Opinion

Sappington v. Commissioner

  • 25 B.T.A. 1385
  • 1932 BTA LEXIS 1389
Court
United States Board of Tax Appeals
Filed
Apr 30, 1932
Status
Published
Author
McMahon
On the bench
Goodeioh, McMahon
Cited by
6 cases
Authority
More cited than 10.6%

The opinion

McMahon,

concurring: The correct result has been reached in this proceeding.

However, the majority opinion contains the following, to which I can not agree:

What a governmental function is depends not upon what was so considered at the time the Constitution was adopted, but upon the necessity of exercising the function today. Whether it is of general public concern is the criterion by which to determine what is a governmental function. Public needs vary with the changing conditions under which mankind finds itself. New scientific discoveries, new economic situations, new means of transportation, and increased complexity in social relations cause new governmental functions to become necessary to the welfare of society. Cf. Group No. 1 Oil Corporation v. Bass, 38 Fed. (2d) 680, 683.

The language which supports this view will be found at page 684 of the opinion in that case, which is the opinion of the District Court of the United States for the Western District of Texas. However, the Circuit Court of Appeals, Fifth Circuit, reversed the District Court (41 Fed. (2d) 483), and the Supreme Court of the United States affirmed the Circuit Court ( 283 U. S. 279 ). Neither the Circuit Court nor the Supreme Court approved the language used by the District Court.

The language used by the District Court is contrary to that of the United States Supreme Court in South Carolina v. United States, 199 U. S. 437, 456 , which is in part as follows:

* * * The exemption of the State’s property and its functions from Federal taxation is implied from the dual character of our Federal system and the necessity of preserving the State in ail its efficiency. In order to determine to what extent that implication will go ioe must turn to the condition of things at the time the Constitution was framed. What, in the light of that condition, did the framers of the convention intend should be exempt? [Italics ours.]

I am aware that there is some support for what the District Court said in Group No. 1 Oil Corporation v. Bass, supra, and for what is said in the opinion of the majority of the Board, in the opinion of Chief Justice Winslow, speaking for a majority of the court in Borgnis v. Falk Co., 133 N. W. (Wis.) 209, 215-216, which however, does not involve the question of an essential governmental function, the question involved in the instant proceeding and in South Carolina v. United States, supra.

What is said in the concurring opinions of Justices Barnes and Marshall in Borgnis v. Falk Co., supra, is supported by the case of South Carolina v. United States, supra.

I quote from the concurring opinion of Justice Barnes (pp. 222-3), as follows:

I concur in the opinion of the Chief Justice, except in so far as it is said in effect that our Constitutions may mean one thing to-day and something different to-morrow, depending on whether conditions and ideals have in the *1400 meantime undergone a change. I regard our Constitutions as immutable, except when changed in the manner therein prescribed. * * * To hold otherwise is to say that the courts may change our fundamental laws. This would be a clear usurpation of power, never vested nor intended to be vested in the courts, and one which was reserved to the people themselves. * * * I do not share the belief that our Constitutions have become archaic, or that they have outlived their usefulness. * * *

I quote also from the concurring opinion of Justice Marshall (pp. 223, 225) as follows:

* * * The fertile method of dealing with the Constitution has been eliar-a eterized as one which has “ furnished a mode of argument which would on the one hand leave the Constitution crippled and inanimate, or on the other give it an extent of elasticity subversive of all rational boundaries.” Story, Constitution, 389.

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If the Constitution is to efficiently endure, the idea that it is capable of being resquared, from time to time, to fit new legislative or judicial notions of necessities in praesenti, instead of new legislation being tested by it, must be combated whenever and wherever advanced, and wrong impressions in regard to the matter carefully guarded against. To even, significantly, speak of making the Constitution adaptable to new conditions by means of interpretation, when the selection of new and constitutional means, adaptable to such conditions, is meant, is liable to confuse and weaken that high regard all should have for the fundamental law as a broad, definite, certain, comprehensive, unvarying and unvariable system, other than by the means therein pointed out. Dark will be the day, if that day will ever come, for the people of this country, and dark to the people of all countries whose attention is directed here for lessons in constitutional government, when our system shall not be held up by the courts as speaking the same at one time as at another, except in so far as changes shall be made in the particular way. That is the doctrine of Marbury v. Madison, 1 Cranch, 137 , 2 L. Ed. 60 . No one can read that great exposition of our system without appreciating how illogical it is to speak of interpretation as an instrumentality for giving, from time to time, a different cast to the fundamental law. * * *

What Justices Barnes and Marshall said applies with equal, if not greater, force to the question as to what an essential governmental function is, which is involved in this proceeding.

To say that a “governmental function” “depends not upon what was so considered at the time * * * the Constitution was adopted ” and that present “ general public concern is the criterion by which to determine what is a governmental function,” is to disregard our Constitution.

For a discussion of what is meant by essential governmental function and a distinction between that and public use and public purpose, see T. P. Wittschen, 25 B. T. A. 46.

Furthermore, the reasoning of the majority opinion, set forth in the foregoing quotation, is unnecessary to sustain the result reached in this proceeding, since it appears clearly from that opinion that education was considered to be an essential governmental function *1401 at the time of the adoption of the Federal Constitution. This brings this proceeding within the language quoted from South Carolina v. United States, supra.

In the light of the foregoing discussion, I address myself further to the question as to whether petitioner was engaged in the performance of an essential governmental function.

In Vestal v. Pickering, 267 Pac. (Oreg.) 821, at p. 823, it is stated by the Supreme Court of Oregon: “ It must be conceded that under our form of government the conduct of the public schools is a governmental function.”

The real question before us is as to whether the governmental function in question in this proceeding is an essential one.

In Veazie Bank v. Fenno, 8 Wall. 533 , it is stated:

* * * that the reserved rights of the states, such as the right to pass laws, to give effect to laws through executive action, .to administer justice through the courts, and to employ all necessary agencies for legitimate purposes of state government are not proper subjects of the tawing power of Congress. [Italics ours.]

In Trustees of Dartmouth College v. Woodward, decided in 1819, 17 U. S. 517, at p. 632 , the Supreme Court of the United States, speaking through Chief Justice Marshall, used this significant language:

That education is an object of national concern, and a proper subject of legislation, all admit. That there may be an institution, founded by government, and placed entirely under its immediate control, the officers of which would be public officers, amenable ewolusively to government, none will deny. [Italics ours.]

Apparently, this was said in response to the argument of counsel for the defendant in error in that case at p. 600, as follows:

The education of youth, and the encouragement of the arts and sciences, is one of the most important objects of civil government. Yattel lib. 1, c. 11, Sections 112-13. [Italics ours.]

An argument of similar import, but more elaborate, is found in the following excerpt from the brief filed in this proceeding by counsel for the University of Illinois as arnica curiae and concurred in by the Attorneys General of Illinois, Iowa, Kansas, Kentucky, Minnesota, Mississippi, Montana, Nebraska, New York, North Dakota, Ohio, and Texas:

* * * general enlightenment is one of the first conditions of permanent and successful democratic government. Education everywhere concerns the state; but in a republic, where all ultimate power rests in the citizen, expres-ing his will through the instrumentality of a secret ballot, it is simply impossible to overestimate the importance of his bringing to the task of casting his ballot a large measure of cultivated intelligence and correct information. Ignorance and indifference are the two arch enemies of free institutions. Both can be routed if our public school system fulfills its promise. * * *

*1402 This is a compelling reason for the conclusion that the education by a state of the citizens of a state is an essential governmental function.

As stated in South Carolina v. United States, supra, at p. 448:

* * * We Rave in this Republic a dual system of government, National and state, each operating within the same territory and upon the same persons; and yet working without collision, because their functions are different. There are certain matters over which the National Government has absolute control and no action of the State can interfere therewith, and there are others in which the State is supreme, and in respect to them the National Government is powerless. To preserve the even balance between these two governments and hold each in its separate sphere is the peculiar duty of all courts — preeminently of this — a duty oftentimes of great delicacy and difficulty.

Thus, to the extent that there is reserved to the state, under the Federal Constitution, control over the subject of education, the state is supreme and “the National Government is powerless.” That there is reserved to the State of Maryland the power to do what it did upon the subject of education, as appears from the facts in this proceeding, is not questioned here and can not be successfully challenged.

Since the state, like the Federal Government, is supreme, each within its sphere, as pointed out by the United States Supreme Court, it follows irresistibly that each state must have reasonable latitude in the exercise of its powers, functions and duties and also similar latitude in determining what governmental functions are essential and when and how and by whom and by what instru-mentalities they will be performed, subject to such limitations as those pointed out in Pierce v. Society of the Sisters, 268 U. S. 510 , which have no application here. Otherwise, what is said by the United States Supreme Court in the above quotation would have little, if any, meaning.

Furthermore, the Federal Government should accord very great respect to a state when a state is acting within its sphere; and should not disturb such action of the state unless clearly not well founded. Cf. Jones v. Portland, 245 U. S. 217 , and Fall Brook Irrigation District v. Bradley, 164 U. S. 112 .

In Jones v. Portland the United States Supreme Court said (p. 221) :

The act in question has the sanction of the legislative branch of the state government, the body primarily invested with authority to determine what laws are required, m the public interest. [Italics ours.]

In Fall Brook Irrigation District v. Bradley, 164 U. S. 112 , the United States Supreme Court said (p. 160) :

For these reasons, while not regarding the matter as concluded by these various declarations and acts and decisions of the people and legislature and *1403 courts of California, we yet, in the consideration of the subject, accord to and treat them with very great respect, and we regard the decisions as embodying the deliberate judgment and matured thought of the courts of that State on this question. [Italics ours.]

While each of these cases deals with the question of a public use, I see no reason why the reasoning in them should not apply with equal, if not greater force, to the exercise by a state of an essential governmental function, such as is involved in this proceeding.

It is obvious from the facts in this proceeding that the State of Maryland determined that the education offered by the University of Maryland and its law school was essential. Among other things, it levied taxes and used funds derived therefrom for the maintenance and operation of such university and law school. It can not be said that in these respects it has exceeded that reasonable latitude to which it is entitled in the performance of its essential governmental functions.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.

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