Darnell v. State
| Decision Date | 04 February 1910 |
| Docket Number | No. 21,379.,21,379. |
| Citation | 174 Ind. 143,90 N.E. 769 |
| Parties | DARNELL et al. v. STATE. |
| Court | Indiana Supreme Court |
OPINION TEXT STARTS HERE
Appeal from Circuit Court, Marion County; H. C. Allen, Judge.
Action by the State against Isaac M. Darnell and others. Judgment for plaintiff, and defendants appeal. Affirmed.Chas. A. Weathus, Jos. F. Cowens, and Cockroft & Odle, for appellants. James Bingham, Morton S. Hawkins, Ed. M. White, D. J. Hefron, W. H. Thompson, Merrill Moores, and A. G. Cavins, for the State.
This is a suit in equity brought by the state in its capacity as a sovereign and as parens patriæ and trustee for all the people and the political subdivisions of the state, to recover of Isaac M. Darnell $12,000 for taxes on property omitted from taxation, to set aside a fraudulent conveyance of real estate, and to foreclose the state's lien for taxes against such real estate, and for the appointment of a receiver. Emma Darnell voluntarily appeared and on application was made a party defendant, and thereupon made claim of ownership to certain personal property mentioned in the complaint. This claim, together with the application for a receiver, was submitted to the court upon affidavits. The personal property was awarded to Mrs. Darnell, and a receiver was appointed to take and hold possession of the real estate in controversy during the litigation.
Appellee caused an affidavit to be filed with its complaint, alleging that appellants Isaac M. Darnell and Walter S. Darnell were not residents of this state, and that the action was to enforce a lien upon real estate in Marion county and for possession of real estate within the state of Indiana, in the language of the provisions of the third subdivision of section 322, Burns' Ann. St. 1908. The court upon this affidavit ordered the publication of nonresident notice as provided in said section requiring appellants to appear and answer to the complaint on January 22, 1908. In response to this notice, which was duly given and proof thereof made and filed in the cause, appellants appeared specially and filed what is termed a “plea in abatement,”to which appellee's demurrer for insufficient facts was sustained. A petition to remove the cause to the federal court was filed by appellants, which petition was rejected, and thereupon appellants jointly and severally demurred to the complaint, on the grounds that the facts therein alleged were insufficient to constitute a cause of action, and that the court had no jurisdiction over the persons of the defendants or the subject-matter of the action. This demurrer was overruled, and, appellants declining to plead further, judgment was rendered in favor of the state in accordance with the prayer of the complaint. Motions to modify and to vacate the judgment were subsequently made and severally overruled.
It is averred upon appeal that the court erred in (1) sustaining appellee's demurrer to the plea in abatement, (2) denying the application for removal to the federal court, (3) overruling appellant's demurrer to the complaint, overruling the motions, (4) to vacate, and (5) to modify, the judgment.
The complaint, in brief, charged: That Isaac M. Darnell was a resident of, and maintained his domicile in, the city of Indianapolis, Marion county, Ind., for each of the years from 1900 to 1907, inclusive, and that during each of said years he was the owner of shares of capital stock in a corporation called “I. M. Darnell & Son Company,” which was incorporated under the laws of the state of Tennessee, and which had exercised no corporate functions, owned no property, and paid no taxes, in this state, during any of said years, and that the value of the stock owned by said Isaac M. Darnell as aforesaid, for each of said years, was as follows: 1900, $89,300; 1901, $89,300; 1902, $89,300; 1903, $49,300; 1904, $49,300; 1905, $49,300; 1906, $49,300; 1907, $49,300. That said Isaac M. Darnell unlawfully omitted and failed to list and return said property for taxation for each of said years, and that on May 10, 1907, the auditor of Marion county duly placed said property on the tax duplicate of said county, and computed and extended taxes thereon for each of said years, and charged the same to said Darnell as taxes on omitted property to the aggregate amount of $10,568.59, which amount, with delinquent penalties of 16 per cent. thereon, remains upon said duplicate and is owing by said Darnell, due and unpaid. That appellant Walter S. Darnell is the son of said Isaac M. Darnell, and for a number of years has managed the business of his father, who is 84 years of age, and on March 28, 1907, the taxing officers of Marion county gave notice by registered letter to said Isaac M. Darnell that they intended to and would assert a claim against him for said omitted taxes, which letter and notice were receipted for by said Walter S. Darnell, who then and there had full notice of the contents thereof. That at the time of receiving said notice said Isaac M. Darnell was the owner in fee simple of certain real estate, described, in the city of Indianapolis, of the value of $8,500 and thereafter said Isaac M. Darnell, with intent to cheat, hinder, and delay appellee, said county, city, board of school commissioners, and others, and for the fraudulent purpose of preventing the collection of said indebtedness and taxes due from him, did on April 25, 1907, by warranty deed convey said real estate to said Walter S. Darnell for a stated consideration of $8,500, but in fact no consideration was paid, promised, or agreed to be paid for such conveyance. That for the purpose of defeating the collection of said taxes said Isaac M. Darnell fraudulently divided and distributed all his property among his children, and since the conveyance of said real estate has had no property subject to execution in this state. That said property is held by Walter S. Darnell in trust for Isaac M. Darnell and is subject to the lien of the state for the payment of said taxes in full.
The plea in abatement, in substance, alleged: That the commencement of this action Isaac M. Darnell was not a resident of this state, and owned no property therein; that prior to March 1, 1907, he removed from Indiana, and at the time the alleged assessment was made he was a nonresident of this state, and none of the property assessed was within the state or owned by him; that Walter S. Darnell had no real or personal property in Marion county subject to taxation for the year 1907; that the purchase and conveyance of said real estate were made for the consideration stated in the deed; and that, at the time the affidavit was made upon which the publication of notice was ordered, neither Isaac M. Darnell nor Walter S. Darnell was a resident, or within the jurisdiction, of this state. This plea is clearly insufficient to abate the action. It is, in effect, a categorical denial of the jurisdiction of the court, and of the truth of material averments of the complaint. The allegation that appellants are nonresidents is of no consequence, since that fact appears from the complaint, and jurisdiction over the cause was acquired in the way provided by statute in such cases. The regularity and sufficiency of the procedure to acquire jurisdiction are not challenged. The denial that the property assessed against Isaac M. Darnell was subject to taxation for the year 1907 goes to the merits, and if true would constitute a partial answer in bar rather than in abatement. The court did not err in sustaining appellee's demurrer in this plea. Sloan v. Lowder, 23 Ind. App. 118, 321, 54 N. E. 135.
It is further contended that the demurrer to the answer in abatement searched the record, and should have been carried back and sustained to the complaint. This view of the law is erroneous, and such a demurrer does not search the record. State v. Roberts, 166 Ind. 585, 589, 77 N. E. 1093;Goldsmith v. Chipps, 154 Ind. 28, 55 N. E. 855;Indiana, etc., R. Co. v. Foster, 107 Ind. 430, 8 N. E. 264;Price v. Grand Rapids, etc., R. Co., 18 Ind. 137;Rush v. Foos Mfg. Co., 20 Ind. App. 515, 51 N. E. 143; 6 Ency. Pl. & Pr. 332.
The petition for removal of the cause to the federal court was rightly denied, for the reasons that there was no diversity of citizenship, or showing that a federal question, or question arising under the Constitution, laws, or treaties of the United States, was involved. A state is not a citizen, and the cause was not removable on the ground of diversity of citizenship. 4 Fed. Stat. Ann. p. 290 (U. S. Comp. St. 1901, p. 509); Postal Tel., etc., Co. v. Alabama, 155 U. S. 482, 15 Sup. Ct. 192, 39 L. Ed. 231;Indiana v. Tolleston Club, 53 Fed. 18;Indiana v. Allegheny Oil Co. (C. C.) 85 Fed. 870. The complaint did not raise any question arising under the Constitution, laws, or treaties of the United States, and the cause was not transferable on such grounds. 4 Fed. Stat. Ann. p. 314; Arkansas v. Kansas, etc., Coal Co., 183 U. S. 188, 22 Sup. Ct. 47, 46 L. Ed. 144;Tennessee v. Union, etc., Bank, 152 U. S. 454, 14 Sup. Ct. 654, 38 L. Ed. 511;Germania Ins. Co. v. Wisconsin, 119 U. S. 473, 7 Sup. Ct. 260, 30 L. Ed. 461;Ames v. Kansas, 111 U. S. 449, 4 Sup. Ct. 437, 28 L. Ed. 482.
The capacity of the state to maintain this suit is not challenged by the demurrer, and it is well settled that the courts are open to the state as a litigant, both by virtue of its corporate rights and in its sovereign capacity. State v. Ohio Oil Company, 150 Ind. 21, 27, 49 N. E. 809, 47 L. R. A. 627.
The owner of property on the 1st day of March is personally liable for the taxes on such property for that year. Mullikin v. Reeves, 71 Ind. 281;Funk v. State ex rel., 166 Ind. 455, 77 N. E. 854.
A tax is a debt for the collection of which a creditor's bill may be brought. State v. Georgia Company, 112 N. C. 34, 17 S. E. 10, 19 L. R. A. 485;Albany County v. Durant, 9 Paige (N. Y.) 182;People v. Weber, 164 Ill. 412, 45 N. E. 723;McInerny v. Reed, 23...
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