Appellees, taxpayers and owners of cattle in Montgomery County, filed a bill in equity for declaratory judgment and respondents filed demurrer. Demurrer of appellants was overruled and counsel for both parties stipulate that the facts alleged in the bill are true, and that the questions for decision are solely questions of law which may be determined from appellees' bill for declaratory judgment.
The circuit court rendered a decree construing the statutes involved in accordance with appellees' contentions. From that decree, this appeal is taken and the rulings of the circuit court are assigned as error.
The question regarding the existence of a justiciable controversy was raised by the demurrer. In overruling the demurrer, the trial court held that such a controversy did exist. The correctness of this ruling is one assignment of error, but we pretermit consideration thereof because appellants state in brief:
The appellants, as tax officials, contend that all cattle are subject to ad valorem tax by virtue of the provisions of Title 51, § 21(e), Code 1940, except as specifically exempt under Title 51, § 2(j), Code 1940.
Appellees contend that all cattle raised on the farm in the hands of the original producer are "products raised on the farm in the hands of the original producers" within the meaning of Title 51, § 21(d), Code 1940, and that cattle remaining in the hands of the original producer thereof are "agricultural products" within the meaning of Title 51, § 2(h), Code 1940. Appellees further contend that cattle which have been raised or grown in the State of Alabama and which remain in the hands of the producer thereof, or his landlord, or in the hands of a co-operative association for all time, and for a period of one year in the hands of the purchaser of said cattle, are exempt from ad valorem taxation under Title 51, § 2(h), Code 1940
The decree appealed from recites that it is:
The above rulings of the circuit court are assigned as error and argued on this appeal. The sole question for decision by this court is the correctness of the above rulings of the circuit court.
Paragraph 1. of the decree below declared that cattle raised on the farm in the hands of the original producer are products raised on the farm in the hands of the original producer and are therefore tax exempt, within the meaning of Subsection (d) § 21, Title 51 Code 1940.
The pertinent subsections of § 21, Title 51 Code 1940, recite as follows:
The subsections quoted above from the 1940 Code are the same, without any material change, as Subsections (d) and (e) of § 10 of Act No. 194, Acts 1935, page 256, entitled "An Act To Provide For The General Revenue Of The State of Alabama."
Stripped of phrases and clauses not essential to this decision, the pertinent provisions of Subsections (d) and (e) of § 21, Title 51 Code 1940, read as follows:
Subsection (d) which is set out above, as it appears to us, is clearly intended to relate to the assessment of "all stocks of goods, wares and merchandise," kept for sale, etc. The proviso of said Subsection (d) relied on by appellees, appears at the end of a sentence which begins with the words "All stocks of goods, wares and merchandise."
The next and last sentence of the subsection provides that in the event the person "carrying on such business shall fail to make return of the amount of stock of goods, wares and merchandise as provided by law, or if the county tax assessor is not satisfied with the return made, * * *," he may proceed in the manner there indicated to obtain information so as to assess the "amount of such stock of goods, wares or merchandise" upon his best judgment.
It appears to us that this subsection was intended by the legislature to deal with a mercantile business. The subjects of taxation mentioned therein are designated by words commonly used to designate the articles or assets owned by persons engaged in the mercantile business or operating a retail store. The subsection provides "* * * this shall include all goods, wares and merchandise kept on plantations or elsewhere, * * * for sale or to be dealt out to laborers or employees for profit, or on account of their wages, * * *."
We think it plainly evident that it was not the intention of the legislature to include "live cattle" in the assessment exemption proviso therein set out. It would appear unreasonable to conclude that live cattle would be a part of the "goods, wares and merchandise" of a mercantile establishment.
Bacon, corn meal, syrup, lard or side meat produced on the farm, might appear in the stock of goods of the plantation store. By the quoted proviso, the legislature intended to exempt from ad valorem tax, such products made from animals and crops produced and processed on a farm, and carried in the stock of goods in the farm store. It does not follow, however, that the legislature intended, by this proviso, to exempt the live animals on such farms from ad valorem tax. Live cattle on the farm would not ordinarily appear in the inventory of a plantation store." * * * all cattle" not specifically exempted would be assessed and taxed under Subsection (e) of § 21.
The record of the origin and history of Subsection (d) of § 21, Title 51, supports and confirms the foregoing conclusion.
Act No. 1, Acts of 1865-66, page 3, in § 2 recites in pertinent part:
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The foregoing provision taxing stocks of goods, wares, and merchandise, including merchandise on plantations, has been carried forward in many subsequent legislative acts. See: 1866-67 Acts, page 259; 1868 Acts, page 297, § 6(4); 1874-75 Acts, page 3, § 5(4); 1875-76 Acts, page 43, Chapter III, § 4(4); Act No. 61, 1882-83 Acts, page 67, § 5(4) adds the provision that the tax shall be apportioned according to the date when the business commenced, and in pertinent part recites as follows:
The Supreme Court held Act No. 61, supra, void for reasons not here important, but the provisions quoted from § 5(4), supra, were carried without substantial change into 1884-85 Acts, page 3.
Act No. 559, 1894-95 Acts, page 1162, introduced for the first time, so far as we have found, the proviso here important, which is to the effect that the assessment shall not include products raised on the farms in the hands of original producer, and in pertinent part recites:
Later acts repeated these provisions, without substantial change, but did change the method of valuation with reference to invoice price and capital employed. See: 1898-99 Acts, pages 48, 164; 1903 Acts, page 184; 1915 Acts, page 386; 1919 Acts, page 282; and the language in § 10(d) of 1935 Acts, page 256, is identical, except for spelling, with Subsection (d) of § 21, Title 51, Code of 1940, which is presently the law in point in the instant case.
Paragraph 1. of the decree appealed from, held that cattle in the hands of the producer are exempt from ad valorem tax within the meaning of Subsection (d) of § 21. For the reasons set out, we are of opinion that this was error.
Paragraphs 2. and 3. of the decree appealed from rest on a construction of Subsection (h) of § 2, Title 51, Code 1940, and declare that cattle in the hands of the original producers, and for one year in the hands of the purchaser of said cattle, are argicultural products within the meaning of Subsection (h) of § 2, and are, therefore, exempt from ad valorem taxation.
The correctness of this holding depends on a construction of Subsection (h) of § 2, in its proper relation to the other provisions of the tax laws. In undertaking this construction, we are to be guided by certain principles and rules of statutory construction. We will hereinafter set out those thoughts to be applicable to the instant case.
The fundamental rule of construction of statutes is to ascertain and give effect to the intention of the legislature as expressed in the statute. This rule hardly
The decree below determined that the term "agricultural products," as used in the statute, included cattle. We have no difficulty in agreeing that the term "agricultural products" may properly be construed to embrace cattle when the intent to include cattle appears from the time, manner, and place in which the term is used. Likewise, horses, mules, hogs, sheep, goats, poultry, and other animals produced on the farm might be included within the meaning of the term "agricultural products," when such an intent appears to be the sense in which the words "agricultural products" are employed. See Dillard v. Webb, 55 Ala. 468.
The question here to be determined, however, is not merely: Does the term "agricultural products" include cattle or livestock, as an abstract proposition, but, as aptly stated by the trial court, the question is:
In seeking the answer to this question, Subsection (j) of § 2 cannot be ignored.
Pertinent subsections of § 2 of Title 51, Code 1940, recite as follows:
If that were the legislative intent as to the livestock enumerated in Subsection (j), the legislature could have easily so expressed that intent by the insertion of the words, "raised by any person," or words of like effect, in Subsection (j).
The legislature did that in § 2 in two instances, in dealing with items which in dealing with items which would be "agricultural products" within the meaning of that term as contended for by appellees.
Subsection (h) expressly provides that "cotton" raised or grown in Alabama, in the hands of the producer shall be exempt. Subsection (i) lists as an exempt article "All cotton, wherever grown, stored in licensed warehouses in the State of Alabama for a period not exceeding twelve months."
Under appellees' definition of "agricultural products," poultry would be included, and if appellees are correct, poultry in the hands of the producer would be exempt under Subsection (h). Yet the legislature expressly dealt with the exemption of poultry under Subsection (o), which specifies as exempt:
If the legislature did intend to create two classes of exempt livestock, as contended by appellees, we can only conclude that the language of the statute fails to express that intention.
§ 2 of Title 51, however, is not a statute levying taxes, but is a statute granting an exemption from taxes. To statutes of this kind, a different rule of construction applies. This court has said:
This rule has also been expressed in the following language:
See also, Title Guarantee Loan & Trust Co. v. Hamilton, 238 Ala. 602, 604, 193 So. 107, 108, where the court said:
The reason for the rule of strict construction against exemptions was stated by this court speaking through Gardner, C. J., as follows:
Appellees appear to concede that the statutes under construction are ambiguous, at least to the extent of sustaining the right of appellees to have a declaratory judgment in this case. We quote from appellees' brief:
A further principle of construction is due to be applied to Subsections (h) and (j) of § 2.
Speaking through Livingston, J., now C.J., this court has said [250 Ala. 328, 34 So.2d 137]:
According to this rule of construction, where a statute enumerates certain things on which it is to operate, the statute is to be construed as excluding from its effect all those things not expressly mentioned. 82 C.J.S. Statutes § 333, p. 666.
This rule of construction is not a technical or arbitrary rule. It is applied by people in all walks of life every day in their ordinary affairs. Perhaps the best illustration can be drawn from traffic signals.
At street intersections, motorists frequently encounter a traffic sign which recites: "NO LEFT TURN." Such a sign does not mention "RIGHT TURN," yet, the motorist immediately infers that right turns are permitted at such an intersection because they are not mentioned on the sign, and, therefore, are intended to be excluded from the prohibition expressly stated against left turns. If both right turns and left turns are prohibited, the sign recites "NO TURN."
Another common sign at intersections is "TURN RIGHT ON RED." LEFT TURNS are not mentioned, but the motorist
Subsection (e) of § 21, levies ad valorem tax on all cattle and horses, mules, studs, jacks, jennets, hogs, sheep, and goats, "except as specifically exempted."
Subsection (j) of § 2 specifically exempts from ad valorem tax: two mules or two horses, two cows, two calves, ten hogs, twenty sheep, and twenty goats.
By these two subsections, the legislature has clearly expressed an intent that the specified numbers of animals therein named shall be treated as tax exempt. The ordinary and reasonable inference is that all animals of the kinds taxed, in excess of the number expressly exempted, shall receive tax treatment opposite and contrary to the treatment accorded to the specified numbers declared exempt.
As applied to cattle, these Code sections clearly express a legislative intent to exempt from taxation the four head of cattle there specified, that is, two cows and two calves. The reasonable inference, therefore, is that the legislative intent was not to exempt any cattle not expressly exempted, and that all cattle of one owner in excess of two cows and two calves are subject to ad valorem tax.
We are unable to conclude that the statute clearly expresses a legislative intent to exempt from taxation all cattle in the hands of the original producer, or that appellees have supported the burden which they assumed when they undertook to establish their right to the tax exemption which they have claimed.
History of Subsecs. (h) and (j), § 2, Title 51
"The genesis of the statute here involved * * * may be looked to in aid of its construction." Baggett v. Jackson, 244 Ala. 404, 13 So.2d 572, 573; Acme Freight Lines v. City of Dothan, 242 Ala. 468, 6 So.2d 595.
The earliest Alabama statute taxing or exempting cattle appears to be an act approved December 27, 1822, Acts of 1822, page 98, which in pertinent part recites:
Later tax statutes followed the same pattern and taxed all cattle owned by any one person in excess of a specified number. See Acts of 1843, page 3; Acts of 1848, page 3; Acts of 1849-50, page 3; Acts of 1862, page 3; and Acts of 1865-66, page 3.
Act No. 260, Acts of 1866-67, page 259, levied a tax "On all cattle on the excess over five head," and contains an exemption proviso as follows:
Act No. 1, 1868 Acts (November Session), page 297, exempted from taxation "To every head of a family personal property to the value of five hundred dollars," and required every person to make a statement
Act No. 1, 1875-6
Act No. 1, approved March 6, 1876, 1875-6 Acts, page 43, entitled "An Act To establish a Revenue Code for the State of Alabama" set the pattern for revenue acts, which has been followed up to the present time with respect to ad valorem taxation of cattle and other farm animals.
The pertintent provisions of said act are as follows:
"Chapter II.—Exemptions From Taxation.
These sections of the 1875-6 Act clearly express an intent that all cattle shall be taxed, except "so much thereof is exempt * * * under the provisions of section one of chapter two." 1 yoke of oxen and 2 cows and calves are exempt under section one of chapter two. Therefore, under this act, all cattle except the number of oxen, cows, and calves, expressly mentioned in section one of chapter two were subject to taxation.
Chapter II of said Act No. 1 listing tax exempt property was codified as § 358, Code of 1876.
The provisions of § 4 of Chapter III of said act setting the tax rate at seventy-five cents per one hundred dollars was changed by the legislature before the 1876 Code was completed. By an act approved February 8, 1877, Acts of 1876-7, page 3, the tax rate was set at seven-tenths of one percent, and the latter act was codified as § 368 of the 1876 Code.
§ 362(5) of the 1876 Code requires a listing for taxation of "all cattle, horses, mules, studs, jacks and jennets and race horses; all hogs, sheep and goats," in the exact language of said Act No. 1, 1875-6 Acts, page 43.
With respect to the matters with which we are here concerned, the levying and exempting provisions of the 1876 Code are the same as Act No. 1, 1875-6 Acts, page 43, except for the omitted exception as hereinabove noted.
We are of opinion that the intent and meaning of said Act No. 1 was carried into the 1876 Code in so far as the number of cattle exempted from taxation is concerned. Under that Code, all cattle, except the number specifically exempted, were subject to ad valorem tax.
The provisions of Act No. 1, 1875-6, levying a tax on cattle and other livestock, and exempting two cows and calves, hogs, goats and sheep have been carried into later acts and finally into the Code of 1940, Title 51. See Acts of 1882-83, page 67; Acts of 1884-85, page 3. The provisions levying a tax on "all cattle, horses * * *." etc., of § 4 of Chapter III of Act No. 1, Acts of 1875-6, constitute the origin of that provision of Subsection (e) of § 21 of Title 51, Code 1940, which levies tax on all cattle, etc.
Act No. 328, General Acts 1919, page 282, employs the words: "except as specifically exempted," in the tax levying provisions of that act, in the same manner as said words appear in § 21(e), Title 51, Code 1940. In pertinent part, said Act No. 328 recites as follows:
We are of opinion that the words "except as specifically exempted," which appear in Subsection (e) of § 21, immediately following the word, "goats," have the same meaning and effect as the words "except when so much thereof is exempt from taxation under section one of chapter two of this act," as the latter words appear in said Act of 1875-6.
The term "agriculture products" appears to have been used for the first time in two legislative acts which were approved on the same day, December 11, 1886.
Act No. 4, Acts of 1886-87, page 31, amended certain sections of the revenue act of December 12, 1884, and in particular amended the exemption section (which is the progenitor of Subsection (j) of § 2, Title 51), in the part here pertinent, to read as follows:
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The exemption statute has treated "two cows and calves" in a generic class separate from "agricultural products" since the first use of the latter term in the exemption statute.
The Senate Journal, 1886-87, page 318, shows that on consideration of the bill which became Act No. 4 of that session of the General Assembly, the Senate inserted the term "agricultural products" by amendment as follows:
The term "agricultural products" was also used by the 1886-87 General Assembly in another exemption statute, Act No. 333 (H.B. 20), 1886-87 Acts, page 757. We must presume the same term had the same meaning in both Acts No. 4 and No. 333, for a different intent does not appear.
H. B. 20, as first introduced, was entitled "An Act To exempt cotton in the hands of producers from Taxation," and, as first presented, provided exactly for the purpose expressed in its title, and no more.
The House and Senate Journals show that this bill was amended during passage. It appears to have been a controversial bill.
H. B. 20, referred to ways and means committee, at first received an adverse report. H. J., 1886-7, page 1181. On November 29, 1886, the bill was read in the House for a third time and lost, yeas 42, nays 49. H. J., 1886-7, page 255.
On November 30, 1886, the vote was reconsidered, and several amendments offered, all of which were withdrawn or lost in the House, except one, which was later stricken out by the Senate substitute. A motion was made to recommit, and also to refer to a select committee.
After passage by the House, H. B. 20 was sent to the Senate, where a substitute reciting as follows was passed:
The House concurred in the Senate substitute which became the final form of the act approved by the Governor.
The legislature which originated the exemption for "agricultural products" retained the older express exemption of certain animals in specific numbers and amounts, as such specific exemption appeared in previous statutes, and as the same appears in later statutes, even to this day.
Any argument that the legislature of 1886-87 expressed an intent to create two
This continued specific exemption of a certain number of named animals, we must conclude, was not inadvertently done.
We are told that it is our duty to ascertain the meaning of the words at the time they were used by the legislature, and to give the words that same meaning now unless the meaning has changed since that time.
This rule has been pronounced by this court as follows:
The provisions of Act No. 333, exempting "cotton" appears in Subsection (8), § 3907, Code of 1896, where exemptions from taxation are listed. Between the 1886 and 1896 Codes, however, pig iron was added as a tax exempt article, and is listed as exempt in § 3907(8), Code of 1896.
See Act No. 659, § 38, Acts of 1896-97, page 1489, approved February 18, 1897.
Act No. 909, page 122, approved February 23, 1899, exempts "cotton and other agricultural products" and pig iron in hands of producer, and adds new exemption for said articles "in the hands of purchaser," purchasing same for prompt shipment.
See also Acts of 1903, page 184, of like import. The quoted exemptions for cotton and pig iron were carried into Code of 1907 as § 2064, separate from the old exemption provision which is Subsection (8) of § 2061, Code of 1907.
Act No. 464, Acts of 1915, page 386, carries forward the older exemption section and also the separate exemption section for cotton, agricultural products, pig iron and manufactured articles.
In Act No. 328, Acts of 1919, page 282, the exemptions for cotton, agricultural products, and cows, calves, etc. were combined in Subsection (g) of § 2 which exempted:
"(g) All cotton or other agricultural products which were raised or grown during the current or preceding calendar year, and which shall remain in the hands of the producer thereof, or his landlord, or in the hands of the purchaser purchasing the same for prompt shipment; provisions and supplies on hand for the current year for the use of the family and the making of the crop; all wearing apparel; farming tools to the value of twenty-five
Pig iron and manufactured products were removed to Subsection (i) of § 2.
See Act No. 172, Acts of 1923, page 152 (H.294 Tunstall).
1933 Acts, Extra Session, page 8, and 1935 Acts, page 256, §§ 2(i) and 2(j), are substantially the same as § 2(h) and (j) of Title 51, Code 1940.
We are not convinced that the intent and meaning of "agricultural products" has changed since 1886; and are further of the opinion that in 1886, as used in the exemption statutes, agricultural products did not include cattle. The same language appears in Subsection (h) of § 2, Title 51, and it is, therefore, our duty now to give that language the original meaning and intention it bore when first used by the law-making power.
We are, therefore, of the opinion that the term "agricultural products" as used in Subsection (h) of § 2, Code 1940, was not intended by the legislature to embrace cattle within the exemption there declared. On other occasions when the legislature intended to include "livestock" within the definition of "agricultural products," the intention so to do has been clearly expressed in unambiguous terms. Title 2, §§ 85 and 130, Code 1940.
We have given careful consideration to the statutes here in question, and are not convinced that the statutes show in clear and unambiguous terms that appellees are entitled to the exemption claimed.
The decree appealed from is not in accord with the opinions herein expressed and is reversed.
The parties have indicated that the only questions to be decided on this appeal are questions of law. It does not appear that the bill of complaint can be amended so as to arrive at a different result.
Therefore, a decree is here rendered declaring that all cattle owned by appellees are subject to ad valorem tax except as specifically exempted therefrom by Subsection (j) of § 2 of Title 51, Code 1940.
This court has no power to amend the tax statutes or the exemption statutes. The power to make the law has been committed to the legislature by the Constitution. The only power of this court is to declare the law as enacted by the legislative branch of government. Constitution of 1901, §§ 42, 43, 44 and 212.
This court has pronounced the following well established principles:
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LIVINGSTON, C. J., and SIMPSON and GOODWYN, JJ., concur.