Drew v. Tifft

• Decision Date: 14 February 1900
• Citation: 81 N.W. 839,79 Minn. 175
• Parties: DREW v. TIFFT, Judge.
• Court: Minnesota Supreme Court

79 Minn. 175

81 N.W. 839

DREW

v.TIFFT, Judge.

Supreme Court of Minnesota.

Feb. 14, 1900.

Appeal from district court, McLeod county; Francis Cadwell, Judge.

Application of Lincoln Drew for a writ of mandamus to M. C. Tifft, Judge of the probate court of McLeod county. From an order denying the writ, relator appeals. Reversed.

Syllabus by the Court

1. The mandate of equality of taxation, as near as may be, of section 1, art. 9, of the state constitution, applies to inheritance taxes exactly as it does to taxes on property, except as otherwise expressly provided in the last proviso to the section, relating to an inheritance tax law.

2. Chapter 293, Laws 1897, which attempts to lay an inheritance tax, is unconstitutional for the reasons: (a) It excludes from its operation real property, and lays the tax upon inheritances of personal property alone; (b) it exempts from its operation persons and corporations whose property is exempt by law from taxation; (c) it allows a larger exemption to lineal heirs than to collaterals, and does not lay the tax on the excess of the value of the property received above a uniform exempted sum.

3. The statute is not unconstitutional because it taxes collateral heirs and distributees at a higher rate than lineals, for the constitution expressly authorizes such graduation of the tax. Haynes & Chase, for appellant.

W. B. Douglas, Atty. Gen., and F. R. Allen, Co. Atty., for respondent.

START, C. J.

This is an appeal by the plaintiff from the order of the district court of the county of McLeod denying his petition for a peremptory writ of mandamus requiring the probate court of that county to proceed with the distribution of the estate of George Drew, deceased, without requiring the payment of an inheritance tax, as provided by Laws 1897, c. 293. The sole question for our decision is the constitutionality of such inheritance tax law. We are relieved from any necessity of discussing the power of the legislature to enact a law taxing all inheritances, or the propriety of exercising such power, for it is unanimously conceded (as it must be) by counsel that such a law, if uniform and equal, without discrimination, would be constitutional, wise, and wholesome. Legacy and inheritance taxes are not of modern origin. They were imposed by the Roman civil law, and in England as early as 1780. They are now in force generally in the countries of Europe. Pennsylvania imposed such taxes by a statute enacted as early as 1826, and similar statutes are now in force in many of the other states of the Union. They have, as a rule, been held to be constitutional by state and federal courts. Dos P. Col. Inh. Taxes, c. 1. But Minnesota is, so far as we are advised, the only state whose constitution in express terms limits the power of the legislature in the laying of an inheritance tax. Therefore the precise question in this case is whether the act in question conforms to the limitations of our state constitution. Such being the case, it necessarily follows that the large number of judicial decisions in other jurisdictions, cited by counsel in this case, although interesting and helpful as illustrating the history of inheritance tax statutes and the general principles upon which they have been sustained, are not directly in point. The here material provisions of our constitution are these: ‘All taxes to be raised in this state shall be as nearly equal as may be, and all property on which taxes are to be levied shall have a cash valuation, and be equalized and uniform throughout the state: provided, that the legislature may, by general law or special act, authorize municipal corporations to levy assessments for local improvements * * *: and provided further, that there may be by law levied and collected a tax upon all inheritances, devises, bequests, legacies and gifts of every kind and description above a fixed and specified sum, of any and all natural persons and corporations. Such tax above such exempted sum may be uniform, or it may be graded or progressive, but shall not exceed a maximum tax of five per cent.’ Const. Minn. art. 9, § 1. This proviso as to an inheritance tax was added in 1894 as an amendment to section 1, art. 9, and is to be construed as a part thereof, precisely as if the original section and the proviso had been adopted at the same time, as a complete statement of the fundamental law upon the subject of taxes, including those upon inheritances. In order to determine intelligently whether the inheritance tax act of 1897 violates any of the provisions of this section, it is first necessary to ascertain its meaning. The power of taxation by the state, except as limited by constitutional provisions, is practically unlimited, hence this section must be construed, not as a grant of the power of taxation, but as a limitation upon the exercise of the power. Cooley, Const. Lim. 105, 593. So construing it, its meaning is obvious, and it stands as a barrier against legislative invasion of the reserved rights of the individual as to the manner of imposing taxes upon him for the support of the state. Its keynote is that ‘all taxes to be raised in this state shall be as nearly equal as may be.’ Counsel for respondent, however, claims that this limitation, as originally adopted, applies only to taxes on property. If this be so, then the power of the legislature to lay unequal and arbitrary impost and excise taxes was left unrestricted. Such a construction is contrary to the spirit of the constitution, its clear and direct language, and the trend of all of the decisions of this court on the question. Stinson v. Smith, 8 Minn. 366 (Gil. 326); Sanborn v. Commissioners, 9 Minn. 273 (Gil. 258); City of Faribault v. Misener, 20 Minn. 396 (Gil. 347); Noonan v. City of Stillwater, 33 Minn. 198, 22 N. W. 444;State v. Gorman, 40 Minn. 232, 41 N. W. 948. It is true that all of these cases involved only questions as to taxes or assessments on property, but the rationale of the opinion in each case leads directly to the conclusion that all taxes, whether on property or in the form of excise and impost taxes, must, under this constitutional mandate, be laid as nearly equal as practicable. The case of State v. Gorman has been understood and cited as an authority that the requirement of our constitution that all taxes to be raised in this state shall be as nearly equal as may be applies to excise and impost taxes, and therefore a statute laying an inheritance tax would be unconstitutional. See Magoun v. Bank, 170 U. S. 283, 18 Sup. Ct. 594, 42 L. Ed. 1037. In the Gorman Case it was held that chapter 103, Gen. Laws 1885, requiring, as a condition precedent to probate proceedings for the settlement of estates in probate court, the payment to the county treasury of specified sums arbitrarily prescribed with reference to the value of the estate, was unconstitutional, because it violated the constitutional requirement of equality of taxation. It is not quite clear whether this decision was based upon the proposition that the tax was one laid upon property or upon the privilege of having estates settled and distributed in the probate court. If the former,-which was probably the case,-the decision is not an authority for or against the right of the legislature to levy an inheritance tax under section 1, art. 9, of the constitution. If the word ‘taxes,’ as used in this section as it originally stood, includes excise and impost taxes, it by no means follows that a statute laying an inheritance tax, which aimed at practical equality, would not be valid.

Again, the decisions of this court with reference to statutes and ordinances imposing license fees upon auctioneers, draymen, hackmen, peddlers, persons dealing in intoxicating liquors, and others engaged in occupations of a character bringing them within the police power of the state, are based upon the proposition that the constitutional mandate that all taxes to be raised must be as nearly equal as may be includes excise and impost taxes. Such statutes have been sustained only upon the ground that the enactment was a proper exercise of the police power, and in every case where it was apparent that the license law was enacted with a view to revenue, and...