State v. Fischl

• Decision Date: 07 April 1933
• Docket Number: 7135.
• Parties: STATE ex rel. KAIN v. FISCHL, County Treasurer.
• Court: Montana Supreme Court

20 P.2d 1057

94 Mont. 92

STATE ex rel. KAIN v. FISCHL, County Treasurer.

No. 7135.

Supreme Court of Montana

April 7, 1933

Action by the State, on the relation of George Kain, against Emanuel Fischl, County Treasurer of Lewis and Clark County, to obtain a writ of injunction.

Demurrer to complaint overruled, and peremptory writ ordered.

William B. Jones, of Helena, for relator.

Sherman W. Smith and John W. Mahan, both of Helena, and Raymond T Nagle, Atty. Gen., and C.J. Dousman, Asst. Atty. Gen., for respondent.

PER CURIAM.

Relator a resident freeholder and taxpayer of Lewis and Clark county seeks a writ of injunction prohibiting the county treasurer of that county from publishing a notice pursuant to the provisions of chapter 41, Laws of 1933, approved March 2 1933, permitting the redemption of real estate sold at tax sale as in the act provided, upon the ground that the act is unconstitutional. As every county, city, and town in the state is affected by the provisions of the act, and the question involved is of general and public interest, we assumed original jurisdiction of the proceeding and directed to the treasurer an order to show cause returnable on April 1st. The cause has been submitted on demurrer to the complaint.

Section 1 of the challenged act reads as follows: "That from and after the passage and approval of this Act, any person having an interest in real estate heretofore sold for taxes to any county or which has been struck off to such county when the property was offered for sale and no assignment of the certificate of such sale has been made by the county making such sale, shall be permitted to redeem the same by paying the original tax, without the payment of any penalty or interest thereon. Such redemption of real estate must be made on or before November 30, 1933, and if such redemption is not made by the 30th day of November, 1933, then redemption can only be made by paying all interest, penalty and costs as now provided by law. This Act shall not apply to the purchaser of any certificate of sale made prior to its passage and approval."

Section 2 provides: "County treasurers and city treasurers in their respective counties and cities shall cause to be published in at least one issue of the official newspaper of such county or city a notice of such right of redemption and extension of time, such notice to be published within sixty days from the approval of this Act."

Section 1 from its first word to and including the words "the original tax" is identical with section 1 of chapter 63, of the Session Laws of 1923; directly following "the original tax," section 1 of chapter 63 concluded with "plus seven per cent interest from the date of sale." Thus the 1923 Act sought to remit the penalty but to charge interest at the rate of 7 per cent. per annum from the date of sale, while the present act seeks to remit the penalty and all the interest. The operation of either would diminish the obligation owed to the state by a delinquent taxpayer. After mature consideration this court said chapter 63 of the Laws of 1923 transgressed the commandment of section 39 of article 5 of the Constitution, and declared the act void. Sanderson v. Bateman, 78 Mont. 235, 253 P. 1100, 1102.

It is conceded by counsel for the respondent that while there is some additional language in section 1 of the present act, as respects the question of constitutionality, it cannot be distinguished from section 1 of chapter 63, supra, and that in order to sustain the present act it will be necessary for this court to overrule Sanderson v. Bateman, supra, and to depart from the rule of stare decisis. See Yellowstone Packing & Provision Co. v. Hays, 83 Mont. 1, 268 P. 555.

Section 39, article 5, of the Constitution of Montana, declares: "No obligation or liability of any person, association or corporation, held or owned by the state, or any municipal corporation therein, shall ever be exchanged, transferred, remitted, released or postponed, or in any way diminished by the legislative assembly; nor shall such liability or obligation be extinguished, except by the payment thereof into the proper treasury."

Counsel for respondent admit that a tax demand lawfully levied and assessed is a liability within the meaning of this section, but they argue that the 10 per cent. penalty and interest accruing upon a tax demand are not included within the term "liability" and, consequently, not within the inhibition of the above section. To sustain this contention they rely upon Jones v. Williams (Tex. Sup.) 45 S.W.2d 130, 79 A. L. R. 983, but that case does not so hold. There the Supreme Court of Texas sustained an act remitting penalties, including interest which it treats as a penalty, for tax delinquents on the theory that the Constitution of Texas (article 3, § 56) permits the Legislature by a general law to remit "fines, penalties, forfeitures, and escheats."

The Texas court does not consider whether the exaction of an amount in addition to the delinquent tax constitutes a liability incurred by the taxpayer, although the Constitution of that state prohibits the Legislature from extinguishing "in whole or in part, the indebtedness, liability or obligation of any incorporation or individual, to this state or to any county or other municipal corporation therein" (article 3, § 55, Constitution of Texas), and it does not cite its own decision in Ollivier v. City of Houston, 93 Tex. 201, 54 S.W. 940, 942, 943 (nor other Texas cases cited post), which involved a statute permitting a taxpayer to plead the statute of limitations in defense to an action instituted by the state for delinquent taxes, which, of course, included penalties under the laws of Texas. In declaring the statute void, the court said: "By that provision of the constitution the legislature is forbidden to pass any law which would 'extinguish any liability, indebtedness or obligation to the state or any county or city,' and thereby power to extinguish liability for taxes was denied. The constitution itself furnishes many evidences of the earnest purpose of the framers to render impossible every form of governmental favoritism. The granting of special privileges, the bestowal of favors, the lightening of the public burdens as to one citizen at the expense of others, are contrary both to its spirit and its letter. So it is declared that taxation shall be equal and uniform. But the force of this provision would be defeated if the power remained to relinquish at will the liability thus justly and fairly fixed. For the prevention of these evils this provision was inserted. Its terms are broad enough to cover every conceivable obligation or liability, the remission of which would diminish...