City of Minneapolis v. Armson

• Citation: 188 Minn. 167,246 N.W. 660
• Decision Date: 03 February 1933
• Docket Number: No. 29236.,29236.
• Parties: CITY OF MINNEAPOLIS v. ARMSON et al. (WORMAN MOTORS, Inc., et al., Interveners).
• Court: Minnesota Supreme Court

246 N.W. 660

188 Minn. 167

CITY OF MINNEAPOLIS v. ARMSON et al. (WORMAN MOTORS, Inc., et al., Interveners).

No. 29236.

Supreme Court of Minnesota.

February 3, 1933.

Appeal from District Court, Hennepin County; Levi M. Hall, Judge.

Action by the City of Minneapolis against J. A. Armson and others, in which the Worman Motors, Inc., and others intervened. From an order overruling interveners' demurrer to the complaint, the interveners appeal.

Reversed.

Stinchfield, Mackall, Crounse, McNally & Moore, of Minneapolis, for appellants.

Neil M. Cronin, City Atty., and Palmer B. Rasmusson, Asst. City Atty., both of Minneapolis, for respondent.

HOLT, J.

The court overruled interveners' demurrer to the complaint, certifying the questions involved to be important and doubtful. Interveners appeal.

From the complaint it appears that plaintiff's assessor included in his assessment of personal property for taxation new and unused motor vehicles owned by certain dealers in the city, on May 1, 1931, of the assessed valuation of $121,945, which was extended upon the tax lists of the auditor against said dealers for an ad valorem tax; that these dealers against whom such tax had been extended have filed with defendants certain applications for reductions in the taxable value of their personal property, basing such claims upon section 2674, Mason's Minn. St. 1927, subd. (b), as amended by chapter 58, Laws 1931; that defendants unless restrained will grant the applications; that the reductions, if granted, will reduce the taxes receivable by the city in the amount of $9,109.29; that the budgets for the city have been made up and are based upon the assessed valuation and include the said sum expected to be received by the city from the taxes extended against said dealers on account of the motor vehicles so assessed; and that to now rebate the amount stated will necessitate an increase in the rate of taxation on other property and irreparably damage other taxpayers. The complaint then avers that said chapter 58, Laws 1931, contravenes sections 2 and 7 of article 1 and section 1 of article 9 of the State Constitution.

Section 2674, Mason's Minn. St. 1927, relates to the taxation of motor vehicles using public streets and highways, placing upon them a more onerous tax than upon other personal property by virtue of article 16 of the Constitution, the trunk highway amendment. Subdivision (b) of said section 2674, here involved, prior to the enactment of chapter 58, Laws 1931, read: "Motor vehicles not subject to taxation as provided in the foregoing section, but subject to taxation as personal property within the state of Minnesota, shall be assessed and valued at thirty-three and one-third per cent of the true and full value thereof and be taxed at the rate and in the manner provided by law for the taxation of ordinary personal property; provided, that if the person against whom any tax has been levied on the ad valorem basis because of any motor vehicle shall, during the calendar year for which such tax is levied, be also taxed under the provisions of this act, then and in that event, upon proper showing, the Minnesota tax commission shall grant to the person against whom said ad valorem tax was levied, such reduction or abatement of assessed valuation or taxes as was occasioned by the so-called ad valorem tax imposed." The proviso above quoted was construed as not applying to new vehicles owned by a dealer on May 1, which were afterwards sold by the dealer to persons who upon such sale paid the license tax for the balance of the year. It was held applicable only to cars which had been assessed upon the ad valorem basis against a dealer on May 1, and which thereafter, in the same year, the dealer concluded to use upon the public highway and therefore paid the license tax thereon. State ex rel. v. Minnesota Tax Commission, 178 Minn. 300, 227 N. W. 43. That proviso lent itself to construction, and we think it was properly construed in that case, so that there was not a duplication of a tax against the same person, even though the same property had been subject to two different taxes during one year. That decision was filed in October, 1929. The next Legislature by chapter 58, Laws 1931, added this second proviso to subdivision (b) of said section 2674 of the Code: "And provided further that, if said ad valorem tax upon any automobile has been assessed against a dealer in new and unused motor vehicles, and the tax imposed by this act for the required period is thereafter paid by the owner, then and in that event, upon proper showing, the Minnesota Tax Commission, upon the application of said dealer, shall grant to such dealer against whom said ad valorem tax was levied such reduction or abatement of assessed valuation or taxes as was occasioned by the so-called ad valorem tax imposed." There can be no doubt that the proviso was enacted to grant the relief to dealers which by our construction of the first proviso the dealers were excluded from. It is also very clear that the 1931 proviso leaves no room for construction. It plainly enacts that, if an ad valorem tax upon any automobile has been assessed against a dealer in new and unused motor vehicles and the license tax, for a required period of the tax year, is thereafter paid by the owner, the dealer, on proper showing, shall be entitled to a reduction of the ad valorem assessment or tax occasioned thereby. The attack on chapter 58, Laws 1931, must therefore be confined to the contention that it violates some provision of the Constitution of this state. Although the complaint alleges this law to be violative of sections 2 and 7 of article 1 as well as of section 1 of article 9, neither the oral argument nor the brief attempted to point out wherein any provision of chapter 58, Laws 1931, is repugnant to either of the two sections specified of article 1. We therefore need only consider the arguments made touching the alleged conflict of the proviso added in 1931 with section 1 of article 9.

The first contention is that chapter 58 impinges upon this sentence in the section of the Constitution last mentioned: "The power of taxation shall never be surrendered, suspended or contracted away." After so declaring, the same section exempts from taxation certain property devoted to certain purposes and authorizes the Legislature to exempt other property within prescribed limits. It is therefore argued that any statute is unconstitutional that purports to exempt from taxation property other than that so declared by this section 1 of article 9; hence chapter 58, Laws 1931, is unconstitutional, for its effect is to exempt certain motor vehicles of dealers from taxation. It may be conceded that a law which exempts from taxation property not exempted by or under the constitutional provision referred to is void. Le Duc v. City of Hastings, 39 Minn. 110, 38 N. W. 803; State v. Pioneer Sav. &...