sioners of Rush County, 128 Ind. 65, E. Rep. 488; Bowles v. State, 37 Ohio 27 N. E. Eep. 235, 11 L. R. A. 835; St. 35; Reelfoot Lake Levee District Shelby County Judge v. Shelby E. E. v. Dawson, 97 Tenn. (13 Pick.) 151, Co., 5 Bush, 225; Challiss v. Parker, 36 S. W. Eep. 1041, 34 L. E. A. 725; 11 Kans. 394; People ex rel. Wood Carson v. St. Francis, etc.. District, V. Draper, 15 N. Y. 532, where a law Keel v. Board, etc., 59 Ark. 513, 27 establishing a metropolitan police dis- S. W. Rep. 590. trict containing parts of several coun- 20 See § 421. ties was upheld; Buffalo & S. L. R. R. FORMATION OF TAX DISTRICTS. 235 creation of such political divisions ; and when a new tax district is created with powers of local taxation for one or more specified purposes, the tax district thus created becomes a new political subdivision of the state, to which the power of taxation may lawfully be delegated.^^ The distinctive marks of political divi- sions are said to be : That they embrace a certain territory and its inhabitants, organized for the public advantage and not in the interest of par- ticular individuals or classes; that their chief design is the exer- cise of governmental functions ; and that to the electors residing within each is to some extent committed the power of local gov- ernment, to be wielded either mediately or immediately within their territory for the peculiar benefit of the people there residing.^^ 421. The cases just cited are part of a series of New Jersey cases in which the legislative power to create separate taxing dis- tricts within the bounds of established political subdivisions is considered. The result of these cases is to hold that dual gov- ernment with distinct functions may exist in the same territory; that a political organization within the bounds of another must have a public character and be endowed with some of the powers of local government. In accordance with these principles laws which established separate drainage districts within other political divisions, but which failed to provide for " the essential element, in a sustainable political division, of the popular voice of the inhabitants of the territory," were held to be invalid.^* 422. So also a law was held invalid which created lighting districts within a township, although it did leave, to the legal voters of the respective lamp districts authorized, the fixing of the sums to be therein raised by taxation, because the proposed district lacked certain other elements of a distinct political organ- ization, stated as follows: The district is not given power to elect officers to act for it. It is not given a corporate name, nor corporate authority, even 21 Allison V. Corker, 67 N. J. L. 596, Drainage and Water Commissioners, 52 Atl. Rep. 362, 60 L. R. A. 564; 41 N. J. L. 154-157. Hoey V. Ocean Township, 39 N. J. L. 23 McCloskey v. Chamberlin, 37 N. 75; Auryanson v. Hackensack Im- J. L. 388, as explained in Allison v. provement Commission, 45 N. J. L. Corker, 67 N. J. L. 596, 52 Atl. Rep. 113. 362, 60 L. R. A. 564; to the same 22 Lydecker y. Englewood Township effect, see Baldwin v. Fuller, 39 N. J. 236 CONSTITUTIONAL LAW OP TAXATION, to eonlTact fbr the erection and maintaining of the street lamps ; and while the voters therein are authorized to determine the amount to be raised for street lighting, the money voted is raised and expended by the township officers, who rcnresent the town- ship. It, is clearly implied from the terms of the act that the township committee shall determine what streets shall be lighted, where the street lamps shall be erected, and how long they shall be maintained. In the disposition of the money raised the dis- trict has no voice. In respect, therefore, to this function of local government, the lighting of streets, the district is not given a separate and independent existence, nor endowed with ^iny power except as a part of the township.^* 423. If the tax is for a purpose plainly germane to the pur- poses for Vk^hich a political subdivision exists, the taxing district should conform to the political boundaries, as in the case of a city tax for ordinary municipal purposes. The legislature, how- ever, is generally the judge of the application of this rule. Taxing a part of a territory for a purpose germane to the whole. 424. How far may a particular locality be taxed for a pur- pose which pertains to the whole state or to some division of the state larger than the particular locality ? The cases generally answer this question by asserting the power of the legislature to impose or authorize such taxation at its discretion, in the absence of specific constitutional restrictions. 425. Examining some decisions : In a case which arose in Alabama the legislature had created a board of commissioners for the improvement of a harbor, and imposed the cost of the improvement upon one cotmty. The United States Supreme Court said, in answer to the argument that the legislation was unauthorized because it imp)Osed upon one county the expense of an imj)rovement for the benefit of the whole state : Assuming this to be so, it is not an objection which destroys its validity. When any public work is authorized, it rests with the legislature, unless restrained by constitutional provisions, to L. 576; affirmed, 40 N. J. L. 615; 214, reversing N. J. , 58 Atl. Lydecker v. Englewood Township Rep. 571. Drainage and Water Commissioners, 24 Peck v. Raritan Township, 52 41 N. J. L. 154; Morgan v. Elizabeth, N. J. L. 319, 19 Atl. Rep. 610, as ex- 44 N. J. L. 57 ; Howell v. Millville, 60 plained in Allison v. Corker, 67 N. J. N. J. L. 95, 36 Atl. Rep. 691 ; Van L. 596, 52 Atl. Rep. 362, 60 L. R. A. Cleve V. Passaic Valley Sewerage Com- 564. missioners, N. J. , 60 Atl. Rep. RELATION BETWEEN PURPOSE AND DISTRICT. 237 determine in what manner the means to defray its cost shall be raised. It may apportion the burden ratably among all the coun- ties, or other particular subdivisions of the state, or lay the greater share or the whole upon that county or portion of the state specially and immediately benefited by the expenditure.^® 426. In a Ilew York case (1840) the cost of a state canal was assessed upon a single city, and the legislative discretion in this respect was upheld (although the primary question in the case was not whether the legislature had power to assess the cost of a state improvement on a particular locality ).^^ In Indiana^ and in Pennsylvania^" the location of a county seat has been held to be such an advantage to a to^vn as to war- rant the imposition of the expense on the local community, al- though the particular Indiana decisions have been overruled on the ground that the act was a local or special act.^" 427. In another 'New York case (decided 1859) the Court of Appeals went to what seems to be the utmost limit in declaring the despotic character of the legislati^'e authority in creating tax districts, there being no constitutional mandate of equality. The legislature had authorized the laying out of a road by town commissioners of highways, leading to certain state property and fortifications. The only application for laying out the road was made by the state commissary-general, who was not an inhabit- ant of the town, and not liable to assessment for highway labor. The court gave the law a construction which threw the expense of this highway, constructed solely for state pvirposes, upon the locality. This result was argued as an objection to such con- struction of the law, and the court said ; But the conclusive answer is, that the state may impose such a burden where, in the wisdom of the legislature, it is considered that it ought to rest.^^ 428. In the same state it was held that the legislature had power to authorize a village to raise money to secure the estab- lishment therein of a state normal school. ^^ 26 County of Mobile v. Kimball, 102 29 Kirby v. Shaw, 19 Pa. St. 2.53. U. S. 691-703, 20 L. ed. 238. See so Board v. State, 155 Ind. 604, 58' also Williams v. Eggleston, 170 U. S. N. .E. Rep 1037. 304, 42 L. ed. 1047, 18 Sup. Ct. Rep. 31 People v. Supervisors of Rich- 617. mond County, 20 N. Y. 252. 27 Thomas v. Leland, 24 Wend. 05. 32 Gordon v. Cornes, 47 N. Y. 608. 28 Schfleck V. Jcffersonville, 152 Ind. 204, 52 N. E. Rep. 212. 238 CONSTITUTIONAL LAW OF TAXATION. In a later case in ISTew York a law was nplield which required a county to pay the wages of a janitor and an armorer employed in militia armories owned by the state and situated in the county, although the constitution expressly provided that " it shall be the duty of the legislature at each session to make sufficient appro- priation for the maintenance " of the militia. Said the court : It is only reasonable that those great centers of population that are subject to the dangers of riot and disorder, and are liable to the citizen for property lost in consequence, should have a large number of the armories located within their limits for proper protection, and it is but just that by reason of these great advan- tages enjoyed certain counties should pay, as they do, a sum esti- mated to be in excess of half a million dollars a year of the aggre- gate sum necessary to maintain the militia. . . . The fact is that the militia of the state does not benefit all localities alike, and the legislation making a part of its maintenance a local charge is the legitimate exercise of the power of local taxation vested in the ilegislature.^^ 429. In a recent case in ISTew York, which seems not to have gone to the Court of Appeals, -it was held that the provision of' the constitution which forbids a village or other municipality to give or lend money or credit in aid of any individual, asso- ciation, or corporation, operated to prevent a village from appro- priating money to repair a county courthouse located in the village, in order to retain the county seat in the village. The ground of the decision was that such an appropriation would be for the benefit of a county, and a county in ISTew York is a cor- poration. The decision, so far as it refers to constitutional rea- sons, proceeds upon grounds somewhat narrower than those which have usually governed the N^ew York courts.^* In an earlier Kew York case there are expressions, not called for by the decision, to the effect that it would be beyond the legislative power to authorize the assessment of lands in a town adjoining a city, to pay for a park, in the city but bordering on the town limits.^* 33 Matter of Bryant, 152 N. Y. 412, had authorized the to\Yn to levy the 46 N. E. Eep. 851. See as to local sup- tax, not whether the legislature had port of state militia, § 433. In Stet- power to do it. son V. Kempton, 13 Mass. 272, 7 Am. ^4 Deady v. Village of Lyons, 39 Dec. 145, a tax levied by a town, in App. Div. 130, 57 N. Y. Supp. 498. time of war, to pay militia for defense, 35 Matter of Lands in Town of Flat- was held to be un.iuthorized, but the bush, 60 N. Y. 398. question was whetlier the legislature RELATION BETWEEN PTJEPOSE AND DISTRICT. 239 Effect of constitutional requirements of equality and uniformity upon the legislative control over taxing districts. 430. Constitutional requirements of uniformity and equality do not generally operate to restrict the legislature in this respect, as the legislature may say that, to the extent of the local burden, the benefit is local, hence . there is sufficient equality and \mi- formity if such local burden is borne by a tax equal and uniform throughout the territory. Thus in an Indiana case a tax imposed by a county to secure the location therein of a state college was held to be for a coimty purpose, and it was said to be sufficiently uniform if uniform throughout the county. ^^ 431. In Oregon a law imposing the cost of improving a harbor, for the benefit of the whole state, upon the territory immediately adjacent, was upheld against the argument that the constitutional requirement of equality and uniformity forbade such legislation ; but the court rested its decision, not so much upon the conclusive- ness -of the legislative discretion as upon the apparent fact that the locality assessed was materially benefited.*^ A similar act was upheld in California."* Other cases under constitutions requiring uniformity and equality uphold similar legislation. In all of them some color of local benefit appears.®^ 432. In Wisconsin an act permitting counties to make dona- lions of land and money to a state home for the feeble-minded to secure its location in the county whose donation should be accepted was, upheld against the contention that the act violated the rule of uniform taxation. It was apparently conceded in the opinion that the legislature would have had no power to compel the county to levy a tax for such a purpose.*" S6 Marks v. Trustees of i'uraue Uni- pie, 84 111. 544 ; County of Livingston versity, 37 Ind. 155. v. Darlington, 101 U. S. 407, 25 L. 3T Cook V. Port of Portland, 20 Oreg. ed. 1015, construing *hc Illinois con- 580, 27 Pae. Rep. 263, 13 L. R. A. stitution; Steiner v. Sullivan, 74 Minn. 533. 49S, 77 N. W. Rep, 286. In Livingston ssQuigg V. Evans, 121 Cal. 546, 53 County v. Weide, 64 111. 427, a law Pac. Rep. ,1093. permitting a county to be taxed to SO Revenuft Commissioners v. State, secure the location of a state reform 45 Ala. 399; Merrick V. Inhabitfints of school was held invalid ibecause no Amherst, 12 Allen. 500. See North- 'benefit could accrue to the localitv ampton v. County Commissioners of from an institution of that character. Hdmpshire. ;45 Mass. 108, 13 N. B. « Lund v. Chippewa County, 93 Wis. Rep. '388; Burr v. City of Carbondale, 640, 67 If. W. Rep. 927, 34 L. R. A. 70 111. 455; Hensley Township v. Peo- 131. 240 CONSTITUTIONAL LAW OF TAXATION. In the same state it has been held that legislation to the effect that where the cost of a bridge in a town exceeds a certain per- centage of all the taxable fjroperty in the town, the county may be required to pay one-half the cost thereof, is valid, and does not break the rule of uniformity. ^^ 433. In Ohio, however, the rule of equality is construed to forbid the legislature to authorize or compel the people of a locality to be taxed to secure the location of any state institution. An act authorizing counties to spend money for the erection of armories for the state militia is invalid.*^ The same has been held in Elorida under the imiformity clause and under a special con- stitutional provision*^ elsewhere quoted.** In iTevada a law pro- viding for a distribution of the license moneys raised in a city, one-fourth to the state, one-fourth to the county and one-half to the city, has been held unconstitutional.*^ 434. Expounding its views in this respect, the Siipreme Court of Ohio said, in holding void for lack of uniformity, a law which authorized any county in the state to tax itself in order to secure the location therein of the state "Agricultural Experiment Sta- tion," an institution for the general benefit, controlled by the state : The character and purpose of a law, not less than its constitu- tionality, are to be determined by its 'operation and effect. If, in effect, its purpose is one that concerns and its benefits are to be bestowed upon the people of the entire state, or the people of a particular class in the entire state, as we have already found to be true of the act in question, then it is a law general in its character, and if it seeks to impose taxation for the carrying out of those purposes, then it would seem to follow that such taxes are state taxes. They are for governmental purposes. All such impositions form part of the general revenue, as distinguished from assessments wnich are special and local impositions upon property in the immediate vicinity of a local improvement, and laid with reference to the special benefit which such property ilerives from the expenditure. Being, therefore, taxes ter gen- eral revenue, measured by the rule heretofore stated, it would 41 State, Baraboo v. Sauk County sioners, 9 Ohio C. C. Rep. 619; af- Supervisors, 70 Wis. 485, 36 N. W. firmed, 54 Ohio St. 615, 47 N. E. Rep. Rep. 396. 1117. i~ Hnbbard v. Fitzsimmons, 57 Ohio ■'3 See § 587. St. 43C, 49 N. E. Rep. 477; Daniel v. « State e.x rel. Milton v. Dickenson, City of Columbus, 8 Ohio C. C. Rep. 44 Fla. 623, 33 So. Rep. 514. 60 L. R. 642: aflSrmed in Wilder v. Daniels, 53 A. 539. Ohio St. 058, 44 N. E. Rep. 11J50; State 45 State v. Boyd, 27 Nev. 249, 74 ex rel. Kriegbaum et al. v. Commis- Pac. Rep. 654. EELATION BETWEEN PURPOSE AND DISTRICT. 241 follow that in order to make the burden equal and tiniform, the taxes should necessarily be imposed npon the taxable property of the entire state. ... We are met with the claim that the people of Wayne county have determined for themselves that the location of the station will be a local benefit to them; that they are content to take the burden, and hence the court should not interfere. It is true that a majority of the electors voting did so determine. And if the proposed tax would affect them only they might be estopped to deny its validity. But the voters are not necessarily the taxpayers, and if they were, there would still remain to consider the rights of the minority who opposed.*® 435. The reasoning of the cases in South Carolina which deny to the legislature the power even to make local assessments in cities for street improvements on the ground that such charges should be borne by the whole city, warrants the view that there no law imposing a tax for a state institution on a locality would be valid.*'' Some express constitutional limitations upon the legislative power to impose taxes on a locality for purposes beneficial to larger territory. 436. In Alabama the constitution provides that: The legislature shall not have the power to require counties or other municipal corporations to pay any charges which are now payable out of the state treasury.*^ 437. In Arkansas the constitution prohibits the use of school taxes in any other district than that in which they are levied. 438. In Georgia and Kentucky the constitutions expressly pro- vide that a municipal corporation may appropriate property to build a state capitol.*^ The implication of these provisions is to prohibit local taxation for any other state institution. 439. In the following named states the power of the legislature to authorize municipal corporations to impose taxes is either ex- pressly limited to taxes for " corporate purposes," or the legisla- ture is allowed to delegate the power to tax for " corporate purposes " or the like, thus impliedly limiting the power to such *6 Wasson v. Commissioners, 49 Ohio 46 Am. St. Rep. 723, 27 L. R. A. 284 ; St. 622, 636, 637, 32 N. E. Rep. 472, Mauldin v. City Council of Green- 17 L. R. A. 795. ville, 53 S. C. 285, 69 Am. St. Rep. 4T Stehmeyer v. City Council of 855, 31 S. E. Rep. 252, 43 L. R. A. 201. Charleston, 53 S. C. 259, 31 S. E. Rep. 48 Art. XI, § 218. 322; Mauldin v. City Council of Green- « See §§ 208-214. ville, 42 S. C. 293, 30 S. E. Rep. 842, 16 242 CONSTITUTIONAL LAW OF TAXATION. purposes. Such provisions, of course, still leave the question open ■whether taxes for state institutions are taxes for " corporate purposes." California,^" Colorado,"^ Florida,'^ Georgia (counties are re- stricted for certain specified purposes,^^) Idaho,"* Illinois,"^ Ken- tucky,"*® Louisiana," Missouri,^* Montana,^" Xebraska,®" South Carolina," South Dakota,®^ Tennessee,"* Washington,^ "West A^'irginia.''^ Taxing a whole territory for purposes which properly pertain only to a part of that territory. 440. The principle of equality requires not only that the bur- dens of the state or its larger subdivisions shall not be cast upon any part thereof less than the whole territory benefited by the burden ; but also that the proper burdens of a part only shall not be assumed by the whole ; for if the taxes which benefit a township only are assumed by the whole county, or the debts of a city are assumed by the state, the people who do not reside within the territory benefited are, to the extent of the added burden, taxed unequally. In the absence of express constitutional restrictions, however, this proposition must be regarded as addressed to the conscience of the legislature only. 441 . So far as the assumption of local obligations by the state is concerned, there can be but little doubt that provisions requir- ing equality and uniformity in taxation do not prevent such action ; for if the legislature determines that the assumption by the state of any local burden is justified by the advantage which it deems will accrue to the state thereby, the local burden becomes a state burden and the rule of uniformity is satisfied if the tax thereby made necessary is uniformly apportioned throughout the state. 50 For text of constitutional pro- M For text, see § 597. •visions, see § 585. 69 For text, see § 598. 51 For text, see § 586. 60 For text, see § 599. 52 For text, see § 587. «i For text, see § 007. 53 For text, see § 587a. «2 For text, see § H08. siFor text see § 588. 63 For text, see § 234. 55 For text, see § 589. «* For text, see § 612. 56 For text, see § 591. 65 For text, see § 613. 57 For somewhat similar provision, eee § 215. RELATION BETWEEN PUBPOSE AND DISTRICT. 243 ' But many of the states, in addition to the requirement of unir formity, have placed in their constitutions further restrictions, some of them quite emphatic, which limit their legislatures in this particular. Such, for instance, are the following: Express constitutional provisions, forbidding states to assume the burdens of local subdivisions. 442. Arkansas. Except as herein otherwise provided, the state shall never assume or pay the debt or liability of any county, town, city or other corporation whatever, or any part thereof, unless such debt or liability shall have been created to repel Invasion, sup- press insurrection or to provide for the nublic welfare and de- fense. Nor shall the indebtedness of any corporation to the state ever be released or in any manner discharged save by pay- ment into the public treasury.®" 442a. Alabama. The state's credit is not to be given to any corporation.®' 443. California. The legislature may not authorize the state or any political subdivision thereof to give or lend its money or credit in aid of any municipal or other corporation.®* 444. Colorado. Similar provisions exist.®* 445. Delaware. No appropriation of the public money shall be made to, nor the bonds of this state be issued or loaned to any county, munici- pality or corporation, nor shall the credit of the state, by the guarantee or the indorsement of the bonds of other undertakings of any county, municipality or corporation, be pledged otherwise than pursuant to an act of the General Assembly, passed with the concurrence of three-fourths of all the members elected to each house.™ 446. Florida. The state's credit shall not be pledged to any corporation.'^^ 447. Georgia. The state shall not assume the debt, nor any part thereof, of any county, municipal corporation, or political division of the 66 Art. XII, § 12. «o For text see § 204. «T See § 202 of this work. TO Art. VIII, § 4. 68 For text of constitutional pro- 71 For text see S 207. vision, see § 203. 244 CONSTITUTIONAL LAW OF TAXATION. state, unlesg such debt shall be contracted to enable the state to repel invasion, suppress insurrection, or defend itself in time of war.''^ The state's credit shall not be loaned to any municipality or rporation.''* 448. Idaho. The state shall never assume the debts of any county, town or other municipal corporation, unless such debts shall have been created to repel invasion, suppress insurrection or defend the state in warJ* The state's credit shall not be loaned to any ^niunicipality or corporation. '^ 449. Illinois. The state shall never pay, assume or become responsible for the debts or liabilities of, or in any manner give, loan or extend its credit to, or in aid of, any public or other corporation, asso- ciation or individuals^ 450. Indiana. Nor shall the General Assembly, on behalf of the state, assume the debts of any county, city, town or township, or of any corpo- ration whatever.'''^ 451. Iowa. The state shall never assume the debts or lia- bilities of any individual, association or corporation " unless in- curred in time of war for the benefit of the state." ^* 452. Kentucky. The commonwealth shall not assume the debt of any count}', municipal corporation or political subdivision of the state, unless such debts shall have been contracted to defend itself in time of war, to repel invasion or to suppress insurrection.'^^ 453. Louisiana. Neither the state nor any political subdivi- sion thereof may assume the liabilities of any political, municipal, or other corporation.*** 454. Maine. The state credit cannot be loaned in any .casa- except to reimburse the local subdivisions for certain expenditures incurred in the vs^ar of the rebellion.*^ T2Art. VII, § VIII, par. I. 78 Art. VII, §§ 1-3. 73 For text see § 208. 79 § 176. 74 Art. XII, § 3. 80 See § 215 for text of constitutional 78 I"or text see §. 209, provision. 76 Art. IV, § 20. 81 See § 2235 for text of constitu- 77 Art. X, § 6. tional provisions. RELATION BETWEEN PURPOSE AND DISTRICT. 24-5 455. Michigan. State credit is not to be loaned to any corpo- ration.*^ 456. Missouri. The state may not assume the obligations of, or giye or lend its credit to, or grant public money to any munic- ipal or other corporation or person.®* 457. Montana. State credit is not to be loaned or property given to any corporation.** The state may not assume the debt of any local subdivision.** 458. Nebraska. State credit is not to be loaned.*^ 459. Nevada. The state shall never assume the debts of any county, town, city, or other corporation whatever, unless such debts have been created to repel invasion, suppress insurrection, or to provide for the public defense.*'^ 459a. New Jersey. State credit is not to be given or loaned to any corporation.** 460. New York. The credit of the state is not to be loaned or its money given to any corporation.*® 461. North Dakota. The credit of the state is not to be loaned or its money given to any corporation.*" 46Z Ohio. The state shall never assume the debts of any county, city, town, or township, or of any corporation whatever, unless such debt shall have been created to repel invasion, suppress insurrec- tion, or defend the state in war.^^ 463. Oregon. The state shall never assume the debts of any county, town, or other corporation whatever, unless such debts shall have been created to repel invasion, suppress insurrection or defend the state in war.^^ 464. Pennsylvania. The commonwealth shall not assume the debt, or any part thereof, of any city, county, borough or township, unless such debt shall have been contracted to enable the state to repel 82 For text of constitutional pro- 87 Art. IX, § 4. vision see § 218. 88 § 225 of this work. 83 For text of constitutional pro- 89 For text see § 227. visions see § 221. so For text see § 228. 84 For text see § 222. 9i Art. VIII, § 5. 85 For text see § 2244. 82 Art. XI, § 8. 86 Art. XII, § 3. 246 CONSTITXJTIONAX, LAW OF TAXATION. invasion, suppress domestic insurrection, defend itself in time of war, or to assist the state in the discharge of any portion of its present indebtedness.** 465. South Carolina. State credit is not to be loaned to any corporation.** 466. South Dakota. State credit is not to be loaned to any cor- poration.®' 467. Tennessee. The state credit is not to be loaned to any municipality.*'' 468. Texas. The state credit is not to be loaned or state funds given to any municipal or other corporation.®^ 469. Utah. The state shall not assume the debt, or any part thereof, of any county, city, town or school district.®^ 470. Virginia. The state credit is not to be granted to any corporation " nor shall the state . . . assume any indebted- ness of any county, city, or town, nor lend its credit to the same."®® 472. Washington. The credit of the state is not to be given or loaned to any corporation or individual.^ 473. West Virginia. The credit of the state shall not be granted to, or in aid of any county, city, township, corporation or person; nor shall the state ever assume, »or become responsible for the debts or liabilities of any county, city, township, corporation or person; nor shall the state ever hereafter become the joint owner, or stockholder in any company or association in this state or elsewhere, formed for any purpose whatever.^ 474. Wisco7isin. The credit of the state is not to be given or loaned to any corporation.^ 475. Wyoming. The credit of the state is not to be given or loaned to any corporation.* Expenditure of proceeds of tax outside the bounds of the taxed districts. 476. A tax may be for a local purpose although the proceeds are to be expended outside the territorial limits of the district 93 Art. IX, § 9. 99 Art. XIII, § 185. 84 See § 232. l For text see § 237. 85 For text see § 23.3. 2 Art. X, § 6. 96 For text see § 234. 3 For text see § 238. 87 For text see § 235. 4 For text see § 239. 98 Art. XIV, § 6. RELATION BETWEEN PUEPOSE AND DISTKICT. 247 where the tax is raised. The use to the locality, and not the place of expenditure, determines. Thus there can be no doubt that a municipality authorized to construct water works, for instance, may buy water rights and erect reservoirs and dams outside the municipal limits. A city may acquire property and construct works outside the city limits, for the discharge of sewage.** Munic- ipalities diyided by a river may construct a bridge across the river, and this is plainly a municipal purpose, although the bridge lies outside the limits of either municipality.* A municipality, duly authorized by charter, may buy real estate, outside its corporate limits, convenient for use in obtaining a supply of crushed rock to be used on the city streets.'' A state may expend money in an exhibition of the resources of the state at an industrial expo- sition outside of the state boundaries.* 477. It has been held that the construction of a railroad from Cincinnati to Chattanooga, Tennessee, was a purpose to which the city of Cincinnati might devote the proceeds of taxation.* It was said that the determination by the city itself, that the pur- pose of the tax was germane to the city's interest, was one to which the courts would give weight.-'*' But in another Ohio case it was held that an act which authorized a town to con- struct a railroad and to levy taxes on the taxable property of the town for the purpose of building so much of the road in the town as could be built for the amount raised, and for the issuing of bonds to complete the same, the road to be connected with another to be built through an adjoining town, was an at- tempt to evade the constitutional provisions which forbade the use of public money in aid of private enterprises,^^ and was there- fore void.^^ In a comparatively recent case the New York Court 5 Langley v. City of Augusta, 118 lOTo the same effect, see Sharpless Ga. 590, 98 Am. St. Eep. 133, 45 S. E. v. Mayor of Philadelphia, 21 Pa. St. Rep. 486; Coldwater v. Tucker, 36 147, 59 Am. Dee. 759; Railroad Co. Mieh. 474, 24 Am. Rep. 601. v. County of Otoe, 16 Wall. 667, 21 6 People ex rel. Murphy v. Kelly, L. ed. 375, 2 Neb. 496 ; Davidson v. 76 N. Y. 475. County Commissioners, 18 Minn. 482; 7 Schneider v. City of Menasha, 118 State v. Mayor of Charleston, 10 Rich. Wis. 298, 99 Am. St. Rep. 996, 95 N. L. 491. W. Eep. 94. 11 Quoted in full in § 229 of this 8 Norman v. Kentucky Board of work. Managers, 93 Ky. 537, 26 S. W. Eep. 12 Taylor v. Commissioners of Ross 901, 18 L. R. A. 556; Daggett v. Col- County, 23 Ohio St. 22. See also gan, 92 Cal. 53, 27 Am. St. Rep. 95, Wyseaver v. Atkinson, 37 Ohio St. 80 ; 28 Pac. Rep. 51, 14 L. R. A. 74. Counterman v. Dublin Township, 38 9 Walker v. Cincinnati, 21 Ohio St. Ohio St. 615. 14, 8 Am. Eep. 24. 248 CONSTITUTIONAL LAW OF TAXATION. of Appeals said of these Ohio decisions, in upholding an act for the construction of a municipal underground railway in the city limits : We do not, however, wish to be understood as approving of those cases, especially in so far as they sustain the right of a city to construct a railroad mainly outside of its own territory and state. •'^ 478. In a recent case in itTorth Dakota an injunction was issued restraining a city from paying money to a " citizens' committee " for erecting a bridge on a road several miles from the town. The ground on which the expenditure was sought to be justified was that the trade of the town would be helped by improving the means of access from the surrounding country ; but the court held that this was a private purpose, for the benefit of the merchants of the town and not for the public at large. ^* Permitting nonresidents of the district to share in the benefits of the tax. 479. In several forms, questions as to the validity of statutes permitting persons residing outside the limits of school districts to attend the schools maintained by those districts have been pre- sented to the courts, under constitutions requiring uniformity. In an Ohio case a law which permitted residents of school dis- tricts in a county containing a city of the first class, which school districts should not have high schools of a grade equal to those of the city, to attend the high schools of the city, and which authorized the county conunissioners to raise the money to reim- burse the city for the additional expense incurred on account of such attendance by taxing the property in such districts outside the city which should not have high school facilities equal to those of the city, was held to be lacking in uniformity, since the county was the taxing district and only a part of the property of the county was taxed. -^^ 480. In Nebraska an act which allowed residents outside a (district having a high school to attend the high school in the dis- 13 Sun Printing and Publishing i* Manning v. City of Devils Lake, Assn. V. Mavor, etc., of New York, N. D. , 99 N. W. Rep. 51, 65 152 N. Y. 257-271, 46 N. E. Rep. 499, L. R. A. 187. 37 L. R. A. 788. is Root v. Board of Education, 52 Ohio St. 589, 41 N. E. Rep. 135. RELATION BETWEEN PURPOSE AND DISTRICT. 249 trict, and providing for payment to the district of a sum fixed by the statute out of the general fund of the county for each siich attendant, was held void, because if the cost of tuition should exceed the &xei sum, the excess of cost became an additional burden on the school district, if the tuition cost less than the rate fixed, the difference resulted to the advantage of the district and the disadvantage of the county generally.^'' 481. There seems to be no reason why a law would be objec- tionable which shoiild permit nonresidents of a district to attend school in that district upon payment of the actual cost of tuition, to be ascertained in any reasonable manner, and which should provide for taxation of each school district to pay the expense incurred on account of the attendance of its inhabitants. In Tennessee a law which permitted children residing outside city limits, but within a half mile thereof to attend school in the city without charge, has been recently upheld, although the con- stitutional objections that such a law was unequal and operated to tax the inhabitants of one district for the benefit of others were strongly urged. The court regarded the elements that the schools were partly supported by state funds and that the control of local governmental corporations is a state function, as sufficient to over- come the objections.^'^ Annexing territory to municipalities. 482. Where the constitution requires equality and uniformity, how far may the legislature go in the way of annexing territory to existing municipalities, and thus subjecting the annexed terri- tory to taxation for previously incurred debts of such existing municipalities ? The answer seems to be that here, as elsewhere, the legislative discretion is of the widest character, and that such legislative action is not subject to control by the courts.^^ 16 High School District v. Lancaster 18 Mayor of Valverde v. Shattuek, 19 County, 60 Neb. U7, 83 Am. St. Rep. Colo. 104, 41 Am. St. Rep. 208, 34 Pac. 525, 82 N. W. Rep. 380, 49 L. R. A. Rep. 947 ; State ex rel. Richards v. 343. In this case it was not deemed City of Cincinnati, 52 Ohio St. 419, necessary to inquire whether the fact 40 N. E. Rep. 508, 27 L. R. A. 737; that the taxpayers of the high school Powers v. Wood County Commission- districts were taxed for the cost of ers, 8 Ohio St. 285 ; Blancliard v. this school and also to pay their share Bissell, 11 Ohio St. 796; Toney v. of the county taxes, rendered the act Mayor, etc., of Macon, 119 Ga. 83, 46 unconstitutional. S. B. Rep. 80; Madry v. Cox, 73 Tex. iTEdmonston v. Board of Education 538, 11 S. W. Rep. 541. An act annex- of Memphis, 108 Tenn. 557, 69 .S. W. ing rural lands to a city is not a con- Rep. 274, 58 L. R. A. 170. tract. Joesting v. Baltimore, 97 Md. 250 CONSTITUTIONAL LAW OF TAXATION. 483. In one of the cases cited," the equality clause was reiu- forced by a clause of the constitution which said that: "The General Assembly shall pass no law for the benefit of a railroad or other corporation, or any individual or association of individ- uals, retrospective in its operations, or which imposes on the peo]ile of any county or municipal subdivision of the state a new liability in respect to transactions or considerations already past." ="> The law under consideration consolidated two municipalities, making the consolidated city liable for the debts of both. It was argued, it seems to me with much force, that the law violated this section by imposing on the inhabitants of each of the old municipalities the burden of part of the debts of the other, and thus imjjosed on the people of each municipality " a new lia- bility in respect to transactions already past." But the co«.rt overruled the argument and upheld the law, saying: A legislative act vphereby one municipal corporation becomes annexed to another, forming one consolidated town or city, the surviving municipality assuming all the corporate debts and tak- ing all the corporate property of the annexed municipality, to- gether "with the authority to levy and collect taxes throughout the enlarged municipality, is not an act retrospective in its opera- tion, nor does it impose upon the people of either municipality a new liability in respect to transactions or considerations already past. The benefit accruing to the people of the surviving city is a present and prospective consideration, and is based upon a present and not upon a past transaction. So, too, there is a present con- sideration accruing to the people of the annexed territory; they receive and enjoy the greater privileges and protection which the larger municipality affords, and at the same time are relieved from the burdens of an independent municipal government. 4-84-. The trouble with this reasoning is that the current taxes which the inhabitants of the two territories will pay for the sup- port of the enlarged city government are all the consideration which they should be compelled to give for the advantages of living in the enlarged city. To say that obliging inhabitants of one municipality to assume the past debts of another is not imposing a retrospective burden on them because they get the benefits of 589, .55 Atl. Rep. 456. See § 1035. 19 Mayor of Valverde v. Shattuck, The extension of city limits does not 19 Colo. 104, 41 Am. St. Rep. 208, 34 deprive those whose lands are annexed Pac. Rep. 947. of the equal protectioQ of the laws. 20 Art. 15, § 12, Colorado Constitu- Toncy v. City of Macon, 119 Ga. 83, tion. 48 S. E. Rep. 80. KELATIOlSr BETWEEN PURPOSE AND DISTEICT. 251 the new government — whicli they must pay for in addition — seems to be vicious reasoning. Take an extreme illustration. Suppose two cities of equal size are consolidated. One has no debt. The other has never raised any money by taxation, so that it owes a large debt for all its past expenses of municipal govern- ment. After the consolidation that debt becomes a burden on the whole consolidated city. The whole city is taxed to pay the expenses of government after the consolidation, and also to pay the debt which one of the former cities had incurred. What con- sideration have the inhabitants of that one of the old cities which had no debt received for the taxes they must pay to cancel the debt of the consolidated city ? Is not a new liability imposed on them in respect of past transactions ? ^^ 485. Aside from the question of the power of the legislature , to annex territory to a city and subject the annexed territory to the previously incurred indebtedness of the city, another closely related question arises : Where the constitution requires equality and due process of la\\', may the legislature annex to a city agricultural lands, unplotted for city purposes, and subject them to taxation for the added expense of municipal government, against the will of the owners of such lands ? Generally speaking, the answer must be that the legislature has such power, that neither requirements of equality nor due process of law restrain it in this regard ; and that the taxpayer who deems himself aggrieved cannot prevent the collection of the taxes. 486. A leading case on the subject is Kelly v. Pittsburgli^~ where the unlimited discretion of the legislature was declared, so far as the Federal constitution is concerned. There the Penn- sylvania legislature had annexed a township to the city of Pitts- burgh. The plaintiff was the owner of a farm of eighty acres in the annexed township. He brought suit to restrain the collec- tion of the city taxes on his land, alleging that it was assessed at a sum enormously beyond its value and almost destructive of his ' interest in the property. The state court denied him relief and he alleged in the United States Supreme Court that the legisla- tion amounted to a taking of his property without due process of law. The Supreme Ceurt upheld the legislation, saying: It is not denied that the legislature could rightfully enlarge the boundary of the city of Pittsburgh so as to include the land. 21 For further interpretation of such 22 104 U. S. 78, 26 L. ed. 658, afiirm- a constitutional provision see chap. 26 ing 85 Pa. St. 170, 27 Am. Rep. 633. of this work. 252 CONSTITUTIONAL LAW OF TAXATION. If this power were denied we are unable to see how such denial coidd be sustained. What portion of a state shall be within the limits of a city and be governed by its authorities and its laws has always been considered to be a proper subject of legislation. How thickly or how sparsely the territory within a city must be settled is one of the matters within legislative discretion. Whether territory shall be governed for local purposes by a county, a city, or a township organization, is one of the most usual and ordinary subjects of state legislation. It is urged, however, with much force, that land of this char- acter, which its owner has not laid off into town lots, but insists on using for agricultural purposes, and through which no streets are run or used, cannot be, even by the legislature, subjected to the taxes of a city, the water tax, the gas tax, the street tax, and others of similar character. The reason for this is said to be that such taxes are for the benefit of those in a city who own property within the limits of such improvements, and who use or might use them if they choose, while he reaps no such benefit. 487. Some state cases supporting this view, and a case asserting that taxation for private purposes is void, were then referred to, and the court continued: We are unable to see that the taxes levied on this property were not for a public use. Taxes for schools, for the support of the poor, for protection against fire, and for water works, are the specific taxes found in the list complained of. We think it .will not be denied by anyone that these are public purposes in which the whole community have an interest, and for which, by com- mon consent, property owners everywhere in this country are taxed. . . . No item of the tax assessed against the plaintiff in error is pointed out as intended for any other than a pub- lic use. The court then referred to the argument that the plaintiff re- ceived no benefit from some of these taxes, and added : Clearly, however, these are matters of detail within the discre- tion, and therefore the power, of the law-making body within whose jurisdiction the parties live. This court cannot say in such cases, however great the hardship or unequal the burden, that the tax collected for such purposes is taking the property of the tax- payer without due process of law?^ 488. Tn most of the states where the constitutions compel equality and uniformity in taxation the power of the legislature to annex agricultural la;ids to municipalities, against the will of 23 See Forsyth v. Hammond, 166 U. S. 506, 41 L. ed. 1095, 17 Sup Ct Rep. 665. RELATION BETWEEN PURPOSE AND DISTRICT. 253 the owners of such lands, is apparently as extreme as in states; where no such limitations exist ; although in such states a greater injustice may be worked than in others, by such annexation, for after annexation the rule of uniformity generally prevents the legislature from exempting the agricultural lands from taxation for which they receive no benefit.^* The eases in such states generally declare the legislative discretion in fixing the municipal boundaries not to be subject to judicial review. And where the taxpayer seeks to restrain the collection of the taxes without attacking the validity of the annexation, the rule of uniformity within the taxing district confronts him; and forbids the varia- tion of the rate of tax or rule of valuation.^ 489. A Michigan case well illustrates the class of cases under discussion, in which taxpayers owning remote or agricultural lands, which have been annexed to a city, have tried to enjoin some particular form of municipal taxation on the general ground that they should not be taxed for improvements for which they receive no benefit, without attacking the validity of the acts of annexation. There a city, containing such remote, unplatted lands, undertook to establish a municipal electric light plant, and taxpayers owning such lands tried to enjoin the proposed action. The injunction was refused.^® 490. In some cases the incorporation in or annexation to an already incorporated municipality of large tracts of land unfitted for municipal purposes has been held to be not authorized by the statute under which the incorporation was attempted. ^^ These cases, however, do not hold that the legislature has not power to accomplish such annexation. 491. There have been some cases in lowa,^* and in Kentucky,^' which hold that the courts niay inquire whether property within 2* See § 1351b. L. R. A. 755; State ex rel. Taylor v. 25 Cary v. Pekin, 88 111. 154, 30 Am. Eidson, 76 Tex. 302, 13 S. W. Rep. 263, Rep. 543; City of New Orleans v. 7 L. R. A. 733; Vestal v. City of Little Cazelar, 27 La. Ann. 156 ; Stoner v. Rock, 54 Ark. 321-329, 15 S. W. Rep. Flournoy, 28 La. Ann. 150: Kimball 891, 16 S. W. Rep. 291, 11 L. R. A. V. Grantsville, 19 Utali, 3U8, 57 Pae. 778. Rep. 1, 45 L. R. A. 628; Ferguson v. 28 Morford v. linger, 8 Iowa, 82; Snohomish, 8 Wash. 668, 36 Pac. Rep. Langworthy v. Dubuque, 13 Iowa, 86, 969, 24 L. R. A. 795; Washburn v. 16 Iowa, 271; Fulton v. Davenport, 17 Oshkosh, 60 Wis. 453, 19 N. W. Rep. Iowa, 404; Buell v. Ball, 20 Iowa, 282; 364. O'Hare v. Dubuque, 22 Iowa, 144; 26 Mitchell V. City of Negaunee, 113 Deeds v. Sanborn, 26 Iowa, 419; Mich. 359, 71 N. W. Rep. 643, 67 Deimon v. Fort Madison, 30 Iowa, Am. St. Rep. 468, 38 L. R. A. 157. 543; Durant v. Kaufman, 34 Iowa, 27 State ex rel. Childs v. Minnetonka, 194. 57 Jlinn. 526, 59 N. W. Rep. 972, 25 2S Courtney v. City of Louisville, 254 CONSTITUTIONAL LAW OF TAXATION. corporate limits receives any benefit from the municipal taxation ; and, if they fijid that it does not, may restrain the taxation (the validity of the act of annexation being unquestioned). These cases have been generally disapproved in other jurisdictions. And in Kentucky the requirement of the present constitution that taxation shall be uniform within the limits of the authority levy- ing the tax is held to compel taxation of all property within the corporate limits, and the earlier cases no longer state the law.«» 482. Closely related to the subject of the legislative povt^er to annex agricultural lands to cities and to subject them to taxation for city purposes is the question as to its power, after such annexa- tion, or in making such annexation, to provide that the annexed lands shall be exempt from certain of the city taxes from which they receive no benefit. Of course where the constitution does not require equality and uniformity there is no doubt that this can be done ; the legislature may create a taxing district for the whole territory for the purposes which are common to the whole territory, and then create smaller taxing districts for the more compact portions of the city where the taxes for the peculiar benefit of those portions may be collected. 4S3. Where the constitution commands equality and uniformity a different question arises. The municipality is the taxing dis- trict, and to vary the rate of taxation in the same taxing district is a violation of the principles of uniformity. In a number of cases, therefore, it is held that laws of the character under con- sideration are unconstitutional.^^ 12 Bush, 419; Preston v. Roberts, 12 752; Jones v. Memphis, 101 Tenn. 188. Bush, 570; Town of Parkland v. 47 S. W. Rep. 138; Citv of Westport Gaines, 88 Ky. 562, 11 S. W. Rep. 649; v. McGee, 128 Mo. 152, 30 S. W. Rep. Ijouisville Bridge Co. v. City of Louis- 523; Copeland v. St. Joseph, 126 Mo. ville, 81 Ky. 189; Cheaney a. Hooser, 417, 29 S. W. Rep. 281; State ex reL 9 B. Mon. 330; Covington v. South- Moody v. Wardell, 153 Mo. 319, 54, gate, 15 B. Mon. 331. S. W. Rep. 574; ilendenhall v. Burton. 30 Board of Councilmen v. Scott, 101 42 Kans. 570, 22 Pac. Rep. 558; Knowl- Ky. 615, 42 S. W. Rep. 104; Pence v. ton v. Supervisors of Rock County, 9 City of Frankfort, 101 Ky. 534, 41 Wis. 410; Slauson v. City of Racine. S. W. Rep. 1011; Briggs, Trustee v. 13 Wis. 398; City of Janesville vl Town of Russellville, 99 Ky. 515, 36 Markoe, 18 Wis. 350. I do not think S. W. Rep. 558, 34 L. R. A. 193; that Wisconsin Central Ry. v. Taylor Shuck V. City of Lebanon, 107 Ky. 252, County, 52 Wis. 37, 8 N. W. Rep. 833, 53 S. W. Rep. 655. can be regarded as overruling tliese SI Hayward v. People, 145 111. 58, Wisconsin cases in this particular. 33 N. B. Rep. 885; Smith v. Mayor of That case reiterates the mandate that Americus, 89 Ga. 810, 15 S. E. Rep. the rule of taxation must be uniform;. EELATION BETWEEN PURPOSE AND DISTRICT. 255 494. An argument has been made in support of laws discrimi- nating between plotted and agricultural lands in municipal taxa- tion, that such taxation was uniform because the rate on all the recorded plots was uniform and the rate on all the farming lands was uniform. This argument amounts to the assertion that the legislature may create different taxing districts, with varying rates of taxation, for the same purpose, or that it may classify property in the sarne taxing district, taxing different classes at different rates. As to this argument the Supreme Court of Wis- consin said in an early case : The answer to this argument is that it creates different rules of taxation to the number of which there is no limit, except that fixed by legislative discretion, whilst the constitution establishes but one fixed, unbending, uniform rule upon the subject. It is believed that if the legislature can by classification thus arbi- trarily and without regard to value, discriminate in the same municipal corporation between personal and real property within, and personal and real property without, a recorded plat, they can also by the same means, discriminate between lands used for one purpose and those used for another; such as lands used for growing wheat and those used for growing corn, or any other crop; meadow lands and pasture lands; cultivated and unculti- vated lands ; or they can classify by the description, such as odd- numbered lots and blocks, and even-numbered ones, or odd and even-numbered sections. Personal property can be classified by its character, use, or description, or as in the present case, by its location; and thus the rules of taxation may be multiplied to an extent equal in number -to the different kinds, uses, descriptions and locations of real and personal property. We' do not see why the system may not be carried further, and the classification made by the character, trade, business, or profession of the owners. . . . We do not believe the framers of the constitutioD intended such a construction, and therefore cannot adopt it.^^ 495. In Maryland it is held, under a constitution which, as interpreted, requires equality and uniformity, that the effect of a law annexing certain territory to a city and providing that the annexed territory shall be taxed at a lower rate than the other territory, is to create different taxing districts ; and that it is con- and while the legislature may make years and their constitutionality seems exemptions, it may not tax the prop- not to have been questioned, erty not exempt except by a uniform 32 Knowlton v. Supervisors of Rock rule. In Indiana laws permitting such County, 9 Wis. 410, 421, 422, 423. distinctions existed for a number of 256 CONSTITUTIONAL LAW OF TAXATION. stitutional to do so and to vary the rate of taxation in the differ- ent districts. Said the Maryland Court of Appeals, after asserting the principle that taxation must be uniform throughout the taxing district : A city, however, is but the creature of the legislature, from which its power of taxation and all other powers are derived; and the same power which authorizes the legislature to make one taxing district of an entire city, equally authorizes it to make two or more taxing districts, if, in its judgment, the public interests require it. The responsibility for establishing such taxing districts rests upon the law-making power, and the prin- ciple of equality is fully gratified by makin? local taxation equal and uniform as to all property within the limits of the taxing districts. . . . Now^ the effect of the (act) is to make the • territory annexed under it a separate taxing district, within the limits of the city as thus extended.^* 496. It seems to me that the difficulty with this very plausible reasoning which enables the legislature to vary the rate of taxation by dividing the municipal territory into several taxing districts is that it loses sight of the fact that, under a requirement of equality and uniformity, it is necessary that the whole territory for the benefit of which the proposed tax is laid shall be the tax- ing district. Where a tax is laid for general municipal purposes, tlie whole municipality is the proper taxing district. The fact that the agricultural territory does not receive as much benefit from the municipal taxes as the improved territory is a good argument for not including it within the municipal limits; but if included, it should be regarded as a part of the municipal tax- ing district. The reasoning of the Wisconsin Supreme Court, above quoted, seems conclusive on this point. Valuable also are the remarks of Judge Alvey, of the Maryland Court of Appeals, in dissenting from the views of the majority in Daly v. MorgavJ* 497. He says: All the jurisdiction and power of the corporation, as a munic- ipal organization, are extended over the inhabitants and terri- tory of the annexed district. Those inhabitants become corporators in common with all the rest of the inhabitants of the city. They are entitled to share equally with the other por- tions of the population, in all the rights, privileges, property, and improvements of the citj', and are liable in common with the 33 Daly V. Morgan. 69 Md. 400, 16 ii Supra. Atl. Rep. 287, 1 L. E. A. 757. KELATION BETWEEN PURPOSE AND DISTfilCT. 257 rest of the population for the debts and obligations of the city, and for the expenses of the city government; they have right to equal representation in the city councils, and thus to partici- pate in the making of laws and ordinances for the government of the whole city, and in imposing taxes and raising revenue for all city purposes. It is not pretended that there is any separate municipal organization for the annexed district, or that it has any peculiar functions to perform, separate and distinct from those of the cHy at large, for which local taxes might he levied. . . . The taxes authorized to be levied on this annexed dis- trict are not to be levied for any special local purposes or objects ; but they are to be levied for the city at large, as part of its common revenue for general city purposes. Levies will be made upon that district as upon all other parts of the city, for revenue to defray the expenses of the municipal government. . . When the taxes from these general revenues are realized, or as they are realized, they form a common city fund or funds for the objects contemplated. 498. Unorganized territory may be attached to an organized county for government and taxation ; and the taxes imposed therein need not — in fact should not — be the ordinary county taxes, but only the taxes for court purposes and the like, from which such unorganized territory receives some benefit. The rule that taxes should be uniform throughout the tax district does not interfere with this proposition, as the unorganized territory need not be regarded as an integral part of the same taxing district as the county, but rather as a separate district, the machinery of assess- ment and collection being the same as that of the county. This is very clearly held in a recent Federal case. The legislature of Oklahoma had attached an Indian reservation to a county, sub- jecting personal property there to taxation for court and terri- torial purposes, but not for county purposes. The county officers undertook to levy county taxes, claiming that the legislature had no right to enact the law limiting the tax in the unorganized territory. The organic act of the territory provided for equal taxation. The act of the legislature was held to be valid. The Supreme Court discussed the subject thoroughly, it showed that there were in reality two districts ; and said : The foundation of the rule which may be said generally to obtain, that there shall be uniformity in taxation of the same kind of property in the same taxing district, rests on the assump- tion that in such district the circumstances regarding the prop- erty to be taxed are ordinarily the same in substance, although there mav, and necessarily must be, some difEerences as to the ' 17 258 CONSTITUTIONAL LAW OF TAXATION. extent to which the different owners of property may be benefited by the taxes collected thereon, and it is to be assumed that an alteration as to rate would work an unjust and illegal discrim- ination in taxing property situated alike. When the difference is deep and radical between the two domains in which the same kind of property may be situated, the law which makes them one district for taxation, so that all the property of the same kind in the same district must he taxed alike, and no reasonable distinction be permitted, must itself be so plain and urgent that no other intention can be suggested.''^ In another Federal case the power of the territorial legislature to unite unorganized and organized territory, and to tax property in the unorganized territory for all purposes was recognized."'' So far as the Federal courts are concerned, therefore, the matter seems to be one of legislative discretion. In Dakota the power of the legislature to tax unorganized territory for purposes other than strictly pertain thereto is denied. ^^ In Kansas the legislative power to tax unorganized territory for state purposes has been upheld.^* Other cases where taxation of such territory was con- sidered are cited. ^* 498a. The foregoing considerations suggest the query: May the legislature — consistently with the mandate of equality and uni- formity — exempt agricultural or unplotted lands within munic- ipal limits from certain specified taxes, at the same time providing that the lands thus exempted shall not have the benefit of those taxes from which they are exempted ? Such a disposition seems to be equal in all essentials. If the taxes from which the outlying lands are exempted form separate funds applicable to distinct purposes; and the laws which make the exemption also provide that those specified, separate funds shall not be applied to the benefit of the exempted terri- tory, there seems to be no good reason for denying the validity of the laws. In fact, in most of the cases where discriminations in favor of agricultural lands have been condemned, I think it will appear that those discriminations were not made in the form 36 Foster v. Pryor, 189 U. S. 325- 38 Francis v. Atchison Ey. Co., 19 332, 47 L. ed. 835, 23 Sup. Ct. Rep. Kans. 303. 549, affirming 11 Okla. 357, 66 Pac. 39 Midland Township v. Roscommon Rep. 348. Township, 39 Mich. 424; Llano Cattle 36 Thomas v. Gay, 169 U. S. 264, Co. v. Kaught, 69 Tex. 402, 5 S. W. 42 L. ed. 740, 18 Sup. Ct. Rep. 340. Rep. 494; Dupree v. Stanley Countv, See 5 Okla. 1, 46 Pac. Rep. 578. 8 S. D. 30, 66 N. W. Rep. 426. 37 Farris v. Vannier, 6 Dak. 186, 42 N. W. Rep. 31, 3 L. R. A. 713. RELATION BETWEEN PURPOSE AND DISTRICT. 259 of exemption of lands in a given district from certain taxes; but rather in the form of exemptions of unplotted lands generally. It has been held, however, that the mandate of equality and uniformity prevents legislation of the kind suggested ; and that a law was void which exempted certain territory annexed to a city from taxation for ten years, for police, fire, and lighting purposes, and provided that di^ring the same period the annexed territory should not receive the benefit of light, fire, and police protection.** Legislative power to divide territory and apportion debts. The statements in the following paragraphs are made without respect to the effect of the " contract clause." *' 499. There can be no doubt that the lenislature has the power, in the absence of express constitutional direction, to provide that when territory is di^'ided, the debts and liabilities of the divided territory shall be apportioned to the new political divisions, or to the divisions to which the affected territory has been added, proportionately to the value of the taxable property of the in- debted territory in the various new subdivisions.*^ And in the absence of such constitutional directions, it need not do this,, but may leave the territory from which part has been subtracted, to bear all the old burdens, allowing the territory stricken off^ to go free.*^ 500. The cases just cited uphold with great clearness the legis- lative authority to change the boundaries of subordinate govern- mental subdivisions and to apportion the debts — and consequently the burdens of taxation — in accordance with the legislative judg- ment, without review by the courts. They are also authority for the proposition that in case of a subtraction of- territory from a *o Jones V. Memphis, 101 Tenn. 188, 310; South Portland v. Cape Eliza- 47 S. W. Rep. 138. beth, 92 Me. 328, 42 Atl. Rep. 503, (m> 41 As to which see § 103S et seq. Am. St. Rep. 502; Frankfort v.Win- 42 People V. Supervisors of Ulster terport, 54 Me. 250 ; North Yarmouth County, 94 N. Y. 263; Mayor v. Shat- .^, skillings, 45 Me. 133, 71 Am. Dec. tuck, 19 Colo. 104, 41 Am. St. Rep. 530 . windham v. Portland, 4 Mass, 208 34 Pac. Rep. 947. ,384; Lycoming County v. Union 43 Commissioners of Laramie County ^ j. p^ g^ ^g .3 ^^ j^^^ V. Commissioners of Albany County, .__i, ^^ ni kit 92 U. S. 307, 23 L. ed. 552; Tulare 5/5; Layton v. New Orleans, 2 La. County V. Kings County, 117 Cal. 199, Aim. ^^1^5 13«P"f '• ^^"<^™,^;.31 \^ is. 49 Pac. Rep. 10; Johnson v. City of 120, H Am. Rep. 602; Wmans v. San Diego, 109 Cal. 468, 42 Pac. 'Rep. School District No. 82, 40 Minn. 13, 249, 30 L. R. A. 178 ; People v. 12 Am. St. Rep. 687, 41 N. W. Rep. Alameda County, 26 Cal. 641; Hughes 539, 3 L. R. A. 46; Board of Eduea- V. Ewing, 93 Cal. 414, 28 Pac. Rep. tion of Cortland v. Board of Educa- 1067; Los Angeles County v. Orange tion, 76 App. Div. 355, affirmed 179 County, 97 Cal. 329, 32 Pac. Rep. N. Y. 556, 71 N. E. Rep. 1128. 260 CONSTITUTIONAL LAW OP TAXATION. town or subdivision without any legislative apportionment all the debts and property of the old town adhere to what remains of it, and the subtracted territory goes free of the debts and without claim to the property. Where a subdivision is divided so that nothing of the old organi- zation remains, the legislature may apportion the debts as it sees iit; and in case of its failure to direct any apportionment, the new subdivisions will be liable to the debts in a proportion based on amount of taxable property taken."** Readjusting indebtedness after division and apportionment. 501. The question remains whether the legislature, after hav- ing separated municipal subdivisions, and after making provision for apportioning the indebtedness, in the act of separation, has the power to change and readjust the burden of that indebtedness. While there is some authority for the propositions that the appor- tionment must be made at the time of the separation — either expressly or by leaving the debts to be distributed according to the rules which govern in case of failure to give directions — and that the legislature cannot subsequently change the arrangement made at the time of separation ; yet the general rule seems to be that here, too, the legislative discretion is untrammeled unless expressly limited in the constitution.*' 502. The cases which follow this rule reject the doctrine that, as between the state and its municipal subdivisions, an act of the legislature dividing one of those subdivisions creates vested rights or contractual relations ; and, while admitting that it is possible for the state to make a contract with one of its municipal govern- mental agencies, yet assert that the subject of such a contract can never be a matter of niunicipal polity or of civil or political power, for the legislature cannot surrender its power as to these things, and thus abandon its prerogatives and strip itself of its inherent and inalienable right of control. 503. The earlier cases which hold that the legislature, after the division of a municipality, may not change the arrangement of burden then made, proceed upon the theory that by the original t* Jlount Pleasant v. Beckwith, 100 Diego, 109 Cal. 468, 42 Pac. Rep. 249, U. S. 514, 25 L. ed. 699. See §§ 1038- 30 L. E. A. 178; People v. Alameda 1045. County, 26 Cal. 641; Layton v. New 4.-) Perry County v. Conway County, Orleans, 12 La. Ann. 515: Dunmore's 5-2 Ark. 430, 12 S. W. Rep. 877, 6 Appeal, 52 Pa. St. 374; Richland L. R. A. 665; Johnson v. City of San County v. Lawrence County, 12 111. 1. RELATION BETWEEN PURPOSE AND DISTRICT. 261 arrangement each of the divisions acquires vested rights which cannot be impaired.*^ Express constitutional provisions with respect to the apportion- ment of debts of divided territory. In some of the states, constitutional provisions exist which de- termine the distribution of liability of divided territory. Sucli, for instance, are: 504. California. Every county which shall be enlarged or created from territory taken from any other county shall be liable for a Just proportion of the existing debts and liabilities of the county or counties from which such territory shall be taken .*^ 505. Colorado. In all cases of the establishment of any new county, the new county shall be held to pay its ratable proportion of all then existing liabilities of the county or counties from which such new county shall be formed.*^ When any part of a county is stricken o£E and attached to another county, the part stricken off shall be held to pay its ratable proportion of all then existing liabilities of the county from which it is taken.*^ 506. Florida. The legislature shall have power to establish new counties, and to change county lines. Every newly established county shall be held liable for its proportion of the then existing liabil- ities of the county or counties from which it shall be formed, rated upon the basis of the assessed value of the property, botli real and personal, subject to taxation within the territory taken from any county or counties; and every county acquiring addi- tional territory from another county shall be held liable for its proportion of the liabilities of such other county existing at the time of such acquisition, to be rated upon the basis of the assessed value of all property subject to taxation within such acquired territory.^* 507. Idaho. When any part of a county is stricken off and attached to another county, the part stricken off shall be held to pay its rat- «Bowdoinham v. Richmond, 6 Me. «'Art. XIV, § 4. 112, 19 Am. Dec. 197; Hampshire v. «Art. XIV, § 5. Franklin, 16 Mass. 88. 60 Art. VIII, § 3. «Art. XI, i 3. 262 CONSTITUTIONAL LAW OF TAXATION. able proportion of all then existing liabilities of the county from which it is taken.^^ 508. Illinois. The portion (of. a county) stricken off and added to another county, or formed in whole or in part into a new county, shall be holden for, and obliged to pay its proportion of, the indebted- ness of the county from which it has been taken.^^ 509. Kentucky. There shall be no territory stricken from any county unless a majority of the voters living in such territory shall petition for «uch division. But the portion so stricken off and added to another county, or formed in whole or in part into a new county, shall be bound for its proportion of the indebtedness of the county from which it has been taken.*^ 510. Louisiana. Whenever a parish shall be enlarged or created from territory •contiguous thereto, it shall be entitled to a just proportion of the property and assets, and be liable for a just proportion of the existing debts or liabilities of the parish or parishes from which such territory shall have been taken.^* -51 1, Maryland. When said new county (Wicomico) shall have been so created, ithe inhabitants thereof shall cease to have any claim to, or in- terest in, the county buildings and other public property of every description, belonging to said counties of Somerset and Worces- ler, respectively, and shall be liable for their proportionate shares «f the then existing debts and obligations of the said counties, according to the last assessment in said counties, to be ascer- tained and apportioned by the Circuit Court for Somerset county, as to the debts and obligations of said county, and by the Circuit Court for Worcester county, on the debts and obli- gations of Worcester county, on the petition of the county com- missioners of the said counties, respectively; and the property in each part of the said counties included in said new county shall be bound only for the share of the debts and obligations of the county from which it shall be separated ; and the inhabit- ants of said new county shall also Day the county taxes levied aipon them at the time of the creation of such new county, as if such new county had not been created; and on the applica- tion of twelve citizens of the proposed county of Wicomico, the surveyor of Worcester county shall run and locate the line from *l Art. XVin, § 3. 53 § 65. 32 Art. X, § 3. B4 Art. 280. BELATION BETWEEN PUKPOSE AND DISTRICT. 263 ileadow Bridge to the Pocomoke Eiver, previous to the adoption or rejection of this constitution, and at the expense of said petitioners.''* 512. Missouri. In all cases of the establishment of any new county, the new county shall be held for and obliged to pay its ratable proportion of all the liabilities then existing of the county or counties from which said new county shall be formed.*® When any part of a county is stricken off and attached to another county, the part stricken off shall be holden for and obliged to pay its proportion of all the liabilities then existing of the county from which it is taken.*'^ When any new county, formed from contiguous territory taken from older counties, or when any county to which territory shall be added taken from an adjoining county shall fail to pay the proportion of indebtedness of such territory to the county or counties from which it is taken, then it may be lawful for any county from which such territory has been taken to leYj and collect, by taxation, the due proportion of indebtedness of such territory, in the same manner as if the territory had not been stricken off.** In the adjustment of liability between the city and county of St. Louis " the city shall take upon itself the entire park tax ; and in consideration of the city becoming the proprietor of all tho county buildings and property within its enlarged limits, it shall assume the whole of the existing county debt. . . . The city shall be exempted from all county taxation.*^ 513. Montana. In all cases of the establishment of a new county it shall be held to pay its ratable proportion of all then existing liabilities of the county or counties from which it is formed, less the ratable proportion of the value of the county buildings and prop- erty of the county or counties from which it is formed ; provided, that nothing in this section shall prevent the readjustment of county lines between existing counties.^" 514. Nebraska. The portion (of territory) . . . stricken off and added to another county, or formed in whole or in part into a new county, 55 Art. XIII, § 3. 58 Art. IX, § 5. 56 Art. IX, § 3. 69 Art. IX, § -23. 57 Art. IX, § 4. «0Art. XVI, § 3. 264 CONSTITUTIONAL LAW OF TAXATION. shall be hoi den for and obliged to pay its proportion of the indebtedness of the counties from which it has been taken.** 514a. South Carolina. All new counties hereafter formed shall bear a just appor- tionment of the valid indebtedness of the old county or counties from which they have been formed.®^ The Geiieral Assembly shall have the power to alter county lines at any time: provided, that before any existing county line is altered the question shall be first submitted to the qualified electors of the territory proposed to be taken from one county and given to another, and shall have received two-thirds of the votes cast: provided further, that the change shall not reduce the county from which the territory is taken below the limits prescribed in sections 3, 4 and 5 of this article: provided, that the proper proportion of the existing county indebtedness of the section so transferred shall be assumed by the county to which the territory is transferred.®^ 515. Tennessee. The fractions taken from old counties to form new counties, or taken from one county and added to another, shall continue liable for their pro rata of all debts contracted by their respective counties prior to the separation, and be entitled to their propor- tion of any stocks or credits belonging to such old counties.®* 516. Texas. When any part of a county is stricken off and attached to or created into another county, the part stricken off shall be holden for and obliged to pay its proportion of all the liabilities then existing of the county from which it was taken, in such manner as may be prescribed by law.®^ 517. Washington. Every county which shall be enlarged or created from terri- tory taken from any other county or counties shall be liable for a just proportion of the existing debts and liabilities of the county or counties from which such territory shall be taken: provided, that in such accounting neither county shall be charged with any debt or liability then existing, incurred in the purchase of any county property or in the purchase or construction of any county buildings then in use or under construction, which shall « Art. X, § 3. «* Art. X, | 4. «Art. 7, § 6. esArt. IX, { 1. MArt. 7, § 7. RELATION BETWEEN PURPOSE AND DISTRICT. 265 fall within and be retained by the county: provided further, that this shall not be construed to affect the rights of creditors.*® 518. Wyoming. In case any portion of an organized county or counties is stricken ofE to form a new county, the new county shall assume and be holden for an equitable proportion of the indebtedness of the county or counties so reduced.®^ Cases construing the foregoing limitations. 519. Counties are not, strictly speaking, municipal corporp,-. tions; although sometimes classed as such, they are purely polit- ical subdivisions of the state, created by its sovereign authority.^ The control of the legislature over them, in the absence of such restrictions as are above quoted, is, if anything, greater in scope than its control of the affairs of municipal corporations, although reflection fails to disclose any substantial reason why there should be a difference ; and the actual decisions do not lay much stress on any such difference. Such express limitations, there- fore, are the only practical limits upon the legislative power in regard to dividing territory and apportioning debts. In construing these express constitutional provisions, the courts have been so mindful of the nature of counties as agencies of government and creatures of the legislative will, that the tendency has been to minimize the effect of the constitutional requirements. 520. In a comparatively recent California case, the Supreme Court of that state interpreted a constitutional provision of the class under discussion in such a way as to leave the legislature just as to free to apportion the liabilities of divided territory as if the people had not put the clause into their constitution. The case was : The legislature divided a county without making any provision for its debt. The constitution provided that " Every county which shall be enlarged or created from territory taken from another county or counties shall be liable for a just propor- tion of the existing debts and liabilities of the county or counties from which such territory shall be taken." The old county paid 66 Art. XI, § 3. County v. Mighels, 7 Ohio St. 109; BiArt. XII, § 2. Commissioners of Talbot County v. 68 Askew V. Hale County, 54 Ala. Queen Anne County, 50 Md. 245 ; Peo- 639, 25 Am. Rep. 730; Washer v. pie v. Ingersoll, 58 N. Y. 1, 17 Am. Bullitt County, 110 U. S. 558, 28 L. Rep. 178. ed. 249, 4 Sup. Ct. Rep. 249 ; Hamilton 266 CONSTITUTIONAL LAW OF TAXATION. part of the debt which existed at the time of division, and sued the new county for its proportion of the debt thus paid. The contention of the plaintiff was " that by the supreme law of the state it has been declared that the new county shall pay a just proportion of the debts of the old county, and it is left with the courts to determine what that jvist proportion may be in a case presented." The court denied this view, and held that the question of what constituted a just proportion was left solely to the legislature; and that in the absence of a legislative apportionment the courts eould do nothing. ®® As this was the exact state of the law before the people of Cali- fornia put this provision into their constitution it is difficult to see what they have accomplished by putting it there. The same rule prevails in Colorado."' 521 . In Texas, on the other hand, it is expressly held, under a constitution which provides that " when any part of a county is stricken off and attached to or created into another county, the part stricken off shall be holden for and obliged to pay its pro- portion of all the liabilities then existing of the county from which it was taken, in such manner as may be prescribed by law," that the question of proportion is a judicial one.^^ The rule of pro- portion, under a constitution requiring equality and uniformity in taxation, is according to taxable value of property, and an act which apportioned indebtedness according to area was held void.^" Exempt property should not be included in the computation.'^^ 522. In ascertaining indebtedness under these constitutional requirements it is not required that the cash in the treasury of the old county be deducted from the total indebtedness, or that unpaid taxes due the old county be deducted, although the legislature un- doubtedly has power to direct such deductions.^* Such " indebtedness " includes bonded indebtedness.'^ 523. With respect to interest, it has been held that the male 89 Tulare County v. Kings County, ^3 Custer County v. Yellowstone 117 Cal. 195, 49 Pac. Rep. 8. County, 6 Mont. 39, 9 Pac. Eep. 586. 70 In re House Bill No. 231, 9 Colo. ■!■* Commissioners of Cheyenne 624, 21 Pac. Rep. 472. County v. Commissioners of Bent 71 Mills County v. Brown County, County, 15 Colo. 320, 25 Pac. Rep. 85 Tex. 391, 20 S. W. Rep. 81; 87 508. Tex. 475, 29 S. W. Rep. 650. 75 Sierra County v. Dona Ana 72 Ibid., 85 Tex. 391, 20 S. \Y. Rep. County, 5 N. Mex." 190, 21 Pac. Rep. 81; Canova v. State, 18 Fla. 512. 83. RELATION BETWEEN PUKPOSE AND DISTRICT. 267 in construing constitutions and statutes which provides for a pro- portionate division of indebtedness is, that the accrued interest on the debt, up to the date as of which the apportionment is made, is to be included in the apportioned indebtedness^^ 524. It seems that, under such constitutional restrictions, the legislature has the power to fix the date as of which apportionment of liability shall be made, at a different time from that at which the division of the county for governmental purposes actually takes place." This of course is reasonable, since time is needed for the ascertainment and adjiistment of the debts ; but under such constitutional provisions it is not conceivable that the legislature may cause the apportionment to be made as of a date vv^hich would result in casting upon one portion of the divided territory any substantial part of the burdens of the other. When the legislature has fixed that date, the " indebtedness " Avhich is apportioned includes only the debts accrued up to that time. It is competent for the legislature, under such a restriction, to determine that the new county shall not be charged with moneys expended by the old county in its territory, after the date fixed for the apportionment, which need not be the same as the date when the organization of the new county goes into effect.^* 525. Where the constitution does not expressly direct a pro- portionate distribution of the property of a divided county, the legislature is free to apportion the property as it sees fit, although the constitution requires that the debts be apportioned.''^* In Texas, indeed, it has been held that under such a constitutional provision the legislature has no power to allow any credits in the apportion- ment of indebtedness, on account of public property retained by one part of the divided territory.*" 526. Where territory is added to a county, it becomes liable to taxation for previously incurred debts of the county, as a matter of course.*-' T6 Holliday v. Sweet Grass County, 79 Los Angeles County v. Orange It) Mont. 364, 48 Pac. Rep. 5.53; Hemp- County, 97 Cal. 329, 32 Pac. Rep. 316; stead County v. Howard County, 51 Washington County v. Weld County, Ark. 350, 11 S. W. Rep. 478. 12 Colo. 152, 20 Pac. Rep. 273. 77 Los Angeles County v. Orange so Mills County v. Brown County, County, 97 Cal. 329, 32 Pac. Rep. 87 Tex. 475, 29 S. W. Rep. 650. 316; Holliday v. Sweet Grass County, 81 Chicago, etc., Ry. Co. v. Cuming 19 Mont. 364, 48 Pac. Rep. 553. County, 31 Neb. 374, 47 N. W. Rep. 78 Los Angeles County v. Orange 1121; Watson v. Pamlico County Corn- County, 97 Cal. 329, 32 Pac. Rep. 316. missioners, 82 N. C. 17. 268 CONSTITUTIONAL LAW OF TAXATION. Exempting municipalities from county road taxes and other county taxes. 527. In several states tlie question has arisen whether, under a requirement of equality and uniformity, a legislature may exempt persons and property within the limits of incorporated municipalities, in counties, from the payment of county road taxes. The theory upon which this has been done or sought to be done is, that the inhabitants of the municipality pay an equivalent for the county taxes in their local street and sidewalk taxes. In principle the question seems to depend upon whether, under the constitution and laws of the state, the county is the road tax- ing district. The rule of uniformity requires that taxes shall be uniform throughout the taxing district, and if the county is the taxing district there seems to be no power in the legislature to- exempt any persons or property from the common burden, al- though their municipal requirements may cause an additional burden of strictly local taxation. But if under the general governmental system of the state, or under the laws regulating the aifairs of the municipality, the county outside the city, and the municipality may be regarded as separate taxing districts, for road purposes, the one district may not be taxed for the purposes of the other.^ A law which should class municipalities and the territory outside them, in the same county, as entirely ^eparate tax- ing districts, would, therefore, be valid; while a law recognizing the county as the district and exempting municipalities within it would be bad. 528. Not all the 'decisions which have uf)held such laws nor those which have denied their validity make the distinction quite so clearly as this, although they are all based upon reasoninpc which recognizes the distinction to some extent. The effect of the oases, I think, is that where the laws and taxing system of the state generally — ■ for wliatever reason — regard county roads a> a common burden on the whole county, the rule of uniformity forbids exemptions of municipalities from county road taxation ;*^ 82 See |§ 408, 419, et seq., as to the 490, and Fox v. City of Eoekford, 3S legislative power vith respect to the 111. 451, holding that an obligation of erection of separate tax districts. labor for the repair of roads is not a 83 Fletcher v. Oliver, 25 Ark. 289 ; tax, but is in the nature of a special Gunnison County v. Owen, 7 Colo. 467, assessment, to which the requirement 4 Pac. Rep. 795; O'Kane v. Treat, 25 of uniformity does not apply, hence 111. 557; Cooper v. Ash, 76 111. 11. the inhabitants of a municipality may See Town of Pleasant v. Kost, 29 111. be exempted from working on road* RELATION BETWEEN PURPOSE AND DISTRICT. 269 and where the legislature has the power to make the territory -out- side the city a sej^arate taxing district, and has done so, the rule of iinif ormity does not prevent — and indeed requires — that the inhabitants of the city should not be obliged to pay county road taxes. ^* 529. So far as concerns the power of the legislature to erect the municipalities and the niral territory outside the municipal- ities into separate road districts, if there be no express require- ment of the constitution that the county shall be the road district, I think the discretion of the legislature undoubtedly is wide enough to permit such a separation,**" and there seems to be nothing in the mere requirement of equality and uniformity to prevent it. But of course imder a constitution commanding uni- formity or prohibiting local and special legislation,*" such enactments could only be made by general \a.\\ uniform through- out the state.*" In the absence of such express requirements of equality or of general legislation there is no reason to suppose that the legisla- tures may not exempt the inhabitants of municipalities from such taxes, to any reasonable extent. 530. The distinction between laws which exempt property in the taxing district from taxation and laws which erect the property desired to be taxed into separate taxing districts is illustrated by some Ohio cases where the taxation imposed was road taxation, although the exemption was not precisely like those exemptions which were reviewed in the preceding sections. In one case the legislature had authorized a county tax for turnpike roads, and had provided that lands in the county which had previously been assessed for the construction of turnpike roads should be exempt, unless the amount of such tax " exceeds the amount of such assess- ment, and, in such case, only the excess shall be levied and col- lected." The constitution provided for equality and uniformity in taxation; and it was held that the law was unconstitutional because the tax was not uniform throughout the district.** In outside the city limits. See also Day Oreg. 65 ; Oregon City v. Moore, 30 V. Roberts, 101 Va. 248, 43 S. E. Rep. Oreg. 215, 46 Pac. Rep. 1017. 362. 85 See §§ 408, 409. 8* Miller v. County of Kern, 137 86 See chap XXIV. Cal. 516, 70 Pac. Rep. 549; Cooper 87 See Fletcher v. Oliver, 25 Ark. V. Ash, 76 111. 11; City of East Port- 289; Gunnison County v. Owen, 7 Colo, land V. County of Multnomah, 6 Oreg. 467, 4 Pac. Rep. 795. (i2 ; Multnomah County v. Siker, 10 88 Fields v. Commissioners of High- land County, 36 Ohio St. 476. 270 CONSTITUTIONAL LAW OP TAXATION. another ease the legislature had created a special road taxiuo district, limiting its bounds in such a manner that, where they would otherwise have included territory lying near a road, which territory had already been assessed for the construction of that road, they should not include such territory, and this legislation Avas upheld.* 531. The principles which have been stated with respect to exemption of municipalities from road taxes apply, of course, to exemptions of municipalities from other taxes which are re- garded as county burdens. Thus in Virginia an act which re- lieved the inhabitants of a town from the payment of taxes for the support of the county poor and of the county roads, upon condition that the inhabitants of the town shoiild support their own poor and care for their own streets, was declared to be invalid under a constitution which ordained uniformity, where the general law required the county levies to be made upon all persons and prop- erty assessed for state taxes within the county.®" Upon the same principles it was held that the legislature could not exempt from county public school taxes any property assessed for state taxes within the county.'' In Arkansas a levy of a tax for " general county purposes " at a different rate in two different districts of the county was held void for lack of uniformity."'' 89 Carlisle v. Hetherington, 47 Ohio Supervisors v. Saitville Land Co., 99 St. 234, 24 N. E. Rep. 488. Va. 640, 39 S. E. Rep. 704. 90 Day V. Roberts, 101 Va. 248, 43 82 Hutchinson v. Ozark Land Co., S. E. Rep. 362. 57 Ark. 554, 22 S. W. Rep. 173, 38 91 Robertson v. Preston, 97 Va. 296, Am. St. Kep. 258. 33 S. E. R«p. 618; Washington County CHAPTER VI. DELEGATION OF THE TAXING POWER. 532. In the principles 'which govern the delegation of the tax- ing power the principle of proportionate equality does not appear so clearly as it does with respect to some of the other constitutional limitations. Yet reflection will show that the reasons of the rule that the taxing power cannot be delegated, as well as of the excep- tion which permits that power to be delegated to municipal bodies, tend toward equality; and that if either the rule or the exception were otherwise, the tendency would be to inequality. The reason of the general rule, as has been stated, is that the legislative power is a trust for the whole people which the legislature cannot trans- fer. The best safeguard of equality in taxation, as well as in other subjects of governmental action, is in the responsibility of the legislature to the people. So long as the power of taxation is directly exercised by the popular representatives, each section hav- ing its representative, the burden is far more likely to be distrib- uted evenly among the people, than if the .power is exercised by some other person or body, not directly responsible to the whole people or perhaps not chosen by them. 5jd. The form of government universal in the United States is based, in each instance, upon a written constitution; and all these constitutions provide for a separation of the powers of govern- ment into executive, legislative, and judicial departments. The persons who exercise these various functions are the direct repre- sentatives and agents of the sovereigii power of the state for the fulfillment of their respective duties. It is a fundamental principle that an agent may not, without express authority, dele- gate his powers and duties to another; especially where those powers and duties are in the nature of a trust. ISTone of these departments of the government (or the persons who occupy the places of trust which constitute them) can delegate their powers to any other agency. Such powers are not privileges, they are solemn duties which cannot be shifted. The legislature, therefore, may not delegate the power of legislation to any other persons or [271] 272 CONSTITUTIONAL LAW OF TAXATION. body of persons and all attempts to do so are inoperative and void.' The legislature cannot delegate its powers to the courts.* IsTor to the whole people.^ 534. The most prominent principle of American and English constitutional law, a principle which is embodied in every written constitution, and the violation of which is reckoned by historians among the chief causes of both the English and the American Revolutions is : that the power of taxation is a legislative power, belonging exclusively to the people and to be exercised only through their legislative representatives.* This power of taxa- tion, therefore, cannot be delegated, and, speaking in pure theory, attempts to delegate it to any other department of government, or to any persons or corporations are void (with one exception to be hereafter stated).^ It is held that power to appoint commis- sioners of equalization may be delegated to the courts,® and power to appoint drainage commissioners may be likewise delegated.'' The Federal constitution and the delegation of the taxing power. 535. Generally speaking, whether the powers of a state legisla- ture may be delegated is a question which is to be determined by the constitution and laws of the state ; and the Eederal constitu- tion contains nothing which will prevent such a distribution of the powers of government among the various departments of gov- ernment as the people of the state see fit. Of course this state- ment must not be taken in too broad a sense. Doubtless a law or 1 Parker v. Commonwealth of Penn- 17 Mich. 437 ; Lafayette, etc., R. K. sylvania, 6 Pa. St. 507, 47 Am. Dee. Co. v. Gteiger, 34 Ind. 185 ; Mayor of 480; People v. Collins, 3 Mich. 415; Baltimore v. State ex rel. Board of State V. Young, 29 Minn. 551; Phila- Police of Baltimore, 15 Md. 376, 74 delphia v. Fox, 64 Pa. St. 181. Am. Dec. 572; Maxwell v. State, 40 2 Bearing v. Bank of Charleston, 5 Md. 273 ; Meriwether v. Garrett, 102 Ga. 497, 48 Am. Dec. 300. U. S. 472, 26 L. ed. 197; State ex 3 Barto V. Himrod, 8 N. Y. 483, 59 rel. Wyatt v. Ashbrook, 154 Mo. 375, Am. Dec. 506. 77 Am. St. Rep. 765, 55 S. W. Rep. a State v. ScamBini, 77 Vt. 92, 59 39 Art. VII, § 4, § 2249 of this work. Atl. Kep. 201. 40 Art. I, § 6, § 2251 of this work. 30 Art. XVI, § 1, § 2217 of this work. 41 Art. X, § 11, § 2256 of this work. 31 Art. VIII, § 1, § 2224 of this work. 42 Art. VIII, § 3, § 2263 of this 32 Art. IV, § 18, § 2226 of this work. work. 33 Art. VII, § 5, § 2229 of this iiEx pcurte Wall, 48 Cal. 279, 17 work. Am. Hep. 425; Parker v. Common- 34 Art. XI, § 6, § 2230 of this work, wealth, 6 Pa. St. 507, 47 Am. Dec. 35 § 50, § 2231 of this work. 480; Geehrick v. State, 5 Iowa, 491; 38 Art. IV, § 44, § 2242 of this work. Maize v. State, 4 Ind. 342 ; Rice v. 37 Art. XIII, § 2, § 2244 of this Foster, 4 Harr. (Del.) 479. work. 280 CONSTITUTIONAL LAW OF TAXATION. that provision for submission of such questions to the elector* is frequently made. And, regardless of such constitutional pro- visions, it is held, even where submission of legislation to a vote of the whole state is not allowed, that these matters of local finance may be left to the direct vote of the people of the community in- terested, where that community is less than the whole state. 550. Thus in New York a clear distinction is drawn between submitting to the vote of the whole people questions affecting the whole state and submitting to the vote of a locality questions affecting the locality. For instance, a law authorizing a city to buy stock in a railroad company, to issue bonds to pay for the stock, and to levy taxes to pay the bonds was upheld, although the law provided that it should not take effect until it had been approved by two-thirds of the electors of the city.** A general law for the incorporation of villages, providing a scheme of taxa- tion, which allowed the electors of an already incorporated village to determine which sections of the general act should apply to their village,** and an act which authorized any town in a specified county to borrow money to aid in the construction of a railroad, upon the written consent of two-thirds of the resident taxpayers*'' have been upheld. These cases sufficiently illustrate the prin- ciple. Other cases to the same effect are cited.*^ 551. The reason for distinguishing between a submission to the people of all the state and those of a municipal corporation is that the legislature, having the right to delegate legislative powers to municipal corporations, may provide for the exercise of such powers by such corporations in any manner it sees fit. And some- times it is said that such laws do not amount to delegations of power, but are completed acts of legislation when they are enacted, and that the popular vote of the community is not a vote as to the ** Bank of Rome v. Village of Rome, Caldwell v. Justices, 4 Jones Eq. (N. 18 N. Y. 38; Cl&rke v. City of Roch- C.) 323; City of St. Louis v. Alex- ester, 28 N. Y. 605. ander, 23 Mo. 483 ; Alcorn v. Hamer, *5Bank of Chenango v. Brown, 26 38 Miss. 652; Johnson v. Stack, 24 N. Y. 467. 111. 75 ; Police Jury v. McDonough, 8 *6Starin v. Town of Genoa, 23 N. Y. La. Ann. 341; Cass v. Dillon, 2 Ohio 439. St. 607 ; Sharpless v. Mayor of Phila- <7Blanding v. Burr, 13 Cal. 343; delphia, 21 Pa. St. 147, 59 Am. Dec. Hobart v. Supervisors of Butte County, 759 ; Commonwealth v. McWilliams,, 17 Cal. 23; Cotton v. Commissioners 11 Pa. St. 61; Louisville, etc., R. R. of Leon County, 6 Fla. 610 ; Mayor, Co. v. Davidson County, 1 Sneed etc. V. Winter, 29 Ala. 651; Powers (Tenn.), 637, 62 Am. Dec. 424; San V. Dougherty County, 23 Ga. 65; La- Antonio v. Jones, 28 Tex. 19. fayette, etc., Co. v. Geiger, 34 Ind. 185 ; THE DELEGATION OF TAXING POWER. 281 expediency of the law, but is merely an election by the munic- ipality whether or not it will avail itself of the benefits of the law. This latter distinction is subtle rather than real. In nearly all the states there are now constitutional provisions which provide for the submission of questions of debt and taxa- tion to the people of the community taxed. For diseiTssion and quotation of such provisions reference is made to chapter XXVII and sections 2212 to 2268 of this work. Delegation of taxing power to municipal subdivisions. 552. There is an exception to the rule that the legislature can- not delegate the power of taxation, which has already been referred to. It is an exception as old as the rule itself; has its origin in the same causes; and is justified by the same governmental reasons. The local municipalities are, viewed in one aspect, the agents of the state for the purposes of local government ; viewed in another aspect they are the local legislatures, directly representative of and responsible to the people of their respective territories. The principle that taxation can only be by consent of the people to be taxed, acting through their representatives, authorizes taxa- tion by local authorities for local purposes, and discountenances interference in such matters by the representatives of other por- tions of the state. Long settled usage confirms this reasoning ; and it is a firmly established doctrine that the power of local taxation for local purposes may be exercised by municipalities. In autlior- izing the local governmental bodies to exercise the power, the legis- latures may be regarded in theory, not really as delegating the power (for it is a power which belongs to the locality rather than to the government at large), but as laying down a general rule for the exercise, by the municipalities, of the power which belongs to them.** *8 Battle V. Mobile, 9 Ala. 234, 44 v. Jones, 26 La. Ann. 708; New Or- Am. Dec. 438; Intendant ^. Chandler, leans v. Turpin, 13 La. Ann. 56; Bui- 6 Ala. 899; Osborne v. Mobile. 44 Ala. gess v. Pue, 2 Gill (Md.), 11; State 498; Washington v. State, 13 Ark. v. Mayhew, 2 Gill, 487; Alexander 752; People v. Kelsey, 34 Cal. 470; v, Baltimore, 5 Gill, 383, 46 Am. Dec. Steward v. Jefferson, 3 Harr. (Del.) 630; People v. Hiirlbut, 24 Jlich. 44, 335; People v. Du Puyt, 71 111. 651; 9 Am. Rep. 103; Harrison v. Vieks- People V. Trustees of Schools, 78 111. burg, 3 Sm. & M. 581, 41 Am. Dec. 136 ; Huck v. Chicago, etc., Ry. Co., 633 ; Smith v. Aberdeen, 25 Miss. 458 ; 86 111. 352; Bradlee v. McAtee, 7 Bush, Beck v. Allen, 58 Miss. 143; St. Louis 667, 3 Am. Rep. 309; Cheaney v. v. Laughlin, 49 Mo. 559; Cameron Hooser, 9 B. Men. 330; Arbegust v. v. Stephenson, 69 Mo. 378; Hnr- Louisville, 2 Bush, 271; Shreveport ford v. Omaha, 4 Neb. 336; State v. 282 CONSTITUTIONAL LAW OF TAXATION. 553. In the delegation of the power of local taxation to munic- ipalities the principle of equality is clearly manifest. Inequality in taxation, whatever form it may take, is never anything else than taxation of some persons or some community for the benefit of others. If a state legislature composed of members from all localities reserved to Itself the power of local taxation for local objects, aside from being wrong in principle, as amounting to interference by some localities in the affairs of others, such a reser- vation would work inequalities in practice, for persons who have no interest in or acquaintance with municipal needs cannot dis- tribute burdens as evenly as can be done by the people of the interested locality, who are to bear the burdens. A result of these considerations is, that those decisions which countenance interference by the legislature in matters of strictly local concern — as where the legislature compels a municipality to tax itself for local objects — depart from the principle of equality in so far as they uphold such interference. The class of municipal authorities to whom the exercise of taxing power may be confided. 554. It is hard to state a precise general rule as to the class of corporate authorities of municipal bodies to whom the taxing power may be delegated. Inasmuch as it is a purely legislative power, strict reasoning forces the conclusion that only the legislative body of a municipality or local subdivision may be permitted to exercise the power ; but this view, while it is the one held in many states, is not held everywhere. The almost universal practice of referring some questions of local taxation and public indebtedness to the people of the localities interested (often, however, under express constitutional autliority), is inconsistent with the view which limits the exercise of the power to the legislative body of the community ; and the courts in some states uphold delegations of taxing power to commissioners who are not chosen by the people. Noyes, 30 N. H. 279 ; Taylor v. New- St. 243, 67 Am. Dec. 289; Butler's berne, 2 Jones Eq. 141, 64 Am. Dec. Appeal, 73 Pa. St. 448; Hope v. 566; Caldwell v. Justices, 4 Jones Eq. Deaderiek, 8 Humph. 1, 47 Am. Dec. 323; Thompson v. Floyd, 2 Jones L. 597-599, overruling Marr v. Enloe, 1 313; Wingate v. Sluder, 6 Jones L. Yerg. 452; Trigally v. Memphis, 6 552 ; Commissioners v. Patterson, 8 Coldw. 382 ; Kinney v. Zimpleman, 36 Jones L. 182; Wilmington v. Roby, 8 Tex. 554; Godden v. Crump, 8 Leigh, Ired. L. 250; Lockhart v. Harrington, 120; Bull v. Read, 13 Gratt. 78. 1 Hawks, 408 ; Hill v. Iligdon, 5 Ohio THE DELEGATION OF TAXING POWER, 283 555. Perhaps a fair statement of the general rale and prac- tice, in the absence of express constitutional restrictions, is that the taxing power cannot properly be delegated to purely admin- istrative officers ; that it should be delegated only to those author- ities who represent the people ; but that the courts, in seeking to uphold legislative acts, sometimes go far in upholding delegations of taxing power to boards or officers whose responsibility to the people is remote and whose authority is administrative rather than legislative. Where the state constitution limits the legislative authority to the delegation of taxing power only to the " corporate authorities " of municipalities, the term " corporate authorities " is limited in scope to those authorities who are elected by the people, or to M'hose power to tax the people taxed have in some way given their assent. Illustrating the proposition that, regardless of express constitu- tional restrictions, the taxing power should not be delegated to ad- ministrative boards or officers, are the following cases: 556. In Staie v. Mayor and City Council of Des Moines*^ the legislature of Iowa had authorized the city of Des Moines under a general law to maintain a board of library trustees for a public library ; and had ordained that the board of library trus- tees should fix a rate of tax fof library purposes, should certify that rate to the city council and that the council should levy the tax according to the rate^so certified. In pursuance of this stat- ute the board fixed and certified a rate, the council refused to levy the tax according to that rate, and the action was brought for a mandamus to compel the council to levy the tax. The mandamus was denied and the act was held to be void as an attempt to dele- gate the taxing power, which could not be delegated except to the corporation itself. 557. In People ex rel. Board of Park Commissioners v. Com- mon Council of Detroif^ the legislature of Michigan had confer- red upon a board of park commissioners power to buy land for parks, and had ordained that the common council of Detroit, upon the certificate of the commissioners of the amount necessary, should raise that amount by the sale of city bonds. Upon application for mandamus to compel the issue of bonds under the act, it was held that as the board of park commissioners were not the legis- 49 103 Iowa, 76, 64 Am. St. Kep. 157, 5»28 Mich. 228, 15 Am. Rep. 202. 72 N. W. Rep. 639, 39 L. R. A. 285. 284 CONSTITUTIONAL LA.W OF TAXATION. lative representatives of the people of the city, the act was void. 558. In Board of Commissioners v. Abbott, ^^ an act appointing a board of road commissioners and authorizing them to levy taxes was held unconstitutional for similar reasons. 559. Illustrating the application of a laxer theory in Xew York^^ it seems to be held that the delegation of power may be carried out through any of the corporate agencies, whether legis- lative or not. In Matter of Zborowski^^ the question was whether a law giving to the commissioner of public works of the city of New York the power to direct the construction of sewers and to levy assess- ments for that purpose was a valid delegation of the taxing power. It was held to be a valid delegation. The court said: The legislature may delegate to a municipality the power to tax for the expenses of the local government and the power to assess for the expenses of local improvements. All the powers of local government are delegated. In the case at hand, the power of assessment is delegated to the corporate body, the mayor, aldermen, and commonalty of New York, and it may lawfully be exercised through the officers of the corporation, if the terms of the legislative delegation so provide. The whole system of government of the North American states is upon this principle. All through the pplitieal arrangements of counties, cities, towns, and villages, and even school districts, local affairs, inchidirig the power of taxation, are put into the hands of local officers. . . . As to the propriety and expediency of putting into the hands of one officer the power which has been exercised by the commissioner of public works in New York city under the act of 1870, question may well be made, but the raising and decision of it is for another power than the courts. Who are " corporate authorities " under constitutions using those express words. 560. A number of cases, decided under constitutions limiting the power of municipal taxation to the " corporate' authorities ""' of the municipalities, give force to the proposition that dele- gated taxing power can only be exercised by some body da- riving its authority directly from the people taxed. The propo- sition has been expounded with great clearness especially by B152 Kans. 148, 34 Pac. Rep. 416. 88; Terrel v. Wheeler, 123 N. Y. 83, See also Parks v. Board of Commis- 25 N. E. Rep. 329; Matter of Rob- sioners, 61 Fed. Rep. 436. erts. 17 Hun, 559. 62 Matter of Zborowski, 68 N. Y. ^3 Supra. THE DELEGATION OF TAXING POWEE. 285 the courts of Illinois, under such a constitutional provision." In a comparatively early case the Supreme Court of Illinois stated the general rule to be that by the phrase " corporate au- thorities," as used in the constitution, " must be understood those municipal authorities who are elected hy the people, or chosen in some manner to which they have given their assent." ^^ 561 . In another case, the constitutionality of the metropolitan police act of East St. Louis was under consideration. The police commissioners were appointed by the act and given power, not to levy a tax, but to estimate the amount needed to enable them to discharge their duties; and the act required the city council to appropriate the amount needed. In case the council failed to do so it was made the duty of the commissioners to issue certi- ficates of indebtedness in the name of the city for the amounts certified. The court said: These police commissioners are not the corporate authorities of East St. Louis, and, therefore, can have no power of taxation. They are not elected by the people of that city nor appointed in any mode to which the people have given their assent. The act creating them has never been accepted by the people or by the city council, but, on the other hand, as alleged in the bill, the city has constantly rejected the authority of the commissioners.^ To the same effect are other cases cited. *^ 562. The provision of the l^ew York constitution which pro- vides for the selection of local officers by the people of the local communities is quoted in full, and discussed elsewhere.^* Some light on the question of who are " corporate authorities," however, is afforded by a decision vmder that clause which vests the appoint- ment of local ofiicers in the electors or in " such authorities thereof as the legislature shall desig-nate." Under this provision it was held that an act which gave to the common council of a city the power to choose a police boar, of four persons, but which allowed each member to vote for two persons, thus placing the power of appointment of two commis- si Quoted in full in § 589 of this 173; State ex rel. Wyatt v. Ashbrook, work. 154 Mo. 375, 77 Am. St. Rep. 705, 55 65Harwood v. St. Clair Drainage S. W. Rep. 627, 48 L. R. A. 265; Commissioners, 51 111. 130. Helena Consolidated Water Co. v. 56 Hinze v. People, 92 111. 406. Steele, 20 Mont. 1, 49 Pac. Rep. 382, 57 Updike V. Wright, 81 111. 49; Peo- 37 L. R. A. 412; State v. Stanford, 24 pie V. Morgan, 90 111. 558; Board of Utah, 148, 66 Pae. Rep. 1061. Education of Woodland v. Board of 58 See § 687 et seq. Trustees. 129 Cal. 599, 62 Pac. Rep. 286 CONSTITUTIONAL LAW OF TAXATION. sioners in the hands of the minority of the city council, was void, as the nainority were not the " local authorities." ^^ 563. The assent of the people to the delegation of taxing- power to a board of officials need not be given by their vote electing those officials. If a law, giving to a board or body other ■ than the legislative body of the taxed district, the power of taxa- tion, has been referred to the people for their ajjproval, and they have voted in favor of it, such action, it seems, is STifficient to constitute such board or body the " corporate authorities " of the district for the purposes specified.** Thus it is held in a number of cases in Illinois, that where a law creating a board of park commissioners, for a municipality, and delegating to them the power of taxation, has been favorably voted on by the people, the delegation of taxing power contained in the act is valid.^" And where the people of a county, voting under a general law, have adopted a system of township organization, under which, as provided by the law, the coimty supervisors have the right to- levy taxes in the towns, the county supervisors are the corporate authorities within the meaning of the constitution.*' 563a. The requirement that the delegation of taxing power shall be to " corporate authorities," occurs in the constitutions of California,*^ Colorado,*^ Idaho,** Illinois,** Missouri,** Montana,*' Nebraska,*^ South Cai-olina,*" South Dakota,™ Utah,''' Washing- ton,'^ and West Virginia.'^. In Kentucky the phrase is '" proper authorities." ''* Municipal bodies to which power of taxation may be delegated may be other than cities, towns, and counties. 564. The essential elements of a municif)al corporation are that it shall be composed of officers of the government, having no 59Rathbone v. Wirth, 150 N. Y. 459, «2Art. XI, § 12, § 585 of this work. 45 N. E. Rep. 15, 34 L. R. A. 408. «3 Art. X, § 7, § 586 of this work. 60 West Chicago Park Commission- 64 Art. VII, § 6, § 588 of this work, ers V. Sweet, 167 111. 326, 47 N. E. 66 Art. IX, § 9, § 589 of this work. Rep. 728; West Chicago Park Com- 66 Art. X. § 10, § 597 of this work, missioners v. Farber, 171 111. 146, 49 «7 Art. XII, § 4, § 598 of this work. N. E. Rep. 427; Dunham v. People, 96 68 Art. IX. § 6, S 599 of this work. III. 331 ; People v. Salomon, 51 111. 37 ; 69 Art. VIII, § 6, § 607 of this work. State V. Standford, 24 Utah, 148, 66 70 Art. XI, § 10, § 608 of this work.. Pac. Rep. 1061. n Art. XIII, § 5, § 611 of this work. eofi Supra. 72 Art. XI, § 12. § 612 of this work. 61 People V. Knopf, 171 111. 191, 49 73 Art. X, § 9, § 013 of this work. N. E. Rep. 424 ; Bebb v. People ex rel. 74 5 181, J 591 of this work. Kochersperger, 172 111. 376, 50 N. E. Rep. 185. THE DELEGATION OF TAXING POWER. 287 personal interest in its concerns, acting as agents of the state for the interest and convenience of the people of a specified locality. Such corporations are usually cities, towns or counties, and in discussing questions of the delegation of power, the courts have usually had that cL..o of civic bodies in mind. But there may be other municipal corporations, organized for special adminis- trative purposes. Such may be school districts and irrigation districts. When such bodies are organized into coi^orations in- stead of being merely administrative boards of some other cor- poration, the power of taxation may be delegated to them even where the constitution restricts such delegation to municipal bodies. '''' Different municipal bodies occupying the same territory.^*' 565. Many, indeed most, public or municipal corporations, in- clude within their bounds the territory of others, as where a city includes a part or the whole of a school district, or where a city is included in the limits of a county, or several cities and counties are included in the limits of a sanitary district or irrigation district. Questions — not generally very serious — have sometimes arisen with respect to the power of the legisla- ture to delegate to such diiferent corporations taxing power over the same territory. Where the legislature is not restrained by some express constitu- tional provisions, no constitutional difficulty can arise, for as stated, the legislative power is quite competent to create different taxing districts for diiferent purposes and to adjust their powers of taxation in such manner as to carry out the purposes of their organization f^ and the only questions which can give serious con- cern are those which arise in the interpretation of the statutes by which the legislative will is expressed. 566. And although constitutional provisions forbidding the legislature to impose taxes for municipal purposes within the limits of municipalities have been invoked in argiunent to limit the legislative power in this regard, it seems that such power is practically unaffected by such provisions. TS/n re Madera Irrigation District, Gommissioners, 12 Colo. 89, 19 Pac, 92 Cal. 296, 27 Am. St. Rep. 107, 28 Eep. 892; People v. Salomon, 51 111. Pac. 272, 675, 14 L. R. A. 755 ; Hughes 37. V. Ewing, 93 Cal. 414, 28 Pac. Rep. T6 See §§ 419 et seq. 1067 (school district) ; see People v. ^^a See § 419 et seq. 288 CONSTITUTIONAL LAW OF TAXATION. Thus it is held in California that constitutional provisions for- bidding the legislature to lay taxes for municipal purposes upon " counties, cities, towns, or other public or municipal corpora- tions " or to delegate power to any " special commission, private corporation," etc., to levy taxes in any municipality''^ do not prevent the legislature from creating such a quasi-municipal or public corporation as an irrigation district or a sanitary district, including counties and municipalities, and bestowing taxing power upon them. The power thus bestowed is a power exercised for purposes entirely distinct from the taxing powers exercised by the municipality or the county; and while the constitutional pro- visions quoted would prevent the legislature from bestowing upon any such irrigation districts or similar corporations the taxing power for purposes properly pertaining to the municipal organiza- tions of the territory, they do not prevent the delegation to such corporations of a concurrent taxing power for purposes other than those which distinctly appertain to the counties and munic- ipalities.™ 567. Said the Supreme Court of California in one of the cases cited : Neither is it in violation of the constitution to incorporate into such district a town or city that has been incorporated for other municipal purposes. A system of irrigation contemplated by the act in question cannot be considered as a "municipal piirpose " within the scope zl the organization of a city or town, and there can be no conflict between a corporation organized under the act to produce a system of irrigation within the dis- trict, and the municipal incorporation of the town of Madera. A water supply for the two corporations is distinct and for dif- ferent purposes. The liability of the inhabitants of the town of ^Madera for the bonded indebtedness of the Madera Irrigation District, as well as for that of their own municipality, does not impair tlie validity of the organization of the district. It is a liability of the same character as rests upon the inhabitants of any town for its proportion of all the indebtedness of the county within which it is situated.™ TT See provisions quoted in § 585 of 334, 26 Pac. Rep. 237 ; Woodward T. this work. Fruitvale Sanitary District, 99 Cal. 78 7n re Madera Irrigation District, 554, 34 Pac. Rep. 239. 92 Cal. 296, 27 Am. St. Rep. 106, 28 79 In re Madera Irrigation District, Pac. Rep. 272, 675, 14 L. R. A. 775; 92 Cal. 290, 27 Am. St. Rep. 106, 28 Board of Directors v. Tregea, 88 Cal. Pac. Rep. 272, 675, 14 L. R. A. 775. THE DELEGATION OF TAXING POWER. 289 Where the constitution permits delegation of taxing power to certain specified classes of subdivisions, may the power be delegated to municipalities not belonging to the specified classes ? 568. Whether constitutional provisions which allow the delega- tion of taxing power to certain enumerated municipal bodies prohibit the delegation of that power to municipal bodies other than those named, is a question upon which the courts are divided. Much depends, of course, upon the precise words of the constitu- tional mandate. The difference in decision seems to rest mainly upon whether such constitutional provisions are regarded as original grants of power, or as limitations upon general legisla- tive powers already existing. A provision which allowed the power to make local improvements by special assessment or taxa- tion to be delegated to " cities, towns and villages " *" has been held not to be exclusive; and laws authorizing such power to be delegated to other municipal corporations are upheld. Thus it is held that the power to establish drains by special assessment or taxation of the property benefited may be conferred upon the authorities of counties, although counties are not included in the enumerated classes.^^ Other cases upholding the same principle are cited.®^ 569. The principles upon which these decisions are based are thus stated by the Nebraska Supreme Court : The authority of the legislature to vest cities, towns, and vil- lages with the power to make local improvements by special taxa- tion of property benefited is not a grant of power. The authority already existed, and the constitution merely prescribes the rule by which taxes shall be apportioned. How, then, can it be claimed that the enumeration of cities, towns, and villages ex- cludes all other municipal corporations. If the constitution was a grant of power, the rule contended for would be correct. But not being a grant of power, and the legislature possessing author- ity, in the absence of an inhibition in the constitution to pass the act in question, it is not obnoxious to the constitution.®^ 80 For text of provisions see § 599 of N. W. Eep. 1069; People v. Highway this work. Commissioners, 15 Mich. 351; People 81 Dodge County v. Acom, 61 Neb. v. Ingham Co., 20 Mich. 95; Carson 376, 85 N. W. Eep. 292; Darst v. v. St. Francis Levee District, 59 Ark. Griffin, 31 Neb. 668, 48 N. W. Rep. 513, 27 S. W. Rep. 590, where delega- 819. tion of taxing power to a levee district 82 State V. Lancaster County, 4 Neb. was upheld under a broad constitu- 537, 19 Am. Rep. 641; State ex rel. tional provision; Davis v. Gaines, 48 Abbott V. Dodge County, 8 Neb. 124, Ark. 370, 3 S. W. Rep. 184. 30 Am. Rep. 819; Chicago, B. & Q. 83 State ex rel. Abbott v. Dodge R. R. Co. V. Klein, 52 Neb. 258. 71 County, 8 Neb. 124, 30 Am. Rep. 819. 19 290 CONSTITUTIONAL LAW OF TAXATION. 570. On the other hand there are decisions which, proceeding upon the theory that the general rule prohibiting the del^ation of the legislative power is subject only to the exceptions specific- ally enumerated in the constitution, hold that the delegation of taxing power to municipal or public corporations not enumerated is not permissible. Thus in Tennessee, an act creating a " levee district " and del^ating, to the levee commissioners appointed under the act,, the power of taxation, was held void under the provisions of the Tennessee constitution which authorize the legislature to delegate the taxing power to " counties and in- corporated towns." ** Similarly in Alabama it is held that taxing power cannot be delegated to a school district, which is not a municipal, although a public, corporation.*'^ But power to tax for school purposes may be conferred upon the counties.^® And in Illinois constitutional provisions like those of Nebraska were held to prevent the l^s- lature from delegating the power of assessment for benefit to any other than the enumerated corporations.*^ Constitutions do not usually vest taxing powrer in municipal- ities by their own force. 571. A constitutional provision which forbids the legislature to levy taxes for municipal purposes within municipalities and which says that the legislature " may " vest the taxing power for such purposes in the corporate authorities of the municipality, does not vest the taxing power in those corporate authorities by its own force. They only obtain power from the legislative grant; the effect of the constitutional provision is to prevent the legislature from directly exercising the power, and to limit it as to the persons to whom the power may be delegated. The legislature retains discretion as to the conditions upon which the taxing power shall be granted and under which it shall be exercised ; and may limit the municipal authorities as to the taxes 84 Reelfoot Lake Levee District v. Board of Directors v. Houston, 71 111. Dawson, 97 Tenn. 151, 36 S. W. Rep. 318, where it was held that power to- 1041, 34 L. R. A. 725. levy assessments could not be dele- 85 Schultes V. Eberly, 82 Ala. 242, gated to a levee district. At present 2 So. Rep. 345. an express constitutional provision al- 86 Southern Ry. Co. v. St. Clair lows such power to be delegated to County, 124 Ala. 491, 27 So. Rep. 23. levee districts. See § 250 of this work. 87 Updike v. Wright, 81 111. 53; THE DELEGATION OF TAXING POWEE. 291 which shall be imposed.** Thus it is held in California under such a constitutional provision*® that the legislature may limit county taxation to the taxation of real and personal property, and may forbid county authorities to levy occupation taxes v^ithin the limits of incorporated villages and cities in the county.'" Delegation of taxing power by constitutions allowing cities to frame their own charters. 572. Where a state constitution contains provisions allowing a city to frame its own charter, the power thus conferred includes the power to adopt a system of taxation, as the power of taxa- tion is necessary to the existence of the municipal government. It is not necessary, in such cases, that the power of taxation be conferred upon the municipality by the legislature; as the constitution itself confers the power of taxation for municipal purposes, to be exercised as limited by the constitution itself.®' What powers may be delegated. 573. The taxing power which may be 'delegated to municipal or subordinate bodies includes the whole taxing power, without reserve, subject only to express limitations contained in the con- stitution. It is entirely competent for the legislature to delegate to a municipality power to impose, for municipal purposes, a clap? of taxes which the state itself is prohibited from imposing for general purposes. This proposition rests on the principle that the enimierated restrictions contained in a state constitution are not grants of power, but are exceptions to the general grant of legislative authority.'* Along this line it is held that, althougli a constitutional provision grants to the legislature the power to impose certain classes of occupation taxes which are enumerated, 88 Hughes V. Ewing, 93 Cal. 414, 28 v. Smith, 133 Cal. 102, 65 Pac. Eep. Pae. Rep. 1067. 309; Davies v. Los Angeles, 86 Cal. 37, 89 Quoted in § 585 of this work. 24 Pac. Rep. 771. The power of the 90 £a! parte Pfirrman, 134 Cal. 143, legislature over such charters, under 66 Pac. Eep. 205. the California constitution, is merely 91 Security Savings, etc., Co. v. the power to accept or reject. Sheehan Hinton, 97 Cal. 214, 32 Pac. Rep. 3; v. Scott, 145 Cal. 684, 79 Pac. Rep. Ex parte Braun, 141 Cal. 204, 74 Pac. 350. Such charters need not conform Rep. 780. See Meier v. City of St. in every detail to the general laws of Louis, 180 Mo. 391, 79 S. W. Rep. the state. Grant v. Berrisford, 955. Under the California constitu- Jlinn. , 101 N. W. Rep. 940. tion the charters of cities thus framed 92 See § 568 et seq. are subject to the general laws. Banaz 292 CONSTITUTIONAL LAW OF TAXATION. it may delegate to municipal bodies the power to impose for mu- nicipal purposes, occupation taxes which are not included in the constitutional enumeration.^^ And, although the state itself re- frains from imposing certain classes of taxes, it may delegate to a municipality the power to impose them.** That the power which may be delegated to municipalities in- cludes the power to impose license taxes is well settled.®^ And where the constitution forbids the legislature to lay taxes in municipalities such license taxes are included in the prohibi- tion.'* 574. In Maine it is held, under a constitutional provision that taxation shall be uniform, that the right to exempt property from taxation cannot be delegated to municipal corporations, although the state may exercise it, because in such case one municipal cor- poration might exempt property of a class which another might tax, hence there would be no uniformity.*^ This proposition, if correct, would seem also to include the proposition that under such a constitutional provision the power to tax cannot be del^ated at all, for the power to tax certainly must include the power to de- termine the rate of tax ; and unless each class of property is taxed at the same rate everywhere there is no uniformity. If a church is exempted in one town and taxed in another — says the Maine court — the requirement of uniformity is violated. Then why is not the requirement equally violated when a church is taxed at one per cent, in one town and at two per cent, in another ? Inas- much as the delegation of power to municipalities to impose taxes and to fix the rate is so integral a part of our governmental system it cannot be believed that constitutional requirements of uni- formity were intended to prohibit such delegations of power. And if this be so, the Maine decision seems unfounded. The truth is that any requirement of uniformity or equality only appertains to the territory in which the particular tax is laid. Concededly municipal corporations may only tax for local »3 Magneau v. City of Fremont, 30 95 See cases cited supra; also County Neb. 843, 47 N. W. Rep. 280, 27 Am. of El Dorado v. Meiss, 100 Cal. 268, St. Rep. 436, 9 L. R. A. 786; Temple- 34 Pac. Rep. 716; Ex parte Mirande, ton V. City of Tekaraah, 32 Neb. 542, 73 Cal. 365, 14 Pac. Rep. 888; Ex 19 N. W. Rep. 373 ; City of York v. parte Wolters, 65 Cal. 209, 3 Pac. Rep. C. B. & Q. R. R. Co., 56 Neb. 572, 76 894; People v. Martin, 60 Cal. 153. N. W. Rep. 1065; Wiggins v. City of 96 People v. Martin, 60 Cal. 153. Chicago, 68 111. 378. 97 Brewer Brick Co. v. Inhabitants 94 Ba; parte City Council, 64 Ala. of Brewer, 62 Me. 62. 16 Am. Rep. 463. 395. THE DELEGATION OF TAXING POWER. 293 purposes. Then why is not a tax equal and uniform within any constitutional requirement which has those qualities so far as the territory on which it is laid — and for the use of which it is laid — is concerned ? Delegation of taxing power to private persons. 575. In a loose opinion the !New York Appellate Division, First Department, upheld a law which created a private corporation called the Board of Fire Underwriters, composed of officers and agents of insurance companies in a city, gave to the corporation authority to maintain a " fire patrol," required all persons en- gaged in the fire insurance business in the city to report to the corporation the amount of premiums received by them during certain months, and authorized the corporation to charge upon all persons engaged in that business sucl% sums as might he. neces- sary to pay the expenses of the fire patrol, not exceeding two per cent, of the premiums received by them. It fixed a penalty for the refusal to make reports and made the sums assessed collectible by action. The court upheld this act on the ground that it was an exer- cise of the police power and not of the taxing power.*^ Inas- much as the money was collected solely for the expense of the fire patrol and not to regulate the insurance business, it is difli- cult to see why the sums collected were not taxes. Eut even if they were not, how is such a delegation of legislative power to a purely private corporation to he justified? ®^^ 576. In a case lately decided by the New York Court of Appeals, an act giving to private corporations for the prevention of cruelty to animals the right to collect for their own use a license fee of one dollar for each dog, in the city of their operation, was held unconstitutional as an appropriation of public money to private uses. With respect to the question of delegation of power, the judge who wrote the opinion said : If it were necessary for the disposition of this ease . . . I certainly should deny the right of the legislature to vest in 98 Board of Underwriters v. Whip- been assailed as delegations of taxing pie, 2 App. Div. 361, 37 N. Y. Supp. power to private individuals, but have 712. usually been sustained. See §§ 249 to 98a Laws creating irrigation, draiiv 253 et seq. age and levee districts, have sometimes 294 CONSTITUTIONAL LAW OF TAXATION. private associations or corporations authority and power affecting the life, liberty, and property of the citizens, except that of eminent domain, to be exercised for a public purpose and the management and control of reformatory institutions to v, ;h persons may be committed by the judicial or other public authorities.®^ Constitutional provisions requiring restriction of municipal taxing power. 577. Provisions to the effect that the legislature, in delegating to municipalities the powers of taxation and contracting debt, shall or may restrict those powers so as to prevent their abuse, exist in the constitutions of a number of states, including Arkansas,' Kansas,^ Michigsin,^ lOssissippi,* E"ebraska,^ Nevada,'^ ISTew York,^ JNTorth Carolina,® North Dakota,* Ohio,^" Oregon," South Caro- lina,^^ South Dakota,^' Wisconsin,** and Wyoming.^^ 578. The rule in the construction of provisions of this character is that they are binding on the conscience of the legislature, that the legislature is the sole judge of what constitutes proper re- striction to prevent abuse, and that the courts will not review the legislative determination in this respect.*® An early case in Wisconsin intimated a different view;*' but for all practical pur- poses the rule in Wisconsin is the same as elsewhere, as the power of the court to interfere is limited to cases where power of taxation or contracting debts is granted for a purpose not munic- ipal}^ These provisions, however, do not grant unlimited powei' to the legislature, in these respects, independent of everything else in the constitution, but other provisions of the constitution, creat- 99 Fox V. Mohawk, etc., Humane So- 13 Art. X, § 1, § 608 of this work. ciety, 165 N. Y. 517-524, 59 N. E. "Art. XI, § 3, § 2266 of this work. Rep. 353, 80 Am. St. Eep. 767, 51 15 Art. XIII, § 3, § 615 of this work. L. E. A. 681. 16 Bank of Eome v. Village of Rome, 1 Art. XII, § 3; art. II, § 23, § 584 18 N. Y. 38; City of Raleigh v. Pe«ce, of this work. 110 N. C. 32, 14 S. E. Rep. 521, 17 2 Art. XII, § 5, § 590 of this work. L. R. A. 330 ; Hill v. Higdon, 5 Ohio 3 Art. XIV, § 13, § 594 of this work. St. 243, 67 Am. Dec. 249; People v. 4 Art. IV, § 80, § 596 of this work. Mahaney, 13 Midi. 481: Nev\ton v. SArt. VIII, § 4. Atchison, 31 Kans. 151, 47 Am. Rep. 8 Art. VIII, § 8, § 600 of this work. 486, 1 Pac. Rep. 288 ; Maloy v. Mari- TArt. XII, § 1, § 601 of this work, ctta, 11 Ohio St. 636. 8 Art. VIII, § 4, § 603 of this work. 17 Foster v. City of Kenosha, 12 «Art. VI, § 130, § 602 of this work. Wis. 616. 10 Art. XIII, § 6, § 604 of this work. 18 Oconto City Water Supply Co. v. 11 Art. XI, § 5, § 605 of this work. City of Oconto, 105 Wis. 76, 80 N. E. 12 Art. VIII, § 3, § 607 of this work. Rep. 1113. THE DELEGATION OF TAXING POWER. 295 ing express limitations upon the taxing and debt contracting powers, are to be construed together with them/® 579. Said the New York Court of Appeals, early expressing what is now the general view: Indefinite as is the rule of restriction prescribed by this pro- vision, and ill-suited in its terms to be judicially applied, it is still both salutary and well suited to be the guide of legislative discretion. It presents to the legislature the general object to be attained, the prevention of abuses in assessments and con- tracting debts, and the general means of attaining that object, by restrictions on the powers to be conferred on municipal cor- porations; but it leaves to the discretionary power of that body the determination of what are abuses, and what extent of restric- tion, on the powers to tax, to lay assessments, to borrow, to con- tract debts, to loan credit, will prevent such abuses. The legis- lative judgment is appealed to, and is to be formed while they are deliberating on the enactment of the law. Each particular case is to be determined on its own circumstances, as to the measure of restriction necessary to secure the end proposed. Eestrictions which as to one municipality would suflBce as to another might be altogether insufficient. In each case they are to apply a limit of power which will, in their judgment, prevent abuse. If their judgment has been in any particular case errone- ous, if the limit which they deemed suflBcient has proved not nar- row enough to exclude abuses, surely their judgment is not to be reviewed and reversed in a court of law. The rule is general that a discretion committed to one authority is not to be re- viewed by another. It holds in regard to tribunals of the most limited power, and it applies at least with equal force when the depositary of the discretion is also the depositary of the legislative power of the state. 580. I conclude, therefore, that the provision in question does not set forth any rule by which a court can adjudge an act of the legislature to be void. The rule was intended to operate upon the conscience and judgment of the legislature in passing laws, and we must assume that the law in question was enacted by them in view of it, and of all the responsibility which it im- posed, and that in the legislative judgment this act did so restrict the powers in question as to prevent abuse.^* It is held that a provision of this sort is not violated by a city charter which makes no provision for the contingent liability of the city for special assessments which may be held void.^* 19 Cincinnati, etc., Ry. Co. v. City 20 Bank of Rome v. Village of Rome, of Cincinnati, 62 Ohio St. 465, 57 18 N. Y. 38, 42, 43. N. E. Rep. 229, 49 L. R. A. 566. 21 Kadderly v. Portland, 44 Oreg. 118, 74 Pac. Rep. 710. 296 CONSTITUTIONAL LAW OF TAXATION. 581. Some -writers have speculated about the effect of such a provision on a municipal charter which should contain no re- strictions of any kind ; but they always end their discussions with the remark that no such charter is likely ever to be granted. Express constitutional provisions with respect to delegation of taxing power. 582. Like most subjects of state constitutional law with respect to taxation, the limits of the legislative authority in delegating the taxing power have been embodied in express con- stitutional provisions in many states. Much that is contained in these provisions is merely declaratory of previous law; but in some instances there are departures. Some of such express provisions are: 583. Alabama. The power to levy taxes shall not be delegated to individuals or private corporations or associations.^^ 584. Arkansas. The Genera] Assembly shall provide, by general laws, for the organization of cities (which may be classified) and incorporated towns, and restrict their power of taxation, assessment, borrow- ing money and contracting debts, so as to prevent the abuse of such power.^^ The state's ancient right of eminent domain and of taxation is herein fully and expressly conceded ; and the General Assembly may delegate the taxing power, with the necessary restriction, to the state's subordinate political and municipal corporations, to the extent of providing for their existence, maintenance and well-being, but no further.^ 585. California. Cities having over 3,500 inhabitants may frame their own charters.^ The legislature shall hai'e no power to impose taxes upon counties, cities, towns, or other public or municipal corporations, or upon the inhabitants or property thereof, for county, city, town, or other municipal purposes, but may, by general laws, vest in the corporate authorities thereof the power to assess and collect taxes for such purposes.^® 22 Art. XI. 25 Art. XI, § 8. 23 Art. XII, § 3. 26 Art. XI, § 12. . 2* Art. II, § 23. THE DELEGATION OF TAXING POWER. 297 The legislature shall not delegate to any special commission, private corporation, company, association, or individual, any power to make, control, appropriate, supervise, or in any way interfere with any county, city, town, or municipal improvement, money, property, or effects, whether held in trust or otherwise, or to levy taxes or assessments, or perform any municipal func- tions whatever.^^ 586. Colorado. The General Assembly shall not delegate to any special com- mission, private corporation or association, any power to make, supervise or interfere with any municipal improvements, money, property or effects, whether held in trust or otherwise, or to levy taxes, or perform any municipal function whatever.^^ The General Assembly shall not impose taxes for the purposes of any county, city, town or other municipal corporation, but may, by law, vest in the corporate authorities thereof respec- tively the power to assess and collect taxes for all purposes of such corporation.^^ Special provisions for the government of the city and county of Denver are contained in the ccnstitution.^" 587. Florida. The legislature shall authorize the several counties and incor- porated cities or towns in the state to assess and impose taxes for county and municipal purposes, and for no other purposes, and all property shall be taxed upon the principles established for state taxation. But the cities and incorporated towns shall make their own assessments for municipal purposes upon the prop- erty within their limits.^^ The legislature shall have power to establish and to abolish municipalities, to provide for their government, to prescribe their jurisdiction and powers, and to alter or amend the same at any time. When any municipality shall be abolished, provision shall be made for the protection of its creditors.^^ 587a. Georgia. The General Assembly shall not have power to delegate to any county the right to levy a tax for any purpose except for educa- tional purposes in instructing children in the elementary branches of an English education only; to build and repair the public buildings and bridges; to maintain and support prisoners; »Art. XI, § 13. 30 Art. XX. 28 Art. V, § 35. 31 Art. IX, § 5. 2B Art. X, § 7. 32 Art. VIII, § 8. 298 COHrSTITUTIONAL LAW OF TAXATION. to pay jurors and coroners, and for litigation, quarantine, roads and expenses of courts; to support paupers and pay debts here- tofore existing.^^ 588. Idaho. The legislature shall not impose taxes for the purpose of any county, city, town or other municipal corporation, but may by law invest in the corporate authorities thereof, respectively, the power to assess and collect taxes for all purposes of such corporations.^* 589. Illinois. The General Assembly may vest the corporate authorities of cities, towns and villages with power to make local improvements by special assessment or by special taxation of contiguous prop- erty, or otherwise. For all other corporate purposes, all munic- ipal corporations may be vested with authority to assess and col- lect taxes; but such taxes shall be uniform in respect to persons and property within the jurisdiction of the body imposing the same.^^ The General Assembly shall not impose taxes upon municipal corporations, or the inhabitants or property thereof, for corporute purposes, but shall require that all the taxable property within the limits of municipal corporations shall be taxed for the pay- ment of debts contracted under authority of law, such taxes to be uniform in respect to persons and property within the juris- diction of the body imposing the same. Private property shall not be liable to be taken or sold for the payment of the corporate debts of a municipal corporation.^* 590. Kansas. The legislature may confer upon tribunals transacting the county business of the several counties, such powers of local legis- lation and administration as it shall deem expedient.^''' Provision shall be made by general law for the organization of cities, towns and villages ; and their power of taxation, assess- ment, borrowing money, contracting debts and loaning their credit, shall be so restricted as to prevent the abuse of such power.^® 591. Kentucky. The General Assembly may authorize the counties, cities or towns to levy a poll tax, not exceeding one dollar and fifty cents per head.^® 33 Art. VII, § VI, par. II. ST Art. 2, § 21. 34 Art. VII, § 6. 38 Art. 12, § 5. 33 Art. IX, § 9. 38 § 180. 36 Art. IX, § 10. THE DELEGATION OF TAXING POWER. 299 The General Assembly shall not impose taxes for the purposes of any county, city, town or other municipal corporation, but may, by general laws, confer on the proper authoritiot- thereof, respectively, the power to assess and collect such taxes.*" 592. Louisiana. The valuation of property for state purposes is the valuation which must be taken for local taxation.*^ 593. Massachusetts. The general court shall have full power and authority to erect and constitute municipal or city governments, in any corporate town or towns in this commonwealth, and to grant to the inhab- itants thereof such powers, privileges, and immunities, not repug- nant to the constitution, as the general court shall deem necessarv or expedient for the regulation and govei'nment thereof.*^ 594. Michigan. The legislature shall provide for the incorporation and or- ganization of cities and villages, and shall restrict their powers of taxation, borrowing money, contracting debts, and loaning their credit.*^ For provisions with respect to delegation of power to county supervisors see the index of this work. 595. Minnesota. Any county and township organization shall have such powers of local taxation as may be prescribed by law.** 596. Mississippi. Provision shall be made by general laws to prevent the abuse by cities, towns and other municipal corporations of their pow- ers of assessment, taxation, borrowing money and contracting debts.*s 597. Missouri. The General Assembly shall not impose taxes upon counties, cities, towns or other municipal corporations or upon the inhab- itants or property thereof, for county, city, town or other munic- ipal purposes, but may, by general laws, vest in the corporate authorities thereof the power to assess and collect taxes for such purposes.*^ 40 § 181. «Art. XI, § 5. ■41 Art. 225. *^ Art. IV, § 80. -•2 Amendment II. « Art. X, § 10. •«3Art. XIV, § 13. 300 CONSTITUTIOTSTAL LAW OF TAXATION. The taxing power may be exercised bv the General Assembly for state purposes, and by counties and other municipal corpora- tions, under authority granted to them by the General Assembly, for county and other corporate purposes.'*' The constitution of Missouri, in addition to the provisions quoted limiting the legislative power of taxation over munici- palities, contains provisions allovfing cities having over 100,000 inhabitants to frame their own charters.** 598. Montana. The Legislative Assembly shall not delegate to any special com- mission, private corporation or association, any power to make, supervise or interfere with any municipal improvements, money, property or effects, whether held in trust or otherwise, or to levy taxes, or to perform any municipal functions whatever.** The Legislative Assembly shall not levy taxes upon the inhab- itants or property in any county, city, town, or municipal cor- poration for county, town, or municipal purposes, but it may by law vest in the corporate authorities thereof powers to assess and collect taxes for such purposes.^" 599. Nebraska. The legislature may vest the corporate authorities of cities, towns and villages, with power to make local improvements by special assessment, or by special taxation of property, beneiited. For all other corporate purposes, all municipal corporations may be vested with authority to assess and collect taxes, but such taxes shall be uniform in respect to persons and property within the jurisdiction of the body imposing the same.°* Private property shall not be liable to be taken or sold for the payment of the corporate debts of municipal corporations. The legislature shall not impose taxes upon municipal corporations, or the inhabitants or property thereof, for corporate purposes.*- 600. Nevada. The legislature shall provide for the organization of cities and towns by general laws, and restrict their power of taxation, assessment, borrowing money, contracting debts, and loaning their credit, except for procuring supplies of water.*^ "Art. X, § 1. BiArt. IX, § 6. 48 Art. IX, §§ 16, 17, 20, 22. B2Art. IX, § 7. 4»Art. V, § .36. esArt. VIII, § 8. BO Art. XII, § 4. THE DELEGATION OF TAXING POWEB. 301 601. New York: It shall bo the duty of the legislature to provide for the or- ganization of cities and incorporated villages, and to restrict the power of taxation, assessment, borrowing money, contracting debts, and loaning their credit, so as to prevent abuses in assess- ment and in contracting debt by such municipal corporations.^ The legislature shall, by general laws, confer upon the boards of supervisors of the several counties of the state such further powers of local legislation and administration as the legislature may, from time to time, deem expedient.^' 602. North Dakota. The Ijegislative Assembly shall provide by general law for the organization of municipal corporations, restricting their powers as to levying taxes and assessments, borrowing money and con- tracting debts ; and money raised by taxation, loan or assessment for any purpose shall not be diverted to any other purpose except by authority of law.'® 603. North Carolina. It shall be the duty of the legislature to provide for the or- ganization of cities, towns and incorporated villages, and to restrict their power of taxation, assessment, borrowing money, contracting debts and loaning their credit, so as to prevent abuses in assessment and in contracting debts by such municipal cor- porations.*^ 604. Ohio. The commissioners of counties, the trustees of townships, and similar boards, shall have such power of local taxation, for police purposes, as may be prescribed by law.*^ The General Assembly shall provide for the organization of cif'es and incorporated villages, by general laws, and restrict their power of taxation, assessment, borrowing money, contract- ing debts and loaning their credit, so as to prevent the abuse of such power.'* 605. Oregon. Acts of Legislative Assembly incorporating towns and cities shall restrict their powers of taxation, borrowing money, con- tracting debts, and loaning their credit.*" 54 Art. XII, § I. 68 Art. X, § 7. BSArt. Ill, § 27. B9 Art. XIII, § 6. B«Art. VI, § 130 60 Art. XI, § 5. ST Art. VIII, § 4. 302 CONSTITUTIONAL LAW OF TAXATION. 606. Pennsylvania. The General Assembly shall not delegate to any special com- mission, private corporation or association, any power to make, supervise or interfere with any municipal improvemen,t, money, property or effects whether held in trust or otherwise, or to levy taxes or perform any municipal function whatever.®* 607. Soidh Carolina. The General Assembly shall restrict the powers of cities and towns to levy taxes and assessments, to borrow money and to contract debts, and no tax or assessment shall be levied or debt contracted except in pursuance of law, for public purposes speci- fied by law.®^ The corporate authorities of cities and towns in this state shall be vested with power to assess and collect taxes for corporate purposes, said taxes to be uniform in respect to persons and property within the Jurisdiction of the body composing the same ; and all the property, except such as is exempt by law, within the limits of cities and towns shall be taxed for the payment of debts contracted under authority of law. License or privilege taxes imposed shall be graduated so as to secure a just imposi- tion of such tax upon the classes subject thereto.*^ 608. South Dakota. The legislature shall provide by general laws for the organiza- tion and classification of municipal corporations. The number of such classes shall not exceed four, and the powers of each class shall be defined by general laws, so that no such corporations shall have any powers, or be subject to any restrictions other than those of all corporations of the same class. The legislature shall restrict the power of such corporations to levy taxes and assessments, borrow money and contract debts, so as to prevent the abuse of such power.** Except as otherwise provided in this constitution, no tax or assessment shall be levied or collected, or debts contracted bv municipal cornorations, except in pursuance of law, for public purposes specified by law; nor shall money raised by taxation, loan or assessment for one purpose ever be diverted to any other.8« The legislature may vest the corporate authority of cities, towns and villages with power to make local improvements bv special taxation of contiguous property or otherwise. For ali M Art. Ill, § 20. «4 Art. X, § 1. 62 Art. VIII, § 3. 65 Art. X, § 2, e3{ 6. THE DELEGATION OF TAXING POWER. 303 corporate purposes, all municipal corporations may be vested with authority to assess and collect taxes; but such tax shall be uniform in respect to persons and property within the jurisdic- tion of the body levying the same.** 609. Teniiessee. The constitutional provision is quoted in § 234 of this work. 610. Texas. Cities having more than ten thousand inhabitants may have their charters granted or amended by special act of the legis- lature, and may levy, assess and collect such taxes as may be authorized by law, but no tax for any purpose shall ever be law- ful, for any one year, which shall exceed two and one-half per cent, of the taxable property of such city; and no debt shall ever be created by any city unless at the same time provision be made to assess and collect annually a sufiBcient sum to pay the interest thereon and create a sinking fund of at least two per cent, thereon.*'' Counties, cities and towns are authorized, in such mode as may now or may hereafter be provided by law, to levy, assess and col- lect the taxes necessary to pay the interest and provide a sinking fund to satisfy any indebtedness heretofore legally made and undertaken; but all such taxes shall be assessed and collected separately from that levied, assessed and collected for current ex- penses of municipal government, and shall, when levied, specify in the act of levying the purpose therefor, and sxieh taxes may be paid in the coupons, bonds or other indebtedness for the pay- ment of which such tax may have been levied.** Cities and towns having a population of ten thousand or less, , may be chartered alone by general law. They may levy, assess and collect an annual tax to defray the current expenses of their local government, but such tax shall never exceed, for any one year, one-fourth of one per cent, and shall be collectible only in current money. And all license and occupation tax levied, and all fines, forfeitures, penalties and other dues accruing to cities and towns, shall be collectible only in current money.*^ The legislature may constitute any city or town a separate and independent school district. And when the citizens of any city •or town have a charter, authorizing the city authorities to levy and collect a tax for the support and maintenance of a public institution of learning, such tax may hereafter be levied and collected, if, at an election held for that purpose, two-thirds of the taxpayers of such city or town shall vote for such tax.™ 69 Art. XI, § 10. 69 Art. XI, § 4. eTArt. XI, § 5. 70 Art. XI, § 10. 68 Art. XI, § 6. 304 CONSTITUTIONAL LAW OF TAXATION. / 611. Utah. The legislature shall not delegate to any special commission, private corporation or association, any power to make, supervise or interfere with any municipal improvement, money, property or efEeets, whether held in trust or otherwise, to levy taxes, to select a capitol site, or to perform any municipal functions.''^ The legislature shall not impose taxes for the purpose of any county, city, town or other municipal corporation, but may, by law, vest in the corporate authorities thereof, respectively, the power to assess and collect taxes for all purposes of such cor- poration. '^^ Gilo.. Virginia. The General Assembly may, by general laws, confer upon the boards of supervisors of counties, and the councils of cities and towns, such powers of local and special legislation, as it may from time to time deem expedient, not inconsistent with the limitations contained in this constitution^* 612. Washington. The legislature may vest the corporate authorities of cities, towns, and villages with the power to make local improvements by special assessment, or by special taxation of property benefited. For all corporate purposes, all municipal corporations may be vested with authority to assess and collect taxes, and such taxes shall be uniform in respect to persons and property within the jurisdiction of the body levying the same.''* Cities may frame their own charters.^' The legislature shall have no power to impose taxes upon counties, cities, towns, or other municipal corporations, or the inhabitants or property thereof, for county, city, town, or other municipal purposes, but may by general laws vest in the cor- porate authorities thereof the power to assess and collect taxes for such purposes.'* 613. West Virginia. The legislature may, by law, authorize the corporate, author- ities of cities, towns and villages, for corporate purposes, to assess and collect taxes; but such taxes shall he uniform, with respect to persons and property within the jurisdiction of the authority imposing the same.''^ 71 Art. VI, § 29. T5 Art. XI, § 10. 72 Art. XIII, § 5. 76 Art. XI, § 12. 73 § 65. "Art. X, § 9. 74 Art. VII, 5 9. DELEGATION OF TAXING POWEE. 305 614. Wiscons-in. See § 2266 of this work. 615. Wyoming. The legislature shall not delegate to any special commissioner, private corporation or association, any power to make, supervise or interfere with any municipal improvements, moneys, property or effects, whether held in trust or otherwise, to levy taxes, or to perform any municipal functions whatever J* The legislature shall restrict the powers of such corporations to levy taxes and assessments, to borrow money and contract debts so as to prevent the abuse of such power, and no tax or assess- ment shall be levied or collected or debts contracted by municipal corporations except in pursuance of law for public purposes specified by law.''^ TSArt. Ill, § 37. «Art. XIII, } 3. 20 CHAPTER VII. LOCAL SELF-GOVERNMENT. Legislative control over local taxation. 61 6. Closely connected with the delegation of the taxing power is the legislative power to compel a municipal corporation or local subdivision to tax itself, or the legislative power to lay taxes for other than state purposes within the municipality. This legislative power is in reality an aspect of the power to create taxing districts, and to apportion the burdens of taxa- tion among them; and in considering it, reference should be made to chapter V of this work, where the powers of the legis- lature in the creation of taxing districts are discussed. Many of the cases referred to in this connection are also considered in that chapter. Local subdivisions regarded as state agencies. 617. Some able courts and text writers have taken the view that the local institutions of self-government, regardless of express constitutional limitations, are so integral a part of American in- stitutions that they are to an extent independent of l^islative control. But even those who press this view most extremely acknowledge the absolute supremacy of the legislature in many matters of chiefly local interest in which, nevertheless, the state has a sovereign interest, such as taxation for purposes of police, schools, health, and highways. 618. In so far as the local subdivisions are the agents of the state for the collection of the general state taxes, there can be no doubt that they are absolutely under the legislative control ; and that the legislature can control their action at pleasure. And there are many matters of government which are usually left to the control of local bodies, and which are usually carried on by means of local taxation; in which, nevertheless, the whole state has an interest and which are subject to the sovereign author- ity of the state. In these matters the state may interfere at will with the local bodies, it may make such dispositions as it may see fit with respect to the conduct of the sovereign functions in [306] LOCAL SELF-GOVERNMENT. 307 the locality, and may compel the local community to tax itself in order to carry out the obligations thus imposed upon it. State control over local police and over local taxation for police protection. 619. Among the matters which are often left to the control of municipalities, but which are, in fact, state functions, are th& preservation of public peace, the protection of life and property,, and, generally, the enforcement of the laws. The state may dele- gate these functions to the localities, but it may resume themr whenever it sees fit. The obligation to jDay the expense incurred in the discharge of police functions is general, upon the whole state ; and it is for the legislature to apportion police protection, and the expense of police support, as it sees fit. The legislature' may, therefore, establish such police organizations in municipal- ities as it sees fit, and may tax the municipalities, or compel thera to tax themselves, to support such organizations.-" 620. One of the cases cited derives peculiar force in this con- nection from the fact that it was decided under a constitutional provision in Missouri, forbidding the legislature to lay taxes in municipalities for inunicipal purposes.^ The legislature had established a metropolitan police district for policing a city and had compelled the municipality to pay the expense. The stat- ute was upheld on the ground that such taxation, not being for a municipal purpose, could be imposed by the legislature without violating the constitutional provision.* 1 People V. Draper, 15 N. Y. .532; N. H. 413, 8.5 Am. St. Rep. 637, 48 State ex rel. Hawes v. Mason, 153 Mo. Atl. Rep. 1100. In State ex rel. Smyth 23, 54 S. W. Rep. 524; State ex rel. v. Moore, 55 Neb. 480, 70 N. W. Rep. V. County Court of St. Louis County, 175, 41 L. R. A. 62-1, an act plaeing^ 34 Mo. 546 ; Mayor of Baltimore v. both fire and police departments of a State, 15 Md. 376, 74 Am. Dec. 572; city under .state control was held void. People V. Mahaney, 13 Mich. 481 ; Possibly it would have been upheld if Mayor, etc., of Aniericus v. Perry, 114 it had related to police clone. Ga. 871, 40 So. Rep. 1004. .i7 L. R. A. 2 For text of provision see § 597 of 230; State v. Hunter, 38 ICans. 578, this work. 17 Pac. Rep. 177 ; State v. Covington, 3 State ex rel. Hawes v. Mason, 153 29 Ohio St. 102; City of Newport v. Mo. 23, 54 S. W. Rep. 524. One .iudge Horton, 22 R. I. 196, 47 Atl. Rep. 312, said that the act was not an act of 50 L. R. A. 330; State v. Kalseni. 130 taxation at all. In Wisconsin the Ind. 434, 29 N. E. Rep. 595, 14 L. R. legislative power to interfere in ap- A. 566 ; Commonwealth v. Plaisted, pointment of local police is denied. 148 Mass 375, 12 Am. St. Rep. 566, O'Connor v. Fond du Lac, 109 Wis. 19 N. E. Rep. 224, 2 L. R. A. 142; 253, 85 N. W. Rep. 327, 53 L. R. A. Police Commissioners v. Louisville, 2 831. As to express constitutional Bush (Ky.), 797; Diamond v. Kain, limitation in New York see §§ Ci,8T 21 La. Ann. 309; Gooch v. Exeter, 70 et seq., and cases cited. 308 CONSTITUTIONAL LAW OF TAXATION. The cases which uphold acts compelling local subdivisions to pay for armories and other expenses of the state militia are based on the same principle; and those which condemn such acts are departures from it.* 621. The same doctrine of the supremacy of the state with respect to the public police is sufficient to support the cases which uphold statutes making cities and counties liable for the damage caused by riots, although these cases do not depend on this sole ground. These cases are cited elsewhere.® A learned text writer, who has taken an extreme position in favor of local independence of legislative control, concedes that the state may compel a local subdivision to tax itself for the erection of courthouses, jails, and the like, as necessary agencies in the enforcement of police regulations* and such taxation is supported by decisions.^ Other instances of proper legislative compulsion in the exercise of police power are acts requiring the payment of court officers,' rent for court offices,* and the support of paupers.'" .State control over local taxation for streets, highways, and bridges. BZZ. The construction and maintenance of highways is a matter which is usually regarded as a subject of the sovereign concern, although usually left to the care of the localities. Upon the same principles as those which allow the state to interfere in matters of police, laws compelling localities to lay taxes for the construc- tion and maintenance of particular highways or bridges are up- held, even where the constitution forbids the legislature to lay taxes in municipalities for municipal purposes. 623. A quite recent case in Illinois illustrates the extent of the legislative authority in this regard. There a "quasi-public" corporation, a drainage district, acting under legislative author- ity, in the course of its works had destroyed a valuable public bridge, owned jointly by two counties, which had been constructed 4 See cases cited at §§ 428-433. N. W. Rep. 677, the power of the 5 See § 349a. state to compel a county to build a 6 Cooley on Taxaf'"'i (3d ed.), Vol. courthouse was denied. II, 1297. 8 Young v. Kansas City, 152 Mo. 7 People ex rel. Commissioners v. 661, 54 S. W. Rep. 535; Marion Board of Supervisors of Oneida County v. Lear, 108 111. 343. County, 170 N. Y. 105, 62 N. E. Rep. o state v. Field, 119 Mo. 593, 24 1092; Kirby v. Shaw, 19 Pa. St. 253. S. W. Rep. 752. In Callam v. Saginaw, 50 Mich. 7, 14 10 Fox v. Kendall, 97 111. 72. LOCAL SELF-GOVERNMENT. 809 at their expense. The statute under which the drainage com- missioners acted, as construed, imposed upon the counties the burden of reconstructing the bridge. In an action by the counties to recover the expense of reconstruction from the drainage district it was held that the counties could not recover and that the statute imposing the expense of reconstruction upon the counties was a valid exercise of legislative power. 624. On the question of the legislative power to determine wlio should pay the cost of reconstruction the court said : We are of the opinion that no provision of the constitution deprives the General Assembly of the power to determine which of these public corporations should pay for the construction of a new bridge. Public highways, and bridges on them, do not belong to the counties or towns which construct them, but are held by them in trust for the entire public. Public corporations, like counties and towns, being subdivisions of the state for gov- ernmental purposes, are really a part of the state government, and their authorities are charged with certain duties, which may be changed, enlarged, or diminished by the General Assembly by general law, subject, of course, to any restriction imposed by the constitution. The legislature has all the power of the people not denied to it by the state or Federal constitution, and a statute cannot be declared invalid because it may appear to be unjust or inexpedient.^^ 625. In the same case it was held that the provision of the Illinois constitution forbidding the legislature to lay taxes in municipalities for corporate purposes, and forbidding the delega- tion of such power to other than the corporate authorities, did not prevent the legislature from exercising its sovereign authority with respect to highways, and compelling the counties to lay taxes in support thereof.''^ Thus in another Illinois case it was decided that these constitutional provisions were not violated by a statute requiring counties to provide one-half the cost of building a bridge, where a town had provided for the other half, and mandamus was awarded against the supervisors of a county com- pelling them to levy a tax to pay half the cost of such a bridge. It was held that " the raising of money by taxation in towns or counties under a general law, for building bridges and maintain- ing highways, and purposes of a similar character in which the 11 Heffner v. Cass and Morgan Coun- 12 Heffner v. Cass and Morgan Coun- ties, 193 111. 439, 62 N. E. Rep. 201, ties, supra. 58 L. R. A. 353. 310 CONSTITUTIONAL LAW OF TAXATION. people of the state at large are interested, is not, within the meaning of the constitution, the levying of a tax for strictly a local corporate purpose ; that a town, in levying taxes for such a purpose, is in a large sense an agency of the state in carrying into effect general laws which have been enacted for the common good; that such towns are a part of the general machinery of the state and county governments, and that the public highways are of genera] concern to the people of the whole state." . . . The commissioners of highways in such a case do not levy the tax on the taxpayers of the coxmty but only perform the duties re- quired of them by the statute on behalf of the county as well as the town.-^^ 626. In ^^lissouri an act was upheld which provided for the expenditure of moneys raised by taxation in a municipality in the maintenance of highways outside the municipality, although the constitution forbids the legislature to levy taxes in cities for local purposes," and, despite the same constitutional provision, a law was sustained authorizing judgments against cities foT local assessments on municipal property.''^ 627. The constitutionality of acts requiring a city to incur a debt in the construction of a rapid transit subway and placing the whole work in charge of officers appointed by the state, over whom the city had no control, is affirmed in Massachusetts. The con- sent of the voters was made a condition of the operation of the act in the case cited, but the court clearly asserted the power of the legislature to pass the act, regardless of such consent. ""^ In a later case a statute (to which it does not appear that the voters had given any assent) was upheld, which provided for the con- struction of a tunnel by a state commission, at the city's expense, and required the tunnel when completed to be leased to a private corporation for twenty-five years at a specified rental. ""^^ 628. In ISTew York the sovereig-n authority of the legislature in matters — inclusive of taxation — affecting highways has been frequently asserted by the courts, in spite of a state constitutional 13 Will County v. People ex rel. 15 Barber Asphalt Paving Co. v. St. Highway Commissioners, 110 111. 511; Joseph, 183 Mo. 451, 84 S. W. Rep. as explained in Heffner v. Cass and 64. Morgan Counties, supra; Wetherell v. lo Prince v. Crocker, 106 Mass. 347, Bevine, 116 111. 631, 6 N. W. Eep. 24; 44 N. E. Eep. 446, 32 L. R. A. 610. Wilson V. Sanitary District, 133 111. i^ Browne v. Turner, 176 Mass. 9, 443, 27 N. E. Rep. 203. 56 N. E. Rep. 969. i^Elting V. Hickman, 172 Mo. 237, 72 S. W. Rep. 700. LOCAL SELF-GOVERNMENT. 311 provision which declares that all city officers whose election or appointment is not provided for in the constitution shall be elected by the electors of the city or appointed by authorities thereof designated by the legislature. In one case an act which conferred upon certain park commissioners, appointed by the legislature, exclusive jurisdiction over certain city streets, was upheld against the contention that the commissioners were made, in effect, city officers by direct legislative appointment ; and an assessment made by those commissioners, for improving such streets was upheld."'*' In another case an act appointing commissioners to widen a certain street by methods different from those which could be taken under the general laws, and an assessment laid under that act, were sustained. ■"' Other 'New York cases are cited.^ 629. The cases already considered sufficiently illustrate the plenary powers of the legislature in compelling local taxation in support of highways and bridges, regardless of local consent or opposition. Others to the same effect are cited.^^ 629a, A recent case in the United States Supreme Court up- holds, in decided terms, the authority of the legislature over streets. The case was : a city had entered into contracts (the existence of which was assumed for argument) with a street railway company with respect to the paving of streets between the rails. The state legislature subsequently passed an act, which was accepted by the railroad company, imposing a different system of taxation and relieving the company of some of the obligations imposed by the previous contract. The city sought to compel the company to per- form the original contract, and asserted that the legislative act iSAstor V. Mayor, 62 N. Y. 567. Commissioners, 28 Kans. 431; Barber 19 People V. McDonald, 69 N. Y. 362. Asphalt Paving Co. v. Gogreve, 41 20 Town of Kirkwood v. Newbury, La. Ann. 251, 5 So. Rep. 848 ; Water- 122 N. Y. 571, 26 N. E. Rep. 10; ville v. Kennebec County, 59 Me. 80; People V. Flagg, 46 N. Y. 401 ; Mat- Pumphrey v. Mayor, etc., of Balti- ter of Woolsey, 95 N. Y. 135; Thomas more, 47 Md. 145, 28 Am. Rep. 446; V. Leland, 24 Wend. 65; People v. Hingham v. Norfolk County, 6 Allen, Havemyer, 47 How. Pr. 494; People 353-358; Salem v. Essex County, 100 V. Sewer Commission, 90 App. Div. Mass. 282; Commonwealth v. New- 555, 86 N. Y. Supp. 445. buryport, 103 Mass. 129; Wilcox v. 21 State ex rel. Bulkley v. Williams, Deer Lodge County, 2 Mont. 574 ; 68 Conn. 131, 35 Atl. Rep. 24, 421, 48 Simon v. Northrup, 27 Oreg. 487, 40 L. R A. 465; aflfirmed in Williams v. Pac. Rep. 560, 30 L. R. A. 171; Phila- Eggleston, 170 U. S. 304, 42 L. ed. delphia v. Field, 58 Pa. St. 320 ; Erie 1047, 18 Sup. Ct. Rep. 617; Gilson v. Erie Canal Co., 59 Pa. St. 174; V Rush County Commissioners, 128 Seanor v. County Commissioners, 13 Ind. 65, 27 N. E. Rep. 235, 11 L. R. A. Wash. 48, 42 Pac. Rep. 552. See 835- Goodrich v. Turnpike Co., 26 Marietta Chair Co. v. Henderson, 121 Ind. 119; State v. Shawnee County Ga. 399, 49 S. E. Rep. 312. 312 CONSTITUTIONAL LAW OP TAXATION. was invalid because it deprived the city of its rights under the contract without its consent. The contention of the city was over- rtded and the court said: It seems plain to us, however, that the asserted right to de- mand the continuance of the obligation to pave and repair the streets, as contained in the orders and decrees of the board of aldermen granting to the defendant the right to extend the loca- tion of its tracks on the conditions named, does not amount to property held by the corporation, which the legislature is unable to touch, either by way of limitation' or extinguishment. If these restrictions or conditions are to he regarded as a contract, we thinJc the legislature would have the same right to terminate it, with the consent of the railroad company, that the city itself would have. These conditions and restrictions were of a public nature, imposed as a means of collecting from the railroad com- pany part, or possibly the whole, of the expense of paving or repaving the streets in which the tracks were laid, and that method of collection did not become an absolute property right in favor of the city, as against the right of the legislature to alter or abolish it, or substitute some other method with the consent of the company, even though as to the company itself there might be a contract not alterable except with its consent. If this contention of the city were held valid, it would yery largely diminish the right of the legislature to deal with its creature in public matters, in a manner which the legislature might regard as for the puhlic welfare.^^ State control over local taxation for schools. 630. Another subject of general interest, which is usually left to the localities, is the maintenance of schools and the care of public education. This also is within the sphere of legisla- tive control. It is quite common to maintain a system of school districts within the limits of counties, towns, and cities, and to provide a system of government and taxation for educational purposes distinct from the systems of municipal government in the same territory. Such systems are within the legislative control in all essential respects. Said the Supreme Court of Indiana in an opinion in which the fight of local self-government generally was recognized as an inherent right: 22 Worcester v. Worcester Consoli- N. E. Rep. 581, citing Springfield v. dated Street Ry. Co., 196 U. S. 539, Springfield Street Ry., 182 Mass. 41, 551, 552, 49 L. ed. 591, 25 Sup. Ct. 64 N. E. Rep. 577. Rep. 327, affirming 182 Mass. 49, 64 LOCAL SELF-GOVERNMENT. 313 But the courts which have carried to its utmost extent the doctrine of local self-government have never so much as inti- mated that it exists as to a matter over vchich the constitution has given the law-making power supreme control, nor have they gone beyond the line which separates matters of purely local concern from those of state control. Essentially and intrin- sically, the schools in which are educated and trained the chil- dren who are to become the rulers of the commonwealth are matters of state, and not of local, jurisdiction. In such matters the state is a unit and the legislature the source of power. The authority over schools and school affairs is not necessarily a dis- tributive one, to be exercised by local instrumentalities, but, on the contrary, it is a central power residing in the legislature of the state.^^ 631. So it is held that an act arbitrarily establishing a school and compelling the people of a county to maintain it is valid.^* In many of the states there are constitutional provisions impos- ing the care of education upon the legislature ; and these pro- visions strengthen the views already expressed.^^ 632. A constitutional provision to the effect that the legislate re shall have power to establish a system of common schools does not prevent the legislature from delegating to township trustees the power to establish high schools in which advanced branches are taught. While such a provision is a limitation on the power of the legislature to establish schools, " while the constitution has not defined what a ' good common-school education ' is, and has failed to prescribe a limit, it is no part of the duty of the courts of the state to declare by judicial construction what particular branches of study shall constitute a common school education." A law establishing high schools is, therefore, constitutional and a tax for the support of such schools is valid.'" 23 state ex rel. Clark v. Haworth, 25 State ex rel. Clark v. Haworth, 122 Ind. 462, 23 N. E. Kep. 946, 7 122 Ind. 462, 23 N. K: Rep. 946, 7 L. R. A. 240. L. R. A. 240. 24 State ex rel. McCausland v. Free- In Louisiana the constitution gives man 61 Kans. 90, 58 Pac. Rep. 959, the parishes charge of taxation for 47 L. R. A. 07. See Koester v. At- public schools. State v. New Orleans, chison County Commissioners, 44 42 La. Ann. 92, 7 So. Rep. 674. In Kans. 141, 24 Pac. Rep. 65; Kevell Georgia the legislature may delegate V. Annapolis, 81 Md. 1, 31 Atl. Rep. to the counties only the power to 695. To the same general effect is maintain elementary schools. See Board of Education v. Kingfisher, 5 § 587a. Okla. 82, 48 Pac. Rep. 103; State 26 Richards v. Raymond, 92 lU. 612, Board of Education v. Aberdeen, 56 34 Am. Rep. 151. Miss. 518. 314 CONSTITUTIONAL LAW OF TAXATION. State control over local taxation for the public health. 633. The public health is one of those subjects of governmental concern as to which the advocates of local independence concede that the legislature has power to impose local taxation.^ But the cases which may be referred to this classification, like some of those which support the power to lay taxes in support of highways, may well rest on the broader ground of the general power of the legis- lature over municipal corporations. Such are cases which permit the legislature to establish sewer systems in municipalities and to direct the cost to be assessed on the localities benefited,^* and those which permit the legislature to establish drainage and sanitary districts and to provide for local drainage.^ Power of the legislature to compel a locality to recognize moral obligations. 634. The power of the legislature to compel a municipality to recognize moral obligations, which have an equitable but not a strictly legal basis, seems to be coincident with its general power to recognize such obligations in matters over which it has direct jurisdiction. That is: The legislature may compel a municipality or local subdivision to recognize a moral obligation resting on such municipality or local subdivision, if that moral obligation is of a class which the legislature may recognize in a claim against the state.^" How far the legislature may make appropriations and levy taxes in recognition of such moral obligations in claims against the state is considered elsewhere in this work.^^ 635. Within this class are the cases where municipalities have incurred obligations, and, owing to formal defects in the proceed- ings, the parties in whose favor the obligations exist cannot estab- lish their rights in courts of law. The legislature may, in such cases, authorize reference of equit- able claims to a board of audit ; or new trials of actions against a 2T Coolev on Taxation (3d ed.), Vol. politan Board of Health v. Heister, 37 2, p. 1300; Davock v. Moore, lOo K. Y. 661; O'Neill v. lloboken, Mich. 120, 63 N. W. Rep. 424, 28 N. J. , 60 Atl. Rep. 50. L. E. A. 7S3 ; People v. Macomb Super- 30 Guthrie Nat. Bank v. Guthrie, 173 Yisors, 3 Mich. 475. U. S. 528, 43 L. ed. 796, 19 Sup. Ct. 28 7m re Kingman, 153 Mass. 566, Rep. 513; Merchants' Nat. Bank v. 27 N. E. Rep. "tTS, 12 L. R. A. 417. East Grand Forks, Minn. , 102 See S 1846, and case.s cited. N. W. Rep. 703. 29 See Taylor v. Board of Health, 31 31 § 326 et seq. Pa. St. 73, 72 Am. Dec. 724; Metro- LOCAL SELF-GOVEENMENT. 315 municipality, where final judgment has gone in its favor on ac- count of technical defects in the making of a contract, or in the proceedings out of which the claim arose.^^ But where the constitution forbids gratuities, and judgment has gone in fa%^or of the municipality on the merits, the legislature cannot order a new trial, for that would be in effect an act of taxa- tion for a private purpose.*^ Such acts, as appropriations for a private purpose, are discussed elsewhere in this work.^* Where an obligation has been incurred by a city, the legislature may directly compel taxation to comply with the obligation, always provided that it is an obligation which the legislature itself might recognize under the state constitution.^' 636. In another part of this work is laid dovsTi the general prin- ciple that the legislature may validate defective acts of taxation in those cases where it might have authorized the taxation — ■ in the method validated — in the first instance.^® The application of this principle to the topic under discussion in this chapter results in the proposition that where taxes laid in, or obligations attempted to be incurred by, municipalities, are invalid because the consent of the people to be taxed, or their local authorities, has not been obtained, the legislature may waive such consent and validate the obligations, if it might have dispensed with the consent in the first instance; otherwise it may not validate such defects. Reference is made to those sections of this work which discuss the powers of the legislature to validate defects generally. ^^ 637. Public charity may be considered as one of those govern- mental matters in which the whole state has an interest; and as to which the state may compel localities to do their duty.^'^*_ It is accordingly held in Maryland that the legislature may compel a municipality to pay for the medical treatment of habitual drunk- ards, residing in the municipality, who may be committed by the courts to a medical institution for treatment and who are them- 32 Town of Guilford v. Supervisors Bridge Co. v. Town of Attica, 119 of Chenango County, 13 N. Y. 143 ; N. Y. 204, 23 N. E. Rep. .542. State ex rel. Cleveland v. Jersey City 34 See §§ 390, 391 et seq. Board 38 N. J. L. 259 ; Guthrie Nat. 35 New Orleans v. Clark, 95 U. S. Bank v. Guthrie, 173 U. S. 528, 43 644, 24 L. ed. 521. L. ed. 796, 19 Sup. Ct. Rep. 513. 36 See §§ 1248 et seq. S3 Matter of Greene, 166 N. Y. 485, 37 Chap. XVII.' 60 N. E. Rep. 183 ; Wrought Iron 3Ta Fox v. Kendall, 97 111. 72. 316 CONSTITTJTION-AL LAW OF TAXATION. selves unable to pay for the same.^® And in Missouri a law which compelled localities to pay the expenses of the care of juvenile delinquents and neglected children was upheld, in the face of a constitutional requirement^ forbidding the legislature to lay local taxes for local purposes.*" The right of local self-government as applied in taxation. 638. Turning from the cases in which questions of the state control over municipalities in matters of highways, police, schools, and the like are involved, and in which there is little dispute as to constitutional power, we come to cases where the courts diverge. These may be roughly divided into three general classes : (1.) Cases in which the power of the state over the munic- ipality is asserted to be practically unlimited (except as to express constitutional restrictions), and in which, consequently, acts of state compulsion in affairs apparently purely local have been sus- tained. (2.) Cases in which the right of local self-government is de- clared to be inherent in the local subdivisions ; and in which, con- sequently, acts of state compulsion in matters purely local have been condemned. (3.) Cases in which the right of local self-government is asserted ; but in which the courts differ as to what are matters of purely local concern. Before dealing with these cases in detail it is proposed to set forth the general grounds upon which the advocates of unlimited legislative control and of local self-government respectively depend. 639. The arguments in support of the inherent independence of local governmental subdivisions are stated by Judge Cooley, in People ex rel. Le Roy v. Rurlbut*^ where taxation was not directly involved. The case is useful in the consideration of the questions under discussion because of the general review, contained in the opinion, of the relations between municipal and state govern- ments. The views expressed are more extreme than those of most courts, and the doctrine that there are certain underlying consti- tutional principles, unexpressed in the written law, which may be 38 Baltimore City v. Keeley Insti- v> Ex parte Lovingj 178 Mo. 194, 77 tute, 81 Md. 106/31 Atl. Rep. 437, S. W. Rep. 508. 27 L. R. A. 646. « 24 Mich. 44, 9 Am. Rep. 103. 39 Quoted in § 597 of this work. LOCAL SELF-GOVERNMENT. 817 relied upon as rules of judicial action, is carried further, in that opinion, than many courts have cared to go. The legislature of Michigan passed an act providing for the appointment of a board of public works for the city of Detroit iind naming the commissioners, in the act itself, for the full term. The act was claimeid to be unconstitutional. Judge Cooley said after discussing certain provisions of the act : 640. These, however, are matters of secondary importance; there lies over and beyond these a question of the highest interest and concern which cannot be answered without a careful scrutiny of the structure of our government and an examination of the principles which underlie free institutions in America. We have before us a legislative act creating for the city of Detroit a new board, which is to exercise a considerable share of the authority usually possessed by officers locally chosen ; to have general charge of the city buildings, property and local conveniences, to make contracts for public works on behalf of the city and to do many things of a legislative character, which generally the common council of cities alone is authorized to do. The legislature has created this board and has appointed its members; and both the one and the other have been done under a claim of right which, unless I wholly misunderstand it, would justify that body in taking to itself the entire and exclusive government of the city, and the appointment of all its officers, excepting only the judicial, for which, by the constitution, other provision is expressly made. And the question, broadly and nakedly stated, can be nothing short of this: Whether local self-government in this state is or is not a mere privilege, conceded by the legislature in its discretion, and which may be withdrawn at any time at pleasure ? I state the question thus broadly because, notwithstanding the able arguments made in this case, and after mature deliberation, I can conceive of no argument in support of the legislative authority, which will stop short of this plenary and sovereign right. 641. Now, it must be conceded that the judicial decisions and law writers generally assert that the state creates municipal bodies, endows them with such of the functions of corporate life, and entrusts them with such share in the local government, as to the legislative judgment shall seem best; that it controls and regu- lates their action while they exist, subjects them to such changes as public policy may dictate, and abolishes them at discretion, in short, that the corporate entities are mere agencies which the state employs for the convenience of government, clothing them for the time being with a portion of its sovereignty, but recalling the whole or any part thereof whenever the necessity or useful- ness of the delegation is no longer apparent. This I understand to be the accepted theory of state constitutional law, as regards 318 CONSTITUTIONAL LAW OF TAXATION. the municipal governments. We seldom have occasion to inquire whether this amplitude of legislative authority is or is not too strongly expressed, for the reason that its exercise is generally confined' within such bounds as custom has pointed out, so that no question is made concerning it. But such maxims of govern- ment are very seldom true in anything more than a general sense; they never are and never can be literally accepted in practice. 642. Our constitution assumes the existence of counties and town- ships, and evidently contemplates that the state shall continue to be subdivided as it has hitherto been; but it nowhere expressly provides that every portion of the state shall have county or township organizations. It names certain oflScers which are to be chosen for these subdivisions, and confers lapon the people the right to choose them ; but it does not in general define their duties, nor in terms preekide the legislature from establishing^ new oflices and giving to the incumbents the general manage- ment of municipal affairs. If, therefore, no restraints are im- posed upon legislative discretion beyond those specifically stated, the township and county government of any portion of the state might be abolished, and the people be subjected to the rule of commissions appointed at the capitol. The people of such por- tion might thus be kept in a state of pupilage and dependence to any extent and for any period of time the state might choose. 643. The doctrine that within any general grant of legislative power by the constitution there can be found authority thus to take from the people the management of their local concerns, and the choice, directly or indirectly, of their local officers, if practically as- serted would be somewhat startling to our people. . . . Con- ceding to the state the authority to shape the municipal organiza- tions at its will, it would not follow that a similar power of con- trol might be exercised by the state as regards the property which the corporation has acquired, or the rights in the nature of property which have been conferred upon it. There are some cases which assert such power, but they are opposed to what seem to me the best authorities, as well as the soundest reason. The municipality, as an agent of government, is one thing; the corporation, as an owner of property, is in some particulars to be regarded in a very different light. The Supreme Court of the United States held at an early day that grants of property to public corporations could not be resumed by the sovereignty.*- When the state deals with a municipal corporation on the footing^ of contract, it is said by Trumbull, J., in Richland v. Lav- rerice*^ the municipality is to be regarded as a private com- pany. In Detroit v. Corey,*^ Manning, J., based his opinion 42Terrett v. Taylor, 9 Cranch, 43, 3 *2a 12 111. 8. L. ed. 6.50 ; Town of Pawlet v. Clarke, «li 9 Mich. 195 Id. 292. 3 L. ffl. 735. And see Dart- mouth Colleue V. Woodward, 4 Wheat. GU4-U98, 4 L, ed. 629. LOCAL SELF-GOVEENMENT. 319 that the city was liable for an injury to an individual, oc- casioned by falling into an excavation for a sewer, carelessly left open, upon the fact that the sewers were the private property of the city, in which the outside public or people of the state at large had no concern. In Warren v. Lyons,*'^ it was held incompetent for the legislature to devote to other public uses land which had been dedicated for a public square. In State V. Hahen*'^^ an act appropriating moneys collected for a primary school to the erection of a state normal school build- ing in the same city was held void. Other cases might be cited, but it seems not to be needful. They rest upon the well-understood fact that these corporations are of a two- fold character; the one public as regards the state at large, in so far as they are its agents in government; the other private, in so far as they are to provide the local necessities and con- veniences for their own citizens; and that as to the acquisitions they may make in the latter capacity as mere corporations, it is neither just, nor is it competent, for the legislature to take them away, or to deprive the local community of the benefit thereof. There may come a time when from necessity the state must interpose. The state may change municipal boundaries, and then a division of the corporate property may be needful. The state may take away the corporate powers, and then the prop- erty must come to the state as trustee for the parties concerned. In either of these cases, undoubtedly, state action becomes essen- tial ; and the property may be disposed of according to the legis- lative judgment and sense of justice ; but even then the appropri- ation must have regard, so far as the circumstances of the case will admit, to the purposes for which the property was acquired, and the interest of those who were corporators when the neces- sity for state intervention arose. 644. In ■^'iew of these historical facts, and of these general prin- ciples, the question recurs whether our state constitution can be so construed as to confer upon the legislature the power to appoint for the municipalities the officers who are to manage the property, interest and rights in which their own people alone are concerned. If it can be, it involves these consequences: As there is no provision requiring the legislative interference to be upon any general system, it can and may be partial and purely arbitrary. As there is nothing requiring the persons appointed to be citizens of the locality they can and may be sent in from abroad, and it is not a remote possibility that self-government of towns may make way for a government by such influences as can force themselves upon the legislative notice at Lansing. As the municipal corporation will have no control except such as the state may voluntarily give it, as regards the taxes to be levied, the buildings to be constructed, the pavements to be laid and the conveniences to be supplied, it is inevitable that parties, 42c 22 Iowa, 351. *2al contracts should so provide.^ 673. Referring to the same subject the Indiana Supreme Court^ in a case already quoted, said : If an act compelled counties, cities, and towns to pay to alt stone masons not less than $2 per perch for stone to be used on any public work, when the market price of stone was but $1.50 per perch, or to the briekmaker not less than $12 per thousand for brick, when brick of the same quality could be bought for $10 per thousand, or to the hardware merchant not less than six 80 166 N. Y. :, 59 N. E. Eep. 716, E. Rep. 129, reversing 73 App. Div. 82 Am. St. Rep. 605, 52 L. R. A. 814. 581, 77 N. Y. Supp. 16. 81 City of Cleveland v. Clements 8* People ex rel. Treat v. Coler, 166. Brother's' Construction Co., 67 Ohio St. N. Y. 144, 59 N. E. Rep. 770. It was 197, 93 Am. St. Rep. 670, 65 N. E. also said in the opinion that this law- Rep. 885, 59 L. R. A. 775. was a restriction on interstate com- 82 179 N. Y. 417, N. E. Rep. . nierce, but thi*; proposition does not 83 People V. Orange Countj' Road amount to much. Construction Co., 17.5 X. Y. 84, 67 N. LOCAL SELF-GOVEKNMENT, 333 cents per pound for iron, when iron of the same quality could be had for four cents per pound, such legislation would shock every reasonable mind, and would be universally condemned as unwar- ranted and unconstitutional.*^ 674. There is high authority for the proposition that laws of the nature under consideration are valid exercises of the power of the state over municipalities. In Kansas a statute which fixed the number of hoiirs which should constitute a day's labor for all persons employed hy or on iehalf of the state or hy or on behalf of any municipality, and which provided that all such persons should receive the prevailing rate of wages in the community, was upheld. The act provided a penalty for its violation, and contractors constructing a courthouse and jail for a county, were convicted under it for employing men more than eight hours a day, and compelling them to work more than eight hours in order to earn the per diem rate of wages prevailing in the community. In sus- taining the conviction, the Supreme Court of Kansas said, after asserting the right of the state to make such requirements with respect to its own employees ; Whatever orders the state mat/ give directly to its own agents, it may require of its political subdivisions — instrumentalities of said government, such as counties, cities, and townships. These subdivisions are merely involuntary political or civil divisions of the state, created by statute to aid in the administration of government. . . •. Indeed, everything relating to the man- agement of counties, cities, and townships, not defined and lim- ited by the constitution, may be taken away bv the state, acting through its legislature; and as to these political divisions and their agents the legislature has the same power that it possesses over state officers. We conclude, therefore, that the statute under consideration is a mere direction of the state to its agents, and a proper exercise of its power in that respect?^ 675. The authority of the Supreme Court of the United States is in favor of the constitutionality of laws which regulate the hours of labor on municipal work, or the rate of wages to be paid by a municipality or its contractors. The question was presented in a recent case where one who had contracted with a municipality to pave a street, was convicted, under the Kansas statute above 85 street v. Varney Electrical Sup- »^ Re Dalton, 61 Kans. 257, 59 Pac. ply Co., 160 Ind. 338, 66 N. E. Rep. Rep. 336, 47 L. R. A. 380. 895, 98 Am. St. Rep. 325, 61 L. R. A. 152, 334 CONSTITUTIONAL LAW OF TAXATION. referred to,*^ of reqiiiring and permitting a laborer to work more than eight hours a day on the work, and requiring him to work more than eight hours in order to gain the prevailing rate of wages. The conviction was affirmed by the Supreme Court, whic-h held that the statute was no denial of the equal protection of the laws and no deprivation of liberty or property without due proc- ess of law. Referring to the argument against the law, the Supreme Court said: These questions — indeed, the entire argument of plaintiff's counsel — seem to attach too little consequence to the relation existing between a state and its municipal corporations. Such corporations are the creatures, mere political subdivisions, of the state for the purpose of exervising a part of its powers. They may exert only such poivers as are expressly granted to them, or such as may be necessarily implied from those granted. What they lawfully do of a public character is done under the sanction of the state. They are, in every essential sense, only auxiliaries of the state for the purposes of local qovernment. They may be created, or, having been created, their powers may be restricted or enlarged, or altogether withdrawn at the will of the legisla- ture; the authority of the legislature, when restricting or with- drawing such powers, being subject only to the fundamental con- dition that the collective and individual rights of the people of the municipality shall not thereby be destroyed.^ 676. In the ease last cited we said that " a municipal corporation is. so far as its purely municipal relations are concerned, simply an agency of the state for conducting the affairs of government, and as such it is subject to the control of the legislature." . . . The improvement of the boulevard in question was a work of which the state, if it had deemed proper to do so, could have taken immediate charge by its own agents ; for it is one of the functions of government to provide public highways for the con- venience and comfort of the people. Instead of undertaking that work directly, the state invested one of its governmental agencies with power to care for it. Whether done by the state directly, or by one of its instrumentalities, the work was of a public, not private, character. . . . We can imaqine no possible ground to dispute the power of the state to declare that no one under- taking work for it or for one of its municipal agencies, should s- See § 674. 977 ; Hill v. Memphis, 134 U. S. 19S- 88 Citing Rogers v. Burlington, 3 203, 33 L. ed. 887, 10 Sup. Ct. Rep. Wall. 654-663, 18 L. ed. 79; United .562; Barnett v. Denison, 145 U. S. States V. Railroad Co., 17 Wall. 322, 135-139, 36 L. ed. 052, 12 Sup. Ct. 328, 329, 21 L. ed. 597; Mount Rep. 819; Williams v. Eggleston, 170 Pleasant v. Beckwith, 100 U. S. 514, U. S. 304-310, 42 L. ed. 1047, 18 Sup. 525, 25 L, ed. 699; State Bank of Ohio Ct. Rep. 617. V. Knoop, 16 How. 369-380, 14 L. ed. LOCAL SELF-GOVERNMENT. 335 permit or require an employee on such work to labor in excess of eight hours each day, and to inflict punishment upon those who are embraced by such regulations and yet disregard them. It cannot be deemed a part of the liberty of any contractor that he be allowed to do public work in any mode he may choose to adopt, without regard to the wishes of the state. On the con- trary, it belongs to the state, as the guardian and trustee for its people, and having control of its affairs, to prescribe the condi- tions upon which it will permit public work to be done on its behalf, or on behalf of its municipalities. No court has authority to review its action in that respect. Eegulations on this subject suggest only considerations of public policy. And with such con- siderations the courts have no concern. . . . We rest our decision on the broad ground that the work being of a public character, absolutely under the control of the state and its mu- nicipal agents acting by its authority, it is for the state to pre- scribe the conditions under which it will permit work of that kind to be done. Its action touching such a matter is final, so long as it does not, by its regulations, infringe the personal rights of others ; and that has not been .done.*^ 677. Whether or not the state has unrestricted powers over mu- nicipalities ; in such matters as the construction of highways, bridges, courthouses, jails, and the like, as to which it is conceded on all hands that the authority of the state is complete, there seemi to be no good reason why the state should not be able to prescribe conditions. Stress was laid upon this point in the Federal Su- preme Court case,®" but in the principal New York case cited, although the work done "ivas highway work, the point seems to have been unconsidered in the prevailing opinions.^* Express provisions forbidding the legislature to levy local taxes for local purposes. 677a. The right of local self-government in matters of purely local concern is secured in many states by provisions forbidding the legislature to lay taxes in municipalities for local purposes. S9Atkin v. Kansas, 191 U. S. 207, Co., 196 U. S. 539, 49 L. ed. 591, 25 48 L. ed. 148, 24 Sup. Ct. Rep. 124, Sup. Ct. Rep. 327, affirming 182 Mass. affirming State v. Atkin, 64 Kans. 174, 49, 64 N. E. Rep. 581. 97 Am. St. Rep. 343, 67 Pac. Rep. 519. so Atkin v. Kansas, 191 U. S. 207, See further, sustaining the right of the 48 L. ed. 148, 24 Sup. Ct. Rep. 124. legislature to modify or abrogate the See § 675 et seq. contracts of the municipality, and as- 91 People ex rcl. Rodgers v. Coler, serting the supremacy of the legisla- 166 N. Y. 1; 82 "Am. St. Rep. 605, 59 ture in matters of contract, Worcester N. E. Rep. 716, 52 L. R. A. 814. V. Worcester Consolidated Street Ky. 336 CONSTITUTIONAL LAW OF TAXATION. These provisions, however, do not prevent the state from exercising taxing power in municipalities for those various local objects in which the state is deemed to have a paramount interest, such as highways, police, charities, and the like, discussed in previous sections.®^ Provisions of the class under discussion are quoted for illustration in this work from the constitutions of California,"' Colorado,^* Florida,'* Idaho,**' Illinois,®^ Kentucky,^* Missouri,"' Montana,^ Nebraska,^* Utah,^ Washington.^ 6776. An act requiring agents of foreign insurance companies doing business in a state to pay to the treasurer of any city or county a certain proportion of the premiums received by them for insurance effected within the limits of the county or city, and pro- viding that the money so paid shall constitute a firemen's relief fund of the county or city in which the property insured is situ- ated, to be under the exclusive control of the authorities of said city or county, is void in California. The charge thus imposed is held to be a charge for revenue imposed by the legislature, and violates the constitutional provision forbidding the legislature to levy taxes for mimicipal purposes in a municipality.* An act which requires that at the time of filing the inventory of estates of deceased persons, or in proceedings relating to the guardianship of infants, there shall be a deposit of one dollar for each thousand dollars of the estate in addition to three thousand dollars, the amoimt being payable to county ofiicers, is an attempt by the legislature to levy a property tax for county purposes in the county, hence is unconstitutional.^ Placing local work in the hands of state boards. 678. In some of the cases already referred to, where the legis- lature has exercised its power of compulsion over municipalities, 92 See §§ 618 to 637, inclusive; Heff- 99 § 597, ner v. Cass and Morgan Counties, 193 1 § 598. HI. 439, 62 N. E. Rep. 201, 58 L. R. A. la § 599. 353, § 625; State ex lel. Hawes v. 2 § 611. Mason, 153 Mo. 23, 54 S. W. Rep. 524, 3 § 612. § 620, ante; Ex parte Loving, 178 * City and County of San Francisco Mo. 194, 77 S. W. Kep. 508. See v. Liverpool, etc., Ins. Co., 74 Cal. 113, § 637, ante. 5 Am. St. Rep. 425, 15 Pac. Rep. 380. 93 § 58.5, ante. See Aachen, etc. v. Omaha, Neb. 94 § 5S6. , 101 N. W. Rep. 3, holding void a 93 § 587. somewhat similar law. 96 S 588. * SFatjo v. Pfister, 117 Cal. 83, 48 17 § 589. Pac. Rep. 1012. f'8 § 591. LOCAL SELF-GOVERNMENT. 337 it has done so by the method of placing the municipal work or local improvement for Avhich the municipality was compelled to tax itself in the hands of state officers, over whom the munic- ipalities had no control, or constituting some corporation or indi- viduals the agents of the state in the performance of the work. The validity of such action, strictly speaking, is a question of method rather than of substantive right. Even where the right of the legislature to interfere is conceded, as in the case of high- ways and the like, the question still arises whether this ought to be done by means of state instrumentalities, whose operations im- pose burdens of taxation upon the people of the locality. 679. Where the state has the power to compel the municipality to act, there seems to be no doubt that it may exercise its power directly through the medium of state officers and commissions. Thus, in the cases involving the validity of the laws for the con- struction of the Boston subway, the laws which were upheld pro- vided for the construction of the work by a body of state commis- sioners over whom the people had no control and in whose selection they had no voice.® In Oregon and Delaware acts which gave to boards of water commissioners appointed by the acts, power to construct water-works in cities and bond the cities to pay for them were sustained.'' In Kentucky an act which placed the construc- tion of a courthouse in a city in the hands of commissioners ap- pointed by a judge was sustained.^ 680. In Pennsylvania (before the adoption of the present con- stitution), an act creating a board of public buildings in a city, naming the commissioners, giving them power to appoint their successbrs, authorizing them to construct public buildings involv- ing the expenditure of millions, and making it the duty of the city council to levy taxes to pay the amount required by them, was held to be constitutional.* In California (before the adoption of the present constitution), an act which placed the debt of a city in charge of a special commission created by the act, and made it the duty of the city to levy taxes at the rate fixed by the com- mission, within the limits of the act, was upheld. ■"' 6 Prince v. Crocker, 166 Mass. 347, SMcArthitr v. Nelson, 81 Ky. 67. 44 N. E. Eep. 446, 32 L. R. A. 610; Here, however, a taxing district called Browne v. Turner, 176 Mass. 9, 56 a " courthouse district " was created. N.,E. Rep. 969. » Perkins v. Slack, 86 Pa. St. 270. 7 David V. Portland Water Commit- lo Board of Commissioners v. Trus- tee, 14 Oreg. 98, 12 Pac. Eep. 174; tees, 71 Cal. 310, 12 Pac. Eep. 224. Coyle V. Mclntyre, 7 Houst. (Del) 44, 30 Atl. Rep. 728, 40 Am. St. Rep. 109. 22 338 CONSTITUTIONAL LAW OF TAXATION. In Wew York acts committing to a state commission the power, " in case they deem it necessary and upon the written request of the local authorities," to locate a route for a municipal railway ; giving them power, after a vote of the people, to construct such railway, and compelling the local authorities, upon the requisi- tion of the commissioners, to issue $55,000,000 of city bonds with which to pay for such construction, have been upheld." 681. The abuses which this power of the legislature brought about in many instances led to the adoption in a number of states of constitutional provisions forbidding the legislature to delegate to any special commission, private corporation, or individual, the power to interfere with any municipal revenues, property, or effects, or to levy taxes, or to perform any municipal function whatever. Some provisions of this class are quoted in this work from the constitutions of California,^^ Colorado, ^^ Montana,-'* Pennsyl- vania,^' Utah,^® Wyoming." 682. The effect of these limitations seems to be to deny to the legislature the power to choose at will the agencies through which its determinations may be accomplished; but not to take away the power of the legislature to compel the municipalitie.'' to incur expenditures, in cases where such power previously existed. In spite of such provisions, the legislature may still doubtless create special taxing districts for special purposes and erect them into public corporations.^® But it may not appoint individuals or state commissions to carry on these works and lay burdens of taxation upon a city. 683. In Pennsylvania, after the adoption of such a provision, a law was passed, which — as construed — transferred the large powers of the commission for erecting public buildings, before referred to, to a single individual, the director of public works of the city. The law was held unconstitutional.^® In another case an act passed before the adoption of the con- n Sun Printing and Publishing 18 See §§ 419 et seq. and cases cited; Assn. V. Mayor, 152 N. Y. 257, 46 N. also Woodward v. Fruitvale Sanitary E. Rep. 499," 37 L. E. A. 788. District, 99 Cal. 554, 34 Pae. Eep 12 See § 585. 239. 15 § 580. i» Perkins v. Philadelphia, 156 Pa 1* § 598. St. 554, 27 Atl. Rep. 356, 32 W. N'. C 10 S 606. 38S, 33 W. N. C. 41, 41 Pitts. Law J 16 § 611. 85. IT § 615. LOCAL SELF-GOVERNMENT. 339 stitution authorized property owners on a city street to elect com- missioners who should improve the street and assess the expense on adjoining property. The improvements having been begun after the constitution went into effect, proceedings under it were enjoined.^^ 684. A similar section of the California constitution seems to have been interpreted in such a manner as to allow the legislature considerable freedom. ^^ Thus it was held that an act which pro- vided for a street improvement and assessment made by three commissioners named in the act, but which act should not take effect until accepted by the city council, was valid.^^ An act which provided for the appointment of conamissioners to make a nfunicipal street improvement, but which made the consent of 'the city council necessary to the validity of their acts, was like- wise upheld. It was said that the commissioners were, in effect, the agents of the city, and Mellen v. Pittsburgh^^ was dis- tinguished because in that case the commissioners had inde- pendent powers.^* There is doubtless some force in this distinc- tion — ■ but much could be said for the proposition that, while abstractly it may be proper enough for the legislature to nominate agents for the municipality, this constitutional provision pro- hibits that particular act. 685. Another decision, allowing private individuals to be licensed to take tolls upon a public road, in payment for keeping the road in repair, is justified on the theory that such tolls are not taxes.^* Another decision, proceeding on the ground of agency for the municipality, upholds a delegation of power to a contractor to collect an assessment for a public improvement.^ An act creating a board of com^missioners of a municipal police life and health insurance fund, which fund is made up by de- ductions from the pay of policemen,^" and an act providing for the commitment of minor criminals to charitable institutions, the expense of maintenance being paid by the county ,^^ are upheld. 20 Mellen v. Pittsburgh, 21 Pitts. 24 Blood v. MeCarty, 112 Cal. 561, 44 Law J. 185. Pac. Rep. 1025. 21 See § 585 for text of provision. 25 Banaz v. Smith, 133 Cal. 102, 65 22 Lent V. Tillson, 72 Cal. 404, 14 Pae. Rep. 309. Pac. Rep. 71. 26 Pennie v. Reis, 80 Cal. 266, 22 22a.8upra. Pac. Rep. 176. 23 Davies v. City of Los Angeles, 86 27 Boys and Girls' Aid Society v. €al. 37, 24 Pac. Rep. 771. Reis, 71 Cal. 827, 12 Pae. Rep. 796. 340 CONSTITUTIONAL LAW OF TAXATION. An act permitting a county clerk to fix the compensation of any number of deputies lie may choose to appoint is in violation of this provision.^* 686. These provisions prohibiting the delegation of power to special commissions, etc., are not retrospective. They do not in- terfere with the operations of special commissions created before their enactment; but prevent future delegations of power.^ Requirements that local officers shall be locally chosen. 687. Provisions to the effect that municipalities shall choose their own officers operate to restrain the legislature from placing the control of local affairs, including taxation, in the hands of anyone except locally chosen officers. The ISTew York constitu- tion in this respect is as follows: All county officers, whose election or appointment is not pro- vided for by this constitution, shall be elected by the electors of the respective counties, or appointed by the boards of supervisors, or other county officers, as the legislature shall direct. All city, town, and village officers, whose election or appointment is not provided for by this constitution, shall be elected by the electors of such cities, towns, and villages, or of some division thereof, or appointed by such authorities thereof, as the legislature shall designate for that purpose. All other officers, whose election or appointment is not provided for by this constitution, and aU officers whose offices may hereafter be created by law, shall be, appointed by the people, or elected as the legislature shall direct.^" 688. While the cases which construe this provision are full of expressions asserting the value of the right of local self-govern- ment which it is supposed to secure, most of the statutes which have been considered in connection with it have been upheld; and in matters involving taxation, at least, it seems to restrict the legislature but little in confiding the care of various subjects to state officers. Most of the cases here referred to have been cited elsewhere, in discussing the particular subjects to which they relate. 28 San Francisco v. Broderick, 125 30 Const. N. Y., art. 10, § 2. This Cal. 188, 57 Pac. Rep. 887. See Tu- section in these words was contained lare County v. May, 118 Cal. 303, 50 in the constitution of 1846, art. 10, Pac. Rep. 427. § 2, and provisions somewhat less 29 Board of Commissioners v. Trus- exact, to the same general effect, were tees, 71 Cal. 310, 12 Pae. Rep. 224; embodied in the constitution of 1821, Perkins v. Philadelphia, 156 Pa. St. art. 4, § IB, and that of 1777, §§ 28 554, 27 Atl. Rep. 356, 32 W. N. C. 385, and 29. 33 W. N. C. 41, 41 Pitts. Law J. 85. LOCAL SELF-GOVERNMENT. 341 Acts authorizing state officials to construct public buildings, parks, and highways, the expense of which was to be paid locally, have been uniformly sustained, and it has been asserted that the transfer of the power was no encroachment upon local govem- ment.^1 Acts creating new systems for the control of police, health, excise, and fire departments, under the control of state officers, the expense being put upon the localities, have been sustained; b\it it must be noted that these acts all involved the erection of new districts for such purposes, which districts included two or more separate municipalities previously existing, which were left un- touched in other respects.^'' These cases — in so far as they involve taxation — may well rest on the power of the legislature to create new taxing districts for special purposes.^* 689. But an act which established a police district consisting of a city with a police force already organized and " three small patches of sparsely settled territory, in all less "than a square mile," was held unconstitutional as an obvious attempt to evade the constitutional provision, because it was designed for the city only, and the outside fragments could have been brought into the city if it was deemed necessary to extend police protection to them.^ 690. The principles to be deduced from all these cases — and others affecting other aspects of state and municipal relation — are, that the local subdivisions have the right to choose their local officers, except as otherwise expressly prescribed by the constitu- tion; that the essential characteristic of an office is the function, and not the name ; that the legislature may not cast the functions and duties of municipal officers upon officers chosen by the state authorities; that matters in which the state at large has an in- terest may be confided to state officers regardless of whether they were previously in charge of local officers, and that the legisla- ture may erect special taxing districts out of two or more munic- 31 People T. Flagg, 46 N. Y. 401 ; Metropolitan Board of Health v. Astor V. Mayor, etc., of New York, 62 Heister, 37 N. Y. 661; Metropolitan N. Y. 567; People ex rel. Kilmer v. Board of Excise v. Barrie, 34 N. Y. McDonald, 69 N. Y. 362 ; People ex rel. 657 ; People ex rel. McMuUen v. Commissioners v. Board of Supervisors Shepard, 36 N. Y. 285. of Oneida County, 170 N. Y. 105, 62 33 See §§ 408 et seq., 419 et seq., 564 N. E. Rep. 1092. et seq. 32 People V. Draper, 15 N. Y. 532; 34 People v. Albertson, 55 N. Y. 50. People V. Pinckney, 32 N. Y. 377; 342 CONSTITUTIONAL LAW OF TAXATION. ipal subdivisions, for special purposes, and may determine tlie method of choosing the officers of such districts ; but that this may not be done as a palpable device for evading the constitutional provision. . Xote that this provision does not prevent the legislature from exercising compulsion over a municipality; but merely limits it as to the agencies it shall employ. 691. Some cases directly involving the taxing power remain to be considered. An act which vested in the governor of the state the appoint- ment of commissioners of taxes and assessments of the city of Ifew York, whose duties were to have charge of the tax sales, and make and correct assessments of real and personal property in the city, for local and general taxation, was held void. It ap- peared that the duties of local assessment had been performed by offic(_'rs locally chosen, at the time of the adoption of the constitu- tion, and that the act in question simply vested the functions of the local officials in the commissioners appointed by the gover- nor.^® In a quite recent case it was held that where a species of prop- erty was subjected to state and local taxation, which had never before been subject to such taxation, the function of assessing such property, though the same was situated in cities, towns, villages, and counties, was not a function which pertained to the office of local assessors. Hence, under the constitutional provision, the officers to whom that function was committed might be appointed in such manner as the legislature should direct. Accordingly an act, which provided that " special franchises," being the privileges granted to street railway companies, gas, water, elec- tric-light companies, and the like, to lay pipes, tracks, wires, etc., in the public highways, should be assessed as real property, and committed the assessment to a state board, was held to be con- stitutional.^® 691a. In Louisiana there are a number of special constitu- tional provisions with respect to the city of New Orleans, and the regulation of certain of its affairs by boards appointed in 35 People V. Raymond, 37 N. Y. 428. App. Div. 184, 643, 80 N. Y. Supp. 85; 36 People ex rel. Metropolitan vStreet affirmed. New York v. State Board of Ey. Co. V. Tax Commissioners, 174 N. Tax Commissioners, 199 U. S. 48, Y. 417, 67 N. E. Rep. 69, reversing 79 L. ed. , 23 Sup. Ct. Rep. 705. LOCAL SELF-GOVERNMENT. 343 whole or in part by state authority.*^ Among them are the fol- lowing provisions, which are, of course, subject to the exceptions set forth in the other articles, which are too long to be quoted here : The electors of the city of Few Orleans and of any political cor- poration which may be established within the territory now, or which may hereafter be, embraced within the corporate limits of said city, shall have the right to choose the public officers, who shall be charged with the exercise of the police power and with the administration of the afEairs of said corporation in whole or in part.^* This article shall not apply to the board of liquidation of the city debt, nor shall it be construed as prohibiting the establish- ment of boards or commissioners, the members of which are elected by the council or appointed by the mayor with the consent of the council. ■ As to all other existing boards or commissions affected by it, said article shall take effect from and after tbc first m.unieipal election which shall be held in the city of Few Orleans after the adoption of this constitution; provided, that nothing herein contained shall be so construed as to prevent the legislature from creating boards or commissioners, whose powers shall extend in and beyond the parish of Orleans, or as affecting present boards of that character, or the board of directors of the public schools; provided, that hereafter, in creating any board with such powers, or in filling vacancies therein, at least two- thirds of the members thereof shall be from the city of New Orleans, and elected by the people or council thereof, or appointed by the mayor as hereinabove provided.^ Under these provisions it has been held that a law providing for an appropriation by the city of a fund for street preservation and ornamentation, to be expended by a board named in the act, is unconstitutional.*" 37 Arts. 309 to 320 of Louisiana Con- *» Board, etc., of Jackson Square v. stitution. New Orleans, 112 La. 957, 36 So. Rep. 38 Art. 319. 817. 39 Art. 320. CHAPTER Vm. THE TAXING POWER OF THE FEDERAL GOVERN- MENT; AND THE LIMITATIONS OF THAT POWER. The Federal power to tax. 692. Those portions of the Federal constitution upon which the Federal power to tax rests, and from which it is derived are as follows: Preamile. We, the people of the United States, in order to form a more perfect Union, establish justice, insure domestic tranquility, pro- vide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity, do ordain and establish' this constitution for the United States of America. Article I, section 1. All legislative powers herein granted shall be vested in a Con- gress of the United States . . . Article I, section 3. Eepresentatives and direct taxes shall be apportioned . . ^ Article I, section 8. The Congress shall have power 1. To lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general wel- fare of_the United States; but all duties, imposts, and excises shall -be uniform throughout the United States. 2. To borrow money on the credit of the United States. 3. To regulate commerce with foreign nations, and among the several states, and with the Indian tribes. 18. To make all laws which shall be necessary and proper for carrying into execution the foregoing powers (all the eniimerated powers of Congress), and all other powers vested by this consti- tution in the government of the United States, or in any depart- ment or officer thereof. Article IVj section 3. The Congress shall have power to dispose of and make all need- ful rules and regulations respecting the territory or other property [344] THE FEDEEAL TAXING POWER. 345 lelonging to ihe United States; and nothing in this constitution shall be so construed as to prejudice any claims of the United States or of any particular state. Article VI. All debts contracted and engagements entered into, before the adoption of this constitution, shall be as valid against the United States under this constitution as under the Confederation. Fourteenth Amendment^ section 4. The validity of the public debt of the United States authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned . . . 693. The foregoing summary, it ■will be observed, does not con- tain all of the provisions of the constitution with reference to taxation; but only those provisions upon which the existence of the power to tax is based. It is manifest from those provisions that the Federal power to tax is plenary and uncontrolled (save by the express limitations hereafter noted), and that, as to all per- sons and all property within the territorial jurisdiction of the United States, the Federal government possesses all the powers of taxation which are essential to complete sovereignty. 694. The langiiage of the constitution is sufficient of itself to establish this proposition. The history of the formation of the constitution is familiar to every American lawyer, and will not be repeated here. That history exposes the weakness of the Confed- eration in respect to taxation — ■ a weakness which more than any other cause led to the fall of the Confederation — and shows that the intent of the framers of the constitution was to avoid that , weakness by granting to the Federal government an amplitude of authority to tax. The reasons which led to the bestowal of such power and justify its exercise are the obvious necessity for revenue in order to carry out the pui-poses of government, the unwisdom of limiting the sources of that revenue in view of possible national exigencies and the necessity that the Federal govsrnment should be able to command its revenues independently of the states.^ It 1 Story on the Constitution, chap. 10.5, 112, 293-296, 301, 333 ; 2 Elliott's XIV §§ 932, 933, 934, 935, 936 et setf.; Debates 95, 96, 118, 198-204; 3 EI- The Federalist, Nos. 21, 30, 31, 32, 34, liott's Debates, 2G1, 262, 290. 35, 41; 1 Elliott's Debates, 77-89, 91, 346 CONSTITUTIONAL LAW OF TAXATION. is the settled law that the Federal taxing power, subject only to the limitations contained in the constitution, and to the essential limitations inherent in the power itself, extends to every person and all property within the jurisdiction.^ 695. It is true that the power of Congress to tax is a very exten- sive power. It is given in the constitution, with only one excep- tion and only two qualifications. Congress cannot tax export.^, and it must impose direct taxes by the rule of apportionment, and indirect taxes by the rule of uniformity. Thus limited, and thus only, it reaches every subject and may be exercised at discretion." ^ The relations between the taxing power thus bestowed upon the general government and the taxing powers of the states are dis- cussed in another part of this work.* For the present it is suffi- cient to state generally that the taxing power of the general government is universally held to be a concurrent power with that of the several states. 696. There is no form of property, no description of person, no franchise, privilege, occupation, or act, to which, within the limits named, the Federal taxing power does not extend. Imposts, ownership of property,® licenses, or charges for the transaction of corporate business, ** the circulation of banks,'' inheritances, or successions,* incomes derived from real and personal property,^ callings or occupations, and business pursuits,''" are all subject to the taxing power .of the go^'ernment. 2 License Tax Cases, 5 Wall.' 462, 18 S. 429, 39 L. ed. 759, 13 Sup. Ct. Rep. L. ed. 497 ; Pollock v. Farmers' Loan 673. The last case held an income and Trust Co., 157 V. S. 429, 39 L. ed. tax unconstitutional because it vio- 759, 15 Sup. Ct. Rep. 673; Knowlton lated the constitutional limitations as V. Moore, 178 U. S. 41, 44 L. ed. 969, to apportionment, but that such a tax, 20 Sup. Ct. Rep. 747. in compliance with constitutional re- ■' Chief Justice Chase in License Tax strictions, was valid, was not ques- Cases, 5 Wall. 462-471, 18 L. ed. 497. tioned by the court or the counsel. * See §§ 750 et seq. Said Mr. Choate in attacking the law 6 Hylton V. United States, 3 Dall. (p. 534) : "It is not any part of our 171, I L. ed. 556. mission here to question the power of 6 Pacific Ins. Co. v. Soule, 7 Wall. Congress to raise money by taxation. 433, 19 L. ed. 95. We believe that Congress has plenary 7 Veazie Bank v. FennO, 8 Wall. 533, power, in the last exigencies of the 19 L. ed. 482. government, to reach every man, every S Scholey v. ReAV, 23 Wall. 331, 22 dollar, every inch of ground, to secure L. ed. 99; Knowlton v. Moore, 178 the common defense and the general U. S. 41, 44 L. ed. 969, 20 Sup. Ct. welfare . . ." Rep. 747. 10 United States v. Singer, 15 Wall. Springer v. United States. 102 U. Ill, 21 L. ed. 49; Head Money Cases, S. 586, 26 L. ed. 253; Pollock v. 112 U. S. 580, 28 L. ed. 798, 5 Sup. Farmers' Loan and Trust Co., 157 U. Ct. Rep. 247. THE FEDERAL TAXING POWER. 347 Providing for the common defense and general welfare. 697. The first question of constitutional limitation which arises is as to the meaning of the language which follows the general grant of power to lay and collect taxes, duties, imposts, and excises*' " to pay the debts and provide for the common defense and general welfare of the United States." In the early days of constitutional interpretation there were publicists who held that the words " to lay and collect taxes, duties, imposts, and excises " granted one distinct and substantial power; and that the words "to pay the debts and provide for the common defense and general welfare of the United States " granted another distinct and substantial power, separate from and independent of the first. This view has not been generally adojDted. " The generally received sense of the nation " has been and is that the latter words are connected with the former and constitute a qualification upon them, so that the meaning is as if the clause read: "The Congress shall have power to lay and collect taxes, duties, imposts, and excises in order to pay the debts and provide for the common defense and general welfare of the United States." In this sense Congress has not an unlim- ited power of taxation ; but it is limited to specific objects, the payment of the public debts and providing for the common de- fense and general welfare. A tax, therefore, laid by Congress for neither of these objects, would be unconstitutional, as an excess of its legislative authority.*^ This qualification of the general grant of taxing power is, in fact, an express statement of the inherent limitations on all taxing power referred to in another part of this work, to wit, that taxation must be for a public pur- pose, and that such purpose must be germane to the objects for which the taxing government exists.'* The power of taxation, though general as to the subjects to which it may be applied, is yet restrictive, as to the purposes for which it may be exercised.** 698. In the political history of the United States the propriety of laying customs duties on imported articles by way of pro- 11 Art. I, § 8. 13 See chaps. IV, V, ante. 12 Story on the Constitution, Vol. I, i* Story on the Constitution, Vol. I, J 908. See §§ 909 et seq. of that work § 931. for an elaboration of the reasoning by which this interpretation is sustained. 348 CONSTITUTIOHrAL LAW OF TAXATION. tection to native industries has been a topic of frequent discus- sion. The party opposed to such duties have not confined them- selves to economic arguments, but have asserted that the taxing power may only be exercised for raising revenue, and that its use for other purposes is unconstitutional. The argument is that the idea of taxation necessarily includes the purpose of rais- ing revenue, that a power to lay and collect taxes is a power to raise revenue when revenue is wanted, and that it cannot be em- ployed for any other purpose than raising revenue. It is answered to this that the power of taxation is a power given " to pay the debts and provide for the common defense and general welfare ;" that there may be other ways of providing for the common de- fense and general welfare than by raising revenue, and that the power of taxation may be employed in other ways.^^ It may also be said that the purpose of the taxation, whether public or not, and hence whether " for the common defense and general welfare " is to be determined by inquiring as to the use to which the proceeds of the tax are put ; and that the purpose of taxation and the motive of the legislature in imposing taxation are very different things. 698a.. That the motive which animates Congress in enacting tax laws cannot be considered by the courts appears very clearly in a recent case, where a Federal law imposing a tax of ten cents a pound on artificially colored oleomargarine was sustained. In this respect the argument which was made against the law was, that the power of internal taxation which the constitution confers on Congress is given to that body for the purpose of raising revenue, and that the tax on artificially colored oleomargarine is void because it is of such an onerous character as to make it manifest that the purpose of Congress in levying it was not to raise revenue but to suppress the manufacture of the taooed article. The proposition thus squarely presented was rejected by the Supreme Court, which, after some discussion and citation of cases, concluded: "It being thus demonstrated that the motive or pur- pose of Congress in adopting the acts in question may not be inquired into we are brought," etc.-*^ In an earlier case the same proposition was asserted in up- 15 See Story on the Constitution, 16 McCray v. United States, 195 U. Vol. I, § 958 et seq. for an elaborate S. 27, 59, 49 L. ed. "8, 24 Sup. Ct. discussion of this topic. Rep 769. THE FEDERAL TAXING POWER. 349 holding a law taxing the circulation of state banks. In answer to the argument that the tax was so excessive as to indicate a purpose on the part of Congress to destroy the franchise of the bank, and was, therefore, beyond the constitutional power of Congress, it was said: The first answer to this is that the judiciary cannot prescribe to the legislative department of the government limitations upon the exercise of its aclmowledged powers. The power to tax may be exercised oppressively upon persons, but the responsibility of the legislature is not to the courts, but to the people by whom its members are elected. So if a particular tax bears heavily upon a corporation, or a class of corporations, it cannot, for that reason only, be pronounced contrary to the constitution.^'^ 699. Viewed in the light of this test of motive, the question which early arose, whether the money raised by taxation can be ap- propriated to any other purpose than those purposes expressly enu- merated in the constitution, presents a more pertinent query. This question also arose out of a political discussion — ^wtether Congress has power to appropriate money to aid internal improvements. It has long b^en settled in the affirmative by the actual practice of the government. Upon the settled construction of the clause already given, that the words " to provide for the common de- fense and general welfare " are the only general qualification upon the power to lay taxes, that power, and consequently the power of appropriation, must extend to all the purposes which are conducive to the common defense and general welfare; in other words. Congress may lay taxes and appropriate the money raised by them to any public purpose germane to the objects of the Federal government. The opposite view, which would have restricted the appropriation of revenues to the furtherance of the enumerated powers of Congress, was based on a construction which made the words " to provide for the common defense and general welfare " mere general terms, explained and limited by the subjoined specifications. This view is not now seriously held.^* 700. In construing the constitutional restrictions of the tax- ing power of Congress, the key to the true interpretation can generally be found in the proposition that the intent of the IT Veazie Bank v. Fenno, 8 Wall. Messages and Papers of the Presidents, 533-548, 19 L. ed. 482. Vol. I, p. 584; Message of President 18 See Story on the Constitution, Monroe, May 4, 1822, Ibid., Vol. II, Vol. I, § 975 et seq.; Message of Presi- p. 144. dent Madison of March 3, 1817, & e 350 CONSTITUTIONAL LAW OF TAXATION. framers and of the people whom they represented was two- fold: (1) To establish a sufficiently strong general government. (3) To protect the states from discriminations by the general government and to prevent encroachments by the general govern- ment upon the states. The people and their leaders at that time had no particular anxiety about individual rights. That suffrage- should be restricted, that the rich man should have more au- thority than the poor man, that some men should be free, some bound apprentices, and some slaves, seemed to them quite natural and practically proper. Their one controlling fear was that the more populous states might use the powers of the general gov- rnment to discriminate against the v/eaker states, that some com- bination of states might be formed which would take advantage of those states not in the combination. 701. The example of a strong general government which they had in mind, and the only one with which most of them were familiar, was the government of Great Britain. The powers of that government were well known to them, its machinery had been copied in most of the states. In view of these facts it may be generally stated that in their bestowal of powers on the general government and in their re- striction of those powers (particularly of taxing powers, since dispute as to taxation was one of the chief causes of the Revolu- tion) they intended: 1. To grant to the general government those powers usually exercised by the government of Great Britain, and in matter^ of taxation to grant the same general authority of classification and selection as was possessed by the British government and by the state governments modeled upon it. 2. To restrict those powers thus granted in such a way as to prevent discrimination among the states.^® Duties, imposts, and excises. 702. The genera] grant of power to tax grants power to Con- gress to lay and collect . . . " duties, imposts, and excises,'^ 19 Upon this general subject, see L. ed. 969, 20 Sup. Ct. Rep. 747; Pollock V. Farmers' Loan and Trust Head Money Cases, 112 U. S. 580, 2S Co., 157 U. S. 429, 39 L. ed. 759, 15 L. ed. 798, :-, Sup. Ct. Rep. 247; In- Sup. Ct. Rep. 673; 158 U. S. 001, 39 sular Tariff Cases, 182 U. S. 1, 222. L. ed. 1108, 15 Sup. Ct. Rep. 912; 45 L. ed. 1041, 21 Sup. Ct. Rep. 743. Knowlton v. Moore, 178 U. S. 41, 44 THE FEDEKAL TAXING POWEE. 351 and qualifies this power with one restriction : " hut all duties, imposts, and excises shall he uniform throughout the United States." 2° In construing this limitation it is essential to inquire: (1) What are "duties, imposts, and excises?" (2) What is the nature of the uniformity required? (3) Throughout what ter- ritory does this requirement of uniformity operate? In those sections of this work which deal with " direct taxes," as referred to in the constitution, the subjects of indirect taxes and of duties, imposts, and excises are discussed, and in defining the one class — direct taxes — the other class now under discussion are incidentally defined. It is shown that all in- direct taxes or taxes which are shifted are included under the words " duties, imposts, and excises." Duty in a general sesse refers to all taxes, but is commonly used to indicate an indirect tax impost on the importation, exportation, or consumption of goods.^^ Impost also in its general sense signifies any tax, tribute, or duty, but it is seldom applied to any but the indirect taxes. Customs duties, as the term is commonly used, are the duties levied upon imports and exports, while excise duties are inland imposts levied upon articles of manufacture and sale, upon licenses to pursue certain trades, or deal in certain commodities, upon special privi- leges, etc.^* 703. The word duty has been the subject of judicial exposition. In 1882 a law was enacted to the effect that " a duty " of fifty cents should be collected for every passenger not a citizen who should come from a foreign port, by any vessel, to a port of the United States, and that the fund thus created should be used to defray the expense of regulating immigration and of relieving poor immigrants in distress. It was held by the Supreme Court^^ that this so-called " duty " " is not, strictly speaking, a tax or duty within the meaning of the constitution. The money thus raised, though paid into the treasury, is appropriated in advance to the uses of the statute, and does not go to the general support of the government. It constitutes a fund raised from those who are engaged in the transportation of these passengers, and who make profit out of it, for the temporary care of the passengers whom they bring among us and for the protection of the citizens 20 Art I § 8, clause 1. 23 Head Money Cases, 112 U. S. 5S0, 21 Cooiey on Taxation (2d ed.), 3. 595, 28 L. ed. 798, 5 Sup. Ct. Rep. 2-17 22/6 id. 4. 352 CONSTITUTIONAL LAW OF TAXATION. among -wliom they are landed." The act was held to be not a taxing act but a regulation of commerce, the duty of fifty cents was held to be merely an incident to that regulation, and in laying it Congress was not subject to the constitutional limita- tions surrounding the taxing power. 704. Defining excises Mr. Justice Field in the income tax cases^* said: Excises are a species of tax consisting generally of duties laid upon the manufacture, sale, or consumption of commodities within the country, or upon certain callings or occupations, often taking the form of exactions for licenses to pursue them. The taxes created by the law under consideration as applied to savings banks, insurance companies, whether of fire, life, or marine, to building or other associations, or to the conduct of any other kind of business, are excise taxes. Taxes on the use of carriages,^^ on sales at exchanges or boards of trade,^^ on the transmission of property from the dead to the living,^ on agreements to sell shares of stock, denominated " calls " by stock brokers,^ on tobacco manufactured for consupip- tion,^' on manufacturers of cheese,^" on the sale of oleomargarine artificially colored,^^ on sales of shares of corporations generally,** on the business of transfer companies,*^ on the amounts iasured, renewed, and continued by insurance companies, on the gross amounts of premiums received, on dividends, undistributed sums, and income,^* on the amount of state bank notes paid out by banks,^* on devolutions of title to real estate,^® and on the gross receipts of companies engaged in refining sugar, in excess of a named sum,^^ have all been upheld as excises. In the last cited 24 Pollock V. Farmera' Loan and 32 Thomas v. United States, 192 U. Trust Co., 157 U. S. 429, 592, 39 L. ed. S. 363, 48 L. ed. 481, 24 Sup. Ct. Eep. 759, 15 Sup. Ct. Rep. 763. 305. 25 Hylton V. United States, 3 Dall. 33 Binns v. United States, 194 U. S. 171, 1 L. ed. 556. 486, 48 L. ed. 1087, 24 Sup. Ct. Kep. 26Nicol V. Ames, 173 U. S. 509, 43 816. See § 719, post. L. ed. 786, 19 Sup. Ct. Rep. 522. 34 Pacific Ins. Co. v. Soule, 7 Wall. 27Knowlton v. Moore, 178 U. S. 41, 433, 19 L. ed. 95. 44 L. ed. 969, 20 Sup. Ct. Rep. 747. 35Veazie Bank v. Fenno, 8 Wall. 28 Treat v. White, 181 U. S. 264, 45 533, 19 L. ed. 482. L. ed. 853, 21 Sup. Ct. Rep. 611. 36 Scholey v. Rew, 23 Wall. 331, 22 29Patton V. Brady, 184 U. S. 608, L. ed. 99. 46 L. ed. 713, 22 Sup. Ct. Rep. 493. 37 Spreekcls Sugar Refining Co. ▼. 30 Cornell v. Coyne, 192 U. S. 418, McClain, 192 U. S. 397, 48 L. ed. 496, 48 L. ed. 504, 24 Sup. Ct. Rep. 383. 24 Sup. Ct. Rep. 376. 31 MeCray v. United States, 195 U. S. 27, 49 L. ed. 78, 24 Sup. Ct. Rep. 769. THE FEDERAL TAXING POWER. 353 case it was held that receipts from interest on bank deposits or dividends of stocks held in other companies should be excluded from the computation of gross receipts. 704a. The provisions forbidding Congress to lay export duties or to prefer the ports of one state over those of another are treated in chapter XI of this work. Uniformity in the Federal constitution. 705. The meaning of " uniform " in the clause providing that " duties, imposts, and excises shall be uniform throughout the United States," has been the subject of much controversy which has only lately been decided authoritatively. It has been con- tended on the one hand that " uniform throughout the United States " refers simply to geographical uniformity and means only that the tax on any person, occupation, act, or article, must be the same in any given state as it is in every other state. On the other hand it has been claimed that the words mean all this and something more, that " uniform " means " equal," and that the tax must not only be uniform with respect to place, but it must also be uniform as between persons, that the words imply and constitute a limitation on the power of Congress to classify taxes among persons ; that under this provision of the constitu- tion, Congress is expressly prohibited from taxing some and exempting others, from making the tax on one class higher than the tax on another. In this view an indirect tax to be constitu- tional must first, as to its essential nature, be uniform as between persons and classes of persons, and second, having this character, it must also be uniform in its territorial operation throughout the United States. 706. The view established by authority is that the words, as Tised in the constitution, refer to mere geographical uniformity. . It is not intended by this to say that Congress can lay indirect; taxes violative of all the principles of equality and uniformity as, between persons. Congress is limited in this regard; but its limitations are derived — not from the words " uniform through- out the United States — but from the general nature of all legis- lative power to tax, from the inherent elements of uniformity and equality which partly make up the concepts of taxation and taxes. The restrictions upon Congress in this regard arise from the very nature of legislative poAver as a power held in trust for 23 354 CONSTITUTIONAL LAW OF TAXATION. tte whole people. The express language of the constitution has not — and was not intended to have — that meaning. 707. It may be said: If this is so, if Congress is limited no matter which way the clause is interpreted, what is the use of discussing the interpretation of the clavise? The answer is: If the element which is spoken of as being inherent in the concept of a tax — the limitation which proceeds from the in- herent nature of legislative power — and which for want of a better term we call uniformity, were the same thing as the limitation which is brought about by the express use of the word " uniform," then there would be no use in discussing the interpretation, for the result would be the same either way. But the two ideas are not the same. The express use of the word " uniform," if construed to apply as between persons and classes, would operate as a far more binding restriction — limiting the legislative power within a narrower scope — than if the limita- tion were merely inherent. The diflSculty is in language itself. We must use the same word to express different things. If the word " uniform " in the constitution is restricted to a geographical significance, then Congress is bound as to persons only by that vague, inherent limitation which comes from the nature of govemment-al power in a free country ; it has the widest discretion of classification and apportionment and is only bound by the necessity of avoiding attempts at absolutely arbitrary and un- just legislation. But if the word " uniform " applies as between persons, classes, and subjects of taxation it is bound not only by this necessity but by something more. The express limitation of the general power (already inherently limited) implies an intent still further to lessen the congressional power of classifica- tion and apportionment, to reserve to the individual some rights which without such express reservation would pass to the state. The difference between the two interpretations is thus seen to be serious — a difference of degree — btit of great degree. 708. The question came up in the Head Money Cases^ where Congress had imposed a charge of fifty cents upon each passenger brought into the ports of the country by steam or sailing vessel. The tax was attacked under the uniformity clause as being not uniform inasmuch as it did not apply to persons brought into 38 112 U. S. 580, 28 L. ed. 798, 5 Sup. Ct. Eep. 247. THE FEDERAL TAXING POWEB. 355 tlie conntry by rail. The court held adversely to this contention, saying : The uniformity here prescribed has reference io the various localities in which the tax is intended to operate. " It shall be uniform throughout the United States." Is the tax on tobacco void because in many of the states no tobacco is raised or manu- factured ? Is the tax on distilled spirits void because a few states pay three-fourths of the revenue arising from it? The tax is uniform when it operates with the same force and effect in every place where the subject of it is found. The tax in this case, which as far as it can be called a tax, is an excise duty on the business of bringing passengers from foreign coun- tries into this, by ocean navigation, is uniform and operates pre- cisely alike in every port of the United States where such pas- sengers can be landed. It is said that the statute violates the rule of uniformity and the provision of the constitution that no preference shall be given by any regulation of commerce or reve- nue to the ports of one state over those of another, because it does not apply to passengers arriving in this country by railroad or other inland mode of conveyance. But the law applies to all ports alike, and evidently gives no preference to one over another, but is uniform in its operation in all ports of the United States. The value of this case as a distinct authority is impaired by the subsequent assertion that the power exercised in this instance was not the taxing power but the power of regulating commerce; so that the reasoning quoted was not essential to the decision of the case. 709. In the income tax cases^ the legislation there inter- preted was attacked for lack of uniformity. On the one hand it was contended that it was not uniform because of the exemp- tion of incomes under a certain amount, and because it taxed incomes derived from certain forms of conducting business at a rate, amounting, in fact, to more than the rate laid upon incomes derived in certain other modes. On the other hand it was claimed that the uniformity clause only referred to geographical uniformity and had no application to the facts presented. The justices who heard the argument were equally divided, and no decision was rendered as to this point. 710. The meaning of "uniform" was finally determined by express authority in a case*" involving the constitutionality of 39 Pollock V. Farmers' Loan and « Knowlton v. Moore, 178 U. S. Trust Co., 157 U. S. 429, 39 L. ed. 759, 41, 44 L. ed. 969, 20 Sup. Ct. Rep. 747. 15 Sup. Ct. Rep. 673. 336 CONSTITUTIONAL LAW OF TAXATION. the progressive legacy tax imposed by the war revenue act of 1898. That act laid a succession tax or death duty upon legacies and distributive shares of personal property, exempting wholly legacies or shares passing to the husband or wife of the deceased, exempt- ing all other such legacies or shares under $10,000 in value and imposing taxes on all other legacies or shares, the rate of which taxes varied according to the amount of the legacy or share and the relationship which the beneficiary bore to the deceased. Against the law it was vigorously contended, (1) that it violated the provision as to uniformity in the particulars stated ; (2) that it violated even the requirement of geographical uniform- ity for the following reason : As the primary rate of taxation depends upon the degree of relationship or want of relationship to a deceased person, it cannot operate with geogTaphical uniform- ity, inasmuch as testamentary and intestacy laws may difFer in every state. 711. The court upheld the act upon both contentions. As to the first it was expressly decided that the uniformity referred to in the constitution is geographical uniformity only; that is, that if an impost, duty, or excise is fixed at the same rate for every state it complies with the constitutional requirement, regardless of the fact that it may bear more heavily upon certain persons or acts than upon others. In support of this decision the court reviewed the history of the constitution and pointed out that the great object of the framers of the constitution was to avoid dis- crimination, not among persons, but as to states ; that if uni- formity in the constitution means intrinsic uniformity the words " throughout the United States " have no meaning ; and that the taxes to which the rule of uniformity is applied are those which, in their nature, are the least capable of being laid with regard to such intrinsic uniformity. 712. Upon this last head, the court said: But the classes of taxes termed duties, imposts, and excises, to which the rule of uniformity applies, are those to which the principle of equality and uniformity, in the sense claimed, is in the nature of things the least applicable and the least susceptible of being enforced. Excises usually look to a particular subject, and levy burdens with reference to the act of manufacturing them, selling them, etc. They are or may be as varied in form as the acts or dealings with which the taxes are concerned. Impost duties take every conceivable form, as may by the legis- THE FEDERAL, TAXING POWER. 357 lative authority he deemed best for the general welfare. They have been at all times often specific. They have sometimes been discriminatory, particularly when deemed necessary by reason of the tariff legislation of other countries. The claim of intrinsic uniformity, therefore, imputes to the framers a restriction as to certain forms of taxes, where the restraint was least appropriate and the omission where it was most needed. The discord which this construction, if well founded, would create, suggests at once the unsoundness of the proposition, and gives rise to the inference that the contrary view by which the unity of the provisions of the constitution is maintained, must be the correct one. In fact, it is apparent that if imposts, duties, and excises are controlled by the rule of intrinsic uniformity, the methods usually employed at the time of the adoption of the constitution in all countries in the levy of such taxes would have to be abandoned in this country, and, therefore, whilst nominally having the authority to impose taxes of this character, the power to do so would be virtually denied to Congress. As to objection (2) the court said: It is certain that the same degree of relationship or want of relationship to the deceased, wherever existing, is levied on at the same rate throughout the United States. The tax is hence uniform throughout the United States, despite the fact that different conditions among the states may obtain as to the objects upon which the tax is levied. 713. Is this rule of geographical uniformity, "which is ordained by the constitution, satisfied by a uniformity of rates as to the states, or does it require a uniformity as between places in the same state ? For illustration, would an excise tax be valid which, as among the states, should impose the same rates on the same subjects, but which should discriminate between the inhabitants of different places in the same state? This question was raised in the Income Tax Cases but received no great attention in argument and was not noticed in the decisions. It is hard to imagine such a case of discrimination; but the reasoning of Knowlton v. Moore*^ leads to the view that such a tax would not be prohibited by the clause of the con- stitution under consideration. The injustice of such discrimina- tion would be remedied by the application of those inherent re- quirements of approximate equality which do not depend upon the written constitution for validity. « 178 U. S. 41, 44 L. ed. 969, 20 Sup. Ct. Rep. 747. 358 CONSTITUTIONAL LAW OF TAXATION, " Throughout the United States." 714. Throughout what territory does the requirement of uni- formity in the imposition of duties, imposts, and excises apply? (a) That it applies to all the states themselves is not doubtful. (&) Going to the other extreme, it is clear that the require- ment does not apply to territory in the mere temporary occupation of the United States, by military conquest and before cession.*^ The rights of the conqueror in such territory are independent of constitutional limitations; they are measured by international law and are exercised by the executive under the war power. These rights end when the war closes and the right of military possession is superseded by a more formal title.*^* (c) As to territory ceded to or acquired by the United States, t6 which Congress has not yet extended the operations of the constitution, or which — to use the phrase of some of the justices of the Supreme Court — is not yet incorporated into the United States, it has been held that the requirement of uniformity is not applicable. The question arose with respect to the collection of duties on goods from Porto Rico, after the cession by Spain and the establishment of a temporary civil government and tariff, under the Foraker act*' 715. In the case cited, the opinion of Mr. Justice Brown is to the effect that the requirement of uniformity was not applicable to Puerto Rico, because Puerto Rico was not a state and because Congress had not extended the constitution to her. His argument seems to be that those constitutional provisions which are limited in application to " the United States " or " throughout the United States " only restrain Congress in legislating for the states; that Congress may extend the constitution to a territory; and when once that has been done, the inhabitants of the territory gain, as it were, vested rights in the constitution which cannot be taken away, they are by that act admitted into the full status of American citizenship which cannot be taken from them ; and until that has been done Congress in legislating for the territories is not bound by the limitations which expressly bind it when legislating for states. 42 Fleming v. Page, 9 How. 603, 13 43" Lincoln v. United States, 197 U. J,, ed. 276; Dooley v. United States, S. 419, 49 L. ed. 816, 25 Sup. Ct. Rep. 182 U. S. 222, 45 L. ed. 1074, 21 Sup. Ct. Rep. 762; Cross v. Harrison, 16 « Downes v. Bidwell, 182 U. S. 244, How. 164, 14 L. ed. 889. 45 L. ed. 1088, 21 Sup. Ct. Rep. 770. THE FEDERAL TAXING POWER. 359 716. The opinion of Justices White, Shir as, and McKenna is summed up in the following language : Whilst in an international sense Puerto Rico was not a foreign country, since it was subject to the sovereignty of and was owned by the United States, it was foreign to the United States in a domestic sense, because the island had not been incorporated into the United States, but was merely appurtenant thereto as a pos- session. As a necessary consequence the impost in question assessed on merchandise coming from Puerto Eico into the United States after the cession was within the power of Congress, and that body was not, moreover, as to such imposts, controlled by the clause requiring that imposts should be uniform throughout the United States; in other words, the provision of the constitution just referred to was not applicable to Puerto Rico. Justice Gray in the main concurred in this view. 716a. Chief Justice Fuller and Justices Harlan, Brewer, and Peckham dissenting held that the term " United States " referred to the " whole American empire " and that the uniformity clause was applicable. In view of the divergent views expressed by the majority and the strong dissent from the result the questions raised cannot be considered settled. The same result would doubtless be reached as to the Philippine Islands. It has been decided that since the cession by Spain they are not a " foreign country " within the Tariff Act of 1897.** 717. As to "the territories in the strict and technical sense, being those which lie within the United States, as bounded by the Atlantic and Pacific Oceans, the Dominion of Canada and the Republic of Mexico, and the territories of Alaska and Hawaii ;" *^ to which Congress has expressly made the constitu- tion applicable,** it can hardly be doubted that this constitutional limitation of uniformity is applicable in legislating for them. 718. Such is the plain intimation of a recent case where certain license taxes imposed in Alaska, which were directed to be paid into the United States treasury, but which appeared to be in- tended and used for the support of the territorial government, a Fourteen Diamond Rings v. United the islands. Lincoln v. United States, States, 183 U. S. 176, 46 L. ed. 138, 197 U. S. 419, 49 L. ed. 816, 25 Sup. 22 Sup. Ct. Eep. 59. The insurrec- Ct. Rep. tion in the Philippines after the ces- ^5 Opinion of Justice Gray, in sion by Spain was not of sufficient Downes v. Bidwell, supra. gravity to affect the legal status of *8U. S. R. S., § 1891. «jbU CONSTITUTIONAL LAW OF TAXATION. were upheld. They were attacked on the ground that, as they "were only collected in Alaska, they were not " uniform through- out the United States." The court upheld them on the ground that as they were in fact local territorial taxes, they need not be uniform throughout the country. But, speaking of the proposition that they would have been unconstitutional if levied only in one territory for the general support of the Federal government,, the Supreme Court said: In order to avoid any misapprehension we may add that this opinion must not be extended to any case, if one should arise, in which it should appear that Congress is, by some special system of license taxation, seeking to obtain from a territory of the United States revenue for the benefit of the nation, as distin- guished from that necessary for the support of the territorial government.*'^ Local taxation in territories. 719. In legislating for the territories, whether organized or unorganized, with respect to local government. Congress has the power of taxation which is possessed by a state legislature, and is uncontrolled by the express limitations of the constitution upon the taxing power when exercised for Federal purposes.** It must be remembered that Congress, in the government of the territories as well as of the District of Columbia, has plenary power, save as controlled by the provisions of the constitution, that the form of government it shall establish is not prescribed, and may not necessarily be the same in all the territories. We are accustomed to that generally adopted for the territories, of a quasi state government, with executive, legislative, and Judicial officers, and a legislature endowed with the power of local taxa- tion and local expenditures, but Congress is not limited to this form. In the District of Columbia it has adopted a different mode of government, and in Alaska still another. It may legis- late directly in respect to the local affairs of a territory or transfer the power of such legislation to a legislature elected by the citizens of the territory. It has provided in the District of Columbia for a board of three commissioners who are the con- trolling officers of the District. It may entrust to them a large *^ Binns v. United States, 194 U. S. trict of Columbia, 116 U. S. 404, 29 L. 486-496, 48 L. ed. 1087, 24 Sup. Ct. ed. 680, 6 Sup. Ct. Rep. 427; Mat- Eep. 817. tingly v. District of Columbia, 97 U. <8 Binns v. United States, 194 U. S. S. 687, 24 L. ed. 1098 ; Loughborough 486, 48 L. ed. 1087, 24 Sup. Ct. Rep.' v. Blake, 5 Wheat. 317, 5 L. ed. 98. 817, see § 718, ante; Gibbons v. Dis- THE FEDEBAL TAXING POWER. 361 volume of legislative power, or it may by direct legislation create the whole body of statutory law applicable thereto. For Alaska, Congress has established a government of a different form. It has provided no legislative body but only executive and judicial officers. It has enacted a penal and civil code. Having created no legislative body and provided for no local legislation in respect to the matter of revenue, it has established a revenue system of its own, applicable alone to that territory. Instead of raising revenue by direct taxation upon property, it has, as it may right- fully do, provided for that revenue by means of license taxes.^ 720, It is within the constitutional power of Congress, acting as the local legislature of the District of Columbia, to tax different classes of property within the District at different rates. . . . The power of Congress, legislating as a local legislature for the District, to levy taxes for district purposes only, in like manner as the legislature of a state may tax the people of a state for state purposes, was expressly admitted,^ and has never since been doubted. In the exercise of this power, Congress, like any state legislature unrestricted by constitutional provisions, may at its discretion wholly exempt certain classes of property from tax- ation, or may tax them at a lower rate than other property.^^ Direct taxes. 721. The limitation imposed as to direct taxes has been already stated. It is the rule of apportionment and is found in the words: "direct taxes shall b^ apportioned among the several states which may he included within this Union according to their respective numhersj" ^^ and " no capitation or other direct tax shall he laid, unless in proportion to the census or enumeration hereinbefore directed to he taJcen." ^^ It becomes necessary to in- quire, in this connection, what are direct taxes? The question first came up with reference to an act of Congress of June 5, 1794, imposing a tax on carriages. The action^* was to recover a penalty for not paying the tax, and the defense was that the tax was invalid because it was a direct tax and was not apportioned among the states. The court held that the tax, being a tax on consumption or expense, was an excise and not a direct tax, hence was valid. There were dicta intimating 49Binns v. United States, 194 U. S. 116 U. S. 404, 407, 408, 29 L. ed. 680, 486 491, 492, 48 L. ed. 1087. 24 Sup. 6 Sup. Ct. Rep. 427. Ct.Rep. 817. 52 Art. I, § 2. 50 In Loughborough v. Blake, 5 ssArt. I, § 9, clause 4. Wheat. 318, 5 L. ed. 98. 54Hylton v. United States, 3 Dall. 61 Gibbons v. District of Columbia, 171, 1 L. ed. 556. 362 CONSTITUTIONAL LAW OF TAXATION. that the only direct taxes referred to by the constitution and subject to the rule of apportionment were capitation taxes and taxes on land, but this point was not decided. 722. Two things are apparent in the opinions of the judges: One that they thought that the institution of slavery was largely responsible for the existence of the rule of apportionment; the other that they hesitated to face the question (then undecided) whether the Supreme Court had the power to declare invalid an act of Congress as in conflict with the constitution. A large part of the opinions is devoted to reasoning of this sort: A direct tax must be apportioned among the states. But a tax on carriages, if apportioned among the states, would work great injustice. Hence a tax on carriages cannot be a direct tax. This reasoning, while it has weight, cannot be regarded as con- chisive, and the prominence given to it in the opinions must be attributed to a then natural desire to avoid the assertion of the right to declare congressional legislation invalid. 723. In 1868, the question arose whether a tax on the business and premiums of an insurance company was a direct tax within the meaning of the constitution. The court held^° that it was not a direct tax but an excise. The case was decided mainly on the authority of IJylton v. United States^^ the court saying: If a tax upon carriages, kept for his own use by the owner, is not a direct tax, we can see no ground upon which a tax upon the business of an insurance company can be held to belong to that class of revenue charges. The dicta of Justices Chase and Patterson to the effect that the only direct taxes contemplated by the constitation are a capitation tax and a land tax are referred to, apparently in support of the conclusion reached. 724. In. Yeazie Bank v. Fenno^^ one of the questions was whether a tax of ten per cent, upon the circulation of state banks was a direct tax and subject to the rule of apportionment. Upon this question the court said: Much diversity of opinion has always prevailed upon the ques- tion. What are direct taxes ? Attempts to answer it by reference to the definitions of political economists have been frequently 55 Pacific Ins. Co. v. Soule, 7 Wall. B5a Supra. 433, 19 L. ed. 95. 86 8 Wall. 533, 19 L. ed. 482. THE FEDERAL TAXING POWER. 363 made, but without satisfactory results. The enumeration of the diflEerent kinds of taxes which Congress was authorized to impose was probably made with very little reference to their speculations. The great work of Adam Smith, the first comprehensive treatise on political economy in the English language, had then been recently published; but in this work, though there are passages which refer to the characteristic difference between direct and indirect taxation, there is nothing which affords any valuable light on the use of the words " direct taxes " in the constitution. We are obliged, iiheref ore, to resort to historical evidence, and to seek the meaning of the words in the use and in the opinion of those whose relations to the government, and means of knowl- edge, warranted them in speaking with authority. And, considered in this light, the meaning and application of the rule as to direct taxes appears to us quite clear. It is, as we think, distinctly shown in every act of Congress on the subject. 725. In each of these acts, a gross sum was laid upon the United States, according to their respective number of inhabitants, as ascertained by the last preceding census. Having been appor- tioned, provision was made for the imposition of the tax upon the subjects specified in the act, fixing its total sum. In 1798, when the first direct tax was imposed, the total amount was fixed at two millions of dollars; in 1813, the amount of the second direct tax was fixed at three millions; in 1815 the amount of the third at six millions, and it was made an annual tax: in 1816 the provision making the tax annual was repealed by the repeal of the first section of the act of 1815, and the total amount was fixed for that year at three millions of dollars. No other direct tax was imposed until 1861, when a direct tax of twenty millions of dollars was laid and made annual; but the provision making it annual was suspended, and no tax, except the first laid, was ever apportioned. In each instance, the total sum was apportioned among the states, by the constitutional rule, and was assessed at prescribed rates, on the subjects of the tax.' These subjects, in 1798, 1813, 1815, 1816, were lands, im- provements, dwelling-houses, and slaves, and in 1861, lands, improvements, and dwelling-houses only. Under the act of 17 US, slaves were assessed at fifty cents on each; under the other acts, according to valuation by assessors. 726. This review shows that personal property, contracts, occupa- tions, and the like have never been regarded by Congress as proper subjects of direct tax. It has been supposed that slaves must be considered as an exception to this observation. But the exception is rather apparent than real. As persons, slaves were the proper subjects of a capitation tax, which is described in the constitution as a direct tax; as property they were, by the laws of some, if not most of the states, classed as real property, descendible to heirs. Under the first view, they would be sub- 364 CONSTITUTIONAL LAW OP TAXATION. ject to the tax of 1798 as a capitation tax; under the latter^, they -would be subject to the taxation of the other years as realty. That the latter view was that taken by the framers of the acts after 1798, becomes highly probable, when it is considered, that in the states where slaves were held, much of the value which would otherwise have attached to land passed into the slaves. If, indeed, the land only had been valued without the slaves, the land would have been subject to much heavier proportional imposition in those states than in states where there were no slaves; for the proportion of tax imposed on each state was determined by population, without reference to the subjects on which it was to be assessed. The fact, then, that slaves were valued, under the acts referred to, far from showing, as some have supposed, that Congress re- garded personal property as a proper object of direct taxation, shows only that Congress, after 1798, regarded slaves for the purposes of taxation as realty. It may be rightly affirmed, therefore, that in the practical construction of the constitution by Congress, direct taxes have- been limited to taxes on land and appurtenances, and taxes on polls, or capitation taxes. The court then referred to Hylton v. United States^^ and held the tax in the case at bar not to be a direct tax. 727. The question next came before the Supreme Conrt in a case®'^ involving the validity of a Federal succession tax on devolu- tions of real estate by will or descent. It was argued against the tax that a tax on the succession to land was in effect a tax on the land itself, which would be a direct tax within the narrowest definition, hence it was void because it -was not ap- portioned among the states. The court held that the tax was an excise and not a direct tax, saying that it was the succession or devolution of the land and not the land itself which was the subject of the tax. It was held that although a lien for the tax was laid upon the land itself, that did not make it a tax on the land ; but was merely a regulation for enforcing collection,, not affecting the nature of the tax. In support of its view the court referred to the act of Parliament from which the act in question was largely copied, and to the English cases giving to that act substantially the same construction.^* The court ex- 66a Supra. Hurlst. & Norm. 136; Attorney-Gen- STSchoiey v. Rew, 23 Wall. 331, 22 eral v. Fitz-John, 2 Ibid. 472; Attor- L. ed. 99. ney-General v. Gardner, 1 Hurlst. & B8 Wilcox V. Smith, 4 Drew. 49 ; Colem. G49 ; Attorney-General v. Gell,. Blythe v. Granville, 13 Sim. 195; 3 Ibid. 020; Braybrooke v. Attorney- Attorney-General V. MidJleton, 3 General, 9 Clark (House of Lords- THE FEDERAL TAXING POWER. 365 pressly refused to decide that the only direct taxes meant by the constitution were capitatirm taxes and land taxes, but re- i'erred to the dicta which stated that view. Federal income taxes. 728. In Springer v. United Siaies^^ the question was squarely presented as to the validity of the Federal income tax. The only question as to the validity of the tax presented in argument or dis- posed of in the opinion was: is a tax on gains, profits, and in- come a direct tax? The questions which came up in the later income tax cases,®" whether taxes on rents, profits of lands, or income of personal property are taxes on the lands and personalty themselves, hence direct taxes, were not discussed; and the argument and opinion turned on the general question of the nature of an income tax, regardless of the sources of the taxed income. The court referred to the previous cases already re- viewed, went over the historical argument as to the meaning of *' direct taxes," and expressly decided : Our conclusions are, that direct taxes, within the meaning of the constitution, are only land and capitation taxes as expressed in that instrument ; and that the tax of which the plaintifF in error complains is Mdthin the category of an excise or duty. 729. The decision in the Springer case which seemed to set at rest the question of what is direct taxation, at least in its relation to an income tax, contained an inconsistency which was afterward fatal to a tax law similar to the one there discussed. It asserted that a tax on land is a direct tax (a proposition which has never been controverted), and also that an income tax is not a direct tax. The inconsistency is revealed in the question which afterward arose : Is a tax on income which is composed of the rents of lands direct or indirect ? The decision that the only direct taxes referred to in the con- stitution are land and capitation taxes was based on the dicta of the judges in the Hylton case, the argument of Mr. Hamilton in that case as to the inequality of the carriage tax if apportioned, and the congressional practice in laying income taxes. Cases), 165; Lyall v. Lyall, Law Re- 59 102 U. S. 586, 26 L. ed. 253. ports 15 Equity, 11; Jeves v. Shad- oo Pollock v. Farmers' Loan and Tvell Law Reports, 1 Ch. App. 1 ; Trust Co., 157 U. S. 429, 39 L. ed. 759, In re Badart, Law Reports, 10 Equity, 15 Sup. Ct. Rep. 673; 158 U. S. 601, ^96 39 L. ed, 1108, 15 Sup. Ct. Rep. 912. 366 CONSTITUTIONAL LAW OF TAXATION. The income tax law of 1894. • 730. In 1894 another income tax was laid by Congress, and this tax became the subject of a litigation in which the definitions of, and the distinctions between, direct and indirect taxation, re- ceived more exhaustive treatment than had previously been ac- corded them. In these decisions®^ the economic definitions of direct taxes are accorded greater weight than in previously de- cided cases; and the historic argument is used to show that these economic definitions were in the minds of the framers of the constitution. In so far as the question of what are direct taxes was involved, the law was attacked on the following grounds : 1. Any tax on income is a direct tax. In support of this ground the economic definition of direct taxes as those which are paid directly by the citizen (indirect taxes being those which are ultimately shifted to someone else by the party who first pays to the tax collector) was urged. It was argued from the practice of the colonies and states at and prior to the adoption of the constitution, and from the fact that the writings of the earlier publicists. Smith, Turgot, and Montesquieu clearly stated this distinction, that this was the understanding of the framers of the constitution. It was pointed out that the theory which limited " direct taxes " to land and capitation taxes was based wholly upon dicta. The court was asked to limit those dicta to their proper effect, as expressions of individual opinion. In reply to these arguments the government and the support- ers of the tax relied mainly on the previous decisions and dicta, and besought the application of the doctrine of stare decisis. 731. (2.) In so far as the tax is a tax on income derived from land, it is a tax on the land itself, hence a direct tax within the meaning of all the decisions. The supporters of this view referred to decisions in the law of real property and of uses and trusts showing that the transfer of the iise or profits of land is a transfer of the land itself, and arg-ued that to take a part of the rents and profits of lands from the owner is the same thing as to tax the lands themselves. 61 Pollock V. Farmers' Loan and 15 Sup. Ct. Rep. 673; 158 U. S. 601, Trust Co., 157 U. S. 429, 39 L. ed. 759, 39 L. ed. 1108, 15 Sup. Ct. Rep. 912. THE FEDERAL, TAXING POWER. 367 To this it was replied that the owner was not taxed with respect to his lands but with respect to his income, that in a tax on lands the amount of the tax and the liability of the owner are measured solely with respect to the lands themselves; while in the case of an income tax the income from all sources is the unit and the fact that it is income from lands is an incidental and irrelevant circumstance. 732. The decision of the court was not unanimous. The whole subject was discussed in opinions both of assent and dis- sent upon the first hearing^^ and upon the rehearing.^* The points with relation to direct taxation which were finally decided were : 1. A tax on income derived from lands is a tax on the lauds themselves, hence a direct tax. 2. A tax on income derived from invested personal property is a tax on the personal property itself. Such a tax is a direct tax within the meaning of the constitution. The reasoniitg upon which these points were decided is stated at great length in the opinions. The following brief extracts, taken in connection with the arguments already recited, will show the general tenor of the reasoning: 733. The first question to be considered is whether a tax on the rents or income of real estate is a direct tax within the meaning of the constitution. Ordinarily all taxes paid primarily by per- sons who can shift the burden upon someone else, or who are under no legal compulsion to pay them, are considered indirect taxes; but a tax upon property holders in respect of their estates, whether real or personal, or of the income yielded by such estates, and the payment of which cannot be avoided, are direct taxes. ITevertheless, it may be admitted that although this definition of direct taxes is prima facie correct, and to be applied in the consideration of the question before us, yet that the constitution may bear a different meaning, and that such different meaning must be recognized. But in arriving at any conclusion upon this point, we are at liberty to refer to the his- torical circumstances attending the framing and adoption of the constitution as well as the entire frame and scheme of the instru- ment, and the consequences naturally attendant upon the one construction or the other. We inquire, therefore, what, at the time the constitution was framed and adopted, were recognized as direct taxes? What 62 157 U. S. 429, 39 L. ed. 759, 15 63 158 U. S. 601, 39 L. ed. 1108, 15 Sup. Ct. Eep. 673. Sup. Ct. Rep. 912. 368 CONSTITUTIONAL LAW OF TAXATION. did those who framed and adopted it understand the terms to designate and include? We must rememher that the fifty-five members of the consti- tutional convention were men of great sagacity, fully conversant with governmental problems, deeply conscious of the nature of their task, and profoundly convinced that they were laying the foundations of a vast future empire.®* 734. The Federalist demonstrates the value attached by Hamilton, Madison, and Jay to historical experience, and shows that they \had made a careful study of many forms of government. Many of the framers were particularly versed in the literature of the period, Franklin, Wilson, and Hamilton for example. Turgot had published in 1764 his work on taxation, and in 1766 his essav on " The Formation and Distribution of Wealth ;" while Adam Smith's "Wealth of Nations" was published in 1776. . . . They were, of course, familiar with the modes of taxa- tion pursued in the several states. From the report' of Oliver Wolcott, when Secretary of the Treasury, on direct taxes, to the House of Eepresentatives, December 14, 1796, his most important state paper,*^ and the various state laws then existing, it ap- pears that prior to the adoption of the constitution nearly all the states imposed a poll tax, taxes on land, on cattle of all kinds, and various kinds of personal property, and that, in addi- tion, Massachusetts, Connecticut, Pennsylvania, Delaware, New Jersey, Virginia, and South Carolina assessed their citizens upon their profits from professions, trades, and employments. 735. The court discussed the history of the constitutional pro- vision under review and the proceedings of the various con- ventions which adopted it and said: From these references . . . it is clear that the rule to govern each of the great classes into which taxes were divided was prescribed in view of the commonly accepted distinction be- tween them and of the taxes directly levied under the systems of the states. Reference is made to the debates in CongTess in support of this view, and to the congressional legislation laying direct taxes, and the result is summed up as follows : 64 " To many in the assembly the government. They had immediately work of the great French magistrate before them the example of Great on the ' Spirit of Laws,' of which Britain ; and they had a still better Washington with his own hand had school of political wisdom in the re- copied an abstract by Madison, was the publican constitutions of their several favorite manual ; some of them had states which many of them had as- made an analysis of all Federal govern- sisted to frame." 2 Bancroft's His- ments in ancient and modern times, lory of the Constitution, 9. and a few were well versed in the best 85 Am. State Papers, 1 Finance 431. English, Swiss and Dutch writers on THE FEDERAL TAXING POWER. 369 ^rom the foregoing it is apparent: 1. That the distinction between direct and indirect taxation was well understood by the framers of the constitution and those who adopted it. 2. That under the state systems of taxation all taxes on real estate or personal property', or the rents or income thereof, were regarded as direct taxes. 3. That the rules of apportionment and of uniformity were adopted in view of that distinction and those systems. 4. That whether the tax on carriages was direct or indirect was disputed, but the tax was sustained as a tax on the use, and an excise. 5. That the original expectation was that the power of direct taxation would be used only in extraordinary exigencies; and down to August 15, 1894, this expectation has been realized. 736. The court reviewed the cases of Pacific Ins. Co. v. SouleJ^ Veazie Bank v. Fennof' and Scholey v. ReWj^ and pointed out that in each of these cases " the decision rested on narrow ground," to wit, the distinction between an excise or charge for the privi- lege of doing business or of succession and a tax on property itself. It was pointed out that in Springer v. United States^^ the original record showed the income to have been derived partly from professional earnings (as to which it could have been sus- tained as an excise or tax on the privilege of doing business) and partly from interest on United States bonds. The action Was for ejectment brought on a tax deed issued to the United States on sale of defendant's real estate for taxes. The defendant contended that the deed was void because the tax was a direct tax and not levied in accordance with the constitution. Unless the tax was wholly invalid the defense failed, hence the validity of the tax as to either part of the income would sustain the action. 737. From the express decision of the court and from the reasoning followed in arriving at the conclusions reached both upon the hearing and the rehearing, the following propositions may be taken to be the law as to what are direct taxes within the constitution. In stating them the precise — and generally unnecessary — scientific definition of all taxes as taxes on personi is followed.™ Direct taxes are : 1. A capitation or poll tax. 2. A tax on land (i. e., a tax on persons in respect of their land or their ownership of land). 3. A tax on rents, income, or profits of land (i. e., a tax on 66 7 Wall. 433, 19 L. ed. 95. 69 102 U. S. 586, 26 L. ed. 253. 67 8 Wall. 533, 19 L. ed. 482. TO See § 43, ante. 68 23 Wall. 331, 22 L. ed. 99. 24 370 CONSTITUTIONAL LAW OF TAXATION. persons in respect of the rents, incomes, or profits derived from land). 4. A tax on personal property (i. e., a tax on persons in re- spect of their personal property or of their ownership of personal property). 5. A tax on income derived from personalty (t. e.^ a tax on persons in respect of income or profits derived by them from the use or investment of personal property). 6. A tax on persons veith respect to income derived from per- sonal employments. Although there is no express adjudication to this effect, the statements in the opinions in Pollock v. Farmers' Loan and Trust Co./"* that such taxes were considered direct taxes in the colonies lead to the opinion that taxes on such profits must be considered direct taxes, despite the distinction made as to Pacific Ins. Co. v. Sovle'^ and Spnnger v. United States.''^ Succession taxes and taxes on employments are discussed in another section.^* Apportionment of direct taxes. 738. The meaning of " direct taxes " in the constitution hav- ing been ascertained, the extent of the limitation on the power of Congress as to such direct taxes is next to be investigated. That limitation is that such taxes " shall be apportioned among the several states which may be included within this Union according to their respective numbers." ''* It is further expressed in the clause " ISTo capitation, or other direct tax, shall be laid, unless in proportion to the census or enumeration hereinafter directed to be taken." ''^ The meaning of " apportionment " as here used is clear. It is the ordinary meaning of the word and no other construction has ever been followed or suggested. Direct taxes are to be laid in such a manner that each state shall bear a proportion of the whole tax equal to its proportion of the whole population. Should such taxes (1) be apportioned among the states alone; (2) should the territories and the District of Columbia and other territory under the control of Congress be included with the states in the apportionment, (3_) may those territories be included 70a Supra. 73 § 704. 71 7 Wall. 433, 19 L. ed. 95. 74 Art. I, § 2. 72 102 U. S. 586, 26 L. ed. 253. 75 Art. I, § 9, clause 4. THE FEDERAL TAXING POWEB. 371 or omitted in the discretion of Congress, and, (4) if included, must the tax be laid proportionately or may Congress act arbitrarily? 739. These questions "were answered in the opinion of Chief Justice Marshall in Loughborough v. Blake?^ There the sole question was whether Congress had power to lay a direct tax on the District of Columbia under these provisions of the con- stitution. It was admitted that Congress might, for district purposes, tax the district, in its capacity as a local legislature. It was held that the taxing power of Congress extends to all the territory of " the American empire," that the words " through- out the United States " in the modification of the power as to uniformity of duties, imposts, and excises mean all the territory of the United States, and that inasmuch as the modification ex- tends to all that territory, the taxing power itself, including the power to lay direct taxes, extends over all that territory, whether states, territories, or unorganized districts. The clause requiring direct taxes to be apportioned among the several states according to their respective numbers, and that which provides that no capitation or other direct tax shall be laid except in accordance with the census, were taken to mean that the tax if laid on such territory must be laid in accord- ance with the census. But it was pointed out that the census is not required to be extended to the territories. 740. Hence the answers to the four questions stated are: (1) Direct taxes may be — but need not be — apportioned among the states alone. (2) They may be apportioned among both the states and terri- tories in proportion to the census. (3) The territories may be included in the tax or not, in the discretion of Congress. (4) If territories are included, the tax should be laid in pro- portion to the census. 741 . Study of the Insular Tariff Cases''' discloses that the re- sults in those cases have no effect on this interpretation of the apportionment clause as to direct taxes. While the opinion of Mr. Justice Brown in delivering the judgment of the court in 76 5 Wheat. 318, 5 L. ed. 98. 45 L. ed. 1074, 21 Sup. Ct. Rep. 7G2; 77 De Lima v. Bidwell, 182 U. S. 1, Downes v. Bidwell, 182 U. S. 244, 45 45 L. ed. 1041, 21 Sup. Ct. Rep. 743; L. ed. 1088, 21 Sup. Ct. Rep. 770. Dooley v. United States, 182 U. S. 222, iil- CONSTITUTIONAL LAW OF TAXATION. Downes v. BldwelV^ declared that the words " uniform through- out the United States," in the clause referring to indirect taxe?, are not a limitation on Congress in their application to the territories, and intimated that Chief Justice Marshall's reason- ing on that point in Loughborough v. Blake'^^ was obiter, yet two considerations exist which show that, so far as direct taxes are concerned, Loii^hborotcgh v. Blake is still to he considered .as containing a correct exposition of the rule both as to the District of Columbia and the territories. They are: (1) The decision in Loughborough v. Blake was not based fiolely on the words " throughout the United States," but also on the clause " no capitation or other direct tax shall be laid except in proportion to the census," etc., which limitation does not apply to indirect taxes which were the subject of consideration in Downes v. Bidwell. This is not a satisfactory distinction, be- cause if the reasoning of Mr. Justice Brown in Downes v. Bidwell is admitted, the constitutional limitations upon congressional power — including this limitation last stated — do not apply at all in legislation for the territories. (2) This consideration is really more valuable. It is that al- though four other justices, a bare majority of the Supreme Court, oconcurred with Mr. Justice Brown in the result reached in Downes v. Bidwell and four others disagreed with him in that result, yet none of the four who agreed and none of the four "who disagreed concurred in the view that the constitutional limita- 'tions of the powers of Congress do not apply to the territories; Ibut the whole eight''* agreed that Congress in legislating for the ^territories is bound by constitutional limitations.^ Federal taxing power cannot impede operations of state govern- ments. 742. Although the taxing power granted to the Federal govern- iment is, as stated, absolute and all-embracing as to the persons iind property within its jurisdiction, it does not extend so far ihat it can be used to embarrass or impede the operations of the 78 182 U. S. 244, 45 L. ed. 1088, 21 45 L. ed. 1088, 21 Sup. Ct. Rep. 770; :Sup. Ct. Rep. 770. opinion of Mr. Justice Gray, p. 345; 78a-S«pra. opinion of Chief Justice Fuller and ™ See opinion of Justices White, Justices Harlan, Brewer, and Peck- Shiras, and McKenna, Downes v. Bid- ham, pp. 352, 353, 354, 355. well, 182 U. S. 289, 290, 291, 292, 293, 80 And see §§ 717, 718, ante. THE FEDEKAIi TAZING POWER. 373 state governments, the continued existence and sovereignty of which, within their respective spheres, the constitution contem- plates and provides for. The state governments existed at the time the constitution was formed, the powers granted to the general government — and especially the taxing power — were not intended to destroy their efficiency or limit their sovereignty further than is expressed. If it were possible for the Federal government to impede the states in the exercise of those powers of government which are expressly reserved to them by the con- stitution,*' the Federal government might render those reserva- tions of power entirely nugatory. Especially is this so as regards the power to tax. If the power of taxation could be used to impede or hamper the states in exercising their reserved powers, all those reserved powers would be at the mercy of the Federal legislature for " the power to tax is the power to destroy." The taxing power of Congress, therefore, does not extend to the taxa- tion of any of the agencies of the state governments, directly or indirectly.** 743. For this reason it has been held that a Federal tax on the salary of a state judicial officer*^ is invalid as tending to im- pede the judicial operations of the state. A municipal corpora- tion within a state cannot be taxed by the United States on dividends or interest of stock or bonds held by it in a railroad or canal company, because the municipal corporation is a repre- sentative of the state, created by the state to exercise a limited portion of its powers of government, and, therefore, its revenues, like those of the state itself, are not taxable by the United States.** So bonds issued by a state of under its authority by its public municipal bodies are means for carrying on the work of the government and are not taxable by the United States.*^ And to tax the income or interest derived from such bonds, or, more accurately speaking, to tax persons by reason or on account of such income or interest received by them is equivalent to taxing 81 Tenth Amendment. "The powers 1108, 15 Sup. Ct. Rep. 912. See also not delegated to the United States by § 753 et seq., as to taxation of Fed- the constitution or prohibited by it to eral agencies by states, and § 823a, as the states, are reserved to the states to taxation of agencies of one state by respectively, or to the people." those of another. 82 Collector v. Day, 11 Wall. 113, 20 83 Collector v. Day, supra. L. ed 122; United States v. Railroad 84 United States v. Railroad Co., IT Co., 17 Wall. 322, 21 L. ed. 597; Pol- Wall. 322, 21 L. ed. 597. lock V. Farmers' Loan and Trust Co., 8S Mercantile Bank v. New York, 121 157 U. S. 429, 39 L. ed. 759, 15 Sup. U. S. 138-162, 30 L. ed. 895, 7 Sup. Ct. Rep. 673; 158 U. S. 601, 39 L. ed. Ct. Rep. 826. 374 constitxjtionaij law of taxation. the bonds directly, since such a tax exercises a sensible influence on the borrowing power of the state or municipality, hence such taxation is not in the power of the Federal government.*® 744. A Federal inheritance tax upon a legacy to a municipal corporation organized under the laws of a state is not a tax upon a state governmental agency and is valid. The same is doubtless true upon a legacy to the state itself. The tax is not imposed upon the state or municipality, but is a condition precedent to the transmission of the property. ^^ And by the same reasoning a Federal inheritance tax on a legacy consisting of state or munic- ipal bonds is valid.** 745. It has been contended that the Federal taxing power does not extend so far as to enable the Federal government, by its use, to destroy privileges or franchises exercised by virtue of the laws of the several states, because such a use of the power would be an invasion by the Federal government of the rights reserved to the states. This proposition has been overruled. In one case it was urged that a Federal inheritance tax law was an in- vasion of the rights reserved to the states because the effect of the extreme enforcement of such a tax would involve the power to destroy the right to receive property on the occasion of death, a subject within the exclusive control of the states. In denying this proposition the Supreme Court said : The principle is pertinent only when there is no power to tax, and has no relation to a case where such right exists. In other words, the power to destroy, which may be the consequence of taxation, is a reason why the right to tax should be confined to subjects which may be lawfully embraced therein, even although it happens that in some particular instance no great harm may be caused by the exercise by the taxing authority of a power beyond its scope. But this reasoning has no application to a lawful tax, for if it had there would be an end of all taxation; that is to say, if a lawful tax can be defeated because the power which is manifested by its imposition may, when further exer- cised, be destructive, it would follow that every lawful tax would become unlawful, and therefore no taxation whatever could be levied.** 86 Pollock V. Farmers' Loan and 88 Plummer v. Coler, 178 U. S. 115, Trust Co., 157 U. S. 429, 39 L. ed. 759, 44 L. ed. 998, 20 Sup. Ct. Rep. 829. 15 Sup. Ct. Kep. 673. 89Knowlton v. Moore, 178 U. S. 41- 87 Snyder v. Bettman, 190 U. S. 249, 60, 44 L. ed. 969, 20 Sup. Ct. Rep. 747. 47 Lu ed. 1035, 23 Sup. Ct. Rep. 803. See § 757, as to similar state tax on legacy to the Federal government. THE fbdeeaIj taxing powbk. 375 In a later case it was argued, against a Federal law taxing oleomargarine, that, as the power to regulate its manufacture and sale was in the class of powers reserved to the states, the law was void as being a usurpation by Congress of the reserved powers of the states. But the act was upheld, this contention being ex- pressly overruled.®" 746. Any act incidental to governmental actions by the states, or forming a part of the same transaction as any governmental action, is exempt from Federal taxation, even though the act be one necessary to be done by a private individual. This is the general rule which may be deduced from a recent Federal case; but possibly the language in which the rule is here stated is too general, and may be limited by later decisions. The actual decision referred to was as follows: The statutes of Illinois and the ordinances of Chicago provided for the giving of bonds by all applicants to whom licenses to sell liquor were granted in the city of Chicago. The Federal war revenue act laid a stamp tax on bonds. An applicant for a liquor license was convicted of making such a bond without affixing the stamps. On error to the Supreme Court the judgment of convic- tion was reversed. 747. Said the Supreme Court: The bonds were obviously intended to secure the proper en- forcement of the laws in respect of the sale of intoxicating liquors; the prompt payment of fines and penalties; a remedy for injuries in person, property, or means of support; and the protection of the public in divers other enumerated particulars. The granting of the licenses was the exercise of a strictly gov- ernmental function, and the giving of the bonds was part of the same transaction. To tax the license would he to impair the efficiency of state and municipal action on the subject and assume the power to suppress such action. And considering license and bond together, taxation of the bond involves the same consequences. In themselves the bonds were not mere incidents of the regulation of the traffic, but essential safeguards against its evils, and governmental instrumentalities of state and of city, as authorized by the state, to insure the public welfare in the conduct of the business, although the business itself was not governmental. They were not mere individual undertakings to secure a personal privilege, as suggested by the court below, but means for the preservation of the peace, the health, and the soMeCray v. United States, 195 U. S. 27, 49 L. ed. 78, 24 Sup. Ct. Eep. 769. 376 CONSTITXmONAL LAW OF TAXATION. safety of the community in compelling strict observance of the law, and remedying injurious results. In line with these views, the bonds in question were construed to be exempt, included in the statutory exemption of states, counties, towns, " or other municipal corporations in the exercise only of functions strictly belonging to them in their ordinary governmental, taxing, or municipal capacity." ®^ A decision of the United States Court of Claims upholds the Federal right to lay an internal revenue tax on the sale of liquors, although the business is directly carried on by a state for its profit. It is said that where a state enters into a commercial business which is a proper subject of Federal taxation it does not thereby withdraw the business from the scope of the Federal taxing power.®^* The decision is open to question and the authority cannot be regarded as final. 748. Whether a franchise granted by a state is a proper sub- ject for Federal taxation depends on the kind of franchise it is. If it is a franchise (either to do or to he) which is granted for the purpose of carrying into effect any of the government-al powers of the state it cannot be taxed by Congress.®^ If it is a franchise which is not granted for such a purpose it is evidently a proper subject for such taxation. A tax laid by Congress upon the circulation of state banks has been declared to be constitu- tional, as not being an impediment to the exercise of powers reserved to the states.^^ The tax was complained of as being in effect a tax and burden on the franchise granted by the state. The question was stated by Chief Justice Chase to be whether it was " a tax on a franchise granted by a state, which Congress, upon any principle exempting the reserved powers of the states from impairment by taxation, must be held to have no authority to lay and collect." The court, answering, said that while the reserved rights of the states and their agencies for carrying into effect those rights are not proper subjects for taxation by Congress, yet franchises granted by a state are often valuable property and when not con- ferred for the purpose of giving effect to some reserved poiver of 91 Ambrosini v. United States, 187 Farmers' Loan and Trust Co., 157 U. U. S. 1, 47 L. ed. 49, 23 Sup. Ct. Eep. 1. S. 429, 39 L. ed. 759, 15 Sup. Ct. Eep. 9U South Carolina v. United States, 673. 39 Ct. CI. 257. 93 Veazie Bank v. Fenno, 8 Wall. 92Veazie Bank v. Fenno, 8 Wall. 533, 19 L. ed. 482. 533-547, 19 L. ed. 482; Pollock v. THE PEDEKAL TAXING POWER. 377 the state are as properly objects of taxation as other property. Furthermore, it was said, a tax on the circulation is not a tax on the franchise but upon property created and " contracts made and issued tinder the franchise or power to issue bank bills." And in reply to the argument that the tax was so excessive as to in- dicate a purpose to destroy the franchise of the bank it was re- sponded that Congress in the exercise of its power to provide a currency for the country may restrain the circulation of notes not issued under its own authority. 749. The distinction taken in this case between a tax on the notes and a tax on the franchise is not well founded. The tax is in fact a tax on the corporate person, the bank, with respect to certain acts which it performs under its franchise ; i. e., the issue of notes. The performance of these acts — the issuing of notes — is an essential part of the bank's franchise (its franchise to do as distinguished from its mere right to exist) and any tax upon its acts in that regard is certainly a burden upon the franchise and impedes the taxpayer — the bank — in its exercise of the franchise. It has been practically conceded by the Supreme Court** that if an inheritance tax were based solely on the right of the state to regulate inheritances a Federal inheritance tax would be void ; and it is- expressly held®^ that a tax on the income derived from municipal bonds is a tax on the bonds themselves, and on the state governmental agency which issues them, that a tax on income received from land is a tax on land, and that a tax on income from personal property is a tax on the property. It is diiEcult to see why a tax on one of the essential acts, per- mission to do which is gra,nted by a franchise, is' not a tax on the franchise itself. The decision in this case must rest on the grounds that the franchise in question was not one conferred for carrying into effect the powers of the state, and upon the power of Congress to regulate the currency. Oppressive Federal taxation; due process of law. 749a. So far as unequal, imjust, or oppressive taxation is con- cerned, the due process of law clause in the Fifth Amendment, 94Knowlton v. Moore, 178 U. S. 41, 759, 15 Sup. Ct. Rep. 673; 158 U. S. 44 L. ed. 969, 20 Sup. Ct. Rep. 747. 601, 39 L. ed. 1108, 15 Sup. Ct. Rep. 95 Pollock V. Farmers' Loan and 912. Trust Co., 157 U. S. 429, 39 L. ed. 378 CONSTITXJTIONAL LAW OF TAXATION. if it be a limitation on congressional power at all, is a limitation of so vague and elastic character as to be hardly worth men- tioning. This is shown in a recent case where a Federal law, laying a tax of ten cents a pound on artificially colored oleo- margarine, and of one-fourth of a cent a pound on uncolored oleomargarine, was upheld. The United States sued for penalty for violating the act. The case came up on demurrer, to an answer which alleged that the coloring matter used in the preparation sold by defendant was not harmful to health, that it was the same coloring matter as was used in nearly all butter sold in the United States, that the yellow color imparted by the coloring matter was necessary to the sale of the article, and that the tax of ten cents a pound would destroy the industry. It was argued against the law that it infringed the due process of law clause in making an arbitrary distinction between colored and uncolored oleomargarine, which distinction was unjustified by any difference of fact ; and further, that the amount was so large that the tax practically destroyed a lawful and innocent business, hence was in violation of the fundamental rights guaranteed by due process of law in free govemmeints. The Supreme Court over- ruled both these contentions.®* 96McCray v. United States, 195 U. S. 27, 49 L. ed. 78, 24 Sup. Ct. Eep. 769. CHAPTER IX. IMPLIED LIMITATIONS OF THE FEDERAL CONSTI- TUTION UPON THE TAXING POWERS OF THE STATES; TAXATION OF FEDERAL AGENCIES. Where the United States and a state tax the same thing, the Federal tax has preference. 750. The general power of taxation which is reserved to the states in the constitution is the complete and uncontrolled power which belongs to sovereignty^ limited only by the expressed or necessarily implied restrictions contained in the constitution. As to persons and property it is a power concurrent with the Federal power, exercised through the same territory (so far as the state territorial jurisdiction extends), and over the same persons with respect to all their property and acts.^ This concurrent power on the part of the states is subject to two limitations, which are not expressly stated in the constitution, but which arise out of it by necessary and imavoidable implication. Where the national and the state governments tax the same article — or the same act — or the same person — the national government must first be satisfied, and in case of an inability in the subject of the tax to bear the double burden,, the state must bear the loss.' 751. In United States v. Fisher^^ the question was as to the validity of a Federal law making debts due to the United States prior liens upon the estate of a bankrupt. It was contended in argument that to give effect to the statute would be to interfere with the sovereignty of the states in the collection of their own revenue. Chief Justice Marshall said : It (the preference) is claimed under the authority to make all laws which shall be necessary and proper to carry into execu- tion the powers vested by the constitution in the government of the United States, or in any department or officer thereof. 1 See chap. II for discussion of this 3 Kent. Comm., Vol. I, pp. 392, 393 ; power. Story on the Constitution, 4th ed., 2 The Federalist, Nos. 23, 31, 32, 33; Vol. I, § 942; United States v. Fisher, Kent Comm., Vol. I, pp. 392, 393 ; Mc- 2 Cranch, 358, 397, 2 L. ed. 304. Culloch V. Maryland, 4 Wheat. 316, 3a Supra. 425, 4 L. ed. 579. [379] 380 CONSTITUTIONAL LAW OF TAXATION. In construing this clause, it would be incorrect, and would pro- duce endless diificulties, if the opinion should be maintained, that no law was authorized which was not indispensably neces- sary to give effect to a specified power. Where various systems might be adopted for that purpose, it might be said, with respect to each, that it was not necessary, because the end might be obtained by other means. Congress must possess the choice of means, and must be empowered to use any means which are in fact conducive to the exercise of a power granted by the con- stitution. The government is to pay the debt of the Union, and must be authorized to use the means which appear to itself most eligible to effect that object. It has, consequently, a right to make remittances, by bills or otherwise, and to take those precautions which will render the transaction safe. 75Z This claim of priority on the part of the United States will, it has been said, interfere with the right of the state sovereign- ties, respecting the dignity of debts, and will defeat the measures they have a right to adopt, to secure themselves against delin- quencies on the part of their own revenue officers. But this is an objection to the constitution itself. The mischief suggested, so far as it can really happen, is the necessary consequence of the supremacy of the laws of the United States on all subjects to which the legislative power of Congress extends. States cannot tax Federal agencies except with Federal permis- sion. 753. Another implied restriction upon the powers of the states is that they may not tax any of the instrumentalities or agencies of the Federal government. This was clearly held in a case* where the state of Maryland had imposed a tax upon the issue of notes by a branch of the Bank of the United States doing business in that stata The Bank of the United States was incorporated by Con- gress for the purpose of aiding in the fiscal operations of the government and for the issue of bank notes to be used as currency. In declaring the tax unconstitutional Chief Justice Marshall laid dowa the following principles, long since ^incontroverted and recog- nized as established law : That the taxing power of a state extends to every person and thing within its jurisdiction ; that it does not extend to persons and things not within the state jurisdiction ; that the government of the United States is supreme within its sphere ; that in carrying out its enumerated powers the Federal government has power to employ and create such agencies as it sees fit; that iMcCullocli V. Maryland, 4 Wheat. 316, 4 L. ed. 579. STATE TAXATION OF FEDERAL AGENCIES. 381 these agencies are not within the state jurisdiction (although oper- ating in the state territory) ; and that to allow to the states any power to impede or burden by taxation the agencies of the Federal government would be to allow them to nullify the powers granted to the Federal government, since the power to tax involves the power to tax to the point of destruction, and by taxing the agencies of Federal power to that point the states would be able to defy and render nugatory the power itself. For these reasons the tax was held unconstitutional and void. 754. The limits of the decision were carefully pointed out:" This opinion does not deprive the states of any resources which they originally possessed. It does not extend to a tax paid by the real property of the bank, in common with the other real property within the state, nor to a tax imposed on the interest which the citizens of Maryland may hold in this insti- tution, in common with other property of the same description throughout the state. State taxation of United States bonds. 755. In the application of the foregoing unquestioned principles the questions which most frequently arise are : What is a Federal agency, and where is the line to be drawn between the proper taxation of the persons and the property engaged or used in carry- iiig on the operations of the agency, and- the prohibited taxation which constitutes a burden on the operations of the agency itself ? An examination of the decided cases is necessary, both to the formulation of any general rule and to its intelligent comprehen- sion. The bonds and other securities of the United States cannot be subjected to taxation by a state or its municipalities, for a tax on the bonds is a tax on the borrowing power of the United States. The tax makes the possession of the bonds less valuable, it makes the net income from them less, it renders them less desirable as an investment, and consequently impedes and impairs the borrowing power of the Federal government.^ 5 Page 436. 907 ; The Banks v. The Mayor, 7 Wall. 6 Weston V. City Council of Charles- 16, 19 L. ed. 57; Bank v. Supervisors, ton, 2 Pet. 449, 7 L. ed. 481; Bank of 7 Wall. 26, 19 L. ed. 60; First Nat. Commerce v. New York, 2 Black, 620, Bank of Louisville v. Kentucky, 9 17 L. ed. 451; New York v. Commis- Wall. 353, 19 L. ed. 701; Home Ins. sioners of Taxes, 2 Wall. 200, 17 L. Co. v. New York, 134 U. S. 594, 33 ed. 793; Provident Institution v. L. ed. 1025, 10 Sup. Ct. Eep. 593. Massachusetts, 6 Wall. 611, 18 L. ed. 382 CONSTITUTIONAL LAW OF TAXATION. 756. Where the tax is directly imposed eo nomine upon secu- rities of the United States the question presents no difficulty. But it has not generally appeared in that simple form. Where the state did not tax the Federal securities eo nomine; but merely levied a general tax upon personal property, regardless of whether it was invested in United States securities or not, and it appeared upon certiorari that a large part of the relator's personal property was invested in such securities, the tax as to those bonds was held void.^ And certificates of indebtedness and United States notes are exempt as well as bonds.* Income derived from United States bonds is not taxable by the states.*^ Premium over par value of United States bonds is not taxable by states. The exemption is based on the bonds themselves, not their value.® Money obtained by the pledge of government bonds is taxable.®* A tax upon the franchise, or privilege to do business, of a bank or savings institution does not constitute a tax upon the bonds of the United States, although the amount of the tax is measured by the amount of the deposits of the institution, which are invested in such bonds.-'*' The grounds of the distinction are that such a fran- chise tax is a tax, not on the property of the corporation, but on the privilege of doing business, the tax would be the same no matter how the funds were invested, and the mere fact that the tax is measured by the amount of the deposits is incidental. The same rule applies in the case of a tax on the franchise or business of an insurance company, where the amount of the tax is determined by reference to its capital stock and dividends. Such a tax is not a tax on the property of the corporation but on its franchise — or privilege of conducting the insurance business — hence it is not a tax on the securities of the United States, although a part of the capital stock is invested in such securities.^' 757. Where a state imposes an inheritance tax upon the trans- mission of property by death, the tax is valid as to that portion of the estate which consists of Federal securities, for the tax is upon 1 Bank of Commerce v. New York, 2 8a Hooper v. State, Ala. , 37 Black, 620, 17 L. ed. 451. So. Rep. 662. 8 The Banks v. The Mayor, 7 Wall. lo Society for Savings v. Coite, & 16, 19 L. ed. 57 ; Bank v. Supervisors, Wall. 594, 18 L. ed. 897 ; Provident 7 Wall. 26, 19 L. ed. 60. Institution v. Massachusetts, 6 Wall. SaMosely v. State, Tenn. , 611, 18 L. ed. 907. 86 S. W. Rep. 714. n Home Ins. Co. v. New York, 134 9 Rhode Island, etc., Co. v. Arming- U. S. 594, 33 L. ed. 1025, 10 Sup. Ct. ton, 21 R. I. 33, 46 Atl. Rep. 403. Rep. 593. STATE TAXATION OF FEDEKAL AGENCIES. 383 the transfer and not on the property. ^^ A state inheritance tax may be laid on the transfer of a legacy bequeathed to the United States.*^ United States bonds may be distrained and sold, like other property, for the collection of delinquent taxes assessed against their o'wner.^* 758. Although the capital of a bank, invested in Federal securi- ties, may not be taxed by a state, the shares of such a bank in the hands of the individual shareholders may be taxed by a state/^ This is held in cases involving other questions arising under the national banking law, but the principle clearly applies to the shares of any institution. The principles to be deduced from the foregoing cases, as to stat-e taxation on the borrowing power of the Federal government, are substantially as follows: A state may not, directly or indi- rectly, burden or impede the borrowing power of the Federal gov- ernment by taxing any of the instrumentalities of that power, bonds, stock, notes, or certificates of indebtedness, except as per- mitted by statute. ^^* As to what constitutes such a burden or impediment, there is a distinction much like the distinction be- tween direct taxes and excise .taxes. Any tax which falls on the securities themselves, or the income from them,^* is void ; any tax which does not fall upon the securities, but which is in the nature of an excise, or which has only incidental reference to property for the determination of its amount, whether that property consists of Federal securities or not being an immaterial circumstance, is not a tax on the Federal borrowing power and is valid. ispiummer v. ColePj 178 U. S. 115, bard v. Board of Supervisors, 23 Iowa, 44 L. ed. 998, 20 Sup. Ct. Rep. 829; 130; Bank of Shreveport v. Board of Utiited States v. Perkins, 163 U. S. Assessors, 41 La. Ann. 181; Utica v. 625, 41 L. ed. 287, 16 Sup. Ct. Rep. Churchill, 33 N. Y. 161; People v. 1073; Mager v. Grima, 8 How. 490, 12 Commissioners, 35 N. Y. 423; Frazer L. ed. 1168. V. Seiborn, 16 Ohio St. 615; First 13 United States v. Perkins, 163 U. Nat. Bank v. Independence, 123 Iowa, S. 625, 41 L. ed. 287, 16 Sup. Ct. Rep. 482, 99 N. W. Rep. 142; People's Sav- 1073. ings Bank v. Layman, 134 Fed. Rep. 1* Scottish Union, etc., Ins. Co. v. 635. But see for a contrary view Bowland, 196 U. S. 611, 49 L. ed. 619, State v. Haight, 31 N. J. L. 399; State 25 Sup. Ct. Rep. 345. v. Hart, 31 N. J. L. 434; State v. Boyd, 15 Van Allen v. The Assessors, 3 32 N. J. L. 273, and Salt Lake City Wall. 573, 18 L. ed. 229; National Nat. Bank v. Golding, 2 Utah, I. Bank v. Commonwealth, 9 Wall. 353, 15a. /mfra, §§ 759, 762, 786. 19 L. ed. 701 ; Exchange Nat. Bank 16 Pollock v. Farmers' Loan and v. Miller, 19 Fed. Rep. 372; First Nat. Trust Co., 157 U. S. 429, 39 L. ed. Bank v. Lindsay, 45 Fed. Rep. 619; 759, 15 Sup. Ct. Rep. 673. People V. Bradley, 39 111. 130; Hub- 384 CONSTITUTIONAL LAW OF TAXATION. Exemption cannot be made instrument of fraud. 759. The exemption from taxation of United States bonds, or indeed any other exemption, cannot be made an instrument of fraud in order to avoid taxation. Upon this principle it is held that one who invests his money in United States bonds (or any other exempt property) before the assessment day, for the pur- pose of avoiding taxation and defrauding the revenue, may be taxed upon the property so invested as if he had never made the investment. In such case the bonds or other exempt properties are not deemed to be taxed, but the whole transaction is deemed to be a nullity on account of the fraud." A" statute of the United States^^ permits circulating notes of national banking associations. United States legal tender notes, and other notes, certificates of the United States payable on demand and circulating or in- tended to circulate as currency, and gold, silver, and other coin, to be taxed as money on hand or on deposit under the laws of any state or territory, provided that such taxation shall be at the same manner and rate as that at which such state or territory shall tax money or currency circulating as money within its jurisdiction. The statute expressly provides that it shall not be construed to change existing laws as to the taxation of national banks. ^® The effect of this statute is to prevent individuals or corporate bodies from obtaining exemption from ordinary taxa- tion in their several states by putting their property into the form of United States currency.^" State taxation of Federal property. 760. The property of the United States; that is, its real and personal property which it holds as owner, and not merely by vir- IT Holly Springs Savings and Ins. 18 Chap. 281, Laws of 53d Congress Co. V. Marshall County, 52 Miss. 281, (2d Session), passed Aug. 13, 1894, 24 Am. Rep. 668; Re People's Bank, Supplement to Revised Statutes, Vol. 203 111. 300, 67 N. E. Rep. 777; Dur- 2, No. 3, p. 236. ham V. State, 6 Ind. App. 23, 32 N. E. 19 See U. S. R. S., §§ 3411, 3412, Rep. 104; Mitchell v. Leavenworth 3413, 3416, 5173, 5214, 5215, 5216, County, 9 Kans. 344 ; affirmed, 91 U. S. 5217, 5218, 5219; Laws of Feb. 8, 1875, 206, 23 L. ed. 302; State v. Assessor, chap. 36, §§ 20, 21 (1 Supp. U. S. R. S. 37 La. Ann. 850; Jones v. Seward 61), March 1, 1879, chap. 125, § 22 County, 10 Neb. 154; Dixon County v. (1 Supp. U. S. R. S. 243), March 3, Halstead, 23 Neb. 697, 37 N. W. Rep. 1883, chap. 121, § 1 (1 Supp. U. S. 621; Poppleton v. Yamhill County, 8 R. S. 404). Oreg. 337; Shotwell v. Moore, 129 20 See Shotwell v. Moore, 129 U. S. U. S. 590, 32 L. ed. 827, 9 Sup. Ct. 590, 32 L. ed. 827, 9 Sup. Ct. Rep. Rep. 362. 362; decided before the enactment of this statute. STATE TAS;ATI0N OF FEDERAL AGENCIES. 385 tue of sovereign dominion, is not subject to state taxation. This rule is founded on the general proposition that the states may not impede the Federal operations. As many, if not most, of those operations involve the use of real and personal property, they could be effectually embarrassed by taxation. It is usual to pro- vide, in admitting new states to the Union, that they shall not tax Federal property. Such provisions are merely declaratory of what is undoubtedly the law, regardless of them.^^ This exemp- tion extends to assessments for local improvements^* and to lands purchased by the United States at a sale for nonpayment of direct taxes.*^ Where land owned by the United States was conveyed to a dry docji company, upon the conditions that the United States might always use the dry dock to be built thereon, free of charge, and that if the land was diverted to other than docking purposes it should revert, to the United States, it was held that the dry dock which was erected and the interest of the company in the land were taxable by the state.^* 761 . In the case of public lands the rule does not exempt lands which have been sold, but not patented ; that is, lands as to which the equitable title has passed out of the Federal government while it still has the naked legal title. Such lands are taxable by the states.^ Where anything remains to be done, by the grantee, in order to perfect his equitable right to a patent, the Federal gov- ernment has still a real and not merely a nominal title, and in such case the lands are exempt.*^ 21 Van Brocklin v. Tennessee, 117 K. I. & P. E,y. v. Davenport, 51 Iowa, U. S. 151, 29 L. ed. 845, 6 Sup. 451; Wisconsin Central K. E. v. Tay- Ct. Rep. 670, an abstract of the lor County, 52 Wis. 37. tax laws of the various states, show- 22 Fagan v. Chicago, 84 III. 227, 233, ing the exemptions of Federal prop- 234. erty, is found on pages 171-173 of 23 People v. United States, 93 111. this opinion; Wisconsin Central R. 30; Van Brocklin v. Tennessee, 117 R. Co. V. Price County, 133 U. S. 496, U. S. 151, 29 L. ed. 845, 6 Sup. Ct. 33 L. ed. 687, 10 Sup. Ct. Rep. 341 ; Rep. 670. JVIcGoon V. Scales, 9 Wall. 23, 19 24 Baltimore Shipbuilding, etc., Co. L. ed. 545 ; Northern Pacific Ry. Co. v. Mayor, 97 Md. 97, 54 Atl. Rep. 623 ; V. Patterson, 154 U. S. 130, 38 L. ed. affirmed, 195 U.S. 375, 49 L. ed. 934, 14 Sup. Ct. Rep. 977 ; Blue Jacket 242, 25 Sup. Ct. Rep. 50. V. Johnson County Commissioners, 3 25 Carroll v. Safford, 3 How. 441, Kan. 299; reversed on another point, 11 L. ed. 671, 5 Wall. 737, 18 L. ed. 667 ; Parker v. 2T Kansas Pacific R. R. Co. v. Pres- Winsor, 5 Kans. 362; Western Union cott, 16 Wall. 603, 21 L. ed. 373; Telegraph Co. v. Richmond, 26 Gratt. Union Pacific R. R. Co. v. McShane, 1, .30;- Andrew v. Auditor, 28 Gratt. 22 Wall. 444, 22 L. ed. 747; Northern 115, 124; West Hartford y. Water Pacific R. R. Co. v. Traill County, Commissioners, 44 Conn. 360; Chicago, 115 U. S. 600, 29 L. ed. 477, 6 Sup. 25 386 CONSTITUTIONAL LAW OF TAXATION. Homesteads are not taxable until the acts which entitle the settler to a patent are fully performed.^ 762. In accordance with this rule a Mexican land grant to individuals, which had been confirmed by Congress Avith a proviso that the grantors should pay the cost of survey before the con- firmation should take effect, was held not taxable before the payment of the cost of survey.^ Where it did not appear whether the Mexican land grant was one which required con- firmation an unconfirmed grant was held to be taxable,*" and the mere fact that the United States may have a possible and con- tingent interest in the lands by reason of some possible defeasance in the conditions under which they are held or by reason of some fact yet undetermined will not defeat the state right of taxation.*^ A mere possessory right in public lands may be taxed,*^ as may equitable interests and improvements on government lands owned by private persons.^* Ct. Rep. 201. These were cases where of the court of private land claims are the states attempted to tax lands not subject to territorial taxation un- granted to the companies by the til the confirmation by the court of United States. The conditions of the the survey. Territory v. Persons, grants had been complied with, except N. M. , 76 Pac. EJep. 316. that the grants provided that patents 28 Long v. Gulp, 14 Kans. 412 ; Bel- should not issue until the expense of linger v. White, 5 Neb. 399; Moriarty surveying and conveying should be v. Boone County, 39 Iowa, 634. Home- paid to the United States; and, this steads are taxable where nothing re- not having been done, patents had not mains to be done by the grantee, issued. The lands were held non- Burcham v. Terry, 55 Ark. 398, 29 taxable by the states. In consequence Am. St. Rep. 42, 18 S. W. Rep. 458. of these decisions and in order to 29 Colorado Co. v. Commissioners, prevent the companies from avoiding 95 U. S. 259, 24 L. ed. 495. taxation by failing to pay the costs 30Maish v. Arizona, 164 U. S. 599, of survey, Congress enacted the stat- 41 L. ed. 567, 17 Sup. Ct. Rep. 193. ute of July 10, 1886, chap. 764, 24 31 Maish v. Arizona, 164 U. S. 599, Stat. 143, which provided that "no 41 L. ed. 567, 17 Sup. Ct. Rep. 193; lands granted to any railroad corpo- Central Pacific Ry. v. Nevada, 162 ration by any act of Congress shall be U. S. 512, 40 L. ed. 1057, 16 Sup. Ct. exempted from taxation by states, ter- Rep. 885; Union Pacific R. R. Co. v. ritories, and municipal corporations on McShane, 22 Wall. 444, 22 L. ed. 747. account of the lien of the United 32 Maish v. Arizona, 164 U. S. 599, States upon the same for the costs 41 L. ed. 567, 17 Sup. Ct. Rep. 193 of surveying, selecting, and conveying (supra) ; People v. Shearer, 30 Cal. the same, or because no patent has 645; People v. Cohen, 31 Cal. 210; been issued therefor ; but this pro- People v. Mining Co., 37 Cal. 54 ; Peo- vision shall not apply to lands un- pie v. Donnelly, 58 Cal. 144. surveyed." Under this statute such 33 Quincy v. Lawrence, 1 Idaho, 313 ; lands surveyed but unpatented are People v. Mining Co., 1 Idaho, 409; held to be taxable. Central Pacific Oswalt v. Hallowell, 15 Kans. 154; Ry. V. Nevada, 162 U. S. 512, 40 L. Ivinson v. Hance, 1 Wyo. 270; Hod- ed. 1057, 16 Sup. Ct. Rep. 885. It is gon v. Burleigh, 4 Fed. Rep. HI. held that lands claimed under a decree STATE TAXATION OP FEDERAL AGENCIES. 387 State taxation of property of Indians. 763. The relation of Indians to the Federal government is unique. So long as they retain their tribal organization to any extent the general principle seems to be that themselves, their lands, and their personal property are excluded from state juris- diction and cannot be taxed.^* This exemption has generally been secured to them by treaty. But where a title is taken by an Indian individually in fee simple to lands within the state jurisdiction, separated from the tribal residence and under no restraint, super- vision, or control by the United States, the lands are not exempt.^* 764. Where lands were allotted to Indians in severalty, under an agreement and act of Congress whereby each Indian to whom lands were allotted received an instrument called a " patent," which declared that the United States held the legal title to the lands allotted in trust for the sole use and benefit of the Indian and his heirs for twenty-five years, and that at the end of such period the United States would convey the lands to the Indian or his heirs in fee, free from any charge or incumbrance, it was held that neither the lands, nor the improvements thereon, nor the horses, cattle, and other personal property of the Indians on such lands, could be taxed by the state in which the lands were situated, while the lands were so held in trust by the United States. The instruments called " patents " were held to be " noth- ing more than instruments or memoranda in writing, designed to show that for a period of twenty-five years the United States would hold the land allotted, in trust for the sole use and benefit of the allottee, or, in case of his death, of his heirs, and subse- quently, at the expiration of that period — unless the time were extended by the President, he would be entitled to a regular patent conveying the fee." ^® See further as to taxation of In- dians, § 929 ei seq. State taxation of Federal " franchises." 765. The principle of exemption of Federal agencies from state taxation operates also to exempt from such taxation fran- 34 The Kansas Indians, 5 Wall. 737, 38 United States v. Rickert, 188 U. 18 L. ed. 667; The New York Indians, S. 432, 47 L..ed. 532, 23 Sup. Ct. Rep. 5 Wall. 761, 18 L. ed. 708. 478. 38 Pennock v. Commissioners, 103 U. S. 44, 26 L. ed. 367. 388 CONSTITUTIONAL LAW OF TAXATION. chises and privileges granted by the United States in the fur- therance of its governmental aims or in pursuit of its constitu- tional objects. But this exemption is strictly limited and confined ■within such narrow bounds, and no more, as are made necessary by the reason of the exemption. Such franchises and privileges are exempt only to this extent: that the states may not impose upon them taxes which interfere with the enjoyment of the right or privilege itself. Examining the eases which illustrate and are the exponents of this principle, the inquiry takes two forms: (1) Which fran- chises and privileges have been held to be taxable by the states? (2) Which have been held nontaxable? 766. In the pursuit of these inquiries the two meanings of the word " franchise " must be kept in mind. In one sense a fran- chise, with reference particularly to a corporation, refers to its right or privilege of existence — its privilege to he a corpora- tion — the right granted to its members to partake of the ad- vantages of the corporate form. In another sense a franchise is a fjvivilege or right to do some particular thing, to use the streets, to do business in a particular place, or something of that nature. When discussing such a franchise, granted to individuals, as some- times occurs, the term causes no confusion of thought; but when the grant is to a coirporation, such confusion is likely to occur un- less the distinction is remembered. ^'^ Somewhat allied with the taxation of Federal franchises or privileges is the taxation of companies, performing Federal ser- vice and holding Federal privileges, upon their property. 767. An examination of some cases will be helpful: The Union Pacific Railroad, Eastern Division, was a Kansas corporation holding its charter from Kansas and having its rail- road in Kansas territory. It received a subsidy and land grant from CongTOss and undertook to perform certain duties in con- sideration therefor. The subsidy and grant were given for the purpose of assisting in the establishment of a system of Pacific railroads to be used, among other things, as Federal agencies of communication and transportation; and the duties the company undertook were in connection with these Federal objects. There was no Federal statute granting any exemption from taxation. The company was and remained a state corporation. The state 87 See §§ 51 et aeq. STATE TAXATION OF FEDERAL AGENCIES. 389 of Kansas laid a tax on certain of its property, the collection of which tax the company sought to enjoin. ^®^ It was held that while Congress might have exempted the agencies employed in the Federal service from taxation, the right to exemption could not be maintained in the absence of congressional legislation. The case was distinguished from McCulloch v. Maryland^^ in this : That in that case, although there was no express exemption, the bank had its charter from the United States and became an arm and agency of the Federal government directly by the act of its creation, while in the case at bar the corporation was not a Fed- eral agency by its essential nature but only became such to a limited extent by contract. The effect of the case is that a state corporation does not become a Federal agency exempt from taxa- tion by the mere fact of its employment in some capacity by the Federal government. And it is to be noted that the tax complained of was on the land and personalty*** of the company. There seemed to be no suggestion of a tax on any franchise. 768. The Union Pacific Railway Company was incorporated by Congress ; at the time of its incorporation all the territory through which its road was to pass was Federal territory. The purpose of its incorporation was avowedly to provide a military cmd postal agency for the gove7-nmenial service, the bonds of the government were issued in its aid, lands were granted to it, the Federal government was represented directly in its board of con- trol, it undertook to serve the government in the transportation of troops, mail, and munitions of war. In those res])ects it was concededly a Federal agency. Afterward the state of ISTebraska was created out of a part of the Federal territory through which the road ran. The state laid a tax on the real and tangible per- sonal property of the company; and immunity from the tax was sought on the ground that the company was a Federal agency.*^ It was held that the test of exemption is whether a given tax impedes the Federal agency in its Federal operation ; that a tax on the property of a Federal agent which it bears in common with other persons and property does not so impede it; that a- tax on the operations of a Federal agent does so impede it ; that the tax in the case at bar was a tax on the property merely and might properly be laid by the state. It was pointed out that the 38 Thomson v. Pacific K. R., 9 Wall. *» Page 585. 579, 19 L. ed. 792. ^i Railroad Co. v. Peniston, 18 Wall. 39 4 Wheat. 316, 4 L. ed. 579. 5, 21 L. ed. 787. 390 CONSTITUTIONAL LAW OF TAXATION. bank taxes previously held void*^ were taxes upon the operations of the Federal agency. The element emphasized in Thomson v. Pacific Railroad*^ that the corporation interested in that case was a state, and not a national, corporation, was disregarded. 769. The Western Union Telegraph Company, a New York corporation, received from the government certain privileges re- garding the use of public rgads, and in exchange bound itself to carry governmental telegraph messages. A state tax on the com- pany upon each message sent was held void as to the governmental messages, as a tax on a Federal agency.** Here the tax was upon the operations of the Federal agency in the government service and tended directly to impede those operations. 770. The state of Massachusetts laid a tax on " the corporate franchise" of telegraph companies. The valuation of such cor- porate franchise was declared to be equal to the value of the capital stock of the corporations, after deducting therefrom the value of their taxable real estate and a sum, proportioned by reference to the length of their lines, for the value of their capital stock outside the state. The state sought to collect the tax and to •enjoin the company from doing business pending its collection.*^ The company resisted the tax as a tax upon the means employed to carry on governmental service. It was held that the tax, though nominally upon the corporate franchise (which here seems to mean its right to exist and do business as a corporation, and not its privileges with regard to the use of military and post roads), was really a tax upon the property of the corporation within the state, hence a valid tax. But the state statute per- mitting an injunction against it was held invalid so far as the injunction would operate to restrain the company from using the post roads and transacting the government business.*^ The question whether the tax on the capital stock, which included all the elements which gave that stock value, including the Federal privileges, was to that extent a direct tax on the Federal privi- leges, does not seem to have been considered. It is a question which relates chiefly to method of assessment.*^ 42 McCuUoch V. Maryland, 4 Wheat. 45 Western Union Telegraph Co. v. 316, 4 L. ed. 579; Osborn v. Bank of Massachusetts, 125 U. S. 530, 31 L. United States, 9 Wheat. 738, 6 L. ed. ed. 790, 8 Sup. Ct. Rep. 961. 204. 46 See Western Union Telegraph Co. « 9 Wall. 579, 19 L. ed. 792. v. Gottlieb, 190 U. S. 412, 47 L. ed. « Telegraph Co. v. Texas, 105 U. S. 1116, 23 Sup. Ct. Rep. 730. 460, 26 L. ed. 1067. « See also Massachusetts v. West- STATE TAXATION OF FEDERAL AGENCIES. 391 771. In a case which arose soon after^^ this element was de^ cisive. The Central Pacific Eailroad Company was a California corporation to which Congress had granted certain aids, together with the franchise to construct and operate a railroad as a part of the transcontinental railway system, and which had assumed certain governmental obligations with relation to the transporta- tion of troops and mails. The state of California in assessing the company's property for taxation included all its franchises. It was held that this was error; that while the state might tax all the visible property of the company it could not tax those of its franchises which were derived from the Federal government. The gTound of the decision seems to be that a franchise, such as in this case, to do a particular thing, granted by the United States, cannot be impaired by the state and that any taxation is impairment. The exemption was not based on the theory that the railroad was a government agent by reason of any service it rendered, but that it enjoyed a privilege which, the Federal gov- ernment having constitutionally granted, the state could not im- pair. It will be seen that this exemption, while it is based on the same fundamental reasons as the exemption of governmental agencies, is not quite the same thing as that exemption. In the particular case under discussion the whole assessment was held void because the valuation of the Federal franchise was in- separably blended with the other valuations.** 772. Can earnings derived from the carriage of the United States mails be made the subject of state taxation by franchise or excise taxes on the corporations carrying them? This ques- tion was presented, but not decided, in a New York case.^" The slatute in question imposed an "excise tax or license fee" on transportation corporations, computed on the basis of its gross earnings on business " originating and terminating within the state." As to interstate mails such a tax would doubtless be in- valid.^^ As to intrastate mails, if invalid, it would be so as a ern Union Telegraph Co., 141 U. S. state taxation. Central Pacific R. R. 40 35 L. ed. 628, 11 Sup. Ct. Rep. v. California, 162 U. S. 91, 40 L. ed. 889. 903, 16 Sup. Ct. Rep. 766. 48 California v. Central Pacific R. 50 People ex rel. N. Y. Cent., etc., R. Co., 127 U. S. 1, 32 L. ed. 150, 8 R. R. Co. v. Morgan, 168 N. Y. 1, 60 Sup. Ct. Rep. 1073. N. E. Rep. 1041, affirming 57 App. 49 Subsequently it was held that the Div. 302, 68 N. Y. Supp. 135, the tax state franchise of the Central Pacific there complained of being avoided on was not merged in the Federal frali- another ground. chise so as to exempt the former from 51 See chap. X. 392 CONSTITUTIONAL LAW OF TAXATION. tax on a Federal agency, and such is probably the law. Such a, tax would be clearly a burden on the operations of the Federal agency; the power to tax those operations directly or indirectly would involve the power to increase the cost of transmission to a burdensome point. 773. Property in the hands of a receiver appointed by a Fed- eral court is subject to state taxation to the same extent as other property. ^^ Summary. 774. The principles to be deduced from these eases are: 1. The fact that any corporation or individual is employed in rendering service to the Federal government does not exempt any of the property of such corporation or individual from state taxation. ^^ 2. From various expressions in the opinions in the cases just cited, from the line of decisions in the national bank cases, and from the reason of the rule which exempts Federal agencies, it is probable that Congress may, by express legislation, exempt from state taxation so much at least of the property of such cor- poration as is actually used in the Federal employment and necessary to the discharge of such employment. 3. The operations of any corporation or individual employed as a Federal agency are exempt from state taxation. This ex- emption is limited to those operations which constitute a part of the Federal employment or are necessary to the discharge of the Federal business.*^ It is also probably limited to operations which are directly performed in the service of the republic as a result of some specific selection of the particular agency by the Federal government, and does not extend to every act or employ- ment of every person which incidentally or remotely may be a factor in the conduct of the Federal business.^* 52 Central Trust Co. v. Wabash, etc., Co., 141 U. S. 40, 35 L. ed. 628, 11 Ey. Co., 26 Fed. Eep. 11; George v. Sup. Ct. Kep. 889. St. Louis, etc., Cable Co., 44 Fed. Rep. 54 Telegraph Co. v. Texas, 105 U. S. 117; Ex parte Chamberlain, 55 Fed. 460, 26 L. ed. 1067; Western Union Eep. 704; Walters v. Western, etc., Telegraph Co. v. Massachusetts, 125 Ey. Co., 68 Fed. Rep. 1002. U. 8. 530, 31 L. ed. 790, 8 Sup. Ct. 53 Thomson v. Pacific R. E., 9 Wall. Eep. 961. 579, 19 L. ed. 792; Eailroad Co. v. 55 gee opinion in Thomson v. Pacific Peniston, 18 Wall. 5, 21 L. ed. 787; E. E., 9 Wall. 579; Eailroad Co. v. Western Union Telegraph Co. v. Peniston, 18 Wall. 5, 21 L. ed. 787 ; Massachusetts, 125 U. S. 530, 31 L. Western Union Telegraph Co. v. ed. 790, 8 Sup. Ct. Eep. 961; Massa- Massachusetts, 125 U. S. 530, 31 L. chusetts V. Western Union Telegraph ed. 790, 8 Sup. Ct. Eep. 961. STATE TAXATION OF FEDERAL AGENCIES. 393 4. In determining whether any corporation is exempt from state taxation to any extent by reason of employment in the Fed- eral service it is not material whether it owes its creation to Fed- eral or state authority. The character of the service and not the nature of the corporation is to be considered.^^ But when the question is as to the exemption of a corporation by reason of its holding a Federal privilege, the nature and origin of its corporate franchise are elements to be considered.®'' 5. A privilege or franchise granted by the United States, which it has constitutional power to grant, cannot be made the subject of state taxation.®^ If the constitution, the paramount law, bestows the power to grant it, the states have no power to impair the value of the grant by any taxation whatever; and this must be so whether or not the privilege is one which in its use assists the operations of the Federal government. Miscellaneous. 775. In line with the general principle it is held that a state may not lay an income or excise tax on the oflBce or salary of a Federal officer.®^ 776. A personal tax which impedes or may impede the opera- tions of the Federal government is void. Thus where a state laid a tax on all persons leaving the state by rail or stage this tax was held void, not as a regulation of commerce, but as impeding the functions of the general government in the movement of its officers and servants. ^° State taxation of patents and copyrights. 777. There seems to be no direct adjudication by the United States Supreme Court of the question whether a patent right granted to an inventor by the United States is such a franchise or l-'rivilege as is exempt from taxation by the states. There is language in the opinion in McCulloch v. Maryland,^ which inti- mates that such rights are exempt. Some diversity appears in the decisions of the state courts^ which will be noticed. 66 Railroad Co. v. Peniston, 18 Wall. Collector, 11 Wall. 113, 20 L. ed. 122. 5 21 L. ed. 787. See also Melcher v. Boston, 9 Mete. ' 67 McCulloch V. Maryland, 4 Wheat. 73, where a clerk in a post-office was 316 4 L. ed. 579. And see opinion in subjected to state income tax; Sweat Thomson v. Pacific K. K., 9 Wall. 579, v. Boston, etc., R. R. Co., 5 N. B. R. 19 L. ed. 792. 249; Purnell v. Page, 133 N. C. 125, 58 California v. Central Pacific E. 45 S. E. Rep. 534. R Co., 127 U. S. 1, 32 L. ed. 150, 8 60 Crandall v. Nevada, 6 Wall. 35, Sup. Ct. Rep. 1073. 18 L. ed. 745. 59 Dobbins v. Erie County, 16 Pet. 61 4 Wheat. 316, 4 L. ed. 579. 435, 10 L. ed. 1022. And see Day v. 394 CONSTITUTIONAL LAW OF TAXATION. The patent right and the tangible property manufactured under it are distinct and separate things,"^ and the tangible property manufactured under a patent is undoubtedly subject to state taxation like other tangible property. The right to manufacture or use any invention does not arise out of the Federal patent. The inventor does not receive aay affirmative privilege which he had not before the grant. The thing he does receive — and the only thing — is the right to be the sole manufacturer. It is the exclusion of others which constitutes the value of the grajit. This exclusion of others — and this alone — is the Federal franchise or privilege granted. The exemption of Federal franchises and agencies from state taxation only exists to the extent necessary to prevent impairment of the Federal privilege granted or impediment of the Federal agency. 778. It has been held that police regulations which prevent the use of a patented article are within the legislative capacity of the states. In one case^^ a state statute which operated to prevent the sale of a patented oil was held to be a legitimate exercise of the police power, the court saying : " the itse of the tangible property which comes into existence by the application of the discovery is not beyond the control of state legislation, simply because the patentee acquires a monopoly in his discovery." In another case®* Jordan was sued to recover penalties for vio- lating a state statute regarding the practice of medicine. His de- fense was that the medicine he used was one for which a Federal patent had been granted to him. This was held to be no defense. The court said in part : The sole operation of the statute (under which the patent was granted) is to enable him to prevent others from using the products of his labors except with his consent. But his own right of using is not enlarged or affected. There remains in him, as in every other citizen, the power to manage his property, or give direction to his labors, at his pleasure, subject only to the paramount claims of society, which requires that his 62 Patterson v. Kentucky, 97 U. S. Commonwealth v. Edison Electric 501, 24 L. ed. 1115; Commonwealth Light Co., 145 Pa. St. 131, 27 Am. St. V. Westinghouse Electric, etc., Co., 151 Rep. 683, 22 Atl. Rep. 841, 845. Pa. St. 205, 24 Atl. Rep. 1107, 1111; 63 Patterson v. Kentucky, 97 U. S. Webber v. Virginia, 103 U. S. 344, 26 501, 24 L. ed. 1115. L. ed. 565 ; Commonwealth v. Central, 64 Jordan v. The Overseers of Day- etc, Telephone Co., 145 Pa. St. 121, ton, 4 Ohio, 295. 27 Am. St. Rep. 677, 22 Atl. Rep. 841; STATE TAXATION OP FEDERAL AGENCIES. 395 enjoyment may be modified by the exigencies of the com- munity. . . .^^ 779. In Pennsylvania it has been held that the patent right itself, as distin^ished from the tangible article, cannot be taxed by the state. ^® In the cases cited the question arose in the form, whether that part of the capital stock of a corporation (not the shares) which was invested in patent rights could be taxed by the state. It was held that it could not. The court in the first case cited said after citing California v. Central Pacific R. R. Co.^'' to the point that a Federal franchise cannot be taxed by a state : While a patent right may not be a franchise in the strict sense of that word, it certainly resembles it in being a privilege which concerns, and is intended to benefit, the public, and which depends for existence and preservation upon the government which confers it. Such a right granted by Congress would be exposed to serious danger if every state could tax it at will, either directly or by means of a tax upon capital stock. In Pennsylvania it could be reached without difficulty by exercising a legislative power to classify subjects of taxation. Suppose a taxing statute to put together in one class all corporations whose capital stock was invested, either in whole or in part, in patents granted by the United States, and to tax them at a different rate from all other corporations. If this would be constitu- tional, the class first named might be destroyed. . . . The point decided is that the state may not tax capital stock invested in any form of the intangible right. In Maryland it is intimated that the capital stock of a corporation invested in patent rights is taxable.^ The point is not directly decided, however, since the tax in question was h'eld to be a tax on the shares, and in that view, the shares being distinct and sep- arate property,®* it is not material in what form the assets of the company are. 780. In J^ew Tork'^" the stock of corporaltions whose capital is invested in patent rights has been subjected to tax and the validity B5 To the same general effect that Commonwealth v. Edison, etc., Co., the state may control the use of prop- 157 Pa. St. 529, 37 Am. St. Rep. 747, erty created by patent, see Vanini v. 27 Atl. Eep. 379. Paine, 1 Harr. (Del.) 65; Livingston 6^127 U. S. 1, 32 L. ed. 150, 8 Sup. V. Van Ingen, 9 Johns. (jST. Y.) 507. Ct. Rep. 1073. 66 Commonwealth v. Westinghouse 68 United States Electric Power, Electric, etc., Co., 151 Pa. St. 265, 24 etc., Co. v. State, 79 Md. 70, 28 Atl. Atl. Rep. 1107, 1111; Commonwealth Eep. 768; Crown Cork and Seal Co. v. V. Westinghouse Air Brake Co., 151 State, 87 Md. 687-703, 67 Am. St. Pa. St. 276, 24 Atl. Rep. 1111, 1113; Rep. 371-379, 40 Atl. Rep. 1074. Commonwealth v. Philadelphia Co., 69 See § 49. 157 Pa. St. 527, 27 Atl. Rep. 378; TO People ex rel. The Edison Elec- .396 CONSTITUTIONAI, LAW OF TAXATION. of the tax tiplield. But the case cited cannot be regarded as an authority for the proposition that patent rights are exempt from taxation by the states, for no claim of exemption by reason of the Federal franchise appears in the reported brief for the relator, no mention of it is made by the court in the opinion, and the only point decided was that such capital was " capital employed within; the state," under the circumstances of the case/^ 781. If the case referred to, which has sometimes been citefi as authority for the proposition that patent rights can be taxed by the states, was ever authority for that proposition, it must be considered as overruled by a later case where it was directly held that such rights are exempt from state taxation.''^ 782. Capital stock issiTed in consideration of the right to use a patented article within a given territory is not capital invested in patent rights.''^ Where a privilege tax is laid upon a corporation, measured by its capital stock or assets, the corporation is not entitled to any deduction on the ground that part of its capital is invested in patent rights. The tax is on the privilege, not on the patent rights. ''* 783. Copyrights stand on the same footing as patents, and are exempt from state taxation.'^ State taxation of national banks. 784. The closing language of Chief Justice Marshall, in McCuUoch V. Maryland,''^ holding a state tax on the note issues of the United States Bank to be unconstitutional, is as follows : This opinion does not deprive the states of any resources which they originally possessed. It does not extend to a tax trie Light Co. v. Campbell, 138 N. Y. 269. See also American Mutuoscope 543, 34 N. E. Rep. 370. 20 L. R. A. Co. v. State Board of Assessors, 70 463. N. J. L. 172, 56 Atl. Rep. 369. 71 See §§ 756, 757, and Home 73 Commonwealth v. Central, etc., Ins. Co. V. New York State, 134 U. S. Telegraph Co., 145 Pa. St. 121, 27 594, 33 L. ed. 1025, 10 Sup. Ct. Rep. Am. St. Rep. 677, 22 Atl. Rep. 841. 593; 92 N. Y. 328, where it was held 74Marsden Co. v. State Board of that this New York tax was a tax on Assessors, 61 N. J. L. 461, 39 Atl. franchise and not on property, so that Rep. 638 ; People ex rel. Edison Elee- it was immaterial whether or not the trie Light Co. v. Campbell, 138 N. Y. capital of the company was invested 543, 34 N. E. Eep. 370, 20 L. R. A. in exempt property (which til the case 453. cited was United States bonds). 75 People ox rel. Johnson v. Roberts. 72 People ex rel. Edison Ilhiminat- 159 N. Y. 70, 45 L. R. A. 126, 53 ing Co. V. Board of Assessors, 156 N. N. E. Rep. 685. Y. 417, 42 L. R. A. 290, 51 N. E. Rep. 76 4 Wheat. 316, 436, 4 L. ed. 579. STATE TAXATION OF NATIONAL BANKS. 397 paid by the real property of the bank, in common with the other real property within the state, nor to a tax imposed on the interest which the citizens of Maryland may hold in this institu- tion, in common with other property of the same description throughout the state. But this is a tax on the operations of the bank, and is, consequently, a tax on the operation of an instru- ment employed by the government of the Union to carry its powers into execution. Such a tax must be unconstitutional. 785. The distinction made is between such taxation of a national bank as impedes its operation as a governmental agency and the taxation which is to be borne by its real estate and by its share- holders in common with the other citizens of a state. Clearly if the real estate of a national bank is taxed by the state in common with all the other real property in the state no burden or impedi- ment is laid upon the bank's fiscal operations, for the ownership of real estate is not, in any conceivable sense, essential to those operations. And the taxation of the citizens of the state upon their individual property in the bank is likewise no impediment, because that property is subject to tax wherever invested, and the state cannot be said to be impeding the fiscal operations of the bank by taxing a shareholder upon the share, which he may own, just as it would tax him upon the same capital if invested in some other form of property. 786. This distinction has been embodied in the Pederal statute under which states are permitted to tax the real property and shares of national banks. It is as follows :" Nothing herein (the act constituting the national banks) shall prevent all the shares in any (national banking) association from being included in the valuation of the personal property of the owner or holder of such shares, in assessing taxes imposed by authority of the state within which the association is located, but the legislature of each state may determine and direct the manner and place of taxing all the shares of national banking associations located within the state, subject only to the two restrictions, that the taxation shall not be at a greater rate than is assessed upon other moneyed capital in the hands of individual citizens of such state, and that the shares of any national bank- ing association owned by nonresidents of any state shall be taxed in the city or town where the bank is located, and not else- where. Nothing herein shall be construed to exempt the real property of associations from either state, county, or municipal taxes, to the same extent, according to its value, as other real property is taxed. 77 R. S. U. S., i 5219. 398 CONSTITUTIONAL LAW OF TAXATION. It will be observed tbat all the restrictions contained in the statute are directed to the one end — to leave the banks free and unhampered in the performance of their functions as fiscal agencies of the government; and that, this object being secured, the banks and their shareholders are in other respects subjected to the state^ jurisdictions. This proposition is the key to the interpretation of the statute. The circumstances under which the national bank- ing law was passed throw further light upon this rule of inter- pretation. 787. At the beginning of the civil war the currency of the country consisted almost entirely of notes issued by numerous state banks, independent of each other, differing in credit, re- sources, and methods of management. There was no national currency except coin and no national regulation of the currency. On July 17, 1861, the issue of treasury notes payable in coin was authorized by Congress. On December 31, 1861, the state banks suspended specie payment. On February 25, 1862, in conse- quence of this suspension and of the state of the country the issue of United States notes not payable on demand was authorized. On February 25, 1863, the national banking act was passed. This act contained no provision for state taxation, but such a pro- vision was added in 1864. The object of the act was to regulate existing currency, to provide a market for United States bonds, and to provide a safe and elastic system of national currency. The country was in a state of war — a war in which the conflict between Federal and state authority was a leading issue. Through- out the loyal states there was a strong party opposed to extensions of Federal power. The purpose of Congress in limiting state taxation was to limit it sufficiently to attain the ends enumerated, but to leave the states free from every limitation not necessary to those ends. With these considerations in mind the statutes and the decisions should be examined. 788. It is well established law that the present system of na- tional banks, as well as the old United States banks, constitute Federal agencies, organized by Congress under its power to regu- late the currency.''* 78Veazie Bank v. Fenno, 8 Wall. TJ. S. 283, 40 L. ed. 700, 16 Sup. Ct. 533, 19 L. ed. 482; Farmers' Bank v. Rep. 502; Owensboro Nat. Bank v. Deering, 91 U. S. 29, 23 L. ed. 196; Owensboro, 173 U. S. 664, 43 L. ed. Davis V. Elmira Savings Bank, 161 850, 19 Syp. Ct. Rep. 537. STATE TAXATION OF NATIONAL BANKS. 399 As such agencies they are exempt from state taxation except in so far as Congress may have waived the exemption.'^® 789. The Supreme Court has summed up the law in this re- spect as follows: National banks are instrumentalities of the Federal govern- ment, created for a public purpose, and as such necessarily sub- ject to the paramount authority of the United States, it fol- lows that an attempt, by a state, to define their duties or control the conduct of their affairs is absolutely void, wherever such attempted exercise of authority expressly conflicts with the laws of the United States, and either frustrates the purpose of the national legislation or impairs the efficiency of these agencies of the Federal government to discharge the duties for the perform- ance of which they were created. These principles are axiomatic and are sanctioned by the repeated adjudications of this court.®* It follows then necessarily from these conclusions that the re- spective states would be wholly without power to levy any tax, either direct or indirect, upon the national banks, their property, assets, or franchises, were it not for the permissive legislation of Congress.** A state law of taxation of the property or shares of such banks, which either in terms or effect does not come within the restric- tions fixed by Congress, is void.*^ Real estate of national banks. 790. As the real property of such banks is expressly made sub- ject to taxation but little controversy has arisen concerning it, and such controversies have generally turned on the construction of state statutes and have not involved the question of the state's right of taxation. It has been held that such property is to be taxed in the township where it is located.*^ In Pennsylvania the real 79 Owensboro Nat. Bank v. Owens- 8i Owensboro Nat. Bank v. Owens- boro, 173 U. S. 664, 43 L. ed. 850, 19 boro, 173 U. S. 664, 43 L. ed. 850, 19 Sup. Ct. Rep. 537 ; McHenry v. Sup. Ct. Rep. 537. Downer, 116 Cal. 20, 47 Pac. Rep. 779, 82 Van Allen v. The Assessors, 3 45 L. R. A. 737; Covington City Bank Wall. 573, 18 L. ed. 229; Lionberger V. Covington, 21 Fed. R«p. 489; Rich v. Rouse, 9 Wall. 468, 19 L. ed. 721. V. Packard Nat. Bank, 138 Mass. 527 ; 83 National Commercial Bank v. Carthage v. First Nat. Bank, 71 Mo. Mayor, 62 Ala. 284, 34 Am. Rep. 15; 508, 36 Am. Rep. 494; Pittsburgh v. National State Bank v. Young, 25 First Nat. Bank, 55 Pa. St. 45. Iowa, 311. 80 Davis V. Elmira Savings Bank, 161 U. S. 283, 40 L. ed. 700, 16 Sup. Ct. Rep. 502. 400 CONSTITUTIONAL LAW OF TAXATION. estate of national banks is taxed separately from their other capital.^ Other questions of national bank taxation arising under the laws of states are discussed in the cases cited in the note, but have no real bearing on the subject of constitutional limitation.^^ 791. The meaning of the term " real estate " is, of course, well known in the law. But the effect of a New York decision seems to be, with respect to such chattels real as leases for years and buildings erected on the lands of another, that while such es- tates are, strictly speaking, personal property, yet where the statutes and taxing system of a state regard such interests as realty for purposes of taxation, they are to be taxed against the bank as such. This was held in a case where the state officers had included such assets in the valuation of the shares, and a shareholder successfully sought to have the value of the chattels real deducted from the assessment, on the ground that they should be taxed as realty imder the statutes of the state.*® 792. The real estate of a national bank cannot be taxed where the real estate of state banks is exempt.*^ Under the Connecticut statutes it is held that the real estate of a national hank, directly used in its operations, is not taxable.*^ State taxation of personal property of national banks. 793. The personal assets of a national bank are not subject to state taxation. By permitting the taxation of the shares Con- gress has allowed the states to exercise their taxing power to the limit to which they tax their own citizens, and by not permitting has clearly excluded them from taxation of the personal assets of the bank itself. Congress " has in fact withdrawn them (the banks) and their property from the domain of state taxation, except so far as it has expressly consented that they may be taxed. That consent, so far as it has been given, is contained in section 5219 of the Revised Statutes. It does not permit taxa- tion of any property belonging to the bank, except only its real 84 Second Nat. Bank v. Caldwell, 13 86 People ex rel. Van Nest v. Corn- Fed. Rep. 429. missioners of Taxes, 80 N. Y. 573. 85Loftin V. Citizens' Nat. Bank, 85 87 City Nat. Bank of Paducah v. Ind. 341 ; Board of Commissioners v. City of Paducah, 10 Ky. L. Rep. 221, Citizens' Nat. Bank, 23 Minn. 280; 9 S. W. Rep. 218. County Commissioners v. Farmers' SSMiddletown Nat. Bank v. Middle- Nat. Bank, 48 Md. 117. town, 74 Conn. 449, 51 Atl. Rep. 138. STATE TAXATION OF NATIONAL BANKS. 401 estate." *® The exemption continues after the bank has become insolvent and has passed into the hands of a receiver, as the bank does not lose thereby its character as a Federal agency.®" State " franchise " or privilege taxes on national banks; 794. License or privilege taxes upon national banks, and fran- chise taxes or taxes on business, are clearly burdens upon the operations of the banks, hence forbidden.®^ A national bank can- not be compelled to pay taxes on its capital stock.^ That fran- chise taxes in the nature of privilege or license taxes, imposed upon national banks as a condition of doing business, are void is a plain proposition. That " franchise " taxes, imposed by the states as 'property taxes upon the intangible property of national banks, are void, is expressly held.®* In the first case cited the state of Kentucky had laid a fran- chise tax upon corporations, including banks, valuing the whole property of the bank and then deducting the tangible property to fix the value of the intangible property or " franchises," and basing the tax upon the valuation thus determined. 795. The Supreme Court, after discussing the cases interpret- ing the character of the tax, said: The tax, then, as defined in the law, as interpreted by the Court of Appeals of Kentucky, and by this court in the opinions from which we have excerpted, is a tax nominally on the fran- chise of the corporation, but in reality a tax on all the intangible property of the corporation. The proposition then comes to this : JSTothing but the shares of stock in the hands of the shareholders of a national bank can be taxed, except the real estate of the bank. The taxes which are here resisted are not taxes levied upon the shares of stock in the hands of the shareholders, but are taxes levied on the franchise or intangible property of the 89 Covington City Bank v. Coving- 45 ; Macon v. First Nat. Bank^ 59 Ga. ton, 21 Fed. Rep. 489; Rosenblatt v. 648. And see also Second Nat. Bank Johnston, 104 U. S. 462, 26 L. ed. 832 ; v. Caldwell, 13 Fed. Rep. 429 ; People V. National Bank, 123 Cal. 53, Carthage v. First Nat. Bank, 71 Mo. 69 Am. St. Rep. 32, 55 Pac. Rep. 685, 509, 36 Am. Rep. 494. 45 L. R. A. 747 ; Miller v. Heilbron, 92 First Nat. Bank v. Lampasas, 58 Cal. 133; National State Bank v. Tex. Civ. App. , 78 S. W. Rep. Young, 25 Iowa, 311. 42. 90 Rosenblatt v. Johnson, 104 U. S. 93 Owensboro Nat. Bank v. Owens- 462, 26 L. ed. 832 ; Woodward i?. Ella- boro, 173 U. S. 664, 43 L. ed. 850, 19 worth, 4 Colo. 580. Sup. Ct. Rep. 537; Third Nat. Bank 91 National Bank of Chattanooga v. of Louisville v. Stone, 174 U. S. 432, Mryor, 8 Heisk. (Tenn.) 814; Pitts- 43 L. ed. 1035, 19 Sup. Ct. Rep. 759. burgh V. First Nat. Bank, 55 Pa. St. 26 402 CONSTITUTIONAL LAW OP TAXATION. corporation. Thus, bringing the two conclusions together, there would seem to be no escape in reason from the proposition that the taxing law of the state of Kentucky is beyond the authority conferred by the act of Congress, and is therefore void for repug- nancy to such act. 796. This case disposes of the question whether the surplus funds of national banks can be taxed, since if the intangible assets of national banks cannot be taxed, their tangible personal assets certainly cannot. This had previausly been held in a ease where the shares had been taxed to the shareholders at their full value."* 796a. Both with respect to the taxation of intangible assets and with respect to the taxation of surplus or undivided profits of national banks, the argument has been made that, while in form such taxes are not imposed on the shares of stock in the hands of the stockholders, nevertheless they are equivalent to a tax on the shares of stock in the hands of the shareholders, and,, therefore, do not violate the act of Congress. This view was taken in a state court, where it was held that, where the shares are taxed to the shareholders at their par value, the bank mav be taxed on the undivided profits. The state court thought that if the state might reach the surplus indirectly by taxing the- shares at their full market value, it might reach the surplus directly by taxing the shares at their par value and taxing the surplus against the bank.®' The answer to this proposition is that Congress has not per- mitted the thing to be done in that way. 797. The Supreme Court said, in rejecting the argument, in so far as it applied to the taxation of intangible assets: It is, however, urged that whilst the taxes may not be in form imposed on the shares of stock in the names of the shareholders,, and may be in form a tax on the franchise or property of the bank, nevertheless they are equivalent to a tax on the shares of stock in the names of the shareholders, and therefore do not violate the act of Congress. But this proposition concedes thai the taxing statute does not conform to the act of Congress, and yet invoices its permissive authority, since, as already shown, without the grant made by the act of Congress 'there would he no power to tax at all. Passing, nevertheless, this contradiction, M Covington City Nat. Bank v. Gov- 56 N. H. 38, 22 Am. Rep. 416. AnJ ington, 21 Fed. Rep. 484. see Strafford Nat. Bank v. Dover, 58' 95 First Nat. Bank v. Peterborough, N. H. 316. STATE TAXATION OF NATIONAL BANKS. 403 and looking beneath the mere form, we come to the substance of things. The alleged equivalency, in order to be of any cogency, must of necessity contain two distinct and essential elements — equivalency in law and equivalency in fact. Does it contain either? is the question. 798. To be equivalent in law, involves the proposition that a tax on the franchise and property of a bank or corporation is the equivalent of a tax on the shares of stock in the names of the shareholders. But this proposition has been frequently denied by this court, as to national banks, and has been overruled to such an extent in many other cases relating to exemptions from taxation, or to the power of the states to tax, that to maintain it now would have the effect to annihilate the authority to tax in a multitude of cases, and as to vast sums of property upon which the taxing power is exerted in virtue of the decisions of this court holding that a tax on a corporation or its property is not the legal equivalent of a tax on the stock, in the names of the stockholders. . . .^* 799. While this conclusion suffices to dispose of the case, we advert to the contention that although there may not be a legal equiva- lency, there is nevertheless one in fact, and therefore the tax should be sustained. It may be that in the case before us, there is a coincidence between the sum of the tax levied upon the corporation and the amount which would have been imposed had the shares of stock in the names of the shareholders been assessed according to the act of Congress. But that this is not the neces- sary result of the taxing statute is too plain to require comment. The fact that it is not is well illustrated by Henderson Bridge Co. V. Kentucky,^ for there the tax which was sustained on the franchise or intangible propertv of the corporation admittedly enormously exceeded the total of the capital stock, and proceeded upon the theory that the bonds issued by the corporation were an element to be taken into consideration in fixing the value of the franchise or intangible property. If the mere coincidence of the sum of the taxation is to be allowed to frustrate the pro- visions of the act of Congress, then that act becomes meaningless and the power to enforce it in any given case will not exist. This follows since if mere coincidence of amount, and not legal power, be the test, only a pure question of fact would arise in any given case. The argument that public policy exacts that where there is an equality in amount between an unlawful tax and a lawful one, the unlawful tax should he held valid, does not strike us as worthy of serious consideration.^^ •6 See § 49. »8 Owensboro Nat. Bank v. Owens- 97 166 U. S. 150, 41 L. ed. 953, 17 boro, 173 U. S. 664, 43 L. ed. 850, 19 Sup. Ct. Rep. 532. Sup. Ct. Rep. 537. 404 CONSTITUTIONAL LAW OF TAXATION. State taxation of national bank shares in the hands of share- holders. 800. There are some state cases which hold or intimate that the shares of a national bank in the hands of the shareholders may be taxed by the states without the permission of Congress.^® But all the cases which have held taxation of the shares invalid be- cause of noncompliance with the conditions imposed by the act of Congress may be regarded as authorities against the propo- sition. 801. In permitting the taxation of the shares of national banks by the states Congress has drawn the line clearly between taxation of the bank itself on its capital stock, which is not allowed, and taxation of the individual shareholders on their shares, which is allowed. Where the shares are expressly included eo nomine in the assessment against the individual there is an absolute and literal compliance with the statute. A tax on the capital stock itself, in the hands of the bank, undcT any form is void.-^ A tax upon the capital of the bank is not the same thing as. a tax upon the property in the hands of the share- holders.^ 801a.. Although the bank may not be taxed on its capital, the state may lay the tax upon the shareholders and collect it from the bank. The effect of such procedure is not to tax the bank but to make the bank an agency of the state for the collection of the tax from the shareholders. The corporation is presumed to reim- burse itself by collecting the proportionate amount of tax from each shareholder.® 802. The reasons for permitting the shares thus to be taxed en masse are stated by Mr. Justice Miller as follows: It has been the practice of many of the states for a long time to require of corpoTations thus to pay the tax levied on their 99 stetson V. Bangor, 56 Me. 274; 4,809; Salt Lake City Nat. Bank v. City of Utica v. Churchill, 33 N. Y. Golding, 2 Utah, 1. 161; Parker V. Siebern, Ohio, , 2 Van Allen v. Assessors, 3 Wall. 5 Am. Law Reg. N. S. 526. 573, 18 L. ed. 229. 1 National Commercial Bank of 3 Aberdeen Bank v. Chehalis County, Mobile V. Mayor, 62 Ala. 284, 34 166 U. S. 440, 41 L. ed. 1069, 17 Sup. Am. Rep. 15; National Bank v. Ct. Rep. 629; National Bank v. Corn- Fisher, 45 Kans. 726, 26 Pae. Rep. monwealth, 9 Wall. 353, 19 L. ed. 482; Miller v. First Nat. Bank, 701; Waite v. Dowley, 94 U. S. 527, 46 Ohio St. 424, 21 N. E. Rep. 860; 24 L. ed. 181; Whitney Nat. Bank v. First National Bank v. Smith, 65 111. Parker, 41 Fed. Rep. 402; Common- 44; First Nat. Bank v. Douglas wealth v. First Nat. Bank, 4 Bush, County, 3 Dill. 298, Fed. Cas. No. 98, 96 Am. Dec. 285. STATE TAXATION OF NATIONAL BANKS. 405 shareholders. It is the common, if not the only, method of doing this in all the Few England states, and in several of them the portion of this tax which should properly go as the share- holder's contribution to local or municipal taxation is thus col- lected by the state of the bank and paid over to the local munic- ipal authorities. In the case of shareholders not residing in the state, it is the only mode in which the state can reach their shares for taxation. ... A very nice criticism ... is made to us to show that the tax must be collected of the share- holder directly, and that the mode we have been considering is by implication forbidden. But we are of opinion that while Congress intended to limit state taxation to the shares of the bank, as distinguished from its capital, and to provide against a discrimination in taxing such bank shares unfavorable to them, as compared with the shares of other corporations, and with ' other moneyed capital, it did not intend to prescribe to the states the mode in which the tax should be collected. The mode under consideration is the one which Congress itself has adopted in collecting its tax on dividends, and on the income arising from bonds of corporations. It is the onlv mode which, certainly and without loss, secures the payment of the tax on all the shares, resident or nonresident; and, as we have alreadv stated, it is the mode which experience has justified in the New England states as the most convenient and proper, in regard to the numerous wealthy corporations of those states. It is not to be readily inferred, therefore, that Congress intended to prohibit this mode of collecting a tax which they expressly permitted the states to levy.* 803. Statutes which, in terms, apparently tax the stock or capital of the national bank itself, but which are capable of an interpretation which makes the tax one on the shares in the hands of the stockholders, the bank being made the agent, are given such an interpretation. Thus a statute of Washington, which, standing alone, provided that national banks should report the amount of their capital, surplus, and undivided profits, and that " the aggregaie amount of capital, surplus, and undivided profils shall he assessed and taxed as other like property in the state is assessed and taxed " was construed in connection with another sec- tion which provided that each " bank and banking association shall be liable to pay any taxes assessed against them as the agent of each of its shareholders, owners or ovsmer under the provisions of this act, and may pay the same out of their individual profit account or charge the same to their expense account, or to the 4 National Bank v. Commonwealth, 9 Wall. 353, 361, 363, 19 L. ed. 701. 406 CONSTITUTIONAL LAW OF TAXATION. accounts of such shareholders, owners or owner in proportion to their ownership ;" and as so construed w.as upheld, as laying a tax on the shares which was paid by the bank as the agent of the shareholders.^ 804. The Supreme Court said in this case® that " it was not alleged in the hill or claimed on argument that the hank ivas not in possession of funds belonging to the stockholders severally, sufficient to pay the tax, proportioned to their ownership of stock," the intimation being that if such had been the ease, a different result might possibly have been reached. What is other moneyed capital? 805. It is provided in the Federal statute permitting state tttsa- tion of national bank shares that such taxation " shall not be at a greater rate than is assessed upon other moneyed capital in the hands of individual citizens." "^ In the construction of the statute it has frequently been necessary to determine what is meant by " other moneyed capital." 806. The rule for determining whether any particular form of property is within the terms " other moneyed capital " is found in the purpose of the law. That p'urpose was to permit taxation which should not interfere with the banks as governmental agen- cies, and to prohibit such taxation as should interfere with them as g'overnmental agencies. To discriminate against them in favor of other banks or institutions doing the same kind of business v;ould interfere with their growth, spread, and usefulness, and thus hamper their paiblic employments. But to tax some kinds of investment more lightly than investments in the banking busi- ness is not a discrimination against the national banks if all banks and bank shares are taxed alike. Henoe the rule that " other moneyed capital " means only capital which comes into business competition with national banking capital and does not mean every form of monetary investment.* 5 Aberdeen Bank v. Chebalis County, Bank v. Chehalis County, 166 tJ. S. 166 U. S. 440, 41 L. ed. 1069, 17 Sup. 440, 41 L. ed. 1069, 17 Sup. Ct. Ct. Rep. 629, affirming 6 Wash. 64, Rep. 629; First. Nat. Bank v. 32 Pae. Rep. 1051. Ayers, 160 U. S. 660, 40 L. ed. 6 Page 446. 573, 16 Sup. Ct. Rep. 412 ; Talbott 7U. S. R. S., § 5219. V. Silver Bow County, 139 U. S. 438, sXational Bank of Wellington v. 35 L. ed. 210, 11 Sup. Ct. Rep. 594; Chapman, 173 U. S. 205, 43 L. ed. Palmer v. Meilahon, 133 U. S. 060, 669, 19 Sup. Ct. Rep. 407; Aberdeen 33 L. ed. 772, 10 Sup. Ct. Rep. 324; STATE TAXATION OF NATIONAL BANKS. 407 807. The key to the proper interpretation of the act of Congress is its policy and purpose. . . . A tax upon the money of individuals, invested in the form of shares of stock in national banks, would diminish their value as an investment and drive the capital so invested from this employment, if at the same time similar investments and similar employments under the authority of state laws were exempt from an equal burden. The main purpose, therefore, of Congress in fixing limits to state taxation, on investments in the shares of national banks, was to render it impossible for the state, in levying such a tax, to create and foster an unequal and unfriendly competition, by favoring institutions or individuals carrying on a similar busi- ness and operations and investments of a like character. The language of the act of Congress is to be read in the light of this policy. . . . The business of banking, as defined by law and custom, consists in the issue of notes payable on demand, intended to circulate as money where the banks are banks of issue; in receiving deposits payable on demand; in discounting commercial paper; making loans of money on collateral security; buying and selling bills of exchange ; neq-otiating loans, and deal- ing in negotiable securities issued by the government, state and national, and municipal or other corporations. These are the operations in which the capital invested in national banks is employed, and it is the nature of that employment which consti- tutes it in the eye of this statute " moneyed capital." Corpora- tions and individuals carrying on these operations do come into competition with the business of national banks, and capital in the hands of individuals thus emploved is what is intended to be described by the act of Congress.^ 808. " Moneyed capital " does not mean all capital the value of which is measured in terms of money, neither does it necessarily include all forms of investments in which the interest of the owner is expressed in money. Shares of stock in railroad com- panies, mining companies, manufacturing companies, and other corporations are represented by certificates showing that the owner is entitled to an interest expressed in money value in the entire capital and property of the corporation; but the property of the corporation which constitutes this invested capital may consist mainly of real and personal property which, in the hands of individuals, no one would think of calling moneyed capital, and its business may not consist in any kind of dealing in money or conjmercial representatives of money.^" First Nat. Bank v. Waters, 19 Blatehf. 9 Mercantile Bank v. New York, 121 242, 7 Fed. Kep. 152; Mercantile Nat. U. S. 138, 30 L. ed. 895, 7 Sup. Ct. Bank v. Shields, 59 Fed. Rep. 952; Rep. 826. Commercial Bank v. Chambers, 182 U. lO National Bank of Wellington v. S. 556, 45 L. ed. 1227, 21 Sup. Ct. Chapman, 173 U. S. 205-214, 43 L. Rep. 863; Ankeny v. Blakely, 44 ed. 669, 19 Sup. Ct. Rep. 407. Oreg. 78, 74 Pac. Rep. 485. 408 CONSTITUTIONAL LAW OF TAXATION. 809. Moneys invested in corporations or in individual enter- prises that carry on the business of railroads, manufacturing enterprises, mining investments,^* trust companies,*" building and loan associations,^^ and in mortgages are not moneyed capital "within the meaning of the act of CongTess ; such stocks as those in insurance companies may be legitimately taxed on income instead of value, because such companies are not competitors for business with national banks." An allegation that, while national bank shares were taxed " large amounts of taxable moneyed capital owned by resident citizens and invested in interest bearing loans and securities " were not taxed, which " other moneyed capital was all the moneyed capital in the city owned by resident individual citizens and invested in interest bearing loans, discounts and securities, except that invested in in- corporated banks located in that city," does not make out a case of discrimination against the national banks; as "we are still uninformed whether the moneyed capital left unassessed was, as to any material portion thereof, moneyed capital coming into com- petition with that of national banks. The averment that the ' moneyed capital ' exempted was ' taxable,' does not enable us to say that it therefore consisted of investments within the meaning of the term ' moneyed capital ' as used in the act of Congress." *'* 810. It is to be observed that the words of the law do not em- biaoe all " other moneyed capital " but only " other moneyed capi- tal in the hands of individual citizens." This excludes other mon- eyed capital in the hands of corporations, although the business of some corporations may be such as to make the shares therein be- longing to individual citizens moneyed capital, as in the case of banks. The terms of the act include shares of stock or other inter^ ests owned by individuals in all enterprises in which the capital employed in carrying on the business is money, where the object of the business is the making of money. The act includes money in the hands of individuals employed in a similar way, invested in loans, or in securities for the payment of money, either as an investment of a permanent character, or temporarily, with a view 11 Talbott V. Silver Bow County, 139 l* Aberdeen Bank v. Chehalis U. S. 438, 35 L. ed. 210, 11 Sup. Ct. County, 166 U. S. 440-461, 41 L. ed. Rep. 594. 1069, 17 Sup. Ct. Rep. 629. 12 Mercantile Bank v. New York, IB Bank of Commerce v. Seattle, 166 121 U. S. 138, 30 L. ed. 895, 7 Sup. U. S. 463, 41 L. ed. 1079, 17 Sup. Ct. ■ Ct. Hep. 826. Rep. 996. 13 Consolidated Nat. Bank v. Pima Co., Arizona Supreme Court, 1897. STATE TAXATION OF NATIONAL BANKS. 409 to sale or repayment and reinvestment. In this way the moneyed capital in the hands of individuals is distinguished from what is known generally as personal property.^® Not every act discriminating against national banks, in favor of other moneyed capital, is condemned. 81 1. In pure theory, of course, any exemption whatever of any property from taxation is a discrimination against all property not exempted, so that, viewing the subject in such an aspect, no state could tax national bank shares at all if it had on its statute books any law exempting any moneyed capital, however small in amount. This is not the true or the reasonable construction of the statute. The right of every government to exercise a reasonable discretion in the promotion of public objects by exempting certain property from taxation, is well established and has been upheld under constitutional provisions requiring equality and uniformity in taxation. Congress could have denied to the states altogether the right to tax national bank shares, but having granted it, the grant should not be so construed as to make it worthless, for the right of taxation would be worthless if every exemption of other prop- erty, however slight or reasonable, were held to be a discrimination forbidden by the act. So a reasonable exemption, in accord with custom and based on motives of public policy, is held not to be a discrimination within the meaning of the act." It was not in- tended by Congress to impair the discretionary right of the states to exempt property, the only purpose of the act is to prevent un- friendly discrimination.^^ And. where a state by contract made before the passage of the national banking law had partially ex- empted two banks, that exemption did not prevent the state from taxing national banks.^^ 16 Mercantile Bank v. New York, v. School Directors, 23 Wall. 480, 23 121 U. S. 13S, 156, 157, 30 L. ed. 895, L. ed. 112. 7 Sup. Ct. Eep. 826. is Adams v. Nashville, 95 U. S. 19, IT So held as to savings banks and 24 L. ed. 369. charitable institutions, however large 19 Lionberger v. Rouse, 9 Wall. 468, the exemption, in Mercantile Bank v. 19 L. ed. 721. See 43 Mo. 67. But New York, 121 U. S. 138, 30 L. ed. see First Nat. Bank v. Stone, 88 Fed. 895, 7 Sup. Ct. Rep. 826; National Rep. 408, where a state's disability to Bank of Wellington v. Chapman, 173 tax certain banks, due to the applica- U. S. 205, 43 L. ed. 669, 19 Sup. Ct. tion of res judicata, was held to con- Rep. 407. As to certain mortgages, stitute such discrimination, bonds, and recognizances see Hepburn 410 CONSTITUTIONAL LAW OF TAXATION. 81 2. From the foregoing principles based on the purpose of the act, it follows that when the state, in the exercise of its power of exemption, carries the exemption of other property so far as to amount, in fact, to unfriendly discrimination, the statute operates a.nd prevents the taxation of the national bank shares under such circumstances. Such a condition arises when the exemption is of other moneyed capital which comes into competition with the capi- tal invested in national bank shares, to such an extent as to hamper the spread and growth of the bank's operations. It is, therefore, held that where a large and material part of the moneyed capital of a state is so exempted (the exemptions in the cases cited not being of savings bajik capital) such exemption constitutes a dis- crimination which is forbidden by the statute.^'* Assessment of bank shares " at a greater rate " than other moneyed capital. 813. In determining what constitutes assessment " at a greater rate " the same general purpose of the act — to prevent in fact discrimination against the national banks — furnishes the key to interpretation. If " rate " merely means the percentage levied by the state upon the taxable property of the citizen, as finally valued, it is obvious that by adopting a system of valuation which in fact valued bank shares at a higher proportion with relation to real value than other moneyed capital, or by permitting deductions from the valuation, to owners of some moneyed capital, which should not be permitted to owners of national bank shares, a state could comply with the letter and evade the spirit of the law. But this cannot be done. The words " assessment. . at a greater rate " include the whole process by which the amount of the tax which the individual is to pay is ascertained ; and any state law, which, in terms or in effect, by the method of assessment or valua- tion, or by permitting discriminative deductions, operates to take more in proportion to value from the owner of national bank shares than from the individual owner of other moneyed capital violates the congressional enactment. 20Boyer v. Boyer, 113 U. S. 690, judgments, recognizances, moneys due 28 L. ed. 1089, 5 Sup. Ct. Rep. 706, on contracts for sale of real estate, a case involving the validity of county and loans by corporations; Whitney taxation of national bank shares where Nat. Bank v. Parker, 41 Fed. E,ep. the state lavi^ exempted from county 402. And see Boyer's Appeal, 103 Pa. taxation railroad securities, certain St. 387. shares of other corporations, mortgages. STATE TAXATION OF NATIONAL BANKS. 411 814. Thus it is held in a number of cases that where the indi- \-idual owners of other moneyed capital are allowed to deduct their ■debts from the assessed valuation of their property and the owners of national bank shares are not allowed to make such deduc- tions, a case of discrimination is presented.^^ Generally the same deductions or credits must be allowed to holders of national bank shares as are allowed to owners of other moneyed capital.^^ To permit state banks to deduct from their assessments funds invested in nontaxable securities does not constitute a discrimina- tion against owners of national bank shares who are not permitted to make such deductions, inasmuch as a tax on the capital and a tax on the shares are distinct things. ^^ 815. Statutes which provide in the case of national banks and incorporated state banks for a taxation of the shares at their true, value in money and which require such banks to return to the auditor, for the purposes of such assessment, their assets and liabilities, and which allow private bankers to deduct from their assets for taxation such of their debts as are connected with the banking business, do not discriminate as between the national bank shareholders and private bankers, although the shareholders are not allowed to deduct their debts from the value of their shares. In order to arrive at their (the shares) true value in money, the bank returns to the auditor the amount of its liabilities as well as its resources. Thus, in both incorporated and unincor- porated banks the same thing is desired, and the same result of assessing the value of the capital employed in the business, after the deduction of the debts incurred in its conduct, is arrived at 21 Whitbeck v. Mercantile Nat. 309 ; Whitney Nat. Bank v. Parker, Bank of Cleveland, 127 U. S. 193, 22 41 Fed. Rep. 402; Mercantile Nat. L. ed. 118, 8 Sup. Ct. Rep. 1121; Mc- Bank v. Shields, 59 Fed. Rep. 952; Henry v. Downer, 116 Cal. 20, 47 Pac. City Nat. Bank v. Paducah, 2 Flip. Rep. 779, 45 L. R. A. 737; People v. C. C. 61, 1 Fed. Cas. No. 2,743; Evans- Weaver, 100 U. S. 539, 25 L. ed. 705 ; ville Nat. Bank v. Britton, 10 Biss. Wasson v. First Nat. Bank, 107 Ind. 503, 8 Fed. Rep. 867, 105 U. S. 322, 206, 8 N. E. Rep. 97; First Nat. Bank 20 L. ed. 1053; Wasson v. First Nat. v. Albia, 86 Iowa, 28, 52 N. W. Rep. Bank, 107 Ind. 206, 8 N. E. Rep. 97; 334; City of Newport v. Mudgett, 18 National Bank v. Fisher, 45 Kan. 726, Wash. 271, 51 Pac. Ren. 466; Ankeny 26 Pa*. Rep. 482; McAdeu v. Board V. Blakely, 44 Oreg. 78, 74 Pac. Rep. of Commissioners, 97 N. C. 355, 2 S. 485. E. Rep. 670 ; Ruggles v. Fond du Lac, 22 Supervisors v. Stanley, 105 U. S. 53 Wis. 436, 10 N. W. Rep. 565; 305 26 L. ed. 1044; National Albany Weston v. Manchester, 62 N. H. 574. Exchange Bank v. Wells, 18 Blatchf. 23 First Nat. Bank v. Farwell, 10 478, 5 Fed. Rep. 248; Richards v. Biss. 270, 7 Fed. Rep. 518; Exchange Rock Rapids, 31 Fed. Ren. 505; First Nat. Bank v. Miller, 19 Fed. Rep. 372. Nat. Bank v. Richmond, 39 Fed. Rep. 412 CONSTITUTIONAL LAW OF TAXATION. in each ease as nearly as is possible, considering the difference in manner in which the moneyed capital is represented in imincor- porated banks as compared with incorporated banks which have a capital stock divided into shares. That mathematical equality is not arrived at in the process is immaterial.^* 816. It was contended in a recent case that national bank shareholders were the subjects of unfriendly discrimination, and were denied the equal protection of the laws, when, in estimat- ing the value of the assets for the purpose of arriving at the value of the shares, the assessors took into consideration the value of the real estate, situated ontside the state, owned by the bank. Said the Supreme Court: There is obviously no merit in the further contention that reversible error was committed because of the refusal to deduct from the value of the shares of stock the assessed value of real estate owned by the bank, situated in other states than Utah. There was no proof that such a deduction was authorized by the laws of Utah in valuing shares of stock of other than national banking associations. On the contrary, the Supreme Court of Utah, from an examination of the several constitutional and statutory provisions respecting the subject of taxation in Utah, concluded that the only deductions which were authorized in the assessment of the shares of stock of national banks or other cor- porations organized and doing business in the state were deduc- tions from the value of the shares of the value of real estate situate in Utah. Manifestly, the purpose was to prevent double taxation by the state, a tax on the real estate as such, and a further tax thereon by a tax on the stock to the extent that such real estate entered into the value of the stock. As the national banking law, however, permits the taxation of shares of stock of a national bank in the state where the bank is domiciled, the state of domicile is of course entitled to collect taxes upon the full value of such shares of stock. While real estate of a bank situated outside of the state of domicile is taxed in the state of its situs, yet the value of such real estate necessarily enters into and is considered in estimating the value of the shares of stock, and to deduct the value of the real estate would, to the extent of such deduction, reduce the real value of the shares, without a compensatory equivalent.^^ 817. The mere fact that some debts are allowed to be deducted by holders of certain classes of moneyed capital from some 24 First Nat. Bank of Wellington v. 25 Commercial Bank v. Chambers, Chapman, 173 U. S. 205, 43 L. ed. 182 U. ,S. .556, 45 L. ed. 1227, 21 Sup. 669, 19 Sup. Ct. Rep. 407. Ct. Rep. 8G3, affirming 21 Utah, 324, fil Pac. Rep. 560, 5i, L. R. A. 346. STATE TAXATION OF NATIONAL BANKS. 413 moneyed capital, while holders of national bank shares are not allowed to make such deductions, is not of itself sufficient to make out a ease of unlawful discrimination. It must clearly appear that the amount of moneyed capital from which debts are allowed to be deducted, as compared with the amount in- vested in shares of national banks, is so large as to leave no doubt that the discrimination is real and substantial. Thus statutes of Ohio have been upheld which allowed owners of " credits " to deduct certain kinds of their debts from the total amount of their credits in valuing their property for taxa- tion, while no such right was given to owners of property other than " credits," and no such deduction was allowed to share- holders in national banks. It was argued against the law that shares in national banks shojild be treated the same as credits, and their owners should be permitted to deduct their debts from the valuation of that property. It appeared that " credits " did not include investments in bonds and stocks, or claims for de- posits in banks, or the surplus or undivided profits of savings banks or unincorporated banks, or bank-notes. The term did include all legal claims or demands for labor and service. 818. Said the court: These claims (for service or labor) are not in any sense of the word moneyed capital. They include all claims for professional or clerical services, as well as for what may be termed manual labor, and their total must amount to a large sum. What pro- portion that total bears to the whole sum of credits we do not know, and the record contains no means of ascertaining. It is impossible to tell from anything appearing in this record what proportion of the whole sum of credits consists of moneyed capital within the meaning of the Federal act. We know that claims for labor or services do not consist of that kind of capital. We also know that there are nrobably large amounts of other forms of property which might enter into the class of credits as defined in the act which would not be moneyed capital within the meaning of the act of Congress, as that meaning has been defined by this court in the cases above cited. It is thus seen that there are large and unknown amounts of what are in the act termed " credits " which are not moneyed capital, and that the total amoimt of credits which are moneyed capital, within the definition given by this court to that term, is also unknown. That portion of credits which is not moneyed capital, as so defined, does not enter into the question, because the comparison must be made with other moneved capital in the hands of indi- vidual citizens. We are thus wholly prevented from ascertaining 414 CONSTITUTIONAL LAW OF TAXATION". what proportion the moneyed capital of individual citizens, in- cluded in the term "credits" (and from which some classes of dehts may be deducted), bears to the amount Invested in national bank shares. We are, therefore, unable to say whether there has or has not been any material discrimination such as the Federal statute was enacted to prevent.^* 819. The effect of these cases with respect to deduction of debts from credits seems to be to overrule the cases in which re- fusal to allow deduction of debts from national bank shares, while allowing deduction of debts from credits, is held to be discrimination. Some such cases are cited.^^ 820. In some cases shares of stock in national banks have been regarded as " credits " within the meaning of statutes allow- ing the deduction of debts from credits in making the valuation.^ Discrimination in methods — taxing shares of national banks and property of state banks. 820a. It is undoubtedly the law that the statute does not re- quire the states to conform their methods of taxing state banks- to the method of taxing national bank shares. No conflict neces- sarily arises between the act of Congress and the state law, solely because the latter provides one method for taxing state banks and other moneyed corporations, and another method for taxing national bank shares.^® A state may, therefore, tax national bank shares, while exempting the shares and taxing the capital or prop- erty of state banks, if there be no actual, substantial discrimina- tion in effect against the national banks.^'* Where, however, the difference in method actually operates tO' the disadvantage of the national banks, the state law in that respect is void.^"" A quite recent case, in which the law of Cali- 26 National Bank of Wellington v. Iowa, 28, 52 N. W. Rep. 334; City of Chapman, 173 U. S. 205, 43 L. ed. Newport v. Mudgett, 18 Wash. 271^ 669, 19 Sup. Ct. Rep. 407; to same ef- 51 Pac. Rep. 466; Ruggles v. Fond du feet, First Nat. Bank of Garnett v. Lac, 53 Wis. 436, 10 N. W. Rep. 565. Ayres, 160 U. S. 660, 40 L. ed. 573, 29 San Francisco Nat. Bank v. 16 Sup. Ct. Rep. 412; Commercial Dodge, 197 U. S. 70-79, 49 L. ed. 669,. Bank v. Chambers, 182 U. S. 556, 45 25 Sup. Ct. Rep. 384; Nevada Nat. L. ed. 1227, 21 Sup. Ct. Rep. 863. Bank v. Dodge, 119 Fed. Rep. 57. 27McGuire v. Board of Revenue, 71 sold.; Davenport Bank v. Daven- Ala. 401 ; Pollard v. State, 65 Ala. port Board of Equalization, 123 U. S.. 628; Miller v. Heilbron, 58 Cal. 133; 83, 31 L. ed. 94, 8 Sup. Ct. R«p. 73_ Wasson v. First Nat. Bank, 107 Ind. soa Covington v. First Nat. Bank, 206, 8 N. E. Rep. 97. 198 U. S. 100, 49 L. ed. 963, 25 Sup.- 28 First National Bank v. Albion, 86 Ct. Rep. , where a law which placed. STATE TAXATION OF NATIONAL BANKS. 415 fornia as to the taxation of banks was condemned, illustrates this proposition. The law of California provided for the taxa- tion of national bank shares at market value, and for the taxation of state banks on their property, exempting state bank shares. But, as construed by the Federal Supreme Court, the law did not imperatively require that the intangible assets or franchises of state banks should be included in the valuation of their prop- erty. The value of intangible assets or franchises, it was held, was necessarily included in the market value of the shares of national banks, hence it was held that there was a discrimina- tion in this respect against the national banks.^* 821. Where discrimination occurs by reason of the action of the state's taxing officers, although not by the law of the state, the courts will protect against such discrimination. Thus where a statute of Ohio provided for a valuation of all personal pro]5- erty at its actual cash value, but the systematic practice of tho taxing officers was to assess national bank shares at or near their actual value, and other moneyed capital at less than its actual value, the collection of the tax on the national bank shares was enjoined.^^ Likewise, where the local officers had assessed the bank shares at 60 per cent, of their true value in money, in ac- cordance with the practice adopted for the valuation of other moneyed capital, and a state board of equalization had increased the valuation to 65 per cent.,, no corresponding increase being made in the valuation of other moneyed capital, the case is one of discrimination to be enjoined.^^ 822. It seems from the cases cited that violation of the con- gressional statutes will not be deemed to exist, at least not to the extent of justifying injunction, unless the discrimination and disparity in valuation are the results of systematic, and, to some extent, general, action on the part of the officers of the state. If the discrimination is the act of some isolated individual the courts of the state are probably the primary sources of relief. a retroactive tax on the shares of Jose Gas Co. v. January, 57 Cal. 614. national banks was held void for dis- See Ankeny v. Blakely, 44 Oreg. 78, crimination. 74 Pae. Rep. 485. 31 San Francisco Nat. Bank v. 32 Pelton v. National Bank, 101 U. Dodge, 197 U. S. 70, 49 L. ed. 669, 25 S. 143, 25 L. ed. 901 ; Cummings v. Sup. Ct. Rep. 384, construing Bank National Bank, 101 U. S. 153, 25 L. of California v. San Francisco, 142 ed. 903. Cal. 276, 100 Am. St. Rep. 130, 75 33 Whitbeck v. Mercantile Nat. Pac. Rep. 832, Spring Valley Water Bank of Cleveland, 127 U. S. 193, 32 Works v. Schottler, 62 Cal. 69, San L. ed. 118, 8 Sup. Ct. Rep. 1121. 416 CONSTITUTIONAL LAW OF TAXATION, It is necessary in order to invoke the Federal statute that there shall be either a discrimination on the face of the state statute or a material discrimination in fact.^* Individual cases of dis- crimination will not invalidate a state statute.*® To make a case of discrimination the legislative intent to discriminate must either be proven, or presumed from the fact that the statute results in actual discrimination.^® The presumption is that no discrimi- nation was intended.*^ A law providing that the tax on the shares of state banks shall be collected from the shareholders directly, while the tax on the shares of national banks shall be collected from the bank does not constitute discrimination against the na- tional bank shares.^* If the valuation of the bank shares does not involve the dis- crimination prohibited by the statute it is immaterial what sys- tem of valuation is followed, that being a matter left to the con- trol of the states. They may be assessed at more than their par value,*^ or at their actual market value.*" 823. The amendatory act of 1868 declares the "place" of taxation to be the state where the bank is located. The tax on shares held by nonresidents of the state is to be imposed in the city or towti where the bank is located. The place of making as- sessments on resident shareholders, whether at their homes or in the city where the bank is located, is within the discretion of the state legislature.*^ State taxing bonds of another state. 823a. Courts have been asked to hold that the provision of the constitution to the effect that " full faith and credit shall be given in each state to the public acts, records, and judicial pro- ceedings of every other state," is a limitation of the taxing power Si First Nat. Bank v. Ayres, 150 ner, 116 Cal. 20, 47 Pae. Rep. 779, 45 U. S. 660, 40 L. ed. 573, 16 Sup. Ct. L. R. A. 737. Rep. 412; National Bank of Welling- 37 Van Slyke v. State, 23 Wis. 655. ton V. Chapman, 173 U. S. 205, 43 L. 38 Merchants and Manufacturers' ed. 669, 19 Sup. Ct. Rep. 407; Daven- Bank v. Pennsylvania, 167 U. S. 461, port Bank v. Davenport Board of 42 L. ed. 237, 16 Sup. ft. Rep. 829. Equalization, 123 U. S. 83, 31 L. ed. 39 Hepburn v. The School Directors, 94, 8 Sup. Ct. Rep. 73. 23 Wall. 480, 23 L. ed. 112. 35 Supervisors v. Stanley, 105 U. S. ■40 People v. Commissioners of Taxes 305, 26 L. ed. 1044. and Assessments, 94 U. S. 415, 24 L. 36McMahon v. Palmer, 102 N. Y. ed. 164. 176, 55 Am. Rep. 796, 6 N. E. Rep. « Tappan v. Merchants' Nat. Bank, 400; Exchange Nat. Bank v. Miller, 19 Wall. 490, 22 L. ed. 189. 19 Fed. Rep. 372; McHenry v. Dow- STATE TAX ON BONDS OP ANOTHER STATE. 417 of the states, in this respect: that this provision prevents one state from taxing the bonds of another state which exempts its (the debtor state's) bonds from taxation. It does not seem pos- sible that such a construction could be given to the clause, and the courts have so held.*^ The states in these respects are foreign to each other, and nothing prevents them from taxing each other's securities found in their jurisdiction. 42 Bonaparte v. Tax Court, 104 TJ. Mich. 22, 86 Am. St. Efip. 524, 85 S. 592, 26 L. ed. 845 ; Bacon v. Board N. W. Rep. 307, 60 L. R. A. 321. See of State Tax Commissioners, 126 chap. Ill, as to situs. 27, CHAPTER X. STATE* TAXATION IN INTERFERENCE WITH COMMERCE. 824. The Congress shall have power ... To regulate com- merce with foreign nations, and among the several states, and with the Indian tribes.^ 825. The study of the decisions which have construed the grant to Congress of power to regulate commerce results in one definite impression, and almost only one. That impression is, that each case is decided on its own facts, that but one question is really vital, to wit : " Does the state legislation here presented for review, in its bearing on the facts here presented by the ap- pellate record, actually and practically constitute a restraint or burden on commerce? " If the impression made upon the court in any given case is that the legislation complained of is a practi- cal, real burden on commerce, that legislation will probably be nullified, although in nullifying it it may be necessary to dis- tinguish some former line of cases by ingenious rather than ob- vious reasoning. If such legislation does not seem to the court to create such a burden, it will probably make but little difference in the decision of the case that the language of some prior de- cision seems to place the legislation in question among the things forbidden to the states. This is not written in criticism ; in practical affairs there is probably no way in which a court can do consistent justice except by using a great deal of inconsistent language. If judges had divine prescience it would not happen. The fact is noted, however, and in examining the decisions with a view to determining the probable fate of his case, the practitioner will do well to remember it. 826. The limitation imposed upon the taxing power of the states by this power to regulate commerce has been the subject of at least as much litigation as any other constitutional limita- tion. Almost eveiy tax which a state can impose, excepting poll taxes, in some degree affects the operations of interstate or foreign commerce. To what degree this interference may extend without 1 U. S. Const., art. I, § 8. [418] STATE TAXES INTERFERING WITH COMMEKOE. 419 trenching on the Federal prerogative is an inquiry met in almost every case. Before examining in detail the scope of this limitation it will be profitable to ascertain : (1) What is "commerce" within this provision? (2) How far is the congressional power exclusive? What is commerce? 827. Interstate or foreign commerce in the sense of the con- stitution is not limited to traffic. It includes commercial inter- course in all its branches. It includes the navigation of inland waters by coasting vessels,^ the transportation of freight and pas- sengers,^ the transmission of messages by telegraph* and by tele- phone,^ the act of landing passengers,* the sale of imported articles in the original packages in which they are imported,^ the act of soliciting orders for nonresident merchants,* and the act of ship- ping merchandise from outside a state destined to points within it.^ The business of marine insurance is not commerce.'"' Con- ducting natural gas from place to place by means of pipes is commerce. ^^ 828. In cases which arose under the Federal law prohibiting combinations in restraint of trade"'^ it is held that the business of commission merchants, organized into a live stock exchange, the business of whose members is the purchase and sale of live stock at the particular place where the stock exchange is located, is not in- terstate commerce ; and this is so despite the facts that some of the 2 Gibbons v. Ogden,.9 Wheat. 1, 6 8 Corson v. Maryland, 120 U. S. L. ed. 23. 502, 30 L. ed. 699, 7 Sup. Ct. Rep. 3 Gloucester Ferry Co. v. Pennsyl- 655 ; Asher v. Texas, 128 U. S. 129, vania, 114 U. S. 196, 29 L. ed. 158, 32 L. ed. 368, 9 Sud. Ct. Rep. 1; Rob- 5 Sup. Ct. Rep. 826. bins v. Shelby Taxing District, 120 4 Western Union Telegraph Co. v. U. S. 489, 30 L. ed. 694, 7 Sup. Ct. Pendleton, 122 U. S. 347, 30 L. ed. Rep. 592. 1187, 7 Sup. Ct. Rep. 1126. » Walling v. Michigan, 116 U. S. 5/n. re Pennsylvania Telephone Co., 446, 29 L. ed. 691, 6 Sup. Ct. Rep. 48 N. J. Eq. 91, 27 Am. St. Rep. 462, 454. 20 Atl. Rep. 846. 10 Hooper v. California, 155 U. S. 6 Gloucester Ferry Co. v. Pennsyl- 648, 39 L. ed. 297, 15 Sup. Ct. Rep. vania, 114 U. S. 196, 29 L. ed. 158, 207. 5 Sup. Ct. Rep. 826 ; Henderson v. n State v. Indiana, etc., Co., 120 Mayor of New York, 92 U. S. 259, 23 Ind. 575, 22 N. E. Rep. 778. L. ed. 543. 12 Hopkins v. United States, 171 U. 7 Brown v. Maryland, 12 Wheat. S. 578, 43 L. ed. 290, 19 Sup. Ct. Rep. 419, 6 L. ed. 678; Leisy v. Hardin, 40; Anderson v. United States, 171 135 U. S. 100, 34 L. ed. 128, 10 Sup. U. S. 604, 43 L. ed. 300, 19 Sup. Ct. Ct. Rep. 681. Rep. 50. 420 CONSTITUTIONAL LAW OF TAXATION. cattle sold by the members were shipped from other states, con- signed to them as factors, and that the yards of the association were situated in two states. The sale of the cattle is the business transacted; this sale occurs in one place, and the fact Ihat the cattle are brought from other states is only incidental. The business of storing grain in elevators and delivering it to carriers for transportation to other states is not interstate commerce. ■'^' Where an ele^'ator company is exclusively engaged in unloading grain from points without the state, and loading it for delivery to points in and out of the state, and vice versa, it is held in New York to be engaged in interstate commerce.*^** 829. Commerce or transportation between two points in the same state does not, as to that state, become interstate commerce because of passage of the property over some other state in the course of transportation ; and the state where the act of commerce originates and terminates may' regulate it or tax it.-'* As to the state through which merely the act of transportation takes place, it is undoubtedly interstate commerce beyond the state power of legulation. 830. Although the transportation of goods or passengers be- tween two points in the same state by a carrier whose whole line is in the state is not, of itself, interstate commerce; yet it becomes interstate commerce if it appears that such transportation is a part of one continuous journey from one state to another under one continuous contract of passage. The test here, as in the case of passage between points in the same state partly through the terri- tory of some other state, is the inquiry where the act of continuous transportation originates and where it terminates. Thus where a carrier whose whole line is in a state receives foreign goods from some other carrier by virtue of foreign bills of lading, par- l2aMunn V. Illinois, 94 U. S. 113, graph Co., 113 N. C. 223, 18 S. E. 27 L. ed. 77; Budd v. New York, 143 Rep. 391, 22 L. R. A. 571; Campbell U. S. 517, 36 L. ed. 247, 12 Sup. Ct. v. Chicago, etc., Ey. Co., 86 Iowa, Rep. 468. 587-590, 53 N. W. Rep. 352, 17 L. K. 12b People ex rel Connecting Tenui- A. 444. It makes no difference that nal Ry. Co. v. Miller, 178 N. Y. 194, a telegraph message was sent by one 70 N. E. Rep. 472, reversing 84 App. company to a point without the state, Div. 174. thence by another company to a point 13 Lehigh Valley R. R. Co. v. Penn- within the state; it is still taxable by sylvania, 145 U. S. 192, 36 L. ed. 672, the state, especially where the first 12 Sup. Ct. Rep. 806; Leavell v. West- company might have transmitted the ern Union Telegraph Co., 116 N. C. message wholly within the state. 211, 47 Am. St. Rep. 798, 21 S. B. Leavell V. Western Union Telegraph Rep. 391, 27 L. R. A. 843 ; Railroad Co., supra. Commission v. Western Union Tele- STATE TAXES INTEBFEBING WITH COMMERCE. 421 ticipating in through rates and charges, ^nd transports those goods from one point to another point in the same state, that act is inter- state commerce.''* 831. In the case of land transportation, in order to conBtitute interstate commerce, it may be necessaryi that there should be some agreement by the transporting carrier with other companies to perform the act which is a link in the chain of interstate com- merce."" It is not so on the navigable waters of the United States, for a vessel navigating those waters, even between two points in the same state, is engaged in interstate com- merce when she in fact carries articles brought from or destined for points outside the state, and it is immaterial that she " does not run in connection ^\i\h, or in continuation of, any line of vessels or railway leading to other states." ^^ The reason of the distinction is that " commerce on land between the different states is so strikingly dissimilar in many respects from commerce on water, that it is often difficult tO' regard them in the same aspect in reference to the respective constitutional powers and duties of the state and Federal governments. ISTo doubt commerce by water was principally in the minds of those who framed and adopted the constitution, althO'Ugh both its language and spirit embrace commerce by land as well. Maritime transportation requires no artificial roadway. Nature has prepared to hand that portion of the instrumentality employed. The navigable waters of the earth are recognized public highways of trade and intercourse. No franchise is needed to enable the navigator to use them. Again, the vehicles of commerce by water being instruments of inter- communication with other nations, the regulation of them is as- sumed by the national legislature. So that state interference with transportation by water, and especially by sea, is at once clearly marked and distinctly discernible. But it is different with trans- portation by land." ^^ l*CinpiaTiati. New Orleans, etc., Ry. IB The Daniel Ball, 10 Wall. 557, Co. V. Interstate Commerce Commis- 19 L. ed. 999, where the "navigable sion, 162 U. S. 184, 40 L. ed. 935, 16 waters of the United States " are de- Sup.' Ct. Rep. 700; Louisville and fined. Nashville R. R. Co. v. Behlmer, 175 16 Railroad Co. v. Maryland, 21 U. S. 648, 44 L. ed. 309, 20 Sup. Ct. Wall. 456, 22 L. ed. 678; People ex Rep '209- People ex rel. Connecting rel. Penn. R. R. Co. v. Knight, Terminal Ry. Co. v. Miller, 178 N. Y. 171 N. Y. 354, 98 Am. St. Rep. 610, 194 70 N. E. Rep. 472, reversing 84 64 N. E. Rep. 152 ; affirmed. New York Add Div 174 ^^ '"<*'• Penn. R. R. Co. v. Knight, 192 14i Cases cited supra. U. S. 21, 48 L. ed. 325, 24 Sup. Ct. Kep. 202. 422 CONSTITUTIONAL, LAW OF TAXATION. 832. In accordance with the principles above stated it is held in a Federal case that the act of interstate commerce is not completed when the goods have come within the boundary line of the state of their destination; but continues until they have reached their destination. The act of moving such goods from a station platform to a freight warehouse in the course of such transportation is an act of interstate commerce." And until the goods are actually delivered to the consignee the protection of the constitution continues. While they continue in the hands of the carrier the state may not interfere.-'* 833. The principles just discussed have been interpreted by the "New York Court of Appeals. The law of 'New York, among other taxes, lays taxes on transportation corporations, measured by the amount of business done within the state, excluding earnings derived from business of an interstate character. In one case the Pennsylvania Railway Company w^as taxed in New York for busi- ness done in that state. Its sole business in 1;he state was trans- portation of goods and passengers by means of ferry boats and railroads to other states, the collection of charges, sale of tickets, and maintenance of docks, offices, etc., in connection with such business; and it was held that the business could not be taxed.*® In a later ca^se it appeared that the railroad company operated a cab service wholly in ISTew York city, the cabs running to and from its station. The state sought to tax the company on the business done by the cabs ; and it was contended by the company that the business done was interstate commerce, because the pas- sengers carried were either passengers from other states bound to !New York city points or passengers from New York points boimd to other states. It appeared that the contracts of the passengers for the use of the cabs were not connected with the contracts for passage to outside points, but were wholly separate and independent. It was held that this business was not interstate commerce,^* and this decision has been affirmed in the United States Supreme Court.^i IV Rhodes v. Iowa, 170 U. S. 412, 42 152; affirmed. New York ex rel. Penn. L. ed. 1088, 18 Sup. Ct. Rep. 664. R. R. Co. v. Knight, 192 U. S. 421, 48 18 American Express Co. v. Iowa, L. ed. 325, 24 Sup. Ct. Rep. 202. The 196 U. S. 133, 49 L. ed. 417, 25 Sup. Daniel Ball, supra, was distinguished, Ct. Rep. 182. the decision there being shown to have 19 People ex rel. Penn. R. R. Co. v. rested upon the congressional author- Wemple, 138 N. Y. 1, 33 N. E. Rep. ity over navigable waters. 720, 19 L. R. A. 694. 21 New York ex rel. Pennsvlvania 20 People ex rel. Penn. R. R. Co. v. R. R. Co. v. Knight, 192 U. S." 21, 48 Knight, 171 N. Y. 354, 64 N. E. Rep. L. ed. 325, 24 Sup. Ct. Rep. 202. STATE TAXES INTERFERING WITH COMMERCE. 423 How far is the Federal power over commerce exclusive? 834. The powers of the Fedei'al government with respe(^ to taxation are concurrent with those of the states, so that no act of taxation by a state is forbidden merely beeatise it covers the same subject as a Federal tax. But the power of Congress to regulate conmierce is a power distinct from that of taxation; and a state tax, valid so far as the Federal taxing power is concerned, may be invalid if, in addition to its revenue raising effect, it has any effect upon the stream of commerce sufficient to amount to a regulation or interference. 835. This congressional power over commerce, in cases where Congress has legislated, is exclusive; that is, where there is Con- gressional legislation touching any subject of interstate commerce the state has no legislative power.^^ A question which has caused difficulty arises where there has been no congressional legislation, and some state regulation of commerce is in controversy. There the question is : In the absence of congressional action, has the state power to regulate ? 836. This question is largely one of fact in each case. The principle which is to govern is laid down in Leisy v. Hardin.^ The power vested in Congress "to regulate commerce with foreign nations, and among the several states, and with the' Indian tribes," is the power to prescribe the rule by which that commerce is to be governed, and is a power complete in itself, acknowledging no limitations other than those prescribed in the constitution. It is coextensive with the subject on which it acts, and cannot be stopped at the external boundary of a state; but must enter its interior and must be capable of authorizing the disposition of those articles which it introduces, so that they may become mingled with the common mass of property within the territory entered.^* 837. And while, by virtue of its jurisdiction over persons and prop- erty within its limits, a state may provide for the security of the lives, limbs, health, and comfort of persons and the protec- tion of property so situated, yet a subject-matter which has been confided exclusively to Congress by the constitution is not within the jurisdiction of the police power of the state, unless placed there by congressional action.^^ The power to regulate commerce 22 Gibbons v. Ogden, 9 Wheat. 1, 6 24 Citing Gibbons v. Ogden, 9 Wheat. L. ed. 23 ; Gloucester Ferry Co. v. 1, 6 L. ed. 23 ; Brown v. Maryland, 12 Pennsylvania, 114 U. S. 196, 29 L. ed. Wheat. 419, fi L. ed. 678. 158, 5 Sup. Ct. Rep. 856. as Citing Hentlerson v. Mayor of 23 135 U. S. 100, 34 L. ed. 128, 10 New York. 92 U. S. 259, 23 L. ed. 543; Sup. Ct. Rep. 681. Railroad Co. v. Husen, 95 U. S. 465, 424 CONSTITUTIONAL LAW OF TAXATION. among the states is a unit, lut if particular subjects within lis operation do not require the application of a general or uniform system, the states may legislate in regard to them with a view to local needs and circumstances, until Congress otherwise directs; but the power thus exercised by the states is not identical in its extent with the power to regulate commerce among the states. The power to pass laws in respect to internal commerce, inspec- tion laws, quarantine laws, health laws, and laws in relation to bridges, ferries, and highways, belongs to the class of powers pertaining to locality, essential to local intercommunication, to the progress and development of local prosperity, and to the pro- tection, the safety, and the welfare of society, originally neces- sarily belonging to, and upon the adoption of the constitution reserved by, the states, except so far as falling within the scope of a power confided to the general government. Where the subject-matter requires a uniform system as between the states, the power controlling it is vested exclusively in Congress, and cannot be encroached upon by the states; but where, in relation to the subject-matter, different rules may be suitable for different localities, the states may exercise powers which, though they may be said to partake of the nature of the power granted to the general government, are strictly not such, but are simply local powers, which have full operation until or unless circum- scribed by the action of Congress in effectuation of the general power.^® 838. Whenever a particular power of the general government is one which must necessarily be exercised by it, and Congress re- mains silent, this is not only not a concession that the powers reserved by the states may be exerted as if the specific power had not been elsewhere reposed, but, on the contrary, the only legitimate conclusion is that the general government intended that power should not be affirmatively exercised, and the action of the states cannot be permitted to effect that which would be incompatible with such intention. Hence, inasmuch as inter- state commerce, consisting in the transportation, purchase, sale, and exchange of commodities, is national in its character, and must be governed by a uniform system, so long as Congress does not to pass any law to regulate it, or allow the states so to do, it thereby indicates its will that such commerce shall be free and untrammeled.^' 24 L. ed. 527; Walling v. Michigan. U. S. 691, 26 L. ed. 238; Brown v. 116 U. S. 466, 29 L. ed. 691, 6 Sup. Houston, 114 U. S. 622-631, 29 L. ed. Ct. Rep. 454; Eobbins v. Shelby Tax- 257, 5 Sup. Ct. Rep. 1091; Wabash, ing District, 120 U. S. 489, 30 L. ed. St. Louis, etc., Ry. v. Illinois, 118 U. 694, 7 Sup. Ct. Rep. 592. S. 557, 30 L. ed. 244, 7 Sup. Ct. Rep. 29 Citing Cooley v. Port Wardens of 4 ; Robbins v. Shelby Taxing District, Philadelphia, 12 How. 299, 13' L. ed. 120 U. S. 489-493, 30 L. ed. 694, 7 996. Sup. Ct. Rep. 592. 27 County of Mobile v. Kimball, 102 ; STATE TAXES AFFECTING COMMERCE. 425 839. Laws regulating pilots and pilotage, and imposing penal- ties for nonemployment of pilots and failure of masters to make reports to pilots, are among those subjects of local regulation as to wMch the states may legislate in the absence of congressional regu- lation of the same scope.^^ The territories have the same right as the states in this respect, subject of course to the jurisdiction of Congress over territories.^ The enactment of congressional legis- lation as to any of these local matters of commercial regulation ousts the state jurisdiction, not, as to the whole subject; but as to those matters within the scope of the congressional regulation. ''* The inspection laws of the several states are within the police power of the states. Such laws are not regulations of commerce. The constitution expressly permits the states to impose the cost of executing inspection laws upon exports and imports to and from foreig-n countries, and the same principle applies to inter- state commerce. ^^ State license taxes affecting interstate commerce. 840. A state license tax upon a business, calling, or occupation which makes the payment of the tax a necessary condition to carrying on the business in the state, is invalid so far as it affects the business of those engaged in interstate commerce. The leading case upon this general proposition is Brown v. Maryland,^^ where a state statute, imposing a license tax upon the occupation of " importers of foreign articles or commodities," and which thus by its express terms burdened foreign commerce, was held to be invalid. Following the same principle are the numerous cases which hold that a license tax imposed upon an agent engaged in trans- acting business in a state for parties without the state, the busi- ness transacted being in the nature of interstate commerce, is void. 28 Cooley V. Port Wardens of Phila- 3i Patapsco Guano Co. v. North delphia, 12 How. 299, 13 L. ed. 996. Carolina, 171 U. S. 345, 43 L. ed. 191, 29 Edwards v. Panama, 1 Oreg. 424. 18 Sup. Ct. Rep. 862. For discussion 30 State ex rel. Livandias, 36 La. of the power of the states with re- Ann. 127; The South Cambria, 27 gard to inspection laws see §§ 941 et Fed Hep. '526; Thompson v. Darden, seq. 198 'U. S. 310; Olsen v. Smith, 19.i 32 12 Wheat. 419, 6 L. ed. 678. U. S. 332, discussing fully questions relating to state pilotage laws. 426 CONSTITUTIONAL LAW OF TAXATION. 841. Some of these eases are as follows: A statute of Tennessee enacted that : All drummers and all persons not having a regular licensed house of business in the taxing district, offering for sale or selling goods, wares, or merchandise therein by sample, shaU be required to pay to the county trustee therein the sum of $10 per week, or $25 per month, for such privilege, and no license shall be issued for a longer period than three months. A citizen and resident of Ohio was convicted under this statute of having offered for sale articles of merchandise belonging to a firm in Cincinnati without having procured a license. The Supreme Court held that so far as the tax applied to sales by nonresidents of goods for nonresident vendors, the state statute was invalid as a regulation of interstate commerce, and reversed the judgment of conviction, saying: It would not be difficult, however, to show that the tax author- ized by the state of Tennessee in the present case is discriminative against the merchants and manufacturers of other states. They can only sell their goods in Memphis by the employment of drummers and by means of samples; whilst the merchants and manufacturers of Memphis, having regular licensed houses of business there, have no occasion for such agents, and, if they had, they are not subject to any tax therefor. They are taxed for their licensed hoviscs, it is true, but so, it is presumable, are the merchants and manufacturers of other states in the places where they reside; and the tax on drummers operates greatly to their disadvantage in comparison with the merchants and manufacturers of Memphis. And such undoubtedly was one of its objects. This kind of taxation is usually imposed at the instance and solicitation of domestic dealers, as a means of pro- tecting them from foreign competition. And in many cases there may be some reason in their desire for such protection. But this shows in a still stronger light the unconstitutionality of the tax. It shows that it not only operates as a restriction upon interstate commerce, but that it is intended to have that effect as one of its principal objects. And if a state can, in this way, impose restrictions upon interstate commerce for the benefit and protection of its own citizens, we are brought back to the condi- tion of things which existed before the adoption of the constitu- tion and which was one of the principal causes which led to it.^* 842. A state license tax upon wholesale dealers in liquors, pre- venting them from placing their goods in the hands of retail dealers 33 Kobbins v. Shelby County Taxing District, 120 U. S. 489, 30 L. ed. 694., 7 Sup. Ct. Kep. 592. STATE TAXES AITECTING COMMERCE. 427 inside the state without paying the tax, is invalid.^ Likewise a law imposing an annual tax on parties outside a state, who have "wholesale establishments for the sale of liquors in the state, to be jpaid in every place where they have such establishments, is a regu- lation of commerce and is void.^ 843. A state statute which required from " every commercial traveler, drummer, salesman, or solicitor of trade, by sample or otherwise, an annual occupation tax," was held invalid in so far as it affected one soliciting orders for a business house in another slate.^® The same was held in the case of an agent of a Maryland busi- ness house soliciting orders for outside goods in th4 District of Columbia without having taken out a license as required by an act of the legislative assembly of the District of Golumbia.^^ An agent of a nonresident manufacturer, who solicits by sample orders for pictures and picture frames, the goods being shipped directly from the factory of the nonresident manufacturer to the purchaser, is engaged in interstate commerce; and a statute or municipal ordinance imposing a tax on agents soliciting orders for such goods is invalid as to such an agent. ^* 844. Other cases where agents of nonresident sellers of goods without the state have been held to be exempt from state license taxes are cited.®* 34Lyng V. Michigan, 135 U. S. 161, Bourland, 137 111. 534, 31 Am. St. 34 L. ed. 150, 10 Sup. Ct. Eep. 725. Rep. 382, 27 N. E. Rep. 692; Rogers 85 State V. Zophy, 14 S. D. 119, 86 v. McCoy, 6 Dak. 238, 44 N. W. Rep. Am. St. Rep. 741, 84 N. W. Rep. 391. 990; McLoughlin v. City of South 38 Asher v. Texas, 128 U. S. 129, 32 Bend, 126 Ind. 471, 26 N. E. Rep. 185, L. ed. 368, 9 Sup. Ct. Rep. 1. 10 L. R. A. 357; State v. O'Connor, 5 3T Stoutenburgh v. Hennick, 129 U. N. D. 629, 67 K W. Rep. 824; Mc- S. 141, 32 L. ed. 637, 9 Sup. Ct. Rep. Clellan v. Pettegrew, 44 La. Ann. 356, 256. 10 So. Rep. 853; Coit v. Sutton, 102 38 Brennan v.- Titusville, 153 U. S. Mich. 324, 60 N. W. Rep. 690, 25 L. 289, 38 L. ed. 719, 14 Sup. Ct. Rep. R. A. 819; State v. Rankin, 11 S. D. 829, reversing Titusville v. Brennan, 144, 76 N. W. Rep. 299; Laurens v. El- 143 Pa. St. 642, 22 Atl. Rep. 893 ; more, 55 S. C. 481, 33 S. E. Rep. 561, State V. Scott, 98 Tenn. (14 Pick.) 45 L. E. A. 249; Hurford v. State, 91 254, 39 S. W. Rep. 1, 36 L. R. A. 461. Tenn. 669, 20 S. W. Rep. 201 ; Talbutt 39Stockard v. Morgan, 185 U. S. v. State, 39 Tex. Cr. Rep. 64. 73 Am. 27, 46 L. ed. 785, 22 Sup. Ct. Eep. St. Rep. 903, 44 S. W. Rep. 1091; Ad- 576; Stratford v. Montgomery, 110 kins v. Richmond, 98 Va. 91, 81 Am. Ala. 619, 20 So. Rep. 127; State v. St. Eep. 705, 34 S. E. Rep. 967, 47 Agee, 83 Ala. 110, 3 So. Rep. 856; L. R. A. 583; Clements v. Casper, 4 ■\\rought Iron Range Co. v. Johnson, Wyo. 494, 35 Pac. Rep. 472 ; In re 84 Ga. 758, 3 Inters. Com. Rep. 146, Kimmel, 41 Fed. Rep. 775; In re 11 S. E. Eep. 233, 8 L. R. A. 273; Rozell, 57 Fed. Rep. 155; In re Mitch- McClelland's Case, 96 Ga. 749, 22 S. ell, 62 Fed. Eep. 576. E. Rep. 329; City of Bloomingdale v. 428 CONSTITUTIONAL LAW OF TAXATION. BA5. It makes no difference in the application of the principle under discussion that the state statute taxes alike agents for resi- dents and nonresidents, persons engaged in domestic commerce and those engaged in interstate commerce. Upon this proposition the Supreme Court said, in a Tennessee case already discussed : It is strongly' urged, as if it were a material point in the case, that no discrimination i? made between domestic and foreign drummers, those of Tennessee and those of other states, that all are taxed alike. But that does not meet the difficulty. Inter- state commerce cannot be taxed at all, even though the same amount of tax should be laid on domestic commerce, or that which is carried on solely within the state. This was decided in the ease of the State Freight Tax.*" The negotiation of sales of goods which are in another state, for the purpose of intro- ducing them into the state in which the negotiation is made,, is interstate commerce.*' 846. It is submitted that it is not the fact of residence or non- residence of the agent which makes the tax valid or invalid. Said the Supreme Court in a case where a tax on resident agents for nonresident principals was held to be invalid : We attach no importance to the fact that in the Eobbins case** the individual taxed resided outside the state. He was taxed by reason of his business or occupation while within it, and the- tax was held to be a tax on interstate commerce.*^ 847. And, although in most cases where the taxes on the agent's- occupation have been held invalid, the principals were non- residents of the taxing state, and although the lang-uage used in the opinions in some of these cases** seems to indicate that the residence of the principal is a controlling element, it is not be- lieved that such is, in fact, the law, or that it would be so held in a case where the nonresidence of the principal was the only element relied upon to defeat the tax. The location of the goods Oft the time the sale is negotiated is in truth the controlling fact. *0 15 Wall. 232, 21 L. ed. 146. lina, 187 U. S. 622, 47 L. ed. 336, 23- « Eobbins v. Shelby County Taxing Sup. Ct. Rep. 229. District, 120 U. S. 489, 30 L. ed. 694, 42Robbins v. Shelby County Tax- 7 Sup. Ct. Rep. 592 ; Brennan v. Titus- ing District, 120 U. S. 489, 30 L. ed. ville, 153 U. S. 289, 38 L. ed. 719, 14 694, 7 Sup. Ct. Rep. 592. Sup. Ct. Rep. 829, reversing Titus- 43 Stockard v. Morgan, 185 U. S. ville v. Brennan, 143 Pa. St. 642, 22 27, 35, 36, 46 L. ed. 785, 22 Sup. Ct. Atl. Rep. 893; Stockard v. Morgan, Rep. 576. 185 U. S. 27, 46 L. ed. 785, 22 Sup. ** Notably Stockard v. Morgan, 185- Ct. Rep. 576; Caldwell v. North Caro- U. S. 27, 46 L. ed. 785, 22 Sup. Ct. Rep. 576. STATE TAXES AFI-EOTING COMMERCE. 429 It is the sale of foreign goods to the domestic purchaser which constitutes the act of interstate commerce. This element appears in all the cases and constitutes the real test. It is true that for many purposes, the situs of personal property follows the domicile of the owner, no matter where the goods are in fact situated. But in determining whether goods are or are not the subjects of interstate commerce, the actual place where they are, and not where the owner happens to be, ought to control. It is not the goods themselves that are taxed in the cases under discussion, but the act of interstate commerce of which they are a part, and in determining whether their sale constitutes inter- state commerce, regard must be had to the place where the goods actually are when sold, and to the place to which they are actually intended to be transported. 848. That the real location of the goods and not the residence •of the owners is the controlling fact appears from expressions in several cases : When goods are sent to one state from another for sale, or, in consequence of a sale, they become part of its general prop- erty, and amenable to its laws; provided, that no discrimination be made against them as goods from another state, and that they be not taxed by reason of being brought from another state, but only taxed in the visual way as other goods are.*^ But to tax the sale of such goods, or the ofEer to sell them, before they are brought into the state, is a very different thing, and seems to us clearly a tax on interstate commerce itself.*® The question in this ease is whether a manufacturer of goods, which are unquestionably legitimate subjects of commerce, who carries on his business of manufacturing in one state can send an agent into another state to solicit orders for the products of his manufacture, without paying to the latter state a tax for the privilege of thus trying to sell his goods.*' It is too plain for argument that the supposed incomplete con- dition of articles of commerce, if shipped directly to the pur- chasers, cannot subject them to the license tax. . . . Trans- actions between manufacturing companies in one state, through 45 Citing Brown v. Houston, 114 U. agreed statement of facts in this case, S. 622, 29 L. ed. 257, 5 Sup. Ct. Eep. that the goods sold were outside the 1091 ; Machine Co. v. Gage, 100 U. S. state at the time of sale, although 676, 25 L. ed. 754. this fact is assumed throughout the ^SRobbins v. Shelby County Taxing opinion. District, 120 U. S. 489-497, 30 L. ed. 47 Brennan v. Titusville, 153 U. S. 694, 7 Sup. Ct. Rep. 592. Curiously 289, 297, 298, 38 L. ed. 719, 14 Sup. enough, it does not appear in the Ct. Eep. 829. 430 CONSTITUTIONAL LAW OF TAXATION. agents, with citizens of another, constitute a large part of inter- state commerce; and for us to hold, with the court helow, that the same articles, if sent hy rail directly to the purchaser, are free from state taxation, hut if sent to an agent to deliver, are taxable through a license tax on the agent, would evidently take a considerable portion of such traffic out of the salutary protec- tion .of the interstate commerce clause of the constitution.** 849. Although, as stated, it is not the residence or nonresidenco of the principal or the agent, but the situs of the goods, which renders a license tax on the occupation of selling foreign goods repugnant to the interstate commerce clause, in the view of the writer ; yet there can be no doubt that a statute which should dis- criminate between resident and nonresident principals, or resident and nonresident agents, in the imposition of a 1' cense tax, would be invalid. But such a statute would be invalid, whether the business concerned was interstate commerce or not, and it seems to the writer that the clause of the constitution which would render it invalid would be the clause which guarantees to the citizens of each state the privileges and immunities of citizens in the several states.'*® License taxes on peddlers, 850. That the inquiry whether the goods sold are within the taxing state when sold, and not the residence of the principal or of the agent, is the test which determines the validity or invalidity of a license tax on an agent of a nonresident principal, is clearly shown in the cases which uphold laws and ordinances imposing license taxes on peddlers, although those cases depend to some extent upon the doctrines which permit the states latitude in the exercise of the police power. A leading case on this subject is Emert v. Missouri.^" There it appeared that a law of Missouri defined peddlers, prohibited peddling by any one without a license, for which a fee vras charged, and provided a punishment for anyone who should peddle without such license. An agent of a nonresident sewing machine company was convicted for violation of this law, and his contention on appeal was that the law was invalid as a regulation of interstate commerce. 48 Caldwell v. North Carolina, 187 W 1.50 U. S. 296, 39 L. ed. 430, 15 U. S. 622, 631, 632, 47 L. ed. 336, 23 Riip. Ct. Rep. 307, affirming 103 Mo. Sup. Ct. Eep. 229. 241, 23 Am. St. Rep. 874, 15 S. W. *9,See chap. XIV, and §§ 854 ct seq. Eep. 81, 11 L. R. A. 219. STATE TAXES AFFECTING COMMBECE. 431 It appeared that lie was a salaried agent of the sewing ma- chine company, that in his employment he had gone from place to place in Missouri Avith a horse and wagon, soliciting orders for the sale of the company's machines, that lie had in the wagon one machine which he offered for sale to various persons, that he finally sold that machine to a purchaser in the state; that the machine belonged to the nonresident company and was sold for its account, and that the agent had no peddler's license. The conviction was sustained and it was held that the im- position of a license tax upon the agent was not repugnant to the " commerce clause." 851. Upon the question whether the agent was engaged in commerce the Supreme Court said: The defendant's occupation was offering for sale and selling sewing machines, by going from place to place in the state of Missouri, in a wagon, without a license. There is nothing in the case to show that he ever offered for sale any machine that he did not have with him at the time. His dealings loere neither accompanied nor followed by any transfer of goods, or of any order for their transfer, from one state to another; and were neither interstate commerce in themselves, nor were they in any way directly concerned with such commerce. The only business or commerce in which he was engaged was internal and domestic: and, so far as appears, the only goods in ivhich he was dealing had become part of the mass of property within the state. Both the occupation and the goods, therefore, were subject to the tax- ing power, and to the police power, of the state. 852. Similarly a statute of Tennessee, which imposed a tax upon peddlers of sewing machines, which statute the Supreme Court of Tennessee construed as not discriminating between ma- chines of foreign and of domestic manufacture, was upheld in an earlier case. There a foreign sewing machine company kept an agency in Tennessee and sent its machines into that state to be sold there ; the tax being imposed upon an agent who travelef. E. Rep. chine Co. v. Gage, 9 Baxt. 518. 317, 22 L. R. A. 531 ; Steinipv Block 52 State V. Wheelock, 95 Iowa, 577, v. Richland, 26 La. Ann. 642; Sauls- 5S Am. St. Rep. 442, 64 N. W. Rep. bury v. State, 43 Tex. Cr. Rep. 90, 432 CONSTITUTIONAL LAW OF TAXATION. A peddler, -within the meaning of these eases, is one who travels from place to place, and who sells and delivers at the same time.'' Discriminating laws. 854. Where there is any discrimination in license taxation, either between domestic and foreign goods or between domestic and foreign vendors, such discrimination renders the tax invalid, whether the goods be in the state or out of it. This is illustrated in Welton v. Missouri,^* where a statute of Missouri imposed a license tax upon the occupation of peddling certain goods, nat the produce of the state, no license being re- quired for selling such goods produced in the state. The statute was held to be void, the court saying : It is sufficient to hold now that the commercial power con- tinues until the commodity has ceased to be the subject of dis- crimination by reason of its foreign character. That power protects it, dven after it has entered the state, from any burdens imposed by reason of its foreign origin. The act of Missouri encroaches upon this power in this respect, and is, therefore, in our judgment, unconstitutional and void. A Texas statute, imposing a license tax on the occupation of selling liquors, excepting from its provisions the sale of liquors manufactured in the state, has been held invalid.* Other cases where similarly discriminating laws have been con- demned are eited.^^ 855. An occupation tax law which discriminates between resi- dent and nonresident persons is likewise invalid, and is so held, on varying gTOunds, not only as an interference with interstate commerce, but also as a denial of the equal protection of the laws and of the privileges and immunities of citizens in the several states." 96 Am. St. Rep. 837, 63 S. W. Rep. 344, 26 L. ed. 565 ; Walling v. Michl- 568, where a peddler's tax, held valid, gan, 116 U. S. 446, 29 L. ed. 691, 6 was imposed on an agent who sold Sup. Ct. Rep. 454; Vines v. State, 67 both goods which he had with him Ala. 73 ; Rodgers v. McCoy, 6 Dak. and goods which were out of the state 238, 44 N". W. Rep. 990; Marshaltown at the time. v. Blum, 58 Iowa, 184, 43 Am. Rep. SSEmert V. Missouri, supra; South 116, 12 N. W. Rep. 266; State v. Bend v. Martin, supra. Browning, 62 Mo. 591; State v. Pratt, 64 91 U. S. 275, 23 L. ed. 347. 59 Vt. 590, 9 Atl. Rep. 556. 55Tiernan v. Rinker, 102 U. S. 123, 57 gee § 854, supra, also §§ 1108 et 26 L. ed. 103. seq. 56 Webber v. Virginia, 103 U. S. STATE TAXES AFFECTING COMMERCE. 433 Thus a statute which imposed a license tax on peddlers, but which prohibited the issue of a license to anyone not a citizen of the United States, was held by the Supreme Court of Maine to be invalid, as a denial to aliens of the equal protection of the laws.^* The Maine court held that the interstate commerce clause had no application to the facts of the particular case, inasmuch as the goods which the peddler was selling were in the state at the time of sale. 856. A municipal ordinance prohibiting the grant of a ped- dler's license to a nonresident of the state, and allowing the grant of such licenses to residents, has been likewise held in- valid in Pennsylvania, on the express ground that it was a trade regulation and an attempt to regulate interstate commerce.^* A statute of Maryland which imposed a higher rate of license tax, for selling goods, upon nonresidents than upon residents, was held void in the United States Supreme Court upon the ground that such a statute amounted to a denial of the privileges and immunities of citizens of the several states.^'' Other cases to the same general effect are cited.^^ 857. Those cases which hold nondiscriminatory state license or occupation taxes to be invalid are confined in their applica- tion to persons whose exclv^sive business is the sale or delivery of commodities which are outside the state at the time of sale. Where agents in a state do not confine their business to that of agency for the handling of outside goods, but do a general agency or brokerage business, in the course of which they may or may not represent nonresident principals, and may or may not be engaged in negotiating sales of goods which are outside thv3 state, the state may lay a tax upon the privilege of following such general agency or brokerage business. This Avas held in a case where parties who had taken out a license as general mer- chandise brokers, were held liable to pay the license tax imposed upon such busings, although it happened that all their business for the year in which the tax was imposed was transacted for nonresident principals in the sale of goods which were without the state.^ 68 state V. Montgomery, 94 Me. 192, 61 State v. Wiggin, 64 N. H. 508, 15 47 Atl. Rep. 165, 80 Am. St. Eep. 386. Atl. Rep. 128, 1 L. R. A. 56 ; Com- B9Sayre Borough v. Phillips, 148 monwealth v. Meier, 92 Va. 814, 23 Pa. St. 482, 24 Atl. Rep. 76, 33 Am. S. E. Rep. 917, 31 L. R. A. 379. St. Rep. 842, 16 L. R. A. 49. 62 Ficklen v. Shelby County Taxing 60 Ward v. Maryland, 12 Wall. 418, District, 145 U. S. 1, 36 L. ed. 601, 20 L. ed. 449. 12 Sup. Ct. Rep. 810. 28 434 CONSTITUTIONAL LAW OF TAXATION. 858. And, generally, a state maj impose license taxes on occu- pations carried on within its borders, either for revenue or for purposes of police regulation; and if, in so doing, it does not discriminate between residents and nonresidents, citizens and aliens, or home and foreign goods, such taxation does not amount to interference with interstate commerce merely because dealing in foreign goods enters incidentally into some or all of the occupations taxed, or because nonresidents or aliens are ^v.h- jected to the same taxation as citizens and residents.*^ Delivery of goods from without the state, previously sold by sample. 859. The delivery to purchasers, of goods shipped from out- side the state, which goods have been previously sold to sucli purchasers by sample, is an act of interstate commerce, and n'j tax can be laid upon an agent for the delivery of such outside goods, in respect to such acts of delivery. This is so even where the goods are not shipped from -.vithout the state directly to the purchasers, but are shipped to the agent, who breaks the original package and distributes the goods to the purchasers. This has recently been held in a case in the United States Su- preme Court, settling a question upon which the state courts had differed. The case was: pictures and frames, which had been previously ordered by purchasers from an outside manu- facturer, were shipped in bulk to an agent in the state of sale, the pictures and the frames being shipped in separate packages. The agent opened the packages, put the pictures into the frames, and distributed the framed pictures to the purchasers. The city in which the sales and deliveries took place laid a tax on 63 Ficklen v. Shelby County Taxing S. E. Rep. 383 ; State v. Stevenson, District, 145 U. S. 1, 36 L. ed. 601, 109 N. C. 730, 26 Am. St. Rep. 595, 12 Sup. Ct. Rep. 810; Kehrer v. 14 S. E. Rep. 385; Wrought Iron Stewart, 197 U. S. 60, 49 L. ed. 663, Range Co. v. Carver, 118 N. C. 334- 25 Sup. Ct. Rep. 403, see § 857, 336, 24 S. E. Rep. 353; Ex parte supra; Aaniston v. Southern Ry., 112 Butin, 28 Tex. App. 304, 13 S. W. Ala. 566, 20 So. Rep. 917; Price v. Rep. 10; State v. Richards, 32' W. Va. People, 193 111. 114, 86 Am. St. Rep. 353, 9 S. E. Rep. 247, 3 L. R. A-. 705; 306, 61 N. E. Rep. 844, 55 L. R. A. Saulsbury \. State, 43 Tex. Cr. Rep. 588; Carrollton v. Bazette, 159 111. 90, 96 Am. St. Rep. 837, 63 S. W. 293,. 31 L. R. A. 522, 42 N. E. Rep. Rep. 568, overruling French v. State, 840; Carson v. State, 57 Md. 265; 42 Tex. Cr. Rep. 222, 58 S. W. Rep. State V. Smithson, 106 Mo. 154, 17 1015, 52 L. R. A. 160, and Kirk- S. W. Rep. 222; State v. French, 109 patrick v. State, 42 Tex. Cr. Rep 459, N. C. 722, 26 Am. St. Rep. 590, 14 60 S. W. Rep. 762. STATE TAXES AFFECTING COMMERCE. 435 the agent in respect of such deliveries. TJjDon the question of the validity of this tax it was argued, in favor of the tax, (1) That the pictures were not completed before they came into the state, (2) that they were not shipped direct to the purchasers, but to the vendor's agent, hence the principal was engaged in manufacturing and delivering the pictures within the state. As to this, the Supreme Court said: 860. But we are not disposed to concede, that, under the facts of this case, the pictures were, in any proper sense, incomplete wlien received in Greensboro. That the frames and the pictures were in separate packages, if such was the case, was merely for con- venience in packing and handling, and "placing the pictures in their proper places " (the language of the verdict) meant that each picture was placed in the frame designed for it. The selec- tion of the frame was as much a part of the purchase and sale as the selection of the picture. Nor does the fad that these articles were not shipped sepa- rately and directly to each individual purchaser, hut were sent to an agent of the vendor at Greensioro, who delivered them to the purchasers, deprive the transaction of its character as inter- state commerce. It was only that the vendor used two instead of one agency in the delivery. It would seem evident that if the vendor had sent the articles by an express company, which should collect on delivery, such a mode of delivery would not have sub- jected the transaction to state taxation. The same could be said if the vendor himself, or by a personal agent, had carried and delivered the goods to the purchaser. That the articles were sent as freight by rail and were received at the railroad station by an agent who delivered them to the respective purchasers, in no way changes the character of the commerce as interstate.®* 861. The case just discussed^^ must be regarded as overruling Croy V. Obion County f^ which was a case similar in every es- sential respect but one. There a person solicited orders by sample for goods which were outside the state at the time of sale, the orders were taken by him in his own name, and the goods were ordered by him from a nonresident manufacturer 64 Caldwell v. North Carolina, 187 Commons, 111 Ga. 536, 36 So. Eep. U. S. 622, 632, 47 L. ed. 336, 23 Sup. S66, 51 L. R. A. 134. See also to the Ct. Rep. 129. Supporting this de- Siime effect Be Spain, 47 Fed. Rep. cision is Norfolk and Western Ry. Co. 208, 14 L. R. A. 97. V. Sims, 191 U. S. 441, 48 L. ed. 254, 24 65 Caldwell v. North Carolina, Sup. Ct. Rep. 151, reversing 127 N. C. supra. 521, 37 S. E. Rep. 138. This case 68 104 Tenn. 525, 78 Am. St. Rep. must be regarded as overruling Kim- 931, 58 S. W. Rep. 235, 51 L. R. A. mel V. State, 104 Tenn. 184, 56 S. W. 254. Eep. 854, and Racine Iron Co. v. Mc- 436 CONSTITUTIONAL LAW OF TAXATION. without disclosing the names of the purchasers, he received the goods in bulk and delivered them to the purchasers. Thus he •was not an agent for a nonresident principal, but a resident principal. It was held that he was not engaged in interstate commerce, and a tax on his occupation was upheld. So far as this decision depends on the fact that " the sales were not of original packages but of distinct parts of an original package after it had been broken," Caldwell v. North Carolina directly overrules it. And if, as has been urged,®^ the situs of the goods at the time of sale determines the validity of the tax, then the fact that he was not an agent for a nonresident principal is immaterial. 862. Although, as shown by the foregoing, an agent may not be taxed in respect to acts done in the completion of the trans- action of interstate commerce, he may be taxed in respect to acts done by him after the act of commerce has been completed, al- though done with relation to the same subject-matter. Thus it is held that an occupation tax on the occupation of " putting up lightning rods " is valid when applied to the agent of a non- resident manufacturer who delivers lightning rods which have been sold by sample, and who also puts up the rods for the purchasers, when requested, withoilt extra charge.^ And where A nonresident enlarger of portraits sends portraits previously ordered, to its agent within the state, the purchasers having the option of buying a frame out of a stock of frames already in the state, the agent is taxable in respect to the sale of frames.®' And although the agent of nonresident merchants who distributes within the state goods shipped to him for delivery may not be taxed in respect of such goods, he may be taxed in respect of sales made directly by him to local customers.™ Taxes on sales in original packages. 863. Where a license tax is imposed on the occupation or business of selling, that license tax may not be applied to sales ■67 See § 847 et seq. 69 Chrystal v. Macon, 108 Ga. 27, 68 State V. Gorham, 115 N. C. 721, 33 So. Rep. 810. The case of Laurens 44 Am. St. Rep. 494, 20 S. E. Rep. v. Elmore, 55 S. C. 477, 33 S. E. Rep. 179, 25 L. R. A. 810. In so far as 560, 45 L. R. A. 249, seems to decide this case holds that the deliver}/ was the contrary, but it is not clear from r.ot an act of commerce, it is over the opinion whether the stock of ruled by Caldwell v. North Carolina, frames was actually in the state. supra. TOKehrer v. Stewart, 197 U. S. 60, 49 L. ed. 663, 25 Sup. Ct. Rep. 403. STATE TAXES AFFECTING COMMERCE. 437 of goods which have been shipped from without the state and are sold in. the original packages, as such a tax would be a burden on interstate commerce/^ This rule, however, is confined within somewhat narrow limits. The principle involved has been con- sidered more prominently in cases where the states, in the exer- cise of their police power, have sought absolutely to forbid sales of goods of certain classes.''^ The term " original package " is not defined by statute. It is a convenient form of expression used by the coiirts to indicate the form in which goods are originally brought into the states. The changing conditions of commerce vary the application of the term. But " whatever the form or size employed, there must he a recognition of the fact thai the transaction is a hona fide one; and that the usual methods of interstate shipment have not been departed from for the purpose of evading the police laws of the states." ^^ 864. These views have been recently expounded in cases aris- ing under state laws prohibiting or taxing sales of cigarettes. These laws were attacked as contrary to the commerce clause. The cigarettes in question in one case were shipped in the small paper boxes in which they are commonly sold at retail, these boxes being shipped loosely in open baskets. It was held that the small paper boxes were not original packages; and the state law forbidding the sale of the cigarettes was sustained.'^* In later cases, a state law taxing sales of cigarettes was held to be valid and applicable to sales of cigarettes, shipped under the following conditions described in the opinion: These packages were shipped absolutely loose, and were not boxed, baled, wrapped, or covered, nor were they in any way attached together. Xothing appears in the record to indicate the means used in transporting these cigarettes from the factory of the manufacturer to the place of business of the retail dealer, and we are left to infer that they were shoveled into and out of 71 Brown v. Maryland, 12 Wheat. 725 ; Vance v. Vandercook, 170 U. S. 419, 6 L. ed. 678; Leisy v. Hardin, 438, 42 L. ed. 1100, 18 Sup. Ct. Rep. 135 U. S. 100, 34 L. ed. 128, 10 Sup. 674; Schollenberger v. Pennsylvania, Ct. Rep. 681. 171 U. S. 1, 43 L. ed. 49, 18 Sup. Ct. 72 Walling V. Michigan, 116 U. S. Rep. 757. 446, 29 L. ed. 691, 6 Sup. Ct. Rep. 73 Cook v. Marshall County, 196 U. 454; Bowman v. Chicago Ry. Co., 125 S 261-270, 49 L. ed. 471, 25 Sup. Ct. U. S. 465, 31 L. ed. 700, 8 Sup. Ct. Rep. 233. Rep. 689; Leisy v. Hardin, 135 U. S. 74 Austin v. Tennessee, 179 U. S. 100, 34 L. ed. 128, 10 Sup. Ct. Rep. 343, 45 L. ed. 224, 21 Sup. Ct. Rep. 681; Lyng v. Michigan, 135 XJ. S. 132. 161, 34 L. ed. 150, 10 Sup. Ct. Rep. 438 CONSTITUTIONAl, LAW OF TAXATION. a car and delivered to plaintiffs in that condition. The packages were not separate!}' or otherwise addressed, but at the time they were delivered to the express company the driver gave a receipt showing the number of packages and the name of the person to whom they were to be sent, retaining a duplicate himself. This method was regarded as an attempt to evade the police laws of the state. ^® Other state eases are substantially to the same effect.''® 865. Taxes which are not license taxes upon the occupation of selling, but are taxes on " sales " generally, may be laid by the states, notwithstanding that the articles sold have been brought in from other states by the seller and are sold in the original packages, provided that no discrimination is made as to residents and nonresidents, or as to outside and domestic goods. ^^ And where the effect of the tax is the same as to goods brought from other states and goods manufactured in the state, although the mode of collection is different, there is no such discrimination as constitutes interference with interstate commerce. ''* Buying goods for shipment outside state. 866. Purchasing or manufacturing goods for shipment to points outside a state is as much a part of interstate commerce as the sale of goods shipped from without; and the same prin- ciples apply. Thus where a tax is laid, without any discrimina- tion, upon any occupation or business, the fact that the product of that business may be shipped out of the state does not render the tax void as a regulation of commerce. Thus a license tax on the business of taking oysters for sale or transportation is not invalid as to a resident of the state, although he may sell or transport his oysters beyond the state.™ But it is held that the purchase of wool by the agent of a foreign corporation for shipment to such corporation outside the state, for sale on com- mission, is an act of interstate commerce.^" 76 Cook V. Marshall County, 196 U. T7 Woodruff v. Parham, 8 Wall. 123, S. 261, 49 L. ed. 471, 25 Sup. Ct. Rep. 19 L. ed. 382. 233; Hodge v. Muscatine County, 196 T8 Hinson v. Lott, 8 Wall. 148, 19 U. S. 276, 49 L. ed. 477, 25 Sup. Ct. L. ed. 387. Rep. 237. T9 State v. Applegarth, 81 Md. 293, 76 McGregor v. Cone, 104 Iowa, 465, 31 Atl. Rep. 961, 28 L. R. A. 812. 65 Am. St. Rep. 522, 73 N. W. Rep. 80 MacNaughton Co. v. McGirl, 20 1041, 39 L. R. A. 484. Opposed to Mont. 124, 63 Am. St. Rep. 610, 49 the views stated in the text is State Pac. Rep. 651, 38 L. R. A. 367. The V. Goetzc, 43 W. Va. 495, 64 Am. St. case was not one involving taxation. Rep. 871, 27 S. E. Rep. 225. STATE TAXES AFFECTING COMMERCE. 439 867. The collection of clothing, by the agent of a foreign laundry, to be sent to such laundry, there washed, and returned to the agent for redelivery to the owners, is held in Tennessee not to be interstate commerce, and a license tax on the occupa- tion of the agent was upheld.^^ The ground of the decision was that the labor performed by the laundry is not a commodity which is the subject of commerce. " There is no commodity created of which the ownership is changed. It is simply a personal con- tract based on a valuable consideration." In a Pennsylvania case it was held (or rather said, for the reasoning of the opinion was not necessary to the decision) that a law which imposed a license tax upon the privilege of buying produce in certain counties, " with intent to send the same for sale or barter to any other market out of said counties," and which fixed the tax upon persons residing outside said counties at a rate double that fixed in the case of persons residing in the counties, was neither a regulation of commerce nor a viola- tion of the guaranty to the citizens of each state of the privileges and immunities of citizens in the several states, nor a law im- posing an export duty.*^ It is more than probable that in the case of a person engaged in purchasing produce to be shipped out of the state, this opinion would be disapproved, either in the same court, or a higher one. But the particular ease in which the expressions were used was that of a person who had bought produce in the counties named, to be shipped to another county in the same state. Taxes on acts of transportation and communication. 868. Wot only sales of goods, but also acts of transportation and communication, are included in the definition of commerce ; hence license taxes laid by the states upon such acts are void in so far as they constitute conditions necessary to be complied ' with before engaging in such commerce, or burdens upon it. Such taxes, when laid, have been justified by those who contended in favor of their validity, sometimes upon the ground that the police power of the state includes the regulation of carriers within its borders, and sometimes on the ground that the state has power to impose conditions on foreign corporations doing 81 Smith V. Jackson, 103 Tenn. 673, S2 Eothermcl v. Meyeile, 130 Pa. St. 54 S. W. Eep. 981, 47 L. R. A. 416. 250, 20 Atl. Eep. 583, 9 L. R. A. 366. 440 CONSTITUTIONAL LAW OF TAXATION. business in its borders and to fix the terms upon ■which its domestic corporations shall do business (carriers generally being corporations). These propositions are doubtless true, within cer- tain limits ; but one of the limits upon their application is that the powers of the states, in taxation, in matters of police, and in the regulation of corporate conduct, may only be exercised in such a manner as not to trespass upon the exclusive jurisdiction of Congress in the field of interstate and foreign commerce. 869. A case the facts of which quite fully illustrate the ap- plication of these principles is Pickard v. Pullman Southern Car Go.^ There the state of Tennessee had laid a privilege tax of $50 per car upon the privilege of running sleeping cars over rail- roads in Tennessee, the cars not being owned by the railroad companies over whose roads they were run. In the particular case the cars for the running of which the tax was exacted were run into and through Tennessee from and into other states, trans- porting passengers from other states into or across Tennessee, or from Tennessee into other states. It was held that the tax, in so far as it applied to the privilege of running the cars in ques- tion, was a burden on interstate commerce and, therefore, in- valid.«* In another case a state tax on telegraph companies in respect to all messages sent by them was held invalid as to all messages sent outside the state.*^ 870. In Crutcher v. Kentucky^^ the limits of the jurisdiction of the states in the exercise of their police powers and their powers to impose conditions on corporations are clearly stated. The state of Kentucky had enacted that no agent of a foreign express company should " set up, establish, or carry on the busi- ness of transportation in this state," without obtaining a license and paying a fee therefor. In addition certain statements were required from, and conditions imposed upon, such express com- panies, with respect to assets, liabilities, and investments. It was held, with respect to the agent of a company engaged in both interstate and domestic transportation, that the act was 83 117 U. S. 34, 29 L. ed. 785, 6 of harmony with later decisions on Sup. Ct. Rep. 635. the subject of situs. 84 There is some loose language in 85 Telegraph Co. v. Texas, 105 U. the opinion in this case, about the S. 460, 26 L. ed. 1067. situs of the ears and the domicile of 86 141 U. S. 47, 35 L. ed. 652, 11 the car romDiiny. which is unneces- Sup. Ct. Rep. 854. sary to the decision and which is out STATE TAXES AFFECTING COMMERCE. 441 void in so far as it operated to impose conditions upon the transaction of interstate business. Said the court: These regulations are clearly a burden upon (interstate) com- merce. Whether intended as such or not, they operate as such. But taxes or license fees in good faith imposed exclusively on express business carried on wholly within the state would be open to no such objection. The case is entirely different from that of foreign corporations seeking to do a business which does not belong to the regulating power of Congress. 871. Other cases where state license taxes on acts of trans- portation or communication have been condemned are: A municipal license tax imposed on a telegraph company, the payment of which was made a condition of the right to do business, the company being engaged in the transmission of interstate telegrams.*^ A state license tax imposed upon the agent of a foreign railroad corporation having no line in the state, engaged in soliciting business for the corporation.^* A state tax imposed upon a foreign railroad corporation as a condition of keeping an office in the state.*^ 872. A state law providing that carriers of freight shall pay a tax on all freight carried, including freight taken up within the state and carried out of it and freight taken up without and brought within it, is a regulation of interstate commerce, hence invalid, and it makes no difference that no discrimination is made between such freight and freight carried wholly within the state.^ 87 Leloup V. Port of Mobile, 127 U. pany or railroad company doing busi- S. 640, 32 L. ed. 311, 8 Sup. Ct. Rep. ness in that city and having a busi- 1380 ; Commonwealth v. Smith, 92 Ky. ness extending beyond the limits of 38, 36 Am. St. Rep. 578, 17 S. W. the state " of $500, and a license tax Eep. 187. of $100 on every such company doing ssMcCall V. California, 136 U. S. busit^ess within the limits of the 104, 34 L. ed. 392, 10 Sup. Ct. Rep. state, was unanimously upheld. In 881. Leloup V. Port of Mobile, 127 U. S. 89 Norfolk and Western R. E. Co. v. 640, 32 L. ed. 311, 8 Sup. Ct. Rep. Pennsylvania, 136 U. S. 114, 34 L. ed. 1380, Justice Bradley said of the or- 394, io Sup. Ct. Rep. 958, reversing dinance upheld in Osborne v. Mobile: 114' Pa. St. 256, 6 Atl. Rep. 45. "In view of the course of decisions 80 Case of the State Freight Tax, 15 made since that time it is very certain Wall. 232 21 L. ed. 146. that such an ordinance would now be In Osborne v. Mobile (1872), 16 regarded as repu'j;nant to the power Wall. 479, 21 L. ed. 470, an ordinance conferred upon Congres.s to regulate of the city of Mobile which laid a commerce among the several states." license tax on "every express com- 442 CONSTITUTIONAL LAW OF TAXATION. In Maryland an act imposing a tax of two cents a ton on coal mined and transported to any place in the state or elsewhere was held to be an invalid regulation of commerce.®^ Taxes on ferries. 873. It Avas held in Wiggins Ferry Co. v. East St. Louis^^ that a municipal license tax of iifty dollars per boat, imposed upon " keepers of ferries," was valid as applied to a ferry com- pany which operated a ferry across a river which was the boundary between two states, and which (apparently) operated no other ferry. In view of the course of decisions since this decision was made, it cannot now be regarded as authority in this respect.®^ In Gloucester Co. v. Pennsylvania^ a state tax on a ferry company similarly employed, calculated by reference to the amount of its capital stock, was held void as a regulation of inter- state commerce. 874. Although the case was not one where the state had exer- cised its power with respect to the licensing of ferries, the Su- preme Court said, speaking of that power in its relation to interstate commerce: It is true that, from the earliest period in the history of the government, the states have authorized and regulated ferries, not only over waters entirely within their limits, but over waters separating them; and it may be conceded that in many respects the states can more advantageously manaee such interstate fer- ries than the general government; and that the privilege of keep- ing a ferry, with a right to take toll for passengers or freight, is a franchise grantable by the state, to be exercised within such limits and under such regulations as may, be required for the safety, comfort, and convenience of the public. Still the fact remains that such a ferry is a means, and a necessary means, of commercial intercourse between the states bordering on their divided waters, and it must, therefore, be conducted without the imposition by the states of taxes or other burdens upon the com- merce between them. freedom from such impositions does not, of course, imply exemption from reasonable charges, as com- pensation for the carriage of persons, in the way of tolls or fares, 91 State v. Cumberland, etc., R. R. 93 See §§ 874-876, 877, infra, and Co., 40 Md. 22. cases cited. 92 107 U. S. 365, 27 L. ed. 419, 2 94 114 u. S. 196, 29 L. ed. 158, 5 Sup. Ct. Rep. 257; Chivers v. People Sup. Ct. Rep. 826. 11 Mich. 43, to same eifect. STATE TAXES AFFECTING COMMERCE. 443 or from the ordinary taxation to which other property is sub- jected, any more than lilte freedom of transportation on land implies such exemption. . . . That freedom implies exemp- tion from charges other than such as are imposed by way of com- pensation for the use of the property employed, or for facilities afforded for its use, or as ordinary taxes upon the value of the property. 875. Perhaps this case is overruled by Henderson Bridge Co. V. Kentucky^'' and perhaps not. The decisions were regarded as inconsistent by the four justices who dissented in the latter case. But until the Supreme Court directly states whether the one case was intended to overrule the other, nobody will know. 876. In a recent case,®^ the facts were that a county had un- dertaken, under state authority, to exact a license tax from a company which carried on a " ferry " for transporting railroad cars, loaded or unloaded, across a river which was the boundary between two states. The landing place in one of the states was in the county. The tax was three dollars for each car trans- poi'tfcd. The company resisted the tax on the gTound that it was a tax on interstate commerce. Without passing on the question whether the powers of the states over ferries generally extend to the imposition of license taxes on the operation of interstate ferries, the Supreme Court held the tax void as an interference with interstate commerce, holding that such a " ferry " as this was not a ferry in the "' strict technical sense." Said the court : In that sense a ferry is a continuation of the highway from one side of the water over which it passes to the other, and is for transportation of passengers or of travelers with their teams and vehicles and such other property as they may carry or have with them.®^ It proceeds at regular intervals, and, growing out of the local necessities and the public interest in its operation, is subject to local control, and at common law the exclusive fran- chise to operate a ferry within designated limits might be con- ferred upon a particular person or persons. In a strict sense the ferry business is confined to the transportation of persons with or without their property, and a ferryman carrying on only a ferry business is bound to transport in no other way.^* as 166 U. S. 150, 41 L. ed. 955, 17 9^ Citing Mayor, etc., of New Yorlc Sup. Ct. Eep. 530, discussed in §§ 916, v. Starin, 106 N. Y. 1-11, 12 N. E. 917. Rep. 631; Broadnax v. Baker, 94 N. C. 96 St. Clair County v. Interstate, 675, 55 Am. Rep. 633. etc., Transfer Co., 192 U. S. 454, 48 98 Citing Mayor, etc., of New York L. ed. 518, 24 Sup. Ct. Eep. 300. 444 CONSTITUTIONAL LAW OF TAXATION. 877. The opinion concludes with the following significant language, with respect to the power of the states to regulate ordinary ferries between states: Because we have, arguendo, rested our conclusion in this case upon the assumption that the respective states have the power to regulate ferries over navigable rivers constituting boundaries between states, we must not be understood as deciding that that doctrine, which undoubtedly finds support in the opinions an- nounced in Fanning v. Gregoire!^ and Conway v. Taylor^ has not been modified by the rule subsequently laid down in Glouces- ter Ferry Co. v. Pennsylvania^ and Covington, etc.. Bridge Co. V. Kentucky.^ As this case has not required us to enter into these considerations we have not done so. 878. In Louisville, etc., Ferry Co. v. Kentucky'^ a state tax on so much of an interstate ferry franchise, considered as prop- erty, as was derived from the adjoining state, was held void be- cause the franchise had its situs in the adjoining state, but the question of interstate commerce was not passed upon. In People ex rel. Pennsylvania R. R. Co. v. Wemple^ a tax on the " franchise or business " of corporations, doing business within the state, estimated upon the amount of capital employed within the state, was vacated, it appearing that the only business done by the corporation within the state was the operation of an interstate ferry, in such business as related to interstate trans- portation. The police powers of the states and interstate commerce. 879. In many of the cases where state license or privilege taxes upon persons engaged in interstate commerce have been con- demned, the arguments in justification of such taxes have been that the taxes in question were to be upheld imder the police powers of the states; and it has been said in overruling these arguments that the police power must be exercised in subordina- V. Starin, 106 N. Y. 1-11, 12 N. E. 2 114 U. S. 196, 29 L. ed. 158, 5 Eep. 631; Wyckoff v. Queens County Sup. Ct. Rep. S2B. Ferry Co., 52 N. Y. 32, 11 Am. Rep. 3 154 U. S. 204, 38 L. ed. 962, 14 650; Conway v. Taylor, 1 Black, 603, Sup. Ct. Rep. 1087. 17 L. ed. 191; Mayor of New York * 188 U. S. 385, 47 L. ed. 513, 23 V. New England Transfer Co.. 14 Sup. Ct. Rep. 403, discussed in § 102. Blatehf. 159, Fed. Cas. No. 10.197. 5)38 N. Y. 1, 33 N. E. Rep. 733, 19 «e 16 How. 624, 14 L. ed. 1043. L. R. A. 694. 1 1 Black, 603, 17 L. ed. 191. STATE TAXES AFFECTING COMMEECE. 445 tion to the right of Congress to regulate interstate commerce.® Nevertheless persons and corporations engaged in interstate com- merce are not exempt from the police powers of the states; and where license fees are imposed purely as matters of reasonably necessary police regulation and not for revenue, and without dis- crimination against persons engaged in — or agencies of — in- terstate commerce, such taxes are valid.^ In the cases just cited the question was as to the validity of certain municipal license fees imposed, for regulation and inspection, upon telegraph com- panies. 880. In one of the eases, the Supreme Court stated the ap- plicable principle as follows: , We hold that the city of Philadelphia had power to pass such an ordinance as this, requiring the company to pay a reasonable license fee for the enforcement of local governmental supervi- sion. In other words, if a corporation, although engaged in the business of interstate commerce, so carries on its business as to justify, at the hands of any municipality a police supervision of the property and instrumentalities used therein, the munici^ pality is not boimd to furnish such service for nothing, and may, in addition to ordinary property taxation, subject the cor- poration to a charge for the expense of the supervision.* 881. Of course, if any discrimination is made, in imposing such taxes, against persons or corporations engaged in interstate commerce, the taxation is void.* And, in order to uphold such taxes as police regulations, it is necessary that they should be reasonably proportioned — al- though not exactly equal — to the cost of the police supervision. The subject of reasonableness of such fees is elsewhere discussed.^* Such taxes, imposed as revenue measures, are invalid. ThiTS ■where the fees imposed by a municipal ordinance for " inspection and regulation " appeared on the record to be twenty times the cost of inspection and regulation, the ordinance was held to be a revenue measure, hence void.^^ 6 See Brennan v. Titusville, 153 U. 8 Atlantic and Pacific Telegraph Co. S. 289, 38 L. ed. 719, 14 Sup. Ct. Rep. v. Philadelphia, supra. 829. See also in this connection 9 See §§ 854 et seq. f§ 868, 869, 870 et seq. "> See §§ 1445 et seq. 7 Western Union Telegraph Co. v. n Postal Telegraph Cable Co. v. New Hope, 187 U. S. 419, 47 L. ed. Taylor, 192 U. S. 64, 48 L. ed. 342, 24 240, 23 Sup. Ct. Rep. 204; Atlantic Sup. Ct. Rep. 208, reversing 202 Pa. and Pacific Telegraph Co. v. Philadel- St. 583, 52 Atl. Rep. 128. phia, 190 U. S. 160, 47 L. ed. 995. 23 Sup. Ct. Rep. 817. 446 CONSTITUTIONAL LAW OF TAXATION. Doubtless, too, a municipality is so far limited in the enforce- ment of such license charges that it cannot make their payment a condition of permitting a company engaged in interstate com- merce to do business. ^^ In the cases cited in which the right to impose such charge* was upheld, the method of collection employed was to sue the companies to recover the amoimts due.''^ Tolls for the use of improvements in navigable waters. 882. The inland navigable waters of the United States con- stitute a part of its interstate commercial waterways, and vessels licensed by the United States to conduct a coasting trade are entitled to unobstructed passage over them. The state may not,, therefore, even as regards waters wholly within its limits, exact a license fee or tax from vessels having a coasting license from the United States, as a condition of navigating those waters.-"* Such a license fee or tax is not made valid by being imposed " in lieu of wharfage." ^^ But where fees are exacted, not as a license for the use of the waters, but as a toll or compensa- tion for improvements made in the waterways by the state au- thority, the exaction is constitutional since it is merely a pay- ment for benefits received.^^ And as a general principle taxes or charges imposed in this, way iipon any commercial enterprise, as compensation for some specific benefit other than the general benefits of government, are not, strictly speaking, taxes at all. They are not regarded as taxes by economic writers ;■"' and are not in conflict with i2Crutcher v. Kentucky, 141 U. S. .310, 59 S. W. Rep. 103, 51 L. R. A. 47, 35 L. ed. 652, 11 Sup. Ct. Rep. 850. 854; Western Union Telegraph Co. v. iBHuse v. Glover, 119 U. 8. 543, 30' Massachusetts, 125 U. S. 530, 31 L. L. ed. 487, 7 Sup. Ct. Rep. 313; ed. 790, 8 Sun. Ct. Rep. 961. Cincinnati v. Bryson, 15 Ohio, 625, 45 13 Western Union Telegraph Co. v. Am. Dec. 593; Frommer v. Richmond, New Hope, 187 U. S. 419, 47 L. ed. 31 Gratt. 646, 31 Am. Rep. 746; Mc- 240, 23 Sup. Ct. Rep. 204 ; Atlantic Reynolds v. Smallhouse, 8 Bush, 447 ; and Pacific Telegraph Co. v. Philadel- Thames Bank v. Lovell, 18 Conn. 500, phia, 190 U. S. 160, 47 L. ed. 995, 23 46 Am. Dec. 332; Wisconsin R. R., Sup. Ct. Rep. 817. etc., Co. v. Manson, 43 Wis. 255, 28. "Gibbons v. Ogden, 9 Wheat. 1, 6 Am. Rep. 542; Carondelet Canal Co. L. ed. 23; Foster v. Davenport, 22 v. Parker, 29 La. Ann. 430, 29 Am. How. 244, 16 L. ed. 248; Moran v. Rep. 339. New Orleans, 112 U. R. 69, 28 L. ed. " Plehn's Introduction to Public 653, 5 Sup. Ct. Rep. 38; Harman v. Finance, 95-103; Jtill, Political Eeon- Chicago, 147 I'. S. 396, 37 L. ed. 221, omy, Bk. V. chap. V; Smith, Wealth of 13 Sup. Ct. Rep. 310. Nations. Bk. V, chap. 1. See §§ 932- 15 St. Louis V. Consolidated Coal 941 et seq., as to inspection laws. Co., 158 Mo. 342, 81 Am. St. Rep. STATE TAXES AFFECTING COMMERCE. 447 the Federal constitution.-'^ A state may require locomotive engi- neers engaged in interstate traffic to pass an examination and pay a license fee for the service rendered in making the exami- nation and issuing the license.™ "Wharfage fees, which may be measured by size or tonnage of vessels, are among the charges which may be imposed by the state as compensation for benefits; and are not tonnage duties.^" Where such charges are exorbitant and unreasonable they cannot be at- tacked in the Federal courts as being tonnage duties disguised as wharfage. The remedy for such exorbitant charges is in the state courts or in application to Congress.^^ In order to justify wharfage fees, the proprietor, municipal or private, must have constructed wharves at his own expense.^ 883. Where, in the imposition of such compensatory charges, there is any discrimination between foreign and domestic vessels, or persons, or products, the imposition is an inadmissible regula- tion of commerce and is invalid.^^ Taxes on corporations engaged in interstate commerce. 884. While the right of a state to impose conditions on cor- porations of its own creation must be exercised in subordination 18 St. Louis V. Western Union Tele- 20 Cincinnati, etc., Co. v. Catletta- graph Co., 148 U. S. 92, 37 L. ed. burg, 105 U. S. 559, 26 L. ed. 1169; 380, 13 Sup. Ct. Rep. 485, where a Worsley v. Second Municipality, 9 tax was imposed by a municipality Rob. (La.) 324, 41 Am. Dee. 333; as a charge for the u.se of the streets Sweeny v. Otis, 37 La. Ann. 520; for telegraph lines (that the bearing Ouachita Packet Co. v. Aiken, 121 of the taxes on interstate commerce U. S. 444, 30 L. ed. 976, 7 Sup. Ct. was considered appears from the dis- Rep. 907; Transportation Co. v. Par- senting opinion) ; Postal Telegraph kersburg, 107 U. S. 691, 27 L. ed. 584, Cable Co. v. Adams, 71 Miss. 455, 42 2 Sup. Ct. Rep. 732. Am., St. Rep. 476, 14 So. Rep. 39, 21 Ouachita Packet Co. v. Aiken, 121 where a state license tax on telegraph XT. S. 444—449, 30 L. ed. 976, 7 Sup. companies in lieu of all other taxes Ct. Rep. 907. See further as to wharf- was upheld partly on this principle, age charges, §§ 952, 953, treating which does not, however, seem to be of the distinction between such charges applicable, since no special material and tonnage duties, benefit was given in return for the 22 New Orleans v. Wilmot, 31 La. tax. The exemption from other taxa- Ann. 65. tion does not seem to be a benefit 23 Guy v. Baltimore, 100 U. S. 434, which brings the case within either 25 L. ed. 743, where wharfage fees the legal or economic authorities. imposed by the city of Baltimore on 19 Smith v. Alabama, 124 U. S. 465, vessels carrying goods other than the 31 L. ed. 508, 8 Sup. Ct. Rep. 564; products of Maryland were held to be Dent V. West Virginia, 129 U. S. 114, in conflict with the Federal eonstitu- 32 L. ed. 623, 9 Sup. Ct. Rep. 231; tion. See also The John M. Uelch, 18 Nashville, etc., R. R. Co. v. Alabama, Blatchf. 74, 2 Fed. Rep. 383, and 128 U. S. 90, 32 L. ed. 352, 9 Sup. §§ 854 et seg., 1108 et seq. Ct. Rep. 28. 448 CONSTITUTIONAL LAW OF TAXATION. to the congressional power to regulate commerce, yet where the effect of such conditions upon commerce is merely a remote and incidental eilect, not discriminating against corporations engaged in such commerce, the conditions will be upheld. Thus a fee imposed by a state for filing articles of incorporation of a con- solidated corporation is not repugnant to the congressional power, although the consolidated corporation may be engaged in inter^ state commerce.^* And an annual fee for the privilege of corporate existence may be exacted from domestic corporations, regardless of the nature of the corporate business or of its investments.^® A state franchise tax upon a domestic corporation, which is con- strued to be a privilege tax upon the privilege of exercising the corporate franchises in the state, is not a regulation of interstate commerce because of the fact that the corporate products are manufactured in another state.^® 885. Thus a state license tax imposed on a foreign corpora- tion, engaged in the business of milling and mining in another state, for the privilege of keeping an office in the taxing state, is upheld as not being a regulation of commerce f although when the corporation is directly engaged in interstate commerce such a tax is invalid.^'^* 886. This distinction between corporations engaged in inter- state transportation and those engaged in private commercial business was further emphasized in a case involving a tax upon a Michigan manufacturing corporation^^ upon which the state of New York had imposed a license or franchise tax, computed upon the basis of capital employed in the state. The tax was upheld upon the theory that the state has the right to impose conditions upon foreign corporations doing business in its territory. The distinction between manufacturing and business corpora- tions, and those engaged in communication and transportation, upon which the decision as to interstate commerce was based, can only be a difference in degree. Both kinds of corporations are en- 24 Ashley v. Ryan, 153 U. S. 436^ 38 19 Am. St. Rep. 394, 19 Atl. Rep. 733. L. ed. 773, 14 Sup. Ct. Rep. 865, a£- 27 Pembina, etc., Co. v. Pennsyl- flrming 49 Ohio St. 504, 31 N. E. Rep. vania, 125 U. S. 181, 31 L. ed. 650, 8 721; Chicago, etc., Ry, Co. v. State, Sup. Ct. Rep. 737. 153 Ind. 134, 51 N. E. Rep. 924. 27a Norfolk and Western Ry. Co. v. 26 Honduras Commercial Co. v. State Pennsylvania, 136 U. S. 114, 34 L. ed. Board of Assessors, 54 N. J. L. 278, 394, 10 Sup. Ct. Rep. 958, reversing 23 Atl. Rep. 648. 114 Pa. St. 256, 6 Atl. Rep. 45. 26 Standard Underground Cable Co. 28 New York v. Roberts, 171 U. S. V. Attorney-General, 46 N. J. Eq. 270, 658, 19 Sup. Ct. Rep. 58, 43 L. ed. 323. STATE TAXES AFFECTING COMMEKCE. 449 gaged in interstate commerce, but in the case of the one kind the decisions say, in effect, that a tax of this sort is too remote in its operations to be considered a regulation of commerce. If the tax were prohibitory probably a different question would be presented. In an earlier case,^ where the facts were similar, the tax was held not to be a regulation of interstate commerce upon the ground ap- parently^" that a tax on the franchise or business of a corporation engaged in interstate commerce is not a regulation of commerce, at least if the business of the corporation is mercantile and not trans- portation or communication. Taxes on gross receipts of carriers. 887. The cases where taxes laid upon gross receipts of inter- state carriers within a state have been condemned, are to be dis- tinguished from the line of cases which discuss the validity of franchise, privilege, or excise taxes laid upon carriers engaged in interstate business, measured by reference to the whole, or to a calculated proportion, of their gross receipts everywhere. This latter class of cases seem to be irreconcilable. A chronological examination of cases upon this subject will best introduce a summary of their effect, so far as such a consistent summary can be made. This topic excludes from consideration the cases where the tax has been held to be upon the corporate franchise con- sidered as property. 888. In the case of The Staie Tax on Railway Gross Beceipt^^ Pennsylvania had laid a tax " upon the gross receipts " of domestic railroad companies, the amount of the tax being a percentage of such gross receipts. No distinction was made between receipts from local and from interstate traffic. The tax was sustained principally on the ground that the tax for each half year was paid at the end of the half year, after the receipts had reached the treasury of the company and become its property. The line of reasoning of the court was the same as that by which a state is allowed to tax articles of interstate commerce after ihey have be- come a part of the general mass of property in the state. The court also briefly referred to the tax as a tax on the " franchise granted," and said " it is not to be questioned that the states may tax the franchises of companies created by them, and that 29 Horn Silver Mining Co. v. New 30 Page 318. York, 143 U. S. 305, 36 L. ed. 164, 12 31 15 Wall. 284, 21 L. ed. 164. Sup. Ct. Kep. 403. 29 450 CONSTITUTIONAL LAW OF TAXATION. the tax may be proportioned either to the value of a franchise granted, or to the extent of its exercise; nor is it deniable that gross receipts may be a measure of proximate value, or, if not, at least of the extent of enjoyment." There was a strong dissent from this decision by three justices, who held that, no matter what the form of the tax, it was in fact a burden on interstate commerce. 889. In the case of the Delaware Railroad Tax^ Delaware had taxed domestic railroad corporations, having lines partly in other states, as follows: (1) A tax was laid, payable each year, "of three per cent, upon their net earnings or income received from all sources during the previous year," the road paying only such proportion of its earnings as the length of line in the state bore to the whole road; (2) "one-fourth of one per cent, upon the actual cash value of its capital stock," the tax being collected on such proportion of the capital stock as the length of the road in the state bore to the whole road;^ (3) a privilege tax " for the use within the state " of each locomotive $100 and each passenger car $25. These taxes, attacked on several grounds, were upheld. The interstate commerce questions were very briefly considered, the court saying: The exercise of the authority which every state possesses to tax its corporations and all their property, real and personal, and their franchises, and to graduate the tax upon the corpora- tions according to their business or income, or the value of their property, when this is not done by discriminating against rights held in other states, and the tax is not on imports, exports, or tonnage, or transportation to other states, cannot be regarded as conflicting with any constitutional power of Congress. 890. The cases just discussed rest, so far as their bearing on interstate commerce is concerned, mainly on the right of a state to tax corporations of its own creation as it pleases, as a con- dition of their continued existence. The effect of these decisions would be that, so far as domestic corporations are concerned, the only taxes which would be repugnant to the commerce clause would be taxes directly laid on the act of interstate transporta- tion, or on its subjects. 32 18 Wall. 206, 21 L. ed. 888. situs see §§ 72 et seq., 101 et seq.; 33 For discussion of this method of with respect to equality see § 1461 valuation with respect to questions of et seq. STATE TAXES AFFECTING COMMEECE. 451 891. In Erie Railway Company v. Pennsylvania^^ the right of a state to tax the gross receipts of foreign corporations doing- business in the state was upheld, but no question of interstate commerce seems to have been raised. 892. In Fargo v. Michigan^^ the state of Michigan had imposed a percentage tax upon the gross receipts of a foreign transporta- tion corporation engaged in interstate business. The tax was sought to be justified on the ground that the state had a right to impose such conditions as it pleased on foreign corporations which exercised their franchises in its borders; and on the fur- ther ground that the tax was on the gross receipts as property after they had been earned. As to this last contention, the court held that the situs of those receipts was at the home office where- the state had no right to tax them; and the validity of the tax, therefore, rested on the right of the state to impose conditions on foreign corporations. The court, in holding the tax invalid,, used language in effect destructive of the principles upon which the previous cases of State Tax on Railway Gross Receipts and Delaware Railroad Ta^ were decided, saying : The proposition that the states can, by way of a tax upon' business transacted within their limits, or upon the franchises, of corporations which they have chartered, regulate such business. or the affairs of such corporations, has often been set up as a defense to the allegation that the taxation was such an inter- ference with commerce as violated the constitutional provision now under consideration. But where the business so taxed is: commerce itself, and is commerce among the states or with for- eign nations, the constitutional provision cannot thereby be evaded; nor can the states, by granting franchises to corpora- tions engaged in the business of the transportation of persons or merchandise among them, which is itself interstate commerce, acquire the right to regulate that commerce, either by taxation or in any other way. 893. The principles thu.s expressed in Fargo v. Michigan?^ were enforced in Philadelphia and Southern Steamship Co. v. Pennsylvania f' by which State Ta^ on Railway Gross Receipts'^ Avas overruled. The state of Pennsylvania, which seems to have- 34 21 Wall. 492, 22 L. ed. 595. 37 122 U. S. 326, 30 L. ed. 1200, T 35 121 U. S. 230, 30 L. ed. 888, 7 Sujp. Ct. Rep. 1118, reported below,. Sup. Ct. Kep. 857, reported below in Philadelphia, etc., Steamship Co. v^ Fargo V. Auditor-General, 57 Mich. Commonwealth, 104 Pa. St. 109, where 598, 24 N. W. Eep. 538. the tax was sustained. ss Supra. 38 Supra, 15 Wall. 284, 21 L. ed. 164. 452 CONSTITUTIONAL LAW OF TAXATION. employed every known device for taxing corporations, had taxed the gross receipts of all corporations engaged in transportation and doing business in Pennsylvania, whether incorporated there or in some other state. The tax was laid directly on the gross receipts, the langTiage of the act being that such companies " shall pay to the state treasurer, for the use of the commonwealth, a tax of 8/10 of one per centum upon the gross receipts of such company for tolls and transportation, telegraph business or ex- press business." The case before the court was the case of a domestic steamship company engaged in interstate traffic. The argument of the counsel for the tax seemed to abandon the idea that the tax was a privilege tax, and endeavored to show that it was one on the franchise as property. But the court said : The second ground upon which the decision (in State Tax on Railway Gross Receipts) was based was, that the tax was upon the franchise of the corporation granted to it by the state. We do not think that this can be affirmed in the present case. It cer- tainly could not have been intended as a tax on the corporate franchise,^ because by the terms of the act, it was laid equally on the corporations of other states doing business in Pennsyl- vania. If intended as a tax on the franchise of doing business — which in this case is the business of transportation in carrying on interstate and foreign commerce — it would clearly be uncon- stitutional. The ground taken in State Tax on Railway Gross Receipts that the tax might be regarded as on property, since the receipts had become part of the general mass of property of the company, was declared to be " untenable." 894. In line with this reasoning some cases have been decided in other courts holding taxes on gross receipts derived frora interstate business unconstitutional.^ 895. The law upon the subject of the taxation of gross receipts was thus apparently settled when in 1891 the decision in Maine V. Grand Trunk Railway Co.*^ practically overruled Philadelphia, etc.. Steamship Co. v. Pennsylvania,*'^ the Supreme Court re- soMeaamg, apparently, the franchise son Canal Co. v. Commonwealth, 1 of corporat* existence. Monagh. 36, 17 Atl. Rep. 175, 21 « State V. Woodruff, etc.. Coach Co., W. N. C. (Pa.) 406; Commonwealth lU Ind. 155, 15 N. E. Rep. 814; v, New York, etc., Ry. Co., 21 W. N. Northern Pacific Ry. Co. v. Raymond, C. (Pa.) 210; Commonwealth v. Dela- 5 Dak. 356, 46 N. W. Rep. 538, 1 ware, etc., Ry. Co., 21 W. N. C. (Pa.) L. R. A. 732; Vermont and Canada 412; People ex rel. Connecting Terini- R. R. Co. V. Vermont Central R. R. nal Ry. Co. v. Miller, 178 N Y. 194, Co., 63 Vt. 1, 21 Atl. Rep. 262-731, 70 N. E. Rep. 472, reversing 84 App. 10 L. R. A. 562; Delaware and Hud- Div. 174. STATE TAXES AFFECTING COMMEKCE. 453 turning to one of the positions taken in State Tax on Railway Gross Receipts.*^ The tax was laid by ascertaining the whole gross receipts of the road, dividing the result by the whole num- ber of miles of the road, and then multiplying the quotient by the number of miles in the state, to ascertain the amount of the gross receipts upon which the tax should be estimated. The law applied to both domestic and foreign corporations and the tax was ex- pressed to be " an annual excise tax for the privilege of exercising its franchises in the state." The tax was held to be no interfer- ence with commerce, the right of the state to tax the exercise of the corporate franchises was clearly affirmed; and it was said that resort to the gross receipts was only had to ascertain the value of the business done and thus obtain a guide as to tha amount of the excise tax to be levied. The court said : We are unable to perceive in that resort any interference with transportation, domestic or foreign, over the road of the railroad company, or any regulation of commerce which consists in such transportation. A comparison of this language with that used in Fargo v. Michigan*'*' will show how radical was the change in the position of the court. Four justices dissented from the decision. To the same effect is a recent Maryland case, upholding a tax law very similar to the Maine law referred to.'*^ Where a l^ew York statute laid a privilege tax on the fran- chises of railroads, measured by gross receipts of m^ra-state busi- ness, it was held that, since the receipts from carrying interstate and intra-state mails could not be separated, no tax could be assessed on receipts for carrying mails.*® Summary with respect to taxes on railway gross receipts. 896. The law with respect to privilege taxation of corpora- tions engaged in interstate commerce, by reference to their gross receipts, seems to be as follows, so far as any siimmary can be made: 1. The state may not directly and in terms lay a tax on the act of interstate transportation. 41 142 U. S. 217, 35 L. ed. 994, 12 45 Cumberland, etg,, Ry. Co. v. State, Sup. Ct. Rep. 121-163. 92 Md. 668, 48 Atl. Rep. 903, 52 L. *2 Supra. R'. A. 764. ^ Supra. 46 People ex rel. N. Y. C, etc., Ry. 44 § 802, supra. Co. v. Morgan, 168 N. Y. 1, 60 N. E. Rep. 1041. 454 CONSTITUTIONAL LAW OF TAXATION. 2. It may tax the proceeds received from such transportation, if it imposes the tax in the form of a tax on the privilege of exercising corporate franchises in the state, referring to the gross receipts as a means of determining the value of the privilege ; and employing some reasonable rule — such as proportioning the tax hj reference to mileage within and without the state, to determine the excise on the privilege. 3. It probably may not tax the receipts from interstate com- merce directly. Separation of interstate and intra-state business. S97. There is no doubt that acts of transportation or com- munication wholly within a state may be made the subjects of privilege taxation, and where a tax is imposed upon a carrier en- ;gaged in both interstate and intra-state traffic, if the statute im- posing the tax can be construed as applicable only to the intra- istate traffic, it will be upheld. Illustrating this rule, a statute of Missouri which required that express companies should make a report of business done " within this state," and requiring an annual license fee or occupation tax based thereon was upheld, as .applying only to intra-state traffic. The act required each express company to file a report showing " the entire receipts for business 'done within this state of each agent of such company doing busi- mess in this state," and provided that sums paid to railroads or steamboats " within this state " for the transportation of freight "* within this state," might be deducted from the gross receipts, ;and required the company to include as such receipts all sums ^earned or charged " for the business done within this state." The Supreme Court said: This positive and oft-repeated limitation to business done within the state (that is, business begun and ended within the ■state) evidently intended to exclude, and the language employed certainly does exclude, the idea that the tax is to be imposed upon the interstate business of the' company. "Business done within this state " cannot be made to mean business done between that state and other states.*'' So a Florida statute, imposing a license tax on " all express flC»m.panies doing business in this state, etc.," was held to affect (tmly local, as distinguished from interstate, commerce.*^ *7 (Pacific Express Co. V. Seibert, 142 48 Osborne v. Florida, 33 Fla. 162, ^. S. 339, 35 L. ed. 1035, 12 Sup. Ct. 39 Am. St. Rep. 99, 25 L. R. A. 120, Kcp. 25©. U So. Rep. 588; affirmed, 164 U. S. STATE TAXES AFFECTING COMMERCE. 455 Statutes imposing a license tax for business done " from one point in this state to another point in this state " have been upheld.** Other cases interpreting statutes along the same lines are cited. ^** It will be observed that, in the several statutes under considera- tion in the above cases, apt words were used, expressing the legisn lative intention to impose the tax upon the local business only. 898. The following are examples of statutes which have been held to be void, as not sufficiently discriminating between inter- state and intra-state business: An ordinance of a city of Alabama which provided that "the license tax for the year is hereby fixed as follows: On tele- graph companies, $2.25." With respect to this ordinance the United States Supreme Court said : But it is urged that a portion of the telegraph company's busi- ness is internal to the state of Alabama, and, therefore, taxable by the state. But that fact does not remove the difficulty. The tax affects the whole business without discrimination. There are sufficient modes in which the internal business, if not already taxed in some other way, may be subjected to taxation without the imposition of a tax which covers the entire operations of the company.*^ A statute of Kentucky which required a license fee from the agent of every express company not incorporated by the laws of Kentucky.^^ A statute of Tennessee which imposed a tax on sleeping car companies, operating cars over roads not owned by them, of " fifty dollars for each and every of said cars or coaches used or run over said roads." ^ 650, 41 L. ed. 586, 17 Sup. Ct. Eep. L. E. A. 442; Ogden City v. Grossman, 214. 17 Utah, 66, 53 Pac. Eep. 985; State *9 Eailroad Co. v. Harris, 99 Tenn. v. Eoeky Mount Bell Telephone Co., 684, 43 S. W. Eep. 115, 53 L. E. A. 27 Mont. 394, 71 Pac. Eep. 311; !I21 ; Western Union Telegraph Co. v. York v. Chicago, etc., E. E. Co., 56 City of Fremont, 39 Neb. 692, 58 Neb. 572, 76 N. W. Eep. 1065; State N. W. Eep. 415, 26 L. E. A. 698. v. Fleming, Neb. , 97 N. W. 50 Postal Telegraph Co. v. City Coun- Eep. 1063 ; Webster v. Bell, 68 Fed. eil of Charleston, 153 U. S. 692, 38 Eep. 183; Gibson County v. Pullman L ed. 871, 14 Sup. d. Eep. 1094; Southern Car Co., 42 Fed. Eep. 572; Moore v. City of Eufala, 97 Ala. 673, Kehrer v. Stewart, 197 U. S. 60, 49 11 So Eep. 921; Anniston v. Southern L. ed. 663, 25 Sup. Ct. Eep. 403. Ey Co 112 Ala. 557, 20 So. Eep. 51 Leloup v. Port of Mobile, 127 915; Montgomery v. Shoemaker, 51 U. S. 640, 32 L. ed. 311, 8 Sup. Ct. Ala. 114; Southern Express Co. v. Eep. 1380. Mobile 49 Ala. 404; Alabama, etc., 82 Cruteher v. Kentucky, 141 U. S. Co V Bessemer, 113 Ala. 668, 21 So. 47, 35 L. ed. 649, 11 Sup. Ct. Eep. 851. Eep 64- State ex rel. Beck v. Wag- 53 pickard v. Pullman Car Co., 117 ener 77 Minn. 483, 77 Am. St. Eep. U. S. 34, 29 L. ed. 785, 6 Sup. Ct. Eep. 681,'80 N. W. Eep. 633-778, 1134, 46 035. 456 CONSTITUTIONAL LAW OF TAXATION. An ordinance of a city of Virginia, which imposed a license tax " on every express company having an ofSce " in the city " and leceiving goods, wares, and merchandise, and forwarding them to places within the state of Virginia, or receiving goods, wares, and merchandise within the state of Virginia, and delivering them in the city." It was held that the clause " having an office in the city . . . and receiving goods, wares, and merchandise, and forwarding them to points within the state of Virginia," referred to the receipt of goods from " any quarter within or without the state." ^* A statute of Montana which imposed a license tax upon carriers engaged in transmitting goods " from one place to another." ®* 899. Where a statute levies a tax upon a person engaged both in interstate and domestic commerce, based on its business, although the statute makes no discrimination in terms between interstate and intra-state business, if it appears that the receipts from interstate business are actually separable from the receipts from intra-state business, the law will be upheld as to the tax on intra-state business and condemned as to the tax on interstate business. Following this principle is a case in which a law of Pennsyl- vania was examined, which provided for a tax upon every ton of freight transported by a railroad in that state, at certain rates. The company made returns to the accounting officers of the state, in which they stated separately the amount of freight transported wholly within the state, and also the amount brought into and carried out of the state. The tax was upheld as to the freight transported wholly within the state and condemned as to the other. ^^ 900. A single tax, assessed in gross upon the receipts of a tele- graph company, whose receipts were derived partly from inter- state commerce and partly from commerce within the state, but which receipts were returned and assessed in gross and without separation or apportionment, was held to be valid as to that part of the tax assessed on the receipts derived from domestic business ; and the collection of the tax was enjoined as to that part assessed on interstate business, it appearing hy stipulations on the record that the interstate iiLsiness and the intra-state iusiness were 6* Webster v. Bell, 68 Fed. Rep. 183, 56 Case of State Freight Tax, 15 15 C. C. A. 360. Wall. 232, 21 L. ed. 146. 55 State V. Northern Pacific Express Co., 27 Mont. 419, 71 Pac. Rep. 404, 94 Am. St. Rep. 824. STATE TAXES AFFECTING COMMERCE. 457 actv/dly capable of separation^ and that the respective amounts had heen ascertained.^^ 901. Where a state statute taxed telegraphic messages, making no distinction between interstate and intra-state messages, a judg- ment against the telegraph company for the full amount of the taxes was reversed, on the ground that so much of the tax as applied to interstate (and public) messages was unconstitutional, and the case was remanded to the state court, to " proceed there- after as justice may require, but not inconsistently with this opinion." ^* This was done, said the Supreme Court in another case, " to permit the Supreme Court of that state, if it could separate the taxes upon the two classes of telegrams, to do so, and to render judgment accordingly .®® 902. A statute of Alabama imposed a tax " on the gross amounts of the receipts by any and every telegraph company de- rived from the business done by it in this state," which statute the highest court of the state construed as applying to all receipts from biLsiness done in the state, and actually received there, although received for messages delivered at or sent from places outside the state. A telegraph company made a return showing its receipts for messages wholly transmitted within the state, the state officers required a report showing all receipts within the state, and assessed the tax on that basis. The state court upheld the assessment on that basis;** but the United States Supreme Court reversed the judgment of the state court, saying : As the record of the case presents the means by which the receipts arising from commerce wholly within the state, and from that which . . may be called interstate commerce, can be separated, the judgment of the Supreme Court of Alabama is reversed and the case remanded to it for further proceedings in conformity with this opinion.®^ 903. Where it is not possible to separate the earnings of a carrier derived from intra-state business from those derived from interstate business it cannot be taxed at all on account of those inseparable earnings. This is illustrated in a case where a statute of ISTew York imposed a license tax on a carrier based on gross 57Ratterman v. Western Union Tele- graph Co., 127 U. S. 411, 32 L. ed. graph Co., 127 U. S. 411, 32 L. ed. 229, 8 Sup. Ct. Rep. 1131. 229, 8 Sup. Ct. Rep. 1131. 60 80 Ala. 273, 60 Am. Rep. 99. 58 Telegraph Co. v. Texas, 105 U. S. si Western Union Telegraph Co. v. 460, 26 L. ed. 1067. Alabama State Board, 132 U. S. 472, 5»Ratterman v. Western Union Tele- 33 L. ed. 409, 10 Sup. Ct. Rep. 161. 458 CONSTITUTIONAL LAW OF TAXATION. earnings " from its transportation or transmission business orig- inating and terminating mthin this state." The state comptroller sought to tax receipts derived from carrying the mails, and it appeared that those receipts were incapable of separation. The comptroller thereupon assessed the carrier upon the whole receipts from that source. It was held that this could not be done.*^ 904. The intimations contained in a recent opinion are worthy of notice, as indicating what would be the effect of state laws compelling an interstate carrier to do local business. A law of Mississippi laid a privilege tax on each sleeping and palace car carrying passengers from one point to another within the state, one hundred dollars, and twenty-five cents per mile for each mile of track " over which the company runs its cars." (This last clause was construed to mean " over which the company runs its cars in this state.") The constitution of Mississippi declared sleeping car companies to be common carriers.®* A foreign sleeping car company, being sued for the taxes, pleaded — and offered evidence on the trial tending to prove — that its intrastate business was conducted at a loss. It contended that this fact would show that the business within the state was a burden on its interstate business — hence that a tax, predicated on its business within the state, was in fact a burden on interstate commerce, while at the same time the constitutional provision above referred to compelled it to carry on the local biisiness. The Supreme Court of Mississippi, however, upheld the tax, merely saying that the argument of the company was " fallacious." The Supreme Court of the United States affirmed the judgment, saying: If the clause of the state constitution referred to were held to impose the obligation supposed, and to be valid, we assume without discussion that the tax would be invalid. . . . But we assume that the opinion of the Supreme Court of Mississippi intends to meet the difficulty frankly, and when it says that the argument against the tax drawn from the above interpretation of the constitution is fallacious, we take it as meaning that no sixeh interpretation will be attempted in the future, and we take it so the more readily that we can see no ground for a different view.®* 62 People ex rel. New York Cent., the tax was a burden or a Federal etc., E. R. V. Morgan, 168 N. Y. 1, agency. 60 N. E. Rep. 1041. The court found 63 § 195 of Mississippi Constitution, it unnecessary to consider whether 64 Pullman Company v. Adams, 189 STATE TAXES AFFECTING COMMERCE. 459 State taxation of property employed in interstate commerce. 905. Propertyi employed in interstate commerc* may be taxed as property by a state having jurisdiction over it, provided that none of the rights of the Federal government are infringed. Taxation of the property does not constitute a r^ulation of com- merce, although its effect incidently and remotely may be to in- crease the cost of that commerce over what it would be if there were no taxation. The distinction is similar to that made in the case of property employed in Federal agencies. The property itself can be taxed in both cases, but the act cannot. 906. ]^o question ever arises as to state taxation of physical l^roperty actually having its fixed sitits in the taxing state. N"o one would contend that the horses owned by an express company, the roadbed and rails owned by a railroad company, or the wires and instruments of a telegraph company are exempt from ordi- nary property taxation in the state of their sittis, on the valua- tion of the physical properties. The cases in which contention has arisen have presented more complex and elusive states of fact. 907. The first remove from the simple cases just referred to is found in those cases where carriers engaged in interstate traffic are taxed by a state on account of property directly used in such traffic, although such property is not continually within the state. Two recent cases present such facts and uphold such taxation. In American Refrigerator Transit Co. v. Hall^ the taxed car- rier was a foreign corporation which operated refrigerator cars in the carriage of freight from places in Colorado to places outside that state, from places outside the state to places within it, or between places wholly outside of the state. The carrier neither owned nor leased a railroad but paid the railroads for transport- ing its cars. Its cars were never run in fixed numbers, or at regular times, or as regular parts of particular trains. It kept no cars in the state except for such purposes; it did no other business in the state than that described, and had no office or property, other than the cars, in the state. The average number of its cars in {he state during the year was forty. The state laid a property tax upon the company, basing such tax upon the assessed valuation of the said average number of the cars in the state. U. S. 420, 47 L. ed. 877, 23 Sup. Ct. Sup. Ct. Rep. 599, affirming 24 Colo. Rep. 494, affirming 78 Miss. 814, 84 291, 65 Am. St. Rep. 223, 51 Pac. Am. St. Rep. 647, 30 So. Rep. 647. Rep. 421. 65 174 U. S. 70. 43 L. ed. 899, 19 460 CONSTITUTIONAL LAW OF TAXATION. 908. It was held that the tax was valid and was not an inter- ference with interstate commerce Said the Supreme Court : The state statutes impose no burdens on the business of the plaintiff in error, but contemplate only the assessment and levy of taxes upon the property situated within the state; and the only question is whether it was competent to ascertain the number of the cars to be subjected to taxation by inquiring into the average number used within the state limits during the period for which the assessment was made. It having been settled, as we have seen, that where a corporation of one state brings into- another, to use and employ, a portion of its movable personal property, it is legitimate for the latter, to impose upon such prop- erty, thus used and employed, its fair share of the burdens of taxation imposed upon similar property used in like way by its- own citizens, we think that such a tax may be properly assessed and collected, in cases like the present, where the specific and individual items of property so used were not continuously the same, but were constantly changing, according to the exigencies- of the business, and that the tax may be fixed by an appraise- ment and valuation of the average amount of the property thus habitually used and employed. Nor would the fact that such cars were employed as vehicles of transportation in the inter- change of interstate commerce render their taxation invalid. 909. In Union Refrigerator Transit Co. v. LyncJi^ the facts- were like those in the case just discussed, except that it did not appear in the record before the court what the average number of cars used in the state was. The tax, which was assessed upon the valuation of ten cars, was upheld ; the Supreme Court saying that, in the absence of allegations or proof that the assessment was unreasonable, Unequal, or unjust in this respect, or that the- method of valuation was erroneous, " the presumption is that the- action of the taxing officers was correct and regular, and that the number of ears assessed by the state board of equalization was the- average number used and employed by plaintiff in error in the state of Utah during 1897." 910. In Pullmans Palace Car Co. v. Pennsylvania^'^ a tax on a corporation running cars in a state in a similar manner was up- held. The tax was one on the company's " capital stock," taking as the basis of assessment such proportion of the capital stock as the number of miles of railroad over which cars were run in 66 177 U. S. 149, 44 L. ed. "08, 20 67 141 U. S. 18, 35 L. ed. 613, 11 Sup. Ct. Eep. 631, affirming 18 Utah Sup. Ct. Rep. 876, affirming 107 Pa. 378, 55 Pac. Rep. 639, 48 L. R. A. 790. St. 156. See § 914, infra. STATE TAXES AFFECTING COMMEECE. 461 ihe state bore to the whole number of miles over whicli cars were run. In the opinion, however, language is used which indi- cates that the court regarded the tax as one upon the average number of cars in the state. 911. In Marye v. Baltimore & Ohio BailroacP^ the question Avas whether a Maryland railroad company, having no road in Virginia, was taxable under the Virginia laws upon rolling stock owned by the company and employed upon connecting railroads leased by it in that state, yet not assigned permanently to those roads but used interchangeably upon them and upon roads in •other states, as necessity might require. It was held not to be so taxable solely because the tax laws of Virginia appeared upon their face to be limited to corporations of that state; but the •opinion of the court expressly recognizes the right of the state to tax the property and to fix the tax " by an apportionment and valuation of the average amount of the property thus habitually used." «^ Taxation of " franchises " of interstate carriers, regarded as property. 912. That the intangible property, or " franchises " considered as property, of a corporation engaged in interstate commerce, may be taxed as property by the states, and that such taxation does not amount to regulation of or burden upon interstate commerce is now well settled. 913. The chief methods by which the valuation of such in- tangible assets, considered as property, has been ascertained, and which have been upheld are: In the case of an interstate telegraph, or railroad company, to take into consideration the value of the whole lines of the com- pany, taking into consideration the market value of the stock and bonds as indicating the value of the whole property; and to assess the value of the property within the state at such a propor- 68 127 U. S. 117, 32 L. ed. 94, 8 Sup. the ears can only be taxed as prop- Ct. Rep. 1037. erty by the state in which the com- es The case of State v. Stephens, 146 pany has acquired a domicile and the Mo. 662, 69 Am. St. Kep. 625, 48 cars have a situs," is in direct con- S. W. Rep. 934, is not in harmony flict with the line of authorities which •with the cases just cited. That case, hold that property engaged in inter- iii holding that as to the cars of a state commerce may be taxed and foreign corporation used in the state that it may be so taxed and acquire a '■' Being instruments of interstate com- sUus in a state other than that in merce Congress alone has jurisdiction which its owner has a, domicile, over them, except as above indicated 462 CONSTITUTIONAL LAW OF TAXATION. tion of the value of the whole property as the length of the lines within the state bears to the whole length. In employing this method, the value of the intangible property or " franchises " within the state may be ascertained by deducting from the valua- tion thus obtained the assessed value of the tangible property in the state, subject to local taxation, or the whole property within the state may be assessed as a unit, at the proportionate value ob- tained as stated. Property taxation by this method does not con- stitute a burden upon interstate commerce.™ 914. In the case of an interstate carrier of passengers, not owning or operating lines of its own, but operating cars over the lines of railroads both within and without the state, to ascertain the value of the whole capital stock (either at par or in certain eases at a valuation to be determined in a way wliich does not appear, or in certain cases to be computed by reference to the rate of dividends), and to fix the value of the capital stock within the state by taking, as such value, such proportion of the value of the whole capital stock as the number of miles of railway over which cars were run in the state bore to the whole number of miles over which cars were operated. This tax seems to have been re- garded more as a tax upon the average number of cars within the state than as one upon intangible property. But however such a tax may be classified, it was held not to be a burden upon inter- state commerce.''^ To-day this tax would probably be called a tax upon both the tangible and intangible properties of the com- pany within the state, considered as a unit. 915. The next step, in logical sequence, is the taxation of the purely intangible properties of interstate carriers which neither own nor operate physical agencies of traffic between the states; but which are taxed in the state upon the value of their " intan- gible " assets, although those intangible assets consist almost wholly of the " good-will " of their businesses, which good-will is TO Western Union Telegraph Co. v. porting the text also is Western Taggart, 163 U. S. 1, 41 L. ed. 49, 16 Union Telegraph Co. v. Gottlieb, Sup. Gt. Eep. 1034; Cleveland, etc., 191 U. S. 412, 47 L. ed. 1116 23 Ey. Co. V. Backus, 154 U. S. 439, 38 Sup. Ct. Rep. 730; Western Union L. ed. 1041, 14 Sup. Ct. Rep. 1122. Telegraph Co. v. Massachusetts, 125 The state statutes in these cases pro- U. S. 530, 31 L. ed. 790, 8 Sup. Ct. vided for the deduction from the value Rep. 961; Massachusetts v. Western of the vphole property, as indicated by Union Telegraph Co., 141 U. S. 40 the market value of the stocks, of the 35 L. ed. 628, 11 Sup. Ct. Rep. 889. assessed value of the real estate of the 71 Pullman's Palace Car Co. v. Penn- companies outside the state not di- sylvania, 141 U. S. 18, 35 L. ed. 613 rectly used in their business. Sup- 11 Sup. Ct. Rep. 876. STATE TAXES AFFECTING COMMERCE. 463 derived largely if not wholly from their activities as interstate carriers. Such taxation was upheld in the case of express com- panies, which were taxed as follows: The whole value of the property of an express company was ascertained by a method of appraisement which took into con- sideration the entire value of the stock of the company, the value of its property in the state was then determined by taking such proportion of the whole value of the property as the value of the tangible assets in the state bore to the value of all the tangible assets of the company. The effect of this method was that the company's property in the state was assessed at a value much greater than that of its tangible assets. It was held such a tax was one on property and not on business, hence that it was not a burden on interstate commerce. ^^ Four of the nine justices of the Supreme Court regarded these taxes as burdens on interstate commerce. 916. The taxation of the intangible assets of corporations en- gaged in interstate commerce was carried to an extreme limit in Henderson Bridge Go. v. Kentucky ^^ where a tax was laid by the state of Kentucky on the " franchises " of a bridge corporation Avhich owned a railroad bridge, and approaches, across the Ohio river between Indiana and Kentucky, and also owned some rail- road track in Indiana. Apparently the company owned no other property, at least no such intimation appears in the reported decision. Two-thirds of the length of the bridge lay in Kentucky. The company did not operate any cars over the bridge, but took tolls from the railroad companies which used the bridge. Prac- tically all, or at least a great part, of the earnings of the company were derived from tolls paid for transactions of interstate com- merce. The assessing board took into consideration the market value of the stock and bonds of the corporation, and its gross receipts ; and fixed the value of the capital stock of the corporation at $2,900,000. It deducted therefrom the assessed value of the tangible prop- erty in Indiana. Two-thirds of the remainder (a fraction pro- 72 Adams Express Co. v. Ohio, 165 Eep. 527, where the statute which U. S. 194, 41 L. ed. 697, 17 Sup. Ct. was upheld called the tax a " fran- Rep. 311; rehearing, 166 U. S. 185, 41 chise" tax, and it appeared that the L. ed. 965, 17 Sup. Ct. Eep. 604; taxed carrier was a copartnership. Adams Express Co. v. Kentucky, 166 ^s 166 U. S. 150, 41 L. ed. 955, 17 U. S. 171, 41 L. ed. 960, 16 Sup. Ct. Sup. Ct. Rep. 530. 464 CONSTITUTIONAL LAW OF TAXATION. portionate to the length of the bridge in Kentucky as compared to the whole) was held to be the value of the company's whole property in Kentucky. From this value, the assessed value of the company's tangible property in Kentucky was deducted, and the remainder — a substantial sum — was held to be the value of the company's franchises, or intangible property, in Kentucky, upon which valuation the company was assessed. 917. The tax was upheld, although the company contended that the tax was a burden on commerce inasmuch as the value of its " franchises " was based on its earning capacity, and its earn- ings were derived from tolls for using the bridge in interstate co^mmerce. The majority of the court said : Clearly the tax was not a tax on the interstate commerce car- ried on by means of the bridge, because the bridge company did not transact such business. That business was carried on by the persons and corporations which paid the bridge company tolls for the privilege of using the bridge. The fact that the tax in question was to some extent affected by the amount of tolls received, and, therefore, might be supposed to increase the rate of tolls, is too remote and incidental to make it a tax on the business transacted. Speaking for the minority (four justices) Justice White said : I consider it a new and startling doctrine to say that a bridge which is situated in two states, with the sanction of the laws of both, which has been made a post route by act of Congress, is not an instrument of interstate commerce, and that the traflBc which goes over such bridge is not such eommercs, and that the ipceipts derived from or charges resulting from such business are not receipts derived from interstate commerce business. Pushed to its legitimate conclusion, this premise deprives the interstate commerce clause of the constitution of its entire efficiency, and is, I think, in direct conflict with the constitution as interpreted by this court from the foundation of the gov- ernment.^* State taxation of property which is the subject of interstate commerce. 918. Property which comes into a state as the subject of inter- state commerce may be taxed there, as a part of the general mass 74 To the eflfect that a tax on the it, is not a tax on commerce, is the ease capital stock or franchises of an in- of Keokuk and Hamilton Bridge Co. v. terstate bridge company, which does Illinois, 175 U. S. 626, 44 L. ed. 299, not itself carry on transportation over 20 Sup. Ct. Bep. 205. See opinions in STATE TAXES AFFECTING COMMEKCE. 465 of property in the state, if it comes under such circumstances as to have acquired a situs, although it is in the original package, and in the hands of the person who brought it into the state. Illus- trating this rule it is held that coal in barges, brought into a state from without, and remaining in the barges in which it had been brought into the state, and which has been offered for sale while in the barges, is subject to taxation as a part of the general mass of property in the state/^ It appeared in this case that, after the levy of the tax, and before the trial, a part of the coal had been exported from the country, and the remainder had been sold in the interior of the taxing state. 919. The ground of the decision, as explained in a later caae,™ was that the tax " was imposed aft«r the coal had arrived at its destination and was put up for sale. The coal had oome to its place of rest, for final disposal or use, and was a commodity in the market of New Orleans. It might continue in that condition for a year or two years, or only for a day. It had become part of the general mass of property in the state, and as such it was taxable for the current year as all other property in the city of IsTew Orleans was taxable. Under the law it could not be taxed again until the following year. It was subjected to no discrim- ination in favor of goods which were the products of Louisiana. It was treated exactly in the same manner as such goods were treated." 920. In the case in which the foregoing expressions were used, the facts were similar to those in Brown v. Hovston (supra), and the decision was the same." It makes no difference in the taxation of such goods, as property, brought from other states, that they are still in the original pack- ages. They may be taxed notwithstanding that fact. This is the difference between imports from a foreign country and goods brought from another state: goods brought from another state may be taxed as property in the original packages, while for a state to People ex rel. Connecting Terminal 156 U. S. 577, 39 L. ed. 538, 15 Sup. Ey. Co. V. Miller, 178 N. Y. 194, 70 Ct. Rep. 415, 40 La. Ann. 226, 8 Am. N. B. Rep. 472, reversing 84 App. Div. St. Rep. 519, 3 So. Rep. 642. To the 174_ same effect, Myers v. County Commis- 75 Brown v. Houston, 114 U. S. 622, sioners of Baltimore County, 83 Md. 29 L. ed. 257, 5 Sup. Ct. Rep. 1091. 385, 55 Am. St. Rep. 349, 35 Atl. Rep. 76 Pittsburgh, etc., Coal Co. v. Bates, 145, 34 L. R. A. 309. See Kehrer v. infra. Stewart, 197 U. S. 60, 49 L. ed. 663, 77 Pittsburgh, etc., Coal Co. v. Bates, 25 Sup. Ct. Rep. 403. 30 46(j CONSTITUTIONAL LAW OP TAXATION. tax imports from a foreign country in original packages would be to lay a duty on imports, which is forbidden.™ In the case just cited a tax was upheld, which was laid by a state on goods which were owned by a nonresident manufacturer. The goods had been shipped by the manufacturer from points outside the state to warehouses inside the state, and were held there for distribution to various points within and without the state as orders should be secured. The court held that these goods were not in transit but were subject to state taxation.^® 921 . Likewise property which is intended for export to another state or out of the country may be taxed as a part of the general mass of property in the state where it has its sitiiSj up to the time when it is delivered to a carrier for transportation out of the state, or has been started upon its course of transportation by a continuous route or journey.*" 922. Coe V. ErroP^ illustrates this proposition clearly. Logs which had been cut in Maine, and others which had been cut in IN'ew Hampshire, were floated in course of transit down a stream in New Hampshire to the town of Errol, in New Hampshire, thence they were to be floated down to a place in Maine. The logs were cut and floated down to Errol during the winter previous to the date of taxation (April 1st). As to the logs cut in New Hampshire, the right of the town of Errol to tax them as prop- erty was sustained. Said the Court: There must be a point of time when they (the logs) cease to be goTemed exclusively by the domestic law and begin to be governed and protected exclusively by the national law of com- mercial regulation, and that moment seems to us to be a legiti- mate one for this purpose, in which they commence their final movement for transportation from the state of their origin to that of their destination. When the products of the farm or the forest are brought in from the surrounding country to a town or station serving as an entrepot for that particular region, whether on a river or a line of railroad, such products are not yet exports, nor are they in process of exportation, nor is exporta- tion begun until they are committed to the common carrier for transportation out of the state to the state of their destination, or have started on their ultimate passage to that state. Until 78 American Steel and Wire Co. v. L. ed. 715, 6 Sup. Ct. Eep. 475, affirm- Speed, 192 U. S. 500, 48 L. ed. 532, ing 62 N. H. 303; Brown v. Houston, 24 Sup. Ct. Eep. 365, affirming (Tenn.) 114 U. S. 622, 29 L. ed. 257, 5 Sup. 75 S. W. Rep. 1037. Ct. Rep. 1091; Diamond Match Co. v. 79 American Steel and Wire Co. v. Ontonagon, 188 U. S. 82, 47 L. ed. Speed, supra. 394, 23 Sup. Ct. Rep. 266. 80 Coe v. Errol, 116 U. S. 517, 29 si Supra. . STATE TAXES AFFECTING COMMERCE. 467 then it is reasonable to regard them as not only within the state of their origin, but as a part of the general mass of property of that state, subject to its jurisdiction, and liable to taxation there, if not taxed by reason of their being intended for exportation, but taxed without any discrimination, in the usual way and man- ner in which such property is taxed in the state. . . . But if such goods are not taxed as exports, nor by reason of their ex- portation or intended exportation, but are taxed as part of the general mass of property in the state, at the regular period for assessment of such property and in the usual manner, they not being in course of transportation at the time, is there any valid reason why they should not be taxed ? 923. Where the property has actually been delivered to the carrier for transportation out of the state, it within the protection of the constitution, and may not be taxed by the state.^^ In order thus to escape the local tax there must be a completed delivery to the carrier*^ accompanied by a " purpose to ship imme- diately or at least as soon as transportation can be conveniently obtained, followed by actual shipment in a reasonable time." ** The mere intent to ship, unaccompanied by other elements, is not sufficient.^* Property in transit. 924. Property brought into a state in the course of transit from a point in another state to a point in another state, is under the protection of the commerce clause, and may not be taxed in the state through which it is in transit, as a part of the general mass of property in the latter state. This is so even though the transit is of the most leisurely sort. Thus in Coe v. ErroP^ logs were cut in Maine and floated (Jown a stream to a town in New Hampshire, en route to a point in Maine. They were detained at the New Hampshire town by reason of low water. A tax laid Bpon them by the town was vacated by the New Hampshire courts, and this action was approved in the case cited. 925. In Kelly v. Bhoads^'^ a tax was levied by an assessor in Wyoming on certain sheep, under a statute authorizing the taxa- 82 Coe V. Errol, supra. See Ian- 85 Carrier v. Gordon, 21 Ohio St. guage quoted in § 922, supra; State 605. V. Railroad Co., 40 Md. 22. 86 116 U. S. 517, 29 L. ed. 715, 6 83 Coe V. Errol, supra. Sup. Ct. Eep. 475. See quotation in 'siOgilvie V. Crawford County, 7 § 922, supra. Fed. Rep. 745 ; Walton v. Westwood, sr 188 U. S. 1, 47 L. ed. 359, 23 73 111. 125; Standard Oil Co. v. Bach- Sup. Ct. Rep. 259, reversing 7 Wyo. elor 89 Ind. 1. 237, 75 Am. St. Rep. 904, 51 Pac. Rep. 593. 468 CONSTITUTIONAL, LAW OF TAXATION. tion of live stock brought into the state for grazing purposes. The sheep were being driven from a place in Utah to a place in IN^ebraska for shipment thence by rail to a place farther east. Their journey across Wyoming occupied eight or nine weeks, and they were maintained by grazing on the way. It was held that they were the subjects of interstate commerce and that the state of Wyoming had no jurisdiction to tax them.*® 926. Where goods are brought into one state from another and there subjected to some process of manufacture or partial manu- facture, they are there taxable although their ultimate destination when completed is some other state.** A mere accidental or unavoidable delay in transit through a state will not subject property to taxation there, but the delay may last as long as to do so.^ Some miscellaneous decisions. 927. Taxes laid by the states, upon the masters or owners of vessels, of a certain sum per head for each passenger brought into the country, are taxes upon commerce with foreign nations, and, as such, are invalid. It makes no difference that they are laid under the guise of police regulations, since the police power of the states must be exercised in subordination to the exclusive Federal jurisdiction over interstate and foreign commerce.®* A statute of Congress to the same effect, however, is valid.®® A state tax on stage and railroad companies for every passenger carried out of the state is void.®* A state tax on legacies to aliens is not a tax on commerce,®^ nor is a tax on brokers, notwithstanding that they deal in bills of exchange which are instruments of commerce.®* But a stamp tax on bills of lading or exchange is a tax on commerce.®® 88 See also State v. Carrigan, 39 23 L. ed. 543 ; Chy Lung v. Freeman, X. J. L. 35. 92 U. S. 275, 23 L. ed. 550; People v. 89 Standard Oil Co. v. Combs, 96 Compagnie Ggngrale Transatlantique, Ird. 179, 49 Am. Rep. 156; Powell v. 107 U. S. 59, 27 L. ed. 383, 2 Sup. Ct. City of Madison, 21 Ind. 335 ; Rieman Rep. 87. V. Shepard, 27 Ind. 288. 95 Head Money Cases, 112 U. S. 580, 90 Burlington Lumber Co. v. Wil- 28 L. ed. 798, 5 Sup. Ct. Rep. 247. letts, 118 111. 564, 9 N. E. Rep. 257, 96 Crandall v. Nevada, 6 Wall. 35, where logs in transit which had been 18 L. ed. 745. kept on shore for several years were 97 Mager v. G-rima, 8 How. 490, 12 held to be taxable. L. ed. 1163. 94 Passenger Cases, 7 How. 283, 12 98 Nathan v. Louisianaj 8 How. 73, L. ed. 702; Henderson v. The Mayor 12 L. ed. 992. of New York, 92 U. S. 259, 23 L. ed. 99Almy v. California, 24 How. 169, 543 ; Commissioners of Immigration 16 L. ed. 644. V. North German Lloyd, 92 U. S. 259, STATE TAXES AFFECTING COMMERCE. 469 928. Taxes upon the occupation of an emigrant agent engaged in hiring laborers in the state for service without the state are not r^ulations of interstate commerce. The effect of such taxes upon commerce is too incidental and remote to amount to regula- tion.-' A state license tax on all persons taking or planting oysters in certain waters is not a regulation of commerce.^ A tax on per- sons living in houseboats is not a tax on commerce, although it applies to persons in such boats on the navigable waters of the United States.^ Commerce with Indians. 929. There are not many decisions interpreting the congres- sional power over commerce with the Indian tribes, with respect to taxation. It is well established, however, that local taxation of the 'property of others than Indians, within a state or territory, is not an interference with the congressional power, although the property taxed is situated on an Indian reservation. Thus a state tax on the property of an Indian trader is valid, although the property is kept on the reservation and used in his trade. "* 930. The taxation, by a territory, of cattle grazing on an In- dian reservation in the territory, under leases granted by the Indians, is not a regnilation of commerce. The ground upon which such taxation was said, in argument, to be upon commerce was: It is said to interfere with, or impose a servitude upon, a law- ful commercial intercourse with the Indians, over which Congress has absolute control, and in the exercise of which control it has enacted the statute authorizing the leasing, by the Indians, of their unoccupied lands for grazing purposes. Said the Supreme Court: The taxes here in question were not imposed on the business of grazing, or on the rents received by the Indians, but on the cattle as property of the lessees, and, as we have heretofore said that such a tax is too remote and indirect to be deemed a tax or burden on interstate commerce, so it is too remote and indirect 1 Williams v. Fears, 179 U. S. 270, 3 Robertson v. Commonwealth, 101 45 L. ed. 186, 21 Sup. Ct. Rep. 128; Ky. 285, 40 S. W. Rep. 920. State V. Hunt, 129 N. C. 686, 40 S. B. i Cosier v. McMillan, 22 Mont. 484, Rep. 216, 85 Am. St. Rep. 758, over- 56 Pac. Rep. 965; Moore v. Reason, 7 ruling State v. Moore, 113 N. C. 697, Wyo. 292, 51 Pac. Rep. 875; Noble v. 18 S. E. Rep. 342, 22 L. R. A. 472. Amoretti, 11 Wyo. 230, 71 Pac. Rep. 2 Johnson v. Loper, 46 N. J. L. 321. 879. As to taxation of the lands of Indians, see §§ 763, 764. 470 CONSTITUTIONAL LAW OF TAXATION. to be regarded as an interference with the legislative power of Congress.* The lands and track of a railroad company in an Indian reser- vation have been held subject to territorial taxation.^ A state license tax on an Indian trader has been condemned^ B Thomas v. Gay, 169 U. S. 264, 275, Fisher, 116 U. S. 28, 29 L. ed. 542, 6 42 L. ed. 740, 18 Sup. Ct. Rep. 340; Sup. Ct. Eep. 240; Maricopa aatl Wagoner v. Evans, 170 U. S. 588, 42 Phenix Ry. Co. v. Arizona, 156 U. S. L. ed. 1154, 18 Sup. Ct. Rep. 730; 347, 39, L. ed. 447, 15 Sup. Ct. Rep. Foster v. Pryor, 189 U. S. 325, 47 391. L. ed. 835, 23 Sup. Ct. Rep. 549. 7 Foster v. CommissionerB, 7 Miaa. 6 Utah and Northern Ey. Co. v. 84. CHAPTEE XT. OTHER FEDERAL RESTRICTIONS WITH REJECT TO COMMERCE. Export and import duties. 931. No tax or duh' shall be laid on articles exported from any state. No preference shall be given by any regulation of com- merce or revenue to the ports of one state over those of another, nor shall vessels bound to, or from, one state, be obliged to enter, clear, or pay duties in another.^ This provision is evidently intended to secure equality among the several states vnth respect to commercial affairs. It is a prohibition applicable to the Federal government,^ and is con- sidered here because of its similarity to the provision applicable to the states, next to be quoted. 932. No state shall, without the consent of the Congress, lay any imposts or duties on imports or exports, except what may be absolutely necessary for executing its inspection laws; and the net proceeds of all duties and imposts, laid by any state on im- ports or exports, shall be for the use of the treasury of the United States ; and all such laws shall be subject to the revision and control of the Congress.® The consent of Congress, referred to in this provision, hag not been given, so far as the vrriter can ascertain. 933. The vford " imports " here used refers only to articles imported from countries foreign to the United States,* and not to articles brought into one state from another part of the United States. The vyord was so understood at the time the constitution was framed; and that it is used in that sense appears from the history of the constitution. The limitation on the power of the states with respect to articles brought from other states is found in the congressional power to regulate commerce. The same inter- pretation is applied to the word " exports " which only refers to articles carried to foreign countries^ Articles taken out of the 1 Const., art. I, § 9. 5 Pittsburg and Southern Coal Co. 2 Fairbank v. United States, 181 v. Louisiana, 156 U. S. 590, 600, 39 L. U. S. 283, 45 L. ed. 862, 21 Sup. Ct. ed. 544, 15 Sup. Ct. Rep. 463; Dooley Eep. 648. V. United States, 183 U. S. 151, 46 L. 3 Const., art. I, § 10. ed. 128, 22 Sup. Ct. Eep. 62. 4 WoodruflF V. Parham, 8 Wall. 123, 19 L. ed. 382. .^^j-. 472 CONSTITUTIONAL LAW OF TAXATION. country to a foreign country are exports, even though the owner intends to bring them back again f hut it is probable that this rule would not apply in a case where it should be sought to avoid a general property tax on articles thus temporarily exported. 934. The question of what is a foreign country has been dis- cussed elsewhere, with relation to the Federal taxing powerJ Of course a country entirely without the jurisdiction of the United States is foreign. The decisions under other provisions of the constitution indicate that within this provision territory in the temporary military possession of the United States and held by no other title,* and territory occupied by the United States in time of peace with the declared intention of resign- ing sovereignty as ' soon as a stable local government can be formed,* are to be regarded as foreign. Such territory, as to the first class mentioned, is held solely under the war power; and, as to the second class, the conditions of the occupation preclude any classification of the territory as domestic. As to ceded territories before congressional action incorporating them into the Union, it is not possible to state any incontestible rule in view of the conflicting opinions by which the cases to be cited were decided; but the decisions — whatever their effect as to the status of conquered or ceded territory — do support the view that any possession by the United States, other than mere military possession in time of war (or, as in the case of Cuba, possession disclaiming sovereignty), is sufficient to make the territory so held domestic to some extent, hence not foreign.^" « Kidd V. Flagler, 54 Fed. Rep. 369. Pepke, Claimant, v. United States, 183 7 See §§ 714 et seq. V. S. 176, 46 L. ed. 138, 22 Sup. Ct. 8 Fleming v. Page, 9 How. 603, 13 Rep. 59; Lincoln v. United States, 197 L. ed. 276; Dooley v. United States, U. 8. 419, — L. ed. — , 25 Sup. Ct. Rep. 182 U. S. 222, 45 L. ed. 1064, 25 Sup. — , the ease of the Philippine Islands Ct. Rep. 762. after cession and during tiie pendency SNcely v. Henkel, 180 U. S. 109, 45 of revolt; Cross v. Harrison, 16 L. ed. 457, 21 Sup. Ct. Rep. 308 How. 164, 14 L. ed. 889, the case of ( Cuba ) . California after cession and before 1* De Lima v. Bidwell, 182 U. S. congressional action; Loughborough v. 1, 45 L. ed. 1041, 21 Sup. Ct. Rep. Blake, 5 Wheat. 317, 5 L. ed. 98, the 743, the case of Puerto Rico before case of the District of Columbia and congressional action and after the the territories; American Ins. Co. v. treaty, of cession; Downes v. Bidwell, Canter, 1 Pet. 511, 7 L. ed. 242, the 182 U. S. 244, 45 L. ed. 1088, 21 Sup. case of Florida after cession. As to Ct. Rep. 770; Dooley v. United States, Downes v. Bidwell, supra, this view 183 U. S. 151, 46 L. ed. 128, 26 Sup. seems contrary to the decision; but Ct. Rep. 62, the case of Puerto Rico five out of nine judges held that after cession and after congressional Puerto Rico was domestic territory, action; Fourteen Diamond Rings, Emil STATE DUTIES ON IMPORTS AND EXPORTS. 473 Imports. 935. The chief practical feature, as to taxation, of the dis- tinction between that limitation on the taxing power of the states which is contained in the prohibition of duties on imports or exports, and that other limitation derived from the congressional power to regulate commerce, is that goods brought from one state into another may be taxed as a part of the general mass of property in the state in the original package in the hands of the person who has brought them into the state ;^^ and such taxation does not amount to an unconstitutional regulation of commerce ; while any form of tax on goods imported from a foreign country — except for the purpose of inspection laws — amounts to a duty if the goods remain in the original package and have not become a part of the general mass of property in the state. To tax such prop- erty before it has become incorporated into that general mass is to exact payment for the privilege of such incorporation, and the right to do that belongs to Congress alone.^^ 936. This prohibition of state taxation of imports extends to every form of tax which may be a burden on the act of importing, or on the article imported. It prohibits a license tax imposed on the importer as such,^^ and the application of a general license tax to merchants whose sole business is importing.^* Imported articles may not, while remaining in the hands of the importer and in the original packages, be subjected to the general property tax of the state, although all other property in the state is subject to the tax.^® As soon as the original package is broken and the goods taken therefrom and placed on sale,^® or as soon as they pass out of the hands of the importer,'-^ they become subject to state taxa- tion. An original package, as the term is used in the frequent decisions on the subject, is " the package of the importer as it 11 Woodruff V. Parham, 8 Wall. 123, is Low v. Austin, 13 Wall. 29, 20 19 L. ed. 382. And see §§ 919, 920. h. ed. 517; People ex rel. Bijur v. 12 This distinction between goods Barker, 155 N. Y. 330, 49 N. B. 941; imported from another country, and State v. Board of Assessors, 46 La. goods brought in from another state, Ann. 145, 49 Am. St. Rep. 318, 15 So. as to taxation in the original package, Hep. 10. is insisted on in American Steel and le People ex rel. Matheson v. Rob- Wire Co. V. Speed, 192 U. S. 500, 48 erts, 158 N. Y. 162, 52 N. E. Rep. L ed. 532, 24 Sup. Ct. Rep. 365. 1103; May v. New Orleans, 51 La. 13 Brown v. Maryland, 12 Wheat. Ann. 1067, 25 So. Rep. 960. 419, 6 li. ed. 678. 17 Waring v. The Mayor, 8 Wall. 14 State V. Kennedy, 19 La. Ann. 110, 19 L. ed. 342. 426, 427; State v. Shapleigh, 27 Mo. 347-349. 474 CONSTITUTIONAL LAW OF TAXATION. existed at the time of its transportation." It is " a bundle put up for transportation or commercial handling." ^^ " It is a thing in form to become as such an article of merchandise, or transportation or delivery from hand to hand." ^® The case or box or bale constitutes the original package in the commercial sense. STo single article therein, though separately wrapped, is an orig- inal package.* For further definition and discussion of the rules with respect to taxation of articles in original packages see §§ 862-864 et seq., relating to interstate commerce. The protection of the Federal constitution does not extend beyond the first sale by the importer. The goods in the hands of his agent are regarded as still in his possession.^^ Export duties. 937. The prohibition upon the levy of an export duty by the states is of substantially the same scope and effect as the similar prohibition on the Federal government.^ There are but few cases interpreting the prohibition upon the Federal government. An excise charge of twenty-five cents or ten cents a package, regard- less of the quantity or value of the tobacco contained in the pack- age, laid on all tobacco intended for export, has been held not to be an export duty. Such a charge is not really a tax at all, but is in the nature rather of an inspection charge, a payment for services rendered.^* 938. When an article has taken on the character of an export it cannot be taxed by the state (or Federal government) in any form, not even as a part of the general mass of property in the state. ^* Btit the exemption does not begin until commerce has 18 state V. Board of Assessors, 46- Rep. 12; In re Beirne, 42 Fed. Eep. La. Ann. 145, 49 Am. St. Kep. 318, 545; State v. Winters, 44 Kans. 728, 15 So. Rep. 10. 25 Pac. Eep. 235, 10 L. R. A. 616. 19 United States v. Goldback, 1 21 SohoUenberger v. Pennsylvania, Hughes C. C. 529, Fed. Cas. No. 15,222. 171 U. S. 1, 43 L. ed. 49, 18 Sup. Ct. 20 state V. Parsons, 124 Mo. 436, 46 Rep. 757, not a case of taxation. Am. St. Rep. 437, 27 S. W. Rep. 1102; 22 Turpin v. Burgess, 117 U. S. Austin V. State, 101 Tenn. 563, 70 504-506, 29 L. ed. 988, 6 Sup. Ct. Am. St. Rep. 703, 50 L. R. A. 478, 48 Rep. 836. S. W. Rep. 310; 179 U. S. 343, 45 L. 23 Turpin v. Burgess, supra; Pace cd. 224, 21 Sup. Ct. Rep. 132. It is v. Burgess, 92 U. S. 372, 23 L. ed. immaterial that the larger package is 657 ; Burwell v. Burgess, 32 Gratt. owned by the transporting carrier. 472. See §§ 911 et seq. Ibid. But see Smith v. State, 54 Ark. 2* Blount v. Munroe Co., 60 Ga. 61, 248, 15 S. W. Rep. 882 ; Keith v. State, where goods bought by a citizen of 91 Ala. 2, 8 So. Rep. 353, 10 L. R. A. a foreign state for export, in the hands 430; Wade v. State, 63 Vt. 80, 22 Atl. of his agent awaiting shipment, were DUTIES ON IMPOETS AND EXPOBTS. 475 actually begun. Manufacture is not a part of commerce, but is antecedent to it. Hence a Federal stamp tax imposed on the manufacture of certain articles is valid in its application to tbe manufacture of goods intended for export, and such a tax ia in no sense an export duty.^ 939. Any charge which actually amounts to an export duty is void, although not called by that name. The state of California laid a tax on all bills of lading of gold or silver intended for transportation to any point without the state. It was held void, as an export duty on the gold and silver. The court said that the bill of lading is so necessary and usual an incident of commer- cial transportation that a tax on it amounts to a tax on the act of transportation. Furthermore, the fact that the tax only applied to bills of lading of gold or silver, showed that it was intended to be an export duty on those articles, for if it had been in fact an excise tax upon bills of lading it would have applied to bills of lading for other articles.''® 940. In a recent case^ a Federal stamp tax of ten cents on export hills of lading (the stamp tax on ordinary bills of lading being one cent under the same act), was held by a divided court to be in effect a tax on exports, hence unconstitutional. Said the court: The requirement of the constitution is that exports should he free from any governmental burden. ... If Congress may place a stamp duty of ten cents on bills of lading on goods to be exported it is because it has power to do so, and if it has power to impose this amount of stamp duty it has like power to impose any sum in the way of stamp duty which it sees fit. And it needs but a moment's reflection to show that thereby it can as effectually place a burden upon exports as though it placed a tax directly upon the articles exported. It can, for the purposes of revenue, receive just as much as though it placed a duty directly upon the articles, and it can just as fully restrict the free exporta- tion which was one of the purposes of the constitution. held to have become exports, and as to foreign exports as well, and as to such segregated from the general mass such the reasoning of the case is con- of property. See Fitch v. Madison, 24 ceived to be sound. Woodruff v. Par- Ind. 425; §§ 921-925, and eases cited, ham, 8 Wall. 123, 19 L. ed. 382, con- as Cornell v. Coyne, 192 U. S. 418, tains nothing opposed to this view. 48 L ed. 504, 24 Sup. Ct. Rep. 383. See Fairbank v. United States, infra. 26AlmV v. California, 24 How. 169, 2T Fairbank v. United States, 181 16 L. ed. 644. The facts of this case U. S. 283, 45 L. ed. 862, 21 Sup. Ct. were those of a case of interstate com- Rep. 648. merce, but the law in question applied 476 CONSTITUTIONAL LAW OF TAXATION. Inspection laws. 941. The right of the states to enact inspection laws, and to provide for their execution by the exercise of the taxing power, is not derived from the Federal constitution. It is a part of the police power, inherent in sovereignty, which belongs to the states and which is only affected by the constitution in so far as that instrument limits it. The congressional control of interstate commerce, and the prohibition which denies to the states the right to lay duties upon exports and imports, would, if unqualified, work a serious limitation on the power of the states in this respect. But this express exception in the constitution amounts to a complete recognition of the states' right to impose such duties; and in harmony with the spirit of the instrument such impositions are held not to be infringements of the power of Congress over inter- state commerce.^* The ground of the exception is the same as that which permits charges for the use of wharves, and other improvements,^" to wit, that such impositions are not really taxes or burdens at all, but payments for a necessary service. 942. An " inspection " is some form of examination which can be accomplished by " looking at or weighing or measuring the thing to be inspected, or applying to it some crucial test." An examina- tion which involves the taking of testimony or evidence is said to be " not inspection in any sense whatever." ^^ Such an examination is at least something more than inspection. The word involves the idea of an examination and test exclusively physical, the application of a standard of physical essentiality.^^ " Inspection laws," as the term is used in the constitution, apply only to property. A tax cannot be levied on free human beings in the form of a charge for inspecting them.^* 943. The primary and most usual application of inspection laws is to articles intended for export. In that application the purpose of the laws is to ascertain the fitness of the inspected ar- ticles for commerce, and they do not become subjects of commerce until after the inspection. The validity of such laws as applied to 28 See § 879 et seq. 32 See Fidelity, etc., Co. v. Seattle, 30 See §§ 882, 883. 16 Wash. 445, 47 Pae. Rep. 963; Neil- 31 People V. Compagnie Genfirale son v. Garza, 2 Woods, 287, 17 Fed. Transatlantique, 107 U. S. 59-62, 27 Gas. Xo. 10,091. L. ed. 383, 2 Sup. Ct. Rep. 87 ; Hospes 33 People v. Compagnie G6n6rale V. O'Brien, 24 Fed. Rep. 147; Robert- Transatlantique, 107 U. S. 59, 27 L. son V. McGough, 118 Ala. 159-107, 24 ed. 383, 2 Sup. Ct. Rep. 87. So. Kep. 391. STATE INSPECTION LAWS. 477 exports has never been seriously doiibted.^* That they are valid as applied to articles brought from other states or imports from foreign countries, and to articles of domestic manufacture, has been doubted; but it seems to be settled that the police power of the state extends to the protection of its own citizens as well as those of other jurisdictions by suitable inspection laws.^ 944. A state law, which has in other respects the essential characteristics of an inspection law, is unconstitutional if it dis- criminates between the products of the enacting state and those of any other parts of the United States or a foreign country.^® Such a law amounts to an interference with commerce beyond the neces- sary and legitimate operation of inspection laws.^'^ The validity of inspection laws which prohibit — or are claimed to have the effect of prohibiting — the sale of any class of articles within a state, is not within the scope of this work, which only deals with such laws in their relation to the taxing power. Where an in- spection law only applies to an article brought into a state from certain states named, it is void.^* 945. It has not been doubted that inspection laws may legiti- mately extend to any class of goods the inspection of which is iiianifestly intended and calculated in good faith to protect the public health, the public morals, or the public safety.^ And it is now definitely determined that these laws may extend to any class of articles the inspection of which will tend to prevent a fraud or imposition on the general public. The police power of the state is as efficacious in this regard to protect the public from deception in its purchases as to protect its health or safety.** 34 Patapseo Guano Co. v. North than 100 miles from the place of Carolina, 171 U. S. 345, 43 L. ed. 191, slaughter, without inspection, was IS Sup. Ct. Eep. 862. held to amount to an unconstitutional 35 Patapseo Guano Co. v. North discrimination against the products Carolina, supra; Neilson v. Garza, 2 of other states; Minnesota v. Barber, Woods, 287, 17 Fed. Cas. No. 10,091. 130 U. S. 313, 34 L. ed. 455, 10 Sup. 3fi Voight V. Wright, 141 U. S. 62, 35 Ct. Rep. 862, where an inspection law L. ed. 638, 11 Sup. Ct. Rep. 855, where prohibiting the sale of meats from cat- a law of Virginia, requiring the in- tie not inspected within the state was spection of all flour brougnt into the held invalid. state, and imposing a penalty for the 88 Higgins v. Casks of Lime, 130 sale of such flour uninspected, was Mass. 1. held void because it did not apply 39 Minnesota v. Barber, 136 U. S. to flour manufactured in Virginia; 313, 34 L. ed. 455, 10 Sup. Ct. Rep. Georgia Packing Co. v. Mayor, 60 Fed. 862. Rep. 779, 780, 22 L. R. A. 778. *o Patapseo Guano Co. v. North 37 To the same effect see Brimmer Carolina, 171 U. S. 345, 43 L. ed. 191, V. Retman, 138 U. S. 78, 35 L. ed. 18 Sup. Ct. Rep. 862; Stokes v. De- 862, 11 Sup. Ct. Rep. 213, where a partment of Agriculture, 106 N. C. law prohibiting sales of meat more 439, 11 S. E. Rep. 476; Stciner v. 478 CONSTITUTIONAL LAW OF TAXATION. 946. Where the amounts charged as fees for inspection should be grossly in excess of the cost of the inspection the question of whether the law was in fact an inspection law or a revenue law ■v\ould probably be a judicial question, and if it should be deeidedi that the law was a revenue law it would be unconstitutional as a duty and as an interference with commerce.*"" But it would require the clearest evidence of a gross overcharge to obtain such a finding ; and if a law is in fact an inspection law, the courts will not set it aside on the ground of excessiveness, for the constitution expressly gives to Congress the right to supervise and control such charges.*^ 947. As to the general characteristics and provisions of inspec- tion laws, a good deal of discretion is left to the legislature in determining the scope of the inspection, the method and charges, and even in permitting such reasonable exemptions from some provisions as do not clearly amount to unconstitutional discrimina- tions. Such things are classed among those matters of local control which are within the police power. In view of the fact that such laws operate upon exports before they have become articles of commerce it seems probable and logical that the legis- lative discretion in these particulars is somewhat greater with respect to articles intended for shipment out of the state than with respect to articles brought from without. Thus a law requiring- that all tobacco shipped out of the state should be opened and inspected, which excepted from that provision all tobacco packed in the neighborhood where grown, providing, however, that upon such tobacco should be paid the same charges as upon other tobacco, has been upheld.*^ In the same case a provision requiring- Roy, 84 Ala. 93, 5 Am. St. Rep. 332, vent its introduction into the state- 4 So. Rep. 172 ; Vanmeter v. Spurrier, altogether ; and the validity of the in- 94 Ky. 22, 21 S. W. Rep. 337 ; Fair- speetion la\ys in both cases was rec- cloth V. DeLeon, 81 Ga. 158, 7 S. E. ognized as based on the right of the Rep. 640; Goulding Fertilizer Co. v. state to prevent deception. Driver, 99 Ga. 623, 25 S. E. Rep. 922; 40a See §§ 881-1445 et seq. all cases involving laws requiring the 41 Neilson v. Garza, 2 Woods, 287,, inspection of fertilizers; Plumley v. Fed. Cas. No. 10,091; Turner v. Mary- Massachusetts, 155 U. S. 461, 39 L. ed. land, 107 U. S. 38, 27 L. ed. 370, '2 223, 15 Sup. Ct. Rep. 157; Schollen- Sup. Ct. Rep. 44; Patapsco Guano Co. berger v. Pennsylvania, 171 U. S. 1, v. North Carolina, 171 U. S. 345, 43 43 L. ed. 49, 18 Sup. Ct. Rep. 757; L. ed. 191, 18 Sup. Ct. Rep. 802. cases where the right of the state to 42 Turner v. Maryland, 107 U. S. 38, regulate the sale of oleomargarine so 27 L. ed. 370, 2 Sup. Ct. Rep. 44.. as to prevent its sale as butter, and Annexed to this case, in a, note, is a to secure its purity, was recognized, table of inspection laws of various- although in the latter case a statute states, was held void which operated to pre- STATE TONNAGE DUTIES. 479 all tobacco for outside shipment to be brought to specified ware- houses was held to be a reasonable requirement. Tonnage duties. 948. The Federal constitution provides** that "no state shall without the consent of Congress, lay any duties of tonnage." The consent of Congress that such a duty be laid by any state has never been given.** Wh-at is a duty on tonnage within the meaning of this section ? Viewed in the light of congressional enactments** the word tonnage, as applied to American ships and vessels, means their entire cubical capacity, or the contents of the vessel expressed in tons of 100 cubic feet, as estimated and ascertained by the rules of admeasurement and computation prescribed by those Fed- eral statutes.** 949. A duty on tonnage in the strict sense is any form of tax the amount of which is measured directly or indirectly by ref- erence to the tonnage or cubical contents or capacity of the vessel.*^ It is a charge for the privilege of entering or lying in or trading in a port or harbor.*^ But the constitutional prohibition would not serve its whole purpose if restricted tm pro rata taxes, and a duty on tonnage is, therefore, held to include any duty on a ship, whether a fixed sum upon its whole tonnage or a sum to be ascer- tained by computing the amount of tonnage with the rate of duty.*' And the whole effect of the prohibition is that no tax, custom, or toll can be levied upon the tonnage of any vessel without the con- sent of Congress.^" 950. Observe that this restriction as to tonnage duty is greater than the restrictions implied in the congressional power to regu- late commerce and that clause which prohibits the laying of export or import duties by the states ; for it applies, not only to vessels en- gaged in interstate and foreign commerce, but to vessels wholly employed in the navigable waters of a single state. *^ *3 Art. 1, § 10. *8 Transportation Co. v. Parkers- 44 See State Tonnage Tax Cases, 12 burgh, 107 U. S. 691-696, 27 L. ed. Wall. 204-216, 20 L. ed. 370. 584, 2 Sup. Ct. Rep. 732. 46 U. S. R. S., §§ 4153 et seq. 48 Steamship Co. v. Port Wardens, 46 State Tonnage Tax Cases, 12 6 Wall. 34, 18 L. ed. 749. Wall. 204-212, 20 L. ed. 370; Alex- 60 SheflSeld v. Parsons, 3 Stew. & ander v. Railroad, 3 Strobh. (S. C.) Port. (Ala.) 304; Lott v. Morgan, 41 598. Ala. 250. 47 State Tonnage Tax; Cases, 12 51 State Tonnage Tax Cases, 12 Wall. 204, 20 L. ed. 370. Wall. 204, 20 L. ed. 370. The tax 480 CONSTITUTIONAL LAW OF TAXATION. 951 . In accordance with these principles a city tax of one cent per ton each three months on every steam packet or other vessel from certain adjoining states trading steadily at that port/^ a tax on vessels exclusively engaged in the towage and lighterage business in the harbor of Mobile,^* a tax of a specified sum per ton on registered vessels exclusively employed within the waters of the taxing state/* a statute enacting that the wardens of a port within the state should be entitled to receive $5 for every vessel entering the port, whether called on to perform any service or not,^^ a law compelling vessels which enter a port, or load, or unload, or make fast, to pay a certain percentage per ton,'^ and a law taxing vessels on basis of length in feet^^ have all been held void. The arguments in favor of the taxes in these cases were either that they applied only tx) domestic vessels or that they were among those regulations of local affairs within the police power of the state. 952. Although a state may impose such import and export du- ties as are necessary for the execution of its inspection laws,^ it cannot do this by means of a tax in the nature of a tonnage duty. Hence a tonnage tax imposed by a state in order to defray the expense of its quarantine regulations is void.®® A state, however, may enforce reasonable quarantine regulations and exact fees for quarantine examinations, as a part of its police legislation.*" And a state or municipality may impose wharfage dues as compensa- tion' for the use of its wharves and measure those dues by tonnage.''^ See further, as to wharfage charges and compensatory dues, § 882 et seq. here was laid on vessels having coast- 59 Peete v. Morgan, 19 Wall. 581, 22 ing licenses from the United States; L. ed. 201. See also Northwestern, but there seems to be no reason why etc.. Packet Co. v. St. Paul, 3 Dill, a tonnage tax laid on vessels not hav- 455, Fed. Gas. No. 10,346. ing such a license is not equally a e* Morgan v. Louisiana, 118 U. S. tonnage duty. 455, 30 L. ed. 237, 6 Sup. Ct. Eep. 52 Alexander v. Railroad, 3 Strobh. 1114. This case is distinguished from (S. C.) 598. Peete v. Morgan, supra, in the par- B3 Lott V. Morgan, 4 1 Ala. 250. ticulars that in Peete v. Morgan the 54 State Tonnage Tax Cases, 12 tax was imposed, whether services Wall. 204, 20 L. ed. 370. were rendered or not ; and that it was 55 Steamship Comnany v. Portward- measured by tonnage. ens, 6 Wall. 31, 18 L. ed. 749. 61 Packet Company v. St. Louis, 100 56Inman Steamship Co. v. Tinker, U. S. 423, 25 L. ed. 688; Packet Com- 94 U. S. 238, 24 L. ed. 118; Webb v. pany v. Keokuk, 95 U. S. 80, 24 L. ed. Dunn, 18 Fla. 727. 377; Ouachita Packet Co. v. Aiken, 67 Harbor Commissioners v. Pash- 121 U. S. 444, 30 L. ed. 976, 7 Sup. ley, 19 S. C. 320. Ct. Eep. 907. 58 See §§ 932-941, et seq. PEEFEBENCE OF POETS. 481 953. It is sometimes necessary to determine whether a given charge is a legitimate wharfage fee or a tonnage duty. If the charge is actually imposed for the use of wharves, and is not collected unless wharves are used it is a wharfage fee. But if it is imposed for the privilege of entering the harbor or tying to an unimproved bank or levee®^ it is a tonnage tax.^^ A paved city street, where during periods of high water boats land their cargoes, which at other times are landed on the unimproved bank of the river, provides no wharfage facilities for which the city can collect tonnage charges."* But where the landing is made, not against the wharf but against a wharf boat immediately adjacent to the wharf, the charge is valid. "^' 954. ISTothing in the Federal constitution prevents the states from taxing ships as property ; that is, laying a general property tax on ships having their situs in the state for purposes of taxation. Such a tax differs from a tonnage duty in that a property tax is based on values without regard to cubical contents, while a tonnage duty is based on capacity without regard to value."® Preference of ports. 955. The provision that no preference shall be given to the ports of one state over those of another is applicable to Congress ■only and does not apply to the states."^ It is a limitation on the general power of Congress to regulate commerce. If a state should endeavor by some legislation to gain advantage for its ports over those of some other state, such legislation could be attacked as in violation of the " commerce clause '' of the con- stitution. As the limitation expressly applies only to the ports 62 The Lizzie E., 30 Fed. Rep. 877. Wall. 204-213, 20 L. ed. 370; Trans- 63 Cannon v. New Orleans, 20 Wall, portation Co. v. Wheeling, 99 U. .577, 22 L. ed. 417; Shreveport v. S. 273, 25 L. ed. 412; S. C, 9 W. Va. Coast Line, 37 La. Ann. 562, 55 Am. 178, 27 Am. Rep. 554 ; Oteri v. Parker, _Rep. 504; Cape Girardeau v. Camp- 42 La. Ann. 379, 7 So. Rep. 571; "tell, 26 Mo. App. 15; People v. Pa- Johnson v. Merchants' Line, 37 Fla. cific Mills Co., 60 Cal. 327; City v. 518-523, 19 So. Rep. 646, 37 L. R. A. Sehulenberg Co., 13 Mo. App. 60, hold- 526, 527, and note; Gunther v. Balti- ing that a city cannot collect wharf- more, 55 Md. 459. age for goods landed beyond its wharf 67Munn v. Illinois, 94 U. S. 113, 24 in time of high water. L, ed. 77; Morgan v. Louisiana, 118 64 Shreveport v. Coast Line, 37 La. U. S. 455, 30 L. ed. 237, 6 Sup. Ct. Ann. 562, 55 Am. Rep. 504. Rep. 1120; Johnson v. Chicago, etc., 66Vicksburg v. Tobin, 100 U. S. Elevator Co., 119 U. S. 388, 30 L. ed. 430, 25 L. ed. 690. 447, 7 Sup. Ct. Rep. 260. 66 State Tonnage Tax Caaes, 12 31 482 CONSTITUTIONAL LAW OF TAXATION. of " a state," it constitutes in terms at least no hindrance to preferences given by Congress to the ports of territories or other ports under the jurisdiction of the United States. Sudi prefer- ences could only be attacked under the " uniformity clause." ** 956. Other Federal provisions affecting commerce are the clauses with respect to the privileges and immunities of citizens. These are considered in chapter XIV. •8 See §§ 714 ei teq. CHAPTER XII. CONTRACTUAL LIMITATIONS ON THE TAXING POWERS OF THE STATES. 957. The Federal constitution provides : Fo state . . . shall pass . . . any law impairing the obligation of contracts.^ 958. Nearly all of the state constitutions forbid laws impair- ing the obligation of contracts, and in most of the constitutions the language used is identical with that of the Federal constitution. In some constitutions, however, the language is varied sufficiently to merit special notice. Such, for instance, are the constitu- tions of: 959. Alabama. There can be no law of this state impairing the obligation of contracts by destroying or impairing the remedy for their enforce- ment ; and the legislature shall have no power to revive any right or remedy which may have become barred by lapse of time, or by any statute of this state. After suit has been commenced on any cause of action, the legislature shall have no power to take away such cause of action, or destroy any existing defense to such suit.^ 960. Colorado. That no eerson, corporate or otherwise; the other where a statute offers a bounty in the shape of tax exemption to all who engage in specified un- dertakings. 1031. A fair illustration of the first class is Christ Church v. Philadelphia^ where an act of the legislature granted, to an al- ready incorporated charity, exemption from taxation on its real property, the reason of the exemption being that " in consequence of the decay of the buildings of the hospital estate its means are curtailed and its iisefulness limited." A subsequent act repealed the exemption; and in a suit brought to restrain the collection of taxes it was contended that the act of exemption was a contract. But the court said : This concession of the legislature was spontaneous, and no service or duty, or other remunerative condition, was imposed on the corporation. It belongs to the class of laws denominated ■privilegia favorabilia. It attached only to such real property as belonged to the corporation, and while it remained as its prop- erty; but it is not a necessary implication from these facts that 20 Providence Bank v. Billings, 4 L. ed. 641, 23 Sup. Ct. Rep. 386; St. Pet. 514, 7 L. ed. 939; Christ Church Louis, etc., Co. v. Loftin, 30 Ark. 693; V. Philadelphia, 24 How. 300, 16 L. Bradley v. MeAtee, 7 Bush, 6G7, 3 Am. ed. 602: Oilman v. Sheboygan, 2 Rep. 309; Illinois, etc., Co. v. Irvin, Black, 510, 17 L. ed. 305; Salt Co. v. 72 111. 452; People v. Roper, 35 N. Y. East Saginaw, 13 Wail. 373, 20 L. ed. 629; People v. Commissioners, 47 N. 611, 19 Mich. 259, 2 Am. Rep. 82; Y. 501; Lord v. Litchfield, 30 Conn. Tucker v. Ferguson, 22 Wall. 527, 22 116, 4 Am. Rep. 41; Easton Bank v. L. ed. 805; West Wisconsin Ry. v. Commonwealth, 10 Pa. St. 450; Xorth Supervisors, 93 TJ. S. 595, 23 L. ed. Missouri, etc., Co. v. Maguire. 49 Mo. 814; Grand Lodge v. New Orleans, 490, 8 Am. Rep. 141; Herrick v. Ran- 166 TJ. S. 143, 41 L. ed. 951, 17 Sup. dolph, 13 Vt. 525; Monaghan v. Lewis, Ct. Rep. 523; Chicago Theological — Del. — , 51 Atl. Rep. 948. Scminnrv v. Illinois, 188 U. S. 002, 47 -' 24 Fow. 300, 16 L. ed. 602. 512 CONSTITUTIONAL LAW OF TAXATION. the concession is perpetual, or was designed to continue during the corporate existence. . . . It is in the nature of such a privilege that it exists bene placitum, and may be revoked at the pleasure of the sovereign.^ 1032. The class of cases where the exemption has been offered as a bounty to all persons engaged in a particular undertaking is well illustrated by the case of Salt Company v. Saginaw.^ The Michigan legislature enacted a law to encourage the making of salt. It provided that all persons or corporations who should engage in the salt-making biisiness should be entitled to its bene- fits ; that all property used in salt making should be exempt from taxation and that the state should pay a bounty on salt manufac- tured. Afterward another act modified and limited the tax ex- emption. In an action to restrain the collection of taxes it was contended that the original act was a contract and that the plain- tiff's investment of capital and engagement in the salt business upon the faith of the act were a consideration. It was held that the exemption was a mere bounty, repealable at the will of the state. The exemption was distinguished from an exemption granted by exptess charter by the fact that the law applied to all persons or corporations who should engage in the business speci- fied. " There is no obligation on the part of any person to com- ply with the conditions of the law. It is a matter purely volun- tary; and, as it is purely voluntary on the one part, so it is purely voluntary on the other part ; that is, on the part of the legislature, to continue or not to continue the law." The case was distinguished from cases of incorporations under general laws, by the fact of incorporation in the one case and its absence in the other. " In such cases the scope of the act takes in the whole period for which the corporation is formed. The language means that during the existence of any corporation formed under the act, the stipulation or exemption specified in it is to operate." ^ 22 To the same effect are Grand 66 Me. 501; Appeal Tax Court v. Lodge V. New Orleans, 166 U. S. 143, Grand Lodge, 50 Md. 428; State v. 41 L. ed. 951, 17 Sup. Ct. Rep. 525. Commissioners, 37 N. J. L. 23; State where a very similar exemption was Board v. Paterson, etc., E. R. Co., 50 concerned, and where it was contended N. J. L. 451, 14 Atl. Rep. 013; People that the charitable purpose for which v. Commissioners, 47 N. Y. 501 ; Peo- the exempted property was purchased pie ex rel. v. Commissioners, 67 N. Y. and used was a sufficient considera- 109, 23 Am. Rep. 94; Ibid. 516. tion; Tucker v. Ferguson, 22 Wall. 23 13 Wall. 373, 20 L. ed. 611, 19 527, 22 L. ed. 805; West Wisconsin Mich. 259, 2 Am. Rep. 82. R.R. Co. V. Supervisors, 93 U. S. 595, 24 Cases of the same class are Welch 23 L. ed. 814; State v. Maine Central, v. Cook, 97 U. S. 541, 24 L. ed. 1112, STATE TAXES IMPAIRING CONTRACTS, 513 1033. In a later case, it appeared that a general tax law had enacted that railroads thereafter built and operated in a certain territory should be exempt from taxes for ten years, unless the gross earnings should exceed a certain sum. It was held that this act did not constitute a contract with persons who built and oper- ated roads (apparently) in reliance upon its provisions. Said the Supreme Court, after speaking of the absence of consideration : It may be that a state, by sufficient words, might bind itself without consideration, as a private individual may bind himself by recognizance or by affixing a seal. A state might abolish the requirement of consideration altogether for simple contracts by private persons, and it may be that it equally might dispense with the requirement for itself. But the presence or absence of consideration is an aid to construction in doubtful cases — a cir- cumstance to take into account in determining whether the state has purported to bind itself irrevocably or merely has used words of prophecy, encouragement or bounty, holding out a hope but not amounting to a covenant. In the case at bar, of course, the building and operating of the railroad was a sufficient detriment or change of position to constitute a consideration if the other elements were present. But the other elements are that the 'promise and the detriment are the conventional inducements each for the other. Ko matter what the actual motive may have been, by the express or implied terms of the supposed contract, the promise and the considera- tion must purport to be the motive each for the other, in whole or at least in. part. It is not enough that the promise induces the detriment, or that the detriment induces the promise, if the other half is wanting. ... No doubt the state expected to encourage railroad building and the railroad builders expected the encouragement, but the two things are not set against each other in terms of bargain. 1034. But this is a somewhat narrow and technical mode of dis- cussion for the decision of an alleged constitutional right. The broad ground in a case like this is that, in view of the subject- matter, the legislature is not making promises, but framing a scheme of public revenue and -public improvement. In announc- ing its policy and providing for carrying it out it may open a chance for benefits to those who comply with its conditions, but it does not address them, and therefore it makes no promise to them. It simply indicates a course of conduct to be pursued until circumstances or its views of policy change. It would be quite intolerable if parties not expressly addressed were to be allowed to set up a contract on the strength of their interest in and where an exemption of property em- Roper, 35 N. Y. 629, where the exemp- ployed for manufacturing purposes tion was of property belonging to all was held to be a gratuity; People v. persons who had served in the militia. 514 CONSTITUTIONAL LAW OF TAXATION. action on the faith of a statute, merely because their interest was obvious and their action likely, on t"he face of the law.^ 1035. A provision in a city charter to the effect that certain streets once improved shall not be again improved at the expense of abutting property ov^ners is held by several of the state courts not to constitute a contract between the state and the property O'svners who have been assessed under it, and a subsequent change in the charter whereby the expense of further improvements is assessed against the property owners is not prohibited by the Federal constitution. In the cases to be cited the argument of those who contended that the earlier charter provisions amounted to contracts was that the payment of the original assessnient by the- jjroperty owners was a consideration received by the city. But the courts in each instance replied that the payment by the prop- erty ovpner under the original assessment was made solely in con- sideration of the special benefit received by him in that improve- ment ; that the assessment for further improvement was presumed to be in payment for the further benefits conferred; that the provision in the original charter whereby he was exempted from further assessment was a mere '' act of grace " on the part of the legislature and the city whereby they excused the property owner from burdens which otherwise he would have had to bear; and that this " act of grace " could be revoked at pleasure.^® An act aimexing county property to a city, and providing that the county rate of taxation should not be increased until a certain time, does not amount to a contract between the state and the city which can- not be impaired by a subsequent act. The consent of the voters in the annexed territory does not make the act of annexation a contract.^^ Estoppel, acquiescence, and ratification of contracts for exemption. 1036. The contract of exemption does not arise by estoppel; and does not usually arise by acquiescence. Although a state or municipality, as a gratuity, has exempted persons or property 25 Wisconsin, etc., Ry. Co. v. Powers, N. Y. 101, 74 N. E. Rep. 953, a statute- 191 U. S. 379, 386, 387, 48 L. ed. 229, exempting a street railroad from obli- 24 Sup. Ct. Rep. 107. gation to pave streets beyond a cer- 26 Ladd v. Portland, 32 Greg. 271, tain extent was held to be a gratuity, 67 Am. St. Rep. 526, 51 Pac. Rep. revocable at the will of the legisla- 654; State v. Mayor, etc., of Newark, ture. See Worcester v. Worcester Con- 37 N. J. L. (8 Vroom) 415, 18 Am. solidated Street Ry. Co., 196 U. S. Rep. 729; Bradley v. McAtee, 7 Bush 529, — L. ed. — , 25 Sup. Ct. Rep. — . (Ky.), 667, 3 Am. Rep. 309. In 27 Joesting v. Baltimore, 97 Md. Rochester v. Rochester Ry. Co., 182 589, 55 Atl. Rep. 456. IMPAIRING CONTKACTS TO LAY TAXES. 515 for a long time, and in reliance upon such exemption those per- sons or the owners of the property have bought property and expended money in improvements, the state or municipality is not thereby estopped from asserting its right to tax.^^ 1037. But although such a contract cannot arise by estoppel, a contract of exemption or commutation of taxes which is origin- ally invalid may be ratified by the subsequent acts of the state so as to make it binding. This principle was distinctly recog- nized in the concurring opinions of five out of nine justices of the Supreme Court in a case^ where a contract of commutation, the validity of which was at least doubtful, was regarded as validated by a subsequent constitutional amendment wherein the existence of such contracts was recognized, and by the acceptance by the state of the commuted tax payments for a long period of years. The decision in the case turned upon various grounxis but all of the opinions^" depended to som'p extent upon this principle. Contracts by which the exercise of the taxing power is promised. 1038. The cases previously referred to all involved contracts by winch the state bound itself not to exercise some part of its taxing power. Th^e is a class of cases from which it appears that the contract of the state (or its municipality) to tax is as valid as its contract not to tax, and that such a contract is pro- tected by the Federal constitution. Such are cases where the state or a municipality has sold its bonds, valid at the time of issue. There is a contract between the state or municipality and the purchasers that the bonds will be paid from the proceeds of taxation.^^ 28 Hibernian Benevolent Society v. 29 Stearns v.' Minnesota, 179 U. S. Kelly, 28 Oreg. 173, 52 Am. St. Rep. 22.S, 45 L. ed. 162, 21 Sup. Ct. Rep. 73. 769, 42 Pae. Rep. 3, 30 L. R. A. 167 ; so Pages 233, 238, 253, 254, 258, 259. Vicksburg, Shreveport and Pneifip Rv. 31 Louisiana v. Jumel, 107 U. S. Co. V. Dennis, 116 U. S. 665, 29 L. 711, 27 L. ed. 448, 2 Sup. Ct. Rep. ed. 770, 6 Sup. Ct. Rep. 625; Wells v. 128; Von HoflFman \. Quincy, 4 Wall. Savannah, 181 U. S. 531. 45 L. ed. 535, 18 L. ed. 403; Galena v. Amy, 986, 21 ,Sup. Ct. Rep. 697, affirming 5 Wall. 705, 18 L. ed. 560; Riggs v. 107 Ga. 1, 32 S. E. Rep. 669; see Johnson County, 6 Wall. 166, 18 L. § 1007 for details of this case; see ed. 768; Rees v. Watertown, 19 Wall. State v. Addison, 2 S. C. 499, where 109, 22 L. ed. 72; United States v. the question was not as to the exist- Jefferson County, 5 Dill. 310, 1 Mc- ence of any contract or as to estoppel, Crary, 356, Fed. Cas. No. 15,472; but was one of legislative interpreta- United States y. New Orleans, 2 tion of its own enactment; Wisconsin, Woods, 230, Fed. Cas. No. 15,871; etc Ry. Co. v. Powers, 191 U. S. 379, Sibley v. Mobile, 3 Woods, 535, Fed. 48 L. ed. 229, 24 Sup. Ct. Rep. 107; Cas. Xo. 12,829; Brodie v, McCabe, Jefferson Countv v. Watertown, 98 33 Ark. 690; Morgan v, Beloif. 7 App. Div. 494, 90 N. Y. Supp. 790. Wall. 613, 19 L. ed. 203; Wolff v. 516 CONSTITUTION.iL LAW OF TAXATION. 1039. The plainest case of this sort arises where a mnnlci- pality has issued bonds or contracted debts nnder a law by which it is provided that a special tax to pay the debts shall be levied and the proceeds of the tax devoted to the payment. Laws pro- viding for the special tax and setting aside its proceeds to pay the bonds are parts of the contract of the mimicipality with its credi- tors, upon the faith of Avhich.the creditors lend their money or in some way give value. In such a case a subsequent statute which restricts the power of taxation thus given impairs the obligation of the contract, and it is the duty of the corporation to collect the taxes and apply them regardless of the subsequent statute.^^ A statute which lessens a city's real taxing power by requiring assessments of property at less than their cash value, impairs the obligation of a contract to pay bonds, where the statute, at the time the bonds were issued, provided for assessment at full cash value.^^'' 1 040. ' Slightly different in facts but governed by the same essential principles are cases where the municipality has issued its valid bonds without any provision for special taxes or special funds for their payment. In such a case the legislative au- thority to issue the bonds (and the postulate of their validity necessarily involves such legislative aiithoritf) is also authority for the levying of a tax to pay them, and this authority is a Ivew Orleans, 103 U. S. 358, 26 L. ed. 101 ; Goodale v. Fennell, 27 Ohio St. 395; Louisiana v. Pillsbury, 105 U. S. 426, 22 Am. Rep. 321; Commission- 278, 26 L. ed. 1090 ; Ralls County ers of Limestone County v. Rather, 48 Court V. United States, 105 U. S. 733, Ala. 433 ; Edwards v. Williamson, 70 26 L. ed. 1220; Mobile v. Watson, Ala. 145 ; Slaughter v. Mobile County, 116 U. S. 289, 29 L. ed. 620,. 6 Sup. 73 Ala. 134; Peorin, etc., Ry. v. Peo- Ct. Rep. 398; Fort Madison v. Fort pie, 116 111. 408, 6 N. E. Rep. 501. Madison Water Co., 134 Fed. Rep. 32 Von Hoffman v. Quincy, 4 Wall. 214, 67 C. C. A. 142; Folsom v. Green- 535, 18 L. ed. 403; Riggs v. John- wood County, 137 Fed. Rep. 449; son County, 6 Wall. 166, 18 L. ed. Welch V. Ste. Genevieve, 1 Dill. 768 ; Loviisiana v. Pillsbury, 105 135, Fed. Cas. No. 17,372; United U. S. 278, 26 L. ed. 1090; "Nelson States V. County Treasurer, 1 Dill. v. St. Martin's Parish, 111 U. S. 528, 2 Abb. (U.- S.) 60, Fed. Cas. 716, 25 L. ed. 574, 4 Sup. Ct. Rep. No. 16,538; Ex parte Parsons, 1 048; Mobile v. Watson, 116 U. S. Hughes, 285, Fed. Cas. No. 10,774; 289, 29 L. ed. 620, 6 Sup. Ct. Rep. United States v. New Orleans, 17 Fed. 398; Galena v. Amy, 5 Wall. 705, 18 Eep. 488; United States v. Judges, 32 J,, ed, .i60, where tlie municipal char- Fed. Rep. 715 ; State v. New Orleans, ter authorized the laying of a special 17 La. Ann. 17; State v. Young, 29 tax to pay all bonded indebtedness. Minn. 541, 9 N. W. Rep. 748; State Austin v. Cahill, — Tex. — , 88 S. W. v. New Orleans, 37 La. Ann. 17; Saloy Rep. 542. V. New Orleans, 33 La. Ann. 89; Gibbs 32a Eort Madison v. Fort Madison V. Green, 54 Miss. 609; McCless v. Water Co., 134 Fed Fep 214 67 C Jleekins, 117 N. C. 40, 23 S. E. Rep. C. A. 142. ' IMPAIRING CONTRACTS TO LAY TAXES. 517 part of the contract between the municipality and its creditors. " It is clear that "where a st^te has authorized a municipal cor- poration to contract, and to exercise the power of local taxation to the extent necessary to meet its engagements, the power thus given cannot be withdrawn until the contract is satisfied. ^^ Enforcement of a state's contract to tax. 1041. Where the bonds issued are -those of a state, and the- state afterward limits its own taxing power or refuses to exer- cise it, the problem presented, while it involres no difficulty as a matter of pure theory, is much harder to solve practically, for there is no way in which the state can be directly compelled to- perform its contract. It cannot be sued by a citizen in the Federal courts.^* The state of the bondholder's residence can- not take an assignment of his claim and bring suit against the offending state to compel performance of its contract.^' Man- damus will not lie against the officers of the state either to com- pel them to levy the tax which the state by its law has forbidden them to levy, or to compel them to devote the proceeds of the tax to the payment of the bonds when the state has forbidden them to do so,^® or generally to compel the officers of the state to perform the contract when the state has forbidden them to do so. A suit for these purposes against the officers is in effect a suit against the state itself, within the spirit of the eleventh amendment. ^^ 33 Wolff V. New Orleans, 103 U. S. STAtitoni v. Greenhow, 107 U. S. 358, 26 L. ed. 395; Broadfoot v. Fay- 769, 27 L. ed. 468, 2 Sup. Ct. Eep. 9], etteville, 124 N. C. 478, 70 Aid. St. where mandamus was sought to com- Eep. 610, 32 S. E. Eep. 805; Ham- pel the officers of the state to receive mond V. Place, 116 Mich. 628, 72 Am. its obligations in payment of taxes, St. Rep. 543, 74 N. W. Eep. 1002 ; according to its contract, and was see People ex rel. Eeynolds V. Common denied; Marj'c v. Parsons, 114 U. S. Council of Buffalo, 140 N. Y. 300, 37 325, 29 L. ed. 205, 5 Sup. Ct. Rep. Am. St. Rep. 563, 35 N. E. Rep. 485. 932, 962, where remedy sought and Reference should be had to that chap- refused was injunction; Carter v. ter of this work which deals with Greenhow, 114 U. S. 317, 29 L. ed. limitations of the tax rate. 202, 5 Sup. Ct. Rep. 928, 962, where 34 Eleventh Amendment. a suit against a collector for dam- 35 " One state cannot create a con- ages, based upon his refusal to ac- troversy with another state, within cept such obligations in payment of the meaning of that term as used in taxes, was dismissed; In re Ayers, the judicial clauses of the constitu- Scott & McCabe 123 U. S. 443, 31 L. lion, by assuming the prosecution of pd. 21G. 8 Sup. Ct. Eep. 164, where debts owing by the other state to its it was held that an action to restrain citizens." New Hampshire v. Louis- state officers from executing laws iana, 108 U. S. 76, 27 L. ed. 656, 2 alleged to be in violation of the state's Sup.' Ct. Eep. 176. contract was virtually a suit against se' Louisiana v. Jumel, 107 U. S. 711, the state, hence forbidden. 27 L. ed. 448, 2 Sup. Ct. Eep. 128. 518 CONSTITUTIONAL LAW OF TAXATION. 1041a. A late decision of the Supreme Court shows another device of those who seek to enforce obligations against defaultr ing. states. In South Dakota v. North Carolina^^ the facts were : the state of jN^orth Carolina had issued bonds, secured by mort- gage on certain railroad stocks held in the state treasury. The bonds were not paid. The holders donated some of them, abso- lutely, to .the state of South Dakota. The state of South Dakota accepted the gift and sued Worth Carolina and the other bond- holders in the Supreme Court, to recover the amount due and, in default of payment, to foreclose the mortgage on all the stock in behalf of all the bonds. It was held that the suit might be maintained. The earlier case of New Hampshire v. Louisiana?'^ was distinguished as follows: Neither can there be any question respecting the title of South Dalcota to these bonds. They are not held by the state as repre- sentative of individual owners, as in the case of New Hampshire V. Louisiana, for they were given outright and absolutely to the state. It is true that the gift may be considered a rare and unexpected one. Apparently the statute of South Dakota Was passed in view of the expected gift, and probably the donor made the gift under a not unreasonable expectation that South Dakota would bring an action against North Carolina to enforce these bonds, and that such action might enure to his beneiit as the owner of other like bonds. But the motive with which a gift is made, whether good or bad, does not affect its validity or the question of jurisdiction. As against the state of ISTorth Carolina, and as to the bonds held by South Dakota, judgment for payment, or in default, for the sale of so much of the railroad stock as was pledged to secure the bonds held by South Dakota, was given. But as to the in- dividual defendants bondholders, the action iva^ dismissed. It was not necessary, in the particular case, to pass upon the ques- tion of their right to obtain relief in a suit by a state against a state, as the mortgage in effect was a separable one. The hope of the bondholders seems to have been to secure payment of their bonds as an incident of the suit to enforce pay- ment of the state's bonds. 1042. Although, by reason of the sovereign character of the state, it cannot be held to answer directly for the violation of its contract, and cannot be compelled to perform it, yet its 88 192 U. S. 286, 48 L. ed. 448, 24 39 108 U. S. 76, 27 L. ed. 656, 2 Sup. Ct. Rep. 269. Sup. Ct. E«p. 176, cited supra. IMPAIRING CONTRACTS TO LAY TAXES. 519 statutes made in violation of such a contract are void, no one can be deprived of property by their force and no officer for the collection of taxes can justify his acts under them. When the state or its officers seek any affirmative relief or try to enforce any remedy under the void statutes they are met by the assertion of the invalidity of those laws under which they act.*" Some of the cases cited under the foregoing paragraphs are known as the Virginia coupon cases. The state of Virginia had enacted that interest coupons on certain of its bonds should be receivable for taxes. Afterward by various acts if hampered their re- ceivability. One of these acts provided that the receiver of taxes should accept nothing but money, that the holder of coupons might pay in money under protest, then sue on his coupons for a refund. One holder of coupons tendered them for taxes, they were refused, he refused to pay money, and the collector levied according to law upon his personalty. In detinue against the collector to recover the property it was held that the taxpayer had a right to pay in coupons, which right was secured to him by the state's contract; that the act requiring the collector to receive only money was void; that the tender of coupons was a good tender; and that the collector could not justify his wrong- ful taking of the personalty by the void legislation.*^ 1043. In another case*^ a law of the state subsequent to the law making the coupons receivable for taxes, had laid a tax on the bonds and had provided for a deduction of this tax from the amount of the coupons tendered in payment of taxes. In a proceeding by a coupon holder — not the owner of bonds — to compel the collector to receive the coupons for the full amount it was held that the later law was a violation of the contract of the earlier one; and that the coupon holder was entitled to mandamus to compel the collector to receive the coupons for the full amount. 1044. In later cases*^ the propositions stated above to have been established by the Virginia coupon cases were reiterated. The cases referred to are chiefly valuable as showing how vari- 40 Poindexter v. Greenhow, 114 U. ^3 A number of cases reported to- S. 270, 29 L. ed. 185, 5 Sup. Ct. Rep. gether under the name of McGahey 903; Hartman v. Greenhow, 102 U. S. v. Virginia, 135 U. S. 662, 34 L. ed. 672, 29 L. ed. 5. 304, 10 Sup. Ct. Rep. 972. See also 41 Poindexter v. Greenhow, 114 U. McCuUough v. Virginia, 172 U. S. S. 270, 29 L. ed. 185, 5 Sup. Ct. Kep. 102, 43 L. ed. 382, 19 Sup. Ct. Eep. 903. 134. 42 Hartman v. Greenhow, 102 U. S. 672, 26 L. ed. 271. 520 CONSTITUTIONAL LAW OF TAXATION. ously the obligation of a contract may be impaired and how strenuously the Federal courts endeavor to avoid such impair- ment An act which compels the taxpayer in a suit to establish the validity of his coupons, to produce the bond from which the coupons were cut, at the time of offering them in evidence, a provision which prohibits expert testimony in such a suit, to establish the genuineness of the coupons, a special license tax imposed upon the act of offering such coupons for sale, a new statute of limitation which only allowed one year after its passage for the tender of such coupons in payment of taxes, were all held to be unreasonable and onerous conditions which materially impaired the obligation of the contract. ■*" 1045. The obligation of the contract of a municipality with its creditors cannot be evaded by the legislative device of a dissolution of the old corporation and a reincorporation of the same territory or a part of it into a new corporation or cor- porations. The obligations of the old corporation survive against the new creations which have taken its place and may be en- forced against those new organizations in the same manner and to the same extent as enforcement might have been had against the old.*^ 1046. Where a municipal organization has in fact been lawfully effected and has issued valid obligations, those obliga- tions survive although the organization be abandoned for years; upon a municipal reorganization of the territory they constitute valid debts to pay which taxes must be laid; and mandamus will issue to the municipal officers to compel a tax levy for that purpose. This has been held in a case illustrative of circum- stances which frequently occurred in the earlier period of settle- ment of the newer states, where a county had been organized in an uninhabited region " solely for purposes of plunder," the plunderers issuing bonds, selling them to innocent purchasers at a distance, and then abandoning the territory. Afterward ** The legislation of Virginia as to ^ Broughton v. Pensacola, 93 U. S. these coupons has been under discus- 266, 23 L. ed. 896; Mobile v. Watson, sion in its various phases in the fol- 116 U. S. 289, 29 L. ed. 620, 6 Sup. lowing eases in addition to those al- Ct. Rep. 398, both cases where a bond- ready cited: Antoni v. Wright, 22 liolder of the old corporation obtained Gratt. 833; Clarke v. Tyler, 30 Gratt. judgment against the new corpora- 134; Commonwealth v. Weller, 82 Va. tion and mandamus to compel the 623; Barry v. Edmunds, 116 U. S. levy of taxes to pay the judgment ; 550, 29 L. ed. 729, 6 Sup. Ct. Rep. Mount Pleasant v. Beekwith, 100 U. 501, and cases reported with it; Royall S. 514, 25 L. ed. 699, where a, mu- V. Virginia, 121 U. S. 102, 30 L. ed. nicipal corporation had been dissolved 883, 7 Sup. Ct. Rep. 826. and its territory divided among three STATE TAXES IMPAIEING CONTRACTS. ' 521 ■when bona fide settlers arrived and took up th?i abandoned organization they found themselves compelled to pay the old obligations. In the case cited it is to be noticed that there had been a legislative recognition of the old organization; and the bonds "were in the hands of innocent purchasers for value.'**' 1047. Where the state, however, instead of reorganizing the old corporation and delegating to it the local taxing power, abolishes the old corporation and provides for the levy of taxes directly by the state, although the old obligations remain valid, there is no method by which they can be directly enforced against the state. The sovereign character of the state forbids it.*^ Taxation of contracts. 1048. Contracts or interests arising under contracts are prop- erty and may be taxed by the state in which they have their taxable situs like other property.*^ If the state has taxing jurisdiction such taxes cannot be considered as an impairment of contractual obligation, since the liability to and possibility of taxation must be regarded as having been within the contempla- tion of the parties at the time of making the contract. 1049. A state or city may tax such of its own contracts of indebtedness — as are in its jurisdiction — as property in the adjacent corporations; Brewis v. Du- (unavailingly) to enforce the collec- luth, 3 McCrary, 223, 13 Fed. Rep. tion of unpaid taxes which had 334; Laird v. De Soto, 22 Fed. Eep. become due by means of a receiver 422; Hill v. Kahoka, 35 Fed. Rep. of a municipal corporation appointed 33; Pac. Imp. Co. v. Clarksdale, 20 by a court at the instance of Ct. App. 635, 41 U. S. App. 165, bondholders. It was held that the 74 Fed. Rep. 664; Em parte Folsom, unpaid taxes were not debts which i 131 Fed. Rep. 496, where the dissolu- receiver could collect. See also as tion was sought to be effected by a to collection of taxes by an offi- constitutional amendment; Shapleigh eer of the court. Thompson v. V. St. Angelo, 167 U. S. 646, 42 L. Allen County, 115 U. S. 550. 29 L. ed. ed. 310, 17 Sup. Ct. Rep. 957; Gaither 472, 6 Sup. Ct. Rep. 140; Rees v. V. Green, 40 La. Ann. 366, 4 So. Rep. Watertown, 19 Wall. 107, 22 L. ed. 213; Broadfoot v. Fayetteville, 124 N. 72, where it was held that the courts C. 478, 70 Am. St. Rep. 610, 32 S. E. have no power to appoint their own Rep. 804; Mayor, etc. v. Territory, 1 officers to collect the taxes of mu- Okla. 202, 31 Pac. Rep. 194, 21 L. R. nicipal corporations and apply them A. 847. See § 499 et seq. as to the to the payment of corporate obliga- legislative power in dividing muniei- tions. The creditor's remedy is by pa.lities and adjusting the debts of mandamus. Welch v. Ste. Genevieve, the divided territory. ' 10 Am. Law Reg. N. S. 512, was ex- 46 Comanche County v. Lewis, 133 pressly disapproved. In Supervisors U. S. 198, 33 L. ed. 604, 10 Sup. Ct. v. Rogers, 7 Wall. 175, 19 L. ed. 162, Rep. 286; State ex rel. v. Yoxall, 40 the court exercised such a power by Kans. 323, 19 Pac. Rep. 723. virtue of an express statute of Iowa. 4T See §§ 1041 et seq. and Meri- 48 See chap. III. where questions of wether v. Garrett, 102 U. S. 472, situs are discussed. 26 L. ed. 197. where it was sought 522 ' CONSTITUTIONAL LAW OF TAXATION. same majmer as it taxes other property.*® But the state or city may not tax its own bonds, collecting the tax by deducting it from the interest due on the bonds and paying to the creditor the difference; and this seems to be so regardless of the situs of the bonds. Such a tax is an impairment of the contractual obligation. It stops the payment which the creditor has been promised before it reaches him. After the city or state has performed its contract by paying to its creditor all that is due him, it may then tax the contract as property, collecting the tax in the same manner as it collects the taxes on other property. But an interference with the creditor's stipulated payment before it has reached him is an impairment of the obligation of his contract^" The bonds may be taxed but the tax must be col- lected out of the general property of the taxpayer and not out of what the state or city owes him. The same is probably true of taxes on private contracts. It is held that a state may not tax the bonds of one of its own corporations owned by non- residents, compelling the corporation to deduct the tax from the interest due the bondholders and to pay it to the state, '^ and that a state may not compel a foreign corporation, when paying, in a foreign state, the interest on bonds held by residents of the taxing state, to deduct a tax from the interest due such residents and pay it to the taxing state.*^ " Impairing the obligation." 1050. What is the obligation of a contract and Avhat impairs it ? The obligation is the duty — law enforced — which the party to a contract has, of doing the thing which lie has agreed to do. Any law which in any degree releases a party to a con- tract from this duty of doing what he has agreed to do,^^ or which (in the case of an executed contract) releases him from the effects of what he has done bv reason of such an undertaking,'" impairs the obligation of the contract. The law which binds the contracting parties to the performance of their agreements is an essential part of the contract. The validity of the contract 49 People ex rel. Manhattan Fire ern R. R. Co. v. Pennsylvania, 153 Ins. Co. V. Commissioners, 76 N. Y. U. S. 628, 38 L. ed. 846, 14 Sup. Ct. 64; Murray v. Charleston, 96 U. S. Rep. 952; Delaware and Hudson 432, 24 L. ed. 760. Canal Co. v. Pennsylvania, 156 U. S. 50 Murray v. Charleston, 96 U. S. 200, 39 L. ed. 396, 15 Sup. Ct. Rep. 432, 24 L. ed. 760; Mayor, etc., of 358. These cases rest largely upon Macon v. Jones, 67 Ga. 492 ; State v. the absence of territorial jurisdiction. Board of Assessors, 35 La. Ann. 659. 53 Sturges v. Crowninshield, 4 61 State Tax on Foreign Held Bonds, Wheat. 122, 4 L. ed. 529. 15 Wall. 300, 21 L. ed. 179. 6* Fletcher v. Peck, 6 Cranch, 87, B2 New York, Lake Erie and West- 3 L. ed. 162. IMPAIKING THE OBLIGATION OF CONTRACTS. 523 at the time of making it, its construction under the established canons of interpretation then prevailing, the methods by which it is to be enforced, the kind of evidence by which it may be proven, all these are essential elements of its obligation, and any change in any of these respects by which a party to a contract is placed in a worse position than that which the parties contemplated at the time the contract was made, is an impair- ment of its obligation. 1051. An act directly repealing the law under or by which a contract is made and which essentially enters into it is of course an impairment of its obligation. Thus a law of a state which repeals a provision in a bank charter by which the notes of the bank were made receivable for taxes, impairs the obliga- tion of the contract as to all notes issued before the repeal.^' And this is so even where the notes came into the hands of the person who presents them for taxes subsequent to the repeal. An act repealing an exemption from taxation or a commutation of taxes granted by contract is an impairment.^^ 1052. A decision by the highest court of a state enforcing a subsequent statute or ordinance and holding void a law which the highest court of the state had previously held valid is like- wise an impairment of the obligation of contracts created by and under the prior act.^^ Laws abridging the remedy. 1053. Not only by direct repeal is the obligation of a con- tract impaired. Any law impairs it which prevents its enforce- ment, or which materially abridges the remedy for enforcing it which existed at the time it was contracted, and does not supply an alternative remedy equally adequate and efficacious.^^ ss Furman v. Niohol, 8 Wall. 44, 19 prior decisions of the same court. L. ed. 370; Keith v. Clark, 97 U. S. But it was held that the decision 454, 24 L. ed. 1071. was not in conflict with such prior B6 For illustrative cases see §§ 996b decisions, and that the bonds did not ef ggg. constitute a contract. 57 See § 972 and cases cited, also ssMcGahey v. Virginia, 135 U. S. McCullough V. Virginia, 172 U. S. 662, 34 L. ed. 304, 10 Sup. Ct. Rep. 102, 43 L. ed. 382, 19 Sup. Ct. Rep. 972; Bronson v. Kinzie, 1 How. 311, 134. This rule was sought to be ap- 11 L. ed. 143; Walker v. Whitehead, plied to the facts in a recent case, 10 Wall. 314, 21 L. ed. 357; Von Hoflf- Zane v. Hamilton County, 189 U. S. man v. Quincy, 4 Wall. 535, 18 L. ed. 370, 47 L. ed. 858, 23 Sup. Ct. Rep. 403; Tennes.9ce v. Sneed, 96 U. S. 69, 538, where it was claimed by counsel 24 L. ed. 610; Memphis v. United that the decision of the highest court States, 97 U. S. 293, 24 L. ed. 920 ; of Illinois declaring a law under which Memphis v. Brown, 97 U. S. 300, 24 municipal bonds were issued to be L. ed. 924; Howard v. Bugbee, 24 unconstitutional, was in conflict with How. 461, 16 L. ed. 753. 524 CONSTITUTIONAL LAW OF TAXATION. " ]!Tot]iing is more material to the obligation of a contravc than the means of its enforcement. The ideas of validity and remedy are inseparable and both are parts of the obligation which is guaranteed by the constitution against impairment." ^® Acts which prevent the enforcement of a contract aie, speak- ing with reference to the contracts of the state or municipality to tax, any acts which throw obstacles in the way of the jDerson who is entitled to the exercise of the power in his behalf, under the law as it existed when the contract was made. Thus where a law under which municipal bonds were issued provided for a special tax, and mandamus was then the usual remedy to com- pel the levy of such a tax, if necessary, a subsequent law pro- hibiting the issue of the writ of mandamus is held to be an impairment of the obligation of the contract.^ And laws which take away the remedy existing at the time of making the con- tract, substituting in its place some other remedy not so useful or effective, are likewise impairing in result.®^ 1054. Although a law taking away the remedy as it existed at the time of making the contract is by itself an impairment of the contractual obligation, it is not regarded as such if another remedy equally effective is given. It is not necessary that the remedy given shall be in all respects as convenient to the con- tracting party as the one taken away. It is sufficient if it be substantially as good. The rule seems to be that in modes of proceeding and forma to enforce the contract the legislature has the control, and may enlarge, limit, or alter them, provided that it does not deny a remedy, or so embarrass it with conditions and restrictions as seriously to impair the value of the right.^^ In line with these expressions it is held that where a state, in chartering a bank, had made the bills of the bank receivable for taxes, and had subsequently taken away the right of the taxpayer to compel the collector to receive them by mandamus, providing in place of that remedy that the taxpayer might pay in money, under protest, and then bring a suit within thirty days for the 59 Walker v. Whitehead, 16 Wall, stipulated, the legislature provided for 314, 21 L. ed. 357. exchanging the debt for premium 60 Louisiana v. Pillsbury, 105 U. S. bonds, of which the dates of payment 278, 26 L. ed. 1090. of principal and interest were to be 81 Louisiana v. Pillsbury, supra, determined by a lottery, where, instead of the special tax con- 62 Bronson t. Kinzie, 1 How. 311,. templated Ij.v the original contract and 11 L. ed. 143. the right of payment at the time IMPAIHING THE OBLIGATION OF CONTRACTS. 525 recovery of the money so paid ; the remedy given was suLstantiallv as good as the one taken away and there was no impairment of <.-ontractnal obligation. If the taxpayer had tendered bills which the state's contract had bound it to receive, and kept the tender good, that fact would appear in the proofs and he would have judgment.^ The cases cited depend to some extent upon the doctrines of the legislative supremacy in matters of taxation, which the courts are disinclined to limit further than the constitution strictly compels them to limit it and the public necessity that the collection of taxes shall be impeded as little as possible. In such matters the con- venience of the individual is not consulted to the same extent as in matters of private right. " It (the remedy provided) is a wise and reasonable precaution for the security of the government. No government could exist that permitted the collection of its revenues to be delayed by every litigious man, or every embarrassed man, to whom delay was more important than the payment of costs." *** It is quite conceivable that similar changes in the remedies open to parties to wholly private contracts would be held to constitute impairments of their obligations. 1055. Indeed, the decision in Tennessee v. Sneed (supra) seems to the writer to be practically overruled by Poindexter v. Yirginia.^ There a similar act, likewise requiring the holder of coupons on bonds issued by the state to pay money under pro- test and sue to recover back the money, was held not to be a remedy equal to the one of mandamus he had under the contract. It is true that in Poindexter v. Virginia the taxpayer stood on the defensive while in Tennessee v. 8nead he sought affirmative relief ; but this fact hardly reconciles the expressions of the two cases. 1056. The Virginia legislation which has been mentioned has given rise to a number of cases which show how the obligation of a contract may be impaired by legislation obstructive of the remedy. The nature of the contract has been described.®" In a number 63 Tennessee v. Sneed, 96 U. S. 69, a suit aad took away the old remedy 24 L. ed. 610 ; Antoni v. Greenhow, did not amount to a new contract be- 107 U. S. 769, 27 L. ed. 468, 2 Sup. tween the state and the billholders, Ct. Rep. 91, where the remedy by whereby the state agreed that the bill- mandamus was not taken away but holders should have that particular certain conditions were attached to remedy. it- Whaley v. Gaillard, 21 S. C. 569; 64 Tennessee v. Sneed, supra. South Carolina v. Gaillard, 101 U. S. 65 114 U. S. 270, 29 L. ed. 185, 5 433 25 L. ed. 937, where it was held Sup. Ct. Rep. 903. that the act which provided for such 86 See §§ 1041-1042. 526 CONSTITUTIONAL LAW OF TAXATION, of cases reported together®'' it is held that the following acts con- stituted impairments of the obligation : An act which imposed upon the taxpayer tendering coupons in payment of taxes, the duty of producing in court, at the time of offering the coupons in evi- dence, the bond from which such coupons were cut; an act which prohibited expert testimony to establish the genuineness of such coupons (the coupons being engraved or stamped with a fac simile of the signature of the state treasurer) ; an act imposing a special license tax upon the right to offer such tax-receivable coupons for sale, such act being a material interference with their negotiabil- ity; and a statute of limitations requiring all such coupons to be presented in payment of taxes within one year after its passage. It was questioned in those cases whether an act authorizing a suit to be brought against a taxpayer who tendered his tax in coupons, and whether acts requiring their rejection were not impairments of the contract. In the same cases it was held that a law requiring liquor licenses to be paid in money did not impair the obligation of the state's contract, since the state may impose such conditions as it pleases upon the liquor traffic under the police power. Transfer or extension of contractual rights of exemption. 1057. The right of exemption or immunity from taxation which may be gained by contract is a right which, unless other- wise expressly provided, pertains strictly to the persons or corpo- rations to which it is originally granted; and does not pass to assignees or successors, except by express statutory direction or absolutely necessary implication. This results from the principle that exemptions are strictly construed and never sustained unless given in language clearly and unmistakably evincing a purpose to grant such immunity or exemption. All doubts upon the question are resolved in favor of the public.®* Illustrating this proposition, 67McGahey v. Virginia, 135 U. S. v. Commissioners, 112 U. S. 609, 28 C62, 34 L. ed. 304, 10 Sup. Ct. Kep. L. ed. 837, 5 Sup. Ct. Rep. 299; Mer- 972. cantile Bank v. Tennessee, 161 U. S. 68 Covington and Lexington Turn- 161, 40 L. ed. 656, 16 Sup. Ct. Eep. pike Co. V. Sandford, 164 U. S. 578, 461; Pickard v. East Tennessee, etc., 41 L. ed. 560, 17 Sup. Ct. Rep. 198; Co., 130 U. S. 637, 32 Jb. ed. 1051, 9 Norfolk and Western R. R. v. Pendle- Sup. Ct. Rep. 640; Phcenix Ins. Co. ton, 156 U. S. 067-673, 39 L. ed. 574, v. Tennessee, 161 U. S. 174, 40 L. ed. 15 Sup. Ct. Rep. 413; Chesapeake and 660, 16 Sup. Ct. Rep. 471; Keokuk Ohio Ry. v. Miller, 114 U. S. 176, 29 and Western R. R. Co. v. Missouri, L. ed. 121, 5 Sup. Ct. Rep. 813; Mor- 1,52 U. S. 301, 38 L. ed. 450, 14 Sup. gan V. Louisiana, 93 U. S. 217, 23 Ct. Rep. 592; Memphis, etc., R. R. L. ed. 860; Wilson v. Gaines. 103 U. Co. v. Berry, 41 Ark. 446; Arkansas, S. 417, 26 L. ed. 401; Memphis R. R. etc., R. R. Co. v. Berry, 44 Ark. 22; TRANSFER OF CONTRACTTJAL EXEMPTIONS. 527 it Is held that a grant of exemption to a railroad company pertains strictly to the original line mentioned in the charter, and to such property as is absolutely necessary to ite operation.*" 1058. The case of Morgan v. Louisiana™ is fairly illustrative of the principle, and contains a clear exposition of the nature of immunities from taxation arising out of contract. A railroad company had by charter from Louisiana exemption of its capital stock, works, fixtures, shops, warehouses, vehicles, and other ap- purtenances for a specified term. Under legal authority it mort- gaged part of the road, its equipments, appurtenances, rights and franchises. The mortgage was foreclosed and that part of the ■road, its equipments, and franchises were bought by Morgan at the foreclosure sale. Afterward the remainder of the road, in- cluding the franchises appertaining thereto, was bought by Mor- gan at a sheriff's sale under a judgment for other indebtedness. In defense of a suit to collect taxes Morgan claimed that among the rights and franchises thus purchased by him was the immu- nity from taxation of the original company. The court held that this claim was ill-founded, saying: 1059. It can hardly be supposed that the legislature intended that the exemption should follow the fixtures and vehicles of the corn- pan}' after they had passed out of its control, so that wherever found, the power of taxation could not touch them ; or that work- shops and warehouses ceasing to be the property of the company should carry to its subsequent possessors a privilege intended only for the benefit of the corporation. The language of the statute requires no such construction and intendments will not be in- dulged to enlarge the operation of a clause restraining the exer- cise of a sovereign attribute of the state. As has often been said by this court, the whole community is interested in retaining the power of taxation undiminished, and has a right to insist that its abandonment shall not be presumed in any case where the deliberate purpose of the state to abandon it does not appear. 1060. The court likened exemptions from taxation to exemp- tions from execution to show their personal character, and con- tinued : Much confusion of thought has arisen in this case and in similar cases from attaching a vague and undefined meaning to Commonwealth v. Masonic Temple Co., more, etc., Ry. Co. v. Mayor, 89 Md. 87 Ky. 349, 8 S. W. Rep. 699; Ken- 98, 42 Atl. Rep. 923; Adams v. Yazoo, tucky Cent. R. R. Co. v. Common- 77 Miss. 194, 24 So. Rep. 210, 60 L. wealth, 87 Ky. 661, 10 S. W. Rep. 269; R. A. 33. State V. Maine Central, 66 Me. 512; 69 Bancroft v. Wicomico County, State V. Chicago, etc., Ry. Co., 89 121 Fed. Rep. 874. Mo. 523, 14 S. W. Rep. 522; Balti- 70 93 U. S. 217, 23 L. ed. 860. 528 CONSTITUTIONAL LAW OF TAXATION. the term " franchises." ' It is often used as synonymous with rights, privileges, and immunities, though of a personal and temporary character; so that, if any one of these exists, it is loosely termed a "franchise," and is supposed to pass upon a transfer of the franchises of the company. But the term must always be considered in connection with the corporation or prop- erty to which it is alleged to appertain. The franchises of a railroad corporation are rights or privileges which are essential to the operations of the corporation, and without which its road and works would be of little value ; such as the franchise to run cars, to take tolls, to appropriate earth and gravel for the bed of its road, or water for its engines, and the like. They are posi- tive rights or privileges without the possession of which the road could not be successfully worked. Immunity from taxation is not one of them. The former may be conveved to a purchaser of the road as part of the propertv of the company ; the latter is personal and incapable of transfer without express statutory direction. 1061. It will be apparent from the foregoing that the rule against the transfer of contractual immunity is not a rule of con- stitutional law, but rather of the interpretation of the contract. The rule has been applied, denying the right to transfer the immunity in other cases of purchase under foreclosure.^'' It has been held in a state court that where the state acquired, through foreclosure, under express statutory authority, the prop- erty and franchises of a corporation, and then by express act transferred to a new corporation all the property and franchises 71 Wilson V. Gaines, 103 U. S. 417, the mortgagor company upon such 26 L. ed. 401, where the sale was in sale " shall ipso facto be dissolved, foreclosure of the statutory lien of ... . that the purchaser on such the state, and the statute directed the sale " shall forthwith be a corpora- sale among other things of " the fran- tion and shall succeed to all such chises," ..." and all the rights, franchises, rights and privileges " privileges and immunities appertain- . . . " as would have been had by ing to the franchise ;" Memphis R. R. the first company but for such sale Co. v. Commissioners, 112 U. S. 609, and conveyance;" Pickard v. East 28 L. ed. 837, 5 Sup. Ct. Rep. 299, Tennessee, etc., Ry. Co., 130 U. S. 637, where the mortgage was of the prop- 32 L. ed. 1051, 9 Sup. Ct. Rep. 640; erty of the exempted corporation " to- Mercantile Bank v. Tennessee, 161 U. gether with the charter by which said S. 161, 40 L. ed. 656, 16 Sup. Ct. Rep. company was incorporated and under 461; Baltimore, etc., Ry. Co. v. County which it is organized, and all the Commissioners of Wicomico County, rights and privileges and franchises 93 Md. 113, 48 Atl. Rep. 853; Lake thereof:" Chesapeake and Ohio Ry. Drummond, etc., Co. v. Common- Co. V. Miller, 114 U. S. 176, 29 L. ed. wealth. 103 Va. 337, 49 S. B. Rep. 12L, 5 Sup. Ct. Rep. 813, where the 506, 68 L. R. A. 92. And see other general statute governing foreclosures cases supra. of railroad mortgages provided that TKANSJEE OF CONTEACTTJAL EXEMPTIONS. 529 acquired by the foreclosure, the new corporation took a right to commutation of taxes which the old corporation had heldJ^ Consolidation of corporations as affecting exemption. 1062. Whether, upon the consolidation of two or more corpo- rations, the consolidated concern takes contractual rights of tax exemption or immunity held by one or both of the original cor- porations, and if so, to what extent it takes them, are questions which depend for solution upon the particular facts of each case, the method of consolidation or merger, the language of the con- solidating act, and the effect of the consolidation upon the original corporate lives. The questions have arisen chiefly with respect to the consolidation of railway companies. Whether or not tax exemptions pass to the new corporation depends chiefly on the constructicm of the statute under which the consolidation is made ; and in construing the statute the main inquiry is whether the old corporations are destroyed and a new one created, or whether the new corporation is merely a continuation of the old corporations, or whether one or more of the old corporations are merged in another pre-existing corporation which continues its exist^ice while they lose theirs. 1063. Reviewing some cases in which contractual exemptions have continued after consolidation ; an early ease is Philadelphia, etc.. Railroad Co. v. MarylamdP where an exemption, which per- tained to the stock and property of one of several corporations which were consolidated under a statute providing for a continu- ation of the corporate life under one corporate name, was held not to apply to the stock and property which had belonged to one of the other old corporations. It was said that the original ex- emption as to the property which it covered — " as far as it went " — continued to the new corporation. In Tomlinson v. Branch'^* it was held that where a railroad company, to which, by its charter, an exemption from taxation was granted for a limited period, was by act of the legislature " merged " in another company, which thereby became vested with all its rights, property, and privileges, the exemption applied to the property with its limitation of time, and although the com- pany in which it was merged had been granted a perpetual ex- 72 Railroad Co. v. Parcher, 14 Minn. T3 10 How. 376, 13 L. ed. 461. 224; County of Stevens v. Railway « 15 Wall. 460, 21 L. ed. 189. Co., 36 Minn. 467, 31 N. W. Rep. 942. 34 530 CONSTITUTIONAL LAW OF TAXATION. emption from taxation in its charter, this perpetual exemption would not be extended to property so acquired, without express words or necessary intendment to that effect. 1064. In Central Railroad v. Georgia'^ the legislature author- ized two roads to " consolidate " their " stocks " and all their " rights, privileges, immunities, property, and franchises " in puch manner that each owner of shares of one of them should be entitled to receive an equal number of shares of the consolidated companies. It was held that this consolidation was not a sur- render of the existing charters of the two companies ; and also that the consolidated company, as to the franchises, property, and income of each of the constituent companies, had the same ex- emptions and immunities as the original companies. Here the road whose charter contained the exemption from taxation was preserved intact by the consolidation; and it was held that its exemption continued, while the other road was un- doubtedly intended to go out of existence ; and as the latter road held its property and franchises subject to taxation, the former, succeeding to them, held them alike subject. 1065. To the same general effect, that where companies are consolidated, there being no interruption of the corporate life, the consolidated corporation holds the franchises and property of the old corporations subject to the same respective rights, exemp- tions, and liabilities as those to which such franchises and proper- ties were severally subject when held by the original corporations, are the cases cited.'^® In all the above cases the point to be noticed is that there was no interruption of the corporate life of either company ^ and that the consolidated company, instead of being a new corporation, was regarded as merely a continuation of the old ones. It is to be further observed (and in most of the cases cited this was the point directly held) that the consolidated corporation gains no exemption as to propertj' which was not exempt before con- solidation. 1066. Turning to another class of cases, we find that where the statutes consolidating the corporations are such as to work a dissolution of the old companies and a reorganization of the T5 92 U. S. 665, 23 L. ed. 757. 29 L. ed. 833, 6 Sup. Ct. Rep. 649 ; 7« Chesapeake, etc., Ry. Co. v. Vir- Detroit, etc., Ey. Co. v. Powers, 138 ginia, 94 U. S. 718, 24 L. ed. 310; Fed. Rep. 264. Tennessee v. Whitworth, 117 U. S. 139, TKANSFEE OF CONTKACTUAL, EXEMPTIONS. 531 new one, there is held to be a total interruption of the corporate life; and when this state of facts exists, acts passed since the grant of the original charters and before the consolidation, declaring the charters of corporations subject to be altered, amended, or rer- pealed by the legislature, become applicable ; so that the con- stitutional provision against impairing the obligation of contracts can no longer be invoked.'''^ 1067. In one case''* stress was laid upon the facts that the consolidation was not a merger of one company into another ; and that it was not " a mere alliance or confederation of the two. If it had been, each would have preserved its separate existence as well as its corporate name. Eut the act authorized the consoli- dation of the stocks of the two companies, thus making one capital in place of two. It contemplated, therefore, that the separate capital of each company should go out of existence as the capital of that company." 1068. Intermediate constitutional provisions prohibiting ex- emptions from taxation also become applicable in such cases of consolidation by the organization of new corporations ; and those provisions then operate to destroy the former exemptions. The contract clause of the constitution has no application in such circumstances.^® Statutory transfer of " rights, privileges, franchises, immuni- ties," etc. 1069. Another set of cases, not strictly referable to the class of cases arising under the contract clause, but belonging rather to cases which construe statutes of exemption, are those cases where the legislature, by contractual charter, has bestowed ex- emptions on one company and then in the charter of another com- pany has bestowed on that other company the same " rights and privileges," or " rights, privileges, and immunities," or " fran- chises," as those kotowed on the first company. The cases are here referred to because they depend on the same principles of statutory construction as those where a direct transfer of rights is claimed from one company to another. 7T Shields V. Ohio, 95 U. S. 319, 24 78 Railroad Co. v. Georgia, sujn-a. L. ed. 357 ; Railroad Co. v. GJeorgia, 98 79 Keokuk and Western E. R. v. U. S. 359, 25 L. ed. 185; Railroad Co. Missouri, 152 U. S. 301, 38 L. ed. 450, V. Maine, 96 U. S. 499, 24 L. ed. 836; 14 Sup. Ct. Rep. 592; Yazoo and Mis- St. Louis, etc., Ry. v. Berry, 113 U. sissippi Valley Ry. Co. v. Adams, 180 S. 465, 28 L. ed. 1055, 5 Sup. Ct. Rep. U. S. 1, 45 L. ed. 395, 21 Sup. Ct. Rep. -i29; McMahan v. Morrison, 16 Ind. 240, rehearing 181 U. S. 580, 45 L. ed. 172, 79 Am. Dec. 418. 1011, 21 Sup. Ct. Rep. 729. 532 CONSTITUTIONAL LAW OF TAXATION. 1 070. The tendency is to hold that exemptions are not granted by such statutes. The cases are not harmonious. In Phcenix Insurance Co. v. Tennessee^ the legislature by charter had pro- vided that the " Bluff City " company should pay a certain rate of tax " in lieu of all other taxes." Later, in the charter of the " De Soto " company, all the " rights, privileges, and immuni- ties " of the " Bluff City " company were granted to the " De Soto " company. Afterward the " Washington " company was incorporated and by its charter it was granted all the rights and privileges (omitting "immunities") of the "De Soto" com- pany. The question was whether the " Washington company " had the same privileges as to taxation as the " Bluff City " com- pany. It was held that it had not. The court laid especial stress on the omission of the word " itnmunities " from the charter of the " Washington " company. It said that the phrase " rights, privileges and immunities," in the charter of the " De Soto " company, were " certainly full and ample for the purpose of grant- ing an exemption from taxation contained in the first or original statute, and when in granting to still another company certain rights the word ' immunities ' is dropped, its absence would seem and ought to have some special significance." . . . "The word ' immunity ' expresses more clearly an intention to include therein an exemption from taxation than does either of the other Mords. Exemption from taxation is more accurately described as an ' immunity ' than as a ' privilege,' although it is not to be denied that the latter word may sometimes and under some cir- cumstances include such exemption." ^^ In some earlier cases it was held that a grant of " all the rights, powers, and privileges " of one company to another was sufficient to grant to the latter an exemption of taxation held by the former." «' 1071. The contract of exemption may inure to the benefit of purchasers from the original parties when such is the reasonable implication of the contract. Thus when a state, in incorporating a university, vested in the university certain lands, authorized the university to lease the lands for ninety-nine years, aud provided 80 161 U. S. 174, 40 L. ed. 660, 16 worth, 117 U. S. 139, 29 L. ed. 833, 6 Sup. Ct. Rep. 471. Sup. Ct. R«p. 649. See Wilmington, 81 See foreclosuTe and consolidation etc., R. R. v. Alsbrook, 146 U. S. 279- cases cited, ante, §§ 1057 et seq. 297, 36 L. ed. 972, 13 Sup. Ct. Rep. 82 Humphrey v. Pegues, 16 Wall. 72. 244, 21 L. ed. 326; Tennessee v. Whit- IMPAIKING THE OBLIGATION OF CONTRACTS. 533S that the lands leased should be forever exempt from taxation, it was held that' such a charter and the acceptance of the leases by the lessees at a fixed rate constituted a binding contract, and that the lands were exempt in the possesion of the lessees.^^ Miscellaneous, 1071a. Where lands were granted by a state to a corporation with an exemption from taxation " until the same shall have been sold and conveyed by said company," it was held that the exemp- tion only continued until the equitable title had been conveyed ; that the company could not thereafter postpone taxation indefi- nitely by neglecting to convey the legal title; and that taxation of such lands after the passing of the equitable title and before the passing of the legal title did not impair the obligation of a contract.^ The words "sold and conveyed," as found in the exempting section, are satisfied when the railroad company has received full payment for the lands, and executed an instrument by which all its equitable and substantial interest in them is transferred.^' 1072. An inheritance tax on the transfer of a deposit of money in banks in the taxing state, which deposit is part of the estate of one who in his lifetime was not a resident of the taxing state, does not violate the obligation of any contract, the law imposing the tax being in force at the time the deposit was made.** And such a transfer or succession tax, not being a direct tax on prop- erty, but a charge on a privilege exercised or enjoyed under the laws of the state, does not, when imposed in eases where the prop- erty passing consists of securities exempt by statute, impair the obligation of a contract within the meaning of the constitution of the United States.®^ 1073. In a late case®* it was held by four of the justices that where lands were granted by the United States to a state in aid of the construction of a railroad and for no other use, the state SSMatheny v. Golden, 5 Ohio St. 171 N. Y. 682, 64 N. E. Rep. 1118, 361. 69 App. Div. 127, 74 N. Y. Supp. 508. 84 Winona and St. Peter Land Co. 87 Orr v. Gilman, 183 U. S. 278, 46 V. Minnesota, 159 U. S. 526, 40 L. ed. L. ed. 196, 22 Sup. Ct. Rep. 213, af- 247, 16 Sup. Ct. Rep. 83; State v. firming Matter of Dows, 167 N. Y. Winona and St. Peter R. R. Co., 21 227, 88 Am. St. Rep. 509, 60 N. E. Jlinn. 472. Rep. 439, 60 App. Div. 630, 71 N. Y. 85 See § 761 et seq. Supp. 1135. 86Blackstone v. Miller, 188 U. S. 88 Stearns v. Minnesota, 179 U. S. 189, 47 L. ed. 439, 23 Sup. Ct. Rep. 223, 45 L. ed. 162, 21 Sup. Ct. Rep. 277, affirming Matter of Blackstone, 73. 534 CONSTITUTIONAL LAW OF TAXATION. held them as trustee, and the peculiar circumstances of the trust created enabled the state to make a contract granting them to the railroad company and exempting them from taxation, in con- sideration of certain specified payments by the company, in spite of the existence of a clause in the constitution of the state pro- hibiting exemptions. It was said, among other things, that a commutation of taxes is not an exemption. The decision rested on various grounds, the facts were peculiar, and the opinions cannot be adequately summarized. They should be read. Five of the justices concurring in the decision did not concur in this opinion. CHAPTER Xm. LIMITATIONS UPON TAXING POWER IMPOSED BY TREATIES. 1074. The Federal constitution provides that: This constitution, and the laws of the United States which shall be made in pursuance thereof, and all treaties made, or which shall be made, under the authority of the United States, shall be the supreme law of the land; and the judges in every state shall be bound thereby, anything in the constitution or laws of any state to the contrary notwithstanding.^ 1075. Treaties with foreign nations and with the Indian tribes, made pursuant to the constitution, are the supreme law of the land, and have the same effect as statutes enacted by Congress pursuant to the constitution.* Congress has power, without inter- ference from the judiciary, to enact laws contrary to the provisions of treaties, and has done so; and such laws have been enforced.* It is plain, however, that there is a moral obligation resting on Oongress not to enact laws of that sort. 1076. State constitutions and laws which violate treaties are void in respect to rights secured by such treaties.* Inheritance tax cases arising under treaties. 1077. There are some instructive decisions in Louisiana ex- plaining the effect of treaties upon tax laws. In 1850 an act of Louisiana, substantially incorporating former acts, imposed a tax on inheritances passing to persons not resident-3 of the state and not being citizens of any state or territory in the Vnion.^ lArt. VI, §2. 12 Sup. Ct. Rep. 522; Thomas v. 2U. S. Const., art. 6; Martin v. Gay, 169 U. S. 264, 42 L. ed. 740, 18 Hunter, 1 Wheat. 304, 4 L. ed. 97 ; Sup. Ct. Rep. 340 ; Edye v. Robertson, Foster v. Nelson, 2 Pet. 253, 7 L. ed. 112 U. S. 580, 28 L. ed. 798, 5 Sup. 415; Clark v. Braden, 16 How. 635, Ct. Rep. 247. 14 L. ed. 1090 ; Jost V. Jost, 1 Mackey * Ware v. Hylton, 3 Dall. 199, 1 <2Beebe v. Magoun, 122 Iowa, 94, 986. NOTICE AND HEARING IN TAX PROCEEDINGS. 569 sioners, in determining the question of benefits, followed a wrong rule of apportionment or charge. And if a lot claimed to be more than 100 feet away from the proposed street should be included within the area of assessment, the owner is entitled to an oppor- tunity to make his proofs upon that issue before it is conclusively determined -against him. 1145. So also a person assessed for a certain amount in the assessment of the general property tax has no right to be heard upon the questions of whether a general property tax should be laid, or whether the rate at which it is laid is or is not too high. But he must be given an opportunity to show, for instance, that he is assessed for too much property, or that the amount of his tax is more than it should be according to the rate fixed, or that he is not a resident of the district in which the tax is levied. Illustrations of this sort might be multiplied; but enough has been said to show the distinction between the questions as to which notice need not in all cases be given and those as to which it must be given. Authorities to the effect that due process of law requires notice and opportunity to be heard on such questions as apportionment, individual amount including valuation, and liability, are cited in the note.*^ 1 1 46. Speaking of this requirement of notice, the opinion in one of the cases cited^* says : It must be conceded that property cannot be taken by the right of eminent domain, without some notice to the owner, or 43 Lehman v. Robinson, 59 Ala. 219; 53 Mo. 17; Melvin v. Weare, 56 N. H. Darling v. Gunn, 50 111. 424; Brown 436; Gaboon v. Coe, 57 N. H. 556; V. Denver, 7 Colo. 305, 3 Pac. Rep. State v. Drake, 33 N. J. L. 194 ; Stale 455; Patten v. ""Green, 13 Gal. 325; v. Commissioners, 41 N. J. L. 83; Hutson V. Woodbridge, 79 Cal. 90, Stuart v. Palmer, 74 N. Y. 1S3, 30 16 Pac. Rep. 549, 21 Pac. Rep. 435; Am. Rep. 289; Matter of Trustees of Dyer v. Farmington, 70 Me. 515; New York Protestant Episcopal Pub- Beebe v. Magoun, 122 Iowa, 94, 101 lie School, 31 N. Y. 574; Remsen v. Am. St. Rep. 259, 97 N. \V. Rep. 986; Wheeler, 105 N. Y. 573, 12 N. E. Rep. Butler V. Supervisors, 26 Mich. 22 ; 564 ; Overing v. Poote, 65 N. Y. 263 ; Thomas v. Gain, 35 Mich. 155, 24 Matter of Ford, 6 Lans. 92; Ireland Am. Rep. 535 ; Dool v. Cassapolis, 42 v. City of Rochester, 51 Barb. 414 ; Mich. 547, 4 N. W. Rep. 265 ; Wood- Philadelphia v. Miller, 49 Pa. St. 440 : man v. Auditor-General, 52 Mich. 28, Clements v. Hale, 47 Vt. 680; Violett 17 N. W. Rep. 227 : Whiteford v. Pro- v. Alexandria, 92 Va. 561, 53 Am. St. bate Judge, 53 Mich. 130, 18 N. W. Rep. 825, 23 S. E. Rep. 909, 31 L. R. Rep. 598 ; South Platte Land Co. v. A. 382. The requirement of notice ap- Buffalo County, 7 Neb. 253 ; Barker plie.9 to assessments of water rates v. Omaha, 16 Neb. 269, 20 N. W. Rep. made on vacant lots. See § 1139a. 382; Commissioners v. Lang, 8 Kans. 44 Stuart v. Palmer, 74 N. Y. 183 284; Lowell v. Wentworth, 6 Gush. 30 Am. Rep. 289. 221; Pacific Ry. Co. v. Cass County, 570 CONSTITUTIONAL LAW OF TAXATION. some opportunity on the part of the owner, at some stage of chc proceeding, to be heard, as to the compensation to be awarded him. An act of the legislature, arbitrarily taking property foi' the public good, and fixing the compensation to be paid, could not be upheld. There would in such case be the absence of that " due process of law " which both the Federal and state consti- tutions guarantee to every citizen. Can it be, that when the public takes land for a public highway, the owners thereof are entitled to a hearing as to the compensation which they are to receive, and yet that the lands on both sides of the highway may be assessed to pay such compensation, to their entire value, with- out any opportunity on the part of the owners to be heard ? The legislature can no more arbitrarily impose an assessment for which property may be taken and sold, than it can render a judgment against a person without a hearing. It is a rule founded on the first principles of natural justice, older than written constitutions, that a citizen shall not be deprived of life, liberty, or property without an opportunity to be heard in de- fense of his rights; and the constitutional provision that no per- son shall be deprived of these without " due process of law " has its foundation in this rule. ... It has sometimes been inti- mated that a citizen is not deprived of his property within the meaning of this rule, by the imposition of an assessment. It might as well be said that he is not deprived of his property by a Judgment entered against him. 1147. In a Maryland case in 1876*^ it was held, in accordance with the general principles which have been stated, that an ordi- nance for repaying a street which did not provide for notice to and hearing of the property owners to be assessed for the improve- ment was void for lack of due process of law. Afterward upon reargument this ruling was reversed*® and for a number of years thereafter it was the law in Maryland that such notice and hear- ing were unnecessary.*^ In 1890 the question came up again and the Maryland Court of Appeals, upon the authority of vari- ous Federal and state court cases which have been discussed,** reversed its former rulings and held such notice and hearing to be essential.*® « Mavor, etc. v. Scharf, 54 Md. 499. etc., of Baltimore, 64 Md. 1, 20 Atl. 46 56 Jill. 50. Eep. 988. 4T Mayor, etc., of Baltimore v. Johns 48 See §§ 1144-1146. Hopkins Hospital, 56 Md. 1 ; Moale *^ Ulman v. Mayor, etc., of Balti- ct al. V. Mayor, etc., of Baltimore, 61 more, 72 Md. 587, 20 Atl. Rep. 141, Md. 224; Alberger et al. v. Mayor, 21 Atl. Rep. 709, 11 L. R. A. 224; see 79 Md. 469, 30 Atl. Rep. 43. NOTICE AND HEARING IN TAX PROCEEDINGS. 571 1148. In a recent Iowa case^** it was held that a collateral inheritance tax law which did not provide for notice o£ the ap- praisement to the heirs, legatees, or devisees of the decedent, the transfer of whose estate was taxed, was not due process of law.*^ It was unavailingly contended, on behalf of the validity of the law, that a succession tax was one of that class of taxes referred to in section 1138 of this work,^^ such as poll taxes, license taxes, and the like, where no hearing is necessary because a hearing would be useless. The court said that the heir had a vested interest in the property of his ancestor,^^ and that "the collateral inheritance tax imposes a burden upon this interest which is fixed and de- tcnnined by an appraisement of the property, and no provision for notice to the heir or opportunity to be heard is made." 1 1 49. In Michigan, on the other hand, it is held that inasmuch as an inheritance tax is not a tax upon the legatee or heir, but upon the transfer, no notice is necessary.^* This decision seems to be in hannony with generally accepted doctrines as to the nature of inheritance taxes. The Michigan court says, succinctly: It is said that the act is void because it does not provide for a personal notice, and opportunity to resist the assessment, and that it therefore takes property without due process of law. This loses sight of the fact that it is not taking the property of the legatee, but is imposing a condition upon the acquisition of property. What notice is sufficient. 1 1 50. As to what constitutes notice and opportunity to be heard, in compliance with this requirement of due process, no general rule can be laid down which will cover all cases. The whole tendency of the Federal courts in construing this require- ment has been to uphold the state legislation, and in this effort the decisions have gone far ; so that the assertions that almost any kind of actual or constmctive notice is sufficient, and that pro- 50 Ferry v. Campbell, 110 Iowa, 290, persons" as should be entitled to no- 81 N. W. Rep. 604, 50 L. R. A. 92. tiee. 51 To the same effect is Re McPher- 52 See Hagar v. Reclamation Dis- son, 104 N. Y. 306-321, 58 Am. Rep. trict, 111 U. S. 701, 28 L. ed. 569, 4 502' 10 N. E. Rep. 685, where notice Sup. C't. Rep. 663. by mail to such persons as the " sur- 53 Citing Weaver v. State, 110 Iowa, Togate may by order direct," was pro- 328, 81 N. W. Rep. 603; Moore v. Tided for. This notice was upheld, the Gordon, 24 Iowa, 158. court saying: " It is a fair inference 54 Union Trust Co. v. Probate that it was intended that he should Judge, 125 Mich. 487, 84 N. W. Rep. direct notice to be given to all such 1101. 572 CONSTITUTIONAL LAW OP TAXATION. vision for the most formal sort of a hearing is enough, are not far from the truth — so far as the Federal constitution is con- cerned. In one of the earlier cases in which the question came up in the Supreme Court, °^ Mr. Justice Miller, speaking for the court, formu-lated the general considerations which guide it in disposing of the topic, as follows: 1151. It is not a little remarkable, that -while this provision has been in the constitution of the United States, as a restraint upon the authority of the Federal government, for nearly a century, and while, during all that time, the manner in which the powers of that government have been exercised has been watched with jealousy, and subjected to the most rigid criticism in all its branches, this special limitation upon its powers has rarely been invoked in the judicial forum or the more enlarged theater of public discussion. But while it has been a part of the consti- tution, as a restraint upon the powers of the states, only a very few years, the docket of this court is crowded with cases in which we are asked to hold that state courts and state legislatures have deprived their own citizens of life, liberty, or property with- oiit due process of law. There is here abundant evidence that there exists some strange misconception of the scope of this pro- vision as found in the fourteenth amendment. In fact it would seem, from the character of many of the cases before us, and the arguments made in them, that the clause under consideration is looked upon as a means of bringing to the test of the decision of this court the abstract opinions of everv unsuccessful litigant in a state court of the justice of the decision against him, and of the merits of the legislation on which such a decision may be founded. . . . We lay down the following proposition, as applicable to the case before us : That whenever, by the laws of a state, or by state authority, a tax, assessment, servitude, or other burden is imposed upon property for the public use, whether it be for the whole state or of some more limited portion of the community, and those laws provide for a mode of confirming or contesting the charge thus imposed, in the ordinary , courts of justice, with such notice to the person, or such proceeding in regard to the property, as is appropriate to the nature of the case, the judgment in such proceedings cannot he said to deprive the owner of his property without due process of law, however obnoxious it may be to other objections. 1152. Following the general course thiis laid down it is held that the following methods of notice are sufficient : B5 Davidson v. New Orleans. 96 U. S. 97, 24 L. ed. 616. NOTICE AND HEAKING IN TAX PEOCEEDINGS. 573 Personal service of notice within reasonable time to object on all owners known and in reach of process, and by advertisement as to those unknown, and who could not be found.^ Notice published in a newspaper of general circulation in the county where the property is situated, for at least two weeks.^'' Notice published for not less than ten days in two daily news- papers printed in the city Avhere the property is located.^ Notice published after the completion of the improvement, by one insertion in one of the daily newspapers published in the city where the property is situated.^* Notice published for not less than ten days in one or more daily newspapers in the city where the property is situated and posted along the line of the improvement.®" Four weeks' pub- lication of notice of sale of lands is enough.*^ 1 1 53. The contents of the " notice " referred to in all these cases are a statement of the nature and extent of the proposed im- provement or ta^, more or less general in its nature, and a clause ■fixing time and place at which some authority having charge of the matter will hear objections, or at which objections may be filed. A notice which does not contain these elements, with some degree of definiteness, can not be considered a notice at all, and due process of law,®^ in a case Avhere the time and place of hearing objections were not fixed by statute, as hereinafter noted. With regard to property and personal taxes a publication of the tax list is sufficient notice.®^ A mere technical error in the publication, such as a defect in the name and a misstatement of the sex of the owner of property does not render the notice bad.^ Where the only notice given or authorized relates to a prelim- inary resolution of a city council or other legislative body declar- ing the necessity or expediency of the proposed tax or public im- provement, but makes no reference to any assessment of property 56 Davidson v. New Orleans, supra. 60 Wulzen v. Board of Supervisors, 57 Winona and St. Peter Land Co. 101 Cal. 15, 40 Am. St. Rep. 17, 35 V. Minnesota, 159 U. S. 526, 40 L. ed. Pae. Rep. 353. 247, .16 Sup. Ct. Rep. 83. See St. oi Johnson v. Hunter, 127 Fed. Rep. Joseph V. Truckenrailler, 183 Mo. 9, 219. 81 S. W. Rep. 1116; Woodrough v. 62 Xorfoij^ y Young, 97 Va. 728, 47 Douglas County, Neb. , 98 N. L. R. A. 574, 34 S. E. Rep. 888. W. Rep. 1092 ; "Williams v. Pittoek, 35 63 Winona and St. Peter Land Co. Wash. 271, 77 Pac. Rep. 385. v. Minnesota, 159 U. S. 526, 40 L. ed. 68 Lent V. Tillson, 140 U. S. 316, 247, 16 Sup. Ct. Rep. 83. 3.5 L. ed. 419, 11 Sup. Ct. Rep. 825. 64 Castillo v. McConnico, 168 U. S. 59Walston V. Nevin, 128 U. S. 578, 674, 42 L. ed. 622, 18 Sup. Ct. Rep. 32 L. ed. 544, 9 Sup. Ct. Rep. 192; 229. Preston v. Roberts, 12 Bush, 580-587 : Beck V. Obst, 12 Bush, 268. 574 CONSTITUTIONAL LAW OF TAXATION. i" ■which may be necessary, the notice is not due process of law."'* !N"otic6 to " owners of abutting lands " is not notice to one whose land does not abut on the proposed improvement ;*" and, likewise, where an assessment is made on lands in the " vicinity," while notice is provided as to owners of lands " abutting " on the im- provement, there is a denial of due process of law.''' 1 1 54. The notice to which we refer need not be a personal citation ; it is sufficient if it be given by a law designating the time and place where the parties may contest the justice of the valuation. As a general rule, only statutory notice is given. The state may designate the kind of notice and the manner in which it shall . be given. All that we assert, or have asserted, is, that there must be a notice of some kind, which will call the attention of the parties to the subject, and inform them when and whore they will be permitted to expose any alleged wrong in the valuation of which they may complain.** 1 1 55. There is ample authority supporting the statement just quoted, that where the statute, or tlie ordinance imposing the tax, fixes a time during which, and a place at which, complaints may be heard by some authority competent to correct errors, no pub- lication or personal notice is necessary. The law in prescribing the time and place when and where such complaints will be heard, gives all the notice that is necessary.®' Every person is charged with knowledge of the provisions of the law. It is so held in a case of assessment of property tax on bank shares;™ a state tax on property and stock of railway corporations;'^ a state tax on bonds and certificates of indebtedness.'^ A city ordinance relating to a street assessment, enacted pursuant to law, is on the sanu' footing as a statute in this regard.'* 1 1 56. It was held in one case where a state officer was named as the person to whom complaint should be made, that it was not 65 Scott V. Toledo, 36 Fed. Rep. 385, ™ Palmer v. McMahon, 133 U. S. 1 L. R. A. 688; Norfolk v. Young, 97 660, 33 L. ed. 772, 10 Sup. Ct. Rep. Va. 728, 47 L. R. A. 574, 34 S. E. Rep. 324. 886. '■I Pittsburgh, etc.. Ry. Co. v. esLanglois v. Cameron, 201 111. 301, Backus, 154 U. S. 421, 38 L. ed. 1031, 66 N. E. Rep. 332. 14 Sup. Ct. Rep. 1114; State ex rcl. v. STBeebe v. Magoun, 122 Iowa, 94, Jones, 51 Ohio St. 492, 37 N. E. Rep. 101 Am. St. Rep. 259, 97 N. W. Rep. 945; St. Ix)uis. etc., Ry. Co. v. Davis. 986. 132 Fed. Rep. 629. 68 Santa Clara County v. Southern t2 Bell's Gap R. R. Co. v. Pennsyl- Pacific Ry. Co., 18 Fed. Rep. 410. vania, 134 U. S. 232, 33 L. ed. 892, 10 09Hagar v. Reclamation District, Sup. Ct. Rep. 53?. Ill U. S. 701-710. 28 L. ed. 569, 4 73 Broadw>iv Baptist Church v. Mc- Sup. Ct. Rep. 0(i3 ; St. Louis, etc, Ry. Atee, 8 Bush, 508. 8 Am. Rep. 480 : Co. v. Wortlien, .)2 Ark. 529, 13 S. W. Wulzen v. Board of Supervisors, 101 Rep. 254, 7 L. R. A. 374. Cal. 15,, 40 Am. St. Rep. 17, 35 Pac. Rep. 353. NOTICE AND HEABING IN TAX PROCEEDINGS. 575 necessary that the statute should fix the place of complaint, since, in the absence of express provision to the contrary, his office was presumed to be the place. ^* In the same case it Avas contended that there was no due process of law because stockholders of the bank whose shares were taxed had no notice of the time at which they might be heard. The statute fixed a time within which the bank should make its report to the state auditor-general and directed him to hear any stockholder who wished, and the court said that this was suflficient notice as to time. Notice to a cor- poration of the taxation of shares has been held to be notice to the shareholders.''^ In another ease,'® a law was held sufficient which fixed the time and place of the first meeting of a state board of equalization, although in holding subsequent meetings the board did not ad- journ to any day certain. At what stage the taxpayer must have notice. 1 1 57. It will thus be seen that the notice required to be given to the taxpayer by the requirement of " due process of law " is of the most formal character ; and that in this respect the limitation imposed on the taxing power of the states by the fourteenth amendment is very, very small. With respect to the stage of the proceedings at which he must receive notice the requirement is almost equally slight. The general rule which may be laid dovrai as applicable to all cases is that the taxpayer must have the notice in time to contest ihe proceeding before the tax becomes an absolvite lien on his prop- erty or before it becomes his absolute personal liability.'' This branch of th« topic is really one of the aspects in which to view the broader question — what is the nature of the hearing which must be given ? and will be treated in connection with it. T4 Merchants' Bank v. Pennsylvania, L. ed. 569, 4 Sup. Ct. Rep. 663 ; Pal- 107 U. S. 461, 42 L. ed. 236, 17 Sup. mer v. McMahon, 133 U. S. 660, 33 Ct. Rep. 829. L. ed. 772, 10 Sup. Ct. Rep. 324; TS Corry v. Mayor, etc., of Balti- Spencer v. Merchant, 125 U. S. 345, iTiore. 96 Md. 310, 103 Am. St. Rep. 31 L. ed. 763, 8 Sup. Ct. Rep. 921; 364 53 Atl. Rep. 942; affirmed, Corry Fallbrook Irrigation District v. Brad- V. Baltimore, 196 U. S. 466, 49 L. ed. ley, 164 U. S. 112, 41 L. ed. 369, 17 556, 25 Sup. Ct. Rep. 297. Sup. Ct. Rep. 56; Stuart v. Palmer, T3 Lander v. Mercantile Bank, 186 74 N. Y. 183, 30 Am. Rep. 289; Vio- U S 458, 46 L. ed. 1247, 22 Sup. Ct. lett v. Alexandria, 92 Va. 561. 53 Am. Eep. 908. St. Rep. 825, 23 S. E. Rep. 909, 31 77 Davidson v. New Orleans, 96 U. L. R. A. 382. See Ballard v. Hunter, S 97, 24 L. ed. 616; Hagar v. Rec- — Ark. — . 85 S. W. Rep. 252. la'mation District, 111 U. S. 701. 28 576 CONSTITUTIONAL LAW OF TAXATION. The nature of the hearing required. 1 1 58. The abstract proposition to which all will agree is : that the hearing for which opportunity must be given must be an actual hearing on the real merits, and not a merely formal one. By the real merits must be imderstood those questions as to which the hearing applicable to the nature of the case might possibly make some change in the taxpayer's obligation. That is to say, where the legislature has bestowed the power to fix the limits of taxing districts on some subordinate body, the taxpayer has a right to be heard upon the question of whether the boundaries shall be fixed so as to include his residence or his property, as the case may be ; as well as upon questions of apportionment and the amount; while if the legislature has fixed the district bounds the real merits do not include that question. 1 1 59. What, then, amounts to a hearing on the real merits ? This question cannot be answered abstractly. The only way to arrive at any conclusion regarding it is to examine the adjudged cases, and the expressions contained in the opinions. It is to be noticed that the Tederal decisions are more inclined than those of the state to interpret this requirement favorably to state legisla- tion. The desire expressed frequently in the Federal opinions, not to interfere in the taxing systems of the states, is nowhere more apparent than in the decisions upon this topic. 1 1 60. In McMillen v. Anderson,''^ a case involving the collec- tion of a license tax (a form of tax to which the required oppor- tunity to be heard is less applicable than to many other forms), the right to enjoin the collection of any illegal tax was held to constitute sufiicient opportunity to be heard ; and it was said that the requirement of security for the injunction did not destroy the character of the proceeding as due process of law. It is held, with relation to an assessment for local improvement, that a statute requiring that the assessment should be confirmed by a court of record before becoming effectual, giving to persons interested the right to file exceptions and oppose the confirmation, and giving the court authority to refuse to confirm, afforded a sufficient opporttmity to be heard.™ 1161. Where the laws of a state provide that a tax or an assess- ment for improvements can be enforced only by suit in court, in 78 93 U. S. 37, 24 L. ed. 335. Sup. Ct. Rep. 1086; Musser v. Adair, ■» Davidson v. New Orleans, 96 U. 55 Ohio St. 466, 45 N. E. Kep. 903; S. 97, 24 L. ed. 616; Wuits v. Hoag- Wight v. Davidson, 181 U. S. 371, 45 land, 114 U. S. 606, 29 L. ed. 229, 5 L. ed. 900, 21 Sup. Ct. Rep. 616. NOTICE AND HEARING IN TAX PROCEEDINGS. 577 which the taxpayer may set forth all his grievances by way of defense, the opportunity to be heard is sufficient.** Where, before the assessment becomes final, opportunity is given to appear and make proofs before a board of commissioners, or a board of equalization, having authority to hear complaints and proofs and make correction of the assessment, the opportunity is sufficient.*^ In such proceedings the assessors or board of equalization act judicially, and the opportunity given is equivalent to the oppor- tunity given by a proceeding in court. *^ It is sufficient where opportunity is given before the assessment becomes final, to appear before a single officer having the matter in charge and having authority to make changes.^ 1 1 62. Where a taxpayer dissatisfied with an assessment (or tax) may review it by proceeding in court there is due process.®* And if the laws give the aggrieved taxpayer the right of an appeal or to be heard upon an application for an abatement or remission of the tax before he has been deprived of his property or the lien thereon is irrevocably fixed, there is sufficient oppor- tunity to be heard.* 80 Hagar v. Reclamation District, 111 U. S. 701, 28 L. ed. 569, 4 Sup. Ct. Rep. 663; Reclamation District V. Evans, 61 Cal. 104; Winona and St. Peter Land Co. v. Minnesota, 159 U. S. 526, 40 L. ed. 247, 16 Sup. Ct. Rep. 83; Garvin v. Daussman, 114 Ind. 429, 5 Am. St. Rep. 637, 16 N. E. Rep. 826. 81 Kentucky Railroad Tax Cases, 115 U. S. 321, 29 L. ed. 414, 6 Sup. Ct. Rep. 57 ; Spencer v. Merchant, 125 U. S. 345, 31 L. ed. 763, 8 Sup. Ct. Rep. 921, 100 N. Y. 585, 3 N. E. Rep. 682; Fallbrook Irrigation District v. Bradley, 164 U. S. 112, 41 L. ed. 369, 17 Sup. Ct. Rep. 56; Palmer v. McMahon, 133 U. S. 660, 33 L. ed. 772, 10 Sup. Ct. Rep. 324, 102 N. Y. 176, 55 Am. Rep. 796, 6 N. E. Rep. 400; Paulson v. Portland, 149 U. S. 30, 37 L. ed. 637, 13 Sup. Ct. Rep. 750 ; Carson v. St. Francis Levee District, 59 Ark. 513, 27 S. W. Rep. 590; Chase v. Trout, — Cal. — , 80 Pac. Rep. 81; Denver v. Kennedy, — Colo. — , 80 Pac. Rep. 122. 83 Hagar v. Reclamation District, 111 U. S. 701-710, 28 L. ed. 569, 4 Sup. Ct. Rep. 663; State v. Morris- town, 34 N. J. L. 445; State v. Jer- 37 sey City, 24 N. J. L. 662; Barhyte v. Shepherd, 35 N. Y. 238; Hassan v. Rochester, 67 N. Y. 528; Williams v. Weaver, 75 N. Y. 30; Jordan v. Hyatt, 3 Barb. 275; Ireland v. Rochester, 51 Barb. 416; Griffin v. Nixon, 38 Miss. 424; Keokuk, etc., Bridge Co. v. Peo- ple, 161 111. 132, 43 N. E. Rep. 691. 83 Walston V. Nevin, 128 U. S. 578, 32 L. ed. 544, 9 Sup. Ct. Rep. 192; Bell's Gap R. R. Co. v. Pennsylvania, 134 U. S. 232, 33 L. ed. 892, 10 Sup. Ct. Rep. 533; Merchants' Bank v. Penn- sylvania, 167 U. S. 461, 42 L. ed. 236, 17 Sup. Ct. Rep. 829, where a law tax- ing bank shares was upheld, which di- rected that the report of the bank as to the shares should be filed witli the auditor-general at a stated time and place and directed him to hear any stockholder who might desire to be heard. 84 Lent V. Tillson, 140 U. S. 316, 35 L. ed. 419, 11 Sup. Ct. Rep. 825: Hodge v. Muscatine County, 196 I^. S. 276, 49 L. ed. 477, 25 Sup. Ct. Rep. 237, affirming 121 Iowa, 482, 96 N. W. Rep. 968. 85 King v. Portland City, 184 U. S. 61. 46 L. ed. 431, 22 Sup. Ct. Rep. 290, 38 Oreg. 402, 63 Pac. Rep. 578 CONSTITUTIONAL LAW OF TAXATION. 1 1 63. But "where a statute wliicli gives the taxpayer no right to be heard upon valuation and apportionment in the preliminary proceedings, provides for the collection of the assessment by suit in which all valid defenses may be raised ; and also provides for another summary method of collection by placing the tax on the general tax list to be collected by distraint and forfeiture, there is not due process, for the public authorities may, at their option, resort to the latter method, and if they do, the taxpayer never has an opportunity to be heard.^^ Right of contest must include questions of apportionment and valuation. 1 1 64. The right to attack ox resist the tax or assessment in court, which is referred to in the several sections just preceding,, must be a right to contest the questions of apportionment, amount, or valuation on the facts. A system which should provide that the tax or assessment should only be enforced by suit ; but which, either expressly or by construction of the courts, should provide that the assessment itself should be conclusive upon the subject of valuation and apportionment, would not be due process, if the assessment had been made without opportunity to be heard.*'' And this seems to be what is meant by the cases which hold that an opportunity to contest in court is sufficient. In a suit in which apportionment and valuation should not be contestable, the only inquiries possible would be into the constitutionality of the law imposing the assessment and into the question of the conformity of the assessment to the law under which it was made. To call such a system due process would be reasoning in a circle. 2, 55 L. R. A. 812; Towns v. Klamath affirming 121 Iowa, 482, 96 N. W. Rep. County, 33 Greg. 225, 53 Pac. Rep. 968; Newton v. McKay, — Iowa,—, 604 ; Weed v. Boston, 172 Mass. 28, 102 N. W. Rep. 827 ; Hacker v. Howe, 51 N. E. Rep. 204, 42 L. R. A. 642; — Neb. — , 101 N. W. Rep. 255; see National Bank of Commerce v. New Chicago, etc., Ry. Co. v. Richardson Bedford, 155 Mass. 313, 29 N. E. R«p. County, — Neb. — , 100 N. W. Rep. 532; Sears v. Street Commissioners, 950; State v. Back, . — Neb. — , 100 173 Mass. 350, 53 N. E. Rep. 876; N. W. Rep. 952; People ex rel. Simp- In re Madera Irrigation District, 92 son v. Wells, 181 N. Y. 252, 73 N. E. Cal. 296, 27 Am. St. Rep. 106, 28 Rep. 1025. Pac. Rep. 272, 675, 14 L. R. A. 755 ; 86 Scott v. Toledo, 36 Fed. Rep. 385, Da-vies v. Los Angeles, 86 Cal. 46, 24 1 L. R. A. 688: Murdock v. City of Pac. Rep. 771; Gilmore v. Hentig, 33 Cincinnati, 39 Fed. Rep. 891. Kans. 170, 5 Pac. Rep. 781; Hodge v. 87 See Violett v. Alexandria, 92 Va. Muscatine County, 196 U. S. 276, 49 561, 53 Am. St. Rep. 825, 23 S. E. Rep. L. ed. 477, 25 Sup. Ct. Rep. 237, 909, 31 L. R. A. 382. NOTICE AND HEARING IN TAX PEOCEEDINGS. 579 Right to hearing must be absolute. 1 1 65. It has been held expressly that the statute itself must give the opportunity to be heard as a matter of right, and not as a mat- ter of favor. It must be demandable, compelling the attention of the assessing authority under an imperative obligation, with the sense of official responsibility for impartial and right decision, which is imputed to the discharge of official duty. It is not enough that the owners may by chance have notice or that they may as a matter of favor have a hearing. The law must require notice to them, and give them the right to a hearing and an opportunity to be heard. It matters not, upon the constitutionality of such a law, that the assessment has, in fact, been fairly apportioned. The constitutional validity of law is to be tested, not by what has been done under it, but by what may, by its authority, be done.^^ 1 1 66. Abstractly, prcbably the foregoing statement would not be disputed in any court. The United States Supreme Court, however, in its anxiety to uphold the tax systems of the states, has used language indicating that where the statute fails to pro- vide such a hearing as a matter of rights the requirement of hear-^ ing as such matter of right will he read into it. In the Kentucky Railroad Tax Cases^ that court said: And if the plaintiffs in error have the constitutional right to such hearing, for which they contend, the statute is properly to be construed so as to recognize and respect it, and not to deny it. The constitution and the statute will be construed together as one law. This was the principle of construction applied by this court, following the decisions of the state court, in Neal v. Delaware,^'' where words, denying the right, were regarded as stricken out of the state constitution and statutes by the con- trolling language of the constitution of the United States; and in the case of Cooper v. The Wadsworth Board of Worhs,^'^ in a case where a hearing was deemed essential it was said by Byles, J., " that, although there are no positive words in a statute requiring that the party shall be heard, yet the justice of the common law will supply the omission of the legislature." 1 1 67. The case from which the foregoing language is quoted was a case where the highest court of the state which had enacted 88 Stuart V. Palmer, 74 N. Y. 183, 89 115 U. S. 321-334, 29 L. ed. 414, 30 Am. Rep. 289; Violett v. Alex- 6 Sup. Ct. Rep. 57. andria, 92 Va. 561, 53 Am. St. Rep. «• 103 U. S. 370, 26 L. ed. 567. 825, 23 S. E. Rep, 909, 31 L. K. A. «1 14 C. B. N. S. 180. 382. 580 CONSTITUTIONAL LAW OF TAXATION. the law had construed the law so as to require notice and oppor- tunity to be heard. ®^ In a later case*' a city council, pursuant to charter, made an ordinance directing an assessment and appointing persons called viewers to make it. There was doubt as to whether the charter provided for notice in such cases. The ordinance contained no direction for notice. The viewers, however, gave notice by pub- lication, and reported that they had done so "pursuant to" the ordinance. Then the city council passed another ordinance ap- proving the report of the viewers. As to the sufficiency of the notice thus given the Supreme Court said : In other words, the council by this latter ordinance approved the construction placed by the viewers upon the first, to the effect that it required notice. It would seem that when notice was in fact given, notice whose sufficiency is not challenged, a construction put by the council upon the scope and effect of its own ordinance should be entitled to respect in any challenge of the regularity of the proceedings had under the ordinance. In this case neither the fact of notice nor the subsequent con- struction of it need have been depended on, for the ordinance pre- scribed that the viewers should hold stated meetings at a fixed place, and gave the right to be heard to persons who should appear before them."* But the language is quoted as indicating the atti- tude of the Supreme Court upon such questions. In a recent New York ease a statute which did not expressly provide for notice and hearing in an assessment proceeding was upheld because it contained words making " all other provisions of law " with respect to taking private property, applicable to pro- ceedings under the act.^ e2 Cincinnati, etc., Ry. Co. v. Com- 94 See §§ 1155-1161. monwealth, 81 Ky. 492-512. 95 Matter of Riverside Park, 95 App. 93 Paulsen v. Portlajid, 149 U. S. Div. 552, 89 N. Y. Supp. 6. See also ?o. ,37 L. ed. 637, 13 Sup. Ct. Rep. People ex rel. Simpson v. Wells, 181 780. N. Y. 252, 73 N. E. Rep. 1025. CHAPTER XVL DUE PROCESS OF LAW IN THE COLLECTION OF TAXES AND ENFORCEMENT OF TAX LAWS. 1 1 68. In explaining the summary character of " due process of law " in tax proceedings generally, reference has already been made to some of the cases which deal with the subject of due process in relation to the collection of taxes, as distinguished from their assessment} Those cases, with others, will now be discussed in more detail, in their bearing upon the question: What is due process of law in the collection of taxes and the enforcement of tax laws, after the tax has been finally apportioned and assessed ? 1 1 69. It is not to be doubted that the executive process of levy and distraint of goods and chattels may issue to collect ordinary property and personal taxes, and that the assessment-roll is a sufficient basis for the process, so far as the requirement of due process of law is concerned.^ The collection of such taxes, after they are assessed, is a purely administrative act. jSTo constitu- tional right of the taxpayer is invaded when the assessment is collected by forcible process, any more than when a judgment is forcibly collected. He has his day in court upon the questions of apportionment and valuation before the assessment becomes final ; and he has no reason to complain of force in the matter of collec- tion. It is competent, also, for the legislature to enact that per- sonal taxes may be collected by levy on and sale of the delinquent's real estate,^ or by arrest of his person.* 1 1 70. A statute which permits the purchaser at a tax sale to foreclose his lien by a suit in the nature of a proceeding in rem 1 See §§ 1122 et seq, ante. tilled Spirits, 14 Wall. 44, 20 L. ed. 2 Palmer v. McMahon, 133 U. S. 660, 815. 33 L. ed. 772, 10 Sup. Ct. Rep. 324; s Springer v. United States, supra, 102 N. Y. 176, 55 Am. Rep. 796, where the sale of lands to satisfy an 6 N. E. Rep. 400; Springer v. United income tax was held to be due process; States, 102 U. S. 586, 26 L. ed. 253; Sawyer v. Dooley, 21 Nev. 390, 32 Murray's Lessee v. Hoboken Land and Pac. Rep. 437. Improvement Co., 18 How. 272, 15 * Palmer v. McMahon, supra; Coni- L. ed. 372; Mayor, etc. v. Johns Hop- monwealth v. Byrne, 20 Gratt. 105, Idns Hospital, 56 Md. 46 ; Nelson where arrest and imprisonment under Lumber Co. v. McKinnon, 61 Minn, a mere license certificate issued by a 219, 63 N. W. Rep. 630; Gibson v. commissioner of the revenue, on fail- Mason, 5 Nev. 302; Weimar v. Bun- ure to pay a tax as a distiller, was bury. 30 Mich. 201; Henderson's Dis- held to be due process of law; In re Haekett, 53 Vt. 354. [581] 582 CONSTITUTIONAL LAW OF TAXATION. "" ' by which the owner may be completely barred is due process,' although no provision is made for the service of notice on a lien- holder. 1171. License and occupation taxes are quite commonly en- forced by arrest and imprisonment, and the doing of the act upon which the license tax is imposed, without a license, is generally made a misdemeanor. This method has ample justification in prescription, and universal custom, and is due process of law.® A whisky tax may be made a lien on lands ;^ and a license tax for carrying on a business may be made a lien upon the premises in which the business is carried on, although possibly the owner, if a different person than the one carrying on the business, may be entitled to notice and hearing before the tax finally becomes a lien. The owner is presumed to know the law, and to know what business is being carried on in his premises, and to have let the property with a knowledge that it might become incumbered by a tax imposed upon such business.* Franchise taxes on corporations, and privilege taxes generally, may be enforced by distress and sale of personal property.* The legislature has power to authorize the collection of taxes on land out of personal property.^" Making taxes personal liabilities. 1172. Generally, the power of the legislature to make taxes assessed against real or personal property personal liabilities of the resident owner is unquestioned. The taxes are in fact as- sessed against the owners in respect of such property, although it is common to speak of them as being assessed against the prop- erty." 5 Leigh V. Green, 64 Neb. 533, 101 Cincinnati v. Buckingham, 10 Ohio, Am. St. Eep. 592, 90 N. W. Rep. 255 ; 257. affirmed, 193 U. S. 79, 48 L. ed. 623, 7 Commonwealth v. Walker, 25 Ky. 24 Sup. Ct. Eep. 390. L. Kep. 2122, SO S. W. Rep. 185. oMcCaskell v. State, 53 Ala. 511; 8 Hodge v. Muscatine County, 196 Denver City R. R. Co. v. Denver, 21 U. S. 276, 49 L. ed. 477, 25 Sup. Ct. Colo. 350, 52 Am. St. Rep. 239, 41 Rep. 237, affirming 121 Iowa, 482, 96 Pae. Kep. 820, 29 L. R. A. 608; Be N. W. Rep. 968. Dassler, 35 Kans. 678, 12 Pac. Rep. 9 Scottish Union, etc., Ins. Co. v. 130; Campbell V. Anthony, 40 Kans. Rowland, 196 U. S. 611, 49 L. ed. 652, 20 Pac. Rep. 492; Appleton v. 619, 25 Sup. Ct. Rep. 345. Hopkins, 5 Gray, 530; Daggett v. 10 Maus v. Logansport, etc., R. E., Everett, 19 Me. 373; Bozeman v. Cad- 27 III. 77; Randall v. Elwell, 52 N. well, 14 Mont. 480, 36 Pac. Rep. 1042; Y. 521, 11 Am. Rep. 747. St. Louis V. Sternberg, 69 Mo. 289; n City of Oakland v. Whipple, 39 Eosenbloom v. State, 64 Neb. 342, 89 Cal. 112; City of New Orleans v. Day, >r. W. Rep. 1053, 57 L. R. A. 922; 29 La. Ann. 416; see § 1192 for pres- DUE PROCESS IN ENFOECKMENT OF TAX LAWS. 583 1 1 73. There is no doubt of the constitutional power of the legislature, as a general rule, to authorize the collection of taxes by an action at law against the person taxed.'^^ In Louisiana the constitution prohibits suits at law for taxes.'* An act providing that, in case the collector cannot seize the property assessed, he may have a summary rule commanding the person assessed or his representatives to deliver the property in satisfaction of the de- linquent taxes, is held to be constitutional, as the proceeding con- templated is not such a " suit " as is forbidden by the constitution.'* 1 1 74. The general rule seems to be that where the legislature has not authorized any method of collecting a tax, but has laid the tax, an action at law will lie to collect it.'^ 1 1 75. Where the legislature, however, has authorized a method of collection, that method is exclusive, and generally in such case an action will not lie unless the statute expressly authorizes it.'" «nt constitutional rule in Louisiana; 65 Tex. 619; State v. Severance, 55 Succession of Mercier, 42 La. Ann. Mo. 378; State ex rel. Ziegenheim v. 1135, 8 So. Rep. 732, 11 L. R. A. 817; Titman, 103 Mo. 553, 15 S. W. Rep. Snipe V. Shriner, 44 N. J. L. 206. 936; Richards v. Commissioners of And see cases cited infra. As to mak- Clay County, 40 Neb. 45, 42 Am. St. ing taxes personal liabilities of non- Rep. 650, 58 N. W. Rep. 594; Dawes residents see §§ 164-165 et seq. A County v. Furay, Neb. , 99 N. nonresident stockholder in a domestic W. Rep. 271 ; Hanson v. Gray, 12 S. corporation may be made personally D. 124, 76 Am. St. Rep. 591, 80 N. liable for taxes on his stock. Corry W. Rep. 175. V. Baltimore, 196 U. S. 466, 49 L. ed. 16 Montezuma Valley Water Supply 556, 25 Sup. Ct. Rep. 297, affirming Co. v. Bell, 20 Colo. 175, 36 Pao. Rep. ^6 Md. 910, 53 Atl. Rep. 942. 1102; Stafford County Commissioners 12 State V. N. Y., N. H. & H. Ry. v. First Nat. Bank, 48 Kans. 561, 30 Co., 60 Conn. 326, 22 Atl. Rep. 765 ; Pac. Rep. 22 ; Louisville Water Co. v. People V. Central Paciiic Ry. Co., 43 Commonwealth, 89 Ky. 244. 12 S. W. Cal. 398; Litchfield v. Macomber, 42 Rep. 300, 6 L. R. A. 69; Baldwin v. Barb. (N. Y.) 288; Inhabitants of Hewitt, 88 Ky. 673, 11 S. W. Rep. X'oxcroft V. Piscataquis Camp Meet- 803; Home Savings Bank v. Boston, ing Association, 86 Me. 78, 29 Atl. 131 Mass. 277; Packard v. Tisdale, 50 Rep. 951; Hanson v. Gray, 12 S. D. Me. 376; City of Detroit v. Jepp, 52 124, 76 Am. St. Rep. 591, 80 N. W. Mich. 458, 18 N. W. Rep. 217 ; Catling Rep. 175. And see also cases cited v. Commissioners of Carteret County, infra, § 1174. 92 N. C. 536, 53 Am. Rep. 432 ; Cam- 13 Art. 210, quoted in § 1192 of this den v. Allen, 26 N. J. L. 398; Hib- work; Rivers v. City of New Orleans, bard v. Clark, 56 N. H. 155, 22 Am. 42 La. Ann. 1196, 8 So. Rep. 484. Rep. 432; Richards v. Commissioners 1* State V. Meyer, 41 La. Ann. 436, of Clay County, 40 Neb. 45, 42 Am. 6 So. Rep. 590; Parker v. Sun Ins. St. Rep. 650, 58 N. W, Rep. 594; Co., 42 La. Ann. 1172, 8 So. Rep. 018. Chamberlain v. Woolsev, 66 Neb. 141, 15 State V. N. Y., N. H. & H. Ry. 92 N. W. Ren. 181: McKeesport Co., 60 Conn. 326, 22 Atl. Rep. 765 ; Borough v. Fidlor, 147 Pa. St. 532, 23 City of Baltimore v. Howard, 6 Harr. Atl. Rep. 799 ; Rochester v. Glenchauf, & j. (Md.) 383; American Coal Co. 40 Misc. (N. Y.) 446; Hanson County V. Allegany County Commissioners, 59 v. Gray, 12 S. D. 124, 76 Am. St. Rep. Md. 185; Gatling v. Commissioners of 591, 80 N. W. Rep. 175; Crismon v. Carteret County, 92 N. C. 536. 53 Am. Reich, 2 Utah, 111; Board of Educa- Rep. 432; Mayor, etc. v. McKee, 2 tion v. Old Dominion, etc., Co., 18 W. Yerg. 167; Cave v. City of Houston, Va. 441. 584 CONSTITUTIONAL LAW OF TAXATION. There are some cases which hold that an action will lie although another method is provided by statute.*^ ■ Forfeiture of lands. 1176. The sale of lands for unpaid taxes is, of itself, a vnlid mode of enforcing collection. Questions have sometimes arisen as to the methods of forfeiture which are allowable, and there are decisions which serve to indicate how wide is the legislative dis- cretion in such procedure. Several of the states have enacted laws which, in some form or other, have decreed that on failure of the owners of lands to com- ply with the tax laws, by paying the taxes assessed against the lands, or by failure to list the lands for taxation, the lands should ipso facto, without a sale and without ofSce found, be forfeited to the state, the state's title vesting by operation of the statutes. It has been argued against the statutes that this procedure was not due process of law, because some sale or act equivalent to office found is necessary to divest the owner's title. A brief examina- tion of the cases is necessary in order to appreciate the decisions. 1177. In Mississippi'* a statute declaring the forfeiture of lands on the failure of the ovraer simply to pay the taxes due thereon, without notice or hearing in any form, was held to be in violation of the constitutional provision prohibiting the taking of private property for public use without just compensation being first made therefor, or the deprivation of property without due process of law. 1 1 77a. In Kentucky'* a statute declaring that in all cases where lands should be forfeited for failing to list for taxation, or stricken off to the state, the title to such lands should vest in the state by virtue of the act, without inquest or office found,^ unless such lands should have been redeemed according to law, was hpld to be unconstitutional. The Kentucky Court of Appeals said: In pursuing this inquiry we need not call in question the power of the legislature to provide for the levy and collection 17 Marshall County v. Knoll, 102 County, 1 White & W. Civ. Cas. Ct. Iowa, 573, 69 N. W. Rep. 1146, 71 App. (Tex.) 58. X. W. Rep. 571; City of Dubuque v. 18 Griffin v. Mixon, 38 Miss. 424. Illinois Central Ry. Co., 39 Iowa, 56; 19 Marshall v. McDaniel, 12 Bush, McLean v. Myers, 134 N. Y. 480, 32 378, 382, 385. ><. E. Rep. 63, where another statu- ^"Office found" is the finding of tory method was held applicable ; an inquest of office. An " inquest of State V. Memphis, etc., R. R. Co., 82 office " is an inquiry made, by author- Tenn. 56; Howard v. Mayor of Hous- ity or direction of the proper officer, ton, 59 Tex. 76; Clegg v. Galveston into matters affecting the rights and interests of the crown or of the state. DUE PROCESS IN ENFOBCEMENT OF TAX LAWS. 585 of taxes in the most summary manner. The right of the com- 3 monwealth, through its executive and ministerial officers, to ; assess property for taxation, to ascertain the sum payable by each taxpayer, and to seize and sell his property in satisfaction of such sum, is not open to doubt. It is equally clear that the legislature may impose upon the taxpayer the duty of listing his property for taxation, and may prescribe, for the neglect of the duty so imposed, penalties reaching even to the forfeiture of the estate not listed. But when such laws are enacted, the forfeit- ures prescribed must be regarded as penalties, and they cannot be inflicted until inquiry has first been made and the commission of the offense ascertained by " due process of law." To enjoin what shall be done or left undone, and to secure obedience to the injunction by appropriate penalties, belongs exclusively to legislation. To ascertain a violation of such injunction and inflict the penalty belongs to the judicial function.^^ By the Magna Charta it is declared that no citizen shall be disseized of his freehold or be condemned but by the lawful judgment of his peers or by the law of the land. The substance of this declara- tion is contained in our Bill of Eights. Its meaning and inten- tion is that no man shall be deprived of his property without being first heard in his own defense. . . . We conclude with- out hesitation that so much of the Act of 1825 as "provided that for a mere failure to list lands for taxation the title should be forfeited, and should, ipso facto, without inquiry or trial, and without opportunity to the party supposed to be in default even to manifest his innocence, be vested in the commonwealth, is unconstitutional and void. 1 1 78. In a recent Worth Carolina case it was held that an act was unconstitutional, which provided that the failure to list certain swamp lands for taxation, or to pay the taxes on them, before a specified date, should work a complete forfeiture and should ab- solutely vest the title to the lands in the state board of ediication " and no suit, action, proceeding, order, decree, or judicial deter- mination shall he necessary to such forfeiture, hut it shall fee ahsohde at the expiration of the time herein prescribed, upon the nonpayment of the aforesaid taxes and interest." In holding the act invalid, as a deprivation of property without due process of law, the Supreme Court of ISTorth Carolina, after referring to the definitions of due process of law which make some hearing and inquiry essential, said : " It is useless to cite further authorities as to what is due process of law, when the act itself specifically provides that no process whatever shall he necessary." The court distinguished State v. Sponaugle^^ saying : 21 Gaines v. Buford, 1 Dana, 481. ^ Infra, § 1185, 45 W. Va. 415, 32 S. E. Rep. 283, 45 L. K. A. 727. 586 CONSTITUTIONAL LAW OF TAXATION. The distinction between a forfeiture and a sale for taxes must be borne in mind, as they are essentially different in nature and result. A sale is the collection of a debt, is public, is made only after notice, and passes no title until the deed is made, of which the owner must have additional notice. In the mean- time he can pay his taxes and keep his land. On the contrary, a forfeiture works secretly and immediately, without notice to the owner, and without opportunity of redemption.^* 1 1 79. Statutes and constitutional provisions in, Virginia and West Virginia, almost, but not entirely, like the statutes just dis- cussed, have been sustained by the state courts and the United States Supreme Court. So far as the latter court is concerned, the element the presence of which was relied on to sustain its decision was the precise element which was not present in the Kentucky, Mississippi, and IvTorth Carolina cases just considered — that element being that the statutes of West Virginia offered to the owr^r of the forfeited lands in the particular case decided an opportunity to he heard before he was oust-ed of possession by the state, in the enforcement of the title gained by the forfeiture.^ 1 1 80. The state of Virginia, by an act of February 27, 1835, enacted that the owners of lands west of the Alleghenies should cause the same to be listed for taxation before a specified date, and should actually pay the taxes thereon; and that in case of their failure to do so such lands should be forfeited to the state. In the first case in which the Supreme Court of Appeals of Vir- ginia passed upon this statute, it said : And it further seems to the court that such forfeiture became absolute and complete by the failure to enter and pay the taxes therein in the manner prescribed by the act. And no inquisition or judicial proceedings or inquest, or finding of any hind, ims required to consummate such forfeiture?^ The act was enforced and the principle thus enunciated was adhered to consistently by the Virginia courts, up to the time that the lands west of the Alleghenies passed to the state of West Virginia.^® 23 Parish v. East Coast Cedar Co., taxes which "ought to have leen 13.3 N. C. 478, 485, 486, 45 S. E. Rep. levied or assessed " against the lands, 768, 98 Am. St. Rep. 718. The dis- a cause of forfeiture ; to same effect as tinction drawn between a sale and a case just cited, Roper v. Elizabeth forfeiture in this case is not alto- City Lumber Co., 135 N. C. 742, 47 gether accurate because some of the S. E. Rep. 757. circumstances which are described as 24 See mfra, §§ 1184 et seq., King v. essentials of a sale are not usually Mullins. regarded as absolute essentials. 25 staat's Lessee v. Board, 10 Gratt. The statute contained another pro- 400-402. vision, also held unconstitutional, 26 Smith's Lessee v. Chapman, 10 which made the failure to pay any Gratt. 445; Wild's Lessee v. Serpell, DUE PROCESS IN ENFOBCEMENT OF TAX LAWS. 587 In one of the cases cited^ the court said : It was perfectly within the competency of the legislature to declare such forfeiture and divest the title by the mere operation of the act itself. 1181. After the separation of Virginia and West Virginia, the courts of West Virginia recognized these Virginia decisions as binding.^ 1 1 82. The West Virginia constitution of 1872^ contained a similar provision for the forfeiture of lands not listed, provided that the title should vest in the state " by operation hereof " and gave the owner an opportunity to redeem within a period not to exceed twenty years. It also provided*" that such lands should be sold by a proceeding in the Circuit Court-, and that the owner thereof might vsdthin two years claim the surplus on the sale, in excess of the taxes.*^ 10 Gratt. 405-408; Levasser v. Wash- burn, 11 Gratt. 572, 580, 581; Usher's Heirs v. Pride, 15 Gratt. 190; Smith 1-. Tharp, 17 Gratt. 221. 27 Levasser v. Washburn, supra. 28 Twiggs V. Chevallie, 4 W. Va. 463; Smith v. Tharp, 17 W. Va. 221. 29 Aft. XIII, § 6. 30 Art. XIII, § 4. 31 Art. XIII, § 5. The text of the constitutional provisions is as follows : "All title to lands in this state here- tofore forfeited, or treated as for- feited, waste, and unappropriated, or pbcheated to the state of Virginia or this state, or ourchased by either of said states at sales made for the non- payment of taxes and become irre- deemable, or hereafter forfeited, ■ or treated as forfeited, or escheated to this state, or purchased by it and be- come irredeemable, not redeemed, re- leased, or otherwise disposed of, vested and remaining in this state, shall be, and is hereby transferred to, and vested in any person (other than those for whose default the same may have been forfeited or returned delin- quent, their heirs or devisees ) , for so much thereof as such person has, or shall have had actual continuous pos- session of, under color or claim of title for ten years, and who, or those under whom he claims, shall have paid the state taxes thereon for any five years during such possession; or if there he no such person, then to any person (other than those for whose default the same may have been for- feited, or returned delinquent, their heirs or devisees), for so much of said land as such person shall have title or claim to, regularly derived, mediately or immediately from, or un- der a grant from the commonwealth of Virginia or this state, not forfeited, which but for the title forfeited would be valid, and who. or those under whom he claims has, or shall have paid all state taxes charged or charge- able thereon for live successive years, after the year 1865, or from the date of the grant, if it shall have issued since that year; or if there be no such person, as aforesaid, then to any person (other than those for whose default the same may have been forfeited, or returned delinquent, their heirs and devisees), for so much of said land as such person shall haVe had claim to and actual continuous possession of, under color of title for any five successive years after the year 1865, and have paid all state taxes charged or chargeable thereon for said period." Art. XIII, § 3. "All lands in this state, waste and unappropriated, or heretofore or here- after for any cause forfeited, or treated as forfeited, or escheated to the state of Virginia, or this state, or purchased by either and become ir- redeemable, not redeemed, released, transferred or otherwise disposed of, the title whereto shall remain in this state till such sale os is hovnimfter 588 CONSTITUTIONAL LAW OF TAXATION. 1 183. In a case arising under these sections the Supreme Court of Appeals of West Virginia said : The purpose of the statutes passed to enforce this system was not merely to create a lien for the taxes on these delinquent and unoccupied lands, but to effect by their own force and vigor an absolute forfeiture of them and effectually vest the title thereto in the state without the machinery of any proceeding of record or anything in the nature of an inquest of office. Such was- intended to be and such was in fact the effect of these statutes.^^ To the same effect are more recent West Virginia cases, which uphold the competency of the state to enact the forfeiture. ^^ 1 1 84, The validity of the West Virginia constitutional pro- visions, under the fourteenth amendment, came to the Supreme Court of the United States for determination in 1898.^'' It ap- peared there that the Code of West Virginia required such for- feited lands to be sold for the beneiit of the school funds, made mentioned be made, shall by proceed- ings in the Circuit Court of the county in which the lands or a part thereof, are situated, be sold to the highest bidder." Art. Xlil, § 4. " The former owner of any such laud, shall be entitled to receive the excess of the sum for which the land may be sold over the taxes charged and chargeable thereon, or which, if the land has not been forfeited, would have been charged or chargeable thereon, since the formation of this state, with interest at the rate of twelve per centum per annum, and the costs of the proceedings, if his claim be filed in the Circuit Court that decrees the sale, within two years thereafter." Art. XIII, § 5. " It shall be the duty of every owner of land to have it entered on the land books of the county in which it, or a part of it, is situated, and to cause himself to be charged with the taxes thereon, and pay the same. When for any five successive years after the year 1869, the owner of any tract of laud containing one thousand acres or more, shall not have been charged on such books with state tax on said land, then by operation hereof, the land shall be forfeited and the title thereto vest in the state. But if, for any one or more of sucli five .years, the o\^^ler shall have been charged with state tax on any part of the land, such part thereof shall not be for- feited for such cause. And any owner of land so forfeited, or of any interest therein at the time of the forfeiture thereof, who shall then be an infant, married woman, or insane person, may, until the expiration of three years after the removal of such dis- ability, have the land, or such, inter- est cliarged on such books, with all state and other taxes that shall be, and but for the forfeiture would be, chargeable on the land, or interest therein for the year 1863, and every year thereafter with interest at the rate of ten per centum per annum ; and pay all taxes and interest thereon for all such years and thereby redeem the land or interest therein ; Provided, Such right to redeem shall in no case extend beyond twenty years from the time suclv land was forfeited." Art. XIII, § 6. 32McClure v. Maitland, 24 W. Va. 561, 575, 578. 33 Anvil V. Laeger, 24 W, Va. 583; McClure v. Mauperture, 29 W. Va. 033, 2 S. E. Rep. 761; Tebbetts v. Charleston, 33 W. Va. 705, 11 S. E. Rep. 23; Holly River Coal Co. v. Howell, 36 W. Va. 489-501. 15 S. E. Rep. 214; Hays v. Camden, 3S W. Va. 109, 18 S. E. Rep. 461; Wiant v. Hays, 38 W. Va. 681, 18 S. E. Rep. 807, 23 L. R. A. 82. 34 King V. Mullins, 171 U. S. 404.. 43 L. ed. 214, 18 Sup. Ct. Rep. 925. DUE PROCESS IN ENFORCEMENT OF TAX LAWS. 589 it the duty of the school commissioners to file a petition in the Circuit Court for the sale, stating, among other things, the names of the claimants so far as knowTi; and provided for a reference and inquiry, a hearing on exceptions, and a decree of confirma- tion and sale. It was also provided that the owner might be the purchaser by paying the amount due; that if sold to some one else he might recover within two years the surplus on the sales; and that at any time during the pendency of the proceedings he might redeem; and finally, that the court in such a suit might hear and determine all questions of title, possession, and boun- dary, as well as any and all conflicting claims to the real estate in question. 1 1 85. Construing these provisions together with the constitu- tional provisions, the Supreme Court held that the system of West Virginia amounted to " due process of law, inasmuch as it thus appeared that under the statutes of West Virginia since 1882 the owner of the forfeited lands had the right to become a party to a judicial pK)ceeding, of "s^^ich he was entitled to notice, and in which the court had authority to relieve him on terms that were reasonable, from the forfeiture of his lands." ^'' The court expressly refused to decide the question whether the provision decreeing the forfeiture, ifso facto, considered alone, was in con- flict with the national constitution, saying that the decision was not necessary for the decision in the particular case. In King v. Ht.lfielcP^ the provisions of the West Virginia con- stitution with respect to forfeiture, standing alone, were held void, as conflicting with the due process of law clause of the Fed- eral constitution. It was also held that the discrimination in the constitution of West Virginia^^* between tracts over 1,000 acres and tracts under that amount was arbitrary, and a denial of the equal protection of the laws. In this latter respect it is very doubtful whether the decision can be deemed sound. *^ This ease seems to have been reversed on other grounds in the Supreme Court.'''^ 1 1 86. A provision for forfeiture by the force of the statute, without giving the owner any opportunity to redeem, or to be heard upon the questions of ownership and failure to list the 15 King V. Mullins, supra; State v. 3'^ Bell's Gap Ry. Co. v. Peimsyl- Sponauele, 45 W. Va. 415, 32 S. E. vania, 134 U. S. 232, 33 L. ed. 892, 10 Rep. 283, 43 L. R. A. 727. Sup. Ct. Rep. 533. 36 130 Fed. Rep. 564. 38 Hatfield v. King, 184 U. S. 162, 36a § 1182, note. 46 L. ed. 481, 22 Sup. Ct. Rep. 477. 590 CONSTITUTIONAli LAW OF TAXATION. property, would probably be held invalid in the Supreme Court. The Supreme Court has more than once intimated such a view, without finding it necessary to decide the point.^" In a case where a forfeiture of lands to the government arose from failure to perform the conditions of the grant, it was said that before a forfeiture or reunion with the public domain could take place a judicial inquiry should be instituted, or office found, or its legal equivalent.*" In the same case it was said that " a legis- lative act, directing the possession and appropriation of the land, is equivalent to office found." *^ In that case, however, an oppor- tunity had been given to all settlers and claimants to come in and exhibit their claims. 1 1 86a. The right of the owner of lands to redeem his lands from a sale for taxes, within a reasonable time, while it is a stat- utory right except where expressly protected in the constitution, yet seems to belong to that class of statutory rights which are so com- mon and so old as to be integral parts of our tax systems. The policy of the law and the presumptions of the courts favor the right of redemption ; statutes are construed in favor of the right and against forfeitures. The practice of allowing some right of redemption in sales of lands is so firmly fixed in our governmental habits that a statute which should do away mth it altogether would probably be held unconstitutional on some ground or other. Reference is made in this connection to the preceding sections; and to the chapters with respect to curative acts. Notice of sale unnecessary. 1 1 87. It is not essential to due process of law, in the sale of lands (or other property) that the legislature should provide for any notice of the sale except where the constitution provides other- wise. It is competent for the legislature to provide for the sale of lands for delinquent taxes, on any day, without any notice whatever.*^ 39 Bennett v. Hunter, 9 Wall. 326- « Allen v. Armstrong, 16 Iowa, 336, 19 L. ed. 672; Fairfax's Devisee 508; Hurley v. Powell, 31 Iowa, 64; V. Hunter's Lessee, 7 Craneh, 625, 3 see Russell v. Akley Lumber Co., 4.5 L. ed. 453; King v. Mullins, supra. Minn. 376, 48 N. W. Rep. 3; Morgan iOUViited States v. Repentigny, 5 v. Carter, 54 Minn. 141, 55 N. W. Rep. Wall. 211, 267, 18 L. ed. 627. 1117; Crisman v. Johnson, 23 Colo. 41 Citing Fairfax v. Hunter, supra; 1S7, 58 Am. St. Rep. 224. 47 Pac. Rep. Smith V. Maryland, 6 Crancli, 286, 3 296; Beatrice v. ^Vright, — Neb. L. ed. 225. — , 101 N. W. Rep. 1039. DUE PEOCESS IN ENFORCEMENT OF TAX LAWS. 591 It has been quite recently held that a stati^te, giving to the pur- chaser at a tax sale a lien on the lands, and permitting him to foreclose the lien by a proceeding in the nature of a proceeding in rem against the land itself, the only notice being a notice by publication, both as to residents and nonresidents, is valid under the Federal constitution and the constitution of ISTebraska.** When a statute has required notice, a curative act cannot excuse failure to give it.** Giving tax liens priority. 1 1 88. There is no doubt of the legislative power to give liens for taxes, water rates, and assessments, priority over all other liens which are earlier in time. This is, in one sense, a taking of the mortgagee's property to pay the mortgagor's taxes, for it cer- tainly tends to impair the security of a prior mortgagee. The taxes are looked upon as against the land itself, and although this is regarded by some as an unscientific view, its practical results are satisfactory. The practice is almost universal in the American states, and violates no provision of the Federal constitution.*' It has been said that statutes giving tax liens priority will not be construed retroactively if such construction can be avoided.** An inheritance tax may be made a lien on the property transferred, although the tax is on the privilege of inheritance.*^ The lien of a reassessment may be made to relate back to the old assessment, taking precedence of intervening mortgages.** The state's lien for taxes may be made superior to local assessments for benefits, re- gardless of the time when the liability was created.*® Selling railroad tracks piecemeal to pay taxes. 1 1 89. A question upon which the state courts do not agree is whether a railroad right of way and track can be sold piecemeal to satisfy a lien for taxes or assessments. It is held in some cases ■13 Leigh V. Green, 193 U. S. 79, 48 District, 134 III. 384, 25 N. E. Eep. L. ed. 623, 24 Sup. Ct. Kep. 390, af- 781, 10 L. R. A. 285. firming 64 Neb. 533, 101 Am. St. Rep. ^^Re Prince, 131 Fed. Rep. 546; 592, 90 N. W. Rep. 255, Haley v. Butte County, S. D. , 44 § 1252a. 100 N. W. Rep. 739. 45 Provident Institution v. .Jersey 47 State \. Ferris, 53 Ohio St. 314, City, 113 U. S. 506, 28 L. ed. 1102, 5 41 N. E. Rep. 579, 30 L. R. A. 218. Sup. Ct. Rep. 612; see Leigh v. Green, 48 Commissioners of Sinking Fund 193 U. S. 79, 48 L. ed. 623, 24 Sup. v. Linden, 40 N. J. Eq. (13 Stew:) Ct. Rep. 390; O'Dea v. Mitchell, 144 27. Cal. 374, 77 Pac. Rep. 1020; Wabash, 49 White v. Thomas, 91 Minn. 395, etc., Ry. Co. v. East Lake Fork, etc., 98 X. W. Rep. 101. 592 CONSTITUTIONAL LAW OF TAXATION. that there is no diiference in this respect between a railroad right of way and other property; and that a part of the track or -right of way may be sold to pay delinquent taxes or assessments.^ 1 1 90. There are a number of cases, however, which hold that, as a railroad's right of way and track are essential to the per- formance of its public duties, the courts will not permit their sale, piecemeal, as such a sale would destroy the whole value of the road as a public agency. It seems that the legislative power ex- tends far enough to ordain such sales, but the courts will not permit them except by clear and express legislative command. Taxes upon such properties are enforced by personal judgments against the roads, or by sales subject to the easements of the roads.^^ Some express constitutional provisions with respect to sales and forfeitures. 1191. In some states the procedure of sale and the right of redemption are governed by express constitutional provisions. Such, for instance, are the following : Illinois. The General Assembly shall provide, in all cases where it may be necessary to sell real estate for the nonpayment of taxes or special assessments for state, county, municipal or other pur- poses, that a return of such unpaid taxes or assessments shall be made to some general officer of the coimtv having authority to receive state and county taxes; and there shall be no sale of said property for any of said taxes or assessments but by said officer, upon the order or judgment of some court of record.®^ The right of redemption from all sales of real estate for the nonpayment of taxes or special assessments of any character whatever, shall exist in favor of owners and persons interested in such real estate, for a period of not less than two years from such sales thereof. And the General Assembly shall provide by law for reasonable notice to be given to owners or parties inter- ested, by publication or otherwise, of the fact of the sale of the 60 Illinois Central Ry. Co. v. East Tnd. 443, 24 N. E. Rep. 350; 8 Ind. Lake Fork Drainage Commissioners, App. 377, 35 N. E. Rep. 916; Phila- 129 111. 417, 21 N. E. Rep. 925; Wa- delphia v. Philadelnhia, etc., Ry. Co., bash, etc., Ry. Co. v. East Lake Fork 177 Pa. St. 292, 36 Atl. Rep. 172, 34 Drainage Commissioners, 134 111. 384, L. R. A. 564; Lake Shore, etc., Ry. 25 N. E. Rep. 781, 10 L. R. A. 285; Co. v. Grand Rapids, 102 Mich. 374, Ludlow V. Cincinnati, etc., Ry., 78 Ky. 60 N. W. Rep. 767, 29 L. R. A. 195 ; 357 ; Northern Indiana Ry. Co. v. Con- New York, etc., Ry. Co. v. Morrisania, nolly, 10 Ohio St. 159. 7 Hun, 652; Chicago, etc., Ry. Co. v. 51 Pittsburgh, etc., Ry. Co. v. Fish, Milwaukee, 89 Wis. 506, 62 N. W. 158 Ind. 525, 63 N. E. Rep. 454; Rep. 417, 28 L. R. A. 249. Louisville, etc., Ry. Co. v. State, 122 52 Art. IX, § 4. DUE PEOCESS IN ENFOECEMENT OF TAX LAWS. 593 property for such taxes or assessments, and when the time of redemption shall expire: Provided, that occupants shall in all cases be served with personal notice before the time of redemption expires.^* 1192. Louisiana. There shall be no forfeiture of property for the nonpayment of i^xes, state, levee, district, parochial or municipal, but at the expiration of the year in which such taxes are due the collector shall, without suit, and after giving notice to the delinquent in the manner to be provided by law, advertise for sale in the official journal of the parish, city or municipality, provided there be an official Journal in such parish, city or municipality, the properly on which the taxes are due in the manner provided for judicial sales, and on the day of sale he shall sell such portion of the property as the debtor shall point out; and in case the debtor shall not point out sufficient property, the collector shall at once and without further delay, sell the least quantity of property which any bidder will buy for the amount of the taxes, interest and costs. The sale shall be without appraisement, and the prop- erty sold shall be redeemable at any time for the snaCe of one year, by paying the price given, including costs, and twenty per centum thereon. No judgment annulling a tax sale shall have effect until the price and all taxes and costs paid, with ten per centum per annum on the amount of the price and taxes paid from date of respective payments, be previously paid to the pur- chaser; provided, this shall not apply to sales annulled on ac- count of taxes having been paid prior to the date of sale, or dual assessments. All deeds of sale made, or that may be made, by the collector of taxes, shall be received by courts in evidence as prima facie valid sales. No sale of property for taxes shall be set aside for any cause, except on proof of dual assessment, or of payment of the taxes for which the property was sold, prior to the date of the sale, unless the proceeding to annul is instituted within six months from service of notice of sale, which notice shall not be served until the time of redemption has expired, or within three years from the adoption of this constitution (1898), as to sales al- ready made, and within three years from the date of recordation of the tax deed, as to sales made hereafter, if no notice is given. The manner of notice and form of proceeding to quiet tax titles shall be provided by law. Taxes on movables shall be collected by seizure and sale by the tax collector of the movable property of the delinquent, whether it be the property assessed or not, sufficient to pay the tax. Sale of such property shall be made at public auction, without appraisement, after ten days' adver- tisement, made within ten days from date of seizure, and shall be absolute and without redemption. 63 Art. IX, § 5. 594 CONSTITUTIONAL LAW OF TAXATION. If the tax collector can find no corTjoreal movables of the delinquent to seize, he may levy on incorporeal rights, by noti- fying the debtor thereof, or he may proceed by summary rule in the courts to compel the delinquent to deliver up for sale prop- erty in his possession or under his control.^* The tax shall be designated by the year in which it is collect- able, and the tax on movable propertv shall be collected in the year in which the assessment is made.^^ All the articles and provisions of this constitution regulating and relating to the collection of state taxes and tax sales shall also apply to and regulate the collection of parish, district, municipal, board and ward taxes."* 1 1 93. Mississippi. The legislature shall provide by law for the sale of all delin- quent tax lands. The courts shall apply the same liberal prin- ciples in favor of such titles as in sale by execution. The right of redemption from all sales of real estate, for the nonpayment of taxes, or special assessments, of any and every character what- soever, shall exist, on conditions to be prescribed by law, in favor of owners and persons interested in such real estate, for a period of not less than two years."' 1 1 93a. Nebraska. The right of redemption from all sales of real estate, for the nonpayment of taxes or special assessments of any character whatever, shall exist in favor of owners and persons interested in such real estate, for a period of not less than two years from such sales thereof ; Provided, that occupants shall in all cases be served with personal notice before the time of redemption expires."^ This provision applies to both administrative and judicial sales."^ 1194. Texas. Provision shall be made by the first legislature tor the speedy sale of a sufficient portion of all lands and other property for the taxes due thereon, and every year thereafter for the sale of all lands and other property upon which the taxes have not been paid, and the deed of conveyance to the purchaser for all lands and other property thus sold shall be held to vest a good and perfect title in the purchaser thereof, subject to be impeached only for actual fraud; provided, that the former owner shall, 64 Art. 233. BSArt. IX, § 3. BSArt. 234. B9 Logan v. Carnahan, 66 Neb. 685, 66 Art. 243. 92 N. W. E«p. 984. 67 § 79. DUE PROCESS IN ENFOECEMENT OF TAX LA^^'S. 595 ■within two years from date of purchaser's deed, have the right to redeem the land upon the payment of double the amount of money paid for the land.®** Property in the hands of an agent may be taxed to the agent. 1 1 95. That property in the hands of an agent or bailee of the owner may be taxed to the agent, and the agent compelled to pay the tax whether the owner be resident or nonresident, is well established. This is justified on the theory that the agent has the property and may recoup himself for any pay- ment he may make ; while any other rule would make it easy for owners of property to avoid taxation by placing it in the hands of others.®^ 1196. In one of the recent cases cited, the United States Su- preme Court upheld a state statute which provided that the proprietors of bonded warehouses should pay the taxes on liquors stored in such warehouses; and which gave them a lien on the property for the amount so paid.^^ The court said : A state has the undoubted right to tax private property having a situs within its territorial limits, and may require the party in possession of the property to pay the taxes thereon. . That imder Federal legislation distilled spirits may be left in a warehouse for several years, that there is no specific provision in the statutes in question giving to the proprietor who pays the taxes a right to recover interest thereon, and that for spirits so in bond negotiable warehouse receipts have been issued, do not affect the question of the power of the state. The state is under no obligation to make its legislation conformable to the contracts which the proprietors of bonded warehouses may make with those who store spirits therein,^ but it is their business, if they wish further protection than the lien given by the statute, to make their contracts accordingly.®^ 1 1 97. Other instances where this is done are where grain stored in elevators is taxed to the elevator owner,^ where prop- erty of nonresidents in the hands of resident agents is taxed to 60 Art. VIII, § 13. 62 Chap. 704, Laws of Maryland, 61 Carstairs v. Cochran, 193 U. S. 1892, as amended by chap. 320, Laws 10, 48 L. ed. 596, 24 Sup. Ct. Eep. of 1900. 318, affirming 95 Md. 488, 52 Atl. 63 Carstairs v. Cochran, 193 U. S. Eep. 601; Appeal Tax Court v. Pat- 10, 48 L. ed. 596, 24 Sup. Ct. Rep. terson, 50 Md. 366; Hoyt v. Commis- 318, affirming 95 Md. 488, 52 Atl. sioners of Taxes, 23 N. Y. 238 ; People Rep. 601 : to same effect Comnion- V. Trustees, etc., of Ogdensburgh, 48 wealth v. Gaines, 80 Ky. 489. N. Y. 390 ; German Trust Co. v. Board 6* Minneapolis and Northern Ele- of Equalization, 121 Iowa, 325, 96 N. vator Co. v. Traill County. 9 N. D. W. Rep. 878; and see cases cited in 213, 82 N. W. Rep. 727, -50 L. R. A. following sections. 266; Walton v. Westwood. 73 111. 125. 596 CONSTITUTIONAL LAW OF TAXATION. the agent,^ where money, credits, or property generally is in the possession or control of another for loaning, investment, or use for profit,®^ where money belonging to litigants in the hands of a county treasurer is assessed to the treasurer,^ where money in savings banks is assessed to the banks,®* where personal property is assessed to the person having control of the premises where it is situated.™ 1 1 98. In these cases, where the validity of the assessment was variously attacked as violative of requirements of due process of law, or of equality and uniformity, or as taking private property for public use, the right of the state to make the mere possession of property the basis of taxation was upheld. It was said in one case: The relative rights and equities which may exist between the owner and possessor of the whisky cannot affect the right of the state to autiiorize its assessment to either of them, as the legis- lature may deem most prudent and apt to result in securing taxes therefrom. ^^ 1 1 99. In another case it is said : We deem it sufficient to say, inasmuch as the property in ques- tion is protected by the laws of the state to the same extent as the property of any other citizen, and as the rate of taxation is the same as that levied on all the citizens resident in the same taxing district, that the plaintiff's property is not appropriated to public use without compensation. It seems to us eminently just that the plaintiff, and those for wdiom he is acting, shall share the burdens incurred in enforcing the laws under and by virtue of which property is protected.''* 1200. The same principle is manifest in the cases which sustain laws making banks and other corporations liable for the taxes assessed against the shareholders of the corporations in re- spect of their shares. The corporation is the instnmientality by which the shareholders hold the property; all the property which the corporation holds actually belongs to the shareholders; and 65 Palmer v. Corwith, 3 Pin. 267; 69 People v. Badlam, 57 Cal. 602. City of Merrill v. Lumber Co., 75 Wis. 70 Spanish River Lumber Co. v. City 142, 43 N. W. Rep. 653. of Bay City, 113 Mich. 181, 71 N. W. 66 Hutchinson v. Board, 66 Iowa, 35, Rep. 595. 23 N. W. Rep. 249; 67 Iowa, 182, 25 71 Commonwealth v. Gaines, 80 Ky. N. W. Rep. I2I; and see sections 87 489. «t seq. 72 Hutchinson v. Board, 66 Iowa, 35, 68 People V. Lardner, 30 Cal. 243 ; 23 N. W. Rep. 249. see City of San Obispo v. Pettit, 87 CaL 499, 25 Pac. Rep. 694. DUE PKOCESS IN ENFORCEMENT OF TAX LAWS. 597 the corporation may recoup itself out of the property fur the taxes paid.''^ Where a husband by law is in control of his wife's lands, he may be made liable for the taxes in the iirst instance.'^'' 1201. The essential element, the presence of which justifies the taxation of the agent, is the fact that the agent has the assets in his hands out of luhich he may reimburse himself.''^ This is illustrated in a Federal case where a recovery against a receiver of an insolvent national bank, for state taxes assessed against the shareholders, was denied on the ground in part that the receiver had no assets of the shareholders in his hands. Said the court: Where a bank is insolvent the shares are generally worse than worthless, and the receiver has no assets belonging to the share- holders which can be applied to the payment of taxes assessed on shares.''^ Selling one man's property to pay another's tax. 1202. Whether property in the possession of one against whom taxes have been assessed, but who does not own tlie prop- erty, may be seized and sold to pay his taxes, is a very different question from that which arises when an agent is taxed on account of property in his hands belonging to his principal. While statutes providing for the sale under a tax warrant of any property found in the possession of the tax debtor have been sustained, it is difficult to see any logical ground upon which they can proceed. Doubtless it is in the power of the legisla- ture to enact as a presumptive rule of evidence, that property in the possession of the tax delinquent shall be deemed to be liable for his taxes ; but to make this an absolute rule, so as to deny the true owner the right to prevent a sale by showing his ownership, cannot be regarded as anything but an arbitrary taking of property. The cases which hold that the legislature may make a tax deed presumptive, but not conclusive, evidence of title, furnish an instructive analogy.'"^ T3 First Nat. Bank v. Common- 75 See cases cited supra; and opin- wealth, 9 Wall. 353, 19 L. ed. 701; ion in Knoxville Traction Co. v. Mc- Aberdeen Bank v. Chehalis Couiity, Millan, 111 Tenn. 521, 77 S. W. Ttpn. 166 U. S. 440, 41 L. ed. 1069, 17 Sup. 665, Nov. 20, 1903, discussed in §§ 1210 Ct. Rep. 629. See § 801a et seg., and et seq. eases cited; Corry v. Baltimore, 196 76 Stapylton v. Thaggard, 91 Fed. U S 466, 49 L. ed. 556, 25 Sup. Ct. Rep. 93, 33 C. C. A. 353. Rep. 297. "See §§ 1267 et seq. 74 Union School District v. Bishop, 76 Conn. 695, 58 Atl. Rep. 13. 598 CONSTITUTIONAL L.AW OF TAXATION. 1203. In New York a statute has been upheld which author- ized the collector to seize and sell not only goods and chattels of the person taxed, but any goods and chattels in his possession, and provided that " no claim of property made by any other person shall be available to prevent a sale." ^* In one of the cases cited it was held that the statute did not apply to property tran- siently on the lands of the tax debtor ; and that the provisions of the statute constituted " a rule of evidence " the main pur- pose of which was " not to authorize the property of one man to be taken to pay the tax of another, but to prevent disputes as to the ownership of property which the collector might seize." ^® 1 204. In the later case cited, the T^Tew York Court of Appeals discussed fully the constitutionality of the statute and upheld it, saying: It is claimed that legislative authority to sell the property of A to pay the tax of B is not due process of law, and also that it violates the constitutional injunction that private property shall not be taken for public use without just comnensation. Con- fining the proposition to this bare statement, its correctness may be admitted. But the statute in question adds the additional pre- requisite or condition, that to authorize the property of A to be taken for a tax against B, the property must be in the possession of B at the time of the taking, or rather, the statute does not inquire whether the legal title is in A or B, hut it conclusively adjudges it to he in the person taxed for the purposes of seizure and sale, provided it is in his possession. For the purpose of col- lecting the tax, the actual ownership, in contemplation of the statute, follows the actual possession. The possession under tlie statute is not merely a badge of ownership, it is title, so as to subject the property to seizure and sale for a tax against the possessor. Is the statute a violation of any constitutional guar- anty ? It has a very close analogy in the common-law proceed- ing of distress for rent, which permitted the distraint of the property of a stranger found on the demised premises. The law of distress for rent was the law of this state up to 1846. The principle tliat the property of a stranger on the demised premises might be distrained was always recognized in our legis- lation, although its rigor was relaxed and its hardships mitigated from time to time by qualifications and exceptions. 1205. I am not aware that the constitutionality of this feature of the law was ever questioned. Its validity has frequently been TSHersee v. Porter, 100 N. Y. 403, T9Lake Shore R. E. Co. v. Roach, 3 N. E. Rep. 338; Sheldon v. Van 80 N. Y. 339. Buskirk, 2 N. Y. 473; Lake Shore R. R. Go. V. Roach, 80 N'. Y. 339. DUE PEOCESS IN ENFORCEMENT OF TAX LAWS. 599 assumed by the courts.*' It is to be observed that this stringent remedy wag permitted to enforce obligations between individuals. The similar remedy given by the tax laws is to enforce the sov- ereign and indispensable power of taxation. ... In view of this long continued acquiescence by the executive, legislative, and judicial departments of the government in the legislation now in question, the court would not, we think, be justified in departing from the common understanding that the statute authority to seize any property in the possession of a person taxed, for the payment of the tax, justifies the seizure and sale of the property of a third person so situated. Each individual in the community has notice of the law, and is presumed to understand that if his chattels are by his consent or permission in the possession of another, they can be taken for a tax against the person in posses- sion. The law was probably framed to prevent fraud and col- lusion, and disputes as to title, and each individual in the community may be assumed to have consented that his property shall be subject to the right of the state in this way to enforce the power of taxation. ^^ 1206. The question of due process of law was not raised in a Pennsylvania case*^ where a statute was upheld which per- mitted distraint of the property of an occupant of land for taxes assessed against the owner of the land, even where the property was not on the land taxed. *^ In New Jersey** a statute was sustained which permitted the goods of the tenant to be seized for the tax on the lands, and allowed him to deduct the value ■of the goods from the rent or to recover it from the landlord. The reasoning of the New Jersey court states, as the true ground upon which such distraints can be distinguished, if at all, from arbitrary seizures:*'' The tenant suffered no hardship, he was presumed to have in his own hands full indemnity, and ample provision was made for his protection. In accepting the relation of tenant, he volun- tarily assumed the statutory responsibility and could be prepared to meet it. 1207. In the Michigan case of Sears v. Cottrell^^ such a stat- ute, copied from New York, was upheld by a divided court, 80 Citing Holt v. Johnson, 14 Johns. 46; Smeich v. County of York, 68 Pa. 425; Spencer v. McCowen, 13 Wend. St. 439; Wright & Slingluff v. Wig- 256; Gilbert v. Moody, 17 Wend. 354. ton, 84 Pa. St. 163. In none of these siHersee v. Porter, 100 N. Y. 403, cases was the question of due process 3 N. E. Rep. 338. of law raised. 82 McGregor v. Montgomery, 4 Pa. 84 Morrow v. Dows, 28 N. J. Eq. 459. St. 237. 86 Page 461. 83 See Moore v. Marsh, 60 Pa. St. 865 Mich. 251. 600 CONSTITUTIONAL LAW OF TAXATION. although expressly attacked on the ground that a statiite anthov- izing the seizure and sale of one man's property to pay another man's debt was not due process. The majority of the court based its decision on the analogy between the seizure under the statute and the common-law remedy of distress for rent^ saying ;^^ But if the principle of taking the property of one man far the debt of another can be justified as an exercise of legislative power for the benefit of individuals, to enforce the prompt pay- ment of rent, much more can it be justified for the collection of the public revenue, upon which the welfare of the whole com- munity depends. 1208. In a later case^ a statute providing that the interest* of ovvmer and mortgagee of real property should be taxed sepa- rately, and providing also, among other things, that the tax on the interests of both should be a lien on the whole land, was? upheld. It was contended that this law compelled a sale of the mortgagor's fee to pay the tax on the mortgagee's interest, hence was not due process. But it was pointed out by the court that the law permitted the mortgagor to pay the mortgagee's tax and deduct the amount paid from his debt, and said further: It is strenuously insisted that the provision which makes the mortgagor liable for the tax assessed against the mortgagee is unconstitutional; and it is said that it is not within the consti- tutional power of the legislature to compel one man to pay another man's debt — a proposition safe enough in itself, but not conclusive as to the right to provide that the mortgagor or occupant of lands shall be liable for the tax on such lands. It is not necessary to go to the length to which the majority of the Court went in Sears v. Cottrell^ in order to sustain this pro- vision. The relation of the owner of the fee to the property is such that the right to assess the whole property to him is un- doubted. 1209. A recent case in the United States Supreme Court, based upon the principle that the relation of the owner of the fee to the tenant is such as to warrant extreme measures, up- holds the right of the state to make a license tax, on a business or occupation, a lien on the premises where the business is carried on. Said the Supreme Court : STPage 269. Assessors, 91 Mich. 78, 51 N. W. Kep. 88 Common Council of Detroit v. 787, 16 L. R. A. 59. 89 Discussed supra. DUE PEOCESS IN ENFOECEMENT OF TAX LAWS. 601 It was within the power of the legislature to make this tax a lien on the propert)' whereon the business was carried. If gen- eral taxes upon real estate, and specific taxes for improvements thereto, including pavements, sidewalks, sewers, the opening of streets and keeping them clean, may be made liens upon the property affected, it is difficult to see why a tax upon the busi- ness carried on upon such property may not be made a lien as well as a claim against the owner. The owner is not only charge- able with a knowledge of the law in respect thereto, Jout he is presumed to know the business there carried on and to have let the property M'ith knowledq'e that it might become incumbered by a tax imposed upon such business.** Possibly the owner is entitled to notice and hetiring before tlie tax becomeS' a lien.®* 1210. Some cases are noticed which are in conflict with the tendency of decision shown by the previous discussion. In a recent case the Supreme Court of Tennessee condemned a statute which made one person liable for another's privilege or occupation tax. The statute laid a tax on " all persons, com- panies, or corporations owning, controlling, or conducting the business of advertising in street cars ... in dummy cars or railroad cars . . . and in railroad depots." " Provided,, that the street car company or railroad company who leases or sells such advertising privileges shall he liable for the payment of the above (faxes on) privileges." ^^ 1211. A tax was assessed under this statute against an ad- vertising company, which had hired from a street car conipatiy the exclusive privilege of advertising in the cars of the street car Gonapany for a term of years at a fixed rental. The ad- vertising company exercised the privilege and was " liable for the tax." The advertising company refused to pay the tax ; and, by authority of the statute, the collector issued a distress warrant for the tax against the street car company. Ths street car com- pany paid the tax under protest and sued the collector to re- cover the sum paid. The ground of the suit was that the statute in qirestion was a deprivation of property other than by " the law of the land," or ^vithout due process of law, and a denial of the equal pro- tection of the laws. The real constitutional question was one of. due process of law. 90 Hodge V. Muscatine County, 196 91 Ihid. V. S. 276, 280. 281, 49 L. ed. 477, 25 92Tenn. Acts, of 1903, chap. 257, Sup. Ct. Rep. 237; affirming 121 Iowa, p. 599. 482, 96 N. W. Eep. 968. 602 CONSTITUTIONAL LAW OF TAXATION. 1212. The court held the statute unconstitutional, and gave judgment for the street ear company, saying: The traction company and the advertising company are dis- tinct and independent corporations, owing each other no duty or obligation, and having no interest in common. The former is engaged solely in operating a street railway, and the latter in the advertising business. The tax is imposed upon the business of advertising in street cars — a privilege exercised by the adver- tising company, not by the street ear company. It is not a liability of the traction company but one of the advertising com- pany. The only relation of the two companies is that the former is the creditor of the latter for the rent due it for the use of its cars for advertising purposes. The statute arbitrarily imposes upon the traction company liability for this debt of the adver- tising company, and requires it to pay it with its own means. This is a deprivation of property without a hearing or due process of law, clearly within the prohibitions relied upon. This is too obvious for argument, and the property of one citizen can no more be taken to pay a tax or public debt due from another than the private debt of such other person. The court distinguished the cases where corporations are made to pay taxes against the shareholders, by pointing out that in all such cases the corporation has or is supposed to have, assets of the shareholders out of which it can reimburse itself.®^ 1213. In Montana a loosely dra^^-n statute which, as con- strued, gave to the state a lien on all property used in the liquor business, for the amount of the liquor license tax, whether the property was owned by the dealer or not, and which provided for the collection of the tax by distress, was held not to be due process of law."* 1214. In a Vermont case*® a tax collector seized property in the tax delinquent's possession; which another man claimed to own and brought an action of replevin to recover. The trial court found that the claimant had title, but that the ostensible ownership and the actual possession were in the person liable for the tax. The question was thus presented whether the doc- trine of fraud in law was applicable so as to render the property liable for the tax; or, speaking more accurately, so as to estop the claimant from setting up his title against the levy. The court held that that doctrine was not applicable, that it was 93 Knoxville Traction Co. v. McMil- »* Chauvin v. Valiton, 8 Mont. 451, Ian, 111 Tenn. 521, 77 S. W. Rep. 665 20 Pac. Eep. 658, 3 L. R. A. 194. (Nov. 20, 1903). 95 Daniels v. Nelson, 41 Vt. 161, 98 Am. Dec. 577. DUE PROCESS IN ENFOECEMENT OF TAX LAWS. 603 confined in its application to the rights of bona fide purchasers and creditors ; and that the state was not a creditor in that sense. The party to which the tax is owing is not a creditor. The state, the town, the school district, do not give credit by way of trust and confidence. They make an authoritative and arbi- trary exaction. Penalties for failure to comply with tax laws. 1215. The imposition of penalties in the shape of interest for no^ipayment of taxes, and the enforced collection of them, and •of costs in case of collection by suit, are customary methods of enforcing collection. In such procedure tliere is nothing viola- tive of due process of law. Interest is the ordinary penalty im- posed by uni^•ersal custom upon the nonpayment of delinquent •obligations ; and if the state is compelled to resort to legal pro- ceedings in order to collect its taxes it may provide reasonable compensation for the officials charged with any duty in connec- tion therewith, and incorporate the charges therefor as costs in the case. Liability for these costs and expenses can be avoided hy payment of taxes, and one who fails to discharge his obliga- tions to the state, compelling it to go into court, has no ground for complaint because he is charged with the ordinary expenses ■of a lawsuit."" The imposition of a penalty for the nonpayment of a direct tax, in addition to the tax, and the sale of property to collect the tax and penalty, making the owner's right to redeem de- pendent upon the payment of both tax and penalty, are not acts which violate the Federal constitution by increasing the propor- tionate share of the direct tax which any state is called upon to pay.®'^ Penalties for nonpayment may vary as to different classes of property.''* 1215a.. A case may be imagined, of course, where the penal- ties imposed for nonpayment would be so great as to amount to arbitrary confiscation of property, but the tendency of the courts 96 League v. Texas, 184 U. S. 156, v. Huffaker, 11 Nev. 300; Ex parte 46 L. ed. 478, 22 Sup. Ct. Rep. 475; Lynch, 16 S. C. 32; Louisiana Liqui- 93 Tex. 553, 57 S. W. Rep. 34; West- dation Commissioners v. Marrero, 106 ern Union Telegraph Co. v. Indiana, La. 130, 30 So. Rep. 305. 165 U. S. 304, 41 L. ed. 725, 17 Sup. »' De Treville v. Smalls, 98 U. S. Ct. Rep. 345; High v. Shoemaker, 22 517, 25 L. ed. 174. Cal. 363; State v. Moss, 69 Mo. 495; 98 Missouri, etc., Ry. Co. v. Miami Drexel v. Commonwealth, 46 Pa. St. County, 67 Kans. 434, 73 Pac. Rep. 37- Commonwealth v. Wyoming Val- 103; Galveston, etc., Ry. Co. v. Gal- ley Canal Co., 50 Pa. St. 410 ; State veston, 96 Tex. 520, 74 S. W. Rep. 537. 604 CONSTITtlTIONAL LAW OF TAXATION. has been to sustain some very severe penalties. An addition of fifty per cent, to the taxes levied* and a double assessment^ have been held to be constitutional. 1216. Penalties may be imposed not only for nonpayment of taxes; but, generally speaking, for any delinquency in com- pliance with tax laws. Thus a penalty or forfeiture may be imposed for failure to list property for taxation.^ A constitu- tional provision against usury has no application to the case of a penalty in the shape of interest imposed for nonpayment of taxes. ^ 1217. Some statutes impose a penalty for not listing in the shape of an addition to the tax, and these statutes are upheld on grounds of immemorial custom and public necessity rather than by strict logical adherence to general principles.* Thus a double valuation may be imposed as such a penalty.^ A for- feiture of the whole property for failure to list has been up- held.^ Failure of mortgagor to make a statement as to respective interests of mortgagor and mortgagee in lands may be punished by assessing the whole estate to the mortgagor, although general statutes provide that mortgagor's and mortgagee's interests shall be taxed separately.'^ 1218. There is no doubt that the legislature may make it the duty of the taxpayer to hand in a list of his property at or be- fore a specified time, and may provide that in the event of his failure to do so, the assessor may make the best assessment he can and the taxpayer shall lose the right to a hearing on the amount of his assessment.'^ 89 Western Union Telegraph Co. v. 3 Galveston, etc., Ry. Co. v. City of Indiana, 165 U. S. 304, 41 L. ed. 725, Galveston, 96 Tex. 520, 74 S. W. Rep. 17 Sup. Ct. Rep. 345; Ex parte Lynch, 537. 16 S. C. 32; Boyer v. Jones, 14 Ind. 4 Biddle v. Oaks, 59 Cal. 94; Em 354 ; De Treville v. Smalls, 98 U. S. parte Lynch, 16 S. C. 32. 517, 25 L. ed. 174. B Bartlett v. Wilson, 69 Vt. 23, 8 iBiddle v. Oaks, 59 Cal. 94. Atl. Rep. 321; see Howes v. Barrett, 2 King V. Mullins, 171 U. S. 404, 56 Vt. 141; Brush v. Baker, 56 Vt. 43 L. ed. 214, 18 Sup. Ct. Rep. 925; 143; see to the contrary, under a State V. Sponaugle, 45 W. Va. 415, 32 special constitutional provision, Mc- S. E. Rep. 283, 43 L. R. A. 727; and see Cormick v. Fitch, 14 Minn. 252; and cases cited in § 1176 et seq.; Butler compare Boyer v. Jones, 14 Ind. 354. V. Bailey, 2 Bay, 244; State v. Bell, 6 King v. Mullins, 171 U. S. 404, 1 Phil. (N. C.) 76; Winnimesset Co. 43 L. ed. 214, 18 Sup. Ct. Rep. 92.-); V. Chelsea, 6 Cush. 477; Donovan v. State v. Sponaugle, 45 W. Va. 415, 32 Insurance Co., 30 Md. 155; State v. S. E. Rep. 283, 43 L. R. A. 727; see Welch, 28 Mo. 600; Louisville, etc., §§ 1170 et seq. R. R. Co. V. State, 25 Ind. 177, 87 Am. 7 Abbott v. Frost, 185 Mass. 398, 70 Dec. 358; Commonwealth v. Citizens' N. E. Rep. 478. Nat. Bank, 25 Ky. L. Rep. 2100, 80 7a Glidden v. Harrington, 189 U. S. S. W. Rep. 158. ' 255, affirming 179 ilass. 486. DUE PKOOESS IN ENFOBCEMENT OF TAX LAWS. 605 If a person liable to taxation neglects or refuses to carry in his account he waives his right to be heard and ... is with- out remedy. We do not see that such a procedure is in any way repugnant ... to the provisions that no person shall be deprived of life, liberty, or property, without due process of law.* Retroactive acts for the collection of taxes. 1219. The requirement of due process of law does not pre- vent a state from enacting retrospective laws changing the method of collecting taxes, or laws giving to the state an additional remedy for the collection of delinquent taxes. A delinquent tax- l^ayer has no vested right in an existing mode of collecting taxes. There is no contract between him and the state that the latter will not vary the mode of collection. These principles are illustrated in a recent Texas case' where the legislature passed an act providing for the collection of de- linquent taxes by judicial proceedings. Prior thereto the col- lection was enforced by an administrative sale. In the case de- cided, the lands had been sold for taxes and bid in by the state, then the state proceeded under the new law and secured a judg- ment of foreclosure and sale. The defendant contended that the rights of the state were fixed and determined by the sale, and that any right of a purchaser at such sale, whether state or private individual, to review or continue any lien for taxes must depend upon some statute existing at the time of the sale; and that hence this act of the legislature providing for the collection of delinquent taxes by judicial proceedings was a violation of the constitutional guaranty of due process in so far as it avoided the legal effect of the prior administrative sale and directed a further judicial sale with the rights attending thereon. This view was rejected by the Supreme Court upon the prin- ciples stated in the beginning of this section. 1220. In some Michigan cases, however, the principle as- serted in the case just discussed, that the state may assert reme- dies in addition to those which it had at the time the taxes were laid, seems to be somewhat limited. It is held in those cases that the legislature cannot subsequently make an assessment for benefits a personal charge against the owner of the lands, Avhere SMcTwiggan v. Hunter, 19 R. I. 358; Cedar Rapids & M. R. Co. v. 265-268, 33 Atl. Rep. 5, 29 L. R. A. Carroll County, 41 Iowa, 346. 526 ; Porter v. County Commission- 9 League v. Texas, 184 U. S. 156, 46 crs, 5 Gray, 365; Otis Co. v. Ware, 8 L. ed. 478, 22 Sup. Ct. Rep. 475, af- Gray, 509; State v. Apgar, 31 N. J. L. firming League v. State, 93 Tex. 553, 57 S. W. Rep. 34. 606 CONSTITUTIONAL LAW OF TAXATION. the assessment was not a personal charge at the time it was made ; although no douht seems to have been entertained that the legis- lature would have originally had power to do so.^" State's remedies in collection of taxes may be assigned to assignee of state's claim. 1221. The claim of the state for taxes may be sold or assigned, and where this is done, directly or indirectly, the purchaser or assignee may be given remedies for the enforcement of his claim as drastic as those which the state itself possesses. A statute may confer, upon a purchaser at a tax sale,- the same means in the foreclosure of his lien, as the state could employ in a direct proceeding. Said the Supreme Court, in so holding: In authorizing the proceedings under the statute to enforce the lien of the purchaser, who has furnished the state its revenue in reliance upon the remedy given against the land assessed, the state is as much in the exercise of its sovereign power to collect the public revenues as it is in a direct proceeding to distrain property or subject it to sale in summary proceedings." 1222. Similar in principle to the statute just discussed are statutes which authorize municipalities in making local improve- ments to pay for the same by issuing " special tax bills " to the contractor, giving the contractor the same remedies as the city for their collection. ^^ In a California case, a statute of the same kind, which authorized a contractor for a street improvement to get his pay by collecting the assessment, was held to be con- stitutional.''* Exemptions from execution and taxation do not exempt from liability to tax spies. 1223. State constitutions sometimes provide for the exemp- tion of certain property from levy and sale under execution or other legal process. It is expressly provided, however, in some constitutions, that such constitutional exemptions do not exempt property from sale for taxes, or that no property shall he exempt 10 City of Grand Rapids v. Lake 12 See Moberley v. Hogan, 131 Mo. Shore, etc., Ey. Co., 130 Mich. 238, 97 19, 32 S. W. Kep. 1014. Am. St. Rep. 473, 89 N. W. Rep. 932; 13 Banaz v. Smith, 133 Cal. 102, 65 Mogg V. Hall, 83 Mich. 576, 47 N. W. Pac. Rep. 309. The particular con- Rep. 553. stitutional objection which Avas urged 11 Leigh V. Green, 193 U. S. 79, 89, against the act was that it was an in- 90, 48 L. ed. 0-23, 24 Sup. Ct. Rep. 390, valid delegation of taxing power to a. affirming 64 Neb. 533, 101 Am. St. Rep. private individual. 592, 90 N. VV. Rep. 255. DUE PROCESS IN ENFOKCEMENT OF TAX LAWS. 607 from sales for taxes. Such provisions are found in the constitu- tions of Georgia/* Louisiana/^ Nevada/® North Carolina," South Carolina," Texas,^** Virginia,^*' West Yirginia.^^ 1224. Regardless of such express provisions, constitutional or statutory exemptions from levy and sale under execution or legal process do not exempt from levy and sale for delinquent taxes.^ And although property is exempt from taxation, it is not exempt from levy to collect its owner's delinquent taxes.^ Thiis it has been recently held that United States bonds may be distrained to pay a state privilege tax on a foreign corporation.^ In Mississippi the constitution expressly provides that the poll tax therein ordained shall be " a lien only on taxable prop- erty." ^ It is held that under this provision property which is exempt from taxation cannot be sold to enforce the payment of the poll tax.^** In Texas a tax lien exists on homesteads for taxes thereon ; but not for taxes on other property.^^ Making special assessment a personal liability. 122&. Whether the legislature can make a special assessment for benefits a personal liability against a resident owner of the property assessed is a question as to which the courts are divided. It is settled that a nonresident of the state cannot be made per- sonally liable for such an assessment.^ To make an assessment a personal charge against the resident owner of the property is not a deprivation of property without due process of law under the Federal constitution. Such mat- ters are a part of the local tax systems of the states, with which the Federal constitution does not interfere.^ WArt. IX, § II. 23 Ring V. Williams, 13 Tex. Civ. IB Art. 244. App. 609, 35 S. W. Rep. 733. 16 Art. IV, § 30. 24 Scottish Union, etc., Ins. Co. v. 17 Art. X, § 25; see City of Wil- Bowland, 196 U. S. 611, 49 L. ed. 619, mington v. Sprunt, 114 N. C. 310, 19 25 Sup. Ct. Rep. 345. S. E. Rep. 348. 25 § 243 of Mississippi constitution. 18 Art. Ill, § 28 ; see Oliver v. White, 26 RatliflF v. Beale, 74 Miss. 247, 20 18 S. C. 235. So. Rep. 865, 34 L. R. A. 472. 19 Art. XVI, § 50; see Ring v. Wil- 27 Marlin v. Green, Tex. , 78 liams, 13 Tex. Civ. App. 609, 35 S. W. S. W. Rep. 704. Rep. 733. 28 Dewey v. Des Moines, 173 U. S. 20 § 190, subd. 4. 193, 43 L. ed. 665, 19 Sup. Ct. Rep. 21 Art. VI, § 48. 379, fully discussed in § 164 of this 22 Gentry v. Purcell, 84 Ind. 83; work. Commonwealth v. Lay, 75 Ky. 283, 23 29 Davidson v. New Orleans, 96 U. Am. Rep. 718 ; McKee v. Christian, 103 S. 97, 24 L. ed. 616. Pa. St. 431. See also cases cited supra, § 1223. 608 CONSTITUTIONAL LAW OF TAXATION. That there is no personal liability in the absence of express statutory authority has been often held.^" Cases upholding the right. 1226. Those state courts which assert that to make a special assessment a personal charge upon the owner of the lands is not a deprivation of property without due process of law, proceed upon the theory that the power to make assessments is merely a form of the taxing power; and hold in effect that the assessment is against the owners of the lands and not against the lands them- selves. In strict logic, this is the correct theory, for the state deals with persons and not with inanimate things. While the benefits are usually said to accrue to the lands, yet reflection will show that lands, as such, can neither be benefited nor injured. It is the owners of the Imids who are benefited by the supposed increase in the value of their property due to the improvement. Hence there can be no doubt of the right of the state to recover the cost of the improvement from them, either by the usual method of making the cost a lien on the lands, or by making it a personal charge to be collected by other methods. 1227. In Indiana personal judgments against railroad com- panies have been given for the collection of street and drainage assessments \ipon the railway property, in lieu of sale of the as- sessed property, over the objection of the railway companies. These judgments proceed upon the ground that the railway com- panies have public duties which would be interfered with if the roads were sold piecemeal to satisfy the assessments, hence the personal judgments instead of sales of the property. These cases, however, on whatever ground, are undoubtedly authorities sup- porting the constitutionality of laws authorizing personal judg- ments in such cases. ^^ In one of the cases cited an attorney's fee for the collection of the assessment was included in the judg- ment and this was upheld.^^ In another Indiana case it was held that a " tax " assessed on lands for the construction of a turn- so Buell V. Ball, 20 Iowa, 282 ; 31 Pittsburgh, etc., Ry. Co. v. Fish, Neenan v. Smith, 50 Mo. 525; Ivan- 158 Ind. 525, 63 N. E. Rep. 454; Louis- hoe V. City of Enterprise, 29 Oreg. 245, ville, etc., Ry. Co. v. State, 122 Ind. 45 Pac. Rep. 771, 35 L. R. A. 58; Mc- 443, 24 N. E. Rep. 350; Louisville, Keesport v. Fidler, 147 Pa. St. 532, etc., Ry. Co. v. State, 8 Ind. App. 377, 23 Atl. Rep. 799; City of Franklin 35 N. E. Rep. 916; Lake Erie, etc., V. Hancock, 204 Pa. St. 110, 53 Atl. Ry. Co. v. Bowker, 9 Ind. App. 428, Rep. 644; McCrowell v. City of Bristol, 36 N. E. Rep. 864; see §§ 1189-1190. 89 Va. 652, 16 S. E. Rep. 867, 20 L. R. 32 Pittsburgh, etc., Ry. Co. v. Fish, A. 653; Green v. Ward, 82 Va. 324. supra. DUE PROCESS IN ENFORCEMENT OF TAX LAWS. 609 pite road might be collected by distress and sale of personal property.^^ 1228. In Iowa the constitutionality of statutes making the ■owners of lands personalty liable for assessments has been ex- pressly upheld, without discussion of the principles involved, the decision being rested solely on the weight of authority in the United States.^* This decision has been reaffirmed, and may now be regarded as the settled law of the state.^^ 1229. In Maryland the right of the legislature to make the assessment a personal liability of tlie owner of the property to the extent of the value of the property has been upheld against con- stitutional objections. Whether the liability of the owner can be extended beyond the value of the property is a question as to which the Supreme Court of Maryland said : " We express no opinion until it arises."^® 1230. In Michigan in an early case the Supreme Court was •evenly divided upon the question whether a la^v authorizing a personal judgment against the owner of lands assessed for benefit was constitutional.^^ 1231. In Ohio the constitutionality of statutes of the sort un- der consideration has been expressly affirmed, tJie Missouri and California cases holding such statutes unconstitutional, having been considered and their reasoning rejected.^^ But it is inti- mated that the judgment cannot exceed the value of the land. Neither the constitutional provision nor the legislation on the subject contemplates such a result. The constitution requires the power to be restricted so as to prevent its abuse ; and present legislation restricts its exercise to twenty-five per centum of the value of the property.^ 1232. In Pennsylvania laws assessing the owners of property for benefits and making them personally liable are express! v Tipheld. Such assessments are said to be referable wholly to the taxing power, and it is said that: 33 Hazzard v. Heacock, 39 Ind. 172. Mayor, etc., of Baltimore, 49 Md. 446 ; 34 City of Burlington v. Quick, 47 Dashiell v. Mayor, etc., of Baltimore, Iowa, 222. 45 Md. 615. 36 Farwell v. Des Moines Brick Mfg. 37 Woodbridge v. City of Detroit, 8 Co., 97 Iowa, 286, 66 N. W. Rep. 176, Mich. 274. -35 L. E. A. 63 ; Dewey v. Des Moines, 38 Gest v. City of Cincinnati, 26 101 Iowa, 416, 70 N. W. Rep. 605; re- Ohio St. 275; Hill v. Higdon, 5 Ohio versed, 173 U. S. 193, 43 L. ed. 665, 19 St. 243; Cummings v. Fitch, 7 Ohio Sup. Ct. Rep. 379, because the owner Dec. 36, 1 Wkly. L. Bui. 77. was a nonresident. See § 1225. 39 Gest v. City of Cincinnati, supra. 36 Moale V. Mayor, etc., of Baltimore, See Laird v. Cincinnati, 9 Am. L. Eec. ■61 Md. 224-236; Handy v. Collins, 60 479, 5 Wkly. L. Bui. 903. Md. 229, 45 Am. Rep. 725; WolfiF v. 39 610 CONSTITUTIONAL LAW OF TAXATION. Assessment against the property itself is only a means of com- pelling the owner to pay and thus relieve his property of the charge or lien against it. In some cases dicta may be found, and perhaps decisions also, to the effect that assessments for benefits cannot be made or enforced against the owner of the property benefited; but the principle is unsound. As already remarked, the remedy for the collection of such assessments or taxes, as well as every other species of tax, is a matter of legislative discretion.** 1233. In other states statutes making ovyners of lands person- ally liable for assessments for benefits have been enforced vsdth- out special consideration of their constitutionality.*^ Personal liability denied. 1234. In Illinois the power to assess for benefits is derived from a clause of the constitution which gives power to make local improvements by special assessment or special taxation " of con- tiguous property or otherwise." *^ Under this clause it is held that the taxation of the owners of contiguous property is not permissible. Special taxation imposed upon contiguous property is one thing, and special taxation imposed upon the owners of such contiguous property is quite another and an entirely different tiling.*^ Special taxation of contiguous property can no more be made & personal liability of the owners of the contiguous property sO' taxed, than can a special assessment be made a personal liability of the owners of property against which an assessment is made on account of supposed benefits. Both proceedings are in rem and not in personam, under our constitution.** *o In re Vacation of Centre .Street, City of Itliaea v. Baboock, 72 App. Div. 115 Pa. St. 247-254, 8 Atl. Rep. 56; 260, 76 N. Y. Supp. 49. ■ Vacation of Howard Street, 142 Pa. 42Art. IX, § 10, quoted in § 589 of St. 601, 21 Atl. E«p. 974; McGonigle this work. V. City of Allegheny, 44 Pa. St. 118; « Craw v. Village of Tolono, 96 111. City of Franklin v. Hancock, 204 Pa. 255, 36 Am. Rep. 143. St. 110, 53 Atl. Rep. 644. ii Ibid. Supporting these proposi- ti Nichols V. City of Bridgeport, 23 tions quoted, are City of Virginia v. Conn. 189, 60 Am. Dec. 636; City of Hall, 96 111. 278; Illinois Central Ry. New Orleans V. Wire, 20 La. Ann. 500; Co. v. Drainage Commissioners, 129 Bordages v. Higgins, 1 Tex. Civ. App. 111. 417, 21 N. E. Rep. 925 ; Illinois 43, 19 S. W. Rep. 446, 20 S. W. Rep. Central Ry. Co. v. People, 170 111. 224,. 184, 726; Allen v. Drew, 44 Vt. 174; 48 N. E. Rep. 215; Illinois Central Ry. Mayor, etc. v. Colgate, 12 N. Y. 140; Co. v. People, 161 111. 244, 43 N. E. People V. Brooklyn, 4 N. Y. 419, 55 R«p. 1107 ; Village of Lemont v. Jenks, Am. Dec. 266; Bennett v. City of Buf- 197 111. 363, 90 Am. St. Rep. 172, 64 falo, 17 N. Y. 383; Matter of Eisner, N. E. Rep. 362. 86 App. Div. 207, t.3 N. Y. Supp. 670 ; DUE PEOCESS IN ENFOECBMENT OF TAX LAWS. 611 1235. In Kentucky a provision in a city charter authorizing a personal judgment against an owner of abutting property for the amount assessed against such property for a street improve- ment was held to be unconstitutional and void.*^ 1 236. In Mississippi it is said that a "' local assessment can only be levied on land, it cannot, as a tax can, be made a personal liability of the taxpayer; it is an assessment on the thing sup- posed to be benefited." ^* 1 237. In Missouri it was held in 1873 that the legislature has no power to authorize a personal judgment against the owner of lands assessed for benefits. A clear distinction was made between taxes and assessments for benefits, the latter being held to be laid on the lands alone.*^ Since that time the rule has been reiterated and is the settled law of the state.** 1238. In ]Srorth Carolina it is held that the legislature has no power to authorize a personal judgment against the owner of lands, for the amount of the assessment.*^ 1 239. In Oregon a municipal ordinance authorizing personal judgments against the owners of property assessed for street im- jjrovements was held to be void for lack of charter authority to jjass such an ordinance ; and it was said that : It is extremely doubtful whether a statute creating or author- izing a personal liability against a landowner for local improve- ments can be upheld on constitutional grounds.^" 1240. The Supreme Court of Virginia, in an opinion which merits attention, held that an assessment could not be made a per- sonal liability of the owner; because to do so would change its character to that of an ordinary tcux; in which case the constitu- tional requirement of equality and uniformity would render the assessment void.^-' •4^ Meyer v. City of Covington, 103 City of Clinton v. Henry County, 115 KJ^ 546, 45 S. W. Rep. 769; Barker v. Mo. 557-570, 22 S. W. Rep. 494, 37 •Southern Construction Co., 47 S. W. Am. St. Rep. 415; Carlin v. Cavender, Rep. 608, 20 Ky. L. Rep. 796. 56 Mo. 286; Seibert v. Copp, 62 Mo. WTown of Macon v. Patty, 57 Miss. 182; Higgins v. Ausmuss, 77 Mo. 351; 378, 34 Am. Rep. 451. City of St. Louis v. Brown, 155 Mo. « City of St. Louis v. Allen, 53 Mo. 545, 56 S. W. Rep. 298. 44. This had been previously inti- *9 City of Raleigh v. Peace, 110 N. C. mated but not decided in Xeenan v. 32, 14 S. E. Rep. 521, 17 L. R. A. 330. Smith, 50 Mo. 528. A number of 50 Ivanhoe v. City of Enterprise, 20 earlier eases in which such statutes Oreg. 245, 45 Pac. Rep. 771, 35 L. R. had been enforced without question of A. 58. their constitutionality were overruled 51 Asberry v. City of Roanoke, 91 to that extent. Va. 562, 22 S. E. Rep. 360, 42 L. R. A. 48 City of Pleasant Hill v. Dasher, 636. 120 Mo. 675-680, 25 S. W. Rep. Sfifj ; 612 CONSTITUTIONAL LAW OF TAXATION. 1241. In Washington it was early held by the Supreme Court of the territory that an assessment could not be made a personal liability of the owner of the property because the rule allowing such procedure " is not in accord with reason or justice." ^^ Later in the state Supreme Court it was intimated, but not decided, that an act making the owner personally liable would be unconsti- tutional.^^ 1242. In California, after some variance in the decisions, the law has been detennined to be that the owner may not be made personally liable beyond the value of the land assessed. After the lien of the assessment on the land has been exhausted, no personal liability remains.^ 1 243. In some other cases, already referred to, it is intimated or suggested that the owner cannot be made personally liable be- yond the value of the lands. "^ 1 244. If the owner of lands may be made personally liable for any part of an assessment, why may he not be made liable for all of it, whether it exceeds the value of the lands or not ? What has the value of the lands to do with his personal liability? It is true that it is unjust to make an owner pay more for sup- posed benefits to his lands than the lands are worth after the sup- posed benefit has accrued. But this is an injustice which should vitiate the assessment itself^ and not the remedy hy which it is collected. If the assessment exceeds the value of the lands, that fact is of itself substantial proof that in the making of the assess- ment there was some error in fact or method which calls for correction, or that there was some vice in the statute under which the assessment was laid, rendering that statute obnoxious to the requirement of due process of law.^ 1245. Such questions may properly be raised in those stages of the proceeding which result in the fixing of the amount of benefits. In extreme cases the fact of excess of assessment over value may be the basis of an injunction against the collection of the excess. But to say that the legislature may not make the ovsmer per- B2 City of Seattle v. Yesler, 1 Wash. 55 Moale v. Mayor, etc., of Baltimore, Ter. 571. 61 Md. 224; Gest v. City of Cincinnati, B3 City of Seattle v. De Wolfe, 17 26 Ohio St. 275 ; Laird v. Cincinnati, Wash. 349-351, 49 Pac. Eep. 553. 9 Am. L. Rec. 479, 5 Wkly. L. Bui. 54 Taylor v. Palmer, 31 Cal. 240; 903; Broadway Baptist Church v. Me- Raiidolph V. Bayne, 44 Cal. 366 ; Gillis Atee, 8 Bush, 508, 8 Am. Rep. 480 ; V. Cleveland, 87 Cal. 214, 25 Pac. Rep. Allen v. Drew, 44 Vt. 174. 351; Manning v. Den, 90 Cal. 610, 27 56 See §§ 1992 et seq. Pac. Rep. 435. DUE PROCESS IN ENFORCEMENT OF TAX LAWS. 613 sonally liable for the whole amount of the assessment, regardless of the value of the property assessed, is to say that questions of fact which have been adjudicated in a legal proceeding must be again considered in enforcing the liability created in that pro- ceeding. 1246. In some cases statutes have been construed as not au- thorizing personal judgments against owners of property as- sessed, no reference being made to the constitutional question.'^ ST Barber Asphalt Paving Co. v. 1888, 28 So. Rep. 261; City of Omaha Watt, 51 La. Ann. 1345, 26 So. Rep. v. State, Neb. , 94 N. W. Rep. 70; Moody y. Chadwick, 52 La. Ann. 979. CHAPTER XVn. DUE PROCESS OF LAW — CURATIVE ACTS. 1247. The legislative power is frequentlj called upon to cure defects in tax proceedings whicli have already taken place. What are the limits upon its power to cure such defects ? There is no doubt that it has the power to some extent.^ The general rule of limitation is: The l^islative power can- not cure defects which are jurisdictional. It cannot make valid-- a void tax which has heen laid, if it could not have laid that tax in the first place. It cannot validate a method of procedure which omits some step which is so essential that if the original law had directed its omission the law would have been void.^ 1248. Conversely, it is generally held that the legislature, by curative acts, may remedy the omission of acts with respect to tax procedure, which have been required by law, but which acts the legislature might have dispensed with in the first place.^ For illustration such omissions which may be cured are: the failure of the assessor to return his lists within the time fixed by law,"* the levy of an ad valorem tax by a county instead of a per capita tax which it was authorized to levy,® unauthorized acts of officers which have rendered the tax lists invalid,® the failure of ofiBcers 1 Kearney v. Taylor, 15 How. 494, 14 Polk, 84 Iowa, 12, 50 N. W. Rep. 38 ; L. ed. 787. Clinton v. Walliker, 98 Iowa, 655, 68 2 Butler V. Supervisors of Saginaw N. W. Rep. 4.31 ; Lewis v. Eastford, County, 26 Mich. 22; People v. Super- 44 Conn. 477; Emporia v. Norton, 13 visors of Ingham County, 20 Mich. 95 ; Kans. 569 ; Forster v. Forster, 129 Hart V. Henderson, 17 Mich. 218; Ab- Mass. 566; Warren v. Boston, bott V. Lindenbower, 42 Mo. 162; Mass. . 72 N. E. Rep. 1022; Sin- Harper V. Rowe, 53 Cal. 238; People clair v. Learned, 51 Mich. 535; Dan- V. Goldtree, 44 Cal. 323 ; Hopkins v. iells v. Watertown Township, 61 Mich. Mason. 61 Barb. (N. Y.) 469; Chamber- 514, 28 N. W. Rep. 673; Clementi v. lain V. Taylor, 36 Hun, 24; Cromwell Jackson, 92 N. Y. 591; Hatzung v. V. McLean, 123 N. Y. 474, 25 N. E. Syracuse, 92 Hun, 203, 36 M. Y. Supp. Rpp. 932; Dean v. Borchsenius, 30 521; Vandeventer v. Long Lsland City, ^Vis. 237; Marsh v. Chesnutt, 14 111. 139 N". Y. 133; Appeal of Hewitt, 88 223 ; Baer v. Choir, 7 Wash. 631, 36 Pa. St. 55 ; Townsend v. Wilson, 9 Pa. Pac. Rep. 286; Godifrey v. Bennington St. 270; Kaehler v. Dobberpuhl, 56 Water Co., 75 Vt. 350, 55 Atl. Rep. Wis. 480, 14 N. W. Rep. 644. 654. *Musselman v. Logansport, 29 Ind. SMattingly v. District of Columbia, ■ 533. 97 U. S. 687, 24 L. ed. 1098; Board- 5 Marion County v. Louisville, etc., man V. Bcckwith, 18 Iowa, 292; Iowa, Ry. Co., 91 Ky. 388, 15 S. W. Rep. etc., Land Co. v. Soper, 39 Iowa, 112; 106I. Huff V. Cook, 44 Iowa, 639 ; Tuttle v. 6 Bellows v. Weeks, 41 Vt. 590. [014] ACTS CUBING DEFECTS IN TAX PROCEEDINGS. 615 to take tlie oath required by law/ omission to advertise or record a «ity ordinance,^ unauthorized meetings and proceedings of a state board of equalization.® 1249. The legislature cannot cure a jurisdictionally void tax •or assessment by indirection. Thus in a case where certain assess- ments had been judicially held void, not merely for a defect in process, but because they appeared to have been laid for a private purpose, an act was held void which directed the supervisors of the county to levy an assessment for the following year on the lands as to which " the levy of any such taxes shall be delayed, or such taxes set aside by judicial proceedings." It was said by Judge Cooley that the act was an assumption by the legislature •of judicial power - — a direct effort to accomplish, by a legislative command to the taxing officers, that which the courts had en- joined.^'' And where a city had assumed to tax real estate which lay outside the city limits, a subsequent statute authorizing the ■extension of the city limits to include such property, does not validate. the tax." Where there is a jurisdictional defect, the title to property sold or taken to pay the tax does not pass out of the original owner, and an act which assumes to validate the void proceedings amounts merely to a legislative judgment.''^ 1250. It is not a necessarily fatal objection to a curative stat- ute that it is passed, while suits are pending, for the purpose of curing defects which are the subjects of that pending litigation. The law as it stands at the time of rendering judgment is the law of the case. Where the defects are of the kind that may be cured, the courts apply the curative legislation in the pending suits. ^* 7 Smith V. Hard, 59 Vt. 13, 8 Atl. 13 Miller v. Graham, 17 Ohio St. 1 Bep. 31; Sinclair v. Learned, 51 Mich. Co'svgill v. Long, 15 111. 202; Hepburn 335, 16 N. W. Kep. 672; Clementi v. v. Curts, 7 Watts, 300; Mayor, etc. v, Jackson, 92 N. Y. 591; Townsend v. State, 32 N. J. L. 453; Sidway v, Wilson, 9 Pa. St. 270; Kaehler v. Lawson, 58 Ark. 117, 23 S. W. Rep jJobberpuhl, 56 Wis. 480, 14 N. W. 648; Ferry v. Campbell, 110 Iowa. 290 Eep. 644; but see Bartlett v. Wilson, 81 N. W. Rep. 604, 50 L. R. A. 92, 59 Vt. 23, 8 Atl. Rep. 321. where a curative act providing for no- SEno V. Mayor, 68 N. Y. 214; Schen- tice of appraisal under a collateral in ley V. Commonwealth, 36 Pa. St. 29, 78 heritance law invalid originally be Am. Dec. 359. cause no notice was provided, was up 9 First Nat. Bank v. Isaacs, 161 held and applied by the court in a Ind. 278, 68 N. E. Rep. 288. pending case; Windsor v. Des Moines 10 Butler v. Supervisors of Saginaw 110 Iowa, 175, 80 Am. St. Rep. 280 County, 26 Mich. 22. 81 N. W. Rep. 476; Middleton v. City 11 Atchison, etc., R. R. Co. v. Ma- of St. Augustine, 42 Fla. 287, 89 Am. nuilkin, 12 Kans. 301. St. Rep. 227, 29 So. Rep. 421; Vaughn 12 Conway v. Cable, 37 HI. 82, 87 v. Swayzie, 56 Miss. 704. Am. Dec. 240. 616 CONSTITUTIONAL LAW OF TAXATION. 1251. In dealing with curative and validating legislation gen- erally, it should be noted that " jurisdictional " defects and " jurisdictional " requirements are of two distinct classes. Thus- any material act which the legislature, in laying down rules of conduct for taxing boards and officers, has made it necessary that they should do, is a jurisdictional act so far as the taxing hoards or taxing officers are concerned, for the legislature, their superior, has made it obligatory upon them.-'* Such acts are, for instance,, the proper description of the property on the assessment-rolls in the manner prescribed by the statute, the authentication of the as- sessment-rolls in the prescribed manner, the filing of the rolls in the designated office, service of notice, and the like. These acts are jurisdictional, not because they are in themselves necessary to the exercise of the taxing power, but because the legislature has or- dained that the taxing power shall be exercised in the particular method of which they are a part. Though jurisdictional as to the officers, they are not jurisdictional as to the legislature, and the familiar principle that an act which the legislature oould have dispensed with at first it can dispense with by a curative act, operates.^' 1252. The other class of jurisdictional acts are those which are jurisdictional as to the legislature itself — those things which must be done because the people, the superiors of the legisla- ture, in written constitutions or in inherent restraints upon legis- lative power, have said they are essential. The legislature cannot dispense with these things and cannot cure omissions of them, for the same reason that subordinate boards cannot dispense with legislative requirements, to wit, because the inferior cannot depart from the commands of the superior. And where the defect is of such a nature that the legislature has power t-o cure it by a validating act, it is the law that the validating act must provide for giving the taxpayer some actual or constructive notice of the validation, and a reasonable time within which to pay the tax or assessment thus validated.-"* 1252a. There seems to be a class of acts which the legislature might have dispensed with in the first place, yet which, if made a part of the proceedings, and omitted, it cannot subsequently dis- pense with so as to destroy vested rights. These are such acts as 14 See TifFt v. Buffalo, 82 N. Y. 204- 16 Cromwell v. MacLean, 123 N. Y. 209. 474. 25 N. E. Rep. 932. 15 Ensign v. Barse, 107 N. Y. 329, 14 N. E. Rep. 400, 15 N. E. Rep. 401. ACTS CURING DEFECTS IN TAX PROCEEDINGS. 617 notice to the taxpayer of the sale of his property, and the like acts which operate as protections to private rights of property. These acts are sometimes spoken of as jurisdictional in the sense that the legislature cannot cure their omission although it might have dispensed with them in the first place.^' But it seems to the writer that the real reason why these acts cannot be validated is not that the defects are of tlie class which the legislature has not jurisdiction to validate. If the general rule be granted that the legislature can validate omissions which it might have authorized in the first instance, there can be no escape from the conclusion that it can validate even the most important omissions in statu- tory procedure. The truth seems to be that there are certain re- quirements, customarily inserted in statutes, which the citizen has a right to rely on; that these more important requirements ap- proach almost to the dignity of constitutional rights ; that where the citizen has relied on them a kind of estoppel, to speak very loosely, is raised against the state; and that in such cases the rule that the legislature may validate the omission of acts which it might have dispensed with in the first instance is limited by the greater rule that legislative acts which amount to plain and fla- grant injustice amount to a taking of property without due process of law, by whatever theory the taking is sought to be justified. Acts of this class are conceived to be acts which are made by statute to be conditions precedent, by performance of which the administrative officers acquire authority to act at all; and which are links in the chain of procedure by which the citizen may be deprived of his property. Such are notices of sale of lands for taxes, made requisite by statute.''* A New York case illustrates this class of defects. Property which had belonged to a nonresident decedent was assessed to " estate of " the said decedent. The statute required that lands of a resident be as- sessed either to the owner or the occiipant. The lands in fact belonged, under the decedent's will, to a resident. It was held that a sale of the lands, under this assessment, was void, and that the legislature could not validate it although it might have allowed the assessment to the estate of the decedent in the first place. ^* Further discussion of this class of cases will be found in section 1254. iTMcCordv. Sullivan, 85 Minn. 344, 561; Kipp v. Dawson, 31 Minn. 373, 88 N. W. Rep. 989, 89 Am. St. Eep. 382, 17 N. W. Rep. 961, 18 N. W. 561. Eep- 96. 18 McCord V. Sullivan, 85 Minn. 344, 19 Cromwell v. MacLean, 123 N. Y. 88 N. W. Rep. 989, 89 Am. St. Rep. 474, 25 X. E. Rep. 932; also Edwards 618 CONSTITUTIONAL LAW OF TAXATION. In Pennsylvania, a sale of lands made before the expiration of the statutory period at which such sales "were to be made was held to be beyond the reach of a general curative act.^ Other cases bearing upon the same principle are cited. ^ Thus where assessments are made or taxes laid by a body having no jurisdic- tion over the territory or the subject-matter, a validating act will not be construed to cure the defect, although the legislature might have given the authority in the first instance.^^ Where a valua- tion by assessors was made a prerequisite of an assessment, and it was provided that the assessment should not exceed one-half the value of the property, a general curative statute, curing irregu- larities, was held not to cure an assessment made without pre- vious valuation.^ Prospective and retrospective acts. 1 253. With respect to the manner and time of their operation, curative statutes may be broadly classified as prospective and retrospective. By prospective statutes are meant those laws which prescribe general rules for future action, and provide that certain errors, omissions, or imperfections shall not invalidate the pro- ceedings in which they may occur. Retrospective statutes include those laws, either general or special, which look to the past and purport to validate proceedings which have already taken place. Sometimes, as in recent New York legislation,^* curative laws are both retrospective and prospective ; that is, they validate past acts and make provision for future errors. The general principles which govern the power of the legis- lature apply with equal force both to prospective and retrospective legislation. Questions arise most frequently with respect to retro- spective laws, because such laws are more likely to affect rights vested or deemed to be vested, and because the element of prior notice of the immateriality of the errors, which is an element which always exists in cases arising under prospective laws, is absent from the other class of cases. ^ V. Fairex, 47 La. Ann. 170, 16 So. 22 Harris v. Anaonia, 73 Conn. 359, Rep. 736. 47 Atl. Rep. 672; People v. Brooklyn, 20 Miller v. Hale, 26 Pa. St. 432. 71 N. Y. 495; People v. Wilson, 119 21 Harper v. Rone, 53 Cal. 233; N. Y. 515, 23 N. E. Rep. 1064; Atchi- Mowry v. Blandin, 64 N. H. 3. 4 Atl. son, etc., R. R. Co. v. Maquilkin, 12 Rep. 882 ; Stephan v. Daniels, 27 Ohio Kans. 301. St. 527; Forster v. Forster, 129 Mass. 23 Matter of Second Avenue Church, 559; Wall v. Wall, 124 Mass. O.', ; 66 N. Y. 395. Clementi v. Jackson, 92 X. Y. 591 ; a* Sfe; §§ 1274 et seq. I'eople ex rel. Barnard v. Wemple, 117 25 The following cases, some of which N. Y. 77, 22 N. E. Rep. 761. have been already cited and discussed. ACTS CUEING DEFECTS IN TAX PROCEEDINGS. 619 1 253a. The constitutions of some of the states contain provi- sions forbidding the passage of special retrospective curative acts or affecting private rights. The following are some examples of such provisions: California. The legislature shall not pass local or special laws . . . Eighteenth. — Legalizing, except as against the state, the unau- thorized or invalid act of any ofEcer.^^ Idaho. The provision is similar to that of California.^ Louisiana. The General Assembly shall not pass any local or special law on the following specified subjects : Legalizing the unauthorized or invalid acts of any officer, servant or agent of the state, or of any parish or municipality thereof.^* Missouri. The provision is like that of California.^ Washington. The provision is like that of Califomia.*" Eef- orence is made to sections 1726-1T75 of this work, for discussion of local and special laws. 1254. There has been some conflict in the state courts upon the question whether a mistake upon the tax-roll in the name of the owner of land could be validated. The Supreme Court has held that a tax deed cannot be made conclusive evidence upon this point,^^ but it does not follow from this that a prospective statute, refer to prospective curative acts in Prindle v. Campbell, 9 Minn. 212; various states, showing in line with Harper v. McKeehan, 3 W. & S. 238; the principle already stated, what er- McCord v. Bergantz, 7 Watts, 487 ; rors may be thus corrected: Buck v. Dietrich v. Mason, 57 Pa. St. 40; People, 78 111. 560; Chiniquy v. Peo- Hoffman v. Bell, 61 Pa. St. 444; Heft pie, 78 111. 570; Purrington v. People, v. Gephardt, 65 Pa. St. 510; State 79 111. 11; Enrigh v. People. 79 111. v. Wise, 12 Neb. 313; Larson v. ■2U; Thatcher v. People, 79 111. 597; Dickey, 39 Neb. 463, 42 Am. St. Rep. Beers v. People, 83 111. 488; Edwards 595, 58 N. W. Rep. 167; State v. V. People, 88 111. 340 ; Lyle v. Jacques, Vanderbilt, 33 N. J. L. 38 ; State v. 101 111. 644; Gage v. Bailey, 102 111. Montclair, etc., Ry. Co., 43 N. J. L. 11; Ware v. Little, 35 Iowa, 234; Jef- 524; Re Hearn, 96 N. Y. 378; Eno v. f rey V. Brokaw, 35 Iowa, 505 ; Genther New York, 68 N. Y. 214; Astor v. V. Fuller, 36 Iowa, 604 ; Sibley v. Bui- New York, 62 N. Y. 580 ; Stephen v. lis. 40 Iowa, 429; Burlington V. Quick, Daniels, 27 Ohio St. 527; Bolton v. 47 Iowa, 222 ; Farnsworth v. Rand, 65 Cleveland, 35 Ohio St. 319. Me. 19; McManus v. Hornaday, 124 26 Art. IV, § 25. Towa, 267, 104 Am. St. Rep. 316, 100 27 Art. Ill, § 19. N. W. Rep. 33; Tyler v. Hardwick, 6 28 Art. 48. Met. (Mass.) 470; Sargent v. Bean, 29 Art. 4, § 53. 7 Gray, 125; Westhampton v. Searle, 30 Art. II, § 28, subd. 12. 127 Mass. 502; Newago Portland 31 Marx v. Hanthorn, 148 U. 8. 172, Cement Co. v. Sheridan Township, 37 L. ed. 410, 13 Sup. Ct. Rep. 508. Mich. , 100 N. W. Rep. 747; 620 CONSTITUTIONAL LAW OF TAXATION. declaring in advance tliat such errors should not invalidate the assessment, or a retrospective statute, expressly curing these er- rors, would not be valid. It has been held that such prospective statutes are valid.^^ In Massachusetts such a prospective statute having reference to the collection of the tax rather than to the sale of the land, has been sustained.^^ Of course there is a differ- ence between cases of mere error in the spelling of the name of the owner of land, where the taxes are actually assessed against the O'wner, or where the taxes are on the land sold, and cases where land is sold for taxes assessed against a person who never ovpned it. There can be no doubt that a validating act could not cure the latter case.^* Validating bonds. 1255. Where a local debt has been incurred, for a purpose- which is in itself public, and germane to the purposes for which the taxing district or government exists, but the proceedings are- void because the legislature has not authorized them, or because the town or municipality has gone beyond the statutory author- ity, or because there was some iiTegularity in the steps taken, the defect is undoubtedly jurisdictional — in a sense — still the legis- lature may by a curative act validate the proceedings, because, in the first place, it might have conferred the jurisdiction.^^ 1256. This principle has been frequently invoked where municipal bonds have been issued for some proper municipal purpose, and there has been some vn'egularity in the election bi/ which they were voted, or some excess of or depaHvre from the statutory authority for the issue, by the officers in charge of the matter. In such eases curative acts validating the proceedings or confirming the act, otherwise without authority, are held to- be competent.^® 32 Farnsworth Company v. Rand, 65 35 gee Booth v. Woodbury, 32 Conn. Me. 19; State v. Vanderbilt, 33 N. J. L. 118; Cowell v. Hopkinson, 45 N. H. 9; 38; State v. Montclair, etc., E. R., 43 Lowell v. Oliver, 8 Allen, 247; Comer N. J. L. 524. V. Folsom, 13 Minn. 219; Board ef 33 Tyler v. Hardwick, 6 Met. 470; Commissioners v. Bearss, 25 Ind. 110; Weathampton v. Searle, 127 Mass. 502. Middleton v. City of St. Augustine, 4? But this statute -was held not to Fla. 287, 29 So. Rep. 421, 89 Am. St. validate a sale for taxes assessed to Rep. 227; Windsor v. Des Moines, 110 another than the true owner. Sargent Iowa, 175, 80 Am. St. Rep. 280, 81 V. Bean, 7 Gray 125. N. W. Rep. 476; Taylor v. Thompson. 34 Abbott V. Lindenbower, 42 Mo. 42 III. 9; MeMillen v. Boyles, 6 Iowa. 162, 46 Mo. 291. See Hamilton v. 305; MeMillen v. The County Judge Fond-du-Lac, 25 Wis. 490-49.5, where and Treasurer of Lee County, 6 Iowa, a prospective st-atute did not cure an 391. assessment in which the hinds of two •'iSGelpcko v. Dubuque, 1 Wall. 175- persons -were assessed together under 203, 17 L. ed. 520; Whitewater Valley one aggregate assessment; see § 1252a. Canal Co. v. Vallette, 21 How. 413- ACTS CUEING DEFECTIVE MUNICIPAL BOND ISSUES. 621 1257. The rule, with certain limitatious, was stated by the New York Court of Appeals as follows :''" It is the doctrine of this court, established in the cases arising under statutes for bonding towns in aid of railroads, that when the right to issue the bonds of the town is made by the statute to depend upon the consent of taxpayers or other conditions precedent, and the bonds are issued without the conditions having been performed, they are void in whosesoever hands they may be. But the legislature may overlook a defective execution of the power conferred, and, by retroactive legislation, cure defects in the action of municipalities under these etatutes. The legisla- ture may, in the first instance, prescribe the conditions upon which the bonds may be issued. It may designate the agencies through which the municipality shall act, and determine what measure of consent of taxpayers shall be required, and in what form it shall be expressed. It may by subsequent legislation, when there has been a failure to perform conditions precedent, and the bonds have been issued, dispense with said conditions, and ratify and confirm, and make valid and obligatory upon the municipality, bonds issued without such performance • — at least, it may do so in cases where the municipality has, through the construction of the road, or by the receipt of the stock of the company in exchange for the bonds, received the benefit which the statute contemplated as the equivalent for the liability it was authorized to incur. The officers authorized under these statutes to issue the bonds are public agents and the legislature, looking over the whole matter, may, when in its judgment justice requires it, ratify and confirm their acts which otherwise would (not) be valid. 1258. In practically all of the cases where these validating acts have been sustained, the municipal creditors have had the equities on their side. Generally the municipality has had the benefit of the money derived from the issue of the bonds,^ and 423, 16 L. ed. 154; Beloit v. Morgan, 7 Safe Deposit Co. v. City of Attica, 56 Wall. 619, 19 L. ed. 205; St. Joseph U. S. App. 330, 29 C. 0. A. 214, 85 Townsliip V. Rogers, 16 Wall. 644, 21 Fed. Rep. 387; Reed v. Plattsmouth, L. ed. 328; Thompson v. Perrine, 103 107 U. S. 568, 27 L. ed. 414, 2 Sup. a. S. 806, 26 L. ed. 612 (declining to Ct. Rep. 208 ; People v. Mitchell, 35 follow Horton v. Town of Thompson, N. Y. 551; Town of Duanesbnrgh v. 71 N. Y. 513, which was a case hold- Jenkins, 57 N. Y. 177; Bass v. Colum- ing upon the facts that the act of the bus, 30 Ga. 845 ; Middleton v. City of municipality attempted to be vali- St. Augustine, 42 1^'la. 287, 89 Am. dated was one which the legislature St. Rep. 227. 29 So. Rep. 421; Wind- had no power to authorize in the first gor v. Des Moines, 110 Iowa, 175, 80 place) ; Thompson v. Perrine, 106 Am. St. Rep. 280, 81 N. W. Rep. 476. U. S. 589, 27 L. ed. 298, 1 Sup. Ct. 37 Williams v. Town of Duanes- Rep. 564-568; Anderson v. Santa burjrh, 66 X. Y. 129-136. Anna, 116 U. S. 356, 29 L. ed. 633, 6 38 ,See Read v. Plattsmouth, svpra; Sup. Ct. Eep. 413; Otoe County v. Williams v. Town of Duanesburgh, 66 Baldwin, 111 U. S. 1-13, 28 L. ed. N. Y. 129, for typical instances. 331, 4 Sup. Ct. Rep. 265; Springfield 622 CONSTITUTIONAL LAW OF TAXATION. the plaintiffs have generally been innocent holders. Of course a legislature ought not, under the guise of a validating act, to impose on a municipality an obligation for which it had received no benefit in favor of persons who should acquire their claims Mith notice of the facts ; but silch legislation would be void, if void, not because of lack of power to pass validating acts, but because surit an enactment would not be a validating act at all, but a legis- lative judgment. 1259. Going further than 1,he cases which allow validation of bonds where there has been departure from statutory author- ity are some Federal and other decisions, which authorize valida- tion where there was a total absence of power to issue. Of this class is the case of Utter v. Franlclin?^ There the legislature of Arizona had authorized a county to issue bonds in aid of the con- struction of a certain railroad. At the time of this authorization an act of Congress was in force which forbade the territorial legis- lature to authorize any municipal corporation to incur any debt or obligation other than should be necessary to the administration of its internal affairs. These bonds were held void, because the build- ing of a railroad was not necessary to the administration of the county's internal affairs.'*" Afterward Congress authorized the territorial officials to issue new bonds in exchange for all such bonds which had been " authorized by legislative enactments." It was held that Congress had power to validate these invalid bonds. " Their only defect was that they had been issued in excess of the powers conferred upon the territorial municipali- ties." In an earlier case*' the Supreme Court sustained an act of Congress nullifying a legislative act of the territory of Dakota authorizing the issue of railway bonds, but validating action theretofore taken by a county voting a subscription to a certain railroad company, holding it to be " equivalent to a direct grant of power by Congress to the coiinty to issue the bonds in dispute." 1260. When a territory becomes a state, the legislature suc- ceeds not only to the powers of the territorial legislature, but, subject to the state constitution, to the general legislative power which Congress possessed over the 'territory. The state legis- lature, therefore, may validate bond issues defective because the 38 172 U. S. 416, 43 L. ed. 498, 19 « National Bank v. Yankton County, Sup. Ct. Rep. 183. 101 U. S. 129, 25 L. ed. 1046. 40 Lewis V. Pima County, 1 S.S U. S. 54, 39 L. ed. 67, 15 Sup. Ct. Rep. 22. ACTS CURING DEFECTIVE MUNICIPAL BOND ISSUES. 623 teiTitorial legislature which assuiaed to authorize (hem had no power to do so.*^ 1261. In these Federal cases just discussed,*^ bonds were issued -without valid statutory authority. The language of the 'Sew York cases previously referred to^ and some others, indi- cates that the power to validate only extends to cases where there have been departures from statutory directions, or ^vhere the statutory authority exists in some degree, but lias been ex- ceeded. In view of these Federal decisions and others it may be considered settled that bonds void because wholly unauthor- ized may be validated by subsequent acts, if their original issue might have been authorized.*^ Thus where bonds have been voted at an election for which there is no warrant of law they may be validated.*® And where the constitution of a state de- clares that no mimicipality shall become indebted to an amount in excess of a certain limit without the assent of three-fifths of the voters, a statute is constitutional which authorizes the voters to ratify an indebtedness which, when created, was void because in excess of the limit. *^ 1262. A curative act, which validates municipal bonds void for lack of jurisdiction to issue them, in cases where the munic- ipality resists the claim of the bondholders, is in some degree a compulsion exercised by the legislature over the municipality, for the effect of the validating act is to compel the municipality to tax itself. This branch of the subject is treated elsewhere.*^" It is suiScient to say here that in the absence of special state con- stitutional provisions to the contrary, this is not usually a good objection to a validating act.** In one case, where the argument was expressly made against the constitutionality of the validating act, that " a statute which attempts to create a municipal debt where none existed before, as by attempting to validate void bonds, 43McBryde v. Montesano, 7 Wash. 46 Anderson v. Santa Anna, 116 69, 34 Pac. Eep. 559. U. S. 356-364, 29 L. ed. 633, 6 Sup. 43 Utter V. Franklin and National Ct. Rep. 413; Bolles v. Brimfield, 120 Bank v. Yankton County, supra. U. S. 759, 30 L. ed. 786, 7 Sup. Ct. 44 §§ 1256, 1257 et seq., supra. Eep. 736. 46 Grenada County Supervisors v. 47 West v. Chehalis, 12 Wash. 369, Brogden, 112 U. S. 261, 28 L. ed. 704, 50 Am. St. Rep. 896, 21 Pac. Rep. 5 Sup. Ct. Eep. 125; Ritchie v. Frank- 171. Jin County, 22 Wall. 67, 22 L. ed. 825 ; 47a Chap. VII. Steines v. Franklin County, 48 Mo. 48 See Utter v. Franklin, 172 U. S. 167, 8 Am. Rep. 87 ; Hannibal and St. 417, 43 L. ed. 498, 19 Sup. Ct. Rep. Joseph Ey. Co. v. Marion County, 36 183; Read v. Plattsmouth, 107 U. S. Mo. 294 ; Barton County V. Walsei, 47 568, 27 L. ed. 414, 2 Sup. Ct. Eep. Mo. 189; Knapp v. Grant, 27 Wis. 208. 147; Bass v. Columbus, 30 Ga. 845. 624 CONSTITUTIONAL LAW OF TAXATION. is unconstitutional and void," the Supreme Court upheld the bonds.*" 1263. A distinction is made by eminent persuasive authority, between acts validating a debt void for irregularities and defects and acts validating such a tax. The distinction is that in the case of a debt there is no opposing party, the town acts for itself and against no one. In the case of a tax, on the other hand, the town in levying it without authority acts against individuals who would be entitled if the proceedings were legal to have notice and be heard at various stages. If the proceedings are illegal no one is bound to take notice of them or can have a legal hear- ing with respect to them, and a restrospective affirmance would, in effect, establish the claims without opportunity to be heard. "It is not believed this is competent."'** 1264. The effect of such a proceeding with respect to debts would be that the irregularly incurred debt would be validated, then a tax would be regularly laid to pay it in the same manner as for the payment of a debt regularly incurred in the first instance. If a debt originally invalid can be thus validated, it is difficult to see why a tax, for similar purposes, originally in- valid, may not be similarly made valid. The ultimate result in each case is the same, for in each case the taxpayer is finally called upon to pay money by virtue of proceedings void in their inception. And it is thought that the better opinion is that a tax or local or special assessment laid, as well as a debt incurred, for a valid public purpose germane to the objects of the taxing government, although void for lack of authority to lay it, may be validated by a curative act.^^ 1265. Of course, where there are express constitutional pro- visions forbidding the local levy, the principle that the legisla- ture cannot validate what it could not authorize applies."^ 49 St. Joseph Township V. Rogers, 16 Vt. 648; Richmond, etc., R. R. Co. Wall. 644, 21 L. ed. 328; see Thomp- v. Commissioners, 84 N. C. 504. son V. Perrine, 103 U. S. 806, 26 L. ed. 51 Matter of Sackett, 74 N. Y. 95; 612. In Illinois the state constitu- Grim v. Weissenberg School District, tion does not permit the legislature 57 Pa. St. 433, 98 Am. Dec. 237 ; to validate void bonds so as to impose Tucker v. Justices, 34 Ga. 370 ; Matt- a liability upon the municipality with- ingley v. District of Columbia, 07 U. S. out its consent. Choisser v. People, 687, 24 L. ed. 1098. 140 111. 21, 29 N. E. Rep. 546; Taddis 52 Quaker City National Bank v. v. Richland Co., 92 111. 119. Nolan County, (36 Fed. Rep. 883, 14 60 Cooley on Taxation (2nd ed.), 302, C. C. A. 157, 30 U. S. App. 5, afiftrm- 303 ; see Commissioners v. Carter, 2 ing 59 Fed. Rep. 660. Kans. 115; Tunbridge v. Smith, 48 MAKING TAX DEEDS CONCLUSIVE EVIDENCE. 625 1266L Among the instances of unauthorized local taxation ■which has been validated by subsequent legislation are laws im- posing taxes to pay bounty to soldiers.^ Making a tax deed conclusive. 1267. Generally speaking, the legislative power is not com- petent to pass a curative act making a tax deed conclusive evi- dence of the holder's title. It may, no doubt, enact laws regu- lating evidence, but it cannot, under the pretext of regulating evidence, go so far as to make the deed or certificate of govern- mental officers conclusive evidence that those officers have com- plied with the jurisdictional requirements which are essential to the exercise of .the taxing power. Such legislation would be arbitrary confiscation of property, lacking the essentials of due process of law.^* ' 1268. Which are the jurisdictional matters as to which a tax deed may not be made conclusive evidence? The general prin- ciple was stated in an Iowa case^^ as follows: If any given step or matter in the exercise of the power to tax (as for example, the fact of a levy by the proper authority) is so indispensable, that, without its performance, no tax can be raised, then that step or matter, whatever it may be, cannot be dispensed with, and with respect to that the owner cannot be concluded from showing the truth, by a mere legislative declaration to that effect. In another Iowa case®* the essentials, in the case of the or- dinary sale of lands for the nonpayment of taxes, are said to be: 53 Bonney v. Eeed, 31 N. J. L. 133; Iowa, 439; Eeed v. Thompson, 58 Iowa, Grim v. Weissenberg School District, 455 ; Maguire v. Henry, 84 Ky. 1, 4 57 Pa. St. 433, 98 Am. Dec. 237. Am. St. Rep. 182; State v. Herron, 29 54 Marx V. Hanthorn, 1<<8 U. S. 172, La. Ann. 848; In re Douglass, 41 La. 37 L. ed. 410, 13 Sup. Ct. Rep. 508, Ann. 765, 6 So. Rep. 675; Baumgard- iiffirming 12 Sawy. 365, 30 Fed. Rep. ner v. Fowler, 82 Md. 631, 34 Atl. Rep. .579; Stoudenmire v. Brown, 48 Ala. 537; Quinlon v. Rogers, 12 Mich. 168; 699; Davis v. Minge, 56 Ala. 121; Groe.sbeck v. Seeley, 13 Mich. 329; Oliver v. Robinson, 58 Ala. 46 ; Stead- Case v. Dean, 16 Mich. 13 ; Virden v. man v. Planter's Bank, 7 Ark. 424; Bowers, 55 Miss. 1; Dingey v. Paxton, Briscoe v. Coulter, 18 Ark. 423; Cairo, 60 Miss. 1038; Abbott v. Lindenbower, etc., R. R. V. Parks, 32 Ark. 131; 42 Mo. 162, 46 Mo. 291; Ewart v. Clarke v. Mead, 102 Cal. 516, 36 Pac. Davis, 76 Mo. 129; Larsen v. Dickey, Rep. 862; Wantlau v. White, 19 Ind. 39 Neb. 463, 42 Am. St. Rep. 595, 58 470 ; White V. Flynn, 23 Ind. 46 ; Allen N. W. Rep. 107; Wright v. Cradle- v. Armstrong, 16 Iowa, 508; Adams v. baugh, 3 Nev. 341 ; Kelly v. Herrall, 10 Beale, 19 Iowa, 61; Corbin v. Hill, 21 Sawy. 161, 20 Fed. Rep. 364; Bannon Iowa, 70; McCreedy v. Sexton, 29 v. Burnes, 39 Fed. Kep. 892. Iowa, 356, 4 Am. Rep. 214; Powers v. S5 Allen v. Armstrong, 16 Iowa, 508. Fuller, 30 Iowa, 476; Martin v. Cole, 50 ircCready v. Sexton, 29 Iowa, 356, 38 Iowa, 141; Immegart v. Gorgas, 41 4 Am. Rep. 214. 40 626 CONSTITUTIONAL LAW OF TAXATION. (1) the listing and assessing of the property; (2) the levy of the tax upon the property in proportion to its value; (3) the tar warranty authorizing the collector to sell the property; (4) the saXe. Said the court: These are essential and jurisdictional, and every other provision of the revenue law may be said to be directory only, and not essential to the exercise of the taxing power. In Louisiana, the essential facts have been clearly stated to be i First, that a tax has been levied; second, that the property sold is subject to taxation; third, that the property has been assessed ; fourth, that the taxes had not been paid ; fifth, a statu- tory warrant for the sale ; sixth, a sale made under such warrant.*'^ 1269. The following are some of the facts as to Avhich it is held, pursuant to the foregoing principles, that the tax deed may not be made conclusive evidence : That the tax itself was valid ;°* that the property was actually assessed ;'*" that the grantee named in the deed was the purchaser at the sale ;^ that notice to redeem was duly given where the statute requires such notice ;^^ that notice of sale was duly given, where the statute requires such notice;®^ or that the power to sell had not been previously ex- hausted.*^ The listing of the lands of an individual to an " estate " is a defect as to which the deed may not be made con- clusive.^ 1270. It is well settled that the legislature may make a tax deed prima facie evidence of all such essential jurisdictional facts,*® and as appears from prior quotations, it may make the deed conclusive evidence of all matters which rest in mere ex- pediency — acts which need not havo been required in the first BT/ji, re Douglass, 41 La. Ann. 765, 6* Cromwell v. MacLean, 123 N. Y. 6 So. Rep. 675. 474, 25 N. E. Eep. 932. 58 Lufkin V. Galveston, 73 Tex. 340, 86 See cases cited supra, and Pillow 11 S. W. Rep. 340. V. Roberts, 13 How. 472, 14 L. ed. 228; 59 Abbott V. Lindenbauer, 42 Mo. De Treville v. Smalls, 98 U. S. 517, 162, 46 Mo. 291; Powers v. Fuller, 30 25 L. ed. 174; Keely v. Sanders, 99 Iowa, 476 ; Robinson v. First National U. S. 441, 25 L. ed'. 327 ; Sherry v. Bank, 48 Iowa, 354 ; In re Lake, 40 McKinley, 99 U. S. 496, 25 L. ed. 330 ; La. Ann. 142, 3 So. Rep. 479. Callanan v. Hurley, 93 U. S. 387, 23 «o Larsen v. Dickey, 39 Neb. 463, 42 L. ed. 931 ; Williams v. Kirtland, 13 Am. St. Rep. 595, 58 N. W. Rep. 167. Wall. 306, 20 L. ed. 683; Lamb v. 61 Miller v. Miller, 96 Cal. 376, 31 Gillett, 6 McLean, 365, Fed. Cas. No. Pae. Rep. 247 ; Reed v. Thompson, 56 8,012 ; Huntington v. C. P. R. R. Co., Iowa, 455, 9 N. W. Rep. 331. 2 Sawy. 503, Fed. Cas. No. 6,991; 62Marx V. Hanthorn, 148 U. S. 172, Jenkins v. McTague, 22 Fed. Rep. 37 L. ed. 410, 13 Sup. Ct. Rep. 508. 748; Thweat v. Black, 30 Ark. 732; 63Bannon v. Burnes, 39 Fed. Rep. O'Grady v. Barnishel, 23 Cal. 287; 892. Brunn v. Murphy, 29 Cal. 326; Weth- MAKING TAX DEEDS CONCLUSIVE EVIDENCE. 627 place, and which the legislature by a curative act may excuse when omitted, acts in which the public, rather than the taxpayer, is especially concerned.^* 1271. It has been held that the regularity of the proceedings at the sale, after the jurisdiction to sell has been acquired, is one of the matters as to which the tax deed may be made conclusive/''^ Following this principle, it is held that the tax deed may be made conclusive evidence that the sale was held at the place fixed by law ; that it was made for the amount of the tax due ; and also that the deed need not show for the taxes of what year it was sold ;®* and that the requirements of law as to selling in separate parcels were complied with ;^ that the officer making the sale had quali- fied by giving the statutory bond;™ that the formal process au- thorizing the sale was issued." And the failure to use the dollar mark in stating the amount of the tax where the statute requires it to be stated in dollars and cents ;'^ the failure of the assessors to sign the roll where they had sig-ned a certificate, M'hile the law required both the roll and certificate to be signed; erbee v. Dunn, 32 Cal. 106; Moss v. Shear, 25 Cal. 38, 85 Am. Dec. 94; Watson V. Atwood, 25 Conn. 313; Dickerson v. Aeosta, 15 Fla. 614; Sams V. King, 18 Fla. 557 ; Messinger v. Germain, 1 Gilm. 631 ; Milliken v. Pat- terson, 91 Ind. 515; Long v. Burnett, 13 Iowa, 28, 81 Am. Dec. 420; Clark V. Connor, 28 Iowa, 311; Genther v. Fuller, 36 Iowa, 604; Robinson v. First Nat. Bank, 48 Iowa, 354; Taylor V. Miles, 5 Kans. 498, 7 Am. Rep. 558; Bowman v. Cockrill, 6 Kans. 311 ; Hobson V. Button, 9 Kans. 477; Mor- rill V. Douglas, 17 Kans. 291; Garden- hire V. Mitchell, 21 Kans. 83; Coco V. Thieman, 25 La. Ann. 236; Orono V. Veazie, 57 Me. 517; Sibley v. Smith, 2 Mich. 486; Lacey v. Davis, 4 Mich. 140, 66 Am. Dec. 524; Baker v. Kelly, II Minn. 480; Hand v. Ballou, 12 N. Y. 541; Johnson v. Elwood, 53 N. Y. 431; Coleman v. Shattuck, 62 N. Y. 348; Turney v. Yeoman, 14 Ohio, 207 ; Stanbery v. Sillon, 13 Ohio St. 571 ; Woodward v. Sloan, 27 Ohio St. 592; Lee v. Jeddo Coal Co., 84 Pa. St. 74; Cook v. Pennington, 15 S. C. 185 ; McPhail v. Burris, 42 Tex. 142; Delaplaine v. Cook, 7 Wis. 44; Hart V. Smith, 44 Wis. 213. 66 See all cases cited supra, and es- pecially Marx V. Hanthorn, 148 U. S. 172, 37 L. ed. 410, 13 Sup. Ct. Rep. 508; S. C, 12 Sawy. 365, 30 Fed. Rep. 579; Allen v. Armstrong, 16 Iowa, 508; Ware v. Little, 35 Iowa, 234; Jeffrey v. Brokaw, 35 Iowa, 505; Gould V. Thompson, 45 Iowa, 450; Shawler v. Johnson, 52 Iowa, 473, 3 N. W. Rep. 604; Raley v. Guinn, 70 Mo. 273; Stewart v. Crysler, 21 Hun, 285. 67 Doughty V. Hope, 1 N. Y. 79; Tallman v. VThite, 2 N. Y. 66 ; Ensign V. Barse, 107 N. Y. 329, 14 N. E. Rep. 400, 15 N. E. Rep. 401; People v. Turner, 117 N. Y. 227, 15 Am. St. Rep. 498, 22 N. E. Rep. 1022; Joslyn v. Rockwell, 128 N. Y. 334, 28 N. E. Rep. 604; Larson v. Dickey, 39 Neb. 463, 42 Am. St. Rep. 595, 58 N. W. Rep. 167; McCready v. Sexton, 29 Iowa, 356, 4 Am. Rep. 214. eSLarsen v. Dickey, 39 Neb. 463, 42 Am. St. Rep. 595, 58 N. W. Rep. 167, overruling Haller v. Blaco, 10 Neb. 36, 4 N. W. Rep. 362; Howard v. Lancaster, 11 Neb. 582, 10 N. W. Rep. 497 ; Thompson v. Merriam, 15 Neb. 498, 20 N. W. Rep. 24; and Shelley V. Towle, 16 Neb. 194, 20 N. W. Rep. 251. 69Rima V. Cowan, 31 Iowa, 125. 70 Powers v. Penny, 59 Miss. 5. 71 Hurley v. Powell, 31 Iowa. 64. 72 Ensign v. Barse, 107 N. Y. 329, 14 N. E. Rpp. 400, 15 N. E. Rep. 401 ; American Tool Co. v. Smith, 14 Abb. N. C. 378, 90 N. Y. 670. 628 CONSTITUTIONAL LAW OF TAXATION. the use of the words " solvent creditor " where " solvent debtor " Avas required by statute and was obviously intended; the failure of assessors to make the required certificate within the time required by law; the failure to deliver notice for publication to the printer within the time fixed, are all cured by the tax deed." 1272. It was argued in some cases in Oregon, that a tax deed, issued under laws which made the deed conclusive evidence as to certain facts in the prior tax proceedings, constituted a contract between the purchaser and the state, the obligation of which was impaired by subsequent legislation making the deed prima facie evidence only of those matters. This view was approved in the Circuit Court for the District of Oregon.''* It was apparently disapproved by the Supreme Court of the United States, which did not, however, expressly decide the question.''® Statutes of limitation effectuating tax deeds. 1273. Although a tax deed may not be made conclusive evi- dence of title in itself, the legislature may enact statutes of limitation, fixing a reasonable time within which tax titles may be attacked, and making the titles (of persons in possession under such deeds) absolute after the expiration of that time, even though the defects of the tax title are jurisdictional in their nature.'® 1274. In one of the ISTew York cases just cited,''' the statute under consideration provided that a tax deed made by the state comptroller, after the lapse of two years from the date of its record, should be conclusive evidence of the regularity of all the proceedings in which the conveyance was made. The plaintiff in the case brought ejectment; the defendant, in possession, claimed under a tax deed which had been recorded for more than 73 Ensign v. Barse, supra. 786, 20 Sup. Ct. Eep. 042; Meigs v. 74 Tracy v. Reed, 13 Sawy. 622, 38 Roberts, 162 N. Y. 371, 56 N". E. Rep. Fed. Rep. 69, 2 L. R. A. 773; Marx v. 838, 76 Am. St. Rep. 322; People v. Hanthorn, 12 Sawy, 373, 30 Fed. Rep. Francisco, 76 App. Div. (N. Y.) 262, 579. 78 N. Y. Supp. 423; Crisman v. Johii- 75 Marx V. Hanthorn, 148 U. S. 172- son, 23 Colo. 264, 47 Pac. Rep. 296, 181, 37 L. ed. 410, 13 Sup. Ct. Rep. 58 Am. St. Rep. 224; Virginia Coal 608, citing Rich v. Flanders, 39 N. H. Co. v. Thomas, 97 Va. 527, 34 S. E. 304; Howard v. Moot, 64 N. Y. 262; Rep. 486; see also In re Brown, 135 Kendall v. Kingston, 5 Mass. 524; U. S. 701, 705, 707, 34 L. ed. 304, Commonwealth v. Williams, 6 Gray, 10 Sup. Ct. Rep. 972; Terry v. Ander- 1; Goshen v. Richmond, 4 Allen, 458. son, 95 U. S. 628, 632, 633, 24 L. ed. 76 Turner v. New York, 168 U. S. 365. 90, 42 L. ed. 392, 18 Sup. 'Ct. Rep. 38; 77 Meigs v. Roberts, 162 N. Y. 371, Saranac Lake and Timber Co. v. 56 N. E. Rep. 838, 76 Am. St. Rep. Comptroller, 177 U. S. 318, 44 L. ed. 322. MAKING TAX DEEDS CONCLUSIVE EVIDENCE. 629 two years; the plaintiff said that the tax deed was void by reason of jurisdictional defects; the defendant relied upon the statute M'hich made the tax deed conclusive evidence of regularity after the lapse of two years, and the plaintiff asserted that the legis- lature had no power thus to cure jurisdictional defects. Upon the issue thus presented, Judge Cullen, speaking for the Court of Appeals, said: This statute, though in some aspects a curative law, is pri- marily and essentially much more; it is a statute of limitation. It was distinctly held to be such in two decisions of this court™ and by the Supreme Court of the United States.™ A curative act in the ordinary sense of that term, is a retrospective law acting on past cases and existing rights. The power of the legislature to enact such laws is, therefore, confined within comparatively nar- row limits, and they are usually passed to validate irregularities in legal proceedings or to give effect to contracts between parties which might otherwise fall for failure to comply with technical legal requirements. A very full enumeration of the cases in which the legislature may properly exercise this power is to be found in Forster v. ForsterP But there may be in legal pro- ceedings defects which are not mere informalities or irregulari- . ties, but so vital in their character as to be beyond the help of retrospective legislation; such defects are called Jurisdictional. This principle does not apply to a statute of limitations, for such. a statute will bar any right, however high the source from which it is deduced, provided that a reasonable time is given to a party to enforce his right. 1275. The JSTew York Court of Appeals in this case probably went as far as any court will ever go in the direction of upholding such statutes. Earlier (but recent) expressions of the same court contained intimations, at least, that jurisdictional defects were not cured by quite similar statutes. ^^ And one of the New Fork Appellate Divisions, after the decision quoted, said that the Court of Appeals could not have intended to liold that such a statute operated to make the tax deed conclusive as to defects which rendered the sale absolutely void.^^ Judge Kellogg there said: 78 Citing People v. Turner, 117 401; Joslyn v. Rockwell, 128 N. Y. X. Y. 227, 15 Am. St. Rep. 498, 22 334, 28 N. E. Rep. 604. N. E. Rep. 1022, 145 N. Y. 451, 40 82 Wallace v. International Paper N. E. Rep. 400. Co., 53 App. Div. 41, 65 N. Y. Supp. T9 Turner v. New York, 168 U. S. 90, 543, holding that the limitation only 42 L. ed. 392, 18 Sup. Ct. Rep. 38. runs in favor of those deeds which 80 129 Mass. 559. the •comptroller was authorized to 81 See Ensign v. Barse, 107 N. Y. execute. 329, 14 N. E. Rep. 400, 15 N. E. Rep. 630 CONSTITUTIONAL LAW OF TAXATION. And still I do not believe that the court of last resort meant to declare that a short statute of limitations could create a title, could make an unauthorized deed, a deed absolutely void in its inception, a conclusivelv valid one. In other words, I do not think the court intended to declare that the comptroller might deed to John Doe the Capitol at Albany under the form of a tax deed, and after the lapse of a year fronl the date of record of the deed, unless some action was taken, that the deed would be con- clusive evidence of title. Nor would a comptroller's deed of property, against which no tax was ever levied, be at any time good. 1276. Prior to the recent United States Supreme Court de- cisions cited in section 1273 the general trend of authority seems to have been in favor of the narrower doctrine which limited the legislative power in the enactment of statutes of limitation to quiet- ing titles in which there were nonjurisdictional defects.^^ 1277. In discussing Meigs v. Roberts^* emphasis was laid on the fact that the defendant icas in possession, relying on the tax deed and the staiuie of limitations. A statute of limitations, even though it bars every action, however " high its source," it must be remembered, only hars actions and does not create rights. No statute, operating as a statute of limitations merely, can force a man in possession of what he claimsas his full rights to bring an action to ward off some attack which he may suppose will be made. Therefore it has been held by what seems to be sound sa See Radcliffe v. Scruggs, 46 Ark. void sale. The point to be noticed in 96-106; Pursley v. Hayes, 22 Iowa, this case is that the defendant, the 11, 92 Am. Dee. 350; Boyles v. Boyles, purchaser at the sale, icas in posses- 37 Iowa, 592; Feller v. Clark, 36 Minn, sion under his tax deed. The differ- 338, 31 N. W. Rep. 175 ; Kipp v. Fern- ence between this case and the Su- hold, 37 Minn. 132-134, 33 N. W. Rep. preme Court cases and the New York 697 ; Smith v. Kipp, 49 Minn. 119, case of Meigs v. Roberts, supi-a, is in 51 N. W. Rep. 656; Lembeck v. Jersey the different view which was taken of City, 30 N. J. Eq. 554; Alexander v. the legislative power to enact statutes Gordon, 41 C. C. A. 228, 101 of limitation. The Federal Supreme Fed. Rep. 91, 4th Circuit; but see Court states its view succinctly as fol- Woolfork v. Buckner, 60 Ark. 163-167, lows: "The law is like any other 2fi P. W. Rep. 372. In this last case statute of limitations. It is not af- the decision was that an Arkansas fccted by what the rights of the plain- statute (somewhat similar to that of tiff in error ivere. JS^hatcver they New York) which provided that no uyere their remedy is gone, and the suit for the recovery of lands sold title and possession of the state, what- for taxes should be maintained unless ever may have been the defects in the the purchaser was seized or possessed proceedings of which they are the of such lands within two years next consummation, cannot now be dis- preceding the commencement of such turbed." Saranac, etc., Laud Co. v. action, while it might be given effect Comptroller of New York, 177 U. S. to protect the title of the purchaser 318, 48 L. ed. 786, 20 Sup. Ct. Rep. from attack on account of mere ir- 642. regularities, could not operate to pro- 84 Supra. tect the purchaser at an absolutely MAKING TAX DEEDS CONCLUSIVE EVIDENCE. .631 reasoning that as to an owner in possession, even though his pos- session be only constructive, a limitation law cannot force him to resort to legal proceedings in defense of his title. ^^ The contrary has been held in Wisconsin.^® Where such a statute is relied upon as a defense it must be specially pleaded, like any other statute of limitations.^^ 1278. The distinction between curative acts and statutes of limitation, stated in Meigs v. Roberts, supra,^ was quite strongly •emphasized in a more recent case where a statute, ojierating retro- spectively, and purporting to make a tax deed conclusive as to certain jurisdictional matters, was held to be beyond the legis- lative power, because as to those matters the statute of limitations gave no opportunity to be heard. The statute was quite like those considered in the earlier New York cases, and its material parts were as follows : The " con- veyances " referred to were tax deeds : Every such conveyance heretofore executed . . . which have for two years been recorded in the office of the clerk of the county . . . shall he conclusive evidence that the proceed- ings prior thereto, from and including the assessment of the lands, and all notices required by law to be given previous to the expiration of the time allowed for redemption, were regular and vrere regularly given, published, and served according to the pro- visions of all laws directing and requiring the same or in any manner relating thereto, but all such convevanees and certificates, and the taxes and tax sales on which they are based, shall be subject to cancellation, by reason of the payment of such taxes, or by reason of the levying of such taxes by a town or ward having no legal right to assess the land on which they are laid, or by reason of any defect in the proceedings affect- ing the jurisdiction on constitutional grounds, on direct applica- tion to the comptroller, or in an action brought before a com- petent court therefor; provided, however, that such application 85Groesbeck v. Seeley, 13 Mich. 29; Black (U. S.), 599, 17 L. ed. 261, has Oase V. Dean, 16 Mich. 12; and see sometimes been cited as an authority •the remarks of Peekham, J., in Jos- for the same position. It is not sucli lyn V. Rockwell, 128 N. Y. 334, 28 an authority for two reasons: (1) N. E. Eep. 604, and Cooley's Const. The United States Supreme Court in Lim., p. 366. In Meigs v. Roberts, tliat case only professed to follow supra, the court said : " It is ques- the decisions of the highest court of tionable whether as to an owner in Wisconsin; (2) the defendant was in actual possession of land the record possession, relying on the tax deed. •of a hostile conveyance in the clerk's 87 Nehasane Park Association i . oflSce is sufficient to set a statute of Lloyd, 167 N. Y. 431, 60 N. E. Rep. limitations running against him so 741. as to destroy his title. 88 162 N. Y. 371, 76 Am. St. Rep. 86 Hill V. Kricke, 6 Wis. 442. The 322, 56 N. E. Rep. 838. •case of Lefftngwell v. Warren, 12 632 CONSTITUTIONAL LAW OF TAXATION. shail lie made, or such action irought, in the case of all sales held prior to 1895 within one year from the passage of this act; and in the case of the sale of 1895 and of all sales hereafter held,, that such application shall he made, or such action brought, within five years from the expiration of the period allowed hy law for the redemption of lands sold at the particular sale sought to he canceled.^ 1279. It is to be observed that, in its retrospective efFect, this act made tax deeds recorded for more than two years before its passage, ahsolutely conclusive, except that the owner might have one year after the passage of the act within which to apply to cancel the same (1) by reason of the payment of the taxes, (2) by reason of the levy of the taxes by a town or ward having no legal right to assess the land, or (3) by reason of any defect in the proceedings affecting the jurisdiction on constitiitional grounds. But for any defect, jurisdictional or otherwise, not included in these three grounds the ov:ner of property ivhich had been sold and the tax deed recorded more ihan two years before, had abso- lutely no remedy; as to all such defects the act, operating retro- spectively, made the deed conclusive. 1280. The case cited was an action for partition of lands brought after the passage of the statute. The plaintiffs claimed under the former owner, whose land had been sold for the non- payment of taxes. The defendant claimed under a tax deed dated in 1886, and recorded in 1887, nine years before the passage of the statute. The plaintiff proved that the reason the taxes in question had not been paid was that, in 1886, within the time allowed for redemption, his predecessor in title had applied for a statement of all the taxes due, and had received from the comptroller a statement purporting to show all taxes due on the lands ; and had paid all the taxes shown by such statement. The taxes for which the land was sold and the deed issued were not mentioned in such statement, although due at the time. This defect was sufficient, under the New York decisions, to. invalidate the sale.®" But inasmuch as the deed had been recorded more than two years, and more than a year had elapsed since the passage of the statute, the lower courts held that the tax deed was conclusive and gave judgment for the defendants. 89 Laws of 1896, chap. 908, § 132, X, Y. 150; People ex rel. Cooper v. being § 132 of tlie Tax Law. Refjistrar of Arrears, 114 N. Y. 19 80 Van Benthuysen v. Sawyer, 36 20 JSf. E. Rep. 611. CUEIITG DEFECTS BY REASSESSMENTS. tio^J 1281. Eut the Court of Appeals reversed the judgment of the lower courts, and held that, as the defect proved in the sale was neither (1) that the taxes had been paid, nor (2) that the town or ward had no legal right to assess the land, nor (3) a defect affecting the proceeding on constitutional grounds, the act of 1896 had attempted to cut off the o\\Tier's right without giving him any opportunity at all to assert it. Hence the act, in so far a? it made the tax deed conclusive as to jurisdictional defects, was void as a curative act; and, as it gave no time at all, after its passage, to seek a cancellation of the sale on any grounds except the three grounds enumerated, it was void as a statute of limi- tations.** 12810-. The constitution of Louisiana provides that tax sales shall not be set aside for any cause except dual assessment or proof of payment of taxes before the sale, unless the proceeding to annul be brought within six months after the notice of sale, or within three years after the adoption of the constitution as to sales there- tofore made, or within three years from date of recording tax deed, in cases where no notice of sale is served.®^ This three years' limitation as to prior sales is held to be due process of law.«^ Reassessments. 1 282. The general rule with respect to curative acts applies to reassessments, that is to say, where an assessment or tax is void because of irregularity, or the omission of some vital act in the process, in fact, in any case in which the legislature might origi- nally have levied the tax, the legislature may reassess it. 1 283. A most instructive case, illustrating to the fullest extent the legislative power in this respect, is the New York case of Spencer v. Merchant^* affirmed in the United States Supreme Court. ®^ Here there had been a previous assessment of certain lots for a street improvement, which assessment had been held void because the law under which it was made gave no notice or oppor- tunity to be heard to the property owners.*® Some of the assess- ments had been paid before this decision. After the decision all the other assessments were canceled. 91 Wallace v. McEcheron, 176 N. Y. 93 Ashley Co. v. Bradford, 109 La. 424 68 N. E. Rep. 663, reversing 641, 33 So. Rep. 634. Wallace v. International Paper Co., 9* 100 N. Y. .585, 3 N. E. Rep. 682. 84 App. Div. 88, 82 N. Y. Supp. 556. 95 125 U. S. 345, 31 L. ed. 763. 8 92 Art. 233, quoted in § 1192 of this Sup. Ct. Rep. 1)21. •ivork 96 Stuart v. Palmer, 74 N. Y. 183, 30 Am. Reo. 289. 634 CONSTITUTIONAL LAW OF TAXATION. Subsequently the legislature, by statute, imposed the unpaid portion of the cost of the improvement, with the interest thereon, iipon those lots included within the limits of the original assess- ment, upon Avhich that original assessment had not been paid. The lots thus assessed were isolated parcels, not contiguous, and some of them not fronting upon the street. In this reassessment notice and hearing were given as to the apportionment of the burden among the lots assessed. Among the objections made to the. reassessment was that " it was an unconstitutional attempt made by the legislature to validate a void assessment." The principal bases of this contention seem to have been that the property owTiers thus assessed were given no notice and opportunity to be heard as to the apportionment of the burdens of the improvement as hehveen them and the other property owners who had paid the void assessment and that the effect of the whole proceeding was practically to do by reassess- ment the identical wrong which had tainted the original assess- ment. 1284. It was held, both in the Supreme Court of the United States^^ and in the IsTew York Court of Appeals®^ that the reassessment was within the legislative power, that it was prac- tically a new assessment, that the legislature in the exercise of its power to fix the taxing district, and the amount of the tax, and to determine the fact of benefits, had the power even to assess such isolated parcels and to determine the gTOss amount of benefit to be exactly the sum which remained unpaid on the previous void assessment, with interest. The dissenting judges described the whole act as an evasion. These decisions show the legislative power of reassessment in its widest scope. They make that power entirely coextensive with the original power to assess. It is not likely that the power of reassessment will be carried farther than it has thus been carried. 1285. In the Matter of Van Antwerp/^ an asse^.-raent for street improvements had been made, which was concededly in- valid because of the failure to procure certain consents of prop- trty owners, which consents were made necessary by law. After this assessment had been made the legislature enacted that one- third of the cost of the improvement should be borne by the city 97 Justices Matthews and Harlan 9S Judges Rapallo and Earl dissent- dissenting, ing. 99 56 N. Y. 261. CUEING DEFECTS BY REASSESSMENTS. 635 and that two-thirds should be a lien on the land in the districts of assessment, " and two-thirds and no more of said several assess- ments . . . is hereby levied on the several pieces of land and premises within said several and respective districts, a7id in the ^lanie proportions in which the same has heen already assessed and ■avvortiotved therein as aforesaid, levied as a tax to be collected and applied by said city." This act was upheld, the court saying, among other things : " It is also objected that it is not competent for the legislature to validate a void assessment, and that it could only authorize a reassessment. The answer to this is that the legislature did not attempt to legalize the old assessments, but itself exercised the power to make new assessments. The old assessments are referred to, not for the purpose of adoption, hut for the purpose of fixing the specific amount by the proportion specified." The language italicised shows the difference, more metaphysical than real, between attempts to validate void assessments, and levying reassessments. The cases cited in the note support the propositions laid down in the cases just considered, as to the legislative power to make reassessments retrospectively.-^ ' 1 286. When an assessment is void because levied for some pri- vate "or illegal purpose,^ such, for instance, as a purpose prohibited by the state constitution,* of course no reassessment can cure the defect, for every reassessment is subject to the same objection. But if the tax was void merely for want of legislation to authorize it, it may be reassessed after appropriate legislation has been had.* 1 Richman v. Supervisors, 77 Iowa, Donley v. City of Pittsburgh, 147 Pa. 513, 14 Am. St. Rep. 308, 42 N. W. St. 348, 30 Am. St. Rep. 738, 23 Atl. Rep. 42-2, 4 L. R. A. 445; West Chi- Rep. 394; Whitney v. City of Pitts- cago Park Commissioners v. Farber, burgh, 147 Pa. St. 351, 30 Am. St. 171 111. 146, 40 N. E. Rep. 427; Lom- Rep. 740, 23 Atl. Rep. 395; Harris- bard V. West Chicago Park Commis- burgh v. MeCormiek, 129 Pa. St. 214, sioners, 181 U. vS. 33, 45 L. ed. 731, 21 18 Atl. Rep. 126; Chester City v. Sup Ct Rep. 507; Cummings v. West Black, 132 Pa. St. 569, 19 Atl. Rep. Chicago Park Commissioners, 181 111. 276, 6 L. R. A. 802. 136, 54 N. E. Rep. 941 ; Brevoort v. 2 Dean v. Charlton, 23 Wis. 590, 99 Detroit, 24 Mich. 322 ; Bryam v. De- Am. Dec. 205 ; Dill v. Roberts, 30 Wis. troit, 50 Mich. 56, 12 N. W. Rep. 912, 178; Plumer v. Supervisors, 46 Wis. 14 N. W. Rep. 098; Warren v. Boston, 163, 50 N. W. Rep. 416; Emporia v. Mass. , 72 N. E. Rep. 1022; Norton, 13 Kans. 569. Lord V. Bayonne, 36 Vr. (65 N. J. L.) 3 Dean v. Borchsenius, 30 Wis. 236. 127. 46 Atl. Rep. 701; Howard * Mills v. Charlton, 29 Wis. 400, 9 Savings Inst. v. Newark, 23 Vr. Am. Rep. 578; May v. Holdridge, 23 (52 N. J. L.) 1, 18 Atl. Rep. 072; Wis. 93. In Wisconsin, when a tax is Lang V. Kiendl, 27 Hun, 66 ; Not- set aside for a jurisdictional defect, a tage V. Portland, 35 Oreg. 539, 76 reassessment is had under judicial Am. St. Rep. .513, 58 Pac. Rep. 883; supervision. Bradley v. Lincoln Co., 636 CONSTITUTIONAL LAW OF TAXATION. Reassessments by subordinate bodies may be authorized. 1 287. The legislature may not only directly reassess the amount of an invalid tax or assessment but it may also authorize it to be done by a subordinate body. This was done in an Iowa case^ where the amount of a levee assessment, which had been held to be void because the necessary petitions of a majority of the property owners had not been obtained,® was directed to be assessed, by the local board of supervisors, " upon the lands in said counties bene- fited by location and construction of the said levee, in proportion to the amount of benefit to said lands respectively. Said hoards shall take as the basis for such reapportionment and reassessment the lists or schedides of lands in their respective counties hereto- fore assessed hy them for said levy as henefited thereby." Pro- vision was made for notice and hearing upon the questions of benefit and apportionment and it was provided that credit should be given upon the amount of the reassessment to anyone who had paid the old assessment, to the extent of his payment. This act was upheld as a valid exercise of legislative power. In a Mary- land case, where counsel in argument urged, against the validity of a law, the proposition that " our legislature has not undertaken to make the assessment here as was done by the New York legisla- ture in Spencer v. Merchant,"'^ it was expressly held that the legis- lature may authorize the reassessment by any subordinate body to which the power to make the original assessment might have been delegated.* 1 288. Reassessments of taxes proper, as well as of special assess- ments, are within the legislative power ; and that power, like other curative powers, may be exercised generally by prospective stat- 60 Wis. 71, 18 N. W. Rep. 732; Wood- quired by a statute as a condition of ruflF V. Depew, 60 Wis. 128, 18 N. W. relief from a void assessment, or Rep. 761. The legislature has power where the property is exempt from to provide that in actions to avoid taxation, or the tax has in fact been taxes, where the court is of the opin- paid. Plumer v. Supervisors, supra. ion that the tax should be avoided 5 Richman v. Muscatine County for reasons affecting its groundwork. Supervisors, 77 Iowa, 513, 14 Am. St. there shall be a stay of proceedings Rep. 308, 4 L. R. A. 445, 42 N. W. Rep. until a reassessment shall be had, and 422. that the plaintiff shall be required, as 6 Richman v. Muscatine County .L condition of relief, to pay the just Supervisors, 70 Iowa, 627, 26 N. W. iimount of his tax. to be ascertained Rep. 24. by reassessment. Plumer v. Super- ^ 100 N. Y. 585, 3 N. E. Rep. 682. visors, 46 AVis. 163, 50 N. W. Rep. 8 Mayor, etc., of Baltimore v. Uhl- 416; Warden v. Supervisors. 14 Wis. man, 79 Md. 469, 30 Atl. Rep. 43; see 618; Kellogg v, Oshkosh, 14 AMs. 623; also JIatter of Hollister, 96 App. Div. Myrick v. La Crosse, 17 \Ais. 442; .iOl, 85 X. Y. Supp. 518; afiixmed, 180 Howes V. Racine, 21 Wis. .il4. Rut a N. \^ 518, 72 N. E. Rep. 1143. reassessment or paymeni cannot be re- EEASSESSMENTS TO INCLUDE OMITTED PKOPEKTY. 637 utes which provide a general scheme of reassessments in ease of defective original assessments.® 1 289. An act validating a void assessment in a municipality is contrary to the provision of the California constitution which denies to the legislature power to impose taxes in municipalities.-'* Assessing omitted property. 1290. Some decisions have been made, involving the question of what is due process of law, in cases where property has escaped assessment and the legislature has provided means for the collec- tion of the taxes for the years in which it has escaped. In these decisions, as in those upon other branches of the subject, the reluc- tance of the Federal courts to interfere with the tax systems of the states, and the willingness of the state courts to enforce the require- ments of due process of law, are both clearly apparent. 1291. The recent case of Florida Central, etc., Railroad Co. v. Reynolds^^ was one where the decision turned upon the clause which guarantees the equal protection of the laws rather than upon the requirement of due process of law. However, the case may be considered as authority for the proposition that due process of law does not prevent a state from reaching backward and assessing and collecting taxes upon property (or persons) omitted from the assessment-rolls in prior years, either through lack of statutory provision therefor, or in consequence of a misunderstanding of the law, or from the neglect of administrative oificials.'^ 9 Kaehler v. Dobberpuhl, Town v. Winona and St. Peter Land Co., 40 Treasurer, 56 Wis. 480, 14 N. W. Rep. Minn. 512, 41 N. W. Rep. 465, 42 644. N. W. Rep. 473; see State v. Winona 10 Brady v. King, 53 Cal. 44 ; Taylor and St. Peter Land Co., 41 N. W. Rep. V. Palmer, 31 Cal. 240; People r. 465; State v. Certain Lands in Red- Lynch, 51 Cal. 15, 21 Am. Rep. 677; wood County, 42 N. W. Kep. 473; .Schumaker v. Toberman, 56 Cal. 508; London v. Hope, 26 Ky. Law Rep. Fanning v. Sehammel, 68 Cal. 428, 9 112, 80 S. W. Rep. 817; Harwood Pac. Rep. 427; Kelly v. Luning, 76 v. North Brookfield, 130 Mass. 561; Oal. 309, 18 Pae. Rep. 335. People ex rel. Brooklyn City R. R. Co. 11 183 U. S. 471, 46 L. ed. 283, 22 v. The Board of Assessors of Brooklyn, Sup. Ct. Rep. 176, the same case in 92 N. Y. 430; Wheeling v. Hawley, 18 the state court passed through three W. Va. 472; South Nashville St. Ry. appeals, Bloxham v. Florida Cent. Co. v. Morrow, 87 Tenn. (3 Pickle) R. R. Co., 35 Fla. 625, 17 So. Rep. 406, 11 S. W. Rep. 348, 2 L.' R. A. <)02; ibid., 39 jLua. 243, 22 So. Rep. 853; State v. Whitworth, 8 Lea, 594; 697; Reynolds v. Florida Cent. R. R. Shelby County v. Miss, and Y. R. Co., 42 Fla. 387, 28 So. Rep. 861. Co., 16 Lea, 401, 1 S. W. Rep. 32; see 12 The same general proposition is Buck v. Miller, 147 Ind. 586, 45 N. E. supported by Winona and St. Peter Rep. 647, 47 N. E. Rep. 8, 62 Am. Land Co. v. Minnesota, 159 U. S. 526, St. Rep. 436, 37 L. R. A. 384; State 40 L. ed. 247, 16 Sup. Ct. Rep. 83, ex rel. Davis and Starr Lumber Co. v, reported below as Redwood County Pors, 107 Wis. 420, 83 N. W. Rep. 70C, 638 CONSTITUTIONAL LAW OF TAXATION. And although property which has escaped assessment has passed out of existence before steps are taken to reach it for taxation, it may nevertheless be assessed. ^^ In some Maryland cases it is held that property which has been omitted from the rolls may be placed on the rolls by the assessors- at any time during the current year, although the date of assess- ment fixed by the statute has gone by.-'* 1292. In Virginia the following constitutional provision exists with respect to omitted property: After this constitution shall be in force (1902), no statute of limitation shall run against any claim of the state for taxes upon any property ; nor shall the failure to assess property for taxation, defeat a subsequent assessment for and collection of taxes for any preceding year or years, unless such property shall have passed to a iona fide purchaser for value, \?ithout notice, in which latter case the property shall be assessed for taxation against such purchaser from the date of his purchase.** Reassessments of undervalued property. 1293. The undervaluation of property cannot be distinguished in principle from its total omission from the roll, and the legisla- tive power is competent to provide for reassessments to include- such undervalued property at its true value. -"^ 1294. In Weyerhauser v. Minnesota^'' the appellant endeav- ored to distinguish reassessments for undervaluation from reas- sessments to include omitted property by reason of the fact that " the former assessments constituted judicial judgments, and hence to commit to the executive the power of setting them aside or to set them aside without notice or opportunity to be heard is not due process of law." The court replied to 51 L. R. A. 917. It has been held 15 § 174. that a law for the assessment of prop- 18 Weyerhauser v. Minnesota, 176- erty omitted in past yeai-s was invalid, U. S. 550, 20 Wui. Ct. Rep. 485, 44 in so far as it provided a penalty. L. ed. 583, affiiming State v. Weyer- Muir V. Bardstown, 27 Ky. Law Rep. hauser, 68 Minn. 353, 71 N. W Rep 1150, 87 S. W. Rep. 1096. 265; Gallup v. Schmidt, 183 U. S. 13 State ex rel. Davis v. Starr 300, 46 L. ed. 207, 22 Sup. Ct. Rep. Lumber Co. v. Pors, 107 Wis. 420, 83 162, affirming 154 Ind. 196, 56 N. E. N. W. Rep. 706, 51 L. R. A. 917. Rep. 443; Louisville and N. R. R. v. 1* Baltimore, etc., Ry. Co. ^. County State, 8 Heisk. 790; i--i.ate v. Nashville Commissioners of Wicomico County, Sav. Bank, 16 Lea, 114: oouth Nash- 93 Md. 113, 48 Atl. Rep. 853; Ameri- ville Street Ry. Co. v. Morrow. 87 can Coal Co. v. County Commissioners Tenn. (3 Pickle) 406. 11 S. W. Rep> of Allegnnv Coiintv, •'"if) Md. 185; Hop- 348, 2 L. 1!. A. 853; State v. Northern kins V. Van Wyck, 80 Md. 7, 30 Atl. Belle Hill and Min. Co., 15 Nev. 385; Rep. 556 ; State v. liorner, 34 Md. Simmons v. Aldrich, 41 Wis. 250. 569. 1'? Supra. NOTICE IN CASE OF EBASSESSMENTS. 639 this argument by conceding, arguejido, that the former assess- ments were judicial judgments, and pointing out that the statute there provided for an orderly course of inquiry, report, entry upon the assessment books, assessment by the assessor, and an action for the collection of the taxes levied in the r^ular judicial tribunals.** 1295. Whenever a reassessment of any kind is made, -whether to validate a void assessment or to reach omitted property, or to secure a revaluation of property undervalued or overvalued, there is the same necessity for notice and hearing as in the case of an original assessment. ■'■^ In the New York case cited^ an assess- ment was invalid because lands were assessed to the nonresident owner instead of the occupants. The state comptroller, as he was bound to do, canceled the assessments; and, under author- ity of a statute which did not provide for notice and hearing, reassessed the lands to the occupants. The reassessment was held to be void as to the occupants, for lack of notice and hearing, and the statute was limited in its application accordingly. 1296. In some cases arising in Indiana the statute under con- sideration provided, that if the person claiming to own the omitted property, " or occupying it or in possession thereof, resides in the county and is not present, he (the assessor) shall give such person notice, in writing, of his intention to add such property to the tax duplicate." In one case, where one of the persons who owned or was in possession of the omitted property was in the county, and had received the statutory notice, and the other, a nonresident, had received actual notice, the claim was made that the taxing oiBcer did not acquire jurisdiction. It does not appear what the ground of the claim was, although it may be inferred that it was that the law did not provide for notice and hearing to nonresidents. The court referred to the contention as idle, and, without any definite statement of reasons, said: 18 Much in the opinion in Adams v. w People ex rel. Barnard v. Wemple, Tonella, 70 Miss. 701, 14 So. Rep. 17, 117 N. Y. 77, 22 N. E. Rep. 761; 22 L. E. A. 346, is in conflict with Myers v. County Commissioners, 83 these views. The only proposition nee- Md. 385, 35 Atl. Rep. 144, 55 Am. St. essary to the decision of that case was Rep. 349, 34 L. R. A. 309 ; Adams v. that the legislature could not devolve Tonella (or Revenue Agent v. Tonella), the duty of assessment upon the state 70 Miss. 701, 14 So. Rep. 17, 22 L. revenue agent, under the state con- R. A. 346. stitution. ^^ People ex rel. Barnard v. Wemple, supra. 640 CONSTITUTIONAL LAW OF TAXATION. The assessment officer is not required to go outside his own county to give notice to anyone of his intention to assess omitted property.^^ 1297. In another ease a nonresident executor (of a decedent who had been a resident) who had received actual notice of a reassessment, sought to evade the reassessment upon the express ground that the law did not provide for notice to nonresident owners of reassessed property. The Supreme Court of Indiana held that this proposition was unavailing as to him, because, being an executor appointed by a domestic court of probate, he was " an official resident," and therefore within the express terms of the law.^^ On writ of error from the Supreme Court of the United States it was held that the Supreme Court was bound by the state court's decision that the plaintiff was a resident; and after referring to the opinion of the Indiana court, showing that after the assessment the taxpayer might still contest the matter in the courts, the Supreme Court pointed out that in the case at bar the taxpayer had actually appeared in the courts and contested. The judgment was therefore affirmed.^ 1298. If a case should arise where such an assessment was levied on a nonresident property owner, without actual notice, under such a statute providing for no kind of notice of the re- assessment, it is to be doubted whether the statute would be up- held. It does not seem that the right to contest the assessment in the courts, when there has been no notice of the existence of any assessment to contest, would be sufficient in such a case to bring the statute within the requirements of due process of law. Arrearages acts. 1299. In some New York cases the legislative power to enact laws providing for a general equitable readjustment of unpaid taxes was considered. Prior to 1883 a large amount of taxes, assessments, and water rates were in arrears in the city of Brook- lyn. They had accumulated to an amount exceeding ten million dollars, and the validity of some of them was in question. A great many taxpayers, of course, had paid their proportion of these taxes, assessments, and water rates for those years — the unpaid taxes, etc., for which constituted the amount in arrears. 21 Buck V. Miller, 147 Ind. 580, 45 =2 Gallup v. Schmidt, 154 Ind. 196, N. E. Eep. G47, 47 N. B. Rep. 8, 62 56 N. E. Rep. 443. Am. St. Eep. 436, 37 L. R. A. 384. 23 Gallup v. Schmidt, 183 U. S. 300, 46 L. ed. 207, 22 Sup. Ct. Rep. 162. ACTS ADJUSTING ARREARAGES. 641 Under these circumstances the ISTew York legislature enacted^* a law the purpose of which was to determine, as to each parcel of land upon which there were arrears, how much of such arrears ought, in fairness and justice, to be charged on the land, without regard to any defect or irregularity, jurisdictional or otherwise, in the original proceedings. The act directed that the local board of assessors should publish a general notice requiring the owners of all lands affected by arrearages, and all other persons having an interest. in or lien on the lands, to present their objec- tions to the reduction or remission of any such arrears to the board. Provision was made for a hearing upon such objections. The board was authorized then to determine the amoimt to be charged on each parcel of land; and such amount was made a charge on the lands in lieu of all prior taxes, assessments, and arrears. It was held, without any particular discussion of the prin- ciples upon which the decisions were based, that the act was within the legislative power in dealing with the collection of taxes.^^ 1300. Upon the question of apportionment, it was said that, It is not seen that there was any apportionment provided for in the act violative of any constitutional right. It was not within its contemplation or purpose to levy taxes for city charges upon a portion only, or less than the whole, of the taxable prop- erty in the city, nor was such its legitimate effect. But by it provision was made to deal with and adjust, upon a fair basis for collection, taxes in arrear only. Those assessed and levied upon other lands during the period referred to had been paid. The burden of the taxes so in arrear was thus properly as well as equitably upon the property which had escaped the payment of those before then levied and attempted to be levied upon it. This was within the taxing power of the state.^* It does not clearly appear whether the question of apportion- ments here presented was, had the legislature power to direct this reapportionment of arrearages among the taxpayers in arrear ; or, had the legislature power to reduce the taxes already levied as between those in arrear and those who had paid? 24 Chap. 14, Laws of 188.3. Wheeler, 125 in. Y. 696, 26 N. E. Rep. 25 Terrell v. Wheeler, 123 N. Y. 76, 141; Martin v. Stoddard, 127 N. Y, 33 N. Y. St. Rep. 404, 25 N. E. Rep. 61, 27 N. B. Rep. 285. 329 ; Lamb v. Connolly, 122 N. Y. 26 Lamb v. Connolly, supra. 531, 25 N. E. Rep. 1042; Fithian v. 41 CHAFTEE XVm. EQUALITY AND UNIFORMITY, GENERALLY. 1300a. In ckapter I of this work, endeavor is made to show that equality is the basic principle of all the constitutional law of taxa- tion. In this and subsequent chapters equality in taxation is dis- cussed concretely, with reference to particular constitutional lim- itations and particular cases. 1301. Equality in taxation is presented to the student in three- aspects, two of which are, to an undetermined extent, foi-ms of the other. There is first the equality which is inherent in the idea of taxation, then the equality which is commanded in the state con- stitutions in the various provisions for equality and uniformity of taxation, and finally the equality which is ordained by the Tederal constitution in the provision of the fourteenth amendment that " ISTo state shall deny to any person, within its jurisdiction, the equal protection of the laws." The two latter classes of written limitations are, to some extent, declaratory of the rough, inherent equality which is one of the elements of all taxation as distin- guished from confiscation, yet they are not altogether coincident with it. The principal difference in practical effect between the written and the unwritten limitations in this respect, as in others, is, that the unwritten limitation of inherent equality is left to the interpretation of the legislature, the conscience of the legislative authority is practically the only sanction for its enforcement, and only in the extremest cases amounting to gross and palpable con- fiscation, will the courts interfere with the legislative determina- tion. Reference is made to chapter I of this work for further- discussion of inherent equality. 1302. The written limitations of the state and Federal consti- tutions afford no such discretion to the legislature, and the courts in dealing with these limitations are not confronted with the legis- lative determination but have only to enforce the plain mandate of the written law. To use an illustration defective in some respects : When a statute is attacked in the courts because it violates some principle of inherent equality, the court is in much the same posi- tion as an appellate tribunal which is asked to reverse a judgment, based on the verdict of a jury, upon the ground that the verdict is unsupported by the evidence. In such a case the question is, not is there sufficient evidence, but is there any evidence, by which [642] EQUALITY AND UNIFOBMITY GENERALLY. G43 this verdict is supported. If there is, the judgment is affirmed. The determination of the legislature, upon these questions of inher- ent right, such as whether the tax approximates equality or whether the purpose is public, carries with it a weight somewhat greater than attaches to the verdict of a jury upon a question of fact. In enforcing the limitations of a written constitution, on the other hand, a court is in the position of an appellate tribunal hav- ing to review the action of another court upon a bill of exceptions, by a proceeding in the nature of a writ of error. The only ques- tion in the one case is, were the rulings of the lower court iu accordance with the law, the question in the other case is, is the statute under consideration in harmony with the written con- stitution ? Questions of discretion may come up, but they are of minor weight. Inherent equality not enforced by the courts. 1302t^ Although there are some expressions to the effect that there is an inherent law of equality in taxation, to which the legis- lature must conform, and which the courts will enforce, the weight of authority denies the existence of such an inherent limitation ; or, more accurately, the weight of authority denies that the courts may enforce any such limitation. This does not mean that the legislature may mate any exaction it pleases in the form of a tax. If confiscation is attempted in the guise of taxation, then inequality becomes so gross as to amount to the taking of property for a private purpose, which cannot be done.^ But there are many inequalities which would not be toler- ated under express constitutional requirements of equality and uni- formity, which yet do not amount to confiscation ; and the courts cannot correct or prevent these inequalities, in the absence of such express restraints. A decision in 'Sevf York,^ early in the development of the con- stitutional law of taxation, and a recent decision in Connecticut^ expound this principle clearly. 1303. Said the New York Court of Appeals, referring to the assertion in a previous case* that a tax to be valid must be appor- tioned " upon principles of just equality," and upon all the prop- erty in the same political district; and that this is a fundamental 1 See chap. IV. 3 State v. Travelers Insurance Co., 2 People V. Brooklyn, 4 N. Y. 419, 73 Conn. 255, 47 Atl. Rep. l'99, 57 55 Am. Dec. 266. L. R. A. 481. * People V. Brooklyn, 6 Barb. 209. 644 CONSTITUTIONAL LAW OF TAXATION. principle of free government, which, although not contained in the constitution, limits and controls the power of the legislature: This is new and it seems to me to be dangerous doctrine. It clothes the judicial tribunals with the power of trying the validity of a tax by a test neither prescribed nor defined by the constitu- tion. If by this test we may condemn an assessment apportioned according to the relation between burthen and benefit, we may with far better reason condemn a capitation tax on the ground that numerical equality is not just equality; or a general prop- erty tax, because it compels one portion of a community to pay more than their just share for the benefit of another portion. All discriminations in the taxation of property, and all exemp- tions from taxation on grounds of public policy, would fall by the application of this test. If this doctrine prevails it places the power of the courts above that of the legislature in a matter affecting not only the vital interests, but the very existence of the government. It assumes that the apportionment of taxation is to be regulated by judicial, and not by legislative discretion. It obstructs the exercise of powers which belong to and are in- herent in the legislative department, and restrains the action of that branch of the government in cases in which the constitution has left it free to act. 1304. In another place the court said: Taxes cannot be laid without apportionment; and the power of apportionment is, therefore, unlimited, unless it be restrained as a part of the power of taxation. There is not, and since the original organization of the state government there has not been any such constitutional limitation or restraint. The people have never ordained that taxation must be limited or regulated by any or either of the rules laid down by the Supreme Court in the case of The People v. Mat/or of Brooklyn,^ or in the case now under consideration. They have not ordained that taxation shall be general, so as to embrace all persons or all taxable persons within the state, or within any district, or territorial division of the state; nor that it shall or shall not be numerically equal, as in the case of a capitation tax ; nor that it must be in the ratio of the value of each man's land, or of his goods, or of both com- bined; nor that a tax must be coextensive with the district, or upon all the property in a district which has the character of and is known to the law as a local sovereignty. Nor have they ordained or forbidden that a tax shall be apportioned according to the benefit which each taxpayer is supposed to receive from the object on which the tax is expended. In all these particulars the power of taxation is unrestrained.^ 5 Barb. 209. 6 People v. Brooklyn, 4 X. Y. 419, 55 Am. Dec. 266 (1851). EQUALITY AND UNIFORMITY GENERALLY. 645 1305. The Connecticut Supreme Court of Errors, fifty years later/ said: We deem it, therefore, immaterial whether or not the apothegm, " taxation should be equal and uniform,"" is sound and ought to be incorporated in our constitution; for, whatever our view as to this might be, we should be compelled to hold that unequal taxation by the legislature might be valid, if the sovereign who enacted our fundamental law has seen fit to grant the power of taxation and refused to impose such a limitation on its exercise. Passing then to the real question — is there in our funJla- mental law any expressed provision or clear implication, from provisions therein contained, that " taxation shall be uniform and equal ? " There can be no claim that such a mandate is directly expressed in either the state or national constitution. Express provisions of that nature may be found in the local con- stitutions of many states, and have proved a source of practical difficulties for legislatures and courts. They are not found in our own, which assumes what experience has taught — that thp power of taxation cannot safely be cabined within a theory of uniformity and equality. Taxes, to be both uniform and equal, affecting each inhabitant in proportion to his abilitv to con- tribute, can only be devised by a government unhampered by the limitations of humanity. With the complications of civilized society, the stress of taxation is not and cannot be confined to the individual who pays the tax; its ramifications are widespread and hidden. This and other considerations forbid the assertion of any specific theory as essential to just taxation. It is true that it is the interest of every government that the burden of taxation should be distributed fairly and equally, and that it is the duty of the department in which the taxing power may be vested to honestly use its best judgment to secure such result. If this is what is meant by uniformity and equality being of the essence of taxation, the saying is correct, although unfortunately expressed. But the assertion that a violation of the legislative duty of fair and equal taxation, under a constitution like our own, inherently involves a violation of that constitution, by an overstepping of the limits of the legislative power, is not true. If a broad expression of the above principle is desirable it may be stated thus : Justice and equity in the stress of the whole hurden is inherent in taxation, and the power of accomplishing that result is vested, with the power of taxation, in the legislature, subject only to restrictions specified in the grant of that power, and to the general limitations placed hy the constitution on the exercise of all legislative power. But it is unwise to limit the principle by the terms of any authoritative formula.^ 7(1900.) 73 Conn. 255, 47 Atl. Eep. 299, 57 8 State V. Travellers' Insurance Co., L. R. A. 481. 64G CONSTITUTIONAL LAW OF TAXATION. The Federal guaranty of equal protection of the laws. 1306. The general purpose of the guaranty of the equal pro- tection of the laws, in its application to taxation, has been stated by the Supreme Court as follows : The provision . . . was not intended to prevent a state from adjusting its system of taxation in all proper and reasonable ways. It may, if it chooses, exempt certain classes of property from any taxation at all, such as churches, libraries, and the property of charitable institutions. It may impose different specific taxes upon different trades and professions, and may vary the rates of excise upon various products; it may tax real estate and personal property in a different manner; it may tax visible property only, and not tax securities for payment of money; it may allow deductions for indebtedness, or not allow them. All such regulations, and those of like character, so long as they proceed within reasonable limits and general usages, are within the discretion of the state legislature, or the people ol the state in framing their constitution. But clear and hostile discriminations against particular persons and classes, especially such as are of an unusual character, unknown to the practice of our governments, might be obnoxious to the constitutional pro- hibition. It would, however, be impracticable and unwise to attempt to Jay down any general rule or definition on the sub- ject, that would include all cases. They must be decided as they arise. We think that we are safe in saying, that the fourteenth amendment was not intended to compel the state to adopt an iron rule of equal taxation. If that were its proper construction it would not only supersede all those constitutional provisions and laws of some of the states, whose object is to secure equality ol taxation, and which are usually accompanied with qualifications deemed material ; but it would render nugatory those discrimina- tions which the best interests of society require; which are neces- sary for the encouragement of needed and useful industries; and the discouragement of intemperance and vice ; and which every state, in one form or another, deems it expedient to adopt.* 1 307. This court has repeatedly laid down the doctrine that diver- sity of taxation, both with respect to the amount imposed and the various species of property selected either for bearing its burdens or for being exempt from them, is not inconsistent with a perfect uniformity and equality of taxation in the proper sense of those terms; and that a system which imposes the same tax upon every species of property, irrespective of its nature or con- dition or class, will be destructive of the principles of uniformity » Bell's Gap R. R. Co. v. Pennsyl- 923, 5 Sup. Ct. Rep. 357; Magoun v vania, 134 U. S. 232, 33 L. ed. 892, 10 Illinois Trust and Savings Bank, 170 Sup. Ct. Rep. 533; and see Barbier U. S. 283, 42 L. ed. 1037, 18 Sup. Ct. V. Connolly, 113 U. S. 27-31, 28 L. ed. Rep. 594. EQXJALITV AND UNIFOBMITY GENERALLY. 647 and equality in taxation and of a ]tist adaptation of property to its burdens.^* The Federal constitution imposes no restraints on the state in regard to unequal taxation.^^ 1308. Indeed, this whole argument of a right under the Federal constitution to challenge the tax law on the ground of inequality in the burdens resulting from the operation of the law is put at rest by the decision in Bell's Gap Railroad v. Pennsylvania (supra) .^* If it be a fact that the franchise of a Kentucky corporation is taxed at a different rate from the tangible property in the state, there can be no question that the state had power to tax it at a different rate, so far as the constitution of the United States is concerned.^^ There is no denial of the equal protection of the laws when steam railroads in a city are exempt from a tax laid on street Tailroads/^' or when underground city railroads are exempted I'rom a tax which is laid on surface railroads/^*" or where railroad, property is assessed at a higher valuation than other property.''*' Equality in the state constitutions. 1309. The effect of all this is, that the only real, effective protection against inequality in taxation, which is available to the taxpayer, is such protection as is afforded by the constitutions of the states. Most states now provide expressly for equality and uniformity, nearly all have constitutional provisions forbidding the passage of local or special laws, most of them in addition have expressed in their constitutions the exemptions from taxation which shall be allowed and have forbidden all other exemptions. Some of the later constitutions contain other provisions tending to equality, such as forbidding' taxation of shares of corporate stock when the property of the corporation is taxed, or provid- ing even that the taxation of foreign corporations shall be by uni- form rule. The whole tendency of recent constitutional enact- ment in the states is to confine the discretion of the legislature to narrower limits. The general attitude of the state courts is not 10 Pacific Express Co. v. Seibert, 142 Sup. Ct. Rep. 342 ; St. Louis, etc., Ry. U. S. 339, 351, 35 L. ed. 1035, 12 Sup. Co. v. Davis, 132 Fed. Rep. 629. Ct. Rep. 250. 1^* Savannah, etc.. Ry. Co. v. Sa- il Davidson v. New Orleans, 96 vannah, 198 U. S. 392, 49 L. ed. 1097, U. S. 97-105, 24 L. ed. 616. 25 Sup. Ct. Rep. 690. 12 Merchants' Bank v. Pennsylvania, isb Metropolitan Street Ry. Co. v. 167 U. S. 461, 42 L. ed. 236, 17 Sup. New York, 199 U. S. 1, 49 L. ed. , Ct. Rep. 829. 25 Sup. Ct. Rep. 705. 13 Coulter V. Louisville, etc., Ry. Co., I3e St. Louis, etc., Ry. Co. v. Davis, 196 U. S. 599-608, 49 L. ed. 615, 25 132 Fed. Rep. 629. 648 CONSTITUTIONAL LAW OF TAXATION. 80 pronounced in this respect; still the courts, interpreting these constitutions, while giving due weight to the co-ordinate authority of the legislatures, have been compelled to recognize the limits which the people have set on the legislative power. To this general tendency of thought and law, the states of Ifew York and Connecticut are the most conspicuoiis exceptions. In both of these states there are no express requirements of equality in taxation; and the courts go to the extreme in upholding the acts of the legislature. In a subsequent chapter the state constitutional provisions are given in detail, and reference is made to decisions in each state.'* 1310. In the following pages are considered various classes of concrete cases in which the application of the prineiiDle of equality has been expounded. In beginning, it may be remarked that the equality which is commanded by constitutions is not absolute and perfect equality. Such equality can never be obtained. Reason and constitutional requirements are satisfied if approximate equality is attained.'^ 1311. Constitutional provisions requiring equality and uni- formity, or requiring that all property shall be taxed according to its value, are not self -executing in so far as they are afiirmative in character. They are not self-executing to such an extent as to authorize taxing ofiicials to levy taxes on property which has not been subjected to taxation by the legislature. ■'^'' For illustration, in one of the cases cited the taxing officials had assessed and taxed the good will of a newspaper business. It was held that the legislature had not authorized the taxation of good will, although it might have done so; and that the requirement of the constitution, that " all property " should be taxed, did not authorize the assessment without further legislation.-''' Where the constitution provides for taxation by valuation the wChap. XXIII. 58 L. R. A. 949: Riley v. Western 15 State Railroad Tax Cases, 92 U. Union Telegraph Co., 47 Ind. 511; S. 595, 23 L. ed. 669; Pacific Express Hyland v. Brazil Block Co., 128 Ind. Co. V. Seibert, 142 U. S. 339, 35 L. ed. 335, 26 N. E. Rep. 672 ; State Board of 1035, 12 Sup. Ct. Rep. 250; People v. Tax Commissioners v. Holliday, 150 Henderson, 12 Colo. 369, 21 Pac. Rep. Ind. 216, 49 N. E. Rep. 14, 42 L. R. A. 144; State v. Canda Cattle Car Co., 826; McHenry v. Downer, 116 Cal. 85 Minn. 457, 89 N. W. Rep. 66; Com- 20, 47 Pac. Rep. 779, 45 L. R. A. 737 ; monwealth v. Mill Creek Coal Co., 157 Commissioners v. Rooky Mountain Pa. St. 524, 27 Atl. Rep. 375; Kelley News Co., 15 Colo. App. 189, 61 Pac. V. Rhoads, 7 Wyo. 237, 75 Am. St. Rep. Rep. 494. 904, 51 Pac. Rep. 593; Crozer v. Peo- 17 Hart v. Smith, 159 Ind. 182. fl.i pie, 206 111. 464, 69 N. E. Rep. 489. Am. St. Rep. 280, 64 N. E. Rep. 661, 16 Hart V. Smith, 159 Ind. 182, 95 58 L. R. A. 949. Am. St. Rep. 280, 64 N. E. Rep. 661, EQUALITY AND UNIFOKMITY GENERALLY. 649 legislature must ordain the method and provide the machinery for ascertaining the valuation.^® There are cases which indicate that these constitutional require- ments are self-executing and require the taxation of every form of property without further legislation.^^ In so far as they operate as prohibitions, provisions requiring equality and uniformity are self-executing, and a law which, in its afSrmative effect, is in conflict with such a requirement, must of course fall. Equality in local assessments. 1312. It is generally held that assessments for local improve- ments are not governed by provisions requiring taxation to be proportional, or equal or uniform. The application of such pro- visions woidd, of course, forbid all methods of assessment liv frontage, or area, or benefit, and would permit only assessment by valuation. The rule of interpretation that " taxation " in such provisions refers only to general property taxation, is invoked to prevent this result. ^^ iSMeHenry v. Downer, 116 Cal. 20, La. Ann. 297; Charnock v. Levee 47 Pae. Rep. 779, 45 L. R. A. 737. Board, 38 La. Ann. 328; Excelsior 19 See § 46. Planting, etc., Co. v. Green, 39 La. 21 Hagar v. Board of Supervisors of Ann. 455, 1 So. Rep. 873; Rosetta, etc., Yolo County, 47 Cal. 222; see People Co. v. Jollisaint, 51 La. Ann. 804-808, V. Whyler, 41 Cal. 351, where a, levee 25 So. Rep. 477; State ex rel. Hill v. tax was held not to be a local assess- Judges, 46 La. Ann. 1293, 16 So. Rep. ment; City of San Diego v. Linda 219; Barber Asphalt Paving Co. v. Vista Irrigation District, 108 Cal. 189, Gogreve, 41 La. Ann. 251, 5 So. Rep. 41 Pac. Rep. 291, 35 L. R. A. 33; 848; City of Auburn v. Paul, 84 Me. White v. People, 94 111. 604; Craw 212, 24 Atl. Rep. 817; Alexander v. V. Tolono, 96 111. 255, 36 Am. Rep. Mayor, etc., of Baltimore, 5 Gill, 383, 143; Wilbur v. Springfield, 123 111. 46 Am. Dec. 630; Dorgan v. City of 395, 14 N. E. Rep. 871; Moore v. Boston, 12 Allen (Mass.) 223; Motz People, 106 111. 376; Palmer v. v. Detroit, 18 Mich. 495; Daily v. Stumph, 29 Ind. 329; Board of Com- Swope, 47 Miss. 367; Vasser v. George, missioners v. Harrell, 147 Ind. 501- 47 Miss. 713; Alcorn v. Hamer, 38 505, 46 N. E. Rep. 124; Hines v. Miss. 652; Meir v. St. Louis, 180 Mo. Leavenworth, 3 Kans. 186-197; City 391, 79 S. W. Rep. 955; Board of of Ottawa V. Barney, 10 Kans. 270- Directors of Alfalfa Irrigation Dis- 279; Newman v. City of Emporia, 41 trict v. Collins, 46 Neb. 411, 64 N. W. Kans. 583, 21 Pae. Rep. 593; Holz- Rep. 1086; Raleigh v. Peace, 110 N. C. hauer v. City of Newport, 94 Ky. 396, 32, 14 S. E. Rep. 521, 17 L. R. A. 330 ; 22 S. W. Rep. 752; O'Mahoney v. Bui- Hilliard v. City of A.sheville, 118 N. lock, 97 Ky. 774, 31 S. W. Rep. 878; C. 845, 24 S. E. Rep. 738; Busbee v. Maddux v. City of Newport, 12 Ky. Commissioners of Wake County, 93 L. Rep. 657, 14 S. W. Rep. 957; Lex- N. C. 143; Rolph v. City of Fargo, 7 ington V. McQuillan's Heirs, 9 Dana, N. D. 640. 76 N. W. Rep. 242, 42 L. R. 513, 35 Am. Dec. 159; Yeatman v. A. 646; Reeves v. Treasurer, 8 Ohio Crandall, 11 La. Ann. 220; New Or- St. 332; Thomas v. Wood County, 11 leans Di-ainage Co., Praying, etc., II Ohio St. 678; see Lima v. Cemetery La. Ann. 371; Wallace v. Shelton, 14 Association, 42 Ohio St. 128. 51 Am. La. Ann. 408; O'Leary v. Sloo, 7 La. Rep. 809: Kadderly v. City of Port- Ann. 25; Municipality V. Guillotte, 14 land, 44 Oreg. 118, 74 Pac. Rep. 710, 650 CONSTITUTIONAL LAW OF TAXATION. 1313. In variation from this general rule it was early held in Minnesota that local assessments must be laid by valuation and not by benefit.^^ The present Minnesota constitution expressly permits them to be laid by benefit and, in certain cases, by front- age. ^^ In South Carolina and Tennessee^ it is held that the rule of equality prohibits assessments except by value, upon all the property in the taxing district. In South Carolina the legis- lature seems to have no power to erect a special taxing district for assessment purposes, local improvements being regarded as a general charge on the municipalities where they are made.^ In Tennessee the legislature may erect special districts for local im- provements, but cannot delegate the taxing power to them, as the constitution only permits that power to be delegated to cities and counties. The legislature must lay the tax itself, in proportion to value.^® Corporations. 1314. Laws which impose upon foreign corporations doing business in a state the same taxation and other restrictions as are imposed upon corporations of the taxing state by the states where such foreign corporations are domiciled have generally been held to involve no inequality. The decisions upholding such laws rest mainly upon the proposition that a state may impose such condi- tions as it sees fit upon foreign corporations doing business in its territory ; and further that such a basis of classification is reason- able.^' The argument has been made that such laws amount to an unconstitutional delegation of the taxing power to the legis- lature of another state, and in one instance this view has been ir^ Pae. Rep. 222; King v. City of 22 Stinson v. Smith, 8 Minn. 366; Portland, 2 Oreg. 146; Masters v. Bidwell v. Coleman, 11 Minn. 78. City of Portland, 24 Oreg. 161, 33 23 Minnesota Const., Art. IX, § 3. Pae. Rep. 540; Ladd v. Gambell, 35 24 See § 1843, and cases cited. Oreg. 393, 59 Pae. Rep. 113; Huide- 25 Stehmeyer v. City Council of koper V. City of Meadville, 83 Pa. St. Charleston, 53 S. C. 259, 31 S. E. Rep. 156; Chester City v. Black, 132 Pa. St. 322; Mauldin v. City Council of Green- 5U8, 19 Atl. Rep. 276, 6 L. R. A. 802; ville, 42 S. C. 293, 46 Am. St. Rep. Beaumont v. Wilkesbarre City, 142 723, 20 S. E. Rep. 842, 27 L. R. A. Pa. St. 198, 21 Atl. Rep. 888; Round- 284; Mauldin v. City Council of Green- tree V. City of Galveston, 42 Tex. 612; ville, 53 S. C. 285, 69 Am. St. Rep. Allen V. City of Galveston, 51 Tex. 855, 31 S. E. Rep. 252, 43 L. R. A. 101. 302 ; County of Harris v. Boyd, 70 Tex. 26 Reelfoot Lake Levee District v. 237, 7 S. "W. Rep. 713; Norfolk v. Dawson, 97 Tenn. (13 Pick.) 151, 36 Ellis, 26 Graft. 224; Sands v. Rich- S. W. Rep. 1041, 34 L. R. A. 725. mond, 31 Graft. 571, 31 Am. Rep. 742; 27 Home Ins. Co. v. Swigert, 104 111. Richmond, etc., R. R. Co. v. Lynch- 653; Union, etc., Ins. Co v Durfee burg, 81 Va. 473: Green v. Ward, 82 164 111. 186, 45 N. E. Rep. 441; State Va. 324; Wilson v. Town of Phillippi, v. Insurance Co., 115 Ind 257 17 39 W. Va. 75, 19 S. E. Rep. 553; City N. E. Rep. 574; Blackmer v. Royal of Parkersbnrg v. Tavenner, 42 W. Va. 4S6, 21 S. E. Rep. 179. EQUALITY' AND UNIFOEMITY GENEBALLY. 651 S'ustaincd ;^® but it is not sound — the act of the foreign legis- hiture is not the legislative act, but merely the contingency which sets the law in operation.^® 1315. The same general rules with respect to equality and uni- formity apply in the taxation of corporate franchises — considered as privileges, not property — as are applied with respect to ordi- nary license or privilege taxation.^** It is held in many cases that requirements of equality and uniformity do not apply to taxation of franchises, when such taxes are in the nature of privilege taxa- tion.^i 1316. Where franchises are taxed as property the natural and logical view would be that constitutional requirements of equality and uniformity should apply to the taxation of them just as such requirements apply to the taxation of other property. This view would probably be held more generally than it is held if it were not for two circumstances. One is that many constitu- tions, in addition to the requirement of equality and uniformity, contain provisions excepting " franchises " from its operation, such for instance, as that clause in the Illinois constitution which per- mits the taxation of corporate franchises " by general law, uniform as to the class on which it operates." Many of these provisions Avere enacted at times when the law of taxation of franchises had not been developed to the extent to which it is now developed, and when the distinction between the taxation of franchises as prop- erty, and excise or privilege taxation of franchises, was not so apparent as it now is. The language of these provisions and of the cases interpreting them leads to the view that the idea of the Ins. Co., 115 Ind. 291, 17 N. E. Kep. 952, 31 L. R. A. 41, 56 Am. St. Kep. 580; Phenix Ins. Co. v. Welch, 29 367; State v. Fosdick, 21 La. Ann. Kans. 672. 434; Portland Bank v. Apthorp, 12 28 Clark & Murrell v. Port of Mo- Mass. 252 ; Connecticut Mut., etc., Co. bile, 67 Ala. 217, 10 Ins. L. J. v. Commonwealth, 133 Mass. 161; 29 People V. Fire Association of Commonwealth v. People's Five Cent Philadelphia, 92 N. Y. 311, 44 Am. Bank, 5 Allen, 428; State v. Philadel- Rep. 380; Home Ins. Co. v. Swigert, phia, etc., Ry. Co., 45 Md. 361, 24 104 111. 653. See § 542. Am. Rep. 511; State v. Western Union 30 See §§ 1415 et seq., of this work. Telegraph Co., 73 Me. 518; State v, 31 Phoenix Carpet Co. v. State, 118 Maine Central Ry. Co., 74 Me. 370; Ala. 143, 72 Am. St. Rep. 143, 22 So. Boston, etc., Co. v. State, 62 N. H. 648; Rep. 627 ; Phrenix Assur. Co. v. Fire Standard Underground Cable Co. v. Department of Montgomery, 117 Ala. Attorney-General. 46 N. J. Eq. 270, 631, 23 So. Rep. 843, 42 L. R. A. 468; 19 Atl. Rep. 733, 19 Am. St. Rep. 394: Bank v. Worrell, 67 Miss. 47, 7 So. Trenton Sav. Fund v. Richards, 52 Rep. 219; Scottish Union, etc., Ins. N. J. L. 156, 18 Atl. Rep. 582; South- Co. V. Herriott, 109 Iowa, 606, 77 ern Gum Co. v. Laylin, 06 Ohio St. Am. St. Rep. 548, 80 N. W. Rep. 665; 578, 64 N. E. Rep. 564; Western Union Southern Building and Loan Assn. v. Telegraph Co. v. Mayer, 28 Ohio St. Norman, 98 Ky. 294, 32 S. W. Rep. 537. 652 CONSTITUTIONAL LAW OF TAXATION. franchise which was dominant in the minds of the framers of these provisions was the concept of it as a privilege and not as property. The other circumstance is but a phase of the first. In some states where no special constitutional provision has been made with respect to franchise taxation the tendency has been to make no distinction between franchises regarded as privileges and fran- chises regarded as property. The result has been that the language, authorities, and reasoning which are strictly applicable only to privilege taxation have been applied to property taxation of franchises, so that the same court is found holding at one time that a franchise is property, and at another that the taxation of a franchise is not restricted by the- limitations which restrict the taxation of property. Some cases are cited in the note to this paragraph which may be regarded as authorities for the statement that requirements of equality and uniformity apply to the taxation of franchises as prop- erty. The confusion of thought with respect to the nature of fran- chises, which appears in most opinions, forbids a more positive statement. Some of these cases are cases where the tax was not in terms upon a franchise, but upon a valuation of property as a unit, including the franchises.^^ 1317. The cases arising under the Illinois constitution ilhis- trate the class of cases where corporate franchises, although taxed as property, are not entirely subjected to the rule of equality and, uniformity. The constitutional provision is : The General Assembly shall provide such revenue as may be needful by levying a tax, by valuation, so that every person and corporation shall pay a tax in proportion to the value of his, her, or its property, . . . but the General Assembly shall have povi-er to tax peddlers, auctioneers, brokers, hawkers, . . . and persons or corporations owning or using franchises and priv- ileges, in such manner as it shall, from time to time, direct by general law, uniform as to the class upon which it operates. Under this provision it has been invariably held that the taxa- tion of corporate franchises is not governed by the rule of propor- tionate valuation, but by the rule only of uniformity of the law 32 Parker v. North British, etc., Ry. Atl. Rep. 578, reversing 19 Vr. (4S Co., 42 La. Ann. 428, 7 So. Rep. 599; N. J. L.) 1, 57 Am. Rep. 510, 2 Atl. State V. Stephens, 14(5 Mo. 662, 69 Rep. 789; Pingree v. Auditor-General. Am. St. Rep. 62,i, 48 S. W. Rep. 929, 120 Mich. 9.5, 78 N. W. Rep. 1025, 44 strictly this was not a ease of fran- li. R. A. 679; .State ex rel. Schriver v. chise taxation ; State Board v. Central Karr, 64 Neb. 514, 90 N. W. Rep. 298. Ry. Co., 19 Vi-. (48 N. J. L.) 146, 4 EQUALITY AND UNIFORMITY GENERALLY. 653 *'as to the class on which it operates;" and this is so in the oases where the franchises are clearly taxed as property, as in the com- mon case of the incliision of their vaUie in the whole capital stock.^^ 1318. In the taxation of foreign corporations upon the privi- lege of doing business and exercising their corporate franchises in the state, the rale that constitutional provisions commanding equal- ilj and uniformity do not apply to the taxation of franchises and privileges, is imited with another principle which also operates to free the legislature from such restrictions in this respect. That principle is the frequently applied one that a foreign corporation may only do business and exercise its franchises in any state by the permission of that state, which maj' attach such conditions as it pleases to its consent. This latter principle is the one upon which the most reliance is placed by the weight of authorities which hold that in the taxation of foreign corporations upon their privileges, franchises, or business, the legislature is not restrained by such constitutional provisions. In accordance with these principles it is held that a law taxing foreign insitrance companies at a greater percentage of their gross receipts than domestic ones does not violate a requirement of uniformity,^* nor does a law taxing the gross receipts of foreign building and loan associations,^ nor one imposing a franchise tax, measured by capital stock, on foreign corporations.^'^ ISTor does a law imposing an inheritance tax on legacies to foreign charitable or religious corporations, while legacies to domestic charitable or religious corporations are exempt from such tax, violate either a state requirement of equality and uniformity, or the fourteenth amendment.*^ Specific taxes. 1319. Wliere a tax on specific property is laid as a property tax, as distinguished from a license tax, a constitutional requirement of equality and uniformity will invalidate it unless it is graded ac- cording to value ; and a specific tax of so much per article without 33 State Railroad Tax Cases, 92 U. 35 Southern Building and Loan Assn. S. 575, 611, 612, 2.3 L. ed. 663; Porter v. Norman, 98 Ky. 294, 56 Am. St. V. Rockford, etc., R. R. Co., 76 111. 561 ; Rep. 367, 32 S. W. Rep. 952, 31 L. R. Sterling Gas Co. v. Higby, 134 111. A. 41. 557, 25 jSr. E. Rep. 660. 36 Western Union Telegraph Co. v. 3+ Scottish Union and Nat. Ins. Co. Mayor, 28 Ohio St. 521. V. Herriott, 109 Iowa, 606, 77 Am. St. 37 Humphreys v. State, 70 Ohio St. Rep. 548, 80 N. W. Rep. 665; Hughes 67, 101 Am. St. Rep. 888, 70 N. E. Rep.. V. City of Cairo, 92 111. 339; Common- 957; In re Speed's Estate, 216 111. 23, wealth V. Milton, City of Lexington v. 74 N. E. Rep. 809. Milton, 12 B. Mon. (Ky.) 212, 54 Am. Dec. 522. 654 CONSTITUTIONAL LAW OF TAXATION. reference to value will be void. Thus a specific tax of one cent per acre on the land in a certain township was held void under such a constitutional provision;'* as also were a tax of $1 on each road wagon in a county, levied for road purposes;"''® an act providing that nonresidents grazing cattle in any county in a state should pay fifty cents a head therefor in lieu of taxes f° an act requiring every railroad company to pay the state one dollar for each mile of track in the state;*-' a tax on railroads of a specified svim, measured by the length of the main track and branches ;*^ an act imposing a tax of $1.25 on all bicycles within certain counties without regard to value ;*^ an act taxing all liquors manufactured for sale within the state at a specified sum per gallon;** an act imposing a tax of two cents a ton on all coal mined, regardless of value;*® a similar tax of so much per ton on all ore mined in lieu of taxes on real and personal property used in mining;*® a tax on cotton measured by weight;*^ a tax on cattle by the head;** a tax of $10 each on oil depots.*** 1 320. In a numfeer of cases municipal charges imposed on tele- graph and telephone companies of some fixed sum for each pole placed in the streets, have been sustained under the police power as license fees, or as rentals charged for the use of the streets. The line between such charges and specific taxes is certainly very nar- row, especially where the fees substantially exceed the cost of regulation and inspection.*® A late Pennsylvania case held void a specific tax of twenty-five cents a foot on street railways, which was imposed as a " license " tax.*®" In a South Carolina ease a tax of $8 per lot laid by the munici- pal authorities on lots in a health resort, apparently regardless of value, and applied to road, street, and beach repairs, was upheld as an exercise of the police power. ^^ In a case decided under the 38 Blight V. McCullough, 27 Ind. 223. « State v. Lakeside Land Co., 71 39 Smith V. County Commissioners, Minn. 283, 73 N. W. Rep. 970. 117 Ala. 196, 23 So. Ecp. 141. « Sims v. Parish of Jackson, 22 La. ■40 Kiowa County Commissioners v. Ann. 440. Dunn, 21 Colo. 185, 40 Pac. Rep. 357. 48 Livingston v. Albany, 41 Ga. 21. 41 Pittsburgh, etc., Ry. Co. v. State, 48a Standard Oil Co. v. Common- 49 Ohio St. 189, 30 N. E. Rep. 435, 16 wealth, 26 Ky. Law Rep. 985, 82 S. W. L. R. A. 380. Rep. 1020. 42 State V. Railroad Corporation, 4 49 See §§ 1446 et seq. and cases S. C. 376. cited. 43 Ellis r. Frazier, 38 Oreg. 4li2, 63 49a Pittsburgh, etc., Ry. Co. v. Pitts- Pac. Rep. 642, 53 L. E. A. 615. burgh, 211 Pa. St. 479', 60 Atl. Rep. 44 State V. Bengseh, 170 Mo. 81, 70 1077. S. W. Rep. 710. 50 Thomas v. Moultrieville, 52 S. C. 4fi State V. Cumberland, etc., R. R. 181, 29 S. E. Rep. C47. This seems. Co., 40 Md. 22. rather far-fetclied. EQUALITY AND UNIFORMITY EXEMPTIONS. 655 ISTebraska constitution of 1869, which required taxation to be uni- form, it was held that a tax of $4 per acre on certain lands, reganl- less of the vahie of the lands, was valid. The court distinguished the case from cases in other states where similar taxes had been held unconstitutional by pointing out that the Nebraska constitu- tion did not require taxes to be ad valorem.^^ The present consti- tution of Nebraska requires taxes to be ad valorem/''^ and even under the former constitution the case must be regarded as remark- ably at variance with the current of authority. Exemptions. 1321. The decisions which have construed exemptions from taxation, in many instances, involve statutory rather than constitu- tional questions, and even in those where questions of constitutional construction have arisen those questions have been complicated by the necessity of construing statutes in which the constitiitional mandates have found expression. The cases are very numerous, but the general principles of construction are well established, and may be discussed without excessive citation. The first universal rule of construction is that exemptions, whether statutory or constitutional, are to be strictly construed against the exemption and in favor of the right to tax ; and that no property or person is to be exempted unless the intention to exempt such property or person clearly appears in some statute or constitutional provision. The relinquishment or curtailment of the power of taxation is never presumed. A deliberate purpose to exempt must appear from the express language of the la^v. This rule is so universally recognized that citation of authority to sus- tain it is almost unnecessary. It is referred to in the vast majoi-- ity of all the cases which deal with the subject of exemption from taxation in any of the aspects which that subject presents. A few of the cases in which it is expressed are oited.^^ Bl Burlington, etc., E. R. Co. v. York 157 Mo. 51, 57 S. W. Rep. 532, 50 L. County, 4 Neb. 293. E. A. 191; Phillips Exeter Acadeniv 52 See § 1014 of this work. v. Andover, 58 N. H. 306, 42 Am. Eep. 53 Bank of Commerce v. Tennessee, 589; Frantz v. Dobson, 64 Miss. 031, 161 U. S. 134, 40 L. ed. 645, 16 Sup. 60 Am. Eep. 68, 2 So. Eep. 75; Bangor Ct. Rep. 456 ; Files v. State, 48 Ark. v. Lodge, 73 Me. 428, 40 Am. Rep. 309 ; 529; Stein v. Mobile, 17 Ala. 234; State Board of Assessors v. Paterson, People ex rel. Kochersperger v. etc., Ry. Co., 50 N. J. L. (21 Xr.) 440, Chicago Theological Seminary, 174 111. 14 Atl. Eep. 610; People ex rel. Nt-w- 177, 51 N. E. Rep. 198; Barbour v. burgh Savings Bank v. Peck. 157 Louisville Board of Trade, 82 Ky. 645; N. Y. 51, 51 N. E. Rep. 412; Philadel- State V. Board of Assessors, 47 La. phia v. Pennsylvania Hospital. 134 Pa. Ann. 1498, 18 So. Rep. 462; Anne St. 171, 19 Atl. Rep. 490; iionis v. Arundel County v. Annapolis, etc.. Ey. Lone Star Chapter, 08 Tex. 098, .3 S. Co., 47 Md. 592; Fitterer v. Crawford, W. Rep. 519. 656 CONSTITUTIONAL LAW OF TAXATION. 1322. The legislative power to make exemptions is often spoken of as a power to make reasonable exemptions ; bnt eveii conceding that the general power is limited in this way, it re- mains true that tlie legislature itself is the first jndge, and, ex- cept perhaps in the grossest and most flagrant cases, the only judge, of the reasonableness of the exemption. Of course a case can be imagined where an exemption would amount to plain confiscation of the property of those who are taxed for the bene- fit of the others ; such, for instance, as a law which should exempt half the property of a state from taxation, leaving the other half to bear the whole burden of taxation; but no legislature is at all likely to pass any such law.^* Save for this very vagiie and almost nonexistent limitation, the legislative discretion in making exemptions, in the absence of express restraints, is uncontrolled. 1323. The oft-repeated phrase, that the foTirteenth amend- ment was not desigTLed to interfere with the tax systems of the states, is an accurate index of the value of that ameadment as a restraint on the power of exemption. Of course, if a ease of ex- emption amounting to flagrant confiscation should arise, as indi- cated in the last section, relief might be had under the clause forbidding a denial of the equal protection of the laws ; and in this respect, perhaps, the fourteenth amendment may be regarded as being an express embodiment of the vague limitation the po'?- sible existence of which has been suggested. But mere inequal- ity resulting from exemptions, even great and substantial ine- quality, wil\ not of itself be' sufficient to invoke the protection of the amendment. ^^ 1324. Most exemptions from taxation belong to classes which it has been the policy of the various states to exempt from the beginning. These customary exemptions all have some well- understood basis, and a brief reference to the principal ones, without citation of authority, is all that is necessary. 1325. Church property, actually used for religious worship, is everywhere exempt. In addition, some states exempt parson- ages and a limited amount of property of ministers of the gospel, who arc usually also exempted from poll and occupation taxes. The universal recognition of the moral value of religious insti- tutions to the people at large, together with the general attach- 54See Thomns V. Sneed, no Va. 613, 1037, 18 Sup. Ct. Rep. 594; Bell's 30 S. E. Rep. SSii. Gap R. R. Co. v. Pennsylvania, 134 BSMagoun v. Illinois Trust and Sav- U. S. 232, 33 L. ed. 892, ' 10 Sup. Ct. ings Bank, 170 U. S. 283, 42 L. ed. Rep. 533. EXEMPTIONS. 657 ment of the people to some form of religious worsliip, are the ;gTounds upon which these exemptions are based. The policy of the country has always been to encourage educa- tion in all its aspects, and property used for educational pur- poses is likewise generally exempt. Public libraries are some- times included in this exemption. Charitable institutions do work which otherwise the state -would be compelled to do, which justifies their exemption. Property used for burial purposes, when not held and sold for profit, is generally exempt. One reason for this exemption per- haps is that it would be difficult to collect the tax from the occupants. It is quite customary to exempt the tools of a workingman, the library of a professional man, a limited amount of personal property, and the like, and sometimes a homestead of limited Talue. The property of various public bodies, such as horticultural, ■agricultural, and scientific societies, is frequently exempted on the ground that they render a public benefit. Such institutions for profit as railroads, manufacturing enter- prises, and the like have been exempted on the supposed ground that the public benefit gained by their presence was equivalent to the taxes. These exemptions are not so common as they were. 1326. Constitutions which comanand uniformity and equality generally provide specifically for the common exemptions of church property, schools, colleges, mechanics' tools, and the like; and in most states it is held that the legislature under such con- stitutions has no power of exemption except as expressly provided in the constitution.®' 36 Mayor of Mobile V. Stonewall Ins. Co. v. City of New Orleans, 31 La. Co., 53 Ala. 570 ; Little Roek, etc., Ry. Ann. 440 ; Commonwealth v. Makib- V. Worthen, 46 Ark. 312; People v. ben, 90 Ky. 384, 14 S. W. Rep. 372, 29 -McCreery, 34 Cal. 432; People v. Eddy, Am. St. Rep. 382; Le Due v. City of 43 Cal. 331; Bloxham v. Florida Cen- Hastings, 39 Minn. 110, 38 N. W. Rep. tral, etc., Ry. Co., 35 Fla. 625, 17 So. 803; State ex rel. Realty Co. v. Cooley, Rep. 902; People's Loan and Savings 62 Minn. 183, 64 N. W. Rep. 379, 29 Institution of Joliet v. Keith, 153 111. L. R. A. 777 ; State v. Bengsch, 170 65.5, 39 ^T. E. Rep. 1077; Raymond v. Mo. 81, 70 S. W. Rep. 710; Union Hartford Fire Ins. Co., 196 111. 329, Pacific R. R. Co. v. Saunders County, 63 N. E. Rep. 745 ; Cooper v. Ash, 76 7 Neb. 228 ; State v. Poynter, 59 Neb. 111. 11; Northwestern University v. 417, 81 N. W. Rep. 431; State v. Car- People, 80 111. 333, 22 Am. Rep. 187; son Savings Bank, 17 Nev. 146, 30 State ex rel. Morgan v. Workingman's Pac. Rep. 703 ; Crawford v. Linn Building, etc., Assn., 152 Ind. 278, 53 County, 11 Greg. 482, 5 Pac. Rep. 738; N. E. Rep. 168 ; Denniston v. Terry, Poppleton v. Yamhill County, 8 Greg. 141 Ind. 677, 41 N. E, Rep. 143; State 337; Mumford v. Sewall, iTOreg. 67, v. City of Indianapolis, 69 Ind. 375, 35 4 Pac. Rep. 585, 50 Am. Rep. 412; Am. Rep. 223; Louisiana Cotton Mfg. Fox's Appeal, 112 Pa. St. 337, i Atl. 42 658 CONSTITUTIONAL LAW OF TAXATION. 1327. In some states, although the constitutions contain re- quirements expressive of the idea of equality in taxation, it is held that the power to make reasonable exemptions remains with the legislature. In some of these states it will be found that the constitutional mandate of equality is not so direct and positive as in those states where the power is denied. This is so in Iowa, where the constitution, while containing expressions expressing equality, does not forbid exemptions,'''^ and Maryland.^* In some other states the constitutions more clearly require uniformity and equality, but the legislative practice of exempt- ing certain classes of property has continued so long that the courts acquiesce. Such states are Maine,®® !M;issachusetts,'* Michigan, ^^ Wew Hampshire.®^ 1328. In ISTew Jersey and Mississippi it is held that the re- quirement of uniformity does not take away from the legislature the power of classifying and selecting the subjects of taxation, and exempting some classes ; but exemptions of less than a class are void.®^ 1329. By reasoning which must be regarded as somewhat strained, exemptions of manufacturing corporations from state taxes, in the face of a constitutional prohibition of exemptions, have been upheld in Pennsylvania, on the ground that such ex- emptions are not exemptions from all taxation, such corporations being subject to cou-nty and local taxes.** 1330. In Kansas itis held that the requirement of uniformity and equality does not forbid the legislature to make exemptions other than those specified in the constitution.^ 1330a. Where Congress delegates to a territorial legislature the power of taxation, the territorial legislature may make Rep. 149, 17 W. Jf. C. 449; Judge v. N". J. L. (23 Vr.) 156, 18 Atl. Rep. Spencer, 15 Utah, 242, 48 Pac. Rep. 582; Merchants' Ins. Co. v. Newark, 1097; In re Assessment, etc., 4 S. D. 54 N. J. L. (25 Vr.) 138, 23 Atl. Rep. «, 54 N. W. Rep. 818. 305; Adams v. Yazoo and Mississippi 57 See §§ 1540 et seq., and cases Valley R. R. Co., 77 Miss. 194-286, 24 there cited. So. Eep. 317, fiO L. R. A. 33, upholding 68 See §§ 1574 et seq. and eases cited, to this extent Mississippi Mills v. n9See § 1569 and cases cited. Cook, 56 Miss. 40; see § 1601 and OT Day V. Lawrence, 167 Mass. 371, cases cited. 45 N. JE. Rep. 751; § 1580 and cases 6* Hawes Mfg. Co.'s Appeal, 1 cited. Monaghan, 353; Commonwealth v. 61 § 1590 and cases cited. G«rmania Brewing Co., 145 Pa. St. 83, 62 Brewster v. Hough, 10 N. H. 138. 22 Atl. Rep. 240. See § 1628 and cases cited. 65 Sumner County v. City of Wel- 03 See § 1633 and eases cited; Sisters lington, 66 Kans. 590, 97 Am. St. Rep. of St. Elizabeth v. Chatham, 51 N. J. 396, 72 Pac. Rep. 216, 60 L. R. A. 850. L. (22 Vr.) 89, 16 Atl. Rep. 225; See § 1549a and cases cited. Trenton Saving Fund v. Richards, 52 EXEMPTIONS. 659 reasonable exemptions. An exemption of incomes of $1,000 and under from a territorial income tax is reasonable.* 1331. Municipal corporations have only such portion of the legislative taxing power as is expressly delegated to them. They have no inherent povi^er of exemption, and the grant of power to tax does not include any power of exemption or commutation."^ In one of the cases cited a city contracted with a railroad company to exempt its property from city taxation in consideration of a stated annual payment. It was held that this contract was in- valid, upon the ground that the city's charter contained no grant of power to make exemptions, and that the delegated power of taxation was in the natiire of a public trust which could not bo surrendered, in whole or in part.®* In another case a city had contracted to exempt a gas company from taxation in considera- tion of its furnishing gas to the city at a reduced rate, and the contract was held to be ultra vires and void.*® In another recent case a city agreed with a water company that tlie company should furnish certain water on certain terms. The contract provided that the city should not, for thirty years, impose a greater license tax than $500 on the company. Within thirty years the city levied a license tax of $1,000 on the company, which resisted pay- ment, basing its resistance on the contract. The contract was held void, it appearing that there was no express legislative authority for making it.™ Where the constitution requires uniformity or forbids the legis- lature to grant exemptions, the legislature cannot, of course, dele- gate the power of exemption to municipalities.'^^ In Maine the legislature cannot authorize a municipality to ssPeaeoelv v. Pratt, 121 Fed. E«p. Co. v. Cartersville, 89 Ga. 683, 16 S. 772, 58 C. C. A. 48. E. Rep. 25. 6T Mayor of Birmingham v. Birming- 68 State v. Hannibal, etc., R. R. Co., ham Waterworks Co., 139 Ala. 531, 101 75 Mo. 209. Am. St. Rep. 49, 36 So. Rep. 614; 69 Austin v. Austin Gas, etc.. Co., 09 Wilson V. Supervisors, 47 Cal. 91; Tex. 180, 7 S. W. Rep. 200. In Car- Tampa V Kaunitz, 39 Fla. 683, 63 Am. tersville Improvement Co. v. Carters- St. Rep. 202, 23 So. Rep. 416; New ville, 89 Ga. 683, 16 S. E. Rep. 2.'), Orleans v. St. Charles St. Ry. Co., 28 it was held that while a city cannot La. Ann. 497 ; State v. Hannibal, etc., exempt a gas company from taxation, R. R. Co., 75 Mo. 209; Hazlitt v. Mt. it may agree to pay for gas a stipu- Vemon, 33 Iowa, 229 ; Mack v. Jones, lated sum per lamp, and in addition 21 N. H. 393 ; Austin v. Austin Gas, a sum equal to all the taxes assessed etc., Co., 69 Tex. 180, 7 S. W. Rep. against the company. 200 ; Whiting v. Town of West Point, TO Mayor of Birmingham v. Birming- 88 Va 905, 14 S. E. Rep. 698, 29 Am, ham Waterworks Co., 139 Ala. 531, St. Rep. 750, 15 L. R. A. 860; Carters- 101 Am. St. Rep. 49, 36 So. Rep. 614. ville Waterworks Co. v. Cartersville, 71 Wilson v. Supervisors, 47 Cal. 91; 89 Ga. 689, 16 S. E. Rep. 70; see see cases cited supra. also Cartersville Improvement, etc.. 660 CONSTITUTIONAL LAW OP TAXATION. make exemptions from taxation ;^^ but it may authorize a munici- pality to commute taxes for a consideration.''* Commutations. 1332. Where the legislature is under no express constitutional restraints regarding its use of the taxing power, there is no doubt that its right to make exemptions and its right to divest itself of the power of taxation in particular instances by contract, in- clude the power of commuting taxes — that is, the power to take something else, either a specified sum of money, or labor, or some other advantage, in place of the taxes.^* Constitutional provisions requiring uniformity and equality in taxation, or forbidding ex- emptions, or forbidding local or special laws, modify this power. Most of the cases hold that a requirement of equality and uni- formity, which plainly operates to forbid exemptions, forbids com- mutation of taxes, since commutation is only another form of ex- emption. It makes no difference that the commutation is for something which the legislature may deem an adequate equivalent of the taxes. A constitution which commands equality and uni- formity takes away from the legislature the discretion which it would otherwise possess in this respect — such a constitution is a declaration by the people that their representatives shall not have the power to decide what is or is not an equivalent for taxes.''^ 72 Brewer Brick Co. v. Brewer, 62 soeiation of America v. Assessors of Me. 62, 16 Am. Rep. 395; Farnsworth St. Louis County, 49 Mo. 512; State Co. V. Lisbon, 62 Me. 451; Dyer v. v. Lakeside Land Co., 71 Minn. 283, Farmington, 70 Me. 515. 73 N. W. Rep. 270; Little Falls Elec- ts City of Portland v. Portland trie, etc., Co. v. Little Falls, 74 Minn. Water Co., 67 Me. 135; Maine Water 197, 77 N. W. Rep. 40; Georgia State Co. V. City of Waterville, 93 Me. 586, Building, etc., Assn. v. Stewart, 109 45 Atl. Rep. 830, 49 L. R. A. 294. Ga. 80, 35 S. E. Rep. 73; Dubuque v. 74 Daughrill v. Insurance Co., 31 Illinois Central R. R. Co., 39 Iowa, Ala. 91; Illinois Central R. R. Co. v. 56; State v. Poynter, 59 Neb. 417, 81 McLean, 17 111. 291; Hunsaker v. N. W. Rep. 431; State v. Insurance Wright, 30 111. 146; Grant v. Daven- Co. of North America, Neb. port, 36 Iowa, 396; Cartersville Im- 100 N. W. Rep. 405; Newark and South provement Co. v. Cartersville, 89 Ga. Orange R. R. Co. v. Clark, 53 N. J. L. 683, 16 S. E. Rep. 25; Home of the (24 Vr.) 332, 21 Atl. Rep. 302 ; Colum- Friendless v. Rouse, 8 Wall. 430, 19 bia Ave., etc., Co. v. Dawson, 130 Fed. L. ed. 495; Humphrey v. Pegues, 18 Rep. 152; Memphis, etc., R. R. Co. v. Wall, 244, 21 L. ed. 326. Gaines, 3 Tenn. Ch. 604; Ellis v. Louis- 75 Hogg V. Mackey, 23 Oreg. 339, 31 ville, etc., R. R. Co., 8 Baxt. 530; Pac. Rep. 779, 37 Am. St. Rep.' 682, Railroad Co. v. Gaines, 97 U. S. 697, 19 L. R. A. 77; City of New Orleans 24 L. ed. 1091; Chattanooga v. Nash- V. Lafayette Ins. Co., 28 La. Ann. 756 ; ville, etc., R. R. Co., 7 Lea, 561 ; Alt- City of New Orleans v. New Orleans geld v. Citv of San Antonio, 81 Tex. Waterworks Co., 36 La. Ann. 432; City 436, 17 S. W. Rep. 75, 13 L. R. A. 383; of New Orleans v. New Orleans Sugar City of Austin v. Austin Gas Light Shed Co., 35 La. Ann. 548; City of and Coal Co., 69 Tex. 180, 7 S. W. Rep. New Orleans v. St. Charles, etc., Co., 200; State Trenton Saving Fund v. 28 La. Ann. 498 ; State v. Hannibal, Richards, 52 N. J. L. 156, 18 Atl. Rep. etc., R. R. Co., 75 Mo. 208; Life As- 582. ' EXEMPTIONS. 661 1333. Illustrating this proposition: in two cases cited, acts of the legislature providing that all insurance companies doing business in the state should pay certain license fees in full acquit- tance for all taxes except taxes on real estate, were held void,'^" as was a statute which relieved a railroad company from taxes in consideration of its agreement to transport the troops and muni- tions of war of the state for twenty years without charge.''^ In Kentucky the constitution forbids exemption except in con- sideration of public services, and it is held that the waterworks of a city used to furnish water to the inhabitants are not exempt as rendering a public service.''* It seems from the case quoted that public services are services rendered to the state or its municipal corporations in their political, governmental, capacity, and that in consideration of such services taxes may be commuted. Under this constitution the commutation held void in the Oregon case above referred to™ would have been valid. There are cases which hold that the rule of equality and uni- formity does not prevent commutations.*" Tests of the right of exemption. 1334. Whether the exemptions are statutory or constitutional, the language of many constitutions and statutes makes the use or character of property and not its ownership, the test of the I'ight of exemption of private property. Where the use is thus made the test, the property, in order to be exempt, must generally 76 City of New Orlpans v. Lafayette Co. v. Cartersville, 89 Ga. 683, 16 S. E. Ins. Co., 28 La. Ann. 756; Northwest- Rep. 25; see Cartersville Waterworks em Mut. Life Ins. Co. v. Lewis and Co. v. Cartersville, 89 Ga. 689, 16 S. Clark County, 28 Mont. 484, 98 Am. E. Rep. 70. In Reynolds, etc., Co. v. St. Rep. 572, 72 Pac. Rep. 982. Police Jury, 44 La. Ann. 863, 11 So. 77 Hogg V. Mackey, 23 Oreg. 339, 31 Rep. 236, a parish, as a defense to an Pac. Rep. 779, 37 Am. St. Rep. 682, action to compel it to levy a tax which 19 L. R. A. 77, where the act in form had been voted, set up that a certain was not an exemption but an appro- railroad comoany had been exempted priation of the taxes for that purpose, from such tax by the parish author- 78 Commonwealth v. Makibben, 90 ities for a consideration, hence the Ky. 384, 29 Am. St. Rep. 382, 14 S. W. whole tax was claimed to be invalid. Rep. 372. It was held that, since the rate of tax 79 Hogg V. Mackey, 23 Oreg. 339, 31 remained the same, no one was hurt, Pac. Rep. 779, 37 Am. St. Rep. 682, and the whole tax was not invalid on 19 L. R. A. 77. that account. This was a very dif- soHunsaker v. Wright, 30 111. 146; ferent thing from upholding the valid- Illinois Central R. R. Co. v. McLean, ity of the contract remitting the t;ix. 17 111 291; see Raymond v. Hartford In City of Portland v. Portland \\'ater Fire Ins. Co., 196 111. 329, 03 N. E. Co., 67 Me. 135; Maine Water Co. v. Rep. 745, holding under the present City of Waterville. 93 Me. .oSn, 4.") Atl. constitution that the legislature can- Rep. 830, 49 L. R. A. 294, ;igrecmeata not commute a municipal tax foi a by municipalities for coir.inutir'j Inxes state tax; Cartersville Improvement in consideration of watx-r supply were 662 CONSTITUTIONAL LAW OF TAXATION. be used directly, immediately, and exclusively, for the purposes which constitute the criterion of exemption.*^ 1335. An extreme application of the rule that use, not owner- ship, is the criterion, was made in a Nehraska case, where it was held that property leased by a religious association and used for religious purjDOses was exempt. ^^ In an Ohio case, on the other hand, Tv'here the exemption was of " institutions " of purely public charity, property used, but not owned, by a charitable institution was taxed. *^ 1336. Property which is owned by an institution the pur- poses of which are such as to entitle property used for those purposes to exemption, but which is rented or employed for profit, is sometimes held not exempt, although the profits obtained are iised for the purposes of the institution. In order to secure the exemption it is necessary, according to this view, that the use for the piirposes of the institution be direct.^* And it has been held that where an institution owns property not used for profit but held for investment it is not entitled to the exemption.^" upheld, although in Maine municipali- ties cannot be authorized to grant ex- emptions. 81 City of San Diego v. Linda Vista Irrigation District, 108 Cal. 189^ 41 Pac. Rep. 291, 35 L. R. A. 33; Trus- tees of Academy v. Bohler, 80 Ga. 159, 7 S. E. Rep. 033 ; Massenberg v. Grand Lodge, 81 Ga. 212, 7 S. E. Rep. 636; Wardens of St. Mark's Church v. Mayor, 78 Ga. 541, 3 S. E. Rep. 561 ; Korthwestern University v. People, 80 111. 333, 22 Am. Rep. 187; People ex rel. Kochersperger v. Chicago Theologi- cal Seminary, 174 111. 177, 51 N. B. Rep. 198; Washburne College v. Com- missioners of Shawnee County, 8 Kans. 344; Ottawa University v. Franklin County, 48 Kans. 460, 29 Pac. Rep. 599 ; Vail v. Beach, 10 Kans. 214 ; St. Mary's College v. Growl, 10 Kans. 442; Stahl V. Kansas Educational Assn., 54 Kans. 542, 38 Pac. Rep. 796; Ramsey County v. Church of the Good Shep- herd, 45 Minn. 229, 47 N. W, Rep. 783, 11 L. R. A. 175; Hennepin County v. Grace, 27 Minn. 503, 8 N. W. Rep. 761 ; St. Peter's Church v. County of Scott, 12 Minn. 395; but see Ramsey County V. McAlester College, 51 Minn. 437, 53 X. W. Rep. 704. IS L. R. A. 278, V here the real property of a college u-cd for the residence of the professors, was held to be exempt as used for col- lege purposes; Montana Catholic Mis- sions v. County of Lewis and Clarke, 13 Mont. 559, 35 Pac. Rep. 2, 22 L. R. A. 684; Omaha Medical College v. Rush, 22 Neb. 449, 35 N. W. Rep. 222 ; Academy of the Sacred Heart v. Irey, 51 Neb. 755, 71 N. W. Rep. 752. The athletic field o-f a college, which is rented in summer, is not exempt. Peo- ple ex rel. Adelphi v. Wells, 97 App. Div. 312, 89 N. Y. Supp. 957. 82 Scott V. Society of Russian Israelites, 59 Neb. 571, 81 N. W. Rep. 624. 83 Humphries v. Littlft Sisters of the Poor, 29 Ohio St. 201. 84 People ex rel. Kochersperger v. Chicago Theological Seminary, 174 111. 177, 51 N. E. Rep. 198;" Chicago Theological Seminary v. People. 189 111. 439, 59 N. E. Rep. 977; Chicago Theological Seminary v. People, 193 111. 619, 61 N. E. Rep. 1022; St. Mary's College V. Crowl, 10 Kans. 442; Stahl V. Kansas Educational Institution, 54 Kans. 542, 38 Pac. Rep. 796; Fitterer V. Crawford, 157 Mo. 51, 57 S. W. Rep. 532, 50 L. R. A. 191; Young Men's Christian Association ol Omaha v. Douglass County. 60 Nob. 642, S3 N. W. Rep. 924, 52 L, R. A. 123. 85 First Christian Church v. City of EXEMPTIONS. 663 1337. An extreme illustration of this rule is furnished by one of the cases cited, where a farm and the property used in work- ing it, which belonged to an Indian school, and which farm was cultivated in connection with the school, the produce being used in the maintenance of the institution, were held not to be entitled to exemption, althovigh property used " directly " for the pur- poses of the school would have been exempt.^® In a JSTebraska case, on the other hand, while the court reiterated the rule that in order to obtain the exemption the use must be " direct, im- mediate, and exclusive," it was held that the buildings and grounds of a seminary were exempt, although the grounds included a vegetable garden the product of which was Avholly used to supply the seminary table. *^ Illustrating the liberality with which the courts sometimes construe constitutional exemptions, it has been held that an insti- tution for teaching physical culture is an educational institution, under a constitution exempting edvicational institutions from taxation.^® 1338. Under constitutions and statutes exempting property nsed for charitable purposes, lodges, societies, and beneficial orders, such as Masons, Knights of Pythias, and the like, whose charities are restricted to their own members, their families, widows, and orphans, have frequently sought exemptions of their ])roperty. Whether they are entitled to exemption — it being assumed that they can prove that their purposes are charitable, for there is no presumption that a lodge or secret society is a charitable institution*® — depends much on the wording of the Beatrice, 39 Neb. 432, 58 N. W. Rep. County, 30 Colo. 507, 71 Pac. Rep. 410, 4gg_ overruling County Commissioners v. 86 St. Mary's College v. Growl, 10 Colorado Seminary, 12 Colo. 497, 21 Kans 442 ^^.e. Rep. 490 ; see also Willard v. 87 Academy of the Sacred Heart v. Pike, 59 Vt. 202, 9 Atl. Rep. 907. In Irey 51 Neb. 755, 71 N. W. Rep. 752. Maine it is held that occasional leas- The'same was held in New Jersey, ing of exempt property, and receiving v/here the exemptions were statutory; rentals, does not destroy the exemp- Sisters of Charity v. Chatham, 52 N. tion. The substantial use must be for J. L. (23 Vr.) 373, 20 Atl. Rep. 292, exempt purposes. Curtis v. Andros- ^ L. R. A. 198; Cooper Hospital v. eoggin Lodge, Me. , 59 Atl. Bird'sall, 63 N. J. L. (34 Vr.) 85, 42 Rep. 518. See also People ex rel. Mt. Atl Rep. 853 (and it makes no differ- Pleasant Academy v. Mezger, 'jo App. enee that the title to the property is Div. 237, 90 N. Y. Supp. 488. vested in a trustee, which is a foreign 88 German Gymnastic Assn v. City corporation, Litz v. .Johnson, 65 N. J. of Louisville, Ky. , 80 S. W. L. (36 Vr.) 169, 46 Atl. Rep. 776; Rep. 201, 65 L. R. A. 120, 25 Ky. L. Congregation of St. Vincent de Paul Rep. 2105. V. Brakely, 67 N. J. L. (38 Vr.) 176, 8«Adelphia Lodge Knights of 50 Atl. Rep. 589) ; and in Colorado, Pythias v. Crawford, 157 Mo. 356, 57 Colorado Seminary v. Arapahoe S. W. Rep. 1020. 6G4 CONSTITUTIONAL LAW OF TAXATION. constitution or statute, tlie qnestion being here discussed mainl.y" as a constitutional one. Where the constitution or statute ex- empts institutions of purely public charity, as is the case in many states, the property of or used by such institutions is not gen- erally exempt, since they are private enterprises.^ 1339. But where the exemptions are not thus restricted to purely public charities, but are granted to " charitable institu- tions," or property " used for purposes purely charitable," or the like, such lodges and societies may secure the exemptions granted for themselves or the property they use in their purposes, if they show that they exist for purposes of benevolence and charity, although they limit their benevolence to their ovm members and those dependent on their members.^* 1339fiL Where the ownership of property is the criterion of exemption the inquiry must be as to the title, legal or equitable, or both. The scope of this work does not include detailed dis- cussion of the statutes of various states, in such respects as this. In the collection of cases cited in the note many state decisions- will be found.''* Public property. 1340. Exemptions of property belonging to the public are sometimes expressly declared in constitutions, and, where not so expressly declared, they are sometimes spoken of as exemptions implied from the nature of governmental institutions. The ex- emption of the property and agencies of the Federal government from state and local taxation,*^ and of the property and agencies- *o City of Newport v. Masonic Tem- 163; Donohugh v. Library Co., 86 Pa. pie Assn., Ky. , 56 S. W. Rep. St. 306. 405; Bangor v. Masonic Lodge, 73 Me. 9i Fitterer v. Crawford, 157 Mo. 51,. 428, 40 Am. Rep. 369; Young Men's 57 S. W. Rep. 532, 50 L. R. A. 191; Protestant, etc., Society v. Fall River, Mayor of Savannah v. Solomon's 160 Mass. 409, 36 N. E. Rep. 57 ; Hen- Lodge, 53 Ga. 93 ; Indianapolis v. nepin Coxmty v. Brotherhood of Geth- Grand Master of the Lodge, 25 Ind> semane, 27 Minn. 460, 38 Am. Rep. 518; State ex rel. Bertel v. Board of 298, 8 N. W. Rep. 595 ; Morning Star Assessors, 34 La. Ann. 574 ; Hibernian Lodge V. Hayslip, 23 Ohio St. 144; Benevolent Society v. Kelly, 28 Oreg. Mitchell V. Treasurer of Franklin 173, 52 Am. St. Rep. 769, 42 Pac. County, 25 Ohio St. 144; Philadelphia Rep. 3, 30 L. R. A. 167; Petersburg v- V. Masonic Home, 160 Pa. St. o72, 40 Petersburg Benevolent Assn., 78 Va. Am. St. Rep. 736, 2S Atl. Rep. 954, 23 431. A club house owned by a lodge L, R. A. 525; Swift's Executors v. of Ellcs is not exempt. Green Bay Beneficial Society of Easton, 73 Pa. St. Lodge v. Green Bay, 122 Wis. 452, 100 362; Babb v. Reed, 5 Rawle, 151, 28 N. W. Rep. 837. Am. Dec. 650 ; Burd Orphan Asylum 92 See American and English En- V. School District of Upper Darby, 90 cyclopedia of Law (2d ed.), Vol. XII,. Pa. St. 21; Delaware Institute of 266. Science v. Delaware County, 94 Pa. St. 93 See chap. IX. EXEMPTIONS. 665 of the state governments from Federal taxation,*^ have already been dealt witli. The implied exemption of state property from state and local taxation is not often brought into discussion because nearly all state constitutions exempt such property, and where the constitu- tions do not, the statutes generally do make such exemptions. It would be manifestly absurd for the state to tax itself, to take the money out of its treasury with which to pay taxes back to the treasury, which is all such taxation would amount to. And, in their relation to the state, municipalities, counties, and other political subdivisions are state agencies; and taxation of state property by them would only be another form of taxation of the state by itself. In addition, the taxation of state property by local governments would result in a lack of uniformity, for the people of the whole state would be taxed for the benefit of the localities where the state property should be located. 1341. Municipalities are only gwost-governmental, and differ- ent considerations apply to the taxation of their property. The general rule with respect to state taxation of the property of such corporations, sometimes regarded as an implied limitation arising out of the general nature of our public institutions, and sometimes expressed in written constitutional restrictions, is, that the legislature may not tax — or rather, ivill not be deemed to have intended to tax — the property of mimicipal corporations owned and used by them in carrying out their strictly govern- mental functions, but that the other property of such corpora- tions, held for commercial purposes, or for the convenience or profit of its citizens, is subject to state taxation, at the will of the legislature. 1342. The distinction between these classes of municipal prop- erty was well expressed by the highest court of Kentucky in a case where the question was whether an act was valid, exempting from taxation the property of a water company whose stock was owned by the sinking fund of the city of Louisville, as follows: A municipal corporation has a double character, in one it acts strictly in its governmental capacity, in the other for the profit or convenience of its citizens. Considered in the latter light, it occupies the attitude of a private corporation merely, while in the former it is an arm of the state government, or a part of its political power. It is an imperium in imperio. The prop- erty necessary to the exercise of those duties which are strictly 94 See §§ 742 et aeq. 666 CONSTITUTIONAL LAW OF TAXATION. governmental is exempt from taxation, but this is not so of that which i? held by the municipalit}^ for the comfort of its citizens, . individually or collectively, or for money-making purposes merely. While the sinking fund of the city of Louisville is a distinct corporation, yet it is owned by the city, and merely con- trols its funds. It discharges no governmental duties, and was created merely to make money for the city. It may invest the funds in stocks of any character, if they are likely to bring good returns, like any other private corporation. It will hardly be contended that if it were to invest money in a private manu- facturing company, that the legislature could constitutionally exempt that company from taxation. In short, the city in its private, and not its governmental, character, owns the stock and property of the water company ; and this ownership is not neces- sary to the execution of its duties as a political or governmental power. This being so, it stands upon the same footing as would any individual or body of persons if like privileges had been con- ferred upon them, and cannot be constitutionally exempted from state taxes, save in consideration of public services.^^ 1343. Under constitutional requirements of uniformity and equality, the rule takes on a slightly different aspect; and then may be stated, generally, to be, that the public property of such cor- porations may be exempted and their private property must be taxed. Provisions providing for the exemption of public prop- erty are quite commonly coupled with provisions requiring equal- ity. The examination of some eases, expounding such provisions, will prove helpful. Others are cited in the resume of the state decisions on uniformity and equality, to be found elsewhere.^® 1344. In Illinois the constitution provides that "the property of the state, counties, and other municipal corporations, both real and personal . . . may be exempted from taxation, but such exemption shall be only by general law." It also provides for taxation in proportion to valuation. It was said in an early case that the assessment of public taxes upon the public property of the state, county or municipal corporations was a mere question of legislative j)olicy ; and that the power existed to make such property bear its share.^^ It is held that this constitutional lan- guage plainly implies that the property of municipal corporations is subject to taxation unless there is a law exempting it.** 95 Clark V. Louisville Water Co., 90 646 ; Matter of Swigert, 123 111. 267, Ky. 515, 14 S. W. Rep. 502; partially 14 N". E. Rep. 32; People v, Chicago, reported, ■><) Am. St. Rep. 386. 124 111. 636, 17 N. E. Rep. 56; Sani- 96 See chap. XXllI. tary District of Chicago v. Martin, 173 STHiggins v. Chicago, 18 111. 276. 111. 243, 64 Am. St. Eep. 110, 50 N. E. 88 Cook County v. Chicago, 103 111, Rep. 201. EXEMPTIONS. 667 1345. In the revenue act under which some of the cases just cited were decided, the legislature of Illinois clearly marked the distinction between jDroperty owned by municipal corporations and actually iised for public purposes, and property owned by them and not so used, by exempting: All property of every kind belonging to the state of Illinois . . . and . . . All market houses, public squares or other public grounds used exclusively for public purposes; all works, machinery and fixtures belonging exclusively to any town, village, or city, and used exclusively for conveying water to such town, village or city. It was held under this act that no exemption was granted in the case of lands lying outside the city of Chicago and outside the limits of a public corporation known as the Sanitary District of C'hicago, owned by the latter corporation, which were found by the court below to be " necessary for the purpose of constructing the channel for the said districts and its adjuncts thereto, for the purpose of drainage of said sanitary district in accordance with the provisions of the act of the legislature authorizing the creation of said district; and that said lands have been used and were acquired by said district exclusively for such purpose." ^ 1 346. In this case the Supreme Court of Illinois construed the «ct very strictly and confined the exemption within very narrow limits. " Public grounds " were limited to mean only svich grounds as are resorted to and used by the public generally, such as streets, parks, and the like. In another case exemption was denied to a bridge belonging to the city of Moline and lying with- out the corporate limits,' and in another to a farm belonging to the city of Chicago lying outside the corporate limits and not actually used for public purposes.^ I think that the construction placed on this act by the Illinois courts is narrower than that which most courts would uphold. 1 347. ^^'orks for the supply of water or light to inhabitants are held in Kentucky to be owned by municipalities in their private capacity, hence they are taxable.^ And a, municipal corporation has been held to be subject to taxation upon its intangible property 99 Sanitary District of Chicago v." 3 Commonwealth v. Makibben, 00 Kv. Martin, 173 111. 243, 64 Am. St. Rep, 384, 21.1 Am. St. Rep. 382, 14 S. \V. 110 50 N. E. Rep. 201. Rep. 372; City of Newport v. Com- 1 Matter of Svvigert, 123 111. 267, 14 monwealth, Ky. , 50 S. \V. X E Rep 32. Rep. 845, 51 S. W. Rep. 433, 45 L. a People V. Chicago, 124 111. 636, 17 R. A. 518, 21 Ky. L. Rep. 42. N. E. Rep. 56. 668 CONSTITUTIONAL I>AW OP TAXATION. used in supplying water, to wit, the franchise for that pur- pose, to the same extent as a private corporation.* 1348. Where city waterworks are used solely for the purpose of cleaning streets, extinguishing fires, and the like, their use is purely governmental, and they are exempt from taxation under a constitutional provision permitting exemptions of public properly used for public purposes.^ In Kansas it is held that the legis- lature has power to exempt from taxation waterworks owned b}- a city, akhough water is sold to private individuals.* Public- parks owned by municipalities,^ engine houses and other buildings and appliances necessary and incidental to the operation of a municipal fire department^ have been held to be exempt. It has been held that a municipal dispensary owned by a city is exempt, although the municipality ,had not authority to establish it.® 1349. There are some cases which say that property exempt must be owned by the state or municipal corporation itself, or by some one holding for its exclusive benefit and use, and not by some other quasi-'pvJolic body, or a private person. Under a constitutional provision in Georgia which exempted " all public property " from taxation the legislature passed an act exempting armories " owned " and occupied by the state militia. This act was held to be unconstitutional as such armories were not public property. In the particular case the property was owned by a private corporation known as the " Eoard of Trustees of the Gate City Guards," neither the legal nor equitable title being in the state or in any subdivision thereof. ^° Public property, it was said, " embraces only such property as is owned by the state or some political division thereof, and title to which is vested directly in the state or one of its subordinate political divisions, or in some * City of Newport v. Commonwealth, 7 City of Owensboro v. Common- Ky. , 50 S. W. Rep. 845, 51 wealth, 20 Ky. L. Rep. 1281, 49 S. W. S. W. Rep. 843, 45 L. R. A. 518, 21 Rep. 320, 44 L. R. A. 202; Sanitary Ky. L. Rep. 42. Bonds of a street District of Chicago v. Martin, 173 111. lighting company, owned by a city, are 243, 64 Am. St. Rep. 110, 50 N. E. not exempt in Kentucky. City of Rep. 201. Frankfort v. Commonwealth, 26 Ky. ^ City of Owensboro v. Common- L. Rep. 957, 82 S. W. Rep. 1008. wealth, 20 Ky. L. Rep. 1281, 49 S. W. 5 City of Owensboro v. Common- Rep. 320, 44 L. R. A. 202, overruling wealth, 20 Ky. L. Rep. 1281, 49 S. W. City of Louisville v. Commonwealth, Rep. 320, 44 L. R. A. 202, as inter- 1 Duv. 295, 8.5 Am. Dec. 624; and see ])reted in City of Newport v. Common- Greenwoed v. Louisville, 13 Bush, 226, wealth, Kv. , 50 S. W. Rep. 26 Am. Rep. 263. 845, 51 S. W. 'Rep. 843, 45 L. R. A. 8 Walden v. Whigham, 120 Ga. 646, 518, 21 Ky. L. Rep. 42. 48 S. E. Rep. 159. 8 Sumner County V. City of Welling- 10 Board of Trustees of Gate Citv ton, 66 Kans. 590, 97 Am. St. Rep. Guards v. Atlanta, 113 Ga. 883, 3» 396, 72 Pac. Rep. 216. S. E. Rep. 394, 54 L. R. A. 806. * EXEMPTIONS. 669 person holding exclusively for the benefit of the state or a sub- ordinate public corporation." ^^ So in Kentucky property owned by a separate corporation known as the sinking fund, is not exempt as public property ;^^ and in Minnesota, a provision exempting '' public property used exclusively for any public purpose," was held not applicable to real estate owned and leased by a private person, who received the rents to his own use, which real property was used exclusively as a public market under municipal authority and regulation. ^^ 1350. The exemption of property used for public purposes when held by some one other than the state or a municipal corpora- tion for the exclusive ienefit and use of the public, is illustrated hx a case construing a statute which exempted " all public property . belonging to this state." The question was one of construction and not of legislative power. It was held iinder this statute that tlie property held by the Regents of the University of Michigan in their corporate capacity was the public property of the state held by the corporation in trust for the purposes — wholly educa- tional — to which it was devoted.^* 1351. Contractual exemptions are discussed in another chapter ire others. But even under such provisions, the proposition that a tax on different forms in which interests in the same prop- erty are represented, is a tax on different properties, hence is not double taxation ; and the related proposition, that an indirect tax and a direct tax, both of which ultimately reach the same property, or are paid by the same person, are not double taxation; are fre- quently applied with the practical result that actual double taxa- tion often occurs with the approval of the courts. 1 364. Among the states where duplicate taxation is most care- fully avoided, either by express constitutional enactment or by the decisions of the courts, or by both, are Alabama,^ Cali- 2 People ex rel. N. Y. C, etc., E. R. v. Home Ins. Co., 92 N". Y. 328 ; Toll Co. V. Roberts, 32 App. Div. 113-115, Bridge Co. v. Osborn, 33 Conn. 7. 52 N. Y. Supp. 859; affirmed, 157 N. 3 Const., Art. XI, § 211, quoted in Y 677 51 N. E. Rep. 1093; People § 1505 of this work. 676 CONSTITUTIONAL LAW OF TAXATION. fornia/ Idaho,^ Michigan,® Montana/ New Hampshire,* and Utah.^ In Illinois there are strong expressions against double taxation,-''' but the actual decisions on the subject do not differ from those in most states as much as might be inferred from the general ex- pressions.'* In other states, under constitutional requirements of equality and uniformity, it has been said that double taxation is not necessarily unconstitutional.'^ Direct double taxation. 1365. Of course where the same property is directly taxed to the same person twice in the same levy, such taxation is void. It discriminates between the person thus taxed and others in like situation — i. e,., other possessors of property, who are taxed but once. The avoidance of such taxation is more a matter of statutory construction than of constitutional law, for such in- stances must generally occur through mistake of law or fact by the taxing officers, and not by deliberate intention of the legisla- ture. This is illustrated in Illinois cases where the law required property used in connection with a railroad for tracks, side tracks, etc., to be valued by a state board as a part of the whole value of the road by the " unit " method, and made other realty subject to assessment by local assessors. Under this law real property which had been assessed and taxed by the state board (the taxes so laid having been paid) was assessed again by local assessors in the same general levy. The local tax was held to be unauthorized and void.'^ iGermania Trust Co. v. San Fran- 67 Am. St. Eep. 224, 51 N. E. Rep. <;isco, 128 Cal. 589, 61 Pac. Rep. 178; 907, 49 L. R. A. 408. Burke v. Badlam, 57 Cal. 594, 602, n See discussion of particular in- 603. stances in following sections. s Const., Art. VIII, § 5, quoted in 12 Fish v. Branin, 23 N. J. L. 484; § 1527 of this work. ' Pacific Nat. Bank v. Pierce County, 20 6 Standard Life and Accident Ins. Wash. 675, 56 Pac. Rep. 936. Co. V. Board of Assessors of Detroit, 13 Chicago, etc., Ry. Co. v. People, 95 Mich. 466, 52 N. W. Rep. 17. 99 111. 464; Chicago, etc., Ry. Co. v. 7 Const., Art. XII, § 17, quoted in People, 98 111. 350 ; Chicago, etc., Ry. § 1612 of this work. Co. v. Miller, 72 111. 144. But a rail- 8 Kimball v. Milford, 54 N. H. 406 ; road company cannot avoid local taxa- Sinith V. Burley, 9 N.-H. 423. tion on property not actually used for fl Art. XIII, § 2, quoted in § 1694 of railroad track by returning it to the tliis work. state board as railroad tracks. People 10 Chicago, etc., Ry. Co. v. People, v. Board of Equalization, 203 111. 2f)(i, nn 111. 464; Scully v. People, 104 111. 68 N. E. Rep. 943. In a case in C>li- 349; Chicago v. Collins, 175 111. 445, fornia it appeared that one of the ends DOUBLE TAXATION. 677 1365(1. In a Georgia case the law required a return of realty for taxation on the 1st of each April; and a return of personalty for taxation on the 1st of each May. The lien of both taxes accrued on April 16th. The owaer of real estate, returned for taxation on April 1st, sold it on April 5th. On May 1st she returned her personalty for taxation, including the money received for the real estate. She paid the tax on the personalty, and re'fused to pay on tlie realty, and at her suit injunction was granted (on appeal) re- straining the collection of the tax on the lot, on the ground that to tax her on both the lot and the proceeds in the same year ■ would be unconstitutional double taxation.-'* 1365&. The taxation of rents to the owner of the land, before the rents are due, has been held to be unauthorized double taxation.-'^ In Louisiana an assessment of trees upon a plantation, which trees had already been taxed as a part of the plantation for the same calendar year, was held void."'® Property situated in. a municipality cannot be taxed by two jiu-isdictions for the same purposes, as that would be unconsti- tutional double taxation. Where a " parish committee " had autliority, under a peculiar system, to levy taxes upon a munici- pality, it was held that the property in the municipality could not be subjected to taxation by the " police jury " of the parish, for substantially the same governmental purposes. ^^ A tax upon the income derived from land or from investments in personal property is a direct tax upon the land or the invest- ments.'^* Where the land is taxed, therefore, a tax on the income derived from it is double taxation. This was held in 'Sew Hamp- shire in a case where owners of lands had leased the lands under a lease which provided that the lessee should pay all taxes and assessments. The lands were taxed to the lessees, and the own- ers were taxed for the value of the lease as an interest distinct of a railroad was on a wharf, which i* Sheibley v. City of Rome, 107 Ga. belonged to the railroad company. The 384, 33 S. E. Rep. 398. wharf yielded to the company an in- 15 Scully v. People, 104 111. 349. come distinct from that yielded by the 19 Palfrey v. Connely, 106 La. 699, road. The whole road was assessed 31 So. Rep. 148. by a state board, and the wharf was n Felix v. Wagner, 37 La. Ann. 391. also assessed by the local authorities. 18 Pollock v. Farmers' Loan and It was held that this was not double Trust Co., 157 U. S. 429, 30 L. ed. taxation, as the wharf was property 759, 15 Sup. Ct. Rep. 673; 158 V. S. distinct from the roadbed. Pacific 601, 39 L. ed. 1108, 15 Sup. Ct. Rep. Coast Ry. Co. v. Ramage, Cal. , 912 : Kennard v. Manchester, 68 N. H. 37 Pac. Rep. 532. 61, 36 Atl. Rep. 553. G78 CONSTITUTIONAL LAW OF TAXATION. from the fee. The value of the lease was assessed at a sum which, placed at interest, would amount to the rent reserved. The tax was abated, the Supreme Court saying : " The constitution forbids such inequality of taxation."^ However, the taxation of rents reserved in fee under a lease to the person entitled to receive the rents, while the real estate itself is taxed to the lessee, is authorized in New York, where there is no requirement of equality.^^ The manner of disposition of income after it has been received cannot affect the power of the state to tax incomes, and the invest- ment of income in taxable real estate does not render the taxation of the income double taxation.^ Taxing standing timber to the owner of the timber and the lands on which it stands to their owner is of course not double taxation, if the value of the timber is taken separately from the value of the lands.^^ The receiver of an insolvent bank may be taxed on the assets in one district, and in other districts the creditors may be taxed on their proportions of the assets.^* 1365c. In a Virginia case where statutes provided that sol- vent credits should be taxed, the statutes were construed to pre- vent the taxation of notes or other evidences of debt in the hands of a court officer, executed for the purchase price of property sold under a decree of the court. It was said that to construe the statutes so as to tax such notes would be to cause uncon- stitutional double taxation ; as the debt — to satisfy which the property had been sold under the court's decree — was already taxed, and to tax the notes received on the sale would be to tax the same debt twice.^^ Presumption is against double taxation. 1366. The presumption of law, it is said in many cases, is against double taxation, and it is said that statutes will be con- strued to avoid such a result if possible. 20 Kennard v. Manchester, 68 N. H. 24 Gerard v. Duncan, Miss. , 61, 36 Atl. Rep. 553. 36 So. Eep. 1034. 21 Woodruff V. Oswego Starch Co., 26 Fulkerson v. Bristol, 95 Va. 1, 27 177 N. Y. 23, 68 N. E. Rep. 944, af- S. E. Rsp. 815. This is quite a dif- firming 70 App. Div. 481, 74 N. Y. ferent thing from taxing the debt and Supp. 961. also the property for the purchase 22 Lott V. Hubbard, 44 Ala. 593. price of which the debt was created. 23 Globe Lumber Co. v. Lockett. 106 La. 414, 30 So. Rep. 902. DOUBLE TAXATION. 679 Double taxation is, however, never to be presumed. Justice requires that the burdens of government shall, as far as practi- cable, be laid equally on all, and, if property is taxed once in one way, it would ordinarily be wrong to tax it again in another way, when the hurden of both taxes falls on the same person. Some- times tax laws have that eiiect ; but if they do, it is because the legislature has unmistakably so enacted. All presumptions a/re against such an imposition?'^ Property and privilege taxation with respect to the same article. 1367. Although an article has already been taxed as property, upon an ad valorem basis, that fact will not generally render a privilege tax upon an occupation or business in which it is used obnoxious to a constitutional requirement of uniformity. ^^ In one case a license tax on butchers of so much for each wagon used was assailed under such a constitutional requirement because the wagons had already been taxed as property. The court said, in overruling the contention : The tax now in question is not a property tax but a business tax. The wagon is treated as an instrument used in carrying on the business of the complainants within the city, and it has been ruled, and, no doubt, rightly ruled, that the number and kind of vehicles may be regarded in measuring a tax of this description. That the complainants are in no default to the ■state and county in respect to taxes upon the value of the wagon as property is no protection to them against the business tax now demanded.^ 26 Tennessee v. Whitworth, 117 U. ford, 54 N. H. 406 ; Berry v. Windham, S. 129-137, 29 L. ed. 830, 6 Sup. Ct. 59 N. H. 288, 47 Am. Reo. 202 ; People Rep. 645; Board of Revenue v. Mont- ex rel. New London Savings Bank gomery Gas Light Co., 64 Ala. 269; v. Coleman, 135 N. Y. 231, 31 N. E. Germania Trust Co. v. San Francisco, Rep. 1022; People ex rel. N. Y. C, 128 Cal. 589, 61 Pac. Rep. 178; People etc., R. R. Co. v. Roberts, 32 App. V. Townsend, 56 Cal. 556; Savings Div. 113, ll5, 52 N. Y. Supp. 859; Bank v. New London, 20 Conn. Ill; affirmed, 157 N. Y. 677, 51 N. E. Rep. Osborne v. New York, etc., R. R. Co., 1093; Commonwealth v. Fall Brook 40 Conn. 491 ; Palfrey v. Connely, 106 Coal Co., 156 Pa. St. 488, 26 Atl. Rep. La. 699, 31 So. Rep. 148; State v. 1071; Fidelity Co. v. Loughlin, 139 Sterling, 20 Md. 502; Gordon's Exec- Pa. St. 612, 21 Atl. Rep. 163; Ful- utors v. Baltimore, 5 Gill, 231 ; Monti- kerson v. Bristol, 95 Va. 1, 27 S. E. cello Distilling Co. v. City of Balti- Rep. 815; Ridpath v. Spokane County, more, 90 Md. 416, 45 Atl. Rep. 210; 23 Wash. 436, 63 Pac. Rep. 261. Standard Life and Accident Ins. Co. v. 27 American Express Co. v. St. Board of Assessors of Detroit, 95 Mich. Joseph, 66 Mo. 675, 27 Am. Rep. 382; 466, 52 N. W. Rep. 17, see Detroit St. Joseph v. Ernst, 95 Mo. 367; Common Council v. Board of Assessors, Aurora v. McGannon, 138 Mo. 38, 39 91 Mich. 78, 51 N. W. Rep. 787, 16 S. W. Rep. 469; Springfield v. Smith, L. R. A. 59; State v. Simmons, 70 138 Mo. 645, 60 Am. St. Rep. 569, 40 Miss. 485-498, 12 So. Rep. .477; State S. W. Rep. 757, 37 L. R. A. 446; Little v. Jackman, 69 N. H. 318, 41 Atl. Rock v. Prather, 46 Ark. 479. Rep. 347, 42 L. R. A. 438 ; Smith v. 28 Davis, v. Mayor, etc., of Macon, Burley, 9 N. H. 423; Kimball v. Mil- 64 Ga. 128, 37 Am. Rep. 60. 680 CONSTITUTIONAL LAW OF TAXATION. License taxes upon street car companies of so much per car (in addition to ordinary property taxes) are upheld under constitu- tional requirements of uniformity.® License taxes on wagons used in the streets of a city have been upheld against similar conten- tions.^" A merchant may be required to pay both a license tax^ measured by his " stock of goods,'' and an ad valorem tax on prop- erty invested in the business.^^ A billiard table may be taxed as property, and also a license tax may be laid upon its use.^* 1 368. Where in such case the alleged privilege tax is in fact a property tax, it is a violation of the rule of uniformity and equality and is invalid. In Illinois, a license tax imposed on owners' vehicles for the privilege of using the city streets was held invalid on several grounds, among others, that it was double taxation, as the vehicles were already taxed ad valorem.. Said the Supreme Court of Illinois : It is a fundamental maxim in taxation that the same property shall not be subject to a double tax payable by the same party ^ directly or indirectly.^ In Oregon a specific tax on bicycles was held invalid, among other grounds, as double taxation because bicycles were already taxed ad valorem.^* In Georgia it was held that while business and the property used in business might both be taxed, a tax on a wagon kept for private use and not employed in the business of the owner, and which had already been taxed ad valorem, was void for duplicity. ^^ In Kentucky it was held that a specific tax imposed on vehicles used in or in connection with the regular 29 Denver City Ey. Co. v. Denver, 48, 49 L. ed. , 25 Sup. Ct. Rep. 21 Colo. 350, 52 Am. St. Rep. 239, 41 705. I'ae. Rep. 826, 29 L. R. A. 608, in 30 St. Louis v. Green, 70 Mo. 562, this ease there was some question in 7 Mo. App. 468; Ft. Smith v. Scruggs, the lower courts whether the charge 70 Ark. 549, 69 S. W. Rep. 679, 91 of $25 was excessive as a charge for Am. St. Rep. 100, 58 L. R. A. 921 ; police regulation; but in the final dis- Kentz v. City of Mobile, 120 Ala. 623, position of the case the question be- 24 So. Rep. 952. came immaterial because the charge 31 De Arman v. Williams, 93 Mo. Avas upheld as a license tax and not 159 ; City of Aurora v. McGannon, 138 as a police regulation; Newport News Mo. 38, 39 S. W. Rep. 469. Railway and Electric Co. v. City of 32 State v. Jones, Idaho, , 75 N'ewport News, 100 Va. 157, 40 S. E. Pac. Rep. 819. Rep. 645. There is no denial of equal- 33 Chicago v. Collins, 175 111. 445, ity when the franchises of a street rail- 67 Am. St. Rep. 224, 51 N. B. Rep. way are taxed as property, in addi- 907, 49 L. R. A. 408. tion to license fees for the running 34 Ellis v. Frazier, 38 Oreg. 462, 63 of the street cars. New York v. State Pac. Rep. 642, 53 L. R. A. 454. Board of Tax Commissioners, 199 U. S. 36 Johnston v. Macon, 62 Ga. 645. DOUBLE TAXATION. 6H1 business of the owner was a proper exercise of the power to license an occupation ; but that a statute authorizing a city to impose a tax on all vehicles kept for family use, such vehicles being liable to ad valorem taxation, was void as authorizing double taxation of that class of property.^' Taxation of debtor and creditor in respect of the same property. 1 369. The assessment of credits to their owner, and the assess- ment of the property for which the credits were given to its owner, is constitutional.^^ The method of valuing the property of a cor- poration by basing the valuation upon the stock and bonded debt is not unconstitutional duplicate taxation in Tennessee.^* 1370. It is generally held that a mortgagee of property may be taxed in respect of the mortgage debt, and at the same time the owner of the property may be taxed in respect of it at its full value, without deduction of the mortgage debt.** 1371. In California the constitution is strictly interpreted ii gainst double taxation. While it allows the taxation of bonds and other obligations securing debts, yet it has always been under- stood that double taxation in any form is no part of the scheme whereby such credits are to be taxed.^** It is held, under the California constitution,*^ that where bonds are secured by mort- gage, inasmuch as the constitution makes them an interest in the property on which they are secured, the bonds cannot be taxed if the property on which they are secured is taxed at its full value. Said the California Supreme Court, in reply to the proposition by ^vhich such double taxation is commonly justified : 38 Livingston V. Paducah, 80 Ky. 656. Md. 218; Allen v. County Commis- 37 People V. Rhodes, 15 111. 304; sioners of Harford Co., 74 Md. 294, Goldgart v. People, 106 111. 25; GriflSn 22 Atl. Kep. 398; Appeal Tax Court V. Board of Review, 184 111. 275, 56 N. of Baltimore v. Rice, 50 Md. 302 ; At- E. Rep. 397, where the amount due torney-G«neral v. Supervisors of Sani- and unpaid under a contract for the lac County, 71 Mich. 16, 38 N. W. sale of lands was taxed as a credit, Rep. 639; see Detroit Common Coun- the vendee being in possession of the cil v. Board of Assessors, 91 Mich, lands and having agreed to pay the 78, 51 N. W. Rep. 787 ; State v. Jones, taxes on them, although the vendor 24 Minn. 251; St. Louis, etc., Co. v. still held title; Kingsley v. Merrill, Board of Assessors of St. Louis Wis. , 99 N. W. Rep. 1044. Countj', 56 Mo. 503; Morrison v. Man- as Grundy County V. Coal Co., 94 Chester, 58 N. H. 538; Drew v. Mor- Tenn. 295, 29 S. W. Rep. 116. rill, 62 N. H. 23; Judge v. Spencer, 39 Alabama Gold Life Ins. Co. v. 15 Utah, 242, 48 Pac. Rep. 1097; Lott, 54 Ala. 499; Lamar v. Palmer, State v. Carson City Savings Bank, 18 Fla. 147; People v. Worthington, 17 Nev. 146, 30 Pac. Rep. 703. 21 111. 171, 74 Am. Dec. 86; Griffin 40 Germania Trust Co. v. San Fran- V Board of Review of La Salle County, cisco, 128 Cal. 589, 61' Pac. Rep. 178. 184 111.275,56 N. E. Rep. 397; Mayor, « For the text see § 1510 of this etc., of Baltimore v. Canton Co., 63 work. 682 CONSTITUTIONAL LAW OF TAXATION. It is no answer to say that if the bonds are assessed to the holder, and he pays the tax on them, he is taxed only once; for double taxation may consist in requiring a double contribution to the same tax on account of the same property, even though the assessments are to different persons.*^ Double taxation of corporations and corporate property and shares. 1372. The property or capital stock of a corporation may bo taxed and at the same time it may be subjected to a " franchise " tax in the nature of a privilege tax.*^ A foreign insurance com- pany may be compelled to pay a license fee, for the privilege of doing business in the state, and also a tax upon the excess of premiums received annually, over losses and ordinary expenses incurred v?ithin the state.'** A co-operative insurance company may be taxed on its property, vs^hich consists of money con- tributed by members for the payment of losses; although the mem- bers are taxed on the property which the company has insured.*® 1 373. Although the " franchises " of a corporation are already taxed as property, a " franchise " or privilege tax may also be imposed upon the corporation. An ad valorem tax may be imposed upon the franchise considered as property, and also a privilege tax for the use of the franchise.*® Where a corpora- tion is engaged in conducting a licensed occupation, it may be compelled to pay both a " franchise " tax for its corporate privi- leges and the occupation tax imposed on the business it conducts.*^ *2 Germania Trust Co. v. San Fran- v. Board of Commissioners, 72 N. C. Cisco, 128 Cal. 589-595, 61 Pao. Eep. 10; Southern Gum Co. v. Laylin, 66 178; Estate of Pichoir, 128 Cal. 615, Ohio St. 578, 64 N. E. Rep. 564; West- 61 Pac. Rep. 1130; Estate of Fair, 128 ern Assurance Co. v. Halliday, 127 Cal. 607-610, 61 Pac. Rep. 184. Fed. Rep. 830. 43 Troy Fertilizer Co. v. State, 134 « Northwestern Mutual Life Ins. Ala. 333, 32 So. Eep. 618; State Rail- Co. v. Lewis and Clarlje County, 28 road Tax Cases, 02 U. S. 575, 23 L. Mont. 484, 98 Am. St. Rep. 572, 72 ed. 663; Porter v. Rockford, etc., Ey. Pac. Eep. 982. Co., 76 111. 561; Ottawa Glass Co. v. *5 German Washington Fire Insur- McCaleb, 81 111. 556; Walker v. ance Assoc, v. City of Louisville, 25 Springfield, 94 111. 364; South Gov- Ky. L. Rep. 1697, 78 S. W. Rep. 472. ington, etc., Ry. Co., v. Town of Belle- *6 South Covington, etc., Ry. Co. v. vue, 105 Ky. 283, 49 S. W. Rep. 23, Town of Bellevue, 105 Ky. 283, 49 57 L. E. A. 50; Levy v. City of Louis- S. W. Eep. 23, 57 L. E. A. 50; Levy ville, 97 Ky. 394, 30 S. W. Eep. 973, v. City of Louisville, 97 Ky. 394, 16 16 Ky. L. Eep. 872, 28 L. R. A. Ky. L. Eep. 872, 30 S. W. Rep. 973, 480 ; United States Electric Power 28 L. R. A. 480 ; Southern Gum Co. v. and Light Co. v. State, 79 Md. 63, Laylin, 66 Ohio St. 578, 64 N E Rep. 28 Atl. Rep. 768 ; St. Joseph v. Ernst, 564. 95 Mo. 360, 8 S. W. Rep. 558; Wil- 47 Cobb v. Commissioners of Dur- mington Unde'rwriters' Insurance Co. ham County, 122 N. C. 307 30 S E V. Stedman, 130 N. C. 221, 41 S. E. Rep. 338. Rep. 279; Wilmington, etc., R. R. Co. DOUBLE TAXATION. 683 1374. Shares of corporate stock in the hands of shareholders and the property of the corporation itself are different proper- ties; both may be taxed at their full value without violation of constitutional requirements of uniformity and equality. Such taxation is held not to be double taxation.*® 1 375. In New Hampshire where the rule of equality is strictly followed, shares of stock of a corporation cannot be taxed to the holders while at the same time the corporate property is taxed,'"' and this is so where the corporate property is taxed in a foreign state.^<> In California, it is held that shares of a corporation, all of whose property is taxed (in the state) to the corporation, can- not be assessed in the hands of the shareholders/'^^ In Montana the constitution expressly provides that the " stocks " of a corporation shall not be taxed if the property of the corporation, represented by the " stocks," is in the state and has been taxed. '^ In Utah the constitution contains a similar provision.®^ In "Virginia the constitution declares that where a franchise tax is imposed on a corporation doing business in the state, or where a domestic corporation is taxed upon all its capital, the shares of such corporations shall not be further taxed.^ The *8 Van Alen v. Assessors, 3 Wall. R. A. 853 ; Commonwealth v. Char- 573, 18 L. ed. 229 ; Bradley v. People, lottesville, etc., Co., 90 Va. 790, 44 4 Wall. 459, 18 L. ed. 433; Bank of Am. St. Rep. 950, 20 S. E. Rep. 364 Commerce v. Tennessee, 161 U. S. 134- (under the former constitution). In 146, 40 L. ed. 645, 16 Sup. Ct. Rep. Wheeler v. County Commissioners, 88 456; Owensboro Nat. Bank v. Owens- Me. 175, 33 Atl. Rep. 983, it was held boro, 173 U. S. 664, 43 L. ed. 850, 19 that under the statutes the value of Sup. Ct. Rep. 537; Jefferson County all the assessed property of a com- Saving* Bank v. Hewitt, 112 Ala. 564, pany must be deducted, in assessing 20 So. Rep. 926; Atlanta, etc., Assn. the shares for taxation. Any other V. Stewart, 109 Ga. 80, 35 S. E. Rep. course would be double taxation " con- 73; Illinois Nat. Bank v. Kinsella, 201 trary to the spirit and policy of the 111. 31, 66 N. E. Rep. 338; Greenleaf law of taxation." V. Board of Review of Morgan County, 49 Smith v. Burley, 9 N. H. 423 ; 184 111. 226, 75 Am. St. Rep. 168, 56 Nashua Savings Bank v. Nashua, 46 N. B. Rep. 295 ; Danville Banking and N. H. 398 ; Cheshire County Telephone Trust Co. V. Parks, 88 111. 170; In re Co. v. State, 63 N. H. 167. St. Louis Loan and Investment Co., 50 Kimball v. Milford, 54 N. H. 406. 194 111. 609, 62 N. E. Rep. 810; South- 51 Burke v. Badlam, 57 Cal. 594; ei-n Building and Loan Assn. v. Nor- Germania Trust Co. v. San Francisco, man 98 Kv. 294, 56 Am. St. Rep. 367, 128 Cal. 589-595, 61 Pac. Rep. 178. 32 S. E. Rep. 932, 31 L. R. A. 41; 52 Art. XII, § 17, quoted in § 1612 Belo V. Commissioners of Forsyth of this work. See Commissioners of County, 82 N. C. 415, 33 Am. Rep. Silver Bow County v. Davis, 6 M«nt. 088- Commonwealth v. Fall Brook 306, 12 Pac. Rep. 688. Coal Co., 156 Pa. St. 488, 26 Atl. Rep. B3 Art. XIII, § 2, quoted in § 1694 of 1071; Memphis v. Bank, 91 Tenn. 546, this work. 19 S. W. Rep. 758 ; South Nashville 54 Art. XIII, § 170, quoted in § 1698 Street Ry. v. Morrow, 87 Tenn. (3 of this work. Pick.) 406, 11 S. W. Rep. 348, 2 L. 684 CONSTITUTIONAL LAW OP TAXATION. shares of stock of banking institutions are to be taxed, but in valuing them the assessed value of real estate of the banks in the state is to be deducted.^ In Washington it has been held that shares of stock of domestic corporations will not be taxed in the hands of shareholders, where the capital stock is taxed ; but this- is not a constitutional provision. ®® 1376. In Pennsylvania cases it was conceded that a distinction exists between the property of the corporation and the shares of the corporation as property ; and that the legislature had power to tax both ; but it was held that the legislature had not done so- by the statute there in question; and that a scheme of taxation which taxed domestic corporations upon their capital stock and taxed the shares of other corporations in the hands of the holders, provided for but one tax, in each case falling upon the property of the corporation. The question of franchise taxation did not arise, except in so far as franchises are included in capital stock." Other cases where taxation of shares and also of corporate prop- erty has been disapproved, are cited.^^ In the valuation of national bank shares, for taxation, the value of shares of stock of other domestic corporations may be included, although those other corporations have been taxed on their prop- erty.^« 1 376a. Where the capital stock of a corporation consists wholly of real estate, the fact that it has paid county and other local taxes on the real estate does not make a state tax on the " capital stock " double taxation, obnoxious to the law or constitution of Pennsyl- vania.*^ In California the taxation of a seat on a stock exchaftge, to the owner, upon the theory that the " seat " represented his in- terest in the property of the corporation which (apparently) owned the exchange, was held invalid as double taxation, where it ap- peared that the corporation had already been taxed upon its prop- erty.«^ 65 Art. XIII, § 182, quoted in § 1699 Union Depot Co., 42 Minn. 142, 4a of this work. N. W. Rep. 840, 6 L. R. A. 234; Foster 56Ridpath V. Spokane County, 23 v. Stevens, 63 Vt. 175, 22 Atl. Rep. Wash. 436, 63 Pac. Rep. 261. 78, 13 L. R. A. 163. B7 Commonwealth v. Fall Brook Coal 59 Pacific Nat. Bank v. Pierce- Co., 156 Pa. St. 488, 26 Atl. Rep. County, 20 Wash. 675, 56 Pac. Rep. 1071; Commonwealth v. Lehigh Coal 936. and Navigation Co., 162 Pa. St. 603, 6o Commonwealth v. Hillside Ceme- 29 Atl. Ecp. 064. tery Co., 170 Pa. St. 227, 32 Atl. Rep. ssstroh V. Detroit, 131 Mich. 109, 404. 90 N. W. Rep. 1029 ; State v. St. Paul 61 Sau Francisco v. Anderson, lOS '' DOUBLE TAXATION. 685 In Mississippi it is held that in the assessment of the " capital stock " of corporations, the value of taxed tangible properiy must be dediicted, otherwise there would be unconstitutional double taxation.®^ Taxation by different jurisdictions. 1377. A kind of double taxation which is unavoidable in the United States so long as the different state governments exist, is where the same property is taxed in different jurisdictions. This subject is treated elsewhere.®* Here it is enough to say that a state makes its laws with reference to its own territory, and cannot be expected to construct its tax system with reference to what is done by other states. A state's constitution is applicable only throughout its own territory — and a requirement of equality and luiiforniity is complied with when enforced with respect to acts done in that territory. It is no defense, therefore, to a state's claim for taxes, to say that the property has already been taxed in another jurisdiction. So far as the taxing state is concerned that is an immaterial fact. Taxation under such circumstances, therefore, is generally upheld. 1 378. Along this line it is held that a state may tax the shares ■of a national bank, and in valuing them may take into consider- ation the value of real estate of the bank which is situated and ■assessed in another state f* that the shares of stock of a domestic corporation may be taxed to a resident shareholder, although the corporate property is situated and taxed in another state ;®^ that shares of stock of foreign corporations may be taxed to resident shareholders, regardless of whether or not the property of such foreign corporations is taxed in the states of their origin;*® that this is so although the tax system of the taxing state does not allow the taxation of shares where the property of the corporation is taxed in the state j^'' that bonds secured on property which is Cal. 69, 42 Am, St. Rep. 98, 36 Pac. 65 Whitaker v. Brooks, 90 Ky. 68, Rep. 1034. 13 S. W. Rep. 355. 62 state V. Simmons, 70 Miss. 485, 66 Bradley v. Bauder, 36 Ohio St. 12 So. Rep. 477. Apparently the laws 28, 38 Am. Rep. 547; Dwight v. Mayor, of Mississippi make no clear distine- etc., of Boston, 12 Allen, 316, 90 Am. tion between the taxation of " capital Dec. 149 ; Greenleaf v. Board of Re- stock " of corporations, and the taxa- view of Morgan County, 184 111. 226, tion of shares in the hands of the 75 Am. St. Rep. 168. 56 N. E. Rep. shareholders. 295; Porter v. Rockford, 76 111. .561. 63 See chap. III. *' Bacon v. Board of State Tax Com- 64 Commercial Bank v. Chambers, missioncrs, 126 Mich. 22, 86 Am. St. 182 U S 556, 45 L. ed. 1227, 21 Sup. Rep. 524, 85 N. W. Rep. 307, 60 L. Ct Rep 863, affirming 21 Utah, 324, R. A. 321. Contra, Kimball v. Milford, >6l'Pac: Rep. 560, 56 L. R. A. 346. 54 N. H. 406. 686 CONSTITUTIONAL LAW OP TAXATION. situated and taxed outside the state where the bonds are, may be taxed bj such state, although such bonds are not taxable under the tax system of such state when secured on property which is as- sessed and taxed at its full value within the state;®* that prop- erty Avhich has been taxed by one state may afterward be taxed in the same year by another state to which it has been removed ;^ that an inheritance tax may be imposed on the succession to a bank de- posit by the state of the deceased owner's domicile and also by the state of the bank's location;™ that personal property owned by a nonresident may be taxed in the state where it is found, although it is also taxed in the state where the owner resides -^^ that removal to another county after the assessment of a property tax in the county of original residence, and the payment of a merchants' or manufacturers' tax in the second county, do not prevent the col- lection of the first tax.''^ An owner of personalty who is taxed for county purposes in the county of his residence may after- ward be taxed for city purposes by a city to which he has removed in the same yearJ^ A Pennsylvania corporation owning per- sonal property in other states may be taxed in Pennsylvania in respect of such property, although it is also taxed in such other states in respect thereto.'^* 1 379. A recent case in the United States Supreme Court holds that there is no inequality, under the fourteenth amendment, in a state statute which taxes stocks of railroads incorporated in other states, and does not tax stocks of domestic railroad corpora- tions. It appeared that the franchises and property of domestic railroad corporations were taxed, and this fact was taken into consideration. We say that the state in taxing stock may take into account the fact that the property and franchises of the corporation are untaxed, M'hereas in other cases they are taxed; and we say 68 Mackey V. San Francisco, 113 Cal. 70 Blackstone v. Miller, 188 U. S. 392, 45 Pac. Rep. 696, as explained 189, 206, 207, 47 L. ed. 439, 23 Sup. in Germania Trust Co. v. San Fran- Ct. Rep. 277. Cisco, 128 Cal. 589-596, 61 Pac. Rep. 71 Winkley v. Newton, 67 N. H. 80, 178. 36 Atl. Rep. 610, 35 L. R. A. 756; 89 Nathan v. Spokane County, 35 Prairie Cattle Co. v. Williamson 5 Wash. 26, 76 Pac. Rep. 521, 65 L.R. A. Okla. 488, 49 Pac. Rep. 937. 336, 102 Am. St. Rep. 888; Kelly v. 72 De Arman v. Williams, 93 Mo. Rhoads, 7 Wyo. 237, 75 Am. St. Rep. 1.39, 5 S. W. Rep. 904; State v. Brown 904, 51 Pac. Rep. 593, 39 L. R. A. Tobacco Co., 140 Mo. 218, 41 S. W. 594; Grigsby Construction Co. v. Free- Rep. 77G. man, 108 La. 435, 32 So. Rep. 399, 58 73 Helgenberg v. Wilson, 55 Ind. 210. L. R. A. 349. 74 Conimomvoalth v. Delaware, etc., Co., 206 Pa. St, (_;45, 50 Atl. Rep. 914. DOUBLE TAXATION. 687 untaxed, "because they are not taxed hy the state in question. The real grievance in a case like the present is that, more than probably, they are taxed elsewhere. But with that the state of Alabama is not concerned. No doubt it would be a great advan- tage to the country and to the individual states if principles of taxation could be agreed upon which did not conflict with each other, and a common scheme could be adopted by which taxation of substantially the same property in two jurisdictions could be avoided. But the constitution of the United States does not go so far. . . . The state of Alabama is not boimd to make- its laws harmonize with those of other states. // property is untaxed by its laws, then for the purpose of its laws the property is not taxed at alU^ Taxing bank deposits both to the bank and the depositor. 1380. Bank deposits may be taxed directly to the depositor, and, in various forms, to the bank also. The relation between a bank and its depositor is that of debtor and creditor, and the tax- ation of the deposit to both is the same thing as the taxation of a debt to the creditor and of the property of the debtor directly to the owner. ^* 1381. In California it is said that to assess deposits in savings banks to the banks and also to the depositors would be unconsti- tutional double taxation." 1382. In Maryland in 1863 an act taxing savings banks on their deposits was construed so as to exclude from the computation such deposits as were invested in stocks of companies which had already been taxed, on the ground that to constrae the act other- wise would be unconstitutional double taxation.'^* Following this decision, and construing a later' act identical in terms with the one construed in the case just cited, it was held in 1887 that deposits invested in ground rents, reserved under long leases, which were taxed to the leasehold owmer, should be excluded from the computation of a tax on savings bank deposits. The court in this later case, however, said that they regarded the tax on the savings 75Kidd V. Alabama, 188 U. S. 730, from the opinion; Common Council oi 47 L ed. 669, 23 Sup. Ct. Rep. 401, Detroit v. Board of Assessors, 91 Mich, affirming State v. Kidd, 125 Ala. 413, 78-95, 51 N. W. Eep. 787, 16 L. R. A. 28 So. Rep. 480; see also State v. 59, where taxation as real estate of Fidelity, etc., Co., Tex. Civ. App. mortgages owned by savings bank.?, the 80 S. W. Rep. 544. depositors also being taxed on their 76 ICnox V. Commissioners of Shawnee deposits, was held not to be double County, 20 Kans. 596, where it was taxation " in any objectionable sense." held that deposits in banks must be 77 Burke v. Badlam, 57 Cal. .1'.I4, 002, taxed to the banks; and the propo- 003. eition of the text logically follows 78 State v. Sterling, 20 Md. 502. G88 CONSTITUTIONAL LAW OF TAXATION. bank deposits as a franchise tax and not a property tax ; atid that they would have held that the taxation described was unobjec- tionable, if they had not felt bound to construe the act in accord- ance with the prior decision, which was the law at the time the act was passed.^* Property and shares of building and loan associations. 1383. There has been some contention in the courts, under requirements of uniformity and equality, with respect to the taxation or exemption of the stock and notes of co-operative build- ing and loan associations. It has been contended that the shares ef stock iss\ied by, and notes and mortgages held by, a building and loan association, are really only representative of the actual assets of the members, in the shape of houses into which the funds of the associations have gone, so that to tax the shares- of stock, or the notes and mortgages, would be double taxation, inasmuch as the real property owned by the members is also taxed. This is only another form of the argument that mortgages and the mort- gaged property should not both be taxed. It is true that the debtors ^jf a building and loan association are members of the creditor corporation, but this is held not to make any difference. It is also true that the value of the nonpaid-up shares of such corpo- rations, held by borrowers, is, in fact, a pro tanio discharge of their mortgage debts, but inasmiich as the shares and the mort- gages are different properties, they are regarded as being subject to taxation separately and without deduction, although represent- ing the same property. 1384. The decisions in different states are based upon widely •differing statutes and no clear general rule can be deduced from them. A brief reference to some cases will give a clearer idea of the state of the law than any attempt to state a general rule. The result of the cases seems to be, so far as nonborrowers, or o^vners of paid-up or partly paid-up shares is concerned, that they must be taxed like owners of other property, and that exemptions of such shares are in conflict with requirements of equality and uniformity. 1385. In Indiana a statute provided that each building and loan association should be assessed with the amount paid in upon the shares, less the amount loaned to the shareholders, and that 79 state V. Central Savings Bank of Baltimore, 67 Md. 290, 10 Atl. Rep. 200, 11 Atl. Rep. :!r.7. DOUBLE TAXATIOISr. 689 *' neither said association nor the shareholders therein " shall be liable to other taxation upon said shares of stock." ^ This st-atute being in force, a holder of paid-up shares of stock in a building and loan association was assessed for the value of such shares. He contended that he ought not to have been taxed. 1386. It was held that the statute only applied to borrowers' -shares^ the court saying: When a shareholder in a building and loan association has borrowed from it the value of his stock, and is engaged, under the rules of the association, in repaying his loan by weekly or monthly installments . . . it would seem that the stock so held in his name is not of any real value, except to show the terms of his contract of payment to the association. As to such stock, moreover, it would appear that the money on hand, being the difference between that received by the association and that so loaned out by it, is the true value of the assets of the associa- iion, and the amount, therefore, for which it should be taxed, aside from the mortgaged real estate, the latter being also duly assessed for taxation. If this were true, there would, in effect, be no exemption of shares from taxation, such shares being of no money value. 1387. After strongly intimating that the statute, in its ex- emption of borrowers' shares, was constitutional, the court went on to say that paid-up shares ivere in effect debentures or evi- dences of indebtedness owed by the corporation to the share- holders, and said: Such shares of stock are of the apparent value of the money paid upon them to the association, and should be taxed accord- ingly, as any other credits. It was said that if the statute should be considered as exempt- ing such paid-up (or partially paid-up) shares " we should have to consider the statute itself unconstitutional." *' In a later case it was held that partly paid-up " running " shares of a building and loan association should be taxed to the shareholder, and that a construction which should exempt them would be unconstitutional.^^ In other Indiana cases where the question arose indirectly it is said that all stock of nonborrowers, of every kind, must be taxed, and its exemption would be unconstitutional.^^ 80 Acts 1891, p. 233, § 8507, R. S. 82Harn v. Woodard, 151 Ind. 132, 1894. 50 N. E. Rep. 33. 81 beniston v. Terry, 141 Ind. 677, 83 State ex rel. Morgan v. Working- 682, 683, 41 N. E. Rep. 143. men's etc., Associatioa. 152 Ind. 278, 44 690 CONSTITUTIONAL LAW OF TAXATION. 1388. In Georgia it is said that the shares of stock, whether of a borrowing member or of a nonborrowing member, are taxable at their actual value, and whether they have any value or not is a question not of law, but of fact for the taxing authorities. They are a distinct property from the property of the corporation, and the property of the corporation cannot be exempted, although the shares are taxed.^ This seems to be the most sensible and reason- able view. In an earlier case it Avas said that to construe a law, which provided for an exemption of so much of the capital of such corporations, which had been loaned to the shareholders upon real estate, as to make a total exemption, would be to render the law unconstitutional. But the section was so construed as to- render such shares taxable at their actual valii£, and the court said that When stock is advanced on to its full value, instead of being worth anything as stock, or having any market value, it is worse than nothing, because the holder, though he can never derive any benefit from it, is subject to future assessments. It would be perfectly just and right to exempt that class of stock from tax- ation, because it does not represent any value whatever. But stock which has not been advanced on is not lessened in its value in any way by the manner in which the loans of the association are secured. Unadvanced stock is worth to the holder its mar- ket value (and that is all that is taxed), no matter how the loans of the association may be secured.*^ 1389. Borrowers' shares, that is, shares which have been bor- rowed upon to the extent of all or part of their value, stand on a different footing. Such shares are worth only the excess of their book value over the sum loaned against them, and a law exempt- ing them wholly when loaned upon to their full value, or taxing them at their net rather than their gi-oss value, would not really be an exemption law but a law iixing their assessment at their real value. These views find some support in the opinions of the- courts.^" 1390. In Illinois a statute has been held unconstitutional which exempted from taxation shares of stock pledged to the 5.? ISr. E. Rep. 168; Co-Operative, etc., Loan Assn., 80 Ga. 515-517, 5 S. E. Assn. V. State, 156 Ind. 463, 60 N. E. Rep. 775. Rep. 146; see Marion County V. Marion so Atlanta, etc., Assn. v. Stewart^ Trust Co., 30 Ind. App. 137, 65 N. E. 109 Ga. 80, 35 S. E. Rep. 73; Mc- Rep. 589. Gowan v. Savannah Mutual Loan 84 Atlanta, etc., Assn v. Stewart, 109 Assn., 80 Ga. 515-517, 5 S. E. Rep. Ga. 80, 35 S. E. Rep. 73. 775 ; Denniston v. Terrv, 141 Ind. 677, SBMcGowan v. Savannah Mutual 682, 683, 41 N. E. Rep.'l43. See these cases discussed in §§ 1385-1388, ante. DOUBLE TAXATION. 691 association as security for a loan equal in amount to the par value of the stockj other shares of stock being taxed. ^'^ In Minnesota a statute which exempted from taxation shares of stock of such associations "upon which loans have been made or money ad- vanced " was held unconstitutional, the court saying : However small the amount advanced to a shareholder on his stock, the whole of it (by this statute) is exempt from taxation.'* 1391. In Georgia an act which provided that the shares of building and loan associations, not advanced on, should be taxed, at their true value, and that the taxes thus imposed should be " in lieu of all other taxes or licenses " . . . " against said association, except a business license" and except a fee to the state, was held to be repugnant to the requirement of equality and uniformity. The tax, it was said, was in effect a tax on the shares in the hands of the shareholders, and the property of the corporation was not taxed at all.^ 1392. In Minnesota a statute which provided for the taxation of such associations by taxing them upon their office furniture and real estate, and by taxing " the shares held by each member,'' . . . " in the county of his residence " was held by implication. to exempt the shares of all shareholders who resided out of the state. The result was that the whole property of the association was not reached. The law was held unconstitutional.®" 1393. In Illinois it is held that where the real property of a building and loan association is assessed to the association and the shares to the shareholders, all the property of the association is taxed, and that the notes and mortgages held by the association cannot be taxed.®^ In another case the notes and mortgages were held to be taxable (it not appearing that the shares were taxed)."" 1 394. In North Carolina the " capital stock," that is, the property, of a building and loan association, must be listed for taxation, and any statute which exempts it, or which " attempts to make the burden of taxation it bears greater or less than that 8T/n re St. Louis Loan and Invest- v. Stewart, 109 Ga. 81, 35 S. E. Rep. ment Co., 194 111. 609, 62 N. E. Rep. 73. 810. *" State v. Pioneer Savings and Loan 88 State V. Pioneer Savings and Co.. 63 Minn. 80, 65 N. W. Rep. 138. Loan Co., 63 Minn. 80-89, 65 N. W. 91 In re St. Louis Loan and Invest- Rep. 138. ment Co., 194 111. 609, 62 N. E. Rep. 8» Georgia State, etc., Assn. v. 810. Mayor, etc., of Savannah, 109 Ga. 63, 92 People's Loan and Home.stead 35 S E. Rep. 67; Atlanta, etc., Assn. Assn. v. Keith. 153 111. 609, 39 N. E. Rep. 1072, 28 L. R. A. 65. 692 CONSTITUTIONAL LAW OF TAXATION. wLicli is laid on other property of the same situs and value . . . is unconstitutional and void;" and this is so although the corpO' ration pays also a privilege tax.®^ In Minnesota a statute was construed and enforced as imposing a tax upon the mortgages owned by a building and loan association, the mortgages not hav- ing been taxed as a part of the capital stock.** In Pennsylvania it is said that a law taxing loans generally and exempting loans made by building and loan associations, is unconstitutional.*' Deduction of debts. 1 395. The deduction of indebtedness from credits, or from tax- able property generally, in listing property for taxation in states Avhere there is no rule of uniformity and equality, is of course entirely within the legislative control. The fourteenth amend- ment lays no restriction on the states in this respect, they " may allow deductions for indebtedness or not allow them." ^ 1396. In states where the rule of uniformity and equality is followed, there is some conflict of authority and enactment. As to the deduction of debts from credits, the weight of author- ity is that this can be done. The chief argument which has been made against the constitutionality of such deductions is that " credits " are property and that to allow indebtedness to be deducted from them in listing property for taxation is in effect a,n unconstitutional exemption of so much of the credits as equals the indebtedness deducted. In answer to this proposition the courts which hold that laws allowing the deduction of debts from credits are constitutional, say that while credits are property, their value must be ascertained, and the deduction of their owner's in- debtedness from the credits is the best way of ascertaining their value. Such deductions have been upheld, against constitutional objec- tions, in the cases cited.^'' 1397. In California the constitution expressly authorizes the deduction from credits of debts due to bona fide residents of the 03 Charlotte Building and Loan sylvania, 134 U. S. 232-237, 33 L. ed. Assn. y. Commissioners of Mecklcn- 892, 10 Sup. Ct. Rep. 533. burg County, 115 N. C. 410, 20 S. E. 9T Florer v. Sheridan, 137 Ind. 28, 36 Rep. 520. N. E. Rep. 365, 23 L. R. A. 278; 9* State V. Redwood Falls Building Treasurer of Fayette County v. Ped- and Loin Assn., 45 Minn. 154, 47 pie's and Drovers' Bank, 47 Ohio St. N. W. Rep. 540, 10 L. R. A. 752. 503, 25 N. E. Rep. 697, 10 L. R. A. 95 Fox's Appeal, 112 Pa. St. 337, 4 196; State v. Moflfett, 64 Minn. 292, Atl. Rep. 149, 17 W. N. C. 449. 07 N. W. Rep. 68; State v. Northern 96 Bell's Gap Railroad Co. v. Penn- Pacific Ry. Co., Minn. 103 N. W. Rep. 731. DOUBLE TAXATION. 693 state. This section impliedly forbids the deduction of debts other than those specified ; and the deduction of debts from money and property generally. The constitution expressly excepts credits secured by mortgage or trust deed from the class of credits from which debts may be deducted; but even in such cases the credits and the property on which they are secured cannot both be taxed.®® 1398. In Kansas the constitution commands that notes, bills, and other property of banks and bankers shall be taxed " without deduction." ^ As all taxation must be equal and uniform this section seems to prohibit deductions for indebtedness.^ In Utah the constitution permits a deduction of debts from credits.^ The same is true in Washington.* In a case in South Dakota a statute allowing the deduction of debts from credits was held unconstitu- tional, as lacking in uniformity and equality, because it discrimi- nated in favor of one class of property, i. e., credits.^ 1399. Whether laws allowing deduction of indebtedness from all property, instead of from credits alone, are valid, is another question as to which there is division. In some states such laws are upheld, the deduction of debts being regarded as a jtist means of reaching the true value of the debtor's property.® In Indiana a law which authorized the owner of land to deduct mortgage in- debtedness not exceeding $700 and not exceeding one-half the value of the land, from its valuation for taxation, was upheld, not as an exeinption law, but as a means of reaching the just valuation of the property.'^ 1400. In Ohio it was held that although deduction of debts from credits would be constitutional, a deduction of debts from property generally would not be so.® 1401. In Nebraska deductions of indebtedness, whether of in- dividuals or corporations, in assessing property for taxation, are 98 Art. XIII, § 1, quoted in § 1510 6 Wctmor* v. Multnomah County, 6 of this work. Oreg. 463; Macklot v. Davenport, 17 99 Germania Trust Co. v. San Fran- Iowa, 379, deduction allowed (it seems) CISCO, 128 Cal. 589, 61 Pac. Rep. 178. from money and credits. See § 1514 of tnis work. estate ex rel. Lewis v. Smith, 158 lArt. XI, § 2, quoted in § 1544 of Ind. 543, 63 N. E. Rep. 25, 214, 64 this work. N. E. Rep. 18; writ of error dismissed 2 See, however, §§ 1645-1650 et seq., in Smith v. Indiana, 191 U. S. 139, and Ohio cases there cited construing 48 L. ed. 125, 24 Sup. Ct. Rep. 51. a similar provision of the Ohio eon- 8 Treasurer of Fayette County v. stitution ' People's and Drovers' Bank, 47 Ohio 3 Art. 'XIII, § 3, quoted in § 1695 St. 503, 25 N. E. Rep. 697, 10 L. R. A. of this work. 196, limiting Exchange Bank of Co- i Art. VII, § 2, quoted in § 1707 of lumbus v. Hines, 3 Ohio St. 1 ; Hub- this work. bard v. Brush, 61 Ohio St. 252, 55 5 In re Assessment and Collection of N. E. Rep. 829. Taxes, 4 S. D. 6, 54 N. W. Rep. 818. 694 CONSTITUTIONAL LAW OF TAXATION. held to be forbidden by the constitution. Hence a law providing for the assessment of the capital stock of certain companies, in- cluding their franchises, by deducting the amount of the corporate indebtedness from the value of their shai'es of stock, has been held void.®' In Minnesota, likewise, the deduction of corporate indebtedness from the valuation of the capital stock, in assessing the capital stock, is unconstitutional, as it amounts to a double deduction, since the value of the stock itself is affected by the corporate indebtedness.''" Deductions of debts from property gen- erally are likewise unconstitutional in South Dakota." 1 402. Shares of corporate stock are not " credits " within the meaning of constitutional or statutory provisions, authorizing a deduction of debts from credits. ^^ Allowing certain persons or corporations to deduct debts from credits or property, while other persons or corporations are not permitted to make such deduc- tions, has been held to be unconstitutional discrimination. ■^■'' Penalties. 1 403. Penalties may be imposed for failure to list property or pay taxes or otherwise comply with the tax laws.-'* The imposi- tion of such penalties, it is held, does not constitute duplicate or unequal taxation, although thereby the owner of property may be compelled to pay more than his neighbors. Such penalties are not taxes at all — thej^ are payments exacted in the enforcement of the tax laws, but they are imposed as a punishment for delin- quencies which it is in the power of the taxpayer to avoid by com- pliance with the laws. Thus where a taxpayer refuses to furnish the assessors of a county with a list of his property, as provided by law, his property may be taxed by the county \inder statutory provisions to that effect, although it has already been taxed by another county for the same year; and this is not duplicate taxation.-'^ 9 state ex rel. Shriver v. Karr, 64 34 N. E. Rep. 102; Chapman v. Na- Neb. 514, 90 N. W. Rep. 298. tional Bank of Wellington, 56 Ohio w State V. Duluth Gas and Water St. 310, 47 N. E. Rep. 54; affirmed, Co., 76 Minn. 196, 78 N. W. Rep. First Nat. Bank of Wellington v. 1032, .57 L. R. A. 63. Chapman, 173 U. S. 205, 43 L. ed. 11 In re Construction of Revenue 669, 19 Sup. Ct. Rep. 407. Laws, 2 S. D. 58, 48 N. W. Rep. 813. is State' v. Duluth Gas and Water 12 Commercial Nat. Bank v. Cham- Co., 76 Minn. 96, 98 N. W. Rep. 1032, hers, 21 Utah, 324, 61 Pac. Rep. 560, 57 L. R. A. 63. ,56 L. R. A. 340; affirmed, 182 U. S. 14 See § 1215 et seq. 5o(i, 4.5 L. ed. 1227, 21 Sup. Ct. Rep. 15 Erwin v. Hubbard, 4 Idalio, 170, 803; Niles v. Shaw, 50 Ohio St. 370, 37 Pac. Rep. 274. CHAPTER XX. EQUALITY AND THE POLICE POWER IN LICENSE, PRIVILEGE AND OCCUPATION TAXES. 1 403a. The power of the state in laying privilege or occupation taxes, as revenue measures^ is unlimited as to the occupations upon which such taxes may be laid. Every conceivable occupa- tion may be made the subject of taxation, and the common practice in this respect is so well established that no citation of authority is needed for the proposition. The power, of course, must be exercised in subordination to constitutional restrictions on the taxing power. As the subject of occupation taxes is so blended with that of license taxation under the police power, it has been thought well to discuss these topics together. The prin- cipal constitutional limitations which have been invoked — gen- erally unsuccessfully — against license, privilege, and occupation taxes, are those which embody equality. These are considered in this chapter. Examples of occupations and acts which have been made the subjects of taxes of the sort under discussion are found in almost every section of this chapter ; and reference to the index will show where any particular occupation is dealt with. 1404. Whether a given measure of license taxation is an exer- -cise of the taxing power or of the police power is a question fre- quently presented. The test which most readily occurs to the mind is : Is the charge laid for the purpose of producing revenue or for the purpose of regulation? ^ but this inquiry, while useful as a starting point in classification, is far from final in its results. Many revenue-producing taxes are upheld by the principles which justify the police power — liquor license fees are an illustration. The legislative description of the measure as a tax law, or a license law, or a regulative measure, is not controlling.^ The production of revenue does not necessarily stamp the measure as an exercise ■of the taxing power. ^ 1 Village of Lemont v. Jenks, 197 v. Frazier, 38 Oreg. 462, 63 Pac. Rep. 111. 363, 90 Am. St. Rep. 172, 64 N. E. 642, 53 L. R. A. 454. Hep. 362; Eac parte Jaclcson, 143 Cal. 3 Eon parte Mirande, 73 Cal. 36.5, 14 564, 77 Pae. Rep. 457. Pac. Rep. 888; Leavenworth v. Booth, 2 State V. Bengsch, 170 Mo. 81, 70 15 Kans. 627; Van Sant v. Harlem S. W. Rep. 710; Ex parte Gregory, 20 Stage Co., o9 Md. 330; State, Flan- Tex App. 210, 54 Am. Rep. 516: Ellis agan v. Plainfield, 44 N. J. L. 118; State V. Bean, 91 N. C. 554. [695] 696 CONSTITUTIONAL LAW OF TAXATION, 1405. There are instances of license taxation, such as the ordi- nary taxes on the occupation of retail rum-selling, which, though revenue producing and intended to be so, are yet clearly seen to- bo exercises of the police power and not of the taxing power. It is easy to see that restrictions of uniformity and equality in the exercise of the taxing power do not apply at all to such exercises of the police power. At the other extreme there are instances of privilege and occupation taxes, such as taxes on the occupation of a wholesale grocer, or on lawyers, or on street-car companies at so much per car for the privilege of running cars, which are taxes 2)ure and simple, and cannot be called police regulations at all, since such taxes have revenue for their only object and do not relate at all to the public order, morals, health, or safety. It is plain that restraints on the taxing power mar apply to such taxes. Many license taxes, however, do not fall into either of these ex- treme classes, but contain elements of both ; and the distinction in these respects between the police power and the taxing power is so vague and shadowy that in most cases no one (except sometimes the judge who vsTites the prevailing opinion in the court of last resort) can tell with any certainty whether a given tax is an exer- cise of the police power or an exercise of the taxing power. 1406. The result of this blending of powers — taken together with another element to be discussed, namely, the greater latitude which most constitutions as construed allow to the legislature in the exercise of the taxing power with respect to license taxes — is, that most license taxes are sustained. If they contain elements- which would render them invalid under the taxing power, they are likely aJso to contain elements which enable the courts ta regard them as police regulations, and to hold that the restrictions on the taxing power have no application ; if they are so unreason- able and oppressive as to be void if viewed as police regulations, the taxing power may be invoked to sustain them; and finally, if they are classified as belonging to the taxing power, the stricter constitutional limitations which bind the legislature in taxing- property are generally held not to bind it in taxing privileges and occupations. Most license taxes which have been held invalid have been either police regulations containing no element of justifica- tion as taxes and which were so severe as compared Avith the objects of police regulation as to be oppressive, or tax laws which violated express constitutional principles as to uniformity and equality among members of the same class. With these general consider- ations in mind the study of adjudged cases will be useful. It licp:nse and privilege taxation. 697 must be remembered that but few cases proceed upon any one clear ■ principle, consequently cases cited as upholding any given prin- ciple will often be found to be also based on others equally appli- cable to the given case. Revenue measures and police regulations distinguished. 1407. A general principle which is useful, so far as it goes, in determining whether a given measure is a tax law or a police regulation, is that a charge or fee imposed upon a common occupation or business of general utility, which is not likely to be harmful to the community, is a tax law and must be subject to the limitations applicable to the taxing power. The principles of this distinction were clearly set forth in a Missouri case involving the validity of a state law which authorized municipal corporations to impose license taxes, accord- ing to various classifications, on department stores. The charge permitted by the act was called " a license fee " and the act was entitled: "An act to regulate business and trade in cities," etc. The court said : Courts look beyond the mere title of an act to see and deter- mine its real object, purpose, and result, and where the power of taxation therein provided for, is exercised for the mere purpose of revenue, or undue restraint or prohibition, as is most manifest in the act in question, its designation as a license fee will not save it from the constitutional restrictions that would apply to it as the imposition of a tax. In no sense can this most extraor- dinary act be regarded as a police measure, and consequently it does not fall within the protection of the police power. It nowhere attempts to protect any public interest or defend against any public wrong. It shows upon its face that regulation is not its purpose, but that revenue, or undue restriction in the interest of others not embraced in the class designated, is the aim in view. While a most onerous license fee by name is imposed, no police inspection, supervision, or regulation is provided, nor is any standard set for the applicant to establish, or that he agrees to attain or maintain, but any and all persons engaged in the business designated in the act, without qualification or hindrance, may come, and a license on payment of the stipulated sum to the commissioner named in the act will issue, to do business subject to no prescribed rule of conduct, and under no guardian eye, but according to the unrestrained judgment or fancy of the appli- cant and licensee. The applicant is simply required to pay his money and take out his license. That is the beginning and the ending of the police supervision over him or his business, so far as concerns the act in question. 698 CONSTITUTIONAL LAW OF TAXATION. 1408. In order to sustain legislation of the character of the act in questioti, as a police measure, the courts must ie able to see that its object, in some degree, tends toward the prevention of sopie offense w manifest evil, or has for its aim the preservation of the public health, morals, safety, or welfare. If no such object is discernible, but the mere guise and masquerade of public con- trol, under the name of " an act to regulate business and trade," etc., is adopted, that the liberty and property rights of the citizen may be invaded, the courts will strike down the act as unwar- ranted. Mere legislative assumption of the right to direct and indicate the channel and course into which the private energies of the citizen shall ilow, or the attempt to abridge or hamper his right to pursue any lawful calling or avocation which he may choose without unreasonable regulation or molestation have ever been condemned in all free governments. And again, referring to the classification of the act, imposing license charges on the sale of various classes of articles, gTouped together under one management : Such grouping together for sale or disposition of these articles of daily use and necessity does not endanger or threaten the peace and good order of society. They neither engender disease, spread contagion, corrupt the morals, or encourage dissipation or vice in any form because of such combination, and no sanction for such reasons can be found for the act, as a police measure.* Equality and uniformity — taxes which are police regulations. 1409. One general class of cases consists of those which regard the license taxes which they concern as exercises of the police power, imposed for purposes of regulation, hence unaffected by those restrictions on the taxing power which command equality and uniformity. A recent Illinois case well illustrates the class.^ The legislature there had laid a license charge on employment agencies, and had made the act of operating such an agency with- out payment of the license fee a misdemeanor. The appellant had been found guilty of such misdemeanor on a plea of not guilty; and on appeal sought to show that the law was unconsti- tutional. The case was thus presented against the law in the 4 State ex rel. Wyatt v. Ashbrook, N". E. Rep. 1004 ; State v. Bengsch, 170 154 Mo. 37.5, 385, 386, 77 Am. St. JIo. 81, 70 S. W. Rep. 710; State v. Rep. 7(i.j, 769, 770, 55 S. W. Rep. Bixman, 162 ilo. 1, 62 S. W. Rep. 828 ; 627, 48 L. R. A. 265. To the same State v. Angelo, 71 N. H. 224, 51 Atl. effect as to the distinction between Rep. 905; City of Tev-re Haute v. police regulation and ta.xation are Kersev. 159 Ind. 300. 95 Am. St Rep. Chicago V. Netcher, 183 HI. 104, 75 298, 6*4 N. E. Rep. 469. Am. St. Rep. 93, 55 N. E. Rep. 707, 5 Price v. People, 193 111. 114, 61 48 L. R. A. 261; Wilkie v. Chicago, N. E. Rep. 844, 55 L. R. A. 588 188 111. 444, 80 Am. St. Rep. 182, 58 LICENSE TAXES UNDER THE POLICE POWEE. 699 most direct form, with all the presumptions of fact against the licensed. The Illinois constitution" expressly authorized the legislature to tax certain occupations. The occupation of an employment agent was not among them. The law was upheld as an exercise of the police power. The court said : It is an attribute of sovereign power to enact laws for the exercise of such restraint and control over the citizen and his occupation as ma^^ be necessary to promote the health, safety, and welfare of society. This power is known as the police power. In its exercise the General Assembly may provide that any occu- pation irhich is the proper subject of the power may not be pur- sued by the citizen except authorized by a license issiied by public authority so to do. Such enactment may require the payment of a fee, and the execution of a bond with security, conditioned in view of the objects and purpose of the act, as a prerequisite to the issuance of such license. Wliat occupations are the proper suhjects of this poiuer is a judicial question.'' It was held that the charge of $200 was not oppressive. 1410. Like the equality in taxation ordained by state consti- tutions, the principle of equality expressed in the fourteenth amendment does not operate to restrict the states in the exercise EQUALITY AND UNIFORMITY IN PRIVILEGE TAXATION. 717 village ordinance to the effect that no person should sell fresh meat on any street in the village in quantities less than one- quarter without first paying to the village $10 in advance for each month, and obtaining a permit, under penalty of fine or imprisonment, was held to he an unauthorized attempt at exer- cising arbitrary power, not justified by the police power in the interest of the public health, and to be " unauthorized class legis- lation for the benefit of the few at the expense of the many." . . . " Such a by-law is not reasonable, and in this case the license fee or tax, whichever you may call it, is so extortionate as to make it almost prohibitory." ^^ The discriminatory feature particularly prominent was that the effect of the ordinance would be to confine the meat business to persons who sold in shops. In a city of crowded streets such a regulation would probably be well within the police power. 1442. In an Ohio case an ordinance imposing a license tax ■of $25 per day iipon the privilege of selling goods imported into the city for the purpose of being sold at auction, and not im- posing such a charge for the privilege of so selling goods not imported for that purpose, was held to be discriminatory and unreasonable.'^* In California a somewhat similar discrimina- tion by ordinance, fixing one rate of license for selling goods which were in the city, or in transit to it, and another much larger rate for selling; goods not in the city and not in transit to it, was likewise held unreasonable.^® A municipal requirement of a license fee of $.300 for the privilege of selling goods by sample in a citv Avas held unreasonable and oppressive in Ten- nessee.™ In Michigan, where the principles of equality are quite strictly enforced, an ordinance imposing a large license fee on 111. 489; state v. Bean, 91 N. C. .554; 884, 17 L. R. A. 184; Glaser v. Cin- McGrath v. Newton, 29 Kans. 364; cinnati. 31 Ohio L. J. 243; Hirshfield Iowa City v. Newell, 115 Iowa, 55, v. Dallas, 29 Tex. App. 242, 15 S. W. 87 N. W. Rep. 739; Lyons v. Cooper, Rep. 124; Salt Lake City v. Wagner, 39 Kans. 324, 18 Pac. Rep. 296; Little- 2 Utah, 400; Mayor v. Beasley, 1 field V. State, 42 Neb. 223, 47 Am. Humph. 232, 34 Am. Dec. 646; Nash- St. Rep. 697, 60 N. W. Rep. 724. 2S ville v. Althorpe, 5 Coldw. 554. L. R. A. 588; Caldwell v. Lincoln, 19 73 Chaddock v. Day, 75 Mich. 527, Neb. 569, 27 N. W. Rep. 647 ; Dunham 13 Am. St. Rep. 468, 42 N. W. Rep. V. Rochester, 5 Cow. (N. Y.) 462; Vil- 977, 4 L. R. A. 809. lage of Carthajre v. Frederick. 122 74 ^rnrphy v. Sipe, 49 Ohio St. 536, N Y. 268, 33 St. Rep. 383, 25 N. E. 31 N. E. Rep. 884, suh mm. Re Sipe, Rep. 480, 10 L. R. A. 178; Brooks v. 17 L. R. A. 184. Mangan, 86 Mich. 576, 24 Am. St. 75 Ev parte Frank, 52 Cal. 606, 28 Rep. 137, 49 N. W. Rep. 633; People Am. Rep. 642. V Russell, 49 Mich. 617, 43 Am. Rep. 76 Nashville v. Althorpe, 5 Coldw. 478, 14 N. W. Rep. 568; Sipe v. 554. Murphy, 49 Ohio St. 536, 31 N. E. Rep. 718 CONSTITUTIONAL LAW OF TAXATION. nonresident peddlers, discriminating in favor of residents, was held unreasonable.^^ In Pennsylvania an ordinance ■which fixed a license fee for peddlers at a prohibitive figure, but exempted residents, was held invalid.™ In Iowa a license fee of $250 per month imposed by ordinance on transient merchants was held unreasonable and excessive;'® as was a similar one in jSTew York imposing a charge of $10 a day.*" In ISTew Jersey a license fee of $15 for a one-horse car and $25 for a two-horse car was held unreasonable.*^ In Kentucky a municipal ordinance requiring every person, firm, or corporation buying claims to pay an annual license fee,*^ one requiring those engaged in contracting for pub- lic, municipal, railroad, or bridge work to pay an annual license fee of $100 per annum,*^ and one imposing a tax on agents of insurance companies not located in the city, which was not imposed on agents of companies located therein,** were held unreasonable and void. In Illinois an ordinance imposing a license charge of $30 a year on plumbers;*® in New Jersey an ordinance exacting a fee of five cents for each use of the public streets of Paterson to sell hay, wood, or country produce,*® and a license fee of $2,500 for auction sales;*' in Kansas an ordinance taxing drug- gists, which amounted to an oppressive effort to destroy the busi- ness,*^ were held unreasonable. A city ordinance taxing each person selling trading stamps to merchants $600 a year, and each merchant using trading stamps $100 per year was held to be un- reasonable and void.**"* Municipal license taxes held to be reasonable. 1443. Citation of authority is hardly needed for the principle that the presumptions are all in favor of the reasonableness of an ordinance.*® The following are instances where ordinances 77 Brooks V. Mangan, 86 Mich. 576, 84 Simrall v. Covington, 90 Ky. 444, 24 Am. St. Rep. 137, 49 N. W. Kep. 14 S. W. Rep. 369, 29 Am. St. Eep. 033. 398, 9 L. E. A. 556. 78 Sayre v. Phillips, 148 Pa. St. 482, 85 Wilkie v. Chicago, 188 111. 444, 33 Am. St. Eep. 842, 24 Atl. Eep. 76, 80 Am. St. Eep. 182, 58 N. B. Eep. 16 L. E. A. 49. 1004. 79 Ottumwa V. Zekind, 95 Iowa, 622, 88 Kipp v. City of Paterson, 2 Dutch. 58 Am. St. Eep. 447, 64 N. W. Eep. (26 N. J. L.) 298. 046, 29 L. E. A. 734. STMargolies v. Atlantic City, 67 80 People V. Jarvis, 19 App. Div. 466, N. J. L. 82, 50 Atl. Rep. 367. 40 N. Y. Supp. 596, 12 N. Y. Grim. 88 Lyons v. Cooper, 39 Kans. 324, Rep. 333. 18 Pac. Eep. 296. 81 State V. Hoboken, 41 N. J. L. 71. ssaEx parte Hutchinson, 137 Fed. 82Bitzer v. Thompson, 105 Ky. 514, Rep. 949. 49 S. W. Rep. 199. fSMnyor, etc. v. Drydock, etc.. Rv. SSFigg V. Thompson, 105 Kv. 509, Co.. 133 N. Y. 104, 44 St. Rep. OH, 30 88 Am. St. Rep. 316, 49 S. W. Kep. N. E. Rep. 563; Vnn Hon'< v. City of 202. Selma, 70 Ala. 36i, 45 Am. Rep. '85; EQUALITY AND UNIFORMITY IN PRIVILEGE TAXATION. 719 attacked for unreasonableness have been held to be reasonable: An ordinance exacting a license fee of $10 from all persons en- gaged in selling merchandise;"^ a license fee of $15 per year from all persons selling meat f^ a license fee of not less than $5 or more than $10 on each wagon selling milk;"^ a license fee of $10 on milk dealers;"^ an ordinance imposing license fees of from $4 to $10 on vehicles, and exempting certain classes, such as vehicles bringing produce to market and vehicles owned by liverymen;^ a license fee of $15 on steam laundries, $10 for every male person in the business other than in a steam laundry, and $25 for a male laundryman employing one or more other persons;'^ a license fee of $3 on draymen;"^ an ordinance im- posing a tax of $35 on hucksters, and $15 on their assistants, for every six months;®^ a license fee of $2.50 per day from tran- sient peddlers ;°* a license charge on street cars of $25 per car;*' a license charge on street cars of $10 per car;^ a classification of restaurants for taxation, imposing a smaller tax on restaurants where meals were served by the proprietor or any member of his family,^ have been upheld. 1444. The power to establish and regulate public markets is a well-recognized phase of the police power of municipalities. Ordinances establishing such markets and imposing a license tax on persons selling elsewhere have been upheld as reasonable exer- cises of the police power.* Atkina v. Philips, 26 Fla. 281, 8 So. 96 City of Cincinnati v. Bryson, 15 Rep. 429, 10 L. R. A. 158; Common- Ohio St. 625, 45 Am. Dec. 593. wealth V. Patch, 97 Mass. 221 ; Little- 97 Kansas City v. Overton, 68 Kans. field V. State, 42 Neb. 223, 47 Am. St. 560, 75 Pac. Rep. 549. Rep. 697, 60 N. W. Rep. 724, 28 L. R. 98 Cherokee v. Fox, 34 Kans. 16, 7 A. 588; State v. Trenton, 53 N. J. L. Pac. Rep. 625. See also Titusville v. 132, 20 Atl. Rep. 1076, 11 L. R. A. Brennan, 143 Pa. St. 642, 24 Am. St. 410. Rep. 580, 22 Atl. Rep. 893, 14 L. R. 90 Van Hook v. City of Selma, 70 ^- 100; Levy v. State, 161 Ind. 251, Ala. 361, 45 Am. Rep. 85. 68 N. E. Rep. 172. 81 Kinsley v. Chicago, 124 111. 359, ^ f ^,^TL ^'?^ ^'I" S°- ''o?n^''T';\ ^^ 16 N. E. Rep. 260. 2°^°- l"a' .^oj^"^ ^t f^'t ^^^' " ^'^^• 92 People V. Mulholland, 82 N. Y. ^?c^?f'i?,^- ^4;^' ,.« M r.- •?94 q7 Am RpT) 568 Springfield v. Smith, 138 Mo. 64.5, „;tLt^',I'^' =.+ ; .o NT 1 oo, 60 Am. St. Rep. 569, 40 S. W. Rep. 93 Littlefield v. State, 42 Neb. 223, ygy 37 L R A 446 47 Am. St Rep. 697, 60 N. W. Rep. ^Re Lemon, 143 Cal. 946. 77 Pac. 724, 28 L. R. A. 588. j^^p 455^ gg ^ R. A. 946. 94 Burlington v. Unterkircher, 99 3 City of Jacksonville v. LedAvith, 26 Iowa, 401, 68 N. W. Rep. 795. j'la. 163, 23 Am. St. Rep. 559, 7 So. 96 State ex rel. Toi v. French, 17 Rep. 885, 9 L. R. A. 69. And see Mont. 54, 41 Pac. Rep. 1078, 30 L. R. generally as to the police power to A. 415. Although this tax was upheld, establish and regulate markets. State it seems to be plainly unjust and op- v. Namias, 49 La. Ann. 618, (J2 Am. pressive. St. Rep. 657, 21 So. Rep. 852; State 720 CONSTITUTIONAL LAW OF TAXATION. Amount of license fee which municipality may impose under the police power. 1445. Where the right of the municipality or legislature to impose the charge depends solely on the police power, the amount of the license fee becomes an important element in determining the reasonableness of the ordinance. What amount of fee or charge may be exacted is a question upon which the authorities are in conflict. There are some cases in which it is said that no more than the expense of issuing the license can be charged. Even in such cases it is conceded that this expense, being neces- sarily fixed in advance, and being incapable of exact determina- tion, need not be shown to be precisely equal to the license fee; and that, so long as there is a reasonable approximation in the charge to the apparent cost of issue, the ordinance will be upheld. " All reasonable intendment should be in favor of its fairness and justice as a fee." * The general rule, however, is, that a license fee imposed by ordinance under the police power may at least include not only the expense of issuing it,^ but also the expense of inspection and the additional labor of officers and other ex- penses imposed by the business; and here, too, owing to the neces- sity of fixing the fee in advance by estimation, and the impossi- bility of determining the exact cost of inspection and regulation, a wide discretion is allowed to the legislature or municipal authorities.® In a recent case in Missouri it was said that the rule that inspection fees must be limited to the cost of inspection applies only to those callings which the state has power to regulate, but V. Davidson, 50 La. Ann. 1297, 24 So. Rep. 885, 9 L. R. A. 69; Atkins v. Rep. 324, 69 Am. St. Rep. 478; New Phillips, 26 Fla. 281, 8 So. Rep. 429, Orleans v. GrafBna, 52 La. Ann. 1082, 10 L. R. A. 158; Arliadelphia Lumber 78 Am. St. Rep. 387, 27 So. Rep. 590. Co. v. Arkadelphia, 56 Ark. 370, 19 4 Muhlenbrinck v. Commissioners, 13 S. W. Rep. 1053 ; Fayetteville v. Vr. (42 N. J. L.) 364, 36 Am. Rep. Carter, 52 Ark. 301, 12 S. W. Rep. ol8; Mobile v. Yuille, 3 Ala. 137, 36 573, 6 L. R. A. 509; Van Hook v. Am. Dec. 441; City of Jackson v. Selma, 70 Ala. 361, 45 Am. Rep. 85; Newman, 59 Miss. 385, 42 Am. Rep. Cole v. Hall, 103 111. 30; Burlington 367. V. Putnam Ins. Co., 31 Iowa, 102; St. 8 Smith V. Alabama, 124 U. S. 465, Louis v. Boatmen's, etc., Co., 47 Mo. 21 L. ed. 508, 8 Sup. Ct. Rep. 564; loO: People v. .Jarvis, 19 App. Div. Nashville, etc., Ry. Co. v. Alabama. (N. Y.) 466, 46 N. Y. Supp. 596, 12 128 U. S. 96, 32 L. ed. 352, 9 Sup. Ct. N. Y. Crim. Rep. 333; Tenney v. Lentz, Rep. 28 ; State v. Forcier, 65 N. H. 42, 16 Wis. 566 ; Baker v. Cincinnati, II 17 Atl. Rep. 577; State v. Heineman, Ohio St. 534; Cincinnati v. Bryson, 15 80 Wis. 253, 27 Am. St. Rep. 34, 49 Ohio, 625. 45 Am. Dec. 593; Chester N. W. Rep. 818. City v. Western Union Tel. Co., 154 6 City of .Jacksonville V. Ledwith, 26 Pa. St. 464, 25 Atl. Rep. 1134; Van Fla. 163, 23 Am. St. Rep. 558, 7 So. Baalen v. People, 40 Mich. 258. AMOUNT OP LICENSE FEES. 721 not to suppress, and even in this case the fees are not limited to the mere cost of inspection.' 1446. In a line of cases in Pennsylvania involving munic- ipal license taxes on telegraph lines and poles a very broad dis- ■cretion in fixing the license fee was allowed to the municipal- ities. In one case it appeared that the rates charged were at least five times the amount of expense involved in the supervision exercised by the municipality. The Supreme Court said: For the purposes of this case we must treat this averment as true, as far as it goes. The difficulty is it does not go far enough. It refers only to the usual, ordinary, or necessary ex- pense of municipal ofScers, of issuing licenses and other expenses therebj' imposed upon the municipality. It makes no reference to the liability imposed upon the city by the erection of telegraph poles. It is the duty of the city to see that the poles are safe, and properly maintained, and should a citizen be injured in person or property by reason of a neglect of such duty, an action might lie against the city for the consequences of such neglect. It is a mistake therefore to measure the reason- ableness of the charge by the amount actually expended by the city for a particular year, to the particular purposes specified in the affidavit.* 1447. In another case it was said: Clearly the reasonableness of the fee is not to be measured by the value of the poles and wires, or of the land occupied, nor by the profits of the business. The elements which enter into the charge are the necessary or probable expense incident to the issuing of the license and the probable expense of such inspec- tion, regulation, and police surveillance as municipal authorities may lawfully give to the erection and maintenance of the poles and wires.® These taxes amounted to one dollar per pole, and two dollars and a half per mile of wire. They were sustained in the United States Supreme Court, which said, referring to the foregoing ■cases : Concurring in these views in general, we think it would be going much too far for us to decide that the test set up by the plaintiff in error (the test referred to was that the charge should not exceed the sum which would reimburse the municipality for the expense to which it had been put by the telegraph company's occupation of the highway) must be necessarily applied, and the 7 State V. Bixman, 162 Mo. 1, 62 Telegraph Co., 154 Pa. St. 464, 25 S. W. Rep. 828. Atl. Rep. 1134. 8 Chester City v. Western Union » Taylor Borough v. Telegraph Co 202 Pa. St. 583, 52 Atl. Rep. 128. 46 722 CONSTITUTIONAL LAW OF TAXATION. ordinance held void for failure to meet it. As the Supreme Court pointed out, the elements entering into the charge are- various, and the Court of Common Pleas, the Superior Court, and the Supreme Court of Pennsylvania have held it to be reasonable, and we cannot say that their conclusion is so mani- festly wrong as to justify our interposition.^" 1448. In a quite recent case of this class the Supreme Court of the United States reiterated the views expressed in previous- cases 'with respect to the rules "which govern the amount of these- license fees imposed under the police povs'er. Said the court: True, it is often said, that a license tax is in its nature arbi- trary; that it is not necessarily graduated by the value of the- property invested in the business licensed or its profitableness- But such observations are pertinent only in case the license is resorted to for the purpose of revenue. When it is authorized only in support of police su-pervision, the expense of such super- vision determines the amount of the .charge, and if it were pos- sible to prove in advance the exact cost, that would be the limit of the tax. In the nature of things that, however, is ordinarily impossible, and so the municipality is at liberty to make the- charge large enough to cover any reasonable anticipated expenses. It is authorized to fix such charge in advance, and need not wait until the end of the period for which the license is granted. It may not act arbitrarily or unreasonably, but the risk may right- fully be cast upon the licensee, and the charge cannot be avoided because it subsequently appears that it was somewhat in excess of the actual expense of the supervision, nor can the licensee then recover the difference between the amount of the licence and such cost.^^ 1449. In a case decided a few years earlier the Supreme Court had upheld a charge of five dollars per pole imposed by a municipal ordinance of St. Louis which had been attacked as a re- striction of commerce, on the ingenious ground that it was a rental 10 Western Union Telegraph Co. v. v. Norfolk, 101 Va. 125, 43 S. E. Rep. New Hope, 187 U. S. 419, 47 L. ed. 207. 240, 23 Sup. Ct. Rep. 204, affirming n The judgment of the Circuit Court 16 Pa. Sup. Ct. 306. To the same ef- against the licensees for the amount feet are Western Union Telegraph Co. of the license was reversed in this case,. V. Philadelphia, 22 Wkly. Notes Cas. not because the charge was held un- 39 ; same title, 89 Fed. Rep. 454 ; City reasonable, but because, there being a of Allentown v. Western Union Tele- conflict of evidence, the trial court graph Co., 148 Pa. St. 117, 33 Am. should have left the question of rea- St. Rep. 820, 23 Atl. Ren. 1070; City sonableness to the jury, which it had of Philadelphia v. Postal Telegraph not done. Atlantic and Pacific Tele- Cable Co., 67 Hun (N. Y.), 21, 50 graph Co. v. Philadelphia, 190 U. S. N. Y. St. Rep. 301, 21 N. Y. Supp. 160, 47 L. ed. 995, 23 Sup. Ct. Rep. 656; see Postal Telegraph Cable Co. 817. AMOUNT OF LICENSE FEES. 723 charged by the city for the space occupied in the streets, and not a license fee at alL This view was necessary to sustain the charge, since if viewed as a tax it was a restriction on commerce, and if viewed as a police measure it was unreasonable and excessive.-'^ I cannot see why this charge was not a license fee just as much as were the Pennsylvania charges. The case is an illustration of how hard the Supreme Court strains to uphold tax laws. In Arkansas a tax of fifty cents a pole on electric light poles was regarded by the court as a rental charge, there being no inspection or regulation by the municipality; and was held invalid as in violation of the contract of the municipality with the company.-'* In a late Pennsylvania ease a pretended license tax of twenty-five cents a foot laid by a city on street railways was held void, as a license tax, because the revenue was plainly in excess of all possible expense of regulation.-'** 1450. The discretion allowed to the legislature or municipal authorities is, of course, not an uncontrollable discretion, and when the amount of the charge is disproportionate to any pos- sible cost of regulation, it will be held to be a revenue measure, hence not sustainable as a reasonable exercise of the police power. The Pennsylvania telegraph pole license cases just referred to cast 3ome doubt on this proposition if carried to their extreme effect; still it is not probable that these decisions will be logically followed in all cases even by the courts which made them. The question has usually arisen in cases where the municipality had no charter authority to impose the charge in question as an exer- cise of the taxing power; hence such charge could only be sus- tained as a police regulation. Ca^es of this sort, where ordi- nances were held tmreasonable, were : An ordinance requiring owners of and exhibitors in theaters to pay the city constable $2 a night for his attendance at performances, where his services appeared to be unnecessary and the theaters were already specially taxed;" license fees aggregating $1,600 per annum wliere the cost of regulation was shown to be about $35 per annum ;^^ a license fee of $100 for the use of the streets for the telephone business ;'^ a license fee of $20 a year for laundries ;" 12 St. Louis V. Western Union Tele- I3a Pittsburgh Ky. Co. v. Pittsburgh, graph Co., 148 U. S. 92, 37 L. ed. 380, 211 Pa. St. 479, 60 Atl. Eep. 1077. 13 Sup. Ct. Eep. 485, reversing 39 K Waters v. Leech, 3 Ark. 110. Fed. Rep. 59. 15 Philadelphia v. Western Union IS Hot Springs Electric Light Co. v. Tel. Co., 40 Fed. Rep. 615. Hot Snrings, 70 Ark. 300, 67 S. W. lO Sunset, etc., Co. v. iledford. 115 Eep. 761. Fed. Rep. 202. iTiJe Wan Yin, 22 Fed. Rep. 701. 724 CONSTITUTIONAL LAW OF TAXATION. a license fee of $25 a day for auctioneers ;^ $2,500 a year on auctions;^® a license fee of $10 a day on auctioneers.^'* 1451. Other illustrations of void license fees imposed by municipalities, where there was no authority to tax for revenue and where the charge depended solely for support upon the police power, are: A license fee attempted to be laid by the city of Chicago, under a power to regulate the streets, on all wheeled vehicles whatever using the streets f^ but such a tax is valid when express authority to lay it is conferred by the legislature;^ a tax on wagons of nonresidents engaged in hauling in or out of the city.^^ A license tax on vehicles using the streets, exempting street cars, automobiles, and vehicles of nonresidents, does not deprive any one of the equal protection of the laws.^ Under the J^orth Carolina constitution allowing taxation of trades and occu- pations, a tax cannot be laid on the single act of carrying a per- son out of town.^^ License fees imposed for restricting business. 1452. Where a business or calling is of such a character that a multiplication of those who carry it on is likely to become a public nuisance, the license fee, under the police power, may exceed the limits of cost of issuance, regulation, and inspection, and miay be fixed at such an amount as will tend to restrict the number of places and persons engaged in it. The most familiar illustration of this doctrine is found in the liquor license taxes,^^ which are generally, though not always, imposed by direct state authority. The principle, however, applies to municipal legis- lation under the general power of police, and becomes an element in determining the reasonableness of ordinances.^^ 18 Stull V. De Mattos, 23 Wash. 71, see Memphis v. Battaile, 8 Heisk. 524, 02 Pac. Rep. 4ol, 51 L. R. A. 892. 24 Am. Rep. 285; Edenton v. Cape- isilargolies v. Atlantic City, 67 N. heart, 71 N. C. 156, as to such li- J. L. 82, 50 Atl. Rep. 367. censes on residents. 20 People V. Jarvis, i9 App. Div. 24 Kersey v. Terre Haute, 161 Ind. (N. Y.) 466, 46 N. Y. Supp. 596, 12 471, 68 N. E. Rep. 1027. N. Y. Crim. Rop. 333. 25 State v. Cooper, 135 N. 0. 1, 47 21 Chicago V. Collins, 175 111. 445, S. E. Rep. 129. 67 Am. St. Rep. 224, 49 L. R. A. 408, 26^0! parte McNallv, 73 Cal. 632, 15 51 X. E. Rep. 907. Pac. Rep. 368; Dennehy v. City of -"J Ft. Smith V. Scruggs, 70 Ark. 549, Chicago, 120 111. 627, 12 N. E. Rep. 91 Am. St. Rpp. 100, 09 S. W. Rep. 679, 227 ; Kitson v. Ann Arbor, 26 Mich. 58 L. R. A. !)21 ; Tonilinson v. In- 325. dianapolis, 144 Ind. 142, 43 N. E. Rep. 27 City of Duluth v. Krupp, 46 Minn. 9, 36 L. R. A. 413 ; City of Terre Haute 435, 49 N. W. Rep. 235 ; City of V. Kersey, 159 Ind. 300, 95 Am. St. Leavenworth v. Booth, 15 Kans. 627 ; Rep. 298, 64 N. E. Ren. 469. see Tenney v. Lentz, 16 Wis. 566; 23 St. Charles v. Nolle, 51 Mo. 122; Burch v. Savannah, 42 Ga. 596. AMOUNT OF LICENSE FEES. 725 1453. In the case of shows, theah'ical performances, and the like, the municipal right to impose license charges under the power of police seems to be less limited than in some other cases. So far as this liberty of imposition is based on any well- defined ground, that ground seems to be the supposed danger to the public morals from unrestricted exhibitions. In fact, the long-established custom of municipalities is probably the safest constitutional basis upon which to rest such ordinances ; and the ease with which such taxes can often be collected without objec- tion on the part of any one permanently identified with the com- munity is one of the conditions of fact which perpetuate the cus- tom. But however that may be, municipal license charges on such shows in excess of any possible cost of issuance of license and of inspection have been sustained as police measures.^ S8 See page 701, note 25, page 723, note 14, and page 844, note 51. CHAPTER XXI. EQUALITY AND DUE PROCESS IN METHODS OF TAXATION. 1454. The equality and uniformity which are commanded by the Federal and state constitutions do not include merely formal equality — uniformity in things unessential. Neither the spirit nor the letter of the constitutions requires that the legislative dis- cretion be absolutely trammeled. The course and effect of the decisions have been to leave the legislatures just as free as pos- sible and to regard the constitutional' provisions as limiting the legislative power in matters of substance only, and not in matters of form. Now, the real, substantial elements of the process of taxation of property are the rate and the valuation. If the rate and the rule of valuation are the same for all property, it makes no sub- stantial difference that different methods and agencies are em- ployed in fixing the valuation, making the assessment, and col- lecting the tax; and the employment of such different methods and agencies as may be appropriately applied to different classes of property does not violate either the Federal guaranties of the equal protection of the laws and due process of law or the require- ments of uniformity and equality which are contained in the state constitutions.* 1 Kontnok^- Railroad Tax Cases, 115 557; Western Union Telegraph Co. v. V. S. 321, 6 Sup. Ct. Rep. 57, 29 L. ed. Poe, 04 Fed. Rep. 9 (overruling West- 414; reported below, Cincinnati, etc., ern Union Telegraph Co. v. Poe, 61 Ey. Co. V. Commonwealth, 81 Ky. 492; Fed. Rep. 449, and Adams Express Co. Columbus Southern Ry. Co. v. Wright,- v. Poe, 61 Fed. Rep. 470) ; State ex 151 U. S. 470, 38 L. ed. 238, 14 Sup. rel. Poe v. Jones, 51 Ohio St. 492, 37 Ct. Rep. 396 ; reported below, 89 Ga. N. E. Rep. 945 ; Adams Express Co. v. 574, 15 S. E. Rep. 293; Pittsburgh, Kentucky, 166 U. S. 171, 41 L. ed. 960, etc., Ry. Co. v. Backus, 154 U. S. 421, 17 Sup. Ct. Rep. 527; see Western 38 L. ed. 1031, 14 Sup. Ct. Rep. 1114; Union Tel. Co. v. Norman, 77 Fed. Cleveland, etc., Ry. Co. V. Backus, 154 Rep. 13; State Railroad Tax Oases, U. S. 439, 38 L. ed. 1041, 14 Sup. Ct. 92 U. S. 575, 23 L. ed. 663; Wells, Rep. 1122; reported below, 133 Ind. Fargo, etc. v. Crawford County, 63 513, 33 N. E. Rep. 421, 18 L. R. A. Ark. 576, 40 S. W. Rep. 710, 37 L. R. 729 ; Adams Express Co. V. Ohio State A. 371; St. Louis, etc., Ey. Co. v. Auditor, 165 U. S. 194, 41 L. ed. 683, Worthen, 52 Ark. 529, 13 S. W. Rep. 17 Sup. Ct. Rep. 305, rehearing, 166 254, 7 L. R. A. 374; San Francisco, U. S. 185, 41 L. ed. 965, 17 Sup. Ct. etc., Ry. Co. v. State Board of Equali- Rep. 604; Sanford v. Poe, 37 U. S. zation, 60 Cal. 12; People v. Central App. 378, 69 Fed. Rep. 546, 60 L. R. A. Pacific R. R. Co., 43 Cal. 398; Ameri- 641 ; Western Union Telegraph Co. v. can Refrigerator Transit Co. v. Adams Poe, 37 U. S. App. 399, 69 Fed. Rep. 28 Colo. 119, 63 Pae. Rep. 410; People 1726] EQUALITY AND DUE PROCESS IN METHODS. 727 Assessment of some property by state boards while other prop- erty is assessed by local officers. 1455. Many of the cases cited, in -which diversity of method lias been held not to result in lack of equality and uniformity, are cases where railroad, telegraph, telephone, and express prop- -erties, and the like, have been valued and taxes collected by state l)oards or agencies, while other property was valued by local assessors and the tax collected through local officers. The laws providing for this diiference are upheld upon the principles stated.^ V. Henderson, 12 Colo. 369, 21 Eac. Eep. 144; Osborne v. State, 33 Fla. 162, 39 Am. St. Rep. 99, 25 L. R. A. 120. 14 So. Rep. 588; affirmed, 164 U. .S. 650, 41 L. ed. 586, 17 Sup. Ct. Rep. 214; Porter v. Rockford, etc., R. E. Co., 76 111. 561; Coal Run Co. v. Finlen, 124 111. 666; Sterling Gas Co. V. Higbie, 134 111. 557; Ottawa Gas Light, etc., Co. v. Downey, 127 111. 201; Western Union Tele- graph Co. V. Taggart, 141 Ind. 281, 40 N. E. Rep. 1051, 60 L, R. A. 671; State V. Express Companies, 144 Ind. 549, 42 N. E. Rep. 483; United States Express Co. v. Ellyson, 28 Iowa, 374; Central Iowa Ry. Co. v. Board of Su- pervisors, 67 Iowa, 199, 25 N. W. Rep. 128; Missouri Valley, etc., Ry. Co. v. Harrison County, 74 Iowa, 283, 37 N. W. Rep. 372 ; Primghar State Bank v. Rerick, 96 Iowa, 238, 64 N. W. Rep. 801; Gulf R. R. Co. v. Morris, 7 Kans. 210; Commissioners of Ottawa County V. Nelson, 19 Kans. 234, 27 Am. Rep. 101 ; Commonwealth v. Taylor, 101 Ky. 325, 19 Ky. L. Rep. 552, 41 S. W. Rep. 11; Wathen v. Young, 103 Ky. 36, 19 Ky. L. Rep. 1678, 44 S. W. Rep. 115; City of Louisville v. Louisville Public Warehouse Co., 107 Ky. 184, 53 S. W. Rep. 291; Paducah Street Ry. Co. v. County of MeCracken, 105 Ky. 472, 20 Ky. L. Rep. 1094, 49 S. W. Rep. 178; State Tax Commissioners v. Board of Assessors, 124 Mich. 491-496, 83 N. W. Rep. 209; State v. Weyerhauser, 68 Minn. 353, 71 N. W. Rep. 765; Sawyer V. Dooley, 21 Nev. 390, 32 Pac. Rep. 437; Mechanics' Nat. Bank v. Baker, «5 N. J. L. (36 Vr.) 113, 46 Atl. Rep. 586; affirmed, 05 N. J. L. (36 Vr.) 549, 48 Atl. Rep. 582; Trenton Iron Co. v. Yara, 42 N. J. L. (13 Vr.) 357; State Board of As- sessors V. Central R. R. Co., 48 N. J. L. (19 Vr.) 146, 4 Atl. Rep. 578; State V. Jones, 121 N. C. 616, 28 S. E. Rep. 347 ; Minneapolis and Northern Elevator Co. v. Trail County, 9 N. D. 213, 82 N. W. Rep. 727, 50 L. R. A. 266; Wagoner v. Loomis, 37 Ohio St. 571; Shotwell v. Moore, 45 Ohio St. 632, 16 N. E. Rep. 470; Commonwealth V. Delaware Division Canal Co., 123 Pa. St. 594, 16 Atl. Rep. 584, 2 L. R. A. 798; Commonwealth v. Lehigh Valley Ry. Co., 129 Pa. St. 429, 18 Atl. Rep. 406; Coal Ridge Improvement, etc., Co. V. Jennings, 127 Pa. St. 397, 47 Atl. Rep. 986; Carroll v. Alsup, 107 Tenn. 257, 64 S. W. Rep. 193; Commonwealth V. Brown, 91 Va. 762, 21 S. E. Rep. 357, 28 L. R. A. 110; Eureka District Gold Mining Co. v. Ferry County, 28 Wash. 250, 68 Pac. Rep. 727 ; Wright v. Stin- son, 16 Wash. 368, 47 Pac. Rep. 761; Charleston, etc.. Bridge Co. v. Kan- awha County Court, 41 W. Va. 658, 24 S. E. Rep. 1002. A municipal corpo- ration may be authorized to tax dif- ferent classes of property by diflferent methods. German Washington Fire Ins. Assn. v. City of Louisville, 25 Ky. L. Rep. 2097, 80 S. W. Rep. 154. 2 See cases cited supra, § 1454, espe- cially Kentucky Railroad Cases, 115 U. S. 321, 6 Sup. Ct. Rep. 57, 29 L. ed. 414; reported below, Cincinnati, etc., Ry. Co. V. Commonwealth, 81 Ky. 492; State Railroad Tax Cases, 92 U. S. 575, 23 L. ed. 663 ; Pittsburgh, etc., Ry. Co. V. Backus, 154 U. S. 421, 38 L. ed. 1031, 14 Sup. Ct. Rep. 1114; Cleve- land, etc., Ry. Co. v. Backus, 154 U. S. 439, 38 L. ed. 1041, 14 Sup. Ct. Eep. 1122; reported below, 133 Ind. 513, 33 N. E. Rep. 421, 18 L. R. A. 729 ; Porter V. Rockford, etc., Ry. Co., 76 111. 561; Missouri Valley, etc., Ry. Co. v. Har- 728 CONSTITUTIONAL LAW OF TAXATION. The reasoning of these authorities is "well stated in a Missouri case cited: It is further insisted . . . that the act is void, because it violates that provision of our constitution which declares that taxation on property shall be uniform. We are unable to per- ceive the force of this objection. Under the act no "oart of th'^ company's property is exempt, and it is all taxed alike at a cash valuation. The board of equalization assess all the property at its cash value, and then it is taxed in the same manner as all other property of a like description. The principle of uniformity is adopted throughout. Its validity is in no wise impaired or affected because a different mode of assessment is provided for. so long as the same end is attained. It is not an absolute and indispensable requisite that the county or corporation assessor should make the assessment. That duty may be devolved upon any other ofBcer or officers, if uniformity is accomplished and preserve^.^ So also it is said: The right to classify railroad property, as a separate class, for purposes of taxation, grows out of the inherent nature of the property, and the discretion vested by the constitution of the state in its legislature, and necessarily involves the right, on its part, to devise and carry into efEect a distinct scheme, with different tribunals, in the proceeding to value it. If such a scheme is due process of law, the details in which it differs from the mode of valuing other descriptions and classes of property cannot be considered as a denial of the equal protection of the laws.^ The same reasoning was applied in Kentucky in upholding a law which provided for the assessment of liquors in bonded ware- houses under the control of the government by a state board, while other property was assessed by the local officers.'' A law providing for the taxation of one class of railroads by one method on an ad valorem basis, and that other roads which have certain previous charter exemptions from ad valorem taxa- tion shall be taxed by a very similar method on the basis of their incomes is not a denial of the equal protection of the laws and rison County, 74 Iowa, 283, 37 N. W. 5 Commonwealth v. Taylor, lOI Kv. i;ep. 372; (State v. Severance, .3o .Mo. 325, 19 Ky. L. Rep. 552, 41 S. W. Hep. 378; Michigan R. R. Tax Cases, 138 11; Wathen v. Young, 103 Ky. 36, 10 Fed. Rep. 223. Ky. L. Rep. 1678, 44 S. W. Rep. 115; 3 State V. Severance, 55 Mo. 378- City of Louisville v, Louisville Public 387. Warehouse Co., 107 Ky. 184, 53 S. W. 4 Kentucky Railroad Tax Cases, 115 Rep. 291. U. S. 321, Sup. Ct. Rep. 57, 29 L. ed. 414. EQUALITY AND DUE PHOCESS IN METHODS. 729 does not violate state constitutional requirements of equality and uniformity.® An extreme instance of a classification in privilege taxation that was upheld as sufficiently uniform may be found in some Tennessee cases, where a law was upheld which imposed a privi- lege tax on all turnpike companies " that collect toll both ways " and laid no tax' on other turnpike companies.^ As explained in a subsequent case " the principal, if not the only reason for this classification was that the companies subjected to the tax were enjoying greater advantages, with the sanction of the state, than those enjoyed by the companies not so taxed.* 1456. But when assessment by different agencies or taxation by different methods results or may fairly be seen to be likely to result in an actual inequality among members of the same class, then the method itself is repugnant to requirements of equality. It is the substantial consequence of the law which is to he looked at. The Missouri act taxing department stores fur- nished an instance of such inequality. There the law classified department stores for license taxation, and gave to the local officers in each city power to fix the rate within specified limits.® The Supreme Court of Missouri said as to this point: All of the class of merchants thus arbitrarily named, under this act, are not subject to the same uniform rate of tax. Even as to them the tax may vary according to the whim or fancy of the different commissioners to be named by the Governor for the different cities, as will be seen from a reading of the act. The merchant in St. Joseph, for selling the articles enumer- ated in each of the classes or groups designated in the act, may be required to pay three hundred dollars, while for selling the same articles in Kansas City his brother denartment-store merchant may be required to pay four himdred dollars, and the merchant of St. Louis be required to pay five hundred dollars, and all under the same act. . . . Thus it is seen that the uniformity clause of the constitution has been violated in this act ... on account of the discretion given to the commis- sioner to be named under the act to fix, in different cities, dif- ferent license fees or rates of taxation upon the merchants of the same designated class.^" 6 Columbus Southern Ry. Co. v. 99 Tenn. 684, 43 S. W. Rep. 115, 53 Wright, 151 U. S. 470, 38 L. ed. 238, L. R. A. 921. 14 Sup. Ct. Rep. 396, 89 Ga. 574, 15 9 See § 554 et seq., as to the uncon- S. E. Rep. 293. stitutionality of such a delegation of 7 Turnpike Cases, 92 Tenn. 309, 22 legislative power. S. W. Rep. 75. 10 State ex rel. Wyatt v. Ashbrook, 8 Knoxville and 0. Ry. Co. v. Harris, 154 Mo. 375. 55 S. W. Rep. 627, 77 Am. St. Rep. 705, 48 L. R. A. 265. 730 CONSTITUTIONAL LAW OF TAXATION. Allowing appeal or rehearing in some cases and not in others. 1457. Another circumstance which has often been asserted in argument to constitute inequality occurs where a law provides for an appeal from the decision of the assessing board as to property generally, but denies such an appeal with respect to the valuation of certain classes of property. This element frequently is found in conjunction with provisions providing for the assess- ment of railroad properties and the like by a state board, an appeal being denied in such cases ; while as to property generally an appeal is allowed from the local assessors to a state board. Such laws are generally upheld by the courts, as not lacking in equality or uniformity. ■'^ It is said that the privilege of appeal is not an essential part of any remedy, and may be granted or withholden at the will of the legislature. The following language was used by the Indiana Supreme Court, in upholding a law which provided that railway property should be assessed in the first instance by the State Board of Tax Commissioners, there being no appeal, while in respect to other classes of property the original assessment was made by local boards, and appeal was allowed to the state board. Equal protection of the law does not require that all persons shall have the right of a hearing or trial before the same tribunal, and in all the same tribunals, and having the same right of appeal from one to another. . . . The statute in question provides a general sj'stem for taxation and assessment and valu- ation of property, and the method of ascertaining the valuation and assessing each class and kind of property applies alike to all persons holding and owning the same class of property, and it applies alike to all persons under like circumstances and conditions. ^^ Making different taxes payable at different times. 1458. There is no denial of equality and uniformity where different classes of taxes are made payable at different times, ^^ 11 See cases cited in § 1454, ante, Railroad Tax Cases, 92 U. S. 575, 23 especially Pittsburgh, etc., Ey. Co. v. L. ed. 663 ; Commonwealth v. Taylor, Backus, 'l54 U. S. 421, 38 L. ed. 1031, 101 Ky. 325, 19 Ky. L. Rep. 552, 41 14 Sup. Ct. Rep. 1114; Cleveland, etc., S. W. Rep. 11; Deane v. Indiana, etc., Ry. Co. V. Backus, 154 U. S. 439, 38 Co., 161 Ind. 371, 68 N. E. Rep. 686. L. ed. 1041, 14 Sup. Ct. Rep. 1122; 12 Cleveland, etc., Ry. Co. v. Backus, reported below, 133 Ind. 513, 33 N. E. 133 Ind. 513, 529, 531, 33 N. E. Rep. Rep. 421, 18 L. R. A. 729; Kentucky 421, 18 L. R. A. 729. Railroad Tax Cases, 115 U. S. 321, 29 13 Commonwealth v. Brown, 91 Va. L. ed. 414, 6 Sup. Ct. Rep. 57; re- 762, 21 S. E. Rep. 357, 28 L. R. A. ported below, Cincinnati, etc., Ry. Co, 110. V. Commonwealth, 81 Ky. 492; State EQUALITY AND DUE PEOCESS IN METHODS. 731 or "where provision is made for intervals between the times for making the successive assessments upon the various classes of property M^hich intervals are different as to the respective classes/* or where taxes are made payable at different times in different counties.^^ In a California case, a law of that state provided for the collection of taxes, from persons whose real property was not sufficient to secure the payment of the personal taxes, at the time of making the assessment; and permitted persons, whose real property was sufficient to secure the payment of the personal taxes, to defer payment until a later date, after equalization. This law was assailed as lacking in uniformity under the pro- vision of the California constitution which declared that " all property in the state, not exempt under the laws of the United States, shall be taxed in proportion to its value to be ascertained as provided by law " ^® and also under that clause which pro- hibited the passage of local or special laws for the assessment and collection of taxes. ^^ It was held that law was not a special one; that the intrinsic differences between secured and unsecured taxes were such as to make the classification reasonable; and the law was upheld.^* Distributing railroad property. 1458a There is no denial of equality where the rolling stock, franchises, and other unloeated property of a railroad company are distributed, by the legislature, among the several counties in which the road is situated, there to be taxed at the varying rates of local taxation prevailing in those several counties, instead of being taxed to the railroad in the county where its principal office is located.''® Rule of valuation. 1459. The rule that substantial equality is all that is required, apjDlies to the rule of valuation as well as to the methods of assessment and collection. If the rules of valuation laid down in the statutes or followed by the officers result in substantial 1* St. Louis Iron Mountain and l!> See eases cited in § 1455, ante, Southern Ry. Co. v. Worthen, 52 Ark. especially Columbus Southern Ry. Co. 529, 13 S. W. Rep. 254, 7 L. R. A. 374. v. Wright, 151 U. S. 470, 38 L. ed. 238, 15 State V. Jones, 121 N. C. 616, 28 14 Sup. Ct. Rep. 396; reported below, S. E. Rep. 347. 89 Ga. 574, 15 S. E. Rep. 293; State 16 § 1, art. 13. Railroad Tax Cases, 92 U. S. 575, 23 17 Subd. 10, § 25, art. 4. L. ed. 663. 18 Rode V. Siebe, 119 Cal. 518, 51 Pac. Rep. 869, 39 L. R. A. 342. Two judges dissented. 732 CONSTITUTIONAL LAW OF TAXATION. equality of valuation, it is immaterial that those rules are diffei'^ ently stated for different classes of property. This is illustrated in a Washington ease where the constitution provided for uni- formity and equality and ordained that all property should be assessed according to its " true value in money." The statutes provided that mining property should be assessed at such amount as it " "would sell for at a fair, voluntary sale for cash," and that other property should be valued at the " value at whicli the property would be taken in payment of a just debt from a solvent debtor." It was held that these requirements were consistent with the constitution, as both these rules of valuation amounted in substance to the same thing.^ Failure to provide for an equal- ization of values of certain classes of property does not invalidate a tax law, where the statute requires that all property shall be assessed at its true value.^'*" 1460. The valuation of property for taxation involves the decision of questions of fact by tribunals constituted for the pur- pose of deciding such questions. With their decisions the courts cannot ordinarily interfere. Where assessing officers have acted in good faith, it may be said as a general rule that a mere in- equality of valuation of property in particular instances affords no ground for complaining, on constitutional gTOunds, that the assessment is void for lack of uniformity and equality, where such inequality is due to mistake and is not due to fraud or to any general system of valuation designed to produce inequality.^^ To invoke the jurisdiction of courts to annul the assessment it must appear that there was actual fraud or habitual and system- atic violation of law by undervaluation.^^ 20 Eureka District Gold Mining Co. 89 Ga. 597, 15 S. E. Kep. 301; Odd V. Ferry County, 28 Wash. 250, 68 Fellows Assn. v. Dayton, 25 Ky. L. Pac. Rep. 727. Where franchises are Rep. 665, 76 S. W. Rep. 181; Shattuck taxed as property, earning capacity v. Smith, 6 N. D. 56, 69 N. W. Rep. is the correct basis of valuation. 5 ; Exchange Bank v. Hines, 3 Ohio Rocheblave Market Co. v. New Or- St. 1; Smith v. Kelly, 24 Greg. 464, leans, 110 La. 529, 34 So. Rep. 665. 33 Pac. Rep. 642; West Portland Park 20a Michigan Railroad Tax Cases, 138 v. Kelly, 29 Greg. 412, 45 Pac. Rep. Fed. Rep. 223. 901; Dayton v. Multnomah County, 34 21 Coulter V. Louisville, etc., Ry. Greg. 239, 55 Pac. Rep. 23 ; Chamber- Co., 196 U. S. 599, 49 L. ed. 015, lain v. Walter, 60 Fed. Rep. 788; 25 Sup. Ct. Rep. 420; People ex Baker v. King County, 17 Wash. 623, rel. Stewart v. Feitner, 95 App. 50 Pac. Rep. 481; Noyes v. King Div. 481, 88 N. Y. Supp. 774; Strat- County, 18 Wash. 420, 51 Pac. Rep. ton V. Collins, 43 >". J. L. 562; 1052; Edison Electricllluminating Co. Spring Valley Coal Co. s. People, 157 v. Spokane County, 22 Wash. 168, 60 111. 543, 41 N. E. Rep. 874; Keokuk Pac. Rep. 132; templeton v. Pierce and Hamilton Bridge Co. v. People, County, 25 Wash. 377, 65 Pac. Rep. 161 111. 514, 44 N. E. Rep. 206; 553. Georgia Midland, etc., Ry. Co. v. State, 22 ]srew York v. Barker, 179 U. S. EQUALITY AND DUE PEOCESS IN METHODS. 733 Where an unequal assessment, however, can be shown to have been made in malice or bad faith, where the assessing officer has acted in frand or has fraudulently refused to exercise his judg- ment, the courts will relieve against such an assessment as being Tepug-nant to the rules of uniformity and equality.^ And where an unequal assessment is shown to have been made in pursuance of some fixed rule or general system pursued by the assessing officers, the result of which is overvaluation or under- valuation, or inequality of assessment, the assessment will be held invalid for lack of uniformity and equality.^ 1460a. The principles laid down in the preceding sections are frequently applied in cases where the taxpayer's complaint is, not that his property is valued at more than its full value, but that it is valued at its full value, wliile the property of others is valued at less than its full value. Where constitution or statute expressly requires that all prop- «rty be taxed at its full cash value, some courts say that an in- •dividual taxpayer may not have his assessment scaled down to correspond with the assessments of others whose property is a.^sessed at less than its full value. In such cases, the remedy is, say these courts, not to decrease the assessment of one "whose property is assessed according to the statute, but to in- crease the assessments of the others. ^^ 279, 45 L. ed. 190, 21 Sup. Ct. Rep. v. Ferris, 55 Kans. 120, 39 Pae. Rep. 121; People ex rel. Clearing House, 1042; Oregon, etc., R. R. Co. v. Jack- etc, Co., V. Barker, 158 N. Y. 709, 53 son County, 38 Oreg. 589, 64 Pac. iSr. E. Rep. 1130; People ex rel. Fiske Rep. 307, 65 Pac. Rep. 369; Andrews T. Feitner, 95 App. Div. 217, 88 N. Y. v. King County, 1 Wash. 46, 23 Pae. Supp. 694 ; affirmed, 180 N. Y. 536, Rep. 409, 22 Am. St. Rep. 136 ; Taylor 72 K. E. Rep. 1148; Supervisors v. v. Louisville, etc., Co., 88 Fed. Rep. Stanlev, 105 U. S. 305, 26 L. ed. 1044; 350, 31 C. C. A. 537, 60 U. S. App. State v. Western Union Tel. Co., 165 166. Mo. 502, 65 S. W. Rep. 775. Where the constitution fixes the 23 Gove V. City of Tacoma, 26 Wash, basis of assessment of a city as the 474, 67 Pac. Rep. 261 ; Whatcom state assessment of the preceding year. County V. Fairhaven Land Co., 7 Wash, all additions thereto by the local au- 101, 34 Pac. Rep. 563; Benu v. Chehalis thorities are forbidden. They may not Couritv, 11 Wash. 134, 39 Pac. Rep. add the value of improvements erected ;!65; Knapp v. King County, 17 Wasfi. since the state assessment was made. .")f!7 50 Pae. Rep. 480. See cases cited (Elyton Land Co. v. Birmingham, 89 l>elow. -^l^,. 477, 7 So. Rep. 901 ), or an increase 24 Chicago and Alton R. R. Co. v. in the value of the property which was Livingston County, 68 111. 459 ; Bureau assessed in the last state assessment. County V. Chicago, etc., Ry. Co., 44 Bessemer v. Tennessee, etc., Co., 131 111. 229; Chicago, etc., Ry. Co. v. Ala. 138, 31 So. Rep. 492. Boone County, 44 111. 240; Darling v, 25 Evansville, etc., Ry. Co. v. Com- - lature has power to classify persons and property for taxation. A law requiring the assessment of the tangible and intangible property of an express company as a unit, laying down as a rul(r of assessment such proportion of the value of the entire capital stock as the number of miles of raihvav over which it carries on business in the state bears to the total number of miles of rail- road over which it carries on business, was construed to permit the taxing officers to receive evidence of the true value of the property and to assess it at its true value, though that might be greater or less than the sum found by applying the statutory rule, and as so construed was upheld. ^^ 1510. California. All property in the state, not exempt under the laws of the United States, shall be taxed in proportion to its value, to be ascertained as provided by law. The word " property," as used in this article and section, is hereby declared to include moneys, credits, bonds, stocks, dues, franchises, and all other matters and things, real, personal, and mixed, capable of private ownership; provided^ that property used for free public libraries and free museums, growing crops, property used exclusively for public schools, and such as may belong to the United States, this state, or to any county or municipal corporation within this state, shall be exempt from taxation. The legislature may provide, except in case of credits secured by mortgage or trust deed, for a deduction from credits of debts due to iona fide residents of this state.^^ All buildings, and so much of the real property on which they are situated as may be required for the convenient use and occupation of said buildings, when the same are used solely and 28 Fletcher v. Oliver, 25 Ark. 289. Fort Smith v. Scruggs, 70 Ark. 549, Compare Miller v. County of Kern, 137 91 Am. St. Rep. 100, 69 So. Rep. 679, Cfal. 516, 70 Pae. Rep. 549, and Gun- 58 L. R. A. 921. nison Co. v. Owen, 7 Colo. 467, 4 Pac. 3i Fort Smith v. Scruggs, supra. Rep. 795. See § 527 et seq. 32 Wells, Fargo, etc. v. Crawford 30 Little Rock v. Prather, 46 Ark. Coimty, 63 Ark. 576, 40 S. W. Rep. 479; Baker v. State, 44 Ark. 134; 710, 37 L. R. A. 371. Washington v. State, 13 Ark. 752 ; 33 Amended 1894, art. XIII, § 1. EQUALITY AND UNIFORMITY IN CALIFORNIA. 767 exclusively for religious worship, shall be free from taxation; provided, that no building so used which may be rented for religious purposes and rent received by the owner therefor, shall be exempt from taxation.^* All bonds hereafter issued by the state of California, or by any county, city and county, municipal corporation, or district (including school, reclamation, and irrigation districts) within said state, shall be free and exempt from taxation.^^ Land, and the improvements thereon, shall be separately assessed. Cultivated and uncultivated land, of the same quality, and similarly situated, shall be assessed at the same value.^® Every tract of land containing more than six hundred and forty acres, and which has been sectionized by the United States Government, shall be assessed, for the purposes of taxation, by sections or fractions of sections. The legislature shall provide by law for the assessment, in small tracts, of all lands not sec- tionized by the United States Government.^^ 1511. Income taxes may be assessed to and collected from persons, corporations, joint-stock associations, or companies resident or doing business in this state, or any one or more of them, in such cases and amounts, and in such manner, as shall be prescribed by law.^* The legislature shall provide for the levy and collection of an annual poll tax, of not less than two dollars, on every male in- habitant of this state over twenty-one and under sixty years of age, except paupers, idiots, insane persons, and Indians not taxed, said tax shall be paid into the state school fund.^^ Fruit and nut-bearing trees under the age of four years from the time of planting in orchard form, and grapevines under the age of three years from the time of planting in vineyard form, shall be exempt from taxation, and nothing in this article shall be construed as subjecting such trees and grapevines to taxation.** The legislature shall have the newer to provide by law for the payment of all taxes on real property by installments.*^ State and county boards of equalization are provided.*^ 1512. All laws of a general nature shall have a uniform operation.** No special privileges or immunities shall ever be granted which may not be altered, revoked, or repealed by the legislature, 34 Amendment adopted Nov. 6, 1900. 39 Art. XIII, § 12. Art. XIII, § 1%. 40 Amendment adopted November 6, 36 New section; amendments adopt- 1894. Art. XIII, § 12%. ed. Nov. 4, 1902. Art. XIII, § 1%. 41 Art. XIII, § 7. 36 Art. XIII, § 2. *^ Art. XIII, § 9. 3TArt. XIII, i 3. *3Art. I, § 11. 38 Art. XIII, § 11. 768 CONSTITUTIONAL LAW OF TAXATION. nor shall any citizen, or class of citizens, be granted privileges or immunities which, upon the same terms, shall not be granted to all eitixens.** The legislature shall not pass local or special laws. . . . Tenth — For the assessment or collection of taxes. . . . Thirteenth — Extending the time for the collection of taxes. . . . Sixteenth — Eeleasing or extinguishing, in whole or in part, the indebtedness, liability or obligation of any corporation or person to this state, or to any municipal corporation therein. . . . Nineteenth — Granting to any corporation, association, or individual, any special or exclusive right, privilege or im- munity. . . . Twentieth — Exempting property from taxa- tion. . . . Thirty-third — In all other cases where a gen- eral law can be made applicable.*^ 1513. The former constitution provided for equality and uni- formity in taxation throughout the state, and that '' all property in this state shall be taxed in proportion to its value, to be as- certained as directed by law." The property referred to in this provision was held, before the adoption of the present constitution, to be private property, or all property other than that belonging to the United States or the state, or public property.*® The present constitution embodies this distinction. Corporate fran- chises are property within this provision. ^'^ The requirement of equality and uniformity refers only to property taxation,** and does not prevent a tax on business graded by Halcs.*^ The legislature has no power to exempt any property in the state from taxation.®" Hence the legislature cannot authorize a board of supervisors to remit a tax or part of a tax in a specified district. ^^ <4 Art. I, § 21. pie v. Naglee, 1 Cal. 252, 52 Am. Dec. «Art. IV, § 25. 312; People v. Coleman, 4 Cal. 46, 60 « People V. McCreery, 34 Cal. 432; Am. Dec. 581. Doyle V. Austin, 47 Cal. "353. « Sacramento v. Crocker, 16 Cal. 47 San Jos6 Gas Co. v. January, 57 119. See Ex parte Frank, 52 Cal. Cal. 614; Spring Valley Water Works 606, 28 Am. Pep. 642. where a mu- V. Schlotter, 62 Cal. 69; San Francisco nieipal license tax on merchants, dis- Gas Light Co. v Schlotter, 62 Cal. criminating against selU'is by sample. 119. The state franchise of a railroad was held void for unrea^nnahloness. company is not exempt, although the BO People v. McCreery, 34 Cal. 432, company is to some extent emploj'ed overruling in this particular High v, in the Federal service. Central Pacific Shoemaker, 22 Cal. 303, and People v. Ry. Co. V. Board of Equalization, 60 Coleman, 4 Cal. 46, 60 Am. Dec. 581; Cal. 35; People v. Central Pacific Ry. Minturn v. Hays, 2 Cal. 590; I'eople Co., 105 Cal. 576, 38 Pac. Rep. 905; v. Eddy, 43 Cal. 331; People v. Gerke, Colusa V. Glenn, 124 Cal. 498, 57 Pac. 35 Cal. 677; People v. YVhartenby, 38 Rep. 477; see People v. Central Pa- Cal. 461; Lick v. Austin, 43 Cal. 590; cific Ry. Co., 83 Cal. 393, 23 Pac. Rep. Mackey v. San Francisco, 113 Cal. 392, 303. 45 Pac. Rep. 696. ■18 People V. McCreery, supra; Peo- 51 Wilson v. Supervisors, 47 Cal. 91. EQUALITY AND UNIFOEMITY IN CALIFORNIA. 769 1514. A tax for state purposes must be uniform in rate throughout the state ;'^ and a municipal tax is uniform if it ■operates equally in the municipality where it is laid.^^ A tax law is not lacking in uniformity because different methods of collecting •delinquent taxes are provided in different counties.^* And a law separately classifying railroads operating in more than one county for the purpose of collection of delinquent taxes, does not violate -a provision forbidding special laws for the collection of taxes.^* Double taxation is forbidden.^^" Bonds of a railroad company, secured by mortgage on realty in the state, cannot be taxed. ^^'' The rule forbidding double taxation does' not prevent the taxation •of property by different governments.^^ Double taxation may be imposed as a penalty for non-compliance with tax laws.®^'* Bonds of a railroad secured by property outside the state may be taxed. ^^ The lender of money is not subjected to double taxation by reason of a statute requiring payment of taxes on money loaned him and on solvent debts due him over his own indebtedness.^® Solvent loans are subject to taxation notwithstanding they are secured by the pledge of exempt property. ^^ License charges im- posed for revenue are taxes, and power to impose them can only be vested in municipalities by general law.®* A law requiring payment of court fees of $1 per thousand in «xcess of $3,000 of value, on estates, is a property tax law void for lack of equality and uniformity.'*" Eeference is made to sections 1475, 1486, 1487 for other California cases involving inheritance tax laws. 1515. The word "taxes" in the constitution does not include local assessments for benefit, hence requirements of equality and uniformity do not apply to them.'^ But where a tax was levied 52 People V. McCreery, 34 Cal. 432. 56 People v. McCreery, 34 Oal. 432. 63 San Francisco v. Spring Valley si Security Savings Bank v. San Water Works, 54 Cal. 571. Francisco, 132 Cal. 599, 64 Pae. Rep. 54 People V. Central Pacific E. R. 898 ; San Francisco v. La Society Co., 43 Cal. 3i,8. Frangaise, 131 Cal. 612, 63 Pac. Rep. 55 People V. Central Pacific R. R. 1016. See also for taxation of solvent Co.. 105 Cal. 576, 38 Pae. Rep. 905. credits. People v. Black Diamond Co., 55a Burke v. Badlara, 57 Cal. 594; 37 Cal. 54; People v. Whartenby, 38 Cermania Trust Co. v. San Francisco, Cal. 461 ; People v. Hibernia Bank, 51 128 Cal. 598, 61 Pac. Rep. 178; Fair's Cal. 243, 21 Am, Rep. 704; Bank of Estate, 128 Cal. 607, 61 Pac. Rep. 184. Mendocino v. Chalfante, 51 Cal. 369. 55b Germania Trust Co. v. San Fran- 58 Ew parte Jackson, 143 Cal. 564, •Cisco, 128 Cal. 607, 61 Pac. Rep. 184. 77 Pac. Rep. 457. 56c San Francisco v. Fry, 63 Cal. 58a Fatjo v. Pfister, 117 Cal. 83, 48 420. Pae. Rep. 1012. 55d Biddle v. Oaks, 59 Cal. 24. 69 Emery v. San Francisco Gas Co., 56eMackay v. San Francisco, 113 28 Cal. 345 ; Hagar v. Board of Super- Cal. 392, 45 Pac. Rep. 690. visors of Yolo County, 47 Cal. 222; 49 770 CONSTITUTIONAL LAW OF TAXATION. by the legislature for the construction of a levee for the benefit of a "whole district, such tax is not an assessment for a local improvement, and is properly laid in proportion to value and not in proportion to benefit. The fact that in the construction of such a levee some of the property taxed is injured instead of bene- fited, does not make the tax unequal or lacking in uniformity.*"" 1516. The present constitution exempts growing crops, prop- erty used exclusively for public schools, and such as may belong- to the United States, this state, or to any county or municipal corporation within this state. This exemption of municipal cor- porations relates to general county and state taxes and has nO' reference to local assessments, hence unoccupied lands of a munic- ipal corporation may be subjected to local assessment by an irriga- tion district."^ There is no implied exemption from such assess- ments of lands not actually used by the municipality for public purposes.^^ A reclamation district is a public agency of the state, and property acquired thereby which is indispensable to- the execution of its objects is public property of the state and is exempt from state and county taxation as such.®* 1517. In order that taxation may be uniform it is necessary that each taxing district confine itself to property within its territorial jurisdiction, otherwise double taxation will result. Hence a law was held void which provided for the taxation of migratory live stock, by enacting that ■when a county assessor- assessed any live stock, he should take, from the owner, a list of any of the stock which " will during the year be moved to an- other county for pasturage, and the name of the county ;" and provided that a list of such stock " to be removed," with its value, should be sent to the treasurer of the county of contem- plated destination, and enacted that the latter county should pay to the former one-half of any taxes collected for county pur- poses on the property listed.^ An act which exempts property in municipalities from a county road tax is valid since they are- made separate districts and compelled to maintain their own streets and alleys.*^ City of San Diego v. Linda Vista Irri- 63 Reclamation District v. County of gation District, 108 Cal. 189, 41 Pac. Sacramento, 134 Cal. 477, 66 Pac. Eep. Rep. 291, 35 L. R. A. 33; Turlock Ir- 668. rigation District v. Williams, 76 Cal. e* People v. To-wnsend, 56 Cal. 633. 360, 18 Pac. Rep. 379. 65 Miller v. County of Kern, 137 Cal. 60 People V. Whyler, 41 Cal. 351. 516, 70 Pac. Rep. 549. Compare 61 City of San Diego v. Linda Vista Fletcher v. Oliver, 25 Ark. 289, and Irrigation District, 108 Cal. 189, 41 Gunnison County v. Owen, 7 Colo. 467, Pac. Rep. 291, 35 L. R. A. 33. 4 Pac. Rep. 795. See § 527 et seq. 62 lUd. EQUALITY AND TJKIFORMITY IN COLORADO. 771 In providing for the reassessment of a void tax, the legislature may permit credit to be given for sums paid on account thereof. "^^ 1518. Colorado. The General Assembly shall not pass local or special laws . . . granting to any corporation, association or individual any special or exclusive privilege, immunity or franchise whatever. In all other cases where a general law can be made applicable, no special law shall be enacted."^ All taxes shall be uniform upon the same class of subjects within the territorial limits of the authority levying the tax and shall be levied and collected under general laws which shall prescribe such regulations as shall secure a just valuation for taxation of all property, real and personal; Provided, That the household goods of every person being the head of a family, to the value of two hundred dollars, shall be exempt from taxation. Ditches, canals and flumes owned and used by individuals or corporations for irrigating lands owned by such individuals or corporations, or the individual members thereof, shall not be separately taxed so long as they shall be owned and used ex- clusively for STich purpose : And provided further. That the pro- visions of this section shall not afEect such special assessments for benefits and municipal improvements as the corporate author- ities of cities, towns or improvement districts may assess and collect under provisions to be prescribed by law.^ The property, real and personal, of the state, counties, cities, towns and other municipal corporations, and public libraries shall be exempt from taxation. ^^ Lots, with the buildings thereon, if said buildings are used solely and exclusively for religious worship, for schools, or for strictly charitable purposes, also cemeteries not used or held for private or corporate profit, shall be exempt from taxation, unless otherwise provided by general law.™ All laws exempting from taxation property other than that hereinbefore mentioned shall be void.''' All corporations in this state, or doing business therein, shall be subject to taxation for state, county, school, municipal and other purposes, on the real and personal property owned or used by them within the territorial limits of the authority levying the tax.^2 State and county boards of equalization are created.'^' The General Assembly may provide that the increase in the value of private lands, caused by the planting of hedges, orchards 66 People v. Latham, 52 Cal. 598. 70 Art. X, § 5. 6T Art. V, § 25. 71 Art. X, § 6. 68 Art. X, § 3, 72 Art. X, § 10. 69 Art. X, § 4. 73 Art. X, § 15. i 772 CONSTITUTIONAL LAW OF TAXATION. and forests thereon, shall not, for a limited time, to be fixed by law, be taken into account in assessing such lands for taxation,''* 1519. Perfect equality cannot be had, only approximate equal- ity is required.^*" The requirement of uniformity only applies to property taxes, and does not apply to a license tax on street cars.''' It does not apply to local assessments.'^ License taxes may be im- posed on liquor dealers -^vithout violation of the rule of uniform- ity.'"* A statute providing that live stock brought into the state at any time before December 31st of any year are liable to taxation for that year, while other kinds of property brought into the state after May 1st, are not liable for that year, is lacking in uniform- ity,'''' as is also a statute which exempts real estate in munic- ipalities from taxation for road purposes and makes no provision for its taxation for maintaining streets." Railroads may be sepa- rately classified and assessed as a unit."* 1520. Connecticut. There is no requirement of equality or "uniformity in taxation in the constitution of Connecticut ; and there is no requirement of equality implied from the nature of institutions or the "spirit" of the constitution.'^ An inherit- ance tax law, distinguishing in rate between lineals and col- laterals, and exempting estates under $10,000, is valid.™ 1521. Delmrare. All taxes shull be uniform upon the same class of subjects TV'ithin the terriioi'ial limits of the authority levying the tax, ■ and shall be levied and collected under general laws, but the ■General Assembly may by general laws exempt from taxatioTi :such property as in the opinion of the General Assembly will best promote the public welfare.*" -n Art. XVIII, § 7. IS County Commissioners of Pueblo 74a Crawford v. Lathrop, 3 Colo. County v. Wilson, 15 Colo. 90, 24 Pac. 428; Commissioners v. Wilson, 15 Colo. Rep. 563. SO, 24 Pac. Rep. 564. '''! Gunnison County v. Owen, 7 Colo. T5 Denver City Ry. Co. v. City of 467, 4 Pac. Rep. 795. Compare Miller Denver, 21 Colo. 350, 52 Am. St. Rep. v. County of Kern, 137 Cal. 516, 70 239, 41 Pac. Rep. 826, 29 L. R. A. 608. Pac. Rep. 549, and Fletcher v. Oliver, As to taxation of cars and car com- 25 Ark 289. See § 527 et seq. j)anies in Colorado, see §§ 74, 75, 1465. T'^a Ames v. People, 26 Colo. 83, 56 Nonproducing mines should be assessed Pac. Rep. 656. by the same rule of valuation as other 78 State v. Travellers' Ins. Co., 70 real estate. Pilgrim, etc.. Mining Co. Conn. 590, 66 Am. St. Rep. 138, 40 V. Teller County, 32 Colo. 334. Atl. Rep. 465 ; Middletown Nat. Bank 75a Denver v. Knowles, 17 Colo. 204, v. Middletown, 74 Conn. 449, 51 Atl. 30 Pac. Rep. 1041. Rep. 138. 7Bb Parsons v. People, Colo. , 79 Appeal of Nettleton, 76 Conn. 235, 76 Pac. Rep. 666. 50 Atl. Rep. 565. 80 Art. VIII, § 1. EQUALITY AND UNIFOEMITY IK DELAWAEE AND FLORIDA. 773 The General Assembly shall provide for lev^dng and collecting- a capitation tax from every male citizen of the state of the age of twenty-one years or upwards; but such tax to be collected in any county shall be uniform throughout that county, and such capitation tax shall be used exclusively in the county in which it is collected.^^ In all assessments of the value of real estate for taxation, the value of the land and the value of the buildings and improve- ments thereon shall be included. And in all assessments of the rental value of real estate for taxation, the rental value of \h& land and the rental value of the buildings and the improvements thereon shall be included. The foregoing provisions of this section shall apply to all assessments of the value of real estate or of the rental value thereof for taxation for state, county, hundred, school, municipal or other public purposes.*^ Special laws for the collection of taxes are annulled by the adoption of the requirements of equality and uniformity, and that taxes shall be levied and collected by general laws.^^" The school of a religious society, a residence for its teachers, a dormitory^ and a farm whereon the pupils are taught agriculture, its products being used to maintain the school, are exempt.*^ 1522. Florida. The legislature shall not pass special or local laws . . . for assessment and collection of taxes for state and county purposes.^* In all cases enumerated in the preceding section all laws shall be general and of uniform operation throughout the state.^ The legislature shall provide for a uniform and equal rate of taxation, and shall prescribe such regulations as shall secure a; just valuation of all property, both real and personal, excepting; such property as may be exempted by law for municipal, educa- tional, literary, scientific, religious or charitable purposes.** The legislature may also provide for levying a special capita- tion tax, and a tax on licenses. But the capitation tax shall not exceed one dollar a year and shall be applied exclusively to com- mon school purposes.^® Tiiere shall be exempt from taxation property to the value of two hundred dollars to every widow that has a family dependent on her for support, and to every person that has lost a limb or been disabled in war or by misfortune.^^ 81 Art. VIII, § 5. 83 Art. Ill, § 20. 82 Art. VIII, § 7. 84 Art. Ill, § 21, 82aMonaghan v. Lewis, Del. , 85 Art. IX, § 1. 59 Atl. Rep. 948. .86 Art. IX, § 5. 82b Rettew v. St. Patrick's Church, 87 Art. IX, S 9. 4 Penne. 593, 58 Atl. Rep. 828. , 774 CONSTITUTIONAL LAW OF TAXATION. 1523. The constitution of 1868, as amended in 1875, provided that the property of all corporations shall be subject to taxation, except property used exclusively for religious, educational, or charitable purposes. The legislature has no power to exempt from taxation the property of any corporation created since the enactment of this provision, or to exempt the property of any corporation which was not exempt before. A right of exemption given by prior statutes does not pass by assignment to a corpora- tion created since the enactment went into effect.** A statute imposing a graduated license tax upon express companies by classes has been upheld.*^ The property of a debtor may be taxed to him and the debt may be taxed to the creditor although the taxed property is mortgaged to secure the debt.^ 1524. Georgia. All taxation shall be uniform upon the same class of subjects, and ad valorem on all property subject to be taxed within the territorial limits of the authority levying the tax, and shall be levied and collected under general laws. The General Assembly may, however, impose a tax on such domestic animals as, from their nature and habits, are destructive of other property. The General Assembly may, by law, exempt from taxation aU public property ; places of religious worship or burial ; all institu- tions of purely public charity ; all buildings erected for and used as a college, incorporated academy, or other seminary of learning ; the real and personal estate of any public library, and that of any other literary association, used by or connected with such library; all books and philosophical apparatus; and all paintings and statuary of any company or association, kept in a public hall and not held as merchandise, or for purpose of sale or gain: Provided, the property so exempted be not used for purposes of private or corporate profit or income. No poll tax shall be levied except for educational purposes, and such tax shall not exceed one dollar annually upon each poll. All laws exempting property from taxation, other than the property herein enumerated, shall be void.®^ Laws of a general nature shall have uniform operation throughout the state, and no special law shall be enacted in any case for which provision has been made by an existing general law.s2 1 525. One of the permitted exemptions was " all institutions of purely public charity " and the legislature exempted them in 88 Bloxham v. Florida Central and So. Eep. 588 ; affirmed, 164 U. S. ^650, Peninsular R. R. Co., 35 Fla. 025, 17 41 L. ed. 586, 17 Sup. Ct. Rep. 214. So. E«p. 902. 90 Lamar v. Palmer, 18 Fla. 147. S9 Osborne v. State, 33 Fla. 162, 39 81 Art VTT, § H. Am. St. Rep. 99, 25 L. R. A. 120, 14 92 Art. I, § III, Par. I. EQUALITY AND UNIFORMITY IN GEORGIA. 775 those words. It was held that lands held in trust to appropriate the annual product to the erection of a poorhouse and the support •of its inmates forever were not exempt. " The poorhouse, when ■erected, will be exempt, but not detached property from which its support is to be derived." ^ That a college has an income from tuition fees will not destroy its right to exemption.^ A Masonic temple is not exempt when used for corporate profit or income.*" A provision in a corporate charter denying to the mimicipal au- thorities power to tax farming lands within the corporate limits for corporate purposes is void, such lands not being included in the classes enumerated by the constitution.*® A municipal cor- poration cannot exempt a gas company from taxation but it may agree to pay for gas a stipulated sum per lamp, and in addition thereto a sum for all the lamps supplied equivalent to the amount of taxes imposed upon the company.*^ A parsonage is not included in the exemption of places of religious worship.*^ 1 526. Under the provision that all taxes shall be uniform on the same class of subjects and ad valorem on all property sub- ject to be taxed within the territorial limits of the authority levying the tax, a municipal ordinance taxing realty only is void.** Under this provision taken in connection with one requiring all taxes to be levied and collected under general laws, the legislature may not impose a penalty on one class of taxpayers (railroads) for nonpayment, which is not imposed on other classes, nor require execution to issue against them on October 1st, when it does not issue against others until December 20th.* The ad valorem clause applies to taxes on property only, and not to taxes on sales of liquor.^ The uniformity clause only requires uniformity as to classes and permits the classification of occupa- tions for taxation.^ But when a tax on the business of a merchant is measured by the amount of goods sold the prin- ciple of uniformity demands that the tax should be ad valorem, 93 Trustees of the Academy of Rich- 98 Wardens of St. Mark's Church mond County v. Bohler, 80 Ga. 159, v. Mayor of Brunswick, 78 6a. 541. 7 S. E. Rep. 633. 99V€rdery v. Village of Summer- 94 Linton v. Lucy Cobb Institute, ville, 82 Ga. 138, 8 S. E. Rep. 213, 117 Ga. 678, 45 S. E. Rep. 53. comparing this provision with the ssMas'^pTiherg v. Grand Lodge, 81 former one ii! the constitution of Ga. 212, 7 S. E. Rep. 636. 1868. !"■ Smith y. Mayor of Americus, 89 i Atlanta and Florida R. R. Co. v. Ga. 810, 15 S. E. Rep. 752. Wright, 87 Ga. 487, 13 S. E. Rep 578. 97 Cartersville Improvement, etc.. Compare § 1458. Co. V. Cartersville, 89 Ga. 683, 16 2Kenney v. Harwell, 42 Ga. 417. S. E. Rep. 25. See Cartersville Water 3 Burch v. Savannah, ti Ga. 600. Works Co. V. Cartersville, 89 Ga. 689, 16 S. E. Rep. 70. 776 CONSTITUTIONAL, LAW OF TAXATION. and a tax law that ranges dealers in classes, each class limiteii by a minimum and maximum amount, and imposes the same- rate of tax on each class, is unconstitutional.* A tax on drays graded according to the number of horses employed and the- capacity of the drays is uniform; but a tax on a private- wagon is a property tax and it cannot be taxed again in the form of a license tax.^ An ordinance which imposes a tax upon sales of merchandise graded strictly by amount is not lacking in uniformity because it provides that any person can be relieved of the tax by paying $200 per annum.® The extension of city limits does not deprive those whose lands are taken in and as- sessed for city taxes of the equal protection of the laws.'' 1527. Idaho. The legislature shall not pass local or special laws for the- assessment and collection of taxes, extending the time for the collection of taxes, or exempting property from taxation.* The legislature shall provide such revenue as may be needful, by levying a tax by valuation, so that every person or corpora- tion shall pay a tax in proportion to the value of his, or her,, or its, property, except as in this article hereinafter otherwise provided. The legislature may also impose a license tax (both upon natural persons and upon corporations, other than munic- ipal, doing business in this state) ; also a per capita tax. Provided, the legislature may exempt a limited amount of im- provements upon land, from taxation.^ The property of the United States, the state, counties, towns, cities, and other municipal corporations, and public libraries, shall be exempt from taxation. i" All taxes shall be uniform upon the same class of subjects within the territorial limits, of the authority levying the tax, and shall be levied and collected under general laws, which shall prescribe such regulations as shall secure a just valuation for taxation of all property, real and personal; Provided, that the legislature may allow such exemptions from taxation from time to time as shall seem necessary and just, and all existing exemp- tions provided by the laws of the territory, shall continue until changed by the legislature of the state; Provided further, that duplicate taxation of property for the same purpose during the same year, is hereby prohibited. ^^ * Johnston v. Macon, 62 Ga. 645. 8 Art. Ill, § 19. B Ihid. 9 Art. VII, § 2. « Joseph V. Milledgeville, 97 Ga. 513, lOArt. VII, § 4. 25 S. E. Rep. 323. li Art. VII, § 5. TToney v. City of Marion, 119 Ga. 83, 46 S. E. Rep. 80. EQUALITY AND UNIFOBMITY IN IDAHO AND ILLINOIS. 777 State and county boards of equalization are provided. 1528. The requirement of uniformity is self-executing. Under it a state board of equalization may raise or diminish the aggre- gate valuation of the property of a county by a just percentage; but may not raise or diminish the valuation put upon any class or classes of property. ^^ The requirement of uniformity does not apply to laws for liquor licenses; that requirement only applies to taxation for revenue simply, and not to impositions made under the police power.^^ Where the taxpayer refuses to furnish the assessor with a list of his property as required by section 1429 of the Kevised Statutes, his property may be taxed by the county although it has already been taxed in another county for the same year, and this is not duplicate taxation, but a penalty for his refusal to comply with the statute." Iso title can be obtained by a tax deed of lands belonging to the state, since they are exempt from taxation under the constitution.^^ A sale of lands of the United States for taxes is void.^" A billiard table may be taxed as property, and also a license fee may bo imposed for its use.^'^ 1 529. Illinois. Local and special laws are forbidden . granting to any corporation, association or indi- vidual, any special or exclusive privilege, immunity or franchise whatever. In all other eases where a general law can be made applicable, no special law shall be enacted.^^ The General Assembly shall provide such revenue as may be needful by levying a tax, by valuation, so that every person and corporation shall pay a tax in proportion to the value of his, her, or its property, such value to be ascertained by some per- son or persons, to be elected or appointed in such manner as the General Assembly shall direct, and not otherwise; but the General Assembly shall have power to tax peddlers, auctioneers,, brokers, hawkers, merchants, comniission merchants, showmen, jugglers, innkeepers, grocery keepers, liquor dealers, toll bridges, ferries, insurance, telegraph and express interests, or business, vendors of patents and persons or corporations owning or using franchises and privileges, in such manner as it shall from time- 12 Orr V. State Board of Equaliza- 15 State v. Stevenson, 6 Idaho, 367,. tion, 2 Idaho, 923, 2S Pac. Eep. 416. 55 Pae. Rep. 887. 13 State V. Doherty, 2 Idaho, 1105, 16 People v. Owhyee Mining Co., 1 29 Pac. Eep. 855. Idaho, 409. 14 Erwin v. Hubbard. 4 Idaho. 170, 17 State v. Jones, Idaho, , 75 .37 Pac. Rep. 274. Pac. Rep. 819. IS Art. IV, § 22. 778 CONSTITUTIOJSTAL LAW OF TAXATION. to time direct by general law, uniform as to the class upon which it operates.^^ The property of the state, counties, and other municipal cor- porations, both real and personal, and such other property as may be used exclusively for agricultural and horticultural societies, for school, religious, cemetery and charitable purposes, may be exempted from taxation; but such exemption shall be only by general law.^° 1 530. The requirement of uniformity does not apply to special taxation for local improvements as authorized by the constitu- tion,^^ nor to special assessments.^ The rule of uniformity does not prohibit laying assessments for benefit according to frontage.^ The repair of a boulevard is not a local improvement, hence a tax levied for that purpose must be levied according to the rule of uniformity and a special tax on contiguous property is void.^* An assessment by local assessors, whether made in pur- suance of any fixed rule or habit does not appear, whereby the personal property of railroad companies was assessed at two- thirds its value, while that of other persons was assessed at one- third, was held contrary to the requirement of uniformity.^ Where bank stock was assessed at par while other personal prop- erty was assessed at one-third its value, the action of a board of revision in reducing the assessment to one-third of the value of the stock was sustained.^ Mathematical uniformity is not re- quired, and a valuation once in four years is enough.^ A water ordinance imposing, as compensation for fire protection, a certain sum per annum in addition to water rates, on each lot having thereon a building and adjoining a street through which there is a public water pipe, is unconstitutional as lacking in uni- formity.^ 1531. The requirement of uniformity is geographical; county taxes must be tmiform throughout the county and municipal taxes must be uniform throughout the municipality.® The taxation of 19 Art. IX, § 1. same eflfeet. Bureau County v. Chicago, 20 Art. IX, § 3. etc., Ry. Co., 44 111. 229 ; Chicago, etc., 21 Art. IX, § 9; White v. People, 94 Ry. Co. v. Boone County, 44 111. 240. 111. 604. 26 Darling v. Gunn, 50 111. 424. 22 Moore v. People, 106 111. 376. 27 Crozer v. People, 206 111. 464, 69 23 Craw V. Tolono, 96 111. 255, 36 N. E. Rep. 489. Am. Rep, 143; Wilbur v. Springfield, 28 Village of Lemont v. Jenks, 197 123 III. 395, 14 N. E. Rep. 871. 111. 363, 90 Am. St. Rep. 172, 64 N. E. 24 Crane v. West Chicago Park Com- Rep. 362. missioners, l.'")3 111. 348, 38 N. E. Rep. 29 Sleight v. People, 74 111. 47; 943. 26 L. R. A. 311. Livingston County v. Weider, 64 111. 2.-1 Chicago and Alton R. R. Co. v. 427. Livingston County, 68 111. 459. To the EQUALITY AND UNIFORMITY IN ILLINOIS. 779 corporate franchises by the " unit " method does not violate the requirement of uniformity, so long as that taxation is, by general law, uniform as to the class on which it operates.^" The unit method of valuing railway property and franchises does not con- flict with the requirement that property must be taxed in the district where it is located.^^ The taxation of such corporate franchises in the form of a tax measured by capital stock, the tangible property of the corporations being taxed at the same time like other tangible property, does not violate the constitu- tion, if such taxation is made, by general law, uniform as to class.^^ Likewise license and privilege taxes are not subject to the rule of absolute uniformity. It is said that " a license is not a tax in the constitutional sense of the term,"^^ but this saying only seems to mean what is generally held in most states, that the constitutional requirement of uniformity does not apply to privilege taxation.^* 1532. The rule of uniformity as to the class upon which the law operates applies to license taxes. ^^ A discrimination in taxation between foreign and domestic insurance companies does not violate the constitutional rule.^® Although foreign insurance companies may be legitimately considered by the legislature as xaembers of one class, yet they may be classified as among them- selves; and a classification which taxes them by imposing upon any company incorporated under the laws of a foreign state the same rate of tax as is imposed by such foreign state upon Illinois companies doing business there is a legitimate classification.^'' Gas light companies may be taxed in a class by themselves.^' Certain corporations may be put in one class and taxed by one 30 state Railroad Tax Cases, 92 of East St. Louis, 102 111. 560; Walker U. S. 575, 23 L. ed. 663; Porter v. v. City of Springfield, 94 111. 364, Eockford, etc., Ry. Co., 76 111. 561; where a license fee was levied by Ottawa Glass Co. v. MoCaleb, 81 111. percentage upon receipts of foreign 556. insurance companies; Cole v. Hall, 31 People V. State Board of Equal- 103 111. 30, the case of a dog tax. ization, 205 111. 296, 68 N. E. Eep. 35 Village of Crotty v. People, 3 111. 943. App 465; Braun v. Chicago, 110 111. 32 Cases cited above, also Danville 186. Lumber and Manufacturing Co. v. 36 Ducat v. Chicago, 48 111. 172, 95 Parks, 88 111. 463; Republic Life Ins. Am. Dec. 529; Hughes v. Cairo, 92 Co. V. Pollak, 75 111. 202 ; Pacific HI. 339. In estimating " net receipts " Hotel Co. V. Lieb, 83 111. 602 ; Hopkins, of foreign insurance companies for Receiver, v. Taylor, 87 111. 436. taxation, fire losses should not be de- 33 People V. Thurber, 13 111. 554 ; ducted. National Fire Ins. Co. v. Han- City of East St. Louis y. Wehrung, 46 berg, 215 111. 378, 74 N. E. Rep. 377. 111. 392; United States Distilling Co. 3T Home Ins. Co. v. Swigert, 104 v. Chicago, 112 111. 19. 111. 653. 34 Lovingston v. Board of Trustees, 38 Williams v. Rees, 9 Biss. 405, 2 99 111. 564; Wiggins Ferry Co. v. City Fed. Rep. 882. 780 CONSTITUTIONAL, LAW OF TAXATION. method, Avliile other corporations are put in another class and taxed by another method. ^^ The failure o£ the state board of equalization to assess some corporations does not render the assess- ment unequal as to others. ^^^ Legacies to foreign religious cor- porations may be taxed, although legacies to domestic religious corporations are exempt. ^^"^ A classification of liquor dealers im- posing a tax of $150 on dealers in malt liquors and $500 on dealers in other liquors is reasonable.^ The shares of stock in a corpora- tion in the hands of the shareholders, and the property of the cor- poration, are different and distinct properties, and both may be taxed without violating the rule of uniformity. Such taxation is- not double taxation.*** The assessment of the shares of a building- and loan association to the shareholders and the real estate to the- corporation is not unconstitutional and this method reaches all the property of the association.*^ The legislature cannot impose- upon railroads the expense of burying people who die on the- cars, as this may be considered as a special tax, lacking in uni- formity.*^ 1 533. Uniformity does not require similarity of method of assessment in all cases, and all assessments need not be made by the same agencies of assessment.*^ The second clause of section 1 of article 9 of the constitution is not confined to occupations, but applies also to property inter- ests which may be included in the method adopted by the legis- lature, which need not be uniform.** 1534. There can be no exemption except by general law.*^ An act exempting the stock and notes of building and loan asso- ciations, on the ground that such stock and notes merely repre- sent money invested in taxable property, was held unconstitu- 38a Coal Run Co. v. Finlen, 124 111. v. Parker, 19G 111. 388, 63 N. E. Rep.. 660; Sterling Gas Co. v. Higbie, 134 725. 111. 557 ; Ottawa Gas Light Co. v. 42 Ohio and Mississippi Ry. Co. v.. Downey, 127 111. 201. Lackej', 78 111. 55, 20 Am. Rep. 259. 38b Coal Run Co. v. Finlen, supra. « Porter v. Rockford, etc., R. R. Co., 38c iJe Speed's Estate, 216 111. 23, 70 111. 561. 74 N. E. Rep. 809. 44 Raymond v. Hartford Fire Ins, 39Timm v. Harrison, 109 111. 593. Co., 196 111. 329, 63 N. E. Rep. 745; 40 Illinois Nat. Bank v. Kinsella, Illinois Central R. R. Co. v. McLean 201 111. 31, 66 N. E Rep. 338; Green- County, 17 111. 291; Sterling Gas Co. v.. leaf V. Board of Review of Morgan Higby, 134 111. 557, 25 N. E. Rep. 660 ; (■ountv, 184 111. 220, 75 Am. St. Rep. Coal Run Coal Co. v. Finlen, 124 111. 168, 56 N. E. Rep. 295; Danville Bank- 666, 17 N. E. Rep. 11; Porte-r v. ing and Trust Co. v. Parks, 88 111. Rockford, etc., Co., 76 111. 561. 170. *5 Edgar Collegiate Institution v. « In re St. Louis Loan and Invest- People, 142 111. 363-367, 32 N. E. ment Co., 194 111. 609, 02 N. E Rep. Rep. 494. 810; Olney Loan and Building Assn. EQUALITY AND UNIFORMITY IN ILLINOIS. 781 tional,*" as was also an act providing that no stock of a mutual (building, loan and homestead association " while loaned upon by, and pledged as security to, the association issuing it, to an -amount equal to the par value of such stock, shall be subject to •assessment." *^ The legislature cannot exempt or release from inunicipal taxation any corporation or individual, or its property, within the municipal limits ; nor can it commute such tax for a ■state tax.*^ Residents of a municipality cannot be exempted from paying or working out county road taxes by reason of their payment of municipal road taxes ;*® but it seems that the munic- ipality may be erected into a separate road district, with its own Tate of tax, without violating the rule of uniformity.^** An assessment of labor for the repair of roads, however, is not a tax, but is rather in the nature of an assessment, and the inhabitants of a municipality may therefore be exempted from working on roads outside the city limits.^^ An act exempting from taxation for city revenue lots in cities exceeding ten acres in size is void.''^ The constitution of 1848 contained no express prohibition of the -commutation of state taxes, such as is contained in the constitu- tion of 1870 ; and under that constitution it was held that the legislature might commute ad valorem taxes of a railroad com- pany for a certain percentage of the gross receipts of the road ;°" also, that it might release the inhabitants of a city from taxa- tion for county purposes in consideration of the support of resident paupers and the payment of covirt expenses by the city.^ 1 535. Property owned by religious or educational corpora- tions, and not used exclusively for religious or educational pur- poses, cannot be exempted by the legislature. Property held oy such institutions for profit cannot be exempted, ^^ even though the income be used for the purposes of the institutions. ®® A charter -exemption held by a theological seminary is not lost by becoming *6 People's Loan and Savings Insti- 53 Illinois Cent. R. R. Co. v. McLean, -lution of Joliet v. Keith, 153 111. 655, 17 111. 291. 39 N. E. Rep. 1077. 64 Hunsaker v. Wright, 30 111. 146. 47 In re St. Louis Loan and Invest- 55 Northwestern University v. Peo- •ment Co., 194 111. 609, 62 N. E. Rep. pie, 80 111. 333, 22 Am. Rep. 187. .810. 56 People ex rel. Koohersperger v, 48 Raymond v. Hartford Fire Ins. Chicago Theological Seminary, 174 111 Co., 196 111. 329, 63 N. E. Rep. 745. 177, 51 N. E. Rep. 198; Chicago TheO' 49 Cooper V. Ash. 76 111. 11; O'Kane logical Seminary v. People, 189 111 V. Treat, 25 111. 557. 439, 59 N. E. Rep. 977 ; Chicago Theo 60 f'ooper V. Ash, supra. logical Seminary v. People, 193 111 51 Town of Pleasant v. Kost, 29 111. 619, 61 N. E. Rep. 1022. These were 490 ; Fox V. City of Rockford, 38 111. eases which involved the construction 45 L of charter exemptions, but the prin- 52Hayward v. People, 145 III. 58, ciples stated are equally applicable in 33 N. E. Rep. 885. cases of constitutional interpretation. 782 CONSTITUTIONAL LAW OF TAXATION. the " Divinity Department " of a university, ■with rooms in the university building, if it retains its separate corporate existence and devotes its income to its own support.®^ The property of religious and educational institutions cannot bo exempted from assessments for benefit for local improvements.^* 1536. A private schoolhouse in vphich a private school is kept for profit cannot be exempted.^® Exemptions of purely public^ charities are only of corporations.^ Property used as a play- ground for a parochial school is not exempt. ^"^ A fraternal bene- fit society is not exempt as a charitable institution.®^ Lands held by the trustees of the Illinois Industrial University, the beneficial title to which is in the state, are exempt as state property.®^ A sanitary district is not such an agency of the state that its prop- erty can be regarded as state property, so as to be exempt under the constitution and the reventie act.^ A special tax for local improvements cannot be levied on the property of the state, ^'^ nor upon the property of the United States.^ Eeal estate belonging to a city or county, however, may be assessed for local improve- ments.®^ A toll bridge belonging to a city, outside the corporate limits, is not exempt unless there is a law expressly exempting- it.®* The question of exemption of municipal property is wholly one of legislative policy, and not of constitutional law.®* An act taxing personalty and not taxing credits or loans grant.? an unconstitutional exemption.™ Where United States bonds are purchased to avoid taxation, the transaction may be disregarded as fraudulent and the property taxed." 1537. Indiana. The legislature may not pass local or special l^vs " for the assessment and collection of taxes for state, county,. 57 People ex rel. Kochersperger v. University v. Champaign County, 7ft Baptist Theological Union, 171 111. 111. 184. 304, 49 N. E. Rep. 559. 64 Sanitary District of Chicago v. 58 City of Chicago v. Baptist Theo- Martin, 173 111. 243, 50 N. E. Rep. logical Union, 115 111. 245, 2 N. E. 201, 04 Am. St. Rep 110. Rep. 254; Chicago, etc., Ry. Co. v. 65 /,(, re City of Mt. Vernon, 147 Seip, 120 111. 104, 11 N. E. Rep. 418; 111. 359, 35 X. E. Rep. 533, 23 L. R. A. University of Chicago v. People ex rel. 807. Seip, 118 111. 565, 9 N. E. Rep. 289. 66 Fagan v. City of Chicago, 84 111. 59 People V. Ryan, 138 111. 263, 27 227. X. E. Rep. 1095. «7 County of Adams v. City of 60 People ex rel Huck v. Western Quincy, 130 111. 566, 22 N. E. Rep. Seaman's Friend Society, 87 111. 247. 624; County of McLean v. City of 61 McCuUough v. Board of Review, Bloomington, 106 111. 209. 183 111. 373, 55 N. E. Rep. 685. 68 Matter of Swigert, 123 111. 267, 62 State Council of Catholic Knights 14 N. E. Rep. 32. V. Board of Review, 198 111. 441, 64 esHiggins v. Chicago, 18 111. 276. N. E. Rep. 1104. to Trustees v. McConnell, 12 111. 138. 63 Trustees of Illinoi.s Industrial n Re People's Bank, 203 111. 300, 67 N. E. Rep. 777. EQUALITY AND UNIFORMITY IN INDIANA. 783 tfiwiisliip, or road purposes ;" '^ and for such cases " all laws shall he guueral, and of uniform operation throughout the state." '^ The General Assembly shall provide, by law, for a uniform and equal rate of assessment and taxation; and shall provide such regulations as shall secure a just valuation for taxation of all property, both real and personal, excepting such only, for municipal, educational, literary, scientific, religious, or charitable purposes, as may be specially exempted by law.''* 1 538. An act taxing foreign insurance companies for the bene- fit of a pension fund for disabled firemen is unconstitutional as lacking in uniformity.'^^ County taxes for the purpose of securing the location of a state college in the county are collected for a county purpose, and they are sufficiently uniform if they are uniform throughout the county. If they are collected under the general law for the col- lection of taxes for county purposes they do not violate the pro- hibition against local or special laws.''" The prohibition against collection of taxes by local or special laws is not violated by local taxation for local objects." A law permitting the cost of con- structing turnpikes to be assessed upon the real estate within three-quarters of a mile of the proposed road was held valid, for it was a general law and all localities might avail themselves of its- benefits.™ So also held of a law permitting local assessments in cities.^® The right to levy school taxes may be delegated to local trus- tees without violating the requirement of uniformity.*" The re- quirement of uniformity does not control the manner in which taxes are expended after collection.^'' 1539.' The requirement of a uniform and equal rate does not mean that the rate must be the same for all purposes throughout the state; but it must be uniform and equal throughout the terri- tory in which the tax is laid, whether state, county, or city.*^ A 72 Art. 4, § 22. 79 Palmer v. Stumph, 29 Ind. 329. 73 Art. 4, § 23. 80 Robinson v. Schenck, 102 Ind. 307^ 74 Art. 10, § 1. IN. B. Rep. 698, overruling Green- 75 Henderson v. London, etc., Ins. castle, etc. v. Black, 5 Ind. 5.57 ; Co., 135 Ind. 23, 34 N. E. Rep. 565, Adnmson v. Auditor, 9 Ind. 174. 41 Am. St. Rep. 410, 20 L. R. A. 827. 80a Kerr v. Perry School Twp., 76 Marks v. Trustees of Purdue Uni- Ind. , 70 N. E. Rep. 246. versity, 37 Ind. 155. «i Lafayette, etc., R. R. Co. v. 77 City of Lafayette v. Jenners, 10 Geiger, 34 Ind. 185; Bright y. McCul- Ind. 75 ; Anderson v. The Kerns Drain- lough, 27 Ind. 223 ; City of Richmond' age Co., 14 Ind. 199, 77 Am. Dec. 63. v. Scott, 48 Ind. 508; Loftin v. Citi- 78 Goodrich v. The Winchester, etc., zens' National Bank, 85 Ind. 341-:!4.i; Turnpike Co., 26 Ind. 119. Gilson v. Commissioners of Rush 784 CONSTITUTIONAL LAW OF TAXATION, law permitting persons living outside a city to send (heir children to school in the city, and providing that they shall be taxed as if they lived in said city, is equal and uniform, since it operates throughout the state upon all persons in the same circumstances alike."^ The requirements of uniformity and equality do not apply to local assessments.*^ It is not necessary that the method of assessment shall be the same. Persons and property may be classified in separate classes, and different methods of assessment and enforcement of collection may be applied to the various classes.** The right of appeal may be given in some cases and ■denied in others.*^ Different penalties for nonpayment may be imposed upon the different classes.** The assessment of corporate franchises by the method of esti- mating the value of the whole corporate property as a unit profit- producing plant, and making the requisite deductions for the value of the tangible property, does not violate the requirements of iiniformity and equality. *'^ 1540. Any law directly or indirectly exempting the stock of building and loan associations from taxation is unconstitutional.** Paid-up building and loan stock is taxable against lhe owner as a credit; its exemption would be unconstitutional.*® An exemp- tion of property of an unmarried woman to the amount of $500 is unconstitutional ; such exemption is not for a charitable pur- pose.°* An exemption of property in a city from taxation for roads outside the city does not exempt from taxation, for free County, 128 Ind. 65, 27 N. E. Rep. consisting of telegraph, telephone, ex- 235, 11 L. R. A. 835, upholding an press, and other like corporations. assessment for the purchase of toll 87 Cleveland, etc., Ry. Co. v. Backus, roads; Clark v. Town of Noblesville, 133 Ind. 513, 33 N. E. R«p. 421, 18 44 Ind. 83. L. R. A. 729; Pittsburgh, etc., Ry. Co. 82 Kent V. Town of Kentland, 62 v. Backus, 133 Ind. 625, 33 N. E. Rep. Ind. 291, 30 Am. Rep. 182. 432; State v. Express Companies, 144 83 Palmer v. Stumph, 29 Ind. 329 ; Ind. 549, 42 N". E. Rep. 483 ; Western Board of Commissioners v. Harrell, Union Telegraph Co. v. Taggart, 141 147 Ind. 501-505, 46 N. E. Rep. 124. Ind. 281, 40 N. E. Rep. 1051, 60 L. R. 84 Cleveland, etc., Ry. Co. v. Backus, A. 671. 133 Ind. 513, 33 N. E. Rep. 421, IS 88 State ex rel. Morgan v. The Work- L. R. A. 720: State v. Express Com- ingman's Building, etc., Assn., 152 panies, 144 Ind. 549, 42 N. E. Rep. Ind. 278, 53 N. E. Rep 168; Harn 483. v, Woodard, 151 Ind. 132, 50 N. E. Cleveland, etc., Ry. Co. v. Backus, Rep. 33; Co-Operative, etc., Assn. v. supra; Deane v. Indiana, etc., Co., 161 State, 156 Ind. 463, 60 N. E. Rep. inu, o71, 68 N. E. Rep. 686. 146. 86 Western Union Telegraph Co. v. so DpTini-ton v. Terry, 141 Ind. 677, State, 146 Ind. 54, 44 N. E. Rep. 793, 41 N. E. Rep. 143. \Yliere a statute imposing a penalty of 'M State v. City of Indianapolis, 69 50 per cent, and attorney's fees, for Ind. 375, 35 Am. Rep. 223; Warner nonpayment, was imposed on a class v. Curran, 75 Ind. 309. EQUALITY AND UNIFORMITY IN IOWA. 785 turnpikes.®^ In the absence of a statute providing for a method ■of assessing and valuing life insurance policies they are not tax- able.®^ An act permitting the deduction of mortgage indebtedness not exceeding $700 from the assessed value of real estate, for the purposes of taxation, such deduction not to be greater than one- lialf the assessed value, does not violate the requirement of uni- formity and equality nor deny the equal protection of the laws."* The exemption for charitable purposes is not limited to public charities ; a private charitable enterprise from which an indi- vidual proprietor derives personal benefit is exempt.^ An ex- emption of automobiles, street ears, and vehicles of nonresidents from a license tax on vehicles for the use of city streets does not deprive any one of the equal protection of the laws.**^ A license tax on transient merchants does not deprive them of the equal protection of the laws.®® An exemption of the personal property, employed in other states, belonging to residents, taken in connection with the taxa- tion of property, employed in the state, belonging to nonresidents, is not violative of the rule of equality.*^ 1540a. Iowa. All laws of a general nature shall have a uniform operation; the General Assembly shall not grant to any citizen or class of citizens, privileges or immunities, which, upon the same terms, shall not equally belong to all citizens.®* The General Assembly shall not pass local or special laws for the assessment and collection of taxes for state, county, or road purposes.^® In such cases and in all others where a general law can be made applicable, All laws shall be general and of uniform operation throughout the state.®®" The property of all corporations for pecuniary profit shall be subject to taxation the same as that of individuals.^ 91 Gavin v. Commissioners of Wells 9* Vink v. Work, 158 Ind. 638, 64 County, 104 Ind. 201, 3 N. E. Eep. N. B. Rep. 83. 846, not decided on constitutional 95 Kersey v. City of Terre Haute, grounds. 161 Ind. 471, 68 N. B. Rep. 1027. 92 State Board of Tax Commissioners 96 Levy v. State, 161 Ind. 251, 68 V. Holliday, 150 Ind. 216, 49 IST. E. N. E. Rep. 172. Rep. 14, 42 L. R. A. 826, the dissenting 97 Buck v. Beach, Ind. , 71 •opinion arguing that they should be N. E. Rep. 963. taxed as other property and that the 98 Art. I, § 6. omission was in violation of the con- 99 Art. 3, § 30. stitution. 90a Art. 3, § 30. 93 State V. Smith, 158 Ind. 543, 63 l Art. 8, § 2. N. E. Rep. 25, 214, 64 N. E. Rep. 18. 50 78(5 CONSTITUTIONAL LAW OF TAXATION. 1 541 . If a law operates upon every person withia the relation or circumstances provided for throughout the state it is suffi- ciently unifonu, although not all citizens or localities may hap- pen to be in the circumstances which invoke the application of the law. Therefore an act providing that all cities and town^v theretofore incorporated under special acts and charters, ami which did not then possess the power to sell personal and real property for the collection of delinquent taxes, should have that power, was upheld, although assailed as being a local or special law and lacking in uniform operation. It was said that the act " operated upon a particular condition, and attached to it certain consequences, and that, whenever that condition existed, the con- sequences follow." ^ A curative act, reciting that various munic- ipalities had levied special taxes to pay judgments, under cir- cumstances of doubtful validity, and legalizing all such taxes, was held to be a general law of uniform operation.^ A curative act legalizing a levy without authority is valid.* So is a curative act legalizing proceedings of local supervisors in levying a levee assessment.'' A municipal ordinance requiring transient mer- chants who may do business in the city to pay a license fee is not lacking in uniformity since it applies to all such transients alike.® The same was held of a statute imposing a license fee on itinerant vendors of drugs. ^ 1 542. The uniformity prescribed permits classification as to methods of taxation ; and an act which provided a specific rule for the assessment of express and telegraph companies, different from that applicable to the assessment of other property;^ an act providing a specific rule for the assessment of railway com- panies f an act providing for the assessment of all railroad bridges by the executive council except bridges over the Mississippi and Missouri rivers, leaving such bridges to be assessed by the local assessors ;^** an act which provided that the shares of state banks 2Haskel v. City of Burlington, 30 64 N. W. Eep. 646, 58 Am. St. Rep. Iowa, 232. 447, 29 L. E. A. 734, apparently over- 3 Iowa Railroad Land Co. v. Soper, ruling Pacific Junction v. Dyer, 64 39 Iowa, 112; Iowa Railroad Land Co. Iowa, 38, 19 N. W. Rep. 862, and V. Carroll County, 39 Iowa, 151. Marshaltown v. Blum, 58 Iowa, 184, *Boardnian v. Beckwith, 18 Iowa, 43 Am. Rep. 116, 12 N. W. Rep. 266. 292; Chicago, etc., Ry. v. Independent estate v. Gouss, 85 Iowa, 21, 51 District, 99 Iowa, 556, 63 N. W. Rep. X, VV. Rep. 1147. 881. 8 IT. S. Express Co. v. EUyson, 2S 5 Richman v. Supervisors of Musca- Iowa, 374. tine County, 77 Iowa, 513, 14 Am. St. 9 Central Iowa Ry. Co. v. Board of Rep. 308, 42 N. W. Rep. 422, 4 L. R. Supervisors, 67 Iowa, 199, 25 N. W. A. 445. Rep. 128. eOttumwa V. Zekind, 95 Iowa, 622, w Missouri Valley, etc., Ry. Co. v. EQUALITY AND UNIFORMITY IN IOWA. 787 should be assessed to the banks, while the shares of national banks should be assessed to the individual owners ;^^ and an act taxing the capital of a corporation to the corporation, and the shares to the shareholders,'^ have all been upheld as sufficiently uniform in operation and as not being local or special laws. A tax of a certain percentage on the gross receipts of foreign insurance companies at a higher rate than that imposed on domes- tic companies does not violate tha requirement of uniformity, nor the clause prohibiting the granting of special privileges to any citizen or class of citizens, since a foreign corporation is not a citizen, and the law applies to all foreign insurance companies alike.i=* A law remitting penalties upon taxes not paid within a certain time is not liable to the constitutional objection that it is a special law.-'* A law permitting a taxpayer to deduct the amount of liis debts from the gTOss amount of his money and credits in listing his property for taxation is, it seems, not lacking in imiformity and not a special law.-'' An inheritance tax law with a fixed ex- emption of amount and exempting certain relatives of decedent does not lack uniformity. ■'® 1543. The Iowa constitution contains no prohibition of ex- emptions, except as to corporations for profit. The exemption of church property does not conflict with the provision that no per- son shall be taxed for the support of religion.-''^ An exemption of lots of more than ten acres in city limits from taxation for municipal purposes is constitutional.'^ An exemption of sales iiy jobbers and wholesalers, in interstate business, from a tax on sales of cigarettes is valid. '^^ An exemption from taxation does not exempt from special assessments.'® A law which attempts to release railroad corpora- tions from the payment of city taxes upon payment of a per- centage tax on receipts violates the provision which declares Harrison County, 74 Iowa, 283, 37 is /re re McGhee's Estate, 105 Iowa, N. W. Kep. 372. 9, 74 N. W. Rep. 69.5. 11 Primghar State Bank v. Eerick, 17 Trustees of Griswold College v. 96 Iowa, 238, 64 N. W. Rep. 801. State, 46 Iowa, 275, 26 Am. Rep. 138. 12 Cook V. Burlington, 59 Iowa, 251, 18 Licht v. Burlington, 73 Iowa 29, 44 Am. Rep. 679. 34 N. W. Rep. 494. 13 Scottish Union and National Ins. I8a Cook v. Marshall County, 196 U. Co. V. Herriott, 109 Iowa, 606, 80 S. 261, 49 L. ed. 471, 25 Sup. Ct. Rep. N. W. Rep. 665, 77 Am. St. Rep. 548. 233, affirming 119 Iowa, 384, 93 X. W. 14 Beeoher v. Supervisors of Webster Rep. 372. • County, 50 Iowa, 538. 19 Farwell v. Des Moines Brick Mfg. isMacklot V. Davenport, 17 Iowa Co., 97 Iowa, 286, 66 N. W. Rep. 176, 379. 35 L. R. A. 263; Sioux City v. Inde- 788 CONSTITXJTIOKAL LAW OP TAXATION. that the property of corporations for pecuniary profit shall be subject to taxation the same as that of individuals.^ Likewise is void a law which taxes insurance companies on premiums and exempts them from other taxes.^^ This provision requires the courts, in case of doubt, to construe a law as not providing for a corporate exemption. ^^ A law commuting local taxes of a tele- phone company is void.^^ An exemption of a water-works com- pany from municipal taxation, in consideration of the water sup- ply, is valid. An exemption of property lying beyond the reach of the water works from a tax for water rents is valid.^ A board of supervisors may levy road taxes within city limits even though the proceeds may not be expended in the city.^ Lands owned by the United States are not subject to tax, but the liability does not depend upon the issue of the patent. If the equitable title has passed out of the government they may be taxed before patent has issued.^® 1544. Kcmsas. No special privileges or immunities shall ever be granted by the legislature which may not be revoked by the same body.^ All laws of a general nature shall have a uniform operation throughout the state; and in all cases where a general law can be made applicable, no special law shall be enacted.^® The legislature shall provide for a uniform and equal rate of assessment and taxation; but all property used exclusively for state, county, municipal, literary, educational, scientific, relig- ious, benevolent and charitable purposes, and personal property to the amount of at least two hundred dollars for each family, shall be exempted from taxation.^* The legislature shall provide for taxing the notes and bills discoimted or purchased, moneys loaned, and other property, effects, or dues of every description (without deduction), of all banks now existing or hereafter to be created, and of all bankers ; so that all property employed in banking shall always bear a pendent School District, 55 Iowa, 150, 24 Grant v. Davenport, 36 Iowa, 396. 7 N. W. Rep. 548. 26 Chicago, etc., Ry. Co. v. Murphy, 20 Davenport v. Chicago, etc., Ry. 106 Iowa, 43, 75 N. W. Rep. 680. Co., 38 Iowa, 633; Dubuque v. Illinois 26 Goodnow v. Wells, 67 Iowa, 659, Cent. R. R. Co., 39 Iowa, 55. 25 N. W. Rep. 864; Barrett v. Kevane, 2lHawkeye Ins. Co. v. French, 109 100 Iowa, 653, 69 N. W. Rep. 1036; Iowa, 585, 80 N. W. Rep. 660., Durham v. Hussman, 88 Iowa, 29, 22 Iowa Homestead Co. v. Webster 55 N. W. Rep. 11; Hussman v. Dur- County, 21 Iowa, 221; Dubuque, etc., ham, 165 U. S. 144, 41 L. ed. 664, R, R. Co. V. Webster County, 21 Iowa, 17 Sup. Ct. Rep. 253. 235. 27 Bill of Rights, § 2. 23 Layman v. Iowa Telephone Co., 28 Art. II, § 17. 123 Iowa, 591, 99 N. W. Rep. 205. 29 Art. XI, § 1. EQUALITY AND UNIFORMITY IN KANSAS. 789 burden of taxation equal to that imposed upon the property of individuals.^'* 1 545. The rule that all laws of a general nature must have a ■uniform operation receives the same construction, in Kansas as elsevi^here; that is, it is held that a law to be uniform need not operate alike on every individual and place; it is only necessary that it shall operate equally upon all individuals and localities meeting the conditions under which the act becomes applicable." The provision was not intended to have a retroactive effect, abro- gating laws already passed. ^^ A herd law for certain named counties, however, is unconstitutional, as not having a uniform operation throughout the state.^^ In a case directly involving a question of taxation, however, where the general law permitted counties to levy a tax not exceeding five mills on the dollar for county purposes, and the legislature passed a law permitting the counties of Wyandotte and Cowley, named therein, to levy a tax of ten mills on the dollar for county purposes, it was held that such a law was a special law, hence it was not required to have a uniform operation throughout the state.^* The constitution does not require uniformity of methods of taxation, and different methods may be adopted for the taxation of different classes of property. ^^ 1 546. It is not necessary that the rate of assessment and taxa- tion shall be equal throughout the state; all that is required is that there shall be equality and uniformity of rate in each taxing district.^® The constitution does not require an equal and uni- form rule of taxation, but only an equal and uniform rate. A statute taxing real estate, while personalty in the same taxing dis- trict goes untaxed, is therefore constitutional.^^ And a statute which set off a new township from the territory of a former one, and made the new township liable to taxation to pay for bridges theretofore authorized which were erected wholly in the territory 30 Art. XI, § 2. 35 Gulf E. E. Co. v. Morris, 7 Kans. 31 Koester v. Commissioners of Atch- 210; Commissioners of Ottawa County ison County, 44 Kans. 141, 24 Pac. v. Nelson, 19 Kans. 234, 27 Am. Eep. Eep. 141; Commissioners of Leaven- 101. worth County v. Miller, 7 'Kans. 479, 38 Hines v. City of Leavenworth, 3 12 Am. Eep. 425; State v. Nemaha Kans. 186-201; Midland Elevator Co. County, 7 Kans. 542; Eiee v. State, 3 v. Stewart, 50 Kans. 378, 32 Pac. Eep. Kans. 141. 33; Commissioners of Ottawa County 32 State V. Thompson, 2 Kans. 432. v. Nelson, 19 Kans. 234, 27 Am. Eep. 33 Darling v. Eodgers, 7 Kans. 592; 101. Robinson v. Perry, 17 Kans. 248. S7 Commissioners of Ottawa County 34 Midland Elevator Co. v. Stewart, v. Nelson, 19 Kans. 234, 27 Am. Rep. 60 Kans. 378, 32 Pac. Eep. 33. 101. 790 CONSTITUTIONAL LAW OF TAXATION, not included in the new township, is valid.^* A law by which a railroad which extends into unorganized territoi-y is taxed by the state, while the other property in such territory escapes taxation because of the lack of local government, is sufficiently uniform.** In a somewhat peculiar case it was held that the requirement of equality is not violated when county commissioners, ordered by the state board of equalization to increase the value of all property in the county, except railroad property, ten per cent., do not do so, but instead raise the rate of taxation for state purposes in the county ten per cent.** A law Avhich provides for an additional tax of one-half mill in counties where there is a deiiciency in the state tax is constitutional.*^ 1 547. The requirement of uniformity and equality of rate does not apply to license taxation.*^ A law which imposes the same taxes and restrictions on foreign insurance companies, or corpora- tions, generally, doing business in Kansas, as are imposed on Kan- sas corporations by the states in which such foreign corporations are organized, is valid.*^ It is no objection to the validity of license taxes that they are graduated by some reasonable standard, such as the average amount of stock.** A city ordinance taxing hucksters $35, and their assistants $15, for every six months is not unreasonable.*" ISTor does the requirement apply to special assessments for local improvements;*® nor to capitation taxes, nor poll taxes, nor re- quirements to work on the roads or train in the militia.*'' 1548. An assessment of any class of property for taxation at its full value, while other property is valued, not by accident or 38 Commissioners of Ottawa County 47 Am. Rep. 486, 1 Pac. Rep. 288 ; V. Nelson, 19 Kans. 234, 27 Am. Rep. State v. Topeka, 36 Kans. 76, 59 Am. 101, following Commissioners of Sedg- Rep. 529, 12 Pac. Rep. 310. wick County v. Brinker, 16 Kans. 498. 43 Phenix Ins. Co. v. Welch, 29 Kans. 39 Francis v. Railroad Co., 19 Kans. 672. 303. 4* City of Newton v. Atchison, 31 40 Geary County v. Missouri, etc., Kans. 151, 47 Am. Rep. 486, 1 Pac. Ey. Co., 62 Kans. 168, 61 Pac. Rep. Rep. 288. IGS, reversing 9 Kans. App. 350, 58 45 Kansas Citv v. Overton, 68 Kans. Pac. Rep. 121. 560, 75 Pac Rep. 549. 41 Atchison, etc., Ry. Co. v. Clark, 46 Hines v, Leavenworth, 3 Kans. 60 Kans. 831, 58 Pac. Rep. 561. But 186-197; City of Ottawa v. Barney, see State v. Commissioners of Leaven- 10 Kans. 270-279; Newman v. City of worth County, 2 Kans. 61. Emporia, 41 Kans. 583, 21 Pac. Rep. 42 City of Leavenworth v. Booth, 15 593; Commissioners of Ottawa County Kans. 627; Fretwell v. City of Troy, v. Nelson, 19 Kans. 234-241, 27 Am. 18 Kans. 271; Commissioners of Ot- Rep. 101. tawa County v. Nelson, 19 Kans. 234- 47 Commissioners of Ottawa County 241. 27 Am. Rep. 101; McGrath v. v. Nelson, 19 Kans. 234-241, 27 Am. ( ity of Newton, 29 Kans. 364; City Rep. 101. 01 Newton v. Atchison, 31 Kans. 151, EQUALITY AND UNIFORMITY IN KANSAS. 791 -"mistake, but pursuant to a concerted plan, at one-quarter its value, violates the requirement of a uniform and equal rate of air^sessment and taxation.^* An act providing for the taxation of cattle driven into the state for grazing after the date when prop- • A uniform poll tax is imposed.'^* Provision shall be made by general laws whereby cities and towns may be authorized to aid and encourage the establishment of manufactories, gas works, water works, and other enterprises of public utility other than railroads, within the limits of said cities or towns, by exempting all property used for such purposes, from municipal taxation for a period not longer than ten years.-"^* 1601. The legislature has the power, under the equality clause, to select, for exemption from taxation, certain classes of property, such as the implements of farmers, the tools of mechanics, and the like, for reasons of public policy. When granted, such exemptions apply to such property, "whether owned by individuals or corpora- tions. ®'* But the requirement that the property of corporations for profit shall be taxed the same as that of individuals prohibits the legislature from exempting the property of any corporations for profit from taxation, so long as similar property of individuals is taxed.®^ A law which granted a general exemption of property- used in manufacturing for ten years®^ is valid, since it does not grant an irrepealable exemption and applies alike to the property of individuals and of corporations.®^ 1602. The requirement of the 1869 constitution that all prop- erty shall be taxed in proportion to its value, to be ascertained as directed by law, contemplates an assessment as a prerequisite to taxation. One who retails liquors without a license does not thereby become a delinquent taxpayer to the amount of the license fee.®* The requirement of the 1890 constitution that assessment shall be by general laws and uniform rules, requires that the as- sessment shall be made by the assessors provided for in the con- stitution ; and a law which provides for an assessment of omitted property by another officer, called a state revenue agent, is void.®^ Under the constitution of 1869, it was held that a privilege or occupation tax might be laid.®* 1603. Municipal as well as state taxation is included in the rule of equality. A law therefore which forbids municipalities IS8 § 243. 82 Passed prior to the constitution 69 § 192. of 1890, which limited such exemp- 60 Adams v. Yazoo and Mississippi tions by the state to five years. Valley R. R. Oo.j 77 Miss. 194-286, 24 83 Adams v. Tombigbee Mills, 78 So. Rep. 317, 60 L. R. A. 33, sustaining Mrss. 676, 29 So. Rep. 470. - in this particular Mississippi Mills v. 64 State v. Adler, 68 Miss. 487, 9 So. Cook, 56 Miss. 40. Rep. 645. 61 Adams v. Yazoo, etc., Ry. Co., 65 State v. Tonella, 70 Miss. 701, 14 supra, overruling in this respect Mis- So. Rep. 17, 22 L. R. A. 346. sissippi Mills v. Cook, supra. 66 Stewart v. Potts, 49 IMiss. 749. 820 CONSTITUTIONAL LAW OF TAXATION. to collect from banks a tax greater than the state tax for the same year is void, since if the general rate of taxation in any munici- pality is greater than the state rate, inequality results.®^ How- ever, such an act passed prior to the constitution of 1890 was upheld, since the decisions under the constitution of 1869 had expressed the rule that the " subjects of taxation may be classified in the discretion of the legislature, and if all of the same class are taxed alike, there is no violation of the equality and uniformity required by the constitution." ^^ The recent cases cited in this paragraph seem to have construed the constitution of 1890 so as to deny to the legislature this power of classification.^ The purpose of the constitution with respect to taxation of domestic insurance companies is to protect them from an aggrega- tion of taxes whose sum shall exceed that required to be paid by foreign insurance companies, except when their assets are great enough to yield an ad valorem tax, which, when added to any privilege tax required, %vill exceed the tax required of foreign companies. Hence the requirement of a privilege tax on domestic companies by the state is an implied exemption of such domestic companies from all state and local taxation until the excess re- quired arises. Such an exemption is within the legislative power.™ 1 604. The " taxation " which is required to be equal, uniform, and ad valorem does not include local assessments, nor do general tax laws or exemptions apply to such local assessments.^'' Local tax districts may be created for local purposes and taxa- tion imposed in them for such purposes. Hence an act authoriz- ing local taxation for separate schools for white and colored children is valid in this respect.''^ The exaction of a docket fee in one judicial district only is a violation of the rule of equality." 1 605. Missouri. The constitution prohibits the passage of local or special laws " exempting property from taxation " or " granting to any corporation, association or individual any special or ex- clusive right, privilege or immunity." 67 Adams v. Mississippi State Bank, Ey. Co., 77 Miss. 194, 24 So. Rep. 317, 75 Miss. 701, 23 So. Rep. 395, citing 60 L. R. A. 33. dicta of Vasser v. George, 47 !Miss. TO Brennan v. Mississippi Home Ins. 713, and Daily v. Swope, 47 Miss. 307. Co., 70 Miss. 531, 13 So. Rep. 228. 68 Adams v. Bank of Oxford, 78 Mi^. 71 Daily v. Swope, 47 Miss. 367 ; 532, 29 So. Rep. 402; Vicksburg Bank Vasser v. George, 47 Miss. 713; Al- V. Worrell, 67 Miss. 47, 7 So. Rep. 219. corn v. Hamer, 38 Miss. 652. 69 Adams v. Mississippi State Bank, 72 Chrisman v. City of Brookhaven, 75 Mi'is. 701, 23 So. Rep. 395; Adams 70 Miss. 477, 12 So. Rep. 458. V. Bank of Oxford, 78 Miss. 532, 29 73 Murray v. Lehman, 61 Miss. 283. So. Rep. 402; Adams v. Yazoo, etc., EQUALITY AND UNIFORMITY IN MISSOURI. 821 In all other cases where a general law can be made applicable, no local or special law shall be enacted; and whether a general law could have been made applicable in any case is hereby declared a judicial question, and as such shall be judicially de- termined without regard to any legislative assertion on that subjects* No law " mailing any irrevocable grant of special privileges or immunities can be passed." ''^ The power to tax corporations and corporate property shall not be surrendered or suspended by act of the Gejivral Assembly.'^" Taxes may be levied and collected for public purposes only. They shall be uniform upon the same class of subjects within the territorial limits of the authority levying the tax and all taxes shall be levied and collected by general laws.'^'^ All property subject to taxation shall be taxed in proportion to its value.^* All railroad corporations in this state or doing business therein, shall be subject to taxation for state, county, school, municipal and other purposes, on the real and personal property owned or used by them, and on their gross earnings, their net earnings, their franchises and their capital stock.™ The property, real and personal, of the state, counties and other municipal corporations, and cemeteries, shall be exempi from taxation. Lots in incorporated cities or towns, or within one mile of the limits of any such city or town, to the extent of one acre, and lots one mile or more distant from such cities or towns, to the extent of five acres, are exempted from taxation, when the same are used exclusively for religious worship, for schools, or for purposes purely charitable ; also, such property, real or personal, as may be used exclusively for agricultural or horticultural societies : Provided, That such exemptions shall be only by general law.** All laws exempting property from taxation, other than the property above enumerated, shall be void.®^ The General Assembly of this state shall never interfere with the primary disposal of the soil by the United States, nor with any regulation which Congress may find necessary for securing the title in such soil to bona fide purchasers. No tax shall be imposed on lands the property of the United States; nor shall lands belonging to persons residing out of the limits of this state ever be taxed at a higher rate than the lands belonging to persons residing within the state.®^ 74 Art. IV, § 53. , 79 Art. X, § 5. 75Art. 11, §15. SOArt. X, §6. 76 Art. X, § 2. 81 Art. X, § 7. 77 Art. X, § 3. 82 Art. XIV, § 1. 78 Art. X, § 4. 822 CONSTITUTIONAL LAW OF TAXATION. 1606. License and privilege taxes are permitted, but all taxes other than property taxes must be uniform as to the class on "^vliich they operate. A law that discriminates between members of the same class is wanting in uniformity and void. Hence an act is void which imposes a poll tax on all male residents of a city over twenty years old, but exempts those who vote.*^ An ordinance wliich licensed meat shops in a city and provided that owners of such shops in the new city limits might sell both at the shops and on wagons, while owners of shops in the old city limits might only sell at the shops, was held unconstitutional.^ The rule of uniformity is only applicable, throughout the taxing district. Special road districts may be established, the rate of taxation A-nrying in various districts, so long as the rate throughout each district is the same.^' A merchant may be required to pay both a license tax and an ad valorem tax on tlie property invested in the business.*® A municipal ordinance which levies a " license tax " on " the goods, wares, and merchandise " of merchants, lays a property tax and is void for lack of uniformity since it only applies to the property of merchants.*^ 1607. An act which imposed a tax " on distilled liquors," of a .-]; 35 Scott V. Society of Russian Israel- 166. ites, 59 Neb. 571, 81 N. W. Rep. 624. 38 Art. IV, § 20. 38 Young Men's Christian Associa- 39 Art. IV, § 21. tion of Omaha v. Douglass County, 60 «> Art. VIII, § 2. Neb. 642, 83 N. W. Rep. 924, 52 L. R. 41 Art. X, § 1. A. 123. EQUALITY AND UNIFORMITY IN NEVADA. ii'61 1622. The prohibition of local or special laws with respect to the assessment and collection of taxes simply prohibits such laws with respect to the manner or mode of assessment and collection ; that is to say, it prohibits special laws regulating those acts which assessors and collectors generally perform. It does not pre- vent the legislature from authorizing or directing county commis- sioners to levy a special tax on the county by the passage of a local law. A law authorizing one county to issue bonds in aid of a rail- road, and to levy a special tax to pay them, was accordingly upheld.^^ A law which applies only to an individual or a number of individuals selected out of the class to which they belong is a special and not a general law. Hence an act which ratified the unauthorized acts of district attorneys in suits prior to a certain date, in consenting to judgments which in effect waived the right of the state to the accrued penalties for nonpayment of taxes im- posed by the general law, was held invalid as a special law;*'' also a law was held invalid which remitted the claims of the state for such penalties accrued prior to said date where the original tax was paid before that date ; and a law which provided that judg- ments for taxes and penalties, in which no execution had issued before a iixed date, should be discharged upon payment of the original tax and other costs.** 1623. Uniformity of agencies and methods is not required. Different classes of property may be assessed by different boards of assessors.*^ The uniformity clause applies to ad valorem, and not to license, taxation ; and a law imposing a license tax upon salesmen does not violate it.*® A percentage tax on the gross receipts of foreign in- surance companies is a license tax, and is not repugnant to tlip constitution.*'^ The legislature has no power to exempt any prop- erty not enumerated in the constitution. Mortgages and money in bank secured by mortgages must be taxed.*^ All ad valorem taxes must be equal, both in rate and valuation. The entire proceeds of mines must be taxed, and not merely the amount on hand when the assessor makes his annual visit, *^ 42 Gibson v. Mason, 5 Nev. 283. ^T Ex parte Cohn, 13 Nev. 424. 43 State V. California Mining Co., 15 48 State v. Carson Savings Bank, 17 Nev. 234. Nev. 146, 30 Pac. Rep. 703. 44 State V. Consolidated Virginia 49 State v. Estabrook, 3 Nev. 173; Mining Co., 16 Nev. 432. State v. Kruttschmidt, 4 Nev. 178 ; 45 Sawyer v. Dooley, 21 Nev. 390, 32 State v. Manhattan Silver Mining Co. Pac. Bep. 437. 4 Nev. 318. i&EiX parte Robinson, 12 Nev. 263, 28 Am. Rep. 794. S32 CONSTITUTIONAL LAW OF TAXATION. 1 624. New Hampshire. The General Court has power to impose and levy proportional and reasonable assessments, rates and taxes upon all the inhabitants of, and residents within, the said state, and upon all estates within the same.^" And while the public charges of government or any part thereof shall be assessed on polls and estates in the manner that has here- tofore been practiced, in order that such assessments may be made with equality there shall be a valuation of the estates within the etate taken anew once in every five years, at least, and as much oftener as the General Court shall order.^^ 1 625. " Proportional and reasonable " in this constitution mean about the same thing that " uniform and equal " do in others. The effect of the provision is to secure uniformity of operation of tax laws and equality of rate and valuation. The legislature cannot impose a tax on lands in a particular unincorporated place for the jDurpose of repairing roads in such place or for any other purpose.''^ 1 626. It seems that the rule which prevails in nearly all of the other states, that requirements of equality and uniformity apply only to ad valorem, taxation, and do not apply to privilege taxa- tion, is not followed in New Hampshire. The requirement is held to apply to all taxation. Persons and estates are the only, subjects of taxation in New Hampshire, and taxation on both irust be proportional and reasonable; that is, uniform and equal. Following these principles, a law which imposed a tax of two per cent, on the gross receipts of express companies in the state, or, in lieu of that, $5 a mile for the number of miles over which the business was done, was held void because it was not a tax on prop- erty, or on polls, or estates, but on business, because it was laid withoiit reference to the assessment of other property and because it was laid on one particular kind of business, while other business was exempt. ^^ An inheritance tax law which exempted legacies to direct descendants was held void for inequality.®* So also was a municipal ordinance which required property owners or occupants to clean snow from the sidewalks in front of their property. The work was said to be a municipal duty, and the effort to compel the property owner to do it was in effect the imposition of an addi- tional unequal tax.^ A law imposing a license fee upon physi- 50 Part II, art. 5. 54 Curry v. Spencer, 61 N. H. 624, 61 Part II, art. 6. 60 Am. Rep. 337. 52 Opinions of Justices, 4 N. H. 564. 55 state v. Jackman, 69 N. H. 318, 53 State V. U. S. and Canada Express 41 Atl. Rep. 347, 42 L. R. A. 438. Co., 60 N. H. 219. EQUALITY AND UNIFOEMITY IN N. H. AND N. J. 833 cians, but exempting from its provisions physicians " who have resided and practiced their profession in the town or city of their present residence since January 1, 1875," was held void for •discrimination.®® 1 627. The cases already cited show how strictly the New Hamp- shire constitution is interpreted against double taxation. The cap- ital stock of a corporation cannot be taxed if the shares of stock are at the same time taxed to the owners.®^ Where a foreign rail- road company situated in another state pays taxes on all its prop- erty the holders of shares of stock of such corporation should not be taxed thereon in IsTew Hampshire.®^ Deposits in savings banks cannot be taxed twice, once to the bank and once to the depositors.^" Mortgaged property, however, may be taxed to the mortgagor in possession, even though the mortgagee is taxed on liis money at interest.^ Property which is taxed as such cannot be taxed as stock in trade. The purpose of the statutes which, if taken liter- ally, would subject some kinds of property to double taxation is to subject them only to single taxation and, by comprehensive description, to prevent them from escaping taxation.*^ 1 628. The uniformity required is, that the tax should be uni- form throughout the taxing district.®^ The legislature may exempt certain classes of property from taxation, by general laws.^ Acts reimbursing individuals for money paid by them for substitutes for military service are invalid.®* 1629. New Jersey. Property shall be assessed for taxation under general laws and by uniform rules, according to its true value.®^ The legislature shall not pass private, local or special laws . . . granting to any corporation, association or individual any exclusive privilege, immunity or franchise whatever.®® 56 state V. Pennoyer, 65 N. H. 113, 60 Morrison v. Manchester, 58 N. H. 18 Atl. Rep. 878, 5 L. R. A. 709. The 538; Drew v. Morrill, 62 N. H. 23. ease was not regarded as one arising ei Connecticut Valley Lumber Co. v. under the taxing power, but the con- Monroe, 71 N. H. 473, 52 Atl. Rep. stitutional provisions for equality in 940. taxation were cited. 62 State v. U. S. and Canada Express 57 Smith V. Burley, 9 N. H. 423; Co., 60 N. H. 219-243; Boston, etc., Nashua Savings Bank v. Nashua, 46 R. R. v. State, 60 N. H. 87. N H. 398 ; Cheshire County Telephone 63 Brewster v. Hough, 10 N. H. 138 Co V. State, 63 N. H. 167. 84 Bowles v. LandraflF, 59 N. H. 164 58 Kimball v. Milford, 54 N. H. 406. Gould v. Raymond, 59 N. H. 260 59 Berry v. Windham, 59 N. H. 288, Drake v. Northampton, 59 N. H. 260. 47 Am. Rep. 202. 85 Art. IV, § VII, suDd. 12. 66 Art. IV, § VII, subd. 11, 53 834 CONSTITUTIONAL LAW OF TAXATION. 1630. The requirement of equality and uniformity is self- executing to the extent that it operates as a repeal of local or special tax laws which are not equal and uniform. The constitution " com- manded that property should be assessed under general laws and by a necessary implication interdicted assessments for taxation thereafter under special laws." ®^ An act which provided for a. reduction of the assessment of certain property to a sum specified therein upon the filing of a specified affidavit with the commission- ers of appeal, was abrogated by the adoption of the amendment requiring assessment of property at its true value.®* Acts granting- special exemptions are abrogated by the constitution.^ 1631. The constitution is satisfied by uniformity throughout each taxing district, which imposes the same percentage of actual value upon all taxable property in the township for township pur- poses, in the county for county purposes, and so on.''" An act which empowers a municipality to erect lesser taxing districts within its boundaries upon which taxes for specified purposes maj- be levied is unconstitutional. For the general laws and uniform rules required by the con- stitution it substitutes the unrestrained will of the common coun- cil as expressed through city ordinances.''^ 1 632. The constitution does not require uniformity of method, so long as substantial equality is secured. An act which assesses and taxes national bank shares by a method different from that employed in taxing and assessing other moneyed capital, and which provides one method for assessment of shares of resident stock- holders and another method for assessment of shares of non- residents, is constitutional. The differences of conditions justify these classifications.''^ Railway, turnpike, insurance, canal, or 67 North Ward Nat. Bank v. City to Stratton v. Collins, 43 N. J. L. of Newark, 10 Vr. (39 N. J. L.) (14 Vr.) 562; Vail v. Runyon, 41 N. 380; 11 Vr. (40 N. J. L.) 558; Rankin J. L. (12 Vr.) 98. V Love, 46 N. J. L. (17 Vr.) 132; 71 Morgan v. Comptroller of Eliza- Howell V. Richards, 47 N. J. L. (18 beth, 44 N. J. L. (15 Vr.) 571; Bald- Vr.) 434, 1 Atl. Rep. 495; Little v. win v. Fuller, 39 N. J. L. (10 Vr.) Oliver, 59 N. J. L. (30 Vr.) 89, 34 Atl. 576; Vreeland v. Jersey City, 43 N. J. Rep. 943. L. (14 Vr.) 135; Culver v. Jersey City,. ssBIume V. Bowes, 65 N. J. L. (36 45 N. J. L. (16 Vr.) 256; Auryansen Vi-.) 470, 47 Atl. Rep. 487. v. Haekensack, 45 N. J. L. (16 Vr.) 09 Newark, etc., E. R. Co. v. Clark, 113; Taylor v. Smith, 50 N. J. L. (21 53 N. J. L. (24 Vr.) 332, 21 Atl. Rep. Vr.) 101, 11 Atl. Rep. 321. 302; Sisters of St. Elizabeth v. Chat- ^2 Mechanics' Nat. Bank v. Baker, ham, 51 N. J. L. (22 Vr.) 89, 16 Atl. 65 N. J. L. (36 Vr.) 113, 46 Atl. Rep. Rep. 225. 586; affirmed, 65 N. J. L. (36 Vr.). 549, 48 Atl. Rep. 582. EQUALITY AND UNIFOKMITY IN NEW JERSEY. 835 banking corporations may be separately classified as to methods and agencies of assessment and collections^ 1633. The constitution does not require all property to be taxed; the legislature has the power to select the subjects of taxa- tion.^* When selected and classified, however, all the property in a class must be taxed by a uniform rule.''^ Special exemptions of less than a class of property are void. Hence are void an act ex- empting the property'- of a single religious society;'® an act taxing savings banks on their deposits, in lieu of all other taxes except taxes on real estate purchased under foreclosure ;'' an act com- muting the taxes of a railway company;''^ special acts exempting bonds issued by particular municipalities,'* and an act exempting members of a fire company.™* The rules of equality and uniform- ity have no application to franchise or privilege taxes on corpora- tions.^" An exemption of a corporation or its property from taxa- tion exempts also the shares in the hands of the shareholders.** An exemption of the shares exempts also the stock of the corpora- tion, and exempts the corporation itself from franchise taxation.*" 1 634. The requirement that property shall be assessed at its true value fixes the sole standard of assessment. An arbitrary assessment by the legislature*^ is void; as is an act Avhich substi- tutes some other measure of assessment than the true value of prop- erty. Hence an act which provides that if the assessed value of real estate in a tax district other than that of railway and canal corporations is relatively lower than that at which the state board of assessors has valued the property of such corporations in that district, the state board shall reduce the valuation of railroad and "3 Trenton Iron Co. v. Yard, 42 N. 79 Merchants' Ins. Co. v. Newark, 54 J. L. (13 Vr.) 357; State Board of N. J. L. (25 Vr.) 138, 23 Atl. Eep. Assessors v. Central R. R. Co., 48 N. 305. J. L. (19 Vr.) 146, 4 Atl. Rep. 578. 79a Tippett v. McGrath, 70 N. J. L. 74Stratton v. Collins, 43 N. J. L. 110, 56 Atl. Rep. 134, affirmed, 59 (14 Vr.) 562; State Board of As- Atl. Rep. 118. sessors v. Central R. E. Co., 48 N. J. 80 Standard Underground Cable Co. L. (19 Vr.) 146, 4 Atl. Rep. 578. v. Attorney-General, 46 N. J. Eq. (1 75 State Board of Assessors v. Cen- Dick.) 270, 19 Am. St. Rep. 394, 19 tral R. R. Co., 48 N. J. L. (19 Vr.) Atl. Rep. 733. 146, 4 Atl. Rep. 578. 81 State v. Branin, 3 Zab. (23 N. J. 76 Sisters of St. Elizabeth v. Chat- L.) 484; State v. Bentley, 3 Zab. (23 ham, 51 N. J. L. (22 Vr.) 89, 16 Atl. N. J. I>.) 532; State v. Powers, 4 Zab. Rep. 225. (24 N. J. L.) 400. 77 Trenton Savings ^und v. Rich- 82 Hancock v. Singer Mfg. Co., 62 ards, 52 N. J L. (23 Vr.) 156, 18 Atl. N. J. L. (33 Vr.) 289, 41 Atl. Rep. Rep. 582. 846, 42 L. R. A. 852. 78 Newark and South Orange, etc., 83 Blume v. Bowes, 65 N. J. L. ( 38 R. R. Co. V. Clark, 53 N. J. L. (24 Vr.) 470, 47 Atl. Rep. 487. Vr.) 332, 21 Atl. Rep. 302. 836 CONSTITUTIONAL LAW OP TAXATION. canal property in that district to the lower standard, is unconsti- tutional. The legislature might lawfully require the state board and the Supreme Court ... to consider the estimate which the local assessors put upon other than railroad property, but they cannot require the acceptance of this estimate as the correct standard of the value of railroad property. The property so taxed would be assessed, not according to its own true value, but according to the true value of some other property.®* 1635. Mere inequality of valuation, arising from mistake or from the wilful act of an individual assessor, and not due to any general system of valuation designed to produce inequality, will not render an assessment repugnant to the constitution.*® The constitutional mandate only refers to the assessment of taxes — the apportionment of the burden. The methods of collection and enforcement are left to legislative discretion. Hence acts making taxes a lien paramount to prior mortgages and encumbrances are not forbidden.*® The rules of uniformity and of taxation by general laws have no application to the purposes for which taxes are levied. The objects may be as diverse as the needs of each taxing district require. So long as the money is raised by uniform taxation under general laws the requirement of uniformity is satisfied. Hence .a special act authorizing a single township to collect a special tax ;for repair of a wharf is not repugnant to the constitution in this particular.*' The apportionment of the money raised by taxation among the various governmental subdivisions of the state is not governed by the requirement of iiniformity.** An act creating a gw^-municipal corporation, entitled " a sew- age district," embracing a large number of municipalities and parts thereof, in several counties, for the purpose of relieving from the pollution of streams by sewage in the district, giving the com- missioners of the district power to construct sewers, etc., to issue bonds, to apportion the expense among the various municipalities involved, and compelling the officers of the various municipalities to levy and collect the taxes certified by the sewage commissioners, and to pay them when collected to the commissioners is invalid as a local law and as delegating taxing power to a body other than a political division.*^ 84 Williams v. Settle, 51 N. J. L. S7 Bacon v. Mulford, 41 N. J. L. (12 (22 Vr.) 512-517, 18 Atl. Rep. 750. Vr.) 59. 86 Stratton v. Collins^ 43 N. J. L. 88 state Board of Assessors v. Cen- 562. tral E. R. Co., 48 N. J. L. (19 Vr.) so Trustees of Public Schools v. City 140, 4 Atl. Rep. 578. of Trenton, 30 N. J. Eq. (3 Stew.) 6fi7. s^ Van Cleve v. Passaic Valley EQUALITY IN NEW TOEK AND NOETH CAEOLINA. 837 1636. New York. The legislature shall not pass a private or local bill . . . granting to an}' private corporation, association or individual any exclusive privilege, immunity or franchise whatever.^ This provision was designed to prohibit original and independ- ent grants. An act restricting and regulating an existing right is not within this prohibition.^' The legislature may not pass any private or local bill " granting to any person, association, firm or corporation, an exemption from taxation on real or personal property." '^ 1637. North Carolina. The General Assembly shall levy a capitation tax on every male inhabitant in the state over twenty-one and under fifty years of age, which shall be equal on each to the tax on property valued at three hundred dollars in cash. The commissioners of the several counties may exempt from- capitation tax in special cases, on account of poverty and infirmitj', and the state and county capitation tax combined shall never exceed two dollars on the head.^* Laws shall be passed taxing, by uniform rule, all moneys, credits, investments in bond, stocks, joint-stock companies, or otherwise; and, also, all real and personal property, according to its true value in money. The General Assembly may also tax trades, professions, franchises, and incomes, provided that no income shall be taxed when the property from which the in- come is derived is taxed.^* Property belonging to the state, or to municipal corporations, shall be exempt from taxation. The General Assembly may exempt cemeteries and property held for educational, scientific, literary, charitable or religious purposes; also, wearing apparel, arms for muster, ' household and kitchen furniture, the mechan- ical and agricultural implements of mechanics and farmers, libra- ries and scientific instruments, or any other personal property, to a value not exceeding three hundred dollars.^" All taxes levied by any county, city, town or township shall be uniform and ad valorem upon all property in the same, except property exempted by this constitution.®^ Sewerage Commission, — N. J. — , v. L. I. City, 101 N. Y. 439, 5 N. E. 60 Atl. Rep. 214, reversing 58 Atl. Rep. 80. Rep. 571. ®2 Art. Ill, § 18, Amendment of 1901. 90 Art. Ill, § 18. 93 Art. V, § 1. This poll tax may 91 Matter of Gilbert El. R. R., 70 not exceed the tax on $300 worth of N. y. 361. See Matter of Application property, but need not equal that of Union Ferry Co., 98 N. Y. 139; amount. Wingate v. Parker, N. 0, Syracuse Water Co. v. Syracuse, 116 , 48 S. E. Rep. 774. N. Y. 167, 186, 22 N. E. Rep. 381, 5 84 Art. V, § 3. L. R. A. 546 ; Trustees of Firemen's 95 Art. V, § 5. Fund V. Roome, 93 N. Y. 314; iloran 90 Art. VII, § 9. 838 CONSTITUTIONAX. LAW OF TAXATION. No man or set of men are entitled to exclusive or separate emoluments or privileges from the community but in considera- tion of public services.®^ 1638. The rule of uniformity requires that taxes shall be levied on all property in the taxing district. A law which taxes only real property in the district is invalid.®* A levy on real estate alone in a county, under the provisions of the " stock law," for the pur- pose of building fences, if regarded as a tax, is invalid, as lacking in uniformity.^'' A municipal tax on real estate, the stocks of goods owned by merchants being nnassessed, is void for lack of uniformity, although the municipality increased the taxes on the monthly sales of merchants by an amount more thau sufficient to make up the deficiency caused by such exemption.^ 1639. License or privilege taxes may be imposed, and are not altogether subject to the rule of uniformity.^ A statute imposing a license tax on the business of buying and selling fresh meat in cities or towns, the amount of the tax varying according to tho population of the place where the business is done, is constitu- tional.^ A license tax payable in advance may be imposed by a municipality on the occupation of buying tobacco.* A law ap- pointing a commissioner to look after the shell-fish industry, and providing for payment of his salary by a tax on oysters and clams, does not violate the rule of uniformity.*" In the imposition of license, as of other taxes, however, there must be territorial uniformity throughout the taxing district. A statute which imposes a license tax on the occupation of an emi- grant agent in certain counties of the state, leaving the other counties free from its operations, is void for lack of uniformity.^ A license tax of $25 a year on the occupation of emigrant agents generally does not violate any provision of the state or Federal constitution, and is not unreasonable in amount.® A license tax on merchants, based on the amount of business done, excepting fi'om the computation business done in the pur- 97 Art. I, § 7. report of this case saj's that the stat- es Cobb V. Elizabeth City, 75 N. ute is unconstitutional, but this is C. 1. error. 90 Harper v. Commissioners of New 4 State v. Irvin, 126 N. C. 989, 35 Hanover County, 133 N. C. 106, 45 S. E. Rep. 430. S. B. Rep. 526. 4i Brooks v. Tripp, 135 N. C. 159, 1 London v. City of Wilmington, 78 47 S. E. Rep. 401. N. C. 109. ■ 5 State v. Moore, 113 N. C. 697, 18 2Gatlin v. Tarboro, 78 N. C. 119. S. E. Rep. 342, 22 L. R. A. 472. 3 State V. Carter, 129 N. C. 560, 40 6 State v. Hunt, 129 N. C. 686, 85 S. E. Rep. 11. The headnote in the Am. St. Rep. 758, 40 S. E. Rep. 216. EQUALITY AND UNIFOKMITY IN NORTH CAROLINA. 839 ■chase and sale of " farm products gurchased from the producer," is validJ A license tax on hotel-keepers, graded according to their gross receipts, and exempting from taxation those whose yearly receipts are less than $1,000, is valid.* Under the provision allow- ing taxation of trades, professions, and incomes, a city cannot 'onforce a license tax upon a single act of carrying persons out of town, as that does not amount to a business.® 1 640. There is no doubt of the power of the legislature to levy SI franchise tax on corporations, or that the intangible and the tangible property of corporations may be assessed separately.^* Although an insurance company has already paid a " franchise " tax, measured by reference to its gross receipts, it should also, under the rule of uniformity, pay an ad valorem tax upon its prop- erty.^^ An exemption from property taxes does not exempt from privilege taxation. ^^ Where a corporation is engaged in an occu- pation upon which a privilege tax is laid, it must pay both the tax upon its corporate " franchise," for the privilege of existing and doing business as a corporation, and the special taS imposed •oh the occupation in which it is engaged.-'^ A tax may be levied by a county on the rails and roadbed of a railroad company, although the company has already paid a " franchise " tax, based upon a valuation of its property.^* 1 641 . The time when taxes shall be made payable is not an ■essential, and it is not a denial of equality or uniformity to make them payable at different times in different counties.'® The Tule of uniformity does not control the manner in which taxes are expended after collection. '^^ Special assessments for local improvements may be laid according to benefit, and are not governed by the rule of uniformity.'* An act which deprives one township in a county of the benefits of a law author- izing the building of fences to protect lands from stray cattle, 7 state V. Stevenson, 109 N. C. 730, 13 Cobb v. Commissioners of Durham ■26 Am. St. Rep. 595, 14 S. E. Rep. 385. County, 122 N. C. 307, 30 S. E. Rep. 8 Cobb V. Commissioners of Durham 338. ■County, 122 N. C. 307, 30 S. E. Rep. w Wilmington, etc., R. R. Co. v. 338. Board of Commissioners, 72 N. C. 10 9 State V. Cooper, 135 N. C. 1, 47 (1875). S. E Rep. 129. 15 State v. Jones, 121 N. C. 616, 28 10 Jackson v. Corporation Commis- S. E. Rep. 347. 'Sion, 130 N. C. 385, 42 S. E. Rep. 123. I5a Holton v. Mecklenburg County, 11 Wilmington Underwriters Ins. 93 N. C. 430. -Co. V. Stedman, 130 N. C. 221, 41 S. 16 Raleigh v. Peace, 110 N. C. 32, 14 E. Rep. 279. S. E. Rep. 521, 17 L. R. A. 330; Bus- 12 Royster Guano Co. v. Tarboro, bee v. Commissioners of Wal<;e County, 126 N.'C. 69, 35 S. E. Rep. 231. 93 N. C. 143; Billiard v. City of Ashe- 840 CONSTITUTIONAL LAW OF TAXATION. ■while leaving that township subject to a special assessment for building such fences in the rest of the county, is invalid." 1642. North Dakota. All laws of a general nature shall have a uniform operation.'* No special privileges or immunities shall ever be granted which may not be altered, revoked or repealed by the Ijegislative Assembly; nor shall any citizen or class of citizens be granted privileges or immunities which upon the same terms shall not be granted to all citizens.'* The legislature shall not pass local or special laws . . » granting to any corporation, association or individual . . . any special or exclusive privilege, immunity or franchise what- ever, ... or for the assessment or collection of tax^ or ex- empting property from taxation.^** Laws shall be passed taxing by uniform rule all property according to its true value in money, but the property of the United States and the state, coimty and municipal corporations, both real and personal, shall be exempt from taxation; and the Legislative Assembly shall by a general law exempt from taxation property used exckxsively for school, religious, cemetery or char- itable purposes and personal property to any amount not exceed- ing in value two hundred dollars for each individual liable to taxation; but the Legislative Assembly may, by law, provide for the payment of a per centum of gross earnings of railroad com- panies to be paid in lieu of all state, county, township and fchool taxes on property exclusively used in and about the prosecution of the business of such companies as common carriers, but no- real estate of said corporations shall be exempted from taxation in the same manner, and on the same basis as other real estate is taxed, except roadbed, right-of-way, shops and buildings used exclusively in their business as common carriers, and whenever and so long as such law providing for the payment of a per centum on earnings shall be in force, that part of section 179 of this article relating to assessment of railroad property shall ceasfr to be in force.^' 1643. The requirement that the legislature shall exempt cer- tain property is not self -executing ; and when the legislature has,., enacted a law narrower than the constitutional requirement, the omission cannot operate to annul the statute which only executes the constitutional mandate in part. Hence a law exempting " insti- ville, 118 N. C. 845, 24 S. E. Rep. 18 Art. I, § 11. 738; Cain v. Commissioners of Davie i9Art. I, § 20. County, 86 N. C. 8. 20 Art. II, § 69. 17 Harper v. Commissioners of New 21 Art. XI, § 176. See § 157 of thist Hanover County, 133 N. C. 106, 45 work for § 179. S. E. Rep. 526. a EQUALITY AND UNIFORMITY IN OHIO. 841 tutions of purely public charity " is valid, although the constitu- tion commands the legislature to exempt property used for charitable " purposes. A public hospital owned by an individual, conceded to be a " public charity," was held not exempt, becaiise it belonged to an individual and not to an institution.^^ The legis- lature has the right to classify persons and property for the pur- pose of taxation, and to assess and collect taxes upon different classes of property by different methods. Grain in elevators may be separately classified for taxation. ^^ A law is of a general nature and has a uniform operation if it applies to all the persons and property throughout the state who are in the circumstances in- dicated by the law.^^ 1 644. The rule of uniformity does not apply to privilege taxes^'*' nor to assessments for local improvements.^" A law which assesses and taxes grain in houses or elevators to the owners of the store- houses or elevators, giving them a lien on the grain us against the actual owners thereof, is not lacking in uniformity as imposing a greater burden on owners of elevators than on other persons.^ Undervaluation, in good faith, by a local assessor will not in- validate an assessment,^ nor will omission of property from the roll, either by inadvertence or design.^ 1645. Ohio. All laws of a general nature shall have a uniform operation throughout the state.^" The levying of taxes by the poll is grievous ajid oppressive ; therefore, the General Assembly shall never levy a poll tax, for county or state purposes.^^ Laws shall be passed, taxing by a tmiform rule, all moneys., credits, investments in bonds, stocks, joint-stock companies, or otherwise; and also all real and personal property, according to- its true value in money; but burying grounds, public school- houses, houses used exclusively for public worship, institutions of purely public charity, public property used exclusively for any 22Engstad v. Grand Forks County, 25 State v. Klectzen, 8 N. D. 28G, 78- 10 N. D. 54, 84 N. W. Kep. 577. N. W. Eep. 984. 23 Minneapolis and Nortliern Ele- 26Rolph v. City of Fargo, 7 N. D^ vator Co. v. Trail County, 9 N. D. 21,3, 640, 76 N. W. Rep. 242, 42 L. R. A. 82 N. W. Rep. 727, 50 L. R. A. 266. 646. 24 Vermont Loan and Trust Co. v. 27 Minneapolis and Novtliern Elc- Whithed, 2 N. D. 82, 49 N. W. Rep. vator Co. v. Trail County, 9 N, I). 213, 318; Minneapolis and Northern Ele- 82 N. W. Rep. 727, 50 L. R. A. 260. vator Co. v. Traill County, 9 N. D. 2S Shattuck v. Smith, 6 N. D. 56, 091- 213, 82 N. W. Rep. 727, 50 L. R. A. N. W. Rep. 5. 266. See Plummer v. Borsheim, 8 N. 29 Ibid. D. 565, 80 N. W. Rep. 690. 30 Art. II, § 26. 31 Art. XII, § 1. 842 CONSTITUTIONAL LAW OF TAXATION. public purpose, and personal property, to an amount not exceed- ing in value two hundred dollars, for each individual, may, by general laws, be exempted from taxation; but all such laws shall be subject to alteration or repeal ; and the value of all property, so exempted, shall, from time to time, be ascertained and pub- lished, as may be directed by law.^^ The General Assembly shall provide, by law, for taxing the notes and bills discounted or purchased, moneys loaned, and all other property, effects, or dues, of every description, (without deduction) of all banks, now existing, or hereafter created, and of all bankers, so that all property employed in banking, shall always bear a burden of taxation, equal to that imposed on the property of individuals.^^ The property of corporations, now existing or hereafter created, shall be subject to taxation the same as the property of indi- viduals.'* 1646. Where a special taxing district is created by the legis- lature, the tax must be imiform throughout the district. A law "vvhich provided that residents of a county within which there was a first-grade city, who did not reside within such city or within a school district which maintained a high school, might attend such high school in the city ; and that all the property of the -county not within the city and not within a school district which maintained a high school might be taxed to pay to the city the expense incurred by reason of such attendance, was held void for "want of uniformity, as the whole county was the taxing district, and only a part of the property in it was taxed."'' Likewise, the erection of armories for the use of the state militia is a general purpose of the state ; and an act authorizing counties to expend money for the erection of such armories is in violation •of the rule of uniform taxation.^® A law which authorized any eounty of the state to raise money by taxation of the property in the county to secure the location therein of the " Ohio Agricultural Experiment Station," which was a state institution, controlled by the state, and of general benefit, was held lacking in uniformity as authorizing the taxation of a single county for the benefit of the state.''' 32 Art. XII, § 2. This provision has City of Columbus, 8 C. C. Rep. 642; been amended, taking effect Januai-y affirmed in Wilder v. Daniels, 53 Ohio 1, 1906, so as to exempt state and St. 658, 44 X. E. Rep. 1150; State ex municipal bonds. rel. v. Kriegbaum et al., 9 C. C. Rep. 33 Art. XII, § 3. 619; affirmed, 54 Ohio St. 615, 47 N. 34 Art. XII, § 4. E. Rep. 1117. 35 Root V. Board of Education, 52 37 Wasson v. Commissioners, 49 Ohio Ohio St. 589, 41 N. E. Rep. 135. St. 622, 32 N. E. Rep. 472, 17 L. R. A. 36 Hubbard v. Fitzsimmons, 57 Ohio 795. St. 436, 49 N. E. Rep. 477; Daniel v. EQUALITY AND UNIFORMITY IN OHIO. 843 1647. A law is local, although general in its language, if the language be so restricted as to apply to but one county in the «tate.«» A law which limits the amount of assessments for local improve- ments in cities of a stated population is uniform in its operation, since it applies to all cities of the designated class. ^^ A tax for Tefunding assessments to persons who have been assessed for build- ing toll roads is uniform if levied on all the property in the county.*'* A law which authorizes county commissioners of one ■county to levy county taxes at a specified rate is a law of general 7iature, applicable to but one county in the state, hence void as Jacking in uniform operation.*^ 1 648. " Institutions of purely public charity " include schools ■established by private donation and carried on for the benefit of the general public; and such schools are exempt from taxation.*^ It is immaterial by whom, or in what manner, the title is held.*^ An asylum for the destitute, sick, and blind, irrespective of nation- ality or creed ;** a public library open to all on equal terms, whose revenues are used for library purposes,''^ and a camp-meeting asso- •ciation which makes charges for the conveniences it provides for those who attend the meetings,** are all exempt as institutions of purely public charity. A graduated inheritance tax law has been held invalid because of graduations in the rate according to the value of the legacy ; and because legacies under a certain amount were exempt, as in conflict with that clause of the Bill of Eights which says that government is instituted for the " equal protection and benefit " of the people.*^ But an act which taxed at a uniform rate all transfers of property by death to any persons, except certain lineal and collateral kindred, exempting the sum of $200 in each transfer, was upheld.** 38 Mott V. Hubbard, 59 Ohio St. 199, owned, by a charitable institution was 53 N. E. Rep. 47 ; Fields v. Commis- not exempt. sioners, 36 Ohio St. 481. ** Humphries v. Little Sisters of the 39 City of Cincinnati v. Connor, 55 Poor, 29 Ohio St. 201. Ohio St. 82, 44 N". E. Rep. 582. *5 Cleveland Library Asan. v. Pelton, 40 Warder v. Commissioners, 38 Ohio 36 Ohio St. 253. St. 639. 4S Davis v. Cincinnati Camp Meet- 41 Pump V. Lucas County, 69 Ohio ing Assn., 57 Ohio St. 257, 49 N. E. St. 449, 69 N. E. Rep. 666. Rep. 401. i2Gerke v. Pursell, 25 Ohio St. « State v. Ferris, 53 Ohio St. 314, ■229. 41 N. E. Rep. 579, 30 L. R. A. 218. -i^ Ibid. See folio-wing ease, vphere *» Hagerty v. State, 55 Ohio St. 613, under the language of the statute, it 45 N. E. Rep. 1046. ^las held that property used, but not 814 CONSTITUTIONAX, LAW OF TAXATION. 1649. Taxes which are imposed in the exercise of the police power are not subject to the constitutional restraint of uniformity. A per capita tax on dogs, imposed for the protection of wool growers,** a tax upon the business of liquor sellers,^" a tax upon the privilege of giving theatrical exhibitions,^'' a tax upon the business of gas companies to pay the salary of a state inspector,''" an act imposing a tax upon the business of trafficking in cigarettos"'* ha^-e been upheld. 1 650. A law permitting individuals and certain corporations to deduct their debts and liabilities from their taxable assets for assessment, is lacking in uniformity,^* as the constitution requires that the assets of banks and bankers shall be taxed without de- duction. Private bankers are included in this requirement.'"'' Later it has been held that " credits " are the excess of claims- and choses in action over debts^ and that an unincorporated bank may deduct its debts, deposits, and exempt securities from the total amount of its credits in making a return, although it could not deduct them from its cash,°^ and that a foreign business cor- poration may make such deductions.^^ Shares of stock are not credits ; and a shareholder in a national bank is not entitled to a deduction of his debts from the amount of his shares in making his return.^* 1651. An act authorizing a turnpike road tax in a county, ex- empting from the tax imposed all lands theretofore assessed for the construction of free turnpikes, unless the amount of such tax " exceeds the amount of such assessment, and, in such case, only the excess shall be levied and collected " is unconstitutional.** But the legislature may create a special taxing district, limiting- its bounds so that where they would otherwise include territory, lying near another road, which had previously been assessed, they should not include such territory.^* Where a villag-e is annexed 48 Hoist V. Roe, 39 Ohio St. 340, 48 S6 Treasurer of Fayette County v. Am. Rep. 459. Bank, 47 Ohio St. 503, 25 N. E. Rep. 50 Adler v. Whitbeclc, 44 Ohio St. 697, 10 L. R. A. 196. 539, N. E. Rep. 672. 57 Hubbard v. Brush, 61 Ohio St. 51 Baker v. Cincinnati, 11 Ohio St. 252, 55 N. E. Rep. 829. 534. 58 Chapman v. National Bank of 52 Cincinnati Gas, etc., Co. v. State, Wellington, 56 Ohio St. 310, 47 N. E. 18 Ohio St. 237. Rep. 54; affirmed. First Nat. Bank of 53Metz V. Haggcrty, 51 Ohio St. 521, Wellington v. Chapman, 173 U. S. 205, 38 N. E. Rep. 11. 43 L. ed. 669, 19 N. E. Rep. 407. 54 Exchange Bank v. Hines, 3 Ohio 69 Fields v. Commissioners of High- St. 1 ; Latimer v. Morgan, 6 Ohio St. land County, 36 Ohio St. 476. 279. oo Carlisle v. Hetherington, 47 Ohio. 55 Ellis V. Lincke, 3 Ohio St. 66. St. 234, 24 N. E. Rep. 488. EQUALITY AND UNIFORMITY IN OHIO. 845 to a city, a tax may be constitutionally authorized by the legis- lature upon the territory of the former village alone to pay bonds issued by the village. For the purpose of such taxation the village may be continued as a separate taxing district,®^ 1652. The rule of uniformity does not apply to local assess- ments*^ and exemptions from taxation do not apply to assessments for local improvements.*^ 1 653. It is not necessary that all persons and property shall be taxed by the same method. The legislature may classify persons and property, and provide for their assessment and taxation by different methods and agencies, so long as substantial uniformity of valuation and taxation is maintained. A law requiring the valuation of bank stock by the state board of equalization while other property was valued by local ofScers,** a law taxing money or property converted into nontaxable securities at the monthly average amount or value of such property or money during the time the taxpayer held the same (in its original shape) while other property was assessed as of a particular day,*^ laws provid- ing for the valuation of the property and franchises of express, telegraph, and telephone companies by a state board and by estimating the value of the property and franchises in the state as a proportionate part of the capitalized value of the corporate property** have all been upheld. 1 653a. The taxation of shares of incorporated banks, including in the valuation thereof the value of exempt bonds owned by the banks, is not unequal because unincorporated banks are allowed to deduct the value of such bonds in the valuation of their prop- erty, because taxation of the property of the banks and of the shares are distinct things, and because it is " impossible to deter- mine," under the statutes, whether this produces such an inequal- ity as calls for a remedy, the unincorporated bank being taxed upon all its property not exempt, while the incorporated bank is not taxed upon its franchise. *'' Excise " franchise " or privilege taxes may be imposed on cor- porations, although their franchises are already taxed as property. 61 City of Cleveland v. Heisley, 41 65 Shotwell v. Moore, 45 Ohio St. Ohio St. 670. 632, 16 N. E. Rep. 470. 62 Reeves v. Treasurer, 8 Ohio St. 66 State v. Jones, Auditor, 51 Ohio 333; Thomson v. Wood County, 11 St. 492, 37 N. E. Rep. 945; see Cum- Ohio St. 678. mings v. National Bank, 101 U. S. 63 Lima v. Cemetery Assn., 42 Ohio 153, 25 L. ed. 903, and §§ 1466 et seq. St. 128, 51 Am. Rep. 809. 6T Cleveland Trust Co. v. Lander, 62 64Wagonerv.Loorais,37 0hio St. 571. Ohio St. 266, 56 N. E. Rep. 1036. S46 CONSTITUTIONAL LAW OF TAXATION. The rule of uniformity applies only to property — and not to privilege — taxation. Hence a law imposing an annual privilege or franchise tax upon corporations estimated on a percentage of their capital stock is constitutional,^ as is a gross receipts tax on. telegraph companies,^ and a law imposing a fee for iiling article* of incorporation or dissolution based on the authorized capital stock.™ Taxes upon property measured by amount, area, or quantity, or by any other measure than value, lack uniformity. An act requiring a railroad company to pay a "license" fee of $1 for each mile operated is in fact a specific jjroperty tax, and is void.'^^ 1654-. Oregon. No law shall be passed granting to any citizen or class of citizens, privileges or immunities which, upon the same terms, shall not equally belong to all citizens.''^ No tax duty shall be imposed without the consent of the people or their representatives in the Legislative Assembly ; and all tax- ation shall be equal and uniform.''^ The Legislative Assembly shall provide by law for a unifornii and equal rate of assessment and taxation ; and shall prescribe- such regulations as shall secure a just valuation for taxation of alL property, both real and personal, excepting such only for munici- pal, educational, literary, scientific, religious or charitable pur- poses, as may be specially exempted by law.^* The legislature shall not pass local or special laws . . . for the assessment and collection of taxes for state, county, township or road purposes.'^ 1655. The purpose of the prohibition of special or local laws- for the assessment and collection of taxes was to prohibit any mode- or manner of assessment and collection which would interfere with or contravene the method of assessing and collecting taxes as pro- vided by the general law. It does not prevent the legislature from authorizing a county or tax district to levy and collect a special tax for a specified purpose, in the same manner as other taxea are levied and collected.''® An act taxing bicycles for the con- struction and repair of highways in ten out of the thirty-three- 68 Southern Gum Co. v. Laylin, 66 72 Art. I, § 19. Ohio St. 578, 64 N. E. Rep. 564. 73 Art. I, § 32. 69 Western Union Telegraph Co. v. 74 Art. IX, § 1. Mayor, 28 Ohio St. 521. 75 Art. IV, § 23. 70 Ashley v. Ryan, 49 Ohio St. 504, 76 Simon v. Northup, 27 Oreg. 487, 31 N. E. Rep. 721. 40 Pac. Rep. 560, 30 L. E. A. 171; 71 Railway Co. v. State, 49 Ohio St. Oregon City v. Moore, 30 Oreg. 215^ 189, 30 N. E. Rep. 435, 16 L^ R. A. 380. 46 Pac. Rep. 1617. EQUALITY AND TJNIFOKMITY IN OREGON. 847 counties of the state, is, however, a special or local law " for laying out, operating, or working on highways." ^^ An act pro- viding that sheriffs and clerks in certain named counties should have salaries and should collect and pay into the county treasury specified fees for their services, is a local law for the assessment of taxes, and hence void.^® Such an act is not void if applicable to every county.™ As elsewhere, the requirement of uniformity is construed in. Oregon to require only uniformity in the taxing district. A law erecting a municipality into a separate road district, exempt- ing the inhabitants of the municipality from county road taxes- and authorizing the imposition of a poll tax for street and road purposes on the inhabitants of the municipality, is therefore- valid.*" Such an act is not a local or special law for the assess- 7nent and collection of taxes. ^^ 1 656. The legislature has no power to exempt from taxation any property not mentioned in the constitution. An act which provides for the taxation of mortgages on land situated in not more than one county as a part of the land, and makes no mention of mortgages on land situated in more than one county, is not, however, an exemption of the latter class, since mortgages in that class are left to be taxed as choses in action under the general revenue law. The effect of the law was to classify one-county mortgages separately as to method of taxation, and such a classi- fication is valid.®'* Choses in action must be taxed like other property.^ A fraternal order whose benefits are confined to its own mem- bers and their families is a charitable institution within the con- stitutional meaning.** Under the statutes and constitution of Oregon, the use of property is made the criterion of exemption. Where part of the property of a charitable institution is leased for profit, such property is not exempt, although the profits are 77 Ellis V. Frazier, 38 Oreg. 462, 63 Mortgage, etc., Co. v. School District,. Pae. Rep. 642, 53 L. R. A. 454. 19 Fed. Rep. 359, 21 Fed. Rep. 151 ; 78 Manning v. Klippel, 9 Oreg. 367. King v. Dundee, etc., Co., 28 Fed. Rep. 79 Northern Counties Trust v. Sears, 35, where the same law was held un- 30 Oreg. 388, 41 Pae. Rep. 931, 35 constitutional by the United States- L. R. A. 188. Circuit Court. 80 City of East Portland v. County 83 Poppleton v. Yamhill County, S of Multnomah, 6 Oreg. 62 ; Multnomah Oreg. 337; Mumford v. Sewall, 11 County V. Siker, 10 Oreg. 65. Oreg. 67, 4 Pae. Rep. 585, 50 Am. Rep. 81 Oregon City v. Moore, 30 Oreg. 462. 215, 46 Pae. Rep. 1017. 84 Hibernian Benevolent Society v. 82 Crawford V. Linn County, 11 Oreg. Kelly, 28 Oreg. 173, 42 Pae. Rep. 3,. 482, 5 Pae. Rep. 738; see Dundee 52 Am. St. Rep. 769, 30 L. R. A. 167. 848 CONSTITUTIONAL LAW OF TAXATION. used for the charitable purposes of the institution.®'' Commuta- tions of taxation as well as exemptions are forbidden, hence a law commuting the taxes of a railway company in considera- tion of its carrying free of charge the troops and munitions of the state is invalid.*® 1657. Inequalities in valuation which are not due to wilful or arbitrary discrimination do not render the assessment repug- nant to the constitution.®'^ But where assessors and boards of equalization have wilfully fixed the valuation of property at a predetermined rate, without reference to the rate at which other property is assessed, their acts in that respect are repugnant to the constitution.*® In order to produce proportional or uniform valuations among all the counties of the state, there must be imiformity of classification.®® 1658. The requirement of uniformity does not apply to occu- pation taxes or license fees.''" A tax of $1.25 on each bicycle in certain counties, however, is a property tax and not a license fee, hence it is void as not being laid according to value. It is also void as double taxation, since it is to be presumed that bicycles are already taxed as property by the proper officers.'^ Local assess- ments are not governed by the rule of uniformity.^ 1659. The improvement of a port and harbor is a sufficiently local purpose to authorize the erection of the adjacent territory into a special taxing district to be taxed for such improvement ; and such taxation is not lacking in uniformity as taxing the people of the locality for the general benefit.'^ The rule of equal- ity does not apply to the distribution of the revenue. An act which allows persons whose assessments for .street improvements are more than $25 to pay such assessments in instalments, the city issuing its interest-bearing- bonds for the amount of such ssiUd.; Willamette University v. 89 Dayton v. Board of Equalization, Knight, 35 Oreg. 33, 56 Pac. Rep. 33 Oreg. 131, 50 Pac. Rep. 1009. 124. 90 Ellis V. Prazier, 38 Oreg. 462, 63 86 Hogg V. Mackay, 23 Oreg. 339, 31 Pac. Rep. 642, 53 L. R. A. 454. Pac. Rep. 779, 37 Am. St. Rep. 682, 91 Ibid. 19 L. R. A. 77. 92 King v. City of Portland, 2 Oreg. 87 Smith V. Kelly, 24 Oreg. 464, 33 146; Masters v. City of Portland, 24 Pac. Rep. 642; West Portland Park Oreg. 161, 33 Pac. Rep. 540; Ladd v. V. Kelly, 29 Oreg. 412, 45 Pac. Rep. Gambell, 35 Oreg. 393, 59 Pac. Rep. 901; Dayton v. Multnomah County, 34 113; Kadderly v. City of Portland, 44 Oreg. 230, 55 Pac. Rep. 23. Oreg. 118, 74 Pac. Rep. 710, 75 Pac. 88 Oregon, etc., R. R. Co. v. Jackson Rep. 222. County, 38 Oreg. 589, 64 Pac. Rep. 93 Cook v. The Port of Portland, 20 307, 65 Pac. Rep. 369. Oreg. 580, 27 Pac. Rep. 263, 13 L. R. A. 533. EQUALITY AND UNIFOEMITY IN PENNSYLVANIA. 849 ■deferred assessments, to pay for the imiDrovemenls, is not un- ■constitutional because the taxpayers at large must pay the interest ■on the bonds.^* 1660. Pennsylvania. The General Assembly shall not pass any local or special law regulating the affairs of counties, cities, townships, wards, boroughs or schools districts . . . exempting property from taxation . . granting to any corporation, association, or individual, any special or exclusive privilege or immunity.®^ All taxes shall be uniform upon the same class of subjects, within the territorial limits of the authority levying the tax, and shall be levied and collected under general laws ; but the General Assembly may, by general laws, exempt from taxation public property used for public purposes, actual places of religious wor- ship, places of burial not used or held for private or corporate profit, and institutions of purely public charity.^^ All laws exempting property from taxation} other than the property above enumerated, shall be void.®'^ The power to tax corporations and corporate property shall not be surrendered or suspended by any contract or grant to which the state shall be a party .®^ 1661. The provisions of the constitution requiring equality and Tiniformity are prospective in their operation. Prior acts, the ■effect of which might result in lack of uniformity, were not re- pealed by it.'® 1 662. Differences in method of assessment and collection do not violate the rule of uniformity. Absolute uniformity cannot Ije had, and all that is required is substantial uniformity of result. Laws which provide for the assessment and collection of the state tax on individuals by local assessors, while the state tax on the obligations and credits of corporations is collected by state agencies, the treasurers of the corporations being required to deduct the tax from the interest and pay it into the state -treasury, are not lacking in uniformity.^ 94 Ladd V. Gambell, 35 Oreg. 393, l Commonwealth v. Delaware Di- :59 Pae Rep. 113. vision Canal Co., 123 Pa. St. 594, 16 85 Art. Ill, § 7. Atl. Rep. 584, 2 L. R. A. 798; Com- 86 Art IX § 1. monwealth v. Lehigh Valley R. R. Co., 97 Art'. IX', § 2. 129 Pa. St. 429, 18 Atl. Rep. 406; Coal 98 Art. IX, § 3. Ridge Improvement, etc., Co. v. Jen- 99 Allegheny County v. Gibson, 90 nings, 127 Pa. St. 397, 17 Atl. Rep. Ta St 397; Lehigh Iron Co. v. Lower 986; Commonwealth v. New York, L. Macungie Township, 81 Pa. St. 482 ; E. & V^^. R. R. Co., 150 Pa. St. 234, 24 /. 24 Stat. L. 170, Supplement to R. S. 46a Xatrona County v. ShaflFner, 12 U. S., Vol. I (2d ed.), 503, 504. Wyo. 177, 74 Pac. Rep. 88. EQUALITY AND TJNIPOEMITY IN THR TEEKITORIES. 887 Dor shall any law be passed impairing the right to private prop- erty, nor shall any unequal discrimination be made in taxing different kinds of property, but all property subject to' the taxa- tion shall be taxed in proportion to its value: Provided, That nothing herein shall be held to prohibit the levying and collecting license or special taxes in the territory from persons engaged in any business therein, if the legislative power shaJl consider such taxes necessary.** The organic act of Oklahoma above quoted does not deprive the legislature of the power of classification. The legislature may- tax the personal property of non-residents, in unorganized terri- tory, in the county to which such unorganized territory is annexed for judicial purposes.*® The legislature may provide that only "taxes for territorial and court funds shall be collected in unor- ganized territory attached to a county for judicial purposes, although the county is taxed for more purposes.^** License taxes ■collected in territories for local purposes are not subject to the iiniformity rule of the Federal constitution.®^ The Federal re- <[uirement that duties, imposts and excises shall be uniform does not apply to a territorial legislature. A territorial legislature has the full legislative power of classification and selection. A terri- torial income tax law is valid, although it exempts schools and benevolent societies, insurance companies, and incomes under $1,000 a year.**^ A territorial legislature, unless expressly for- bidden by Congress, may make reasonable exemptions.''^ A law ■offering an exemption from taxation to all railroads built imder its provisions, is not a local or special law granting an immunity or franchise, within the meaning of the act of Congress.®* Diifer- ■ent methods of taxation and procedure may be employed for dif- ferent classes of property.®® A statute requiring inspectors to •collect certain fees from one in charge of cattle driven into a speci- fied district conflicts with the requirement that property of non- residents shall not be taxed higher than that of residents. ®® 48 Act of Congress, May 2, 1890, v. Nichols, Ariz. , 80 Pac. Rep. ■chap. 182, 26 Stat. L. 81, § 6, R. S. 392; Railroad Company v. Deuel U. S. Supplement, Vol. I (2d ed.), 720- County, 3 Dak. 1, 12 N. W. Rep. 561; 722. St. Paul, etc., Ry. Co. v. Parcher, 49 Thomas v. Gay, 169 U. S. 264, 42 14 Minn. 297; State v. W. and St. L. ed. 740, 18 Sup. Ct. Rep. 340, re- Paul Ry. Co., 21 Minn. 315; State v. versing Gay v. Thomas, 5 Okla. 1, 46 ^Trustees, etc., 21 Minn. 344; Railroad Pac. Rep. 578. Company v. Chilberg, Wash. , 34 50 Foster V. Pryor, 189 U. S. 325, 47 Pac. Rep. 163; Pryor v. Bryan, 11 I;, ed. 835, 23 Sup. Ct. Rep. 549, af- Okla. 357, 66 Pac. Rep. 348; affirmed, firming Pryor v. Bryan, 11 Okla. 357. 189 U. S. 325. 51 Binns v. United States, 194 U. S. 54 Bennett v. Nichols, Ariz. , 486, 48 L. ed. 1087, 24 Sup. Ct. Rep. 80 Pac. Rep. 392. 816. 55 Boyd v. Wiggins, 7 Okla. 85, 54 52 Peacock v. Pratt, 121 Fed. Rep. Pac. Rep. 411. 772, 58 C. C. A. 48. 58 Farris v. Henderson, 1 Okla. 384, 53 Peacock v. Pratt, supra; Bennett 33 Pac. Rep. 380. CHAPTER XXIV. VARIOUS PROVISIONS OF THE STATE CONSTITU- TIONS SUPPLEMENTING THE REQUIREMENTS OF EQUALITY. Requiring corporations to be taxed the same as individuals. 1721. In the preceding chapter of this work, where state con- stitutional provisions with respect to uniformity and equality are quoted, are found some provisions providing generally that the property of corporations for profit shall be taxed the same as that of individuals. Provisions of this general class are found, for example, in the constitutions of Alabama,^ Colorado,^ lowa,^ Ken- tucky,* Mississippi,^ Missouri,'^ Montana,'^ Nevada,* Ohio,® South Dakota,-'* Texas.-'' Similar provisions to the effect that property employed in banking shall al-ways bear the same burden of taxa- tion as that of individuals, are found in the constitutions of Kansas,'^ Minnesota,^^ Ohio,^* South Dakota.^® 1722. All these provisions may be regarded as supplementing and emphasizing the requirements of uniformity and equality. In most eases, probably in nearly all eases, they achieve nothing more than could be accomplished by the application of the rules of uniformity and equality. However, where the legislature has power to vary methods of valuation or to exeinpt property, these provisions prevent it from classifying corporations or banks separately so as to favor the)n where individuals are not favored. lUvistrating this proposition, it is held that a provision that corporate property shall be taxed the 1 Art. XI, § 217, quoted in § 1505 9 Art. XII, § 3, quoted in § 1646 of of this -work. this work. 2 Art. X, § 10, quoted in § 1519 of w Art. XI, § 2, quoted in § 1679 of this -work. this -work. 3 Art. 8, § 2, quoted in § 1540 of U Art. VIII, § 5, quoted in § 168S this -work. of this work. This provision only ap- * § 174, quoted in § 1550 of this plies to railroad companies. work. 12 Art. XI, § 2, quoted in § 1544 of 5 § 181, quoted in § 1600 of this this work. work. 13 Art. IX, § 4, quoted in § 1592 of 6 Art. X, § 5, a peculiar provision this work. quoted in full' in § 1605 of this work. l*Art. XII, § 4, quoted in § 1646 of 7 Art. XII, § 7, quoted in § 1612 of this work. this work. 15 Art. XI, § 4, quoted in § 1679 of 8 Art. VIII, § 2, quoted in § 1621 of this work, this work. [888] TAXING CORPORATIONS THE SAME AS INDIVIDUALS. 889 Fame as that of individuals forbids the deduction of corporate debts from the value of the whole property, in ascertaining the value of the franchise for taxation, where individuals are not al- lowed to deduct their debts from their assessments.*® Under such a provision a law which released railroad corporations from the payment of city taxes, upon payment of a percentage tax on re- ceipts, was held invalid in Iowa, although the constitution did not forbid commutations or exemptions.-'^ Likewise in Iowa, where an insurance corporation was taxed a percentage of its gross premiums, and exempted from all other taxes, it was held that this exemption made the law unconstitutional.-'* 1723. In Alabama, a law providing for municipal taxation upon banks and insurance companies, in lieu of all other taxation, at a rate not exceeding 60 cents on each $100 of capital stock, was held void under a similar constitutional provision, it appearing that the rate imposed on other citizens was $1.50' per $100.'® 1 724. Where the constitution allows exemptions the effect of such provisions is to prevent exemption of corporations from any taxation to which individuals are subjected; but they may be exempted in the same manner and to the same extent as individuals.^" 1 725. In a Mississippi case a provision of a corporate charter, similar to the constitutional provisions under discussion, was con- strued. It provided that " the real and personal property of said company shall be subject to the same taxes, and to be assessed and collected in the same way, that the real and personal property of individual citizens is assessed and taxed, and not otherwise." Counsel sought to construe this provision to exempt the cor- poration from taxation on franchises and capital stock. The argu- ment was that the section provided for taxation of the real and J a Common-wealth v. Henderson Ala. 391; State Auditor v. Jackson Bridge Co., 99 Ky. 623, 31 S. W. Rep. County, 65 Ala. 142. 486, 29 L. E. A. 73. 20 Adams v. Yazoo and Mississippi 17 Davenport v. Chicago, etc., Ry. Valley R. R. Co., 77 Miss. 194-286, 38 Iowa, 633; Dubuque v. Illinois Cent. 24 So. Rep. 317, 60 L. R. A. 33, partly R. R. Co., 39 lo-vva, 56. See Iowa overruling Mississippi Mills v. Cook, Homestead Co. v. Webster County, 21 56 Miss. 40; Adams v. Tombigbee Iowa, 235, where it was held that in Mills, 78 Miss. 676, 29 So. Rep. 470; case of doubt a law would not be con- Exchange Bank of Columbus v. Hines. strued as granting a corporate exemp- 3 Ohio St. 1 ; Ellis v. Lincke, 3 Ohio tion. St. 66; Latimer v. Morgan, 6 Ohio 18 Hawkeye Ins. Co. v. French, St. 279. See Yazoo, etc., R. R. Co. v. 109 Iowa, 585, 80 N. W. Rep. 660. Levee Commissioners, 37 Fed. Rep. 24, 19 Mayor of Mobile v. Stonewall Ins. where such an exemption was upheld Co.. 53 Ala. 570. To the same effect as a contract. see Perry County v. Railroad Co., 65 890 CONSTITUTIONAL LAW OF TAXATION. personal property, whicli, said counsel, does not include franchises or capital stock; and that these latter were excluded from taxation because the state, having bound itself as to how the real and per- sonal property should be taxed, thereby, by exclusion, bound it- self not to tax the franchise. Said the court : This construction carries the rule " expressio unius est ex- clusio alterius " beyond all reasonable limits, and its application ■would be to subvert or ignore the fundamental principles of construction of charters. We find nothing in this charter pre- cluding taxation of the capital stock of the company.^* Local and special laws. 1726. The prohibitions of the passage of local and special laws for various purposes, the provisions which require that all general laws shall have a uniform operation, and that special laws shall not be passed where general laws can be made applicable, some of which are contained in most of the state constitutions; while they limit legislative action in many other respects than in the exercise of the taking power, yet limit the use of that power most materially and tend to the same end as direct requirements of equality and uniformity in taxation. That end is the effective en- forcement of the principle of proportional equality of burden, which underlies all taxation.^ 1727. Some of these restrictions, of course, expressly limit the taxing power. Such are those which prohibit local or special laws for the assessment and collection of taxes, or for the exemption of property from taxation. But the others may operate as effectively on the taxing power as if that power were expressly referred to. For instance, a local or special law for the incorporation of cities, embodying a delegation of the taxing power for municipal pur- poses, or a local law for the construction of a highway, including provision for taxation to pay the cost of construction and main- tenance, or a general law not of uniform operation, regidating or changing the judicial system (and causing variations in the cost of maintaining the judiciary), are laws which necessarily involve the exercise of the taxing power. Constitutional provisions which re- strict the legislature in the making of such laws are thus seen to 21 State V. Simmons, 70 Miss. 485- tion see §§ 1504 to 1720a; and for 497, 12 So. Rep. 477. such provisions with respect to legal- 22 For quotation of state eon=titu- izing unauthorized acts, see I 1253a tional provisions forbidding local and of this work. special laws with respect to taxa- RESTRICTIONS ON LOCAL AND SPECIAL LEGISLATION. 891 limit the taxing power as effectively as if directly made with re- spect to that power. Some cases interpreting the limitations of the state constitutions with respect to local and special taxation are referred to in the preceding chapter of this work which digests the constitutions and •decisions of the various states upon the topic of equality and uniformity.^* Here are considered some general principles, the results of comparison of the cases cited. Many of the cases dis- cussed in the immediately following pages do not directly refer to the subject of taxation. General laws. 1728. A general law, as distinguished from a local or special law, is one that embraces a class of subjects or places, and does not exclude any subject or place naturally belonging to the class, when -considered in its relation to the subject of classification. In other words, a law framed in general terms, restricted to no locality, and operating equally upon all of a group of objects, which, having regard to the purpose of the legislation, are distinguished by ■characteristics sufficiently marked and important to make them a class by themselves, is not a special or local law, but a general law.2* A local law is one which is confined in its operation to a fixed part of the state.^*^ An act appropriating money to an institu- tion for homeless children is not a local or special act.^* A law is not local or special, or lacking in uniform opera- tion, merely because it does not include in the scope of its opera- tions every locality or person in the state. If it is so general in its terms, that any person or any locality which is, or comes into, the situation and circumstances to which the law is applicable, 23 Chap. XXIII. M. & M. E. R. Co., 20 Iowa, 343 ; Ver- 24 Boorum v. Connelly, 66 N. J. L. mont Loan and Trust Co. v. Whithed, 197, 88 Am. St. Sep. 469, 48 Atl. Rep. 2 N. D. 82, 49 N. W. Rep. 318; Min- S55 ; Van Riper v. Parsons, 40 N. J. L. neapolis, etc.. Elevator Co. v. Traill, 123, 29 Am. Rep. 210; Rutgers v. 9 N. D. 213, 82 N. W. Rep. 727, .50 Mayor, etc., of New Brunswick, 42 L. R. A. 266; Evans v. Phillippi, 117 1^. J. L. 51; Wanser v. Hoos, 60 Pa. St. 226, 2 Am. St. Rep. 655, II N. J. L. 482, 64 Am. St. Rep. 600, 38 Atl. Rep. 630 ; City of Reading v. Sav- Atl. Rep. 449; Matter of Xew York age, 124 Pa. St. 328, 16 Atl. Rep. 788; Elevated R. R. Co., 70 N. Y. 327 ; State v. Carson, 6 Wash. 250, 33 Pac. Matter of Church, 92 N. Y. 1 ; People Rep. 428. V. O'Brien, 38 N. Y. 193; Ferguson v. 24a Clark v. Finley, 93 Tex. 171. Ross, 126 N. Y. 159, 27 N. E. Rep. 24b Hager v. Kentuckv Children's 054; McCormick v. Rusch, 15 Iowa, Home, 26 Ky. L. Rep. 1133, 83 S. W. 129, 83 Am. Dec. 401 ; McAremvich v. Rep. 605, 67 L. E. A. 815. 892 CONSTITUTIONAL LAW OF TAXATION. becomes subject to its operations, it is a general law and is of uniform operation. Tbe classification of localities and persons, for various legislative purposes, is not prohibited by such pro- visions, so long as such classification has that basis of reasonable- ness which distinguishes classification from arbitrary discrimina- tion. Uniform, in the sense of these provisions, does not mean universal.^'' A constitutional provision that " all taxation shall be levied and collected under general laws " is not violated by a law classifying- railroad property separately and providing a distinct method of taxing such property. If such a law operates upon all the property so classified, without discrimination, it is not a special law.2« Basis of classification. 1729. The basis of classification under constitutional restric- tions on local and special legislation, as under all other restrictions tending to equality and uniformity, must be reasonable; that is, there must be some set of characteristics common to every member of each class, and not possessed by the localities or subjects in- cluded in other classes, and these characteristics must bear som© fair relation to the governmental purpose with respect to which the classification is made. 25 Brooks V. Hyde, 37 Cal. 366 ; Peo- kel v. City of Burlington, 30 Iowa, pie V. Judge, 17 Cal. 547; Abeel v. 232 ; Iowa Railroad Land Co. v. Soper, Clark, 84 Cal. 226; Davidson v. Von 39 Iowa, 112; Iowa Railroad Land Co. Detten, 139 Cal. 467, 73 Pac. Rep. v. Carroll County, 39 Iowa, 151; 189; Darrow v. People, 8 Colo. 417; Koester v. Commissioners of Atchison Ex parte Wells, 21 Fla. 280; County, 44 Kans. 141, 24 Pac. Rep. Arms V. Ayer, 192 111. 601, 85 Am. 65; Commissioners of Leavenworth St. Rep. 357, 61 N. E. Rep. 851, County v. Miller, 7 Kans. 479, 12 Am. 58 L. R. A. 277 ; People v. Cooper, 83 Rep. 425 ; State v. Nemaha County, 7 111. 585; Groesch v. State, 42 Ind. Kans. 542 ; Rice v. State, 3 Kans. 141 ; 547-560; Marks V. Trustees of Purdue Chrisman v. City of Brookhaven, 70 University, 37 Ind. 155; City of La- Miss. 477, 12 So. Rep. 458; Phillips v. fayette v. Jenner, 10 Ind. 75; An- Missouri Pacific R. R. Co., 86 Mo. derson v. Kerns Drainage Co., 14 Ind. 540; Nichols v. Walter, 37 Minn. 270, 199, 77 Am. Dec. 63; Kent v. Town 33 N. W. Rep. 800; State v. Spande, of Kentland, 62 Ind. 291, 30 Am. Rep. 37 Minn. 323, 34 N. W. Rep. 164; 182; Boorum v. Connelly, 66 N. J. L. Allen v. Pioneer Press Co., 40 Minn. 197, 88 Am. St. Rep. 469, 48 Atl. Rep. 117, 12 Am. St. Rep. 707, 41 N. W. 955; Van Riper v. Parsons, 40 N. J. Rep. 936, 3 L. R. A. 532; Cobb v. L. 1-10 ; Fitzgerald v. New Brunswick, Bord, 40 Minn. 479, 42 N. W. Rep. 47 N. J. L. 479-487, 54 Am. Rep. 182, 396 ; State v. Ellett, 47 Ohio St. 90, 1 Atl. Rep. 496-501; .Johnson v. As- 23 N. E. Rep. 931, 21 Am. St. Rep. bury Park, 58 N. J. L. 604, 33 Atl. 772; State v. Board of Trustees, 121 Rep. 850; 60 N. J. L. 427, 39 Atl. Wis. 44, 98 N. W. Rep. 954. Rep. 693 : State Board of Assessors 26 Columbus Southern Ry. Co. v. V. Central R. R. Co., 48 N. J. L. 146, Wright, 89 Ga. 574, 595, 596, 15 S. E. 4 Atl. Rep. 578; In re Commissioners, Rep. 293. 49 N. .J. L. 488, 10 Atl. Rep. 363 ; Has- RESTRICTIONS ON LOCAL AND SPECIAL LEGISLATION. 893 With respect to taxation and many other purposes of govem- ■ment, the classification of localities upon the basis of population is universally upheld. Xo distinctions are more plainly related to the general purposes of government than distinctions of popula- tion, for government is merely the preservation of order among Ihe different members of the population, and the difficulties and problems of government vary with the population. Indeed, it has been doubted whether any other method of classification of munic- ipalities is allowable.^^ Other rules of classification, however, have been sustained in tax legislation. A law which classified separately counties having an assessed valuation of more than a specified amount, in which there were more than a specified number of miles of macadamized -and gravel roads, and which permitted a higher rate of road tax in such counties than in others, has been upheld. The classifica- tion by amount of property and length of roads was plainly one which bore a reasonable relation to the purpose of the classifica- ■tion — taxation for highway purposes.^® 1730. Another illustration of a basis of classification which would doubtless have been arbitrary for many purposes, but which, when considered in its relation to the purpose of the act, is seen to be reasonable enough, arose in Iowa under a provision that all laws of a general nature should have a uniform operation. Cer- tain municipalities had levied taxes of doubtful validity to pay judg-ments, and the legislature passed a curative act legalizing those levies in such municipalities. The law was upheld.^' 1730a.. The principles of classification under such provisions liave been well stated in a case in Wisconsin, a state where the necessary relation of the basis of classification to the object of .legislation has been quite strictly insisted on.^* One rule is: All classificaiion must be based upon substantial distinctions which make one class really different from another. It is urged in favor of the classification (under discussion, -which was of cities by population in a law for park and street improve- 27 Wheeler v. Philadelphia, 77 Pa. fieation. It was said that the presence St. 338. of a navigable canal was not an es- 28 State ex rel. Garrett v. Arnold, 136 sential of the classification. Le Tour- Mo. 446, 38 S. W. Rep. 79. A classi- neau v. Hugo, 90 Minn. 420, 97 N. W. fieation, with respect to issuing bonds Rep. 115. This seems strained. ^3f cities whose debt does not exceed 29 Iowa Railroad Land Co. v. Soper, $3 000, is valid. Kaiser v. Campbell, 30 Iowa, 112; Iowa Railroad Land Co. -90 Minn. 375, 96 N. W. Rep. 916. An v. Carroll County, 39 Iowa, 151. act authorizing cities of 50,000 to is- 30 See §§ 1714 et seq., and cases sue bonds to build a bridge over a cited, jiavigable canal makes a valid classi- 894 CONSTITUTIONAL LAW OF TAXATION. ments) that there is much less necessity for perfectly and ex- pensively constructed streets in small cities than there is in large ones. In small cities the streets are much less used, and so high a degree of perfection is not required; while, as to public parks, the people are all, already, as near to the country and the free air as many of the citizens of large cities can be to any public park. It is considered that there is something substantial in this view of the different requirements of large cities as com- pared with small cities, which makes one class really different from the other as respects the propriety of creating debts for permanently improving streets or for buying land for public parks. The difference is sufficient to account for and to justify such a classification for that purpose. It is usually appropriate to classify by population, especially where the object to be ad- vanced by it bears fairly a relation to the number of population in either class; and while opinions may fairly differ as to where the line of distinction should be drawn, that is fairly a subject for the exercise of legislative discretion. It is not open to ques- tion by the courts, unless it shall appear to be a mere device- to evade the constitutional provisions. 1730^. Another rule is: The classification adopted must he ger- mane to the purpose of the law. The distinction in the classi- fication made is based upon a real difEerence of situation, as be- tween large and small cities, as regards the necessity or propriety of creating debts for permanent improvement of streets, and for the purchase of lands for public parks and their improve- ment. It is germane to the purpose of the law. Another rule is: The classification must not be based upoiv existing circumstances only. It must not be so constituted as to preclude addition to the numbers included within a class. The test provided (by the law under discussion) by which to determine which cities are within its provisions, is " the last state or national census." On its face, the statute seems intended to be prospective in its operation; so that such cities as in th& future shall attain to the required population may have the benefits of its provisions. With this interpretation it is in com- pliance with the rule. . . . Another rule is : To whatever class a law may apply, it must apply equally to each member thereof. This law complies with this rule. It operates equally upon each member of the class. It applies equally to every city of the class having a population of 3,000 or more.31 Other cases are cited upholding classification by population, vt^ith respect to local improvements.^''^ 31 Johnson v. City of Milwaukee, 88 Macomb, 179 111. 163 ; Hager v. Gast,^ Wis. 383, 60 N. W. Rep. 270. 27 Ky. L. Eep. 129, 84 S. W. E«p. 556; 31a Bloomington v. Reeves, 177 111. Ross v. Chosen Freeholders, N. J, 161, 52 N. E. Eep. 278; Patterson v. , 55 Atl. Rep. 310. EESTEICTIONS ON LOCAL AND SPECIAL LEGISLATION. 895 Improper classification. 1731. A classification which is based on differences not prop- erly related to the purpose of the legislation, and which takes some of the subjects of legislation out of the class to which they belong, is not permissible, and the law making such a classification is special. This general statement requires illustration in order to be useful. Such an illustration is furnished by Xcvada cases, which are something like the Iowa cases just discussed. '^^ A cura- tive act which legalized the unauthorized acts of district attorneys, in suits prior to a certain daie, in consenting to judgments which 'in effect waived the right of the state to accrued penalties for non- payment of taxes imposed by the general law, was held invalid as a special law f^ and the same was held of an act which remitted the claims of the state for such penalties accrued prior to said date where the original tax was paid p-ior to that date; and a law which provided that judgments for taxes and penalties in which no execution had issued before a fixed date should be discharged upon payment of the original tax and other costs.^* 1732. Observe that in all three of these instances the basis of classification was some characteristic foreign to the nature of the act. Thus, in the first instance the effect was to distinguish between those delinquent taxpayers for whom the district attorneys had not waived the right to penalties and those for whom the district attorneys had waived the right; in the second instance the effect was to distinguish between those delinquents who had paid the tax before a certain date but had refused to pay the penalty, and those who had paid both tax and penalty before that date, and those who had paid neither tax nor penalty before that date; in the third instance the incidental circumstance whether or not an execution had issued before a fixed date was made the basis of classification. Whether or not an act forgiving delinquent taxes is uniform as to those taxpayers who are not delinquent, it is plain that the proper classification of such taxpayers should include all delin- quents, or at least all delinquents in some kind of taxes, real or personal, or the like. 1733. Another illustration of a basis of classification which had no reasonable relation to the purpose of the act is found in a New 32 § 1730. ^* State v. Consolidated Virginia 33 State V. California Mining Co., Mining Co., 16 Nev. 432. 15 Nev. 234. 896 CONSTITUTIONAL LAW OF TAXATION. Jersey law which provided for the incorporation, with certain ptiwers of government, including taxation, of " any township which is a seaside resort for summer visitors, embracing within an area not to exceed two square miles taxable property of the amount of $100,000 or more." This act was held to be a local and s23ecial law. The court said : The act in question is limited to a specified location . . . situation on the seaside. It is further restricted to places so situate which arc the resort for summer visitors, and is appli- cable only to places within these limitations in which taxable property to an amount of $100,000 or more is embraced within an area not to exceed two square miles, ilunicipal powers and franchises such as this act confers are as appropriate to places in an inland situation as to those located on the seashore, and are as suitable to localities inhabited or frequented by other individuals as to resorts for summer visitors. The act leaves population entirely out of view If taxable prop- erly, irrespective of population, be a proper classification on which to base a grant of municipal powers of the scope of those granted by this act, such property presents the same character- istics, wherever situate, as it possesses when located in seaside places frequented by summer visitors.^^ 1734. New Jersey is a state where the rule that the basis of classification must bear some reasonable relation to the purpose of the act is strictly enforced. This is shown in another decision. The legislature enacted a law for the government of " municipal- ities governed by commissioners." This act was held void, as no reason appeared for classifying municipalities by reference to their form of government. It was said : The act is one which attempts to grant certain corporate powers and to regulate the internal affairs of municipalities, and there is no substantial or natural reason that can be proved why its powers and privileges should be conferred upon municipalities governed hy commissioners, in exclusion of all other municipalities of like character governed otherwise.^^ 35 state ex rel. Stockton v. Mayor of owned and sold a waterworks and Somers Point, 52 N. J. L. ( 23 Vv, ) 32, have reserved the right to repurchase. 18 Atl. Rep. 694. In Minnesota a Thomas v. St. Cloud, 90 Minn. 477, separate classification of cities created 97 N. W. Rep. 124. Another was and dissolved by special act, with re- of counties which have at the time spect to the enforcement of their pub- expended $7,000 for courthouse pur- )ic debts, was lield to be arbitrary, no poses. Hetland v. Norman County, reason appearing for distinction be- 89 Minn. 492, 95 N. W. Eep. 305. tween them and other cities. Pepin S6 Dobbins v. Long Branch Commis- V. Sage, 129 Fed. Rep. 657. Another sioners, 30 Vr. (59 N. J. L.) 147, 30 invalid classification was of cities of Atl. Rep. 482. a certain population which have RESTRICTIONS ON LOCAL AND SPECIAL LEGISLATION. 897 1735. A classificaiion hy population, where the subjed-matler ■of the act had no reasonable relation to population, was recently iield void in Minnesota. The statute provided for the care and •cure of inebriates in counties having 50,000 population or more. It was held to be a special law. Said the court: Classification on the basis of population is proper for the pur- poses of legislation on certain subjects, but not upon all, and the precise question here to be determined is whether there is any apparent natural reason why the treatment of indigent inebriates at the expense of the public should be limited to the counties having a population of 50,000 or more, and all other counties excluded. Or, in other words, is there such a difference between urban and rural drunkenness, and its consequences to the drunk- ard, his family, and the public, as to naturally suggest the neces- sity or propriety of classification on the basis of population for the purpose of legislation upon the subject of the cure, at the cost of the public, of indigent inebriates? It would seem that this question must necessarily be answered in the negative.^'' Likewise in a recent Illinois case a law was held to be local and special which classified separately cities of between 20,000 and 50,000 people, giving to property owners in those towns rights with respect to loc.il improvements which were denied to all others in the state.^^" Also a separate classification of cities between 6,000 and 7,000 people, with respect to annexation of territory, was held to be arbitrary. ^^'' A classification with respect to an- nexation of territory of cities within a mile of each other, has heen upheld.^^*^ 1736. There are some decisions in Wisconsin containing lan- guage which might be construed to mean that the laws which were held in those decisions to be local and special were so held on the ground that a law classifying localities by population, which makes the law in fact applicable to but one city, is necessarily a local and special law. But an examination of those cases, some of which are he-re considered, shows that the real principle upon which they were decided was, not that such a classification might not be valid, but that in each case referred to the purpose of the law was one which bore no real relation to the basis of classifica- 37 Murray v. Board of County Com- 103 Am. St. Rep. 234, 72 N. E. Kep. missioners, 81 Minn. 359, 83 Am. St. 399. Eep. 379, 84 N. W. Eep. 103, 51 sib Longview v. Crawfordsville, L. R. A. 828. Ind. , 73 N. E. Rep. 78. 37a L'Hote V. Milford, 212 111. 418, 37c Little Rock v. North Little Rock, g/j- Ark. , 79 S. W. Rep. 785. CONSTITUTIONAL LAW OF TAXATION. tion. In one case a law which provided that in cities of more tlian 150,000 inhabitants certain percentages of the estates of decedents amounting to over $3,000 should be paid to the county treasurer for the use of the county was held invalid,^® there being but one such county in the state. Here it is plain that there was no adequate relation between the object of the law and the basis of classification, since no fair reason can be given why such ai:i act should not apply to the other counties. Such a law also is plainly lacking in uniformity. The same can be said of other cases.^* Laws applying to but one place. 1 737. A law which in express terms only applies to a specified territory or locality in the state is, of cou-rse, a local and special law. An act taxing bicycles in ten out of thirty-three counties of the state, for the construction and repair of highways, is a local law, and is prohibited by a restriction against local laws for high- way purposes.^** An act making a county, specified by name, a municipal corporation is a local and special law.*^ A law apply- ing to but one county, and regulating the place of taxation of shares of stock of corporations domiciled there, is a local and special law.*^ 1 738. A law which in its form is general, and which deals with a subject-matter which is a proper subject for general legislation, is not local or special by reason of the fact that but one, two, or three localities are so circumstanced as to be affected by it; and a classification of subjects of legislation or localities which creates a class into which but one locality or one subject of legislation falls is not thereby rendered local or special legislation. Common illustrations of this proposition are found in laws which classify cities for various governmental purposes by population, applying different regulations to each class; and such laws, creating classes in which there are in fact but one, two, or three cities in the state, are upheld.*^ 38 state ex rel. Sanderson v. Mann, 42 city of Baltimore v. Allegany- 76 Wis. 469, 45 N. W. Rep. 526, 46 County Commissioners, 99 Md. 1, 5T N. W. Rep. 51. Atl. Rep. 632. 39 Wagner v. Milwaukee County, 112 43 Kilgore v. Magee, 85 Pa. St. 401 ; Wis. 601, 88 N. W. Rep. 577. Commonwealth v. Moir, 199 Pa. St. 40 Ellis V. Frazier, 38 Oreg. 462, 63 534, 85 Am. SK Rep. 801, 49 Atl. Rep. Pae. Rep. 642, 53 L. R. A. 454. 351, 53 L. R. A. 837; State v. Rog- 41 Schweiss v. First Judicial Dis- ers, Minn. , 100 N. W, Rep. trict Circuit, 23 Nev. 226, 45 Pac. 659; State ex rel. Garrett v. Arnold, Rep. 289, 34 L. R. A. 602. 136 Mo. 446, 38 S. W. Rep. 79; State EESTBICTIONS ON LOCAL, AND SPECIAL LEGISLATION. 899 To say that no general law can be passed to regulate a certain subject because some of the classes contained in the regulatioit do not yet exist, or exist only in a limited number, is to hold that no law can be passed to regulate future wants or necessities.** 1739. But -where a classification of subjects or localities is wholly illusory, so that only one or some of all such localities or subjects can ever come into a given class, then the law making such a classification is local and special, however general in form it may be. Thus where a law with respect to the incorporation of cities applied in terms to " all cities which hy the census of 1885 " had a population of 30,000, there being but one city in the state which had that population at that census, the law was held void under a provision which prohibited local or special legislation for the incorporation of cities.*^ Supporting the same general prop- osition are the cases cited in the note.*® In Wisconsin a law which provided for the issue of bonds for certain purposes during the year 1897 by any city of the first class, was held to be local and special, there being but one city of that class in the state V. Speed, 183 Mo. 186, 81 S. W. Rep. 1260 ; Givens v. Hillsborough County, Fla. , 35 So. Rep. 88; Evans- ville, etc., Ry. Co. v. Terre Haute, 161 Ind. 26, 67 N. E. Rep. 686; Van Riper v. Parsons, 40 N. J. L. 123, 29 Am. Rep. 210; Rutgers v. Mayor, etc., of New Brunswick, 42 N. J. L. 51; Sun Printing, etc.. Association v. Mayor, etc., of New York, 8 App. Div. (N. Y.) 231, 40 N. Y. Supp. 607, 75 N. Y. St. Rep. 1 ; affirmed, 152 N. Y. 257, 46 N. E. Rep. 499, 37 L. R. A. 788 ; Kittenger v. Buffalo Traction Co., 160 N. Y. 377, 54 N. B. Rep. 1081; People ex rel. New York Elevated R. R. Co. V. Squire, 107 N. Y. 593, 1 Am. St. Rep. 893, 14 N. E. Rep. 820; Peo- ple V. Dunn, 157 N. Y. 528, 52 N. E. Rep. 572; State v. Board of Trustees, 121 Wis. 44, 98 N. W. Rep. 954. «Kilgore v. Magee, 85 Pa. St. 401. Illinois cases seem to deny this proposition. In People v. Knopf, 183 111. 410, 56 N. E. Rep. 155, and Knopf V. People, 185 111. 20, 76 Am. St. Rep. 17, 57 N. E. Rep. 22, a law which provided that in counties of 125,000 inhabitants or more where the aggregate of tax levies certified by the municipalities of the county to the county clerk exceeded five per cent, of the assessed valuation, the clerk should not extend the tax as certified, but should reduce the tax pro rata to five per cent., was held to- be a local and special act, since it plainly singled out Cook county, which was the only county in the state hav- ing such a population; hence the law violated a constitutional restriction against special and local laws. To' the same effect is Strong v. Dignan, 207 111. 385, 99 Am. St. Rep. 225, 69 N. E. Rep. 909. These cases go farther than those discussed in §§ 1739, 1740, and seem to be ] con- flict with the general current of au- thority. See §§ 1714 et seq., and 1736 as to Wisconsin cases. « State V. Des Moines, 96 Iowa, 521, 59 Am. St. Rep. 381, 65 N. W. Rep. 818, 31 L. R. A. 186. To the same eflfect is State v. Scott, Neb. , 100 N. W. Rep. 812. M State V. Ellet, 47 Ohio St. 90, 21 Am. St. Rep. 772, 23 N. E. Rep. 931, where an act which could never apply to more than one particular county was held to be special and local ; State V. Anderson, 44 Ohio St. 248, 6 X. E. Rep. 671 ; State v. Pugh, 43 Ohio St. 112, 1 N. E. Rep. 439; Devine v. Board of Commissioners, 84 111. 590; Topeka V. Gillett, 32 Kans. 431, 4 Pac. Rep. 800; State v. County Court, 89 Mo. 237, 1 S. W. Rep. 307; State v. Her- mann, 75 Mo. 340, where a law whicli 900 CONSTITUTIONAL LAW OF TAXATION. and no practical possibility that any other city could come into the class during that year/'^ 1 740. A law, classifying counties, which applied only to coun- ties of less than 200,000 inhabitants has been held to be local and special. It will not be presumed that counties will decrease in population, and the necessary result of such a classification is ■permanently to exclude the larger counties from its operation/* So a law regulating the collection of taxes, which authorized the owner of real estate in any county of less than 500,000 inhabitants, aggrieved by his assessment, to appeal to the Court of Common Pleas, was held to be local and special.*^ Laws containing exceptions. 1 741 . A law which operates generally, but which excepts cer- tain localities or subjects of the class upon which it operates from the application of the law ; or which creates classes of subjects or localities, but excepts certain members of one or more of the classes from its operation, is lacking in uniformity to the extent of the exceptions ; and to that extent is a local or special law.^" 1 742. It has been held, however, that a general act for the col- lection of taxes is not local or special because it contains a proviso to the effect that it shall not apply to any taxes the collection of which is regulated by a local law (such local laws having been passed before the enactment of the constitution forbidding them). Said the court: provided that the offices of all no- tion, according to the last census, of taries public, in cities of a certain not more than Ji^JtS or less than Jf540, population whose commissions bore were authorized to issue certain date prior to the passage of the act bonds. Of course the law was held and had not expired at such date, to violate a provision forbidding local should be abolished, was held to be a and special laws for the support of local and special act ; Coutieri v. common schools. School City of ilaj-or of New Brunswick, 44 N. J. L. Rushville v. Hayes, 162 lud. 193, 70 58;' Hallock v. HoUingsworth, 49 N.J. N. E. Rep. 134. L. 04, 6 Atl. Rep. 433; Freeholders of « Davis v. Clark, 106 Pa. St. 377. Hudson County v. Buck, 49 N. J. L. 49 City of Scranton v. Silkman, 113 228, 7 Atl. Rep. 860; In re Fagan, Pa. St. 191, 6 Atl. Rep. 146. N. J. , ."57 Atl. Rep. 469 ; State 50 Desmond v. Dunn, 55 Cal. 242 ; V. Boyd, 19 Nev. 43, 5 Pac. Rep. 735; Robinson v. Perry, 17 Kans. 248; McCarthy v. Commonwealth, 110 Pa. State v. Freeholders of Hudson County, St. 243, '20 Atl. Rep. 423; Matter of 50 N. J. L. 82, 11 Atl. Rep. 135; State Henneberger, 1 55 N. Y. 420, 50 N. E. v. Township of Northampton, 50 N. J. Rep. 61, 42 L. R. A. 132. L. 496, 14 Atl. Rep. 587; Matter of 47 Burnham v. City of Milwaukee, Henneberger, 155 N. Y. 420, 50 N. E. 98 Wis. 128, 73 N. W.' Rep. 1018. An- Rep. 61, 42 L. R. A. 132; Cleveland, other instance of wholly illusory class- etc., Ry. Co. v. Urbana, etc., Ry. Co., ification is seen in a law where school 26 Ohio Cir. Ct. Rep. 180; Slatmycr v. districts in cities having a popula- Spriugborn, 26 Ohio Cir. Ct. Rep. 100. BESTKICTIONS ON LOCAL AND SPECIAL LEGISLATION. 901 There is an obvious distinction between a statute -which upon its face is local or special, and one which, though general in form, is thus obstructed in its application (because the existence of prior unrepealed local laws prevents it taking general effect) ; in the one case the local law cannot become general, except by a re-enactment in general form; whilst, in the other, by the repeal of the local law, the special subject affected by it is brought under the general law, the operation of which was previously obstructed .^^ Special laws for the " assessment and collection of taxes." 1 743. Among the most frequent forms in "which the prohibition of local or special lavps appears, is the provision that local or special laws shall not be passed " for the assessment and collection of taxes ;" and in a number of instances the prohibition is more narrowly expressed, forbidding such laws " for the assessment and collection of taxes for state, county, township or road purposes." Such provisions are generally held to refer only to the mode or manner of assessment and collection^ and do not prevent the legis- lature from passing a local or special law authorizing a locality to lay a special tax for some particular purpose, not applicable to the other parts of the state. So long as the special tax which i? authorized is collected in the same manner as other taxes are col- lected, and by .the same uniform rule of valuation and rate as other taxes in the same taxing district, there is no violation of the prohibition.^^ 1744. Illustrating this proposition, in one of the cases cited, a law which authorized a named municipality to acquire a bridge and ferry and to levy a special tax to pay the expense incident to 51 Evans v. Phillippi, 117 Pa. St. buildings has been upheld, although 226, 2 Am. St. Rep. 655, 11 Atl. Rep. it excepted from its operations couri- 630; see Commonwealth v. Reynolds, ties in which building commissioners 137 Pa. St. 389, 20 Atl. Rep. 1011, 27 had previously been appointed. Dicl-c- W. N. C. 139, 38 Pittsb. L. J. 373. inson v. Hudson County, N. J. This distinction does not seem to be , 60 Atl. Rep. 220. very substantial. A law which allows 52 Marks v. Trustees of Purdue Uni- localities to bring themselves within versity, 37 Ind. 155 : City of Lafayette it by accepting its provisions is not v. Jenners, 10 Ind. 75 ; Anderson v. local or special. Commonwealth v. Kerns Drainage Co., 14 Ind. 199, 77 Middleton, 210 Pa. St. 582, 60 Atl. Am. Dec. 63; Kersey v. Terre Haute, Rep. 297. A general exception of a 161 Ind. 471, 68 N. E. Rep. 1027; whole class of cities from a law is Bacon v. Mulford, 41 N. J. L. 59 ; a classification which is valid if the Gibson v. Mason, 5 Nev. 283; Simon basis is reasonable. Schwartz v. v. Northup, 27 Oreg. 487, 40 Piv. Dover, N. J. , 57 Atl. Rep. Rep. 560, 30 L. R. A. 171; Oregon 394; Rose v. Beaver County, 204 Pa. City v. Moore, 30 Oreg. 215, 46 Pac. St. 372, 54 Atl. Rep. 563. A general Rep. 1017. law relating to erection of county 902 CONSTITUTIONAL LAW OF TAXATION. the purchase was upheld, although it was contended in opposition that it violated a constitutional prohibition of the character under 385, 31 N. W. Rep. 203; Common Ga. 49, 11 S. E. Rep. 802, 9 L. R. A. Council of Detroit v. Rentz, 91 Mich. 402; Brodnax v. Groom, 64 N. C. 244; 78, 51 N. W. Rep. 787, 16 L. R. A. Clarlc v. Jack, 60 Ala. 271; Harrison 59; White v. Hinton, 3 Wyo. 753, 30 v. Gordy, 57 Ala. 49. The present Pac. Rep. 953, 17 L. R. A. 66; Koehler constitution of Alabama (§ 106) V. Hill, 60 Iowa, 543, 15 N. W. Rep. gives the courts jurisdiction to in- G09. quire into the fact Wallace v. Board 19 Montgomery Beer Bottling Works of Revenue of Jefferson County, 140 V. Gaston, 126 Ala. 425, 85, Am. St. Ala. 491, 37 So. Rep. 321. Rep. 42, 28 So. Rep. 497, 51 L. R. A. 390. 922 CONSTITUTIONAL LAW OF TAXATION. to these provisions, however, in their application to these subjects, is deemed desirable. In most states provisions of this character are held to be man- datory. There are some cases, however, which regard them as only directory — addressed solely to the conscience of the legislature.^ 1816. The general object of such provisions, especially in their relation to taxation and contracting debt, is to prevent surrrepti- tious legislation of a kind that was formerly very common in American state legislatures. They are interpreted with this object in view. Accordingly, it is generally held that they do not prohibit bills upon a general subject, embracing all the matters which legitimately pertain to the subject. It is not required that each bill should deal literally with but one topic, making a gTeat number of separate bills out of what is properly but one subject-matter. This is fairly illustrated, in a matter of taxation, by a Texas law, which imposed a license tax upon the sale of liquors, classifying various methods of sale. The law was attacked, as embracing two subjects, to wit, taxation for general revenue and the exercise of the police power. It was upheld, upon the general principle, that although there may be more than one sub- ject mentioned in the act, if they are all germane or subsidiary to the main subject, and are not foreign to the main subject, or so long as the provisions are of the same nature and come legiti- mately under one general denomination or subject, the act is con- stitutional.^ 1817. In an Iowa case, the same principle was applied and an act which legalized certain invalid proceedings for the construction of levees, validated the warrants which had been issued for the work and the contracts which bad been made, and provided for the reassessment of the cost of the work upon the lands benefited, was upheld. The argument against the act was that legalizing the warrants and contracts was one subject and ordering the reassess- ment was another.^ Upholding the same general principle that the inclusion of sub- sidiary and germane subjects does not violate a constitutional pro- 22WaNliington v. Page, 4 Cal. 388; 23 Fahey v. State, 27 Tex. App. 146, Pierpont v. Crouch, 10 Cal. 315; Weill 11 Am. St. Eep. 182, 11 S. W. Rep. V. Krafipkl, 54 Cal. Ill; Miller v. 108. fState, 3 Ohio St. 475 ; Pirn v. Nichol- 24 Eichnian v. Supervisors of Mus- son, 6 Ohio Ht. 177; State v. Coving- catine County, 77 Iowa, 513, 14 Am. ton, 20 Ohio St, 102. St. Rep. 308, 42 N. W. Rep. 422, 4 L. R. A. 445. SUBJECTS AND TITI-ES OF ACTS. 923 vision requiring that a bill have but one subject, are the cases cited.2' Expression of subject in title. 1818. Whether or not the subject of an act is fairly expressed in its title is a question upon which common understanding fur- nishes all the guidance which is necessary. The object of the constitutional requirement, in this regard, is likewise to prevent surreptitious legislation. With this object in view, the rule of interpretation is plain, that any title which fairly describes the general pui-poses of the act is sufficient. It is not necessary that the title should set forth a schedule of all the matters referred to in the bill. If the legislature is fairly apprised of the general character of an enactment, by the subject expressed in the title, and all its provisions have a just and proper reference thereto, and are such as, by the nature of the subject so indicated, are manifestly appropriate in that connection, and as might reasonably be looked for in a measure of such a character, the requirement of the constitution is complied with. It matters not that the act embraces technically more than one subject, one of which only is expressed in the title, so that they are not foreisrn and ex- traneous to each other, but blend together in the common purpose evidently sought to be accomplished by the law.^® Speaking along similar lines the Supreme Court of Oregon said : The title is of little importance, except to index and fairly 25 state v. Sloan, 66 Ark. 575, 74 Duluth, 82 Minn. 127, 84 N. W. Eep. Am. St. Rep. 106, 53 S. W. Rep. 47 ; 788 ; State v. Cassidy, 22 Minn. 324, Jones V. Aspen Hardware Co., 21 Colo. 21 Am. Eep. 765; State ex rel. Can- 263, 52 Am. St. Rep. 220, 40 Pac. Rep. ton v. Allen, 178 Mo. 555, 77 S. W. 457, 29 L. E. A. 143; Farmers, etc.. Rep. 868; Paxton, etc.. Land Co. Co. V. Agricultural Ditch Co., 22 Colo. v. Farmers, etc.. Land Co., 45 Neb. 513, 55 Am. St. Rep. 149, 45 Pac. Eep. 884, 50 Am. St. Rep. 585, 64 N. W. 444; People v. Dunn, 80 Cal. 211, 13 Rep. 343, 29 L. R. A. 853; Perkins Am. St. Eep. 118, 22 Pac. Eep. 140; v. Heert, 158 N. Y. 306, 70 Am. St. Pioneer Irrigation District v. Bradley, Rep. 483, 53 aST. E. Rep. 18, 43 L. 8 Idaho, 310, 101 Am. St. Rep. 201, 68 R. A. 858; Johnson v. Harrison, 47 Pac. Rep. 295 ; Hronek v. People, 134 Minn. 575, 28 Am. St. Rep. 382, 50 N. 111. 139, 23 Am. St. Rep. 652, 24 N. W. Rep. 923 ; State v. Nomland, 3 N. E. Eep. 861, 8 L. E. A. 837 ; Cohn v. D. 427, 44 Am. St. Eep. 572, 57 N. W. People, 149 III. 486, 41 Am. St. Eep. Eep. 85; Simon v. Northup, 27 Oreg. 304, 37 N. E. Eep. 60, 23 L. E. A. 821; 487, 40 Pac. Rep. 560, 30 L. R. A. Blaker v. Hood, 53 Kans. 499, 36 Pac. 171; Campbell v. Cook, 86 Tex. 630, Rep. 1115, 24 L. R. A. 854; Los An- 40 Am. St. Rep. 878, 26 S. W. Rep. geles V. Spencer, 126 Cal. 670, 77 Am. 486; Commonwealth v. Brown, 91 Va. St. Rep. 217, 59 Pac. Rep. 202; State 762, 21 S. E. Rep. 357, 28 L. E. A. V. Karstendick, 49 La. Ann. 1621, 22 110; Lacey v. Palmer, 93 Va. 159, 57 So. Eep. 845, 39 L. E. A. 520 ; Feek v. Am. St. Rep. 795, 24 S. E. Rep. 930. Bloomingdale, 82 Mich. 392, 47 N. W. 20 State v. Cassidy, 22 Minn. 324, Kep. 37, 10 L. E. A. 69; Winters v. 21 Am. Rep. 765. 924 CONSTITUTIONAL LAW OF TAXATION. indicate tlie subject of legislation. Matters germane to or prop- erly connected with the subject, or mattei's of detail, have no place in the title, although the circumstance of their being found there affords no constitutional reason for rendering the act void or inoperative.^^ 1819. Upon the principles thus indicated it has frequently been held that generality in the title of an act does not render the act unconstitutional, so long as the title calls attention to tlie subject dealt with.^ The test with respect to generality has been stated by the Su- jjreme Court of Wisconsin as follows : When one, reading a bill with the full scope of the title in mind, comes upon provisions which he could not reasonably have anticipated, because of their being in no way suggested by the title in any reasonable view of it, they are not constitutionally covered thereby. But, in applying that rule, this other rule, which has been universally adopted, must be kept in mind: The statement of a subject includes, by reasonable inference, all those things which will or may facilitate the accomplishment thereof.^ 27 Northern Investment Trust v. Sears, 30 Oreg. 388, 41 Pac. Rep. 931, 35 L. R. A. 188. 28 City Council of Montgomerv v. Moore, 'l40 Ala. 638, 37 So. Rep. 291; Little v. State, 137 Ala. 659, 35 So. Rep. 134; State v. HasTub, 95 Ala. 176, 36 Am. St. Rep. 195, 10 So. Rep. 752, 15 L. R. A. 761 ; Babel v. People, 173 111. 19, 64 Am. St. Rep. 64, 50 N. E. Rep. 322 ; Donnersberger v. Pren- dergast, 128 III. 229, 21 N. E. Rep. 1 ; Pioneer Irrigation District v. Bradley, 8 Idaho, 310, 101 Am. St. Rep. 201, 68 Pac. Rep. 295; Pittsburg, etc., Ry. Co. V. Montgomery, 152 Ind. 1, 71 Am. St. Rep. 301, 49 N. E. Rep. 582; State v. Bowers. 14 Ind. 195; Commissioners of Perry County v. Lindeman, Ind. , 73 N. E.. Rep. 812; Sisson v. Su- pervisors of Buena Vista County, Iowa, , 104 N. W. Rep. 454; Re Schley, Kans. , 80 Pae. Rep. 031; Succession of Levy, La. , 39 So. Rep. 37; Schiller v. State, Fla. , 38 So. Rep. 706; State v. Brown. 41 La. Ann. 771, 6 So. Rep. 038 ; People v. State Insurance Co., 19 Mich. 392; Attorney-General V. Rice, 64 Midi. 385, 31 N. W. Rep. 203; CrooksUm v. County Com- missioners, 79 Minn. 283, 79 Am. St. E/ep. 453, 82 JS\ \'\'. Rep. 580; State V. Bockstruck, 136 Mo. 335, 38 S. W. Rep. 317; State v. Tibbets, 52 Xeb. 228, 66 Am. St. Rep. 492, 71 N. W. Rep. 990; Ex parte Livingston, 20 Xev. 282, 21 Pae. Rep. 322; Mort- land v. Christian, 52 N. J. L. 521, 20 Atl. Rep. 673; Boorum v. Connolly, 66 N. .J. L. 197, 88 Am. St. Rep. 469, 48 Atl. Rep. 955 ; People ex rel. Roch- ester V. Briggs, 50 X. Y. 553 ; Matter of Knaust, 101 X. Y. 188, 4 N. E. Rep, 338; Power v. Kitching. 10 N. Dak, 254, 88 Am. St. Rep. 691, 86 N. W, Rep. 737 ; In re Philadelphia Co., 210 Pa. St. 490, 60 Atl. Rep. 93 Memphis v. Hasting,s, Tenn. , 86 S. W. Rep. 009; Diana Shooting Club V. Lamoreu.\. 114 Wis. 44, 91 Am. St. Rep. 898, 89 X". W. Rep. 880; Jones- boro Citv v. Cairo, etc., Ry. Co., 110 U. S. 192, 28 L. ed. 116, 4 Sup. Ct. Rep. 67; Carter County v. Sinton, 120 U. S. 517, 30 L. ed. 701, 7 Sup. Ct. Rep. 050; Detroit v. Detroit Citi- zens' Street Ry. Co., 184 U. S. 368- 391, 46 L. ed. 592, 22 Sup. Ct. Rep. 410; Farm Investment Co. v. Carpenter, 9 \Yvo. 110, 87 Am. St. Rep. 918, 61 Pac. Rep. 258, 50 L. R. A. 747. 20 Diana Shooting Club v. Lamor- ru.x, 114 ^Yis. 44, 91 Am. St. Rep. SOS, 89 X. W. Rep. 880. SUBJECTS AND TITLES OF ACTS. 925 1820. Ilhistrating these princiiDles, are the following cases: An act entitled " An act to incorporate a railway company," speci- fying the name thereof, has been held to include all provisions which may reasonably have been considered to be designed to aid in forming the corporation and accomplishing the object thereof, including a grant of power to a municipal corporation to take stock in the company, to issue municipal bonds in payment thereof, and all necessary provisions with respect to taxation to raise money to pay the principal and interest on such bonds. ^^ An act entitled '* An act to incorporate the Firemen's Benevolent Association and for other purposes " has been held properly to include a provision requiring the agents of all foreign insurance companies doing business at the home of the association to pay two per cent, of all premiums received by them to the association for its nse.°^ But the contrary is also held.^^ An act entitled " An act to amend the charter of the Coving- ton and Cincinnati Bridge Company," was held properly to in- clude a grant of power to the company to sell part of its stock to the city, and a grant of power to the city to take the stock, issue its corporate bonds to pay for the stock, and levy and collect taxes to pay the bonds.^ An act entitled " An act to amend the charter " of a town " and to reincorporate " the same, properly includes a provision authorizing the city to issue bonds for munic- ipal purposes.^* An act entitled " An act to provide for estab- lishing, etc., public roads and bridges of the several coimties in the state " may include a provision appropriating funds to the re- pair of city streets. ^° 1821. A title reading "An act to set off from the township of Bloomfield, in the county of Essex, a new township, to be called 30 Mahomet v. Quackenbush, 117 U. 32 Henderson v. London, etc., Ins. S. 508. 29 L. ed. 982, 6 Sup. Ct. Rep. Co.. 135 Ind. 23, 41 Am. St. Rep. 410, 858; Schuyler Co. v. People, 25 111. 34 X. E. Rep. 565, 20 L. R. A. 827. 181-183 : Hope v. Gainesville, 72 Ga. 33 Phillips v. Covington, etc.j Bridge 246; Flovd v. Perrin, 30 S. C. 1, 8 Co., 2 Mete. (Ky.) 219. S. E. Rep. 14, 2 L. R. A. 242; Red 34 Judson v. Bessemer, 87 Ala. 240, River Furnace Co. v. Tennessee St. 6 So. Rep. 267, 4 L. R. A. 742. Ry. Co., Tenn. , 87 S. W. Rep. 35 Duval County Commissioners v. 1016. An act to incorporate a Union Jacksonville, 36 Fla. 196, 18 So. Rep. Depot Company, may authorize rail- 339, 29 L. R. A. 416. An act entitled roads to take its stock and guarantee "An act 'concerning gravel and maead- its bonds. Riley v. Charleston Union amized roads " may authorize im- Station Co., 71 S. C. 457, 51 S. E. provements in such roads, assessment'^ Rep. 485. to pay for them, and procedure to 31 Firemen's Benevolent Assoc, v. determine the justness of the assess- Lounsbury, 21 111. 511, 74 Am. Dec. ments. Bowlin v. Cochran, 161 Ind. 115. 486. 69 N. E. Rep. 153. 926 CONSTITtlTIONAL LAW OF TAXATION. the township of ]\Iontclair," is held to be siiiScient to cover pro- visions for the fiscal management of the township, including pro- visions authorizing the issue of bonds. Said the United States Supreme Court: The powers which the township of Montclair is authorized to exert, however varied or extended, constitute, within the mean- ing of the constitution, one object, which is fairly expressed in a title showing the legislative purpose to establish a new or inde- pendent township. It is not intended by the constitution of New Jersey that the title to an act should embody a detailed statement, nor be an index or abstract of its contents. The one general object — ihe creation of an independent municipality — being expressed in the title, the act in question properly em- braced all the means or instrumentalities to be employed in accomplishing that object.^® An act entitled " An act to enable park commissioners having control of any boulevard or driveway bordering upon any public waters of this state to extend the same," may properly provide for the sale of lands to defray the expenses of the proposed im- provements.^'^ An act entitled " An act to promote the horticul- tural interests of the state," may properly contain provisions for the appointment of a horticultural commission in each county, and provisions fixing their compensation, defining their powers and making the expense of destroying insects a lien on the premises affected.^® An act entitled " An act to authorize the incorporation of rural cemetery associations and regulate ceme- teries," may properly include an exemption from taxation of as- sociations formed under the act.*® An act entitled "An act con- cerning drainage," or " An act to provide for establishing, con- structing and maintaining drains in this state " may include pro- visions for assessing the expense of drains on property benefited and for the collection of such assessments and for the collection of attorney's fees.*" " An act to provide for the erection of a state capitol," may authorize the building of a state capitol upon 36 Montclair v. Ramsdell, 107 U. S. 126 Cal. 670, 77 Am. St. Eep. 217, 59 147, 27 L. ed. 431, 2 Sup. Ct. Rep. 391. Pac. Eep. 202. Ts same general effect Paige v. Gross 39 Newark v. Mount Ple-asant, etc., Pointe Twp., 134 Mich. 524, 96 N. W. Co., 58 N. J. L. 168, 33 Atl. Rep. 396. Rep. 1077; Oak Cliff v. State, Tex. « Ross v. Davis, 97 Ind. 79; Wish- , 79 S. W. Rep. 1. mier v. State, 97 Ind. 160; Martin v. 37 People V. Kirk, 162 111. 138, 53 Tyler, 4 N. Dak. 278, 60 N. W. Rep. Am. St. Eep. 277, 45 N. E. Rep. 830. 392, 25 L. R. A. 838. See Gaare v. 38 Los Angeles County v. Spencer, Clav County, 90 Minn. 530, 97 N. W- Rep. 422. SUBJECTS AND TITLES OF ACTS. 92/ grounds now occupied by a penitentiary, and may also authorize a penitentiary board to procure new grounds and build a new penitentiary.*^ 1821a. It seems to be the rule that the repeal of a statute on any subject is germane to the subject-matter of a new law relating to the same subject ; hence the repeal need not be expressly men- tioned in the title of the act.*^ A provision in an amendatory act repealing a statute not connected with the subject of the amend- ment has been held void.*^ A provision for a new assessment where one assessment is invalid h^s been held to be germane to the subject of such assessment.** 1822. There is a limit, however, to the rule allowing general- ity in a title. Such words, for instance, as " for other purposes," " and so forth," are regarded as meaning nothing. As was said by the Supreme Court of New York, they are to be laid " out of consideration." *° A curative act, intended to legalize imau- thorized proceedings of the common council of a particular city, but entitled generally, without naming^ the city, has been held void.*^ An act which attempts to legalize bonds under a title authorizing their issuance is bad.*' An act " to incorporate cities of the first class, and regulating their duties, powers and govern- ment," may not include a provision forbidding the granting of injunctions to restrain the levy and collection of a special tax or assessment to pay the cost of any city improvement.** A title which among other phrases included the words " An act to amend an act in relation to the city of Troy, the government of said city, and to create a municipal improvements commission, and to define its powers and duties," etc., is not broad enough to sustain a provision changing the personnel of the commission.**^ An act 41 State' V. Sloan, 66 Ark. 575, 74 Co., 22 Barb. 634 ; Johnston v. Spicer, Am. St. Rep. 106, 53 S. W. Rep. 47. 107 N. Y. 185, 13 N. E. Rep. 753 ; *2 Commonwealth v. Moir, 199 Pa. Lacey v. Palmer, 93 Va. 159, 57 Am.- St. 534, 85 Am. St. Rep. 801, 49 Atl. St. Rep. 795, 24 S. E. Rep. 930, 31 Rep. 351, 53 L. R. A. 837; Philips L. R. A. 822; Ryerson v. Utley, 16 V. Earnhardt, 27 Pa. Super. Ct. 21; Mich. 269, see St. Louis v. Tiefel, 42 Guilford v. Cornell, 18 Barb. 615; Mo. 578 ; Spier v. Baker, 120 Cal. 370, Quarles v. Sparta, 2 Tenn. Ch. App. 52 Pac. Rep. 659, 41 L. R. A. 196; but 714. see Butner v. BoifeuUet, 100 Ga. 743, 43 State V. Lancaster County, 17 28 S. E. Rep. 464. Neb. 85, 22 N. W. Rep. 228. 4eDurkee v. Janesville, 26 Wis. 697. 44 West Chicago Park Commission- 47 Hamlin v. Meadville, 6 Neb. 234. ers V. Sweet, 167 111. 326, 47 N. E. 48 Towgalin v. Omaha, 25 Neb. 817, Rep. 278; West Chicago Park Com- 41 N W. Rep. 796. missioners v. Farber, 171 111. 146, 49 48a Cahill v. Hogan, 180 N. Y. 304, N. E. Rep. 427. 73 N. E. Rep. 39, affirming 99 App. 46 Town of Fishkill v. Fishkill, etc., Div. 619, 90 N. Y. Supp. 1091. 928 CONSTITUTIONAL LAW OF TAXATION. entitled an act to provide for the government of cities which pre- scribes the dnties of a county treasurer with respect to certain county funds, is bad.**'' 1823. Including unnecessary statements of detail in the title of an act does not render it void, if the general subject is fairly stated, and the details are such as properly pertain to the general subject,*'* It is not a valid objection to an act that the title is broader than the body of the enactment. The danger to be avoided is making the act broader than the title.*" Where a subject is expressed in the title and not contained in the body of the acr, the expression in the title may be treated as surplusage.*'' In the note are cited some cases where unnecessary details were stated in the titles of acts, which acts were upheld.*^ 1824. Sometimes it occurs that the title of an act is conceded to be broad enough fully to cover the contents ; and the question is, docs the act thus entitled deal with two distinct subjects ; in other words, does the title state more than one distinct subject? The principles already stated govern this question. If the sup- posedly different subjects stated in the title are in fact separate and independent topics of legislation, the act is bad; but if 4Sb Wheeler v. State, Neb. 102 N. W. Rep. 773; State v. Case, Wash. , 81 Pae. Rep. 554, and State V. Coffin, Idaho, , 74 Pae. Rep. 902, to same general effect. *9 State V. Jacksonville, etc., Co., 41 Fla. 363, 27 So. Rep. 221; State Board V. Fowler, 50 La. Ann. .1358, 24 So. Rep. 809; Phinney v. Sheppard, etc., Hospital, 88 Md. 633, 42 Atl. Rep. 58. 50 Boyer v. Grand Rapids Fire Ins. Co., 124 Mich. 455, 83 Am. St. Rep. 338, 83 N. W. Rep. 124 ; State v. Burg- doerfer, 107 Mo. 1, 17 S. W. Rep. 646, 14 L. R. A. 846. 51 Judson V. Bessemer, 87 Ala. 240, 6 So. Rep. 267, 4 L. R. A. 742 ; Gandy \. State, 80 Ala. 20, 5 So. Rep. 420. 52 Farmers, etc., Co. v. Agricultural, etc., Co., 22 Colo. 513, 55 Am. St. Rep. 149, 45 Pae. Rep. 444; Frost v. Pfeiffer, 26 Colo. 338, 58 Pae. Rep. 147; State V. Green, 36 Fla. 154, 18 So. Rep. 33; Starnes v. Mutual, etc., Co., 102 Ga. 597, 29 S. E. Rep. 452; Macon v. Hughes, 110 Ga. 795, 36 S. E. Rep. 247; Babel v. People, 174 111. 19, 64 Am. St. Rep. 64, 50 N. E. Rep. 322, 43 L. R. A. 210; Central, etc., Co. v: Fehring, 146 Ind. 189, 45 N. E. Rep. 64; Maule, etc., Co. v. Partenheimer, 155 Ind. 100, 55 N. E. Rep. 751; Aik- man v. Edwards, 55 Kans. 751, 42 Pae. Rep. 366, 30 L. R. A. 149 ; In re Greer, 58 Kans. 268, 48 Pae. Rep. 950 ; State V. Karstendiek, 49 La. Ann. 1621, 22 So. Rep. 845; Brown v. Providence, La. , 38 So. Rep. 478 ; McMorran v. Great Hive, 117 Mich. 298, 75 N. W. Rep. 943; Perkins v. Heert, 158 N. Y, .3K)6, 70 Am. St. Rep. 483, 53 N. E. Rep. 18, 43 L. R. A. 858; Northern Invest- ment Trust V. Sears, 30 Oreg. 388, 41 Pae. Rep. 931, 35 L. R. A. 188; Nottage V. Portland, 35 Oreg. 539, 76 Am. St. Rep. 513, 58 Pae. Rep. 883; State V. Yardley, 95 Tenn. 546, 32 S. W. Rep. 841, 34 L. R. A. 656; Cooper V. Shelbyville (Tenn. Ch. App.), 57 S. W. Rep. "429; McMeans v. Fin- ley, 88 Tex. 515, 32 S. W. Rep. 524; Ex parte Brown. 38 Tex. Cr. Rep. 295, 70 Am. St. Rep. 743, 42 S. W. Rep. 554 ; Geer v. Commissioners, 97 Fed. Rep. 435; Seattle Dock Co. v. Seattle, etc., Waterway Co., 35 Wash. 503, 77 Pae. Rep. 845, affirmed, 195 U. S. 624, 49 L. ed. , 25 Sup. Ct. Rep. 789; Baker v. Kaiser, 126 Fed. Rep. 317. SUBJECTS AISTD TITLES OF ACTS. 929 they may be regarded as germane to each other, so as in reality to constitute but one subject, the act is good. This is only an- other way of saying that unnecessary statements of detail in the title do not make the act bad.^^ Illustrating, see the cases discussed in sections 1816, 1817-- 1823. An act of the legislature of Iowa has been upheld, entitled: *" An act to authorize independent school districts to borrow money and issue bonds therefor, for the purpose of erecting and complet- ing schoolhouses, legalizing bonds heretofore issued, and making school orders draw six per cent, interest in certain cases/' ®* Likewise acts entitled as follows have been upheld, as contain- ing but one subject: An act providing for the appointment of superintendents of irrigation for the water districts of this state; fixing their com- pensation and providing for the pa5rtnent thereof; prescribing their duties and requiring a bond for the faithful performance of each; requiring clerks of district courts to furnish superin- tendents with certain certified decrees, and providing for the pa3'ment of such clerks' fees.^° An act to change in part the compensation and mode of pay- ment thereof to the county clerks, recorder of conveyances, clerks of the circuit and county courts in the state and of the sheriffs of the several counties; to repeal certain provisions of statute providing for the payment of certain fees to said officers and of trial fees in certain cases; to provide for the payment by parties to appeals, actions, suits and proceedings of certain sums to assist the state and the several counties in defraying expenses consequent upon the administration of justice ; to pro- vide for the appointment of deputies for the various ofiBeers above enumerated and for their compensation; and lor the payment to the state and several counties of sums of money and fees paid to said officers by parties litigant.^^ 1825. Unless the constitution expressly prescribes otherwise, the general rule seems to be that an amendatory act is sufficiently entitled if it refers with reasonable certainty to the act which 63 See i 1823 and cases there cited, eral effect. Weed v. Goodwin, 36 Wask. 54Ackley School District v. Hall, 31, 78 Pac. Rep. 26; Borden v. Tres- 113 U. S. 135, 28 L. ed. 954, 5 Sup. Ct. palacios, Tex. , 86 S. W. Rep. Eep. 371. 11- 55 Farmers, etc., Co. v. Agricultural, 56 Northern Investment Trust v. etc., Co., 22 Colo. 513, 55 Am. St. Rep. Sears, 30 Oreg. 388, 41 Pac. Rep. 931, 149, 45 Pac. Rep. 444. To same gen- 35 L. E. A. 188. 59 930 CONSTITUTIONAL, LAW OF TAXATION. is sought to be amended, by some such title as an " act to amend "■ some designated act or statute. ^'^ In order that aa act entitled an act to amend some other act, or the like, may be upheld, it is necessary that the subject-matter of the amendatory act shall be germane to the subject-matter of the original act, or the amendatory act will be bad. In the note are cited some cases illustrating this proposition.'* Where the amendatory act is restricted in its title to certain specified sections or statutes, the act must be restricted in its 6T Thomas v. State, 124 Ala. 48, 27 v. Long, 21 Mont. 26, 52 Pac. Rep. So. Rep. 315; Lewis v. State, 123 Ala. 645; American Surety Co. v. Great 84, 26 So. Rep. 516; People V. Parvin, White Spirit Co. (N. J.), 43 Atl. 74 Cal. 549, 16 Pac. Rep. 490; Car- Rep. 579; Schmalz v. Woolley, 57 N, penter v. Furrey, 128 Cal. 668, 61 Pac. J. Eq. 303, 73 Am. St. Rep. 637, 41 Rep. 369; Butte County v. Merrill, Atl. Rep. 939, 43 L. R. A. 86; People 141 Cal. 396, 74 Pac. Rep. 1036; ex rel. Rochester v. Briggs, 50 N. Y. School District v. School District, 553 ; Dyker Meadow Land, etc., Co. v. Colo. , 78 Pac. Rep. 790; Clay v. Cook, 3 App. Div. (N. Y.) 164, 38 Central Ry. Co., 84 Ga. 345, 10 S. E. N. Y. Supp. 222; David v. Portland, Rep. 967 ; Bagwell v. Lawreneeville, etc., Co., 14 Greg. 98, 12 Pac. Rep. 94 Ga. 654, 21 S. E. Rep. 903; 174 ; State v. Robinson, 32 Greg. 43, 48 Fitts V. City of Atlanta, 121 Ga. Pac. Rep. 357; Philadelphia v. Ridge, 567, 49 S. E. Rep. 793, 67 L. R. A. etc., Ry. Co., 142 Pa. St. 484, 24 Am. 803; Bush v. Indianapolis, 120 Ind. St. Rep. 512, 21 Atl. Rep. 982; In 476, 22 N. E. Rep. 422 ; Green- re Rogers, 192 Pa. St. 97, 43 Atl. Rep. castle, etc., Co. v. State, 28 Ind. 382; 475; Bridgewater y. Big Beaver Bridge Guaranty, etc., Assn. v. Ascherman, Co., 210 Pa. St. 105, 59 Atl. Rep. 108 Iowa, 150, 78 N. W. Rep. 723; 697; State v. Runnells, 92 Tenn. 3.20, Hoskins v. Crabtree, 103 Ky. 117, 82 21 S. W. Rep. 665; State v. Brown, Am. St. Rep. 576, 44 S. W. Rep. 434; 103 Tenu. 449, 53 S. W. Rep. 727; State V. Reed, 49 La. Ann. 1535, 22 Fehr v. State, 36 Tex. Cr. Rep. 93, 35 So. Rep. 761; Fullilove v. Police S. W. Rep. 381; Nichols v. State, 32 Jury, 51 La. Ann. 359, 25 So. Rep. Tex. Cr. App. 391, 23 S. W. Rep. 680; 302; State v. Fox, 51 Md. 412; Com- State v. McCracken. 42 Tex. 383; Eng- stock V. Judge of Superior Court, 39 lish, etc., Co. v. Hardy, 93 Tex. 289, Mich. 195; Kelly v. Minneapolis, 57 55 S. W. Rep. 169; Commonwealth v. Minii. 294, 47 Am. St. Rep. 605, 59 Brnwii. 91 Va. 762, 21 S. E. Rep. 357, N. W. Rep. 304; Winona v. School 28 L. R. A. 110. District, 40 Minn. 13, 12 Am. St. Rep. 58 Fish v. Stockdale, 111 Mich. 46, 087. 41 N. W. Rep. 539, 3 L. R. '\. -ifi; 69 N. W. Rep. 92; Miller v. Hurford, Willis V. Mabon, 48 Minn. 140, 31 Am. 11 Neb. 377, 9 N. W. Rep. 477; State St. Rep. 626, 50 N. W. Rep. 11 iO, 16 v. Pierce County, 10 Neb. 476, 6 N. W. L. R. A. 281; State v. Madson, 43 Rep. 763; Trumble v. Trumble, 37 Minn. 438, 45 N. W. Rep. 586 ; Ward Neb. 340, 5o N. W. Rep. 869 ; Burling- V. Board of Equalization, 135 Mo. 309, ton, etc., Ry. Co. v. Saunders Countv, 36 S. W. Rep. 648; State v. Marion 9 Neb. 507, 4 N. \Y. Rep. 240; State County Court, 128 Mo. 427, 30 S. W. v. Tibbets, 52 Neb. 228, 66 Am. St. Rep. 103; De Both v. Rich Hill, etc., Rep. 492, 71 N. W. Rep. 990; New Co., 141 Mo. 497, 42 S. W. Rep. 1081 ; York, etc., Rv. Co. v. Montelair, 47 State V. Cornell, 50 Neb. 526, 70 N. W. N. J. Eq. 591. 21 Atl. Rep. 493; Rep. 56 ; Henry v. Ward, 49 Neb. 392, Harper v. State, 109 Ala. 28, 19 So. 68 N. W. Rep. 518; In re White, 33 Rep. 857 ; Adams v. San Angelo Water- Neb. 812, 51 N. W. Rep. 287; Hotch- works Co., 86 Tex. 485, 25 S. W. Rep. kiss V. Marion, 12 Mont. 218, 29 Pac. 605. In a recent Iowa case a title Rep. 821 ; State v. Anaconda, etc., Co., reading "An act to revise, amend and 23 Mont. 498, 59 Pac. Rep. 854; State codify the statutes in relation to SUBJECTS AND TITLES OF ACTS. 931 scope to matter germane to the subject of those statutes or sec- tions which are specified in the title."^ In many states the constitutions forbid amendments by refer- ence merely to the titles of the acts amended. Discussion of these provisions belongs to works on general constitutional law, rather than to this work. The present discussion has gone suiSciently far bej'ond the subject-matter of this book. 1826. Where an act is bad because it is broader than its title, that is, where it contains matter not germane to its title, that part which is germane to the title will be allowed to stand, and that part which is not germane to the title will be rejected, if the act is in such form that a separation can be made.*^" In some states this rule is expressed in the constitution itself.®* Where, however, the act contains two subjects, both of which are expressed in the title, it is bad under a constitution which requires a bill to have but one subject, for it is impossible in such case to determine which subject is to have preference.*^ An act entitled " An act to provide for the encouragement of the manu- facture of sugar and chicory " has been held bad for duplicity of subject.*^" crimes and their punishment" was 56 N. Y. 261; Matter of Metropolitan held to be broad enough to include a Gas Light Co., 85 N. Y. B26 ; State v. prohibition on the sale of cigarettes, Read, 49 La. Ann. 1535, 22 So. Rep. and a clause laying a tax of $300 761; lacey v. Palmer, 93 Va. 159, 57 on premises where cigarettes were Am. St. Rep. 795, 24 S. E. Rep. 930, sold and making it a lien on the 31 L. R. A. 822; Watkins v. Bigelow, property. Cook v. Marshall County, 93 Minn. 210, 100 N. W. Rep. 1104. 119 Iowa, 384, 104 Am. St. Rep. 283, 6i State v. Nowland, 3 N. Dak. 427, 93 N. W. Rep. 372. 44 Am. St. Rep. 572, 57 N. W. Rep. 59 People ex rel. Corseadden v. 85. Howe, 177 N. Y. 499, 69 N. E. Rep. •» Ritchie v. People, 155 111. 98, 46 1114; State v. Southern, etc., Ry. Co., Am. St. Rep. 315, 40 N. E. Rep. 454, 115 Ala. 250, 22 So. Rep. 589 ; State 29 L. R. A. 79 ; Ballentyne v. Wieker- V. Tibbetts, 52 Neb. 228, 66 Am. St. sham. 75 Ala. 533; State v. Ferguson, Rep. 492, 71 N. W. Rep. 990; Watkins 104 La. 249, 81 Am. St. Rep. 123, V. Bigelow, 93 Minn. 210, 100 N. W. 28 So. Rep. 917; Moore v. Police Jury, Rep. 1104; Cahill v. Hogan, 180 N. Y. 32 La. Ann. 1015; State v. Harrison, 304, 73 N. E. Rep. 39. ' 11 La. Ann. 722; Antonio v. Gould, 34 eo Bohmer v. Haffen, 161 N. Y. 390, Tex. 49 ; State v. McCracken, 42 Tex. 55 N. E. Rep. 1047; Matter of New 383. York, etc., Bridge Co., 148 N. Y. 540, 62a Oxnard Beet Sugar Co. v. State, 42 N. E. Rep. 1088 ; People v. Briggs, Neb, , 102 N. W. Rep. 80. 50 N. y. 553; Matter of Van Antwerp, CHAPTER XXVT. RETROSPECTIVE LAWS. 1827. Scattered through this book are references to retrospec- tive laws of various kinds, with more or less discussion of their validity. Among the classes of laws which are considered in this respect are acts which profess to cure defects in past proceedings, acts relevying assessments which have been held void, acts seek- ing to reach property which has escaped taxation in past years, arrearage acts, acts taxing successions which have taken place in the past, acts imposing upon counties or cities to which territory has been added the previous debts incurred by that territory, and vice versa, acts annexing territory to municipalities and subjecting such territory to the municipal burdens already existing, and acts providing that the valuation of property for purposes of taxa- tion shall be made at long intervals of time, instead of annually. Reference to the parts of this ^^•ork in which these subjects are considered may be had for detailed discussions.'' Here it is proposed to notice briefly the general subject of the legislative power to enact retrospective laws with respect to taxa- tion and the imposition of public burdens. In this notice the phrase " vested rights" quite commonly used in connection with the topic, is purposely avoided. It is one of those phrases in which is summed up a variety of meanings; it connotes a number of great, yet vague, ideas. This very large- ness o:^ scope which the phrase has come to have renders it usel^s in any attempt at precise thought ; and while precise thought in such matters is of course impossible, yet some precision is gained by the avoidance of terms which import vagueness. 1828. Retrospective laws are here understood to be laws which decree consequences or create liabilities, arising out of facts which existed or transactions which took place before the enactment of the laws; and which consequences or liabilities did not by law exist with respect to such facts or transactions, at the times the facts existed or the' transactions took place. 1 For decisions as to curative acts posing past debts on new territory in generally, reassessments, reaching cases of annexation or division of mu- property which has escaped taxation nicipal subdivisions, §§ 482 to 503 et and arrearages, see chap. XVII, seq.; and see also the index as to all §§ 1247 to 1299; as to taxing past sue- these matters, cessions, §§ 1490 to 1502; as to im- [932] EBTROSPECTIVB LAWS. 933 Thus a law validating irregularities in a past bond issue or tax proceeding is a retrospective law, because it creates a liability on the part of the taxpayer where no legal liability existed before ; and that liability is based upon past acts, which atthe time they took place were not sufficient to cause a liability. Where the constitution does not expressly forbid retrospective laws, the mere fact that a tax law is retrospective does not of itself render the law invalid, either as a violation of contract or a deprivation of property without due process ; for, in the absence of other objections, the legislature may make past facts the basis of its action, as well as facts which have not yet occurred.^ Thus the legislature may make facts which have occurred in the past the basis of present liability for taxes, as where the valu- ation of past years is taken as the basis of present assessment,^ or where an improvement made in the past has been made the basis of a present special assessment.* 1 829. It is so well settled as to require little citation of author- ity, that constitutional provisions forbidding ex post facto laM'S apply only to laws respecting crimes and criminal punishments; and have no application whatever to other retroactive legislation.* These provisions, therefore, have no application to tax laws; except that a law which should provide a punishment such as arrest and imprisonment for the violation of a tax law, or, in the case of license or occupation taxes, should make the carrying on of some business, or the doing of some act, without payment of the tax, a misdemeanor, would probably be an ex post facto law if made applicable to acts done before its passage.* 2 League v. Texas, 184 U. S. 156, 3 Locke v. New Orleans, 4 Wall. 40 L. ed. 478, 22 Sup. Ct. Eep. 475; 172, 18 L. ed. 334; Frellsen v. Mahan, Curtis V. Whitney, 13 Wall. 68, 20 21 La. Ann. 104; see Crozer v. Peo- L. ed. 513; Locke v. New Orleans, 4 pie, 206 111. 464. 69 N. E. Eep. 489. Wall. 172, 18 L. ed. 334; Dixon v. 4 Spencer v. Merchant, 125 U. S. Mayor, etc., of Jersey City, 37 N. J. L. 345, 31 L. ed. 763, 8 Sup. Ct. Rep. (8 Vr.) 39; Sturges v. Carter, 114 U. 921, affirming 100 N. Y. 585, 3 N. E. S. 511, 29 L. ed. 240, 5 Sup. Ct. Rep. Eep. 682; Lombard v. West Chicago 1014; Baltimore, etc., Ry. Co. v. Nes- Park Commissioners, 181 U. S. 33, 45 bit, 10 How. 395, 12 L. ed. 469; Mu- L. ed. 731, 21 Sup. Ct. Eep. 507. af- nieipalityv. Wheeler, 10 La. Ann. 745; firming 181 III. 136, 54 N. E. Rep. New Orleans v. Poutz, 14 La. Ann. 941 ; Seattle v. Kelleher, 195 U. S. 351, 853; St. Louis V. Clemens, 52 Mo. 133 : 49 L. ed. . 25 Sup. Ct. Eep. 44; Howell V. City of Buffalo, 37 N. Y. Warren v. Boston, 187 Mass. 290, 72 267; Sehenlev v. Commonwealth, 36 N. E. Eep. 3022. See § 2003. Pa. St. 29, 78 Am. Dec. 359; State 6 Calder v. Bull, 3 Dall. 386, 1 L. ex rel. American Savings Union v. ed. 648. Whittlesey, 17 Wash. 447, 50 Pac. Rep. 6 Along this line of thought see Fal- 119; and see §§ 1247 to 1299 and 482 coner v. Campbell, 2 McLean, 195, to 503 et seq., and cases there cited. I'ed. Cas. No. 4,020: Wilson v. Ohio, 934 CONSTITUTIONAL LAW OF TAXATION. 1 830. The contract clause of the constitution has not been con- strued in such a manner as to limit the power of the states to enact retrospective tax laws of the kind under discussion. While that clause protects executed as well as executory contracts/ the application of the clause to the subject seems to have been restricted to the express contracts of the state or its agencies to tax or not to tax.^ There is no contract between the state and the individuals subject to its jurisdiction, with respect to the exercise of the taxing power, implied out of their relations. Taxes are not debts; the imposition of taxes and giving relief from their burdens are governmental acts, as to which the contract clause of the constitution has no application, unless by express agreement.* Of course contracts may arise .between the state and the citizen, in the execution of the tax laws ; such as the contract which arises by virtue of a tax sale or tax deed. As to these contracts, the gen- eral rule is that retrospective acts changing the remedy of the individual are valid, and do not amount to impairment of the obli- gation merely because they enhance the difficulty of performance as to one party, or diminish it as to the other. Thus a statute ^vhich requires the holder of a tax certificate to give notice to the occupant of the land, before he takes his tax deed, does not impair the obligation of a contract, although at the time the certificate was issued the law imposed no such obligation /° and a law which denied to purchasers at tax sales, held more than eight years before the law was passed, the right to compel a conveyance, unless action was brought within six months after the passage of the act, and which directed the cancellation of all tax sales made more than eight years before, upon which no conveyance had been given and as to which no action should be commenced within six months, was upheld. ^^ The legislature, however, cannot retroactively extend or etc., Ry. Co., 64 111. 542; Cummings U. S. 156, 46 L. ed. 478, 22 Sup. Ct. V. Missouri, 4 Wall. 277, 18 L. ed. 356 ; Rep. 475; De Pauw v. City of New French v. Deane, 19 Colo. 504, 36 Pac. Albany, 22 Ind. 204-206 ; Perry v. Rep. 609, 24 L. R. A. 387, not cases Washburn, 20 Cal. 318; Finnegan v. with respect to taxation; Dixon v. Fernandina, 15 Fla. 379, 21 Am. Rep. Mayor, etc., of Jersey City, 37 N. J. 292 ; Morris v. Lalaurie, 39 La. Ann. L. (8 Vr.) 39-43. 47, 1 So. Rep. 659; Peiree v. Boston, T Fletcher v. Peck, 6 Cranch, 87, 3 Mete. (Mass.) 520 ;_ Johnson v. How- 3 L. ed. 162. ard, 41 Vt. 122, 98 Am. Dee. 568. 8 See chap. XII. 10 Curtis v. Whitney, 13 Wall. 68, 9 Essex Public Road Board v. 20 L. ed. 513; Oullahan v. Sweeney, Skinkle, 140 U. S. 334, 35 L. ed. 446, 79 Cal. 537, 12 Am. St. Rep. 172, 21 11 Sup. Ct. Rep. 790; Garrison v. New Pac. Rep. 960. York, 21 Wall. 196, 22 L. ed. 612; 11 Wheeler v. Jackson, 137 U. S. rommissioners v. Lucas, 93 tJ. S. 108, 24.5, 34 L. ed. 659, 11 Sup. Ct. Rep. •23 L. ed. 82:2; League v. Texas, 184 7C; see Coulter v. Stafford, 56 Fed. EETROSPECTIVE LAWS. 935 shorten the time of redemption from tax sales, for in such case the purchaser's contract would be violated. ^^ It was held in California that a retroactive law which imposed greater penalties upon the right of redemption from tax sales than existed at the time of the sale was invalid ;^^ and in Illinois, that a retrospective iict which validated tax sales void by reason of the unlawful fail- ure of purchasers to pay their bids was beyond the legislative power.-'* 1831. With respect to due process of law, it is hardly possible to lay down any rule worth anything as to what retrospective acts violate it. We have seen that such acts curing irregularities, acts taxing omitted property, arrearage acts, acts altering the remedy for collection, are upheld. Perhaps as near an approximation to a general rule as can be made is as follows : A retrospective act which merely creates liabilities in the gen- eral nature of ordinary tax burdens, such, for illustration, as a reassessment of a void assessment, or the like; or which alters, enlarges, or extends the remedies of the state as to liabilities already existing, as in the case of laws for assessment of omitted or undervHlued property, is valid, if not unreasonably discrim- inatory or oppressive in operation. A retrospective act, discriminatory in character, or which cre- ates liabilities in the nature of penalties, financial or otherwise, and which by reason thereof puts the taxpayer into a hard situa- tion which he might have avoided if he had had knowledge of the ilaw, is a violation of due process of law. In considering whether a law is so oppressive or discriminatory as to be a taking of property without due process of law, regard should be had to the fact that the lapse of time always brings about changes in human relations, so that a law which reaches back into the past always has a discriminatory tendency, which tends to increase with the increase of time. Illustrating the first branch of this rule is the well-known case of Spencer v. Merchant,^^ where a local assessment which had been Eep. 564, 6 C. C. A. 18 ; Gage v. 13 Teralta Land and Water Co. v. Stewart, 127 111. 207, 19 N. E. Eep. Shaffer, 116 Cal. 518, 58 Am. St. Rep. 702, 11 Am. St. Rep. 116. 194, 48 Pac. Rep. 613. iZDikeman v. Dikeman, 11 Paige, 14 Conway v. Cable, 37 111. 82, 87 494; January v. January, 7 T. B. Mon. Am. Dee. 240. '-.4'' 18 Am. Dee. 211; Merrill v. 15 125 U. S. 345, 31 L. ed. 763, 8 Hearing, 32 Minn. 479, 21 N. W. Rep. Sup. Ct. Rep. 921; 100 N. Y. 585, 3 721; Goeneu >-. Schroeder, 8 Minn. N. E. Rep. 682. 387 ;' Robinson v. Howe, 13 Wis. 341. 936 CONSTITUTIONAL LAW OF TAXATION. held absolutely void for lack of notice and hearing was reassessed by the legislature. Part of the property owners had paid the invalid assessment; and the law making the reassessment only reassessed the amounts unpaid on such parcels as to which the former assessment had not been paid. This law was upheld. This is an instance of a law which created a liability arising- out of past transactions, where no liability previously existed, which liability was in the general nature of tax burdens. League v. Texas^^ is another illustration. Here a law of Texas which gave the state a judicial remedy for the collection of delin- quent taxes, where the former law provided for collection by ad- ministrative sale, was enforced and upheld against an individual delinquent with respect to lands which had already been sold under the former law. The law charged the delinquent with interest from the time when the taxes first became delinquent, and was in that sense retroactive. But this interest, while in a sense a new liability, was incident to the liability already existing; and the liability thus created was of a nature wMch was of the ordinary character of tax burdens. 1832. The comparatively recent New York case of Matter of Pelf^ illustrates the other class of retroactive tax laws, which are so unequal and unjust in operation, and which create burdens so far out of the course of ordinary tax legislation, as to amount to denials of due process of law. The law in question, which was held unconstitutional, was passed in 1899, and imposed a succes- sion tax on all remainders and reversions which had vested prior to June 30, 1885, and as to which enjoyment was postponed, upon their coming into actual possession and enjoyment. This law thus discriminated between remainders vesting before June 30, 1885, and those which vested after that date ; it also went so far back iu time as to be productive of inevitable inequalities, and it laid a burden of tax quite out of the ordinary. These, however, were not the grounds of decision stated in the opinion. The writer submits with great respect, that the court ■ was speaking loosely rather than with precision when it said that the law would impair the obligation of a contract. It would be difficult to say what contract was impaired by it. When the court said that the effect of the law would be to take- 16 184 U. S. 156, 46 L. ed. 478, 22 " 171 N. Y. 48, 89 Am. St. Rep- Sup. Ct. Rep. 475; 93 Tex. 553, 57 791, 63 N. E. Rep. 789, 57 L. R. A.. S. W. Rep. 34. 540. EETROSPECTIVB LAWS. 937 private property for public use without compensation, the limita- tion intended to be spoken of was doubtless that of due process of law. The court said that the law impaired "vested rights." But every tax law impairs " vested rights," for it takes the property of the citizen, as to which his right is absolutely " vested " and complete. A decision in 'New Jersey, which should be read carefully, illustrates admirably the distinction between those retroactive laws Avhich should be upheld, and those which are condemned. There a statute under which taxes had been levied and not collected was repealed ; and thereafter the legislature passed an act reviving the taxes and the penalties attached to nonpayment. So far as the act revived the taxes themselves, it was deemed to be within the legislative power ; but with respect to the penalties, it was deemed to be beyond the legislative power to impose penalties upon the citizen by retroactive legislation.-^* Further illustration of the distinction between retrospective acts which are valid and those which are void is afforded by expressions in a recent Oregon opinion, where a law which gave a city the right to judgment against the owners of property benefited by previous invalid assessments was upheld. It was argued against the act that it authorized personal judgments against property owners for the amounts of assessments, although at the time the invalid assessments were made the law contained no such provision. Said the Oregon Supreme Court: If this construction of the statute is sound, the objection is unquestionably well taken, so far as prior proceedings are con- cerned, because it is not within .the power of the legislature, by a curative act, to impose new duties or obligations. The court, however, construed the statute as not authorizing such personal judgments.-'® Constitutional provisions forbidding retrospective laws. 1833. There are in some state constitutions, express provision .* forbidding retroactive legislation. Sometimes these provisions are found connected with provisions forbidding the impairment of 18 Dixon V. Mayoi-j etc., of Jersey troactive penalty in the shape of in- City, 37 N. J. L. (8 Vr.) 39. This case terest seems to have been upheld, should be compared with League v. w Nottage v. Portland, 35 Oreg. Texas, 184 U. S. 156, 46 L. pd. 478, 22 i"i39, 76 Am. St. Rep. 513, 58 Pac. Rep. Sup. Ct. Rep. 475, supra, where a re- 883, citing Johnson v. Board of Com- 938 CONSTITUTIONAX, LAW OF TAXATION. ccmtract obligations. Such, provisions are contained in the consti- tutions of Alabama, Colorado, Georgia, Louisiana, Missouri, New llamiishire, New Jersey, Ohio, Tennessee, and Texas. These pro- visions are quoted to some extent in sections 959 to 963a inclusive, of this work. In addition, there are other provisions, forbidding the imposition of new liabilities with respect to past transactions. Illustrating this class is the following : Colorado. The General Assembly shall pass no law for the benefit of a railroad or other corporation, or any individual, or association of individuals, retrospective in its operation, or which imposes on the people of any county or municipal subdivision of the state a new liability in respect to transactions or considerations already past.^" Among other states where similar constitutional provisions exist are Idaho*^ and Montana. ^^ It has been said that provisions of this class have no application to municipal corporations or governmental subdivisions of a state or couuty.^^ The writer supposes that this means that such pro- visions have no application to laws passed for the benefit of such municifial subdivisions. Laws uniting or dividing municipalities, and redistributing the debts and property of the old municipalities, are not forbidden by such provisions, nor are they regarded as retroactiA"e laws of the class forbidden by the requirements of due process of law.'* An act validating void bonds, the money for which has been actu- ally received by the municipality issuing the bond?, is valid; as it imposes no new liability, though it changes the form of the obligation.^ An act compelling a city, if it bought a water plant, to buy one already established in the city, was held in Montana to violate this provision.^^ 1834. Constitutional provisions forbidding retroactive legisla- tion do not forbid all legislation of a retrospective character. missioners, 107 Ind. 15, 8 N. E. Kep. 1. et seq.; School District v. School Dis- To same effect see Mich-i^an cases cited, trict, — Colo. — , 78 Pac. Rep. 690; § 1220. Board of Education v. State, 64 Kans 20 Art. XV, § 12. 6, 67 Pac. Rep. 847. 21 Art. XI, § 12. 25 State v. Dickemian, 16 Mont. 278, 22 Art. XV, § 12. 40 Pac. Rep. 698. 23 School District v. School District, 26 Helena Consolidated Water Co. v. — Colo. — , 78 Pac. Rep. 690. Steele, 20 Mont. 1, 49 Pac. Rep. 382, 21 Mayor of Valvcrtle v. Shattuelc, 19 37 L. R. A. 412, discussed in §§ 660- Colo. 104, A^ Am. St. Rep. 208, 34 062 of this work. Pac. Rep. ;)17, discus.sed in §§ 483 EETBOSPECTIVE LAWS. 939 AVTiether a staltute falls within their scope depends upon the character of the relief they afford. If it creates a new right, or a new liability, it is forbidden. If it only affords a new remedy to enforce an existing right or liability, it may be upheld. Illustrating the class of laws which are held void under these provisions, as creating new rights or liabilities, is a law which provided for a refund of taxes previously paid voluntarily, under circumstances which gave no right to a refund under the law as it stood when the taxes were paid.^^ On the other hand acts authorizing the assessment of property liable for taxation in past years, and omitted from the returns or undervalued, have been held to be valid, not being retrospective laws within the meaning of such constitutional provisions.^ 2V Hamilton County v. Rasclie, 50 183 Mo. 17, 81 S. W. Rep. 1087; Ohio St. 103, 40 Am. St. Rep. 053, 33 South Nashville Street Ry. Co. v. X. E. Rep. 408. 19 L. E. A. 584. Morrow, 87 Tenn. (3 Pickle) 406, 11 S. 28Sturges V. Carter, 114 U. S. 511, W. Rep. 348, 2 L. R. A. 853; Gager 29 L. ed. 240, 5 Sup. Ct. Rep. 1014; v. Prout, 48 Ohio St. 89, 26 N. B. Rep. New Orleans v. Railwav Co., 35 La. 1013; Wilmington v. Cronly, 122 N, Aim. 679; State v. Hemaii, 70 Mo. 441 ; 0. 383, 30 S. E. Rep. 9. State ex rel. Hammer v. Vogelsang, CHAPTER XXVII, LOCAL ASSESSMENTS. 1835. The constitutional questions which arise Avith respect to assessments for local improvements upon property in the neighbor- hood, are mainly divisible into three general classes, with respect to the constitutional limitations involved. (1). Questions involving requirements of equality in taxation. These questions, so far as requirements of this sort are applicable to special assessments, are discussed elsewhere in this work.^ In so far as the principle of equality pervades the rule that assess- ments are to be proportioned to benefits, that principle is dis- cussed throughout this chapter, for at every stage in the discussion of assessments the rule that benefits must equal or exceed the assessment is considered. (2). Questions arising under the prohibition against taking private property for public use without just compensation. It is really a kind of Irish bull to say that such questions arise in special assessment cases, for the consensus of authority is that this constitutional limitation only applies to the power of eminent domain and has nothing to do with the power of taxation. It is well settled that assessments are referable to the taxing power. 1 836. The expressions in some opinions to the effect that certain exercises of the power of special assessment amount to taking of property without just compensation^ are instances of the general, not to say loose, language which courts sometimes use in discussing questions of fundamental right ; speaking of the prohibition against taking private property for public use without just compensation, when the applicable limitation really is the prohibition against depriving any person of property without due process of law. That this is so, clearly appears in one of the cases cited, where the Supreme Court of the United States held that an assessment was void because the rale of ass<'s«ment did not take benefits into consideration. The jurisdiction of the Supreme Court was based on the due process of law clause of the Fourteenth Amendment, 1 §§ 1312, 1313, and chap. XXTTI. 416, 96 Am. Dec. 243; Hammett v, 2 Norwood V. Baker, 172 U. S. 269, Philadelphia, 65 Pa. St. 146, 3 Am. 43 L. ed. 443, 19 Sup. Ct. Rep. 187; Rep. Ul5; and doubtless in many Louisville v. Rolling Mill Co., 3 Bush, other cases. [940] LOCAL ASSESSMEjrTS, 941 and could not have been based upon the requirement that private property shall not be taken for public use except upon just com- pensation, because the Federal constitution contains no prohibition of that sort on the states. Yet the Supreme Court said : In our judgment the exaction from the owner of private prop- erty of the cost of a public improvement in substantial excess of the benefits accruing to him is, to the extent of such excess, a taking, under the guise of taxation, of private property for public use without compe7isation? It is generally held that assessments for benefits are not ob- noxious to prohibitions against taking private property for public use without just compensation, being exercises of the taxing power and not of the power of eminent domain.* 1837. (3). Questions arising under the requirement of due process of law. Such questions mainly relate to the jurisdiction of the legis- lature or subordinate body which determines the district of assess- ments ; to the purposes for which assessments may be laid ; and to methods of apportioning assessments. Questions as to the juris- diction of the body which determines the district of assessment are discussed in that chapter of this work which deals with the relation of the purposes of taxation to the district upon which the taxes are laid.= In discussing the purposes for which assessments should be laid, reference is made to the chapter of this work where is dis- cussed the rule that taxation must be for a public purpose.* What is there said should be read in connection with what is said in this chapter. General theory of local assessments. 1838. Before speaking in detail of the purposes for which special assessments may be laid, orderly procedure requires that something should be said about the nature of such assessments, s Norwood V. Baker, 172 U. S. 209, Detroit, 2 Mich. 560; City of St. 43 L. ed. 443, 19 Sup. Ct. Rep. 187. Joseph v. O'Donoghue, 31 Mo. 345 ; * People ex rel. Griffirig v. Mayor of City of Springfield v. Baker, 56 Mo. Brooklyn, 4 N- Y. 419, 55 Am'. Dec. App. 637; Howell v. City of Buffalo, •266; Appeal of Piper, 32 Cal. 558; 37 N. Y. 267; Livingston v. Mayor, Nichols V. City of Bridgeport, 23 Conn, etc., of New York, 8 Wend. 85-101, 22 189, 60 Am. Dec. 636; Barber Asphalt Am. Dec. 622; Litchfield v. Vernon, Paving Co. v. Gogreve, 41 La. Ann. 41 N. Y. 123 ; ScoviUe v. City of Cleve- 251, 5 So. Eep. 848; Brooks v. City of land, 1 Ohio St. 126; Stroud v. City Baltimore, 48 Md. 265 ; Groff v. Mayor, of Philadelphia, 61 Pa. St. 255 ; Round- etc., of Frederick, 44 Md. 67 ; Moale v. tree v. City of Galveston, 42 Tex. 612 Mayor, etc., of Baltimore, 5 Md. 314, 5 See chap. V. «1 Am. Dee. 276; Williams v. City of 6 Chap. IV. 942 CONSTITUTIONAL, LAW OF TAXATION. the theory upon which they are laid, and the distinction between them and ordinary taxes. So much is said on the subject, in those parts of this chapter which deal with methods of apportioning assessments/ that only a brief statement is here made. The subject generally comes up' in eases where the main questions relate to methods of apportion- ment. It has, therefore, seemed more convenient to depart from the orderly sequence of topics and to treat the theory upon which assessments are based as incidental to the questions which arise as to methods of apportionment. 1839. Briefly, then, assessments for beneiits are special taxes laid upon particular real property, to pay in whole or in part for physical public improvements in the neighborhood of that prop- erty. The particular property in the neighborhood is taxed to pay for such improvements upon the theory that the special benefits accruing to the property in the neighborhood, by reason of the construction of the improvements, compensate the owners of the property for the amount of taxes which they pay. The benefits to the value of the property are supposed to be equal to the amount of the assessments.* While such assessments are referable to the taxing power, they are not regarded as taxes within the meaning of constitutional provisions requiring equality and uniformity in taxation. They differ from ordinary taxes in that the citizen who pays ordinary taxes is not siipposed to receive any equivalent for his taxes ex- cept the common benefits of government. On the other hand the owner of proj^erty who pays a local assessment receives, in theory, an equivalent, in the foma of an increase in the value of his prop- erty, for all he pays by way of assessments.® Furthermore, such assessments are generally regarded as claims peculiarly against the property assessed ; while ordinary taxes are primarily personal charges.'" 1840. A IsTorth Dakota opinion is interesting because (in sus- taining an assessment by the frontage rule) it goes to the extreme length of denying that assessments are based on benefits. Most opinions insist on the theoretical principle that assessments are to be proportioned to benefits, and then apply the rule that the legislative determination as to the fact of benefit is conclusive. TSee §§ 1958 et seq., post. 10 See §§ 1225 et seq., -with respect 8 See §§ 1958 et seq. and cases cited, to making an assessment a personal 9 See §§ 1958 et seq. charge. LOCAL ASSESSMENTS. 943 Tlie JSTorth Dakota court likened assessments to taxes generally, saying, among other things : This theory that the tax can only he commensurate with the enhancement in value finds little support in the authorities, and it certainly rests upon no sound legal principle. It assimilates the power of local assessment with the power of eminent domain. It proceeds on the assumption that the hand which takes must also give hack as much as it takes. This is true when the power of eminent domain is put forth. But it is never true, except in a vague sense, when the taxing power is employed. When the sovereign lays its grasp upon private property for a public piirpose, the constitution commands it to make (the owner) compensation, because what is seized is in addition to his share of the public burdens. But, when it is a question how such public burdens are to be borne, the sovereign is under no obli- gation to render him an exact, or even approximately exact, equivalent in money or property. The court cited the cases which support the rules of assessment by frontage, value or area, and those which hold that the legisla- ture may impose the whole or any part of the cost of an improve- ment upon the neighboring property, as militating against the theory of assessments according to benefits.^^ 1841. While such assessments are usually referred to the tax- ing power, laws directing them have in many instances the aspect of police regulations, and are regarded by some courts as exercises of the police power. There is marked diversity of opinion in this respect In Massachusetts, for instance, assessments are con- sidered as taxes almost exclusively.-'^ In Colorado, on the other hand, they were formerly regarded exclusively as matters of police regulation, and assessments for curbing streets have been held void because such work has no relation to the police power.*^ Between these two extremes are the courts which regard certain assessments, as for sidewalks,^* drains, and sewers^' as partaking of the nature of police regulations; but which consider assess- ments generally as being primarily exercises of the power of taxa- tion. 1 842. The fact is that the practice of making these assessments grew up as a matter of public convenience without much regard to constitutional restrictions. The courts have twisljed constitu- HEoIph V. Fargo, 7 N. D. 640, 76 21 Pac. Rep. 901; overruled, Denver N. W. Rep. 242, 42 L. R. A. 647. City v. Knowles, 17 Colo. 204, 30 Pac. 12 White V. Gove, 183 Mass. 333, 67 Rep. 1041, 17 L. R. A. 135. N. E. Rep. 359. l* See § 1980 et seq. 13 Wilson V. Chileott, 12 Colo. 600, us See §§ 1980-1985. 944 CONSTITUTIONAL LAW OF TAXATION. tional theories to suit the established practice. As the term " poliw power," is, after all, only a phrase which is used to justify govern- mental acts which serve some useful end yet have no logical justifi- cation, it has frequently happened that judges who were hard put to it to sustain assessments on logical grounds, but who yet realized that'the system of special assessments was too strong and too old to be overthrown, have referred to this vague and elastic " fK)lice power " to solve their difEculties. I mean no disrespect to the police power, but everybody who has read constitutional decisions knows that the police power is a kind of license to the government to violate constitutional safeguards of individual right. It is necessary that something of the sort should exist, for otherwise the individual might interpose his constitutional rights to the harm of the whole community. Of course this cannot be allowed; but it is just as well to appreciate that the police power under which the rights of the individual are so frequently disregarded is a power which exists in spite of, and not in harmony with, written constitutional restrictions. 1 843. In South Carolina, the most radical dejiarture from the prevailing rule is foimd. There it is held that "the law of the land " (due process of law) prohibits the taxation of " persons or property abutting on a public street for improvements made upon such public streets, in exoneration of other persons or property within the same territorial limits as are the persons or property abutting upon a highway or public street," and that it prohibits the taxation of " property abutting upon a public street to pay the cost of improvements upon the same, according to the supposed benefit to such property by such improvement." ^* The courts of South Carolina distinctly repudiate any mode of taxation for the improvement of city streets according to supposed benefits. Ex- istence of persons or the possession of property, not supposed bene- fits, are the guide. An exception was formerly made to this rule, abutting property might be taxed to pay for sidewalks and sewers in front of it. This exception was made with reluctance and only on account of a long course of previous decisions.^^ But lately it has been held that even this exception is inadmissible and that assessments for sidewalks and drains are invalid.-'^ 16 Mauldin v. City Council of Green- 17 See cases cited supra. ville, 42 S. C. 293, 46 Am. St. Rep. 18 Mauldin v. City Council of Green. 723, 20 S. E. Rep. 842, 27 L. R. A. ville, 53 S. C. 285, 69 Am. St. Rep. 284; State v. City Council, 12 Rich. 855, 31 S. E. Rep. 252, 43 L. R. A. 101. 702. LOCAL ASSESSMENTS. 945 Purposes for which assessments may be laid. 1844. The question whether an assessment is for a purpose for which assessments may properly be laid is one which may be re- viewed by the courts under the " due process of law " clause.-"' The purposes for which such assessments may be laid generally include every public purpose which pertains to the physical bene- fit of the property assessed, regard being had to the purposes for which the lands can be used. The following are some of the purposes for which it has been held that special assessments are justifiable. 1 845. Opening streets. This purpose is so generally recognized as a ijroper purpose for special assessment that no citation of authority is needed.^" Improving and widening city streets so as to make more access- ible a union railway station, to be built and owned by a private corporation, tinder an agreement with the city.^^ Constructing an electric lighting system for lighting streets.^^ Curbing streets.*" Laying sidewalks.^* Widening and straightening streets.^ Grad- ing and paving streets.^® 19 Fallbrook Irrigation District v. Bradley, 164 U. S. 112, 41 L. ed. 369, 17 Sup. Ct. Rep. 56. 20Bauman v. Eoss, 167 U. S. 548, 42 L. ed. 270, 17 Sup. Ct. Rep. 966. 21 Sears v. Board of Street Commis- sioners of Boston, 180 Mass. 274, 62 N. E. Rep. 397. 22 Ewart V. Western Springs, 180 111. 318, 54 N. E. Rep. 478. 23 Adams v. Shelbyville, 154 Ind. 467, 57 K E. Rep. 114, 77 Am. St. Rep. 484, 49 L. R. A. 797; Matter of Burmeister, 76 N. Y. 174; Schenley v. Commonwealth, 30 Pa. St. 29, 78 Am. Dec. 359; Denver City v. Knowles, 17 Colo. 204, 30 Pac. Rep. 1041, 17 L. R. A. 135, overruling Wilson v. Chil- cott, 12 Colo. 600, 21 Pac. Rep. 901. 24 City of Chicago v. Wilson, 195 111. 19, 62 N. E. Rep. 843, 57 L. R. A. 127; Walker v. Morgan Park, 175 111. 570, 51 N. E. Rep. 636 ; Job v. Alton, 189' 111. 256, 82 Am. St. Rep. 448, 59 N. E. Rep. 622; White v. People, 94 111. 604; Craw v. Tolono, 96 111. 255, 36 Am. Rep. 143 ; Buffalo City Ceme- tery V. Buffalo, 46 N. Y. 503; Lowell V. Hadley, 8 Mete. (Mass.) 180; Scott Oounty V. Hinds, 50 Minn. 204, 52 60 N. W. Rep. 523 ; Agens v. Newark, 8 Vr. (37 N. J. L.) 415, 18 Am. Rep. 729; Weeks v. City of Milwaukee, 10 Wis. 242; Virginia Const., art. XIII, § 170, quoted in section 1698 of thi? work. 25 Lent v. Tillson, 140 U. S. 316, 35 L. ed. 419, II Sup. Ct. Rep. 825, af- firming 72 Cal. 404, 14 Pac. Rep. 71; Sears v. Board of Street Commission- ers of Boston, 180 Mass. 274, 62 N. E. Rep. 397; Cook v. Slocum, 27 Minn. 509, 8 N. w. Rep. 755. 26Willard v. Presbury, 14 Wall. 676, 20 L. ed. 719; Warren v. Russell, 129 Cal. 381, 62 Pac. Rep. 75; Thomas v. Highland Park, 187 111. 265, 58 N. E. Rep. 328; Enos v. Springfield, 113 111. 65; Lafayette v. Fowler, 34 Ind. 140; Adams v. Shelbyville, 154 Ind. 467, 77 Am. St. Rep. 484, S7 N. E. Rep. 114, 49 L. R. A. 797; Shank v. Smith, 157 Ind. 401, 61 N. E. Rep. 932, 55 L. R. A. 564; McNamara v. Estes, 22 Iowa, 246 ; Morrison v. Her- shire, 32 Iowa, 271; Wray v. Pitts- burgh, 46 Pa. St. 365; McNair v. Ostrander, 1 Wash. 310, 23 Pac. Rep. 414. 946 CONSTITUTIONAIi LAW OF TAXATION. Ill paving and grading streets the cost of paving and grading street intersections may be included in the assessment. ^^ It has been held that, in making a paving assessment, the greater ease with which fire protection can be given by reason of the im- provement is an element of benefit which may be considered.^ Closing streets and acquiring the easements of private owners therein.^* 1846. Building sewers.^** (This is one of the few purposes for which municipal corporations may now lay assessments in Vir- ginia.**) Purchasing toll-roads and depriving the owners of the right to take toll.^^ Laying water mains in streets'* and laying^ lateral water pipes to connect with main pipes already laid.^ Constructing a viaduct in a street, although the viaduct incident- ally serves the purpose of a bridge across a stream.^ The Min- nesota constitution expressly authorizes assessments for water pipes.^® A general system of water works or other municipal enterprise,, including the buildings, reservoirs, wells, and machinery, is held in Illinois to be a work of general public improvement, and not a " local improvement," within the meaning of the Illinois constitu- tion. Such works must be paid for by general taxation ; although the cost of pipes may be assessed on property benefited.*^ 27 King v. City of Portland, 38 Oreg. Auburn v. Paul, 84 Me. 212, 24 Atl. 402, 63 Pac. Eep. 2, 55 L. R. A. 812; Eep.817; Philadelphia v. Tryon, 35 Pa, State ex rel. Wheeler v. District Court St. 401 ; Stroud v. Philadelphia, 61 Pa. of Ramsey County, 80 Minn. 293, 83 St. 255 ; Parkersburg v. Tavenner, 42 N. W. Rep. 183. W. Va. 486, 26 S. E. Rep. 179 ; Payne v. 28 Chicago Union Traction Co. T. Village of South Springfield, 161 111. Chicago, 202 111. 576, 67 N. E. Rep. 285, 44 N. E. Rep. 105; Fisher v. 383. Chicago, 213 111. 268, 72 N. E. Rep. 680. 29 Matter of Barclay, 91 N. Y. 430; 31 Const., art. XIII, § 170; § 1698 Matter of the Mayor, 157 N. Y. 409, of this work. 52 N. E. Rep. 1126; Vacation of How- 32 Wiuslow v. City of Cincinnati, 2 ard Street, 142 Pa. St. 601, 21 Atl. Ohio Dec. 291. Rep. 974; People v. Lawrence, 36 33 Parsons v. District of Columbia,. Barb. 177 ; Vacation of Centre Street, 170 U. S. 45, 42 L. ed. 943, 18 Sup. Ct.. 115 Pa. St. 247, 8 Atl. Rep. 56. Rep. 521; Allentown v. Henry. 73 Pa. 30 Carson v. Brockton Sewerage St. 404; Allen v. Drew, 44 Vt. 187; Commission, 182 U. S. 398, 45 L. ed. Hewes v. GIos, 170 111. 436, 48 N. E. 1151, 21 Sup. Ct. Rep. 860; 175 Mass. Rep. 922; Hughes v. City of Momence, 242, 56 N. E. Rep. 1, 48 L. R. A. 277 ; 163 111. 535, 45 IST. E. Rep. 300. People ex rel. Scott v. Pitt, 169 N. Y. 34 Palmer v. City of Danville, 154 521, 62 N. E. Rep. 662, 58 L. R. A. 111. 156, 38 N. E. Rep. 1067. 372 ; Mattingly v. District of Colum- 35 Louisville, etc., Ry. Co. v. City of bia, 97 U. S. 687, 24 L. ed. 1098; City East St. Louis, 134 111. 656, 25 N. E. of Pueblo V. Robinson, 12 Colo. 593, 21 Rep. 962. Pac. Rep. 899; Cone v. Hartford, 28 36 Art. IX, § 3, quoted in § 1591 of Conn. 363 ; \^'eed r. Boston, 172 Mass. this work. 28, 51 X. E. Rep. 204, 42 L. E. A. 642; 3T Hughes v. City of Momence, 163 LOCAL ASSESSMENTS. 947 1847. Draining swamp lands.^* Irrigating arid lands.^ Constructing levees.*" In Illinois/^ Louisiana*^ and Mississippi,** levee assessments are expressly authorized by the state constitu- tions. Opening public parks.** Fencing to^^iiships and counties to restrain the wandering of live stock is a pui-pose for which, in North Carolina, assessments on farm lands ha^-e been upheld.*' Assessments for replacing and maintenance. 1 848. The rule supported by the mass of authority seems to be that there is no distinction in principle between the construction of a new improvement and the replacing, repair, or annual main- tenance of an old one. As was said by the Supreme Judicial Court of Massachusetts, in a case where the taxpayer sought to avoid pay- ment of an assessment for annual mainterumce of a common sewer, for the original construction of which his lot had already been assessed : No one denies that it was a special benefit to the petitioner to have a sewer built in front of his land. That benefit was the 111. 535, 45 N. E. Rep. 300; Morgan Park V. Wiswall, 155 111. 262, 40 N. E. Rep. 611; Village of Blue Island v. Eames, 155 111. 398, 40 N. E. Kep. 615. 38 Davidson v. New Orleans, 96 U. S. 97, 24 L. ed. 616; Hagar v. Reclama- tion District, 111 U. S. 701, 28 L. ed. 569, 4 Sup. Ct. Rep. 663; Head v. Amoskeag Mfg. Co., 113 U. S. 9, 5 Sup. Ct. Rep. 441, 28 L. ed. 889; Hagar v. Yolo County, 47 Cal. 222; Commissioner of Highways v. Drainage Commissioners, 127 111. 581, 21 N. E. Rep. 206; Riebling v. People, 145 111. 120, 33 N. E. Rep. 1090; Zigler v. Menges, 121 Ind. 99, 16 Am. St. Rep. 357, 22 N. E. Rep. 782; Re New Or- leans Draining Co., 11 La. Ann. 358; Kinyon v. Duchene, 21 Mich. 498; Sessions v. Orunkilton, 20 Ohio St. 349; Tidewater Co. v. Coster, 18 N. J. Eq. 518, 90 Am. Dec. 634 ; Mound City Land and Stock Co. v. Miller, 170 Mo. 240, 94 Am. St. Rep. 727, 70 S. W. Rep. 721, 60 L. R. A. 190; Brown v. Keener, 74 N. C. 714. 39 Fallbrook Irrigation District v. Bradley, 164 U. S. 112, 41 L. ed. 369, 17 Sup. Ct. Hep. 50; In re Madera Irrigation District, 92 Cal. 296, 27 Am. St. Rep. 106, 28 Pac. Rep. 272, 675, 14 L. R. A. 755; Board of Di- rectors of Alfalfa Irrigation District V. Collins, 46 Neb. 411, 64 N. W. Rep. 1086. See also § 253; Pioneer Irriga- tion District v. Bradley, 8 Idaho, 310, 101 Am. St. Rep. 201, 68 Pac. Rep. 295. 40 Egyptian Levee Co. v. Hardin, 27 Mo. 495, 72 Am. Dec. 276; Columbia Bottom Levee Co. v. Meier, 39 Mo. 53 ; Missouri, etc., Ry. Co. v. Cairbam, 66 Ivans. 365, 71 Pac. Rep. 809. See also §§ 254 et seq. and cases cited. •41 Art. IV, § 31 ; § 250 of this work. 42 Art. 238; § 254 of this work. 43 Art. XI, § 236; § 256 of this work. 44 Shoemaker v. United States, 147 U. S. 283, 37 L. ed. 170, 13 Sup. Ct. Rep. 361; Lombard v. West Chicago Park Commission, 181 U. S. 33, 45 L. ed. 731, 21 Sup. Ct. Rep. 507; Holt V. Somerville, 127 Mass. 408; Foster V. Boston Park Commissioners, 131 Mass. 225; 133 Mass. 321; St. Louis County Court v. Oriswold, 58 Mo. 175 ; Cook V. South Park Commissioners, 61 ill. 115; Owners of Ground v. Mayor of Albany, 15 Wend. 374; MattheAvs v. Kimball, 70 Ark. 451, 68 S. W. Rep. G51, 69 S. W. Rep. 547. 45 Cain V. Commissioners of Davie County, 86 N. C. 8; Greene County 948 CONSTITUTIONAL LAW OF TAXATION. probability that the sewer would be available for use in tlie future. But the city, by building it and receiving a part of the cost from the petitioner, did not impliedly bind itself or the general taxe? that the sewer should be maintained forever, and that the petitioner should be at liberty to use it free of further expense. If building a sewer was a special benefit, keeping the sewer in condition for use by such further expenditure as was necessary was a further special benefit to such as used it.*^ This ease went to the United States Supreme Court, where the property owner claimed that to assess his lot for annual mainte- nance, after he had paid the assessment for original construction, was a taking of property without due process of law, under the Federal constitution. His contention was that the cost of main- tenance was a part of the conunon burden, to be borne by the public. But the Supreme Court held that the question was one of state policy and not of constitutional right; and ui)held the assessment, saying: It was for the legislature to say whether the construction of the sewer entitled the adjoining property owners to the free use of it, or only to the right of a free entrance to it of their par- ticular sewers.*' 1 849. Upon these views the repairing, repaying, and regrading of streets have generally been regarded as purposes for which as- sessments could be laid. Whether it is just that property whicli lias once been assessed for a pavement shall be again assessed for a new pavement, is a matter of discretion, to be determined by the legislature or siibordinate legislative body.*^ Maintaining Commissioners v. Lenoir County Com- 8 Am. Rep. 480; Municipality v. Dunn, missioners, 92 N. C. 180. lOLa. Ann. 57; McCormick v. Patchen, 46 Carson v. Sewerage Commissioners 53 Me. 33 ; Williams v. Detroit, 2 of Brockton, 175 Mass, 242, 56 X. E. Mich. 560;Sheeley v. Detroit, 45 Mich. Kep. 1, 48 L. R. A. 277. 425; Shimmons v. Saginaw, 104 Mich. 47 Carson V. Brockton Sewerage Com- 511, 62 N. W. Rep. 725; State v. Dis- mission, 182 U. S. 398, 45 L. ed. 1151, Irict Court, 80 Minn. 293. S3 N". ^Y. 21 Sup. Ct. Rep. 86. Rep. 183 ; Farrar v. St. Louis, 80 Mo. *8Willard V. Presbury, 14 Wall. 676, 379; People ex rel. Bull r. City of 20 L. ed. 719; WillardV. Willard, 154 Buffalo, 52 App. Div. (N. Y.) 157, 65 U. S. 568, 38 L. ed. lOSS, 14 Sup. Ct. N. Y. Supp, 163; affij-med, 166 N. Y. Rep. 1215; Cram v. City of Chicago, 604, 59 N. E. Rep. 1128; Matter of 139 111. 265, 28 N. E. Rep. 758; Chi- Phillips, 60 N. Y. 16; Ladd v. Port- cago, etc., Ry. Co. v. City of Chicago, Innd, 32 Oreg. 271, 67 Am. St. Rep. 172 111. 66, 49 N. E. Rep. 1006; Pike .V20, 51 Pac. Rep. 654: Adams v. v. City of Chicago, 155 111. 656, 40 Fisher, 75 Tex. 657, 6 S. W. Rep. 772; N. E. Rep. 567; Lux and Talbott Blount v. City of Janesville, 31 Wis. Stone Co. v. Donaldson, 162 Ind. 481, 648; Adams v. Beloit, 105 Wis. 363, 68 N. E. Rep. 1014; Lafayette v. Fow- SI N. W. Rep. 869, 47 L. R. A. 441. ler, 34 Ind. 140: Broadway Baptist In Agens v. Mayor, etc., of Newark, Church V. Mr' \tcc. 8 Bush (Ky.), 508, 35 N. J. L. (6 Vr.) 168, 37 N. J. L. LOCAL ASSESSMENTS. 949 and keeping in repair water pipes in streets have been held to be proper purposes for assessment.** 1850. With some hesitation the Supreme Judicial Court of Massachusetts upheld assessments for street sprinkling/" and thev have been sustained in Minnesota.®^ In Illinois street sprinkling is not a " local improvement " for vyhich assessments can be laid f^ and in Montana the language of the Supreme Court, in holding that school property could not be assessed for street sprinkling, indicates that court's opinion that no permanent benefit accrues to property by reason of street sprinkling. ^^ The same was held in Missouri*^^* and in Utah.^^'* In Indiana assessments for street sweeping have been sus- tained.^* Such transient purposes as street sweeping and sprinkling do not seem to be of a class which bring peculiar lasting benefit to adjacent property. The cases which sustain assessments for these; purposes go farther than either reason or precedent compels. 1851. Assessments for repairing drains and ditches and main- taining them have been allowed. °® Assessments for the use or maintenance of sewers are sustained. ^^ (8 Vr.) 415, 18 Am. Rep. 729, a statute directing an assessment for repaying was held void because the rule of assessment did not take bene- fits into account, but the power to re- pave by assessment was asserted. See also 49 N. J. L. (20 Vr.) 239, 12 Atl. Rep. 770. 49 Parsons v. District of Columbia, 170 U. S. 45, 42 L. ed. 943, 18 Sup. Ct. Rep. 521; Batterman v. City of New York, 65 App. Div. (N. Y.) 576, 73 N. Y. Supp. 44. In Illinois a water tax laid on abutting lots as " com- pensation for increased fire protec- tion," was held void. It was said that the ordinance lacked " the element of sufficient description of any local im- provement that would warrant the conclusion that it was intended to be either a special tax or special assess- ment," and as a tax it was lacking in uniformity. Village of Lemont v. Jenks, 197 111. 363, 64 N. E. Rep. 362, 90 Am. St. Rep. 172. 50 Sears v. Boston, 173 Mass. 71, 53 N. E. Rep. 876, 43 L. R. A. 834 ; Trus- tees of Phillips Academy v. Andover, 175 Mass. 118, 55 N. E. Rep. 841, 48 L. R. A. 550. 51 State V. Ries, 38 Minn. 371, 38 K. W. Rep. 97. 52 City of Chicago v. Blair, 149 111. 310, 36 N. E. Rep. 829, 24 L. R. A. 412. 53 City of Butte v. School District, 29 Mont. 336, 74 Pae. Rep. 869. A levy for " general purposes " will not be deemed to include street sprinkling,, under a constitution whieu requires each levy to state particuhirly its- purposes. Louisville v. Button, 26' Ky. Law Rep. 606, 82 S. W. Rep. 293. 53a New York Life Ins. Co. v^ Priest, 71 Fed. Rep. 815; Kansaa- Citv v. O'Connor, S2 Mo. App. 65. 5Sb Pettit V. Duke, 10 Utah, 311, 37' Pac. Rep. 568. 54 Reinken v. Fueljring, 130 Ind.. 382,. 30 N. E. Rep. 414, 30 Am. St. Rep. 247, 15 L. R. A. 624. 55 Roundenbush v. Mitchell, 154 Ind. 616, 57 N. E. Rep. 510; Johnson v. Lewis, 115 Ind. 490, 18 N. E. Rep. T; Kirkpatrick v. Taylor, 118 Ind. 329, 21 N. E. Rep. 20; Zimmerman v. Savage, 145 Ind. 124, 44 N. EV Rep. 252 ; In re McRae, Minn. ,. 100' N. W. Rep. 384. 50 Carson v. Brockton Sewerage Commission, 182 U. S. 398, 45 L.. ed^ 950 CO^JSTITUTIOSTAL LAW OF TAXATION. 1852-3. Some iiioflifications of the general rule with respect to reconstruction and niaiRtenance remain to be noticed. In Illinois the constitution limits the power which may be delegated to municij)al corjDorations to special taxation or assess- ment for "local improvements." Construing tlie term "local im- provements," the Supreme Court of Illinois said : Used, as it is, in connection with special assessments, which are necessarily based upon the idea of equivalent benefits to the property owner, the idea of permanency in the improvement is necessa/rily involved, that is, the benefit must flow from the actual or presumptive betterment of the street, and must be of such character as to enhance the market value of the property.^^ Upon these principles, an assessment for casual maintenance and repair of a street is held not to be for a. "local improvement;" and a statute authorizing commissioners to levy such an assessment was held to be unconstitutional."^ 1854. On the other hand, a repaving or regrading which is permanent and substantial in its nature is such a " local improve- ment." Thus, an assessment for remacadamizing a street, clean- ing the old pavement, filling holes, and laying six and one-haK inches of new material on top of the old pavement was upheld.''* Under a provision of the Illinois constitution,™ which allowed the power to make assessments for maintenance to be conferred on certain drainage districts, assessments for maintaining and keeping in repair drains and sewers were upheld. ^^ 1 855. In Pennsylvania there is a line of decisions in which the courts have steadfastly refused to permit properties abutting •directly along the line of a street improvement to be assessed for a second improvement, although they had received the immediate benefits of such second improvement. Legislation authorizing such second assessments has repeatedly been held unconstitutional. An examination of these decisions is worth while, as they make a distinct limitation on the legislative power, not found elsewhere. In the leading case a law authorizing the repaving of a street in Philadelphia, which had once been paved by special assessment, 1151, 21 Sup. Ct. Rep. 860; 175 Mass. 69 Field v. City of Chicago, 198 HI. 242, 56 N. E. Rep. 1, 48 L. R. A. 277; 224, 64 N. E. Rep. 840; Bush v. Virginia Const., art. XIII, § 170; Peoria, 215 111. 515, 74 N. E. Rep. 797. § 1698 of this work. 60 Art. 4, § 31. B7 City of Chicago v. Blair, 149 111. 61 Village of Hyde Park v. Spencer, 310, 36 N. E. Rep. 829, 24 L. R. A. 412. 118 111. 446, 8 N. E. Rep. 84G; Mo- bs Crane v. West Chicago Park Com- Chesney v. Village of Hyde Park, 151 missioners, 153 111. 348, 38 N. E. Rep. 111. 634, 37 N. E. Rep. 858. 943, 26 L. E, A. 311. LOCAL ASSESSMENTS. 951 and directing that the cost of repaying should be borne bj owners of abutting property, was held unconstitutional. Mr. Justice Sharswood, delivering the opinion, held that where an owner's property had been once assessed for the cost of an imj)rovenient it could not be again assessed for a second improvement of the same character. He said: Whenever a loca] assessment upon an individual is not grounded upon, and measured by, the extent of his particular benefit, it is, pro tanio, a taking of his private property for pub- lic use without any provision for compensation. . . . The original paving of a street brings the property bounding upon it into the market as building lots. Before that it is a road, not a street. It is, therefore, a local improvement, with benefits almost exclusively peculiar to the adjoining properties. Such a case is clearly within the principle of assessing the cost on the lots lying upon it. . . . But when a street is once opened and paved, thus assimilated with the rest of the city and made a part of it, all the particular benefits to the locality derived from the improvements have been received and enjoyed.^ 1856. Later the court went further and held that the cost of repaying a street could not be charged upon an abutting owner, even where the city had paid for the original paving, upon the principle that the repair is a public duty for the general benefit.®* Other cases in Pennsylvania supporting these principles are cited." 1857. It is heldj in cases cited elsewhere, that statutes and charters which provide that a street once paved at the expense of the property owners cannot be repaved at their expense, do not constitute contracts with the property owners which cannot be impaired by subsequent legislation.®* Provisions for future repairs in contracts for public improve- ments. 1858. Questions have arisen as to the validity of provisions in paving and other contracts requiring the contractor to give bond to keep the pavement in good condition for a number of years. This causes the cost of such repairs to be assessed on property 62 Hammett v. Philadelphia, 65 Pa. 84 Morewood Avenue, 159 Pa. St. 20, St. 146, 3 Am. Kep. 615. To the same 28 Atl. E«p. 123, 132; Alcorn v. City eflfeet is Appeal of the Orphans Asylum of Philadelphia, 112 Pa. St. 494, 4 of Pittsburgh, 111 Pa. St. 135, 3 Atl. Atl. Eep. 185. Eep. 217. *^ See § 1035 and cases cited. 63 City of Williamsport v. Beck, 128 Pa. St. 147, 18 Atl. Eep. 329, 952 CONSTITUTIONAL LAW OF TAXATION. owners as a part of the cost of the work. Except in the iew states where repairs cannot constitutionally be assessed against adjacent property, this does not amount to a constitutional ques- tion; for where the legislature has power to direct that property owners shall be assessed for repairs, it, of course, has power to direct that the cost of securing repairs shall be included in the original assessment. ®° In the states where the legislature has no power to assess repairs on the property owners the constitutional rule depends on the construction of the guaranty. If the language of the contractor's required guaranty be construed to mean that the contractor guar- antees to make good defects which arise by reason of faults in the original construction, the legislature may authorize the require- ment of such a bond.®^ On the other hand, if the provision is one which requires the contractor to make ordinary repairs in the nature of maintenance, it increases the burden on the property owners, by the cost of maintenance, which cannot be done. All that the property owners can be charged for is the cost of original construction ; the cost of repairs and of guaranteeing repairs can- not be included in the assessment, but must be borne by the city at large. "^ 1859. Aside from purely constitutional questions, where stat- utes cast upon a city the cost of repairing streets after original construction the distinction is the same as that already stated. Generally in such case a municipal contract which provides that a contractor shall give bond for repairs for a specified time is unauthorized if construed to refer to ordinary repairs and main- tenance,®* and is valid if construed to refer to such repairs as are necessary by reason of defects in original construction, that is, if the guaranty is in effect to make the work as good as it should have been.™ 66 People ex rel. Bull v. City of Brown v. Jenks, 98 Cal. 10, 32 Pac. Buffalo, 52 App. Div. (N. Y.) 157, 65 Rep. 701; Fehler v. Gosnell, 99 Ky. N. Y. Supp. 163; affirmed, 166 N. Y. 380, 35 S. W. Rep. 1125; Verdin v. 604, 59 N. E. Rep. 1128. St. Louis, 131 Mo. 26, 33 S. W. Rep. 67 Cole V. People, 161 111. 16, 43 N. 480, 30 S. W. Rep. 52; City of Portland B. Rep. 607 ; Latham v. Wilmette, 168 y. Portland Bituminous, etc., Co., 33 111. 153, 48 N. E. Rep. 311; City of Greg. 307, 72 Am. St. Rep. 713, 52 Philadelphia v. Pemberton, 208 Pa. St. Pac. Rep. 28, 44 L. R. A. 527 ; Mc- 214, 57 Atl. Rep. 516. Allister v. Tacoma, 9 Wash. 272, 37 68 Wilson V. Trenton, 32 Vr. (61 N. Pac. Rep. 447, 658; Boyd v. Mil- J. L.) 599, 68 Am. St. Rep. 714, 40 waukee, 92 Wis. 460, 60 N. W. Rep. Atl. Rep. 575, 44 L. R. A. 540. 603; Young v. Tacoma, 31 Wash. 153, 69 Alameda Macadamizing Go. v. 71 Pac. Rep. 742. Pringle, 130 Cal. 226, 80 Am. St. Rep. TO Kansas Citv v. Hansen, 60 Kans. 124, 62 Pac. Rep. 394, 52 L. E. A. 264; 833, 58 Pac. Rep. 474; Shank v. LOCAL ASSESSMENTS. 953 1860. Althoiigh not strictly within the scope of this work, it may be useful to examine some of the contracts which have been held to involve current repairs, and those in which it has been held that it was only required that defects in original con- struction should be made good. It is in the construction of con- tracts that the greatest diversities appear. 1861. In the following cases the contracts were held to be guaranties by the contractors of the quality of the original work : A contract " To keep in continuous good repair all pavement laid under this contract for a space of five years." ''^ A specification that the contractor shall, without extra com- pensation, keep in repair for a period of two years, by making good any settlement or derangement of lines or grades of curbs, gutters and crossings, and by replacing defective materials or work in curbs, gutters, crossings, and pavements.'^ An agreement providing It is understood and agreed that this guaranty shall cover all repairs growing out of imperfections or unsuitability of materials of composition, too great or too little moisture, all defects of workmanship, extreme heat or cold, and all other effects of climate, and covers all other excessive deteriorations more specifically described as follows: etc.^* A contract to keep in repair for ten years. ^* An agreement to " maintain " the pavement for five years.''® A contract to maintain a pavement in good order for five years, and to naake all repairs which may, from any imperfection in the work or material, or from any disintegration or crumbling, be- come necessary in that time.''^^ Smith, 157 Ind. 401, 61 N. E. Eep. (Ky.) 521; Covington x. Dressman, 932, 55 h. E. A. 564; Osburn v. 6 BUsh (Ky.) 210. Lyons, 104 Iowa 160. 73 X. W. Rep. 71 Cole v. People, 161 111. 10, 43 650; Allen v. Davenport, 107 Iowa, 90, N. E. Rep. 607. 77 N W Rep. 532; Barber Asphalt 72 Latham v. Wilmette, 168 111. 153, Paving Co. v. Hezel, 155 Mo. 391, 56 48 N. E. Rep. 311. S W Rep 449 48 L E. A. 285; Sea- 73 Shank v. Smith, 157 Ind. 401, 61 board Nat.' Bank v. Woesten, 147 Mo. N. E. Rep. 932, 55 L. R. A. 564. 467-468, 48 S. W. Rep. 939, 48 L. E. 74 State ex rel. Wheeler v. District \ 279 -Barber Asphalt Paving Co. V. Court of Eamsey County, 80 Minn. Uilman, 137 Mo. 543-565, 38 S. W. 293, 83 N. W. Eep. 183. Rep 458 • People ex rel. North v. 75 Barber Asphalt Paving Co. v. Featherstonhaugh, 172 N. Y. 112, 64 Hegel, 155 Mo. ^l, 56 S. VV. Rep. N E Rep. 802, 60 L. R. A. 768; 449, 48 L. R. A. 285. Robertson v City of Omaha, 55 Neb. 76 Kansas City v. Hanson, 60 Kans. 618, 76 N. W. Rep. 442, 44 L. R. A. 833, 58 Pae. Rep. 474. 534*; Louisville v. Henderson, 5 Bush 954 CONSTITUTIONAL lAW OF TAXATION. A contract requiring the contractor to bear the expense for ten years of " all repairs which may, from any imperfec- tion in said work or material, become necessary within that time." " A guaranty that " the contractor will be required to keep all his work in repair for the period of eight years . . . without expense to the city . . . that is to say that ... he will maintain the asphalt pavement." '^* 1862. On the other hand contracts as follows have been held to require the contractor to make ordinary and casual repairs: A contract made under an ordinance requiring that all persons bidding for street work should " file a bond in the sum to be determined by the mayor, guaranteeing, the work for one year from injury by ordinary use." ™ A contract requiring the contractor to give a bond " for keep- ing the streets so improved in thorough repair for the term of five years from the completion of the contract." ** A contract that the contractor shall keep the work in good repair for five years, and deposit bonds amounting to 10 per cent, of the contract price as security therefor.^ A bond requiring that for five years the contractor " will keep the pavement in repair by immediately, upon proper notice, re- pairing at his own cost and expense any injuries or worn-out places or other defects due to trafiic, or on account of disintegra- tion or decay, or in any manner attributable to defective materials or workmanship." ^ 1863. Along the same lines as the cases just considered is a recent California case where it was held that a provision, in a contract for a street improvement, that " all loss or damage aris- ing from the nature of the work under these specifications " should be borne by the contractor, avoided the assessment by increasing the cost of the work beyond the fair cost of construc- tion.«5 77 Robertson v. City of Omaha, 55 80 Brown v. .Jcnks, 98 Cal. 12, 32 Neb. 618, 76 N. W. Kep. 442, 44 L. R. Pac. Eep. 701. A. 534. 81 Fehler v. Gosnell, 99 Ky. 380, 35 78 People ex rel. North v. Feather- S. W. Rep. 1125. stonhaugh, 172 N. Y. 112, 64 N. E. 82 City of Portland v. Portland Eep. 802, 60 L. E. A. 768. Bituminous, etc., Co., 33 Oreg. 307, 72 79 Alameda Macadamizing Co. v. Am. St. Eep. 713, 52 Pac. Eep. 28, 44 Pringlc 130 Cal. 226, 80 Am. St. Eep. L. R. A. 527. 124, 62 Pac. Rep. 394, 52 Iv. E. A 83 Blochman v. Spreckels, 135 Cal. 264. To same effect, Allen v. Labsap, 662, 67 Pac. Eep. 1061, 57 L. R A. — Mo. — , 87 S. W. Eep. 926. 213. I.OCAI> ASSESSMENTS. 955 Assessments for purposes, the propriety of which has been doubted. 1864. There are some cases where assessments have been held invalid, because laid for purposes which belonged to tlie common burden of taxation. Such cases arise when no benefit inures to the assessed property which does not also inure to the public at large. Some decisions of this sort are now noticed. 1865. Local taxation according to benefits as applied to im- provements in the streets of a city is very different in effect from the same sort of taxation when applied to a countiy highway. In the city the improvement benefits and improves the adjacent and abutting property, but does not particularly benefit the prop- erty at a distance; while in the country districts the highway is an advantage to the public at large. This distinction has been so generally recognized in governmental custom that the cost of improving country highways has almost always been borne by the general public, and the sanction of custom which the practice of local assessments in cities has, does not obtain with respect to such assessments in the country. Local assessments for laying out country or suburban highways, therefore, have generally been held unconstitutional, as taking property without due proc- ess of law, and, in states where the constitution requires equality and uniformity, as lacking in those respects.^ It seems that in Indiana such assessments are permissible.*® An assessment for building a railroad has been held invalid.*^ 1866. Bridges across streams and ravines, and across railroad tracks in cities, appear at first blush to be much more for the bene- fit of the general public than for that of neighboring property owners. It seems most just that in ordinary cases they should be paid for by general taxation, and not by special assessment. In an Illinois case a bridge over a street, upon which bridge railroad tracks were to lie, was held not to be a " local improvement " within the meaning of the constitution authorizing assessments for local improvements.** 86 Re Washington Avenue, 69 Pa. 87 Dyer v. Farmington, 70 Me. 51.5. St 352, 8 Am. Kep. 255 ; Seeley v. 88 City of Bloomington v. Chicago, Pittsburgh, 82 Pa. St. 360, 22 Am. etc., Ry. Co., 134 111. 451, 26 N. E. Rep. 760; Graham v. Conger, 85 Ky. Rep. 366. In Louisville, etc., Ry. Co. 582, 4 S. W. Rep. 327 ; Speriy v. Fly- v. City of East St. Louis, 134 111. 650, gare, 80 Minu. 325, 81 Am. St. Rep. 25 N. E. Rep. 962, an assessment for 261, 83 X. W. Rep. 177, 49 L. R. A. » viaduct in a city, which incidentally 1^-j, constituted a bridge over a creek, was 86 Bowlin V. Cochrane, 161 Ind. 486, upheld, 69 N. E. Rep. 153. 956 CONSTITUTIONAL LAW OF TAXATION. In Pennsj'lvania was vacated an assessment on adjacent prop- erty for the cost of a bridge crossing a stream at a pnblic highway in a city.^* In Wisconsin an assessment to pay for a pile bridge over a ravine in a city was set aside, under a charter only authorizing- the city to grade and pave streets. The questions in the case were wholly statutory.^ In another ease the prospective benefits of a bridge across a river, at the opening of a city street, were allowed to be included in the assessment for opening the street. ^-"^ 1867. In Minnesota assessments for bridges in cities, as parts of a general scheme of street improvement, have been upheld."^ In a case which arose in Connecticut^ and in which the judg- ment of the state courts was affirmed by the United States Supreme Court, r.n act of the legislature which compelled three towns to pay the cost of a bridge across the Connecticut river, and assessed the cost upon the towns, was upheld.®^ To assess the cost of a bridge upon several towns, to be paid by the towns by general taxation, however, is a very different thing from assessing the cost on individual owners of adjacent property. The case in question was decided mainly upon the ground that the legislature has authority to compel municipal subdivisions to construct highways and bridges.^ 1868. It is difficult to see how the widening and deepening of a river or other commercial waterway, in order to improve general navigation, can be regarded as a benefit to adjacent property, so as to warrant the levy of a special assessment to pay for it. In Venice such a special assessment would be proper enough. Ordi- narily, however, an improvement to such a waterway would be- regarded as a matter of benefit to the whole public, to be paid for by the public funds. In an Illinois case an assessment for widen- ing the Chicago river was upheld, but no constitutional qiiestion \vas raised.*^ In a later Illinois case an assessment for widening one branch of that river was held to be unauthorized by the statute (and constitution) which authorized the city to levy assess- 89 In re Saw-Mill Run Bridge, 85 Pa. 222 ; State v. Ensign, 54 Minn. 372, 56 St. 163. N. W. Eep. 41. 90 State ex rel. Vaughn v. Mayor, 93 State ex rel. Bulkeley v. Wil- etc, of Ashland, 71 Wis. 502, 37 N. W. Hams, 68 Conn. 131, 35 Atl. Eep. 24, Rep. 809. 421, 48 L. R. A. 465; affirmed, Wil- 91 Dickson v. City of Racine, 65 Wis. liams v. Eggleston, 170 H. S. 304, 42 306, 27 N. W. Eep. 58. L. ed. 1047. 18 Sup. Ct. Eep. 617. 92 State V. District Court of Ramsey 9* See § 622 et seq. County, 33 Minn. 295, 23 N. W. Rep. 9S Elston v. City of Chicago, 40 III. 614, 89 Am. Dec. 361. LOCAL ASSESSMENTS. 957 ments only for " local improvements." '"' In Wisconsin no distinc- tion is made between highways by water and streets, and assess- ments for improving waterways have been upheld.®^ 1869. The cases where legislative acts levying the cost of har- bor or river improvements upon neighboring territory have been upheld"* are, to a limited extent, authority for the proposition that special assessments may be levied to pay for improving water- ways; but such acts are very extreme exercises of the legislative discretion ; and there is a great difference in fact between imposing the cost of a harbor improvement on a whole community, to be paid by general taxation in the community, and laying the cost hy special assessment on a comparatively few property owners. 1 870. Where a waterway in a city is widened, straightened, or deepened, improving the docking facilities on its banks, it is pos- sible to perceive a peculiar beneiit to the adjacent property. Such a waterway is not usually used for through traffic or general navi- gation, but for traffic incident to the business carried on on the banks. A recent ]!^ew York case xipheld an assessment for a water- way of this sort against the objection of an owner of property, who claimed that the assessment exceeded the beneiits. The power to make an assessment was not doubted."* Assessments on tide lands, for expense of waterways, have been sustained.^ What may be included in cost. 1871. What items may properly be included in the cost of a public improvement, which may be assessed on adjacent property, becomes a constitutional question, when it is remembered that in strictness only such parts of the cost as legitimately contribute to the peculiar local benefit should be assessed upon the neighbor- hood ; and that other items should be paid for out of the general funds. In most cases, however, this must be a constitutional ques- tion of the kind which is left to the determination of the legis- lature. Aside from the fact that the judgment of the legislative and administrative departments in such matters is likely to be at least as good as the judgment of the judiciary, it would be too 96 City of Chicago v. Law, 144 111. 99 Delaware and Hudson Canal Co. 569, 33 N. E. Kep. 855. v. City of Buffalo, 39 App. Div. 333, 97 Johnson v. City of Milwaukee, 40 56 N. Y. Supp. 976 ; affirmed on opin- Wis. 315; Holton v. Milwaukee, 31 ion below, 167 N. Y. 589, 60 K. E. Wis. 27; Hale v. Kenosha, 29 Wis. Eep. 1119. 599- Bond v. Kenosha, 17 Wis. 284; 1 Seattle v. Seattle Dock Co., 35 Soens V. Racine, 10 Wis. 271. Wash. 503, 77 Pac. Eep. 845. 98 See §§ 425 et seq., 665 958 CONSTITUTIONAL LAW OF TAXATION. much to expect the courts to int'jrfere with the Ifgislatlve judg- ment and administrative practice in every little case where it might appear that some item was included in the assessed cost of an improvement which might more properly have been charged to the general fund. Nearly all the eases on the subject of what may be included are simply cases involving the construction of statutes or the decision of questions of fact. 1872. Whether such items as engineers' fees, expense of levy- ing and collecting assessments, interest on money borrowed pending the work, and the like, can be included in an assessment are ques- tions of this class which belong to the legislature. That they may properly be included is held, in construing statutes, in a number of ca^es which are cited without further discussion.^ There are cases where, under statutes, similar items have not been included, but such cases have no bearing on the constitutional ]iropriety of such inclusion. A contingent fund of five per cent., to meet unexpected emer- gencie-:, may be included.^ 1873. That the cost of lands taken in opening or widening a street may ordinarily be included in the assessment seems to be generally uncontested, and no reason is perceived why such cost may not be included unless special constitutional provisions for- bid. In a Minnesota case, where the constitution allowed assess- ments for " local improvements," it was argued that, as it is only necessary to take an easement in lands for street purposes, the taking of the fee was not for a local improvement. This conten- tion was overruled.* 1874. In Ohio the purposes for which assessments may be laid are subject to a limitation, derived from the clauses of the Ohio constitution which say that 2 Gibson V. City of Chicago, 22 111. Rapids, 82 Mich. 298, 46 N. W. Rep. 566; Allen v. City of Davenport, 107 228; St. Paul v. Mullen, 27 Minn. 78, Iowa, 90, 77 N. W. Rep. 532; Fitz- 6 N. W. Eep. 424; Matter of Riverside gerald v. Walker, 55 Ark. 148, 17 Park, 95 App. Div. 552, 89 N. Y. Supp. S. W. Rep. 702; Pittsburgh, etc., Ry. 6; Matter of Hollister, 96 N. Y. 501; Co. V. Fish, 158 Ind. 525. 63 N. E. Rep. State, etc. v. Guttenburg, 38 N. J. L. 454; Town of Cicero V. Green, 211 111. 419; Davis v. Newark, 25 Vr. (54 241, 71 N. E. Eep. 884; Gross v. Peo- N. J. L.) 144, 23 Atl. Rep. 276; Lonff- ple, 193 111. 260, 86 Am. St. Rep. 322, worth v. Cincinnati, 34 Ohio St. lOI. 61 N. E. Rep. 1012: Dashiell v. Mayor, 3 Donovan v. Oswego, 90 App. Div etc., of Baltimore, 45 Md. 615; Mayor, 397, 86 N. Y. Supp. 155. etc., of Baltimore v. Smith Brick Co., * Fairchild v. Citv of St Paul 46 80 Md. 4.=.8, 31 Atl. Rep. 423; Gage v. Minn. 540. 49 N. W. Rep. 325. 'Se? City of Chicago, 195 III. 490, 61 N. E. Kelly v. City of Minneapolis, 57 Minn. Rep. 849: Er Countv Commissioners 294, 59 N. W. Rep. 304, 47 Am St of Hampshirf. U.'^ Mass. 424, 9 N. E. Rep. 005, 26 L. R. A. 92. Rep. 750 ; Tharev v. City of Grand LOCAL ASSESSMENTS. 959 Wliere private property shall be taken for public use, a com- pensation therefor shall first be made in money, or first secured by a deposit of money; and such compensation shall be assessed by a jury, without deduction for any benefits to the property of the owner. ^ And _ The General Assembly shall provide for the organization of cities, and incorporated villages, by general laws, and restrict their power of taxation, assessment, borrowing money, contract- ing debts and loaning their credit, so as to prevent the abuse of such power.^ These are held to be limitations which the courts can enforce; and it is held that they are violated when an owner of lands taken for a public street is assessed, in respect of his remaining lands, to pay the compensation which the city pays him for the lands taken.^ A later case holds that the prohibitions of the constitution go " not only to the extent of preventing the assess- ment of the compensation, damages and costs back onto (sic.) the lands of the owner remaining after the taking, hut to the full extent of prohibiting the assessment of compensation^ damages^ and costs for land so appropriated, upon any real estate whatso- ever." * The principle is that such lands should be paid for with public money (raised by general taxation) because they are taken for public use. For improvements which do not involTe a taking of lands, and which may be of peculiar private benefit, as sewers and surface improvements, assessments may be laid, but only to the extent of the benefit* 1 875. In Illinois it seems that where property is taken by special assessment for opening a street, the amount of the award for the land taken may be assessed upon the neighboring lands, even though those lands belong to the same person who re- ceives the award, for in special assessment there must be an in- quiry and a finding that the benefits equal the assessment. But M'hen property is taken by special taxation the rule seems to have been that the constitutional provision forbidding the taking of property without just compensation forbade that the owner of 5 Art. 1, § 19. * City of Davton v. Bauman, 66 Ohio 6 Art. 13, § 6. St. 379, 04 N. E. Rep. 433. T Cincinnati, etc., Ey. Co. v. City of 9 City of Dayton v. Bauman, 66 Ohio Cincimiati, 62 Ohio St. 465, 57 N. E. St. 379, 64 N. E. Rep. 433. Rep. 229, 49 L. R. A. 566. 960 CONSTITUTIONAL LAW OF TAXATION. the remaining lands should be assessed to pay the damages awarded to him for the lands taken. The reason of this was that in special taxation it was not necessary that there should be a finding that the benefits equaled the assessment.-"* Now that the statutes of Illinois have more closely assimilated special assess- ment and special taxation the rule may be different. In an early ISTebraska case the power of the legislature to as- sess the cost of grading on adjacent property was doubted; but this doubt docs not seem to have been repeated.'^ 1876. Where items are included in an assessment, of a kind which clearly do not form a part of the legitimate expense, and these items are substantial enough to add appreciably to the burden of the assessment, the courts will declare the assessment void as to the excess. A law which should direct that substantial items of this character should be included in an assessment would be condemned, at least in those jurisdictions where the principle that assessments cannot exceed benefits is practicalh' enforced. 1877. There are cases where items have been disallowed which may be regarded as being in the nature of constitutional au- thorities. In a New Jersey case under a statute which permitted municipal authorities to assess " the whole amount of cost and expense," the authorities included in the assessment the costs of litigation growing out of the improvement, and losses incurred by reason of the litigation, which litigation had its oriffin in the " illegal and negligent acts of the borough authorities." 'It was held that these items could not be included in the ' assessment.^* In Illinois it was said, in disallowing the items of interest on and costs of a former illegal assessment : The injustice of charging interest upon an assessment illegal and void, and so pronounced by the courts, is so obvious that the language (the statute) which seems to authorize it, should be made to receive, if possible, a different application. ^^ In a later case attorneys' fees and legal expenses incurred in a former void proceeding were disallowed. ■'■' 1878. In a New York case it was held, at the general term, that a statute which authorized a reassessment upon property loCitv of Bloomington v. Latham, ford, 57 N. J. L. (28 Vr.) 619, 31 Atl. 142 111." 41,2, 32 N. E. Rep. 506, 18 L. Rep. 22S, R. A. 5S7. iSLafiin v. Citv of Chicago, 48 111. n Goodiich V. Citv of Omaha, 10 449. Neb. 98, 4 X. W. Rep'. 424. i* Farr v. West Chicago Park Com- 12 De \A'itt V. Mayor, etc., of Ruther- missioners, 167 111. 355, 46 N. E Rep 893. LOCAL ASSESSMENTS. 961 owners of expenses previously incurred by a municipality in making certain improvements, would not be construed to autkor- ize tbe reassessment of unautborized expenditures.-'^ Likewise it bas been beld tbat an assessment for tbe expense of a work, wbicb expense was made mucb greater tban it sbould bave been by tbe extravagance, negligence, or fraud of tbe city officials, sbould be vacated. It was expressly stated, bowever, tbat If the legislature bas actually sanctioned and adjusted the excessive expenditures which constitute the basis of the property owners' complaint, and bas, in virtue of its taxing power, directed the collection of the same from the property in the locality, that would, no doubt, furnish a complete answer to this application, since the power of the legislature, upon proper notice, to do this cannot he questioned.^® It must be remembered tbat in New York tbe power of tbe legislature in such matters is wider tban it is in most states. Money paid to a contractor, to wbicb be was not entitled, bas been disallowed as an item of assessment.-'^ Although a city, by an ordinance confining tbe right to labor on municipal im- provements to resident citizens, may possibly increase tbe cost of tbe work, it is too late to object to tbe assessment on tbat groimd, after tbe work is done.^^' ~ Defective work. 1879. Generally an assessment for local improvements cannot be resisted by tbe taxpayer on tbe ground tbat tbe work for wbicb tbe assessment is laid was defectively done. In tbe absence of proven fraud on the part of tbe municipal or other public author- ities, tbe action of those authorities in accepting tbe work is con- clusive upon tbe taxpayer.^® 15 Matter of Metropolitan Gas Light 260, 43 N. E. Eep. 229; Haley v. City Co., 23 Hun, 327. This case was of Alton, 152 111. 113, 38 N. E. Rep. modified in the Court of Appeals, 85 750; Purdy v. Drake, 17 Ky. Law Rep. N^. Y. 526, but apparently upon other 819, 32 S. W. Rep. 939; Allen v. grounds. Woods, 20 Ky. Law Rep. 59, 45 S. W. 16 Matter of Livingston, 121 N. Y. Rep. 106; Commissioners of Putnam 94, 24 N. E. Rep. 290. County v. Krauss, 53 Ohio St. 628, 42 17 State, etc. v. Mayor, etc., of Ho- N. E. Rep. 831 ; Mayor, etc., of Balti- boken, 36 N. J. L. (7 Vr.) 378. more v. Raymo, 68 Md. 569, 13 Atl. 17a Chadwick v. Kelly, 187 U. S. 540, Rep. 383 ; Dixon v. City of Detroit, 86 47 L. ed. 293, 23 Sup. Ct. Rep. 175. Mich. 516, 49 N. W. Rep. 628; Vander- 18 Emery v. Bradford, 29 Cal. 75 ; beck v. Jersey City, 29 N. J. L. 441 ; People ex rel. Raymond v. Whidden, Schenley v. Commonwealth, 36 Pa. St. 191 111 374, 61 N. E. Rep. 133, 56 L. 9; Chance v. City of Portland, 26 R A 904; Shrack v. Covalt, 144 Ind. Oreg. 286, 38 Pac. Rep. 68. 61 962 CONSTITUTIONAL LAW OF TAXATION. 1880. But of course this rule, like every other, has its limits. If the municipal authorities have been so grossly negligent, or dishonest, or incompetent, that they have accepted a work which is not at all what is called for by the contract, then the taxpayer may defend. His ground of defense against the assessment will be not alone that the work is worthless, but that the work is worth- less and that the authorities have overstepped the statutory limi- tations on their power. Thus, where an improvement ordinance specified a macadam pavement, while the completed work was nothing but a dirt road, enforcement of the assessment was refused in Illinois. The Supreme Court said: The rule that objections to the manner in which an improve- ment is completed are not available on the application for judg- ment for sale does not extend to eases where the improvement authorized is changed for another, or where the city authorities accept a different improvement from the one for which the assessment was levied.^® 1881. That is to say, the defense to an assessment that the work was not performed according to the terms of the contract can- not be made upon the application for judgment for a delinquent assessment, the remedy of the property holder in such case being by injunction prior to the acceptance of the work by the proper authorities; hut, if a contract is made for one improvement, and atiother and different one constructed, the defense may he made whenever it is attempted to compel the property holders to pay for the same. It is not always an easy matter to distinguish between the two classes of cases — that is, to say when the evi- dence shows merely that the work has been defectively done in pursuance of the contract, and when that defect amounts to the making of a different improvement from the one authorized. : If, however, an ordinance should provide for the improvement of a street by being paved with brick or cobblestone, and a con- tractor should attempt to comply with that ordinance by macad- amizing it, there would be no difficulty in holding that the im- provement was a different one, and the property owner not liable, under the ordinance, to pay for the same.^" Other cases supporting the principles thus announced are cited.^^ 19 Citing People ex rel. Raymond v. v. People ex rel. Kochersperger, 174 Whidden, 191 111. 374, 65 N. B. Rep. 111. 366, 51 N. E. Rep. 747; Bond v. 133, 56 L. R. A. 905. Mayor, etc., of Newark, 19 N. J. Eq. 20 Gage V. People ex rel. Raymond, 379; Pepper v. Philadelphia, 114 Pa. 193 111. 316, 61 N. E. Rep. 1045, 56 L. St. 112, 6 Atl. Rep. 899; Scranton v. R. A. 916. Bush, 160 Pa. St. 499, 28 Atl. Rep. 21 Mason v. City of Des Moines, IDS 926; Kansas Citv v. Askew, 105 Mo. Iowa, 658, 79 N. W. Rep. 389; Church App. 84, 79 S. W. 483. LOCAL ASSESSMENTS. 963 1 882. Where a public improvement is altogether abandoned by the municipal authorities, before completion, and the property owners in the district receive no benefit at all from it, it would be most unjust, and contrary to the whole theory of special assess- ments, to compel them to pay for the work done. An assessment for such a work would be spoliation which a court should not allow. Where an assessment had actually been collected for a work afterward abandoned, one who had paid the assessment was allowed to recover his money from the city.^^ Where, however, the work has been partly completed, and there is some benefit, the taxpayer cannot recover.^^ A city cannot, it is said, collect an assessment for work which it never did at all.^* Assessment should not exceed cost. 1883. It is plain that an assessment should not exceed the v.^hole cost of the work for which the assessment is laid. Any substantial excess of assessment over cost would be general taxation of the particular district, in disregard of all the mandates of equality. A law which should direct or inevitably compel such a result would doubtless be held void anywhere in the United States, as an act of confiscation. Where such excesses do occur, they are usually due to errors on the part of administrative officers ; and for such errors the statutes and the unwritten law generally afford the taxpayer a remedy, either in the assessment proceedings or other- "wise. In Illinois judgment upon an instalment of an assessment was refused against one who had paid prior instalments and who proved that the sum collected on prior instalments was enough to pay the whole cost.^^ In Nevr York it was held that where the amount of the assess- ment, after including all the legitimate items of expense, substan- tially exceeds the entire cost of the work, the assessment is void as to the excess,^® and it requires no argument to show that in any jurisdiction where equality and uniformity in taxation are re- quired, and where the rule that benefits must equal assessments is enforced, a law which should direct an assessment in excess of the cost of an improvement would be void, at least as to the excess. 22McConvilIe v. St. Paul, 75 Minn. 79; Pepper v. Philadelphia, 114 Pa. 383, 77 N. W. Eep. 993, 74 Am. St. St. 112, 6 Atl. Rep. 899. Ecp. 508, 43 L. E. A. 584. 25 People ex re]. McCormaek v. Mc- 23 Strickland v. Stillwater, 63 Minn. Wethy, 177 111. 334, 52 N. E. Rep. 43, 65 N. W. Rep. 131. 479, 165 111. 222, 46 N. E. Eep. 187. 24Dorathyv. City of Chicago, 53 in. 23 Folnisbee v. City of Amsterdam, 142 N. Y. lis, 30 N. E. Rep. 820. 964 CONSTITUTIONAL LAW OF TAXATION. Legislature is the judge of the necessity of an improvement. 1 884. The question of the necessity of a public improvement in one which is left to the legislative discretion. Where the legis- lature itself has determined the necessity for the improvement, no case has been found in which its determination in this respect has been reviewed by the courts. There are some cases in which municipal ordinances directing the construction of improvements have been held unreasonable. These cases will be noticed. But the general rule undoubtedly is that the determination of the legis- lature, or of the body to which it has committed the duty of decision in this respect, cannot be judicially reviewed. This is so, both with regard to original improvements and new works to replace old ones.^^ 1885. There are some cases in which municipal ordinances directing the paving or repaving of streets and assessing the cost on neighboring property owners have been held unreasonable and void because it very clearly appeared that there was no need of a new pavement. In one case confirmation of an assessment was refused on this ground, where the ordinance provided for the con- struction of a cement sidewalk in front of a vacant twenty-acre lot having a frontage of 1,256 feet, and it appeared that five months before, the owner of the lot had built a new plank sidewalk in front of the lot, in compliance with a prior ordinance.^ In another case it was held that an ordinance for paving a sidewalk was unreasonable and oppressive because such sidewalk was in an uninhabited part of the city and unconnected with any other street or sidewalk.^* 27Willard v. Preabury, 14 Wall. 92 N. W. Rep. 216, 60 L. R. A. 161; 676, 20 L. ed. 719; Fallbrook Irriga- Macon v. Patty, 57 Miss. 378, 34 Am. tion District v. Bradley, 164 U. S. 112, Rep. 451; Miller v. Anheuser, 2 Mo. 41 L. ed. 369, 17 Sup. Ct. Rep. 56; App. 168; Joplin Consolidated, etc., Modesto Irrigation District v. Tregea, Co. v. Joplin, 124 Mo. 129, 27 S. W. 88 Cal. 334; Myers v. City of Chicago, Rep. 406; Dodge County v. Acom, 61 196 111. 591, 63 N. E. Rep. 1037; Neb. 376, 85 N. W. Rep. 392; People Broadway Baptist Church v. McAtee, ex rel. North v. Featherstonhaugh, 8 Bush (Ky.), 508, 8 Am. Rep. 480; 172 N. Y. 112, 64 N. B. Rep. 802, 60 Griffith V. Pence, 9 Kans. App. 253, L. R. A. 768 ; Re Fowler, 53 N. Y. 60 ; .59 Pac. Rep. 677 ; Marshall v. Gill, 77 Van Vorst v. Jersey City, 27 N. J. L. Ind. 402; Perkins v. Hayward, 124 493; Zimmerman v. Canfield, 42 Ohio Ind. 445, 24 N. E. Rep. 1033; Oliver St. 463; State ex rel. Baltzell v. V. Monona County, 117 Iowa, 43, 90 Stewart, 74 Wis. 620, 43 N. W. Rep. N. W. Rep. 510; Shimmons v. Sagi- 947, 6 L. R. A. 394. naw, 104 Mich. 511, 62 N. W. Rep. 28 Hawes v. City of Chicago, 158 725 ; Diamond v. City of Mankato, 89 111. 053, 42 N. E. Rep 373, 30 L. R. Minn. 48, 93 N. W. Rep. 611, 61 L. A. 225. R. A. 448; State ex rel. Utiek v. Polk 29 Corrigan v. Gage, 68 Mo. 541. County Commissioners, 87 Minn. 325, LOCAL ASSESSMENTS. 965 An ordinance assessing the cost of a new brick pavement on abutting owners, where there was a good cedar-block pavement which had only existed four years, was held to be unreasonable and void,^° as also was an ordinance which required a good macadam pavement to be replaced with an asphalt one.*^ 1886. But the case must be a very clear one, indeed, in order to induce the courts to review the action of the municipal author- ities. Ordinances have been sustained where it was shown that the sidewalk which was ordered constructed would be very costly to the objector, would be of almost no use to any one in the immedi- ate vicinity, and would only be useful to enable people to go to a certain railroad station ;^^ where it was alleged and contended that the streets along which the walks were to be laid existed in name only, and had never been laid out ; that they were unpaved, uncurbed, ungraded, and but little-used dirt roads, overgrown with grass and weeds, and that there were no conditions requiring, at that time, the building of such walks ;^^ and where, in a good residence neighborhood, a new twenty-foot cement sidewalk was ordered, to take the place of sidewalks of varied material and con- dition, varying in width from six to twenty feet.^* 1887. In Pennsylvania an assessment for a fifteen-inch main eewer whose size was determined wholly by the requirements of remote properties, while a ten-inch sewer would have been enough for the immediate neighborhood, was set aside as to the excess. ^^ Determining the district of assessment. 1 888. The determination of the bounds of the district of assess- ment is a determination of fact, that the property within the dis- trict is benefited. The decision of this question rests with the legis- lature or the subordinate body to which it commits the decision of the question. While the apportionment of the benefits, as be- tween the various parcels in the district, may be questioned in the courts where statutory methods of review exist, it is not ordinarily competent to question the fact of benefit on any constitutional grounds. Except in cases of fraud or the rare cases where the courts find that absolute spoliation has taken place, amounting to a taking without due process of law, the decision of the tribunal SOMcFarlane v. City of Cliicago, 3.3 Field v. Western Springs, 181 111. 185 111. 242, 57 N. E. Eep. 12. 186, 54 N. E. Rep. 929. 31 City of Chicago v. Brown, 205 3* City of Cliicago v. Wilson, 195 111. 568, 69 N. E. Rep. 65. 111. 19, 62 N. E. Rep. 843, 57 L. E. A. 32 Walker v. Morgan Park, 175 111. 127. 570 51 N. E. Rep. 636. separk Avenue Sewers, 169 Pa. St. ' 433, 32 Atl. Rep. 574. 966 CONSTITTJTIOJTAL LAW OF TAXATION. of assessment as to what territory shall be included in the district is conclusive.'® 1889. From this principle it results, as a matter of constitu- tional law, that it is not essential to the validity of an assessment upon property, that the property assessed shall directly abut on the street or place in which the improvement is made. The question in each case is one of fact for the legislature, or for the tribunal of assessment under legislative direction, whether or not the prop- erty assessed is specially benefited by the improvement. If it be determined as a fact, by the proper tribunal, that the property is especially benefited, an assessment is proper, whether the property be abutting and contiguous to the improvement or not.^'^ 1890. In Arkansas, although the constitution only authorizes assessments by municipalities, upon the consent of a majority of the property owners owning property " adjoining " the locality to be affected, assessments may be made upon property near to, though it does not actually abut on, the street or place improved. As the constitutional provision is construed, the legislature may delegate to subordinate municipal agencies, such as city councils, the task "of determining what property is benefited by a pro- posed improvement. When the city council or other agency hav- ing statutory authority has made such a determination, and has included any property in the district of a proposed improve- ment, its action is conclusive that such property is " adjoining " the district to be affected, except in cases of the clearest, demon- strable mistake or fraud.^* 36 See §§ 408 et seq., and cases cited; less average depth than others, and of also Spencer v. Merchant, 125 U. S. an equitable proportion of corner lots, 345, 31 L. ed. 763, 8 Sup. Ct. Rep. does not render the assessment void 921 ; Fallbrook Irrigation District v. for lack of uniformity. Cleneay v. Bradley, 164 U. S. 112, 41 L. ed. 369, Norwood, 137 Fed. Rep. 962. 17 Sup. Ct. Rep. 56; Parsons v. Dis- ST Guild v. City of Chicago, 82 111. trict of Columbia, 170 U. S. 45, 42 472; Louisville, etc., Ry. Co. v. City L. ed. 943, 18 Sup. Ct. Rep. 521; of East St. Louis, 134 111. 656, 25 Duncan v. Ramish, 142 Cal. 686, 76 N. E. Rep. 962; Ray v. Jeffersonville, Pac. Rep. 661; Wolff v. Denver, — 90 Ind. 567; Matter of New Amster- Colo. App. — , 77 Pac. Rep. 364; dam, 126 N. Y. 158, 27 N. E. Rep. Adams v. Shelbyville, 154 Ind. 467, 272, 36 N. Y. St. Rep. 948; McCor- 77 Am. St. Rep. 484, 57 N. E. Rep. mick v. City of Omaha, 37 Neb. 829, 114, 49 L. R. A. 797; Power v. De- 56 N. W. Rep. 626; Lansing v. City troit, — Mich. — , 102 N. W. Rep. of Lincoln, 32 Neb. 457. 49 N. W. 288; Kelly v. Minneapolis, 57 Minn. Rep. 650; City of Cincinnati v. 294, 47 Am. St. Rep. 605, 59 N. W. Eatsehe, 52 Ohio St. 324, 40 N. E. Rep. 304, 26 L. R. A. 92; Beck v. Rep. 21, 27 L. R. A. 536; Hayes v. Holland, 29 Mont. 234, 74 Pac. Rep. Douglas County, 92 Wis. 429, 65 N. 410. And see also cases cited post, W. Rep. 482, 53 Am. St. Rep. 926, 31 I 1889. The exemption from an as- L. R. A. 213. sessment of portions of lots having 38 Little Rock v. Katzenstein, 52 LOCAL ASSESSMENTS. 967 1891. In Pennsj'lvania the discretion of the legislature and its subordinate bodies, in determining the district of assessment, is limited. It is held, as a matter of constitutional law, that the assessment for benefits of properties not abutting on the improve- ments is a taking of property without due process of law.^" In one decision cited it was sought to justify an assessment for a main sewer, on property in the vicinity but not directly abutting, upon the ground that the use of lateral sewers was thus made possible to the owners of the property, and, further, that the neighborhood received a benefit in that a certain watercourse, which before furnished open drainage, was turned into a closed sewer, thus confining the noxious odors which formerly caused discomfort and injured health. It was said that these were bene- fits enjoyed by the city at large and were not proper subjects of special assessment.*" In a still later case an assessment upon property on a street which was a cul de sac for the expense of making it an open street, was held to be unauthorized.'*'^ Legislature may group or divide improvement. 1892. The legislature, or its subordinate legislative agencies having statutory authority, may treat an improvement or a sys- tem of improvements, extending over a wide territory, as a whole, if there be any relation at all between the various parts of the system to justify the union. An assessment for the cost of the whole improvement, considered as a unit, may be apportioned among all the property owners in the benefited district. It is not necessary that the expense of improvements on one street or block be assessed on property near that street or block. " There is no doubt that the legislature, within the limits of reason, can group as -one the distinguishable elements of a public improve- ment." ** It has been held proper for the legislative authorities to lump the cost of extending two streets and widening one of them, apportioning the whole cost among lotowners in the whole Ark 107 12 S. W. Eep. 198; Mat- Sewer Cases, 179 Pa. St. 490, 36 Atl. thews V. Kimball, 70 Ark. 451, 66 S. Kep. 209, 210, 1130 (sewers). W Kep 651 69 S. W. Rep. 547. « Beechwood Avenue Sewer Cases, 39 Washington Avenue, 69 Pa. St. 179 Pa. St. 490, 36 Atl. Rep. 209, 210, 352, 8 Am. Rep. 255 (opening a rural 1130. highway) • Morewood Avenue, 159 Pa. 41 Orkney Street, 194 Pa. St. 425, 45 St. 20, 28 Atl. Rep. 123, 132 (grading, Atl. Rep. 314, 48 L. R. A. 274. paving, and curbing a street); Park 42 Sears v. Boston Si^""^ i ' ;-'^u. .Avenue, 169 Pa. St. 433, 32 Atl. Rep. sioners. 180 Mass. 274, 62 N. E. Rep. 574 (sewers) ; Beechwood Avenue 397, 62 L. R. A. 144. 968 CONSTITUTIONAL LAW OF TAXATION. of the benefited territory;*^ to make a whole city a single sewer district;** to make one district for a connected system of sewers on several streets;** to include the cost of sidewalks on different Btreets in one assessment;*® and to include in one assessment the cost of sidewalks on opposite sides of a street.*^ Other cases asserting the power of the legislature in this respect are cited.** 1893. An extreme illustration of the power of the legislature to group the various elements of an improvement in one assess- ment is found in a recent case decided in the United States Su- preme Court. At a time when planking was paid for by the general funds of a city, the city council, on the petition of a prop- erty owner, extended a street through his property. The street was graded from the beginning, it was planked for some distance, but the planking stopped more than a thousand feet away from the property in question. An assessment for the cost of the opening was held void. Afterward the property was sold. Then the legislature authorized a new assessment on the whole district, in- cluding the property in question, and including the cost of the planking. The Circuit Court for the District of Washington held that the inclusion of the planking in the assessment of property more than 1,000 feet from the end of the planking was manifestly unfair, and enjoined the assessment. But the Supreme Court re- versed the decree of the Circuit Court, saying, among other things, C:f the inclusion of the planking : Taken by itself it looks like an unwarrantable attempt to make one man pay for another man's convenience. On the other hand, BO far as the work was similar in character throughout the street, we are of opinion that the improvement might be regarded as one.*^ And if this be admitted, we cannot say that the assessing *3 Sears v. Boston Street Commis- Lincoln v. Boston Street Commission- sioners, supra. era, 176 Mass. 210-212, 57 N. B. Kep. 44Grunewald v. City of Cedar 356; Alden v. Springfield, 121 Mass. Eapids, 118 Iowa, 222, 91 N. W. Rep. 27, 28; Wells v. Boston Street Commis- 1059. sioners, 187 Mass. 451, 73 N. E. Rep. 45 Walker v. People, 170 111. 410, 48 554; Cuming v. City of Grand Rapids, N. E. Rep. 1010. 46 Mich. 150, 9 N. W. Rep. 141 ; State 48 City of Springfield v. Green, 120 v. District Court of Ramsey Comity, 111. 269, 11 N. E. Rep. 261; Wilbur v. 33 Minn. 295, 23 N. W. Rep. 222; City of Springfield, 123 111. 395, 14 Matter of Inpraham, 64 N. Y. 310; Oil N. E. Rep. 871 ; Storrs v. City of Chi- City v. Oil City Boiler Works, 152 cage, 208 111. 364, 70 N. E. Rep. 347. Pa. St. 348, 23 Atl. Rep. 549 ; Cassitt « Watson V. City of Chicago, 115 v. Neuscheler, — N.J. — , 60 Atl. Rep. 111. 78, 3 N. E. Rep. 430. 1160. *8 Grimmell v. Des Moines, 57 Iowa, « Citing Webster v. Fargo, 181 U. S. 144, 10 N. W. Rep. 330; Kendig v. 394, 45 L. ed. 912, 21 Sup. Ct. Rep. Knight, 60 Iowa, 29, 14 N. W. Rep. 78 : 623. LOCAL ASSESSMENTS. 969 board might not have been warranted in thinking that substan- tial justice was done. There were many cuts and fills made in grading the road. So far as appears, the heaviest work may have been done on the plaintiff's land, which seems to have been the summit of an ascent. Improvement of one sort may have been the greatest there, while that of a different hind, needed ivhere the travel was, was at the other end of the street?" 1894. Conversely it is equally competent for the legislature, within the limits of reason, to divide an improvement into parts, making a separate district of assessment of each part, and ap- portioning the cost of each part among the owners of property in the district adjacent to each part, according to benefits.®^ 1 895. In one of the opinions above quoted it was said that the power of the legislature to group the elements of an improvement was a power to be exercised "within the limits of reason;" and there can be no reasonable doubt that this legislative power does aot extend so far as to enable the legislature, arbitrarily, to unite improvements which have no real relation to each other, either in situation, operation, or benefit, or to divide improvements which are essentially one, into unreasonable fragments for the purposes of assessment. ^^ Cases of clear abuse of the power of fixing the limits of the district. 1896. While the discretion of the legislative authorities is all but absolute in the formation of the taxing district ; and ordinarily an owner of property in the district of assessment will not be heard to say that his property receives no benefit,^^ yet there are cases where the absence of benefit is so clear, where there is no remote possibility of benefit, that the powers of the judiciary to prevent spoliation are invoked. In such very clear cases, assessments, as to the particular property, will be restrained or set aside under the due process of law clause. That the case must be a very clear one indeed is plain from some of the decisions in which assessments 50 City of Seattle v. Kelleher, 195 Findley v. Frey, 51 Ohio St. 390, 38 U. S. 351, 49 L. ed. — , 25 Sup. Ct. N. E. Rep. 114; Schenley v. Common- Rep. 44. wealth, 36 Pa. St. 29, 78 Am. Dec. 359. 51 Bacon v. Mavor, etc., of Savannah, 52 Davis v. City of Litchfield, 145 86 Ga. 301, 12 S". E. Rep. 580; Light- 111. 313, 33 N. E. Rep. 888, 21 L. R. A. ner v. City of Peoria, 150 111. 80, 89, 563; Church v. People, 179 111. 205, 80, 37 N. E. Rep. 69; Spencer v. Mer- 53 N. E. Rep. 554. chant, 100 N.y. 585, 3 N.E. Rep. 682; 53 Pallbrook Irrigation District v. affirmed, 125 U. S. 345, 31 L. ed. 763, Bradley, 164 U. S. 112, 41 L. ed. 309, 8 Sup. Ct. Rep. 921; Hilliard v. Ashe- 17 Sup. Ct. Rep. 56. ville, 118 N. C. 845, 24 S. E. Rep. 738; 970 CONSTITUTIOKAL LAW OF TAXATION. have been upheld. In one case the legislative discretion was held e(mchisive, and the courts refused to interfere, where an owner of property in a town, unsusceptible of irrigation, was subjected to an assessment for irrigating purposes, his property having been included in an irrigation district." 1897. In Massachusetts a statute grouped together a great ■s-ariety of expenses, including all that were connected with the general administration of the sewer department of the entire city of Boston, many of which were proper subjects for general taxa- tion, and including the cost of future construction, and authorized that these expenses be annually assessed upon the real estate of the whole city. This act was held unconstitutional. The court said, among other things: In determining the charge to be made upon any particular estate it is clear that most of the expenses to be reimbursed would be found to have been incurred in ways that could bring no special or peculiar benefit to that estate. The cost of con- stmcting and maintaining sewers remote from it could confer no benefit. In two of these cases it appears that the estates of the petitioner have previously paid special assessments made by the city for the construction of sewers into which the estates drain, and in one of them it appears in like manner that no sewers have been constructed under (the statute under consider- ation), and no repairs made under the provisions of said act upon sewers already existing with which the estates of the peti- tioners have or can have any connection, or from the use of which said estates derive and benefit. Where lands have paid assessments for the construction of all sewers iy whose operation they are affected, it cannot be said that they receive an addi- tional special and peculiar benefit from the general oversight and operation of the sewers of Boston, such as to subject them to a second special assessment."^ 1 898. An assessment upon a lot for the construction of a sewer, which was in part laid upon private property so that the ovraer of the lot could not iave access to the sewer without trespassing upon such private property, was set aside by the Minnesota Su- preme Court, which said that " the assessment must have been made by fraud or demonstrable mistake of fact." ^® In ISTew York it appeared in a suit to restrain the collection of a sewer assess- ment that the plaintiff's property ^\-hich was assessed was so 54Fallbiook Irrigation District v. Boston, 173 Mass. 350, 53 N. E. Eep. Bradley, 104 XJ. S. 112, 41 L. ed. 369, 876. 17 Sup. Ct. Rep. 56. 66 State ex rel. McKune v. District 55 Soars V. Street Commiasioners of Court of Ramsey County, 90 Minn 540, 07 X. W. Eep. 4-25. LOCAL ASSESSMENTS. 971 situated as to derive no benefit at all from the sewer, that no water could be drained from the property into the sewer, without constructing drains and ditches through intervening lands belong- ing to other parties over which plaintiffs had no control. For this, among other reasons, the assessment was set aside. ''^ 1899. In an early ISTebraska case a municipality, under statu- tory authority to construct sewers and lay assessments therefor, divided the city into two sewer districts, one of which was about two and one-half miles long and one and three-quarter miles wide. Much of the territory was unplatted and imused land. A creek furnished natural drainage for a large part of the district. The authorities constructed two main sewers (one of which followed the bed of the creek, the other that of a small stream which emptied into the creek), at a cost of more than $30,000, and laid an as- sessment by value, to pay the cost. The ordinance laying the tax expressly found the fact of benefit to the property. The Supreme Court of Nebraska perpetually enjoined the collection of the assess- ment, saying that the work was one of general public benefit, that it was plain that no lot was exceptionally benefited, that the finding of the fact of benefit was " a fraud on its face." ^* 1900. In Illinois the courts refused to confirm an assessment, for a brick sewer, upon lands which were wholly agricultural, although lying in the city limits. The assessment was extended to lands lying a quarter of a mile on each side of the street on which the sewer was laid; and the district of assessment was ex- tended along said street to a point three miles west of the westerly terminus of the sewer. It appeared that the sewer could not be of any benefit at all to the lands except for surface drainage after some future extension; that the benefit which could be derived from such surface drainage was doubtful, and that the ordinance establishing the sewer did not provide that it might be used for surface drainage.^® In another Illinois case confirmation of a sewer assessment was refused, as to certain agricultural lands, it appearing that the sewer would not improve the surface drainage, and that the sewer ordinance made no provision for enabling the owners of the property to use the sewer.*" 57 Providence Retreat v. City of Buf- 60 Bickerdike v. City of Chicago, 185 falo, 29 App. Div. (N. Y.) 160, 51 111. 280, 56 N. E. Rep. 1096. See N. Y. Supp. 654. Clark v. Chicago, 214 III. ,318, 73 N. E. SSHanscom v. City of Omaha, 11 Rep. 358; McChcsney v. Chicago, 213 Neb. 37, 7 N. W. Rep. 739. 111. 592, 73 N. E. Rep. 368. B9 Edwards v. City of Chicago, 140 111. 440, 30 N. E. Rep. 350. 972 CONSTITUTIONAL LAW OF TAXATION. 1901. In ISTew Jersey confirmation of a sewer assessment was refused, where it appeared that the assessment was upon remote lands not presently benefited, but which might be benefited in case of the construction of branch sewers in the future.®^ 1902. Where property which has been included in the district is omitted from the assessment, the assessment is void.®* Property which may be assessed. 1903. Ordinary real estate may be assessed of course. It Is hard to see how an assessment for special benefits could be made on ordinary personalty. The whole theory of assessments is that special and peculiar benefits accrue to the property which is as- sessed, by reason of physical contiguity to the improvement. How personalty which follows the owner's domicile, and is in itself of a movable nature, can derive any special benefit from a local improvement, is not perceived. A Kansas law was held uncon- stitutional because among other things it provided for the assess- ment of ordinary personal property.®^ In the cases cited, statutes were construed as not authorizing assessments on personal prop- erty.*^ There are some cases, considered elsewhere, where benefits to the " franchise " or business of street railways were regarded as pufiicient to authorize assessments.^ These cases proceed not so much upon any logical theory as upon the popular ground that no railroad should be allowed to escape any burden. 1 904. It is not constitutionally a defense against an assessment to say that the use to which the property assessed is devoted is such that the improvement can be of no benefit. The possibility of benefit is usually regarded as suflicient to warrant the assess- ment. The possible use, and not merely the present use, is to be regarded. Thus, agricultural lands in city limits niay be as- sessed for such improvements as street paving, sewers, and the like, which are of no benefit to the lands while used for agricxiltural purposes.'^^ Cemetery property may be subjected to assessments 81 Vreeland v. Mayor, etc., of Bay- County v. Abbott, 52 Kans. 148, 34 onne, 58 N. J. L. (29 Vr.) 126, 32 Atl. Pac. Eep. 416. Eep. 68 ; New Jersey, etc., Ey. Co. v. 64 Beeeher v. City of Detroit, 92 City of Elizabeth, 37 N. J. L. (8 Vr.) Mich. 268, 52 N. W." Rep. 731; Excel- 390. sior, etc., Co. v. Green. 39 La. Ann. 62 People V. Lynch, 51 Cal. 15, 21 455, 1 So. Eep. 873. Am. Eep. 677; Matter of Klock, 30 65 See § 1921 et seq. N. Y. App. Div. 24, 51 N. Y. Supp. 06 Leitch v. Village of La Grange, B97. 138 111. 291, 27 N. E. Eep. 917; Dick- 63 Commissioners of Wyandotte erson v. Franklin, 112 Ind. 178, 13 LOCAL ASSESSMENTS. 973 for purposes which can be of little or no benefit to the lands in their use for the burial of the dead.®'' 1905. Eeligious, charitable, or educational uses do not relieve property from special assessments.^ 1 906. Property of the United States, of course, cannot be sub- jected to local assessments without the consent of the government.®^ Generally the property of the states and of their subordinate governmental agencies will not be subjected to assessment unless the legislative intent so to subject them is express. A general act subjecting property to assessment will not ordinarily be deemed to include such public property. ''"' There are some decisions, however, which hold that taxation is the rule and exemption the N. E. Eep. 579; Taber v. Grafmiller, 109 Ind. 206, 9 N. B. Eep. 721; Far- well V. Des Moines Brick Mfg. Co., 97 Iowa, 286, 66 N. W. Kep. 176, 35 L. E. A. 63; Duker v. Barber Asphalt Paving Co., 25 Ky. Law Eep. 135, 74 S. W. Eep. 744; McKeesport v. Soles. 178 Pa. St. 363, 35 Atl. Eep. 927; Philadelphia v. Sheridan, 148 Pa. St. 532, 24 Atl. Eep. 80. Eestrictions arising out of covenants in deeds will not relieve from assessments. Matter of Clinton Ave., — App. Div. — , 94 N. Y. Supp. 146. 67 Bloomington Cemetery Associa- tion V. People, 139 111. 16, 28 N. E. Eep. 1076 ; Baltimore v. Cemetery Co., 7 Md. 517; Buffalo City Cemetery v. City of Buffalo, 46 N. Y. 506; Buffalo Cemetery Association v. City of Buf- falo, 118 N. Y. 61, 22 N. E. Eep. 962; City of Philadelphia v. Union Burial Ground Society, 178 Pa. St. 533, 36 Atl. Eep. 172, 36 L. E. A. 263. 68 City of Atlanta v. First Presby- terian Church, 86 Ga. 730, 13 S. E. Eep. 252, 12 L. E. A. 852; Chicago University v. People, 118 111. 565, 9 X. E. Eep. 189; City of Chicago v. Baptist Theological Union, 115 111. 245, 2 N. E. Eep. 254; Zabel v. Louisville Baptists Orphans' Home, 92 Ky. 89, 17 S. W. Eep. 212, 13 L. E. A. 668; Boston Asylum v. Boston Street Com- missioners, 180 Mass. 485, 62 N. E. Eep. 961; Lefevre v. City of Detroit, 2 Mich. 586; Washburn Memorial Orphan Asylum v. State, 73 Minn. 343, 76 N. W. Eep. 204; State v. Mac- Alester College, 87 Minn. 165, 91 N. W. Eep. 484; Sheehan v. Good Samaritan Hospital, 50 Mo. 155, 11 Am. Eep. 1; State, etc. v. Newark, 35 N. J. L. 157, 10 Am. Eep. 223; Eoosevelt Hospital v. Mayor, etc., of New York, 84 N. Y. 108; Philadelphia v. Pennsylvania Hospital, 143 Pa. St. 367, 22 Atl. Eep. 744; Second Universalist Society v. Providence, 6 E. I. 235. 69 Fagan v. City of Chicago, 84 111. 227. 70 State V. City of Hartford, 50 Conn. 89, 47 Am. Eep. 622; City of Hartford v. West Middle District, 45 Conn. 462, 29 Am. Eep. 687 ; Board of Improvement v. School District, 56 Ark. 354, 35 Am. St. Eep. 108, 19 S. W. Eep. 969, 16 L. E. A. 418; Witter V. School District, 121 Cal. 350, 66 Am. St. Eep. 33, 53 Pao. Eep. 905; Edger- ton V. School Township, 126 Ind. 261, 26 N. E. Eep. 156; City of Camden V. Camden Village Corporation, 77 Me. 534, 1 Atl. Eep. 689; Baltimore County Commissioners v. Maryland Hospital for Insane, 62 Md. 127 ; Wor- cester Agricultural Society v. Mayor, etc., of Worcester, 116 Mass. 193, 17 Am. Eep. 159; City of Big Eapids v. Supervisors of Mecosta County, 99 Mich. 351, 58 N. W. Eep. 358; City of Clinton v. Henry County, 115 Mo. 557, 37 Am. St. Eep. 415, 22 S. W. Eep. 494; Green v. Hotaling, 44 N. J. L. (15 Vr.) 347; City of Toledo v. Board of Education, 48 Ohio St. 83, 26 N. E. Eep. 403; People v. Board of Assess- ors, 111 N. Y. 505, 19 N. E. Eep. 90, 2 L. E. A. 148 ; City of Pittsburgh v. Sterrett Subdistrict School, 204 Pa, St. 635, 54 Atl. Eep. 463, 61 L. E. A. 183; Harris v. Boyd, 70 Tex. 237, 7 S. W. Eep. 713. 974 COXSTITUTIONAL LAW OP TAXATION. exception; and that municipal, connty, and school district prop- erty will be subjected to assessment unless the intention to exempt aifirmatively appears. '^^ 1907. Generally constitutional and statutory exemptions of property from taxation do not exempt the property from special assessments.^^ Assessments of railroads. 1908. Whether railroads and street railways may be subjected to assessments for local improvements, is a question which, in various forms, has been frequently before the courts. The question arises by reason of the following facts: Railroads in many instances do not own the absolute fee of property used by them. Sometimes they have only a right of way or easement in lands over which their tracks pass. Sometimes they own the fee, but their ownership is a qualified one, restricted in that they may only use the land for railway purposes. Some- times they acquire their lands by condemnation proceedings, in which they acquire only for the uses of their incorporation. Street 71 McLean County v. City of Bloom- ington, 106 111. 209 ; Adams County v. City of Quinoy, 130 111. 566, 22 N. E. Kep. 624; City of Chicago v. Chicago, 207 111. 37, 69 N. E. 580; Edwards v. Jasper County, 117 Iowa, 365, 94 Am. St. Rep. 301, 90 N. W. Eep. 1006; Franklin County Commissioners v. City of Ottawa, 49 Kans. 747, 33 Am. St. Rep. 396, 31 Pac. Rep. 788. 72 Board of Improvement v. School District, 56 Ark. 354, 35 Am. St. Rep. 108, 19 S. W. Rep. 969, 10 L. R. A. 418; Emery v. San Francisco Gas Co., 28 Cal. 346; San Diego v. Linda Vista Irrigation District, 108 Cal. 189, 41 Pac. Rep. 291, 35 L. R. A. 33; City of Bridgeport v. New York, etc., Ry. Co., 36 Conn. 255, 4 Am. Rep. 63; Atlanta V. First Presbyterian Church, 86 Ga. 730, 13 S. E. Rep. 252, 12 L. R. A. 852 ; Bloomington Cemetery Aajocia- tion V. People, 139 111. 16, 28 N. E. Rep. 1076; Illinois Central Ry. Co. v. City of Decatur, 126 111. 92, 18 N. E. Rep. 315, 1 L. R. A. 613; First Presby- terian Church V. City of Fort Wayne, 36 Ind. 338, 10 Am. Rep. 35; Farwell V. Des Moines Brick Mfg. Co., 97 Iowa, 286, 66 N. W. Rep. 176, 35 L. R. A. 63; Commissioners of Franklin County V. Ottawa, 49 Kans. 747, 33 Am. St. Rep. 396, 31 Pac. Rep. 788; Zabel V. Louisville Baptist Orphans' Home, 92 Ky. 89, 17 S. W. Eep. 212, 13 L. R. A. 668; Lafayette v. Male Orphan Asylum, 4 La. Ann. 1 ; Wor- cester Agricultural Society v. Worces- ter, 116 Mass. 189; Lake Shore, etc.. Ry. Co. V. City of Grand Rapids, 102 Mich. 374, 60 N. W. Rep. 767, 29 L. R. A. 195 ; Baltimore v. Cemetery Co., 7 Md. 517; Washburn Jlemorial Or- phan Asylum v. State, 73 Minn. 343, 76 N. W. Rep. 204; City of Clinton v. Henry County, 115 Mo. 557, 37 Am. St. Rep. 415, 24 S. W. Rep. 494; Kansas City, etc.. Park v. Kansas City, 174 Mo. 42.5, 74 S. W. Rep. 979; Macon v. Patty, 57 Miss. 378, 34 Am. Rep. 451; City of Beatrice v. Brethren Church, 41 Neb. 358, 59 N. W. Rep. 932; Brewster v. Hough, 10 N. H. 138; Paterson v. Society, etc., 24 N. J. L. 385; Roosevelt Hospital v. Mayor, etc., of New York, 84 N. Y. 108 ; Lima V. Cemetery Association, 42 Ohio St. 128, 51 Am. Rep. 809; Philadelphia v. Union Burial Ground Focietv, 178 Pa. St. 533, 36 Atl. Rep. 172, 36 L. R. A. 263; Second Universalist Society v. Providence, 6 R. I. 235; Winona, etc., Ry. Co. v. Watertown, 1 S. Dak. 46, 44 N. W. Rep. 1072; Seanor v. Commis- sioners, 13 Wash. 48, 42 Pac. Rep ri.)2 : Hale v. Kenosha, 29 Wis. 599. LOCAL ASSESSMENTS. 975 railways seldom have an estate in the streets over which their rails are laid, except the privilege or franchise of using the street for their corporate purposes. It has been argued in many cases, and decided in some, that an ordinary street improvement, such as paving or widening, could not possibly benefit property devoted and restricted to such uses; hence that no assessment for benefits could be made. Sometimes the mlatter has been decided on purely statutory grounds. With such cases this book deals only incidentally. 1909. There can be no doubt that the property of a railroad or street railway company, not a part of its track or right of way, or essential to the exercise of its franchises, and held by it with- out restriction as to use, is subject to assessment for benefits like other property. Generally the question whether property used for terminals, stations, yards, and the like, by a railroad company, is benefited by a public improvement, has been deemed to be a question of fact, to be determined by the legislature or its sub- ordinate tribunal of assessment. But little, if any, attention has been paid to the argument that such property cannot be bene- fited because its use is incidental to that of the main stem, which use, for transportation, receives no benefit from local im- provements.^^ In New Jersey city lots owned by a railroad com- pany, not a part of the right of way, have been held subject to assessments, although they were intended to be used in future for enlarging the railroad yard.''* So also have lands above a tunnel, not used in connection with the tunnel, except that, incidentally, they were pierced by a ventilating shaft.^^ In a Connecticut case it was held as matter of law that station property, and vacant property, restricted as to use, could not be benefited by an improve- TS Chicago, etc., Ry. Co. v. Elmliurst, Borough of Mount Pleasant v. Balti- 165 111. 148, 46 N. E. Rep. 437 ; Chi- more, etc., Ey. Co., 138 Pa. St. 365, 20 cago, etc., Ry. Co. v. People, 120 111. Atl. Rep. 1052, 11 L. R. A. 520; City 104, 11 N. E. Rep. 418; Burlington, of Philadelphia v. Philadelphia, etc., etc., Ry. Co. v. Spearman, 12 Iowa, Ry. Co., 177 Pa. St. 292, 35 Atl. Rep. 112; Atchison, etc., Ry. Co. v. Peter- 610, 34 L. R. A. 564; Be Berks Street, son, 58 Kans. 818, 5rPac. Rep. 290; 12 W. N. C. (Pa.) 10. Property State ex rel. Minnesota Transfer Co. v. which is owned by a railroad company District Court of Ramsey County, 68 and leased to an amusement company Minn. 248, 71 N. W. Rep. 27; In re may be assessed. Chicago Union County Commissioners of Hampshire, Traction Co. v. Chicago, 215 111. 410, 143 Mass. 424, 9 N. E. Rep. 756; City 74 X. E. Rep. 449. of Nevada v. Eddy, 123 Mo. 546, 27 T4 Morris & Essex Ry. Co. v. Jersey S. W. Rep. 520; Matter of Alexander City, 64 N. J. L. 151, 44 Atl. Rep. 938. Avenue, 44 N. Y. St. Rep. 546, 17 N. i^IUd., 64 N. J. L. 148, 44 Atl. Rep. Y. Supp. 933; Baltimore, etc., Ry. Co. 937. \. Belmont County, 19 Ohio St. 589; 976 CONSTITUTIONAL LAW OF TAXATION. ment whicli rendered the station easier of access and made the vacant property more valuable for general purposes/® but this case seems to be out of harmony with other authorities and its reasoning is diificult to appreciate. In a later Connecticut case lands owned by a railroad and not restricted as to use were held subject to a sewer assessment.''^ 1910. With respect to assessing the main stem, the right of way, of steam railroads, the authorities are divided. The courts which have held that the road could gain no possible benefit from a local improvement have generally emphasized the fact that the estate of the road in the lands of its roadbed was limited, being either a mere right of way or easement, or a fee restricted in use to the purposes of transportation for which railroads are incor- porated by the state, the argument in either case being that the estate so restricted in use could gain no possible benefit from local improvements, such as paving and opening streets, hence no as- sessment for benefits could be upheld. The cases which uphold such assessments assert that the ease- ment or right of way or estate of a railroad in its roadbed is property; that the devotion of the property to a particular use does not alter its liability to assessment, and that the question of benefits is one to be decided by the legislature or subordinate tribunal of assessment. The cases which are discussed in this connection are considered solely with reference to the constitutional question whether such assessments may be laid, and do not include cases where liability to assessment has been denied because adequate statutory provision did not exist Whether a railroad can derive any benefit from a local assessment is a constitutional question, for if it cannot, the collection of an assessment would be a taking of property vsdth- out due process of law. First are considered cases in which assessments of the character described have been upheld. 1910a. A recent case in the Federal Supreme Court holds, as that court might have been expected to hold, that the Fourteenth Amendment does not prevent the states from laying special assess- ments for street improvements upon railroad rights of way. In upholding such an assessment, made under a Kentucky statute,™ the Supreme Court said: 76 New York, etc., Ry. Co. v. City of 77 New York, etc., Ey. Co. v. New New Haven, 42 Conn. 279, 19 Am. Hep. Britain, 49 Conn. 40. 534. 78 Kentucky Statutes, § 2834. LOCAL ASSESSMENTS. 977 There is a look of logic when it is said that special assess- ments are founded on special benefits and that a law whicli makes it possible to assess beyond the amount of the special benefit attempts to rise above its source. But that mode of argu- ment assumes an exactness in the premises which does not exist. The foundation of this familiar form of taxation is a question of theory. The amount of benefit which an improvement will confer upon particular land, indeed whether it is a benefit at all, is a matter of forecast and estimate. In its general aspects at least it is peculiarly a thing to be decided by those who make the law. The result of the supposed constitutional principle is J simply to shift the burden to a somewhat large taxing district, the municipalityj and to disguise, rather than to answer, the theoretic doubt. It is dangerous to tie down legislatures too closely by judicial constructions not necessarily arising from the words of the constitution. Particularly it is important for this court to avoid extracting from the very general language of the Fourteenth Amendment a system of delusive exactness in order to destroy methods of taxation which were well known when the amendment was adopted, and which it is safe to say that no one then supposed would be disturbed. . . . . . . That apart from the specific use to which this land is devoted, land in a good-sized city generally will get a benefit from having the streets about it paved, and that this benefit generally will be more than the cost, are propositions which, as we have already implied, a legislature is warranted in adopting. But if so we are of opinion that the legislature is warranted in going one step further and saying that on the question of benefit the land shall be considered simply in its general relations and apart from its particular use. On the question of benefits, the present use is simply a prognostic, and the plea a prophecy. If an occupant could not escape by professing his desire for solitude and silence, the legislature may make a similar desire fortified by structures equally ineffective. It may say that it is enough that the land could be turned to purposes for which the paving would increase its value. Indeed, it is apparent that the prophecy in the answer cannot be regarded as absolute, even while the present use of the land continues — for no one can say that changes might not make a station desirable at this point; in which case the advantages of a paved street could not be denied. We are not called upon to say that we think the assess- ment fair. But we are compelled to declare that it does not go beyond the bounds set by the Fourteenth Amendment of the constitution of the United States.™ 1911. In one of the earliest cases on the subject, which arose in Ohio, the question was, whether lands which had been con- 79 Louisville, etc., Ey. Co. v. Barber firming (Ky.) 76 S. W. Eep. 1097, Asphalt Paving Co., 197 U. S. 430, 49 25 Ky. L. Rep. 1024. L ed. , 25 Sup. Ct. Rep. 466, af- 62 978 CONSTITUTIONAL LAW OF TAXATION. deirmed for the purposes of a railroad track before the making of a street improvement, upon which lands the track was built after the improvement was completed, and which lands crossed the im- proved street at right angles, were liable to assessment for the im- provement. The estate of the company in the lands seems to have been " the exclusive right to the possession, so long as it is used for the road." It was held that the assessment was valid. The court, after pointing out that railroad tracks, etc., are liable for general taxes, said: If railroad tracks are taxable for general purposes, it is diffi- cult to perceive why they should not be subject also to special taxes or assessments. The company, to advance its own interests, has seen fit to appropriate to its use ground within the corporate limits of the city of Toledo, few Haven, 42 Conn. 279, 19 Am. Rep. .534. 990 CONSTITUTIOITAL LAW OF TAXATION. Levying the cost of an improvement upon adjacent property without actual inquiry as to benefits. 1936. Whether the legislature may direct that the whole, or a fixed part, of the cost of a public improvement shall be levied upon the property in a given district, without actual inquiry as to whether the benefit to that district equals the cost or the de- termined part of the cost, is a question which has usually teen complicated with questions relating to the rule of apportionment. Usually the question has been, may the legislature assess the cost on adjacent property by the " front foot " rule ? This really involves two questions : (1.) May the whole or a fixed part of the cost of the improve- ment be imposed on the designated district, without an opportunity to the property owners to show that the cost exceeds the benefit ? (2.) May the sum finally imposed upon the district be ap- portioned among the various property owners by a fixed unit of distribution, such as a front foot or a square foot ? These two questions are considered separately. 1937. Where the legislature itself lays the assessment, fixing the bounds of the taxing district, and orders that the cost of the improvement or a fixed part thereof shall be assessed on the property owners, the legislative act must be regarded as a con- clusive finding of fact that the property in the district is benefited to the extent of the cost of the improvement. The Federal con- Btitution offers no barrier to such legislative action. In a case which arose in the District of Columbia, Congress directed a street opening and provided that "not less than one- half " of the damages awarded should be assessed against the ad- jacent lots and such other lots as should be benefited by the jury which apportioned the assessment. Any inquiry as to the actual benefits being less than one-half the damages awarded, was thus absolutely precluded. The act was upheld and it was expressly asserted that : The legislature, in the exercise of the right of taxation, has the authority to direct the whole, or such part as it may pre- scribe, of the expense of a public improvement, such as the estab- lishing, the widening, the grading, or the repair of a street, to be assessed upon the owners of lands benefited thereby.^^ 22 Wight V. Davidson, 181 U. S. 371, authority of Norwood v. Baker, 172 379, 45 L. ed. 900, 21 Sup. Ct. Eep. U S. 269, 43 L. ed. 443, 19 Sup. Ct. 616, reversing 16 D. C. App. 371, Eep. 187. To the same effect are which had held the contrary upon the Bauman v. Eoes, 167 U. S. 548, i2 LOCAL ASSESSMENTS. 991 1938. The state courts generally uphold the legislative power in this particular, and sustain laws fixing the limits of the assess- ment district and directly providing that the whole or a fixed part of the cost of an improvement shall be assessed on property within -the district, or property benefited in the district. Said the Supreme Judicial Court of Massachusetts, in upholding such an act with respect to sewer assessments: Under the recent decisions it may be true that when the legis- lature is passing an act of general future application, and when, therefore, it cannot be supposed to have compared the local bene- fit with the cost, the only mode in which it can be made certain, apart from the police power, that constitutional rights are pre- served, is by limiting each assessment upon an estate to the benefit received by that estate. But when the legislature has contemplated a certain region and may he supposed to have acted in view of a specific scheme, there is no doubt that within reason- able limits it may determine that the cost of an improvement shall fall upon a designated district, and may fix the principles upon which the cost shall be apportioned.^ Of course cases which uphold the broader proposition that the legislature may authorize subordinate bodies to lay the whole cost of an improvement upon " adjacent " or " abutting " property, are also authorities upholding the power of the legislature to lay such cost on a fixed territory directly.^* 1939. The broader cases just referred to are those which hold that the legislature may lay down a rule for the making of assess- ments by cities or other subordinate bodies, not directly fixing the bounds of each district; but stating an invariable rule for determining such bounds, such as that the assessment shall be laid on " abutting," or " fronting," or " adjacent " property; and providing that the whole or a fixed part of the cost shall be laid on the property thus generally described. Legislation of this sort is not a taking of property without due process of law under the Federal constitution,^^ and is upheld in many of the state courts.^* L. ed. 270, 17 Sup. Ct. Eep. 966; 24 See § 1939. Parsons v. District of Columbia, 170 25 French v. Barber Asphalt Paving U. S. 45, 42 L. ed. 943, 18 Sup. Ct. Co., 181 U. S. 324, 45 L. ed. 879, 21 Kep. 521. Sup. Ct. Rep. 625. overruling Norwood 23 Smith V. Mayor, etc., of Wor- v. Baker, 172 U. S. 209, 43 L. ed. 443, cester, 182 Mass. 232, 65 N. E. Rep. 19 Sup. Ct. Rep. 187; Cass Farm Co. 40 50 L. R. A. 728: Re Kingman. 153 v. Detroit, 181 U. S, 396, 45 L. ed. Mass. 566, 27 N. E. Eep. 778, 12 L. 914, 916, 21 Sup. Ct. Rep. (544, 645. R. A. 417; Spencer v. Merchant, 100 26 City Council of Montgomery v. N. Y. 385, 3 N. E. Rep. 682; affirmed, Moore, 140 Ala. 638, 37 So. Rep. 291; 125 U. S. 34.5, 31 L. fd. 763, 8 Sup. Hadley v. Dague, 130 Cal. 207, 62 Pac. Ct. Rep. 921. Rep. 500; Banaz v. Smith, 133 Cal. 992 COKSTITUTIONAL LAW OF TAXATION. In Minnesota the constitution allows assessments to be made either by frontage or hy ienefit or by the lineal foot in certain cases.^^ Cases which hold that cost, as distinct from benefit, cannot be made the basis of assessment. 1940. There are cases in the state courts, however, which hold that such acts, whereby the legislature lays down the fixed and general rule that the cost of an improvement shall be assessed by a subordinate assessing body upon abutting or adjacent property owners, excluding inquiry as to whether the property is benefited to the extent of such cost, are unconstitutional. In such cases where a general rule is made for the guidance of subordinate bodies in future assessments, the legislature cannot be supposed 102, 65 Pac. Eep. 309; San Francisco Paving Co. v. Bates, 134 Cal. 39, 66 Pac. Kep. 2 ; Wolflf v. City of Denver, — Colo. App. — , 77 Pac. Rep. 364; Denver City v. Knowles, 17 Colo. 204, 30 Pac. Rep. 1041, 17 L. R. A. 135; Ferguson v. Borough of Stamford, 60 Conn. 432, 22 Atl. Rep. 782; Hack- worth V. City of Ottumwa, 114 Iowa, 467, 87 N. W. Rep. 424; Allen v. City of Davenport, 107 Iowa, 90, 77 N. W. Rep. 532; Minneapolis, etc., Ry. Co. v. Lindquist, 119 Iowa, 144, 93 N. W. Rep. 103; English v. Mayor, etc., of Wilmington, 2 Marvel (Del.), 03, 37 Atl. Rep. 158; Speer v. Athens, 85 Ga. 49, 11 S. E. Rep. 802, 9 L. .1!. A. 402; Bacon v. Savannah, 86 Ga. 301, 12 S. E. Rep. 580; Pioneer Irrigation District v. Bradley, 8 Idaho, 310, 101 Am. St. Rep. 201, 68 Pac. Rep. 295, where, although the cost was appor- tioned in the district according to benefits, yet the whole cost was laid on the district without inquiring whether the benefit to the whole dis- trict equaled the cost; Burnes v. At- chison, 2 Kans. 454; Parker v. Chal- liss, 9 Kans. 155; Barfield v. Gleason, 111 Ky. 491, 63 S. W. Rep. 964; City of Lexington v. McQuillan's Heirs, 9 Dana, 513, 35 Am. Dec. 159; Broad- way Baptist Church v. McAtee, 8 Bush, 510, 8 Am. Rep. 482; Kelly v. Chadwick, 104 La. 719, 29 So. Rep. 295; affirmed, 187 U. S. 540. 47 L. ed. 293, 23 Sup. Ct. Rep. 175 ; Bruning v. riiadwicV. ion To. 106' 3-1 So. Rep. 90; Barber Asphalt Paving Co. T. French, 158 Mo. 534, 58 S. VV. Rep. 934, 54 L. R. A. 492; Heman v. Gil- liam, 171 Mo. 258, 71 S. W. Rep. 163; Ross V. Kendall, 183 Mo. 338, 81 S. W. Rep. 1107; Cass Farm Co. v. City of Detroit, 124 Mich. 433, 83 N. W. Rep. 108; affirmed, 181 U. S. 396, 45 L. ed. 914, 21 Sup. Ct. Rep. 644; Williams v. Mayor, etc., of Detroit, 2 Mich. 560; Motz V. City of Detroit, 18 Mich. 495; Sheley v. City of Detroit, 45 Mich. 431, 8 N. W. Rep. 52; City of Kalamazoo v. Prangoise, II.t Mich. 554, 73 N. W. Rep. 801 (the authority of these Michigan decisions is limited to cases of street paving) ; McMillan V. Butte, 30 Mont. 220, 76 Pac. 203; People ex rel. Scott v. Pitt, 169 N. Y. 521, 62 N. E. Rep. 662, 58 L. R. A. 372; Billiard v. City of Asheville, 118 N. C. 845, 24 S. E. Rep. 738; Webster V. Fargo, 9 N. Dak. 208. 82 N. W. Rep. 732, 56 L. R. A. 156; Rolph v. Fargo, 7 N. Dak. 640, 76 N. W. Rep. 242, 42 L. R. A. 646 ; Harrisburgh v. McPher- ran, 200 Pa. St. 343, 49 Atl. Rep. 988; Scranton v. Koehler, 200 Pa. St. 126, 49 Atl. Rep. 792; Cleveland v. Tripp, 13 R. I. 50; Tripp v. City of Yankton, 10 S. Dak. 516, 74 N. W. Rep. 447; City of Parkersburg v. Tavenner, 42 W. Va. 486, 26 S. E. Rep. 179; Dancer V. Town of Mannington, 50 W. Va. 322, 40 S. E. Rep. 475; Meggett v. City of Eau Claire, 81 Wis. 326, 51 N. W. Rep. 566. 27 § 3, Art. IX, quoted in § 1591 of this work. See State v. Robert P. Lewis Co., rehearing, 82 Minn. 402, 85 N. W. Rep. 207, 86 N. W. Rep. 611, 53 L. R. A. 421. LOCAL ASSESSMENTS. 993 to have made a specific finding of the fact of benefit, as is the case where the legislature directly assesses the cost of a particular improvement upon particular territory. Such is the reasoning of some courts, and no flaw is detected in it.^* 1941. In Alabama the constitution provides that: No city, town, or other municipality shall make any assess- ment for the cost of sidewalks or street paving, or for the tos^t of the construction of any sewers against property abutting on such street or sidewalk so paved, or drained by such sewers, in excess, of the increased value of such property derived from such improvements.^^ The cases cited upheld legislative acts \^'hich provided for as- sessments according to actual benefit, after inquiry.^ A provision in a city charter for the assessment against property owners of the cost of a street improvement, " the amount assessed against such property owners to be measured by, and in no case to exceed, the special benefits . . . and in no case to exceed four dollars a front foot " was upheld under the foregoing constitutional pro- vision.^* A reasonable inference from the language of the foregoing cases would be that an assessment by the front-foot rule without actual inquiry as to benefits would be void. But a recent case upholds such an assessment as within the legislative power, limiting the former cases.^^ 1942. In Illinois there are two methods of imposing the cost of local improvements upon property in the neighborhood sup- posed to be peculiarly benefited. One method is called " special assessment," and the other method is called " special taxation." The two have their basis in a provision of the Illinois constitution which authorizes the legislature to bestow upon municipalities the 28Lorden v. Coffey, 178 Mass. 489, Klein, 80 Ala. 461, 7 So. Rep. 386, 8 6.0 N. E. Rep. 124; White V. Gove, 183 L. R. A. 369. In City Council of Mass. 333, 67 N. E. Rep. 359; Dexter Montgomery v. Foster, 133 Ala. 587, V. Boston, 176 Mass. 247, 79 Am. St. 32 So. Rep. 610, a municipal ordinance Rep. 306, 57 N. E. Rep. 379 (cases of for street paving which assessed one- sewer assessment) ; Adams v. Shelby- half the cost upon property owners ville, 154 Ind. 467, 77 Am. St. Rep. without inquiry as to benefits was held 484, 57 N. E. Rep. 114, 49 L. R. A. void, under a charter which provided 797, where the principles stated in the for assessing " the property to be bene- text are upheld by the opinion, and the fited thereby for such amounts as may law under consideration was held con- be fair and reasonable." stitutional. si Inge v. Board of Public Works, 29 Art. XII, § 223. 135 Ala. 187, 93 Am. St. Rep. 20, 33 30 City Council of Montgomery v. So. Rep. 678. Birdsong, 126 Ala. 632, 28 So. Rep. 32 City Council of Montgomery v. 522; Mayor, etc., of Birmingham v. Moore, 140 -Ala. 638, 37 So. Rep. 291. C3 994 CONSTITUTIONAL LAW OF TAXATION. power to make local improvements either by special assessment, special taxation of contiguous property, or otherwise. ^^ The difference between these two methods — in the meaning of the constitution — lies mainly in the manner of ascertaining benefits. In special taxation, it was formerly the statutory prac- tice that the municipal ordinance which directed the assessment should either determine the smn to be raised or give the data by which the commissioners appointed could fix the amount to be raised. When the amount to be raised was thus fixed, it was conclusive on the property owners, and all the commissioners had to do was to assess the property benefited so as to raise the re- quired amount. The legislative determination of the municipal assembly as to the amount to be raised was final, and the property owners were not entitled to a hearing on the question of such amount. The municipal authorities might put the whole cost of the improvement upon the contiguous property. Although this was theoretically done on the hypothesis that the benefits equal the burden, yet there could be no inquiry into the action of the munic- ipal authorities in this respect This method is constitutional. Under it the legislature might authorize the municipality to impose the whole or any part of the cost of a street improvement upon contiguous property by the front-foot rule.** The limits of the taxing district, in the case of special taxation, are fixed by the con- stitution itself, in the words " contiguous property." ^'^ 1 943. The statutes of Illinois in respect of special taxation have been changed, and at the time of this writing they provide that in cases of special taxation there shall be an inquiry, and a hearing of the property owners, upon the question of benefits, the ordinance being no longer conclusive. An ordinance which does not take benefits into account is not invalid, however, for that reason. It seems that such an ordinance is prima facie valid, and that the remedy of the property owner is to show the facts, with respect to benefits, at the hearing.^® This method seems mainly to apply to improvements in the streets, such as sidewalks and the like.^'^ 33 § 9, art. 9, quoted in § 589 of v. Farber, 171 111. 146-158, 49 N. E. this work. Rep. 427 ; Guild v. City of Chicago, 82 34 Wilbur V. City of Springfield, 123 111. 472-478. 111. 395, 14 N. E. Rep. 871; City of 36 Job v. City of Alton, 189 111. 250, Springfield v. Green, 120 111. 269, II 59 N. E. Eep. 622, 82 Am. St. Rep. N. E. Eep. 261; Craw v. Village of 448 (a sidew.alk case); People v. Tolono, 96 111. 255, 36 Am. Rep. 143; Latham, 203 111. 9, 67 N. E. Eep. 403 Job V. City of Alton, 189 111. 256, 59 (sidewalk) ; PfeifTer v. People, 170 III N. E. Rep. 622, 82 Am. St. Rep. 448. 347, 48 N. E. Rep. 979. 35 West Chicago Park Commissioners 37 Hoover v. Peabody, 171 111. 182 LOCAL ASSBSSMEJTTS. 995 1 944. A special assessment differs from special taxation mainly in this, that the assessment cannot, in any case, or under any cir- cumstances, exceed the benefits the property will derive from the improvement, and the owner of the property has the right, if dissatisfied with the assessment, to have this question passed upon by a jury and to have their finding reviewed by an appellate tribunal.^ A special assessment, made on the basis of frontage or value merely, without regard to special benefits, would be invalid ; but the commissioners may adopt such a rule if, upon due inquiry and hearing, they find as matter of fact that the benefits are in proportion to frontage or value. ^* A special assessment may be laid on other than contiguous property/** It is in the discretion of the municipal authorities which method shall be. used.*^ 1945. The constitutions of l^ebraska^ and Washington** con- tain provisions like that of the Illinois constitution just discussed. The constitution of South Dakota** contains a provision somewhat similar. The distinction between special taxation and special assessment seems not to have been emphasized in the decisions of these states. In Nebraska, indeed, it was said in a comparatively early case, that special assessment and special taxation " mean the same thing, viz.: that special assessments may be made on prop- erty to the extent of benefits received by it." *^ 1 946. In Indiana the later cases seem to lay do^vn the rule as follows : The legislature, in fixing the rules by which assessments are to- be made by subordinate bodies, may not absolutely direct that the \i'hole or a fixed part of the cost of an improvement shall be as- sessed on adjacent property, or property benefited. Such a rule, v/hieh would preclude inquiry whether the whole benefit of the improvement was equal to the cost, or the part of the cost thus directed to be assessed, would be unconstitutional, as tending to a 49 N. E. Eep. 367 ; Lightiier v. Peoria, *1 Lightner v. Peoria, 150 111. 80. 150 111 80, 37 N. E. Eep. 69. 37 N. E. Rep. 69; Craw v. Tolono, Off 38 Sterling v. Gait, 117 111. 18, 7 111. 256, 36 Am. Rep. 143; McLean >f E Rep. 471; Walker v. City of County v. City of Bloomington, 106 III. Aurora, 140 111. 402, 29 N. E. Rep. 209. 741. 42 Art. IX, § 6, quoted in § 599 of 88 City of Springfield v. Sale, 127 111. this work. 359, 20 N. E. Rep. 86; Walker v. City « Art. VIII, § 9, quoted in § 612- of Aurora, supra. of this work. 40 Guild V. City of Chicago, 82 111. 44 Art. IX, § 10, quoted in § 608 472; West Chicago Park Commission- of this work. era v Farber, 171 111. 146-158, 49 N. 45 Hansconi v. City of Omaha, 11 E Eep 427. Neb. 37, 7 N. W. Eep. 739. 996, CONSTITUTIONAL LAW OF TAXATION. deprivation of property without due process of law. But the legislature may ordain, as a prima facie rule of evidence, for the guidance of such subordinate assessing bodies, that the whole or a fixed part of the cost of the improvement shall be deemed to be the amount of the benefit, provided that authority is given to the as- sessing body to hear objections, to vary the prima facie rule of benefit, and to cast such part of the cost as is in excess of benefit to the assessed property, upon the general pviblic. If, after such consideration, the assessing body casts the whole cost upon the property specially assessed, adhering finally to the prima facie rale laid down by the legislature, its determination will not be dis- turbed by the courts ; and a statute which ordains such a prima facie rule, giving the assessing body power to change the rule, and whidi provides for a hearing by the assessing body iipon the question of benefit, is constitutional.*^ 1947. From the language of the opinion in the case cited, it may fairly be inferred that in Maine a statute which should au- thorize a subordinate body to lay the cost of an improvement upon a district, without inquiry as to whether the benefit equaled the cost, would be held invalid.*'' 1 948. In Maryland an ordinance passed pursuant to law, which provided that the cost of paving a street should be assessed upon abutting property, was held void because no notice was given to the property owners that they would be assessed for the cost of the work, and no opportunity given to contest any step in the proceed- ing.** Subsequent cases have upheld statutes which provided for assessment of the cost to the extent of special benefits.*^ 1949. In Michigan a law which provided that a subordinate legislative body might fix a taxing district and assess not less than half the cost of the improveinent on property in the district was held void, because the rule precluded inquiry as to benefits.^** <8 Adama v. Shelbyville, 154 Irid. of the legislative determination with 467, 77 Am. St. Rep. 484, 57 N. E. respect to assessing cost on abutting Rep. 114, 49 L. R. A. 797. property and denied the right of the 47 Auburn v. Paul, 84 Me. 212, 24 property owner to a hearing. Mayor, Atl. Rep. 817. etc., of Baltimore v. Scharf, 56 Md. 50, 48Ulman r. Mayor, etc., of Balti- reversing 54 Md. 499; Mayor, etc., of more, 72 Md. .387, 11 L. E. A. 224, Baltimore v. Johns Hopkins Hospital, 20 Atl. Rep. 141, 21 Atl. Rep. 709. 56 Md. 1; Moale v. Mayor, etc., of Bal- 49 Mayor, etc., of Baltimore v. Ul- timore, 61 Md. 224; Alberger v. Mayor, man, 79 Md. 400, 30 Atl. Rep. 43; etc., of Baltimore, 64 Md. 1, 20 Atl. affirmed, 165 U. S. 719, 41 L. ed. 1184, Rep. 988. 17 Sup. Ct. Rep. 1001; Mayor, etc., of bo City of Detroit v. Chapin, 112 Baltimore v. Stewart, 92 Md. 535, 48 Mich. 588, 71 N. W. Rep. 149, 42 L. Atl. Rep. 165. The earlier cases in R. A. 638. Maryland asserted the conclusiveness LOCAL ASSESSMENTS. 997 1950. In IS^ebraska the rule is that the assessment cannot ex- ceed the special benefits, and in order that an assessment may be valid it must affirmatively appear from the record that the assess- ing body took benefits into account. These principles have been laid do^\Ti in cases where the question was as to the validity of particular assessments.^^ If these cases are to be followed to their logical conclusion, a statute or ordinance which should assess the cost of an improvement, instead of the amount of benefit, on the abutting property would be held void. 1951. In ^ew Jersey it is squarely held that a statute which directs the whole amount of the expense of a street improvement to be assessed upon abutting owners is unconstitutional.^^ 1952. The la^\' in Ohio and Oregon seems to be that the legis- lature may authorize the whole or a fixed j)art of the cost of an im- provement to be laid by a subordinate body upon " adjacent " or " abutting " property, or upon some other district the method of bounding which the legislature may determine ; that the law itseK will not be held unconstitutional simply for the reason that the cost is so laid, this being regarded as a technicality ; but that the coiirts will inquire into the record in any given case, and, if it there plainly and affirmatively appears that the benefits are not equal to the assessment, the assessment will be set aside or its collection restrained. ^^ 1953. The Supreme Court of Texas, following what that court (and almost everybody else who read the case of Norwood v. Baker) supposed to be the rule laid doAvn by the United States Supreme Court,^* held that the legislature could not authorize a subordinate body to make improvements and lay the whole or n fixed jDart of the cost, regardless of benefits, upon property " abutting " on the improvements.^^ The court also based its 51 Cain V. Citv of Omaha, 42 Xeb. 53 Sehroeder v. Overman, 61 Ohio St. 120, 60 X. W. Rep. .368; Smith v. Citv 1, 5.5 N. E. Eep. 158. 47 L. E. A. 156: of Omaha, 49 Neb. 883, 69 X. W. Rep. Walsh v. Barron. Gl Ohio St. 15, TO 402; Medland v. Linton, 60 Xeb. 249, Am. St. Rep. .354. C5 N. E. Eep. 164: 82 N. W. Rep. 866; Hanscom v. City Shoemaker v. City of Cincinnati, 68 of Omaha, 11 Xeb. 37. 7 X. \Y. Rep. Ohio St. 603, CS X. E. Eep. 1; King v. 739; John v. Connell, 04 Xeb. 233, 89 City of Portland, 38 Oreg. 402, 63 Pac. KT. W. Rep. 806. Eep. 2, 55 L. E. A. 812; Oregon, etc., 52Bogert V. City of Elizabeth, 12 Ey. Co. v. Portland. 25 Oreg. 229, 35 C. E. Green (27 X. J. Eq.) 568; Mc- Pac. Rep. 452. 22 L. R. A. :713; Wilson Clave V. City of Newark, 4 Stewart v. Salem, 24 Oreg. 504, 34 Pae. Rep. (31 N. J. Eq.) 472; Schum v. Mayor, 9, 691. etc., of Newark, 5 Stewart (32 N. J. 54 Norwood v. B;ik€r, 172 U. S. 269, Eq.) 466; Provident Institution v. 43 L. ed. 443, 19 Sup. Ot. Rep. 187. Allen, 10 .Stflwart (S7 N. J. Eq.) 36, 55 Hutcheson v. Storrie, 92 Tex. 685, -627; Oufver V. Mavor, etc., of Jersey 71 Am. St. Rep. 884, 51 S. W. Rep. City, 16 Vr. (45 N. J. L.) 256. 848, 45 L. R. A. 289, overruling Adams 998 CONSTIIUTIONAL LAW OF TAXATION, decision on the state constitution ; and the rule stated still seems to be the law in Texas, except as to sidewalks which are constructed under the police power. "^ 1954. In Virginia statutes which authorized city councils or other isubordinate legislative bodies to lay the whole or part of the cost of improvements on " the owners of real estate benefited," ■without an opportunity to the owners to contest the correctness of such assessment, were held void.^^ Where, after hearing, the whole or a specified part of the expense is so assessed, the assessment is valid. ^* Under the present constitution the amount of the assess- jnent is expressly restricted to benefits. ^^ 1955. In those states where the legislature may not authorize subordinate bodies to lay the whole cost of an improvement, regard? less of benefits, upon a, fixed territory, ihe excess of cost over benefit must be borne by the general funds of the city or other laxing body.^ Method of apportionment among property owmers. 1 956. Ilaviijg considered whether the cost of an improvement can be laidk on- 'a specified territory, without inquiry whether the iimounf so laid is in excess of benefits, we come to the question : How is the amount of the assessment to be apportioned among the owners of property in the benefited district ? This question of method usually is: May the amount of the assessment be distributed among the property owners of the dis- trict by some general rule, without giving to each property owner an opportunity to show that the amount of the assessment laid on his lot by reason of such rule is greater than the actual benefit ? Concretely, the question has usually been : May the legislature, or its subordinate bodies, under its authority, lay the amount of .an assessment for a street or sewer improvement upon abutting -V. Tiaher, 75 Tex. 657, 6 S. W. Rep. b8 Adams v. City of Roanoke, supra. 772. 69 Art. XIII, § 170, quoted in § 1698 66Lentz V. City of Dallas, 96 Tex. of this work. 258, 72 S. W. Rep. 59 ; Kettle v. City 60 Adams v. Shelbyville, 154 Ind. of Dallas, — Tex. Civ. App. — , 80 467, 77 Am. St. Rep. 484, 57 N. E. Rep. ).U S. W. Rep. 874, writ of error de- 114, 49 L. R. A. 797; Wilson v. Tren- j ied by Supreme Court, June 9, 1904. ton, 61 N. J. L. 599, 68 Am. St. Rep. 67 City of Norfolk v. Young, 97 Va. 714, 40 Atl. Rep. 575, 44 L. R. A. 540; 728, 34 S. K feep. 886, 47 L. R. A. Frevert v. Bayonne, 34 Vr. (63 N. J. -574; Violett v. Citv of Alexandria, 62 L.) 202, 42 Atl. Rep. 773; Lorden v. ■Va. 561, 53 Am.- SU Rep. 825, 23 S. E. Coffey, 178 Mass. 489, 60 N". E. Rep. Rep. 909, 31 L. R. A. 382; Adams v. 124. City of Roanoke, 102 Va. 53, 45 S. E. •Rep. 881. LOCAL ASSESSMENTS. 999 property by the " front-foot rule," each lot paying in proportion to frontage on the improvement ? 1957. Most of the cases on- this subject have been cases where the cost of the improvement was assessed against the abutting prop- erty by the front-foot rule. This "has resulted in unfortunate complications of the subject, for, as said above, whether the whole cost shall be assessed on the district, or only such part as shall be equal to benefits, is an entirely different question from whether the sum assessed shall be appor- tioned among the property owners by the front-foot rule or by any other method! The question^,of assessing cost has already been 'discussed.®^ The propriety of the " front-foot rule " will now be considered ; and in the consideration of -this topic the decisions already reviewed will be agairi noticed. 1 958. It is familiar theory that- the principle upon which the assessment of the cost of making local- improvements upon the property in the neighborhood of the improvement is justified is that the property so assessed receives a peculiar benefit from the improvement, and may therefore be assessed to pay for it to the extent of the benefit.^ 1 959. As a matter of fact, in practice this theory does not amount to much; it finds much support in opinions, but little in the points actually decided. If this principle be carried out to its logical extent, it must follow therefrom that a special assess- trent which imposes upon any property a burden in excess of the special benefit conferred by the local improvement is void, at least to the extent of the excess. 61 See § 1936 et seq. 386, 34 Am. Rep. 4pl ; MeCormick v. 62Bauman v. Ross, 167 U. S. 548- Patchen, 53 Mo. ^S'-Sd, 14 Am. Rep. 589, 42 L. ed. 270, 17 Sup. Ct. Rep. 440; Hammett v. Philadelphia, 65 Pa. 966; Paulsen v. Portland, 149 U. S. St. 146, 151, 153, 3 Am. Rep. 615; 30, 37 L. ed. 637, 13 Sup. Ct. Rep. Barnes v. Dyer, 56 Vt. 469-471; 750; Illinois Central R. Co. v. Deca- Wright v. Boston, 9 Cush. 233-234; tur, 147 ,U. S. 190-202, 37 L. ed. 132, Proprietors of Mount Auburn Ceme- 13 Sup Ct. Rep. 293; Norwood v. tery v. Cambridge, 150 Mass. 12-14, 22 Baker, 172 U. S. 298, 43 L. ed. 443, 19 N. E\ Rep. 66, 4 L. R. A. 836; Dorgan Sup. Ct. Rep. 187; Thomas v. Gain, 35 v. Boston, 12 Allen, 233-237; Boston Mich. 155, 24 Am. Rep. r>3o ; Bogert v. v. Boston and A. R. Co., 170 Mass. 95, Elizabeth, 27 N. J. Eq. 568 ; Wilson v. 49 N. E. Rep. 95 ; Norwood v. New Trenton, 61 N. J. L. 599, 40 Atl. Hop. York and N. E. R. Co., 161 Mass. 259- 575, 68 Am. St. Rep. 714, 44 L. R. A. 264, 37 N. E. Rep. 199, 24 L. R. A. 540; State, etc. v. Hoboken, 36 N. J. 158; Asberry v'. Roanoke, 91 Va. 562, L. 291-293; Agens v. Newark, 37 N. 22 S. B. Rep. 360, 42 L. R. A. 836; J L 415-416f 420-42?, 18 Am. Rep. Walsh v. Barron, 61 Ohio St. 13, 76 729; Macon v. Patty, 67 Miss. 378- Am. St. Rep. 354, 53 N. E. Rep. 164. 1000 CONSTITUTIONAL LAW OF TAXATION. And it follows that any rule or method of apportionment which proceeds without inquiry as to the special benefit conferred upon the property assessed, but arbitrarily fixes the amount of the assess- ment by some invariable standard, having no necessary relation to benefits, transcends the limitations of due process of law. Hence, it is frequently argued that a law which provides for no inquiry as to benefits as between property owners in the district to be benefited, but which lays down as an iron rule that the amount of the whole assessment shall be apportioned among the ]iroperty owners of the benefit district in proportion to frontage on, the street, or in proportion to area, or in proportion to the, value oi the property,*, violates the requirement of due process of law. As will be- shown a little further on, such is not generally the law. Bti't there seems to be no flaw in the reasoning, and if the question were a new one, in the present state of constitutional juris- j)rudence, it probably would be so held. A few years ago the tendency of the courts seemed to be so to hold. But that tendency has been sharply checked in recent decisions by the same court which in a decision but little earlier gave it a strong impetus. 1 960. The case which seemed to determine as a rule of Federal constitutional law that the method of assessment by frontage (and logically also by area or value), without inquiry as to benefits, was not due process of law, was Norwood v. Baker j^ decided in 1898. There an Ohio village had assessed an abutting property owner for the cost of the land taken from him in opening a street, together with the expenses of the improvement, under a statute which pei-mitted the village to make such assessments'" etWie?- in proportion to the benefits which may result from the improvement or according to the value of the property assessed, or by the front foot of the property bounding and abutting upon the improvement, as the council . . . may determine." The Supreme Court held (so it was understood by at least three of its own justices, including the one who wrote the opinion, and by some of the state courts, as will be shown subsequently), that the assessment was void because this statute under which it was made permitted the assessment by frontage, without inquiry as to actual benefit. Three of the justices dissented. Upon the authority of this case laws providing for special assess- ments of property by the front foot were attacked in state and 63 172 U. S. 269, 43 L. ed. 443, 19 Sup. Ct. Eep. 187. LOCAL ASSESSMENTS. 1001 Federal courts all over the country, and in some cases were held to be void.®* 1961. The "front-foot rule," however, was too firmly in- trenched in the taxing system of the country generally to be thus disposed of. The principles upon which it is supported have been explained in innumerable decisions, and are, briefly: That the legislative discretion in matters of taxation extends not only to iixing the taxing district, but to fixing the rule of apportionment; that a direction by the legislature that abutting property shall be assessed by the front foot is a legislative determination that the property is benefited to that extent by the improvement, and that such a determination is within the legislative power. In addition to this foothold in the principle which allows to the legislature the widest discretion in matters of taxation, the rules of assess- ment by frontage, area, and value have been followed so long in many states as to be a j)art of the customary procedure — the gen- eral tax systems — in those states. After the decision in Norwood V. Baker, ^ therefore, a number of state courts reiterated the doctrine that the legislature may direct the cost of local street improvements to be borne by the abutting property in proportions to be ascertained according to frontage, area, or value."" Some of these cases were distingiiishable on the facts from Norivood v. Baker, some were distinguished by ingenious rather than solid reasoning, but all endeavored to avoid the position taken by the Supreme Court in that case. 1 962. Some of these .cases came to the Supreme Court, and the question was thus fairly presented whether the frontage rule of assessment was unconstitutional. The ^ourt, resting on the line 64 Hutcheson v. Storrie, 92 Tex. 685, S^. 'Rep 295 ; Cass Farm Co. v. De- 71 Am, St. Eep. 884, 51 -S. W. Rep. troit, ':24 Mich. 433, 83 N. W. Rep. S48, 49 L. R. A. 289; Adams v. 108; Hemau v. Allen, 156 Mo. 534, 57 Shelbyville, 154 Ind. 467, 77 Am. St. S. W. Rep. 559; Hill v. Swingley, 159 Hep. 484, 57 N. E. Rep, 114, 49 L, R. Mo, 45, 60 S. W, Rep, 114; Barber \. 797 : Loeb v. Columbia Township, Asphalt Paving Co. v, French, 1,")8 Mo, 91 Fed. Rep. 37; Fay v, Springfield, 04 534, 58 S, W, Rep, 934, 54 L, R, A, Fed, Rep, 409; Lyon v, Tonawanda, 98 492; affirmed, 181 tJ, S. 324, 45 L. ed. Fed, Rep, 361; Cowley v, Spokane, 99 879, 21 Sup, Ct, Rep. 025; Conde v. T-ed. Rep. 840; Parker v. Detroit, 103 Schenectady, 164 N, Y. 258, 58 N, E. Fed. Rep, 357. Some of these cases Rep. 130; Webster v. Fargo, 9 N. Dak. were subsequently reversed. See below 202, 82 N. W. Rep. 732 ; Sehroeder v, 63 Supra. Overman, 61 Ohio St. 1, 55 N. E, Rep, esHadlev v, Dague, 130 Cal. 207, 6.2 158, 47 L. R. A. 156; King v. Port- Pae. Rep. 500; Augusta v. McKibben, land, 38 Oreg. 402, 63 Pac, Rep, 8, n:-, 22 Ky. L, Rep. 1224, 60 S. W. Rep, L. R, A. 812; Harrisburg v, McPher- 291; Sears v. Boston, 173 Mass, 71, ran, 200 Pa, St, 343, 49 Atl. Rep. 988; yS N, E, Rep, 138, 43 L, R, A, 834: Gleasou v. Waukesha County, 103 Kelly V, Chadwick, 104 La. 719, 29 Wia '22.'5, 7a K, W. Rep. 249. 1002 CONSTITUTIONAXi LAW OF TAXATION. of cases which hold that the rourteenth Amendment does not con- template interference with the taxing systems of the states, and on those cases which allow to the legislature the widest discretion in matters of taxation, held that a statute which prescribed that assessments for street paving in a city should be made, according to frontage, on the abutting lots, was not in violation of the Fourteenth Amendment.®^ The opinion of the court, delivered by one of the justices who dissented in Norwood v. Baker, asserts that the cases cited are not in conflict with Norwood v. Baker. The three dissenting justices, one of whom wrote the opinion of the court in Norwood v. Baker, say that the cases just cited^ are in conflict with Norwood v. Baker. However that may be, it is now the rule of Federal constitu- tional law that a statute which prescribes assessments for street improvements upon the abutting lots in proportion to frontage, area, or value, without any inquiry as to actual benefits as between property owners, is not, for that -reason alone, a -denial of due process of law. 1963. The rules in some of the state courts, interpreting the due process of law clauses in the state constitutions, have been somewhat unsettled since the United States Supreme Court dis- turbed the course of events by the decision in Norwood v. Baker f^ and then attempted to restore the former ^ate of things by the decision in French v. Barber Asphalt Paving Co.''^ The state decisions may be divided roughly into three classes with respect to this rule : 1964. (1.) Those which hold that the legislature, or its subordinate legislative agencies, under its authority, may de- termine absolutely that the amount of the assessment for street improvements shall be apportioned among the property owners in the district by the rule of frontage (or area or value) ; that the 67 French v. Barber Asphalt Paving District of Columbia. 181 U. S. 40-2, Co., 181 U. S. 324, 45 L. ed. 879, 2! 45 L. ed. 921, 21 Sup. Ct. Rep. 609: Sup. Ct. Rep. 625 (Mo.) ; Tonawanda Shumate v. Heman, 181 U. S" 402. 45 V. Lyon, 181 U. S. 389, 45 L. ed> 90S, L. ed. 916, 922. 21 Sup. Ct. Rep. 645 21 Sup. Ct. Rep. 609 (N. Y.), where (Mo.), sewer construction: Farrell v. assessment was 'for grading and pav- West Chicago Park Commissioners, ing; Webster v. Farfto, 181 U. S. 394. 181 U. S. 4()'4. 45' L. ed. 916, 924, 21 45 L. ed. 912, 21 Sup. Ct. Rep. 627 Sup. Ct. Rep. 609, 645 (111.), street (N. Dak.) ; Cass Farm Co. v. Detroit, opening. 181 U. S. 396, 45 L. ed. 914, 916, 21 68 Supra. Sup. Ct. Rep. 044, 645 (Micb.), pav- 69 172 U. S. 269, 43 L. ed. 443, 19 ing:' Detroit v. Parker, 181 0. S. 399, Sup. Ct. Rep. 187, 45 U ed. 916. 917, 21 Sup. Ct. Rep. 70 181 U. S, 324, 45 L. ed. S79, 21 624, 645 (Mich.), paving; Wonnley v. Sup. Ct. Rep. 625. LOCAL ASSESSMENTS. 1003 legislative determination in this respect is conclusive upon tho property owner. These decisions are practically all cases of street, sewer, and water-pipe improvements. It will be noted that they are largely the same cases as those which uphold the rule that the whole cost of an improvement may be laid on a district without inquiry as to actual benefits ; and that the legislative dis- cretion is conclusive.''^^ Cases supporting the front-foot rule in this extreme sense are cited in the note.'^^ 1965. In Minnesota the front-foot, rule is the subject of an ex- press constitutional provision.''^ 1966. (2.) Those decisions which hold that legislature may ordain that assessments may be laid by the front-foot rule (such rule being prima facie a fair and reasonable method of apportion- ing benefits) ; but which hold that an opportunity must be given the property owner to show that his assessment under such rule is greater than his benefits, and to have the tribunal of assessment pass upon the question of apportioning benefits. Under these decisions the frontage rule is upheld when it is TlSee I 1939 et seq. Mich. 433, 83 N". W. Rep. 108 (these 72 Hadley v. Dague, 130 Cal. 207, 62 Michigan cases are street-paving Pac. Rep. 500; Banaz v. Smith, 133 cpses) ; Barber Asphalt Paving Co. v. Cal. 102, 65 Pac. Rep. 309; San Fran- French, 158 Mo. 534, 58 S. W. Rep. Cisco Paving Co. v. Bates, 134 Cal. JO, 934, 54 L. R. A. 492; affirmed, 181 66 Pac. Rep. 2; Denver City v. U. S. 324, 45 L. ed. 879, 21 Sup. Ct, Knowles, 17 Colo. 204, 30 Pae. Kep. Rep. 625; Heman v. Gilliam, 171 Mo. 1041, 17 I/. R. A. 136; English v. 258, 71 S. W. Rep. 163; Conde v. City Mayor, etc., of Wilmington, 2 Marv. of Schenectady, 164 N. Y. 258, 58 N. (Del.) 63, 37 Atl. Rep. 158; Speer v. E. Rep. 130; People ex rel. Scott v. Athens, 85 Ga. 49, 11 S. E. Rep. 802, Pitt, 169 N. Y. 521, 62 N. E. Rep. 9 L R A 402 ; Bacon v. Savannah, 86 662, 58 L. R. A. 372 ; Hilliard v. City Ga. 301, 12 S. E. Rep. 580; Hack- of Asheville, 118 N. C. 84.3, 24 S. E. worth v' City of Ottumwa, 114 Iowa, Rep. 738; Webster v. Farajo, 9 N. Dak. 467 87 N. W. Rep. 424; Allen v. City 208, 82 N. W. Rep. 732, 56 L. R. A. of Davenport, 107 Iowa, 90, 77 N. W. 156 ; Rolph v. Fargo, 7 N. Dak. 640, Rep. 532; Minneapolis, etc., Ry. Co. 76 N. W. Rep. 242, 42 L. R. A. 646; V. Lindquist, 119 Iowa, 144, 93 N. W. Harrisburgh v. McPherran, 200 Pa. Rep 103; Burnes v. Atchison, 2 Kans. St. 343, 49 Atl. Rep. 988; Scranton v. 454 ; Parker v. Challiss", 9 Kans. loo ; Koehler, 200 Pa. St. 126, 49 Atl. Rep. City of Lexington v. McQuillan's 792; Cleveland v. Tripp, 13 R. I. 50; Heirs 9 Dana, 513, 35 Am. Dec. 159; Trino v. City of Yankton, 10 S. Dak. Kelly'v. Chadwick, 104 La. 719, 29 So. 516, 74 N. W. Rep. 447; City of Park- Rep 295; affirmed, 187 U. S. 540, 47 ersburg v. Tavenner, 42 W. Va. 486, L ed 293, 23 Sup. Ct. Rep. 175; 26 S. E. Rep. 179; Dancer v. Town of Bruning v. Chadwick, 109 La. 1067, 34 Mannington, 50 W. Va. 322, 40 S. E. So Rep. 90; Williams v. Mayor, etc., Rep. 475; Meggett v. City of Eau of Detroit, 2 Mich. 560 ; Sheley v. City Claire, 81 Wis. 326, 51 N. W. Rep. 566. of Detroit, 45 Mich. 431, 8 N. W. Rep. T3 Art. IX, § 3, quoted in § 1591 of 52- City of Kalamazoo v. Prangoise, this work. See State v. Robert P. 115 Mich. 554, 73 N. W. Rep. SOI; Lewis Co., 82 Minn. 402, 86 N. W. Cass Farm Co. v. City of Detroit, 124 Rep. 611, 53 L. R. A. 421, rehearing. 1004 CONSTITUTIONAL LAW OF TAXATION. fiamd in effect, as a fact, after inquiry by the assessing tribunal, that the benefits accruing to each lotowner are equal in amount to his share apportioned by frontage."* 1967. Where the rule of this class of cases obtains, assessments for local improvements made by the arbitrary rule of area or frontage, without inquiry as to benefits, are void as a matter of state constitutional law7° 1 968. Said the !New Jersey court, in defining the rule here dis- cussed : An assessment for a street or sewer so apportioned on the lands that it happens to be coincident with the proportion of area of those lands may, like an assessment on "frontage, be ac- cording to the rule of benefits as established by law. and if commissioners, acting imder that rule, so find and assess prop- erty, that is if they, in assessing property specially benefited, under the proper rule for such assessments that the area or front- age of the assessable property corresponds with the benefits to such property, it would be a proper assessment, and sustainable in the absence of ■ evidence to show, an error in judgment; the mere fact that an assessment laid on. property peculiarly benefited in proportion to {benefits, and limited thereto, corresponds with area, or frontage, will not overturn such assessment.''^ "!* city Council of Montgomery v. Adams v. City of Roanoke, ]02 Va. 53, Birdsonff. 129 Ala. 63a, '2S So. Rep. 45 S. Ev Rep! 881; City of Norfolk v. 52% ■■ Iv6,yor, etc., of Birmingham v. Young, 97 Va. 728, 34 S. E. Rep. 886, Klein, 89 Ala. 461, 8 L. R. A. 369 47 L. R. A. 574. ( see. however, apparently upholding 75 Agens v. Newark, 8 Vr. ( 37 the front foot rule in its extreme form, N. J. ,L.J 415, 18 Am. Rep. -729; Citv Council of Montgomery v. Moore, State v. Jersey City, 4 'Zab. 662 '(24 140" Ala. 638, 37 So. Rep. 291); X. J. Li.) ; ^tate v. Jersey City, 4 Adams v. Shelbyville, 154 Ind. 467, 77 Dutch. 500 (28 N. J. L.) ; St^te v. Am. St. Rep. 484, 57 N. E. Rep. 114. City of Hudson. 5 Dutch. 104 (29 49 L. R. A. 797; Mayor, etc., of Haiti- N. J. L.) -'StMe v: Bergen. 1 Vr. (30 more v. Ulman, 79 Md. 469, 30 Atl. N. J. L.),307; Becker y. -Goddard, 5 Rep. 43; Mayor, etc., of Baltimore v. Vr. ;(34 If. J. L.) 327; Baxter y. Jer- Stewart, 92 Md. 535, 48 Atl. Rep. 165; sey City, 7 Vr. (36 N. J.L.) 188-193; Long Branch Commission y. Dobbins, Bogert v. Elizabeth,^ 12 C. E. Gr. 5GS'- 32 Vr. (61 N. J. L.) 659, 40 Atl. Rep. 569; Central Land Co. v. Bayonne. 27 .i99; Dooling v. Ocean City, 38 Vr. Vr. (56 N. J. L.) 297. 28 Atl. Rep. (67 N. J. L.) 215. 50 Atl. Rep. 621; 713; 'Vreeland T. Bayonne, 29 Vr. (.^8 Raymond y. Rutherford, 26 Vr. (55 N. J. L.) 126, 32 x'i.tl.Rep..68..; Morris N. J. L.) 441. 27 Atl. Rep. 172. 27 Vr. v. Bayonne, 24 Vr. (53 N. J. L.) 299, (56 N. J. L.) 340, 29 Atl. Rep. 156; 21 Atl. Rep. 453; Huteheson y. Storrie, Johnson v. Trenton, 14 Vr. (43 X. .J. 92 Tex. 685, 71 Am. St. Rep. 884, 51 L.) 166; Van Soligen v. Harrison, 10 S. W. Rep. 848, 45 L. R. A. 289; Vr. (39 N, J, X..) 51; Hunt w Rah- Violett v, Alexandria 92 Va. 561, 53 way Co., 10 Vr, (39 N. J. L.) 640; Am. St. Rep. 825.23 S. K. Rep. 909, 31 Putney v. Passaic, 8 Vr. (37 N. J. L.) L. R. A. 382. 65; Kohler y. Guttenberg. 9 Vr. (38 7G New Brunswick Rubber Co. y. Tlie X. J. L. ) 419; Pislor y. Fuller, ."> Vr. Commissioners of Streets and Sewers, (34 N. J. L.) 227-234; Hand y. Eliza- 9 Vr. (38 N. .T. L.> 190, 20 Am. Rep. both, 2 Vr. (31 N. J. L.) 547-551; 380. To the same effect; Morse y. City LOCAL ASSESSMENTS. 1005 There are decisions holding that the fact that the assessors took bfcnetit into account must affirmatively appear in order to sustain an assessment.''^ Probably in most states the assessors would be presumed to have taken benefits into account, if the law provided that they should do so and the contrary did not appear. 1969. (3.) Hardly distinguishable from the cases in class 3 are some decisions, which, so far as a general rule can be deduced from them, seem to hold that the methods of making assessments by frontage, area, or value are reasonable methods of ascertaining henefits in many cases ; that the legislature may adopt them or may authorize subordinate tribunals to adopt them ; that when adopted they are presumed to effect apportionment according to benefits; except in cases where it clearly appears that such methods are in- applicable and must result in injustice. In these cases it seems that if the method by frontage seems to be a reasonable one it will be sustained, although the property owner has had no opportunity to contest the jiistice of the rule ; but if the operation of the method plainly results in injustice, it will be set aside. ^* The writer ventures to express the view that these decisions, thus interpreted, afford the happiest solution of the diificulties which are presented in cases of this kind. 1970. Said the Supreme Court of Oregon, in one of the' cases', cited, after referring to the controversy over the front-foot rule : But we are inclined to believe that the better doctrine, de- dueible from adjudged eases, including those of the Supreme Court of the United States, is that the assessment will be upheld, whenever it is not patent and obvious from the nature and loe*' tion of the property involved, the district prescribed, the condition and character of the improvement, the cost and relative- value of the property to the assessment, that the plan or method adopted has resulted in imposing a burden in substantial excess of Omaha, Neb. , 93 N. W. Rep. 176 Mass. 247, 79 Am. St. Eep. 306, 57 734. N. E. Rep. 380; Schroer^er r, Overmnr,. 7TPoillon V. Rutherford, 36 Vr. (65 61 Ohio St. 1, 55 N. E. Rep. 158, 47 N. J. L.) 538, 47 Atl. Rep. 439: John L. R. A. 156; Walsh v. Barron, 61 V. Connell, 64 Xeb. 233, 89 N. W. Rep. Ohio St. 15, 76 Am. St. Rep. 354, 55 806; Medland v. Linton, 60 Neb. 249, N. E. Rep. 164; Shoemaker v. City of 82 N. W. Rep. 866 ; Smith v. City of Cincinnati, 68 Ohio St. 603, 68 N. E. Omaha, 49 Neb. 883, 69 N. W. Rep. Eep. 1 ; King v. City of Portland, 38 402. Oreg. 402, 63 Pac. Rep. 2, 55 L. R. A. 78 Weed v. Boston, 172 Mass. 28, 51 812; Oregon, etc., Ry. Co. v. Portland, N. E. Eep. 204. 42 L. E. A. 642; Sears 25 Oreg. 229, 35 Pac. Rep. 452, 22 L. V. Boston, 173 Mass, 71, 53 N. E. Rep. R. A. 713; Wilson v. Salem, 24 Oreg. 138, 43 L. R. A. 834; Dexter v. Bostan, oO^, 34 X^ac. Rep. 9, 691. 1006 CONSTITUTIONAL LAW OF TAXATION. of tlie benefits, or disproportionate in the district as between owners^® 1971. Likewise it was said in Massachusetts: Assessments of special taxes by an estimate of the particular benefits to each lot, by measurement of the amount of frontage upon a street or sewer, by the measurement of the area of the lots, and by a valuation of the property, have all been sustained.*" But, as we have already intimated, the only ground on which they can properly rest is that they are methods reasonably deter- mined upon by the tribunals charged with the duty of determin- ing, in reference to the ascertainment of the benefits actually received by the different estates on which assessments are to be laid. . . . Most of our cases and our statutes assume, under the constitution, that these assessments, like other taxes, are to be reasonable, and, in a general sense, proportional.^^ Assessments by area or value. 1972. The power of the legislature, and subordinate bodies under legislative authority, to lay assessments on the basis of area rests on the same principles and is subject to the same limitations as the power to assess on the basis of frontage. Generally speak- ing, the decisions of any state on the subject of frontage assess- ments should be regarded as governing the subject of assessments by area. Many of the decisions, however which uphold the power to assess by frontage without special inquiry and hearing as to bene- fits,^ do so partly on the ground that the frontage riile has been sanctioned by long acquiescence. In states where this ground is taken, and where the practice of assessment by area has never ob- tained, possibly an attempt to introduce assessments by area might be subjected to the more logical rule that was asserted in Norwood ■V. Baker,^ and the requirement of special inquiry and hearing with respect to benefits, before the adoption of the rule, might be enforced. T9King V. City of Portland, 38 Oreg. v. Conant, 139 Mass. 384, 2 N. E. Rep. 402, 63 Pac. Rep. 2, 55 L. R. A. 812. G90. so Citing Springfield v. Gay, 12 si Sears v. Boston, 173 M.ass. 71, 53 Allen, 612; Dorgan v. Boston, 12 Allen, N. E. Rep. 138, 43 L. R. A. 834. The 223; Downer v. Boston, 7 Cush. 277; rule that assessments must not exceed Wright V. Boston, 9 Gush. 233 ; Work- benefits will be read into a statute, man v. Worcester, 118 Mass. 168; Cheney v. Beverly, 188 Mass. 81, 74 Keith V. Boston. 120 Mass. 108; Snow N. E. Rep. 306. V. Fitchburg, 136 Mass. 183; Howe \. 82 See §§ 1939-1964. Cambridge, 114 Mass. 388; Chapin v. S3 172 U. S. 269, 43 L. ed. 443, 19 Worcester, 124 Mass. 464; Camden v. Sup. Ct. Rep. 187. Johnson, 104 Mass. 491; Leominster LOCAL ASSESSMENTS. 1007 The method of assessment by area has frequently been approved as a reasonable one. The cases cited uphold the right of the legislature to authorize subordinate legislative agencies to lay assessments by area.** 1973. In Louisiana the constitution expressly authorizes a tax for levees f^ and a levee tax by area on property specially benefited, in addition thereto, has been upheld.^ In Mississippi the consti- tution provides for a levee tax by area.*'' 1974. Statutes directing assessments for local improvements in proportion to value rest on the same principles as those -which direct assessments by frontage, and are generally upheld as due process of law both in the Federal and state courts. The Supreme Court of the United States said of a statute which prescribed the ad valorem method, for paying the cost of an irrigation system : Assume that the only theory of these assessments for local improvements upon which they can stand is that they are im- posed on account of the benefits received, and that no land ought in justice to be assessed for a greater sum than the benefits re- ceived by it, yet it is plain that the fact of the amount of benefits is not susceptible of that accurate determination which apper- tains to a demonstration in geometry. Some means of arriving at this amount must be used, and the same method may be more or less accurate in different cases involving different facts. Some choice is to be made, and where the fact of some benefit accruing to the lands has been legally found, can it be that the adoption of an ad valorem method of assessing the lands is to be held a violation of the Federal constitution ? It seems to us clearly not. It is one of those matters of detail in arriving at the proper and fair amount and proportion of the tax that is to be levied on the land with regard to the benefits it has received, which is open to the discretion of the state legislature and with which this court ought to have nothing to do. The way of arriving at the amount may be in some instances inequitable and unequal, but that is far from rising to the level of a constitutional prob- 84Keese v. City of Denver, 10 Colo. 27 Mo. 495, 72 Am. Dec. 476 (levee) ; 112, 15 Pae. Rep. 825 (sewer) ; De Cleveland v. Tripp, 13 R. I. 50 Koven v. City of Lakeview, 129 III. (sewer) ; State v. City of Portage, 12 399, 21 N. E. Rep. 813 (sewer); Wis. 562. Swain v. Fulmer, 135 Ind. 8, 34 N. E. 85 Art. Xf, § 238 ; § 254 of this Rep. 639 (sewer) ; Grimmell v. Des work. Moines, 57 Iowa, 144, 10 N. W. Rep. 80 Munson v. Board of Commission- 330 (sewer) ; Barfleld v. Gleason, 111 ers, 43 La. Ann. 15, 8 So. Rep. 900. Ky. 491, 63 S. W. Rep. 964 (street 87 Art. XT, § 236; § 256 of thi^ improvement) ; Broadway Baptist work; Williams v. Cammaek, 27 Miss. Church V. McAtee, 8 Bush (Ky.), 209, 61 Am. Dec. 508; Daily v. Swopp, 510, 8 Am. Rep. 482 (street improve- 47 Miss. 367. ment) ; Egyptian Levee Co. v. Hardin, 1008 CONSTITUTIONAL LAW OF TAXATION. lem anrl far from a case of taking- property without due process of law.** 1975. In Arkansas*^ the constitution prohibits municipal as- sessments except ad valorem, as follows : Nothing in this constitution shall be so construed as to pro- hibit the General Assembly from authorizing assessments on real property for local improvements in towns and cities, under such regulations as may be prescribed by law, to be based upon the consent of a majority in value of the property holders owning , property adjoining the locality to be afEected; but such assess- ments shall be ad valorem and uniform.®" 1 976. Where an assessment is made by value, the value of im- provements on the lands assessed is not usually included; and in- deed it is hard to imagine a case of local assessment where to in- clude the value of improvements would be justified upon the theory of benefits. The greater justice of the practice of excluding the value of improvements from consideration in making assess- ments according to value is recognized and asserted in the cases cited.«i 1 977. In an early Massachusetts case an ordinance which pro- vided for a sewer assessment in proportion to value was held to be tinreasonable and void because it provided that the assessment should be made " having reference to the last valuation in the assessors' books," that is, including the value of improvements. Said the court : ssFallbrook Irrigation District v. (sewer); Kansas Citv v. Ward, 134 Bradley, 164 U. S. 112-176, 41 L. ed. Mo. 172, 35 S. W. Rep. 600 (park); 369-394, 17 Sup. Ct. Rep. 56; Hagar Lockwood v. City of St. Louis, 24 Mo. V. Reclamation District, 111 U. S. 701, 20 (sewer); Creighton v. Scott, 14 28 L. ed. 569, 4 Sup. Ct. Rep. 663; Ohio St. 438 (street improvement); Walston V. Nevin, 128 U. S. 578, 32 Riclimond, etc., Ry. Co. v. City of L. ed. 544, 9 Sup. Ct. Rep. 192 (area); Lynchburg, 81 Va. 473 (water mains). In re Madera Irrigation District, 92 89 Peay v. Little Rock, 32 Ark. 31; Cal. 296-324, 27 Am. St. Rep. 106, 28 Monticello v. Banks, 48 Ark. 251, 2 Pac. Rep. 272, 675, 14 L. R. A. 755; S. W. Rep. 852; Davis v. Gaines, 48 Burnett v. Sacramento, 12 Cal. 76, 73 Ark. 370, 3 S. W. Rep. 184 Am. Dec. 518; Creighton >-. Scott, 14 • 90 Art. XIX, § 19. Ohio St. 438: Gilmore v. Hentig, 33 91 Newman v. City of Emporia, 41 Kans. 156-173, 174, 5 Pac. Rep. 781; Kans. 583, 21 Pac. Rep. 593; Mason v. WiiUacf V. Shelton, 14 La. Ann. 503; Spencer, 35 Kans. 512, 11 Pac. Rep. Wright V. Boston, 9 Cusb. 233; 402 ; Gilmore v. Hentig, 33 Kans. 156. Downer v. Boston, 7 Cush. 277; Dor- 5 Pac. Rep. 781; Brewer v. City of gan V. Boston, 12 Allen, 223; Strow- Springfield, 97 Mass. 152; Snow v. bridge v. Portland, 8 Oreg. 67-82; City of Fitchburg, 136 Mass. 183; City Workman v. City of Worcester, 118 of Springfield v. Gav, 12 Allen, 612; Mass. 168 (sewer); Smith v. Mayor, Downer v. Citv of Boston, 7 Cush 277- etc., of Worcester, 182 Mass. 232, 65 Hoffield v. City of Buffalo 130 N Y N. E. Hep. 40, 59 L. R. A. 728 387, 29 N. E. Rep. 747. LOCAL ASSESSMENTS. 1009 Shall the owner of the lot next to the outlet be, in any event, held to contribute more than the owner of the lot 600 feet above, if the former lot should have a house upon it, and the latter fihould be vacant? We think not. Suppose A owns a lot next to the outlet at Charles street, of the value of $1,000, which, with the house upon it, is valued at $10,000, and that B has a lot of the same dimensions, 600 feet from Charles street, valued at $1,000. By the ordinance, the contribution should be made according to the valuation of the estates in the books of the assessors. The owner of one lot would be held to pay ten times as much as the other. The apportion- ment should be made upon the value of the land independently cf the buildings. It is not for the court to prescribe the mode by which the amount of the contribution should be ascertained; but we are bound to say that, this, which has been provided, is unequal and unreasonable, and therefore void.^^ Making each lot pay the cost of the improvement in front of it. 1978. Excepting such assessments as for sidewalks, and some- times for drains, "which are constructed under the police power, an assessment for local improvements, made by the rule of assessing upon each lot the cost of the improvement in front of it, must be regarded as a taking of property without due process of law. Such an assessment cannot be upheld as an act of ordinary taxation, be- cause it has no reference to the proportionate value of the property assessed, thus being repugnant not only to express constitutional requirements of equality and uniformity; but also to the idea of proportionate equality which lies at the basis of all taxation. Instead of creating taxing districts and treating alike all lots in the district, it makes a separate taxing district of every lot — that is, in effect, it makes no taxing districts at all. It cannot be upheld on the ground of special benefits received, because it is based on cost and not benefit. The method has not the rough, practical fairness of the methods of assessment by frontage or area, for it would often happen that the cost of the part of an im- provement in front of a particular lot would be entirely out of proportion to the benefit received. Of course it may appear, as a matter of fact, that the benefits received coincide with the cost of the improvement in front of the particular lot. But where the assessment is made iy the rule and principle of laying upon each 82 City of Boston v. Shaw, 1 Mete. (Mass.) 130. 64 1010 CONSTITUTIONAL LAW OF TAXATION. lot the cost of the improvement in front of it, it cannot, in prin- ciple, be sustained.®^ 1979. In Iowa each lot may be made to bear the cost of the- improvement in front of it.** A departure from the prevailin^^ view is found in Oregon, where an assessment for an elevated roadway in a street was upheld, the ordinance directing that each lot should bear the full cost of making the improvement upon cne-half the street in front of it. It was said, however, that such a method would not be upheld in a case where it should clearly appear to be unjust and oppressive.* In a Pennsylvania case a lotowner attempted to escape a paving assessment by the front-foot rule, and asserted that he might only be assessed for the cost of the improvement in front of his lot ; but this contention was overruled.*® In a case in Wisconsin, a law which authorized cities^ to compel owners of land on the river front to build and repair docks on their lands, was condemned because no pro- vision for adjusting the expense to benefit was contained in the- law.*^ Assessments under the police power. 1 980. The element of nuisance and danger to the public safety which exists when the highways are unsafe is the basis of a num- ber of decisions which have established, as a general rule of con- stitutional law, that sidewalks in towns and cities may be con- structed under the police power. Ordinances establishing side- walks are regarded as exercises of the police power, conse- quently assessments made on property owners are not entirely subject to the ordinary rules which govern assessments for benefits. Such is the reasoning of the decisions. Why taxes laid in fur- therance of the police power should not be subjected to the ordinary constitutional limitations on taxation, just as much as taxes laid 83 Davis V. Litchfield, 145 111. 313, Whatcom v. Improvement Co., 9 Wash. 33 N. E. Eep. 888, 21 L. R. A. 563; 639, 38 Pac. Rep. 163. See State t. Palmer v. City of Danville, 154 111. 156, Portage, 12 Wis. 562 ; and Weeks v. 38 N. E. Rep. 1067 ; Lexington v. Me- Milwaukee, 10 Wis. 258. Quillan's Heirs, 9 Dana (Ky.), 513,35 94 Warren v. Henly, 31 lo-wa, 31. Am. Dec. 159 ; Motz v. City of Detroit, 95 King v. City of Portland, 38 Oreg. 18 Mich. 495; Weller v. City of St. 402, 63 Pac. Rep. 2, 55 L. R. A. 812. Paul, 5 Minn. 95 ; City v. Clemens, 49 86 Keller v. Scranton, 200 Pa. St. Mo. 552 ; Neenan v. Smith, 50 Mo. 130, 86 Am. St. Rep. 708, 49 Atl. Rep. 525; City of Independence v. Gates, 781. 110. Mo. 374-382, 19 S. W. Rep. 728; 97 Lathrop v. Racine, 119 Wis. 461, Van Tassel v. Mayor, etc, of Jersey 97 N. W. 192. City, 37 N. J. L. (8 Vr.) 128; New LOCAL ASSESSMENTS. 1011 in support of the war power, or the debt-paying power, or the judicial power, is not easy to see. The truth is that it has always been a convenient device of local government to make property owners keep up the sidewalks ad- jacent to their property, and when the courts were called on to justify the practice, they dragged in this ponderous scapegoat called the police power. However that may be, the rule is well established that the con- struction of sidewalks by property owners may be compelled under the police power, either by assessing on each lot the cost of the work in front of it or by any other of the modes of assessment in vogue; and constitutional objections based on the absence of bene- fit, or upon improper apportionment, are generally of no avail. Some cases say that the sidewalk is so essential to the use of the premises to which it belongs that it is to be regarded as an ap- pendage to those premises; and for that reason the legislature or municipal authorities may direct it to be put in order at the sole expense of the owner.^ Such assessments, however, it is held in New Jersey, must be confined to the cost of the sidewalk only, and may not include the cost of the substantial grading and excavating in the part of the street occupied by the sidewalk. That cost must be apportioned according to benefits.^' Assessments for drains and sewers, also, are sometimes justified by the police power.^ 1981. In South Carolina assessments for sidewalks and drain? were formerly the only exceptions to the rule that the constitu- tional requirement of equality and uniformity forbids all local assessments.^ But lately it has been held that even these excep- 98Arndt v. City of Cullman, 132 ler, 9 Heisk. (Tenn.) 349, 24 Am. Hep. Ala. 540, 90 Am. St. Eep. 922, 31 So. 308. Rep. 478; Speer v. Athena, 85 Ga. 49, 99 Van Tassell v. Jersey City, 8 Vr 11 S. E. Rep. 802, 9 L. R. A. 402; (37 N. J. L.) 128; Cronin v. Jersey Macon v. Patty, 57 Miss. 378, 34 Am. City, 9 Vr. (38 N. J. L.) 410; Kirk- Rep. 451; Nugent v. Jackson, 72 Miss, patrick v. Commissioners, 13 Vr. (42 1040, 18 So. Eep. 493; Agens v. New- N. J. L.) 510. ark, 8 Vr. (37 N. J. L.) 415-425, 18 l Muskego v. Drainage Commission, Am. Rep. 729; City of Lincoln v. Ja- 78 Wis. 40, 47 N. W. Rep. 11; Bryant neseh, 63 Neb. 707, 93 Am. St. Rep. v. Eobbins, 70 Wis. 258, 35 N. W 478, 89 N. W. Rep. 280, 56 L. R. A. Rep. 545; State v. Stewart, 74 Wis 762; Wilhelm v. Defiance, 58 Ohio St. 620, 43 N. W. Rep. 947, 6 L. R. A 56, 65 Am. St. Rep. 745, 50 N. E. Rep. 394; Gray v. Board, etc., 139 Mass 18, 40 L. R. A. 294; Tripp v. Yank- 328, 31 N. E. Rep. 734. See §§ 1846- ton, 10 S. D. 516, 74 N. W. Rep. 447; 248 et seq. of this work. Mayberry v. Mayor, 6 Humph. (Tenn.) 2Mauldin v. City Council of Green- 371, 44 Am. Dec. 315; Taylor V. Chand- ville, 42 S. C. 293, 46 Am. St. Rep^ 1012 CONSTITUTIONAL LAW OF TAXATION, tions are inadmissible, and that assessments for sidewalks and drains are invalid.* Compelling property owners to keep streets free from snow and ice. 1982. Statutes and ordinances imposing upon property owners the duty of keeping sidewalks adjacent to their property free from snow and ice belong in fact to the class of police regulations, rather than exercises of the taxing power. In so far as they impose bur- dens on property owners for the public benefit they are, of course, referable to the taxing power, and they may be regarded as im- posing a sort of special assessment. It can hardly be said, how- ever, that any benefit justifying an assessment is received in such cases; and the statutes and ordinances in question really depend for justification on public convenience and long legislative custom. In New York such an ordinance has been upheld as a police regulation, against the objection that it was a taking of private property for public use without just compensation.* In Massa- chusetts a municipal ordinance of the kind under consideration was upheld as a police regulation ; and it was said that, Although the sidewalk is part of the public street, and the public have an easement in it, yet the adjacent occupant is often the owner of the fee, and generally has some peculiar interest in it and benefit from it, distinct from that which he enjoys in common with the rest of the community. He has this interest and benefit, often in accommodating his cellar-door and steps, a passage for fuel, and the passage to and from his own house to the street. To some purposes, therefore, it is denominated his sidewalk. For his own accommodation he would have an interest in clearing the snow from his own door. The owners and occupiers of house-lots and other real estate, therefore, have an interest in the performance of this duty, peculiar and some- what distinct from that of the rest of the community. The ordinance was thus likened to one imposing a special assessment for benefits, and upheld against the objection of inequality.^ 723, 20 S. E. Eep. 842, 27 L. R. A. * Village of Carthage v. Freaerick, 284; State v. City CoTincil, 12 Rich. 122 N. Y. 268, 19 Am. St. Rep. 490, 10 702. L- R. A. 178, 25 N. E. Rep. 480; Peo- 3 JViauldin v. Citv Council of Green- pie v. O'Brien, 45 Hun, 540. ville, 53 S. C. 285, 69 Am. St. Rep. 5 Re Goddard, 16 Pick. 504, 28 Am. 855, 31 S. E. Rep. 252, 43 L. R. A. 101. Dee. 259. LOCAL ASSESSMENTS. 1013 1983. In other states ordinances compelling lotowners to keep sidewalks free from ice and snow have been upheld as police regulations.® In Michigan and Wisconsin it has been assumed, without dis- cussion, that the duty of repairing sidewalks may be imposed on lotowners, and that such owners may be held liable, according to the intention of the legislature, for all the consequences of their defaults. '^ 1984. In some jurisdictions ordinances compelling property owners to remove snow and ice from sidewalks have been held un- constitutional. In Illinois it is said that the police power does not extend so far and that the case is not one to which the principles underlying special assessments are applicable.^ In ISTew Hamp- shire such an ordinance was held to be violative of the constitu- tional rule of equality in taxation, and of the prohibition against taking private property without due process of law.® The Court of Appeals of the District of Columbia held a statute of this character to be void for uncertainty and ine- quality.i'' Whether street railways can be compelled to pave, clean, and re- pair the street near their tracks is considered in sections 192.5 et seq. of this work. 1 985. Lots on which stagnant water or other filth has collected may be cleaned or filled up at the owner's expense. Statutes and ordinances directing such action are referable wholly to the police power, for the protection of the public health and con- venience; and are not governed by the limitations on the taxing power. ^' estate v. McMahon, 76 Conn. 97, 55 Rep. 187; Woodward v. City of Boa- Atl. Rep. 591; City of Lincoln v. Ja- eobel, 84 Wis. 226, 54 N. W. Rep, 332; nesch 63 Neb. 707, 89 N. W. Rep. 280, Toutloff v. City of Green Bay, 91 Wis. 93 Aiii tst. Rep. 478, 56 L. R. A. 762; 490, 65 N. W. Rep. 168; Selleck v. Faxon v. Sweet, 13 N. J. L. 196 ; Bon- Tallman, 93 Wis. 246, 67 N. W. Rep. sail V. Mayor, 19 Ohio St. 418; Mayor, 36. etc., V. Mayberry, 6 Humph. (Tenn.) 8 City of Chicago v. O'Brien, 111 111. 368, 44 Am. Dec. 315; Washington v. 532, 53 Am. Rep. 640; Gridley v. City Mayor 1 Swan (Tenn.), 177; White v. of Bloomington, 88 111. 554, 30 Am. Mayor' 2 Swan (Tenn.), 364. Rep. 566. T City of Detroit v. Cnaffee, 70 Mich. 9 State v. Jackman, 69 N. H. 331, 41 80, 37 N. W. Rep. 882 ; Lynch v. Hub- Atl. Rep. 347, 42 L. R. A. 438. bard 101 Mich. 43, 59 N. W. Rep. 443; lOMcGuire v. District of Columbia, Hine'r T. City of Fond du Lac, 71 Wis. 24 D. C. App. 22, 65 L. R. A. 430. 74 36 N W. Rep. 632 ; Morton v. n Watkins v. Milwaukee, 55 Wis. Smith, 48 Wis. 265, 33 Am. Rep. 811, 335, 13 N. W. Rep. 222. 4 N. W. Rep. 330; Henker v. City of Fond du Lac, 71 Wis. 616, 38 N. W. 1014 CONSTITUTIONAL LAW OF TAXATION. Cases where various methods of assessment have been held to be inapplicable and unreasonable. 1 986. Most of the cases which sustain the front-foot rule in its extremest form^^ are after all but decisions that, with respect to a certain well-defined class of improvements in city streets, the front- foot rule is a reasonable and applicable mode of ascertaining bene- fits. In a case where the legislature had adopted or authorized a method clearly inapplicable to the nature of the improvement, probably few, if any, courts would hesitate to declare that the action of the legislature amounted to spoliation, and was void for lack of due process of law.-^* It is not possible to state a general rule which will enable any one to determine in what cases the method by area, or frontage, or value is applicable or inapplicable. A brief examination of some cases will be useful. Where the assessment against any lot is more than the value of the lot after the improvement is made, there is good ground for believing that the method of assessment was grossly in fault, at least in its application to the particular lot. Cases of this sort are cited and more fully described elsewhere.^* Where the property is so situated that it can derive no benefit at all from the improvement, under any circumstances, the case is one of gross error in the formation of the taxing district, rather than of method of apportionment. These cases also are treated elsewhere.-^^ 1987. That the front-foot rule is generally applicable to sur- face improvements in city streets where lots are all of a nearly uniform depth is well established.-'® In its application to sewers, the statement in one of the Massa- chuse.tts cases, previously cited, is as follows: The weight of authority is that an assessment according to the frontage of lots abutting on a street or public way in a city sometimes may be a reasonable mode of makins; an assessment for the cost of constructing a sewer in such street or way, hecause of the similarity of the lots, but that such an assessment, ■when the sewer is not constructed in a street or way, or is con- 12 See §§ 1962-1964 and cases cited. L. ed. 879, 21 Sup. Ct. Rep. 625, sup- 13 Norwood V. Baker, 172 U. S. 269, ports this proposition. 43 L. ed. 443, 19 Sup. Ct. Rep. 187, H See § 1992 et seq. of this work, even as limited bv French v. Barber 15 See § 1896 et seq. of this work. Asphalt Paving Co., 181 U. S. 324, 45 16 See § 1964 et seq., ante. LOCAL ASSESSMENTS. 1015 structed in the country, where the lots abutting are not laid out as building lots, often would be unreasonable.^'^ Here the rule was held inapplicable to a case where a sewer was made in a strip of private land eight feet wide, described as an '■' unaccepted street," which strip, and the private property on «ach side of it, which was subjected to the assessment, were •described as " low, wet meadow land, unfit for dwelling-houses, and of little or no value for agricultural or pasturage purposes, and not capable of being utilized for any purpose of business or profit vrithout great outlay and expense, especially for filling." ' The -amount of the assessment on this land was $4 per lineal foot ; and the sewer which was constructed was " a large brick sewer, a part •of a long main sewer, designed principally for draining a consider- able territory of valuable land," at some distance from the land assessed.^* In a later case a statute prescribing a sewer assessment by the front-foot rule was held unconstitutional in its application to a case where there was a great difference in grade of the lands at different points along the line of the sewer ; and where the sewer ran along two sides of a comer lot, which lot was thus doubly assessed, with l)ut slight additional benefits.^* 1 988. The method of apportionment by area has been held ap- plicable to assessments for sewer and drainage improvements in a number of cases. Inasmuch as drainage is a kind of benefit which bears, to some extent, a necessary relation to area, the ap- plicability of this method to such cases is readily perceived. The same may be said of assessments for levee purposes, and for irriga- tion.2o 1989. In an oft-cited ease the Supreme Court of Michigan through Judge Cooley, whose views as to the necessity of actual benefits to support assessments were quite decided, held that a ■statute which gave to the common council of a city the power to create a district of assessment for sewers of lands which they should deem benefited; and which directed that the assessment should be made by area on such lands, was unconstitutional. The underlying idea of the decision was that the method of assessment by area was arbitrary and unreasonable in its application to sewer 17 Weed V. Boston, 172 Mass. 28, 42 Mass. 247, 79 Am. St. Rep. 306, 57 I/. E. A. 642, 51 N. E. Rep. 204. N. E. Rep. 379. 18 Weed V. Boston, supra. 20 See § 1972 et seq. for cases where 19 Dexter v. City of Boston, 176 assessments by area have been held applicable. 1016 CONSTITUTIONAL LAW OF TAXATION. assessments, although it was conceded that under certain limitecf circumstances such a method might be allowable.^' This opinion, like many other opinions in regard to such matters, goes much further in theory than actual decisions of the courts hav.e com- monly gone in practice. 1990. In a Washington case it was conceded that the plan of laying assessments according to value is not, of itself, unconstitu- tional ; but in a case where a street assessment was laid by value, without regard to the frontage on the street or the depth of the lots assessed, and where it appeared, as matter of fact, that some- of the lots assessed extended back 1,000, feet, while others only had a depth of 100 feet, so that one lot might pay three or four times as much as another having the same frontage, the assessment was set aside.^^ 1991. A case which is often cited as authority for the proposi- tion that a rural highway cannot be regarded as of such peculiar local benefit as to justify an assessment, and which in fact is authority for that proposition, is also authority for the assertion that, conceding the propriety of an assessment for benefits in suck cases, the rule of apportionment by area or frontage is inapplicable. Said the Supreme Court of Pennsylvania : So long, therefore, as a law faithfully and reasonably provides- for a just assessment, according to the benefits conferred, and does not impose unfair and unequal burthens, it cannot be said to exceed the legislative power of taxation when exercised for proper objects. It is on this ground only that assessments ac- cording to the frontage of property on a ptiblic street to pay for its opening, grading, and paving can be justified. As a practical result in cities and large towns the per front-foot mode of assess- ment reaches a just and equal apportionment in most cases. . . . But it IS an admitted substitute only because practically it arrives, as nearly as human judgment can ordinarily reach,, at a reasonable and just apportionment of the benefits on the abutting properties. . . . But this rule, as a practical ad- justment of proportional benefits, can apply only to cities and large towns, when the density of population along the street, and the small size of lots, make it a reasonably certain mode of arriving at a true result. To apnly it to the country and to farm lands would lead to such inequality and injustice as to deprive it of all soundness- 21 Thomas v. Gain, 35 Mien. 155, 24 Pao. Eep. 447. For a somewnat simi- Am. Eep. 635. lar case see Iowa Pipe, etc., Co. v_ 22 Howell V. City of Tacoma, 3 Callanan, 125 Iowa, 357, 101 N. W. Wash. 711, 28 Am. St. Rep. 83, 29 Eep. 141, 67 L. E. A. 408. LOCAL ASSESSMENTS. 1017 as a rule, or as a substitute for a fair and impartial valuation of benefits in pursuance of law; so that, at the verv first blush, every one would pronounce it to be palpably unrnasonable and unjust. Judged by this rule for deciding in a question of con- stitutional power, the law in this case cannot stand. Whether we view this avenue as a macadamized highway, seven miles long or three hundred, the result is the same to those along its route. To charge its cost upon the farms lying within one mile on each side, at a fixed sum per acre, is so obviously onerous and unreasonable, and leads to such a destruction of private right, and such unfairness of imnosition for the advan- tage of the public at large, and of individuals who pay nothing, it cannot, on any fair principle of reasoning, be said to be a valuation according to benefits. In other words, it cannot, with any degree of truth, be pronounced to be a proper substitute for a just and impartial valuation of benefits. ... I admit that, if we do not analyze the reason and trace the origin of the frontage rule there is a seeming analogy between the Wash- ington avenue act and many preceding it for the improvement of streets in cities and towns. But reasoning by analogv is sometimes a dangerous source of error, and is always so if we fail to see that the analogy itself is accurate. In the present ease an examination of the facts, on which the per frontage rule is based, discloses at once the want of analogy between large farms with single occupants or owners, or wild or untenanted land, in the country, and the small lots of a crowded street in a populous town.^ Where the assessment equals or exceeds the value of the property. 1 992. Where it appears that the amount of an assessment, sup- posedly, for benefits, is equal to or greater than the whole value of the property assessed, the case presented is so manifestly one of error in fact that the courts have almost uniformly restrained or set aside the assessments as to the particular property. Such cases are some- times spoken of as cases of spoliation — as showing that a wrong rule of assessment was followed — and they have been instanced as arguments against the legislative povs?er to lay assessments by the established rules of frontage or area. In logic they do show that the rules of assessment which bring about such results are imper- fect. But all human rules are imperfect and bring about unjust results at times ; and the whole law of special assessments is full of logical absurdities. The practical way to deal with such cases, when they come- before the courts, is to give relief against them 23 Washington Avenue, 69 Pa. St. 352, 8 Am. Eep. 255. 1018 CONSTITUTIONAL LAW OF TAXATION. in the particular cases and with respect to the particular property as to which the assessment is so plainly disproportionate to bene- fits, without laying down any general rule except that the consti- tution and statutes are not to be interpreted so as to permit confiscation. Some cases follow in which assessments have been vacated or restrained because the amount of the assessment equaled or ex- ceeded the value of the property ; and some expressions are quoted which indicate the attitude of the courts. 1993. In Georgia the owner of a narrow strip of land, seven feet wide at one end, three feet wide at the other end, and extend- ing four hundred feet along a city street, was assessed for paving the street. The assessment, laid by the frontage rule, amounted to .'R721. The value of the property after the paving was done was $260. Upon the complaint of the property owner, the collection of the assessment upon the particular property was enjoined. It was said that The exact extent of the benefit necessary to uphold such an assessment is incapable of definition. But it may be asserted, •with perfect confidence, that the present is one of those extreme cases of such doubtful benefit and probable spoliation as will justify the interference of a court of equity in order to prevent the citizen from being arbitrarily deprived of his property.^ 1994. In. Kentucky the grade of a street was changed so that it was raised about twelve feet above the grade of a cross street which formerly entered it. This change made entrance to the cross street impossible and destroyed much of the value of property fronting on the cross street. An assessment for the cost of grading was laid on a district which included some property fronting on the cross street. As to this property, the assessment was greater than its whole value after the improvement. In an action to enforce the assessment the proceedings, as to this property, were dismissed. Said the Kentucky Court of Appeals, after referring to the rule that the question of benefits is one for the legislature : This rule, however, cannot be so extended as to entirely take from the citizen his property. This would work a manifest in- justice. It would be spoliation and not taxation. Under the guise of benefit and taxation he cannot be thus arbitrarily deprived of his property.^ 24 City of Atlanta v. Hamlein, 96 25 Preston v. Rudd, 84 Ky. 150-156. Ga. SSl-aSS, 23 S. E. Rep. 408. LOCAL ASSESSMETfTS. 1019 1985. In another Kentucky case an assessment by the front foot was held to be invalid because the amount of the assessment exceeded the whole value of the lot. The Court of Appeals re- ferred to the rule which regards the front-foot method as prima facie just and the legislative judgment conclusive, and said : Where the entire property' is taken to pay for a public im- provement there is no room for a presumption as to the benefits received, but a case of spoliation is shown.^ 1995. In Nebraska, in a suit to recover back the amount of an assessment paid under protest, evidence was admitted to show that the benefits did not equal the assessment. It appeared that the benefits to the land in question did not exceed $300, and the assess- ment was $2,000. A judgment for the defendant on this evidence was reversed.^' 1 997. Where expensive sewers were constructed in a neighbor- hood where the lots were cheap, the highest value of the lots before the improvement being from $350 to $600, and the assessment on each lot for sewer construction exceeded $200, the assessment was set aside. It was proved that the market value of the lots had not been enhanced to the extent of the amount of the assessments."^ 1998. In a recent Ohio case it appeared that an assessment upon property was in excess of its entire value, and that each lot, before and after the assessment, would not have sold for enough to pay the assessment upon it. (It does not appear in the decision what the particular rule of assessment was.) The court relied upon the principle that special assessments are sustainable only on the theory of special benefits conferred on the land by the im- provement, and said of the assessment in question : " By no refine- ment of reasoning can it be construed to be anything else than the taking of private property for public use without just compensa- tion." The assessment was held invalid; the law imder which it was made was not expressly declared unconstitutional, but was interpreted to mean that " it was not the intention of the legis- lature to permit the city to disregard the fundamental principle v>'hich limits an assessment for benefits to the extent of the benefits conferred by the improvement on the land." ^* 26 City of Louisville v. Bitzer, 115 onne, 63 N. J. L. (34 Vr.) 202, 42 Ky. 359, 73 S. W. Eep. 1115, 24 Ky. Atl. Rep. 773. L." Rep. 2263, 61 L. R. A. 434. 29 Walsh v. Barron, 61 Ohio St. 15, 27 Cain V. City of Omaha, 42 Neb. 76 Am. St. Rep. 354, 55 N. E. Rep. 120, 60 N. W. Rep. 368. 164. 2G TTrevert v. Mayor, etc., of Bay- 1020 CONSTITUTIONAL, LAW OF TAXATION. 1999. A case in Pennsylvania shows the injustice which gen- erally results from laying down hard and fast rules in these mat- ters. As shown elsewhere, it is there held as a hard and fast rule of constitutional law that only property directly abutting on a street may be assessed for an improvement. In a case like the Georgia case above cited a narrow strip of land was assessed for a street improvement, the assessment amounting to more than the value of the land. The Pennsylvania court found itself compelled to enforce the assessment, saying: If the objection now made to this assessment were to prevail,. it would be very easy for the owner of a valuable lot to convey a narrow strip of the front to a convenient friend, and thus- escape altogether.-' Estoppel of property owners to object to unconstitutional assess- ment. 1999a. Where a public improvement is made or a tax is laid upon the petition of the owaers of adjacent property or other per- sons interested, and pursuant in form to, and in compliance with, the statutes of the state, or where the property owners in some other way actively encourage the assessment, a kind of estoppel arises against the persons who made the petition or gave the en- couragement. They may not resist the tax, or the assessment for the improvement, after the work is done, on the ground that the law under which the public authorities acted was unconstitutional. A defense of this nature, it is said, need not be placed entirely upon the strict and technical principles of an estoppel. While it partakes very strongly of that character, it also assumes the nature of a contract, implied from the facts, by which the party obtaining the benefit of the work agrees to pay for it in the manner provided in the statute under which it is done, even though the statute turns out to be unconstitutional. It does not in the least matter what the defense is called, whether it be estoppel or im- plied contract, or one partaking of the nature of both, the result is the same. The property owners who encourage the public au- thorities to make the improvement must pay for it in the manner provided by the statute under which they induced the authorities to act. In this view it makes no difference that the result of the enterprise is disappointing to the property owners. If the im- 30 City of Harrisburg v. JleCormick, 129 Pa. St. 213, 18 Atl. Eep. 126. tOCAL ASSESSMENTS. 1021 provement is made according to the statute under which they caused action to be taken, they obtain such an improvement as they asked for and expected, and they are the ones to bear the loss.*^ The estoppel, if estoppel it be called, may be raised, it seems, by mere failure to object to the assessment and taking the benefits thereof, although on principle it seems that this proposition ought to be taken with the qualification that in order to have this ■effect the failure to object must take place in a case where oppor- tunity to object on constitutional grounds was ample, and knowl- edge and benefit are clearly proven.*^ Along this line it was held in a well-reasoned Texas case, that mere failure to object to the assessment, under an unconstitutional law which gave no hearing on the question of benefits, did not estop the property owner in a suit to restrain the assessment.^^ 31 Shepard v. Barron, 194 TJ. S. 553, 48 L. ed. 1115. 24 Sup. Ct. Rep. 737; Wight V. Davidson, 181 U. S. 371-377, 45 L. ed. 900, 21 Sup. Ct. Eep. 616; (and see) O'Brien v. Wheelock, 184 U. S. 450-491. 46 L. ed. 636, 22 Sup. f tliis work. LIMITATIONS OIT DEBT-CONTEACTING POWEE. imi water might be a necessary expense, but it seems to be stretching the meaning of the word to say that the construction of a municipal plant for that purpose is so necessary as not to require submission to the voters. These decisions overruled previous North Carolina cases holding the contrary.^® Illustrating the stricter theory, it was held in ISTew York that the purchase of voting machines was an " extraordinary expense," within the meaning of a statute whicli required such expenses to be submitted to the voters.^* 2070. The view which commends itself to the author of this- work as to all these distinctions and refinements, with respect to what classes of debt are or are not included in constitutional pro- hibitions upon state and municipal debts, is that they should be literally construed as prohibiting every form of debt in excess of the limitation, voluntary or involuntary. Doubtless hardship to individuals and perhaps to whole communities may occasionally result from such a strict construction. But everybody knows that, as a matter of fact, all or practically all municipal and public cor- porations can keep their expenses and debts within the limitations fixed if they must. The danger that the wheels of municipal gOAr- ernment will ever stop from lack of power to exceed debt Emits is very, very slight. It is far better that some jurors and sheriffs shall lose their fees, that some " necessary expenses " shall go un- paid, than that any precedents shall be established by which xecli- less and extravagant municipalities everywhere shall be enabled to avoid the restrictions which have been placed upon their action. Everybody knows that when municipal corporations exceed their debt limits the excess is generally due to the schemes of design- ing politicians and capitalists who have filled their own pocket?, directly or indirectly, out of the proceeds of the cities' debts. These constitutional prohibitions were intended to check such men, and if the rules of construction are relaxed in the slightest degree, in the most worthy individual cases, they and their lawyers wiB be sure to find a way to take advantage of the precedent thus set, for their own profit. Current expenses payable out of current revenues. 2071. Whether debt limits apply to obligations incurred foT current expenditures, which obligations are intended in good faith 28 Mayo V Washington, 122 N. C. 5, boro Water Co., 126 N. C. 93, 35 S. K. 29 S. B. Eep. 343, 40 L. R. A. 163; Rep. 243, 48 L. R. A. 444. Charlotte v. Shepard, 120 N. C. 411, 29 People v. City of Geneva, 45 Misfc 27 S. E. Rep. 109; Edgerton v. Golds- 237, 92 N. Y. Supp. 91. 1062 CONSTITUTIONAL LAW OF TAXATION. to be met out of current revenues, is a question upon which au- thorities are so much in conflict that it does not seem possible to lay down general rules of complete application. There is a kind of indebtedness for current expenses, payable out of current revenues, which ought not to be included in calculating whether or not a municipality has passed its debt limit. Where a city has money in its treasury, or is in receipt of annual revenues which may properly be devoted to its strictly current expenses, it ought not to be regarded as an increase of its debts to contract for some ordinary article or labor, to be paid for after the article is furnished, or the work is done. Constitutional debt limits are intended to make cities and states pay as they go, but they are not intended to force them to pay in advance. When a city agrees at the beginning of a year to pay a man so much for removing the garbage during that year, a debt is created the moment the man removes a can of garbage. When a stationer supplies a city with writing paper a debt is created unless the city officers pay cash on delivery for the paper. To this extent, at least, the cases which say that a city may contract debts for current expenses payable •out of current revenues without regard to the limit, are sound. A fair statement of what I think is a proper rule is as follows : 2072. A municipality may bargain for the purchase of its ordi- nary supplies, and the rendition of ordinary services to it, in ad- vance of the furnishing of such supplies, or the rendition of such services, so long as its bargainings contemplate no greater expendi- ture than the ordinary revenues applicable to such expenditure. Liabilities of this sort are valid although the statutory or constitu- tional debt limit has been previously reached. The power of the municipality in this respect, however, ought to be somewhat limited as to time, and as the ordinary way of estimating revenues and expenses and levying taxes is by the year, the municipal power to incur debts of this purely current class, regardless of the constitutional limit, should only extend far enough to allow the incurrence of such debts for services rendered or supplies furnished in the year in which the debt is incurred, and for the payment of which the ordinary revenues of that year are sufficient. In fixing a year as the unit of time, the fact that taxes are everywhere levied by the year is the controlling element. A con- tract for supplies to be furnished more than a year in advance and paid for out of taxes not yet laid or estimated could not be called a contract for current expenses to be paid out of current revenues. LIMITATIONS o:n debt-conteacting power. 1063 The eases cited support the general rule thus laid down, though not all of them support all its details.*" The cases cited in an- other section upholding contracts for annual supplies for more than a year do not militate against this rule, but support it, for they hold that the indebtedness does not come into existence until the supplies are furnished. ^^ 2073. It has been held that a city which is already indebted to the constitutional limit may make a valid contract for the services of an attorney to contest the validity of existing debt or to reduce the amount thereof.*^ These cases must rest upon the doctrine that obligations for current expenditures, to be met out of current revenues, do not constitute indebtedness within the meaning of constitutional limitations. 2074. There are some oases, especially in Illinois, where a stricter rule seems to be followed, which deny that a city which is indebted to the constitutional limit may contract debts, even for current expenses to be paid out of current revenues. These cases deny that there is any distinction between debts for current expenses, to be met out of current revenues, and any other debts.** In Illinois, however, the anticipation of current revenues is al- lowed by warrants drawn against cash on hand or against the tax levy of the current year, such warrants being accepted in full satisfaction of the claim.** 2075. In the frequently cited case of La Porte v. Oamewell Fire Alarm Telegraph Co.,^^ a city, indebted to the constitutional limit, made a contract in August, 1890, to buy a fire alarm system, to be paid for May 1, 1891. When the contract was. made and when the system was installed, the city did not have money enough on hand to pay the amount. On May 1, 1891, when the payment 30 Grant v. Davenport, 36 Iowa, 401 ; 31 Sec. 2079. Windsor v. Des Moines, 110 Iowa, 175, 32Logansport v. Dykman, 116 Ind. 190, 191, 80 Am. St. Rep. 280-291, 81 15, 17 N. E. Rep. 587; Talbot v. Iber- X. W. Rep. 476; Appeal of Erie, 91 ville, 24 La. Ann. 135. Pa. St. 398 ; Wade v. Oakmont Bor- 33 City of Springfield v. Edwards, 84 ough, 165 Pa. St. 479, 30 Atl. Rep. 111.626; Prince v. City of Quincy, 105 959; Black v. Chester. 175 Pa. St. 101, 111. 138, 44 Am. St. Rep. 785; Prince 34 Atl. Rep. 354; Aadyston Pipe and v. City of Quincy, 128 111. 443, 21 N. E. Steel Co. V. Corry, 197 Pa. St. 41, 80 Rep. 768; City of Chicago v. Mc- Am. St. Rep. 812, 46 Atl. Rep. 1035; Donald, 176 111. 404, 52 N. E. Rep. O'Bryan v. City of Owensboro, 24 Ky. 982. L Rep. 469, 68 S. W. Rep. 858 ; City 3* City of Springfield v. Edwards, 84 of Terrell v. Dessaint, 71 Tex. 770, 9 111. 626; Prince v. City of Quincy, 128 S. W. Rep. 593; Davis v. County 111. 443, 21 N. E. Rep. 768. Court, 38 W. Va. 104, 18 S. E. Rep. 35 146 Ind. 466, 58 Am. St. Rep. 373. See §§ 2077 et seq. for consti- 359, 45 N. E. Rep. 588, 35 L. E. A. tutional provisions embodying this 686. rule. 1064- CONSTITUTIONAL LAW OF TAXATION. "was due, there was money enough, applicable to current expenses^ to pay the claim. It was held that the debt was void. The ground of the decision was that, in order that a debt for current expenses may be valid, it is not sufficient that the city shall have enough money on hand to pay each particular debt as it comes due; hut there must he enough on hand to pay that debt and all other outstanding indebtedness. This is further than most decisions on the subject go.^® 2076. Warrants or orders drawn by a municipality against cash actually in the treasury, or against taxes actually levied, such warrants or orders being issued for purposes to which the cash or taxes are applicable, cannot be fairly called an indebtedness of the municipality, within the meaning of constitutional limita- tions. A man does not increase his actual debts when he gives- a check on a bank where he has money to meet the check, neither does a city increase its debts by the issue of such a warrant. In order that this rule may be applicable it is necessary, in strictness,, that the order or warrant shall be in effect an absolute assignment^ without recourse^ of so much of the fund on which it is drawn as is necessary to pay it. A leading case arose in Illinois, where the constitutional limitation is interpreted very strictly against all increases of debt. There it was said: First, the tax appropriated must, at the time, be actually levied; second, by the legal effect of the contract hetween the corporation and the individual, made at the time of the appropriation, the appropriation and issuing and accepting of a warrant or order on the treasury for its payment, must operate to prevent any; liability to' accrue on the contract against the corporation.^^ Other cases uphold this rule.^^ 2076a. The anticipation of current revenues, by the issue of revenue bonds, in excess of the constitutional debt limits, or other- wise, is expressly allowed to municipalities in the constitutions of Alabama,^® Georgia,*" Maryland,*^ Missouri,*^ New York,** Soutb Carolina,** Virginia.*^ The text of these constitutional provisions is quoted in the latter part of this chapter. 36 See §§ 2076 to 2078', post; see 39 Section 225. also Doland v. Clark, 143 Cal. 176, 76 w Art. VII, § 7, par. 1. Pac. Eep. 958, a ease somewhat timi- « Art. XII, § 7. lar, where the contract was upheld. *2Art. IX, § 19. 37 City of Springfield v. Edward^ 84 43 Art. VIII, § 10. 111. 626-633. « Art. VIII, § 7. 38 Stone V. City of Chicago, 207 111. « Art. VIII, § 127. 492, 510, 69 N. E. Rep. 970; Blanchard V. Benton, 109 111. App. 569. ' LIMITATIONS ON DEBT-CONTBACTIKG POWEE. 1065 2.011. The limitations in some state constitutions upon munic- ipal expenditure forbid municipalities to incur any debt in any year exceeding the income provided for such year. Some constitu- tions forbid such debts absolutely, others contain certain excep- tions. Such provisions must be regarded as allov^ing, by impli- cation at least, the anticipation of current revenues to the extent of the year's income. Provisions of substantially this general nature may be found in the constitutions of Alabama,*'^ Cali- fornia,*^ Idaho,*^ Missouri,^" Utah,^ Wyoming. ^^ These limita- tions are quoted in the latter part of this chapter. 2078. The meaning of constitutional provisions vs^hich forbid the incurrence in any year of indebtedness exceeding the current revenue is that the indebtedness in any year shall not exceed the- revenue and income actually received in the year, and that no indehtedness or liability incurred in any one year shall he paid out of the revenue of any other year. Under such constitutional provisions it is held that a contract for a series of payments for current supplies or services is valid, so long as the current revenues of any year are sufEcient to meet it.^* In Minnesota it has been held that a charter which forbade a city to incur in any year " any debt or any liabilities in excess of the amount of revenue actually levied and applicable to the payment of such liabilities/' forbade the making of a contract to provide light for five years. It did not appear that the funds- on hand or actually levied were sufficient to meet the aggregate of the payments for five years, and to cover the other municipal expenses of the fiscal year in which the contract was made. The use of the word " liabilities " in the charter, which is a broader- term than " debts " or " indebtedness," justifies this decision.^''' In estimating the revenue for the current year, to determine whether an indebtedness is within the revenues of the year, it was 47 Art. XII, § 225. St. Hep. 653, 30 S. W. Eep. 190, 27 L.. 48 Art. XI, § 18. E. A. 769; Lamar Water, etc.. Co. v. 49 Art VIII § 3. City of Lamar, 128 Mo. 188, 26 S. \V. 50 Art. X, § 12. Eep. 1025, 31 S. W. Rep. 756, 32 L. 51 Art xiv § 3. E. A. 157 ; Utica Water Works Co. v> 52 Art'. XVl' § 4. Utica, 31 Hun (N. Y.), 427. 54 Higgins V. San Diego, llS Cal. 65 Kiichli v. Minnesota Brush Eloc- 524, 45 Pac. Eep. 824, 50 Pac. Eep. trie Co., 58 Minn. 418, 49 Am. St. 670; McBean v. Fresno, 112 Cal. 159, Rep. 503, 59 N. W. Eep. 1088; John^ 53 Am. St. Rep. 191, 44 Pac. Rep. son v. Board of Commissioners, 2/ 358, 31 L. R. A. 794; Doland v. Clark, Minn. 64, 6 N. W. Rep. 411; Rogers 143 Cal. 176, 76 Pac. Rep. 958 ; Saleno v. La Sueur County, 57 Minn. 434, 59- V. City of Neosho, 127 Mo. 027, 48 Am. N. W. Rep. 488. 1066 CONSTITUTIONAL LAW OF TAXATION. held in Missouri that income derived from license fees and from all other sources is to be considered.^ On the other hand it has been held that the item of receipts from license fees is too uncer- tain and contingent to be taken into consideration.^^ Annual supplies of water, gas, and the like, 2079. The weight of authority is to the effect that a municipal corporation may contract for a supply of water, or gas, for rent of buildings, or like necessaries, and may stipulate for the payment of an annual sum for the supplies furnished each year, notwith- standing that the aggregate of its annual payments during the life of the contract may exceed the amount of indebtedness limited by the constitution. These authorities say that there is a distinction hetween a debt and a contract for a future indebtedness to be in- curred, provided the contracting -party perform the agreement out of which the debt may arise. There is also a distinction between the latter case and one where an absolute debt is created at once, as by the issue of bonds, although such debt be payable in the future by instalments. In the one case the indebtedness is not created until the consideration has been furnished; in the other the debt is created at once, the time of payment being only postponed.®^ 56 Lamar Water, etc., Co. v. City of City of South Bend v. Reynolds, 15.5 Lamar, 1^8 Mo. 188, 26 S. W. Eep. Ind. 70, 57 N. E. Eep. 706, 49 L. E. 1025, 31 S. W. Eep. 756, 32 L. E. A. A. 795 (rent of City Hall) ; Black v. 157. Chester, 175 Pa. St. 101, 34 Atl. Eep. 67 Rice V. City of Milwaukee, 100 354; Blanks v. City of Monroe, 110 Wis. 516, 76 N. W. Rep. 341. La. 944, 34 So. Eep. 921; Smith v. 68 Walla Walla v. Walla Walla Dedham, 144 Mass. 177, 10 N. E. Eep. Water; Co., 172 U. S. 1, 43 L. ed. 341, 782; Ludington Water Supply Co. v. 19 Sup. Ct. Eep. 77; East St. Louis Ludington, 119 Mich. 480, 78 N. W. V. East St. Louis, etc., Co., 98 111. 415, Eep. 558; Lamar Water and Electric 38 Am. Eep. 97; Cain v. Wyoming, Light Co. t. Lamar, 128 Mo. 188. 26 104 111. App. 538; Crowder V. Sullivan, S. W. Eep. 1025, 31 S. W. Eep. 756, 128 Ind. 486, 13 L. E. A. 647, 28 N. E. 32 L, E. A. 157; Saleno v. Neosho, 127 Eep. 94; Valparaiso v. Gardner, 97 Mo. 627, 48 Am. St. Eep. 653, 30 S. Ind. 1, 49 Am. Eep. 416; Poland v. W. Eep. 100, 27 L. E. A. 769: Utica Frankton, 142 Ind. 546, 41 N. E. Eep. Water Works Co. v. Utica, 31 Hun (K 1031; Seward V. Liberty, 142 Ind. 551, i.), 426; City of Tyler v. Jester, 97 554, 42 N. E. Eep. 39 ; Creston Water Tex. 344, 78 S. W. Rep. 1058; Works Co. V. Creston. 101 Iowa, 687, Merrill Ry., etc., Co. v. Merrill, 70 N. W. Rep. 739; McBean v. Fresno, 80 Wis. 358, 49 N. W. 965; Stedman 112 Cal. 159, 53 Am. St. Rep. 191, 44 v. Berlin, 97 Wis. 505, 73 N. W. Eep. Pac. Eep. 358, 31 L. E. A. 794; Hig- 57; Columbus Ave., etc., Co. v. Daw- gins V. San Diego, 118 Cal. 524, 45 son, 130 Fed. Rep. 152; Fidelity Pac. Rep. 824, 50 Pac. Rep. 670; City Trust, etc., Co. v. Fowler Water Co., of Denver v. Hubbard, 17 Colo. App. 113 Fed. Rep. 560; City of Centerville 346, 68 Pac. Rep. 993; Lott v. City v. Fidelity Trust and Guaranty Co., of Waycross, 84 Ga. 681, II S. E. 558; 118 Fed. Rep. 332, 55 C. C. A. 348. LIMITATIOIfS ON DEBT-CONTEACTi:SG POWER. 1067 These decisions must all be regarded as resting on the principle that obligations for current expenses, for the payment of which it- is in good faith expected that the current revenues as they accrue will be sufficient, are not included in the constitutional limitations. 2080. Where, however, the city is so indebted that single pay- ment, if regarded as an indebtedness, will exceed the constitutional limit, hut the revenues accruing for each year may reasonably be regarded as sufficient to meet the annual payments, a different question arises. Some cases say that the fact that the payment is to be 'made out of current revenues makes no difference; that as soon as the service is rendered for the first year the payment of the first year becomes a debt, and if it is enough, when added to previous debts, to make a total in excess of the constitutional limitation, the contract is void.®^ On the other hand there are cases which say that where the current revenues are sufficient to meet each year's payment as it accrues, a contract for a supply of water, or light, or other cur- rent supplies or services for a term of years does not create an indebtedness at all; and it follows that a municipality may make such a contract, even though its debts have already exceeded the constitutional limitation, provided only that the annual payments do not exceed the current revenues applicable thereto.^ There are some opinions from the language of which may be implied the view that where a contract for supplies to be furnished in the future is made, the debt is for the aggregate of the payments.®^ 2081 . The rule which allows municipalities to contract for an- nual supplies of water, light, and gas, despite the fact that they are indebted to the constitutional limit, does not allow them to 69 Prince v. City of Quiney, 105 111. Ind. 1, 49 Am. Rep. 416 ; Grant v. 138, 44 Am. Rep. 785; City of City of Davenport, 36 Iowa, 396; Chicago v.-Galpin, 183 111. 399, 55 N. Creston Water Works Co. v. Creston, E. Rep. 731; Beard v. City of Hop- 101 Iowa, 687, 70 N. W. Rep. 739; kinsville, 95 Ky. 239, 44 Am. St. Rep. Smith v. Dedham, 144 Mass. 177, 10 222, 24 S. W. Rep. 872, 23 L. R. A. N. E. Rep. 782; Laycock v. Baton 402; State ex rel. Helena Water Rouge, 35 La. Ann. 475; Reynolds v. Works Co. V. City of Helena, 24 Mont. Waterville, 92 Me. 292, 42 Atl. Rep. 521, 8i Am. St. Rep. 453, 63 Pac. Rep. 553. 99, 55 L. R. A. 336 ; Kielil v. South 81 Beard v. City of Hopkinsville, 95 Bend, 76 Fed. Rep. 921, 44 U. S. App. Ky. 239, 44 Am. St. Rep. 222, 24 S. 687, 22 C. C. A. 618, 36 L. R. A. 228; W. Rep. 872, 23 L. R. A. 402; Xiles Salem Water Co. v. Salem, 5 Ore. 29; Water Works v. Xiles, 59 Mich. 311, Brockway v. City of Roseburg, 26 N. W. Rep. 525 : Davenport v. Ore. , 79 Pac. Rep. 335. See Voss Kleinschmidt, 6 Mont. 502, 13 Pac. V. Waterloo Water Co., (Ind.) 71 N. E. Rep. 249; State v. Medbury, 7 Ohio Rep. 208, 66 L. R. A. 95 St. 522; Brockway v. City of Eose- 60 City of Valparaiso v. Gardner, 97 burg. Ore. , 79 Pac. Rep. 3?5. 1068 CONSTITUTIONAX, LAW OF TAXATION. contract an absolute liability to make certain payments, although the payments fall due in annual instalments. The fact that the payments for annual supplies will never be due unless the supplies are furnished, and the further circumstance that such payments are of the class which are properly met out of current revenues,, are the elements which save contracts for annual supplies from the ban of the constitution. Where a municipality contracts a debt for the purpose of pur- chasing or erecting municipal water works, or a gas or electrie light plant, or public buildings, neither of these two circumstances exist. The liability of the municipality is fixed and certain,, although payments are not due until a future day. The purposes for which such payments are to be made are not current purposes. Hence it is generally held in such cases that the debt incurred is for the aggregate of all the instalments, and if that aggregate,, added to existing debts, makes a total in excess of the constitu- tional limitation, the debt is forbidden by the constitution.^^ 2082. In a recent Pennsylvania case contracts by a school dis- trict for the purpose of building schooThouses, not to be performed within a year, were upheld as contracts for current expenditures payable out of current revenues, it appearing that the debt limit had been exceeded. There is language in the opinion which in- dicates that the court recognized the inconsistency of the decision^ but upheld the contracts because it had been the general practice of school districts to make such contracts.^ Contracts to purchase, in the form of contracts for annual supplies. 2083. There have been oases where municipalities have sought to twist the rule allowing Contracts for annual supplies to be made for a term of years payable out of current revenues in spite of constitutional debt limits, so as to purchase municipal water work> or other works, costing more than the amount for which thev could legally become indebted. This has been attempted by con- tracts of purchase disguised as leases. 62 Windsor v. City of Des Moines, § 2108); Coulson v. City of Portland, 110 Iowa, 175, 80 Am. St. Rep. 280, 81 Deady, 481; Brown v. City of Corrv,. N. W. Rep. 476; French v. City of 175 Pa. St. 528, 34 Atl. Rep. 854. Burlington, 42 Iowa, 614 {these 63 Mellor v. Pittsburg, 201 Pa. St. cases are noteworthy because of the 397, 53 Atl. Rep. 1011. The incon- later cases in Iowa by which the Su- sistency of the Pennsylvania decisions- preme Court sanctioned the incur- may be seen by comparing this case rence of additional debt by means of with Brown v. Corry, 175 Pa. St. 528, the creation of a, " special fund," see 34 Atl. Rep. 854. LIMITATIONS ON DEBT-CONTEACTING POWEE. 1069 In one case a city agreed with contractors that the contractors should construct a water works, issue honds secured by mortgage on the water works, and should then lease the works to the city, for certain agTeed hydrant rentals, for a long term of years. The interest on the bonds was to be paid out of the hydrant rentals paid by the city ; and the excess of the hydrant rentals over interest nvas to he applied to the principal of the honds. When the bonds Avere fully paid the water works were to belong to the city. The " joker " in this scheme was the provision for hydrant rentals. The contract was sought to be justified on the ground that the contract was only a contract to pay hydrant rentals, that is, to pay for annual water supplies, for a term of years, out of ■current revenues. But by making the " hydrant rentals " large •enough to pay interest on the bonds and to reduce the principal iinnually, the city in effect contracted a debt and incurred an ■added burden of taxation which the constitutional limitation was intended to prevent. The Supreme Court of Wisconsin held the ■contract void, although it was found as a fact that the rentals were fair.®* A somewhat similar municipal contract, by a city indebted to the constitutional limit, was held void in Iowa, it appearing that the sums paid as " hydrant rentals " were large enough in fact to pay a reasonable rental and in addition to pay the principal of the debt.9s 2084. Likewise in Maine was condemned a law which created a separate corporation called a City Hall Commission, consisting of certain officers of a city which was already indebted to the con- stitutional limit, and authorized that corporation to issue bonds to build a city hall, to let the building to the city, to pay the surplus of rentals over expenses and interest into a sinking fund, for the payment of the bonds, and when the bonds were paid to take a conveyance of the property. The law also authorized the city to convey to the corporation a lot which it owned, on which the building was to be erected, and permitted the corporation to mort- gage the lot to secure payment of the bonds. The execution of this project was enjoined. Said the Supreme Judicial Court of Maine, after approving the general rule that a city already in- debted to the limit may contract for future supplies or to pay future rentals: But under the guise of the principle thus stated, a rnvnicipality should not he allowed to pass off, as an agreement for renting 64Earles v. Wells, 94 Wis. 285, 59 65 Hall v. Cedar Rapids, 115 Iowa Am. St. Eep. 886, 68 N. W. Rep. 964. 199, 88 N. W. Eep. 448. 1070 CONSTITUTIONAL LAW OF TAXATION. a hall, an agreement tvhich is not really entered into strictly for such purpose. And we feel that the transaction here in question must be repudiated upon that ground. The transaction has In some respects the semblance of a lease, but it is a misnomer to call it such. It is attempted to make it one thing in form, while in reality it is something else. It is apparent enough that the city is to have not merely the use of the building to be erected, but the building itself. It is not to get an annual service to be paid for out of annual revenues, but the city is to acquire a city hall presently, to be paid for by assessments of taxes for the long period of thirty years. It is a purchase. It would not be a misinterpretation to say that the city of Waterville, instead of leasing the property, undertakes to pay for it on the instalment plan, and that what are called rentals for the hall are merely partial payments on its cost.®® 2085. In West Virginia the same scheme appeared in the form of a contract between a city, indebted to the constitutional limit, and a private company, whereby the company was to erect an electric light plant, the city was to pay certain sums quarterly for five years " for the use thereof," except that each succeeding pay- ment was to be $18.75 less than tlie preceding one, and at the end of five years the city had the option to buy the plant for a con- sideration of one dollar. The execution of this agreement was enjoined at the suit of a taxpayer.®^ Other cases holding void con- tracts of purchase in the form of leases, by indebted municipalities, are cited.®* Express provisions as to annual supplies of water, gas, etc. 2086. The powers of municipalities, in obtaining supplies of water, gas, and electricity, building municipal plants for furnish- ing such supplies, and building sewers, have been made the sub- jects of express constitutional limitations in a number of states, and special provisions with respect to debts incurred for such purposes are frequoatly found. Provisions as to one or more of these subjects are contained in the constitutions of Alabama,®* 66 Reynolds v. City of Waterville, 92 time, rentals paid are to be deducted Me. 292, 42 Atl. Rep. .553. from the price, is valid if made in 67 Spilman v. City of Parkersburg, good faith. Doland v. Clark, 143 Cal. 35 W. Va. 605, 14 S. E. Rep. 279. 170, 76 Pac. Rep. 958. See Voss v. 68 Baltimore, etc.. Ry. Co. v. People, Waterloo Water Co. (Ind.), 71 N. E. 200 111. 541, 66 N. E. Rep. 148; Put- Rep. 208, 66 L. R. A. 95; Scott v. nam v. City of Grand Rapids, 58 Laporte, 162 Ind. 34, 68 N. E. Rep. Mich. 416, 25 N. W. Rep. 330. A 278, 69 N. E. 675. contract whereby, if the city exercises 60 Art. XII, § 225. an option of purchase within a limited LIMITATIONS ON DEBT-CONTEACTING POY/EE. 1071 California,™ Louisiana/^ Montana/^ New York/' ISTortli Dakota/* South Dakota/^ Utah,™ Virginia," Washington,™ Wyoming/'^ These provisions are quoted in full at the end of this chapter. Who is to decide in advance whether debts will exceed current revenues. 2087. Where the state or municipality is allowed to contract debts within the limits of current revenues, its action in this respect may be embarrassed by miscalculations. A debt may be contracted which is, in good faith, regarded as within the current revenues, but it niay turn out that the revenues are less than was estimated. Is the debt valid if under these circumstances the current revenues are not sufficient to meet it ? A decision in Pennsylvania is to the effect that where the munic- ipality has acted in good faith such debts are valid notwithstanding that the current revenues have proven to be insufficient. It is the rule in that state that a city, although it is indebted up to the constitutional limit, may contract for expenditures if it has on hand the money to pay them or provides at the time a present means of raising it otherwise than by loan.*" A municipality had contracted a debt for a sewer expecting to pay part of it out of an assessment which was levied. As to certain property the assess- ment was held invalid, consequently that burden of expense fell on the city. The city, at the time the sewer contract was made, was indebted up to the constitutional amount. In an action on the contract the city defended on the ground that the debt ex- ceeded the constitutional limitation. It was argued on behalf of the city, that as the debt had turned out to be greater than the current revenues provided for its payment it was void. But the court said, in giving judgment against the city : 2088. It is not, however, always possible to adapt present action to future results with absolute precision, and if means are adapted which in good faith, according to reasonable expectation, will produce a sufficient fund, the contract entered into on the fsnth of them should not be held unlawful on account of an uninton- tional miscalculation, or an accidental and unexpected failure to 70 Art. XI, § 18. " Art. VIII, § 127. 71 Art. 281. 78 Art. VIII, § 6. 72 Art. XIII, § 6. T9 Art. XVI, § 5. 73 Art. VIII, § 10. 80 Appeal of Erie, 91 Pa. St. 398; 7* Art XII '§ 183. Wade v. Oakmont Borough, 165 Pa. St. 75 Art." XIII, §4. 479, 30 Atl. Eep. 959. 76 Art. XIV, § 4. 1072 CONSTITUTIONAL LAW OF TAXATION. produce the full result. Thus, if a city, at the time of making a contract, levies a special tax in good faith supposed to be ade- quate to meet it, but in consequence of fire or flood or decline in values the result is an insufficient fund, it cannot be held tliat ihe contract, good at its inception, would thereby be made bad.**! This case fairly illustrates what seems to be the sound rule. In ■cases where the adequacy of the provision made far the payment of the debt is of importance, the question whether the revenue accruing or the tax levied is an adequate provision must always be decided, in the first instance, by the legislature or the subordinate body to which the power of decision has been delegated. In a ■case of bad faith, or where the inadequacy of the provision plainly appears at the inception of the arrangement, doubtless the legis- lative determination will be disregarded by the courts, but it ought not to be set aside for mere miscalculation, or error of judgment in •estimating results.*^ It is held in California, however, that the creditor contracts with the constitutional limitation in view, and takes his chances of losing his money if the current revenues turn ■cut to be insufficient.*^^ Liability for torts. 2089. Limitations on the debt-contracting power of municipali- ties are not intended to enable a municipality to escape liability for its torts. It was the purpose of those who framed such limita- tions to prevent the increase of wilful debt, not to deprive persons who have been injured by the municipality of all effective remedy. Hence it is generally no defense to an action in tort against a city to say that the city is already indebted to the constitutional limit. Perhaps it is more technically correct to say that the city is estopped to set up the defense. 2090. Judgments for torts, however, must be included in cal- culating the total debts of a municipal corporation, in order to as- certain whether the debt limit has been reached.*^ Such judgments are debts, and the rule of estoppel which forbids the defense, that the constitutional limit has been reached, to be interposed against ■one who has been injured by a city's tort, has no application out- side of eases where action is brought to recover for a tort. And in a recent Pennsylvania case a city which was indebted 81 Addyston Pipe and Steel Co. v. San Francisco Gas Co. v. Brick-ivedel, ■Corry, 197 Pa. St. 41, 80 Am. St. Eep. 02 Cal. 641; Shaw y. Statler. 74 Cal. «12, 46 Atl. Eep. 1035. 258, 15 Pac. Eep. 833; Schwartz v. 82 See § 2144. Wilson, 75 Cal. 504. 17 Pac. Rep. 449. 82a Smith V. Broderick, 107 Cal. 644, 83 Stone v. Chicago, 207 111. 492, 69 40 Pac. Rep. 1033, 48 Am. St Rep. 167; N. E. Rep. 970. LIMITATIONS ON DEBT-CONTEACTING POWEE. 1073 lip to tlie constitutional limit was enjoined, at the suit of a tax- [>ayer, from constructing a viaduct without expense to itself, hui which construction would render the city liable in damages to abutting owners. It was held that a liability for unliquidated damages for tort was among the " debts " which the constitution forbade. Said the Supreme Court of Pennsylvania: It is true that the constitution does not exempt municipalities, how great soever their indebtedness, from liability for wrongful and tortious acts. But it does not authorize the voluntary assumption of obligation to pay money by a scheme of tort.^* 2091. An unliquidated claim for damages in tort cannot fairly be considered as a part of a city's debt, in calculating whether a constitutional limit has been reached. To say nothing of the often exaggerated amount of such claims, their contingent character and the impossibility that there can be at any time an adequate record of their amount render it extremely improbable that they were ever intended to be included. !N^o city could sell any bonds or contract any debt at all if every possible lender knew that his bonds were likely to become invalid in case some previously existing, but unknown and unliquidated, claim for damages should ultimately result in a judgment for a sum beyond the constitu- tional limitation. This rule has been applied to the claim of a taxpayer against a city for taxes illegally collected,®'* to the liability of a city for negligently failing to raise money to pay for street improvements,^® to a claim for damages for negligent construction of a gutter,®^ to claims for damages for changing the grade of streets,®* to condem- nation awards made in widening streets, the assessments for which the city has failed to collect,®^ to a liability of a city for erroneous assessments.®*' Changing the form of debt — refunding bonds. 2092. Prohibitions upon the creation or incurring of indebt- edness cannot fairly be construed as forbidding a state, county, or municipal corporation to change the form of its indebtedness. 84 Keller v. Scranton, 200 Pa. St. 88 Cook v. City of Ansonia, 66 Conn. 130 86 Am. St. Rep. 708, 49 Atl. Rep. 413, 34 Atl. Rep. 183; Smith v. City 781. of St. Joseph, 122 Mo. 643, 27 S. W. 85 Thomas v. City of Burlington, 69 Rep. 344. Iowa, 140, 28 N. W. Rep. 480. 89 Baker v. City of Seattle, 2 Wash. 86 Little V. City of Portland, 26 576, 27 Pac. Rep. 462. Oreg. 235, 37 Pae. Rep. 911. See Dime 90 Fort Dodge, etc., Co. v. City of Deposit, etc., Bank v. Scranton, 208 Fort Dodge, 115 Iowa, 568, 89 N. W. Pa. St. 383, 57 Atl. Rep. 770. Rep. 7. 87Bastle V. City of Des Moines, 38 Iowa, 414. 68 1074 CONSTITUTIONAL LAW OF TAXATION. A man does not increase kis debts when he gives a note in renewal of another for the same sum, or in settlement of an open account. Where a municipality seeks to refund or extend its debt by the process of exchanging one bond or warrant for another, no serious difficulty can arise, for there is no time whrai the whole outstanding issue is in any wise increased by the operation.®^ 2093. Where the refunding operation is sought to be carried out by the process of selling new bonds and applying the proceeds to the payment of the old ones, a different question is presented. The authority of the United States Supreme Court is, and since 1892 has been, to the effect that bonds issued in excess of the con- stitutional limitation are invalid, although issued for the purpose of applying their proceeds to the payment of pre-existing debt.. The case in which this was held was as follows : The constitution of Iowa forbade municipal corporations (which included townships) to " become indebted in any manner or for any purpose " in excess of a certain- amount.®^ The Iowa legislature enacted that a district township might issue bonds to fund its outstanding indebtedness, said bonds to- be issued upon a vote of the district authorities. The act con- tinued : The treasurer ... is authorized to sell the bonds at not less than par . . . and apply the proceeds to the payment of the outstanding bonded indebtedness of the district . . hut the bonds hereby authorized shall be issued for no other pur- pose than the funding of outstanding bonded indebtedness.^ This act is qiioted here in order to show how carefully the legislature restricted the use of the proceeds to refunding pur- poses. 2094. Under this act. a district township vrhich was already in debt to the constitutional limit issued its refunding bonds. In a suit on the bonds by the holders the township defended on the ground that the bonds were invalid, as being issued in excess of the constitutional limitation. The Supreme Court held that the bonds were invalid, saying: It is evident that if, as in the case at bar, new bonds are issued without a cancellation or surrender of the old oiies, the aggregate debt outstanding, and on which the corporation is liable to be 91 See JDoon Township v. Cummins, 82 Art. XI, § 3, quoted in § 2229 of 142 U. S. 366-372, 35 L. ed. 1044, 12 this work. Sup. Ct. Eep. 220. 93 Laws of 18th General Assembly 127. LIMITATION'S ON DEBT-CONTRACTING TOWER. 1075 sued, is at once and necessarily increased, and, if new bonds equal in amount to the old ones are so issued at one time, is doubled ; and that it will remain at the increased amount until the pro- ceeds of the new bonds are applied to the payment of the old ones, or until some of the obligations are otherwise discharged. It is true that if the proceeds of the sale are used by the municipal officers, as directed by the statute, in paying off the old debt, the aggregate indebtedness will be ultimately reduced to the former limit. But it is none the less true, that it has been increased in the interval, and that unless those officers do their duty, the increase will be permanent. It would he incon- sistent alike with the words and with the object of the constitu- tional provision, framed to protect municipal corporations from being loaded with debt beyond a certain limits to make their liability to be charged with debts contracted beyond thai limit depend solely upon the discretion or the honesty of their officers.^ 2095. This decision, while it is within the letter of the con- stitutional provision quoted, and in some aspects may be said to be within its spirit also, does not seem to be as clearly within the general spirit of such limitations as are some other decisions, such, for instance, as those holding that the limitation applies to debts for current expenses, and to compulsory obligations. The purpose of debt limits is to prevent extravagance and foster economy. Generally refunding operations are undertaken witli the purpose of reducing interest payments, or placing loose and iintnown obligations in a fixed and definite form. It may often happen, and in fact does frequently happen, that a debt cannot be refunded by the process of exchanging one obligation for an- other, for the holders of some of the old bonds may neglect or refuse to present their bonds for exchange, or may insist upon payment. Sometimes, also, the outstanding indebtedness is in a form which cannot well be refunded by the process of exchange, as for instance, it may be in the form of warrants, drawing a high rate of interest and in small amounts. Generally the holder of a warrant drawing seven or eight per cent, interest, as many of them do, would refuse to exchange it for a bond at four or five per cent., when he knows that there is no money in the treasury so that it cannot be paid in cash, and that if he waits long enough he is sure to get the money and, in addition, the high rate of interest. The application of this decision might actually oper- ate in many eases to increase the burdens of the community, in- stead of diminishing them. 94 Doon Township v. Cummins, 142 U. S. 366-372, 35 L. ed. 1044, 12 Sup. Ct. Rep. 220. 1076 CONSTITUTIONAL LAW OF TAXATION. Three of the justices of the Supreme Court dissented from the decision, saying, among other things : The object of the constitutional provision was to prevent the incurrence of a new debt, or the increase of an existing debt beyond a limited amount. The object of the statute was to enable district townships to fund their indebtedness by issuing and selling bonds at not less than their par value, and applying the proceeds to the payment of such outstanding indebtedness, or by exchanging such bonds for outstanding bonds. If the con- struction placed upon this statute (sic) by the court be correct, it is difficult to see how any township can avail itself of it, if such township has an existing indebtedness up to the amount of the constitutional limitation, since the new bonds, whether issued to be sold for cash or to be exchanged for other bonds, must, while the process of sale or exchange is going on, nominally in- crease the indebtedness of the corporation. I regard this as too technical an interpretation of the constitutional provision. Had the proceeds of these bonds been properly applied no question could have arisen as to the indebtedness of the township having been increased by their issue. If the district township had the right to issue the bonds, which it certainly had, if the statute under which they are issued be constitutional, the pur- chaser of such bonds was under no obligation to see that the money he paid for them was applied to extinguishing the existing indebtedness. He was entitled to act upon the presumption that the officers charged with the execution of the law would not betray their trust, and would deal fairly with the people who had put them forward to represent them. In my view this is simply an /attempt to saddle the holders of these hands with the derelictions •of the officers chosen by the electors of this township to act for ihem in this transaction, and who were alone entitled to receive ' the money. The Supreme Court of Iowa follows the rule laid down by the United States Supreme Court.®* 2096. There is a New York decision, handed down since Doon Township v. Cummins^^ was decided, which may be regarded as supporting the view of the dissenting justices in Doon Township V. Cummins, that refunding bonds may be sold in excess of the ■constitutional limit, although it cannot be regarded as direct authority, because the decision may be rested on other grounds. A city was forbidden by its charter to borrow any money which should not be payable during the current year and which could not be discharged out of the income of the current year. The city '95 Reynolds v. Lyon County, 121 86 Supra. Iowa, 733, 96 N. W. Eep. 1096. UMITATIONS ON DEBT-CONTRACTING POWEE. 1077 sought to take advantage of a general act, passed after its charter was granted, which allowed cities to refund their bonded debt, by issuing new bonds and paying the old debt with the proceeds of their sale. In a case where the validity of the refunding bonds was questioned as being contrary to the charter forbidding the contracting of debts not to be paid in the current year, the Court of Appeals held that the sale of refunding bonds was not an in- crease of debt forbidden by the charter, saying, among other things : " It must be conceded that the transaction in form may be a borrowing of money, but in substance it is the very difFerent case of refunding an existing debt. There is a new creditor and a reduced rate of interest, but the same old debt." The prohibi- tion of the charter, it was said, " had an obvious purpose and meaning. It was to restrain the creation of a debt, not the ex- tension of one already existing; to prevent a new liability, not to postpone payment of an old one; to shield the taxpayers from the waste and danger of extravagant and needless appropriations, and not to obstruct the convenient and beneficial extension of a jjroper debt lawfully incurred." ®^ 2097. In holding directly that bonds sold for the purpose of applying the proceeds to the payment of pre-existing debt are not to be regarded as increasing the debt of a city, within the mean- ing of constitutional debt limits, the Supreme Court of South Dakota gave an effective answer to the argument in the majority opinion in Doon Township v. Cummins^ to the effect that the dishonesty of the municipal officers may result in the permanent increase of the debt, if such refunding bonds be allowed to be issued in excess of the constitutional limitation. Said that court : Doubtless the constitutional provision under diseu^ion was designed to confine municipal indebtedness within prescribed limits, hut it could hardly have teen intended or expected to pre- vent embezzlement or misappropriation of public funds.^ In 1898, Judge Sanborn, speaking for the United States Cir- cuit Court of Appeals of the Eighth Circuit, distinguished the case before him from Doon Township v. Cummins, and upheld (on grounds of estoppel) certain refunding bonds issued in excess- of a constitutional limitation. He said of the decision in Doon 97 City of Poughkeepsie v. Quin- ^ National Life Ins. Co. v. Mead, IS tard, 136 N. Y. 275, 32 N. E. Rep. S. Dak. 37, 82 N. W. Rep. 78, 79 Am. 764. St. Rep. 876, 48 L. R. A. 785. 98 142 U. S. 366-372, 35 L. ed. 1044, 12 Sup. Ct. Rep. 220. 1078 CONSTITUTIONAL LAW OF TAXATION. Township V. Cummins, distinguishing between bonds exchanged for others, and bonds sold for the purpose of paying old debts : The distinction seems to he more nice than real, and, in view of the vigorous dissent which is recorded with the opinion, we may be permitted to doubt whether it will ever be made again. ^ A California case to the same effect is cited.^ 2098. Questions as to the validity of refunding bonds in excess of the constitutional limitations are avoided to a greater or less extent in a number of states, by express constitutional provisions authorizing the issue of refunding bonds. Such provisions miist be regarded as authorizing the refunding operation to be made by the method of sale as well as by that of exchange. No constitu- tional provision would be needed to authorize an exchange. Such provisions, in various forms, are found in the constitu- tions of Alabama,* Colorado,* Delaware,' Florida,® Kentucky,'^ Maryland,* Missouri,® North Dakota,^" Ohio," Pennsylvania,^ South Carolina,'^ South Dakota," Utah," Virginia,^® Wyoming." Bonds and money in sinking funds. 2099. It is held in several states that a city's ovni bonds held in its own sinking fund are not to be considered as a part of its debt in calculating the amount of such debt under constitutional debt limits."'® ISTo reason is perceived why the same doctrine should not be applied in the case of other property held in a sinking fund, 1 City of Huron v. Second Ward n Art. VIII, § 2, quoted in § 2253 Savings Bank, 57 U. S. App. 593, 86 of this work. Fed. Rep. 272, 30 C. C. A. 38, 49 12 Art. IX, § 4, quoted in § 2255 of L. R. A. 534. this work. 2 Los Angeles v. Teed, 112 Cal. 319, is Art. X, § 7; Art. VIII, § 7; Art. 44 Pac. Rep. 580. X, § 5, quoted in §§ 2256-2257 of this 3 Art. XI, § 213; art. XII, §§ 224, work. 2;i5, 222, quoted in §§ 2212-2213 of MArt. XIII, § 2, quoted in § 2258 this work. of this work. 4 Art. XI, § 6, quoted in § 2219 of 15 Art. XIV, § 1, quoted in § 2260 this work. of this work. 5 Art. VIII, § 3, quoted in § 2221 of 16 Art. XIII, § 184, quoted in § 2262 this work. of this work. 6 Art. IX, § 6, quoted in § 2222 of 17 Art. XVI, § 3, quoted in § 2267 this work. of this work. 7§§ 50, 158, quoted in §§ 2231- 18 Kelly v. City of Minneapolis, 63 2232 of this work. Minn. 125, 65 N. W. Rep. 115 30 8 Art. XII, § 7, quoted in § 2236 of L. R. A. 281 ; Bank for Savings v. this work. Grace, 102 N. Y. 313, 7 N E Rep. 9 Art. IV, § 44; Art. IX, § 19, 162; Brooke v. Citv of Philadelphia, quoted in §§ 2242-2243 of this work. 162 Pa. St. 123, 29" Atl. Rep 387 24 10 Art. XII, § 182, quoted in § 2252 L. R. A. 781. of this work. LIMITATIONS ON DEBT-CONTEACTING POWEE. 1079 devoted hy law to the payment of the debt. It is thought that the reasoning of the decisions just referred to justifies the deduc- tion of any property in such a sinking fund from the total out- standing debt, in order to ascertain the amount of actual indebt- ■cdness within the meaning of constitutional limitations. In other cases it has been held that securities in a sinking fund, the nature •of -which securities does not appear in the reports, should be nsidered, but only actual liabilities.^^ A statute which permits 48 Gibbons v. Mobile, etc., Ry., 36 « See Eppig v. City of Columbus, Ala. 410; Blanchard v. Benton, 109 117 Ga. 263, 43 S. E. Rep. 803. Ill App. 569; Jones v. Hurlbut. 13 50 Jacoby v. Dallis, 115 Ga. 272, 41 T^eb. 125, 13 N. W. 5; Eppig v. City S. E. Rep. 611. of Columbus, 117 Ga. 263, 43 S. E. 51 Webb Granite, etc., Co. v. Wor- Rep. 803. cester, 187 Mass. 385, 73 N. E. Rep. 639. 1090 CONSTITUTIONAL LAW OF TAXATION. lands of the state to be assessed for local improvements does not create a debt within the meaning of a constitutional provision which allows state debts to be created only for certain specified purposes.®^ An ordinance accepting a library building donated on condition that the city raise $1,000 annually for its support creates a debt.'^^^ 2122. Constitutional and statutory provisions respecting the issue of municipal bonds frequently provide that they shall be sold at not less than their " par value," or employ some equivalent ex- pression. Everybody knows what " par " means, but the intri- cacies of fact which are presented in lawsuits, and the impossibil- ity of selecting any language which may not become the subject of controversy in its application to all classes of facts, are illustrated in some cases in which the meaning of " par " had to be construed. In these cases it is held that " par " means the f a^e of the bonds with accrued interest added. In one case where state bonds were authorized to be sold at not less than par, a sale of bonds which were to draw interest from the time of sale, but which were to be paid for in future instalments only, and without interest, was held to be a sale for less than par. It was held that the bonds were not binding upon the state, because its agents had exceeded their au- thority.®* More lately a contract by village officers, who were authorized to sell bonds at their par value, was held void, the ofii- cers having agreed to sell bonds on which interest had accrued, for the face value of the bonds.** General limitations on the powers of municipalities in theincur-^ rence of debt. 2123. This work deals with constitutional limitations; and questions of the interpretation of statutes, and of the general and statutory powers of municipal corporations with respect to the in- currence of indebtedness are not properly within its scope. Some general rules are stated and some decisions briefly cited, on points which have some bearing on the powers and limitations of munic- ipalities in this respect ; but it is not pretended that the citation of authority is complete. In considering the power of subordinate governmental bodies, 52 Eager v. Gast, 27 Ky. L. Kep. Paige (N. Y.), 527; Delafield v. State- 129, 84 S. W. Eep. 556. of Illinois, 26 Wend. (N. Y.), 192, 2r 52a Ramsey v. Shelbyville, 26 Ky. Hill (N. Y.), 159. L. Rep. 1102, 83 S. W. Rep. 116. 54 Village of Fort Edward v. Fish 53 State of Illinois v. Delafield, 8 156 N". Y. 363, 50 N. E. Eep. 973 LIMITATIOITS ON DEBT-CONTEACTING I'OWEE. 1031 such as counties and cities, to incur debt or issue bonds, the necessity that legislative authority be had for the incurrence of the debt must always be remembered. Debts (exclusive of liability for tort) may be incurred in the following ways: (1.) By entering into contracts, or incurring liability, for salaries, labor, materials, and supplies, these terms being used comprehensively. (2.) By borrowing money under some form of contract other than negotiable instruments. (3.) By the issue of negotiable instruments. It is almost unnecessary to say that express authority^ conferred by a statute otherwise constitutional, is sufficient to authorize any subordinate governmental agency to incur debt by any of these methods. The difficulties arise when the incurrence of debt is sought to be justified by implied statutory authority. As to (1) there is substantially no doubt that where power to do any act or accomplish any end is given to a municipal or other subordinate corporation, the power to enter into such contracts and incur such obligations as are reasonably and properly in further- ance of the statutory purpose is impliedly given. The power to make reasonable contracts and incur the obligations which spring therefrom is incident to the corporate powers granted. Debts arising on contracts for supplies purchased on credit or labor in- cident to the powers granted are therefore valid.®^ 2124. The New York Court of Appeals, in so holding, used the following language: Municipal corporations, especially, obtain their funds, for the most part, periodically, by means of annual taxation, and it is impossible by any degree of care to adjust their means to their wants so accurately, but that exigencies will arise, rendering necessary a resort to the credit of the corporation. To deny to such corporations the power to use their credit in any case would scarce comport with the objects for which they are created. Under such a rule they could not procure materials for the repair of a bridge, unless the money had been raised in advance. The affairs of no mimicipal corporation were ever .con- ducted, I presume, without incurring obligations, for various pur- poses, in anticipation of its revenues. It may be said that there is a distinction between incurring debts for the ordinary and I 55 Allen V. Intendant of Lafayette, 89 Ala. 641, 8 So. Rep. 30, 9 L. R. A. ' 497. 1092 CONSTITUTIONAL LAW OF TAXATION. current expenses of the corporation, to be defrayed by the ex- pected annual income, and debts upon an extended credit, for objects of a permanent character, as, for instance, that a debt may be created for the repair of a bridge or market, but not for the erection of or procuring a suitable site for such market. I am unable to discover any solid basis for such a distinction, or any definite line by which it could be marked. J t: is easy to see that it would be extremely difficult, if not impossible, to manage the affairs of a municipal corporation without the power to contract upon its credit. Every contract for labor, not paid for in advance, is necessarily a contract upon credit, because the labor, when once performed, cannot be re- called. It is otherwise in the case of the purchase of property to be paid for on delivery, because, unless payment is made, it need not be delivered. Still, if it consists of several parcels, as of sev- eral loads of lumber or of stone, to be delivered at different times and paid for when all are delivered, this is a contract upon credit for all except the last load. Were a corporation authorized in general terms to build a bridge, without specification of manner or means, it would scarcely be doubted that it might contract with some person to furnish the materials and erect the bridge at a specific price, to be paid upon the completion of the job, and yet this would be to build the bridge entirely upon the credit of the corporation. But it is useless to multiply arguments upon this point. The power of a corporation to contract upon its credit cannot reason- ably be denied ; and if it may do so at all, there is, I think, no rule of law which limits the length of such credit.^® There is no doubt that evidences of debt of any usual kind may be issued in payment for property purchased or labor or materials furnished on credit, although there is no express power to issue such evidences, so long as the instruments issued are not endowed with the peculiar attributes of conxmercial paper.^^ Some state decisions seem to sustain the view that commercial paper may be issued, by implied authority, in payment for property or services which the municipality has power to purchase on credit. ^^ 2125. Whether a municipal corporation may horroiv money without express authority is a question upon which there is division. The power of taxation which is invariably granted to municipal bodies is granted in order to enable the corporation to 56 Ketcham v. City of Buffalo, 14 N. Andress, 56 Ind. 157 ; Craig School Y. 356. 364, 365. See contra, Duke v. Township v. Scott, 124 Ind. 72, 24 County of Williamsburgh, 21 S. C. N. E. Rep. 585; Colburn v. Railroad, 414 (a county). 94 Tenn. 43, 28 S. W. Rep. 298. 57 Merrill v. Monticello, 138 U. S. 58 Ketchum v. Citv of Buffalo 14 073. 34 L, ed. 1069, 11 Sup. Ct. Rep. N". Y. 356; Clark v. School District, 3 441; Sheffield School Township v. R. I. 199, LIMITATIONS ON DEBT-CONTEACTING POWEE. 1093 raise what money is necessary in order to meet its obligations and carry out its corporate purposes. The presumption is that the legislature has granted taxing power to an extent sufficient, in its judgment, to attain the corporate objects. This presumption, it is held in a number of cases, is ordinarily conclusive against any implied power to borrow money. ^* Quotation from some opinions best shows the reasoning upon which these rulings are based. Said Justice Bradley, in the United States Supreme Court : A municipal corporation is a subordinate branch of the domes- tie government of a state. It is instituted for public purposes only, and has none of the peculiar qualities and characteristics of a trading corporation, instituted for purposes of private gain, except that of acting in a corporate capacity. Its objects, its responsibilities, and its powers are different. As a local govern- mental institution it exists for the benefit of the people within its corporate limits. The legislature invests it with such powers as it deems adequate to the ends to be accomplished. The power of taxation is usually conferred for the purpose of enabling it to raise the necessary funds to carry on the city government and to make such public improvements as it is authorized to make. As this is a power which immediately affects the entire constituency of the municipal body which exer- cises it, no evil consequences are likely to ensue from its being conferred, although it is not unusual to affix limits to its exer- cise for any single year. The power to borrow money is dif- ferent. When this is exercised, the citizens are immediately affected only by the benefit arising from the loan, its burden is not felt till afterward. Such a power does not belong to a municipal corporation as an incident of its creation. To be possessed it must be conferred by legislation, either express or implied. It does not belong, as a mere matter of course, to local governments to raise loans. Such governments are not created for any such purpose. Their powers are prescribed by their charters, and those charters provide the means for exercising the powers; and the creation of specific means excludes others. Indebtedness may be incurred to a limited extent in carrying 59 Allen v. Intendant of Lafavette, Swackhamer v. Town of Hacketts- 89 Ala. 641, S So. Rep. 30, 9 L. E. A. town, 37 N. J. L. (8 Vr.) 191; Wells 497; Simpson v. Lauderdale County, v. Town of Salina, 119 N. Y. 280, 23 56 Ala. 64; Wetumpka v. Wetumpka N. E. Kep. 870, 7 L. R. A. 759; Parker Wharf Co., 63 Ala. 611; Goodwin v. v. Supervisors of Saratoga Covmty, Town of East Hartford, 70 Conn. 18, 106 N. Y. 392, 13 N. E. Rep. 308; 38 Atl. Rep. 876; Farr v. City of Starin v. Town of Genoa. 23' N. Y. Grand Rapids, 112 Mich. 99, 70 N. W. 439; Ketelmm v. City of Euflfalo, 14 Rep. 411; Law v. People, 87 111. 385; N. Y. 356, 366; Mayor v. Ray. 19 Parsons v. Inhabitants of Monmouth, Wall. 468, 22 L. ed. 164, four justices 70 Me. 262 (not a strong case) ; out of eight. 1094 CONSTITUTIONAL LAW OF TAXATION. out the objects of the corporation. Evidences of such indebted- ness may be given to the public creditors. But they must look to and rely on the legitimate mode of raising the funds for its payment. That mode is taxation.®" Said the New York Court of Appeals : It is the policy of the laws that town charges shall be met by annual recurring taxation, and thus extravagance and improvi- dence are in some degree checked, as those who create town charges or are the taxpayers when they arise must bear the burden of taxation to meet them. It is quite easy for the tax- payers of to-day to create a debt which they are not to feel and which the taxpayers of the future are to discharge. The system of laws relating to towns requires that all bills for moneys ex- pended, or materials furnished, or services rendered to the town shall be verified and presented to the board of town auditors and audited by them, and then enforced by warrants of the board of supervisors against the taxpayers of the town. This whole system would be subverted if towns could borrow money upon credit to meet town charges. Then the money would have to be repaid whether the town had had the benefit thereof or not, and the wise provisions of the statutes to secure economy and safety by the audit of accounts would be entirely frustrated.*^ 2125a. Speaking of the distinction between borrowing money, and incurring debt by contract or purchase on credit, the New York Court of Appeals said : It is true the power to contract to pay A $10,000 at the end of a year for doing certain work, and the power to borrow $10,000 of B on the credit of a year, for the purpose of paying A for doing the work, might seem, at first view, to be substan- tially identical. The amount is the same, and the time of pay- ment the same; the creditor only is difEerent. A little examination, however, will show that there is a very material difference between the two. If the power of the cor- poration to use its credit is limited to contracting directly for the accomplishment of the object authorized by law, then the avails or consideration of the debt created cannot be diverted to any illegitimate purpose. The contract not only creates the fund, but secures its just appropriation. On the contrary, if the money may be borrowed, the corporation will be liable to repay it, although not a cent may ever be applied to the object for which it was avowedly obtained. It may be borrowed to build a market, and appropriated to build a theater, and yet the cor- poration would be responsible for the debt. The lender is in no soMavor v. Ray, 19 Wall. 468-475, 61 Wells v. Town of Salina, 119 N. 22 L. ed. 104. Y. 280, 290, 291, 23 N. E. Rep. 870, 7 L. R. A. 759. LIMITATIONS ON DEBT-COKTEACTlNG POWEE. 1095 ^ay accountable for the use made of the money. It is plain, ■therefore, that if the policy of limiting the powers and expendi- tures of corporations to the objects contemplated by their charters is carried out, their right to incur debts for those objects must be strictly confined to contracts which tend to their direct accomplishment. If they procure the requisite funds by the indirect mode of borrowing, they may resort to any other in- direct mode of obtaining them, such as establishing some profit- able branch of trade, entering into commercial enterprises, etc., the avowed object being to obtain the means necessary to ac- complish some authorized purpose. No one can fail to see that to concede to corporations the power to borrow money for any purpose would be entirely subversive of the principle which ■would limit their operations to legitimate objects. Hence the distinction between such a power and that of stipulating for a credit in a contract made for the direct advancement of some authorized corporate object.*^ 21 25&. The courts which assert the rule that municipal corpora- tions have ordinarily no implied po-wer to borro-w money do not deny that such a po^wer may sometimes be implied. In many of the cases "which have been cited upon that proposition there are ex- pressions indicating that the power to borrow money may be implied from peculiar language in some express power, or from the grant of some express power, under extraordinary circum- stances, or of such an extraordinary nature as to imply the neces- sity of borrowing money in order to execute the power. ^* There are a number of decisions in which it is held or said that the power to borrow money to execute the express corporate powers is ordinarily implied from the grant of those powers. These decisions proceed upon the ground that the grant of power to achieve the corporate objects carries with it the power to select any reasonable and ordinary means to attain those objects; and that borrowing being one of the usual and common methods by which men and corporations raise money when they need it, the employment of that method is within the discretion of the municipality.®* Where a debt has been lawfully contracted, it is held in some 62Ketchum v. City of Buffalo, 14 W. Rep. 941; Bank of Chillieothe v. N. Y. 356, 365, 366. Mayor, 7 Ohio St. (Part II) 31, 30 esGause v. Clarksville, 5 Dill. 165, Am. Dee. 185; Clark v. School Dis- Ved Cas. No. 5,276. trict, 3 R. I. 199; Mills v. Gleason, 64 Board v. Day, 19 Ind. 450; Miller 11 Wis. 470, 78 Am. Dec. 721; State v. V. Board, 66 Ind. 162; State v. Windle, Common Council, 7 Wis. 688; Clark v. 156 Ind. 648-651, 59 N. E. Eep. 276; .Janesville, 10 Wis. 136. State V. Babcock, 22 Neb. 614, 35 N. 1096 CONSTITUTIONAL LAW OF TAXATIOOSr. cases that implied power exists to borrow money or give a note to pay it.^^ Wherever the power to borrow money exists, whether expressly or by implication, the power to give evidence of debt, other than negotiable paper, exists by implication, whether granted expressly or not. Such evidences may be certificates of indebtedness, city warrants, vouchers, cheques, drafts, and the like ; but the implied power here described does not extend so far as to allow such evi- dences of debt to be endowed with those attributes of commercial paper by which an absolute obligation to pay is created, free from legal OT equitable defenses.*^ 2125c. Whether a municipality may issue negotiable honds^ endowed with the attributes of commercial paper, without express statutory authority, is the most puzzling form in which questions as to the implied power of municipal corporations to contract debts have been presented to the courts. This question is presented in two aspects : (1.) May the power to issue negotiable paper for the purpose of carrying out the other express corporate powers be implied from the grant of those other corporate powers ? (2.) May the power to issue negotiable paper be implied from the existence of the power to borrow money, whether that power exists expressly or by implication ? (1.) The cases which hold that the power to borrow money may not ordinarily be implied, but must be expressly granted,®' are, of course, authorities against the existence of any power to issue neg(;- tiable paper, implied from the grant of other corporate powers or incidental to the general powers of the corporation. In addition, the United States Supreme Court and a number of the state courts hold that no such power is ordinarily implied from the grant of any corporate power. ®^ 65 Austin V. District Township, 51 U. S. 400, 28 L. ed. 470, 4 Sup. Ct. Iowa, 102, 49 N. W. Rep. 1051; Clark Rep. 489; Police Jury v. Britton, K> V. School District, 3 R. I. 199. Wall. 566, 21 L. ed. 251; Concord v. 06 Mayor v. Rav, 19 Wall. 468, 22 Robinson, 121 U. S. 165, 30 L. ed. 885,. L. ed. 164; Merrill v. Monticello, 138 7 Sup. Ct. Rep. 937; Kelley v. Milan, U. S. 673, 34 L. ed. 1070, 11 Sup. Ct. 127 U. S. 139, 32 L. ed. 77, 8 Sup. a. Rep. 441; Austin v. District Town- Rep. 1101; Norton v. Dyersburg, 127 ship, 51 Iowa, 102, 49 N. W. Rep. U. S. 160, 32 L. ed. 85, 8 Sup. Ct. Rep. 1051; Folsom v. School Directors, 91 1111; Hill v. Memphis, 134 U. S. 198, 111. 404; Williamsport v. Common- 33 L. ed. 887, 10 Sup. Ct. Rep. 562; wealth, 84 Pa. St. 487, 24 Am. Rep. Gause v. City of Clarksville, 5 Dill. 208. 165,. Fed. Cas. No. 5,276 (in these 67 See § 2125 ante, and cases cited, foregoing cases it was held that the 68 Claiborne County v. Brooks, 111 grant of power to a municipality to LIMITATIONS ON DEBT-CONTRACTING POWER. 1097 Power to issue refunding bonds cannot be implied from power to issue the original bonds, nor from the general corporate powers.®'* There are some cases which hold that power to issue negotiable bonds will be implied from the grant of ordinary municipal powers, for the purpose of carrying those powers into effect.™ 2125(i. (2.) Some early decisions of the United States Supreme Court were to the effect that the power to issue negotiable securi- ties might be implied from the existence of the power to borrow money.^^ But in more recent cases the Supreme Court has ex- pressly overruled these decisions ; and has held that neither an im- plied power to borrow money'^^ nor an. express power, in a city charter, "to borrow, for general purposes, not exceeding $15,000 on the credit of the said city," ^* warranted the issue of negotiable securities. The opinions in these cases are to the effect that the power to issue negotiable securities will only be allowed to munic- ipal corporations, by implication, in cases where the power ex- pressly granted will be rendered entirely nugatory unless the power tC' issue negotiable paper is implied. It was said in one of the cases: The confining of the power in the present case to a borrowing of money for general purposes on the credit of the city, limits it to the power to borrow money for ordinary governmental pur- poses, such as are generally carried out with revenues derived from taxation; and the presumption is that the grant of the power was intended to confer the right to borrow money in anticipation of the receipt of revenue taxes, and not to plunge the municipal corporation into a debt on which interest must be paid at the rate of ten per cent, per annum, semi-annually, for at least ten years. It is easy for the legislature to confer upon a municipality, when it is constitutional to do so, the power subscribe in aid of a railroad did not 68 Coquard v. Village of Oquawka, authorize the issue of negotiable bonds 192 111. 355, 61 N. E. Eep. 660. to pay the subscription); Ashuelot 70 State v. Babcock. 22 Neb. 614. Nat. Bank v. School District, 56 Fed. 35 N. W. Rep. 941 ; Ibid., 25 Neb. 279, Rep. 197. 5 C. C. A. 468; Clark v. 25 N. W. Rep. 155; State y. Madison, City of Des Moines, 19 Iowa, 199, 87 7 Wis. 688. See Kelley v. Mayor, 4 Am. Dec. 423; C<5quard v. Oquawka, Hill, 263. 192 111. 355, 61 N. E. Rep. 660; Jef- 71 Rogers v. Burlington, 3 Wall. ferson County v. Lewis, 20 Fla. 980; 654, 18 L. ed. 79; Mitchell v. Burling- Newgass v. City of New Orleans, 42 ton, 4 Wall. 270, 18 L. ed. 350. La. Ann. 163, 21 Am. St. Rep. 368, 72 Merrill v. Montieello, 138 U. S. 7 So. Rep. 565; Goodnow v. Ramsey 673, 34 L. ed. 1070, 11 Sup. Ct. Eep. County. 11 Minn. 31; Rogers v. Le 441. Sueur' County, 57 Minn. 434, 59 N. W. 73 Brenham v. German- American Rep. 488; Colburn v. Railroad, 94 Bank, 144 U. S. 173, 36 L. ed. 390, 12 Tenn. 43, 28 S. W. Rep. 298; Nolan Sup. Ct. Rep. 559. County V. State, 83 Tex. 182, 17 S. W. Rep. 823. See Chpmung Canal Bank V. Supervisors, 5 Den. 517. 1098 CONSTITUTIONAL LAW OF TAXATION. to issue negotiable bonds; and under the well-settled rule that any doubt as to the existence of such power ought to be deter- mined against its existence, it ought not to be held to exist in the present caseJ* A number of the state courts have held that the power to issue negotiable bonds will ordinarily be implied from the power to borrow money ; because the ordinary way in which municipalities borrow is by the issue of negotiable bonds. The decisions cited were made before Brenham v. German-American Bank,''^ and it is yet to be seen how much that decision will influence the current of thought in the state courts.'^* Statutory power to " issue bonds " gives power to issue negotia- ble bonds. The general power to issue bonds must be taten to authorize bonds in the form of such well-known commercial obliga- tions. That usual form embodies a contract and obligation negotiable in its terms.''^ Power to borrow money and issue bonds for corporate purposes gives power to issue bonds to refund exist- ing debts.''* 21 26. If in the issue of bonds, or the incurrence of indebtedness generally, there is any substantial departure from constitutional and statutory authority, by any subordinate officials, boards, or bodies, the departure invalidates the indebtedness. It is no answer to say that the departure was for the best interests of the com- munity ; subordinate officers have no concern except to keep to the terms of their commissions.™ 74 Brenham v. German- American 77 City of Cadillac v. Woonsocket Bank, 144 U. S. 173-182, 36 L. ed. Inst, for Savings, 58 Fed. Rep. 935; 390, 12 Sup. Ct. Eep. 559 ; to the same Ashley v. Board of Supervisors, 60 effect, that express power is necessary Fed. Kep. 55, 8 C. C. A. 455; West to the issue of commercial paper. Plains Township v. Sage, 69 Fed. Eep. Coquard v. Village of Oquawka, 192 943, 16 C. C. A. 553; Howard v. 111. 355, 61 N. E. Eep. 660. Kiowa County, 73 Fed. Eep. 406; 75 Supra, 144 U. S. 173, 36 L. ed. Klamath Falls v. Sachs, 35 Oreg. 325, 390. 12 Sup. Ct. Eep. 559. 76 Am. St. Eep. 501, 57 Pac. Eep. 329. 70 Mayor of Griffin v. Inman, 57 Ga. 78 National Life Ins. Co. v. Mead, 13 370; Evansville, etc., Ey. v. Evans- S. Dak. 37, 82 N. W. Eep. 78, 79 Am. ville, 15 Ind. 395, but see Myers v. St. Rep. 876, 48 L. E. A. 785; Morris Jeffersonville, 145 Ind. 431, 45 N. E. v. Taylor, 31 Oreg. 62, 49 Pac. Eep. Rep. 452; Doty v. Ellsbree, 11 Kans. 660; Huron v. Second Ward Sav. 209 ; Common Council of Muskegon y. Bank, 30 C. C. A. 38, 86 Fed. Rep. 272, Mayor, 94 Mich. 453, 54 N. W. 170; 49 L. E. A. 534; Portland Sav. Bank Orchard v. School District, 14 Neb. v. Evansville, 25 Fed. Rep. 389. 378, 15 N. W. Eep. 730; Middleton v. 79 Sutro v. Pettit, 74 Cal. 332, 5 Am. Allegheny Co., 37 Pa. St. 241; Com- St. Eep. 442, 16 Pac. Eep. 7; Lytle v. monwealth v. Pittsburgh, 34 Pa. St. Lansing, 147 U. S. 59, 37 L. ed. 78, 496; Eeinboth v. Pittsburgh, 41 Pa. 13 Sup. Ct. Eep. 254; MeClure v. St. 278; Bunch v. Fluvanna County, Oxford, 94 U. S. 429, 24 L. ed. 129; 86 Va. 452, 10 S. E. Rep. 532. Bates County v. Winters, 97 U. S. 83, LIMITATIONS ON DEBT-CONTKA.CTING POWEK. 1099 Illustrating this principle: Where it is provided by law that bonds shall contain a recital of the purpose of their issue, a recital which only refers to an * Utah,^^ Virginia,^^ Washington,^' West Virginia,^* Wisconsin."^ These constitutional provisions are all quoted at the end of this chapter. The wisdom of regulations of this sort is apparent, and they are so common that it may be stated as the prevailing rule of the state constitutions that provision for the payment of public debts must be made at the time such debts are created. 2134. These are mandatory provisions, and substantial com- pliance with them is a necessary condition of the validity of public debts sought to be. created in the states where they exist. They are not merely addressed to the conscience of the legislature, they leave the legislature no discretion as to compliance; and failure V. Davis, 56 111. 413; Marion County 36a Art. 281. V. Winkley, 29 Kans. 36; State v. 37 Art. 3, § 34. Echols, 41 Kans. 1, 20 Pac. Rep. .523 ; 38 Art. IX, § 5. Walker v. Oswald, 68 Md. 150, 11 Atl. 39 Art. IV, § 44; art. X, § 12. Rep. 711; Smith v. Proctor, 130 N. Y. 40 Art. XIII, § 2. 3in, 29 N. E. Rep. 312, 14 L. R. A. « Art. XII, § 1. 403 ; Citizens of De Soto Parish v. « Art. IX, § 3. Williams, 49 La. Ann. 422, 21 So. Rep. 43 Art. IV, § 6, subd. 4. 647, 37 L. R. A. 761; Metcalfe v. i* AH. VII, § 4; art. VIII, § 10. Seattle, 1 Wash. 301, 25 Pac. 1010; « Art. XII, §§ 182-184. Gillespie v. Palmer, 20 Wis. 544 ; « Art. VIII, § 2. Armour v. Finney County Commission- 47 Art. IX, § 10. ers, 41 Fed. Rep. 322. 48 Art. VIII, § 7. 29 Art. XI, § 18; art. XVI, § 1. 49 Art. XIII, § 2. 30 Art. XI, §§ 4-8. 50 Art. XI, §§ 5-7. 31 Art. VII, § VII, par. II. 51 Art. XIII, §§ 9-2. 32 Art. VII, § 11; art. VIII, § 13. 52 Art. VIII, § 127. 33 Art. IV, § 18; art. IX, § 12. 53 Art. VIII, § 3. 34 Art. VII. §§ 5-6. 54 Art. X, § 8. 35 Art. XT,' §§ 5-6. 65 Art. VIII, § 6; art. XI, § 3. 36 ss 50-159. 1104 CONSTITUTIONAL LAW OF TAXATION. to comply with them constitutes an element of fact which may he considered, and the consequences applied, in any court Avhere the validity of the debt is questioned.®® 2135. The tendency of the courts seems to be to require com- pliance with the essentials of these constitutional provisions, and not to allow other provisions for payment, to be substituted in place of the constitutional requirements. Literal and technical compliance is not always insisted on. In Texas these requirements have been before the courts frequently. Ir one case it was held that the language and purpose of the con- stitution were satisfied by an order for the annual collection by taxation of a " sufficient sum to pay the interest thereon and create a sinking fund, etc.," although the order did not fix the rate or per cent, of taxation for each year by which the sum was to be col- lected, but left the fixing of such rate for each successive year to the commissioners court or city council. It was contended in argument that the ordinance, which provided for the issue of water-works bonds, was void, because it did not levy a tax, but delegated to the assessing and collecting officers the power to make such levy from year to year. 2136. It was said that To so construe these provisions as to require, at the time the debt is created, the levy of a fixed tax to be collected through a long series of years, without reference to the unequal sums that would in all probability, be realized therefrom, instead of the collection anmially of a certain " sufficient sum " to pay the annual interest and create the sinking fund required by law, would be doing violence to the language used, and (to) authorize, in eases where values rapidly increase, the extortion from the tax- payers of large amounts of money m excess of the amount neces- sary to satisfy the interest and principal of the bonds, would invite municipal corruption and extravagance.®'^ Likewise in Illinois it is held that the law need not provide for the tax for the whole period the bonds are to run. It is enough if an annual tax is ordained.®^* 56 ditizens' Bank v. City of Terrell, 57 Bassett v. El Paso, 88 Tex 168, 78 Tex. 450, 14 S. W. Rep. 1003 ; 30 S. W. Rep. 893. Oubre v. Town of Donaldsonville, 33 57a Pettibone v. West Chicago Park La. Ann. 386; Gray v. Tax Collector, Commissioners, 215 111. 304, 74 N E. 107 La. Ann. 671, 32 So. Rep. 42; Wil- Rep. 387. Contra, under 'a statute, kins V. City of Waynesboro, 116 Ga. Kyes v. St. Croix County, 108 Wis. 359, 42 S. E. Rep. 767 ; Cahill v. 136, N. W. Rep. ; see Wilkins Hogan, 44 Misc. Rep. 360, 89 N. Y. v. Waynesboro, 116 Ga. 359 42 S E Supp. 1022. Rep. 767. ' LIMITATIONS ON DEBT-CONTEACTING POWEE. 1105 2137. In Georgia, a notice of an election to authorize certain bonds contained, among other things, a statement that " the amount of principal to be paid (that is collected as a part of the sinking fund for the redemption of the bonds) to be, etc." This was held to be an invalid notice, as the constitution provided for the levy of an annual tax and the provision for a sinking fund could not be substituted in its place."* In Missouri it was held that the question of a sinking fund or tax levy for the debt need not be submitted to the voters, although the question of the creation of the debt must be so submitted, under the constitutional require- ment elsewhere quoted"* in this work.^ 2138. It is held in several states that the requirement that provision be made " at the time of creating " the debt, is complied with if the debt is contracted under a previous general law, which authorizes subordinate bodies to create such debts, and requires them to levy taxes sufficient to pay the interest and create a sink- ing fund to pay the principal;®-' and this construction has been followed by the United States Supreme Court. ®^ The debts the validity of which was asserted in these decisions were created under and by virtue of the laws which authorized the provision for sinking funds. It also appeared in some of these cases that taxes had been actually levied for the creation of sinking funds. 2139. In Idaho, where the constitution required that provision be made for the payment of the interest, and for an annual tax to pay the principal within twenty years,^ it was held that the consti- tution was complied with if the levy of the annual tax to pay the principal was to be commenced about ten years after the issue of the bonds." In an Illinois case, the requirement of the levy of a tax to pay the interest of a debt was held not to be violated by an, ordinance which made no provision for a tax for such interest in the year in which the ordinance was enacted, it appearing that no interest was due in that year.^ The requirement of the Texas sswilkins v. City of Wavnesboro, 62 Wade v. Travis County, 174 U.S. 116 Ga. 359, 42 S. E. Rep. 767. 499, 43 L. ed. 1060, 19 Sup. Ct. Rep. 59 § 2243. 715, reversing 52 V. S. App. 395, and 60 State ex rel. Columbia v. Allen, 72 Fed. Rep. 985. 183 Mo. 283, 82 S. W. Rep. 103. 63 § 2225 of this work. 61 Mitchell County v. Bank of 64 Boise City v. Union Bank and Paducah, 91 Tex. 361, 43 S. W.Rep. Trust Co., 7 Idaho, 342, 63 Pac. Rep. 880; Howland v. San Joaquin County, 107. 109 Cal. 152, 41 Pae. Rep. 864; Pet- 65 Lussen v. Sanitary District, 192 tibone v. West Chicngo Park Com- 111. 404, 61 N. E. Rep. 544. missioners, 215 111. 304, 74 N. E. Rep. 387. 70 1106 CONSTITUTIONAL LAW OF TAXATION. constitution, of a two per cent, sinking fund for principal each year, does not forbid making a debt payable in ten years. The purpose of the requirement is to secure payment of the debt in not more than fifty years.®* 2140. Where bonds are issued in payment of an existing law- ful debt, and no annual tax levied as provided by the constitu- tion, it was held in Pennsylvania that the bonds were void; but as the debt for which they were issued was lawful, it was held that the creditor might recover by suit on the original contract.*'^ What amounts to a sufficient provision. 2141. The purpose of the requirement of a sinking fund is not only to prevent the city from involving itself in expenditure with- out providing means to pay, but also to enable the municipality to sell its bonds and other securities at the highest figure, by giving the municipal creditors the best security possible. These views lead to the conclusion that it is not enough that the authorities shall in fact Jevy a tax sufiicient, if not repealed, to comply with the constitutional requirements. ISTor is it sufficient that the law under which the debt is created shall authorize the levy of such a tax. The provision for payment must amount to a fixed, definite right on the part of the creditor, such a right as he can enforce in the courts, a right given him by law. Said the Supreme Court of Texas: We understand that the provision required by the constitu- tion means such fixed and definite arrangements for the collec- tion of such tax as would become a legal right in favor of the bondholders of the bonds issued thereon, or in favor of any person to whom such debt might be payable. It is not sufficient that the municipal authorities should by the law be authorized to- levy and collect a tax sufficient to produce a sinking fund greater than two per cent., but to comply with the constitution the law must itself provide for a sinking fund not less than two per cent., or require of the municipal authorities to levy and collect a tax sufficient to produce the minimum prescribed hy the consti- tution.^^ 2142. Ordinarily a constitutional provision requiring the levy of a tax to pay interest and principal of a debt should be deemed 66Bagby v. Bateman, 50 Tex. 446. 68 Mitckell County v. Bank of 67Rainsburgh Borough v. Fyan, 127 Padueah, 91 Tex. 361, 91 S. W. Eep. Pa. St. 74, 17 Atl. Rep. 678, 4 L. E. A. 880. 336. LIMITATIONS ON DEBT-CONTRACTING POWER. 1107 to be complied with if the laws under authority of which tho debt is created make the required provision in such fixed form that the creditor can compel compliance by mandamus or other- wise. The mere failure of administrative officers to obey the law in this respect, their refusal actually to levy the tax, ought not to invalidate the debt, if the legislative authorities have made the required provision. The exact language of the particular con- stitutional provision in any case must of course control. Most of them expressly require that the law shall make the provision.®^ There are cases which hold that these constitutional provisions are self-executing, that they are read into every statute and that by virtue of them the municipal authorities may be compelled to make the provision, although the statute does not expressly so provide.®^" So far as this principle is applied to the protection of municipal creditors, it is doubtless correct. To carry it so far as to hold a law valid where no rights of creditors were concerned, aj was done in one case,®®'' seems to be going to the extreme. 2143. Where a statute authorizing the issue of certain bonds provided that " when said bonds are signed and before they are issued " the county officers should levy a tax to pay the principal and interest, the bonds were held to be valid although the county officers did not levy the tax until six months after the issue of the bonds. It was held that the failure of the county officers to do their duty did not defeat the bonds, since the statute did not make their act a condition precedent. It appeared that there was no constitutional provision on the subject at the time the debt was contracted.™ 2144. The sufficiency in amount of the provision made for the payment of the debt must be left largely to the discretion of the legislature or of the subordinate bodies to which the legislature has delegated the duty of determination. Of course there may be cases where the insufficiency appears on the face of the law or ordinance which purports to make the provision for payment re- quired by the statute. Such would be a case where the law or oidinance creating a debt of say $100,000, with interest at five 69 See Wade v. Travis Countv. 174 East St. Louis v. People, 124 111.655, U. S. 499, 19 Sup. Ct. Eep. 715, 43 17 N. E. Rep. 447 ; Pettibone v. West L. ed. 1060; Bassett v. El Paso, 88 Chicago Park Commissioners, 215 111 Tex. 166, 30 S. W. Rep. 893 ; Mitchell 304, 74 N. E. Rep. 387. V. Bank of Paducah, 91 Tex. 361, 43 esb Pettibone v. West Chicago Park S. W. Rep. 880. Commissioners, supra, e9a East St. Louis v. Amy, 120 U. 70 Marion County v. Coler, 67 Fed. S. 600, 30 L. ed. 798, 7 Sup. Ct. 739 ; Rep. 60, 14 C. C. A. 301. 1108 CONSTITUTIONAL LAW OF TAXATION. per cent., should provide in terms for a tax levy not exceeding in the aggregate $4,000 a year.™" Or, if the constitution should pro- vide for an irrepealable tax law, a provision in the tax law lim- iting its duration to a fixed period, would make a case of which the courts could take notice. In such cases, where the insuffi- ciency of the provision should appear as a matter of calculation or otherwise certainly, doubtless the courts would hold the law invalid." But ordinarily the legislative authority must decide whether a given tax rate will produce enough money to pay the bonds, what amount is proper to be put into the sinking funds every year, and the legislative determination in this respect should not generally be reviewed." If through error of judgment, or mis- calculation, or unexpected emergencies, the provision made subse- quently proves inadequate, the debt cannot thereby be said to be invalidated. Where the body to which the constitution has dele- gated the duty of deciding the question of adequacy has made its determination, subsequent events will not ordinarily be allowed to ^veaken the force of that determination, or impair the validity of the debt created.'^ The possibility that the provision will prove inadequate because the assessed valuation may decrease will not suffice to overturn the legislative determination.''^* :;■ Classes of debts to which sinking fund requirements apply. "2145. The classes of debts to which such limitations apply liave frequently been considered in Texas. They do not apply to debts for ordinary current expenses, to be paid within the fiscal year, such as printing,'^^ annual expenses for fire protec- tion, and lighting,''^ or salaries of municipal officers," or to the refunding of existing debt.'^ These requirements do apply to all other than current debts pay- 70a See Wilkins v. Waynesboro, 116 75 Dwyer v. Brenham, 65 Tex. 527; Ga 359, 42 S. E. Rep. 767. Wichita v. Skeen, 18 Tex. Civ. App. 71 Citizens' Bank v. Terrell, 78 Tex. 63.3. 4.i S. W. Rep. 1037. 450, 14 S. W. Rep. 1003. 76 Tyler v. Jester (Tex. Civ. App.), 72 See Marcy v. Township of Os- 74 S. W. Rep, 359; Denison v. Foster weffo, 92 U. S. 638, 23 L. ed. 748, (Tex. Civ. App.) , 37 S. W. Rep. 167. ^vhich is not identical in fact with the 77 Tyler v. Jester (Tex. Civ. App.), case supposed, but embodies tlie prin- 74 S. W. Rep. 359; City of Oak Cliff eiple. V. Etherid^e (Tex. Civ. App.), 76 S. 73 See Addyston Pipe and Steel Co. W. Rep. 602. V. Corrv. 197 Pa. St. 41, 80 Am. St. 78 Conklin v. City of El Paso (Tex. Rep. 812, 46 Atl. Rep. 1035, dis- Civ. App.) , 44 S. W. Rep. 879; Tvler cussed in §§ 2087, 2088; Cable v. Al- v. Jester, 97 Tex. 344, 78 S. W. Rep. itoona, 200 Pa. St. 15, 49 Atl. Rep. 367. 1058. They do not apply to a resolu- 74 State ex rel. Columbia v. Allen, tion of a, city council directing the re- 183 Mo. 283, 82 S. W. Rep. 103. funding of money to persons who have LIMITATIONS ON DEBT-CONTRACTING POWER. 1109 able ■within the year. They apply to notes for materials to im- prove city property, payable one and two years after the debt is contracted;''® to a contract for street improvement;*" to a contract for the erection of a city hall;*^ to a contract for the erection of garbage furnaces;*^ to a contract for the purchase of a large quantity of fire hose,*^ to an increase of interest upon refunding of existing debt;** to the purchase of an electric light plant by the compromise of an existing claim.*^ Before 1895 the constitution of New York only required that sinking funds should be created where the bonds were issued by cities of over 100,000 inhabitants.** The constitution has been amended since then ; and it has been held that, whether or not the requirement of a sinking fund applies to all water bonds, it cer- tainly applies to all issues of bonds in excess of ten per cent, of the assessed valuation of any municipality.*^ 21 46. When the provision is partial there are cases which hold that to the extent of the provision that debt created is valid.** 2147. The fact that the law creating a debt makes provision for a special tax to pay it does not limit the creditor's right of payment to the fund yielded by the special tax. He is a creditor of the municipality or other governmental division for the full amoimt of his debt, and is entitled to be paid in full, regardless of the amount yielded by the special tax, unless the contrary is expressly provided.*® Municipal bodies coincident in territory. 2148. Where two or more municipal corporations or political bodies are wholly or partly coincident in territory, they are never- theless regarded as separate bodies for the purposes of constitu- paid assessments under the front-foot 85 Austin v. MeCall, 95 Tex. 565, 68 rule. Houston v. Stewart, Tex. S. W. Rep. 791. , 87 S. W. Rep. 663. 86 Sweet v. City of Syracuse, 12i> TSCity of Terrell v. Dessaint, 71 N. Y. 316, 27 N. E. Rep. 1081, 2» Tex. 770, 9 S. W. Rep. 593. N. E. Rep. 289. 80 Howard v. Smith, 91 Tex. 15, 38 87 Cahill v. Hogan, 44 Misc. Rep. S. W. Rep. 15. 360, 89 N. Y. Supp. 1022; affirmed on, 81 Riddle V. Terrell, 82 Tex. 336, 18 other grounds, 180 N. Y. 304, 73 I^. E. S. W. Rep. 691; Fourth Nat. Bank v. Rep. 39. Dallas (Tex. Civ. App.), 73 S. W. 88 Cole v. City of Slireveport, 41 La. Rep. 841. Ann. 839, 6 So. Rep. 688; Obre v. 82 Noel V. San Antonio, 11 Tex. Civ. Town of DonaldsonvillCj 33 La. Ann. App. 582, 33 S. W. Rep. 263. 386; Guy v. Tax Collector, 107 Ln. 83 Mineralized Rubber Co. v. Cle- Ann. 671, 32 So. Rep. 42. burne, 22 Tex. Civ. App. 622, 56 S. W. 89 United States v. Clark County, 96'. Rep. 220. U. S. 211, 24 L. ed. 028; United States 84 Tyler v. Jester (Tex. Civ. App.), v. Macon County, 99 U. S. 582, 25 L. 74 S. W. Rep. 359. ed. 331; Knox County v. United 1110 CONSTITUTIONAL LAW OF TAXATION. tional debt limitations, unless the contrary is expressed in the constitution. In reckoning the indebtedness of a county, thi3 in- debtedness of a city within its borders is not to be considered ; in reckoning the indebtedness of a city the debt of an independent school district wholly or partly in the city limits is not to be con- sidered; and vice versa. This rule of interpretation is supported by the authorities.®" The legislative power to create different tax districts or quasi- corporations for various purposes, including the same territory, may thus be used to avoid debt limits.®-^ 21 49. The rule stated is doubtless the correct rule in principle. The courts could not change it without wholly denying the legis- lative power in the creation of subordinate governmental agencies. Under it, however, it is possible for great abuses to be perpetuated ; and it would be well if these abuses should be everywhere guarded against by express constitutional limitations making provision for cases where a large city and a county are nearly coincident in territory, and otherwise restricting the power of independent or- ganizations, covering the same territory, to contract debts. In New York, counties altogether comprised in city limits (meaning the counties in the city of New York) are now expressly forbid- den to contract any debts.®^ In South Carolina an express consti- tutional provision limits the indebtedness of any given territory for all purposes, including all political subdivisions in which the territory is situated.®^ Some such provision as this should be in- corporated in every state constitution. This provision does not require that state indebtedness be included in computing the total indebtedness of any territory.®* 2150. Where a debt is incurred or sought to be incurred by some independent board which practically represents a city, al- though technically a separate corporation, it seems that the courts States, 109 U. S. 229, 3 Sup. Ct. Eep. N. W. Rep. 78, 48 L. K. A. 785; Heinl 131, 27 L. ed. 914. v. City of Terre Haute, 161 Ind. 44, 90 Wilson V. Board of Trustees, etc., 66 N. E. Eep. 450. 133 HI. 443, 27 N. E. Eep. 203; 91 See Kennebec Water District v. Adams v. East Eiver Savings Institu- Waterville, and Wilson v. Board of tion, 136 N. Y. 52, 32 N. E. Rep. 622 ; Trustees, etc., supra; see § 2021 Kennebec Water District v. Waterville, of this work applying this rule to lim- 96 Me. 234, 52 Atl. Rep. 774; Lan- its on tax rate. caster School District v. Robinson- ©2 Art. VIII, § 10, quoted in § Humphrey Co., 64 S. C. 545, 42 S. E. 2250 of this work. Rep. 998; Todd v. City of Laurens, 83 Art. X, § 5, quoted in § 2257 of 48 S. C. 395, 26 S. E. Rep. 682 : Hvde this work. v. Ewart (S. Dak.), 91 N. W. Rep. S4 Lancaster School District v. Rob- 474; ^fational Life Ins. Co. v. Mead, inson-Humphrey Co., 64 S. C. 545 42 13 S. Dak. 37, 79 Am. St. Eep. 876, 82 S. E. Rep. 998. LIMITATIONS ON DEBT-CONTEACTING POWEE. 1111 ought to look behind the fiction of an independent corporation, to see what the real fact is. The test should be, is the independent board in fact an agency of the city? are the purposes -which it seeks to carry out municipal purposes ? If the answer is, yes, then the debt contracted by the independent corporation ought to be regarded as the debt of the city for all the purposes of constitu- tional debt limits, for in fact it must be paid by taxation of the ■citizens. In determining whether a municipal board or separate ■ct.rporation is in fact carrying out purposes which are purely municipal, regard should be had to general custom, to the legis- lative and governmental practices of the state and community generally. These views are those of the author and do not find much en- ■couragement in the authorities. There are declarations and in- timations that where the board is practically a municipal agency, debts incurred through its means will be regarded as municipal debts unless the legislative intent that they shall be regarded as the debts of an independent corporation is clear and unmis- takable.*^ 2151. In one of the cases cited the Iowa Supreme Court held that the debt created by a park board in a city was a part of the city's debt, although the park board was elected by the voters of the city, invested with the power of contracting debts, made en- tirely independent of the city authorities, given power to sue and be sued, and placed in control of the parks of the city. Taxes for its support were certified by it to the county auditor, and by him collected and paid over to it.®" On the other hand, in California, the debt of a public library board, having control of a free public library in a city, was held not to be the debt of a " city, co'unty, town, township, board of education or school district," within the meaning of the California constitution.®^ 2152. Somewhat along the same lines is a case which holds that mere governmental subdivisions, which have no organic in- dependence, are not siich separate corporations as may escape the limitations laid upon those corporate bodies of which they form a part, and that a municipal corporation cannot employ the agency 95 Orris v. Park Commissioners, 88 98 Orvis v. Park Commissioners, 88 Iowa, 674, 45 Am. St. Rep. 252, 56 Iowa, 674, 45 Am. St. Rep. 252, 56 N. W. Rep. 294; Reynolds v. City of N. W. Rep. 294. Waterville, 92 Me. 292, 42 Atl. Rep. 97 Robertson v. Library Trustees of 553. Alameda, 136 Cal. 403, 69 Pac. Rep. 1112 CONSTITUTIONAL LAW OF TAXATION. of such subdivisions to create debts which it could not create directly. This case arose in the United States Supreme Court. In Missouri a township is (or was) a mere geographical subdi- vision of a county, partitioned off for local convenience in the matter of elections and a few other things. A town is (or was) a complete municipal corporation. The Missouri constitution forbade " amy county, city or town " to become a stockholder in or loan its credit to any company, with- out a two-thirds vote of the electors. Under statutory authority a county issued its bonds in aid of a railroad on behalf of one of its townships, without the required vote. It was held that the bonds were void. It was said : This specification (of the constitution) embraced every polit- ical organization which could be supposed capable of making a subscription. To contend that the mere subdivision of counties into townships enabled the legislature to defeat the constitutional provision, is to ignore the manifest intention and spirit of this- instruments^ 2153. Generally, however, a constitutional limitation forbid- ding certain municipal or public corporations to incur debt will not be construed to apply to any other independent corporations- than those named, although coincident in territory.*® Limitations on state do not apply to municipalities. 2154. Following the principle that identity of territory does not constitute corporate identity, it is generally held that consti- tutional limitations which, in terms, forbid the state to contract debts for certain purposes, or more than a certain amount, do not apply to the municipal and governmental subdivisions of the state. Many of the cases cited were cases where provisions, for- bidding the state to contract debts or loan credit for works of in- ternal improvement, were held not to forbid the legislature to au- thorize municipalities to engage in such enterprises.-' 98 Harshman v. Bates County, 92 v. Maysville, etc., Ey. Co., 13 B. Men. U. S. 569, 23 L. ed. 747. (Ky.) 1; Prettyman v. Supervisors of 89 In re Madera Irrigation District, Tazewell County, 19 111. 406, 71 Am. 92 Cal. 296, 27 Am. St. Eep. 106, 28 Dec. 230; Perkins v. Lewis, 24 111.. Pac. Eep. 272, 675, 14 L. E. A. 755. 208; Johnson v. Stark County, 24 IlL iPattison v. Supervisors, 13 Cal. 75; Marshall v. Silliman, 61 111. B18; 175; Cass v. Dillon, 2 Ohio St. 607; Eobertson v. City of Eockford, 21 111. Pine Grove Township v. Talcott, 19 451 ; Quincy, etc., Ey. Co. v. Morris, Wall. 666, 22 L. ed. 227, affirming 84 111. 410; Dubuque' v. Dubuque, etc., Talcott V. Pine Grove Township, 1 Ey. Co., 4 Iowa, 1, 66 Am. Dec. 107; Flip. 120, Fed. Cas. No. 13,735; Slack Clapp v. Cedar County, 5 Iowa, 15, 68: LIMITATIONS ON DEBT-CONTRACTING POWER. 1113 2155. There are cases in which it is held that prohibitions and conditions laid upon the state, in the incurrence of debt, apply to municipalities, at least prevent the legislature from authorizing municipalities to incur debts except upon like conditions. In Michigan it is held that the constitutional provision which for- bids the state to be a party to any work of internal improvement ^ applies to all municipal subdivisions of the state, and forbids the legislature to authorize or compel municipal corporations to en- gage in works of internal improvement. The ground of these decisions is that what the state may not do directly it may not authorize the municipalities to do. The Michigan courts read what they fancy to be the " spirit " of the constitutional provi- sion into the letter, a course which the courts of Michigan have been more prone to take than most courts.^ But it seems to the writer that if the people of the various states want these provisions to apply to municipal subdivisions they can easily say so. An examination of the state constitutions shows that in most cases the framers have been careful to make exact and sometimes minute regulations respecting municipal debts ; and where this is so there is no reason why the courts, should read the restrictions which apply to the states as applying to the subdivisions. Operation of debt limitations. 2155a. In so far, as constitutional debt limits are prohibitory in character, that is, in so far as they forbid the incurrence of debt beyond a certain amount, they are of course self -executing ; no legislation is needed to carry them into effect and they invali- date, by their own vigor, debts incurred in violation of their provisions. All the cases so treat them.^" Am. Dec. 678 ; Stewart v. Supervisors ,545, 42 S. E. Rep. 998. The view of of Polk County. 30 Iowa, 9, 1 Am. Eep. some text-writers that certain expres- 238, overruling State v. Wapello sions in People v. Mayor, etc., of Chi- County, 13 Iowa, 388; Renwiek v. cago, .51 111. 17, were intended to over- Davenport, etc., Ry. Co., 47 Iowa, 511; rule the earlier Illinois decisions and Chicago, etc., Ev. Co. v. Sliea, 67 Iowa, to establish the contrary rule which is 728, 21 N. W. Rep. 901; Leavenworth followed in Michigan, is seen, by ref- County Commissioners v. Miller, 7 erence to the later Illinois cases above Kans. 479, 12 Am. Rep. 425; Van cited, to be incorrect. Cleve V. Passaic Valley Sewerage Com- 2 Quoted in § 218 of this work, mission (N. J.), 58 Atl. Rep. 571; 3 Oren v. Pfngree, 120 Mich. 550, 79 Bushnell v. Beloit. 10 \YiB. 195; Rogan N. W, Rep. 814, 46 L. R. A. 407; V. Watertown. 30 Wis. 259 ; State ex People ex rel. Bay City v. State Treas- rel Jones v. Froelich, 115 Wis. 32-42, urer, 23 Mich. 499; Anderson v. Hill, 95 Am. St. Rep. 904, 91 N. W. Rep! 54 Mich. 477, 20 N. W. Rep. 549. 115, 58 L. R. A. 757. See Lancaster Sa Robertson v. Staunton, Va, School District v. Robinson, 64 S. C. 51 S. E. Rep. 178. 1114 CONSTITUTIONAL LAW OF TAXATION. Those provisions of debt limitations which are in a sense per- missive, such as that a countj may by a vote of the electors incur nds, the question is presented of the suiEciency of general recitals of conformity with the constitution and the laws, as com- pared with express recitals asserting performance of particular- conditions, or existence of particular facts. An illustration of what are here called general recitals, is a recital that the bonds are issued in conformity with, or pursuant to, the constitution and laws of the state. An illustration of an express recital is in a case where an election is required, a recital to the effect that on a certain day an election was held pursuant to law and that at such election a majority of the qualified voters determined that the bonds should be issued. There can be no doubt of the efficiency of express recitals of this sort to estop inquiry into the truth of every fact recited, as against a bona fide purchaser, it being understood of course that the recital is of a fact which the authorities issuing the bonds were empowered to ascertain. The cases which hold that an express recital " that the total amount of this issue does not exceed the limitation prescribed by the constitution," estops inquiry as to the fact, are sufiicient authority for this proposition, if authority be needed. ^'^ 2199. While the tendency of those who draw municipal bonds seems to be to rely more and more upon express recitals, yet there seems to be nothing in the Federal decisions which refuses force to general recitals of conformity with the law and consti- tution, as to all matters covered by the recitals. In a text-book which the writer has seen there is a statement to the effect that general recitals cannot now be relied upon, to estop defenses based on the constitutional debt limitation ; the cases cited in sup- port of the proposition are cases where the recital was of con- formity with the law, and there was no recital at all of conformity with the constitution.^^ In other cases there were general recitals 86 Burlington Savings Bank v. City S. 355, 35 L. ed. 1040, 12 Sup. Ct. of Clinton, 111 Fed. Eep. 439. In this Rep. 216; Gunnison County v. Rollins, case there was no express recital that 173 U. S. 255, 43 L. ed. 689, 19 Sup. the limit had not been exceeded. Ct. Eep. 390. Francis v. Howard County, 4 C. C. A. 88 Buchanan v. Litchfield, 102 U. S. 460, 54 Fed. Rep. 487, 2 U. S. App. — . 278, 26 L. ed. 138; Lake County v. 87 Chaffee County v. Potter, 142 U. Graham, 130 U. S. 674, 32 L. ed. 1136 COITSTITUTIONAI LAW OF TAXATION. of compliance with the constitution, but the bonds were held- void because of the lacli of statutory authority to issue them, a defect which no recital could cure.*** The conclusion to which an examination of the authorities leads is : that a general recital of " conformity with " the law or statates, or particular statutes, or the like recital, as " pursu- ant to," or " by authority of," such statutes, is sufficient to estop defenses of noncompliance with the conditions of fact imposed by the statutes recited,*" and that a general recital of compliance with the constitution is sufficient to estop defenses based on non- compliance with the conditions of fact imposed by the constitu- tion.®^ Where an election to authorize the issue of bonds is re- quired, by law or constitution, it seems to be customary to insert an express recital with respect to the holding of the election; al- though general recitals of conformity with the statutes requiring the election have been expressly held to estop inq\iiry as to the regularity of the election. ^^ 2199a. Of course if the law under which the bonds are issued is itself unconstitutional no recitals can have any effect and the 1065, 9 Sup. Ct. Eep. 654 (Citizens' Savings Association v. Perry County, 156 U. S. 092, 39 L. ed. 585, 15 Sup. Ct. Eep. 547, which is sometimes cited in support of the doctrine that general recitals are unavailing, is, in fact, only authority for the proposition that where conditions are imposed by the constitution, recitals of compliance with statutes will not estop inquiry) ; Francis v. Howard County, 4 C. C. A. 460, 54 Fed. Rep. 487, 2 XJ. S. App. — ; Shaw V. Independent School Dis- trict, 23 C. C. A. 169, 77 Fed. Eep, .277; (Jeer v. School. District, 38 C. C. A. 392, 97 Fed. Rep. 732. 89 Dixon County v. Field, 111 U. S. 83, 28 L. ed. 360,'4 Sup. Ct. Rep. 315; Katzenberger \. Aberdeen, 121 TJ. S. .172, 30 L. ed. 911, 7 Sup. Ct. Eep. 947. 90 Knox County v. Aspinwall, 21 How. 539, 16 L.'ed. 208; Evansyille V. Dennett, 161 U. S. 434, 40 L. ed. 760, 16 Sup. Ct. Eep. 613; Stanley County v. Coler, 190 U. S. 437, 47 L. ed. 1126, 23 Sup. Ct. Eep. 811; Waite v. Santa Cruz, 184 U. S. 302, 46 L. ed. 552, 22 Sup. Ct. Eep. 327 ; Town of Coloma v. Eaves, 92 U. S. 484, 23 L. ed. 579; School District v. Stone, 106 U. S. 183, 27 L. e.d. 90, 1 Sup. Ct. Rep. 84; Commissioners v. Bolles, 94 U. S. 104, 24 L. ed. 46; Mer- cer County V. Hackett, 1 \\fall. 83, 17 L. ed. 548 ; Anderson County v. Beal, 113 U. S. 227, 238, 239, 28 L. ed. 966, 5 Sup. Ct. Eep. 433; Cairo v. Zane, 149 U. S. 122, 37 L. ed. 673, 13 Sup. Ct. Eep. 803; Huron v. Second Ward Savings Bank, 57 U.- S. App. 593, 86 Fed. Eep. 272, 30 C. C. A. 38, 49 L. E. A. 534; Commissioners of Hender- son County V. Travellers' Ins. Co., 128 Fed. Eep. 817, 63 C. C. A. 467; Inde- pendent School District v. Eew. Ill Fed. Eep. 1, 49 C. C. A. 198, 55 L. R. A. 364; Coler v. Dwight Township, 3 N. Dak. 249, 55 N W. Eep. 587, 2S L. E. A. 649. 91 See all c.ises cited supra, and cases cited at §§ 2191-2193, holding that there is no difference in con- clusiveness between recitals of per- formance of conditions imposed by the constitution and recitals of conditions imposed by statute; also Waite v. Santa Cruz, 184 U. S. 302, 46 L. ed. 552, 22 Sup. Ct. Eep. 327. 92 Knox County v. Aspinwall, 21 How. 539, 16 L. ed. 208; Humboldt Township v. Long, 92 U. S. 642, 23 L. ed. 752. ■ EEOITALS IBT MUNICIPAL BONDS. 1137 bonds are void.*^ But a mere recital in bonds of an invalid act mil not render the bonds void if there be a valid act in existence under authority of which they could have been issued,®* and -where a bond recites compliance with both a valid and an invalid act, the recitals of compliance with the valid act are sufficient to estop the municipality from denying that the act was complied with.®'* "Where, however, bonds only recite compliance with an invalid act, although the bonds themselves may be sustained under any other act, the recitals do not estop inquiry as to whether the con- ditions of the other acts, not recited, have been complied with.®' Officers whose recitals are effective. 2200. In order that recitals in bonds may operate as estoppels it is necessary that the ofEcers by whom the recitals are made shall have been charged, by law, with the duty of determining the existence of the facts recited. Illustrating this proposition clearly is a case where a statute of Kentucky authorized the " county court " of a county to issue bonds, when authorized to do so by an election. An election was held at which $250,000 of bonds were authorized. The " county court " authorized the issue of $250,000 of bonds, to be signed by the presiding judge and the clerk. In fact, the presiding judge and the clerk issued $320,000 of bonds. On the bach of each bond was indorsed a certificate, reciting com- pliance with the legislative act and the order of the county court, and signed by " George W. Tri-plett, Judge of the County Court of Daviess." It was held that this certificate did not estop the county from pleading the overissue. Said the Supreme Court: The certificate is not a recital in the bond. It is not the act of the county court, is not under its seal nor signed by its clerk ; but is simply the certificate of the person holding the office of judge of that court. Neither the statute, nor the vote of the people, nor the order of the coimty court empowered him to make such a certificate or to determine the question whether 63 Bast Oakland v. Skinner, 94 U. Fed. Rep. 797. Contra, Wilkes County S. 255, 24 L. ed. 125; Wilkes County v. Call, 123 N. C. .308, 31 S. E. Rep. V. Call, 123 N. C. 308, 31 S. E. Rep. 481, 44 L. R. A. 252. 481, 44 L. R. A. 252. 93 Evansville v. Dennett. 161 U. S. 94 Wilkes County v. Coler, 180 U. S. 434, 40 L. ed. 760, 16 Sup. Ct. Rep. 506, 45 L. ed. 642, 21 Sup. Ct. Rep. 613; Defiance v. Schmidt, 123 Fed. 458*; Anderson County v. Real, 113 U. Rep. 1, 59 C. C. A. 159. S 227 28 L. ed. 966, 5 Sup. Ct. Rep. 96 Gilson v. Dayton, 123 U. S. 59, 433- Knox Countv v. Ninth Nat. Bank. 31 L. ed. 74, S Sup. Ct. Rep. 66; Crow 147 U S 91, 37 L. ed. 93. 13 Sup. Ct. v. Oxford, 119 U. S. 215, 30 L. ed. Rep. 267; Fernald v. Oilman, 123 388, 7 Sup. Ct. Eep. 180. 12 1138 CONSTITUTIONAL LAW OF TAXATION. the county court had exceeded the power conferred unon it. An officer's certificate of a fact which he has no authority to deter- mine is of no legal effect.''^ 2201. It is not necessary, in order that officers shall have power to determine and certify a fact, that the power to determine and certify shall be given in so many words. If a constitution or a statute declares that upon the performance of certain conditions bonds shall be issued, the persons who, by law, are empowered to issue the bonds, are thereby empowered, if no oilier specific direc- tion is made, to determine the existence of the fact upon which their power is conditioned.^* 2202. Where bonds are signed by a de facto officer, who, if he were a de jure officer, would have power to bind the municipality by recitals, the recitals act as estoppels to the same extent ias if the officer signing them were an officer de jure. Whether the officer who signs is a de facto officer is a " mixed question of law and fact." ^ But where the person who signed the bonds was one whose term of office had expired, and who had been succeeded by a new officer, the municipality is not estopped from showing his lack of authority, either by any recitals in the bonds or by its act in negotiating them.-*^ Where authority to determine the neces- sary facts is given to a board, recitals in bonds signed by those members of the board whose duty it is to sign raise an estoppel.* Where the record shows on its face that the officers who issued bonds had no authority to issue them, the question of estoppel can- not arise. In one case a statute authorized a county judge, upon the petition of certain taxpayers, to inquire and take proof of the facts stated in the petition, and to make an order of record ap- pointing certain commissioners to issue bonds for the to^vnship. It was held that where the petition was not made by a sufficient 97 Daviess County v. Dickinson, 117 437, 47 L. ed. 1126, 23 Sup. Ct. Rep. U. S. 657, 29 L. ed. 1026, 6 Sup. Ct. 811; Bernards Township v. Morrison, Rep. 657. See also Spitz^r v. Village 133 U. S. 528, 33 L. ed. 726, 10 Sup. of Blanchard, 82 Mich. 234, 46 N. W. Ct. Rep. 333; Fulton v. Riverton, 42 Rep. 400. Minn. 395, 44 N. W. Rep. 257; Coler 98 Knox County v. Aspinwall, 21 v. Dwight Township, 3 N. Dak. 249, How. 539, 16 L. ed. 208; School Dis- 55 N. W. Rep. 587, 28 L. R. A 649. trict V. Stone, 106 U. S. 183, 27 L. 99 Waite v. Santa Cruz. 184 U. S. ed. 90, 1 Sup. Ct. Rep. 84; Town of 302-323, 46 L. ed. 552, 22 Sup. Ct. Coloma V. Eaves, 92 U. S. 484, 23 Rep. 327. L. ed. 579; Chaffee County v. Potter, 1 Coler v. Cleburne, 131 tJ. S. 162, 142 U. S. 355, 35 L. ed. 1040, 12 Sup. 33 L. ed. 146, 9 Sup. Ct. Rep. 720. Ct. Rep. 216; Gunnison County Com- 2 Gibbs v. School District, 88 Mich, missioners v. Rollins, 173 U. S. 255, 334, 24 Am. St. Rep. 295, 50 N W, 43 L. ed. 689, 19 Sup. Ct. Rep. 390; Rep. 294. Stanley County v. Coler, 190 U. S. ESTOPPEL BY DELIVERY AND EEGISTEATION. 1139 number of taxpayers the bonds were void, as the commissioners never acquired authority to issue them.* Recitals as to conditions subsequent. 2203. Eecitals in bonds cannot estop defenses of nonperform- ance of conditions to be performed subsequent to their issue, of which conditions the purchaser is charged with notice by statute, such for instance as a condition that bonds are to be deposited in escrow to be delivered when a railroad is completed.* It is held, however, that where a statute provides for registration of bonds by the holder, with a state officer, and authorizes that officer to certify on the bonds that they have been regularly and legally issued, the effect of such registration and certification is to estop inquiry as to the performance of conditions subsequent.^ And this rule does not apply to conditions subsequent alone, but the estoppel extends to all matters as to which authority to register and certify was given. ^ See the following sections. Estoppel by delivery and registration. 2204. The principle of estoppel by the decision of one to whom the law has committed the determination of a fact is sometimes applied where the determination is shown otherwise than by re- citals to wit, by the mere fact of delivery of the bonds. Some of the earlier cases on estoppel by recitals contain expressions sup- porting this view, as where the fact that an election was duly held is presumed to have been determined, by commissioners to whom the duty of determination was committed, from the mere fact that they delivered the bonds. As was said in Knox County V. Aspinwall:'' Another answer to this ground of defense is, that the pur- chaser had the right to assume that the vote of the county, which was made a condition to the grant of the poiver, had heen ob- tained, from the fact of the subscription, by the board, to the stoch of the railroad company and the issuing of the bonds. In a more recent case the doctrine of estoppel by delivery was applied the delivery being held to be evidence of the decision of 3 Rich V. Mentz, 134 U. S. 632, 33 Rose, 140 U. S. 71, 35 L. ed. 344, 11 L. ed. 1074, 10 Sup. Ct. Rep. 610. Sup. Ct. Rep. 710; Comanche County But see Andes v. Ely, 158 U. S. 312, v. Lewis, 1&3 U. S. 198, 33 L. ed. 604, 39 L. ed. 996, 15 Sup. Ct. Rep. 954. 10 Sup. Ct. Rep. 286. * Lewis V. Commissioners, 105 U. S. 6 Ibid. ; Flogg v. School District, 4 739, 26 L. ed. 993. N. Dak. 30, 58 N. W. Rep. 499, 25 5 Lewis V. Commissioners, 105 U. S. L. R. A. 363. 739, 26 L. ed. 993; Harper County v. T21 How. 539, 16 L. ed. 208. 1140 CONSTITUTIONAL LAW OF TAXATION. the officer to whoin the duty of such decision had been delegated, that the conditions precedent to delivery had been complied with. The bonds had been issued and placed in escrow in the hands of a trustee, to be delivered when the statutory condition pre- cedent to the delivery had been complied with. This condition was that a railroad, in aid of which the bonds had been voted, should be completed through the county before the bonds should be delivered to the company. It was contended that the recitals in the honds of compliance with all conditions did not estop the defense that the bonds had been delivered before the completion of the road through the county, because that was a condition to be performed subsequently to the execution of the honds. 2205. The Supreme Court said: Assuming, without deciding, that such limitation must he placed on the recitals, . . . then the question arises as to the effect of the decision of the trustee that the conditions had been complied with, and of his deliver}' of the bonds, and their subsequent purchase by a hona fide holder. It is said that the bonds were placed in escrow, and that when an instrument is so placed there can be no valid delivery until the condition of the escrow has been performed, and if without performance the instrument passes out of the hands of the one holding it in escrow it is not enforceable against the maker, and that in a suit on the instrument the inquiry is always open whether the con- dition of the escrow has been performed. Whatever may be the rule in case the instrument so placed in escrow be a deed or nonnegotiable contract, we are of opinion that a different rule obtains when the instrument is a negotiable obligation. It was held that the defendant was estopped from setting up the defense.* This estoppel by mere delivery could hardly be held to exist against a constitutional defense of lack of power. 2206. Some of the state constitutions provide for the registra- tion of municipal bonds by some state officer; and there are statutes of like import. A case of this kind is quoted in this chapter from the constitution of Wyoming.® The effect of registration, under a statute or constitution which authorizes registration to be made by the registering officer upoji compliance with certain conditions, is to estop the municipality from asserting that those conditions were not complied with. This 8 Provident Trust Co. v. Mercer 9 Art. XVI, § 8, quoted in § 22G8 of County, 170 U. S. 593, 42 L. ed. 1150, this worli. 18 Sup. Ct. Eep. 788. ESTOPPEL BY DELIVEEY AND REGISTRATION. 1141 was held in a case where a Kansas statute provided that, where bonds were issued for internal improvements upon conditions to be performed by the persons to whom they were issued, they should be delivered to the state treasurer to be held in escrow until the conditions should be complied with, and delivered by him to the persons entitled thereto, " upon the conditions of such subscrip- tion being in all things fully complied with." The statute also provided that the bonds, after delivery, might be presented by the holders to the state auditor, who, upon being satisfied of the regularity of the issue, should register them and certify upon them that they were genuine, and regularly and legally issued. It was held that the registration and indorsement provided by the statute estopped the municipality to defend against a bona fide holder on the ground that the conditions had never been complied with and that the bonds had never been delivered in escrow to the state treasurer,-'** it not appearing on the face of the bonds that they were of the class which required delivery to the state treas- urer. To similar effect are other cases cited. ■'^ 2207. In order, however, that registration may have any effect, there must be a law providing for registration, and the bonds must be of the class as to which the law authorizes registration. This is a question of law; and one as to which the determination of the registering officer has no force. Consequently if bonds issued under a certain act are registered, the municipality is not estopped by any recitals in the certificate of registration, if it appears that there was no authority for registering bonds issued under that act.^^ And the effect of registration and the certifi- cates of registering officers, is confined strictly to those matters which they are authorized to determine. In one case a statute pro- vided that the county judge should certify to the state auditor certain facts as to compliance with preliminary conditions of bond issues, and that thereupon the auditor should register the bonds. It was held that registration did not estop the county from assert- ing that conditions as to the completion of a railroad had not been complied with, because that was not one of the matters which the county judge was to certify, as preliminary to registration.^^ 10 Lewis V. Commissioners, 105 U. 12 Crow v. Oxford, 119 U. S. 215, 30 S. 739, 2(i L. ed. 993. L. ed. 388, 7 Sup. Ct. Eep. 180. 11 Harper County Commissioners v. 13 German Bank v. Franklin County, Rose, 140 U. S. 71, 35 L. ed. 344, 11 128 U. S. 526, 32 L. ed. 519, 9 Sup. Sup'ct. Rep. 710; Comanche County Ct. Rep. 159. V. Lewis, 133 U. S. 198, 33 L. ed. 604, 10 Sup. Ct. Rep. 286. 1142 CONSTITUTIONAL JAW OF TAXATION. Acquiescence. 2208. There are some cases where a county or municipality has been held to be estopped to deny the validity of bonds which it had recognized for a long time by paying interest, or otherwise ratifying. This estoppel has been applied only in cases of irregu- larity.^* But there can be no ratification where there was a total lack of power to issue. ■"" , The Confederate debt. 2209. The only express limitation on the power of the Federal government to assume or contract debts is found in the Fourteenth Amendment, which also limits the powers of the states. The validity of the public debt of the United States, author- ized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned. But neither the United States nor any state shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void.^® 2210. Some of the state constitutions also contain clauses for- bidding the assumption or payment of debts incurred in rebellion against the United States, or for loss of slaves. Such clauses are found in the constitutions of Georgia,^'' North Carolina,'* and Virginia.-'® Express limitations on debt contracting power. 2211. Limitations on the power to lend the public credit to private corporations or individuals, and on the power to contract debts in aid of private enterprises, are quoted in Chapter IV of this work, on the purposes of taxation. The following are constitutional provisions of the various states limiting the power to incur public debt. 2212. Alabama. After the ratification of this constitution (1901), no new debt shall be created against, or incurred by this state, or its author- 14 Calhoun v. Millard, 121 N. Y. 69, 676, 19 L. ed. 1040; Clark v. Town of 24 N. E. Rep. 27, 8 L. R. A. 248; Northampton, 120 Fed. Rep. 661, 57 Citizens' Savings Association v. C. C. A. 123. Perrv County, 156 U. S. 692, 39 L. 16 Fourteenth Amendment, § 4. ed. 585, 15 Sup. Ct. Rep. 547; "Art. VII, § XI. Schmitz V. Zeh, 91 Minn. 290, 97 N. 18 Art. I, S 6; art. VII, § 13. W. Rep. 1049. 19 Art. XIII, § 186. 15 Marsh v. Fulton County, 10 Wall. LIMITATIONS ON DEBT-CONTEACTING POWEE. 1143 ity, except to repel invasion or suppress insurrection, and then only by a concurrence of two-thirds of the members of each house of the legislature, and the vote shall be taken by yeas and nays and entered on the journals ; and any act creating or incur- ring any new debt against this state except as herein provided for shall be absolutely void; provided, the Governor may be authorized to negotiate temporary loans, never to exceed three hundred thousand dollars, to meet the deficiencies in the treas- ury, and until the same is paid no new loan shall be negotiated; provided further, that this section shall not be so construed as to prevent the issuance of bonds for the purpose of refunding the existing bonded indebtedness of the state.^" 2213. No county shall become indebted in an amount including present indebtedness, greater than three and one-half per centum of the assessed value of the property therein ; provided, this limi- tation shall not affect any existing indebtedness in excess of such three and one-half per centum, which has already been created or authorized by existing law to be created; provided, that any county which has already incurred a debt exceeding three and one-half per centum of the assessed value of the property therein, shall be authorized to incur an indebtedness of one and a half per centum of the assessed value of such property in addition to the debt already existing. Nothing herein contained shall pre- vent any county from issuing bonds, or other obligations, to fund or refund any indebtedness now existing or authorized by exist- ing laws to be create d.^^ No city, town or other municipal corporation having a popu- lation of less than six thousand, except as hereafter provided, shall become indebted in an amount, including present indebted- ness, exceeding five per centum of the assessed value of the prop- erty therein, except for the construction or purchase of water works, gas or electric lighting plants, or sewerage, or for the improvement of streets, for which purposes an additional indebt- edness not exceeding three per centum may be created ; provided, this limitation shall not affect any debt now authorized by law to be created, nor any temporary loans to be paid within one year, made in anticipation of the collection of taxes, not exceed- ing one-fourth of the annual revenues of such city or town. All towns and cities having a population of six thousand or more, also Gadsden, Ensley, Decatur, and New Decatur, are hereby authorized to become indebted in an amount including present indebtedness, not exceeding seven per centum of the assessed valuation of the property therein, provided that there shall not be included in the limitation of the indebtedness of such last described cities and towns the following classes of indebtedness, to wit: Temporary loans, to be paid within one year, made in 20 Art. XI, § 213. 21 Art. XII, § 224. 1144 CONSTITUTIONAL LAW OF TAXATION. anticipation of the collection of taxes, and not exceeding one- fourth of the general revenues, bonds or other obligations already issued, or which may hereafter be issued for the purpose of ac- quiring, providing or constructing schoolhouses, water vcorks and sewers; and obligations incurred and bonds issued for street or sidewalk improvements, where the cost of the same, in whole or in part, is to be assessed against the property abutting said im- provements ; provided, that the proceeds of all obligations issued as herein provided, in excess of said seven per centum shall not be used for any purpose other than that for which said obliga- tions were issued. Nothing contained in this article shall pre- vent the funding or refunding of existing indebtedness. This section shall not apply in the cities of Sheffield and Tuscumbia.^^ No city, town, or village, whose present indebtedness exceeds the limitation imposed by this constitution, shall be allowed to become indebted in any further amount, except as otherwise pro- vided in this constitution, until such indebtedness shall be re- duced within such limit; provided, however, that nothing herein contained shall prevent any municipality except the city of Gadsden, from issuing bonds already authorized by law; pro- vided further, that this section shall not apply to the cities of Sheffield and Tuscumbia.^^ 2214. The legislature, after the ratification of this constitution, shall have authority to pass general laws authorizing the coun- ties, cities, towns, villages, districts or other political subdivisions of counties to issue bonds, but no bonds shall be issued under authority of a general law unless such issue of bonds be first authorized by a majority vote by ballot of the qualified voters of such county, city, town, village, district or other political sub- division of a county, voting upon such proposition. . . . This section shall not apply to the renewal, refunding or reissue of bonds lawfully issued, nor to the issuance of bonds in cases where the same have been authorized by laws enacted prior to the ratification of this constitution, nor shall this sec- tion apply to obligations incurred or bonds to be issued to pro- cure means to pay for street and sidewalk improvements or sani- tary or storm water sewers, the cost of which is to be assessed, in whole or in part, against the property abutting said improve- . ments or drained by such sanitary or storm water sewers.^* Further limitations on the power to contract debt are quoted in section 2034 of this work. 2215. Arkansas. Limitations on the power to issiie bonds and! to loan the public credit are quoted in section 201 of this work. 22 Art. XII, § 225. 24 Art. XII, § 222. 23 Art. XII, § 226, LIMITATIONS ON DEBT-CONTEACTING POWEE. 1145 2216. California. No county, city, town, township, board of education, or school districts, shall incur any indebtedness or liability in any manner or for any purpose exceeding in any year the income and revenue provided for such year, without the assent of two-thirds of the qualified electors thereof, voting at an election to be held for that purpose, nor unless before or at the time of incurring such in- debtedness provision shall be made for the collection of an annual tax sufficient to pay the interest on such indebtedness as it falls due, and also provision to constitute a sinking fund for the payment of the principal thereof on or before maturity, which shall not exceed forty years from the time of contracting the same ; provided, however^ that the city and county of San Francisr" may at any time pay the unpaid claims, with interest thereon hi. the rate of five per cent, ner annum, for materials fur- nished to and work done for said city and county during the. forty-first, forty-second, forty-third, forty-fourth, and fiftieth fiscal years, and for unpaid teachers' salaries for the fiftieth fiscal year, out of the income and revenue of any succeeding year or years, the amount to be paid in full of said claims not to exceed in the aggregate the sum of five hundred thousand dollars, and that no statute of limitations shall apply in any manner to these claims; and provided further, that the city of Vallejo, of Solano county, may pay its existing indebtedness incurred in the con- struction of its water works whenever two-thirds of the electors thereof voting at an election held for that purpose shall so decide, and that no statute of limitations shall apply in any manner. Any indebtedness or liability incurred contrary to this provision, with the exceptions hereinbefore recited, shall be void.^^ 2217. The legislature shall not, in any manner, create any debt ■or debts, liability or liabilities, which shall, singly or in the aggregate with any previous debts or liabilities, exceed the sum of three hundred thousand dollars, except in ease of war to repel invasion or suppress insurrection, unless the same shall be authorized by law for some single object or work to be distinctly specified therein, which law shall provide ways and means, ex- clusive of loans, for the payment of the interest of such debt or liability as it falls due, and also to pay and discharge the principal of such debt or liability within twenty years of the time of the contracting thereof, and shall be irrepealable until the principal and interest thereon shall be paid and discharged ; but no such law shall take effect until, at a general election, it shall have been submitted to the people and shall have received a majority of all the votes cast for and against it at such elec- tion; and all moneys raised by authority of such law shall be applied only to the specific object therein stated, or to the pay- ment of the debt thereby created, and such law shall be pub- 25 Art. XI, I 18. Amendment adopted Nov. 6^ 1000. 1146 CONSTITUTIONAL LAW OF TAXATION. lished in at least one newspaper in each county, or city and county, if one be published therein, throughout the state, for three months next preceding the election at which it is sub- mitted to the people. The legislature may, at any time after the approval of such law by the people, if no debt shall have been contracted in pursuance thereof, repeal the same.^® 2218. Colorado. The state shall not contract any debt by loan, in any form, except to provide for casual deficiencies of revenue, erect public buildings for use of the state, suppress insurrection, defend the state, or, in time of war, assist in defending the United States; and the amount of debt contracted in any one year to provide for deficiencies of the revenue shall not exceed one-fourth of a mill on each dollar of valuation of taxable property within the state, and the aggregate amount of such debt shall not at any time exceed three-fourths of a mill on each dollar of said valuation until the valuation shall equal one hundred millions of dollars, and thereafter such .debt shall not exceed one hundred thousand dollars, and the debt incurred in any one year for erec- tion of public buildings shall not exceed one-half mill on each dollar of said valuation, and the aggregate amount of such debt shall never at any time exceed the sum of fifty thousand dollars (except as provided in section five of this article), and in all cases the valuation in this section mentioned shall be that of the assessment last preceding the creation of said debt.^^ In no case shall any debt above mentioned in this article be created except by a law which shall be irrepealable until the indebtedness therein provided for shall have been fully paid or discharged; such law shall specify the purposes to which the funds so raised shall be applied, and provide for the levy of a tax sufficient to pay the interest on, and extinguish the principal of such debt, within the time limited by such law for the pay- ment thereof, which in the case of debts contracted for the erec- tion of public buildings and supplying deficiencies of revenue, shall not be less than ten nor more than fifteen years, and the funds arising from the collection of any such tax shall not be applied to any other purpose than that provided in the law levy- ing the same; and when the debt thereby created shall be paid or discharged, such tax shall cease and the balance, if any, to the credit of the fund, shall immediately be placed to the credit of the general fund of the state.^* A debt for the purpose of erecting public buildings may be created by law, as provided for in section four of this article, not exceeding in the aggregate three mills on each dollar of said 26 Alt. XVI, § 1. 28 Art. XI, § 4. 27 Art. XI, § 3. LIMITATIONS ON DEBT-CONTKACTING POWEE. 1147 valuation ; Provided, That before going into efEect, such law shall be ratified by the vote of a majority of such qualified electors of the state as shall vote thereon at a general election, under such regulations as the General Assembly may prescribe.^* 2219. No county shall contract any debt in any form, except for the purpose of erecting necessary public buildings, making or repairing public roads and bridges; and such indebtedness con- tracted in any one year shall not exceed the rates, upon the tax- able property in such county, following, to wit: Counties in which the assessed valuation of taxable property shall exceed five millions of dollars, one dollar and fifty cents on each thou- sand dollars thereof; counties in which such assessed valuation shall be less than five millions of dollars, three dollars on each thousand dollars thereof; and the aggregate amount of indebt- edness of any county for all purposes, exclusive of debts con- tracted before the adoption of this constitution,^" shall not at any time exceed twice the amount above herein limited, unless when in manner provided by law, the question of incurring such debt shall, at a general election, be submitted to such of the qualified electors of such county as in the year last preceding such election shall have paid a tax upon property assessed to them in such county, and if a majority of those voting thereon shall vote in favor of incurring the debt; but the bonds, if any be issued therefor, shall not run less than ten years, and the aggregate amount of debt so contracted shall not at any time exceed twice the rate upon the valuation last herein mentioned: Provided, that any county of this state which has an indebted- ness outstanding, either in the form of warrants issued for pur- poses provided by law prior to December 31, A. D. 1886, or in the form of funding bonds issued prior to such date for such warrants previously outstanding, or in the form of public build- ing, road or bridge bonds outstanding at such date, may contract a debt by loan by the issuance of bonds for the purpose of liquidating such indebtedness, provided the question of issuing said bonds shall, at a general or special election called for that purpose, be submitted to the vote of such of the duly qualified electors of such county as in the year last preceding such elec- tion shall have paid a tax upon property assessed in such county, and the majority of those voting thereon shall vote in favor of issuing the bonds. Such election shall be held in the manner prescribed by the laws of this state for the issuance of road, bridge and public building bonds, and the bonds authorized at such election shall be issued and provision made for their re- demption in the same manner as provided in said law.^^ 2220. N'o debt by loan in any form shall be contracted by any school district for the purpose of erecting and furnishing school 29 Art. XI, § 5. 81 Art. XI, § 6. 30 1876. 1148 CONSTITUTIONAL LAW OF TAXATION. buildings, or purchasing grounds unless the proposition to create such debt shall first be submitted to such qualified electors of the district as shall have paid a school tax therein, in the year next preceding such election, and a majority of those voting thereon shall vote in favor of incurring such debt.^^ No city or tovm shall contract any debt by loan in any form, except by means of an ordinance, which shall be irrepealable until the indebtedness therein provided for shall have been fully paid or discharged; specifying the purposes to which the funds to be raised shall be applied, and providing for the levy of a tax, not exceeding twelve (12) mills on each dollar of valuation of taxable property within such city or town, sufficient to pay the annual interest, and extinguish the prineirial of such debt within fifteen, but not less than ten years from the creation thereof; and such tax when collected shall be applied only to the purposes in such ordinance specified, until the indebtedness shall be paid or discharged. But no such debt shall be created unless the question of incurring the same shall, at a regular election for councilmen, aldermen or officers of such city or town, be sub- mitted to a vote of such qualified electors thereof as shall, in the year next preceding, have paid a property tax therein, and a majority of those voting on the question, by ballot deposited in a separate ballot box, shall vote in favor of creating such debt; but the aggregate amount of debt so created, together with the debt existing at the time of such election, shall not at any time exceed three per cent, of the valuation last aforesaid. Debts contracted for supplying water to such city or town are excepted from the operation of this section. The valuation in this sec- tion mentioned shall be in all cases that of the assessment next preceding the last assessment before the adoption of such ordinance. ^^ Nothing contained in this article shall be so construed as to either impair or add to the obligation of any debt heretofore contracted by any county, city, town or school district, in ac- cordance with the laws of Colorado territory, or prevent the con- tracting of any debt, or the issuing of bonds therefor, in accord- ance with said laws, upon any proposition for that purpose which may have been, according to said laws, submitted to a vote of the qualified electors of any county, city, town or school district before the day on which this constitution takes effect.^* 2221. Delaware. No money shall be borrowed or debt created by or on behalf of the state but pursuant to an act of the General Assembly, passed with the concurrence of three-fourths of all the members «2 Art. XI, § 7. 84 Art. XI, § 9. S3 Art. XI, § 8. LIMITATIONS ON DEBT-QONTEACTING POWEE. 1149 elected to each house, except to supply casual deficiencies of revenue, repel invasion, suppress insurrection, defend the state in war, or pay existing debts; and anv law authorizing the bor- rowing of money by or on behalf of the state shall specify the purpose for which the money is to be borrowed, and the money so borrowed shall be used exclusively for such purpose; but should the money so borrowed or any part thereof be left after the abandonment of such purpose or the accomplishment thereof, such money, or the surplus thereof, may be disposed of according to law.^^ 2222. Florida. The legislature shall have power to provide for issuing state bonds only for the purpose of repelling invasion or suppressing insurrection, or for the purpose of redeeming or refunding bonds already issued, at a lower rate of interest.^" 2223. Georgia. No debt shall be contracted by or on behalf of the state, except to supply casual deficiencies of revenue, to repel invasion, sup- press insurrection, and defend the state in time of war, or to pay the existing public debt; but the debt created to supply deficiencies in revenue shall not exceed, in the aggregate, two hundred thousand dollars.^^ All laws authorizing the borrowing of money by or on behalf of the state shall specify the purposes for which the money is to be used, and the money so obtained shall be used for the pur- poses specified, and for no other.^® The bonded debt of the state shall never be increased, except to repel invasion, suppress insurrection, or defend the state in time of war.^^ The debt hereafter incurred by any county, municipal corpora- tion or political division of this state, except as in this consti- tution provided for, shall never exceed seven per centum of the assessed value of all the taxable property therein; and no such county, municipality or division shall incur any new debt, ex- cept for a temporary loan or loans to supply casual deficiencies of revenue, not to exceed one-fifth of one per centum of the assessed value of taxable property therein, without the assent of two-thirds of the qualified voters thereof, at an election for that purpose, to be held as may be prescribed by law; but any city, the debt of which does not exceed seven ner centum of the assessed value of the taxable property at the time of the adoption of this S5 Art. VIII, § 3. 88 Art. VIL § IV. 36 Art. IX, § 6. S9 Art. VII, § XII. 37 Art. VII, § III. 1150 CONSTITUTIONAL LAW OF TAXATION. constitution, may be authorized by law to increase, at any time, the amount of said debt, three per centum upon such assessed valuation.^" Any county, municipal corporation or political division of this state, whidi shall incur any bonded indebtedness under the pro- visions of this constitution, shall, at or before the time of so doing, provide for the assessment and collection of an annual tax sufficient in amount to pay the principal and interest of said debt within thirty years from the date of the incurring of said indebtedness.*^ Municipal corporations shall not incur anv debt until pro- vision therefor shall have been made by the municipal govern- ment.*^ 2224. IdaJio. No appropriation shall be made, nor any expenditure author- ized by the legislature, whereby the expenditure of the state during any fiscal year shall exceed the total tax then provided for by law, and apnlicable to such annropriation or expenditure, unless the legislature making such appropriation shall provide for levying a sufficient tax, not exceeding the rates allowed in section nine (9) of this article, to pav such appropriation or expenditure within such fiscal year. This provision shall not apply to appropriations or expenditures to suppress insurrection, defend the state, or assist in defending the United States in time of war.** The legislature shall not in any manner create any debt or debts, liability or liabilities, which shall singly or in the aggre- gate, exclusive of the debt of the territory at the date of its ad- mission as a state, exceed the sum of one and one-half per centum upon the assessed value of the taxable property in the state, except in case of war, to repel an invasion or suppress in- surrection, unless the same shall be authorized by law for some single obligation or work to be distinctly specified therein, which law shall provide ways and means, exclusive of loans, for the payment of the interest of such debt or liability as it falls due; and also for the payment and discharge of the principal of such debt or liability, within twenty years of the time of the contract- ing thereof, and shall be irrepealable until the principal and interest thereon shall be paid and discharged; but no such law shall take effect until at a general election it shall have been submitted to the people, and shall have received a majority of all votes cast for and against it at such election; and all moneys 40 Art. VII, § VII, par. 1. 43 Art. VII, § 11. See § 2037 of 41 Art. VII, § VII, par. II this work for section 9 above men- 42 Art. VII, § X, par. I. tioned. I^IMITATIONS ON DEBT-CONTEACTING POWEE. 1151 raised by the authority of such law shall be applied only to the specific object therein stated, or to the payment of the debt thereby created, and such law shall be published in at least one newspaper in each county, or city and county, if one be pub- lished therein, throughout the state, for three months next pre- ceding the election at which it is to be submitted to the people. The legislature may, at any time after the approval of such law, by the people, if no debt shall have been contracted in pursu- ance thereof, repeal the same.** 2225. N^o county, city, town, township, board of education or school district, or other subdivision of the state, shall incur any indebt- edness, or liability, in any manner, or for any purpose, exceeding in that year the income and revenue provided for it for such year, without the assent of two-thirds of the qualified electors thereof voting at an election to be held for that purpose, nor unless, before or at the time of incurring such indebtedness, provision shall be made for the collection of an annual tax suffi- cient to pay the interest on such indebtedness as it falls due, and also to constitute a sinking fund for the payment of the principal thereof, within twenty years from the time of con- tracting the same. Any indebtedness or liability incurred contrary to this provision shall be void : Provided, That this sec- tion shall not be construed to apply to the .ordinary and neces- sary expenses authorized by the general laws of the state.*^ 2226. Illinois. Each General Assembly shall provide for all the appropria- tions necessary for the ordinary and contingent expenses of the government until the expiration of the first fiscal quarter after the adjournment of the next regular session, the aggregate amount of which shall not be increased without a vote Of two- thirds of the members elected to each house, nor exceed the amount of revenue authorized by law to be raised in such time ; and all appropriations, general or special, requiring money to be paid out of the state treasury, from funds belonging to the state, shall end with such fiscal quarter: Provided, the state may, to meet casual deficits or failures in revenues, contract debts, never to exceed in the aggregate two hundred and fifty thousand dol- lars; and monej's thus borrowed shall be applied to the purpose for which they were obtained, or to pay the debt thus created, and to no other purpose ; and no other debt, except for the pur- pose of repelling invasion, suppressing insurrection, or defending the state in war (for payment of which the faith of the state shall be pledged), shall be contracted, unless the law author- izing the same shall, at a general election, have been submitted to the people and have received a majority of the votes cast for « Art. VIII, § 1. *5 Art, VIII, § 3. 1152 CONSTITUTIONAI, LAW OF TAXATION. members of the General Assembly at such election. The General Assembly shall provide for the publication of said law for three months, at least, before the vote of the people shall be taken upon the same; and provision shall be made, at the time, for the payment of the interest annually, as it shall accrue, by a tax levied for the purpose, or from other sources of revenue; which law, providing for the payment of such interest by such tax, shall be . irrepealable until such debt be naid: And, provided, further, that the law levying the tax shall be submitted to the people with the law authorizing the debt to be contracted.*® 2227. No county, city, township, school district, or other munic- ipal corporation shall be allowed to become indebted in any man- ner or for any purpose to an amount, including existing indebtedness in the aggregate exceeding five per centum on the value of the taxable property therein, to be ascertained by the last assessment for state and county taxes previous to the in- curring of such indebtedness. Any county, city, school district, or other municipal corporation incurring any indebtedness as aforesaid, shall before, or at the time of doing so, provide for the collection of a direct annual tax sufficient to pay the interest on such debt as it falls due, and also to pay and discharge the principal thereof within twenty years from the time of contract- ing the same. This section shall not be construed to prevent any county, city, township, school district, or other municipal corporation, from issuing their bonds in compliance with any vote of the people which may have been had prior to the adop- tion of this constitution in pursuance of any law providing therefor.*^ A special issue of bonds for the Chicago World's Fair is au- thorized.*^ 2228. Indiana. No political or municipal corporation in this state shall ever become indebted, in any manner or for any purpose, to any amount, in the aggregate exceeding two per centum on the value of the taxable property within such corporation, to be ascertained by the last assessment for state and county taxes, previous to the incurring of such indebtedness, and all bonds or obligations, in excess of such amount, given by such corporation, shall be void: Provided, That in time of war, foreign invasion, or other great public calamity, on petition of a majority of the property owners, in number and value, within the limits of such corpora- tion, the public authorities, in their discretion, may incur obli- gations necessary for the public protection and defense, to such an amount as may be requested in such petition.*^ 46 Art. IV, § 18. 48 Art. ]X, § 13. 47 Art. IX, § 12. 49 Art. XIII, § 1. I/IMITATIONS ON DEET-CONTBACTING POWEE. 1153 No law shall authorize any deht to be contracted, on behalf of the State, except in the following cases : To meet casual deficits in the revenue; to pay the interest on the state debt; to repel invasion, suppress insurrection, or, if hostilities be threatened, provide for public defense.^ 2229. Iowa. The state may contract debts to supply casual deficits or fail- ures in revenues ; or to meet expenses not otherwise provided for ; but the aggregate amount of such debts, direct and contingent, whether contracted by virtue of one or more acts of the General Assembly, or at diflierent periods of time, shall never exceed the sum of $350,000 ; and the money arising from the creation of such debts shall be applied to the purpose for which it was ob- tained, or to repay the debts so contracted, and to no other pur- pose whatever.^^ All losses to the permanent school, or university fund of this state, which shall have been occasioned by the defalcation, mis- ' management, or fraud of the agents or officers controlling and managing the same, shall be audited by the proper authorities ■of the state. The amount so audited shall be a permanent funded debt against the state, in favor of the respective fund sustaining the loss, upon which not less than 6 per cent, annual interest sliall be paid. The amount of liability so created shall not be counted as a part of the indebtedness authorized by the €econd section of this-article.^^ In addition to the above limited power to contract debts, the «tate may contract debts to repel invasion, suppress insurrection, •or defend the state in war ; but the money arising from the debts so contracted shall be applied to the purpose for which it was raised, or to repay such debts, and to no other purpose whatever.^^ Except the debts hereinbefore specified in this article, no debt ■shall be hereafter contracted by, or on behalf of this state, unless such debt shall be authorized by some law for some single work or object, to be distinctly specified therein; and such law shall impose and provide for the collection of a direct annual tax, sufficient to pay the interest on such debt, as it falls due, and also to pay and discharge the principal of such debt, within twenty years from the time of the contracting thereof; but no such law shall take effect until at a general election it shall have been submitted to the people, and have received a majority of air the votes cast for and against it at such election; and all money raised by authority of such law shall be applied only to the specific object therein stated, or to the payment of the debt W) Art. X, § 5. B2 Art. VII, § 3. 31 Art. VII, § 2. M Art. VII, § 4. 73 1154 CONSTITUTIONAL LAW OF TAXATION. created thereby ; and such law shall be published in at least one newspaper in each county, if one is published therein, through- out the state, for three months preceding the election at which it is submitted to the people.''* The legislature may, at any time, after the approval of such law by the people, if no debt shall have been contracted in pur- suance thereof, repeal the same ; and may at any time forbid the contracting of any further debt, or liability, under such law;, but the tax imposed by such law, in proportion to the debt or liability which may have been contracted in pursuance thereof,, shall remain in force and be irrepealable, and be annually col- lected, until the principal and interest are fully paid.^ No county, or other political or municipal corporation shall be allowed to become indebted in any manner, or for any pur- pose, to an amount in the aggregate, exceeding five per centum on the value of the taxable property within such county or cor- poration - — to be ascertained by the last state and county tax lists, previous to the incurring of such indebtedness.^^ 2230. Kansas. For the purpose of defraying extraordinary expenses and making public improvements, the state may contract public debts; but such debts shall never, in the aggregate, exceed one million dollars, except as hereinafter provided. Every such debt shall be authorized by law for some, purpose specified therein, and the vote of a majority of all the members elected to each house, to be taken by the yeas and nays, shall be necessary to the passage of such law; and every such law shall provide for levying an annual tax sufBcient to pay the annual interest of such debt, and the principal thereof, when it shall become due; and shall specifically appropriate the proceeds of such taxes t» the payment of such principal and interest; and such appro- priation shall not be repealed nor the taxes postponed or dimin- ished, until the interest and principal of such debt shall have been wholly paid."''' Ko debt shall be contracted by the state except as herein pro- vided, unless the proposed law for creating such debt shall first ^ be submitted to a direct vote of the electors of the state at some general election; and if such proposed law shall be ratified by a majority of all the votes cast at such general election, then it shall be the duty of the legislature next after such election to enact such law and create such debt, subject to all the provisions and restrictions provided in the preceding sections of this article."* B4 Art. VII, § 5. 157 Art. XI, § 5. 65 Art. VII, § 6. 68 Art. XI, § 6. 66 Art. XI, § 3. LIMITATIONS ON DEBT-CONTRACTING POWEE. 1155 / The state may borrow money to repel invasion, suppress insur- rection, or defend the state in time of war ; but the money thus raised shall be applied exclusively to the object for which the loan was authorized, or to the repayment of the debt thereby created.^^ 2231. Kentucky. The General Assembly may contract debts to meet casual deficits or failures in the revenue; but such debts, direct or con- tingent, singly or in the aggregate, shall not at any time exceed five hundred thousand dollars, and the moneys arisins: from loans creating such debts shall be applied only to the purpose or pur- poses for which they were obtained, or to repay such debts : Provided, the General Assembly may contract debts to repel in- vasion, suppress insurrection, or, if hostilities are threatened, provide for the public defense.*' Fo act of the General Assembly shall authorize any debt to be contracted on behalf of the commonwealth except for the purposes mentioned in section forty-nine, unless provision be made therein to levy and collect an annual tax sufficient to pay the interest stipulated, and to discharge the debt within thirty years; nor shall such act take effect until it shall have been sub- mitted to the people at a general election, and shall have received a majority of all the votes cast for and against it: Provided, The General Assembly may contract debts by borrowing money to pay any part of the debt of the state, without submission to the people, and without making provision in the act authorizing the same for a tax to discharge the debt so contracted, or the interest thereon.^^ 2232. The cities and towns of this commonwealth, for the pur- poses of their organization and government, shall be divided into six classes. The organization and powers of each class shall be defined and provided for by general laws, so that all munici- pal corporations of the same class shall possess the same powers and be subject to the same restrictions. To the first class shall belong cities with a population of one hundred thousand or more ; to the second class, cities with a population of twenty thousand or more, and less than one hundred thousand; to the third class, cities with a population of eight thousand or more, and less than twenty thousand; to the fourth class, cities and towns with a population of three thousand or more, and less than eight thou- sand ; to the fifth class, cities and towns with a population of one thousand or more, and less than three thousand; to the sixtli class, towns with a population of less than one thousand. The General Assembly shall assign the cities and towns of the Com- 59 Art. XI, §7. «1 § 50. 60 § 4§. 1156 CONSTITUTIONAL LAW OF TAXATION. monwealth to the classes to which they respectively belong, aiiri change assignments made as the population of said cities and towns may increase or decrease, and in the absence of other satisfactory information as to their population, shall be gov- erned by the last preceding Federal census in so doing; but no city or town shall be transferred from one class to another, ex- cept in pursuance of a law previously enacted and providing therefor. The General Assembly, by a general law, shall pro- vide how towns may be organized, and enact Jaws for the govern- ment of such towns until the same are assigned to one or the other of the classes above named; but such assignment shall be made at the first session of the General Assembly after the organ- ization of said town or city.®^ The tax rate of cities, towns, counties, taxing districts and other municipalities, for other than school purposes, shall not, at any time, exceed the following rates upon the value of the taxable property therein, viz. : For all towns or cities having a population of fifteen thousand or more, one dollar and fifty cents on the hundred dollars; for all towns or cities having less than fifteen thousand and not less than ten thousand, one dollar on the hundred dollars; for all towns or cities having less than ten thousand, seventy-five cents on the hundred dollars; and for counties and taxing districts fifty cents on the hundred dollars ; unless it should be necessary to enable such city, town, county, or taxing district to pay the interest on, and provide a sinking fund for the extinction of, indebtedness created before the adop- tion of this constitution. Iv'o county, city, town, taxing district, or other municipality, shall be authorized or permitted to be- come indebted, in any manner or for any purpose, to an amount exceeding in any year, the income and revenue provided for such year, without the assent of two-thirds of the voters thereof, voting at an election to be held for that purpose ; and any indebt- edness contracted in violation of this section shall be void. Nor shall such contract be enforceable by the person with whom made; nor shall such municipality ever be authorized to assume the same.^^ 2233. The respective cities, towns, counties, taxing districts, and municipalities shall not be authorized or permitted to incur in- debtedness to an amount, including existing indebtedness, in the aggregate exceeding the following named maximum percentages on the value of the taxable property therein to be estimated by the assessment next before the last assessment previous to the incurring of the indebtedness, viz. : Cities of the first and second classes, and of the third class having a population exceeding fifteen thousand, ten per centum ; cities of the third class having a population of less than fifteen thousand, and cities and towns 62 § 156. 63 § 157. LIMIT&.TIONS ON DEBT-CONTRACTING POWEK. 1157 of the fourth class, five per centum; cities and towns of the fifth and sixth classes, three per centum, and counties, taxing districts, and other municipalities, two per centum: Provided, Any city, town, county, taxing district or other municipality may contract an indebtedness in excess of such limitations when the same has been authorized under laws in force prior to the adoption of this constitution, or when necessary for the comple- tion of and payment for a public improvement undertaken and not completed and paid for at the time of the adoption of this constitution: And provided further, If, at the time of the adop- tion of this constitution, the aggregate indebtedness, bonded or fioating, of any city, town, county, taxing district or other munic- ipality, including that which it has been or may be authorized to contract as herein provided, shall exceed the limit herein pre- scribed, then no such city or town shall be authorized or per- mitted to increase its indebtedness in an amount exceeding two per centum, and no such county, taxing district or other munic- ipality, tn an amount exceeding one per centum, in the aggregate upon the value of the taxable property therein, to be ascertained as herein provided, until the aggregate of its indebtedness shall have been reduced below the limit herein fixed, and thereafter it shall not exceed the limit, unless in case of emergency, the public health or safety should so require. Nothing herein shall prevent the issue of renewal bonds, or bonds to fund the floating indebtedness of any city, town, county, taxing district or other municipality.®* Whenever any county, city, town, taxing district or other municipality is authorized to contract an indebtedness, it shall be required, at the same time, to provide for the collection of an annual tax sufficient to pay the interest on said indebtedness, and to create a sinking fund for the payment of the principal thereof, within not more than forty years from the time of con- tracting the same.®^ 2234. Louisiana. The General Assembly shall have no power to contract, or to authorize the contracting, of any debt or liability, on behalf of the state; or to issue bonds or other evidence of indebtedness thereof, except for the purpose of repelling invasion, or for the suppression of insurrection.®* Municipal corporations, parishes and drainage districts, the city of New Orleans excepted, when authorized to do so, by a vote of a majority in number and amount of the property tax- payers, qualified as electors under the constitution and laws of this state, voting at an election held for that purpose, after due 64 § 158. 66 Art. 46. 65 § 159. 1158 CONSTITUTIONAL LAW OF TAXATION.* notice of said election has been published for thirty days in the official journal of the municipality or parish, and where there is no official journal, in a newspaper published therein, may incur debt, and issue negotiable bonds therefor, to the extent of one- tenth of the assessed valuation of the property within said municipal corporation, parish, or drainage district, as shown by the last assessment made prior to the submission of the proposi- tion to the property taxpayers, as above provided, and may be authorized by the property taxpayers voting at said election, to levy and assess special taxes upon the property subject to taxation in the parish, drainage district or corporation; pro- vided, said taxes so imposed do not exceed five mills on the dol- lar of the assessed valuation in any one year, nor run for a greater number of years than the number named in the proposi- tion submitted to the taxpayers. No bonds shall be issued for any other purpose than stated in the submission of the proposi- tion to the taxpayers, and published for thirty days, as afore- said, nor for a greater amount than therein mentioned; nor shall such bonds be issued for any other purpose than for paving and improving streets, roads and alleys, purchasing or constructing a system of water works, sewerage, drainage, lights, public parks and buildings, bridges and other works of public improvement, the title to which shall vest in the municipal corporation, parish or drainage district, as the case may be ; nor shall such bonds run for a longer period than forty years from their date, or bear a greater rate of interest than five per cent, per annum, or be sold by the municipal corporation, parish or drainage district issuing same for less than par. The municipal corporation, parish or drainage district issuing such bonds. shall provide for the pavment of the interest annu- ally, or semi-annually, and the principal thereof at maturity; provided, that the total issue of bonds by any municipality, parish or drainage district, for all purposes shall never exceed ten per cent, of the assessed value of the property in such munic- ipality, parish or drainage district. Provided, that drainage districts availing themselves of the provisions of this ordinance shall be limited to the rate of taxation herein fixed ; and such districts shall be prohibited from levying contributions under the provisions of existing laws, and provided, further, that nothing herein contained shall prevent drainage districts from being establislied under the provisions of existing laws.*^^ 2235. Maine. The credit of the state shall not be directly or indirectly loaned in any case. The legislature shall not create any debt or debts, liability or liabilities, on behalf of the state, which shall singly or in the aggregate, with previous debts and liabilities hereafter 67 Art. 2S1. LIMITATIONS ON DEBT-CONTEACTING POWEB. 1159 incurred at any one time, exceed three hundred thousand dollars, ■except to suppress insurrection, to repel invasion, or for pur- poses of war ; but this amendment shall not be construed to refer to any money that has been, or may be deposited with this state by the s:overnTneTit of the United States, or to anv fund which the state shall hold in trust for any Indian tribe.** The state is authorized to issue bondci payable within twenty- one years, at a rate of interest not exceeding six per cent, a year, payable semi-annually, which bonds or their proceeds shall be ■devoted solely towards the reimbursement of the expenditures incurred by the cities, towns and plantations of the state for war purposes during the rebellion, upon the following basis: Bach •city, town and plantation shall receive from the state one hun- dred dollars for every man furnished for the military service of the United States under and after the call of July second, •eighteen hundred and sixty-two, and accepted by the United States towards its quota for the term of three years, and in the same proportion for every man so furnished and accepted for any shorter period; and the same shall be in full payment for any claim upon the state on account of its war debts by any such municipality. A commission appointed by the Governor and Council shall determine the amount to which each city, town and plantation is entitled; to be devoted to such reimbursement, the surplus, if any, to be appropriated to the soldiers who enlisted or were drafted and went at any time during the war, or if •deceased, to their legal representatives. The issue of bonds hereby authorized shall not exceed in the aggregate three million £ve hundred thousand dollars, and this amendment shall not be construed to permit the cj-edit of the state to be directly or in- directly loaned in any other case or for any other purpose.® No city or town shall hereafter create any debt or liability, which singly, or in the aggregate with previous debts or liabili- ties, shall exceed five per centum of the last regular valuation of said city or town; provided, however, that the adoption of this article shall not be construed as applying to any fund received in trust by said city or town, nor to any loan for the purpose of renewing existing loans or for war, or to temporary loans to be paid out of money raised by taxation, during the year in which they are made.'''' 2236. Maryland. From and after the adoption of this constitution, no debt (except as hereinafter excepted) shall be created by the mayor and city council of Baltimore; nor shall the credit of the mayor and city council of Baltimore be given or loaned to, or in aid of any individual, association, or corporation; nor shall the 68 Art. IX, § 14. TO Art. XXII. 69 Art. IX, § 15. 1160 CONSTITUTIONAL LAW OF TAXATION. mayor and city council of Baltimore have the power to involve' the city of Baltimore in the construction of works of internal improvement, nor in granting any aid thereto, which shall involve the faith and credit of the city, nor make any appropriation therefor, unless such deht or credit be authorized by an act of the General Assembly of Maryland, and by an ordinance of the- mayor and city council of Baltimore, submitted to the legal voters of the city of Baltimore, at such time and place as may be fixed by said ordinance, and approved by a majority of the votes cast at such time and place, but the mayor and city council may, temporarily, borrow any amount of money to meet any deficiency in the city treasury, or to provide for any emer- gency arising from the necessity of maintaining the police, or preserving the safety and sanitary condition of the city, and may make due and proper arrangements and agreements for the removal and extension, in whole or in part, of any and all debts and obligations, created according to law before the adoption of this constitutional 2237. No debt shall be hereafter contracted by the General Assem- bly unless such debt shall be authorized by a law providing for the collection of an annual tax or taxes sufBcient to pay the interest on such debt as it falls due, and also to discharge the principal thereof within fifteen years from the time of contract- ing the same; and the taxes laid for this purpose shall not be repealed or applied to any other object until the said debt and interest thereon shall be fully discharged. The credit of the state shall not in any manner be given, or loaned to, or in aid of any individual association or corporation; nor shall the Gen- eral Assembly have the power in any mode to involve the state in the construction of works of internal improvement, nor in granting any aid thereto, which shall involve the faith or credit of the state ; nor make any appropriation therefor, except in aid of the construction of works of internal improvement, in the counties of St. Marys, Charles and Calvert, which have had no direct advantage from such works as have been heretofore aided by the state; and provided, that such aid, advances or appropri- ations shall not exceed in the aggregate the sum of five hundred thousand dollars. And they shall not use or appropriate the proceeds of the internal improvement companies, or of the state tax, now levied, or which may hereafter be levied, to pay off the public debt, or to any other purpose until the interest and debt are fully paid or the sinking fund shall be equal to the amount of the oustanding debt; but the General Assembly may, without laying a tax, borrow an amount never to exceed fifty thousand dollars to meet temporary deficiencies in the treasury, and may contract debts to any amount that may be necessary for the defense of the state.™ 71 Art. XII, § 7. « Art. 3, § 34. LIMITATIONS ON DEBT-CONTEACTIIfG POWEE. 1161 No county of this state shall contract any debt, or obligation, in the construction of any railroad, canal, or other work of in- ternal improvement, nor give, or loan its credit to, or in aid of any association, or corporation, unless authorized by an act of the General Assembly, which shall be published for two months before the next election for members of the House of Delegates in the newspapers published in such county, and shall also be ap- proved by a majority of all the members elected to each house of the General Assembly, at its next session after said election.^* 2238. Michigan. The board of supervisors of any county may borrow or raise by tax one thousand dollars for constructing or repairing public buildings, highways or bridges; but no greater sum shall be bor- rowed or raised by tax for such purposes in any one year, unless authorized by a majority of the electors of such county voting thereon.''* The state may contract debts to meet deiicits in revenue. Such debts shall not in the aggregate at any one time exceed fifty thousand dollars. The moneys so raised shall be applied to the purposes for which they were obtained, or to the payment of the debts so contracted.'^ The state may contract debts to repel invasion, suppress insur- rection, or defend the state in time of war. The money arising from the contracting of such debts shall be applied to the pur- poses for which it was raised, or to repay such debts.''* No scrip, certificate, or other evidence of state indebtedness shall be issued, except for the redemption of stock previously issued, or for such debts as are expressly authorized in this constitution.'''' 2239. The legislature may provide for the laying out, construction and maintenance of county and township roads, and may provide that any road hereafter laid out shall be a county or township road. County roads may be maintained at the expense of the county, and township roads at the expense of the township. County roads shall be under the control of a board of commis- sioners not to exceed five in number, who shall be elected by the people, the number of said commissioners to be fixed by the board of supervisors of the county. For the construction and main- tenance of county roads the commissioners may provide for an annual tax not exceeding two dollars upon each one thousand dollars of the assessment-roll of the county for the preceding year. No county shall incur any indebtedness or issue any bonds for the construction or maintenance of county roads except upon 73 Art. 3, § 54. ''6 Art. XIV, § 4. 74 Art. X, S 9. 77 Art. XII, § 7. 75 Art. XIV, § 3. 1162 CONSTITUTIONAL LAW OF TAXATION. a vote of two-thirds of all the supervisors elected, and then to be approved by a majority vote at any general or special election ; nor shall any such indebtedness at any time exceed three per cent, of the valuation of the county upon the last preceding assessment-roll. The legislature may modify, change or repeal the powers and duties of the township commissioner of highways and overseer of highways. The legislature may pass all neces- sary laws to carry this amendment into effect: Provided, That any act or acts passed by the legislature to carry this amendment into effect shall provide for a county and township system, and the county system shall become operative only in such counties as shall adopt it by a majority vote of the electors of said county, after the said question has been submitted to them by a two-thirds vote of all the members elect of the board of super- visors of such county, at a general or special election called for that purpose.™ 2240. Minnesota. For the purpose of defraying extraordinary expenditures the state may contract public debts, but such debt shall never, in the aggregate, exceed two hundred and fifty thousand dollars ; every such debt shall be authorized by law, for some single object, to be distinctly specified therein; and no such law shall take effect until it shall have been passed by the vote of two-thirds of the members of each branch of the legislature, to be recorded by the yeas and nays on the journals of each house respectively; and every such law shall levy a tax annually sufficient to pay the annual interest of such debt, and also a tax sufficient to pay the principal of such debt within ten years from the final passage of such law; and shall specially appropriate the pro- ceeds of such taxes to the payment of such principal and in- terest; and such appropriation and taxes shall not be repealed, postponed or diminished until the principal and interest of such debt shall have been wholly paid. The state shall never contract any debts for works of internal improvement, or be a party in carrying on such works, except in cases where grants of land or other property shall have been made to the state, especially dedi- cated by the grant to specific purposes; and in such cases the state shall devote thereto the avails of such grants, and may pledge or appropriate the revenues derived from such works in aid of their completion.''® All debts authorized by the preceding section shall be con- tracted by loan on state bonds of amounts not less than five hundred dollars each, on interest, pavable within ten years after the final passage of the law authorizing such debt; and such bonds shall not be sold by the state under par. . . .** 78 Art. IV, § 49. 80 Art. IX, § 6. 79 Art. IX, § 5. LIMITATIONS ON DEBT-CONTEACTING POWEE. 1163 The state shall never contract any public debt, -unless in time of war, to repel invasion or suppress insurrection, except in the cases and in the manner provided in the fifth and sixth sections of this article.*^ For the purpose of erecting and completing buildings for a hospital for the insane, a deaf, dumb and blind asylum, and state prison, the legislature may by law increase the public debt of the state, to an amount not exceeding two hundred and fifty thousand dollars, in addition to the public debt already hereto- fore authorized by the constitution; and for that purpose may provide by law for issuing and negotiatinp^ the bonds of the state, and appropriate the money onlv for the purpose aforesaid ; which bonds shall be payable in not less than ten nor more than thirty vears from the date of the same, at the option of the state> 2241. The legislature shall not authorize any county, township, city or other municipal corporation to issue bonds, or to become indebted in any manner, to aid in the construction or equip- ment of any or all railroads to any amount that shall exceed five per centum of the value of the taxable property within the county, township, city or other municipal corporation; the amount of such taxable property to be ascertained and determined by the last assessment of said property made for the purpose of state and county taxation, previous to the incurring of such indebtedness.®^ The money arising from any loan made, or debt or liability contracted, shall be applied to the object specified in the act authorizing such debt or liability, or to the repayment of such debt or liability, and to no'other purpose whatever.** 2241a. Mississippi. See sec. 219 of this work. 2242. Missouri. The General Assembly shall have no power to contract or to authorize the contracting of any debt or liability on behalf of the state, or to issue bonds or other evidences of indebtedness thereof, except in the following cases: First, In renewal of existing bonds, when they cannot be paid at maturity, out of the sinking fund or other resources. Second, On the occurring of an unforeseen emergency, or casual deficiency of the revenue, when the temporary liability in- curred, upon the recommendation of the Governor first had, shall not exceed the sum of two hundred and fifty thousand dol- lars for any one year, to be paid in not more than two years from and after its creation. 81 Art. IX, § 7. 83 Art. IX, § 15. 82 Art. IX, § 14a. W Art. IX, § 3. 1164 CONSTITUTIONAL LAW OF TAXATION. Third, On the occurring of any unforeseen emergency, or casual deficiency of the revenue, when the temporary liability incurred or to be incurred shall exceed the sum of two hundred and fifty thousand dollars for any one year, the General Assem- bly may submit an act providing for the loan, or for the con- tracting of the liability, and containing a provision for levying a tax sufficient to pay the interest and principal when they be- come due (the latter in not more than thirteen years from the date of its creation), to the qualified voters of the state, and when the act so submitted shall have been ratified by a two-thirds majority, at an election held for that purpose, due publication having been made of the provisions of the act for at least three' months before such election, the act thus ratified shall be irre- pealable until the debt thereby incurred shall be paid, principal and interest.*'^ The tax aiithorized by the sixth section of the ordinance adopted June sixth, one thousand eight hundred and sixty-five, is hereby abolished, and hereafter there shall be levied and col- lected an annual tax sufficient to pay the accruing interest upon the bonded debt of the state, and to reduce the principal thereof each year by a sum not less than two hundred and fifty thousand dollars; the proceeds of which tax shall be paid into the state treasury, and appropriated and paid out for the purposes ex- pressed in the first and second subdivisions of section forty-three- of article IV of this constitution. The funds and resources now in the state interest and state sinking funds shall be appropri- ated to the same purposes; and whenever said bonded debt is extinguished, or a sum sufficient therefor has been raised, the tax provided for in this section shall cease to be assessed.*® 2243, N"o county, city, town, township, school district or other political corporation or subdivision of the state shall be allowed to become indebted in any manner or for any purpose to an amount exceeding in any year the income and revenue provided for such year, without the assent of two-thirds of the voters thereof voting at an election to be held for that purpose; nor in cases requiring such assent shall any indebtedness be allowed to be incurred to an amount, including existing indebtedness, in the aggregate exceeding five per centum on the value of the taxable property therein, to be ascertained by the assepsment next before the last annual assessment for state and county purposes, previous to the incurring of such indebtedness: Provided, that with such assent any county may be allowed to become indebted to a larger amount for the erection of a courthouse or jail; And provided, further. That any county, city, town, township, school district, or other political corporation or subdivision of the state, incurring any indebtedness, requiring the assent of the voters as aforesaid, shall, before or at the time of doing so, provide for 85 Art. IV, § 44. 81- Art. X, § 14. LIMITATIONS ON DEBT-CONTEACTING POWBB. 1165 "the collection of an annual tax sufficient to pay the interest on .«uch indebtedness as it falls due, and also to constitute a sinking fund for payment of the principal thereof, within twenty years from the time of contracting the same. And provided, further. That the corporate authorities of the city of St. Louis are hereby authorized to issue interest-bearing bonds of said city in the amount of five million dollars, at a rate of interest not to exceed four per cent, per annum, the principal payable within thirty jears from the date of their issue, and the proceeds thereof shall be paid to the corporation organized for the celebration of the Louisiana Purchase Centennial in said city, to be used by said corporation for said celebration, in holding a world's fair or ex- position in said city. And said corporate authorities of St. Louis shall be repaid as large a proportionate amount of the aid given by them as shall be repaid to the stockholders of said corpora- tion on the sum subscribed and paid by them, and any surplus remaining from the assets of said corporation after said stock- Tiolders and said city shall have been paid in full, shall be divided between said stockholders and said city in proportion to the aggregate amount of said stock so paid in and the amount so loaned by said city ; and any amount so received by said city from •said corporation shall be paid into the sinking fund of said city for the redemption of its outstanding bonds: Provided, That if at the election for the adoption of this amendment to the con- stitution a majority of the votes cast within the limits of said city of St. Louis voting for and against this amendment, shall he against its adoption, then no bonds shall be issued under this amendment; And provided, further. That no such indebtedness so created shall be in any part thereof paid by the state or from any state revenue, tax or fund, but the same shall be paid by the city of St. Louis alone.®^ The corporate authorities of any county, city, or any other Tnunicipal subdivision of this state, having more than two hun- dred thousand inhabitants, which have already^^ exceeded the limit of indebtedness prescribed in section twelve of article X ■of this constitution, may, in anticipation of the customary annual revenue thereof, appropriate, during any fiscal year, toward the general governmental expenses thereof, a sum not exceeding seven-eighths of the entire revenue applicable to general govern- mental expenses (exclusive of the payment of the bonded debt of such county, city or municipality) that was actually raised by taxation alone during the preceding fiscal vear ; hut until such excess of indebtedness cease, no further bonded debt shall be incurred, except for the renewal of other bonds.^® 2244. Montana. The Legislative Assembly shall not in any manner create any «T Art. X, § 12, 88 Alt. IX, § 19. S8 1875. 1166 CONSTITUTIONAL LAW OF TAXATION. debt except by law which shall be irrepealable until the indebt- edness therein provided for shall have been fully paid or dis- charged; such law shall specify the purpose to which the funds so raised shall be applied and provide for the levy of a tax suffi- cient to pay the interest on and extinguish the principal of such debt within the time limited by such law for the payment thereof; but no debt or liability shall be created which shall singly, or in the aggregate with any existing debt or liability, exceed the sum of one hundred thousand dollars, except in cases of war, to repel invasion or suppress insurrection, unless the law authorizing the same shall have been submitted to the people at a general election and shall have received a majority of the votes cast for and against it at such election.^" All moneys borrowed by, or on behalf of the state or any county, city, town, municipality or other subdivision of the state, shall be used only for the purpose specified in the law authorizing the loan.®^ The state shall not assume the debt, or any part thereof, of any count)', city, town or municipal corporation.^^ 2245. No county shall be allowed to become indebted in any man- ner, or for any purpose, to an amount, including existing indebt- edness, in the aggregate, exceeding five (5) per centum of the (value of the) taxable property therein, to be ascertained by the last assessment for state and county taxes previous to the incurring of such indebtedness, and all bonds or obligations in excess of such amount given by, or on behalf of such county shall be void. No county shall incur any indebtedness or liability for any single purpose to an amount exceeding ten thousand dol- lars ($10,000) without the approval of a majority of the electors thereof, voting at an election to be provided by law.^^ No city, town, township or school district shall be allowed to become indebted in any manner or for any purpose to an amount, including existing indebtedness, in the aggregate exceeding three per centum of the value of the taxable property therein, to be ascertained by the last assessment for the state and county taxes previous to the incurring of such indebtedness, and all bonds or obligations in excess of such amount given by, or on behalf of, such city, town, township or school district shall be void; Pro- vided, however, that the Legislative Assembly may extend the limit mentioned in this section, by authorizing municipal cor- porations to submit the question to a vote of the taxpayers affected thereby, when such increase is necessary to construct a sewerage system or to procure a supply of water for such munic- ipality which shall own and control said water supply and devote the revenues derived therefrom to the payment of the debt.^* 90 Art. XIII, § 2. 93 Art. XIII, § 6. 91 Art. XIII, § 3. M Art. XIII, § 6. 82 Art. XIII, § 4. LIMITATIOIfS ON DEBT-CONTEACTING POWEE. 1167 2246. Nebraska. The state may, to meet casual deficits, or failures in the rev- enues, contract debts never to exceed in the aggregate one hun- dred thousand dollars; and no greater indebtedness shall be incurred except for the purpose of repelling invasion, suppressing insurrection, or defending the state in war, and provision shall be made for the payment of the interest annually, as it shall accrue, by a tax levied for the purpose, or from other sources of revenue, which law providing for the payment of such interest by such tax, shall be irrepealable until such debt be paid.^^ 2247. Nevada. The legislature shall provide by law for an annual tax suffi- cient to defray the estimated expenses of the state for each fiscal year; and whenever the expenses of any year shall exceed the income, the legislature shall provide for levying a tax sufficient, with other sources of income, to pay the deficiency, as well as the estimated expenses of such ensuing year or two years.^® For the purpose of enabling the state to transact its business upon a cash basis from its organization, the state may contract public debts; but such debts shall never, in the aggregate, ex- clusive of interest, exceed the sum of three hundred thousand dollars, except for the purpose of defraying extraordinary ex- penses, as hereinafter mentioned. Every such debt shall be authorized by law for some purpose or purposes, to be distinctly specified therein; and every such law shall provide for levying an annual tax sufficient to pay the interest semi-annually, and the principal within twenty years from the passage of such law, and shall specially appropriate the proceeds of said taxes to the payment of said principal and interest; and such appropriation shall not be repealed, nor the taxes be postponed or diminished until the principal and interest of said debts shall have been wholly paid. Every contract of indebtedness entered into or assumed by, or on behalf of, the state, when all its debts and liabilities amount to said sum before mentioned, shall be void and of no effect, except in cases of money borrowed to repel invasion, suppress insurrection, defend the state in time of war, or, if hos- tilities be threatened, provide for the public defense.^'' 2248. New Jersey. The legislature shall not, in any manner, create any debt or debts, liability or liabilities, of the state which shall, singly or in the aggregate with any previous debts or liabilities, at any time exceed one hundred thousand dollars, except for purposes of war, 95 Art. XII. § 1. For further limi- 86 Art. IX, § 2. tations see § 223 of this work. 97 Art. IX, § 3. >' 11 G8 CONSTITCTIOSTAL LAW OF TAXATION. or to repel invasion, or to suppress insurrection, unless the snme shall be authorized by a law for some single object cr work, to be distinctly specified therein; which law shall provide the wiiys and means, exclusive of loans, to pay the interest of S'lch debt or liability as it falls due, and also to pay and discharge the prin- cipal of such debt or liability within thirty-five years from the time of the contracting thereof, and shall be irrepealable until such debt or liability, and the interest thereon, are fuily paid and discharged; and no such law shall take effect until it ;--hall, at a general election, have been submitted to the people, and liave received the sanction of a majority of all the votes cast for iind against it at such election; and all money to be raised by ibe authority of such law shall be applied only to the specific object stated therein, and to the pavment of the debt ther'3by created. This section shall not be construed to refer to any money that has been, or may be, deposited with this state by the government of the United States.^s 2249. New York. The state may, to meet casual deficits or failures in revenues, or for expenses not provided for, contract debts; but such debts, directly or contingent, singly or in the aggregate, shall not at any time exceed one million of dollars : and the moneys arising from the loans creating such debts shall be applied to the pur- pose for which they were obtained, or to repay the debt so con- tracted, and to no other purpose whatever.^^ In addition to the above limited power to contract debts, the state may contract debts to repel invasions, suppress insurrec- tion, or defend the state in war ; but the money arising from the contracting of such debts shall be applied to the purpose for which it was raised, or to repay such debts, and to no other pur- pose whatever.^ A debt or debts of the state may be authorized by law for the improvement of highways. Such highways shall be determined under general laws, which shall also provide for the equitable apportio3;iment thereof among the counties. The aggregate of the debts authorized by this section shall not at any one time exceed the sum of fifty millions of dollars. The payment of the annual interest on such debt and the creation of a sinking fund of at least two per centum per annum to discharge the principal at maturity shall be provided by general laws whose force and effect shall not be diminished during the existence of any debt created thereunder. The legislature may by general laws require the county or town or both to pay to the sinking fund the pro- portionate part of the cost of any such highway within the 08 Art. IV, § VI, sub. 4. 1 Art. VII, § 3. 50 Art. VII, § 2. LIMITATIONS ON DBBT-CONTEACTING POWEK. 1169 boundaries of such county or town and the proportionate part of the interest thereon, but no county shall at any tinie for any highway be required to pay more than thirty-five hundredths of the cost of such highway, and no town more than fifteen, hun- dredths. None of the provisions of the fourth section of this article shall apply to debts for the improvement of highways iereby authorized.^* The legislature may appropriate out of any funds in the "treasury moneys to pay the accruing interest and principal of ■any debt heretofore or hereafter created, or any part thereof and may set apart in each fiscal year, moneys in the state treas- ury as a sinking fund to pay the interest as it falls due and to pay and discharge the principal of any debt heretofore or here- after created under section four of article seven of the Consti- tution until the same shall be wholly paid, and the principal and income of such sinking fund shall be applied to the purpose for which said sinking fund is created and to no other purpose •whatever; and, in the event such moneys so set apart in any fiscal year be sufficient to provide such sinking fund, a direct annual tax for such year need not be imposed and collected, as required by the provisions of said section four of article seven, or of any law enacted in pursuance thereof .^'' Except the debts specified in sections two and three of this article, no debts shall be hereafter contracted by or in behalf •of this state, unless such debt shall be authorized by a law, for some single work or object, to be distinctly specified therein; and «uch law shall impose and provide for the collection of a direct annual tax to pay, and sufficient to pay. the interest on such debt as it falls due, and also to pay and discharge the principal of such debt within fifty years from the time of the contracting thereof. No such law shall take effect until it shall, at a general election, have been submitted to the people, and have received a majority of all the votes cast for and against it at such election. On the final passage of such bill in either house of the legis- lature, the question shall be taken by ayes and noes, to be duly entered on the journals thereof, and shall be : " Shall this bill pass, and ought the same to receive the sanction of the people ? " The legislature may at any time, after the approval of such law by the neople, if no debt shall have been contracted in pur- suance thereof, repeal the same; and may at anv time, by law, forbid the contracting of any further debt or liability under such law; but the tax imposed by such act, in proportion to the debt and liability which may have been contracted, in pursuance of such law, shall remain in force and be irrepealable, and be annu- ally collected, until the proceeds thereof shall have made the provision hereinbefore specified to pav and discharge the interest and principal of such debt and liability. The money arising la Art. VII, § 12, added Nov. 1905. M>Art. VII, § 11 added Nov. 1905. 74 1170 OONSTITTJTIOIirAI, LAW OF TAXATIOIf. from any loan or stock creatingr such debt or liability shall be applied to the work or object specified in the act authorizing such debt or liability, or for the payment of such debt or liabil- ity, and for no other purpose whatever. No such law shall be ■ submitted to be voted on, within three months after its passage, or at any general election when any other law, or any bill, shall be submitted to be voted for or against. The legislature may provide for the issue of bonds of the state to run for a period not exceeding fifty years in lieu of bonds heretofore authorized but not issued and shall impose and provide for the collection of a direct annual tax for the payment of the same as herein- before required. When any sinking fund created under this section shall equal in amount the debt for which it was created, no further direct tax shall be levied on account of said sinking fund and the legislature shall reduce the tax to an amount equal to the accruing interest on such debt.^ 2250. • • • Nor shall any such county, city, town or village be al- lowed to incur any indebtedness except for county, city, town or vil- lage purposes. This section shall not prevent any such county, city, town or village from making such provision for the aid or sup- port of its poor as may be authorized by law. No county or city shall be allowed to become indebted for any purpose or in any manner to an amount which, including existing indebtedness, shall exceed ten per centum of the assessed valuation of the real estate of such county or city subject to taxation, as it appeared by the assessment-rolls of said county or city on the last assess- ment for state or county taxes prior to the incurring of such indebtedness; and all indebtedness in excess of such limitation, except such as may now exist, shall be absolutely void, except as herein otherwise provided. No county or city whose present in- debtedness exceeds ten per centum of the assessed valuation of its real estate, subject to taxation, shall be allowed to become indebted in any further amount until such indebtedness shall be reduced within such limit. This section shall not be construed to prevent the issuing of certificates of indebtedness or revenue bonds issued in anticipation of the collection of taxes for amounts actually contained, or to be contained in the taxes for the year when such certificates or revenue bonds are issued and payable out of such taxes. Nor shall this section be construed to prevent the issue of bonds to provide for the supply of water, but the term of the bonds issued to provide the supply of water shall not exceed twenty years and a sinking fund shall be created on the issuing of the said bonds for their redemption, by raising annually a sum which will produce an amount equal to the sum of the principal and interest of said bonds at their maturity. All certificates of indebtedness or revenue bonds issued in antici- pation of the collection of taxes, which are not retired within SArt. VII, § 4, as amended Nov. 1905. LIMITATIONS ON DEBT-CONTEACTING POWEE. 1171 five years after their date of issue, and bonds issued to provide for the supply of water, and any debt hereafter incurred by any portion or part of a city, if there shall be any such debt, shall be included in ascertaining the power of the city to become other- wise indebted except that debts incurred by the city of New York after the first day of January, 1904, to provide for the supply of water shall not be so included. Whenever the boun- daries of any city are the same as those of a county, or when any city shall include within its boundaries more than one county, the power of any county wholly included within such city to be- come indebted shall cease, but the debt of the county heretofore existing shall not, for the purposes of this section, be reckoned as a part of the city debt.* 2251. North Carolina. The state shall never assume to pay, or authorize the collection of any debt or obligation, express or implied, incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave ; nor shall the General Assembly assume or pay, or authorize the collection of any tax to pay, either directly or indirectly, expressed or implied, any debt or bond incurred, or issued, by authority of the convention of the year one thousand eight hundred and sixty-eight, nor any debt or bond, incurred or issued by the legislature of the year one thousand eight hundred and sixty-eight, at its special session of the year one thousand eight hundred and sixty-eight, or at its regular sessions of the years one thousand eight hundred and sixty-eight and one thousand eight hundred and sixty-nine and one thousand eight hundred and seventy, except the bonds issued to fund the interest on the old debt of the state, unless the pro- posing to pay the same shall have first been submitted to the people and by them ratified by the vote of a majority of all the qualified voters of the state, at a regular election held for that purpose.* Until the bonds of the state shall be at par, the General Assembly shall have no power to contract any new debt or pecuniary obligation in behalf of the state, except to supply a casual deficit, or for suppressing invasion or insurrection, unless it shall in the same bill levy a special tax to pay the interest annually. And the General Assembly shall have no power to give or lend the credit of the state in aid of any person, associa- tion or corporation, except to aid in the completion of such rail- roads as may be unfinished at the time of the adoption of this constitution, or in which the state has a direct pecuniary interest, unless the subject be submitted to a direct vote of the people of 3 Art. VIII, § 10, as amended Nov., * Ait. 1, § 6. 1905. 1172 CON-STITUTIONAL I^W OF TAXATIOH. the state, and be approved by the majority of those who shall vote thereon.^ ZSTo county, city, town, or other municipal corporation, shall contract any debt, pledge its faith, or loan its credit, nor shall any tax be levied or collected by any officers of the same, except for the necessary expenses thereof, unless by a vote of the major- ity of the qualified voters therein.® No county, city, town, or other municipal corporation shall assume to pay, nor shall any tax be levied or collected for the payment of any debt, or the interest upon any debt, contracted directly or indirectly in aid or support of the rebellion.'' 2252. North Dakota. The state may, to meet casual deficits or failure in the revenue, or in case of extraordinary emergencies contract debts, but such debts shall never in the aggregate exceed the sum of $200,000, exclusive of what may be the debt of North Dakota at the time of the adoption of this constitution. Every such debt shall be authorized by law for certain purposes to be definitely mentioned therein, and every such law shall provide for levying an annual tax sufficient to pay the interest semi-annually, and the principal within thirty years from the passage of such law, and shall specially appropriate the proceeds of such tax to the payment of said principal and interest, and such appropriation shall not be repealed nor the tax discontinued until such debt, both principal and interest, shall have been fully paid. No debt in excess of the limit named shall be incurred except for the purpose of repelling invasion, suppressing insurrection, defending the state in time of war, or to provide for public defense in case of threatened hostilities; but the issuing of new bonds to refund existing in- debtedness, shall not be construed to be any part or portion of said $200,000.8 The debt of any county, township, city, town, school district or any other political subdivision, shall never exceed five (5) per centum upon the assessed value of the taxable property therein ; provided, that any incorporated city may, by a two- thirds vote, increase such indebtedness three per centum on such assessed value beyond said five per cent, limit. In estimating the indebtedness which a city, county, township, school district or any other political subdivision may incur, the entire amount of existing indebtedness, whether contracted prior or subsequent to the adoption of the constitution, shall be included; provided, further, that any incorporated city may become indebted in any amount not exceeding four per centum on such assessed value without regard to the existing indebtedness of such city, for 5 Art. V, § 4. T Art. VII, § 13. 8 Alt. VII, § 7. 8 Art. XII, § 182. LIMITATION'S ON DEBT-CONTEACTING POWEE. 1173 the purpose of constructing or purchasing water works for fur- nishing a supply of water to the inhabitants of such city, or for the purpose of constructing sewers, and for no other purpose whatever. All bonds or obligations in excess of the amount of indebtedness permitted by this constitution, given by any city, county, township, town, school district or any other political subdivision shall be void." Any city, county, township, town, school district or any other political subdivision incurring indebtedness shall at or before the time of so doing, provide for the collection of an annual tax suflBcient to pay the interest and also the principal thereof when due, and all laws or ordinances providing for the payment of the interest or principal of any debt shall be irrepealable until such debt be paid.^" 2253. Ohio. The state may contract debts to supply casual deficits or fail- ures in revenues, or to meet expenses not otherwise provided for ; but the aggregate amount of such debts, direct and contingent, . . . shall never exceed seven hundred and fifty thousand dol- lars; and the money arising from the creation of such debts shall be applied to the purpose for which it was obtained, or to repay the debts contracted, and to no other purpose whatever.'^ In addition to the above limited power, the state may contract debts to repel invasion, suppress insurrection, defend the state in war, or to redeem the present outstanding indebtedness of the state ; but the money, arising from the contracting of such debts, shall be applied to the purpose for which it was raised, or to repay such debts, and to no other purpose whatever, and all debts, incurred to redeem the present outstanding indebtedness of the state, shall be so contracted as to be navable by the sinking fund, hereinafter provided for, as the same shall accumulate. ^- Exeept the debts above specified in sections one and two of this article, no debt whatever shall hereafter be created by or on behalf of the state.^^ The state shall never contract any debt for purposes of internal improvement.^* 2254. Oregon. The Legislative Assembly shall not loan the credit of the state, nor in any manner create any debt or liabilities which shall singly or in the aggregate with previous debts or liabilities ex- ceed the sum of fifty thousand dollars, except in case of war, 9 Art. XII, § 183. 12 Art. VIII, § 2. 10 Art. XII, § 184. 13 Art. VIII, § 3. 11 Art. VIII, § 1. 1* Art. XII, § 6. 1174 CONSTITUTIONAL LAW OF TAXATION. or to repel invasion or suppress insurrection; and every contract of indebtedness entered into or assumed by or on behalf of the state, when all its liabilities and debts amount to said sum, shall be void and of no effect. ^° No county shall create any debts or liabilities which shall singly or in the aggregate exceed the sum of five thousand dol- lars, except to suppress insurrection or repel invasion; but the debts of any countv, at the time this constitution takes efEect,i® shall be disregarded in estimating the sum to which such county is limited." 2255. Pennsylvania. No debt shall be created by or on behalf of the state, except to supply casual deficiencies of revenue, repel invasions, sup- press insurrection, defend the state in war, or to pay existing debt; and the debt created to supply deficiencies in revenue shall never exceed, in the aggregate at any one time, one million of dollars.^® The debt of any county, city, borough, township, school dis- trict or other municipality or incorporated district, except as herein provided, shall never exceed seven per centum upon the assessed value of the taxable property therein, nor shall any such municipality or district incur any new debt, or increase its in- debtedness to an amount exceeding two per centum upon such assessed valuation of propertv. without the assent of the electors "thereof at a public election in such manner as shall be provided by law; but any city, the debt of which now exceeds seven per centum of such assessed valuation, may be authorized by law to increase the same three per centum in the aggregate at any one time, upon such valuation.^^ Any county, township, school district or other municipality incurring any indebtedness shall, at or before the time of so doing, provide for the collection of an annual tax sufficient to pay the interest and also the principal thereof within thirty years.^" No debt shall be contracted or liability incurred by any munic- ipal commission, except in pursuance of an appropriation previ- ously made therefor by the municipal governmental 2256. South Carolina. ■ To the end that the public debt of South Carolina may not hereafter be increased without the due consideration and free 15 Art. XI, § 7. 19 Art. IX, § 8. 16 18.59. 20 Art. IX, § 10. 17 Art. XI, § 10. 21 Art. XV, § 2. 18 Art. IX, § 4. LIMITATIONS ON DEBT-CONTBACTING POWEK. 1175 consent of the people of the state, the General Assembly is hereby forbidden to create any further debt or obligation, either by the loan of the credit of the state, by guaranty, endorsement, or otherwise, except for the ordinary and current business of the state, without first submitting the question as to the creation of such new debt, guaranty, endorsement or loan of its credit to the qualified electors of this state at a general state election ; and unless two-thirds of the qualified electors of this state, voting on the question, shall be in favor of increasing the debt, guar- anty, endorsement, or loan of its credit, none shall be created or made. And any debt contracted by the state shall be by loan on state bonds, of amounts not less than fifty dollars each, bear- ing interest, payable not more than forty years after final passage of the law authorizing such debt. A correct registry of all such bonds shall be kept bv the treasurer in numerical order, so as to always exhibit the number and amount unpaid, and to whom severally made payable. And the General Assembly shall levy an annual tax sufficient to pay the annual interest on said bonds.^^ No scrip, certificate or other evidence of state indebtedness shall be issued except for the redemption of stock, bonds or other evidence of indebtedness previously issued, or for such debts as are expressly authorized in this constitution.^^ 2257. No city or town in this state shall hereafter incur any bonded debt which, including existing bonded indebtedness, shall exceed eight per centum of the assessed value of the taxable property therein, and no such debt shall be created without submitting the question as to the creation thereof to the qualified electors of such city or town, as provided in this constitution for such special elections; and unless a majority of such electors voting on the question shall be in favor of creating such further bonded debt, none shall be created: Provided, That this section shall not be construed to prevent the issuing of certificates of indebtedness in anticipation of the collection of taxes for amounts actually contained or to be contained in the taxes for the year when such certificates are issued and payable out of such taxes: And pro- vided, further. That such cities and towns shall on the issuing of such bonds create a sinking fund for the redemption thereof at maturity. ISTothing herein contained shall prevent the issuing of bonds to an amount sufficient to refund bonded indebtedness existing at the time of the adoption of this constitution.^* The bonded debt of any countv, township, school district, municipal corporation or political division or subdivision of this state shall never exceed eight per centum of the assessed value of all the taxable property therein. And no county, township, 22 Art. X, § II. 24 Art. VIII, § 7. 23 Art. X, § 7. 1176 CONSTITUTIONAL LAW OF TAXATION. municipal corporation or other political division of this state shall hereafter be authorized to increase its bonded indebtedness if at the time of any proposed increase thereof the aggregate amount of its already existing bonded debt amounts to eight per centum of the value of all taxable property therein as ascertained by the valuation for state taxation. And wherever there shall be several political divisions or municipal corporations covering or extending over the same terri- tory, or portions thereof, possessing a power to levy a tax or contract a debt, then each of such political divisions or municipal corporations shall so exercise its power to increase its debt under the foregoing eight per cent, limitation that the aggregate debt over and upon any territory of this state shall never exceed fifteen per centum of the value of all taxable property in such territory as valued for taxation by the state: Provided, That nothing herein shall prevent the issue of bonds for the purpose of paying or refunding any valid municipal debt heretofore con- tracted in excess of eight per centum of the assessed value of all the taxable property therein.^ 2258. South Dakota. For the purpose of defraying extraordinary expenses and mak- ing public improvements, or to meet casual deficits or failure in revenue, the state may contract debts never to exceed, with previous debts, in the aggregate $100,000, and no greater indebt- edness shall be incurred except for the purpose of repelling invasion, suppressing insurrection, or defending the state or the United States in war, and provision shall be made by law for the payment of the interest annuallv, and the principal when due, by tax levied for the purpose, or from other sources of revenue; which law providing for the payment of such interest and principal by such tax or otherwise shall be irrepealable until such debt is paid; Provided, however, the state of South Dakota shall have the power to refund the territorial debt assumed by the state of South Dakota, by bonds of the state of South Dakota.2« That the indebtedness of the state of South Dakota, limited by sec. 2 of this article shall be in addition to the debt of the territory of Dakota assumed by and agreed to be paid by South Dakota>^ The debt of any county, city, town, school district, civil town- ship, or other subdivision, shall never exceed five (5) per centum upon the assessed value of the taxable property therein. In estimating the amount of indebtedness which a municipality or subdivision may incur the amount of indebtedness contracted i 25 Art. X, § 5. 27 Art. XIII, § 3. 26 Art. XIII, i 2. r LIMITATIOlSrS ON DEBT-CONTEACTING POWEK. 1177 prior to the adoption of this constitution shall be included ; Pro- vided, that any county, municipal corporation, civil township, district or other subdivision may incur an additional indebtedness not exceeding ten per centum upon the assessed value of the taxable property therein for the purpose of providing water for irrigation and domestic uses. Provided, further, that no county, municipal corporation or civil township shall be included within any such district or subdivision without a majority vote in favor thereof of the electors of the county, municipal corporation or civil township as the case may be which is proposed to be in- cluded therein, and no such debt shall ever be incurred for an}^ of the purposes in this section provided; unless authorized by a vote in favor thereof of a majority of the electors of such county, municipal corporation, civil township, district or subdivision in- curring the same.^^ Provision for the assumption of a part of the debt of the Territory of Dakota is made in great detail.^^ Any city, county, town, school district or any other subdivision incurring indebtedness shall, at or before the time of so doing, provide for the collection of an annual tax sufficient to pay the interest and also the principal thereof when due, and all laws or ordinances providing for the payment of the interest or prin- cipal of any debt shall be irrepealable until such debt be paid.^" 2259. Texas. 'No debt shall be created by or on behalf of the state, except to supply casual deficiencies of revenue, repel invasion, suppress insurrection, defend the state in war, or pav existing debt : and the debt created to supply deficiencies in the revenue shall never exceed in the aggregate at any one time two hundred thousand dollars. ^^ For limitations with respect to municipal indebtedness see § 255 of this work. 2260. Utah. No appropriation shall be made, or any expenditure authorized by the legislature, whereby the expenditure of the state, during any fiscal year, shall exceed the total tax then provided for by law, and applicable for such appropriation or expenditure, unless the legislature making such appropriation shall provide for levy- ing a sufficient tax, not exceeding the rates allowed in section seven of this article, to pay such appropriation or expenditure within such fiscal year. This provision shall not apply to appro- 28 Art. Xlli, § 4. 30 Art. XIII, § 5. 29 Art. XIII, §§ 6, 7, 8. 8lArt. Ill, § 49. 1178 CONSTITUTIONAL LAW OF TAXATION. priations or expenditures to suppress insurrections, defend the state, or assist in defending the United States in time of war.^^ To meet casual deficits or failures in revenue, and for neces- sary expenditures for public purposes, including the erection of public buildings and for the payment of all territorial indebted- ness assumed by the state, the state may contract debts, not ex- ceeding in the aggregate at any one time, the sum of two hun- dred thousand dollars over and above the amount of the terri- torial indebtedness assumed by the state. But when the said territorial indebtedness shall have been paid, the state shall never contract any indebtedness, except as in the next section provided, in excess of the sum of two hundred thousand dollars, and all monies arising from loans herein authorized, shall be applied solely to the purposes for which they were obtained.^^ The state may contract debts to repel invasion, suppress insur- rection, or to defend the state in war, but the money arising from the contracting of such debts shall be applied solely to the purpose for which it was obtained.^* All debts and liabilities of the territory of Utah, incurred by authority of the legislative assembly thereof are hereby assumed and shall be paid by this state. ^** 2261. No debt in excess of the taxes for the current year shall be created by any county or subdivision thereof, or by any school district therein, or by any city, town or village, or any sub- division thereof in this state; unless the proposition to create such debt shall have been submitted to a vote of such qualified electors as shall have paid a property tax therein, in the year preceding such election, and a majority of those voting thereon shall have voted in favor of incurring such debt.^^ When authorized to create indebtedness as provided in section three of this article, no county shall become indebted to an amount, including existing indebtedness, exceeding two per centum. No city, town, school district or other municipal cor- poration, shall become indebted to an amount, including existing indebtedness, exceeding four per centum of the value of the tax- able property therein, the value to be ascertained by the last assessment for state and county purposes, previous to the incur- ring of such indebtedness; except that in incorporated cities the assessment shall be taken from the last assessment for city pur- poses : Provided, That no part of the indebtedness allowed in this section, shall be incurred for other than strictly county, city, town or school district purposes: Provided, further. That any city or town when authorized as provided in section three of this W. Art. XIII, § 9. ^ 84a Art. Ill, § 3. S3 Art. XIV, § 1. 86 Art. XIV, § 3. 34 Art. XIV, § 2. LIMITATIONS ON DEBT-CONTEACTING POWEE. 1179 article, may be allowed to incur a larger indebtedness not exceed- ing four per centum additional, for supplying such city or town with water, artificial lights or sewers, when the works for supply- ing such water, light and sewers, shall be owned and controlled by the municipality.^® All monies borrowed by or on behalf of the state, or any legal subdivision thereof, shall be used solely for the purpose specified in the law authorizing the loan.^'^ Nothing in this article shall be so construed as to impair or add to the obligation of any debt heretofore contracted, in ac- cordance with the laws of Utah territory, by any county, city, town or school district, or to prevent the contracting of any debt, or the issuing of bonds therefor, in accordance with said laws, upon any proposition for that purpose, which, according to said laws, may have been submitted to a vote of the qualified electors of any county, city, town or school district before the day on which this constitution takes effect.^* The legislature shall provide by law for an annual tax suffi- cient, with other sources of revenue, to defray the estimated ordi- nary expenses of the state for each fiscal year. For the purpose of paying the state debt, if any there be, the legislature shall provide for levying a tax annually, sufficient to pay the annual interest and principal of such debt, within twenty years from the final passage of the law creating the debt.^^ 2262. Virginia. No city or town shall issue any bonds or other interest-bearing obligations for any purpose, or in any manner, to an amount which, including existing indebtedness, shall, at any time, ex- ceed eighteen per centum of the assessed valuation of the real estate in the city or town subject to taxation, as shown by the last preceding assessment for taxes : provided, however, that nothing above contained in this section shall apply to those cities and towns whose charters existing at the adoption of this constitution authorize a larger percentage of indebtedness than is authorized by this section : and provided further, that in determining the limitation of the power of a city or town to incur indebtedness there shall not be included the following classes of indebtedness : (a.) Certificates of indebtedness, revenue bonds or other obli- gations issued in anticipation of the collection of the revenue of such city or town for the then current year; provided that such certificates, bonds or other obligations mature within one year from the date of their issue, and be not past due, and do not exceed the revenue for such year; 38 Art. XIV, § 4. 38 Art. XIV, § 7. 87 Art. XIV, § 5. 39 Art. XIII, § 2. 1180 CONSTITUTIONAL LAW OF TAXATION. (b.) Bonds authorized by an ordinance enacted in accordance with section one hundred and twenty-three, and approved by the affirmative vote of the majority of the qualified voters of the city or town voting upon the question of their issuance, at the general election next succeeding the enactment of the ordinance, or at a special election held for that purpose, for a supply of water or other specific undertaking from which the city or town may derive a revenue; but from and after a period to be deter- mined by the council, not exceeding five years from the date of BTich election, whenever and for so long as such undertaking fails to produce sufficient revenue to pay for cost of operation and administration (including interest on bonds issued therefor, and the cost of insurance against loss by injury to persons or property), and an annual amount to be converted into a sinking fund sufficient to pay, at or before maturity, all bonds issued on- account of said undertaking, all such bonds outstanding shall be included in determining the limitation of the power to incur indebtedness, unless the principal and interest thereof be made payable exclusively from the receipts of the undertaking.*" No debt shall be contracted by the state except to meet casual deficits in the revenue, to redeem a previous liability of the state, to suppress insurrection, repel invasion, or defend the state in time of war. No scrip, certificate or other evidence of state in- debtedness, shall be issued except for the transfer or redemption of stock previously issued, or for such debts as are expressly authorized in this constitution.*^ 2263. Washington. Whenever the expenses of any fiscal year shall exceed the in- come, the legislature may provide for levying a tax for the ensuing fiscal year, sufficient, with other sources of income, to pay the deficiency, as well as the estimated expenses of the ensu- ing fiscal year.*^ The state may, to meet casual deficits or failures in revenues, ■ or for expenses not provided for, contract debts, but such debts, ■ direct and contingent, singly or in the aggregate, shall not at any time exceed four hundred thousand dollars ($400,000), and the moneys arising from the loans creating such debts shall be applied to the purpose for which they were obtained, or to repay the debts so contracted, and to no other purpose whatever.*^ In addition to the above limited power to contract debts, the state may contract debts to repel invasion, suppress insurrection, or to defend the state in war, but the money arising from the 40 Art. VIII, § 127. « Art. VII, § 8. 41 Art. XIII, § 184. 43 Art. VIII, § 1. LIMITATIONS ON DEBT-CONTEACTING POWEE. 1181 contracting of such debts shall be applied to the purpose for ■which it was raised and no other purpose whatever.** Except the debts specified in sections one and two of this article, no debt shall hereafter be contracted by, or on behalf of this state, unless such debt shall be authorized by law for some single work or object to be distinctly specified therein, which law shall provide ways and means, exclusive of loans, for the pay- ment of the interest on such debt as it falls due, and also to pay and discharge the principal of such debt within twenty years from the time of the contracting thereof. No such law shall take effect until it shall, at a general election, have been sub- mitted to the people and have received a majority of all the votes cast for and against it at such election, and all moneys raised by authority of such law shall be applied only to the specific object therein stated, or to the payment of the debt thereby created, and such law shall be published in at least one newspaper in each county, if one be published therein, through- out the state, for three months next preceding the election at which it is submitted to the people.*^ 2263a. No county, city, town, school district, or other municipal corporation shall for any purpose become indebted in any man- ner to an amount exceeding one and one-half per centum of the taxable property in such county, city, town, school district, or other municipal corporation, without the assent of three-fifths of the voters therein voting at an election to be held for that purpose, nor in cases requiring such assent shall the total indebt- edness at any time exceed five per centum on the value of the taxable property therein, to be ascertained by the last assessment for state and county purposes previous to the incurring of such indebtedness, except that in incorporated cities the assessment shall be taken from the last assessment for city purposes: Pro- vided, That no part of the indebtedness allowed in this section shall be incurred for any purpose other than strictly county, city, town, school district, or other municipal purposes: Provided further, That any city or town with such assent may be allowed to become indebted to a larger amount, but not exceeding five per centum additional, for supplying such city or town with water, artificial light, and sewers, when the works for supplying such water, light, and sewers shall be owned and controlled by the municipality.*® 2264. West Virginia. No debt shall be contracted by this state, except to meet casual deficits in the revenue, to redeem a previous liability of the state, to suppress insurrection, repel invasion or defend the state in M Art. VIII, § 2. •IS Art. VIII, § 6. ■•5 Art. VIII, § 3. 1182 CONSTITUTIONAL LAW OF TAXATION. time of war; but the payment of any liability other than that for the ordinary expenses of the state, shall be equally distributed over a period of at least twenty years.'*'^ The power of taxation of the legislature shall extend to pro- visions for the payment of the state debt, and interest thereon, the support of free schools, and the payment of the annual esti- mated expenses of the state; but whenever any deficiency in the revenue shall exist in any year, it shall, at the regular session thereof held next after the deficiency occurs, levy a tax for tbe ensuing year, sufficient with other sources of income, to meet such deficiency, as well as the estimated expenses of such year.** JSTo county, city, school district, or municipal corporation, ex- cept in cases where such corporations have already authorized their bonds to be issued, shall hereafter be allowed to become indebted, in any manner, or for any purpose, to an amount, including existing indebtedness, in the aggregate, exceeding five per centum on the value of the taxable property therein to be ascertained by the last assessment for state and county taxes, previous to the incurring of such indebtedness; nor without, at the same time, providing for the collection of a direct annual tax, sufficient to pay, annually, the interest on such debt, and the principal thereof, within, and not exceeding thirty-four years; Peovidbd, That no debt shall be contracted under this section, unless all questions connected with the same, shall have been first submitted to a vote of the people, and have received three- fifths of all the votes cast for and against the same.*® 2265. Wisconsin. The state shall never contract any public debt except in the cases and manner herein provided.^" The legislature shall provide for an annual tax sufficient to defray the estimated expenses of the state for each year; and whenever the expenses of any year shall exceed the income, the legislature shall provide for levying a tax for the ensuing year, sufficient, with other sources of income, to pay the deficiency as well as the estimated expenses of such ensuing year.^^ For the purpose of defraying extraordinary expenditures, the state may contract public debts, (but such debts shall never in the affsregate exceed one hundred thousand dollars. ) Every such debt shall be aiithorized by law, for some purpose or purposes to be distinctly specified therein; and the vote of a majority of all the members elected to each house, to be taken by yeas and nays, shall be necessary to the passa^re of such law; and every 47 Art. X, § 4. ' BO Art. VIII, § 4. 48 Art. X, § 5. Bl Art. 8, § 5. « Art. X, § 8. LIMITATIONS ON DEET-CONTEACTING POWEB. 1183 such law shall provide for levying an annual tax sufficient to pay the annual interest of such debt, and the principal within five years from the passage of such law, and shall specially appro- priate the proceeds of such taxes to the navment of such prin- cipal and interest; and such appropriation shall not be repealed, nor the taxes be postponed, or diminished, until the principal and interest of such debt shall have been wholly paid.^^ The legislature may also borrow money to repel invasion, sup- press insurrection, or defend the state in time of war; but the money thus raised shall be applied exclusively to the object for which the loan was authorized, or to the repayment of the debt thereby created.^^ On the passage in either house of the legislature, of any law which imposes, continues or renews a tax, or creates a debt, or charge, or makes, continues, or renews an appropriation of public, or trust money, or releases, dischargees, or commutes a claim, or demand of the state, the question shall be taken by yeas and nays, which shall be duly entered on the journal ; and three- fifths of all the members elected to such house shall, in all such cases, be required to constitute a quorum therein.^* No scrip, certificate, or other evidence of state debt, whatso- ever, shall be issued, except for such debts as are authorized by the sixth and seventh sections of this article.^^ The state shall never contract any debt for works of internal improvement, or be a party in carrying on such works, but when- ever grants of land or other property shall have been made to the state, especially dedicated by the grant to particular works of internal improvement, the state may carry on such particular works, and shall devote thereto the avails of such grants, and may pledge or appropriate the revenues derived from such works in aid of their completion.^* 2266. It shall be the duty of the legislature, and they are hereby empowered, to provide for the organization of cities and incor- porated villages, and to restrict their power of taxation, assess- ment, borrowing money, contracting debts, and loaning their credit, so as to prevent abuses in assessments and taxation, and in contracting by such municipal corporations. Ko county, city, town, village, school district, or other municipal corporation, shall be allowed to become indebted in any manner or for any purpose, to any amount, including existing indebtedness, in the aggregate exceeding five per centum on the value of the taxable property therein, to be ascertained by the last assessment for state and county taxes, previous to the incurring of such indebtedness. 62 Art. VIII, § 6. B5 Art. VIII, § 9. BSArt. VIII, § 7. 66 Art. VIII, § 10. 64 Art. VIII, § 8. 1184 CONSTITUTIONAL LAW OF TAXATION. Any county, city, town, village, school district, or other mtinic- ipal corporation, incurring any indebtedness as aforesaid, shall, before or at the time of doing so, provide for the collection of a direct annual tax sufficient to pay the interest on said debt as it falls due, and also to pay and discharge the principal thereof within twenty years from the time of contracting the same." 2267. Wyoming. The state of Wyoming shall not in any manner create any indebtedness exceeding one per centum on the assessed value of the taxable property in the state, as shown by the last general assessment for taxation, preceding; except to suppress insurrec- tion or to provide for the public defense.^* No debt in excess of the taxes for the current year, shall in any manner be created in the state of Wyoming', unless the propo- sition to create such debt shall have been submitted to a vote of the people and by them approved; except to suppress insurrec- tion or to provide for the public defense.^* No county in the state of Wyoming shall in any manner create any indebtedness, exceeding two per centum on the assessed value of taxable property in such county, as shown by the last general assessment, preceding; provided, however, that any county, city, town, village or other subdivision thereof in the state of Wyoming, may bond its public debt existing at the time of the adoption of this constitution, in any sum not exceeding four per centum on the assessed value of the taxable property in such county, city, town, village or other subdivision, as shown by the last general assessment for taxation.^" 2268. No debt in excess of the taxes for the current year shall, in any manner, be created by any county or subdivision thereof, or any city, town or village, or any subdivision thereof in the state of Wyoming, unless the proposition to create such debt shall have been submitted to a vote of the people thereof and by them approved.^^ No city, town or village, or any subdivision thereof, or any subdivision of any county of the state of Wyoming, shall, in any manner, create any indebtedness exceeding two per centum on the assessed value of the taxable property therein ; provided, how- ever, that any city, town or village may be authorized to create an additional indebtedness, not exceeding four per centum on the assessed value of the taxable property therein as shown by the last preceding general assessment, for the purpose of building sewerage therein. Debts contracted for supplying water to such city or town are excepted from the operation of this section.^ 87 Art. XI, § 3. 60 Art. XVI, § 3. 68 Art. XVI, § 1. 61 Art. XVI, § 4. 69 Art. XVI, § 2. 62 Art. XVI. § 5. LIMITATIONS ON DEBT-CONTEACTING POWEK. 1185 N"o bond or evidence of indebtedness of the state shall be valid unless the same shall have endorsed thereon a certificate signed by the auditor and secretary of state that the bond or evidence of debt is issued pursuant to law and is within the debt limit. No bond or evidence of debt of any county, or bond of any town- ship or other political subdivision, shall be valid unless the same shall have endorsed thereon a certificate signed by the county auditor or other officer authorized by law to sign such certificate, stating that said bond or evidence of debt is issued pursuant to law and is within the debt limit.®^ 2269. Territories of the United States. That no law of any territorial legislature shall authorize any debt to be contracted by or on behalf of such territory except in the following cases : To meet a casual deficit in the revenues, to pay the interest upon the territorial debt, to suppress insur- rections, or to provide for the public defense, except that in addi- tion to any indebtedness created for such purposes, the legis- lature may authorize a loan for the erection of penal, charitable or educational institutions for such territory, if the total indebt- edness of the territory is not thereby made to exceed one per ■centum upon the assessed value of the taxable property in such territory as shown by the last sreneral assessment for taxation. And nothing in this act shall be construed to prohibit the refunding of any existing indebtedness of such territory, or of any political or municipal corporation, county, or other sub- division therein.®* That no political or municipal corporation, county, or other subdivision in any of the territories of the United States shall ever become indebted in any manner or for any purpose to any amount in the aggregate, "including existing indebtedness, ex- ceeding four per cenPUm on the value of the taxable property within such corporation, county, or subdivision, to be ascertained by the last assessment for territorial and county taxes previous to the incurring of such indebtedness; and all bonds or obliga- tions in excess of such amount given by such corporation shall be void. That nothing in this act shall be so construed as to affect the validity of any act of any territorial legislature heretofore enacted, or of any obligations existing or contracted thereunder, nor to preclude the issuing of bonds already contracted for in pursuance of express provisions of law ; nor to prevent any terri- torial legislature from legalizing the acts of any county, munic- ipal corporation, or subdivision of any territory as to any bonds heretofore issued or contracted to be issued.^^ 63 Art. XVI, § 8. § 3, 24 Stat. L. 170, supplement to 6* Act of Congress, July 30, 1886, E. S. U. S., Vol. I, 2nd ed. 504. 65 Ibid., § 4. 75 INDEX. References are to section nvmbers. A. ABANDONMENT: of municipal organization, effect on bonds, 1046. of local improvement by municipal ofScers, assessment for such im- provement, 1882. ABOLITION : of municipal organization, effect on bonds, 1047. ABRIDGEMENT : of remedy impairs contract, 1053 et seq. ABROGATION : of municipal contract by legislature, 629a. ABSTRACT BOOKS: taxes on, 46. ABUSE OF MUNICIPAL TAXING POWER: constitutional requirements that legislature shall prevent, 577 to 581. see Names of States. ABUTTING PROPERTY: rules as to confining local assessments to, 1889 to 1891. levy of local assessment on, without inquiry as to benefits, 1939 to 1954. by frontage rule, 1956 to 1971. see Local Assessments. ACCEPTANCE : of corporate charter by company as element of contract, 997, 998. of local improvement by municipal officers, how far conclusive on tax- payer, 1879 to 1881. ACQUIESCENCE : In city ordinance as contract, 998. long continued, in exemption from taxation, does not create contract, 1007. in invalid municipal bonds, effect of, 2208. see Estoppel. ADDITIONAL INDEBTEDNESS: meaning of, in debt limitations, 2156. ADDITIONAL TAXES: in same year, 68. ADMINISTRATIVE BOARDS: delegation of taxing power to, 556, 557, 558. ADMINISTRATIVE OFFICERS :• delegation of taxing power to, 559. power to determine existence of facts upon which tax law shall go into effect may be given to, 540, 541. authority to put law into operation may be delegated to, 540, 541. may estimate amount of tax if legislative body has discretion to make levy, 543. computations of, cannot be made binding on legislative body, 544. delegation to state commission of power to adjust city debt and fix tax rate, 680. see Deleoation of Taxing Poweb. 1188 INDEX. References are to section numbers. ADMINISTRATORS. See Executors. AD VALOREM TAX: cui-iiig mistaken levy of, 1248. ADVERTISING : tax on business of street-car advertising, lien on street cars, 1210 to 1212. curing failure or neglect in, 1248. ACxENT : credits and property in liands of, 87, 88, 89. corporation may be made, to collect tax from sharelwlders, 801a to 804. for nonresident, taxation of with respect to interstate commerce, 841 to 867, see Commekce, State Taxes ArFEOiiNa. taxing property in hands of, 1195 to 1201. of nonresident, taxing property to, 1197. AGRICULTURAL LANDS: annexing to cities, 485 to 498. exempting from municipal taxation, 492 to 498a. exempting from certain specified taxes, 498a. in cities, local assessments of, 1904. AGRICULTURAL SOCIETIES : sometimes exempted, 1325. ALABAMA CONSTITUTION: with respect to purpose of taxation, 202. loaning public credit or money, 202. engaging in works of internal improvement, 202. aid to private individuals, 202. state or municipality becoming stockholder in private corporation, 202. respecting support of religion, 261. extra compensation to officer or contractor, 356. salary of deceased office^, 356. pension to civil employee, 356. claim without authority of law, 356. localities not to pay state charges, 436. delegation of taxing power to individuals or private corporations, 583. impairing obligation of contracts, 959. irrevocable grants, alteration and repeal of grants, 977. amendment or repeal of corporate charters, 1010. inheritance taxes, 1477, 1506. as to releasing or compromising public claims and taxes, 1777. as to local assessments, 1941. limit on tax rates, 2034. , as to state and municipal debt, 2034, 2212, 2213, 2214. local and special laws, 1504. readjustment of municipal debts, 1504. general laws, 1504. taxes to be proportional, 1505. debts for rent or hire not taxed, 1505. private corporations, associations, and individuals taxed at same rate, 1505. exemptions from taxation, 1505. commutations forbidden, 1505. franchise taxes on corporations, 1506. decisions under, as to equality, exemptions, local and special laws, 1507. commutations under, 1507. requirements of equality only apply to property taxes, 1507. taxes on gross receipts under, 1507. sales of merchants, 1507. foreign corporations, 1507. INDEX. 1189 References are to section numbers, ALASKA. See Tebkitobies of United States. ALIENS : tax on legacy to, 927. tax on legacies to, as affected by treaties, 1077 to 1086. discrimination against, in license taxation, 1435. AMENDMENT : of corporate cliarter becomes part of original, 996f. of corporate charters, state constitutions respecting, 1010 to 1028, see Names of States. statement of subject of act malting, 1825, see Subjects and Titles of Acts. first eight to Federal Constitution apply only to Federal government, 1102, 1103. AMOUNT : of tax to be determined by legislature, 409. of individual tax, notice and hearing as to, 1145, 1164, see Notice and Heabing. of penalties for noncompliance with tax laws, 1215a. of sale, tax deed conclusive as to, 1271. classification by, in license taxation, 1430 to 1434. of license taxes, 1442, 1443, 1445 to 1453. of tax under police power, 1445 to 1453. ANNEXATION : of territory, local and special laws as to, 1735. of rural lands to city, does not create contract, 1035. see Municipality ; Legislature ; Agbicultueal Lands. ANNUAL ASSESSMENT DAY : assessment of property brought into state afterward, 1355 to 1358. ANNUAL INCOME: debt not to exceed, 2077, 2078, 2082, 2087, 2088. of municipality, how estimated, 2078, 2087, 2088. ANNUAL SUPPLIES: power of indebted municipality to contract for, 2079 to 2082. contracts for purchase of municipal works, disguised as contracts for, 2083 to 2085. constitutional provisions as to, 2086. ANNUAL TAX : requirement for levy of, when debt created, 2133 to 2147. see Provision fob Payment or Public Debt. APPEAL : right of, sufficient hearing, 1162, see Notice and Hearing. APPOINTMENT : inheritance tax on estate transferred by power of, 1498 to 1500. APPORTIONMENT : rule of, where constitution requires debt of divided territory to be ap- portioned, 520, 521, 522, 523. of direct taxes under Federal constitution, 695, 738 to 741. notice and hearing on questions of, 1143 to 1147, 1164, see Notice and Hearing. of debts, see Debts ; County ; Municipality. AREA: local assessments on basis of, 1972, 1973. rule of assessment by, inapplicable in certain cases, 1988, 1989, 1991. see Local Assessments ; Frontage ; Value. ARID LANDS: local assessments for irrigating, 1847. see Irrigation. 1190 INDEX. References are to section nunibera. ARIZONA. See Tebmtobies of United States. ARKANSAS CONSTITUTION : lonn of credit, 201. issue of boDds or scrip, 201. becoming stockliolder in or aiding private enterprises, 201. purposes of taxation, 201. extra compensation to officer or contractor, 355. claim unprovided for by pre-existing law, 355. school taxes not to be expended out of district, 437. state not to assume local debts, 442. debts to state not to be released, 442. municipal taxing power to be restricted, 584. delegation of taxing power, 584. power to tax corporations not to be surrendered, 978. amendment or repeal of corporate charters, remission of forfeiture of corporate charters, 1011. taxes to be uniform and equal, 1508. exemptions. 1508. local and special laws, 1508. decisions under, as to local and special laves, exemptions, and equality, 1509. uniformity under, applicable to rate and mode, 1509. exempting city from county road taxes, 1509. rule of equality applies to property, not license or excise taxation, 1509. tax on vehicles in streets, under, 1509. taxation of express property as unit, 1509. as to releasing or compromising public claims, and taxes, 1778. as to local assessments of ad,ioining property, 1890. as to local assessments ad valorem,, 1975. limit on tax rates, 2035. ARMORIES : taxing city to pay for state, 428, 433. state compelling city to build, 620. ARREARAGES. See Releasing Claims foe Taxes ; REFtrNDiNG Taxes. ARREARAGE ACTS : 1299, 1300. ARREST : of person for collection of taxes, 1169, 1171. ASSEMBLY : right of, pertains to citizenship, 1100. ASSESSMENT : is jurisdictional act, 1268. tax deed not conclusive as to, 1268, 1269. of same property by state board and local assessors, double taxation, 1365. under debt limitations, 2157, 2158. amount of, notice to purchaser of municipal bonds, 2180. liens for, may have priority, 1188. see Local Assessments ; Annual Assessment Dat ; Assessment and Collection of Taxes. ASSESSMENT AND COLLECTION OF TAXES : local and special laws for, 1743 et seq. ASSESSMENT ROLL: sufficient basis for distress warrant for collection of taxes, 1169. as basis of calculating debt limit or tax rate, see VALtrATioN. ASSIGNMENT: of contractual exemption, 996b, 1057 et seq. of claim for taxes, 1221, 1222. of special assessment to contractor, 1222. INDEX. 1191 References are to section numbera. ATTORNEYS : taxes on. See Lawyers. ATTORNEY'S FEE : included in personal judgment for special assessment, 1227. for reduction of debt, not included In debt limit, 2073. AUCTIONS AND AUCTIONEERS : license taxes on, 1442. taxes on, in Illinois, 1529. taxes on, in Nebraska, 1614. see SAtES ; Merchants. AUDIT OF CLAIMS. legislative, as to municipalities, 635. by legislature of private claims, 1593. see Legislature. AUTHORITY : defense of lack of, estoppel of by rentals In bonds, 2189, 2190, AUTOMOBILES : exemption of, from tax on vehicles using streets, 1451, 1540. AVERAGE RATE: meaning of, 1590. AWARDS : inclusion of. In city debt, 2091. B. BAD FAITH. See Fraud. BANKERS. See Baitks. BANKRUPT : taxation of property of, 1552. BANKS: capital stock, taxation of, 48. taxes on, measured by deposits, 56. tax on franchise of, 66. payment of price for charter as contract not to tax, 999, 1000, 1001. deposits taxed to bank, 1197. insolvent, collecting tax on shareholders from receiver, 1201. taxed under police power, 1413. tax on, in Alabama, 1507. Illinois, 1530. Iowa, 1542. Kansas, 1544. Kentucky, 1553. Louisiana, 1563. Massachusetts, 1582. Michigan, 1588. Minnesota, 1592. Mississippi, 1600, 1603. New Jersey, 1632. Ohio, 1645, 1650. South Carolina, 1675. South Dakota, 1679. Virginia, 1699. Washington, 1709. double taxation of. See Double Taxation ; National Bank ; Cobpora- TioNS ; Deposits. requirements that they be taxed the same as individuals, 1721 et seq. commutation allowed to, void, where individuals are fully taxed 1723 «ee Circulation of Banks. ' 1192 INDEX. References are to section numbers, BANK DEPOSITS : situs for taxation, 85, 91 to 94, 130. see Deposits ; Banks. BANK NOTES : repealing law making receivable for taxes, as impairment of contract, 1051, 1054. BARBER : tax on, 1562. BAVARIA : treaty with, of 1846, 1079, 1080. BAWDY HOUSE : license tax on, 1414a. BENEFICIAL ORDERS : as to exemptions of, as charities, 1338, 1339. BENEFICIARIES : nonresident, taxation of, 122. see Situs ; Trustees ; Bxecutoes ; Guardians ; Decedent's Estates. BENEFIT THEORY : of taxation, 21 et seq. BENEFITS : validating void bonds where municipality has received, 1258. local assessments are supposed to equal, 1839. theory of, denied, 1840. levying cost of local improvement without inquiry as to, 1936 to 1955. cases holding that assessment on district for local improvement cannot exceed, 1940 to 1954, 1958, 1959 et scq. excess of cost over, borne by general public, 1955. where local assessment exceeds value of property, 1992 to 1999. see Local Assessments. BICYCLES : specific taxes on, 1319. license tax on, 1368, 1655, 1658. BILLIARD TABLE: taxes on, 1528, 1577. BILLS OF LADING: of exports, tax on, is export duty, 940. BOARD OF EQUALIZATION: right to make proofs before, is sufficient hearing, llGl. see Notice and Hearing ; Equalization. BOARD OF UNDERWRITERS: delegation of taxing power to, 575. BONA FIDE PURCHASERS: validating bonds in hands of, 1258, 1255 to 1266. see Curative Acts ; Recitals in Municipal Bonds. BONDED WAREHOUSES: taxation of liquors in, 1553. BONDS : situs of, for taxation, 85 et seq., see Credits. at owner's domicile, 85. of nonresident decedent, 95. at place where found, 86, 95. at place where employed in business, 87. taxes on succession to, 146. compelling corporation to deduct tax from interest, 167, 168 1049 INDEX. 1193 References are to section numbers. BONDS — Continued: corporate, held by nonresidents, taxing and compelling corporation to deduct tax from interest, 1049. of foreign corporation held by resident, compelling corporation to de- duct tax from interest, 1049. when county divided, including in debt apportioned, 522. owned by state municipal corporation, Federal tax on, 743. of state or state municipal corporation. Federal tax on, 743, 744. given under state excise law. Federal tax on, 746, 747. of United States, state taxation of, 755, 756, 757 et seq. see Federal Agencies, Taxation of, by States. of one state may be taxed by another, 823a. municipal, as contracts to exercise taxing power to pay, 1038 to 10-^. enforcement of state's contract to levy taxes to pay, 1041. state, assignment of, to state of bondholder's residence, for enforce- ment, 1041. proceeding on, state against state affirmed, 1041. statute impairing validity of, cannot be enforced against citizen, 1042. Virginia coupon cases, 1042, 1043, 1044. imposing onerous conditions on use of coupons, 1043, 1044. special tax on coupons, 1044. of municipality, where municipal organization abandoned, 1046. where municipal organization abolished, 1047. of state or municipality, taxed by issuing authority, 1049. city taxing its own bonds, deducting tax from interest, 1049. of United States may be sold to pay owner's delinquent state taxes, 757, 1224. double taxation of, 1378. validating defects in issue, 1255 to 1266, see Curative Acts. taxation of, 1514, 1574, 1612. local and special laws as to issue of, 1739. included in computation of public debt, 2058. for anticipation of current revenues, 2076a. in anticipation of local assessment, when included In computing city debt, 2102 to 2104. see Refunding Bonds. payable out of special fund, see Special Fund. sale at par value, 2122. partly in excess of debt limit, valid according to date of delivery, 2104. validity of single Issue of, partly In excess of debt limit, 2165 to 2167. see Debts, Limitations on Poweb to Incur ; and Recitals in Munic- ipal Bonds. BONUS : paid for franchise as contract not to lay further tax, 999 to 1007. BORROWING POWER: of Federal government, state taxation of, 755 to 758. BOUNDARIES : of tax district, see Tax District ; Legislature. BOUNTIES : to private enterprises, 185, 186, 187 et seq. to soldiers, substitutes, and their families, 3.33, 334. refunding money paid to secure substitutes, 333. repayment of loans to relieve municipalities from drafts, 333. payment of, to men whose service was over, 334. to those engaging in industry, as gratuity, not contract, 1032. to soldiers, validating unauthorized taxes for, 1266. BRIDGES : taxes for, 192, 193. municipalities may construct, 242 1194 INDEX. References are to section numbers, BRIDGES — Continued: taxing county to pay for, In township, 432. built by municipality outside its territorial limits, 476. state control of local taxation for, 622 to 629, see Local Selp- GOVEENMENT ; LEGISLATURE. classification of, in Iowa, 1542. assessment for building, 1846, 1866, 18G7. taxes for, under limits on tax rate, 2013. building and repair of, not compulsory county obligation, 2066. BRIDGE COMPANIES: unit method of valuing intangible assets of, considered with respect to commerce, 916, 917. situs of franchises, 103. BROKERS : taxes on, 1529, 1614. BUILDING : taxed under police power, 1414a. BUILDING AND LOAN ASSOCIATIONS: taxation of foreign, 1318. double taxation of, 1383 to 1394. taxation of nonborrowers or paid-up shares, 1384 to 1388. taxation of borrower's shares, 1386, 1387, 1388 to 1390. taxing shares in lieu of all other taxation, 1391. exempting shares of nonresidents, 1392. exempting notes and mortgages of, 1393. exempting capital stock of, 1394. exempting loans made by, 1394. tax on. In Illinois, 1534. in Indiana, 1540. in Kentucky, 1554. in Michigan, 1590. in Minnesota, 1595. in Mississippi, 1600. in Wyoming, 1720. exemption of, in Maryland, 1574. in Pennsylvania, 1665. BURIAL : of indigent dead, municipal debt for, not compulsory obligation, 2065. BUSINESS: making tax on, a lien on place where business is conducted, 1200. a lien on property used in, 1213. of street car advertising, making tax on, a lien on street cars, 1210 to 1212. license tax on, 1367, 1368. taxes on, as revenue measures, 1403a. see License Taxes; Occupation Taxes; Tekritoeial Ju-bisdiction ; Business in State. BUSINESS IN STATE: what constitutes, 131 et seq. owning property is not, 131, 133, 136. operating pipe line is, 132. owning shares in individual partnership, 133. owning shares in limited partnership, 133, 137. in case of insurance company, 133, 137. in Pennsylvania, 131, 133. in New Jersey, 132. 1195 INDEX. References are to section numiera. BUSINESS IN STATE — Continuea: in New York, 134, 140. selling goods by agent, 134, 135, 137. keeping money in bank, 134. keeping office in state, 135, 137. renting property, 136. permanent and continuons business, 138. distinction between doing, and employing capital, 139, 140. CALIFORNIA : recent decision as to taxing bank franchise, 66. CALIFORNIA CONSTITUTION: as to situs, 151. loaning or giving public money or credit, 203. becoming stockholder in corporation, 203. support of church or sectarian school or institution, 262. schools, hospitals, and asylums, 262. recognition of moral or equitable obligations forbidden, 330. extra co'mpensation to officer or contractor, 357. claim without authority of law, 357. state not to assume local debts, 443. state credit not to be loaned to municipal or other corporation, 443. apportionment of debts when county is divided, 504. legislature not to impose local taxes, 585. ■delegation of power in municipal affairs to special commission, indi- vidual, etc., 585. power of taxation never surrendered, 979. amendment or repeal of corporation laws, 1012. as to deductions in listing, 1397. as to legalizing unauthorized acts of officers, 1253a. property taxed in proportion to value, 1510. property defined, 1510. €xemptions, 1510, 1511. deducting debts from credits, 1510. taxing mortgages, 1510. Income taxes, 1511. poll taxes, 1511. taxes in instalments, 1511. boards of equalization, 1511. general laws to have uniform operation, 1512. local and special laws, 1512. special ivileges and immunities, 1512. decisions under, as to etiuality, uniformity, exemptions, local and special laws, etc., 1513, 1514, 1515, 1.516, 1517 as to releasing or compromising public claims and taxes, 1779. as to state and municipal debts, 2216, 2217. CANAL: for state. Imposing cost on single city, 426. CANAL COMPANIES : separately classified in New Jersey, 1632. separate classificu.xon of, in Virginia, 1699. CAPITAL : of corporation invested in United States bonds, state taxation of, 758. national banks exempt from state tax on, 801, 803. CAPITAL STOCK: taxation of, 48, 49. distinction between, and shares, 49, 65. 1196 INDEX. References are to section numbers. CAPITAL STOCK — Contirmed: of corporations, taxes on, are often property taxes, 61. taxes measured by, as privilege taxes, 62, 63. taxes on. In New York, 62. in New Jersey, 63. In Maine, 63. In Ohio, 63. not exempted by requirement that corporations be taxed same as in- dividuals, 1725. see Corporations ; Fbanchises. CAPITATION TAX. See Poll Tax. CAR COMPANIES: situs for taxation, 74, 75. taxation of cars not continuously in state, with respect to interstate commerce, 907 to 911. taxes on, in Texas, 1690. CARPENTER : tax on, 1562. OARS: license taxes on, 1415, 1442, 1443. CARRIAGES : Federal tax on, 704, 721. CASH: in treasury, not deducted in ascertaining debt when county is divided, 522. of municipality, warrants drawn against in anticipation of current revenues, 2076. deduction of, in computing debt under debt limits, 2100. CATTLE : specific tax per head on, 1319. see Live Stock. CELEBRATIONS : appropriations for, 404, 405, 406. CEMETERIES : commonly exempted, 1325. local assessments of, 1904, 1934. CERTIFICATES OF INDEBTEDNESS: of United States, state taxation of, 756, 759. CERTIFICATION : of legislative oflicers as to passage of bills, effect, of, 1804, 1805, 1806. of legislative ofiicers as to entry on journals, effect of 1808 to 1811. of legislative officers as to compliance with requirements of notice, 1814. of officers in issue of bonds, see Recitals in Municipal Bonds ; Registration. CHARITABLE INSTITUTION. See also Charities. exemption from tax by charter, 996d. exemption as gratuity, not contract, 1031. commonly exempted, 1325. exemption of property leased by, 1335. as to exemptions generally, 1334 to 1339. secret societies as, 1338, 1339. what are purely public charities, 1339. local assessments of property of, 1905v INDEX. 1197 References are to section numbers. CHARITIES : taxes for, 259 et seq. state constitutions respecting, 260, 297, see Names op States. under private control, appropriations for, 310 to 325. appropriations to private asylums for care of children, 311 to 314 public as distinguished from private, 315, 316 et seq. restriction of benefits to special class, 319 et seq. appropriations in aid of fire, flood, and drought sufferers, 321. care of inebriates, 323 et seq. legislative compulsion of municipality in matters of, 637. state control of, despite constitutional provision as to local self- government, 637. CHOSBS IN ACTION: situs of, see Credits ; Tekritobial Jueisdici ion. CHURCH PROPERTY: customarily exempted, 1325. local assessments of, 1905, 1934. CIGARETTES : tax on sales of, 1543, 1649. see Original Package. CIRCULATION OF BANKS: Federal taxes on, 696, 704, 724, 748, 749. CITIZENS : of United States, who are, 1095 to 1098a. before Fourteenth amendment, 1095, 1096. corporations are not citizens, 1098. see Privileges and Immunities. CITY: imposing cost of state canal on, 426. see Locality ; Municipality. CIVIL EMPLOYEES. See Pensions ; Public Officees. CLAIMS : against state or city, audit by legislature, 370. contracted without authority of law, constitutional provisions as to 354 to 378, see Names of States. audit by legislature, constitutional provisions forbidding Interpreted, 382, 384 to 389. may be referred to board of claims, 384, 385. technically defective may be paid by legislature, 386 to 389. Incurred without express authority of law, see Pre-existing Law. CLASS : exemption of, as gratuity, not contract, 1032. CLASSIFICATION : in license taxation, 1416 to 1437. by occupation or business in license taxation, 1417 to 1423. by population, 1424 to 1427, 1729 et seq. by amount in license taxation, 1430 to 1434. under Fourteenth amendment, 1430 to 1431a. should be reasonable, 1435, 1436, 1450, 1451, 1729 et seq. illustrations of unreasonable, 1435, 1436, 1450, 1451, 1731 et seq. by relationship in inheritance taxation, 1474 to 1477. by amount in inheritance taxation, 1478 to 1489. in inheritance taxation under Federal constitution, 1474, 1476, 1480. under prohibitions of local and special legislation, 1728 1729 et sen to 1743. ' ''■ principles of, 1730a et seq. Instances of improper classifications, 1731 et seq. 1198 INDEX. References are to section numbers. COAL: in barges, taxation of, witti respect of interstate commerce, 918 to 92ft. specific tax per ton on, 1319. see Mines. COIN: taxation by states, 759. COLLECTION : of tax on corporate shares, 49. equality in, 14. territorial jurisdiction in, 164 to 168. national bank may be made agent to collect from shareholders, 801a tO' 804. right to enjoin gives sufficient hearing, 1160. local and special laws for, 1743 et seq. expense of, included in local assessment, 1872. liability of city for failure in, not included In city debt, 2091. see Collection of Taxes and Bnfoeoement op Tax Laws. COLLECTION OF TAXES AND ENFORCEMENT OF TAX LAWS : 116* to 1246. " due process of law " is the limitation, 1168. distress of goods, 1122 et seq., 1169. assessment-roll sufficient basis for distress, 1169. collection is purely administrative, 1169. sale of lands for collection of income taxes, 1169. arrest of delinquent's person, 1169, 1171. foreclosing tax lien by proceeding in rem., 1170. license taxes by arrest and imprisonment, making violation of law misdemeanor, 1171. making license tax lien on place where business is carried on, 1171,^ 1209. franchise and privilege taxes generally, by sale of personal property,. 1171. making taxes on real or personal property personal liabilities of owner of property, 1172 et seq. making special assessment a personal liability of owner of property, 1220, 1225 to 1246. taxes on land collected out of personalty. 1171. suit at law for collection of taxes, 1173 to 1175. summary order to deliver property in satisfaction of taxes, 1173. Louisiana constitution as to suits at law for taxes, 1173. suit at law where legislature has laid tax but not authorized any method, 1174. where legislature has authorized method of collection, how far that method exclusive, 1175. forfeiture of lands, 1176 to 1187. see FoRFEiTUKE OF Lands foe Noncompliance with Tax Laws. right of redemption from tax sales, 1186a. notice of sale unnecessary, 1187. liens for taxes, assessments, and water rates may be eiven nrioritv 1188. inheritance tax Hen on property, 1188. reassessment may have priority over intervening mortgage, 1188. selling railroad right of way piecemeal for taxes or assessments. 1189, 1190. personal judgments against railroads for collection of taxes and as- sessments, 1190. express constitutional provisions respecting tax sales, redemption, and forfeitures, and collection of taxes, 1191 to 1194. taxing property in bands of agent, 1195, 1196, 1197, 1198, 1199, 120O, INDEX. 119» References are to section numbers. COLLECTION OF TAXES, -ETC.— Continued: taxing liquors in warehouse to owner of warehouse, 1196, 1197. taxing grain in elevator to elevator-owners, 1197. taxing nonresident's property to agent, 1197. money in bank taxed to bank, 1197. personal property taxed to owner of premises where it is, 1197. making corporations liable for tax on shareholders, 1200. making receiver of insolvent bank liable for tax on shareholders. 1201. selling one man's property to pay another man's tax, 1202 to 1214. seizing personalty in possession of a tax delinquent, regardless of Its real ownership, 1202, 1203, 1204, 1205, 1214. seizing personalty transiently on the lands at the tax delinquent, 1203. seizing personalty of an occupant of lands for taxes on the lands, 1206, 1207. making tax on the mortgagee's interest In lands a lien on the lands, 1208. making street car company liable for license tax on persons conducting advertising business in street cars, 1210 to 1212. making license tax on liquor business a lien on all property used in the business, 1213. doctrine of fraudulent failure to change possession not applicable to tax proceedings, 1214. penalties for failure to comply with tax laws, 1215 to 1218. , see Penalties for Noncompliance with Tax Laws. ' retroactive laws for, 1219, 1220, see Reteospective Laws. changing method of, 1219. remedy may be varied, 1219. state may be given additional remedies, 1219. making assessment personal liability of owner, by retroactive law, 1220. state's claim for taxes may be assigned, 1221, 1222. purchaser at tax sale may be given same remedies as state, 1221. special tax bills, 1222. assigning special assessment to contractor, 1222. exemptions from execution and from taxation do not exempt prop- erty from tax sales, 1223, 1224. constitutional provisions forbidding exemptions from tax sales, 1223. United States bonds may be sold to pay owner's delinquent state taxes- 757, 1224. Mississippi constitution as to lien of poll tax, 1224. COLORADO CONSTITUTION: loan or gift of public money or credit, 204, 444. city becoming stockholder in corporation, 204. sectarian appropriations, 263. charities, 263. extra compensation to officer or contractor, 358. claim without authority of law, 358. state not to assume local debts, 444. apportionment of debts when county is divided, 505. delegation of power in municipal affairs to special commission etc 586. delegation of taxing power, legislature not to impose local taxes, 586. impairing obligation of contracts, 960. localaadlggecial laws, 1518. genei^l laws, when applicable, 1518. uniformity and equality, 1518. /equality and uniformity not applicable to special assessments, 1518. exemptions, 1518. corporations to be taxed, 1518. boards of equalization, 1518. X200 INDEX. References are to section numbers. COLORADO CONSTITUTION — CorKM7«e(J: decisions under, as to equality, uniformity, local and special laws, exemptions, 1519. as to releasing or compromising public claims and taxes, 1780. Irrevocable grants, 960. power to tax corporations never relinquished, 980. imposing new liability for past transactions, 483, 484, 1833. retrospective lawSj 960, 1883. limits on tax rates, 2036. as to state and municipal debts, 2218 to 2220. COLORED SCHOOLS: taxation for separate, 1604. COMMERCE. See also Commeecb, State Taxes ArrECTiNO. defined, 827. navigation of inland waters, 827, 831. transporting freight and passengers, 827. landing passengers, 827. sales of imported articles, 827. telegraph messages, 827. telephone messages, 827. taking orders for nonresident merchants, 827, 841. shipping merchandise, 827. insurance, 827. piping natural gas, 827. conducting live stock exchange, 828. transportation between points in some state, 829, 830, 831, 832, 833. transportation between points in some state as part of continuous interstate journey, 830, 831, 832, 833. when contract by carrier to perform act as part of continuous journey necessary, 831. inland navigation as part of continuous interstate journey, 831. moving goods from station platform to warehouse, 832. operating ferry-boats as part of interstate service, 833. operating cab service as part of interstate service, 833. exclusiveness of Federal control, 834 to 839. rules where Congress has not legislated as to, 835 to 839. congressional power over, as affected by state police power, 837, 838. state inspection laws, 837, 839. state regulations as to pilots, 839. COMMERCE, STATE TAXES AFFECTING: equality in, 16. on elevators in, 828. license taxes on sales generally, 840 to 867. taxes on importers of foreign goods, 840. on sellers of goods of nonresidents, 841, 843, 844, 845, 846. on outside dealers selling in the state, 842. on persons selling goods from outside the state, 841, 843, 845, 846, 847. 848. location of the goods at time of sale regarded as controlling element, 845 to 848, also 850 et seq. discriminating between resident and nonresident sellers, 849. 854 to 858. license taxes on peddlers, 850 to 853, 854. peddlers defined, 853. discriminating between foreign and domestic goods, 854 to 858. discriminatory occupation taxes, 855. occupation or license taxes where interstate commerce is onlv inci- dentally affected, 857, 858, 865. nondiscriminatory taxes, 858, 865. delivery of goods previously sold by sample, 859 to 862. INDEX. References are to section numbers. 1201 COMJIERCE, STATE TAXES AFFECTING — CoJiimued. • sales of goods from without the state in original pacliage, S63, 864, 8G5. on act of purchasing or manufacturing goods for shipment outside ■ state, 866, 867. on purchases by agents for nonresidents, 866. on collection of clothes to be washed outside state and returned, 807. on purchases for outside sale, 867. acts of transportation and communication generally, 868 to 872. on privilege of running sleeping cars in state, 869. on telegraph messages, 869. license taxes on telegraph companies, 870, 871. license tax on agent of foreign railroad corporation, 871. tax for keeping office in state, 871. tax on freight, 872. taxes on ferries, 873 to 878. license fees for regulation imposed under police power, 879. fees for inspection and regulation of telegraph companies, 879, 880, 881, 8S2. tolls for use of improvements in navigable waters, 882, 883. no state tax or license fee for navigation, 882. charges for special benefits in form of taxes, 882, 883. wharfage charges, 882, 883. discrimination in tolls or wharfage charges, 883. charge for service in conducting examination of engineers, 882. •charge against telegraph company for use of streets, 882. taxes on corporations engaged in interstate commerce, generally, 884 to 896. tax on corporations only incidentally affecting commerce, 884 to 886. charge for consolidating corporations, 884. annual tax on right of corporate existence, 884. franchise tax on domestic mercantile corporation for privilege of exer- cising corporate franchises, 884. foreign corporations, conditions may be Imposed which only incidentally affect commerce, 885. on foreign mining corporation for privilege of keeping office In state, 885. foreign manufacturing corporation, franchise tax on basis of capital employed in state, 886. •distinction between manufacturing and commercial corporations, and those directly engaged in transportation and communication, 884 to 886. taxes on gross receipts of carriers, 887 to 896, see Gross Receipts. on acts of transportation or communication wholly in state, 897. laws which can be construed as applicable only to Intrastate traffic 897, 904. separation of interstate and Intrastate business, 897 to 904. on express companies, for business wholly within state, 897. Interpretation of statutes, as to separation of interstate and intrastate traffic, 897 to 904. examples of laws not sufficiently distinguishing between interstate and intrastate business, 898, 90S. on telegraph companies, not distinguishing between interstate and intrastate business, 898. on express companies, not distinguishing between interstate and intra- state business, 898. on sleeping car companies, not distinguishing between interstate and intrastate business, 898. laws not separating interstate and intrastate business enforced as to interstate business, where separation can be made in fact, 809 to 902. 76 1202 iNi>E«. References are to section numbers. COMMERCE, STATE TAXES AFYBCTITSIG — Continued : on freight, where Intrastate and interstate freight can be distinguished, 809. on telegraph company, where receipts from interstate and intrastate business can be separated, 900, 901, 902. on railroads, where receipts from Interstate and Intrastate mails can- not be separated, 903. ■where no separation of intrastate and Interstate business can be made, no tax can be imposed, 903. on sleeping car companies, law construed to refer to intrastate traffic, 904. when tax is laid on intrastate business of Interstate carrier, and the state compels the carrier to do the Intrastate business, 904. on intrastate business conducted at a loss by Interstate carrier. 904. property employed in commerce, generally, 905 to 917. property employed in commerce, not continuously in the state, 907 to- 911. refrigerator cars not continuously in the state, 907, 908, 90S, 911. sleeping cars not continuously in the state, 9i0. rolling stock of railroads not continuously in the state, 911. franchises or intangible assets of interstate corporations considered as- property, 912 to 917, see Franchises. on property which is the subject of commerce, 918 to 926. on live stock driven through state, 925. on property in course of manufacture, ultimately designed for another state, 926. on passengers, 927. on legacies to aliens, 927. on occupation of emigrant agent, 928. on oystermen, 928. on commerce with Indians, 929, 930. Federal control over commerce, as supplemented by guaranty of privileges and immunities of citizens, 1110. as to exports to foreign countries, see Exports. as to imports from foreign countries, see Imports. see ToNNASE, Duty or; Preeerence of Ports. COMMISSION. See State Commission. COMMISSION MERCHANTS : license taxes on, 1417a, 1529, 1614. see Merchants ; Sales ; Brokers. COMMODITY : defined, 1582. COMMON DEFENSE AND GENERAL WELFARE: Federal taxes for, 697, 698 et seq. COMMON SCHOOLS: include high schools, 632. see Schools. COMMUTATIONS : of taxes, legislature has power to make, when not expressly restricted. 1332. ^ under requirements of equality and uniformitv. 1332, 1333. of taxes on insurance companies, 1333. of taxes on railroad companies, 1333. in consideration of public service, 1333. not allowed to corporations where not allowed to individuals 1722 1725. COMPENSATION: for taxes, 184. INDEX. 1203 References are to section numbers. COMPENSATORY CHARGES: for special benefits, use of improvements, etc.. In relation to com- merce, 882, 883. COMPROMISE : of public claims for taxes, see Aebeaeages ; Releasing Claims fob Taxes. COMPULSION: local taxation under legislative, 616 et seq., see Local Self-Govbrn- MENT. COMPULSORY BUSINESS : done by interstate carrier, state tax on, 904. COMPULSORY OBLIGATIONS: validating defective municipal bonds without municipal consent, 63G, 1262. Inclusion of. In computation of public debt, 2059 to 2066. see Current Expenses ; Municipality ; Debt, Limitations on Power TO Incur. sometimes excluded from calculation of municipal debt, 2060 to 2063. Imposed by legislature and imposed by constitution, distinguished, 2062, 2063. expense of burying indigent dead is not, 2065. included in calculation of total debt, 2064. contracts are not, though made pursuant to mandatory law, 2065, 2066. CONCURRENT TAXING POWER: delegated to different organizations occupying same territory, 5f)5, 566, 567. of states and Federal government, 45, 695, 750, 834. Federal lien satisfied first, 750, 751, 752. CONDITIONS : imposed by statute or election must be complied with in incurrence of debt, 2126, 2127, 2130. defense of noncompliance with, estopped by recitals in bonds, 2187, 2193. subsequent, recitals do not bar defense of breach, 2203. subsequent, registration and delivery estop defense of breach, 2203 to 2207. CONFEDERATE CRUISERS: compensation for insurance against depredations by, 329. CONFEDERATE DEBT: not to be assumed or paid, 2209, 2210. CONFIRMATION : of tax or assessment, right to oppose, in court is sufficient hearing, 1160. see Notice and Hearing. CONFISCATION: Inheritance tax amounting to, 1479. see Public Purpose ; Spoliation. CONNECTICUT CONSTITUTION : loan or gift of public credit, 205. becoming stockholder in corporation, 205. extra compensation to officer or contractor, 359. no requirement of equality, 1520. CONSENT : of 'community to taxation, 182, 183. of municipality, effect of, when given to control of municipal affairs by state commission, 684. of taxpayers to issue of bonds, validating lack of, 1256, 1257, 1261. see Curative Acts. 1204 INDEX. References are to section numbers, CONSENT — Continued: of property-owners to grant of liquor license, 1410. of locality to taxation, see Local Sew-Govebnment ; LEGiSLATtniE ; Election ; Popctlak Vote. CONSIDERATION : for grant of corporate charter, 996cl, 996e. CONSOLIDATION: of coi'porations, tax for privilege of, 54, 884. transfer of exemptions In case of, 1062 to 1068. CONSTITUTIONAL PROVISIONS : forbidding gifts of public money or credit are self-execoting, 240. see Retbospective Provisions ; Self-Executing Provisions ; Manda- tory Provisions. CONTENTS : of notice in tax proceedings, 1153. CONTIGUOUS PROPERTY: local assessments of, 1942 to 1945. see Local Assessments ; Abutting Peopeett. CONTINGENT FUND: Included in local assessment, 1872. CONTRACT : executory, situs of, 89. legislative act dividing municipality does not create, 502, 503. municipal, legislative power to modify or abrogate, 029a. legislature compelling municipality to perform. 635. municipal, regulating hours of labor, wages, and materials in, 666 to 677, see Labor Laws. federal tax on, 704. by carriers, for continuous journey, as element of interstate commerce, 831. municipal charter not, 1035. act annexing lands to city is not, 1035. taxation of, as property, 1048, 1049. tax deeds as, between state and purchaser, 1272. by indebted municipality, for annual supplies, 2079 to 2081. debts on, included in computation of public debt, 2058. are not compulsory obligations, though made pursuant to mandatory laws, 2065, 2066. by indebted municipality, for purchase of public works, 2081, 2082, 2083 to 2085. debt limitations not construed to impair, 2156. indivisible, partly in excess of debt limit, effect of, 2164. see Impairing Obligation of Contracts. CONTRACTOR : may collect assessment for public improvement, 685. for improvement, assessment may be assigned to, 1222. license taxes on, 1442. see Extra Compensation ; Pre-existing Law ; Local Assessment. CONTRIBUTION : equality of, 20a et seq. CONVERSION : equitable, none in inheritance tax, 1501. COPARTNERSHIPS : not taxable on franchises, 1584. see Partnership. INDEX. 1205 References are to section numbers. COPYRIGHTS : state taxation of, 783. see Patent Rights and Copybights. CORPORATE AUTHORITIES: in certain states power of taxation delegated to, 439, 555. who are, 555, 560 to 563a. chosen or assented to by people, 560, 561. commissioners appointed by legislature are not, 561. minority of city council are not, 562. assent of people to manner of choice, though not chosen by vote, 563. state constitutions respecting, 563a. CORPORATE PURPOSES: local taxation only allowed for in certain states, 439. see Ptjblio Purpose. CORPORATION : general taxing power over, 47. may be taxed on franchises, 47. capital stock, taxation of, 48. shares of, may be taxed, 49. organization tax, 54. consolidation tax, 54. annual tax on, 55. taxes on foreign, 57. unit method of taxation, 61, 72, 74, 75, 101 to 108c, 149, 912 to 917, 1461 to 1473. situs of shares, 99, 100. situs of intangible assets, franchises, 101 et seq., see Feanchises. Federal taxes on, 696, 704. Federal taxes on sales of shares of, 704. taxation of capital on shares invested in United States bonds, 756, 758. employed in Federal service, or having Federal franchises, state taxa- tion of, 765 to 774. with capital invested in patent rights, state taxation of, 779 to 782. agent to collect tax from shareholders, 801a to 804, 120O. engaged in interstate commerce, state taxes on generally, 884 to 896, 912 to 917. tax on right of corporate existence, in respect to commerce, 884. foreign, imposing conditions which only incidentally affect commerce, 885. foreign mining, tax on for privilege of keeping office in state, in re- spect to interstate commerce, 885. foreign manufacturing, franchise tax on basis of capital employed in state, in relation to commerce, 886. distinction between those engaged in manufacturing and commercial business, and those directly engaged in transportation and com- munication, with respect to commerce, 884 to 886. taxes on gross receipts of, 58, 887 to 896. see Gkoss Receipts. taxation of franchises of, considered as property, with respect to inter- state commerce, 912 to 917, see Commerce, State Taxes Atfeoting; and Franchises. charter of, is contract, 970. power to tax not relinquished or suspended, state constitutional pro- visions, 976 to 996a. exemption by charter, 996c to 1008. amendment, repeal, remission of forfeiture of charter, state constitu- tions respecting, 1010 to 1028, see Names of States. exemption as gratuity, not contract, 1029 to 1035. taxing shares owned by non-residents in different manner than those owned by residents, 1113. are persons under Fourteenth amendment, 1114. not citizens, 1098, 1098a. 1206 INDEX. References are to section numbers. COItPORATION — Contimied: taxing foreign at rate imposed by foreign state on domestic, 1314. equality and uniformity in taxation of, 1314 to 1318. discrimination between foreign and domestic, 1318. interpretation of exemptions of, 1851a. double taxation of sbares, stock, franchises and property of, 1369, 1372, 1373, 1374, 1375, 1376, 1376a, 1378, 1379. some taxes on, In Alabama, 1505, 1506, 1507. in California, 1513. in Colorado, 1518. 1519. in Illinois, 1529, 1530, 1531, 1532. in Indiana, 1539, 1540. in Iowa, 1542, 1543. in Kentucky, 1550, 1553, 1554. in Louisiana, 1563, 1566. in Maryland, 1573, 1575. in Massachusetts, 1582, 1584. in Michigan, 1586, 1587, 1588, 1589. in Minnesota, 1592, 1595, 1596. in Mississippi, 1599, 1600, 1603. in Missouri, 1605, 1610. in Montana, 1612. in Nebraska, 1615, 1619. In Nevada, 1621, 1623. in New Jersey, 55, 63, 1632, 1633, 1634. in New York, 56, 62. in Ohio, 1645, 1650, 1653. in Pennsylvania, 1660, 1662, 1663, 1661, 16G5, 1666. in South Carolina, 1675, 1677. in South Dakota, 1679. in Tennessee, 1683, 16S4, 1686. in Texas, 1687, 1688, 1690. in Utah, 1694, 1695. in Virginia, 1697, 1698, 1699, 1703. in West Virginia, 1712. requirements that they be taxed the same as individuals, 1721 et scq. no deductions allowed except same as individuals, 1722. COST: of public Improvements, what Items included in local assessments, 1871 to 1878. of local improvement, assessment should not exceed, 1883. of local improvement, assessment of, without inquiry as to benefits, 1936 to 1955. cases holding that cost cannot be made basis of assessment, 1940 to 1954. of. local assessment, in excess of benefit, borne by general public, 1955. of improvement in front of lot, borne by lot, 1978, 1979. COSTS : of collection, or of lawsuit as penalty for nonpayment, 1215. COTTON : tax on, 1565. COUNTRY ROADS : local assessments for, 1846, 1865. see Roads. COUNTY : imposing cost of harbor improvement on, 425. imposing cost of state schools on, 430, 431. making donations to secure location of state institutions, 430, 431, 432. INDEX. 1207 References are to section numhers. COUNTY — Continued : taxing, to pay for township bridge, 432. state not to assume debts of, 442, 475. legislative act, dividing and apportioning debts does not create con- tract, 502, 503. constitutional provisions as to division of and apportionment of debts, 504 to 518, see Names or States. nature of, 519. legislative control over, 519, 520, 521. rule of apportionment of debts when territory divided, under con- stitution requiring apportionment, 520 to 524. when divided legislature controls distribution of property, 525. when territory added to, liable for previous debt, 526. exempting local subdivisions from county road taxes, 527 to 530. exempting local subdivisions from county school tax, 531. exempting local subdivisions from county poor tax, 531. tax for county purposes at different rates in different townships, 53J. power to make drains delegated to, 568. power to tax for school purposes, 570. may be forbidden to impose occupation tax, 571. agencies of state government, 624. local self-government of, see Local Seif-Government ; Legislature. law levying taxes iUj is not of general nature, 1754. see MUNICIPALITT. COUNTX BUILDINGS: taxing locality to pay for, 426, 429. COUNTY OFFICERS: allowing to fix compensation of unlimited number of deputies, 685. see Officers ; Public Officers ; Administrative Officers ; Subordi- nate Officers. COUNTY SEAT: location of, as benefit to immediate neighborhood, 426, 429. taxing locality to pay for, 426, 429. COUNTY SUPERVISORS: may levy tax in townships, 563. are corporate authorities, 563. see Officers ; Public Officers ; ADMiNiSTr.ATivE Officers ; Subordi- nate Officers. COURTS : situs of funds in control of, 109 et seq., 113. state compelling city to pay expenses of, 621. right to contest tax or assessment in, is sufficient hearing, 1160 to 1164. see Notice and Hearing. as to authority to review legislative acts, see Judiciary; Legislature. COURT HOUSE: constructed by commissioners appointed by judge, 679. tax for, under limits on tax rate, 2014. see Public Building; County Buildings. CREDIT : loan or gift of public, generally forbidden or regulated by state con- stitutions, see Names of States. CREDITS : situs of, for taxation, 85 to 98. at owner's domicile, 85, 96, at place where found, 86. at place where employed in business, 87, 88. 1208 INDEX. References are to section numbers. CREDITS — Continued: situs of — Continued: in hands of agent, 87, 88. resulting from business employment, 89. not reduced to concrete form, 96. deduction of debts from ; in taxing national bank shares, 814 et seq., see National Banks, State Taxation of. national bank shares as, 820. double taxation of, 1369 to 1371. deducting debts from,, generally, 1395 to 1398, see Deductions. corporate shares are not, 1402. taxes on, in California, 1514. in Illinois, 1536. in Montana, 1612. in Utah, 1694 to 1696. deducting debts from, in California, 1510. in Minnesota, 1595, 1597. in Nebraska, 1619. in Ohio, 16.50. in South Dakota, 1681. in Utah, 1696. in Washington, 1707, 1709. CURATIVE ACTS: general rule as to defects which legislature cannot cure, 1247. general rule as to defects which legislature can cure, 3248. examples of omissions and errors which legislature can cure, 1248. failure to return tax lists in time, 1248. levy of ad valorem instead of per capita tax, 1248. unauthorized acts of officers, 1248. failure of officers to take oath, 1248. failure to advertise ordinance, 1248. failure to record ordinance, 1248. jurisdictional defects not cured by indirection, 1249. tax void because levied for private purpose, not cured by legislative reassessment, 1249. void city tax on outside property not cured by extending city limits to Include such property, 1249. sale for void tax passes no title, 1249. statute validating tax void for lack of jurisdiction is legislative judg- ment, 1249. passed while suits are pending, 1250. nature of " jurisdictional " defects discussed, 1251 to 1252a. acts made jurisdictional by statute, 1251, 1252a. acts jurisdictional as to legislature itself, 1252. failure to give statutory notice held to be defect which legislature could not cure, 1252a. statutory conditions, failure to perform which the legislature cannot cure, because the citizen has a right to act on the assumption that they will be complied with, 1252a. prospective and retrospective, 1253. curing mistake in name of owner of lands, 1252a, 1254. retrospective, constitutional provisions forbiddinE;, ]2.'>3a. 1833. validating bonds and debts, 636, 1255 to 1266, 1833, 2160, 2161. distinction between validating void bonds and validating void tax 1263, 1264. validating unauthorized tax to pay bounty to soldiers. 1266. as to prohibition on local and special legislation, 1730, 1731, 1732, 1745 making tax deeds conclusive evidence of title, 1267 to 1281, see Tax Deeds ; Retrospective Laws. see Reassessments. INDEX. 1209 References are to section niimhers. CURRENT EXPENSES: of municipality, payable out of current revenues, application of debt limits to, 2071 to 2088. general rule as to application of debt limits to, 2072. contract for service of attorney, 2073. cases denying power of city to contract debts for, when limit has been reached, 2074, 2075. met by warrants against cash and uncollected taxes, 2074, 2076. purchase of Are alarm system, 2075. provisions that annual debt shall not exceed annual income, 2077, 2078. 2082, 2087, 2088. effect of allowing debt to exceed income, 2087, 2088. CURRENT REVENUES: assignment of, in advance, by warrants, for current expenses, 2074, 2076. anticipation of. by revenue bonds, 2076a. provisions that annual debt shall not exceed annual income, 2077, 2078, 2082, 2087, 2088. effect of debts exceeding, 2087, 2088. debts payable out of, 2110. CUSTOMS DUTIES: notice and hearing as to, 1140. defined, 702, 703. see INDIEECT Taxes. D. DAMAGES : for tort, inclusion In city debt, 2091. DATE: when limit on tax rate taljes effect, 2020. of enactment of various tax laws, considered when total taxes exceed constitutional rate, 2027 et seq. when tax becomes a lien, to be considered when total taxes exceed constitutional rate, 2023, 2025, 2031. of assessment, for computation under debt limits, 2157, 2158. DEBTS : of individuals, taxes to pay, 188. of locality not to be assumijd by state, 442, 475, see Names of States ; Locality. when territory Is consolidated, 483, 484. apportionment of, when territory is divided, 499 to 503. constitutional provisions as to apportionment of, when territory Is divided, 504 to 518, see Names of States. when constitution requires debt of divided territory to be apportioned, power of legislature as to rule of apportionment, 520, 521, 522. 524. when county divided, deducting cash in treasury to ascertain debt, 522. including bonds in debt apportioned, 522. exempt property not included in estimate for apportionment, 521. including interest in debt apportioned, 523. of added territory, county is liable for, 526. municipal, control of placed in hands of state commission, 680. Federal taxes to pay, 697 et seq. deducting from value of national bank shares, 814 to 819. deducting from credits in listing. 1395 to 1398, see Ceedits. deducting from property generally, 1395, 1399 to 1401. taxation of, 1523. of corporations may not be deducted when individuals not allowed such deductions, 1722. 1210 INDEX. References are to section nurribers. DEBTS — Continued : taxation to pay, limitations on tax rate apply to, 2015 et seq. constitutional grants of power to incur, construed in connection with limits on tax rate, 2018 et seq. taxes to pay prior, excepted from limits on tax rate, 2020. DI5BTS, LIMITATIONS ON POWER TO INCUR: equality in, 15. generally, 2054 et seq. nature of, 2054, 2055. what debts are included in computation, 2056 et seq. bonds, and contractual obligations generally, 2058. obligations Imposed by constitution or legislature, 2059 to 2066. compulsory obligation to be included in estimating total debt, 2064. contracts made in execution of municipal obligations, 2065, 2066. necessary current expenses, 2067 et seq. constitutions excepting necessary expenses from debt limitations, 2068. necessary expenses defined, 2069. views of writer, 2070. current expenses payable out of current revenues, 2071 et seq., 2087, 2088. proper rule with respect to current expenses, 2072. debt for attorney's fee to reduce existing debt, 2073. cases denying powder to contract debts for current expenses payable out of current revenues, 2074 et seq. anticipation of current revenues by warrants drawn against current taxes and cash, 2074, 2076. anticipating current revenues by revenue bonds, 2076a. constitutions forbidding incurrence of debt in excess of annual revenue, 2077, 2078. methods of estimating current revenues, 2078, 2087, 2088. annual supplies of water, gas, services, etc., 2079 et seq. when single payment for annual supplies will exceed limit, 2080. purchase of plant, payable in Instalments, 2081, 2082. contracts to purchase In guise of contents for annual supplies, 2083 et seq. contract to buy waterworks disguised as contract to pay hydrant rentals, 2083. contract to buy building disguised as lease, 2084. contract to buy lighting plant disguised as lease, 2085. constitutional provisions as to water, light, and sewage plants and supplies, 2086. wlio decides whether debts will exceed current revenues, 2078, 2087, 2088. Including liability for torts, 2089, 2090, 2091. ■unliquidated claim, 2091. changing the form of debt, refunding bonds, 2092 to 2098. constitutional provisions as to refunding debts, 2098. deduction of property in sinliing funds from debt in applying debt limitation, 2099. deducting cash on hand and uncollected taxes in ascertaining debt, 2100. debts payable out of '• special funds," when included in calculating debt, 2101 to 2117. local assessment bonds, 2102 to 2104. special funds created by levy of special taxos, 2105 to 2110. debts which taxes have been levied to pay, 2110. incurring debts for purchase of public works, payable out of nrofita of plant, 2111 to 2115. ^ hypothecating public property and revenues, 2116, 2117, contracts to purchase, as debts, when performance is optional with municipality, 2118. INDEX. 1211 References are to section niimtiers. DEBTS, LIMITATION ON POWER TO INCUR — Co««WMeS; including interest in computation of debt, 2119, 2120. establisliment of municipal enterprise, as incurrence of debt, 2121. acceptance of donation on condition of levy of tax as creation of debt. 2121. inclusion of estimated expenses in couipvitation of debt, 2121. allowing public property to be assessed for local improvement as in- currence of debt, 2121. sale of bonds at par, 2122. adding accrued interest in sale of bonds, 2122. general limitations on municipalities in incurrence of debt, arising out of necessity for statutory authority, 212.3 to 2127. Implied power of municipalities to incur debts for supplies or labor, 2123, 2124. ■whether municipality has implied power to borrow money, 2125 to 2125b. municipal power to give evidence of debt, other than commercial paper, 2124, 2125b. implied municipal power to issue negotiable securities, 2125c, 2125d. power to issue negotiable bonds implied from power to issue bonds, 2125d. implied power to issue refunding bonds, 2125d. necessity for compliance with statute by subordinate officers, 2126, 2127. ■constitutional requirements that proposition for debt be submitted to popular vote, 2128, 2129. necessity of compliance with conditions imposed by popular vote, 2130. requirements that debt be incurred only by bills passed in certain manner, 2131, see Statutes, 1803 et seq. "necessity for majority when vote is taken, 2132. •constitutional requirements that provision for payment be made when debt is incurred, 2133 to 2147. requirements that sinking fund be created, 2133 to 2147. foregoing provisions mandatory, 21.34. requirement that tax to pay debt be levied at time of incurrence, interpreted, 2135 to 2139. effect of failure to provide annual tax, 2140, 2146, 2147. what amounts to sufficient provision to pay debt, 2141 to 2144. who is to judge of sufHciency of provision as to amount, 2144. classes of debts to which requirements of sinking fund or annual tax apply, 2145. effect of partial compliance with requirement, 2146. creditor's right not limited to the provision made by special tax or sinking fund, 2147. application of, to municipal bodies coincident in territory, 2148 to 2153. e::press provisions as to debts of bodies coincident in territory, 2149. public lands sold but not patented, 761. homesteads, 761. Mexican land grant before survey, 762. unconfirmed grant, 762. improvements on lands owned by United States, 760, 762, lands of Indians, 763, 764. FEDERAL SECURITIES: investment in, to avoid taxation, 759. FEES : under state inspection laws, 946. of public officers, as taxes, 1655, 1710, 1715, 1717. law fixing, is law of general nature, 1755. FENCING : local assessments for, 1847. FERRIES : interstate, state taxes on, 873 to 878. defined, 876. tax on transporting railroad cars over river, 876. situs of interstate ferry franchise, 878. franchise tax on company operating interstate ferry, 878. taxes on, in Arkansas, 1508. in Illinois, 1529. In Nebraska, 1614. in West Virginia, 1713. FERTILIZERS : state inspection laws applied to, 945. FINANCIAL CONDITION: classification of cities by, 1730. FIRE ALARM SYSTEM: purchase of, as necessary current municipal expense, 2075. FIRE DEPARTMENT: of municipality, legislative power to control, 652, 663, 664, 688, FIREMEN : exemption of, in Washington, 1707a. appropriation for 326. see Pensions. FIRE PROTECTION: taxes for, 1530, 1548. INDEX. 1229 References are to section numbers. TLORIDA CONSTITUTION: loan or gift of public money or credit. 207, 446. becoming stoclcholder in corporation, 207. tax for benefit of chartered companies, 207. religious and sectarian appropriations, 265. apportionment of debts when county is divided, 506. delegation of taxing power, 587. legislative control of municipalities, 587. local and special laws, 1522. general laws, 1522. uniformity and equality, 1522. license taxes, 1522. capitation taxes, 1522. exemptions, 1522. decisions under, as to local and special laws, exemptions, uniformity, and equality, 1523. purposes for which state debt created, 2222. FORECLOSURE : by state of mortgage on property of another state, 1041a. of tax lien by proceeding in rem., 1170. FOREIGN CORPORATIONS : insurance companies, 57. gross receipts of, 58. taxation for privilege of doing business in state, 57, 131 et seq., 138, 885, 1314, 1318. taxing bonds of, and compelling corporation to deduct tax from in- terest, 167, 168. may be taxed at rate imposed upon home corporations by respective foreign states, 542. double taxation of, see Double Taxation. see CoBPOBATioNs ; Feanchises. FOREIGN COUNTRY: defined, 714 et seq., 934. taxes on imports from, or exports to, see Imports : Expobts. treaty with, as limitation on taxing power, 1074 to 1086. see Teeatt. FOREIGNERS : license tax on foreign-born laborers, 1435. see Aliens ; Discbimination. FORFEITURE : of corporate charters, remission of, constitutional provisions respecting, 1010 to 1028, see Names of States. of whole property for failure to list, 1217. of right to object to assessment for failure to list, 1218. see Fobfeitcee of Lands foe Noncompliance with Tax Laws. FORFEITURE OF LANDS FOR NONCOMPLIANCE WITH TAX LAWS, 1176 to 1186. due process of law the applicable limitation, 1176 et seq. forfeiture for failure to pay tax, without notice or hearing, held void In Mississippi, 1177. forfeiture for failure to list, without office found, void in Kentuckv 1177a. •'' office found, and inquest of office defined, 1177a. absolute forfeiture for failure to list or pay taxes held void in North Carolina, 1178. Virginia and West Virginia statutes and cases as to forfeiture of lands for failure to pay or list, 1179 to 1185. forfeiture without inquisition upheld in Virginia, 1180. 1230 INDEX. References are to section numbers. FORFEITURE OF LANDS, ETC.— Continued: forfeiture without inquisition in West Virginia, 1181 to 1184. West Virginia constitution respecting forfeiture, 1182. West Virginia constitution, taken togetlier with statutes, held to be due process of law in United States Supreme Court, 1184, 1185. Intimated view of United States Supreme Court, 1186. legislative act equivalent to oiEce found, 1186. express constitutional provisions, 1191 to 1194. FORM OP GOVERNMENT: classification of cities by, for taxation, 1734. FOURTEENTH AMENDMENT: does not limit states in formation of taxing districts, 414. 415, 416. as to legislature delegating powers, 535, 536, 537. part quoted, 1087. origin and scope, 1088 to 1095. purpose of, distinguished from occasion of its enactment, 1C89, 1092. effect not confined to negroes, 1089, 1090, 1092, 1093, 1094. narrow view taken in Slaughter House Cases, 1091. broader view subsequently adopted, 1094. Federal citizenship, constitutional provision quoted, 1095. Federal citizenship before Fourteenth amendment, 1095, 1096. Dred Scott decision, 1096. who are citizens of United States, 1097. national citizenship and state citizenship distinguished, 1097. corporations are not citizens, 1098, 1098a. Indians whose tribal relations are not whollv severed not citizens, 1098a. Chinese born in United States are citizens, 1098a. privileges and immunities of citizens of United States, 1099 to 1106. see Privileges and Immunities. corporations are persons, 1114. effect of equal protection of law clause, lll.'i. see Due Process of Law ; Notice and Hearing ; Equal Protection of Laws ; Equality ; Federal Constitution. FRANCE : treaty with, of 1853, 1077, 1078. FRANCHISES : may be taxed, 47, 47a. necessity of express legislation for taxation of, 47a. taxation as privileges, 47a, 1315 to 1317. taxation as property, 47a, 60 et seq., 66, 912 to 917. 1315 to 1317. classification, 51 et seq., 67. to 6e, defined, 51 et seq. to do, defined, 51 et seq. loose and varied use of word, 53. taxes on, for organization, consolidation or continuance, 54 to 56. to be and to do not always distinguished, 57. to be, taxed as property in California, 66. situs of, 101 et seq. ferry franchises, 102. of domestic corporations, 101. of foreign corporations, 103 et seq. may be given situs in state by legislature, 103 et seq. of express companies, 103, 104. of bridge companies, 103. of railroad companies, 103. of telegraph companies, 103. considered with respect to unit method of taxation 103, 108c of corporations may be apportioned for taxation among localities, 149 162. ' ' INDEX. 1231 References are to section numiers, FRANCHISES — Continued: granted by state, Federal tax on, 748, 749. of corporation whose capital is invested in United States bonds, 756. of corporation owning patent rights, taxation of, 782. of national banks, not taxed by states, 794 to 799. of interstate corporation considered as property, taxation of, by states considered with respect to interstate commerce, 912 to 917. methods of valuing, of Interstate corporations, taxation with respect to interstate commerce, 913 to 917. of interstate telegraph companies considered as property, taxation with respect to interstate commerce, 913. of interstate railroad companies considered as property, taxation with respect to interstate commerce, 913. of interstate sleeping car companies considered as property, taxation with respect to interstate commerce, 914. of interstate express companies, considered as property, taxation with respect to interstate commerce, 915. of interstate bridge companies considered as property, taxation with respect to interstate commerce, 916, 917. payment of price for, as contract not to lay tax on, 999 to 1007, see iMPAtKiNQ Obligation of Contracts. transfer of exemptions by assignment of, 1058, 1059, 1060, 1069, 1(I70. how far requirements of equality and uniformity apply to taxation of, 1315 to 1317. Interpretation of exemptions of, 1351a. double taxation of, 1365a, 1369, 1372, 1373 to 1376a, see Dotjdle Tax- ation. enforcing tax by sale of property, 1171. unit method of taxing, with respect to equality and due process, 1461 to 1473. taxation of, in California, 1513. in Illinois, 1531, 1532. in Indiana, 1539. In Iowa, 1541. In Kentucky, 1550, 1551. 1552, 1553, 1554 In Louisiana, 1556, 1566. In Maine, 1571. In Maryland, 157.5, 1577. In Massachusetts, 1582, 1584. in Michigan, 1587. in Missouri, 1605. in Montana, 1612. In Nebraska, 1614, 1619. in New Jersey, 55, 63, 1633, 1634 in New York, 56, 62. In North Carolina, 1637, 1640. In Ohio, 1653a. in Texas, 1690. in Utah, 1094, 1695. in Virginia, 1698, 1699. 1703. in West Virginia, 1713. In Wyoming, 1719. of co-partnership not taxed, 1584 (see also 915, note). not exempted by requirement that corporations be taxed same as In- dividuals. 1725. basis of valuation of, 1459, 1466 to 1473, 1566. of street railways, local assessments of, 1903, 1921 et seq, of steam railroads, local assessments of, 1909, 1913. application to, of limits on tax rate, 2007. Bee CoBPOKATioNS ; Federal Franchises, State Taxation op. 1232 INDEX. References are to section nunibers. FRANCHISE TAXES. See Franchises. on gross receipts, 58, see Gross Receipts. on freight, 59. measured by capital stock, 61 to 63. FRAUD: vitiates determination as to bounds of tax district, 418. investment in exempt property to avoid taxation, 759. state inspection laws for protection against, 945. not shown in tax proceedings by failure to change possession of per- sonalty, 1214. FREIGHT : tax on, 59. transportation of, as commerce, 827. state taxes on, distinguishing between Interstate and intrastate busi- ness, 899. see Gross Receipts ; Commerce, State Taxes Affecting. FREIGHT COMPANIES: taxes on, 1596. FRENCH SPOLIATION CLAIMS: payments for, 329. FRONTAGE : levy of local assessments by rule of, 1956 to 1972. making lot pay cost of improvement In front of it, 1978, 1979. method of assessment by, inapplicable in various cases, 1987, 1991. FURTHER INDEBTEDNESS: meaning of, in debt limitations, 2156. FUTURE WORK: local assessments for, 2003. G. GAMBLING : license tax on, 1414a. GAMES : license tax on, 1414a. GAS: power of indebted municipality to contract in advance for annual supplies of, 2079 to 2081. constitutional provisions as to municipal supplies of, 2086. GAS COMPANIES: tax on, in Georgia, 1525. in Illinois, 1532. In Ohio, 1649. GAS WORKS: municipal, 247a, 247b. acquisition of, in Missouri, 1608. contract of purchase disguised as contracts for annual supplies, 2081, 2083 to 2085. constitutional provisions as to municipal, 2086. GENERALITY : in title of law, 1817 to 1821a. see Subjects and Titles of Acts. GENERAL INCORPORATION ACT: as contract, 998a. IITDEX. 1233 References are to section numlters. OENERAL LAWS: defined, 1728, 1750, 1751. provisions forbidding special laws when general law can be made applicable, 1747 et seq. legislature to judge of applicability of, 1747, 1748. sometimes courts judge as to applicability of, 1749. illustrations of, 1750, 1751. see General Nature, Laws of, and Local and Special Laws. for constitutional provisions respecting, see Names of States. ■GENERAL NATURE, LAWS OP: to have uniform operation, 1753 et seq. defined, 1751, 1753. illustrations of, 1754, 1755. legislature, judge whether law is of general nature, 1755. courts sometimes judge whether law is of general nature, 1755. law for refunding taxes, 1755. law fixing sheriff's fees, 1755. law for pensioning teachers, 1755. law for levying county taxes, 1754. law for control of public revenues, 1750, 1751. state constitutions concerning, see names of states. see also Local and Special Laws ; General Laws. GENERAL RECITALS: in municipal bonds, effect of, 2198, 2199. see Recitals in Municipal Bonds. GEORGIA CONSTITUTION : loan or gift of public money or credit, 208, 447. purposes of taxation, 208. certain, bonds declared invalid, 208. becoming stockholder In any corporation, 208. religious and sectarian appropriations, 266. extra compensation to oflicer or contractor, 360. localities may build capitol, 438. state not to assume local debts, 447. delegation of taxing power, 587a. as to impairing obligation of contracts, and retrospective laws, 960a. irrevocable grants, 981. power to tax corporations never relinquished, 981. remission of forfeiture of corporate charters, 1013. uniformity and equality, 1524. exemptions, 1524. poll taxes, 1524. special laws, 1524. general laws, 1524. decisions under, with respect to exemptions, uniformity and equality 1525, 1526. as to state and municipal debt, 2223. <}IFT: to state of bondholder's claim against another state, 1041a. of public money or credit, see names of states for constitutional pro- visions respecting, see Public Purpose. "ense taxes, 1527. per capita tax, 1527. exemptions, 1527. duplicate taxation forbidden, 1527. decisions under, as to uniformity, equality, exemptions, duplicate tax- ation, 1528. as to releasing or compromising public claims and taxes, 1781. imposing new liability for past transactions, 1833. retrospective laws, 1833. limits on tax rates, 2037. as to state and municipal debts, 2224, 2225. ILLINOIS CONSTITUTION : loan or gift of public money or credit, 210. appropriations in aid of railroads and canals, 210. drainage, ditches and levees, 250. religious and sectarian appropriations, 268. extra compensation to officer or contractor, 361. claim without authority of law, 8G1. state not to assume local debts, 449. state credit not to be loaned to localities, 449. apportionment of debts when county is divided, .508. delegation of taxing power — legislature not to impose local taxes, 589. private property not to be sold for municipal debts, 589. municipal taxes to be uniform, 589. tax sales, right of redemption and notice, 1191. as to personal liability for special assessments, 1234. as to taxation of franchises, 1317. local and special laws, 1529. proportional tax by valuation, 1529. excise and license taxes, 1529. franchise and corporation taxes, 1529. exemptions, 1529. decisions under, as to equality and uniformity, 1530, 1531 et seq. decisions under as to taxation of franchises, privileges, licenses, and corporations, 1531, 1532, 1533. decisions under, as to exemptions and commutations, 1534, 1535, 1536. as to releasing or compromising public claims and taxes, 1782.' as to special assessment and special taxation, 589, 1942 to 1944. limits on tax rates, 2038. as to state and municipal debts, 2227. IMMIGRANTS : Federal tax on, 703. IMMUNITIES : of citizens, see Privileges and Immuititie3. transfer of corporate, see Tbansfek of Exemptions. IMPAIRING OBLIGATION OP CONTRACTS: acquiescence in city ordinance as contract. 998. general incorporation act as contract, 998a. Federal constitutional provision, 957. state constitutional provisions, 958 to 964. INDEX. 1237 References are to section nvmhers. IMPAIRING OBLIGATION OP CONTRACTS — Coiitinued: general discussion of the contract clause, 965, 966. contract clause has no application to Federal government or ter- ritories, 966. application of contract clause, 966. what constitutes a contract, 9G7 to 970. judgment as contract, 967. elements of contract, 968. implied contracts, 968. executed contracts, 969. corporate charter is contract, 970. city charter not contract, 970, 1035. what kind of action violates constitution, 971, 972. law or constitution of state, 971. municipal ordinance, 971, 998. decision of highest court, 971, 972, 1051, 1052. supreme court decides for itself whether contract exists. 973. power of state to limit taxing power by contract, 974, 975. irrepealable laws, 975. state constitutional provisions with respect to irrepealable laws and grants of the power of taxation, 970 to 996a. exemption passing to grantees of Indians, 996b. exemptions by corporate charter, 996c to 998a. exemption of charitable institution by charter, 996d. exemption of railroad by charter, 996d, 997, 998. consideration for exemption in corporate charters, 996d 996e. supplement or amendment to charter becomes part of original, 996f. acceptance of charter by company an element of contract, 997, 998. payment of price for corporate franchise as contract not to tax the franchise, 999 to 1007. payment of price for franchise in lieu of other taxation, 1000. provision in charter fixing tax, but not providing that such tax shall be in lieu of other taxation, 1001. grant of right to lay tracks in streets upon specified conditions, as contract not to lay further taxes, 1002 to 1005. grant of right to put electric light poles in streets upon certain con- ditions, as contract not to lay further tax, 1006. sale of lands by city, subject to certain specified conditions, as con- tract not to tax such lands, 1007. contract to exempt does not arise by acquiescence, 1007, 1036. provisions allowing legislature to modify or repeal, as modifying con- tractual effect of corporate charter, 1008 to 1028. where provision for repeal is contained in charter, 1008. where provision for repeal is contained in general law, 1008. where provision for repeal is contained in state constitution, 1009. state constitutional provisions particularly providing for repeal of cor- porate charters, 1010 to 1028, see Names of States. grant of exemption as gratuity, 1029 to 1035. presumptions against relinquishment of taxing power, 1029. exemptions of particular corporation or individual as gratuity, 1030 1031. exemption of charitable institution already incorporated, 1031. exemption of a class as gratuity, 1032. bounty to those engaging in industry under general law, 1032. exemption to railroads operating in specified territory, as gratuity 1033 1034. city charter provision that streets once paved shall not be repaved at property owner's expense not contract, 1035. contract of exemption does not arise by estoppel, 1036. 1238 iNi>Ex. References are to section numbers. IMPAIRING OBLIGATION OP CONTRACTS — Com«nMe(i: expenditures on faith of exemption do not estop state from taxing, 1036. ratification of previously invalid coniraet of exemption, 1037. contracts to exercise the taxing pov?er, 10.38 to 1047. issue of municipal bonds as contract to levy taxes to pay them, 1038, 1039, 1040. Issue of bonds to be paid by levy of special tax, 1039. enforcement of a state's contract to levy taxes to pay bonds, 1041, 1041a. assignment to state of bondholder's claim against another state, 1041, 1041a. gift to state of bondholder's claim, 1041a. proceeding against state officers, 1041. state statute impairing validity of it* bonds, is void, and cannot be enforced against citizen, 1042. Virginia coupon cases, 1042, 1043, 1044, 1056. laws impairing contract right of bondholder to pay taxes with coupons cut from bonds, 1042. 1043, 1044. laying tax on coupons presented in payment of taxes, the earlier con- tract being to receive coupons in payment, 1043. special tax on bond coupons offered for sale, 1044. unreasonable statute of limitations concerning bond coupons, 1044. prohibiting expert testimony in suits to establish bond coupons, 1044. compelling production of original bond in suit to establish coupons, 1044. evading municipal contracts and debts by dissolution of old corporation and reincorporation of same territory, 1045. municipal bonds valid though municipal organization for a time aban- doned, 1046. where state abolishes municipal government and governs territory itself, levy of taxes for bonds cannot be enforced by courts, 1047. contracts subject to taxation as property, 1048, 1049. state or city may tax its own bonds or contracts of indebtedness, 1049. state or city taxing its own bonds and deducting tax from interest, 1049. taxing corporate bonds held by nonresidents, compelling corporation to deduct tax from interest, 1049. taxing bonds of foreign corporation held by residents and compelling corporation to deduct tax from interest, 1049. obligation defined, 1050. what impairs obligation, 1050 to 1056. repealing law which is essential element of contract, 1051. repealing bank charter which made banknotes receivable for taxes, 1051, 1054. repealing exemption, 1051. obligation impaired by abridging remedy, 1053 et seq. obligation impaired by acts which prevent enforcement, 1053 to 1056. where right to mandamus given by contract, law repealing right vio- lates obligation, 1053. laws which substitute less effective remedy than original one, 1053. obligation not impaired where substantially equal remedy given, 1054. substituting suit at law for mandamus, 1054, 1055. particular remedy in detail not a part of contract, 1054. several examples of laws impairing obligation by taking away remedy, 1056. short statute of limitations, 1056. transfer of contractual rights of exemption, 1057 to 1071, see Transfer OF Exemptions. exemption ceasing at sale of lands, ceases when equitable title passes, 1071a. peculiar contract of exemption construed, 1073. inheritance tax laws as, 1072, 1491, 1494, 1495. retrospective tax laws do not ipso facto constitute impairment, 1828, 1830. INDEX. 1239 References are to section numbers. IMPAIRING OBLIGATION OF CONTRACTS — Continued: changing remedy of holder of tax certificate, 1830. changing remedies of purchasers- at tax sales, 1830. extending time of redemption from tax sales, 1830. limitation on tax rate not prevent taxation for prior debts, 2020. public creditor's rights subject to existing limits on tax rate, 2016 et seq. debt limitations construed not to impair contracts, 2156. TMPLIED AUTHORITY: of municipality to contract debt and Issue bonds, 2123 to 2125d. IMPORTS : sale of, is commerce, 827. duties on. by states forbidden by Federal constitution, 932. defined, 933. difference between imports from foreign country .ind articles from other states, as to state taxing power, 935. may not be taxed in original package, 935, 936. license tax on importers is duty on, 936. may be taxed when original package is brolien, 936. out of hands of original importer, 936. original package defined, 936. inspection laws apply to. 943, see Inspection Laws or States. notice and hearing as to duties on, 1140. see CoM.MEKCE, State Taxes Affecting. IMPORTERS : license taxes on, as restrictions of commerce, 840. license tax on, is import duty, 936. see Imports ; Commeece, State Taxes Affectinq. see Duties ; Customs Duties. IMPOSITION : state Inspection laws for protection against, 945. IMPOSTS : defined, 702. see Indirect Taxes ; Excises. IMPROVEMENTS : in navigable waters, charge for use of, 882, 883. on lands, taxing and leaving lands exempt, 1352 to 1354. excluded in local assessments by value, 1976, 1977. in front of lot, whole cost borne by lot, 1978,- 1979, see Local Assess- ments. IMPRISONMENT : for violation of tax law, 1171. INCOME : derived from Federal securities, state taxation of, 758. taxing both land and, 1365b. of municipality, provisions that annual debt shall not exceed, 2077, 2078, 2082, 2087, 2088. of municipality, how estimated, 2078, 2087, 2088. INCOME TAXES: in general, 45, 758. exemptions in territorial, 1330a. Federal, 696, 704, 728 to 737. in California, 1511. In Kentucky, 1550. in North Carolina, 1637. In Pennsylvania, 1666. in South Carolina, 1674. in Tennessee, 1682. 1240 INDEX. References are to section numbers. INCOME TAXES — Continued: in Texas, 1687. in Utah, 1695. in Virginia, 1698. in territories of United States, 1720a. INDIANA CONSTITUTION: loan or gift of public money or credit, 211. state assuming debts of localities, 211, 450. certain stock certificates Invalid, 211. Wabash and Erie canal, 211. religious and sectarian appropriations, 269. local and special laws, 1537. general laws, 1537. uniformity and equality, 1537. exemptions, 1537. decisions under, as to equality and uniformity, 1538, 1539. local and special laws, 1538. exemptions, 1539. as to state and municipal debts, 2228. INDIANS : state taxation of lands of, 763, 764. taxes on commerce with, 929, 930, 1720, 1720a. exemption by contract, 996b. INDIAN TRADERS: taxes on, 1720, 1720a. INDIGENT POOR: remitting taxes of, 1695, 1696, 1802. see Charities. INDIRECTION : void tax not cured by, 1249. INDIRECT TAXES : uniformity under Federal constitution, 695, 702 et seq., 705, 706, 707, 708, 709, 710, 711, 712 to 720, see Unifokmity. in territory in temporary occupation of United States, 714. acquired by United States, 714, 715, 716, 716a. in territories in strict sense, 717, 718. local taxes in territories, 719, 720. see Customs Duties; Duties; Excises; Imposts; Imposts; Exports. INDIVIDUALS : taxing corporations same as, 1721 et seq. taxing banks same as, 1721 et seq. INDIVISIBLE CONTRACTS : partly in excess of debt limit, 2164 to 2169. INEBRIATES : care of, see Charities ; Public Purpose. local and special laws as to cure of, 1735. INHERENT LIMITATIONS: existence of, generally, 26, 28 et seq. as to local self government, 639 to 648, 651 to 654. INHERITANCE TAXES : on bank deposits of nonresident, 93, 94, 130, 145. on bonds of nonresident, 145. basis of, 45, 141. on succession to real property outside the state, 142. personalty by state of decedent's domicile, 143. corporate shares, 144. personalty In the state passing from nonresident, 145, 146. INDEX. 1241 Referemxi ire to section numbers. INHERITANCE TA.'X.'E,^ — Continued : residence of beneficiary, 147. Federal, 704, 727, 744 to 747. Federal, on legacy consisting of state or municipal bonds, 744 Federal, on legacy to state municipal corporation, 744. Federal, as Impeding operation of state succession laws, 745. on legacy of United States bonds, 757. on legacy to United States, 757. on exempt securities does not violate contract, 1072. on estate of nonresident does not violate contract, 1072. as affected by treaties, 1077 to 1086. notice and bearing as to, 1148, 1149. may be lien on property transferred, 1188. discrimination as to, between foreign and domestic corporations, ISISV equality in, 1474 to 1489. classifications In, based on relationship to decedent. 1474 to 1477. classification as to relationship under Federal constitution, 1474. not property taxes, but taxes on right of succession. 1475. express constitutional provisions with respect to. 1477. 1484, 1488. discrimination between residents and nonresidents, 1476. privileges and immunities of citizens as to, 1476. exemptions of smaller legacies, 1478 to 1489. progressive rates, 1478 to 1489. classification by amount of estate, 1478 to 1489. decisions upholding classification by amount, and progressive rates, 1478 to 1481. progressive rates, amounts sustained, 1479. amounting to confiscation, 1479. progressive rates and exemptions upheld under Federal constitution,. 1480. upheld under state requirements of equality and uniformity, 1481^ condemned under state requirements of uniformity and equality, 1482 to 1489. exemptions upheld, though progressive rates condemned, 1488. condemned under requirements of equality because viewed as property taxes, 1482, 1483, 1486, 1487, 1502a. upheld as property taxes, 1492 to 1496. condemned as imposed by local and special law, 1489. retroactive effect of, 1490 to 1501. due process of law in, 1490, 1492, 1498 to 1501a. on interests vesting prior to enactment of law. but coming into posses- sion or enjoyment afterward, 1491, 1492, 1494, 1495, 1496 to 1502a. as impairing obligation of contracts, 1072, 1491, 1494, 1495. when devolution takes place, 1497 et seq. on transfer by power of appointment exercised after passage of law, the power being created by will or deed effective before passage of law, 1498, 1499, 1500. no equitable conversion as to, 1501. remaindermen taxable before termination of precedent estates, 1502. discrimination between certain remaindermen and others, 1502a. In Alabama, 1506. California, 1514. Illinois, 1532. Iowa, 1542. Maine, 1571. Massachusetts, 1582. Minnesota, 1591, 1598. Montana, 1613. New Hampshire, 1626. 1242 INDEX. References are to section numbers. INHERITANCE TAXES — Continued: In New York, 1491 et seq. Ohio, 1648. Pennsylvania, 1665. Tennessee, 1683. Utali, 1696. Virginia, 1701. Washington, 1710. Wisconsin, 1715. local and special laws as to, 1736. limits on tax rate do not apply to, 2007. INLAND WATERS: navigation of, is commerce, 827, 831. are commercial highways under control of Congress, 882. INNKEEPERS : taxes on in, 1529, 1582, 1614. INQUEST OF OFFICE: forfeiture of lands without, 1177a to 1180. INSPECTION : of telegraph companies under police power, In relation to Interstate commerce, 879 to 881. defined, 942, see Inspection Laws of States. cost of, element of license tax under police power, 1445 et seq. INSPECTION LAWS OF STATES: right of states to enact, 837, 839, 932, 941 to 947. derivation of right to enact, 941. inspection defined, 942. taking testimony is not inspection, 942. apply only to property, not persons, 942. application to exports, 943. application to imports, 943. application to subjects of interstate commerce, 943. void if discriminatory, 944. apply for protection of public health, 945. for protection of public morals, 945. for protection of public safety, 945. for protection against fraud or imposition, 945. applied to fertilizers, 945. applied to oleomargarine, 945. amount of fees charged, 946. general nature of, within discretion of legislature, 947. reasonable exemptions contained in, 947. excepting tobacco packed in neighborhood where grown, 947. not enforced by means of tonnage duties, 952. INSTALMENTS : contracts for annual supplies by indebted municipalities, payable In, 2079 to 2081. contracts for purchase of municipal buildings and public works, pav- able in, 20S1, 2082 to 2085. INSULAR TARIFF CASES: discussed, 714 to 741. INSURANCE : is not commerce, 827. of public property, expense of, not compulsory obligation, 2066. INSURANCE COMPANIES: wbat constitute doing business in state by, 133. INDEX. 1243 References are to section numbers. INSURANCE COMPANIES — Continued: foreign, taxes on, 57. may be taxed at rates imposed on home companies by respective foreign states, 542. local taxation of, by legislature for local purposes, 677b. Federal tax on premiums and receipts of, 704, 723. commutations of taxes on, 1333. double taxation of, 1372, see Cobpoeations ; Double Taxation. license taxes on, 1419. tax on, in Alabama, 1507. in Illinois, 1529, 1532. in Indiana, 1538. in Iowa, 1543. in Kansas, 1547. in Kentucky, 1554. in Louisiana, 1563. in Massachusetts. 1582. in Michigan, 1588. in Mississippi, 1600, 1603. in Missouri, 1610. in Pennsylvania, 1663. In Nebraska, 1614, 1615. in Nevada, 1623. In NevF Jersey, 1632. in Wisconsin, 1717. In territories of United States, 1720a. commutation allowed to, void, when individuals are fully taxed, 172.3. INSURANCE POLICIES : taxation of, 1539, 1548, 1582. INTANGIBLE ASSETS: of national banks, exempt from state tax. 794 to 799. of interstate companies, taxation of, with respect to interstate com- merce, 912 to 917. see Feanchises ; Cokpokations ; Commeece, State Taxes Affecting ; Methods of Taxation ; Unit Method. INTEREST: when county divided, included in apportionment of debt, 523. on bank deposits. Federal tax on, 704. deducting tax on municipal or state bonds from, 1049. compelling corporation to deduct tax on its bonds from, 1049. as penalty for noncompliance with tax law, 1215. validity of laws Imposing retrospectively, as penalty for nonpayment, 1831, 1832. on money borrowed for work, included in local assessment, 1872. on Invalid assessment, not Included in local assessment, 1877. inclusion of. In computations as to public debt limits, 2119, 2120. INTERNAL IMPROVEMENTS : dredging rivers, 241. operating street railways, 241. defined, 241. Federal power to make, 690. municipal debt for, when state debt forbidden, 2154, 2155. for constitutional provisions with respect to, see Names of States. see Railroads. INTERPRETATION. See Self-Executing Pbovisions ; Peesumptions ; Mandatory Pbovisions. of exemptions of corporations, 1351a. equality is canon of, 32 et seq., 39. INTERSTATE COMMERCE. See Commebce, State Taxes Affecting. 1244 INDEX. References are to section numhers. INTRASTATE TRANSPORTATION OR BUSINESS: as part of interstate commerce, 831 to 833. state tax on, 897. statutes construed as applicable to, 897, 904. separation of receipts from, from receipts from interstate business, 887 to 904. see Commerce, State Taxes Affecting. INVALID ASSESSMENT: costs of and interest on, not included in local assessment, 1877. see Local Assessments. INVALID LAW: bonds reciting, are valid if there is valid law authorizing them, 2199a. IOWA CONSTITUTION: loan or gift of public money or credit, 212. becoming stockholder in private corporation, 212. assuming liabilities of individual or corporation, 212. taxes for religion, 2G9a. state not to assume local or other debts, 451. amendment or repeal of corporate charters and franchises, 1015. general laves, 1540. local or special laves, 1540. equal privileges, 1540. property of corporations to be taxed the same as individuals, 1540. uniformity of operation, 1540. decisions under, as to local and special laws, general laws, uniformity of operation, 1541. decisions under, as to uniformity of taxation, 1542. as to exemptions, 1343. as to state and municipal debts, 2229. IRREGULARITIES : in issue of bonds, estoppel of defense by recitals, 2187. see Cueative Acts. IRREPEALABLE LAWS: creating contracts, 975. state constitutions respecting, 976 to 99Ga, see Names of States. state constitutions as to repeal of corporate charters, lOlO to 1028, see- Names of States. requirements that they be enacted, providing for tax to pay debt, when debt is incurred, 2133 to 2147. IRREVOCABLE GRANTS: of exemption, state constitutions respecting, 976 to 996a. see IMPAIBING Obligation of Contracts. IRRIGATION : is public purpose, 253. either at .public expense or by special assessment, 253. local assessments for, 1847. applicability to assessments for, of rules of area and value, 19SG to« 1991. IRRIGATION DISTRICTS: legislature may form, 416. delegation of taxing power to, 538, 564 to 567. ITALY : treaty with, of 1871, 1081, 1082. INDEX. 1245 References are to section nurnbers. J. JOURNALS OF LEGISLATURE: power of the courts to examine, as to whether bill was properly passed, 1804, 1805, 1S06. requirements that vote be entered on, 1807 to 1812. power of courts to inquire whether vote is entered on, 1807 to 1811. effect of failure to record in, 1812. parol evidence to contradict, 1813. JUDGMENT : situs of, for taxation, 97. validating void tax deed is legislative, 1249. as a contract under Federal constitution, 967. taxation of, 1548. against municipality, creditor's rights under, are subordinate to limits on tax rate, 2015 et seq. of court cannot validate tax in excess of constitutional limit, 2032. for tort, included in estimating city debt, 209O. against municipality, whether tax to pay can be resisted because original debt was in excess of limit, 2170 to 2173. JUDICIARY : may review legislative determination as to purpose, 173. may review legislative determination as to tax district, 416, see Leqis- LATTJKE. may review determination of subordinate body as to bounds of taxing district, 418. taxing power not delegated to, 533, 535. legislative powers delegated to, effect of Federal constitution, 535, 536, 537. granting power to, to appoint commissioners to construct courthouse, 679. sometimes to decide whether general law can be made applicable, 1740. sometimes to decide whether law is of general nature, 1755. power to go behind legislative certification as to passage of bills and entry on journals, 1804 to 1811, see Cebtification; Statutes. JTTNK DEALERS : license taxes on, 1420. JUNKETS: legislative, appropriations for, 406. JURISDICTION : of government is territorial, was formerly personal, 69. see Situs. JURISDICTIONAL ACTS : what are, 1268, 1269. JURISDICTIONAL DEFECTS : curing, generally, 1247 to 1300, see Curative Acts. what are, discussion, 1251, 1252. some which cannot be cured, 1247, 1249, 1251, 1252, 1252a. decisions holding curable, 1259, 1260, 1261. effect of statutes of limitation on, 1273, 1274 to 1281. JUROR'S FEES: warrants for, inclusion of, in calculating county debt, 2059, 2063. JURY: trial by, in local assessment cases, 2001. JUVENIIE DELINQUENTS: state control over municipality in matters affecting, 637. 1246 INDEX. References are to section nwnhers. K. KANSAS CONSTITUTION: works of internal improvement, 213. religious and sectarian appropriations, 270. delegation of taxing power, 590. restricting municipal powers of taxation, 590. corporate charters subject to amendment or repeal, 1016» as to deductions, 1398. special privileges and Immunities, 1544. general laws of uniform operation, 1544. special laws, 1544. exemptions, 1544. taxing banks and bankers, 1544. uniformity and equality, 1544. decisions under, as to uniformity of operation. I'AT). as to uniformity of taxation, 1545, 1546, 1547, 1548. as to equality, 1545, 1546, 1547, 1548. as to exemptions, 1549, 1549a. as to state debts, 2230. KENTUCKY CONSTITUTION : as to situs, 152. purposes of taxation, 214. loan or gift of public money or credit, 214. becoming stockholder in corporation, 214. constructing railroad or highway, 214. building capitol. 214, 438. claim without authority of law, 362. state not to assume local debts, 452. apportionment of debts when county is divided, 509. local subdivisions may levy poll taxes, 591. delegation of taxing power, legislature not to lay local taxes, 591. power to tax not surrendered by contract, 983. no exclusive privileges, 1550. local or special acts, 1550. exemptions, 1550. equality and uniformity, 1550a. corporations to be taxed the same as individuals, 1550a. income taxes, 1550a. license taxes, 1550a. franchise taxes, 1550a. general laws, 1550a. assessment of railroads and railroad property, 1550a. decisions under, as to exemptions, 1551, 1552. as to equality and uniformity, 1553, 1554. as to franchise taxes, 1554. as to license taxes, 1555. limits on tax rates, 2232. as to releasing or compromising public claims and taxes, 1783. as to state and municipal debts, 2231 to 2233. classification of cities, 2232. LABOR LAWS: when they increase cost of public work, 401 to 403, 672, 673, 1878. considered with respect to right of local self government, 666 to 677. regulating hours of labor on municipal works. 671 to 677. regulating wages on municipal work, 666 to 670, 677. regulating hours of labor under municipal contracts, 671, 671a 674, 675, 676. IIJDEX. 1247 References are to section numbers. LABOR LAWS — Continued: regulating wages paid by municipal contractors, 674 to 677. specifying materials to be used in municipal work, 672, 673. increased cost of work due to, Included iu local assessment, 1S78. LANDS : Federal tax on, transfers of title of, 704. Federal tax on Income derived from, 732, 737. Federal tax on, 737. sale of, by city, subject to certain conditions, as contract not to tax further, 1007. transfer of, exemptions of, to lessees, 1071. sale of, for income taxes, 1169. taxes on, collected out of personalty, 1171. forfeiture for noncompliance with tax laws, 1176 to 1187. tax on, collected by seizing occupant's property, 1206, 1207. property on lands of tax delinquent seized for taxes, 1203. tax by acre, 1319. tax by lot, 1320. taken for public Improvement, when cost Included in assessment, 1873 to 1875. of Federal government, see Fedbeal Peopebtt, State Taxation of. see Real Peopehty. LAUNDRIES : license taxes on, 1415, 1443. LAW OF THE LAND: included in due process of law, 1116. see Dub Peocess op Law. LAW OF STATE: impairing obligation of contract, 971. LAWYERS : license taxes on, 1420, 1507, 1577, 1582. LEASED PROPERTY: used for religious or charitable purposes, exempt, 1335. LEASES : contracts of purchase by indebted municipality, disguised as, 2083 to 2085. LEGACY : to aliens, tax on, 927. see Teeaties ; Inhebitance Taxes. LEGALIZING UNAUTHORIZED ACTS: state constitutions forbidding, 1253a. see CtTEATrvB Acts ; RETEOspECirs'E Laws. LEGISLATURE : taxing power belongs to, 24, 173. may declare franchises to be property, 60. may give situs to franchises, 103. power to give taxable situs to property in transit, 126. control over situs as between places in same state, 148 et seq. may distribute railroad, telegraph, and express property among localities, 148, 149. determines what Is public purpose, 173, 178. determination of, is not entirely conclusive, 173. employees of, extra compensation to, 379a, 380, see Extba Compensa- tion ; Pee-Existing Law. 1248 INDEX. References are to section numbers. LEGISLATURE — Continued: may refer private claims to board of claims, although constitution forbids audit of private claim, 384 et seq. may audit claims against municipalities, 388, 389, 635. may compel municipality to pay claim bad for technicalities, 388, 389. mpy waive technical defenses, 390. may waive defense of limitations, 395, 396. power to grant new trials in actions against municipalities, 391 et seq., 635. appropriation to pay for junkets of, 406. to determine tax district, 408, 409, 419. to determine amount of tax, 409. may delegate power to determine district, 409, see Tax Disteict; Delegation. power to determine tax district has limits, 410 et seq. •effect of Federal constitution on power to form tax districts, 414 to 417, is judge of benefits to property included in tax district, 416. power to include noncontiguous territory in tax district, 417. may reassess previous void assessment, 417. power to apportion cost of improvements on territory, 425, 426 to 435. power to form tax districts as affected by requirements of equality and uniformity, 430 to 435. power to cast state burdens on localities as affected by requirements of equality and uniformity, 430 to 435. maj^ annex lands to municipalities, 482 to 491. is sole judge of necessity of annexing lands to city, 482 et seq., 485, 488. may make consolidated city liable for old debts. 483 et seq. power to exempt agricultural lands in cities, 492 to 498a. power to tax unorganized territory, 498. power to divide territory and apportion debts, 499 et seq. power to readjust debt of divided territory after adjustment has once been made, 501, 502, 503. ■constitutional provisions as to power of, in dividing territory and apportioning debts, 504 to 518, see Names of States. under constitutional provisions requiring apportionment of debt of divided countv, its power to determine what is a jnst proportion, 520, 521, 522, 523. when county divided may fix date as of which debt is apportioned, 524. •control over counties, 519, 520, 521. when territory is divided, controls distribution of property, 52.5. not to delegate taxing power, 533, ■'i34. not to delegate powers to courts, 533, 535. effect of Federal constitution on delegation of powers. .135 to 538. power to delegate powers to reclamation district, 538. need not determine details, 539. ■cannot delegate power to tax to administrative officer, 540. may delegate to administrative officer power to put tax law in opera- tion and to determine existence of fact upon which tax law shall go into effect, 540, 541. Illustrations as to delegation of power, 542 to 544. ■delegation of powers to popular vote. 545 to 551. ■delegation of power to municipalities, 552 to 570. action by, necessary where constitution says taxing power may be delegated, 571. power of, to compel local taxation, 196. 616 et seq., 651, 652. may compel local taxation in matters of state concern, 618, 688. may compel local taxation with respect to local police and public peace, 619, 620, 688. may compel city to build armories, 428, ■433, 620. may compel city to pay damage caused by riots, 349a, 621. INDEX. 1249 References are to section tmrnbers. liEGISLATTTRE — Continued: compelling city to pay court expenses, 621. compelling locality to build roads and highways, 622 to 629, 688. compelling locality to build bridges, 622 to 629, 688. power to lay local taxes in matters of state concern, when constitution forbids it to lay local taxes for local purposes, 620, 625, 626. compelling municipality to build bridges where constitution forbids It to lay local taxes for local purposes, 625. compelling municipality to build highways, when constitution forbids it to lay local taxes for local purposes, 626. controlling building of municipal underground railways and tunnels, 627. control of streets, where constitution commands that city officers shall be locally chosen, 628, 688. control of local taxation for schools, 630 to 632, 655. control of local taxation for public health, 633, 688. control of local taxation for sewers and drains, 633. power to alter or abrogate municipal contracts, 629a. compelling municipality to recognize moral obligations, 634, 635, 636. compelling municipality to perform contracts, 635. validating defective obligations of municipalities, 636, 655, 3255 to 1265, 2160, 2161. compelling municipal taxation In matters of public charity, 637. as to appointment of local officers by, 628, 639 to 648. power to control municipal waterworks, 652, 659 to 662. power to control municipal fire department, 652, 663, 664. power to lay cost of river and harbor Improvement on locality, 653, 665. power to compel municipal taxation for parks, 657, 658, 688. right to regulate wages on municipal work, 666 to 670, 677. right to regulate hours of labor on municipal work, 671 to 677. right to regulate hours of labor under municipal contracts, 671, 671a, 674, 675, 676. right to regulate wages paid by municipal contractors, 674, 675, 676, 677. right to compel use of specified materials in municipal work, 672, 673, 677. constitutional provisions forbidding to levy local taxes for local pur- poses, 677a, see Names of States. Interpretation of constitutional provisions forbidding to levy local taxes for local purpose?; 620, 625, 626, 628, 67Tb, 681 to 691. placing local works in hands of state commission, 678 to 686. discretion of, as to Inspection laws, 947. notice and hearing generally unnecessary as to legislative acts, 1130 to 1133, see Notice and Hearing. act of, declaring forfeiture, equivalent to ofiice found, 1186. power to cure defects in tax proceedings, 1247 to 1300, see Cueative Acts; Tax Deeds; Reassessments. power to make exemptions, 1321, 1322, 1323 et seq., see Exemptions ; Commutations. its action in calling a law a revenue measure or a police measure not conclusive, 1404. discretion in amount of license tax not arbitrary, 1450, see License Taxes ; Police Power ; Classification. is usually judge of whether general law can be made applicable, 1747, 1748 et seq. Is usually judge whether law is of general nature, 1755. conclusiveness of certification of its officers, as to passage of bills, and entry on journals, 1804 to 1811, see Certification; Statutes; Journals of Leqislatueb. 79 1250 INDEX. References are to section numbers. LEGISLATURE — Continued: requirement of notice in passage of bills, 1814. requirements as to subjects and titles of acts, see Subjects and Titles- op Acts. Is judge of necessity of local improvement, 1884 et seq. is judge of district of local assessment, 1888 et seq. may group or divide local improvement, 1892 to 1895. abuse of discretion in fixing local assessment district, 1897 to 1902, direct levy of local assessment by, without inquiry as to benefits to- district, 1937, 1938. power to authorize subordinate body to lay local assessment without inquiry as to benefits, 1939 et seq., see Local Assessments. Is judge of emergency requiring state debt. 2159. powers as to local and special legislation, see Local and Special Laws. LEVEES AND DIKES: are works of Internal improvement, 241, 258. public purpose, 248, 249, 250, 254. Illinois constitution respecting, 250. Louisiana constitution respecting. 2.>4. Texas constitution respecting, 25.i. Mississippi constitution respecting, 256. local assessments for, 1847. assessments for, by area, 1978, 1988. void assessment for, 1999b. LEVEE DISTRICT: delegation of taxing power to, 570. LEVY OF TAXES : when notice and hearing unnecessary, 1130 to 1139a, see Notice and' Hearing. unauthorized, curing, 1248, see Curative Acts. Is jurisdictional act, 1268. tax deed not conclusive as to, 1268. which taxes to be levied, when total exceeds constitutional rate,^ 2024 et seq. LIABILITY : of city for damages, element of amount of license tax under police- power, 1446 to 1448. Is broader term than debt, 2078. Imposing, in respect to past transactions, 483, 18?8, 1833 et seq. Imposing, in respect to past transactions, constitutional provisions forbidding, 1833 et seq. for taxes, when fixed, cannot be released, see Releasing Claims for Taxes ; Arrearages ; and Refund. LIBRARY : commonly exempted, 1325. tax for, under limits on tax rate, 2013. accepting donation of, with provision for tax to support it, creates debt, 2121. LIBRARY BOARD: delegation of taxing power to, 5fiQ. debt of, not part of city debt, 2151. LICENSE LAW: popular vote may determine when shall go Into effect, 540. LICENSE MONEYS: distribution between state and city, 433. Including, in estimating city's income, 2078. INDEX. 1251 References are to section numbers. LICENSE TAXES : power to levy delegated to municipalities, 573. Imposed by Federal government, 696. national banks exempt from state, 793 et seq. on sales, as affecting commerce, 840 to 867. on emigrant agent, as violation of privileges and immunities of citizens, 1105, 1106. discriminating against nonresidents, as violation of privileges and immunities of citizens, 1111. notice and hearing unnecessary, 1138, 1139. collection by arrest and imprisonment, 1169, 1171. making lien on place vchere business carried on, 1139, 1171, 1209. enforcement by sale of personal property. 1171. making a lien on property used in licensed occupation, 1213. on street car advertising business, making a lien on street cars, 1210 to 1212. on business, together vcith tax on property used in business, 1367, 1308. on street cars, 1367. on merchants, 1367. in effect property tax, 1368. on bicycles, 1368. are laid tinder taxing power or police power, 1404. confusion in license taxation between taxing power and police power, 1404 to 1406. production of revenue as test of nature, 1404, 1405, 1407, 1408. legislative description as test of nature, 1404. revenue-producing measures sometimes sustained under police power, 1405. under taxing power, where revenue only object, 1405, 1407, 1408. on common or useful calling, usually revenue measure, 1407, 1408. for regulation of acts affecting public morals, health, safety, or order, regarded as police measures, 1404, 1405, 1407, 1408, 1409 et seq. see Police Power. on department stores, revenue measures, 1407, 1408, 1422, 1425. for police purposes, not subject to rules of equality and uniformity, 1409, 1415. on employment agencies, upheld as police measure, 1409. under police power, states not restricted by Fourteenth amendment, 1410. on liquor business, 1410, 1411, 1424, 1427, 1451. making right to grant liquor license discretionary with police commis- sioners, 1410. consent of property-owners condition of granting liquor license, 3410. on dogs, 1412, 1649, 1717. on banking business, as police regulation, 1413. on pedlers, 1414, 1415, 1420, 1436, 1443, see Pedlees. on shows, 1414a, 1450, 1453, 1508, 1529, 1614, 1649. for building, as police regulation, 1414a. requirements of equality not gpnerally applicable to, whether revenue or police measure, 1415, 1507. on games, 1414a. on betting, 1414a. on horse racing, 1414a. on prostitution, 1414a. on grain warehouses, 1414a. uniformity as to class on which they operate. 1416 to 1437. classification in license taxation, 1416 to 1437. classlflcation of, by business or occupations, 1417 to 1423. on stockbrokers, 1415, 1417. on commission merchants, excepting certain classes, 1417a, 1529, 1614. 1252 INDEX. References are to section numbers. LICENSE TAX.^S, — Continued: on express companies, 1415, 1418, 1424, see Expbess Companies. on laundries, 1415, 1443. on sewing machine companies, 1419. on life insurance companies, 1419, see Instjbance Companies. on lawyers, 1420, 1507, 1577, 1582. on physicians, 1507, 1526. on pilots, 839. on milk vendors, 1414a, 1443, 1663. on meat vendors, 1441, 1443, 1606, 1639, 1690. on junk dealers, 1420. on auctioneers, 1420, 1529, 1614. on auction sales, 1442. on emigrant agents, 928, 1105, 1106, 1421, 1426, 1639, 1677. as substitute for tax on personal property, 1423. classification in, by population, 1424 to 1427. classification by streets, 1424, 1427. on horse.shoers, classified by population of town, held void, 1425. classification in, by amount, 1428 to 1434. generally, under Fourteenth amendment, 1429. by amount, under Fourteenth amendment, 1430, 1431, 1431a. by amount, under requirements of equality, 1432, 1433, 1434. on merchants, 1367, 1368, 1415, 1423, 1430 to 1434, 1442, 1443, see Mekchants. on money lenders, 1677. classifications in, should be reasonable, 1435, 1436. illustrations of ai'bitrary classifications in, 1435, 1436. on foreign born, unnaturalized laborers, 1435. discriminating against aliens, unreasonable, 1435. discriminating in favor of veterans, unreasonable, 1436. on oyster tongman, 1437, see Oysters and Oysteemen. imposed by municipality, must be reasonable, 1438. must conform to charter, 1439. by municipality, which are reasonable, illustrations of, 1440, 1443, 1452. presumption in favor of reasonableness, 1440, 1443. illustrations of unreasonableness, 1441, 1442, 1450 to 1452. for vending on streets, 1441, 1442, 1443. for selling goods from outside city, unreasonable, 1442. discriminating against nonresidents, unreasonable, 1442, 1452. of excessive amounts, unreasonable, 1442, 1450. on street cars, 1415, 1442, 1443. on purchasers of claims, unreasonable, 1442. on public contractors, unreasonable, 1442. on plumbers, unreasonable, 1442. on druggists, 1414a, 1442. on vehicles, 1319, 1368, 1443, 1452, 1509, 1526, 1540, 1690. on draymen, reasonable, 1443. on restaurants, 1443. on public markets, under police power, 1444. amounts of, under police power, 1445. expense of issuing license, 1445. cost of inspection and regulation, 1445. liability of city taken into consideration in license tax, 1446 to 1448. expense of police surveillance, 1447, 1448. on telegraph poles, 1446, 1447, 1448, 1449, 1450. as rental for space in streets occupied by telegraph poles, 1449. under police power, discretion of legislature or municipal authorities not arbitrary, 1450. under police power, amount may be sufliicient to prevent multiplication of undesirable places, 1452. on engineers, 883, 1414a. INDEX. 1253 References are to section numbers. LICENSE TAXES — Gontinued: In territories of United States, 1720a. limitations on tax rate do not apply to, 2007. Inclusion of income from, in estimating annual revenue of municipality, 2078. on various callings, see Names op Callings. LIENS : for taxes, priority as between states and Federal government, 750, 751, 752. when business tax made a lien on property where business is carried on, notice and hearing necessary, 1139. for taxes, foreclosure by proceeding in rem., 1170, 1187. making license tax a lien on place where business is carried on, 1139, 1171, 1209. for taxes, assessments, and water rates, may be given priority, 1188. of inheritance tax on property transferred, 1188. of reassessment superior to intervening mortgage, 1188. ' on railroad right of way for taxes and assessments, enforcement of, 1189, 1190. of tax on mortgagee's interest in lands on the whole lands, 1208. on street cars, for tax on street car advertising business, 1210 !» 1212. of business tax on property used in business, 1213. see Collection or Taxes and Enforcement of Tax Laws. LIFE INSURANCE COMPANIES : license taxes on, 1419. see Instjeance Companies. LIGHT : power of indebted municipality to contract in advance for annual supplies of, 2079 to 2081. LIGHTING. See Gas ; Gas Wobks ; Electric Light Works. LIGHTING PLANT: erection of, as necessary municipal expense, 2069. contract for purchase of, by municipality, disguised as contract for annual supplies, 2081, 2088 to 2085. constitutional provisions as to municipal, 2086. see Gas ; Gas Works ; Electric Light Works. LIGHTING DISTRICT: creation of, 422. LIGHTNING RODS: tax on one who puts up, 8C2. LIMITATIONS : defense of, may be waived by state, 395, 396. short statute of, as impairing contract, 1056. statutes of, effectuating and curing defects in tax deeds, 1273 to 1281. see Tax Deeds. statute not giving complete opportunity to be heard, 1278 to 1281. of claim for taxes, in Texas, 1C92. LIQUOR BUSINESS : license tax on, laid under police power, 1404, 1410, 3411. consent of property owners to grant of license, 1410. license tax on, allowed by 14th amendment, 1410. see Rumsellers ; License Taxes. LIQUORS, INTOXICATING : state dispensaries for sale of, 247e. in warehouse, compelling warehouseman to pay taxes on, 1196, 1198. specifl<; tax per gallon on, 1319. in bonded warehouses, taxation of, 1553. taxes on, in Missouri, 1607, 1608. 1254 INDEX. References are to section numbers, LISTING : forfeiture of lands for failure to list, 1176 to 1187, 1217. see FOEFEITtJBE OF LANDS FOE NONCOIIPLIANCE WITH TAX LAWS. penalties for failure to list, 12] 6. addition to tax for failure to list, 1217. double taxation for failure to list, 1217. forfeiture of hearing for failure to list, 1218. curing failure to return in time, 1248. curing defects in, caused by unauthorized act, 1248. is jurisdictional act, 1268. see Collection of Taxes and Enforcement of Tax Laws. LITIGATION : expense of, not included in local assessment, 1877. LIVESTOCK : being driven through state, taxation of, 625. brought into state after assessment day, taxation of, 1355 to 1358. migratory, taxation of. In California, 1517. In Colorado, 1519. In Kansas, 1548. In Washington, 1707a. Wyoming, 1720. In Oklahoma, 1720a. LOANS : discrimination in taxation of, 1394. of building and loan associations, taxation of, 1394, taxation of, in California, 1514. in Florida, 1523. in Pennsylvania, 1665. see Debts ; Credits ; Double Taxation. LOCAL ASSESSMENTS : purposes limited in Virginia, 1698, 1706. may be laid for past improvements, 1828. retrospective in character, 1831. personal judgments for, imposed retrospectively, 1832. of remote property for sewers, 4-12. to equal previous void assessment, 417. may be collected by contractor, 686. assignment of, to contractor, 1222. personal liability for, 122.5 to 1246, 1832. discussion of rule limiting liability to value of land. 1244, 1245. construction of statutes, 1246. requirements of uniformity do not usually apply, 1312. rule of equality applies in some states, 1313. as to rule of equality in each state, see Chap. XXIII. when laid directly by legislature, when notice and hearing unnecessary, 1132, 1137, see Notice and Hearing. constitutional questions respecting, 1835 et seq. equality in, 13, 1835 et seq. as affected by prohibitions of taking private propertv for public use 1835, 1836. are made under the taxing power, 1836, 1839, 1840, 1841. due process of law with respect to, 1837 et seq. general theory and nature of, 1838 ct seq. defined, 1839. supposed to equal benefits, 1839, 1958, 1959 et seq. theory of benefits denied, 1840, 1959. sometimes made under police power, 1841, 1842, 1980 to 1985. INDEX. 1255 References are to section numhers. liOCAL ASSESSMENTS — Con«!ntte(«: not allowed in South Carolina, 1843. purposes for which may be laid, 1844 et seq. to 1878. for street improvements, 1845, 1846, 1849, 1850. closing streets, 1845. for sewers, water mains, and the like, 1846, 1849, 1851. for draining. Irrigating, levees, parks, fencing, 1847, 1851. for maintenance and repairs, 1848 et seq. to 1857. sweeping and sprinkling streets and transient purposes, 1850. provisions for future repairs in contracts for improvements, 1858 to 1863. for country or suburban roads, 411, 1846, 1865. for toll roads, 1846. for building railroad, 1865. for bridges, 1846, 1866, 1867. for making or improving waterways, widening rivers, 1868, 1869, 1870. what Items of cost may be included In, 1871 to 1878. engineers' fees included in, 1872. •expense of collection Included in, 1872. Interest on money borrowed for work included in, 1872. ■contingent fund Included In, 1872. ■cost of lands taken when included in, 1873 to 1875. ■expense of grading, when included in, 1875. effect of Including improper items in, 1876. cost of litigation not included in, 1877. losses incurred by litigation not included in, 1877. for interest on and costs of invalid assessment, 1877. ■unauthorized expenditures not included in, 1878. for expenses caused by extravagance, 1878. for money unlawfully paid to contractor, 1878. for increased cost of work due to labor laws, 1878. for work defectively done, 1879 to 1881. for work which has been abandoned, 1882. should not exceed cost of work, 1883. legislature Is judge of necessity for, 1884 et seq. for improvements which are clearly unnecessary, 1885 to 1887. •determination of district of, 1888 to 1891 et seq. on property not abutting, 1889, 1890, 1891. legislative power to group or divide Improvement, 1892 to 1895. ■cases of legislative abuse of discretion In fixing limits of, 1896 to 1902. ■on property not possibly benefited, 412, 1896 to 1902. property on which assessments may be laid, 1903 to 1935. on real estate, 3903. on personalty, 1903. on property used for purposes which can receive no benefit, 1904 on cemeteries, 1904, 3934. on property devoted to religious and charitable uses, 1905. ■on school property, 1905, 1935. •on public property generally, 760, 1906. exemptions from taxation do not exempt from, 1907. on steam railroads, 1908 to 1920. on street railways, 1921 to 1933. on lands perpetually dedicated to restricted use, 1934, 1935. due process of law as to methods of laying, 1936 to 1991. levying cost ou a district without Inquiry as to actual benefit, 1936 to 1955. Kjonclusiveness of direct legislative determination that district Is bene- fited to extent of cost, 1937, 1938. conclusiveness of determination of subordinate body that district Is benefited to extent of cost, 1939. 1256 INDEX. References are to section numhcrs, LOCAL ASSESSMENTS — C7on«jn«ed; cases bolding that cost distinct from benefit cannot be made basis of assessment, 1940 to 1954. Alabama constitution with respect to, 1941. special taxation and special assessment in some states distinguished, 1942 to 1945. excess of cost over benefits to be charged to general fund, 1955. methods of apportionment among property owners in district, 1956 to- 1979. theory that assessment shall not exceed benefit, 1958, 1959. by frontage, 1959 to 1971. by area or value, 1972 to 1977. excluding value of improvements from computation, 1976, 1977. Arkansas constitution as to ad valorem assessments, 1975. on lot for cost of improvement in front, 1978, 1979. for sidewallis, drains and sewers, under police power, 1980, 1981. compelling property owners to remove snow and ice, 1982 to 1984. filling up lots at owner's expense, 1985. various methods held inapplicable and unreasonable in particular cases, 1986 to 1991. cases where front foot rule is unreasonable, 1987, 1991. cases where assessment by area is unreasonable, 1988, 1991. cases where assessment by value is unreasonable, 1990. cases where assessment equals or exceeds value of property, 1992 to 1999. estoppel of property owners to object to unconstitutional assessment, 1999a, 1999b. notice and hearing in cases of, 2000, see Notice and Heaking. trial by jury in cases of, 2001. subordinate bodies limited to terms of statutory authority. 2002. levied for past work. 2003. future work, 2003. of state property, statute permitting does not create debt, 2121. Inclusion in city debt of liability for erroneous collection of, 2091. bonds issued in anticipation of, when included in computing municipaJ debt, 2102 to 2104. LOCAL AND SPECIAL LAWS : legalizing unauthorized acts of officers, 1253a. Inheritance tax law viewed as, 1489. state constitutions and decisions as to, 1503 to 1720, see Names op- States. general discussion of, 1726 et seq. definition of, 1728. definition of general laws, 1728. law not local or special because all persons and places not included, 1728. classification of railroads not local or special, 1728. basis of classification, 1729. classification by population, 1729, 1730a et seq., 1735, 1736, 1737 et seq. classification by valuation, 1729. classification of counties by length of roads, 1729. classification of cities by financial condition, 1730. principles of classification, 1730a et seq. curative acts, 1730, 1731, 1732. Improper classification, 1731 et seq. as to delinquent taxes, 1731, 1732. as to penalties, 1731, 1732. classification of " resorts for summer visitors," 1733. classification by form of government, 1734. as to cure of Inebriates, 1735. as to local Improvements, 1735, 1744. INDEX. 1257 References are to section numljcrs. LOCAL AND SPECIAL TjAWS — Continued: as to annexation of territory, 1735. classification of municipalities by distance apart, 1735. classification as to taxes on estates, 1736. applying to but one place, 1737 et seq. as to issue of bonds, 1739. classification by maximum population, 1740. laws containing exceptions, 1741, 1742. for assessment and collection of taxes, 1743 et srq. constitutional prohibitions of, are mandatory, 17-)(). prohibitions of, are not usually retrospective, 174(;a. in territories of United States, 1720a. see also Genekal Laws ; General Nature, Laws op. LOCAL GOVERNMENTS: recognized part of our system, 174. LOCAL IMPROVEMENTS: power to make, delegated to municipalities other than cities, towns, and villages, .568. 5G0. placing, in hands of state commissions, 678 to 686. assessment of Federal property for, 760. local and special laws as to, 1735, 1744. see Local Assessments. LOCALITY : imposing cost of harbor improvement on, 425, 431. Imposing cost of state canal on, 426. taxed to pay for county buildings, 426, 429. taxed to pay for state roads, 427. taxed to pay for state school, 428, 430, 431. taxed to pay for state armory, 428, 433. effect of requirements of equality on legislative power to cast state burdens on, 430 to 435. taxed to pay for state institutions, 432, 434. not to be taxed for state purposes, in Alabama, 430. may be taxed to build capitol in Georgia and Kentucky, 438. taxing large territory for benefit of smaller one, 440 to 475. state not to assume debts of, 442 to 475, see Names of States. state not to lend credit to, 442 to 475, see Names of States. not to assume debts of another in Louisiana, 453. tax raised in, may be expended outside, 476 to 478. exempting towns and townships from county road taxes, 527 to 530. exempting towns from county poor taxes, 531. exempting towns from county school tax, 531. delegation of lawmaking power to popular vote of, 548. 549 to ."51. express provisions allowing submission of questions of debt and taxes to popular vote of, 549, see Popular Vote. self government of, see Local Self Government ; JIxts^icipality ; County. LOCAL OFFICERS : constitution requiring that they shall be locally chosen, 687 to 691. for collection of taxes, allowing governor to appoint, 091. see Public Officers ; Administrative Officers ; Subordinate Officers. LOCAL SELF GOVERNMENT: taxation when city frames its own charter, 572. questions of, are related to questions of formation of tax districts, 616. right of, as independent of legislative control, 26, 617. state control of local police and taxation therefor, 619, 620, 688. state control of local police under constitution forbidding legislature to lay taxes in municipalities, 620. 1258 INDEX. References are to section numbers. LOCAL, SELF GOVERNMENT— Oon^jwed; legislature compelling city to build armories, 428, 433, 620. state compelling city to pay court expenses, 621. state compelling locality to build roads and highways, 622 to 629, 688v state compelling locality to build bridges, 622 to 629, 688. state control of local taxation in matters of state concern, under con- stitutions forbidding the legislature to lay local taxes for local pur- poses, 620, 625, 626. state compelling municipality to build bridges when constitution for- bids legislature to lay local taxes for local purposes, 625. state compelling municipality to build highways, when legislature Is forbidden to lay local taxes for local purposes, 626. state controlling building of municipal underground railway, 627. as to highways and streets, when constitution commands that city officers shall be locally chosen, 628, 688. right of legislature to abrogate or modify municipal contract, 629a. as to schools, 630 to 632, 655. as to public health, 633. as to sewers, 633. as to recognizing moral obligations, 634, 635, 036. as to legislative audit of claims against municipality, 390, 391 et seq., 635. as to legislative power to grant new trials in actions against munic- ipalities, 390, 391, 635. as to legislative power to compel municipality to comply with con- tracts, 635. as to matters of public charity, 637. casen in which right of, is applied, 638 et seq. arguments in favor of existence of inherent right of, 639 to 648. states, when right is recognized, 649, 650. states, when right of, is denied or qualified, 651 to 655. arguments against right of, 651 to 654. as to municipal water works, 652, 659 to 662. as to municipal fire department, 652, 663, 664, 688. as to river and harbor improvements, 653, 665. as to local parks, 657, 668, 688. right of legislature to control making of municipal contracts and conduct of municipal enterprises, 666 et seq. right of legislature to regulate hours of labor on municipal works, 071 to 677. Tight of legislature to regulate wages on municipal work, 666 to 677, right of legislature to regulate hours of labor by municipal contractors, 671, 671a, 674, 675, 676. right of legislature to regulate wages paid by municipal contractors, 674, 675, 676, 677. right of legislature to compel use of specified materials in municipal work, 672, 673, 677. express constitutional provisions securing the right of. G77a, see Names OF States. interpretation of constitutional provisions forbidding legislature to levy local taxes for local purposes, 620, 655, 626, 628, 677b to 691. constitution requiring local officers to be locally chosen, 628. 687 to 691. placing local works in hands of state commissions, 678 to 686. see State Commissions. validating defective municipal bonds without municipal consent, 636, 655, 1262. see CvR.^TivB Acts. as to limits on tax rate, 2013, 2014. see Delegation of Taxing Power ; Cobpobate Authorities ; Popular Vote. INDEX. 1259 References are to section numbers, XOCAL TAXATION : to pay militia, 175. for purposes wtiich belong to the whole state, 425 to 435. power of, may be delegated to local authorities, 552, 553 et seq. see Local Self Government ; Delegation op Taxing Powee. LODGES : as to exemptions of, as charities, 1338, 1339. LOGS: in transit, taxation of, 922, 924a. LOSS: state tax on interstate business done at a loss by interstate carrier, 904. LOSSES: not included in local assessment, 1877. LOTTERY : license tax on, 1414a. LOUISIANA : inheritance tax cases arising under treaties, 1C77 to 1085. LOUISIANA CONSTITUTION : as to situs, 152a. loan or gift of public money or credit, 215. becoming stockholder in private corporation, 215. assuming debts of localities, 215. purposes of taxation, 215. aid to railways and public improvements, 215. levees, 254. religious and sectarian appropriations, 271. educational and charitable institutions, 271. extra compensation to officer or contractor, 363. claim without authority of law, 363. neither state nor subdivisions to assume debts of municipal or other corporations, 453. apportionment of debts when parish is divided, 510. valuation of property for local and state purposes to be same, 51)2, 1556. city of New Orleans to choose local officers, 691a. special provisions as to city of New Orleans, its debt, etc., referred to, 691a. limitations of actions to annual tax sales, 1281a. impairing obligation of contracts or vested rights, 961. power to tax corporations never surrendered, 984. as to suits for taxes, 1173. tax sales, forfeitures, redemption, notice, collection, 1192. as to legalizing unauthorized acts of officers, 1253a. inheritance taxes, 1477, 1559. local and special laws, 1556. equality and uniformity, 1556. assessments revised by courts, 1556. state board to assess telegraph, telephone, railway, and express prop- erty, 1556. license taxes, 1556. exemptions, 1557, 1558. poll taxes, 1559. levee taxes, 1559. corporation taxes, 1556, 1.559. decisions under, as to exemptions, 1560, 1561, 1562. as to equality and uniformity, 1563, 1564, 1565, 1566, 1567. as to graduation of license taxes, 1563, 1564. 1260 INDEX. References are to section ntimhers. LOUISIANA CONSTITUTION— Continued: as to releaping or compromising public claims and taxes, 1784. limits on tax rates, 2039. as to state and municipal debts, 2234. M. MAILS : taxation of corporations carrying. 7fi8, 771, 774. taxation of receipts from carrying, 772. state taxes on receipts from carrying interstate, 903. MAINE CONSTITUTION: loan of public credit, 216. state's credit not to be loaned except to local subdivisions In certain cases, 454. power of taxation never surrendered, 985. equality according to valuation, 1568. general valuation every ten years. 1568. decisions under, as to exemptions, 1569. as to equality, 1569, 1570, 1571. as to state and municipal debts, 2235. MAINTENANCE : of public improvements and works, local assessments for, 1848 to 1857. MANDAMUS : against municipal or state officers to compel them to levy taxes to pay bonds, 1039, 1041, 1045, 1046, 1047. to compel authorities to receive coupons in payment of taxes, 1043. substituting anotlier remedy for. as impairing contract. 1053. 1054. Issue of, to compel levy of tax in excess of constitutional rate, at in- stance of creditor, 2015 et seq. to compel authorities to include debt in tax levy, excluding unnecessary items, 2017. to compel levy of tax to pay judgment against municipality, when original debt was in excess of limit, 2170 to 2173. MANDATORY PROVISIONS : prohibitions of local and special laws are, 1746. as to form and methods of enactment of laws, 1803 et serf. MANUFACTURE : property in course of, destined for another state, taxation of, 926. is not part of commerce, 938. MANUFACTURERS : exemptions of, 1325, 1560, 1561, 1562. MANUFACTURING ENTERPRISES: taxes in aid of, 187, 189, 190. sometimes exempted, 1325. MARKETS : municipal taxes on, 1444, 1594. MARYLAND CONSTITUTION; as to situs, 153. public credit not to be used for private purposes or works of Internal improvement, 217. religious and sectarian appropriations, 272. extra compensation to officer or contractor, 364. pensions forbidden, 364. apportionment of debts when county is divided, 511. creation of corporations, amendment or repeal of corporate charters, remission of forfeiture of corporate charters, 1017. poll taxes forbidden, 1572. INDEX. 1261 References are to secHon numhers, MARYLAND CONSTITUTION — Confmued; proportional taxation, 1572. local anrl special laws, 1572. general laws, 1572. decisions under, as to poll taxes, 1573. as to comnmtations. 1573. as to exemptions, 1574. as to equality and uniformity, 1575, 1576, 1577, 1578. as to privilege taxes, 1577. as to state and municipal debts, 2236, 2237. MASSACHUSETTS CONSTITUTION : schools and sectarian appropriations, 273. delegation of power to municipality, 593. exclusive privileges, 1579. proportional and reasonable taxes and assessments, 1573. reasonable duties and excises, 1579. valuation of estates, 1579. decisions under, as to exemptions, 1580. as to proportional and reasonable taxation, 1581, 1582, 158.S, 1585 as to reasonable excises, 1582, 1583, 1584. MATERIALS : used in municipal work, legislative right to specify, 672, 673, 677. see L.4.B0R Laws. MAJORITY : what constitutes, 2132. MEAT, VENDORS OP: license taxes on, under police power, 1441, 1443, 1606, 1639, 1090. MECHANICAL PURSUITS: what are, 1562. MEMBERSHIP : in press association, taxes on, 46. in stock exchange, taxes on, 46. MERCHANTS : limits on rate of tax, applied to tax on, 2007. license taxes on, 1367, 1368, 1415, 1423, 1430 to 1434, 1442, 1443. exempting stocks of, from taxation while increasing their occupation tax, 1353. taxes on, in Alabama, 1507. in Georgia, 1526. in Illinois, 1529. in Iowa, 1541. in ilaryland, 1577. in Massachusetts, 1582. in Missouri, 1606. in North Carolina. 1638, 1639. in Pennsylvania. 1663. in Tennessee, 1682. in Texas. 1690. In Washington, 1707a. MERITS : hearing should be on, 1158. MESSAGES : t.ixation of corporation transmitting, for Federal government, 769, 770. pee Tet^egeaph Companies. METHODS : of valuing Intangible assets of Interstate properties, considered with respect to commerce, 912 to 917, see Fkanchises. 1262 INDEX. References are to section nuinbers. METHODS — Continued: of collection may be changed after tax is assessed, 1219. of procedure, governed by prohibitions of local laws, 1752. of apportioning local assessment among property-owners, 1956 to 1979. see Local Assessments. of assessment held unreasonable, 1986 to 1991. METHODS OF TAXATION: equality and uniformity as to, 14ri4 to 147.3. diversity of, does not violate state or Federal requirements generally, 1454. taxation of certain property by state boards, other by local officers, 1454a, 1455. railroad, etc., property taxed by state boards, 1455. liquor in bonded warehouses taxed by state boards, 1455. when taxation by different agencies results in inequality, 1456. allowing appeal in some cases and not others, 1457. making different classes of taxes payable at different times, 1458. law postponing collection of secured taxes not local or special, 1458. distribution of railway rolling stock to counties,! 4.58a. as to valuation, substantial equality only required, 1459. effect of inequality of valuation in particular instances, 1460. effect when inequality of valuation is due to mistake, 1460. effect of fraudulent inequality, 1460. effect of unequal valuation by design or system, 1460. remedy when some property is valued at full value, while other is valued at less than full value, 1460a. Federal constitution allows diiferent rules of valuation. 1460b. unit method of valuing railroad, telegraph, car, telephone, express, and bridge companies, considered with respect to equality and due process, 1461 to 1473, see Unit Method. state mav either prescribe unit method or leave officers free to follow it, 1471. unit method as to interstate properties when special circumstances exist to enhance value of one part of property, 1472, 1473. MEXICAN LAND GRANT: state taxation of, 762. MICHIGAN CONSTITUTION : as to situs, 154, 1586. grant of public credit, 218. internal improvements, 218. religious and sectarian appropriations, 274. extra compensation to officer or contractor, 365. state's credit not to be loaned, 455. municipal powers of taxation to be restricted, 594. uniform rule of taxation, 1.586. property assessed by state board, 1586. specific taxes, 1586. assessment of corporate property, 1586. equalization by state board, 1586. decisions under, as to specific taxes, 1587. as to equality and uniformity, 1587, 1588, 1589, 1590. as to state and munciipal debts, 2238, 2239. road taxes, 2239. MIGRATORY PROPERTY: taxation of, 1355 to 1358. see Live Stock. MILITARY SERVICE : reimbursing individuals for, 1628, see Bounties. MILITIA : local tax to pay, 175. INDEX. 126iJ ,„^„ References are to section numbers. MILK : license taxes on vendors of, under police power, 1414a, 1443, 1663. MINES : taxation of: in Colorado, 1519. in Montana, 1611. in Nevada, 1621, 1623. In South Carolina, 1674. in Utah, 1695. In Virginia, 1699. in Washington, 1707a. in Wj'oming, 1718. MINING : specific tax per ton on coal or ore mined, 1319. MINING COMPANIES: taxes on, in Minnesota, ]."'>96. MINING OPERATIONS, 190. MINING RIGHTS: taxation of, 46. MINISTERS : property of, sometimes exempted, 1325. sometimes exempted from poll and other taxes, 1325, MINNESOTA CONSTITUTION : loan or gift of public credit, 220. religious and sectarian appropriations, 276. delegation of taxing power, 595. restriction of municipal power of taxation, 595. inheritance taxes, 1484, 1591. equality and uniformity, 1591. assessments for local Improvements, 3591. assessments for watermalns, 1591. taxation according to true value, 1592. exemptions, 1592. property employed in banking, 1592. taxation of railroads, 1592. general laws, 1592. local and special laws, 1592. decisions under, as to equality and uniformity, 1593, 1594, 1595, 1596L 1597, 1598. as to exemptions, 1594, 1595. as to assessments and inheritance taxes, 1598. as to state and municipal debts, 2240, 2241. limits on tax rates, 2040. MISAPPLICATION : of proceeds of bonds, defense estopped by recitals, 2187, 2188. MISDEMEANOR : making violation of license tax law a, 1171. MISSISSIPPI CONSTITUTION: as to situs, 155, 1599. loan or gift of public money or credit, 219, 366. as to debts, 219. assuming indebtedness, 219. becoming stockholder in corporation, 219. levees, 256. religious freedom, 275, 366. Bible in public schools, 275, 305. extra compensation to public officer or contractor, S66. 1264 INDEX. References are to section numbers. MISSISSIPPI CONSTITUTION— Continued: salary of deceased oflicer, 366. pensions, 366. power of taxation not surrendered, 986. exemptions to manufacturers, 986. alteration or repeal of corporate charters, assessment of franchises for taxation, remission of forfeiture of corporate charters, 1018. tax sales, right of redemption, 1193. as to lien of poll tax, 1224. local and special laws, 1599. uniformity and equality, 1599. tax on animals, 1599. special mode of valuation for railroads and corporate property and property not in one county, 1599. power to tax corporations not surrendered, 1599. domestic and foreign insurance companies, 1599. exemptions, 1599, 1600. privilege taxes on building and loan companies, 1599. corporations taxed the same as individuals, 1600. banks and banking capital, 1600. poll taxes, 1600. general laws, 1599, 1600. decisions under, as to exemptions, 1601. as to insurance companies, 1603. as to equality and uniformity, 1602, 1603, 1604. as to releasing or compromising public claims and taxes, 1785. MISSOURI CONSTITUTION : purposes of taxation, 221. appropriations for war debt, 221. loan or gift of public credit or money, 221, 456. assumption of local debts, 221. 4."iG. becoming stockholder in corporation, 221. religious and sectarian appropriations, 277. extra oompensation to officer or contractor, 367. claim without authority of law, 367. apportionment of debts when county is divided, 512. delegation of taxing power, legislature not to lay taxes In munic- ipalities, 597. cities to frame their own charters, 597. as to retrospective laws, 961a. as to legalizing unauthorized acts of officers, 1253a. power to tax corporations not surrendered, 987. as to releasing or compromising public claims and taxes, 1786, limits on tax rates, 2041. as to state and municipal debts, 3242, 2243. local and special laws, 1605. general laws, 1605. irrevocable grants of special privileges, 1605. power to tax corporations not surrendered, 1605. taxes for public purposes only, 1605. uniformity and equality, 1605. taxes to be proportional, 1605. taxes on railroads, 1605. exemptions, 1605. decisions under, as to uniformity and equality, 1606, 1607, 1608, 1C09. as to exemptions, 1610. MISTAKES : curing, generally, 1247 to 1300. see Curative Acts. In name in tax proceedings, curing defects, 1252a, 1254. INDEX. 12G5 References are to section numlirrs. MOBS. See Riots. MONET HAD AND RECEIVED: when municipal bonds invalid, recovery by creditor for, 2174, 2175. MONEY LENDERS : taxation of, 1677. MONEYED CAPITAL: witbin meaning of national banking act, 808 et seq. see National Banks, State Taxation or. MONTANA CONSTITUTION : as to situs, 156, 1611. purposes of taxation, 222, 1612. loan or gift of public money or credit, 222, 457. becoming stockholder in private enterprise, 222. religious and sectarian appropriations, 278. apportionment of debts when county is divided, 513. delegation of power in municipal affairs to special commission, etc., 598. delegation of taxing power, legislature not to lay local taxes, 598. power to tax corporations never relinquished, 988. as to double taxation of corporate stocks, 1375. local and special laws, 1611. general laws, 1611, 1612. uniformity and equality, 1611, 1612. license tax, 1611. exemptions, 1611. power to tax corporations not suspended, 1612. corporations subject to taxation, 1612. toards of equalization, 1612. assessment of railroad property, 1612. duplicate taxation, 1612. property defined, 1612. decisions under, as to exemptions, 1613. as to equality and uniformity, 1613. as to releasing or compromising public claims and taxes, 1787. imposing new liability for past transactions, 1833. retrospective laws, 1833. provision for inviolate school fund, as to liability to local assessments; 1935. limits on tax rates, 2042. as to state and municipal debts, 2244, 2245. MORALS : public, state inspection laws for protection of, 94o. MORAL LAW: ordains equality, 35. nature of, 37 et seq. rule of interpretation, 39. MORAL OBLIGATIONS: appropriations in recognition of, 326 et seq. payment of bounties accruM under law which had been repealed, 327, 328. French spoliation claims, 329. confederate cruisers, 329. recognition forbidden by California constitution, 330. compensating physician for loss of practice by taking of property, 331. compensating parties for loss of investments made on faith of uncon- stitutional laws, 332. bounties to soldiers, substitutes, and families, 333, 334. repayment of sums advanced to relieve from drafts, 333, 334, 80 1266 INDEX. References are to section numbers. MORAL OBLIGATIONS — CoTOimMciZ.- pensions to soldiers, 335. memorial hall, 335. support of G. A. E. post, 335. pensions to civil employees. 336 to 338. reimbursement of public officers for expenses and losses, see Public Officbes. appropriation for widow of deceased public officer, 350, 351, 352, 353. damage by mobs, 349a. power of legislature to compel municipality to recognize, 634, 635, 63'), see BxTEA Compensation ; Labor Laws ; Audit or Pbivate Claims ;; Legislature; Pre-Existing Law. MORTGAGES : situs for taxation, 85 et seq., see Credits. at owner's domicile, 85, 90a. at place where land is, 90 et seq. at place where found, 86. at place where employed, 87, 88. taxed as interests In lands, 90 et seq. making tax on lien on whole lands, 1208. double taxation of, 1370, 1371, 1378. on property outside state, double taxation, 1378. of building and loan associations, taxation of, see Building and Loaw Associations. deducting from value of realty, 1399. taxation of, In California, 1514. in Maryland, 1575. in Michigan, 1587. in Nevada, 1623. in New Hampshire, 1627. in Oregon, 1655. In Pennsylvania, 1663. In Utah, 1695, 1696. In Washington, 1708. of public revenues or property, by city indebted to the limit. 2115 to- 2117. MOTIVE : of legislature not considered by courts, 698, 698a. MUNICIPAL CONTRACTS. See Labor Laws; Local Self Government;. Legislature ; Municipality ; Contracts. MUNICIPALITY : loan or gift of money or credit of, 200 to 240, see Names of States. may construct railroads, bridges and highways, 242, 243, 244, 245. conducting a coal yard, 246, 247. establishing gas or electric light or water works, 247a, 247b. bounties to soldiers, etc., by, 333, 334. reimbursement of public officers of, for expenses and losses, see Public Officers. may not pay for legislative lobbying, 343. may be made liable for damage done by riots, 349a. legislative power to audit claims against, see Legislature. legislative power to grant new trials in action against, see Legisla- ture. legislative power to waive defenses, see Legislature. effect of labor laws and eight hour laws, see Labor Laws. appropriations by, for celebrations and fairs, 405. taxed to pay for state armories, 428, 433. state not to assume debts of, constitutional provisions, 442 to 475, see Names of States. INDEX. 12G7 References are to section nunibers. MUNICIPALITY — Gontinued: state not to lend credit to, 442 to 475. see Names of States. may expend money outside of its territorial limits, 476 to 478. building bridges outside its limits, 476, 478. may buy real estate outside limits, 476. may construct sewage works outside limits, 476. construction of railroads by, outside limits, 477. permitting nonresidents to attend school in, 479 to 481. annexing lands to, 482 et seq., 485. annexing lands to, efCect of Federal constitution, 535 to 537. consolidated subject to debts of former territory, 483. past consideration, making liable for, 483. taxation of agricultural lands, 485 to 498. exempting agricultural lands from taxation, 492 to 498. exempting agricultural lands under requirements of equality and uni- formity, 493 to 498. legislative act dividing and apportioning debts of, does not create con- tract, 502, 503. constitutional provisions as to division of and apportionment of debts, 504 to 518, see Names op States. counties as municipal corporations, 519. when divided legislature controls distribution of property, 525. becomes liable for debts of added territory, 526. exempting, from county taxes, 527 to 531. where legislature of, has discretion as to levy, power to estimate tax may be given to administrative officers, 543. municipal legislature cannot be compelled to accept computations of administrative officer, 544. delegation of taxing power to 552, 553 et seq. class of authorities to whom taxing power may be delegated, 554, 555 et seq. taxing power delegated to legislative authorities of, 555. delegation of taxing power to administrative boards, 556, 557, 558, 559. who are corporate authorities, 560 to 563a. essential elements of, 564. delegation of power to different bodies occupying same territory, 565^ 566, 567. delegation of taxing power to bodies other than those enumerated in constitution, 568 to 570. taxation by, where it frames its own charter, 572. what taxing powers may be delegated to, 573. whether legislature may delegate powers to lay taxes which legislature canaot levy, 573. power to Impose license taxes may be delegated to, 573. power to grant exemptions, 574, 1331 to 1333. taxing powers of, to be restricted by legislature, 577 to 580. as state agency, 618. local self government of, see Local Self GovEKNsrENT ; Legislatube. constitutions forbidding control of affairs of, to be delegated to state commissions, 681, 682, 683 et seq. efCect of constitutions forbidding control of affairs of, to be delegated to state commissions, 682, 683, 684, 685, 686. placing local Improvements in hands of state commission, 678 to 691. may consent to control of municipal affairs by state commission, 684. Federal tax on assets or revenue of, 743. Federal tax on bonds of, 743. Federal tax on legacy to, 744. bonds of. Federal legacy tax on, 744. grant to railway or electric light company of right to use streets, upon certain conditions, as contract not to lay further taxes, 1002 to 1006. 1268 INDEX. Rtjerences are to section numbers. MUNICIPALITY — Contifmed: charter of, is not contract, 970, 1035. provision in charter as to street paving not contract between munic- ipality and property owner, 1035. issue of bonds as contract to tax, 1038 to 1040. dissolving and re-incorporating to avoid debts, 1045. bonds valid, though municipal organization for a time abandoned, 1046. abolition of, by state, effect on bondholders' remedies, 1047. taxing its own bonds, 1049. taxing its own bonds and deducting tax from interest. 1049. In taxes laid by legislature of, where notic£ and hearing unnecessary, 1133, 1137, see Notice and Hearing. notice and hearing unnecessary in fixing rates for use of public facil- ities, such as sewers and water, 1134. extension of city limits does not validate void municipal tax on ter- ritory outside limits, 1249. validating its defective bonds without its consent, 636, 655, 1262. exemption by, in consideration of water supply, 1333. exemptions of property of, 1341 to 1350. taxes by, must be reasonable, 1438 et seq. taxes by, must conform to charter, 1439. power to regulate does not confer power to tax for revenue, 1439. Illustrations of unreasonable municipal taxation, 1441, 1442, 1450 to 1452. taxes 'by, presumptions in favor of reasonableness, 1440. 1443. illustrations of reasonable municipal taxation, 1440, 1443, 1452. goods from without, license taxes on sales of, 1442. power to license markets, 1444. power to make local assessments, see Local Assessments. acceptance of local improvement by, how far conclusive on taxpayer, 1879 to 1881. abandonment of local improvement by, assessment for such improve- ment, 1882. reasonableness of ordinances of, directing local improvements, 1885 to 1887. local assessments of property of, 1906. wher'^ two occupy same territory, effect of limitation on tax rate, 2021. power of, to incur debts, see Debts, Limitations on Power to Inche. inclusion of obligations made compulsory by statute in calculating debt of, 2059 to 2066. power to incur debt for necessary current expenses after limit has been reached, 2067 to 2088. necessary expenses defined, 2069, 2070. anticipating current revenues, 2074, 2076, 2076a. requirements that annul debt shall not exceed income, 2077, 2078, 2082, 2087, 2088. bow annual revenue estimated, 2078, 2087, 2088. when indebted, power to contract in advance for annual supplies 2079 to 2081. building plants for water, gas, etc., contracts for purchase by, disguised as contracts for annual supplies, 2081, 2082, 2083 to 2085. who decides whether debts of, will exceed current revenues, 2087, 2088. estopped to defend against tort on ground of debt limitation, 2089. in calculating debt of, judgment for torts included, 2090. liability for torts not included in computation of debt of, 2091. inclusion of property in sinking fund, in computing debt of, 2099. inclusion of bonds for local improvements in computing debt of, 2102 to 2104. erection or purchase of public improvements, despite debt limits, by creation of debts payable out of special funds, 2105 to 2110. INDEX. References are to section numbers. 1269 MUNICIPALITY — Continued: purchase of waterworks or other works by bonds payable out of profits of plant, 2111 to 2115. mortgage of public revenues or property, 2115 to 2117. debt created by contract as to which performance is optional, 2118. establishment of enterprise by, not necessarily creation of debt, 2121. implied power to incur debt, 2123, 2124. Implied power to borrow money, 2125 to 2125b. implied power to issue negotiable bonds, 2125c, 2125d. necessity for compliance with statutes by ofBcers of, in incurrence of debt, 2126, 2127. where two or more occupy same territory, application of debt limits, 2148 to 2153. debt for internal improvements, where state forbidden to contract, 2154, 2155. validity of debt of, partly in excess of constitutional limit, 2164 to 2169. judgment against, resisting tax to pay because original debt was in excess of constitutional limit, 2170 to 2173. judgment against on quantum meruit, where original debt was in excess of limit, 2174, 2175. estoppel to resist debt, on account of recitals in bonds, 2176 to 2203. see Recitals in Municipal Bonds. estoppel by delivery and registration of bonds, 2203 to 2207. by acquiescence, 2208. MUNICIPAL OWNERSHIP, 242 to 247. N. NAME: assessment to wrong person not cured by validating act, 1252a, 1254. on tax list, tax deed not conclusive as to correctness of, 1269. NATIONAL BANKS, TAXATION OF, BY STATES: including value of realty outside state, 72. general rule, 753, 784. real estate, 754, 785, 786, 790, 791, 792. shares, 754, 785, 786, 800 et seq. notes, 759. Federal statute respecting, 786. origin of national banks, 787. national banks are Federal fiscal agencies, 788. banks are exempt except as allowed to be taxed by Congress, 788, 789. what is real estate of, 791. value of real estate deducted from state valuation of shares, 791. real estate of national banks not taxed when realty of state banks is exempt, 792. pepeonal property exempt, 793. exemption of personalty continues after bank has gone into hands of receiver, 793. license or privilege taxes, 794 et seq. franchise taxes, 794, 795, 796, 797, 798, 799. surplus funds, 796, 796a, 797, 798, 799. stfte tax on capital stock, 801, 803. tax on shares collected from bank, 801a, 802, 803, 804. discrimination between national bank shares and other moneyed capital, 805 et seq., 811 et seq. rule for determining fact of discrimination against bank shares, 806, 807. what is other moneyed capital, 808, 809. 1270 INDEX References are to section, numbers. NATIONAL BANKS, TAXATION OF, BY STATES — Contintted: railroad, mining, and manufacturing shares not moneyed capital, 808, 809. building and loan shares not moneyed capital, 809. moneyed capital such as comes into competition with national banks, 809. moneyed capital in hands of individual citizens, 810. corporations not individual citizens, 810. reasonable exemptions are not discrimination, 811. exemption of large and material part of other moneyed capital is dis- crimination, 812, 817. exempting shares of state banks while national bank shares are taxed, 812. assessing national bank shares at greater rate than other moneyed capital, 813 et seq. valuation, discrimination in, 813 to 822. deductions, allowance of, 813, 814 et seq. deduction of debts from value, 814, 815, 817, 818, 819. credits, allowance of, 814 et seq. discrimination in method, 813, 814, 815, 816, 817, 818, 819. deducting real estate outside the state from value of some shares and not national bank shares, 816. national bank shares as credits, 820. discrimination by acts of taxing officers, though not by law of state, 821, 822. discrimination in pursuit of general plan, 822. place of taxation of national bank shares, 823. double taxation in assessing shares, 1376, 1378, 1379. NAVIGABLE WATERS: right to use, pertains to citizenship, 1100. see Inland Waters. NAVIGATION : no state license fee for, allowed, 882. NEBRASKA CONSTITUTION: as to state and municipal debts, 223, 2246. loan or gift of public money or credit, 223, 458. becoming stockholder in private enterprise, 223. work of internal improvement, 223. freedom of religion, 279. extra compensation to officer or contractor, 368. compensation of officers not increased or diminished, 368. apportionment of debts where county is divided, 514. delegation of taxing power, 599. local taxes to be uniform, 599. as to special assessment and special taxation, 599, 1945. irrevocable grants forbidden, 988a, 1614. right of redemption from tax sales, 1193a. local or special laws, 1614. general laws, 1614. tax by valuation, proportional, 1614. license and franchise taxes uniform as to class, 1614. exemptions, 1614. release or discharge from taxes, 1614. decisions under, as to uniformity and equality, 1615, 1616 1617 1618 1619. decisions under, as to exemptions, 1615, 1620. as to valuation, 1616, 1617, 1619. as to releasing or compromising public claims and taxes, 1788 limits on tax rates, 2043. INDEX. 1271 References are to section numbers. NECESSARY EXPENSES: taxes for, to be collected in full, where total taxes exceed constitutional rate, 2025, 202S. warrants for, as part of municipal debt, 2059 et seq., see Compulsoby Obligations. Incurrence of municipal debt for, after limit has been reached, 2067 to 2088. constitutional provisions as to, 2068. definition considered, 2069, 2070. purchase of municipal light and water works as, 2069. purchase of voting machine as, 2069. NECESSITY : of local improvement, legislature is judge of, 1884 et seq, NEGLIGENCE : liability for, not included in debt limit, 2091. NEVADA CONSTITUTION: loan or gift of public money or credit, 224. becoming stockholder in private enterprise, 224. sectarian instruction, religious and sectarian appropriations, 280. state not to assume local debts, 459. restriction of municipal taxing power, 600. local and special laws, 1621. general laws, 1621. property of corporations, 1621. exemptions, 1621. uniformity and equality, 1621. decisions under, as to local and special laws, 1622. as to uniformity and equality, 1623. as to exemptions, 1623. as to releasing or compromising public claims and taxes, 1795, 1621. as to state debts, 2247. NEW HAMPSHIRE CONSTITUTION: pensions, 369. as to retrospective laws, 961h. proportional and reasonable taxes, 1624. polls and estates assessed, 1624. valuation of estates, 1624. decisions under, as to proportional and reasonable taxation, 1625, 1626, 1628. decisions under, as to exemptions, 1626, 1628. as to double taxation, 1627. NEW JERSEY CONSTITUTION: loan or gift of public money or credit, 225. becoming stockholder in private enterprise, 225. support of religion, 282. as to state debts, 2248. as to impairing obligation of contracts and Impairing remedy, 961c. general laws, 1629. local or special laws, 1629. uniform tax by valuation, 1629. decisions under, as to local and special laws, 1630. as to uniformity and equality, 1631, 1632, 1633, 1634, 1638. as to exemptions, 1633. as to valuation, 1634, 1635. NEW MEXICO. See Tebbitokies op United States. NEW TRIALS : legislative power to grant. In actions against municipalities, 391 et seq., 635. 1272 mDEx. References are to section numbers, NEW YORK : franchise taxes in, 5C, 62. inheritance tax cases arising under treaties, 1086, NEW YORK CONSTITUTION: loan or gift of public money or credit, 227, 460. exceptions for educational purposes, 227. becoming stockholder in private enterprise, 227. provision for support of poor, 227. drainage of agricultural lands, 251. support of religion, religion in schools, 281. charities and reformatories, 313. audit of private claim, 370. extra compensation to officer or contractor, 370. limitations not to be waived by state, 370. restriction of municipal taxing power, 601. delegation of taxing power, 601. local officers to be locally chosen, 687 to 691. local and special laws, 1636. limits on tax rates, 2044. as to state and municipal debts, 2249, 2250. NONPAYMENT : is jurisdictional act, 1268. tax deed not conclusive as to, 1268. NONRESIDENT : taxation of bank deposits of, 93, 94, 130, 145. property of, employed in business, 79, 80, 81, 82, 87, 88, 89, 91, 9S. 127, 128. property in hands of resident agent, 87, 88. 1197. personal property of, taxed where found, 73, 86. trustees, 123, see Executok, etc. taxation for privilege of doing business in state, 131 et seq., 138. beneficiaries, tax on inheritance passing to, 147. personal judgment for taxes and assessments against, 164 to 166, 1225. «f school district attending school in, 479 to 482. taking orders for, is commerce, 827. taxation of property owned by, 920, 1197. discrimination against, in taxation, violates guaranty of privi/eges and immunities of citizens, 1109 to 1113, 1442, 1452. taxing corporate shares of, with different deductions from those allowed residents, not violation of privileges and immunities of citizens, 1113. notice to, in assessments of omitted property, 1296 to 1298. Inheritance tax, 1378, 1476. double taxation of, 1378, see Double Taxation. exemption of shares in building and loan association held by, 1392. discrimination against, 1442, 1452, 1476. exemption of, from tax, 1451, 1540, 1548. NORTH CAROLINA CONSTITUTION: restriction of municipal powers of taxation, 603. amendment or repeal of corporate charters, 1010. limits on tax rates, 2045. as to state and municipal debts, 2251. gift or loan of public credit, 2251. capitation tax, 1637. uniformity tax by valuation, 1637. taxes on trades, professions, franchises and Incomes, 1637. exemptions, 1637. decisions under, as to uniformity, 1638 to 1641. as to license or privilege taxes, 1639. as to franchise and privilege taxes, 1640. as to exemptions, 1638, 1639, 1640. application of uniformity to special assessments, 1641. INDEX, 1273 References are to section numbers. NORTH DAKOTA CONSTITUTION : as to situs, 157. loan or gift of public money or credit, 228, 461. becoming stockholder in private enterprise, 228. internal improvements, 228. restriction of municipal powers of taxation, 602. power of taxation never surrendered, 989. amendment or repeal of corporate charters, remission of forfeiture of corporate charters, 1020. general laws, 1642. special privileges or immunities, 1642. local and special laws, 1642. uniformity by valuation, 1642. exemptions, 1642. taxation of railroads, 1642. decisions under, as to exemptions, 1643. as to general and local laws, 1643. as to uniformity, 1643, 1644. application of uniformity to local assessments, 1644. limits on tax rates, 2046. as to state and municipal debts, 2252. NOTES : of United States, taxation of, 756, 759. of national banlis, state taxation of, 759. situs of, see Ceedits ; and Situs. NOTICE. See Notice and Heaeing. to redeem, tax deed not conclusive as to, 1269. of sale, tax deed not conclusive as to, 1269. when statute requires, legislature cannot validate omission, 1252a. of passage of bills, requirements for publication of, 1814. InsuflScient, of election, defense estopped by recitals in bonds, 2178, 2179. of facts to authorize bond issues, when purchaser not charged with, see Recitals in Municipai, Bonds. of facts on face of bonds, 2196, 2197. NOTICE AND HEARING: where power to determine bonds of tax district is delegated, 418. element of due process of law, 1116, 1117. generally, 1128, 1129. when not necessary in levy of taxes, 1130 to 1139a. how far unnecessary as to legislative acts, 1130, 1131. legislature may, but need not, permit a hearing before it, 1130. how far unnecessary where legislature directly lays special assessment, 1132. how far unnecessary as to acts of local legislature, 1133. not necessary as to amount, rate, or territory, when tax laid by legis- lative body, 1130 to 1133. not necessary as to rates for use of public municipal facilities, 1134, 1139a. as to intention to make improvement, to those likely to be assessed to pay for it, 1135. unnecessary as to appointment of assessing and taxing officers, 1136. difference as to, between taxes directly laid by legislature and those laid by subordinate bodies, 1137, 1141 et seq. unnecessary when nature of tax is such that notice and hearing would be useless, 1138, 1139. unnecessary as to poll taxes, 1138. unnecessary as to license taxes, 1138, 1139. unnecessary as to specific taxes, 1138. necessary where license tix or business becomes Hen on property where business is carried on, 1139. 1274 1J5TDEX. References are to section numbers. NOTICE AND HEARING — ConiiHued; as to water rates, 1134, 1139a. as to Importers of goods, 1140. when necessary, generally, 1141 to 1149. when tax laid by subordinate body, 1141 et seq. necessary as to district and benefit, when tax laid by subordinate body, 1141, 1142. as to value, 1143, 1145, 1146. on questions of apportionment, 1144 to 1147. on questions of individual amount, 1145. as to inheritance tax, 1148, 1149. what constitutes notice, 1150 to 1156. sufficiency of notice, in Supreme Court, 1150, 1151. illustrations of sufl3cient notice, 1152. personal service, 1152. publication, 1152. contents of notice, 1153. notice contained in statute, 1154, 1155. place of hearing, how far necessary to designate In notice, 1155, 1150. stage of proceeding at which taxpayer should have notice, 1157 to 1162. hearing, Its nature and sufficiency, 1158 to 1167. hearing should be on real merits, 1158. right to enjoin collection of illegal tax sufficient hearing, 1160. right to oppose confirmation of assessment In court Is sufficient hearing, 1160. right to defend against tax or assessment in court is sufficient hearing, 1161. right to make proofs before board of correction or equalization is suffi- cient hearing, 1161. right to appear before single officer having authority to make correc- tions is sufficient hearing, 1161. right to review assessment in court is sufficient hearing, 1162. right of appeal or to apply for remission before lien of tax is Irre- vocably fixed is sufficient hearing, 1162. where right to defend in court is not absolute, and no other hearing given, it is not sufficient, 1163. hearing in court must include opportunity to contest questions of value and apportionment on the facts, 1164. right to hearing must be absolute not matter of chance or favor, 1165. right to hearing read into statute, 1166, 1167. forfeiture of lands without, 1176 to 1186. not necessary in sales for taxes, 1187. in cases of reassessments and assessments of omitted or undervalued property, 1295 to 1298. in local assessment cases, 2000. NUISANCE : license tax to prevent, 1451. destroyed at property owner's expense under police power, 1980 to 1985. 0. OATH: curing failure of officers to take, 1248. OBLIGATION : of contract defined, 1050. see Impairing Obligation of Contracts. owned by state or city, not released, see Releasing Claims for Taxes ; Arrearages ; Refunding Taxes. OCCUPANT : of lands, seizing property of, for taxes on lands, 1206, 1207. tNDEX. 1275 References are to section numbers, OCCUPATIONS : Federal taxes on, 696, 737. classification by, in license taxation, 1417 to 1423. taxes on, as revenue measures, 45, 1403a. county may be forbidden to impose taxes on, 571. taxes on, in Illinois, 1529. in Kentuclty, 1550. in Louisiana, 1556... in Maryland, 1577. in Massachusetts, 1582. in Michigan, 1587. in Nebraska, 1614. in Nevada, 1622. in North Carolina, 1637. in Texas, 1687, 1689. in Utah, 1695, 1696. limits on tax rate do not apply to, 2007. see License Taxes, and names of various occupations. OFFICERS : of Federal government, taxation of salary by state, 775. notice and hearing unnecessary as to appointment of, 3136. various errors of, cured by tax deed, 1271. legalizing unauthorized acts of, see Legalizing Unauthorized Acts ; Curative Acts. determination of fact by, as estoppel to defense, see Recitals in Mu- nicipal Bonds. whose recitals in bonds are effective, 2200 to 2202. see Administrative Officers ; Public Officers ; Subordinate Officers. OHIO CONSTITUTION: tax measured by capital stock a privilege tax, 63. loan or gift of public money or credit, 229. becoming stockholder in private enterprise, 229. support of religion, 283. extra compensation to officer or contractor, 371, claim without authority of law, 371. state not to assume local debts, 462. delegation of taxing power, 604. restriction of municipal powers of taxation, 604. impairing obligation of contracts, 962. retroactive laws, 962. general laws, 1645. poll taxes forbidden, 1645. uniformity, according to valuation, 1645. exemptions, 1645. corporations taxed the same as individuals, 1645. decisions under, as to uniformity, 1646, 1647, 1648, 1649, 1650, 1651, 1652, 1653, 1653a. decisions under, as to general and local laws, 1647. as to exemptions, 1648, 1650. application of uniformity to local assessments, 1652. as to deduction for benefits in assessments, 1874. as to state and niuuicipal debts, 2253. as to internal improvements, 2253. OFFICE FOUND: defined, 1177a. forfeiture of lands without, 1177a to 1186. act of legislature equivalent to, 1186, OIL DEALERS : taxation of, 1677. 1276 INDEX. References are to section nurnbers, OIL DEPOTS : tax on, .1554. OKLAHOMA : see Tebkitoeies of United States. OLEOMARGARINE : Federal tax on, is excise, 698a, 704, 704a, 749a. state inspection laws applied to, 945. OMISSIONS: in tax proceedings, curing, 1247 to 1300, see Cueative Acts. of property in district from local assessment, 1902. OMITTED PROPERTY: reassessment of, 1290 to 1292, 1296, 1834, see Curative Acts ; Reassess- ments. Virginia constitution as to, 1292. assessment by revenue agent in Mississippi, 1C02. ONE PLACE: laws applying to, whether local and special, 1737 et seq. ORDER : is a purpose of government, 1, 2. ORDINANCE : municipal, impairing obligation of contract, 971. of municipality, estoppel of defenses based on contents of, by recitals in bonds, 2182, 2185, 2195. as to reasonableness of, see Reasonableness ; License Taxes ; Munioi- palitt. ORE: specific tax per ton on, 1319. see Mines. OREGON CONSTITUTION: loan or gift of public money or credit, 230. becoming stockholder in private enterprise, 230. religious and sectarian appropriations, 284. claims against state, 372. state not to assume local debts, 463. restriction of municipal powers of taxation, 605. amendment or repeal of corporate charters, vested corporate rights not interfered with, 1021. special privileges and immunities, 1654. equality and uniformity, 1654. exemptions, 1654. local and special laws, 1654. decisions under, as to local and special laws, 1655. as to exemptions, 1656. as to uniformity, 1657, 1658, 1659. application of uniformity to local assessments, 1658. as to state and municipal debts, 2254. ORGANIZATION : tax on corporation for, 54. see Pkanchises. ORIGINAL PACKAGE : taxation of property, in, distinction between imports from foreign county and from another state, 920. license taxed by states on sales in, 863, 864, 865 what constitutes, 864, 936. when tax is on sales generally, 865. imports from foreign county not taxed in, 935, 936. when broken, imports may be taxed, 936. INDEX. 1277 References are to section nurribers. OVERLYING TAX DISTRICTS, 424 et seq. taxing power may be delegated to, 565, 566, 567. see Tax District. ■OWNER : of property, personal liability for taxes, 1172 et seq, OYSTERS AND OYSTERMEN : taxes on, 928, 1437, 1577, 1639, 1705. P. PARISH. See County ; Municipality. PARKS : legislative power to compel local taxation for, G57, 658, 688. constructed by state commission, 688. local assessments for, 1847. PARK BOARD : delegation of taxing power to, 557, 563, debt, of part of city debt, 2151. PAROL EVIDENCE : to contradict legislative journals, 1813. PARSONAGES : sometimes exempted, 1325. PARTNERSHIP : property of, situs of, 124. what constitutes doing business by, in state, 132. 133. owning shares in, 132, 133, 137. see Co-Paetneeship. PAR VALUE: sale of bonds at, 2122. PASSAGE OF BILLS. See Statutes ; Notice ; Joubnals of Legislatuee. PASSENGERS : transportation of, is commerce, 827. tax on, 927. see CoMMEBCE. State Taxes Affectinq. PAST IMPROVEMENTS : local assessments for, 2003. PAST TRANSACTIONS : making basis of present legislative action, 1828. new liability in respect of, constitutions forbidding Imposition of, 483, 1833 et seq. see Retrospective Laws. PATENT RIGHTS AND COPYRIGHTS: state taxation of, 777 to 783. property manufactured under patent, 777. police regulations preventing use of patented article, 778. patent right not taxable, 779 to 782. corporation with capital invested in patent rights, 770 to 782. shares of corporation with capital invested in patent rights, 779. capital stock of corporation Issued in consideration of license to use patent, 782. franchise tax on corporation with capital invested in patent rights, 782. copyrights, 783. vendors of, taxes on, in Illinois, 1529. in Nebraska, 1614. 1278 IITDEX. References are to section num'bers. PAVING : effect on local assessment of contractor's agreement to keep In repair, 1858 to 1863. by street railways under compulsion, 1925 to 1933. local assessments for, see Stbeets ; Steeet Improvements; Locai. Assessments. PAYMENT : of taxes, forfeiture of lands for default, 1176 to 1187. PEDLERS : taxes on, as affecting commerce, 850 to 8.i4. defined, 853. license taxes on, 1414, 1415, 1420, 1436, 144a taxes on, in Arkansas, 1508. in Illinois, 1529. in Iowa, 1541. in Louisiana, 1564. In Nebraska, 1614. in Pennsylvania, 1663. in South Dakota, 1681 in Tennessee, 1682. in Texas, 1690. in Washington, 1710. in Wisconsin, 1717. in Wyoming, 1719. PENALTIES FOR NONCOMPLIANCE WITH TAX LAWS: may vary with different classes, 1215. are due process, 1215. interest, 1215. costs of collection, 1215. expenses of law suit, 1215. for nonpayment of direct tax, 1215. making owner's right to redeem dependent on payment of both tax and penalty, 1215. amount of penalties, 1215a. for failure to list property, 1216. not forbidden by constitutional provision against usury, 1216. addition to tax for failure to list, 1217. double valuation for failure to list, 1217. forfeiture of whole property for failure to list, 1217. see Forfeiture of Lands for Noncompliance with Tax Laws. forfeiture of right to ob.iect to assessment for failure to list, 121S. imposition of, is not double taxation, 1403. in Georgia, 1526. in Idaho, 1528. in Iowa, 1542. remission of, in Nevada, 1622. uniformity in, in Washington, 1710. local and special laws as to. 1731. 1732. laws imposing, retrospectively, 1831, 1832. PENDING SUITS : curative acts applicable in, 12.50. PENSIONS : to soldiers and fam.llies, 335. to civil employees. 336 to 33S, to firemen, 336, 337. to policemen, 337. to teachers, 338. to ex-employees, 33S, INDEX. 1279 References are to section numbers, PENSIONS — Continued: constitution of Mississippi, 366. of Alabama, 356. of Marylapfl, 364. of New Hampshire, 369. for teachers, law providing is law of general nature, '1755. PENNSYLVANIA CONSTITUTION : loan or gift of public money or credit, 231. becoming stockholder in private enterprise, 231. religious and sectarian appropriations, 285. charitable and educational appropriations, 285. state not to assume local debts, 464. delegation of power in municipal affairs to special commission, etc., 60ft. Impairing contracts — irrevocable grants, 990. power to tax corporations not surrendered, 990, 1660. local and special laws, 1660. general laws, 1660. special privileges and immunities, 1660. uniformity, 1660. exemptions, 1660. decisions under, as to equality and uniformity, 1661 to 1664, 1666. application of uniformity to local improvements, 16G4. decisions under, as to exemptions, 1664, 1666. as to local, special and general laws, 1667 to 1670. as to releasing or compromising public claims and taxes, 1789. peculiar rule as to local assessments on abutting property, 1891. as to state and municipal debts, 2255. PERPETUAL CONTRACTS : of exemption from taxation generally forbidden, 996a. PERPETUAL DEDICATION: of lands to restricted use, as to liability to local asf?essments, 1934. PERSONAL JUDGMENT : for taxes or assessments against nonresidents, 164 to 166. for taxes, 1172 to 1175. against railroad for taxes and assessments, 1190. for local assessments generally, 1225 to 124C. laws imposing retrospectively, for local assessments, 1832. PERSONAL PROPERTY : taxes on, 45. situs for taxation, 73 et seg., 148 et seq. taxes on succession to, by state of decedent's domicile, 143. Federal tax on, 725, 726, 737. Federal tax on income derived from, 732, 737. of national banks exempt from state taxation, 793 et seq. sale of, for privilege and franchise taxes, 1171. taxed to owner of premises where it is, 1197. in possession of tax delinquent, seizing for taxes regardless of owner- ship, 1202, 1203, 1204, 1205, 1214. transiently on lands of tax delinquent, seizing for taxes, 1203. of occupant of lands, seizing for taxes on lands, 1206, 1207. used in business, making tax on business lien on, 1213. exempted, while realty taxed, 1352 to 1354, 1546, 1574, 1638. license tax as substitute for tax on, 1423. local assessments of, 1903. PERSONAL SERVICE : of notice in tax proceedings, 1152. PERSONS : inspection laws of states do not apply to, 942. corporations are, under 14th amendment, 1114. 1280 INDEX. References are to section nvmhers. PETITION : right of, pertains to citizenship, 1100. irregularity, lacli or insufficiency of, estoppel of defense by recitals in bonds, 2187, 2189. PHOTOGRAPHERS : tax on, 1562. PHYSICAL CULTURE: institution for, exempt as school, 1337. PHYSICIANS : license tax on, 1507, 1626. PILOTS: state regulation of, 839. PIPING: of natural gas is commerce, 827. see Water Mains ; Local Assessments. PLACE : of taxation, 69 et seq., see Situs. of hearing in tax proceedings, how far necessary to designate in notice, 1155, 115G. of sale, tax deed conclusive as to, 1271. PLANKING : local assessments for, 1893, 2003. PLASTERER: tax on, 1562. PLUMBERS : license taxes on, 1442. POLES : in streets, license tax on, 1446 to 1450. POLICE : state control of local, 619, 620, 688, 689. state control of local, under constitution forbidding legislature to lay taxes for municipal purposes, 620, see Locai. Self Goveknment : Legislature. tax for, under limits on tax rate, 2014. POLICE COMMISSIONERS : delegation of power to, 561. POLICE INSURANCE FUND: state commission for, 685. POLICE POWER : taxes for drainage under, 248, 249. taxes for preventing disease, 249. bounties for destroying animals, 258a. sprlnlvling streets, 258a. of states as affected by interstate commerce clause, S37, 838, 870, 879 to 881. specific taxes under, 1320. taxes on telegraph poles under, 1320. taxes on lots under, 1320. license taxes laid under, generally, 1404 to 1453, see License Taxes. whether tax is police regulation or revenue measure, 1404 to 1408. is basis of license taxes for regulation of acts affecting morals, health, safety or order, 1404 to 1409. employment agencies taxed under, 1409. of states, in license taxation, not restricted by 14th amendment, 1410. liquor business taxed under, 1404, 1411, 1427, 1452. dogs taxed under, 1412. INDEX. 1281 References are to section numbers. POLICE VOVf'EiR — Continued: banks taxed under, 1413. pedlers taxed under, 1414, 1420, 1435, 1436, 1443. building permits taxed under. 1414a. shows taxed under, 1414a, 1450, 1453. requirements of equality and uniformity not applicable to taxes under, 1409, 1410, 1415. lotteries taxed under, 1414a. games taxed under, 1414a. betting taxed under, 1414a. horse racing taxed under, 1414a. prostitution taxed under, 1414a. grain warehouses taxed under, 1414a. engineers taxed under, 1414a. taxes on druggists under, 1414a, 1442. classification in license taxation under, 1416 to 1417a, 1421, 1425, 1420, 1427, 1429, 1435, 1436. commission merchants taxed under, 1417a. emigrant agents taxed under, 1421, 1426. horseshoers taxed under, arbitrary classification, 1425. arbitrary tax on alien laborers not justified under, 1435. taxes under, should be reasonable, 1435 et seg. test of reasonableness of municipal taxation under, 1440. Illustrations of unreasonable taxes under, 1441, 1442. unreasonable tax on vendors of meat under, 1441. unreasonable taxes on auctioneers and sales under, 1442. unreasonable discriminations against nonresidents under, 1435, 1441. 1442, 1451. unreasonable taxes on plumbers under, 1442. unreasonable taxes on contractors under, 1442. taxes for use of public streets under, 1442, 1449, 1450, 1451. illustrations of reasonable license taxes under, 1443. presumptions in favor of reasonableness of taxes under, 1443. taxes on sales and auctioneers under, 1442, 1443. reasonable taxes on vendors of meat under, 1443. reasonable taxes on vendors of milk under, 1414a, 1443. reasonable taxes on laundries under, 1443. reasonable taxes on pedlers under, 1443. reasonable taxes on restaurants under, 1443. municipal taxes on public markets under, 1444. amounts of license tax which may be Imposed under, 1445 to 1453. license taxes under, may include cost of issuing license, 1445. of inspection and regulation, 1445. discretion allowed to the authorities in fixing amounts of license taxes under, 1445 to 1453. license taxes under, may include cost by reason of possible liability in- curred by municipality, 1446, 1447, 1448. license taxes under, on telegraph and telephone poles, 1446 to 1450. license taxes under, estimated in advance, 1445, 1448. illustrations of excessive amounts as license taxes under, 1450, 1451. license taxes under, to restrain multiplication of undesirable places, 1414a, 1452. local assessments under, 1841, 1842, 1980 to 1985. POLITICAL SUBDIVISIONS : tax district need not conform to, 419 et seq. power to tax sometimes delegated only to, 420 et seq. essentials of, 421, 422. when tax district should conform to, 423. 81 1282 INDEX. References are to section numbers, POLL TAXES : generally, 45. Federal, 737. notice and hearing unnecessary, 1138. In California, 1511. in Delaware, 1521. in Florida, 1522. in Georgia, 1524. in Idaho, 1527. in Kansas, 1547. in Kentucky, 15o0a. in Maryland, 1572, 1573. in Mississippi, 1224, 1600. In Missouri, 1606. In North Carolina, 1637. In Ohio, 1645. in Oregon, 1655. in Rhode Island, 1671. in South Carolina, 1675. In Texas, 1687. In Virginia, 1699. limits on tax rate do not apply to, 2007. POOR: exempting municipalities from county poor taxes, 531. see Charities ; Indigent Pooe. POOR FARM: purchase of, not compulsory county obligation, 2066. POPULAR VOTE: may determine when license law shall be operative, 540. power of enacting laws not to be delegated to people of whole state. 545, 546. express provisions allowing questions of debt and taxes to be sub- mitted to people of whole state, 547. of local community, submission of questions to, 548 to 551. distinction between submitting questions to vote of local community and to vote of whole state, 550, 551. essential to choice of corporate authorities, 560 to 563a. see Election ; Majobitt. POPULATION : classification by, in license taxation, 1424 to 1427. classification by, as to local and special laws, 1729 et scq.. 1737 ef seq. PORTS : preference as between states forbidden by Federal Constitution, 931. POSSESSION: of personalty, as warrant for its seizure for taxes of per.son in posses- sion, 1202 to 1205, 1214. party in, effect of statute of limitations validating hostile tax titlp, 1274, 1276, 1277. POST ROADS : taxation of corporations occupying, 768 to 774. POWER : of appointment, inheritance tax on estate transferred by, 1498 to 1500. PRE-EXISTING LAW, CLAIMS NOT PROVIDED FOR BY : state constitutional provisions, 354 to 378, see Names of States. legislature may not pay, 383. Where officers had no authority to contract, 383. constitutional provisions forbidding payment of such claims interpreted, 399, 400. where implied authority exists. 399 INDEX. 1283 References are to section numbers. PREFERENCE : to ports of one state over those of another, forbidden by Federal Con- stitution, 931, 955. PREMIUM : of Insurance companies, taxes measured by, 57. over par of United States bonds, taxation of, 756. see Insurance Companies ; Pae Value. PRESUMPTIONS : against relinquishment of taxing povi^er, 1029. against transferability of exemptions from taxation, 1057 to 1060. against personal liability for assessments in absence of statute, 1225. against exemptions, 1321, 1344. against double taxation, 1366. In favor of correctness of legislative certification as to passage of bills, 1804. PREVAILING RATE OP WAGES. See Labor Laws. PRIMA FACIE EVIDENCE : tax deed may be, 1270. PRIORITY : of Federal tax lien over states, 750, 751, 752. of Hens for taxes, assessments and water rates, 1188. of reassessments over Intervening mortgages, 1188. PRISONERS : warrants for expenses of maintenance. Included In calculating county debts, 2059. contracts for supplies to, are not compulsory obligation, 20G1. PRIVATE INDIVIDUALS AND CORPORATIONS: delegation of taxing power to, 575, 576. PRIVATE PROPERTY: tailing for public use, local assessments are not, 1835, 1830. See Eminent Domain. PRIVATE PURPOSES : tax for, is void, 170. is spoliation, 173. see Purposes of Taxation ; Public Purpose. PRIVILEGES AND IMMUNITIES: of corporation, transfer of exemptions by transfer of, 1057, 1058, 1059, 1060, 1069, 1070. of citizens of United States, constitutional provision as to, 1087. who are citizens of United States, 1095 to 1098a. of citizens of United States, what are, 1099 to 1106. protection by government, 1099. right to hold property, 1099. pursuit of happiness and safety, 1099. rights of travel and residence, 1100, 1104, 1105, HOC. right to go to public offices and seaports, 1100. right to use navigable waters, 1100. right to assemble and petition, 1100. right to writ of habeas corpus, IICO. of citizens of United States, theory that they are the rights referred to in the first eight amendments to the Federal Constitution, 1102, 1103. of citizens In several states, 1087, 1099, 1100, 1105, 1106, 1108 to 1113. of citizens, effect of law imposing license fee on occupation of emigrant agent, 1105, 1106. of citizens in several states, discrimination in taxation against citizens of other states, 1109 to 1113. of citizens in several states, constitutional provision as to, supplements commerce clause, 1110. 1284 INDEX. References are to section numbers. PRIVILEGES AND IMMUNITIES — CoM«in«ed; of citizens of several states, meaning of constitutional provision. 1110. of citizens in several states, violated by license tax discriminating be- tween residents and nonresidents, 1111. of citizens in several states, distinction between discriminatory tax laws violating this constitutional provision and those which violate the commerce clause, 1112. of citizens in several states, guaranty not violated by taxing corporate shares of nonresidents for state taxes, without deduction, while resi- dents, paying local taxes, were allowed deductions, 1113. of citizens in several states, inheritance taxes denying, 1476. PRIVILEGE TAXES : generally, 45. when taxes on capital stock are, 62, 63. territorial jurisdiction with respect to, 131 et seq. limitations on tax rate do not apply to, 2007. see License Taxes ; Police Power. PROCEEDING IN REM. : foreclosing tax lien by, 1170, 1187. PRODUCTS OF THE SOIL: exempt, 1682, 1688. PROFESSIONAL MEN: libraries commonly exempted, 1325. see Lawyers ; Physicians ; Engineers ; Ministers. PROFITS : receipt of, from property, as affecting exemptions. 1336, 13.37. of waterworks or other works purchased by indebted municipality, validity of debts payable out of, 2111 to 2115. PROGRESSIVE RATES: in inheritance taxes, 1478 to 1489. PROPERTY : temporarily in a state, situs of, 125 et seq., 127, 128, 129. 130. of divided territory, legislature controls distribution of, 525. not to be credited when indebtedness is divided, 525. of Federal government, state taxation of, 760 to 704, see Federal Property, State Taxation of. employed in Federal service, taxation of, 768 to 774. subject of Interstate commerce, taxation of, 918 to 926, see Commerce, State Taxes Affecting. in transit, state taxation of, 918 to 926. right to hold, pertains to citizenship, 1099. making taxes on personal liability of owner, 1172 et seq. inheritance taxes not on, 1475. inheritance taxes viewed as laid on, 1482, 1483, 1486, 1487, 1501a. inheritance tax upheld as on, 1493 to 1496. defined in California, 1510. in Montana, 1612. in Utah, 1694. see Personal Property ; Real Property ; Property Taxes. PROPERTY TAXES : on corporate franchises, 60 ct seq. when taxes on capital stock are, 01. limits on tax rate apply to. 2007. requirements of equality apply to, 1415. we Franchises ; Property ; Real Property ; Personal Property ; Di- rect Taxes. PRO RATA : where taxes exceed constitutional rate, reduction of, 2025, 2020 et seq. INDEX. 1285 References are to section numbers. PROSPECTIVE LAWS : curing defects, 1253. see Curative Acts, 1247 to 1300. PROSTITUTION : license tax on, 1414a. PROTECTION : right of, pertains to citizenship, 1099. PROTECTIVE TARIFF : Federal power to establish, 698. PROVISION FOR PAYMENT OF PUBLIC DEBT: requirements that It be made when debt is incurred, 2133 to 2147, see Sinking Fund ; Debts, Limitations on Power to Incur. such requirements mandatory, 2134 rt seq. essential compliance necessary, 2135. law ordaining annual tax sufficient. 2135, 2136. need not be submitted to voters, 2137. previous general law sufficient, 2138. requirement of levy of annual tax construed, 2135 to 2139. effect of noncompliance, 2140, 2146. sufficiency of provision as to form, 2141 to 2143. creditor must have fixed right. 2141, 2142. reading requirement Into statute, 2142. sufficiency in amount, 2144. classes of debts to which such requirements applicable, 2145. effecr of partial compliance with requirement, 214(;. creditor's remedy not confined to provision made, 2147. failure to make, defense estopped by recitals in bonds, 2187. PUBLICATION : of notice in tax proceedings, 1152. PUBLIC BUILDINGS: constructed by state commission, 679, 680. as necessary municipal expenses, 2062, 2066. contract for rent of, by indebted municipality, 2079 to 2081. contract for erection or purchase of, disguised as contract for annual supplies, 2081, 2082 to 2085. erection of, out of current revenues, 2082. PUBLIC CHARITY. See Charity. PUBLIC HEALTH: legislative control of local taxation for purposes of, 033. includes establishment of sewers, 633. see Health, Puelic. PUBLIC IMPROVEMENT : notico of Intention to make, 1135. see Local Assessments. PUBLIC LANDS: state taxation of, see Federal Peopertt, State Taxation of. PUBLIC OFFICERS: reimbursement for expenditures and losses incurred in duties of office, 339 to 341. reimbursement for losses incurred in acts in which public has no in- terest, 342, 343. reimbursement for expenses in defending charges of official misconduct, 343, 344, 345, 346, 347, 348. reimbursement for expenses of contest, 349. appropriation for widow of, 350, 351, 352, 353. see Administrative Officers ; Officers ; Subordinate Officers. see Extra Compensation; Pre-existing Law. 1286 INDEX. References are to section numbers. PUBLIC PROPERTY: exemptions of, generally, 1340 to 1350. mortgage of, by indebted municipality, 2115 to 2117. statute permitting local assessment of, does not create debt, 2121. local assessments of, 1906. PUBLIC PURPOSE : tax must be for, 169, 170. legislature judge of what is, 173. legislative judgment not conclusive, 173. wbat is, 176, 177, 178. not narrowly construed, 178. with respect to power of eminent domain, 179, 180 et seg. bounties to private undertakings, 185, 186, 187, 190, 327, 32a manufactures, 187, 189, 190. grist mills, 187, 191. saw mills, 187. debts of individuals, 188. sugar bounties, 190. trees, planting, 190. mining operations, 190. highways, 192, 193. bridges, 192, 193, 242. railroads, 194 to 199, 242 to 245. internal improvements, 241. state constitutions respecting, 200 to 240, see Names of States. municipal enterprises, 242 et seg. coal yard, 246, 247. water works, 247a, 247b. gas and electric light works, 247a, 247b. state dispensaries for sale of liquors, 247c. drainage, 248 to 252. irrigation, 248, 253. levees and dikes, 248, 254. public health, 248, 249, 255, 258a. sprinkling and sweeping streets, 258a. bounties for destroying animals, 258a. schools, 259 et seg., see Schools. religion, 259 et seg., see Religion. charities, 259 et seq., see Chabities. hospitals, see Charities. care of inebriates, 323 to 325. moral and equitable obligationos, 326, 327 et seq., see Moral Obliga- tions. payment of bounties accrued under law which had been repealed, 327, 328. French spoliation claims, 329. Confederate cruisers, 329. compensating physician for loss of practice caused by taking property, 331. compensating parties for investments made on faith of unconstitutional laws, 332. bounties to soldiers, substitutes and families, 333, 334. pensions to soldiers, 335. memorial halls, 335. support of G. A. R. post, 335. pensions to civil employes, 336 to 338. reimbursement of public officers for expenses and losses, see Public Officers. payment of damage done by mobs, 349a. payment to widows of deceased public officers, 350, 351, 352, 353. junkets of legislature, 406. celebration and fairs, 404, 405. INDEX. 1287 References are to section numhera. PUBLIC PURPOSES — Coniimted; see MoKAL Obligations ; Labor Laws. as to claims not provided for by pre-existing law, see Pre-existing Law. as to legislative audit of private claims, 384 et seq., see Legislature : Audit. as to extra compensation to public officers and contractors, 354 te 383, see Extra Compensation. PUBLIC REVENUE : law as to control of, is law of general nature, 1750, 1751, commutations and exemptions in consideration of, 1333. defined in Kentucliy, 1551. PURCHASE : of public works by indebted municipalities, contracts for disguised as leases, 2083 to 2085. of public works by indebted municipalities, out of proceeds of special fund or special taxes, 2105 to 2110. contract of, does not create debt where performance is optional, 2118. PURCHASER : tax deed not conclusive as to identity of, 1269. at tax sales, changing remedies of, 1830. of claims, license taxes on, 1442. PURPOSES OF TAXATION : distinguished from motive of legislature, 172. determined by inquiring what is to be done with proceeds, 172. to be purposes germane to the sphere of the taxing authority, 175. equality in, 26. limits on tax rate considered with respect to, 2008 et seq. should pertain to district taxed, 407 et seq. for which Federal tiixing power is exercised, C97 to 701. question as to. miiy lie raised under due process of law clause, 1126 to 1127. void tax for private purpose cannot be validated, 1249. for which local assessments may be laid, 1844 to 1878. issue of bonds for unlawful purpose defense estopped by recitals, 2187. what are state purposes as to limits on tax rate, 2011, 2012. what are city purposes as to limits on tax rate, 2010, 2013, 2013a, 2014. what are school purposes as to limits on tax rate, 2010, 2013. what are county purposes as to limits on tax rate, 2013, 2013a. see Public Puepose. iJUANTUM MERUIT: Q- where municipal bonds invalid, recovery by creditor on, 2174, 2175. <3UARANTINE REGULATIONS : states may enact and charge fees for examinations, 952. QUASI-MUNICIPAL BODIES. See Sanitary District; Irrigation Dis- trict ; Library Board ; Road Commissioners ; Administrative Offi- cers ; Park Board; Park Commissioners; County; Township. debt of, whether part of municipal debt, 2150, 2151, 2153. exemption of property of, 1349, 1350. EAILROADS : '^• unit method of taxing track, 72, 149, see Unit Method. situs of track and right of way, 72, 149. taxes in aid of, 194 to 240. municipal construction of, 242, 243, 244, 245. construction by municipality outside its limits, 477. state controlling municipality in building, G27. contract to pave city streets, right of legislature to modify, 629a. municipal, placing in hands of state commissions, 679, 680, see State Commissions. 1288 INDEX. References are to section nurnbers. RAILROADS — Continued: state license tax on agent of foreign, 871. state tax for keeping office in state, 871. state tax on freight carried, 872. state taxes on, where receipts from interstate and intrastate business- cannot be separated, 903, see Peeight; Commeece, State Taxes Affecting. taxation of rolling stock not continuously in state, with respect to interstate commerce, 911. Interstate, unit method of valuing intangible assets of, considered with, respect to commerce, 913, see Franchises. exemption from tax by charter, 996d, 997, 998. exemption from taxation of those operating in specified territory as gratuity, not contract, 1033, 1034. selling right of way piecemeal for taxes and assessments, 1189. 1190. personal .ludgment for taxes and assessments, 1190. personal liability for special assessments, 1227. validating defective bonds in aid of, 1257, 1259, and see generally, 1255 to 1266, and Curative Acts. specific tax per mile on, 1819. sometimes exempted, 1325. commutations of taxes on, 1333. double taxation, 1365a, 1367, 1379, see Cobpoeations ; Double Tax- ation. taxes on gross receipts of, see Gross Receipts. taxation of. In California, 1514. In Colorado, 1519. In Georgia, 1526. In Illinois, 1D31. 1534. In Indiana. 1539. in Iowa, 1542, 1543. In Kansas. 1546, 1548. In Kentucky, 1552. In Louisiana, 1556, 15P0. In Maine, 1571. In Maryland, 1573. in Minnesota, 1592. In Mississippi, 1599. In Missouri, 1605. In Montana, 1612. In New Hampshire, 1627. In New Jersey, 1632 et seq. in North Carolina, 1640. In North Dakota, 1642. In Ohio, 1653. In Tennessee, 1683, 1684, 1G85. in Texas, 1688. In Utah, 1696. In Virginia, 1699. in West Virginia. 1712. in "Wyoming, 1719. assessment for building, 1865. local assessments on property of, 1908 to 1933. RAILROAD COMPANIES : taxes on gross receipts of, 58. tonnage tax, 59. situs of franchises, 103. property of, may tie distributed for taxation among localities along the- line, 148, 149, 162. see Railkoads ; Methods of Taxation : Commerce, State Taxes Af- fecting ; Corporations; Franchises. INDEX. 1289 References are to section numbers. RATE: uniformity throughout taxing district, 528, 531. ]35tb, 1507. of tax to pay city debt fixed by state commission, 680. Inequality in, not forbidden by 14th amendment, 1307. discrimination in, between foreign and domestic companies, 1318. see Equality ; Equality and Unlformity, Requirements of • Methods OF Taxation. RATE, CONSTITUTIONAL LIMITATIONS ON: nature and scope, 2005 et seq. are not grants of power to tax up to rate limited, 2006. apply only to property taxes, 2007. apply to franchises, taxed as property, 2007. application of, to taxes for purposes germane to objects of taxing authority, 2008 et seq. cannot be avoided by legislative levy of local ta.v, 2010, 2013a, 2014. for school purposes, interpreted, 2010. for state purposes, interpreted, 2011, 2012. exceptions from, for war and insurrection, interpreted, 2012. for municipal purposes, interpreted, 2013. application of. to taxes to pay debts, 2015 et seq. rights of creditors subject to, 2015 et seq. construed in connection with provisions for levy of specified taxes 2018 et seq. exceptions from, of taxes to pay prior debts, 2020. when they take effect, 2020. application of, to different municipal bodies coincident in territory. 2021. effect of exceeding, 2022 et seq. state constitutions quoted, 2033 et seq. RATIFICATION : of previously invalid contract of exemption, 1037. of invalid debts, 2160, 2161. of invalid municipal bonds, 2208. see Cueative Acts ; Estoppel. REAL PROPERTY: taxation of 45. situs of, for taxation, 72, 150. inheritance taxes on succession to, outside state, 142. lying in two taxing districts, 150. unoccupied, assessed to owner at his residence, 1.50. acquired by municipality outside limits, 476. of national banks, state taxation of, 754, 785 to 702. what is, of national banks, 791, see National Banks, State Tax- ation OF. outside state, deducting from value of national bank shares. 816. taxed, while personalty exempted, 1352 to 1354, 1546, 1574, 1038. double taxation, taxing land and money from sale, 1365a, 1365c. taxing land and income. 1365b. local assessments of, 1903. REASONABLENESS : as element of license taxation, 1435, 1436 et seq., see License Ta':es ; Classification. of municipal taxation, see License Taxes ; Classification ; Munic- ipality. of municipal ordinances directing local improvement, 1885 to 1887. lack of, in certain assessments for sewers, 1897 to 1901. in application of various methods of local assessment to particular cases, 1986 to 1991. where local assessment exceeds value of property, 1992 to 1999. 1290 INDEX. References are to section numbers. REASSESSMENT : of unpaid part of previous void assessment, 417. may have prior lien over intervening mortgage, 1188. general rule, 1282, 1283, 1284. directly by legislature, 1283, 1284, 1285. on noncontiguous lands, 1283, 1284. of previously void assessment, 1283, 1284. of previous assessment void for lack of statutory consent, 1285, 1287. in same proportions as previously void assessment, 1283, 1285, 1287. distinction between reassessments and validation of void assessments, 1285. imposed retrospectively, 1285. where previous assessment void for private purpose, 1286. by subordinate bodies, 1287. of taxes proper, 1288. by general prospective statutes, 1288. of tax which legislature had no original power to lay, void, 1289. of persons or property which have escaped assessment in past years, 1290 to 1292, 1296, 1834. of property which is out of existence, 1291. Virginia constitution as to omitted property, 1292. of property which has been undervalued, 1293, 1294, 1834. notice and hearing, 1295, 1296, 1297, 1298. of omitted property, as to notice to nonresident, 129G, 1297, 1298. arrearages, 1299, 1300. see CuKATiVE Acts ; Retrospective Laws ; Locai, Assessments. RECEIPTS. See Geoss Receipts. RECEIVER : taxing property held by, 46. situs of property in hands of, 109 et seq., 113, 119, 120. Federal, state taxation of property in hands of, 773. of insolvent bank, collecting tax on shareholder from, 1201. RECITALS IN MUNICIPAL BONDS: general rule as to estoppel by, 2176, 2177. principal cases In which law as to, has been developed, 2178 to 2186. estoppel to defend on ground that constitutional limit exci^eded, 2180, 2181, 2186, 2187, 2191 to 2194. defenses which may be estopped by, 2187 to 2193. effect when statute refers to public record, 2194. estoppel by, as to contents of municipal ordinance, 2195. do not estop as to facts as to which notice Is given by stitjite. 2196. do not estop as to facts on face of bonds, 2180, 2196. 2197. effect of general and express, 2198, 2199. effect where statute under which bonds are issued is void, 2199a. of compliance with valid and invalid act, 219r)a. officials who may make, 2200 to 2202. as to conditions subsequent, 2203. RECLAMATION DISTRICT : is public agency, 1510. see Tax District; Arid Lands: Swamp Lan-ds. RECORDING : curing failure In, 1248. RECORD: reindexing, not compulsory county obligation, 2066. contents of, when purchaser of municipal bonds charged with knowl- edge of, 2183, 2184, 2194. 2197. REDEMPTION : right of, from tax sales, llS6a. state constitutions respecting, 1191 to 1194. INDEX. 1291 References are to section numbers. REDEMPTION — Continued: right of, made dependent on payment of both tax and penalty, 1215. of lands from tax sales, changing time for, 1830. REDUCTION : of various tax levies, to obey constitutional limit of rate, 2023 ct seq. REFRIGERATOR CARS. See Car Companies. REFUND : of taxes, retrospective laws compelling, 1834. of taxes, law providing for, is law of general nature, 1755. REFUNDING BONDS: application to, of constitutional debt limitations, 2092 to 2008. expres.s constitutional provisions as to, 2098. implied authority to issue, 2125d. defense of, invalidity, estopped by recitals, 2188. REGISTRATION : of municipal bonds, effect of, 2203 to 2207. REGULARITY : of sale, tax deed conclusive as to, 1271. REGULATION : cost of, element of license tax under police power, 1445 et seq. RELEASING CLAIMS FOR TAXES: state constitutional provisions forbidding, 1776 to 1795, see Names oj? States. general discussion of such provisions, 1796 et seq. constitutional provisions forbidding are self executing, 1797. effect of such provisions is to prevent compromise of tax claims, 3 70S, 1799 et seq. under such provisions when liability is fixed it cannot be relinquished, 1800, 1801. remitting taxes in certain districts, 1802. remitting taxes to indigent persons, 1802. see Refund ; Aeeearages ; Commutations. RELIGION : no appropriation for, 259. state constitutions respecting, 2C0 to 297, see Names of Vaeious States. _ in schools, see Schools ; Charities ; Schoolhouses. RELIGIOUS BODIES: as to exemptions of, 1325, 1334 to 1337. see Church Property. RELINQUISHMENT : of taxing power, presumption against, 1029. REMAINDERS : inheritance taxes on, 1502, 1502a. REMEDY : abridgment of, impairing contract, 1053 to 1056. illustrations of abridgment of, 1053 to ]0.j6. substituting less effective, than original, 1053. when essentially equal given, contract not impaired, 1054. suit at law substituted for mandamus, 1054, 1055. for collection, state may have additional, 1219. REMISSION : of taxes, see Releasing Claims for Taxes ; Arrearages ; Indigent Poor ; Refund. REMOVAL : from one state to another, double taxation resulting, 1378. 1292 INDEX. References are to section numbers. RENTS : taxed to owner of land, I'lOoh. Fpiipral tax on, see Lai^us ; Dibect Taxes ; Income Taxes. REPAIRS : of public Improvements, local assessments for, 1848 et seq., to 1857. see Local Assessments ; Maintenance. effect of provision in contract for street improvement that contractor shall make, 1858 to 1863. of streets, assessments for, 1848 to 1857. REPEAL : of corporate charters, constitutional provisions respecting, 1010 to 1028. see Ikrepealahle Lav^s ; Names or States. of law as impairing obligation of contract, 1051. of bank charter making notes receivable for ta.xes, 1051, 1054. of exemption, 1051. of act need not be mentioned in title of other act, 1821a. see Subjects and Titles of Acts. REPEATING TAXATION, 68. REPLACING : of public Improvements, see Local Assessments ; Repairs. RESTAURANTS : license taxes on, 1443. RESTRICTIONS : on municipal taxing power, legislature to lay, 577 to ."81. RETAILERS : taxes on, 1430 et seg., 1582, 1663. RETROSPECTIVE LAWS: for collection of taxes, 1219, 1220. making assessment personal charge, 1220, 1832. validating debts, 1255 to 1265. making tax deeds conclusive, 1273 to 1281. reassessments of property which has escaped taxation, 1290 to 1292. 1296 to 1298, 1834. reassessments of undervalued property. 1293, 1294, 1834. arrearage acts, generally adjusting delinquent taxes, 1299, 1300. curing defects, 1253, 1253a, 1833. how far valid, 1252a and 1247 to 1300, see Curative Acts. in inheritance taxation, 1490 to 1502a, 18.32, see Inheritance Taxes. general discussion, 1827 et seq. defined, 1828. not ipso facto void, 1828. past acts may be made basis of legislative action, 1828. prohibitions of ex post facto laws only apply to criminal punishments, 1829. validity under contract clause, 969, 1830. changing remedies of purchasers at tax sales, 1830. due process of law with respect to, 1831. general rule as to validity of, 1831. imposing local assessments, 1831. imposing interest and penalties for nonpayment of taxes, 1831, 1832. discriminating in character, 1831, 1832. unequal in operation, 1832. reviving tax laws which had been repealed. 18.32. state constitutional provisions forbidding, 1833 et seq., 1253a, and 959 to 9G3a. uniting or dividing municipalities, 483, 1833. compelling city to buy established water plant, :8o3. effect of constitutional provisions forbidding, 1833, 1S34. providing for refund of taxes, 1834. see Curative Acts ; Reassessments. INDEX. 129:; References are to section num'bers. KETROSPECTIVE PROVISIONS : constitution forbidding appointment of state commission in municipal affairs is not, 686. requirements of equality are not, 1746a. prohibitions of local and special laws are not, 1746a. limits on tax rate are not, 2020. debt limitations are not, 2156. see Retrospective Laws. REVENUE : occupation taxes for, unlimited as to occupation, 1403a. production of, as test whether license charge is police measure or tax, 1404 to 1408. liquor tax as measure for producing, 1411. see CuBRENT Revenues ; Public Revenues. KEVENUE BONDS: issue of, and constitutional provisions as to, 2076a. EHODE ISLAND CONSTITUTION: support of religion, 286. poll tax, 1671. burdens to be fairly distributed, 1671. decisions under, as to equality and exemptions, 1672. HIGHT OP WAT : of railroad, selling for taxes and assessments, 1189, 1190. of railroads, local assessments of, 1903, 1908 to 1933. KIOTS : municipality liable for damage done by, 349a. state compelling city to pay damage caused by, 621. EIVER AND HARBOR IMPROVEMENTS: legislative power to impose cost on locality, 665. local assessments for; 1868 to 1870. EOADS: construction of, public purpose, 193 et seq. assessment of adjacent property for country road, 411, 1991. exempting municipalities from county road taxes, 527 to 530. state compelling locality to build, 427, 622 to 629, 688, see Local Self Government ; Legislature. local, constructed by state commission, 688. see Streets. ROAD COMMISSIONERS: delegation of taxing power to, 558. ROAD TAXES: in Arkansas, 1509. in California, 1517, in Colorado, 1519. in Illinois, 1534. in Indiana, 1538. in Iowa, 1543. in Kansas, 1547. in Kentucky, 1554. in Maryland, 1573, 1574. in Missouri, 1606. in New Hampshire, 1625. in Ohio, 1647, 1651. in Oregon, 1654, 1655. in Virginia, 1704. under limits on tax rate, 2013, 2013a, 2014. ROLLING STOCK. See Railroads. 1294 INDEX. References are to section numbers, RUMSELLERS : see Liquors, Intoxicating ; Liquor Business. tax on, in Colorado, 1519. In Idaho, 1528. In Illinois, 1529, 1532. in Missouri, 1607, 160a In Nebraska, 16] 4. in Obio, 1649. In Pennsylvania, 1663. in South Dakota, 1681. in Texas, 1688. RURAL HIGHWAYS: applicability of frontage or area rule to local assessments for, 411, 1991. S. SAFETY : public, state inspection laws for protection of, 945. SALARY : of state ofBcer, Federal tax on, 743. of Federal officer, taxation by state, 775. of officers fixed by legislature, as part of municipal debt, 2059, 2060, 2063. SALE: of United States bonds for collection of state taxes, 757. of imported articles is commerce, 827. for nonresident seller is commerce, 827. of lands for collection of income taxes, 1169. of personal property for franchise and privilege taxes, 1171. of lands for taxes, right of redemption, 1186a. of lands for taxes, notice not constitutionally necessary, 1187. of railroad right of way for taxes and assessments, 1189, 1190. notice of, when statute requires, legislature cannot validate omission, 1252a. is Jurisdictional act, 1268. tax deed not conclusive as to, 1268. tax deed conclusive as to regularity, 1271. tax deed conclusive as to place, 1271. tax deed conclusive as to amount, 1271. tax deed conclusive as to method, 1271. tax deed conclusive as to formal warrant for, 1271. for taxes, changing remedies of purchasers at, 1830. changing time of redemption, 1830. for tax in excess of constitutional limit, void, 2032. SALES : see Auctions and Auctioneers ; Brokers : Commission Merchants ; Commerce, State Taxes Aitecting ; Hawkers ; License Taxes ; Merchants ; Retailers ; Vendors ; Wholesalers. Federal tax on, 704. tax on, in California, 1513. in Georgia, 1526. in Iowa, 1543. SALESMEN : taxes on, 1564, 1623. see Sales ; Commerce, State Taxes Affecting ; License Taxes ; Occu- pation Taxes. SAMPLE : taxes by states, on sales by, 841 to 848. taxes by states on delivery of goods previously sold by, 859 to 862. INDEX. 1295 References are to section numbers. SANITARY DISTRICT: taxing power delegated to, 566. as to exemptions of property of, 1345. SANITARY MEASURES. See Deainage; Levees; Health, Public. SANITARY PURPOSES: legislative power to lay local taxes for, 633. SAVINGS BANKS: double taxation of, 1380 to 1382. see Banks ; Bank Deposits ; Deposits ; Corporations ; Franchises. SAWMILLS : taxes in aid of, 187. SCALING DOWN: pro rata, of bonds partly in excess of debt limit, 2165 to 2167. of debt other than single issue of bonds, partly in excess of limit, 2168, 2169. SCHOOL DISTRICTS : taxing power delegated to, 564, 570. SCHOOLHOUSES : use of, for religious purposes, 306, 307, 308. for literary societies, 307, 308. SCHOOLS : taxation for, 259 et seq. constitutional provisions respecting, 260 to 297, see Names of States. taxation for private, 299, 300, 313, 314. sectarian, 300. 301, 302, 303, 313, 314 et seq. religious exercises in, 303 et seq. reading Bible in, 303, 304, 305. constitution of Mississippi as to reading Bible, 305. teachers wearing sectarian garb, 309. taxing locality to pay for state school, 428, 430, 431. permitting nonresidents of district to attend, 479 to 481. exempting municipalities from county school taxes, 531. separate white and colored, taxation for, 1604. state control over local taxation for, 481, 630 to 632. see Local Self Government ; Legislature. maintaining districts in limits of municipalities, 030. commonly exempted, 1325. as to exemptions of, 1334 to 1338. local assessments of property used for, 1905, 1935. taxes for, under limits on tax rate, 2010, 2013. SCHOOL TAXES : not to be expended out of district, In Arkansas, 437. SCIENTIFIC SOCIETIES: sometimes exempted, 1325. SCOPE : of taxing power, 44. SECRET SOCIETIES: as to exemptions of, as charities, 1338, 1339. SELF EXECUTING CONSTITUTIONAL PROVISIONS: as to uniformity and equality, 46, 47a, 1311. forbidding loan or gift of public money, 240, as to releasing claims for taxes, 1797. debt limitations, how far, 2155a. see Mandatory Provisions. SELF GOVERNMENT: local, see Local Self Government; Legislature; MuincrPALiTT ; Locality. 1296 INDEX. References are to section numbers. SErARATION : of interstate from intrastate business, witli respect to taxation, 897 to 904. see CoMMEBCE, State Taxes Affecting. SEVERABILITY : of contracts, partly Invalid under constitutional debt limits, 2164 to 2169. SEWAGE WORKS : built by municipality outside limits, 476. SEWAGE DISTRICT: act creating, void in New Jersey, 1635. SEWERS : pertain to public health, 248, 633. legislative control of local taxation for, 633. assessment of remote property for, 412. rates for use of, notice and hearing as to, 1134. local assessments for, 1841, 1846, 1849, 1851. local assessments for use, maintenance, and repair of, 1848, 1851, 1854 (see 1855, 1856). unreasonable assessments for, 1887, 1897 to 1901. assessment for, without inquiry as to benefits, 1938, 1941, see Locai- Assessments. assessments for, by frontage rule, 1956 to 1972, see Frontage. assessments for, by area. 1972, see Aeea. assessments for, by value, 1974 to 1977, see Value. each lot paying for sewer in front, 1978, 1979. assessments for, under police power, 1980, 1981. applicability of methods of assessment for, by frontage, area, and value, 1986 to 1991. where assessment for, exceeds value of property, 1992 to 1999. bonds to build, payable out of special fund, not Included in city debt. 2103. constitutional provisions as to debts for, 2086. SHARES : of corporation in shareholders' hands, taxation of, 49, 65, 1200. of stock corporations, situs of, 99, 100, 150. of corporations, taxes on succession to, 144, 145, 146. of national banks, taxation of, by states, 754, 785, 786, 790, 800 to 804a et seq. Federal tax on sales of, 704. taxation by states, where capital invested in United States bonds. 7.5S. of corporation with capital invested in patent rights, state taxation of. 779. ■ in corporations, owned by nonresidents, taxing in different manner than shares owned by residents, 1113. of corporations, double taxation of, 1374 to 1376a, see Double Tax- ation ; CoRPOBATioNS, 1378, 1379. of building and loan associations, taxation of, 1383 to 1394, see Build- ing AND Loan Associations. of corporation are not credits, 1402, see Corpokations ; Credits. SHAREHOLDERS : taxes on, 65. of corporation, collecting tax on, from corporation, 1200. of insolvent bank, collecting tax on, from receiver, 1201, SHEEP RAISING: taxation of business of, in Utah, 1696. see Livestock. SHIPMENT : of merchandise is commerce, 827. INDEX. 1297 References are to section numbers. SHIPS : registration and enrollment, 76. taxation at home port, 77. taxation at home port, not elsewhere, 78. taxable where employed, 79, 80, 81, 82, 83. at domicile of owner, 83, 84. not taxable at temporary stopping place, 84. tax on, as property, distinguished from tonnage duty, 954. tonnage duties on, 948 to 954, see Tonnage, Duty of. SHOWS : taxes on, 1414a, 1450, 1453, 1508, 1529, 1614, 1649. SIDEWALKS : local assessments for, 1841, 1953, 1980, 1981. compelling property owners to clean, 1982 to 1984. ordinances as to, held unreasonable, 1885, 1886. SINGLE ACT: is not doing business, 1639, 1683. SINGLE-TAX THEORY: under requirements of equality and uniformity, 1352 to 1354. SINKING FUND: inclusion of property in, in computation of municipal debt, 11099. requirements for provision of, at time of creation of debt, 2133 to 2147. see Pbovision fob Payment of Public Debt. failure to provide, defense estopped by recitals in bonds, 2187. SITUS. 69 et seq. taxation of property or persons having no situs, violation of due process of law, 71. of real property, 72, 150. of interstate railroad track and right of way, 72. telegraph lines, 72. personalty, tangible, 73. cars and car companies, 74, 75. tank line company, 75. ships, 76 et seq. to 84. credits, 85 to 98. bonds, 85, 95. mortgages, 85, 90, 90a, 91. cboses in action, 85. notes, 85, 86. bank deposits, 85, 91 et seq., 98, 130. credits employed in business, 87, 88, 89, 98. property and credits in hands of agent, 87, 88. executory contracts, 89. bonds, etc., of nonresidents, which are outside state, 95. credits not reduced to tangible form, 96, 98. uncollected insurance premiums, 96. judgments, 97. «hares of corporate stock, 99, 100, 150. intangible assets, franchises, 101 et seq. ferry franchises, 102. ■of franchises of foreign corporations, 103. may be given to franchises, as property, by legislature, 103 et seq. of franchises of express companies, 103, 104. •of franchises of bridge companies, 103. ■of franchises of telegraph companies, 103. of franchises of railroad companies, 103. unit method of taxing corporate franchises, considered with respect to, 103 to 108c. 82 1298 INDEX. References are to section nnrnbcrs. SITUS — Continued: of property in hands of executors, receivers, guardians, and trustee* generally, 109 et seq., 119, 120, 121, 122, 123. of funds in tbe control of courts, 109 et seq., 119, 120. of property of nonresident beneficiaries, 122. of property held by nonresident trustees, 123. of partnership property, 124. of property in transit, 125 et seq., 127. of property employed temporarily in state, 127 to 130. as between places in same state, 148 et seq. of railroad r^roperty may be distributed to localities along tbe line, 72, 148, 149. ■ of telegraph and express property may be distributed to localities, 149. of real estate lying in two taxing districts, 150. of unoccupied lands, 150. state constitutional provisions as to. 151 to 162. of national bank shares, 823. double taxation affected by, 1377 to 1379. of corporate shares, law fixing in one county is special law, 1749, note, summary as to, 168a. see also Tereitoeial Jueisdiction. SLAVES : debts for, not to be paid, 2210. SLEEPING CARS: state tax on privilege of operating, 869. SLEEPING-CAR COMPANIES : unit method of valuing intangible assets of, considered with respect to commerce, 914, see Franchises. state taxes on, not distinguishing between interstate and intrastat& traffic, 898. law taxing, construed to refer to intrastate traffic, 904. tax where state compels company to do business, 904. taxation of cars not continuously in state, with respect to interstab^ commerce, 910. taxes on, in Texas, 1690. see Car Companies ; Situs ; Unit Method. SNOW : compelling property owners to remove, 1982 to 1984. SOCIETY for prevention of cruelty to animals, delegation of taxing power to, 576. SOLDIERS : bounties to, 333, 334. pensions to, 335, see Pensions, halls in memory of, 335. support of G. A. R. post, 335. see Veterans. SOLVENT LOANS: subject to taxation, 1514. see Ceebits. SOUTH CAROLINA CONSTITUTION: as to situs, 158, 1675. loan or gift of public money or credit, 232, 465. becoming stockholder in private enterprise, 232. purposes of taxation, 232. municipal water and light plants, 247b. state dispensaries for sale of liquors, 247c. religious and sectarian appropriations, 287. claims against state, 373. INDEX. 1299 References are to section num'bt^rs. SOUTH CAROLINA CONSTITUTION — Con fin-Med; extra compensation to officer or contractor, 373. claim without authority of law, 373. apportionment of debts when county is divided, 514a. restriction of municipal taxing power, 607. delegation of taxing power, legislature not to lay local taxes, 607, 1673. amendment or repeal of corporate charters, 1022. equal protection of laws, 1673. local and special laws, 1673. general laws, 1673. uniformity and equality, 607, 1673, 1674, 1675. exemptions, 1674. capitation tax, 1674, 1675. corporate authorities of municipalities vested with taxing power, 1675. local valuation to be same as state, 1675. special school tax, 1675. no wharfage taxes, 1675. decisions under, as to valuation, 1676. as to local and special laws, 1676. as to exemptions, 1677. as to equality and uniformity, 1676. 1077. application of uniformity to local assessmoats, 1678. as to state and municipal debts, 2256, 2257. loan of public credit, 2256. SOUTH DAKOTA CONSTITUTION: loan or gift of public money or credit. 233. -166. becoming stociiholder in private enterprise, LI33. internal improvements, 233. . religious and sectarian appropriations, 288. classification of municipal corporations, 608. restriction of municipal taxing power, 608. delegation of taxing power, 66JS. local taxes uniform, 608. Impairing contracts. Irrevocable grants, 991. power to tax corporations not surrendered, 901. amendment of corporate charters, remission of forfeiture of corporate charters, 1023. private or special laws, 1679. general laws, 1679. special privileges, 1679. equality and uniformity, 1679. taxation of banlcers and banking property, 1G79. exemptions, 1680. special assessments and special taxation, 1680. corporate authorities of municipalities may be vested with taxing power, 1680. decisions under, as to local assessments, 1G81. as to local and general laws, 1681. as to uniformity, 1681. as to releasing or compromising public claims and taxes, 1790. limits on tax rates, 2047. as to state and municipal debts, 2258. SOVEREIGNTY : taxing power an incident of, 44. SPAIN : treaty with, of 1796, 1083 to 1085. SPECIAL ASSESSMENT : distinguished from special taxation, 1042 to 1945. see Local Assessments. 1300 INDEX. References are to section numbers. SPECIAL BENEFITS: charge for, in form of tax, In relation to interstate commerce, 882, 883. see Benefits. SPECIAL FRANCHISES: taxation of, 47a. defined, 51 et seq. discussed, 64 et seq. assessment by state board, 69L see Franchises. SPECIAL FUND: inclusion of debts payable from, In computing debt under debt limita- tions, 2101 to 2115. created by local assessment, when debts payable from such fund are included in computing city debt, 2102 to 2104. created by levy of special taxes, or of general taxes thoughout com- munity, inclusion of debts payable from such fund in computing city debt, 2105 to 2110. created by indebted municipality, out of profits of waterworks or other works, validity of debts payable out of such funds, 2111 to 2115. created by indebted city by mortgage of public property, 2115 to 2117. SPECIAL TAXATION: distinguished from special assessment, 1942 to 1945. see Local Assessments. SPECIAL TAXES: inclusion of debts to be paid out of, in computing municipal debt, 2105 to 2110. see Special Ftjnd. SPECIAL TAX BILLS: issue to contractor, 1222. SPECIFIC TAXES: notice and hearing unnecessary, 1138. under requirements of equality, 1319, 1320, in Louisiana, 1564, 1565. in Michigan, 1586, 1587. in Ohio, 1653a. in Pennsylvania, 1664. in South Carolina, 1677. SPOLIATION : when local assessment exceeds value of property, 1992 to 1909. see Public Purpose. SPRINKLING STREETS: Is public purpose, 258a. assessments for, 1850. by street railways under compulsion, 1932. STAGE : of proceedings at which taxpayer is entitled to notice, 1157 to 1102. STAMP TAX: on goods intended for export, 938. on export bills of lading, 939, 940. In Utah, 1695. STATE: taxing locality for purposes which pertain to, 424 to 439. taxing for benefit of smaller territory, 440 to 475. not to assume local debts, 441 to 475, see Names of States. not to loan credit to localities, 441 to 475, see Names of States. municipalities as agencies of, 618. control of local affairs, see Local Self-Govern ment. INDEX. 1301 References are to section numhers. STATE — Continued: compelling city to build armories, 428, 433, 620. Federal taxing power may not impede governmental operations of, 742 to 749. 16 ly officers of, Federal tax on salary, 743. bonds of, Federal tax on, 744. Federal tax on legacy of, 744. legacy to, Federal tax on, 744. succession laws. Federal legacy tax does not impede, 745. excise bonds given under laws of. Federal tax on, 746, 747. dispensary. Federal tax on sales of, 747. franchises granted by. Federal tax on, 748, 749. taxing power of, concurrent with Federal government, 750. extent of their taxing power, 750. tax liens of subordinate to Federal lien, 750, 751, 752. taxation by, of Federal agencies, 753 et seg. see Fedebal Agencies, State Taxation of ; National Banks ; Fedeeat. Pbopebty, State Taxation of; Fedebal Fbanohises, State Tax- ation of. may tax bonds of sister state, 823a. powers over commerce when Congress has not acted, 835 to 839. police power of, in respect of interstate commerce, 837, 838, 870, 879 to 881. regulation of pilots, 839. Inspection laws of, 837, 839, 932 to 947, see Inspection Laws of States. power of, to limit taxing power by contract, 974, 975, see Impaieing Obligation of Conteact. taxing power limited by treaties, 1074 to 1086. tax systems of, not interfered with by Federal constitution, 1306 to 1308. taxation of same property by different, 1375, 1376, 1376a, see Double Taxation ; Coepoeations, also 1377 to 1379. exemptions of property of, 1340. local assessments of property of, 1906. not restricted by Fourteenth amendment in license taxes under police power, 1410. circulation of banks of. Federal tax on, see Cieculation of Banks. debt limitations on, application of, to municipalities, 2154, 2155. see Leqislatitbe. STATE CANAL. See Canal. STATE COMMISSION: to take charge of municipal works, 639 et seq. for harbor improvement, paid for by county, 053. for municipal waterworks, 652, 659, 679. placing local works in hands of, 678 to 686. for construction of municipal railroad, 627, 679, 680. for municipal fire department, 664, 688. for construction of courthouse, 679. for construction of public buildings, 680, 683, 688. for adjustment of city debt, 680. constitutional provisions, forbidding granting control of municipal afCairs to, 681, see Names of States. Interpretation of constitutions forbidding delegation of control of municipal affairs to, 682 to 686. for street improvements, 683, 684, 688. when consists of single individual, 683. for control of municipal affairs, when municipality consents, 684. for police insurance fund, 685. constitution forbidding appointment of, in municipal affairs is not retrospective, 686. 1302 INDEX. References are to section numters. STATE COMMISSION — Contiiuicd : constitutional requirement that local officer shall be locally chosen, 687 to 691. for control of local parks, 688. tot control of local police, 688, 689. for control of local health, 688. for control of local excise, 688. for assessing special franchises, 691. STATE INSTITUTIONS : taxing locality to pay for, 432, 434, 435. constitutional provisions forbidding locality to pay, 436, 437, 438, 439. taxes for, under limits on state tax rate, 2011. ST.VTE ROADS: taxing neighborhood to pay for, 427 STATE SCHOOL: taxing village to pay for, 428. taxing county to pay for, 430, 431. STATUTES : as to registration and enrollment of vessels, 76. notice contained in, in tax proceedings, 1154, 1155. construed so as to allow hearing, 1166, 1167. as to personal liability for assessments construed, 1246. how far neces.siary to enforce constitutional requirement of equality, 46, 47a, 1311. requirements as to form and methods of passage, 1803 et seg. such requirements mandatory, 1803. presumption in favor of legislative certification of passage of bill, 1804. legislative certification of passage of bill in some states conclusive, 1804. legislative certification of passage of bill in some states not conclusive, 1805. rule in New York as to conclusiveness of legislative certification, 1806. requirement that vote be entered on journal, 1807 et seg. some courts hold legislative certification of entry on journal not con- clusive, 1808 to 1810. some courts hold legislative certification of entry on journal con- clusive, 1811. effect of failure to record in journals, 1812. parol evidence to contradict legislative journals, 1813. requirement of publication of notice before passage of, 1814. subjects and titles of acts, 1815 et seg., see Subjects and Titles of Acts. expression of subject in title, 1818 et seg., see Subjects and Titles of Acts. must be obeyed strictly, in local assessments, 2002. requirements as to passage, in case of incurrence of debt, 2131. must be complied with in incurrence of public debt, 2126, 2127. noncompliance with, defense estopped by recitals in bonds, 2187, 2188, 2189, see Recitals in Municipal Bonds. STEAMSHIP COMPANIES: taxes on gross receipts of, 58. STOCK : of building and loan associations, taxation of, see Buildinq and Loan Associations. of corporations, double taxation of, see Cobpobations ; Double Tax- ation : Capital Stock : Shares. STOCKBROKERS : license taxes on, 1415, 1417. INDEX. 1303 References are to section numhera, STOCK EXCHANGE : taxation of seat on, 46, 1376a. STREET CARS: lien on, for tax on business of street car advertising, 1210 to 1212. exemption of, from tax on vehicles using streets, 1451. STREET IMPROVEMENTS: assessment for, 1841, 1845, 1846, 1848 to 1S57. assessments for, by area, 1972, see Area. assessments for, by value, 1^74 to 1977, see Value. each lot paying for improvement in front, 1978, 1979. assessment for, without inquiry as to benefits, 1940 to 1955, see Locai. ASSESSMEI^TS. assessment for, by frontage rule, 1956 to 1972, see Feontaqe. applicability of methods of assessment for, by frontage, area, and value, 1986 to 1991. when assessment for, exceeds value of property, 1992 to 1999. STREET RAILWAY: grant of right to lay tracks in streets upon specified conditions as ex- emption from further taxation, 1002 to 1005. tax per foot void in Pennsylvania, 1664. license taxes on, 1415, 1442, 144.3, 1519. local assessments of, 1921 to 1933. compelling, to pave streets, 1925 to 1933. to clean streets, 1929 to 1931. to sprinkle streets, 1932. see Railroads ; Coepokations ; Feanchises. STREET LIGHTING COMPANY: taxation of, in Kentucky, 1551. STREETS : delegation of control of, to state commission, 683, 684, 688. charter provision as to paving, not contract, 1035. classification in license taxation by location in, 1427. license taxes for vending in, 1441, 1442, 1443. license taxes for running cars in, 1415, 1442, 1443. license taxes for vehicles in, 1443, 1451. license tax on poles in, 1446 to 1450. legislative control of, 622 to 629a, see Roads ; Local Self-Govebnment ; Legislature. taxes on use of, 1509, 1540, 1690. various improvements and changes in, for which local assessments mav be laid, 1841, 1845, 1846, 1848 to 1857. local assessments for maintenance, repaying, and repair of, 1848 to 1857. local assessments for sweeping and sprinkling, 258a, 1850. making ijroperty-owners clean, 1982 to 1984. SUBJECTS AND TITLES OF ACTS: requirements that law have but one subject expressed in its title, 1815 et seq. object of such requirements, 1816. germane and subsidiary subjects may be Included, 1816, 1817, 1824. expression of subject in title, 1818 et seq. general title is suflScient, 1818, 1819 to 1821a. repeal of other acts on same subject need not be mentioned in title, 1821a. limits of rule allowing generality in title, 1822. unnecessary details may be included, 1823. statement of two subjects in title, 1824. statement of subject of amendatory act. 1825. 1304 INDEX. References are to section numiers. SUBJECTS AND TITLES OF ACTS.— Continued: effect of act broader than title. 1826. effect of act having two subjects, 1826. see Statutes. SUBJECTS OF TAXATION, 45, 46. SUBMISSION OF QUESTIONS: to popular vote, see Populab Vote. SUBORDINATE BODIES : difference as to notice and hearing between taxes laid by, and taxei* laid directly by legislature, 1137, 1141 et seq., see Notice ani> Heabing. SUBORDINATE OFFICERS: must comply with statutes in incurrence of public debt, 2126, 2127. must obey statute in making local assessment, 2002. see Administrative Oitficebs ; Public Oeficebs. SUCCESSION TAXES. See Inheritance Taxes. SUFFICIENCY : of notice in tax proceedings, 1150 to 1156. see Notice and Hearing. SUGAR BOUNTIES, 190, 327. SUIT : at law for collection of taxes, 1173 to 1175. for taxes, Louisiana constitution as to, 1173. SUMMARY PROCESS: is due process of law in tax proceedings, general statement, 1122 to 1125. SUMMER RESORTS: separate classification of, for taxation, 1733. SUPPLEMENT. See Amendment. SUPPLIES : laws increasing cost of, 401, 403, see Labor Laws. SUPREME COURT: decides for itself whether contract exists, 973. SURPLUS : of national banks, exempt from state tax, 796 et seq. SURREPTITIOUS LEGISLATION : prevention of, 1816. SWAMP LANDS: local assessments for draining, 1847. SWEEPING STREETS: by street railways under compulsion, 1929 to 1931. ■ assessments for 258a, 1850. TANK LINE COMPANY : situs for taxation, 75. TARIFF : president may be given power to put Into effect, 541. TAXATION : power of, legislative, 173, 178. contrasted with eminent domain, 179 et seq. INDEX. 1305 References are to section numiers. TAX DEED : making conclusive as to name of person taxed, 1254. cannot be made conclusive evidence of the performance of jurisdictional acts, 1267, 1268. examples of matters as to which deed cannot be made conclusive, 1268, 12fi9. may be made prima facie evidence, 1270. matters as to vyhich deed can be made conclusive, 1270, 1271. and statutes under which it is made, as a contract between state ancj purchaser, 1272. made absolute by statutes of limitation, 1273 to 1281. jurisdictional defects in, cured by statutes of limitation, 1274, 1275, 1276. not validated by statute of limitations as against an owner in posses- sion, 1277. not validated by statute of limitations operating retrospectively which does not give complete opportunity to owner to assert rights, 1278 to 1281. TAX DISTRICT : equality in forming, 10. its relation to the purpose of the tax, 407, 408, 413. to be determined by legislature, 408, 409. legislative power with respect to, has limits, 410 et seq. legislative determination as to, reviewed by courts, 410 et seq. assessing limited district for country road, 411, 1991. legislative power to form not limited by 14th amendment, 414, 415, 416. legislative power to form, is subject to court scrutiny, 416. including noncontiguous territory, 417. delegation of power to determine bounds, 409, 418. notice and hearing, where power to form is delegated, 418. need not conform to political subdivisions, 419 et seq. power to tax sometimes delegated only to political subdivisions, 420 et seq. for drainage, 421. for lighting, 422. when tax district should conform to political subdivisions, 423. taxing part of territory for purpose germane to the whole, 424 et seq. overlying districts, 424 et seq. for harbor improvement, 425, 431. laying cost of state canal on city, 426. taxing locality for expense of county buildings, 426, 429. taxing locality to pay for state road, 427. taxing locality to pay for state institution, 428, 430, 431 to 435. effect of constitutional requirements of equality on legislative power to form, 430 to 435. effect of requirements of equality on legislative power to cast state burdens on localities, 430 to 435. taxing county to pay for township bridge, 432. express constitutional requirements as to taxing locality for benefit of larger territory, 436 to 439. taxing large territory for benefit of smaller one, 440 to 475. proceeds of tax may be expended outside of, 476 to 478. permitting nonresidents to attend school in, 479 to 481. annexing lands to cities, 482 to 491. exempting agricultural lands in cities from municipal taxes, 492 to 49Sa. dividing counties and municipalities, adding new territory and appor- tioning debts and property, 499 to 526, see Legislature; County; Municipality ; Debts ; Division of Territory ; Apportionment ; Names of States. exempting townships and municipalities from county road taxes and other county taxes, 527 to 531, see Roads ; County : Municipality ; Legislature ; Exemption. 1306 INDEX. References are to section numtera. TAX DISTRICT — Continued : (juestion as to, sometimes raised under due process of law clause, 1127. uniformity throughout, 1351b. see Local Assessments. TAXES : definitions of, 41, 42, 43. tolls on public roads are not, 68.5. charges for use of public facilities are not, 46a, 882, 883. local assessments are, 1836, 1839, 1840, 1841. TAXING PO\YER: scope of, 44. not exhausted by exercise, 68. see Delegation of Taxing Poweb. Is legislative power, 533, 534. TAVERN KEEPER : tax on, in Massachusetts, 1582. see Innkeeper. TECHNICALITIES : may be waived by legislature, 390, 391. TELEGRAMS : transmitting. Is commerce, 827. state tax on, 869. TELEGRAPH COMPANY: taxes on gross receipts of, 58, 1507.' situs of, 72, 149. situs of franchises, 103 et seg. property of, may be distributed for taxation to localities, 149, 162. state license tax on, 871. fees for regulation and inspection In relation to interstate commerce, 879 to 881. municipal charge for use of streets, 882. state taxes on, not distinguishing between Interstate and intrastate traffic, 898. state taxes on, where receipts from interstate and Intrastate business can be separated, 900, 901, 902. Interstate, unit method of valuing intangible assets of, considered with respect to interstate commerce, 913, see Franchises. unit method of taxing, considered with respect to equality, 1465. taxes on, in Alabama, 1507. In Illinois, 1529. in Iowa, 1542. in Indiana, 1539. In Louisiana, 1.556. In Jlichigan, 1587. in Nebraska, 1614. in Ohio, 1653. TELEGRAPH POLES: license tax on, 1320, 1446 to 1450. rental for space occupied by, 1449. TELEPHONE : sending messages by, is commerce, 827. taxation of, in Utah, 1696. TELEPHONE COMPANIES : taxes on, 1539, 1543, 1556, 158T. TENANT : of lands, seizing property of, to pay tax on. 1206. 1207. INDEX. 1307 References are to section numbers. TENNESSEE CONSTITUTION : delegation of taxing power to localities, 234. loan of public credit, 234, 4G7. becoming stockholder In private enterprises, 234. Internal improvements, 234. support of religion, 289. apportionment of debts when county is divided, 515. impairing obligation of contracts, 9G3. retroactive Iti s. 963. ■exemptions, 1682. equality and uniformity, 1682. taxation ot merchants, peddlers and privileges, 1682 Incomes, 1682. poll tax, 1682. general laws, 1682. special privileges, 1682. decisions under, as to uniformity, 1683, 1684. 1685. as to exemptions, 1683, 1685. application of uniformity to special assessments, 1686. TERRITORIAL JURISDICTION : of government, 69. equality in, 12. with respect to privilege taxation, 131 et seq. with respect to succession taxes, 141 to 147. in enforcement and collection of taxes, 164, 167. see SiTDS. TERRITORIES OF UNITED STATES : in strict sense, indirect taxes in. 717, 718. acquired by United States, indirect taxes in, 714 to 716a. in temporary occupation of United States, 714. local taxes laid by Congress in. 719, 720. powers of, as to pilots, 839. application to, of Federal contract clause, 966. validation of void bonds of county in. 1259. validation by subsequent state legislature of bonds which territorial legislature issued without authority, 1260, 2161. exemptions by, 1330a. debt limitations in, 2269. subscriptions in, to private enterprises, 239a. income taxes in. 1720a. equality and uniformity in, 1720a. local and special laws in, 1720a. license taxes in, 1720a. exemptions in, 1720a. TERRITORY : application of debt limits to different bodies occupying same, 2148 to 2155. application of tax rate limits to difCerent bodies occupying same, 2021. TEXAS CONSTITUTION : as to situs, 159. loan or gift of public ciedit or money, 235. becoming stockholder in private enterprise, 235. levees, dikes, brealcwaters, 255. sanitary purposes, 255. religious and sectarian appropriations, 290. state's credit not to be loaned or money given to munici jalities, 468. apportionment of debts when county is divided, 516. municipal debt limit, 610. delegation of taxing power, GIO. 1308 INDEX. References are to section nvmbcrg. TEXAS CONSTITUTION — Continued: scbool district, school tax, 610. power to tax corporations not surrendered, 992. corporate charters subject to repeal, 1024. tax sales, right of redemption, 1194. limits on tax rates, 255, 610, 2048. as to releasing or compromising public claims and taxes, 1701, as to state debt, 2259. , as to municipal debts, 255. equality and uniformity, 1687. poll taxes, 1687. occupation taxes, 1687. income taxes, 1687. exemptions, 1687, 1088. taxation of railroads, 1688. local and special ]a\\s, 1688. general laws, 1688. equalization, 1688. decisions under, as to equality and uniformity, 1689, 1090, 1092. as to exemptions, 1691, 1692. application of uniformity to special assessments, 1693. THEATERS : tax on, 1563. see Shows. TIME: when debt comes into existence, is basis of computation under debt limit, 2162. see Date. TITr.ES : of legislative act, see Subjects and Titles of Acts. TOBACCO : increased excise on, 68. Federal tax on, 704. for export, tax on, 937. state inspection laws concerning, 947. purchase of, tax on, 1639. TOLLS : on public roads are not taxes, 685. for use of improvements in navigable waters, 882, 883. TOLL BRIDGES: taxes on, 1529, 1614, 1713. TOLL ROADS: local assessments for purchasing. 1846. purchase of, not compulsory county obligation, 20C6. TONG MAN: tax on, 1437. TONNAGE, DUTY OF: not to be laid by state, 948 to 954. restriction of Federal Constitution, 048. tonnage defined, 948. what is, 049. restriction applies to vessels wholly employed in state, 0.50. examples of, 951. may not be imposed for execution of inspection laws, 952. wharfage fees may be measured by tonnage, 952. distinguished from legitimate wharfage fee, 953. distinguished from property tax on ships, 954. IITDEX. 1309 References are to section numbers, TONNAGE TAX: on railroad, 59. TORT; creditor for, is bound by limits on tax rate, 2020. liability for, debt limitation not a defense, 2089 et scq. judgments for, included in estimating city debt, 2090. city may not contract debt by scheme of, 2090. unliquidated claim for, not included in estimating debt, 2091. TOWNSHIP : debt of part of county debt, 2152. see Quasi-Municipal Bodies ; Locality ; County ; Municipality. TRADING STAMPS : taxes on use of, 1710. TRANSFER OP EXEMPTIONS, 1057 to 1071. exemptions by contract are personal, 1057. presumptions against transferability, 1057, 1058, 1059, 1060. transfer of "rights and franchises," 1058, 1059, 1060. in cases of purchase under foreclosure. 1061. where corporations are consolidated, 1062 to 1068. where consolidation is continuation of old companies, 1063. 1064, 1065. where consolidation works dissolution of old companies, 10G6, 1067. application of constitutional provisions passed before consolidation but after original incorporation, 1066, 1068. where statute confers on one company " rights, privileges, franchises, immunities," etc., of another company, 1069, 1070. to lessees of lands, 1071. TRANSIT : property in, situs of, 125 et seq., 127, 129, 130. see CoMMBKCE, State Taxes Affectino. TRANSPORTATION : of freight and passengers is commerce. 827. between points in same state as commerce, 830 to 833. TRANSPORTATION AND COMMUNICATION : state taxes on, acts of, generally, 868 to 872. TRAVEL : state tax on, 776. right of, pertains to citizenship, 1100, 1104 to 1106. tax on emigrant agent, 1105. 1100. TREATY : Federal constitutional provision as to, 1074. as limitation on Federal taxing power. 1075. , as limitation on state taxing power, 1076. affecting inheritance tax on legacy to aliens, 1077 to 1086. with France, of 1853, 1077, 1078. with Bavaria, of 1846, 1079, 1080. with Italy, of 1871, 1081, 1082. with Spain, of 1796, 1083. 1084, 1085. with Wurtemburg, of 1844, 1080, 1086. with Germany, of 1872, 1086. TREES : bounties for growing, 190. taxing separate from land, 1365c, 1370. taxing, 1566. TRIAL AND JUDGMENT : formal, not necessary in tax proceedings, 1122 to 1125. see Due Process of Law. TROOPS : taxation of corporation transporting, 768, 771, 774. 1310 INDEX. References are to section numbers. TRUST : where municipal bonds invalid, Impressing on municipal assets, 2174, 2175. TRUSTEES : situs of property in hands of, 109 et seq., Ill, 119, 120. U. UNAUTHORIZED ACTS : of public officers, legalizing, see Curative Acts, Legalizing Unauthob- iZED Acts. UNAUTHORIZED EXPENDITURES : not included in local assessment, 1878. UNCOLLECTED TAXES : anticipation of, by warrants drawn against, 2074, 2076. by issue of revenue bonds, 2076a. deduction of, in computing debt under debt limits, 2100. UNCONSTITUTIONAL LAWS : compensating parties for investments made on faith of, 332. payment of claims under, 382. UNDERVALUED PROPERTY : reassessment of, 1293, 1294, 1834. UNIFORMITY : of indirect taxes under Federal constitution, 695, 702 et seq., 705 to 720. meaning of, under Federal constitution, 705, 706, 707 to 712, see In- DiEECT Taxes ; Terbitoeies of United States. only required throughout tax district, 1351b. see Equality and Uniformity. UNIT METHOD : of taxing corporations, 61. of taxing railroads, 72, 148, 149. of taxing telegraph companies, 72, 149. of taxing car companies, 74, 75. of taxing corporate franchises, considered as to situs, 103. 104, 105, 106, 107, 108, 108a, 108b, 108c. considered with respect to equality and due process, see Methods of Taxation, 1461 to 1473. of valuing interstate properties, considered with respect to interstate commerce, 912 to 917, see Franchises. In Arkansas, 1509. In Colorado, 1519. In Illinois, 1530. In Indiana, 1539. in Iowa, 1542. In Nebraska, 1619. in Ohio, 1653. UNITED STATES. See Federal Government. UNORGANIZED TERRITORY : levying taxes in, for benefit of organized county, 413. attaching, to organized territory for taxing purposes, 413. legislative power as to taxation in, 498, 1720a. UNPLATTED LANDS: in cities, see Municipality; Agricultural Lands. USE: of property as criterion of exemption, 1334. of property should be directly for exempted purposes, in order to gain exemption, 1334, 1335. of property as affecting liability to local assessments, 1904 to 1035. INDEX. 1311 References are to section numbers. USURY : constitutional proliibition of, does not prevent penalties for noncom- pliance with tax laws, 1216. UTAH CONSTITUTION : municipal waterworks, 247b. schools, 291. religious and sectarian appropriations, 291. state not to assume local debts, 469. delegation of power in municipal affairs to special commission, etc., 611. delegation of 1 axing power — legislature not to lay local taxes, Gil. irrevocable grants, 993. amendment or repeal of corporate charters, 1025. as to deductions, 1398. general, local and special laws, 1694. equality and uniformity, 1694, 1695. duplicate taxation of corporate stocks, 1694. deductions of debts from credits, 1695. exemptions, 1695. taxation of mines, 1695. stamp taxes, 1695. taxes on incomes, franchises, occupations, licenses, mortgages, 1695. decisions under, as to exemptions, 1696. as to uniformity, 1696. as to releasing or compromising public claims and taxes, 1792. limits on tax rates, 2049. as to state and municipal debts, 2260, 2261. VALIDATING DEFECTS, 1247 to 1300. see CuBATivE Acts. VALIDITY OF TAX : tax deed not conclusive as to, 1269. VALUATION : discrimination in, as to taxation of national bank slinres. 813 to 822. see National Banks, State Taxation of. where statute makes a prerequisite to assessment, curative act not applicable to omission, 1252a. inequalities in, generally, see Methods of Taxation. different bases of, not forbidden by Federal constitution, 1460b. dLscriminations in, in Illinois, 1530. in Kansas, 1546, 1548. in Kentucky, 1553. in Nebraska, 1616. in New Jersey, 1634. in North Dakota, 1644. in Ohio, 1653, 1653a. in Oregon, 1657. in South Carolina, 1677. in Tennessee, 1684. in Washington, 1708. classification of places by, under tax laws, 1729. of past years basis of present assessment, 1828. debts computed on, under debt limitations, 2157, 21.58. earning capacity of franchises basis of, 1459. VALUE : notice and hearing on questions of, 1143, 1145, 1146, 1164, see Notice AND Hearing. local assessments on basis of, 1074 to 1977. 1312 INDEX. References are to section nvmiers. VALUE — Continued: of improvements excluded in making local assessments, 1976, 1977. rule of assessment by, inapplicable in certain cases, 1986, 1990, see LocAi, Assessments ; Frontage ; Abea. cases where local assessment exceeds value of property assessed, 1892 to 1999. means assessed value, 2158. VEHICLES : specific tax on, 1319. license tax on, 1368, 1443, 1452. tax on, in Arkansas, 1509. in Georgia, 1526. in Indiana, 1540. in Texas, 1690. VENDORS : in streets, license taxes on, 1441 to 1443. of goods from outside city, license tax on, 1442. VENDORS OP PATENTS: taxes on, in Illinois, 1529. in Nebraska, 1614. VENDUE MASTERS: taxes on, in Massachusetts, 1582. VERMONT CONSTITUTION: government for common benefit, 1696a. religious and sectarian support, 292. VESSELS. See Ships. VESTED RIGHTS: whether municipality acquires by division of territory and apportion- ment of debts, 503. of corporations not to be destroyed in Oregon, 1021. legislature cannot enact curative acts which destroy, 1252a. see Retrospective Laws. VETERANS : discriminating in favor of, in license taxation, 1436. see SoLDiEKS ; Bounties. VIADUCTS : local assessments for, 1846. VIRGINIA CONSTITUTION : as to situs, 160. loan or gift of public money or credit, 236, 470. becoming stockholder in private enterprise, 230. Confederate debt, 236. state dispensaries for sale of liquors, 247c. charities and schools, 293. religious and sectarian appropriations, 293. state not to assume local debts, 470. delegation of legislative power, 611a. amendment or repeal of corporate charters, remission of forfeiture of corporate charters, 1026. power to tax corporations not to be surrendered, 1697. incorporation and registration fees of corporations, 1097. as to double taxation of corporations, 1375, 1698. as to assessment of omitted property, 1292. special privileges forbidden, 1697. local, special or private laws, 1607. ijeneral laws, 1697. uniformity, 1698. assessments — valuation — classification, 1698. INDEX. 131S References are to section numljors, VIRGINIA CONSTITUTION — CoMimMed; income taxes, 1698. franchise taxes, 1698, 1699. local assessments, 1698. reassessments, 1699. limits on tax rates, 2050. as to state and municipal debts, 2262. assessment of coal and mineral lands, 1699. capitation taxes, 1699. taxation of railroad and transportation corporations, 1699, taxation of shares of banks and trust companies, 1699. exemptions, 1700, 1701. decisions under, as to uniformity, 1703, 1704, 1705. as to commutations and exemptions, 1704, 1705. application of uniformity to local assessments, 1700. VIRGINIA COUPON CASES, 1042 to 1044, 1056. VOLUNTARY DEBTS : included in computation of public debt, 2059 et scq. see Compulsory Obligations. VOLUNTEER FIRE COMPANY: appropriation for, 326. VOTE: requirements of certain number, for passage of bills, 1803 to 1812^ see Statutes ; Election ; Popular Vote ; Majority. VOTING MACHINE : purchase of, is extraordinary municipal expense, 2000. W. WAGES : on municipal work, see Labor Laws. WAGONS : specific tax on, 1319. see Vehicles. WAIVER. See Technicalities. WAR AND INSURRECTION: taxes for, under limits on state tax rate, 2012. WAREHOUSES : license tax on, 1414a. WARRANTS : included in computation of public debt, 2058, 2059. against municipal cash on hand or uncollected taxes, 2074, 2076^ WASHINGTON CONSTITUTION : loan or gift of public money or credit, 237, 472. becoming stockholder in private enterprise, 237. religious and sectarian institutions, 294. apportionment of debts where county is divided, 517. delegation of taxing power, 612, 1707. local taxation uniform, 612. cities frame their own charters, 612. legislature not to lay local taxes, 612. irrevocable grants, 995. power to tax corporations not suspended, 995. amendment or repeal of corporate charters, 1027. as to legalizing unauthorized acts of officers, 1253a. as to deductions, 1398. special privileges, 1707. 83 1314 INDEX Reference's are to section numbers. WASHINGTON CONSTITUTION — OoMHwited; local or special laws, 1707. taxation in proportion to value, 1707. uniformity and equality, 1707. taxation of corporate property, 1707. exemptions, 1707. deduction of debts from credits, 1707. special assessment and special taxation, 1707. decisions under, as to uniformity, 1707a, 1708, 1710. application of uniformity to local assessments, 1709. as to special assessment and special taxation, 608, 1945. as to releasing or compromising public claims and taxes, 1794, 179.5, 1707. as to state and municipal debt, 2263, 2263a. WATER : commutation of taxes in consideration of supply of, 1333. power of indebted municipality to contract in advance for annual supplies of, 2079 to 2081. constitutional provisions as to municipal supplies of, 2086. WATER COURSES: assessments for, 1681. WATER MAINS : local assessments for, 1846. WATER POWER : taxes on, 46, 1581. WATER RATES : when are taxes, 46a. liens for, may have priority, 1188. notice and bearing as to, 1134, 1139a. WATERWAYS : local assessments for improving, 1868 to 1870. see Inland Waters. WATERWORKS : municipal, 247a, 247b. state constitutions respecting, see Names of States. of municipality, legislative power to control, 652, 659 to 602. constitutional guaranty of local self government as affecting legislative power to control, 660. municipal, constructed by state commission, 677. local assessments for, 1846. erection of, as necessary municipal expense, 2069. purchase of, by municipality, disguised as contract for annual supplies, 2081, 2083 to 2085. constitutional provisions as to municipal, 2086. erection or purchase of, by city indebted to limit, by means of bonds payable out of special fund or special taxes, 2105 to 2110. WATERWORKS COMPANY : tax on, 1543. exemptions of, 1551, 1570. WELLS : assessments for, 1681. WEST VIRGINIA CONSTITUTION : religious and sectarian appropriations, 296. state's credit not to be granted to localities or persons, 473. state not to assume local debts, 473. becoming stockholder in corporation, 473. delegation of taxing power, 013. INDEX. 131 5 References are to section numbers. WEST VIRGINIA CONSTITUTION — CoMiWMet?; local taxes uniform, 613. forfeiture of lands for noncompliance with tax laws, 1182. local and special laws, 1711. general laws, 1711. equality and uniformity, 1711. exemptions, 1711. taxation of privileges and franchises, 1711. capitation tax, 1711; delegation of taxing power to municipal corporations, 1711. decisions under, as to uniformity, 1712, 1713. application of uniformity to local assessments, 1713. limits on tax rates, 2051. as to state and municipal debts, 2264. WHARFAGE CHARGES : in relation to interstate commerce, 882, 883. measured by tonnage, 952. tonnage duty in guise of, 953. WHOLESALERS: taxes on, in Pennsylvania, 1663. WIDOWS. See Pensions ; Soldiees ; Public Officers ; Mobal Obligations. AVISCONSIN CONSTITUTION: loan or gift of public credit, 238. religious and sectarian appropriations, 295. state credit not to be loaned, 474. special or private laws, 1714. general laws, 1714. uniformity, 1714. decisions under, as to local or special laws, 1715, 1716. as to uniform'ity, 1717. as to exemptions, 1717. limits on tax rates, 2052. as to state and municipal debts, 2265, 2266. as to internal improvements, 2265. WITNESS FEES : warrants for, inclusion of in calculating county debt, 2059, 2003. WORKINGMAN'S TOOLS: customarily exempted, 1325. WURTEMBURG : treaty with, of 1844, 1080, 1086. WYOMING CONSTITUTION : as to situs, 161, 1719. loan or gift of public money or credit, 239, 475. becoming stockholder in corporation, 239. internal improvements, 239. religions and sectarian appropriations, 297. schools and charities, 297. apportionment of debts when county is divided, 518. delegation of power in municipal affairs to special commissioD, etc., 615. restriction of municipal taxing power, 615. power of taxation not surrendered, 996. amendment or repeal of corporate charters, 1028. equality and uniformity, 1718. consent of people to taxation, 1718. lands and improvements assessed separately, 1718. taxation of coal lands, 1718. exemptions, 1718. equalization, 1719. 1^1® INDEX, References are to section numbers. WYOMING CONSTITUTION — CtmtOTMed; general lawSj 1719. local and special laws, 1719. ^ decisions under, as to uniformity, 1720. ' ^ as to releasing or compromising public claims and taxes, 1793, 1794, 1719. limits on tax rates, 205.3. as to state and municipal debts, 2267, 2268. Y. TEAR: tax deed need not show for what year taxes due, 1271. see Date.