Livesay v. De Armond

Decision Date14 January 1930
PartiesLIVESAY v. DE ARMOND ET AL.
CourtOregon Supreme Court

Appeal from Circuit Court, Deschutes County; T. E. J. Duffy, Judge.

Suit by V. F. Livesay against H. H. De Armond, Joe Innes, E. M. Peck Claude L. McCauley, and others. From an adverse decree defendants named appeal. Reversed.

Ross Farnham, of Bend, for appellants.

M. A. Cunning, of Redmond (Cunning & Brewster, of Redmond, on the brief), for respondent.

ROSSMAN J.

This suit tests the validity and application of 1929 Session Laws, c. 182, which is as follows: "The county court or board of county commissioners of any county may, at its discretion, waive or reduce the penalty or interest, or both, imposed for the failure to pay taxes within the time provided by law, for any year or years prior to and including 1927, if, in its opinion, such action would facilitate the collection of such taxes."

According to the complaint, the plaintiff is a taxpayer in Deschutes county, who owns lands which lie both within and without the Central Oregon irrigation district; he is also the owner of a bond issued by the Squaw Creek irrigation district, which district is partially within Deschutes county. Of the defendants, two are landowners in and taxpayers of Deschutes county, a third is the sheriff and tax collector of that county, and a fourth is the county judge; the latter, together with the other two defendants, compose the county court of Deschutes county. The complaint recites that the three defendants last mentioned, in their official capacities, on the 5th day of June, 1929, made an order directing the sheriff to cancel all interest and penalties on all taxes which had become delinquent prior to the year 1928 providing said taxes were paid on or before September 1, 1929. The pleading alleges that there is due to the county, and to both of the aforementioned irrigation districts, large sums of money for penalties and interest from delinquent taxes, and that the cancellation of these charges "will greatly increase the amount of tax plaintiff and others similarly situated would have to pay." By way of a second cause of suit there is brought into the record the information that on the 5th day of June, 1929, the aforementioned three defendants, who compose the county court, issued an order directing the sheriff to accept payment of taxes on lands owned by the two defendants, Varco and Allen, whom the complaint described previously as landowners in Deschutes county, "without the payment of interest and penalty and upon the payment to the Sheriff of the taxes for county and state purposes, without the payment of taxes for any other purpose and without the payment of interest and penalty." The complaint then alleges that, in obedience to the aforementioned order, the sheriff, as tax collector, accepted payment of the Allen taxes "without interest and penalty and without even the principal of school and irrigation district taxes." It is alleged that a portion of the land owned by Allen lies within the Central Oregon irrigation district. Other allegations of the complaint we deem it unnecessary to review. The relief sought was a decree holding as naught the action of the county court and the tax receipts issued upon the payment of the taxes under the aforementioned circumstances.

Only the four defendants, who are the sheriff, county judge, and county commissioners, filed an answer. It admits that the county court June 5, 1929, issued the order mentioned in the complaint. It alleges, however, that that body was persuaded to make the order because of its opinion that, if the penalty and interest on the delinquent taxes were waived, their collection would be facilitated. The answer describes the lands owned by the defendants Varco and Allen, and recites the conditions of the unpaid taxes against both properties. Concerning the Varco taxes, the allegation is made "that it was then apparent that if payment in full of said taxes, together with the penalty and interest accruing thereon, were insisted upon, then said land would be forfeited to Deschutes County and be removed from the tax roll as a result of which said delinquent taxes, including penalty and interest thereon, would be a total loss." The Allen property, which lies not only within Deschutes county, but also within the Central Oregon irrigation district, was incumbered with delinquent taxes assessed for state, county, and irrigation district purposes. Concerning these delinquent taxes, the averment is made that they, together with the penalties and interest," equaled or exceeded the actual market value of said land." The 1922 taxes against both properties were in the process of foreclosure when the county court made the order complained of. The answer recites at length the reason which persuaded the county court to issue the general order and the specific ones concerning the Varco and Allen properties. This reason was a belief that a cancellation of these charges would produce payment of the tax; that a failure to take such action would result in the properties being taken out of private ownership and their removal from the tax rolls for an indefinite period. Attached to the answer and made a part of it are copies of the orders issued by the county court June 5, 1929. Omitting the preamble, the general order provides:

"Therefore, it is hereby ordered that all penalties and interest accrued on delinquent taxes in Deschutes County, Oregon, levied for the year 1927 and prior years by the levying board of Deschutes County, Oregon, except such as are now in process of foreclosure by the county be, and the same are hereby waived, provided such taxes shall be paid on or before the 1st day of September, 1929, and unless so paid the penalty and interest on all delinquent taxes paid after that date shall be paid.

"It is further ordered that the Sheriff of this County be and he is hereby directed to accept the payment of such taxes without the penalty and interest, and to issue receipts in full therefor when offered by any taxpayer in the County owing such delinquent tax or taxes."

The order concerning the Varco and Allen properties, after reciting the condition of the taxes assessed against these properties, recites:

"Therefore, it is hereby ordered that upon the payment of the principal of all taxes heretofore levied upon said properties that the Sheriff accept the same and issue receipts therefor in full."

To the answer, the plaintiff interposed a demurrer on the ground that the facts stated were not sufficient to constitute a defense. The demurrer was sustained, the defendants declined to plead further, a decree was thereupon entered granting the relief prayed for, and the defendants have appealed.

It is first contended by the plaintiff that chapter 182 of 1929 Session Laws is violative of section 1, art. 9 of our State Constitution which provides: "* * * All taxes shall be levied and collected under general laws operating uniformly throughout the state." The plaintiff argues that under the authority granted by this act one county may waive all interest and penalties attached to delinquent taxes, another may reduce but not entirely cancel these charges, while a third may determine to enforce the entire obligation. He argues that legislation which permits such a result does not contemplate the collection of taxes under laws operating uniformly throughout the state.

Disposing of this contention, it is to be observed that this act does not confer any authority to waive or reduce a tax; the authority granted is confined to a waiver or a reduction of the penalty and interest imposed for the failure to pay the tax. It seems desirable to notice the distinction between a tax and any sums exacted by law for the failure to promptly pay it. Such exactions are often termed interest, yet the reasons which support them are unlike those upon which interest charges are founded. In the absence of some unusual provision in the statute authorizing the levying of a tax, it is generally held that a tax is not a debt. Whiteaker v. Haley, 2 Or. 128; Lane County v. Oregon, 7 Wall. 71, 19 L.Ed. 101; Cooley on Taxation, § 22; 26 R. C. L. "Taxation," § 11. Therefore an unpaid tax draws no interest unless legislation expressly directs a different result. Stitt v. Stringham, 55 Or. 89, 105 P. 252; Cooley on Taxation, § 1274.

From Colby v. City of Medford, 85 Or. 485, 167 P. 487, 500, we quote: "* * * In passing, it may be noted that when interest is charged on a delinquent tax, it is not regarded as interest in the sense that it is a consideration for the forbearance of money, but it is deemed to be a penalty; and when interest, so called, is charged, it is sustained on the theory that it is a means to insure prompt payment of the tax, and it is not a part of the tax. State v. Superior Court, 93 Wash. 433, 161 P. 77."

And from State v. Coos County, 115 Or. 300, 237 P. 678 679, we quote: "We have heretofore held that the increased percentage and other burdens prescribed by the Legislature for nonpayment of taxes, are in the nature of penalties, and are not part of the taxes. Colby v. Medford, 85 Or. 485, 527, 167 P. 487. They may have been prescribed as a means of inducing the taxpayers to pay promptly, but they are distinctive from the tax itself. Taxes are a contribution prescribed by the statute and levied by the authorities for the support of the government; and, as stated in State v. Galveston, etc., 100 Tex. 153, 97 S.W. 71, the penalties are somewhat in the nature of a fine upon a delinquent taxpayer for his delay in paying his taxes. They are not levied by the counties as part of the taxes, but are creatures of the statute, and, what the statute has imposed by way of penalty, the...

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28 cases
  • Jones v. Williams, 6051.
    • United States
    • Texas Supreme Court
    • December 23, 1931
    ...75 S. W. 464; Colby v. City of Medford, 85 Or. 485, 167 P. 487; State v. Coos County, 115 Or. 300, 237 P. 678; Livesay v. DeArmond, 131 Or. 563, 284 P. 166, 68 A. L. R. 422; Specht v. City of Louisville, 135 Ky. 548, 122 S. W. 846; Walston v. City of Louisville (Ky.) 66 S. W. 385; Woolley v......
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    ...released without payment thereof. Interest on delinquent taxes was held to be in effect a penalty. See, also, Livesay v. De Armond, 131 Or. 563, 569, 284 P. 166, 168, 68 A.L.R. 422; State ex rel. First Thought Gold Mines v. Superior Court for Stevens County, 93 Wash. 433, 161 P. 77; Biles v......
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    • Oregon Supreme Court
    • June 6, 1939
    ...the legislature shall apply," Schechter Poultry Corp. v. United States, supra; Panama Refining Co. v. Ryan, supra; Livesay v. DeArmond, 131 Or. 563, 284 P. 166, 68 A.L.R. 422, and Oregon cases there cited. 23. It is only necessary that the statute establish a sufficient basic standard and a......
  • Farr v. Nordman
    • United States
    • Michigan Supreme Court
    • September 4, 1956
    ...permit the tax remedies (i. e., lien, sale) to be employed in its collection. Thus the Oregon court, in Livesay v. DeArmond, 131 Or. 563, 569, 284 P. 166, 168, 68 A.L.R. 422, analyzed the situation in these 'It seems desirable to notice the distinction between a tax and any sums exacted by ......
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1 books & journal articles
  • Administrative Blackmail: the Remission of Penalties
    • United States
    • Political Research Quarterly No. 4-4, December 1951
    • December 1, 1951
    ..."The statute so construeddoes not violate any of the enumerated provisions of the Constitution." 64 5 Hill, 215 (New York) (1843).65 131 Or. 563, 284 P. 166, 169, 68 A.L.R. 422 30 N.M. 491, 239 P. 741 (1925).67 Id. at 747. 619 violator is notified of his liability to the statutory penalty a......

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