CLARK, C.J., concurring opinion.
The plaintiff in this action is now and has been for a number of years the duly elected, qualified, and acting judge of the Superior Court for the Fifteenth Judicial District of North Carolina. His present term of office began on 1 January, 1919, and will continue for a period of eight years. The proposed tax which he calls in question is that which the defendant contends was levied by ch. 34, Public Laws 1921. The position of the defendant is that whatever barrier may have existed heretofore against the collection of such a tax, it has now been removed by the constitutional amendment of 1920. The scope (101) and purpose of this amendment can best be ascertained from the amendment itself:
"1. Amend Art. V, sec. 3, by repealing the proviso in said section `that no income shall be taxed when the property from which the income is derived is taxed,' and substituting in lieu thereof the following: `Provided, the rate of tax on incomes shall not in any case exceed six (6) per cent,' and there shall be allowed the following exemptions to be deducted from the amount of annual incomes, to wit: for a married man with a wife living with him, or to a widow or widower having minor child or children, natural or adopted, not less than $2,000; to all other persons, not less than $1,000; and there may be allowed other deductions (not including living expenses), so that only net incomes are taxed."
It may not be amiss to note just here that the preceding clause in said amended section, "The General Assembly may also tax trades, professions, franchises, and incomes," was not disturbed by the amendment; and this clause has been a part of the Constitution since 1868. Further, it may be noted that the amendment in no way changed the legislative authority to levy an income tax on salaries in general. It simply removed the prohibition against taxing incomes derived from property already taxed, and limited the maximum rate of such tax to six per cent.
The defendant notified the plaintiff in writing that he, as "Commissioner of Revenue, holds that under the income tax provision of the State Constitution and the statute enacted in pursuance thereof, all officials of the State, including . . . judges of the Superior Courts, are required to list and pay an income tax on their salary." He further added that his department would endeavor in every legal way to secure returns and the payment of such taxes. Upon receipt of this communication the plaintiff, on 28 January, 1922, caused a letter to be addressed to the defendant, calling attention to the grave doubt as to the correctness of his ruling, and asked if he would agree to submit a test case for decision so that the matter might be judicially determined on or before 15 March, 1922, this being the limit for the filing of said returns. "The purpose of this letter," he wrote, "is to inquire if you will not consent that an agreed case may be made up and the matter promptly presented to the courts for determination, so that the State, and its officers as well, may know what their respective duties and rights are as to this matter." This suggestion or request was promptly rejected, the defendant saying: "In my opinion these salaries are taxable, both under the State law and the Constitution, and I will endeavor through the machinery of the law to collect these taxes." Following receipt of this letter, the plaintiff instituted the present suit, asking for injunctive relief, and again offering, in his complaint, to agree upon the facts and to submit this as a test case for (102) decision. Again his offer was declined. From a judgment in favor of plaintiff, the defendant appealed.
The defendant contends that under ch. 34, Public Laws 1921, every resident of the State is required to list and pay an income tax on his or her net income, and this, he says, by correct interpretation, includes the plaintiff's official salary, there being no express deduction allowed therefor in the statute. Defendant, therefore, contends that the act just mentioned contains a legislative direction and command that he collect such a tax. In reply to this, the plaintiff says that the defendant's construction of the statute runs counter to Art. IV, sec. 18, of the State Constitution, which provides: "The General Assembly shall prescribe and regulate the fees, salaries, and emoluments of all officers provided for in this article; but the salaries of the judges shall not be diminished during their continuance in office."
The question, then, presented for our decision is clear-cut, and it is this: Does a tax levied on plaintiff's official salary amount to a diminution thereof in derogation of the constitutional provision above quoted? If it does, its illegality must be conceded; otherwise, the injunction should be dissolved.
The case, in its ultimate effect and final analysis, involves the power to tax the compensation of all the judges in the State. On account of the individual relation of the members of this Court to the question, thus broadly stated, we can but regret that it might not have been settled in some other way. But the issue is forced, and we must meet it. Jurisdiction can neither be renounced nor denied. The plaintiff is entitled, by clear legal right, to invoke our decision is so far as his own salary is concerned, and this is a matter in which no other member of the judiciary can have any direct personal interest. There is no other appellate court to which, under the law, he or the defendant may go. This much is said, not by way of apology, but in recognition of the proprieties of the situation. No other choice is given to us, and we should be recreant to our duty if, when a cause is submitted by a citizen who alleges that his rights have been violated, or by an officer who wishes to know the law, we should shrink from deciding it. A majority of the members of this Court are owners of real estate in the city of Raleigh, but this would not be a sufficient reason for our declining to hear a case involving a tax levy by the commissioners of said city.Allen v. Raleigh, 181 N.C. 453. The only course for us to pursue is to consider the cause upon its merits and to decide it, as in other matters, according to the law appertaining to the case. For this position we have precedents from other jurisdictions and from the highest Court (103) in the land, all of which will be cited hereafter.
For what purpose did the Convention of 1835 recommend that a clause be inserted in the State Constitution so as to provide that "the salaries of the judges shall not be diminished during their continuance in office?" Attorney-General Batchelor, in 1856, answered this question as follows: "The reason why this amendment was made to the old Constitution, the debates in the convention do not disclose to us; but it must have been that that body, influenced by the lessons of wisdom drawn from the experience of the past, desired to throw around the judiciary another defense and protection against any attack which might be made on it by the other branches of the Government, and to secure it against all influences which might sway it from the fearless, faithful, impartial, and independent discharge of its duties." 48 N.C. 544.
The instant provision certainly could not have been incorporated in the Constitution for the personal benefit of the judges. They come and go and, at most, hold office for but a brief period. The Constitution, on the other hand, was written for a continuing and growing State, and its provisions deal primarily with questions which affect the public weal. Whatever else may be said, it must be conceded that this clause, which forms a part of our organic law, was purposely added thereto by
men of wisdom and experience, who understood the spirit and genius of our institutions, and who sought to place the independence of the judiciary beyond the field of controversy or debate. They were not ignorant of the melancholy experiences of the past and of the necessity of providing certain effectual checks and balances in this governmental framework which had been bequeathed to them by the fathers. History had also taught them the useful lesson that there is no surer way of losing the blessings of liberty than by meekly submitting to gradual encroachments, under color of law, and that no better instrument could be employed for that purpose than a weak, timid, and subservient judiciary. On the other hand, they were accustomed to look upon the courts, in this government of laws, as the strongest bulwark which they could devise to stand between them and those who would oppress them.
There is another section of the Constitution which may throw some light on the question now in hand. Art. I, sec. 8, provides: "The legislative, executive, and supreme judicial powers of the Government ought to be forever separate and distinct from each other." This has been said to embody succinctly the judgment of the people of North Carolina in regard to "the great principle of the separation of the powers." In this country those who make the laws determine their expediency and wisdom, but do not administer them. The chief magistrate who executes them is not allowed to judge them. To another tribunal is given the authority to pass upon their validity (104) and constitutionality, "to the end that it be a government of laws and not of men." From this great political division results our elaborate system of checks and balances — a complication and refinement which repudiates all hereditary tendencies and makes the law supreme. In short, it is one of the distinct American contributions to the sciences of government. The people of North Carolina have ever guarded this principle with sedulous care. Indeed, so cautious have they been about its preservation that the veto power over acts of the Legislature has been withheld from the Governor of the State. In this respect, our own Constitution may be considered an improvement over the great model from which it was evidently taken, to wit, the Constitution of the United States.
But we are not without a number of precedents by which we may be guided in our present decision; for similar provisions are to be found in the constitutions of other states, and, indeed, the Constitution of the United States contains a provision to the effect that the compensation of the Federal judges "shall not be diminished during their continuance in office." This is the same language used in our own Constitution, and was evidently the pattern from which it was taken. It would seem,
therefore, that we should derive much benefit from ascertaining the meaning and purpose of inserting this parent clause in the National Charter. In this regard, the records of the past may speak for themselves. Alexander Hamilton, writing in defense of the necessity of providing for an independent judiciary, observed: "The executive not only dispenses the honors, but holds the sword of the community; the Legislature not only commands the purse, but prescribes the rules by which the duties and rights of every citizen are to be regulated; the judiciary, on the contrary, has no influence over either the sword or the purse; no direction either of the strength or of the wealth of the society; and can take no active resolution whatever. It may truly be said to have neither force nor will, but merely judgment. . . . This simple view of the matter suggests several important consequences: It proves incontestably that the judiciary is beyond comparison the weakest of the three departments of power; that it can never attack with success either of the other two; and that all possible care is requisite to enable it to defend itself against their attacks." Federalist, No. 78.
And speaking more directly to the immediate point at issue, he said: "In the general course of human nature, a power over a man's subsistence amounts to a power over his will. . . . The plan of the convention accordingly has provided that the judges of the United States shall at stated times receive for their services a compensation, which shall not be diminished during their continuance in office. This, all (105) circumstances considered, is the most eligible provision that could have been devised." Federalist, No. 79.
At a later period, the following views were expressed by John Marshall, who, if any, in regard to the Constitution, was entitled to speak with the weight of authority: "Advert, sir, to the duties of a judge. He has to pass between the Government and the man whom that Government is prosecuting; between the most powerful individual in the community and the poorest and most unpopular. It is of the last importance that, in the exercise of these duties, he should observe the utmost fairness. Need I press the necessity of this? Does not every man feel that his own personal security and the security of his property depends on that fairness? The judicial department comes home in its effect to every man's fireside; it passes on his property, his reputation, his life, his all. Is it not to the last degree important that he should be rendered perfectly and completely independent, with nothing to influence or control him but God and his conscience? . . . I have always thought, from my earliest youth till now, that the greatest scourge an angry heaven ever inflicted upon an ungrateful and sinning people was an
ignorant, a corrupt, or a dependent judiciary." Debates. Virginia Convention, 1829-1831, pp. 616, 619.
But possibly the position here sought to be maintained has not been stated more clearly and forcibly than by Mr. Wilson in his "Constitutional Government in the United States": "It is also necessary that there should be a judiciary endowed with substantial and independent powers, and secure against all corrupting or perverting influences; secure, also, against the arbitrary authority of the administrative heads of the Government.
"Indeed, there is a sense in which it may be said that the whole efficacy and reality of constitutional government resides in its courts. Our definition of liberty is that it is the best practical adjustment between the powers of the Government and the privileges of the individual.
"Our courts are the balance wheel of our whole constitutional system; and ours is the only constitutional system so balanced and controlled. Other constitutional systems lack complete poise and certainty of operation, because they lack the support and interpretation of authoritative, undisputable courts of law. It is clear beyond all need of exposition that for the definite maintenance of constitutional understandings it is indispensable, alike for the preservation of the liberty of the individual and for the preservation of the integrity of the powers of the Government, that there should be some nonpolitical forum in which those understandings can be impartially debated and determined. That forum our courts supply. There the individual (106) may assert his rights; there the Government must accept definition of its authority. There the individual may challenge the legality of governmental action and have it adjudged by the test of fundamental principles, and that test the Government must abide; there the Government can check the too aggressive self-assertion of the individual, and establish its power upon lines which all can comprehend and heed. The constitutional powers of the courts constitute the ultimate safeguard alike of individual privilege and of governmental prerogative. It is in this sense that our judiciary is the balance wheel of our entire system; it is meant to maintain that nice adjustment between individual rights and governmental powers which constitutes political liberty."
The above quotations are selected to show the purpose, intent, and spirit of the framers of the Constitution and the reasons why they thought the particular provision, now under consideration, should be placed in the fundamental law of the land. The primary purpose of the prohibition against diminution was not to benefit the judges, but to
attract good and competent men to the bench and to promote that independence of action and judgment so essential to the preservation of our governmental polity. To quote the language of Chancellor Kent: "It tends, also, to secure a succession of learned men on the bench, who, in consequence of a certain undiminished support, are enabled and induced to quit the lucrative pursuits of private business for the duties of that important station."
Conceiving this to be its purpose, and considering it in connection with the pervading principles of the Constitution, we must construe it, not as a private grant, but as a limitation imposed in the interest of the public good. It was placed there by the people themselves, and it must be observed by their representatives. To hold otherwise "would be to affirm that the deputy is greater than his principal; that the servant is above his master; that the representatives of the people are superior to the people themselves; that men, acting by virtue of powers, may do not only what their powers do not authorize, but what they forbid."
In this country, where the law is supreme, those acting in a representative capacity may not substitute their will for the will of the people as expressed in the original law. No one man or individual is above the law, and it is the duty of all to obey it.
A tax which indirectly takes from the plaintiff a part of that which, by law, he is entitled to receive for his service is clearly within the prohibition against diminution. If what avail to him is the part paid with one hand and taken back with the other? Would it not, in reality, be the same as if such part had never been paid, or had been (107) withheld in the first instance? To borrow an algebraic expression: If x plus y equal z, then x minus y must be less than z, ify be anything at all. This is self-evident, and so plain "that he may run that readeth it." Habakkuk, 2:2. But why elaborate the obvious? Cuibono? It is axiomatic, and universally accepted as a correct principle of law that that which is prohibited from being done directly may not be accomplished by indirection. The people themselves, for reasons which they deemed to be wise and satisfactory, and for their own purposes, have thought it proper to withdraw from the field of taxation the official salaries of their judges. Why should the defendant complain at this? He is but a servant of the people; and it is their will, not his, that is to be done.
But it is asked, Has not the State full power to tax her citizens, one and all? To this we answer, Yes. S. v. Burnett, 179 N.C. 741; Thomas v.Sanderlin, 173 N.C. 332; S. v. Lewis, 142 N.C. 626. Taxation is an incident of sovereign power, and, within the limits prescribed, it may be exercised according to the discretion of those who use it, save in
respect to the objects of taxation which, for wise reasons, have been withdrawn from these general powers. The holdings of a judge and his income derived from other sources are proper subjects of taxation. The plaintiff makes no objection to this, but he does complain at the ruling of the defendant, which singles out his official salary as a special object of taxation, contrary to the Constitution which he has solemnly sworn to support.
If the tax in question be prohibited, it can find no justification in the taxation of other incomes in regard to which there is no prohibition; for, to be sure, doing what the Constitution permits affords no license to do what it prohibits. And let it be understood that we are now talking about a tribute, which the Government exacts, and not a gratuity or a voluntary contribution. Those who wish to pay more than the law requires will doubtless be permitted to do so, but this cannot affect the legal questions involved.
It was the evident purpose and intent of the people, when they inserted this clause in the Constitution, to prohibit any and every kind of diminution, direct or indirect, by taxation or otherwise. The Legislature is completely divested of the power to diminish the salaries of the judges in any manner or form whatsoever. Any other construction would do violence to the plain purport of the language employed and render the clause meaningless. The prohibition is general in its terms, and contains no excepting words. The reasons in support of its adoption, as publicly advanced at the time, outweighed those against it; and its wisdom has never been seriously questioned. On the other hand, time apparently has demonstrated that the Convention, (108) which submitted the amendment, must have been endowed with prophetic vision. Their minds were bent on safeguarding, protecting, and preserving the independence of the judiciary; and this they considered of far more importance to the State than any revenue that could come from taxing the salaries of the judges.
It is true a different interpretation has been sought on several occasions, but each time with the same result. In 1898, Attorney-General Walser ruled that the salaries in question were not subject to a tax, and concluded his opinion with the following statement: "I deem it unnecessary to add anything to the able, convincing, and elaborate opinion of Attorney-General Batchelor hereinbefore referred to." Public Documents, 1899, Document No. 8, p. 95. Again, 1902, Attorney-General Gilmer, in a full and exhaustive opinion, advised the members of this Court and the judges of the Superior Courts that their salaries were not subject to an income tax under the clause in question. This opinion was considered in conference and met with the unanimous
approval of the members of the Supreme Court. "It was then resolved that the Court would consider this opinion of the Attorney-General as settling the matter therein discussed, to the same extent as if it were the opinion of this Court." In re Taxation of Salaries of Judges, 131 N.C. 692. See, also, King v. Hunter, 65 N.C. 603.
In Purnell v. Page, 133 N.C. 125, it was held that the State could not tax the salary of a Federal judge under the clause in the United States Constitution from which the one in our own Constitution was taken, and the above opinions were cited with approval and declared to be established law in that case. This amounted to a judicial dictum, which is more than anobiter dictum. 15 C. J., 953. And later, Mr. Justice Walker, writing in the case of R. R. v. Cherokee County, 177 N.C. 97, had the following to say: "In Purnell v. Page, 133 N.C. 125, it was held that the income of a Federal judge could not be taxed by the State, and vice versa, and that any attempt by the legislature to impose such a tax would be futile, and when properly questioned would be declared void, and this position was conclusively maintained in a strong and able argument by the present Chief Justice, who referred to the opinions of Attorney-General Batchelor, adopted by the Supreme Court, composed then of Nash, C. J., and Pearson and Battle, judges (48 N.C. 544), and that of Attorney-General Gilmer, 131 N.C. 692, approved by the Court as denying the power of the Legislature to tax the salaries of the judges, which would plainly be a diminution of them, forbidden by the Constitution."
Finally, in the case of Evans v. Gore, 253 U.S. 245, the United (109) States Supreme Court (opinion filed 1 June, 1920) has set the matter at rest by holding that, under the above mentioned clause in the Federal Constitution, Congress was without authority to subject the salaries of the Federal judges to an income tax, citing with approval the above expressions in the North Carolina Reports, together with cases from the states of Pennsylvania and Louisiana. Hepburn v.Mann (Pa.), 5 Watts S., 403; New Orleans v. Lea, 14 La. Ann. 194. It would be strange, indeed, for us to hold that the identical words in our own Constitution have a different meaning from those in the Federal Constitution in the face of this decision. Every point now before us seems to have been presented in the Evans case, and there decided against the contentions of the defendant here. See, also, the very recent case of Gillespie v. Oklahoma (opinion filed 30 January, 1922), whereMr. Justice Holmes, writing the opinion, cites the case of Evans v.Gore, supra, with approval, and the same reasons stated therein are again followed and reaffirmed.
Of all the states in which this question has been before the courts for decision, Wisconsin alone, in Wickham v. Nygaard, 159 Wis. 396, has taken the opposite view. This case, however, was decided in 1915, before the decisions of the United States Supreme Court in Evans v. Gore, supra, andGillespie v. Oklahoma, supra.
But it is urged that the Legislature of 1921 increased the plaintiff's salary, and, therefore, the same or any subsequent Legislature may levy a tax against it without incurring the charge of having diminished it during his continuance in office. This argument is based on the contention that by adding an additional sum, the Legislature may then tax the whole so long as the tax does not exceed the increase. Or, to state it differently, the theory of the argument is that because the Legislature thought it necessary and proper to increase the plaintiff's salary, therefore they have the right, notwithstanding the constitutional prohibition, to take it away. That the power to add carries with it the power to subtract, at least to the extent of the addition. This would entirely destroy the constitutional provision we are now considering, frustrate its purpose, and make it indeed a snare and a delusion. Any construction which tends to defeat or to nullify a fundamental principle of constitutional law, come from whatever source or quarter it may, is palpably unsound. Commonwealth v. Mathues,210 Pa. 400. The Constitution is not to be so easily discarded. The moment the increase took effect it became as much a part of the plaintiff's salary as the original amount, and the whole was then protected by the constitutional prohibition against diminution. An undiminished salary is a complete salary in its entirety and not a salary less a tax. (110)
Again, it may be well to note that the amount of the tax can make no difference in dealing with the principle we are now discussing. If it be conceded that the Legislature has the power to levy the proposed income tax up to 6 per cent, it follows that a privilege or vocational tax, without limit, may be imposed on the judges; and this would destroy the constitutional provision now in question. The instant clause was adopted by the people themselves, and meaningless words were not employed by them in writing their Constitution.
Furthermore, we do not think it was the intention of the Legislature that the proposed tax should be collected. It was composed of wise and patriotic men, able and learned lawyers, and the present salaries of the judges were fixed by them with reference to the existing constitutional provisions. There was no suggestion by any member of the Legislature that these salaries should be taxed; and, of course, they were aware of the fact that they would not be, as the law had been construed otherwise. This was the basis and understanding upon which the different
members of the Legislature arrived at what they thought would be a fair, reasonable, and adequate compensation. Therefore, to sustain the tax the will of the Legislature, as well as the above provision of the Constitution, must be set at naught. It is the duty of this Court to declare that such may not be done by executive order or departmental decree.
The amount of the proposed tax in the instant case is negligible, but the principles involved are important, and for that reason we may be excused for having treated the matter somewhat at length.
Prior to the amendment of 1920, the plaintiff's salary was on a parity with revenue derived from property already taxed. Neither was subject to an income levy, simply because the Constitution provided otherwise. The prohibition against levying an income tax on the latter has now been removed, but as to the former it still stands. This is an irresistible and incontestable conclusion to be derived from a reading of the plain words of the Constitution, and we are not at liberty to disregard its provisions. On the contrary, we have endeavored to show that the restraint in question is not only wise, and in keeping with the spirit of our institutions, but was adopted for reasons of the highest public policy. To speak of it as a technicality is a misnomer. There are no technicalities in the Constitution in the sense that term is ordinarily used.
After a careful and earnest consideration of the record, we answer the questions propounded as follows:
Is the plaintiff's income subject to tax? Yes. In this respect he stands on the same footing with other citizens of the State.
Is his official salary to be included in his taxable income? No. (111) The Constitution clearly and plainly provides otherwise.
Let it be understood henceforth that this is the law as it is now written; and it can make no difference whether the tax be levied before or after the taking of office. The spirit as well as the letter of the Constitution must be observed. The judgment of the Superior Court, permanently enjoining the defendant from collecting the proposed tax on the plaintiff's official salary, was clearly correct. What the State pays or allows for his services as a judicial officer is not a proper item to be included in his taxable income.
Affirmed.