
    
      The State, ex relatione Tait and Meggett, v. R. Elfe, City sheriff.
    
    The year’s income which a citizen of Charleston is bound to return for taxation, by the 20th of April, every year, is the income of the preceding and not of the current year.
    No buildings within the City of Charleston, whether on leased lands or not> were made liable, by the City Ordinance of 1844, to taxation, apart from and independently of the lands on which they stand, except such as were therein specially subjected to such taxation.
    
      Before Wahdlaw, J. at Charleston, May Term, 1848.
    Under pleadings in prohibition, questions were presented concerning the liability of the relators to certain taxes under Ordinances of the City Council of Charleston.
    An Ordinance of March, 1844, imposed taxes on lands, «fee., “which shall be payable by the persons who were owners on the first day of January, and taxes upon income &c., of which a true return shall be made to the City Assessor, by the 20th day of April,” and directed that for any default or omission in the return required, there should be a doubling of the tax, of which a list should be delivered by the Assessor to the Treasurer, on or before the 15th day of August, whereupon the Treasurer shall issue executions for the double tax, to be enforced by the City sheriff.
    An Ordinance, re-enacting the taxes for the preceding year, was passed in March, 1845, which exempted from taxation “the income of a mechanic, arising from the trade he pursues,” and specially subjected to taxation, independent of the land, those buildings which stood upon lands of certain societies, leased for five years or more.
    The relators became partners in the business of compressing cotton bales by means of a screw propelled by steam power, and in 1844 they erected a building for carrying on their business, on Duwees’ wharf, wherein they commenced to compress about 15th January, 1845. They had a contract with Dawes and others, owners of the wharf, which was afterwards expressed in a lease, dated June, 1845, whereby a piece of ground on the wharf was demised to the relators, with the right for them to erect thereon a steam cotton press and necessary buildings, for three years certain, and two years more at their option, they paying $1,500 per annum. At the expiration of the two years, the buildings to be taken by the lessors upon certain terms; if the contract should end at the expiration of three years, the lessees to have liberty to move the buildings; it being specified that the lessees should quietly enjoy, “free from State and City Taxes.”
    The City Assessor applied to Tait,. on the premises, in January, 1845, concerning the assessment of the buildings. Tait said, very well. Nb return having been afterwards made, the Assessor applied again — objection was made to the tax on the income. The Assessor assessed the buildings at $5,000, and the income at $10.000; the taxes at the rate of 50 cents per hundred dollars, fixed by the ordinance, came to $75; and the execution was issued for $150, double the amount. The relators desired that the collection of this execution should be prohibited, and objected to the tax on the income.
    1. That the Ordinance intended to include only such income as had been received prior to the first of January preceding ; whereas, here, the business from which the income was supposed to have proceeded, had not begun till after the 1st of January.
    2. That there was no income — the expenses having exceeded the profits.
    3. That the business of compressing cotton was a mechanical pursuit, which was exempted from taxation.
    To the tax on the buildings, they held themselves not to be liable, because lands only were taxed, and for the taxes on lands, the owners of the lands were liable.
    Some evidence was offered.
    Mr. Lopez gave his opinion, that pressing cotton was a mechanical pursuit, but he did not know that either of the relators was a mechanic.
    The City Assessor testified that there were two other steam presses within the City, both of which paid the tax on income in 1845 — but the owners of saw mills and rice pounding mills in the City have not paid that tax, calling themselves mechanics. Further, that the value of the land (exclusive of the buildings) had been included in the assessment of the wharf, which was made in fixing the tax paid by the land owners.
    It appeared that in 1845 the business of the relators stopped, and the buildings passed into other hands. A statement, made by an accountant, showed that the losses and expenses, deducted from the gross receipts, left about $2,700; from which various claims, some of which were disputed, were to be met. If all the claims should be paid, there would be a final loss of $600.
    The Circuit Judge held, that the relators were not mechanics pursuing a trade, in contemplation of the Ordinance ; that they were bound, by 20th day of April, 1845, to have returned their estimated income for the current year, and for default thereof, were liable to a double tax on the assessment which had been made, whether there had been any nett profits or not — and that the buildings were not liable to the tax, distinct from the land.
    
      city Laws ¡282. ’
    A verdict was found accordingly, and both parties appealed. The defendant moved for a new trial, because his Honor charged the jury, that under the Ordinances of the Council, the buildings and machinery of the relators, upon leased land, could not be assessed for taxation apart from and independently of the land.
    Portee, City Att’y.
    RELATORS’ GROUNDS OP APPEAL.
    1. That the year’s income, which the citizen is required to return by the 20th of April, every year, is the income of the preceding year, not of the current year; and his Honor erred in charging the jury differently.
    2. But supposing the Ordinance to have reference to the income of the current year, the relators were not liable to this tax, for the following reasons.
    1. That the bitsiness of compressing cotton is a mechanical pursuit; and they were mechanics, in contemplation of the Ordinance, and not liable to taxation on their income at all; and his Honor should have so charged the jury.
    2. That the relators did not commence business till the last of January, and cannot be subjected to the double tax assessed against them; which, under the Ordinance, is a penalty for not returning what was taxable on the 1st. of January.
    3. That there was, in fact, no income: the profits having been absorbed by the expenses, and his Honor erred in charging the jury that that made no difference.
    
      Petigru and Lesesne, Attorneys for Relators.
   O’Neall, J.

delivered the opinion of the Court.

The first question in this case, is that which is made by the City attorney, on the question whether the buildings and machinery of the relators, upon leased land, can be assessed for taxation. That they can be, under a properly worded Ordinance, is not and cannot be denied. But whether under the Ordinance now before us they are so liable, is another question. The Ordinance of’44, which is that under which the assessment is made, provides that “every house, building, lot, wharf or other land or estate ; also every building, house and improvement, owned, erected or held by any individual or individuals on land under a lease for a term of five or more years, from a religious, charitable or literary society, shall be and is hereby made liable to a tax of forty five cents on every hundred dollars of the full value thereof.”

What is meant by the words, house, building ? Do they mean the house or building as separate from the ground on which they respectively stand: or do they comprehend it 1 I think the construction might be either way, were it not for the other words used, “or other landed estate.” These show that the previous words must have been used in the same sense, as descriptive of different kinds of “landed estate.” If this be true, then the words house or building mean an improved lot of land, as contradistinguished from “lot,” another designation of land, made by the Ordinance. The subsequent part of the Ordinance, making liable to taxation buildings standing on land not liable to taxation, strengthens much this view. I am therefore satisfied with the decision of the Judge below on this point.

The next and only other question which I propose to consider is whether the relators were liable to be double taxed for not returning their income. They began their business in January, 1845. It is under the tax Ordinance of 1845, passed in March, that they are supposed to be liable. The 5th sec. of the Ordinance of ’44 defines this matter of income, which is liable to future taxation. It declares, “all the gross profit or gross income, arising from the pursuit of any faculty, profession or occupation, trade or employment, or from the purchase of bonds, (except those hereafter excepted,) whether in the profession of the law, the profits derived from the costs of suit, counsel fees, or other sources of professional income, and on the amount of commission's received by ven-due masters, or other persons vending goods, wares or merchandize, or real and personal property on commission, shall be liable to a tax of fifty cents on every hundred dollars: provided, however, that nothing herein contained shall be so construed as to subject to taxation the profit or income of any mechanic arising from the work and labor of the particular trade he pursues,” &c. What is meant by “gross profit or gross income arising,” &c ? Do they mean the gross profit or gross income arising in the current year; or do they mean the gross profit or gross income arising from the business of the past year ? This last is, I am persuaded, the true meaning of the words, in every way in which they can be considered. What is profit or income ; some possibility yet to arise; or something which has been realized? Can there be two opinions about it ? Many engage in business, like the relators, and expect to realize wealth, when, instead of it, they experience loss ! Is it gross profit or income to be $600 less than all the receipts? Neither the Judge below, nor the City attorney, has maintained such a proposition. Indeed any one who would talk of such a result being profit or income, would be wiser or madder than all the rest of his race.

Take the words of the Ordinance; they in every instance import a past and not a future sense. The profit or income arising from the pursuit of any faculty, profession or occupation, trade or employment, whether in the profession of the law the profits be derived from the costs of suit, counsel fees or other sources of professional income, is declared liable to the tax. Let us pause here for a moment; how can there be income to be derived from costs of suit, counsel fees or other' sources of professional income hereafter to arise? We may-very well know how much a lawyer in the past year may have received from tax costs, counsel fees, or conveyancing. But what income he is to have from cases to be brought, advice to be given, or conveyances to be prepared, is too much an affair of guess, and depending on other wills than his own, to be called income! Again, the tax is to be on gross profit and income “on the amount of commissions received by vendue masters or other persons vending goods, wares or merchandize, or real and personal property on commission.” How is this to be ascertained. The Ordinance tells us it is on the commissions received and not on those to be received. In another portion of this section, the tax is to be levied on the gross profit, and income, “from the purchase of bonds.” What is meant, bonds to be bought, or on bonds bought ? clearly, purchase, means, title acquired. The only word, in the whole section, which does not indicate a past sense, is the word “arising.” That might, if a tax could be levied on every tittle of income as it arose, import a present sense. But such cannot be; and it may have been used in a past, as well as a future sense. It may be considered that the council used it in this sense, “gross profit or income of the past year, arising from the pursuit,” <fcc. This is no strained meaning of the words, and may be very well adopted.

1 McMull. 410.

Taxes both in the State and City are levied on persons and property in a past sense. The fiscal year of the State begins the 1st of October, that of the City the first of January. Whatever is liable to taxation, found in the hands of any one, at either of these periods, is to be returned. Real and personal property is so returned, and so must income be returned, under the Ordinance of the City. It is the income of the past year, realized and ascertained before the first of January of the current year, which can be returned ; and if this be not done, within the time required by law, the City assessor may assess, and a double tax follows. But these re-lators had no income to return. They began their business after the time to which the tax relates. The case of Carter v. Burger, tax collector, is an authority of our Court in the last resort, that a tax may be levied of future operations, if the words clearly shew that was the intention, otherwise it would be levied, as is usual, of what has been done in the past year. In this case, there are no words which shew that the City intended to levy a tax on a conjectural estimate of what might be a man’s profits, in his business for the current year.

These views dispose of the whole subject in controversy; it is therefore thought better to end it, by setting aside the verdict, and ordering the writ of prohibition, which is accordingly done.

Richardson, J. — Evans, J. — and Withers, J. — concurred.

Frost, J. —

concurred in the conclusion, respecting the tax on income, but not respecting the tax on the houses.

Verdict set aside, and writ of prohibition ordered.  