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(— Ala. —
86 So. 56.)

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In this way it may and does often happen that taxes apparently double are paid in one year, and rightfully paid, on the same property; once, for the year preceding the assessment, as a gain or profit, and a second time as being the owner of it on the first day of the year in which it is assessed" [italics supplied].

In its strictest legal sense the term "property" is applicable to the exclusive right of the owner with respect to the use, control, and disposition of something which is


capable of ownership. But in its more general and popular sense it is applicable to the thing itself. 6 Words & Phrases, pp. 5693-5699. In this sense "property" includes everything which goes to make up one's wealth or estate. Carlton v. Carlton, 72 Me. 115, 116, 39 Am. Rep. 307. In Greene v. Knox, 175 N. Y. 432, 67 N. E. 910, it was held that the salary of an office is property within the protection of constitutional provisions; and a teacher's salary was so held in Hibbard v. State, 65 Ohio St. 574, 58 L.R.A. 654, 64 N. E. 109.

In the Opinion of Justices, 220 Mass. 613, 624, 108 N. E. 574, it was said: "A tax upon the income of property is in reality a tax upon. the property itself. Income derived from property is also property. Property by income produces its kind; that is, it produces property and not something different."

In Boyd v. Selma, 96 Ala. 144, 148, 16 L.R.A. 729, 11 So. 394, this court said: "In its general or ordinary significance, the term 'personal property' embraces all objects and rights which are capable of ownership, except freehold estates in land, and incorporeal hereditaments issuing thereout or exercisable within the same."

In § 2, Code 1852, the words "personal property" are defined as including "money, goods, chattels, things in action, and evidences of debt, deeds, and conveyances."

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This definition, substantially unchanged, is retained in all subsequent Codes, including that of 1907.

To summarize: Money or any other thing of value, acquired as gain or profit from capital or labor, is property; in the aggregate, these acquisitions constitute income; and, in accordance with the axiom that the whole includes all of its parts, income includes property and nothing but property, and therefore is itself property. This conclusion is so clear that we cannot regard it as debatable, and we have discussed the question at such length chiefly out of deference to the learned counsel for the state, who have undertaken to refute it upon reason and upon cited authority. If there is anywhere a lingering doubt upon this question, it will be instantly dispelled by reading the opinions in Ludlow-Saylor Wire Co. v. Wollbrinck, 275 Mo. 339, 205 S. W. 202, and in State v. Pinder, 7 Boyce (Del.) 416, 108 Atl. 43, where it is fully discussed, both upon principle and authority. As pointed out by counsel, the supreme court of Georgia, in the case of Waring v. Savannah, 60 Ga. 93, has declared that income is not property until it is invested, or placed in a bank, or locked up at home; and this conclusion is based upon the theory that "property is a tree; income is the fruit; labor is a tree; income, the fruit; capital, the tree; income, the fruit; ... but so long as it is fruit merely, and plucked to eat, and consumed in the eating, it is no tree, and will produce itself no fruit."

With all due respect to the court which approved such reasoningand we note that Judge Bleckley concurred dubitante-we are unable to appreciate its relevancy or its value. Investing, or depositing, or locking up what is received as income changes not its character, but merely its use; and the notion that a tree is property, while its fruit is not, cannot be sustained upon any principle of logic or common sense. The opinion refers to the earlier

case of Savannah v. Hartridge, 8 Ga. 23, as holding that income is not property, but an examination of that case shows that it merely held 'that a legislative grant of power to the city of Savannah, to raise money "by tax and assessment upon all real and personal estate within the corporate limits of the city," did not include the power to lay a tax on occupations or incomes which had never been taxed by the state. That decision was clearly correct. In both of the Georgia cases referred to above, it must be noted also that the tax under consideration was an excise tax on receipts from a business or occupation, and there is a palpable confusion of thought and of terms. Practically all courts and text-writers are agreed that an excise tax, being a tax on business or occupation, however measured, is not a tax on property. Our own court, in particular, has always carefully distinguished these two subjects of taxation, as we shall hereafter show.

We come now to a consideration of the second question, viz., does the term "property," as used in § 214 of the Constitution, include incomes, as defined and taxed by the Revenue Act of 1919, so as to subject their taxation to the limitation. therein prescribed?

The general principles which should govern courts in interpreting and construing constitutional provisions have been often stated, and need not be now repeated. For present purposes it will suffice to recall what was said in Western U. Teleg. Co. v. State Bd. of Assessment, 80 Ala. 273, 275, 60 Am. Rep. 99, as pertinent to the present inquiry: "Having been taught by experience that no legislative power is more liable to oppressive use than the taxing power, and having suffered evils by resting it too broadly on discretion, the people have shown, in the history of the successive constitutions, a progressive policy to restrain the power of the legislative department in this respect, and to remedy existing, and guard against apprehended, evils, by

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imposing limitations consistent with the public needs and the public safety. The just expositor, in interpreting the constitutional mandates and inhibitions, will consult the changes that have been made from time to time, the causes which produced them, and the mischief intended to be remedied. The words used should be allowed such operation and force as will reasonably accomplish the purposes proposed, but without extension beyond their legitimate meaning, and so as to avoid embarrassing or disabling proper governmental administration."

It is, of course, to be conceded that though "property" is a generic term, which is often used to describe all things that are capable of exclusive ownership, it is variously used also, in a more or less restricted sense, to include only one or more of the kinds or forms or species of the genus. We are here concerned with its meaning only as it relates to the subject of taxation.

In Lott v. Ross, 38 Ala. 156, 160, decided in in 1861, it was said: "Where the words 'taxable property' occur in an independent act, it would seem that they should be understood in the sense of things taxed which are susceptible of ownership or possession, unless there is something in the context which af fixes to them a different meaning, or unless the plain object of the law will be defeated if they are not held to cover subjects of taxation which are not property in the ordinary sense."

This definition was quoted with approval in Western U. Teleg. Co. v. State Bd. of Assessment, 80 Ala. 273, 278, 60 Am. Rep. 99, and has, we believe, never been questioned. The decision in the Lott Case was that a legislative grant of power to Mobile county to levy a specified tax on the "taxable property" within the county did not authorize the imposition of a tax on the gross amount of sales of merchandise, for the reason that such a tax "is not a tax upon the goods themselves, or the fruits of the sale, but upon the

(— Ala. —, 86 So. 56.)

business or act of selling." And it was further said that "this is not, then, a property or income tax, but an occupation or privilege tax" [italics supplied]. It is clear from this language that this court, sixty years ago, conceived of a tax on income as a property tax, and carefully distinguished it from an excise tax on occupation or business.

A chronological review of the several limitations upon the taxing power of the state, as adopted in successive constitutions, will be found in Western U. Teleg. Co. v. State Bd. of Assessment, 80 Ala. 273, 60 Am. Rep. 99, and in Capital City Water Co. v. Board of Revenue, 117 Ala. 303, 23 So. 970. The first limitation, which included personal property, is found in the Constitution of 1868, art. 14, § 1, providing that "all taxes, levied on property in this state, shall be assessed in exact proportion to the value of such property." This identical clause was adopted in the Constitution of 1875, art. 11, § 1, along with the new provision (art. 11, § 4) that "the general assembly shall not have the power to levy, in any one year, a greater rate of taxation than of 1 per centum on the value of the taxable property within this state." In that Constitution also was incorporated the provision (6, art. 11) that "the property of private corporations, associations, and individuals of this state shall forever be taxed at the same rate." This clause was a substantial repetition of § 4, art. 13, of the Constitution of 1868. These several limitations on the taxing power were carried into the Constitution of 1901 in totidem verbis. As each of them uses the word "property" as the subject of taxation, obviously in the same sense, a judicial interpretation of that word in any of them will be equally applicable to all.

The taxation of incomes for revenue is not a new policy in this state. The first tax on annual gains, profits, or incomes and salaries, was levied by the Revenue Act of 1866 (Laws 1865-66, p. 1). In 1867, the

11 A.L.R.-20.

same provision was adopted (Laws
1866-67, p. 259).
1866-67, p. 259). In 1875 (Laws
1874-75, p. 1), the tax was limited.
to salaries; and, in 1876 (Laws
1875-76, p. 46), it was again levied
on "all salaries, gains, incomes and
profits for the preceding year.”
After discussing the application of
this tax to corporations, the conten-
tion being made by the petitioning
corporation that this revenue provi-
sion did not affect corporations, but
only natural persons, Judge Stone
said: "If this be true, then natural
persons are taxed 'upon their an-
nual gains, profits, or incomes,' and
corporations, or artificial persons,
are not. This would violate § 6, ar-
ticle 11, of the Constitution of 1875,
which ordains that 'the property of
private corporations, associations,
and individuals of this state, shall
forever be taxed at the same rate." "
Board of Revenue v. Montgomery
Gaslight Co. 64 Ala. 269, 277.

In a later case, on a petition by the L. & N. Railroad Company to vacate certain assessments made upon its income under the Revenue Acts from 1874 to 1881, it was held that, for reasons not here pertinent, those acts were not intended to be, and could not be, applied to the income of railroads passing through several counties. The board of revenue insisted upon the application of § 6, art. 11, of the Constitution of 1875, and Judge Stone again said: "Under this clause of the Constitution it is contended that, inasmuch as the incomes of individuals-natural persons-are taxed, it is a constitutional duty to tax, at the same rate, the incomes of corporations. Such is undoubtedly the case, and the legislature, when they assert the power, cannot tax one class at a higher rate, and the other at a lower rate. Mobile v. Stonewall Ins. Co. 53 Ala. 570.

when the legislature, through a failure to levy, leave a species of property free of taxation, by providing no machinery which can be adapted to the assessment, the courts of the country are powerless to remedy the evil" [italics sup

plied]. State v. Board of Revenue, 73 Ala. 65, 70.

Conceding that these statements of Judge Stone were dicta, in the strictest sense of that term, and therefore not perforce to be regarded as a settled definition of the word "property," as used in the same limitation when carried into the Constitution of 1901, they were nevertheless deliberate judicial interpretations, pertinent to the subject in hand, and appropriate as bases for the conclusions announced; and we are bound to presume that they reflected the seasoned opinion, not only of Judge Stone, but also of the other members of the court.

In a still later case, holding that a tax laid on the gross receipts of a telegraph company at the rate of 2 per centum was an occupation or privilege tax, and not a tax on property, and was therefore not in violation of the constitutional provision that "all taxes levied on property in this state shall be assessed in exact proportion to the value of such property,' Judge Clopton, speaking for the court, discussed at length the meaning of "property" as used in that limitation, and carefully and pointedly distinguished between an income or property tax and a tax on occupation or privilege.

He said: "With a knowledge of the various subjects of taxation, of the well-defined distinction between property, when made liable to taxes, and other subjects of taxation, and that among such other subjects were occupations, privileges, business, and licenses, which, in the nature of things, are incapable of determinate value, valuation was adopted as the basis and measure of assessment. The limitations, by their terms, signify an intention that the provisions shall be only applicable to property, the value of which is capable of definite ascertainment by the officer whose duty it is to make the assessment, and that all other subjects of taxation should be excluded from their operation." And further: "In Board of Revenue v. Montgomery

Gaslight Co. 64 Ala. 269, and in State v. Board of Revenue, 73 Ala. 65, the tax was imposed on the net income, and not on the business. The money, held and owned by the company as the net result of the business, was the subject of taxation. An income tax stands on different principles; its value is determinable; and the rules governing such tax are inapplicable to a tax on gross receipts" [italics supplied]. Western U. Teleg. Co. v. Board of Revenue, 80 Ala. 278, 60 Am. Rep. 99.


The language which we have quoted from the opinions in the three cases, supra, exhibits, think, a settled consensus of judicial understanding that the term "property," or "taxable property," ineludes all property capable of ownership, whose value can be accurately determined, and that incomes are such property. Those opinions were published in the official reports, and we must presume that they were known and understood by the profession and by the members of the constitutional convention of 1901.

It is supposed by counsel for the state that this repeatedly expressed conception of income as property, within the constitutional limitations on taxation, was dissipated, and currency given to a contrary view, in the case of Capital City Water Co. v. Board of Revenue, 117 Ala. 303, 23 So. 970. We have subjected the opinion in that case to the most rigid scrutiny, and fail to find in it any confirmation of this contention. It was the settled law of this state that a tax laid on the gross receipts of a business is an occupation tax, and not a property tax, within constitutional limitations. Subdivision 5, § 454, Code 1886, levied a tax on such receipts, "after deducting the expenses of carrying on such business." It was held that such a deduction did not change the character of the tax. Evidently the court was on doubtful ground, for two of its ablest members, Justices McClellan and Head, dissented. Justice

(- Ala. -
86 So. 56.)

Haralson, the writer of the opinion,
said: "This point, however, is
urged upon the further contention
that the tax imposed in this case is
an income tax, susceptible of def-
inite ascertainment
as to its
amount, and therefore it is proper-
ty. [Then, following an analysis of
the revenue provision:] Subdivi-
sion 5 of said § 454 must be con-
strued, therefore, as a provision for
an occupation or privilege tax, and
not as a tax proper on property;
and the clause in said subdivision,
'after deducting the expenses of
carrying on said business,'-as in-
dicating no more than the method
adopted by the legislature in ascer-
taining the extent to which the occu-
pation or business has been enjoyed,
and for which it ought to be taxed."

Reference had been previously made in the opinion to the former tax on salaries, gains, incomes, and profits, and it had been remarked that decisions construing them were correct, and not in conflict with the present ruling. Counsel for the taxpayer cited the three cases in 64, 73, and 80 Alabama Reports, and the last was cited as authority in the opinion. Justice Haralson evidently had read them, and had them freshly in his mind. So far from contradicting them, he approves them, and painstakingly shows that the tax he was dealing with was a different kind of tax, and governed by different principles.

It is true that the same justice remarked, incidentally, in the later case of Goldsmith v. Huntsville, 120 Ala. 182, 24 So. 509, that "a tax on gross amount of sales is not a tax on the goods themselves, or on the fruits of the sales, but upon the business of selling; is not a property tax, but an occupation or income tax." But the use of the term "income" in that connection, in view of the learned judge's sound discriminations in his previous opinion, can only be regarded as a casual inadvertence, perhaps a mere lapsus


Another contention, vigorously pressed by counsel for the state, is

that a study of our Revenue Acts and Codes, from 1866 to 1886, inclusive, will show a legislative understanding and assertion that salaries, gains, incomes, and profits are not property, in view of repeated classifications placing them among the schedule of "other subjects of taxation," following the schedule enumerating the items of taxable property, and including "all other property, real or personal, not otherwise specified." And it is argued that such classifications must have been known to the Constitution makers, and must have qualified their understanding of the scope of the term "property" as the subject of tax limitations.

This is a matter worthy of consideration, and has been considered by this court in construing statutes, but never, so far as we are advised, in

construing the constitutions which govern them. However, the force of the argument is dissipated here by the irregularity of the practice. In the Acts of 1866, where "gains, profits, or incomes" were first taxed, there is a general designation of "subjects" taxed, in which the item of corporate dividends, earned but not distributed (which are certainly taxable property), is. placed among the occupations, and incomes, etc., are taxed in a separate and distinct section, apparently unrelated. This arrangement is followed in the Code of 1867, § 434 specifying the "subjects" in general, and § 435 dealing with incomes. The same arrangement is followed in the Act of 1868 (Laws 1868, p. 304). There was nothing in all of this to indicate that the Constitution makers of 1868 intended to impose the taxing limitations of that instrument only upon property which might be owned by a taxpayer at the usual date fixed for assessments, even though that was the usual basis for assessment. That was the only difference between the items of property going to make up a complete income and other items of property. The items of an income are assessed annually as in

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