State ex rel. Lewis v. Smith

• Decision Date: 28 February 1902
• Citation: 63 N.E. 25,158 Ind. 543
• Parties: STATE ex rel. LEWIS et al. v. SMITH, County Auditor.
• Court: Indiana Supreme Court

158 Ind. 543

63 N.E. 25

STATE ex rel. LEWIS et al.

v.SMITH, County Auditor.¹

Supreme Court of Indiana.

Feb. 28, 1902.

Appeal from circuit court, Marion county; Henry Clay Allen, Judge.

Mandamus, on the relation of Martha Lewis and others, against Harry B. Smith, auditor of Marion county. Judgment for defendant. Relators appeal. Reversed.

Wm. L. Taylor, Atty. Gen., Merrill Moores, and C. C. Hadley, for appellants. Hawkins & Smith, for appellee.

GILLETT, J.

This is an action of mandamus instituted by the appellants (relators) against the appellee. The appellee filed a demurrer to the application and alternative writ, which was sustained by the court below. To this ruling the relators excepted, and refused to plead further, and from the final judgment against them that was subsequently rendered they prosecute this appeal.

Counsel discuss but one question in this case, namely, the constitutionality of an act of the general assembly of this state entitled “An act concerning the taxation of real estate encumbered by mortgage, and declaring an emergency.” Acts 1899, pp. 422, 423 (sections 8417a et seq., Burns' Rev. St. 1901; sections 6272a et seq., Horner's Rev. St. 1901). The first three sections of the act are as follows:

“Section 1. Be it enacted by the general assembly of the state of Indiana, that any person being the owner of real estate liable for taxation within the state of Indiana, and being indebted in any sum secured by mortgage upon real estate, may have the amount of such mortgage indebtedness, not exceeding seven hundred dollars, existing and unpaid upon the first day of April of any year, deducted from the assessed valuation of mortgage premises for that year, and the amount of such valuation remaining after such deduction shall have been made shall form the basis for assessment and taxation for said real estate for said year: provided, that no deduction shall be allowed greater than one-half of such assessed valuation of said real estate.

“Sec. 2. Any person desiring to avail himself, or herself, of the provisions of this act, shall, between the first day of March and the first day of May of each year, file with the auditor of the county wherein said real estate is situated a sworn statement of the amount of such mortgage indebtedness existing and unpaid on the first day of March of that year, giving the name and residence of the mortgagee, and shall also give the name and residence of the assignee or bona fide owner or holder of said mortgage, if known, and if not known, said person shall state that fact, and shall also state the record and page where said mortgage is recorded, and a brief description of the real estate upon which said incumbrance exists.

“Sec. 3. The county auditor with whom such statement is filed, in case the money, notes or credits evidenced by such mortgage indebtedness be liable for taxation in any county in the state of Indiana, other than the one wherein such real estate is situate, shall immediately certify and transmit a copy of such sworn statement to the auditor of the county wherein the mortgagee, assignee or bona fide holder or owner of said mortgage resides, or wherein the money, notes or credits evidenced by such mortgage is otherwise taxable.”

The fourth section of the act prescribes a penalty for willfully making a false statement under section 2 thereof. The fifth and last section declares the existence of an emergency for the immediate taking effect of the act.

Counsel for appellee claim that the act in question is unconstitutional, and they especially insist that it contravenes section 1 of article 10 of our state constitution. That section is as follows: “The general assembly shall provide, by law, for a uniform and equal rate of assessment and taxation; and shall prescribe such regulations as shall secure a just valuation for taxation of all property, both real and personal, excepting such only, for municipal, educational, literary, scientific, religious, or charitable purposes, as may be especially exempted by law.” We approach the consideration of this case with a deep sense of its importance, not only because constitutional questions are involved, but because we realize that this act, if upheld, will be a large factor in our revenue system. The people, in their grant of power to the agencies of government, ordained that “the powers of government are divided into three separate departments: the legislative, the executive, including the administrative, and the judicial.” Const. Ind. § 1, art. 3. These departments are co-ordinate. The constitution requires that any person elected or appointed to any office thereunder shall, before entering on the duties thereof, take an oath or affirmation to support such constitution. Section 4, art. 15. The judiciary do not lay claim to a conscience that is quickened beyond that of any other official. The courts do not sit for the purpose of revising or obstructing legislative action, but to enforce the legislative will. Where, however, an enactment of the general assembly falls without the domain of legislative power, or impinges on the limitations with which the people, in their sovereign capacity, have hedged the grant of legislative power about, a court that sits to apply the law as between litigants refuses to enforce it, because the judge, acting on the responsibility of his oath, must enforce the will of the people as declared in their primal social compact, rather than the will of their agent, in another department of the government. The task of declaring a legislative enactment unconstitutional is at once both solemn and delicate, and, while the courts will not decline this responsibility, yet they approach such a duty in a spirit of profound caution and circumspection, and with a disposition to enforce the legislative will by resolving all ultimate reasonable doubts in its favor. It is with this disposition of mind that we approach this question.

The power of taxation is an incident of sovereignty, and is possessed by the government without being expressly conferred by the people. Board v. Holliday, 150 Ind. 216, 49 N. E. 14. The power belongs to that class of powers known as “political powers,” and while, in the genesis of popular government, it was occasionally exercised by the executive branch of the government, yet it is now well settled that the power of taxation is purely a legislative function. Board v. Holliday, supra; Telegraph Co. v. Mayer, 28 Ohio St. 521. “The extent to which it [the taxing power] shall be exercised, the subjects on which it shall be exercised, and the mode in which it shall be exercised, are all equally within the discretion of the legislature, to which the states commit the exercise of the power. The discretion is restrained only by the will of the people, expressed in the state constitution or through elections; and by the condition that it must not be so used as to burden or embarrass the operations of the federal government.” Lane Co. v. Oregon, 7 Wall. 71, 77, 19 L. Ed. 101. And see, also, Sharpless v. Mayor, etc., 21 Pa. 160, 59 Am. Dec. 759. This doctrine is even more forcibly stated by Judge Cooley in his work on Taxation (page 5). He there says: “Everything to which the legislative power extends may be the subject of taxation, whether it be person or property, or possession, franchise, or privilege, or occupation or right. Nothing but express constitutional limitation upon legislative authority can exclude anything to which the authority extends from the grasp of the taxing power, if the legislature, in its discretion, shall at any time select it for revenue purposes. And not only is the power unlimited in its reach as to subjects, but in its nature it acknowledges no limits, and may be carried to any extent which the government may find expedient. It may therefore be employed again and again upon the same subjects, even to the extent of exhaustion and destruction, and may thus become in its exercise a power to destroy. If the power be threatened with abuse, security must be found in the responsibility of the legislature which imposes the tax to the constituency who are to pay it. The judiciary can afford no redress against oppressive taxation, so long as the legislature, in imposing it, shall keep within the limits of legislative authority, and violate no express provision of the constitution. The necessity for imposing it addresses itself to the legislative discretion, and it is or may be an urgent necessity, which will admit of no property or other conflicting right in the citizen while it remains unsatisfied.” Our state constitution does, however, contain some limitationson the legislative authority to tax. These limitations are found in the section of the constitution hereinbefore quoted, and in another section thereof, to which attention will hereafter be directed. Does the act in question violate the constitutional requirement of equality?

It is the theory of every republican government that taxes should be levied equally, but this is impossible, even in the simplest states of society; and the difficulty becomes more and more pronounced as civilization becomes more complex, because the circumstances and pursuits of the people become more diversified. “A just and perfect system of taxation,” says Chancellor Kent, “is yet a desideratum in civil government.” 2 Kent, Comm. 332. “Perfectly equal taxation,” it has again been said, “will remain an unattainable good as long as laws and government and men are imperfect.” Sharswood, J., in Grim v. School Dist., 57 Pa. 433, 437, 98 Am. Dec. 237. As a general rule, taxes due on property are not debts of the owner thereof. Thompson v. McCorkle, 136 Ind. 484, 34 N. E. 813, 36 N. E. 211, 43 Am. St. Rep. 334. But it is nevertheless competent for the legislature to so provide. Snipe v. Shriner, 44 N. J. Law, 206. If it can be fairly said that the equality limitation in the constitution was designed to prevent...