October 16, 1939.
The statute increasing tax on natural gas produced for sale from rate of 2 1/2 per cent. to 10 per cent., with proviso in first section that on and after March 1, 1939, the rate should be 2 1/2 per cent., and providing in second section that the act should take effect from and after September 1, 1939, manifested intent of Legislature that statute should become effective September 1, 1938, instead of September 1, 1939, since it appeared that clerical error occurred in fixing either the effective date or the expiration date for the statute (Laws 1938, Ex. Sess., chap. 89, Const. 1890, sec. 75).
APPEAL from the circuit court of Hinds county; HON. J.P. ALEXANDER, Judge.
Green, Green Jackson, of Jackson, for appellant.
Under Section 75, Mississippi Constitution, Chapter 89, pursuant to Section 2 thereof, did not become operative until September 1, 1939.
Adams v. Railroad Co., 75 Miss. 275; Abbott v. State, 106 Miss. 340, 63 So. 667; Alexander v. Graves, 178 Miss. 583, 173 So. 419; Bobo v. Board of Levee Comrs., 92 Miss. 792, 46 So. 819; Clingan v. State, 135 Miss. 621, 100 So. 185; City of Hazelhurst v. Mayes, 96 Miss. 656, 51 So. 891; Earhart v. State, 67 Miss. 325, 7 So. 347; Gregg Dyeing v. Query, 286 U.S. 472-482, 78 L.Ed. 1232; Gandy v. Public Service Corp., 163 Miss. 187, 140 So. 687; Gibbons v. Brittenum, 56 Miss. 232; Keifer v. Reconstruction Finance Corp., 83 L.Ed. 515; Kennington v. Hemingway, 101 Miss. 259, 57 So. 809; Love v. State, 8 So. 465; Miller v. State, 81 Miss. 162, 32 So. 951; Miller v. Tucker, 140 Miss. 146, 105 So. 774; Miss. Cottonseed Products Co. v. Stone, 184 So. 428; Monaghan v. State, 66 Miss. 514; Roseberry v. Norsworthy, 155 Miss. 845, 100 So. 541; State v. Jackson, 119 Miss. 727, 81 So. 1; State v. Morgan, 79 Miss. 659, 31 So. 338; State v. Traylor, 100 Miss. 544, 56 So. 521; State v. Ware, 102 Miss. 634, 54 So. 854; Swift v. Sones, 142 Miss. 660, 107 So. 881; Texas Co. v. Wheeless, 187 So. 888; 11 Am. Jur., Sec. 69; 16 Am. Jur. 232; Chap. 119, Laws of 1934 as amended by Section 2 of Chap. 158, Laws of 1936; Chap. 156, Laws of 1936; Chap. 89, Extraordinary Session of 1938; Miss. Constitution, Sec. 75, Miss. Constitution, Sec. 169.
Under Chapter 156, Laws of 1936, the tax imposition on natural gas is 2 1/2%, and appellant admits that therefor it is liable. And then Chapter 89 was passed, wherein the provisions were sought to be amended thus "Oil, 2% . . . Natural gas, 10%; provided, however, that on and after March 1, 1939 the rate on natural gas shall be 2 1/2%." Section 2 of that act is: "That this act shall take effect and be in force from and after September 1, 1939."
Section 75, Mississippi's Constitution, provides: "No law of a general nature, unless therein otherwise provided, shall be enforced until sixty days after its passage."
The controversy is as to the rate of taxation in September, 1938. Unless there were affirmative legislation making the law operative at September 1, 1938, under the Constitution the tax could not be enforced until October 24, 1938, as the act was approved August 24, 1938. Section 75 of the Constitution is self-executing and prohibits the operation of this statute during September, unless therein "otherwise provided." We fail to find in this act any legislative adoption of September 1, 1938 as its effective date.
State v. Jackson, 119 Miss. 727, 81 So. 1; Love v. State, 8 So. 465; State v. Morgan, 79 Miss. 659, 31 So. 338; Miller v. State, 81 Miss. 162, 32 So. 951; Clingan v. State, 135 Miss. 621, 100 So. 185.
As said in 11 Am. Jur., Sec. 69: "The courts usually hesitate to declare that a constitutional provision is directory merely, in view of the tendency of the legislature to disregard provisions which are not said to be mandatory. Accordingly, it is the general rule to regard constitutional provisions as mandatory and not to leave any discretion to the will of the legislature to obey or disregard them."
So, in enacting Section 2 the legislature was consciously performing that of them mandatorily required, and we have it:
"Sec. 2. That this act shall take effect and be in force from and after September 1, 1939."
All doubts are resolved in favor of the taxpayer.
Texas Company v. Wheeless (Miss.), 187 So. 880; Mississippi Cottonseed Products Company v. Stone (Miss.), 184 So. 428; Swift v. Sones, 142 Miss. 660, 107 So. 881; Miller v. Tucker, 140 Miss. 146, 105 So. 774.
There are but two provisions in the act, one naming September 1, 1939, the other March 1, 1939, and it is fundamental that the legislative intent must come from the face of the statute, where these conflicting provisions both appear. Reconciliation should be had, if possible, and there is not a single argument that can be adduced for making the operative date September 1, 1938, that cannot be equally made to fix the expiration date at March 1, 1940.
Keifer v. Reconstruction Finance Corp., 83 L.Ed. 515; Mississippi Cottonseed Products v. Stone, 184 So. 428; Monaghan v. State, 66 Miss. 514.
The courts cannot reconstruct or enlarge the meaning of an unambiguous statute.
Another inescapable reason why this judgment should be reversed is that the circuit judge substantially overruled Gibbons v. Brittenum, 56 Miss. 232. The case here is one wherein, in the statute, there are two dates in irreconcilable conflict, and where that occurs then the latter controls.
16 Am. Jur. 232.
Where the statute is irreconcilable it may be void.
59 C.J. 163.
Alexander Satterfield, of Jackson, amicus curiae in behalf of appellant.
We must not overlook the fact that we have before us solely the Act in question, which is Senate Bill No. 104 of the Extra Session of 1938, Laws of Mississippi. The Act was an amendment to Chapter 158 of the Laws of 1936, which in turn was an amendment to Chapter 119 of the Laws of 1934. An examination of the particular Act in question shows that the only change which was made in the previous Act of 1936 which is amended, was that the gas tax was changed, and in all other respects the Act remains the same. Therefore, as to other provisions of the Act in question this amendment has no force or meaning, but as to the gas tax the Act added this clause "10%; provided, however, that on and after March 1, 1939 the rate on natural gas shall be . . ."
This amendment to the Act which we have just quoted was inserted after the words "natural gas" in the second paragraph of Section 2 of the Act, and before the words "two and one-half per cent." To anyone reading the Act it was obvious that the legislature desired to increase the prevailing two and one-half per cent tax on natural gas to ten per cent, but upon reading the statute there is presented the peculiar fact that the Act should take effect on September 1, 1939, six months after the ten per cent tax on natural gas would have expired. It is thus obvious that this Act of the 1938 special session is not clear and if taken literally could not fix a ten per cent tax on natural gas which would expire on March 1, 1939 when the Act itself does not take effect until September 1, 1939.
Mississippi Cottonseed Products Company v. Stone, et al., 184 So. 428.
An examination of the Mississippi Cottonseed Products case indicates that the Supreme Court changed the word "by" to the word "to" in order to make an obvious typographical error clear, but who can say that the provisions of the Act in question are not clear? It is merely a choice of dates. It is Hornbook law to state that the intent of the legislature is to be determined from the language of the statute, but we challenge the court, or anyone else, to tell us from the language of the statute when the ten per cent tax on natural gas should begin and when it should end. It is not the purpose of the court to legislate or to interpret doubtful statutes when it is susceptible to many and varied interpretations.
"Words must be construed in ordinary sense."
"In ascertaining legislative intent the question is, what is the meaning of the statute as worded and not what did the legislature mean to say."
Connelly v. City of Bridgeport, 132 A. 690.
"Statutes must be construed according to natural and obvious import of language used."
"Intent of legislature is to be determined from language of the statute."
Federal Mining and Smelting Company v. Wittenberg, 128 A. 38.
"Where plain words of statute leave no room for construction, courts must follow it regardless of consequences."
Leaman v. Dist. of Columbia, 55 F.2d 1020.
We are frank to admit that our Mississippi courts have been very broad and liberal in adopting rules and precedents to be followed in arriving at the legislative intent in the enforcing of statutes. We are aware of the case of Gandy v. Public Service Corp. of Mississippi, 147 So. 687, 163 Miss. 187, wherein it was held that the true meaning of a statute will be enforced by the courts, even to the extent of correcting language used.
It is well known that the legislature may direct when an Act is to take effect.
76 A.L.R. 1044.
At the time of the passage of the Act, there was in force in the State of Mississippi a two and one-half percent tax, which the declaration does not seek to disturb in any manner whatsoever. The obvious and clear intent and purpose of the particular Act, Chapter 104 of the Extraordinary Session of 1938 was to increase this gas tax from two and one-half per cent to ten per cent. We might further gather from the Act that a reasonable and common sense interpretation that this increase in the gas tax of seven and one-half per cent was to remain in force for only a period of six months, but who can say what six months?
In trying to solve this peculiarly worded statute we must urge upon the court the fundamental principles of law that penal statutes and tax statutes are to be most strictly construed.
The particular Act was passed in August, 1938, and it would certainly not be unreasonable to assume that the legislature did not desire to place this exorbitant tax on the producers of natural gas to take effect immediately, and that in consideration of the interests of those who had developed this new resource for our state it was the intent of the legislature that this additional tax should not begin until September 1, 1939 and expire March 1, 1940.
Coker v. Wilkinson, 106 So. 886; McClendon v. Columbia, 5 A.L.R. 990.
If the Act is to be strictly construed as a tax statute, it should be given that effect which is most advantageous and beneficial to the taxpayer, and if we are to rewrite the Act by judicial determination, then the most that can be said is that it was the purpose of the legislature that the Act take effect on September 1, 1939, and probably that this excessive gas tax of ten per cent should continue thereafter until March 1, 1940.
If the Act is so construed that it took effect on September 1, 1938, then a burden has been placed upon the taxpayer by a construction most favorable to the state and contrary to all rules of construction and the general principles of equity and good conscience.
J.A. Lauderdale, Assistant Attorney-General, for appellee.
When it appears that there is a clerical error in a statute, and the true meaning of this statute can be ascertained from the act considered as a whole, such meaning will be enforced by the courts even to the extent of correcting said errors.
Alexander v. Graves, 178 Miss. 583; Gandy v. Public Service Comm., 163 Miss. 187; Kennington v. Hemingway, 101 Miss. 259; Miss. Cottonseed Products Co. v. Stone, 184 So. 428; Roseberry v. Norsworthy, 135 Miss. 845; State v. Rawls, 103 Miss. 806; State v. Traylor, 100 Miss. 544.
The provisions of Section 1 and Section 2 of the act are not irreconcilable when the whole act is taken into consideration and the intent and purpose of the legislature are derived therefrom.
Counsel for appellant cite several authorities holding that where a tax is doubtful all doubts shall be resolved in favor of the taxpayer. We concede this to be the law. However, it clearly appears that counsel concede that the legislature intended to levy a tax on producers of oil and gas at a higher rate for a six months' period. This provision is clearly expressed and there can be no doubt, and no room for construction.
Roseberry v. Norsworthy, 135 Miss. 845, 860.
Counsel contend by construing the act as being effective September 1st, 1939, that such construction would be more beneficial to the taxpayers. This case was tried on declaration and demurrer thereto. There is no allegation in the declaration as to which date would be more beneficial to the taxpayers.
Argued orally by Garner W. Green, for appellant, and J.A. Lauderdale, for appellee.
This suit was filed by the appellant in the circuit court of Hinds County against the appellee to recover taxes paid by it under protest, and which tax was claimed by the State Tax Commission to be due under the provisions of Chapter 89, Laws of 1938, Extra Session, approved August 20, 1938, amending Chapter 119, Laws of 1934, as amended by section 2 of Chapter 158, Laws of 1936.
The tax thus imposed is commonly called a sales tax, and applies to natural gas produced for sale in this state. Prior to the enactment of the said Chapter 89, Laws of 1938, supra, the tax was at the rate of 2 1/2%, and was increased by section 1 of this act to 10%, with a proviso that on and after March 1, 1939, the rate should be 2 1/2% as under the former statutes. Then section 2 thereof provides that the act should take effect and be in force from and after September 1, 1939.
It is therefore apparent that a clerical error was made in the statute last above mentioned, either in regard to the date "March 1, 1939," mentioned in section 1 thereof as to when the rate was to change from 10% back to 2 1/2%, or in regard to the date "September 1, 1939," mentioned in section 2 thereof, as to when the act was to take effect. Otherwise, we would have the anomalous situation of the legislature having provided that the statute should not take effect until after it should have ceased to operate.
It is manifest that the legislature intended that the increase in the tax from 2 1/2% to 10% should continue until March 1, 1939, as provided for in section 1 of the said Chapter 89, supra, and which is the section that seeks to amend the preceding statutes. Of course, the statute could not so operate unless it should be construed so as to take effect prior to that date. Under Section 75 of the state Constitution the act would have become effective sixty days after its passage, unless otherwise provided by the legislature. We are of the opinion that it is more reasonable to assume that there was an intention to restrict this sixty day limitation than to postpone the effective date of the statute for more than one year after its enactment. It is frequently provided in the enactment of statutes that they shall take effect from and after their passage. It is likewise true that the constitutional limitation of sixty days is frequently allowed to apply by a failure to provide otherwise. It is only in rare instances that the effective date of a statute is postponed for more than one year after enactment; and this is especially true when emergency laws are passed for the purpose of raising revenue, since these measures usually relate to the current biennium if they are to operate only for a short period of time instead of becoming part of a permanent revenue system.
But it is urged that if we should hold that the difficulty here presented is such as to lead necessarily to the conclusion that a clerical error is apparent on the face of the statute, then that we would be equally warranted in saying that the increase in the tax was intended to expire on March 1, 1940, instead of "March 1, 1939," as we would be in saying that the legislature intended that the act should take effect on September 1, 1938, instead of the date specified as "September 1, 1939." If we have not already answered this suggestion by the observations hereinbefore made, then it may be further stated that it is not reasonable that the legislature would extend the operation of a revenue measure, increasing an existing tax fourfold, over into the next state administration where such a measure is to operate for only a short period of time. At any rate, is appears to us to be the more reasonable conclusion that it was intended that the statute should become effective September 1, 1938, instead of "September 1, 1939," where it was to cease in its operation on a March 1st date after its enactment.
The legislative journals disclose that the act in question, introduced under the caption of Senate Bill No. 104, was passed during the closing days of the legislative session; and that the same was passed by both the Senate and House and signed by the presiding officers thereof within two days after its introduction. A mere casual reading of the statute clearly discloses that in this hurried procedure a clerical error occurred either in fixing the date for its expiration as "March 1, 1939," or in fixing the date when it should become effective, as "September 1, 1939."
In the case of Roseberry v. Norsworthy, 135 Miss. 845, 100 So. 514, the Court was there construing Chapter 116, Laws of 1924, which levied a graduated privilege tax on automobiles and trucks. The tax ranged from $10 to $400 per vehicle. The act contained a provision as follows: "Provided, that in all cases the maximum tax for all automobiles, trucks, trailers and semi-trailers shall be $10.00 per annum." The court held that the use of the word "maximum" was a clerical error and that it would substitute the word "minimum" therefor.
See also Earhart v. State, 67 Miss. 325, 7 So. 347; Ott v. State ex rel. Lowery, 78 Miss. 487, 29 So. 520; State v. Rawles, 103 Miss. 806, 60 So. 782; Kennington v. Hemingway, 101 Miss. 259, 57 So. 809, 39 L.R.A. (N.S.), 541, Ann. Cas. 1914B, 392; Gandy v. Public Service Corp., 163 Miss. 187, 140 So. 687; Alexander v. Graves, 178 Miss. 583, 173 So. 417; Miss. Cottonseed Products Co. v. Stone (Miss.), 184 So. 428, not officially reported.
We are of the opinion that in order to give the effect to the statute intended by the legislature, and make it operative at all, it is necessary to hold that the date on which it was to take effect was September 1, 1938. The action of the court below in sustaining the demurrer and dismissing the suit, when the plaintiff declined to plead further, was therefore correct.