Perry v. Commissioners of Franklin County , 148 N.C. 521 ( 1908 )

From the facts stated in the complaint and admitted in the answer it appears that, under the provisions of Revisal, sec. 4115, a special-school district was created in the township of Louisburg, Franklin County, with power to levy a special tax of 20 cents on the $100 worth of property and 60 cents on each taxable poll, to supplement the public school fund apportioned to such district, provided that such tax levy was first submitted to the qualified voters within the boundaries of said special-school district and approved by them in an election held pursuant to law. Said proposition for a special tax was ratified and approved by the majority of the qualified voters of the district, and the tax levied by the commissioners as provided by the law. The Board of Commissioners, on the first Monday in June, 1908, levied throughout the county of Franklin a poll tax of $2 upon each (522) taxable poll in said county for State and county purposes, and in addition to this the commissioners are proceeding to levy and collect from the taxpayers of said district the property tax of 20 cents on the $100 and 60 cents on the poll, making the entire poll tax levied on the taxable polls in said district $2.60. And the complaint charges that such levy, to the extent of this 60 cents, is unconstitutional and void, as being levied in violation of Article V, sec. 1, of the State Constitution.

The plaintiff John R. Perry, a resident and taxpayer of said district, and liable to payment of poll tax therein, in behalf of himself and other like taxpayers in said district, instituted this action to restrain the defendants from levying tax alleged to be illegal, on the ground indicated. On the hearing the restraining order was dissolved, and the plaintiffs excepted and appealed. after stating the case: While the question presented in this appeal is one of commanding interest and far-reaching importance to the entire State, its correct solution, in our opinion, is readily deducible from decisions of this Court heretofore made and which bear upon the subject with more or less directness. Article V, sec. 1, of the Constitution, after directing that the General Assembly shall levy a capitation tax on every male inhabitant of the State over twenty-one and under fifty years of age, and that this poll tax on each shall be equal to the tax on property valued at $300, provides that the State and county capitation tax combined shall never exceed $2 on the head. Section 2 of the article provides that the State and county capitation tax shall be applied to the purposes of education and the support of the poor, and that not more than 25 per cent of such tax in any one year shall be (523) appropriated to the support of the poor. Section 6 of the same article provides that the taxes levied by the Board of Commissioners for county purposes shall be levied in like manner as the State taxes, and shall never exceed the double of the State tax, except for a special purpose and with the special approval of the General Assembly. Construing these sections, the Supreme Court, at the last term, in R. R.v. Commissioners of Mecklenburg, ante 220 and R. R. v. Commissionersof Buncombe, ante 248, held that this restriction on the amount of the poll tax contained in section 1 shall be given the significance which its terms clearly import — that the State and county capitation tax combined shall never exceed $2 on the head, and that this limit fixed on the poll tax for the purposes indicated — that is, for the State and county — shall be always observed, notwithstanding that a given tax may be for some special purpose and with the special approval of the General Assembly. And in Wingate v. Parker,136 N.C. 369, this Court has held that the equation of taxation established by Article V, sec. 1, only applied to State and county taxation and did not extend to municipal corporations or public quasi corporations other than counties, but that in reference to these the regulations and restrictions in regard to taxation were contained in Article VII of the Constitution, supplemented by section 4 of Article VIII, a section which by inadvertence seems to have been given an improper placing in Article VIII instead of Article VII. In the opinion Chief Justice Clark for the Court, speaking to the question, said: "It is clear that this section applies solely to State and county taxation. It requires (1) that the General Assembly shall levy a capitation tax on every male between twenty-one and fifty years of age; (2) that it shall be equal to the tax laid on $300 of property at cash valuation; (3) that the county commissioners may exempt from capitation tax, in special case, on account of poverty and infirmity; and (4) that the State and county capitation tax shall (524) never exceed $2 on the head. If this section embraces municipal taxation, such taxation could very rarely be levied at all, for in most if not all the counties this limit has been reached."

The opinion further quotes with approval from that of Merrimon, J., inJones v. Commissioners, 107 N.C. 248, as follows: "In Jones v.Commissioners, 107 N.C. 248, Merrimon, C. J., for a unanimous Court, holds that the equation prescribed by Article V, sec. 1, does not apply to municipal corporation. On page 258 he says: ``But it is settled by many decisions of this Court that it (Article V, sec. 1) does not establish an exclusive system or scheme of taxation applicable and to be observed in all cases and for all purposes; that on the contrary it applies only to the revenue and taxation necessary for the ordinary purposes of the State and the several counties thereof. . . . The article does not provide or declare that the equation so established shall be of universal and exclusive application; it expressly mentions only the State and counties in connection with the subjects of revenue and taxation, and does not mention cities, towns and other municipal corporations, or make any reference thereto or provide for or as to them. . . . And it is singular that it fails to make some reference to municipal corporations in such respect if it was intended to embrace them. That it does not so intend is more manifest, in that they are expressly provided for in such respects in another district article of the Constitution. . . . Article VII of the Constitution is entitled "Municipal Corporations," and is exclusively devoted to that subject.' This article, in section 9, provides that ``All taxes levied by any city or town must be uniform and ad valorem upon all property in the same,' and nowhere is there any provision requiring the equation of taxation between property and polls to be observed. And in concluding the opinion he further says (on page 263): ``We are therefore of opinion that the equation and limitation of taxation established by the Constitution (Art. V, sec. 1) applies only to taxes levied for the ordinary purposes of (525) the state and counties.' And again (at bottom of page 264): ``We know that it has been said, obiter, in several cases, that the equation and limitation of taxation referred to above must be observed in levying taxes for municipal purposes, but it has not been so decided — certainly not expressly decided — nor can it be, in our judgment, without defeating the true intent reasonably appearing'."

True, these decisions are directly on the question of the equation of taxation established by Article V, but every reason for the ruling on the question of the equation bears with full force on the subject of this restriction on the amount of the poll tax, with the additional and conclusive reason that such restriction in express terms is confined to the "State and county capitation tax." Again, in Smith v. School Trustees,141 N.C. 143, this Court, after most careful consideration, decided as follows:

"2. Chapter 204, Private Acts 1905, creating a graded-school district and authorizing its trustees to levy a tax and issue bonds, when the act is approved by a majority of the qualified voters, is a valid exercise of legislative authority.

"3. The Legislature can create a specific school district within the precincts of a county, incorporate its controlling authorities, confer upon them certain governmental powers, and, when accepted and sanctioned by a vote of the qualified electors within the prescribed territory as required by our Constitution (Art. VII, sec. 7), may delegate to such authorities power to levy a tax and issue bonds in furtherance of the corporate purpose.

"4. School districts are public quasi corporations included in the term municipal corporations, as used in Article VII, sec. 7, of our Constitution, and so come within the express provisions of section 7, that ``No county, city, town or other municipal corporation shall contract any debt, pledge its faith or loan its credit, etc.; nor shall any (526) tax be levied, etc., unless by a vote of the majority of the qualified voters therein.' And the principle of uniformity is established and required by section 9 of this article."

In the case of Smith v. Trustees, supra, the taxing district was created by special act of the Legislature, and the officers of the quasi public corporations were given authority to levy and collect the special tax provided for, while in the present case the district was established, as stated, pursuant to the general law (Revisal, ch. 89, sec. 4115), and the taxes specified are to be collected by the Board of Commissioners. But the main purpose of the incorporation is the levying of a special tax, for a definite purpose, within certain restricted portions of a given county or township, and levying it only where sanctioned by a majority of the qualified voters of the district, and bringing such levy within the other provisions and restrictions of Article VII of the Constitution, that addressed more especially to municipal and other corporations of a quasi public nature, as contemplated by that article; and whether the collection of the tax was done by specified local agencies or by the general authorities of the county, this was only a ministerial matter, a question of method simply, which was not of the substance and should in no way affect the result.

From these authorities it is clear that the tax in question (the 60 cents in excess of the $2 already levied for State and county purposes) is not within the restriction of Article V, sec. 1, of the Constitution, but that the same is a tax imposed for a definite purpose by a special taxing district, coming as a public quasi corporation under the provisions of Article VII of the Constitution, and subject only to the limitations and restrictions contained in that article, notably in section 7, that no 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 officers of the same, except for the necessary expenses (527) thereof, unless by a vote of the majority of the qualified voters therein; and of section 9, to the effect that all taxes levied shall be uniform and ad valorem. In aid of the construction we place upon the provision of the Constitution bearing upon this question, good reasons could be suggested for the distinction in the two classes of taxation. Anticipating, as the result has proved, that the general State and county taxation would very generally reach the limit of $2, the framers of the Constitution did not deem it well to place an arbitrary restriction on all local effort in communities whose enterprise might suggest and financial condition justify a greater amount of taxation than that allowed by the general law. And it was no doubt further considered that the restriction contained in Section VII, forbidding the levy of any unusual tax, except when sanctioned by a majority of the qualified voters of a given district, would operate as a wholesome check against excessive taxation or extravagant expenditure. Certain it is that, with the exception of the restraints indicated, the matter is not further affected by the Constitution, but is referred entirely to the legislative will. As to taxation within these special districts, it is theirs to observe or disregard the equation established by Article V in reference to State and county taxes, and to exceed or abide by the limit established in said article in reference to general taxation. And this is, no doubt, the reason that the convention in framing the Constitution considered it especially pertinent and desirable to insert section 4, Article VIII, containing an admonition that the Legislature should take special care to restrain these local taxing districts, cities, towns and other municipal corporations from excessive levies or extravagance and waste in municipal expenditure. To establish such restraints as "will prevent abuses" in these matters is the language of the organic law.

It is suggested that the construction we give to the Constitution will in certain instances make it possible, by the levy of an exorbitant poll tax, to deprive many citizens within a special district (528) of the right to vote, and this by reason of the provision of the Constitution, "That no person shall be allowed to vote unless he shall have paid his poll tax for the previous year." But not so. The language of Article VI, section 4, of the Constitution, being the article relating to and regulating the right of suffrage, provides that no one shall be entitled to vote unless he has paid his poll tax for the previous year, "as prescribed by Article V, section 1, of the Constitution," thus providing that on payment of the poll tax allowed and established in Article V the right of suffrage in this respect is established, and this poll tax, as we have seen, can never exceed $2.

There is no error in dissolving the restraining order, and the judgment to that effect rendered below is

Affirmed.