Ferris v. Vannier

• Decision Date: 19 February 1889
• Citation: 42 N.W. 31,6 Dak. 186
• Parties: Ferris v. Vannier, County Treasurer.
• Court: South Dakota Supreme Court

42 N.W. 31

6 Dak. 186

Ferris

v.Vannier, County Treasurer.

Supreme Court of the Territory of Dakota.

Feb. 19, 1889.

Appeal from district court, Morton county.

Action to recover taxes paid under protest, brought by John A. Ferris against Charles H. Vannier, treasurer of Stark county. A demurrer to the complaint was sustained, and judgment rendered for defendant. Plaintiff appeals.

*32Tilden R. Selmes and John C. Bullitt, for appellant. Flannery & Cooke, for respondent.

THOMAS, J.

This action was brought by the plaintiff for the recovery of certain taxes paid by him under protest. The complaint alleges, inter alia, that plaintiff was at the time of the grievances complained of a resident of the unorganized county of Billings, and owner of real and personal property therein, and had no property in the county of Stark. That on the 12th day of March, 1885, the legislature of the territory passed an act entitled “An act to amend section 17 of chapter 28 of the Political Code,” and, among other things, provided as follows: “When any personal property is situated and kept in any unorganized county of this territory, then such property shall be subject to taxation in the nearest organized county thereto, and shall be listed and assessed by the assessor of said nearest organized county; and when said unorganized county borders upon two or more organized counties, then said property shall be assessed and taxed in that organized county having the greatest extent of contiguous boundary line.” That pursuant to said act, in the year of 1885, the officers of said Stark county, authorized by the laws of this territory to assess property in said Stark county for the purposes of taxation, and to levy taxes thereon, claimed to have the right and pretended to assess all the personal property of the plaintiff situate in said Billings county, for the purpose of taxation, and to levy certain taxes thereon, to-wit, territorial, general school, bridge, and road, and general county taxes, amounting in the aggregate to the sum of $29.20. That the assessment, levy, and collection of said taxes were illegal because- First, said property was never taxable by Stark county; second, that the act of 1885 is in conflict with the provision of the organic act in relation to taxation, and therefore void; third, the tax is for the exclusive use of Stark county, and to be expended therein, with the exception of the territorial tax, and gives to Billings county and the residents thereof no benefit directly or indirectly; fourth, that there was real estate in Billings county owned by plaintiff and others, none of which was assessed or taxed, but under said act was free therefrom; fifth, that said Stark county issued its warrant to its treasurer, the defendant, to collect said taxes, who demanded the same of plaintiff, which was refused, and thereupon defendant levied upon plaintiff's property, and was about to sell the same, to prevent which plaintiff, under protest, paid said taxes to said defendant, with interest and costs, amounting to $29.40. To this complaint defendant interposed a general demurrer, which was sustained by the district court, pro forma, and judgment was rendered thereon in favor of the defendant, from which said judgment plaintiff appeals to this court. The plaintiff contends that the act of 1885 is unconstitutional for the following reasons: First, it authorizes taxation of personal property of a community for purposes not public or local to it; second, it discriminates in the taxation of different kinds of property in contravention of the organic act; third, it denies to persons within the territory the equal protection of the laws.

The material allegations of the complaint are admitted by the demurrer. It is therefore a fact of record that the taxes complained of were imposed and collected for the exclusive use and benefit of Stark county, and the moneys raised thereby were to be expended within said Stark county, except the territorial tax, and the residents of Billings county were not in any legal sense interested in any of the objects of said expenditure. The organic act of the territory, § 1925, declares that the legislature “shall not pass any law impairing the rights of private property, nor make any discrimination in taxing different kinds of property; but all property subject to taxation shall be taxed in proportion to its value.” The questions presented are important, and of great public interest, and are therefore entitled to, and have received, our most careful consideration. The validity of this tax must be determined from the organic act and such other legal principles as may be *33applicable. Under the second point above named the appellant contends that the legislature of this territory has no power to exempt any property from taxation except that which is expressly exempted in the organic act; the legislature cannot declare what property shall be subject to taxation, but must tax every species of property not exempt by the organic act. We do not think that this objection is well taken, or that it is necessarily involved in this case, and, as the legislature of the territory has frequently exercised this right, which has been acquiesced in and recognized by all classes as a legitimate exercise of power, we do not feel authorized to call it in question here. It is a doctrine well established by the courts that the right to exempt is incident to the right to tax, and is an ordinary exercise of the power of sovereignty, and this right exists unless prohibited by some constitutional or organic provision. Railroad Co. v. Taylor, 52 Wis. 42, 8 N. W. Rep. 833;Gilman v. Sheboygan, 2 Black, 510; Cooley, Tax'n, 145; 1 Desty, Tax'n, 124. As said before, the right to exempt has been recognized and acted upon since the organization of this territory, and we will not now disturb or cast doubt or reproach upon it by a discussion which would in any event be mere dictum, as this question is not involved in this case, for the act in question is not, in our opinion, an attempt to exempt any kind of property from taxation. Under this act an attempt is made to assess and tax personal property in an unorganized county, leaving the real property untaxed, and to levy this tax for the use and benefit of another organized county, regardless of the question whether the two counties are in the same judicial district, or whether said counties have been attached for judicial, revenue, or other purposes, but it is sought to be done simply upon a question of proximity. This legislation cannot, in our opinion, be properly referable to the exercise of the power of exemption, though it may possibly have this effect when it discriminates between different kinds of property by taxing one and not the other. It is contended by plaintiff that this act provides for the taxation of a community for purposes not public or local to it. If this proposition be true, this tax can hardly be sustained. Cooley, Tax'n, 105; 1 Desty, Tax'n, 285. It is a fact admitted of record that this tax was for the exclusive use and benefit of Stark county, and that the money raised by it was to be expended within Stark county, and that the county of Billings did not and will not receive any benefit from said tax, either directly or indirectly, but it was to be expended for objects entirely local to Stark county, and foreign to Billings county. If this be so, how can this tax be sustained? It is a well-established doctrine that taxation in order to be valid must be of a public nature, or for a public purpose, and must also be local. “It is the essence of taxation that it should compel the discharge of a burden by those upon whom it rests.” An attempt to compel one county or municipality to pay a charge properly resting upon the inhabitants of another separate and distinct district or community would be an arbitrary and unauthorized exercise of power. It would be taking private property for private uses, and in no proper sense could it be regarded as taxation, but rather in the nature of confiscation. Cooley, Tax'n, c. 5, pp. 144, 145; 1 Desty, Tax'n, 26, 27; Hammett v. Philadelphia, 65 Pa. St. 146, 151; Dorgan v. Boston, 12 Allen, 223;In re Town of Flatbush, 60 N. Y. 398. It is true that it is not necessary that the money raised by taxation should always be expended within the district where it is levied and collected, but it may be expended for objects outside of the district in which the residents of the district have in a legal sense an interest. District interest is the test whether an object is or is not a proper subject of taxation. Cooley, supra; 1 Desty, supra. It seems to us that this law is an attempt on the part of the legislature to tax one community for the benefit of another, and is therefore void, from the fact that all taxation must be public and local, and for objects in which those who pay the tax have, in a legal sense, some interest, and from which they may receive some benefit.

As said before, it is admitted of record in this case that the tax collected of the residents of Billings county was to be used and expended in matters entirely local to the county of Stark; and to sustain such a tax would not only be unjust and inequitable, but would be to hold that the legislature, under color of exercising the power of taxation, might appropriate private property for private uses. While equal, uniform, and just taxation is hardly attainable under any system of human government, yet in this country most of the states have incorporated into their constitutions express provisions that taxation shall be equal and uniform; and, while this language is not used in our organic act, we think that the prohibition contained therein against discrimination in taxation can hardly be effectually enforced without the adoption of some system that shall be equal and uniform. Can it be said that a system of taxation which taxes one community for the exclusive...