Minneapolis & Northern Elevator Co. v. Traill County, N.D.
| Decision Date | 08 May 1900 |
| Citation | 82 N.W. 727,9 N.D. 213 |
| Court | North Dakota Supreme Court |
Appeal from District Court, Trail County; Pollock, J.
Action by the Minneapolis & Northern Elevator Company against the County of Traill. Judgment for defendant, and plaintiff appeals.
Affirmed.
Cochrane & Corliss, for appellant.
Chapter 5, Laws 1899, shifts the burden of collecting the taxes on grain in elevators from the party legally chargeable with the payment thereof to private citizens and corporations. The power to use the private citizen as a tax collector never extends so far as to warrant the legislature in placing him in a position where there is possibility of injury to him on account thereof. Cooley on Taxn. (2d Ed.) 432; South Nashville Ry Co. v. Morrow, 11 S.W. 348-356. The only cases where the citizen may be used as a tax collector are divisible into three classes: First. Where the tax is levied specifically upon a stock dividend or upon the interest on a corporate bond, and the corporation is required to withhold the amount of the tax from such dividend or such interest and pay it directly into the public treasury. In such cases the corporation cannot be injured because it is not required to advance its own money and look to the future for reimbursement. Belonging to this class are Height v. Ry Co., 6 Wall. 15; Com. v. Ry. Co., 104 Pa 89-106. Second. Where the stock or bond itself is assessed against the owner and the corporation is required to retain out of any dividend or interest payable in the future the amount of such tax. In these cases the corporation is not required in the first instance to advance the money and look for future reimbursement, but becomes responsible for the tax only when there comes into its hands in the form of dividends or interest moneys belonging to the stockholder or bondholder. Belonging to this class are Minot v. Ry Co., 18 Wall. 206; State v. City of Newark, 39 N.J.L. 380; Farmers' etc. Bank v. Hoffman, 61 N.W. 418; Hershire v. Bank, 35 Ia. 272; Maltby v. Ry. Co., 52 Pa. 140; Delaware etc. Co. v Com., 66 Pa. 64-69. Third. Where the stock is assessed against the owner, the corporation is required to advance the tax and look to the stockholder for reimbursement. Here no risk of financial loss is imposed upon a third person. The owner of stock is not merely entitled to dividends, but he is the owner of a proportionate share of the property of the corporation. (St. Albans v. Nat. Car Co., 57 Vt. 68-81). Belonging to this class are First Nat. Bank v. Kentucky, 9 Wall. 353; Cummings v. Bank, 101 U.S. 153; St. Albans v. Nat. Car Co., 57 Vt. 68; City v. Lange, 62 N.W. 158. The lien given by this statute "for the amount of the tax charged under such assessment" imposes upon the elevator company the necessity of determining in advance just what the tax will be and gives it no security for any costs, and no protection against replevin or conversion suits at the direction of the owner of the grain should it claim a lien for too much. "The burden imposed upon the elevator companies is too onerous and threatens great injustice." South Nashville Ry. Co. v. Morrow, 11 S.W. 348-356; City of New Orleans v. Houston, 119 U.S. 265, 7 S.Ct. 198. This law violates subdivision 23 of section 29, Constitution, which prohibits special laws for the assessment and collection of taxes. Also § 11, Constitution, which requires all laws of a general nature to have uniform operation. The legislature may classify and legislate differently for different classes, but classification must have a direct relation to the character of the legislation. Edmonds v. Herbrandson, 2 N.D. 270; Vermont L. & T. Co. v. Whithed, 2 N.D. 282; Plummer v. Borsheim, 80 N.W. 690. The selection of a particular class of personal property, viz: grain, and putting it in a class by itself, the excluding from that class all grain not in an elevator or warehouse, and providing an exceptional and harsh method of collecting this tax, is a purely arbitrary classification and void. State v. Hummer, 42 N.J.L. 439; Edmunds v. Herbrandson, 2 N.D. 270.
John F. Selby, for respondent.
Unless restrained by constitutional provisions the power of the state and legislature as to the mode, form, and extent of taxation is unlimited where the subjects to which it relates are within its jurisdiction. State Tax on Foreign Held Bonds, 15 Wall. 319; Eurich v. Peo., 79 Ill. 214; South Nashville Ry. Co. v. Morrow, 11 S.W. 354; 3 Pickle (Tenn.) 406. The constitution of this state does not require that property shall be assessed in the name of the owner, but that all property shall be taxed according to its value by a uniform rule, and that it shall be assessed in the county in which it is situated. § § 176, 179, 181, Const. Legislative power exists to assess to banks the deposits of individuals. State v. Carson City Sav. Bk., 30 P. 703; Burke v. Bedlam, 57 Cal. 602. It is competent to tax property in an agent's hands, to and in the name of the agent, for the purpose of subjecting all taxable property in the state to taxation. Dalby v. Peo. 16 N.E. 224; Walton v. Westwood, 73 Ill. 125; Curtis v. Township, 23 N.W. 175; Spanish River L. Co. v. Bay City, 71 N.W. 595; Sears v. Cottrell, 5 Mich. 251; Hutchinson v. Board, 23 N.W. 249; City v. Lumber Co., 43 N.W. 653; Ex parte Riddle, 8 Heisk. 817; Carrier v. Gordon, 21 Ohio St. 605. The statute is not obnoxious to the constitutional provision against special legislation. It provides for the assessment of all grain "in any elevator, warehouse or grain house in this state on the first day of April." The term grain house and granary are synonymous and means a repository for grain after it is threshed. The law is uniform in its operation. Tappan v. Bank, 19 Wall. 505.
The only question involved in this case is the constitutionality of chapter 5 of the Laws of 1899, which relates to the assessment and taxation of grain in elevators, warehouses, and grain houses. The plaintiff, in its complaint, in substance alleges that it is a Minnesota corporation, and is duly authorized to do business in this state, and as a public warehouse man; that both prior and subsequent to April 1, 1899, it owned and operated a grain elevator in the Township of Belmont, in Traill county; that on the 1st day of April, 1899, it had in its elevator in Belmont township 20,685 bushels of wheat; that such wheat was sold by plaintiff on March 7, 1899, to one G. A. Thomson, a resident of Montreal, Canada; that the said Thomson had been the owner of said wheat at all times since said purchase, and holds a warehouse receipt therefor, issued to him by plaintiff; that the plaintiff, at the time the assessment for 1899 was made, delivered to the assessor of the taxing district of Belmont a sworn statement, showing that the said G. A. Thomson, and not the plaintiff, was the owner of all of said grain; that the assessor of said district nevertheless listed and assessed all of said grain to and against the plaintiff, and so entered the same on the assessment roll of Belmont township, and the same was thereafter returned to the county auditor, and entered upon his tax list as the property of the plaintiff, and not the property of G. A. Thompson. It is also alleged that the plaintiff contested the assessment both before the township board of review and the county board of equalization, and presented suitable proof to show that Thomson, and not plaintiff, was the owner of the grain assessed to it. The plaintiff broadly challenges the legal right of the state to assess it for this grain. It is conceded that the assessment was entirely regular in form, and that it was made in the manner required by chapter 5 of the Laws of 1899, and that the validity of such assessment turns wholly upon the constitutionality of that enactment. No question of procedure is raised by either party. A demurrer was interposed to the complaint upon the ground that it does not state facts sufficient to constitute a cause of action. This was sustained by the District Court, and plaintiff appeals from the order sustaining it.
The portions of the law under which the assessment was made to which we shall have occasion to refer read as follows Section 1. "All grain in any elevator, warehouse or grain house in this state on the first day of April in each year shall be assessed and taxed in the name of the person, firm, company or corporation owning or operating such elevator, warehouse, or grain house on said date." Section 2. "All agents or other persons in charge of any such elevator, warehouse or grain house shall furnish the assessor under oath a statement of all grain in any such elevator, warehouse or grain house on the first day of April in each year, such statement to include the number of bushels of each and all kinds of grain on said date in any elevator, warehouse, or grain house of which he is agent, or has under his care or control, and shall further show in said statement the owner, or owners of such elevator, warehouse or grain house, or if said elevator, warehouse or grain house is not operated by the owner then the person, firm, company or corporation operating the same." Section 3. "That if the grain so assessed is not owned by the person, firm, company or corporation against whom it is assessed and taxed under the provisions of this act then such person, firm, company or corporation shall have a lien upon such grain for the amount of the tax charged under such assessment and taxation, and can hold such an amount of the grain assessed and taxed under the provisions of this act as may be necessary to pay the tax charged against such person, firm, company or corporation on the grain so assessed and taxed." It is entirely clear that...
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