The appellee owned several shares of capital stock in a national bank, and the State Tax Commission included the dividends received by him from such stock in assessing his income taxes under chapter 120, Laws of 1934. The appellee filed his bill in the Chancery Court of Hinds county for hearing upon the action of the State Tax Commission in making such assessment for income tax upon this capital stock, challenging the right and power of the State Tax Commission to do so, and setting forth the allegations upon which he sought relief. In his petition he alleged that the bank in which he held stock was a national bank, an instrumentality of the Federal Government, the capital, franchise and operations of which are not taxable by the state, except by consent of the Congress of the United States; and the only consent given by Congress to the several states to tax national banks is found in section 548 of title 12 of United States Code Annotated; that the state of Mississippi had elected to tax the shares of national banks according to their value, as provided in section 3138 of chapter 61, Code of 1930; and that all taxes due the state of Mississippi upon shares of the said bank in which the appellee owned shares for the preceding years had been duly assessed and paid to the state, and that therefore the share-holders of the bank cannot be required to pay anything further thereon, either income taxes or otherwise, since by electing to tax the said shares, as above shown, the state of Mississippi exhausted its right to tax the bank or its shares, or the income therefrom. And appellee prayed for general relief.
The Tax Commission, through the Attorney General, demurred to the petition or bill of the appellee, which demurrer was overruled by the Chancellor. Thereupon the Tax Commission filed an answer, admitting that the petitioner is a citizen and taxpayer of Hinds county, Mississippi, and that he prepared and filed, within the time
provided by law, his income tax returns to the state of Mississippi; but denied that said return set forth all income taxes due by him for the said year, and alleged that the petitioner or complainant, without authority of law, deducted from his gross income the sum of $2022, dividends received by him on shares of stock in a national bank, which he claimed were not subject to the tax; and denied that the petitioner had paid all the income tax due by him to the state of Mississippi, alleging that said sum so received as dividends constituted part of his net income subject to taxation under chapter 120, Laws of 1934.
The answer admitted that the bank was a national bank, and as such an instrumentality of the Federal Government, and that the bank was not taxable by the state, except under consent of Congress so to do. It averred that section 548, title 12 U.S. Code Ann., specifically authorized the state of Mississippi to levy an income tax on the net income of petitioner when the same is derived from shares owned by him in the said bank; admitted that the state levied ad valorem taxes on the shares according to their value; but averred that under subdivision (c) of section 548, title 12, U.S. Code Ann., the state was authorized to levy a tax on the net income of petitioner.
On the hearing the Chancery Court held that the appellee, the petitioner, was not subject to the tax on the income from the shares of said national bank, and found that the petitioner was improperly assessed therewith, and annulled such tax. From which judgment this appeal is prosecuted.
We are of the opinion that the Chancellor was correct in so holding. It was not the intention of the Legislature of 1934, in enacting chap. 120, Laws of 1934, to tax income derived from shares in national banks which had been taxed in accordance with the value of such shares, as provided by section 3138, Code of 1930, the state having elected to tax the shares of national banks as therein
provided, and not under the other methods proposed in Section 548, Title 12, U.S. Code Ann., Chapter 120, Laws of 1934, was a new enactment upon the subject of income taxes, repealing chapter 124, Code of 1930, and chapters 96 and 97, Laws of 1932. This act in directing the assessment, levy and collection of income taxes for each calendar year used the phrase "taxable income," the basis of taxation being provided on "the first $2,000.00 of taxable income or any part thereof, at the rate of two and one-half per centum;
"On the next $3,000.00 of taxable income or any part thereof, at the rate of three and one-half per centum;
"On the next $10,000.00 of taxable income, or any part thereof, at the rate of five per centum; on all taxable income in excess of $15,000.00 at the rate of six per centum." Section 3.
At the time of the enactment of this statute it was the settled law of the United States, as shown by a decision of the Supreme Court at that time, that Federal agencies could not be taxed by the states without the consent of Congress, and that the states were limited to the methods provided in the Federal statute, giving its consent to such assessment only to a limited extent, and on specified conditions. It must be presumed that the Legislature, in enacting the statute, had knowledge of the Federal law and of the court decisions construing it.
By clause 3 of article 6 of the United States Constitution, U.S.C.A., it is provided: "The Senators and Representatives before mentioned, and the Members of the several State Legislatures, and all executive and judicial Officers, both of the United States and of the several States, shall be bound by Oath or Affirmation, to support this Constitution; but no religious Test shall ever be required as a Qualification to any Office or public Trust under the United States."
The requirement that the members of the several state legislatures, and all executive and judicial officers, both of the United States, and of the several states, shall be
bound by oath or affirmation to support the Constitution, imposes upon all those exercising the powers of any office the duty of supporting the Constitution, which carries with it the duty of careful examination of the Constitution, and of the construction placed upon it by the highest Court.
The Mississippi Constitution also requires members to take a special oath set forth in section 40 of the Constitution of 1890, which reads as follows: "Members of the legislature, before entering upon the discharge of their duties, shall take the following oath: `I, ____, do solemnly swear (or affirm) that I will faithfully support the Constitution of the United States and of the state of Mississippi; that I am not disqualified from holding office by the Constitution of this state; that I will faithfully discharge my duties as a legislator; that I will, as soon as practicable hereafter, carefully read (or have read to me) the Constitution of this state, and will endeavor to note, and as a legislator to execute, all the requirements thereof imposed on the legislature; and I will not vote for any measure or person because of a promise of any other member of this legislature to vote for any measure or person, or as a means of influencing him or them so to do. So help me God.'"
It must be presumed, therefore, that every member of the legislature gave thought and study to the matter of his obligation to support the Constitution, and governed his actions in accordance with the requirements of the Federal Constitution as interpreted at that time by the highest judicial authority of the nation which has the final power of interpreting the Constitution, which interpretation is binding upon every officer of the Federal Government, and of the state government.
It is further provided in Clause 2 of Article VI of the Constitution of the United States U.S.C.A., that it is the supreme law of the land. It reads as follows: "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, any Thing in the Constitution or Laws of any State to the Contrary notwithstanding."
Turning to other parts of the Constitution, we find that the legislative power of the Federal Government, granted by the Constitution of the United States, is vested in the Congress of the United States, which shall consist of the Senate and House of Representatives; such powers being specified in clauses 1 to 18 of section VIII of article 1 of the Constitution, the 18th clause reading, "To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof."
It is, therefore, the duty of the legislature, in passing state legislation, to conform to the Constitution of the United States, as then understood and interpreted by the highest judicial body vested with authority to construe it. The statute here involved must now be construed just as it would have been, had the controversy arisen shortly after the statute became effective; at which time, in the light of the then existing decisions of the United States Supreme Court, we would have been under duty to limit the broad language of the statute, wherever the language was general enough to include the tax here involved, so as to make it conform to the Federal law as interpreted by the highest court of the United States — which is the supreme law of the land.
It is a familiar rule of statutory construction, that if reasonably possible, statutes shall be construed to conform to constitutional requirements, and that broad language will be limited to conform to constitutional requirements. This was held in the case of New Orleans M. C.R. Co. v. State, 110 Miss. 290, 70 So. 355, wherein the general language of privilege tax laws on railroads, levied by the Legislature of the state upon classification, was
limited to make the statute operative only with respect to intrastate commerce, and not with respect to interstate commerce. This rule is a principle of general statutory construction. See Black on Statutory Construction, page 103, where it is said: "In construing a doubtful or ambiguous statute, the courts will presume that it was the intention of the legislature to enact a valid, sensible, and just law, and one which should change the prior law no further than may be necessary to effectuate the specific purpose of the act in question. The construction should be in harmony with this assumption whenever possible. But presumptions of this kind cannot prevail against the clear and explicit terms of the law."
It is further said, on page 105 of the same book, "It is presumed that the legislature does not design any attempt to transcend the rightful limits of its authority, to violate the principles of international law, or to give extraterritorial effect to its statutes."
In Kennington v. Hemingway, 101 Miss. 259, 57 So. 809, 810, 39 L.R.A. (N.S.) 541, Ann. Cas. 1914B, 392, a statute required contracts and transactions between husband and wife to be reduced to writing and actually recorded on the public records of the county to make it valid; and the Court limited the broad language of the statute, holding that it did not apply to the gift by the husband to his wife of a diamond ring there involved. It was there held that the gift by a husband to his wife of clothing, etc., suitable to her station in life, is valid as against a third person, although such gift is not evidenced by a written instrument, acknowledged and recorded as provided by section 2522, Code 1906. It was also held that in the construction of statutes, courts chiefly desire to reach the real intention of the framers of the law, and knowing this to adopt that interpretation which will meet the real meaning of the legislature, though such interpretation may be beyond or within, wider or narrower than the mere letter of the enactment.
The language there construed was very broad, and provided that, "Transfer or conveyance of goods and chattels, or lands or any lease of lands, between husband and wife, shall not be valid as against any third person, unless the transfer or conveyance be in writing and acknowledged and filed for record as a mortgage or deed of trust is required to be; and possession of the property shall not be equivalent to filing the writing for record, but, to affect third persons, the writing must be filed for record."
In Black on Construction, etc., of Laws, supra, at page 110, it is said, "Every act of the legislature is presumed to be valid and constitutional until the contrary is shown. All doubts are resolved in favor of the validity of the act. If it is fairly and reasonably open to more than one construction, that construction will be adopted which will reconcile the statute with the constitution and avoid the consequence of unconstitutionality."
In Ascher Baxter v. Edward Moyse Co., 101 Miss. 36, 57 So. 299, in syllabus 8 it is said, "Courts in construing a statute will presume that the legislature in enacting the statute was familiar with its own enactments and with the construction which the courts had placed on those enactments." This same idea is also the basis for the well settled doctrine in this state, that where a statute has been construed by the highest court having authority to construe it, and afterwards re-enactment in the statute without change, that the legislature has adopted as a part of the construction placed upon it by the court's decision.
In Henry v. Henderson, 103 Miss. 48, 60 So. 33, in syllabus 3 it is said, "Where a statute has been construed by the highest court of a state and afterwards re-enacted in substantially the same terms, the legislature by such re-enactment adopts along with the statute such construction."
See, also, to the same effect Burks v. Moody, 141 Miss. 370, 378, 3rd syllabus, 106 So. 528, 107 So. 279; Womack
v. Central Lumber Co., 131 Miss. 201, 3rd syllabus, 94 So. 2. Also, 59 C.J., title "Statutes," section 625, Id., section 650; 12 C.J., title "Constitutional Law," section 220.
It is the duty of the Court to construe the acts of the legislature so as to uphold their constitutionality. Easterling Lumber Co. v. Pierce, 106 Miss. 672, 64 So. 461; Richards v. City Lumber Co., 101 Miss. 678, 57 So. 977; Natchez S.R. Co. v. Crawford, 99 Miss. 697, 55 So. 596; State v. Louisville N.R. Co., 97 Miss. 35, 51 So. 918, 53 So. 454, Ann. Cas. 1912C, 1150. In construing statutes, the Court should not attribute to the legislature a design to ignore constitutional limitation on their power to legislate. Of course, the legislature must be understood to have knowledge of the decisions existing at the time of their enactment and not be held to anticipate that the courts would afterwards change their decisions. Laws are presumed to be passed with deliberation, and with full knowledge of all existing laws on the subject, and it will be held reasonable to conclude that in passing a statute it was enacted with full knowledge of all such laws. Cumberland Telephone Telegraph Co. v. State,99 Miss. 1, 54 So. 446.
In 25 R.C.L., 959, section 215, under heading, "Meaning to be Given as of Time of Enactment," it is said, "There is always a tendency, it has been said, to construe statutes in the light in which they appear when the construction is given. It is easy to be wise after one sees the results of experience. The true rule is that statutes are to be construed as they were intended to be understood when they are passed;" citing United States v. Union Pac. R. Co., 91 U.S. 72, 23 L.Ed. 224; Schuyler County v. Thomas,98 U.S. 169, 25 L.Ed. 88; Com. v. Erie N.E.R. Co., 27 Pa. 339, 67 Am. Dec. 471; Platt v. Union P.R. Co., 99 U.S. 48, 63, 25 L.Ed. 424; Bloomer v. Todd, 3 Wn. T. 599, 19 P. 135, 1 L.R.A. 111; See, also, People v. Barnett, 319 Ill. 403, 150 N.E. 290; State v. Boston, etc., R. Co., 123 Me. 48, 121 A. 541.
Gray on Limitation on the Taxing Power, page 398, section 788, lays the rule down in regard to taxation of national banks, as follows: "It is well established law that the present system of National Banks, as well as the old United States Banks, constitute Federal agencies, organized by Congress under its power to regulate currency (citing Veazie Bank v. Fenno, 8 Wall. 533, 19 L.Ed. 482; Farmers Bank v. Dearing, 91 U.S. 29, 23 L.Ed. 196; Davis v. Elmira Savings Bank, 161 U.S. [275] 283, 16 S.Ct. 502, 40 L.Ed. 700; Owensboro Nat. Bank v. Owensboro,173 U.S. 664, 19 S.Ct. 537, 43 L.Ed. 850). Such agencies are exempt from state taxation, except in so far as Congress may have waived the exemption (McHenry v. Downer, 116 Cal. 20, 47 P. 779, 45 L.R.A. 737; Covington City Bank v. Covington, C.C., 21 F. [484] 489; Rich v. Packard Nat. Bank, 138 Mass. 527; Carthage v. First Nat. Bank, 71 Mo. 508, 36 Am. Rep. 494; Pittsburg v. First Nat. Bank,55 Pa. 45). "National banks are instrumentalities of the Federal government created for public purposes, and as such necessarily subject to the paramount authority of the United States. It follows that an attempt by a state to define their duties or control the conduct of their affairs is absolutely void, whenever 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 performance of which they were created. These principles were axiomatic and are sanctioned by the repeated adjudications of this court (Davis v. Elmira Savings Bank, 161 U.S. [275] 283, 16 S.Ct. 502, 40 L.Ed. 700). It follows then, necessarily, from these conclusions that the respective 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. (Owensboro Bank v. Owensboro, supra.)"
In Helvering v. Therrell, 303 U.S. 218-225, 58 S.Ct. 539, 82 L.Ed. 758, and other cases decided therewith, at the October term, 1937, it was said (2nd syllabus), "A state cannot tax appropriate means employed by the United States in the exercise of its delegated powers; and the United States cannot tax instrumentalities employed by a state in the discharge of its governmental duties." It was also held in the third syllabus that, "The exemption of state instrumentalities from Federal taxation does not extend to every instrumentality which a state may see fit to employ, but depends upon the nature of the undertaking."
In New York ex rel. Williams v. Weaver, 100 U.S. 539, 25 L.Ed. 705, it was held that the authority of a state to tax the shares of national banks is derived wholly from the act of Congress, and without the consent of Congress those shares cannot be taxed by the states. See, also, First Nat. Bank v. Albright, 208 U.S. 548, 28 S.Ct. 349, 52 L.Ed. 614.
In Mercantile National Bank v. City of New York, 121 U.S. 138, 7 S.Ct. 826, 30 L.Ed. 895, it was held that neither national banks, their capital, nor shares of stock then held by individuals are subject to taxation by the states wherein they are located, without the consent of Congress.
Thus, the law from 1819, when the Supreme Court, in the case of McCulloch v. Maryland, 4 Wheat. 316, 429, 4 L.Ed. 579, handed down an opinion written by Chief Justice Marshall, until 1938, maintained the doctrine in the Supreme Court of the United States that the states could not tax any instrumentlity of the Federal government without the consent of Congress.
The discussion in McCulloch v. Maryland, supra, was elaborate and lucid, and received the legal and judicial sanction of the country, as expressed by the majority of the courts. It would be interesting, if space permitted, to quote at length from this great original opinion by the greatest jurist in the history of the English speaking
people. I shall quote only a brief passage therefrom: "The sovereignty of a state extends to everything which exists by its own authority, or is introduced by its permission; but does it extend to those means which are employed by congress to carry into execution powers conferred on that body by the people of the United States? We think it demonstrable, that it does not. Those powers are not given by the people of a single state. They are given by the people of the United States, to a government whose laws, made in pursuance of the constitution, are declared to be supreme. Consequently, the people of a single state cannot confer a sovereignty which will extend over to them. If we measure the power of taxation residing in a state, by the extent of sovereignty which the people of a single state possess, and can confer on its government, we have an intelligible standard, applicable to every case to which the power may be applied. We have a principle which leaves the power of taxing the people and property of a state unimpaired; which leaves to a state the command of all its resources, and which places beyond its reach, all those powers which are conferred by the people of the United States on the government of the Union, and all those means which are given for the purpose of carrying those powers into execution. We have a principle which is safe for the states, and safe for the Union. We are relieved, as we ought to be, from clashing sovereignty; from interfering powers; from a repugnancy between a right in one government to pull down, what there is an acknowledged right in another to build up; from the incompatibility of a right in one government to destroy, what there is a right in another to preserve. We are not driven to the perplexing inquiry, so unfit for the judicial department, what degree of taxation is the legitimate use, and what degree may amount to the abuse of the power. The attempt to use it on the means employed by the government of the Union, in pursuance of the constitution, is itself an abuse,
because it is the usurpation of a power which the people of a single estate cannot give. . . .
"But, waiving this theory for the present, let us resume the inquiry, whether this power can be exercised by the respective states, consistently with a fair construction of the constitution?
"That the power to tax involves the power to destroy; that the power to destroy may defeat and render useless the power to create; that there is a plain repugnance in conferring on one government a power to control the constitutional measures of another, which other, with respect to those very measures, is declared to be supreme over that which exerts the control, are propositions not to be denied. But all inconsistencies are to be reconciled by the magic of the word confidence. Taxation, it is said, does not necessarily and unavoidably destroy. To carry it to the excess of destruction, would be an abuse, to presume which, would banish that confidence which is essential to all government.
"But is this a case of confidence? Would the people of any one state trust those of another with a power to control the most insignificant operations of their state government? We know they would not. Why, then, should we suppose, that the people of any one state should be willing to trust those of another with a power to control the operations of a government to which they have confided their most important and most valuable interests? In the legislature of the Union alone, are all represented. The legislature of the Union alone, therefore, can be trusted by the people with the power of controlling measures which concern all, in the confidence that it will not be abused. This, then, is not a case of confidence, and we must consider it is as it really is."
The Court held that the State of Maryland, therefore, could not tax the Bank of the United States, which was an instrumentality or agency of the national government, for the exercise of its delegated power.
Subsequently, in 1824, the case of Osborn et al. v. President and Directors of the Bank of the United States, 9 Wheat. 738,22 U.S. 738, 739, 740, 6 L.Ed. 204, was brought before the Federal Supreme Court, which was asked to re-examined the doctrine announced in McCulloch v. Maryland, supra; this it did, reaffirming the doctrine there announced. The suit of Osborn v. Bank of the United States, supra, was brought to recover from the bank's directors money paid to the state of Ohio as taxes on the bank. The Court adhered to its former ruling, stating in the syllabus, "A state cannot tax the Bank of the United States; and any attempt, on the part of its agents and officers, to enforce the collection of such tax against the property of the bank, may be restrained by injunction from the circuit court."
The act creating the Bank of the United States was subsequently repealed by Congress, but many cases involving the supremacy of Congress in controlling and protecting the powers delegated to it, and upholding its rights, as against the rights of the states were decided. It is impossible to set forth all of the various decisions because of the length of this opinion. But subsequently the United States created National Banks for the purpose of exercising its money powers, and because an agency was needed through which its affairs could be efficiently conducted.
In Farmers Merchants Nat. Bank v. Dearing, 91 U.S. 29, 23 L.Ed. 196, decided in 1875, it was held: "The States can exercise no control over national banks, nor in anywise affect their operation, except insofar as Congress may see proper to permit." In the course of its opinion in this case the Court said: "The principle announced in the authorities cited is indispensable to the efficiency, the independence, and indeed to the beneficial existence, of the General Government; otherwise it would be liable, in the discharge of its most important trusts, to be annoyed and thwarted by the will or caprice of every State in the Union. Infinite confusion would
follow. The government would be reduced to a pitiable condition of weakness. The form might remain, but the vital essence would have departed. In the complex system of polity which obtains in this country, the powers of government may be divided into four classes: — Those which belong exclusively to the States; Those which belong exclusively to the National Government; Those which may be exercised concurently and independently by both; And those which may be exercised by the States, but only with the consent, express or implied, of Congress.
"Whenever the will of the nation intervenes exclusively in this class of cases, the authority of the State retires and lies in abeyance until a proper occasion for its exercise shall recur. Gilman v. Philadelphia, 3 Wall. 713, 18 L.Ed. 96; Ex parte McNeil, 13 Wall. 240, 20 L.Ed. 625. The power of the States to tax the existing national banks lies within the category last mentioned."
The Congress gave limited consent to the taxation of National Banks, prescribing the conditions under which such banks could be taxed by the states. Numerous decisions support the doctrines announced in the last quoted decision; and the law applicable thereto has continued in effect at least until the year 1938 — if not until the present time, which we think it does.
In Gillespie v. Oklahoma, 257 U.S. 501, 42 S.Ct. 171, 66 L.Ed. 338, it was held, "A state may not impose a tax upon the net income derived by a lessee of restricted Creek and Osage Indian lands from sales of his share of oil and gas received under his leases." This case was decided in 1922, at the October term of the Court.
In Burnet v. Coronado Oil Gas Co., 285 U.S. 393, 52 S.Ct. 443, 76 L.Ed. 815, it was held that, "The United States can lay no tax on instrumentalities of state government."
In Union Bank Trust Co. v. Phelps, 288 U.S. 181, 53 S.Ct. 321, 322, 77 L.Ed. 687, 83 A.L.R. 1438, the
Court in its opinion, said, "The several states lacked power to tax national bank shares, except as expressly permitted by Congress. Owensboro Nat. Bank v. Owensboro, 173 U.S. 664, 668, 19 S.Ct. 537, 43 L.Ed. 850; Des Moines Nat. Bank v. Fairweather,263 U.S. 103, 106, 44 S.Ct. 23, 68 L.Ed. 191, [195]; First Nat. Bank v. Anderson, 269 U.S. 341, 347, 46 S.Ct. 135, 70 L.Ed. 295.
"This is enough to negative the idea that shares of national and state banks are essentially the same for purposes of taxation. And the Alabama Supreme Court has held that under her Constitution although the Legislature may have included them in the same class of taxable objects, there is permissible distinction between them. To accept the doctrine that as the states can only tax a federal instrumentality when permitted by Congress, therefore they cannot tax competitors of such instrumentalities within their general jurisdiction in some other fashion without violating the Fourteenth Amendment, would be both illogical and destructive of their proper independence. Such instrumentalities are exempted from state taxation without the express consent of Congress, by the Federal Constitution. They are of a class wholly distinct from the property of ordinary corporations or individuals, and this fact cannot be disregarded by the state."
In Oklahoma ex rel. Oklahoma Tax Comm. v. Barnsdall Refineries,296 U.S. 521, 56 S.Ct. 340, 80 L.Ed. 366, it was held that, "A tax levied by the state of Oklahoma on each barrel of oil produced in the state and used to defray the expenses of administering the state Oil and Gas Proration Law is not within the consent given by Act of Congress of March 3, 1921, authorizing the state of Oklahoma to levy a tax upon the gross production of oil by lessees of lands of the Osage tribe of Indians in Osage County, with the proviso that all taxes so collected shall be in lieu of all other state and county taxes levied upon the production of oil and gas as provided by the laws of Oklahoma, where such statute was enacted in
contemplation of the then existing production tax which was distributable in part to the counties and thus would be of benefit to the Indian owners of lands in Osage County."
In the case of New York ex rel. Rogers v. Graves, 299 U.S. 401, 57 S.Ct. 269, 81 L.Ed. 306, it was held that the Federal government may use a corporation as a means to carry into effect substantive powers granted by the Constitution; and that such corporation was immune from state taxation; and also that where a corporation is immune from state taxation as an instrumentality of the Federal government, fixed salaries and compensation paid to its officers and employees in their capacity as such are likewise immune. This decision was rendered at the October, 1936, term of the Supreme Court of the United States; and shows that up to that time, at least, states could not tax instrumentalities of the Federal government, except with the consent of Congress, and on conditions and to the extent prescribed by Congress.
All the decided law, therefore, at the time of the enactment of the statute here involved was to the effect that Federal instrumentalities were not taxed, and could not be taxed without the consent of Congress. And we must assume that the legislature enacted the statute here involved in the light of these decisions, and intended to conform to them; and its action must be interpreted in the light of these decisions.
The Legislature cannot be held to foresee that the Court would change its decisions, and legislative acts cannot be rightfully interpreted in the light of decisions rendered after the enactment of the statute.
The Sixteenth Amendment to the Federal Constitution, U.S.C.A., enlarged the power of Congress to levy income taxes without apportionment among the several states, and without regard to enumeration; but it did not confer upon the states any power, and their power remains as it existed prior to the Sixteenth Amendment.
We have gone elaborately into the decisions of the Supreme Court of the United States upon the subject involved, largely because of difference of opinion among the Judges of this Court. The conclusion reached is that the Legislature did not intend to tax income upon shares of national banks; and although this decision is reached by an equally divided Court, under the Mississippi law it is the decision of the Court. Robertson, State Revenue Agent v. Mississippi Valley Co., 120 Miss. 159, 81 So. 799, 801. In fact, the result of the decision in such case is concurred in by four judges, one of whom is the trial judge, who is charged with the duty of deciding a controversy originally, and whose opinion, when approved by half of the Judges of the Supreme Court, becomes the law, founded on sound reason and public necessity. The Supreme Court is composed of six Judges, and it will sometimes happen there is an equal division of opinion between the Judges in regard to the correctness of the holding of the trial court. It was said in the case of Robertson, State Revenue Agent v. Mississippi Valley Co., supra, in announcing the position of the Court in making such a decision an affirmative settlement of the law in the case, "Such a division of the court is liable to occur at any time; and there are so many cases in which, by reason of interest, consanguinity, or former connection with the controversy, some one judge is disqualified from sitting, that there would be constant liability to an equal division if the court consisted of an unequal number. If, therefore, a decision made may be disregarded by a circuit judge because not made by a majority, we have and can have no settled law for the state at large, and each circuit judge will determine for himself conclusively what shall be the law for his circuit, and may make it different from the law of the adjoining court. This would so much resemble a judicial scandal that I should deem it my duty to prevent it by yielding my own opinion when the same question should come up again, if yielding should be essential to prevent such a consequence.
The notion that there can be anything improper or opposed to good morals in a judge yielding his opinion when a proper administration of justice requires it is one I do not quite understand. Judges are certainly doing that every day; it would be a great mistake to assume that every judgment in which a court unites expressed in all respects the views of every concurring judge."
It must, therefore, of necessity be recognized that the decision of the court below, when approved by an affirmance, even by an equally divided court, had received the judicial judgment of four judges, all of whom are equally charged with the duty of administering the law in accordance with the Constitution. Such an opinion, then, may be written by the affirming Judges as supports the conclusion reached, which thereafter should be followed as a precedent, regardless of personal opinion. It frequently happens that personal and judicial opinion diverge, and sometimes lie far apart. But a judge should follow the judicial path, and act upon judicial opinion when the law has been settled. Often a judge of the appellate court would decide a case differently from his predecessors, were it a matter of original decision. There should be stability in the law; and if every judge followed his personal opinion, rather than the judicial opinion of his associates and predecessors, there would be no such thing as a settled rule. The public could not safely rely upon the advice of counsel, who must form his opinion upon the decisions of the Court. This Court has given protection to citizens from the effect of overruling cases, holding that transactions had or done under a construction making the act valid at the time it was done continue legal, although afterwards a change of decision was made by the Court. See Wisconsin Lumber Co. v. State, 97 Miss. 571, 54 So. 247; State v. Longino et al.,109 Miss. 125, 67 So. 902, Ann. Cas. 1916E, 371.
A majority of the Court are of the opinion that section 548, title 12 U.S. Code Ann., does not permit the
State to levy an income tax upon the dividends from shares of stock in national banks, because the state had elected to tax the shares of national banks on their value to the owners of such shares, as provided in the first division of said act of Congress; and that if such act of Congress was valid, the state was without power to impose an income tax upon such shares, as a part of his income tax.
Three of the Judges are of opinion that Congress was without power, under the Constitution, to forbid the state to levy an income tax upon the owners of such shares; that such power exists in the state, free from congressional control.
It is a serious thing to undertake to overturn a statute of the United States, passed by the Congress and approved by the President; and while it may be possible for Judges to so hold, we do not have the final decision in such questions. We think it unnecessary to go into a discussion of the constitutional power of the Congress to enact the statute here involved, but in view of the decisions already cited, which have not been overruled, so far as the taxation of national banks is concerned, we think we could not hold the act unconstitutional. That question should be reserved until it becomes absolutely necessary to so decide. Every reasonable doubt in regard to the constitutionality of the statute should be resolved in its favor.
It follows from these views that the judgment of the court below is affirmed.
Affirmed.