State v. Lakeside Land Co.

• Decision Date: 21 January 1898
• Docket Number: Nos. 10,952 - (290).,s. 10,952 - (290).
• Citation: 71 Minn. 283
• Parties: STATE OF MINNESOTA v. LAKESIDE LAND COMPANY.<SMALL><SUP>1</SUP></SMALL>
• Court: Minnesota Supreme Court

71 Minn. 283

STATE OF MINNESOTA v. LAKESIDE LAND COMPANY.¹

Nos. 10,952 - (290).

Supreme Court of Minnesota.

January 21, 1898.

In proceedings by the state in the district court for St. Louis county against the Lakeside Land Company to enforce the collection of delinquent taxes for 1895, after findings and order for judgment, partly in favor of plaintiff and partly in favor of the objector, the case was certified by Moer, J., to the supreme court. Remanded

and judgment directed to be entered against the land for full amount.

Geo. E. Arbury, for the State.

Walter Ayers and Billson, Congdon & Dickinson, for objector.

MITCHELL, J.

In proceedings to enforce the collection of taxes for 1895 upon certain real estate of the Lakeside Land Company, situated in the city of Duluth, the company objected to the entry of judgment on the ground that the assessors in certain towns in the county of St. Louis, outside the city of Duluth, had intentionally and willfully omitted altogether from the tax lists for 1895 large amounts of valuable mineral lands, and intentionally and willfully assessed large amounts of other mineral properties far below their actual value in money, thereby making its individual assessments a larger proportion of the aggregate taxable property of the county than they should have been, and hence greatly increasing the amount of the taxes levied on its lands beyond what they would have been had all the taxable property been duly assessed and taxed.

It is not claimed that the assessment or valuation for the purposes of taxation placed on the objector's land was unfair or excessive, or that it was unfair or unequal compared with that placed on lands generally, other than the particular mineral lands above referred to. Special objections were made to taxes levied for school purposes for the independent school district of Duluth, created by Sp. Laws 1891, c. 312. One of the objections to this tax was that it had never been levied by the board of county commissioners of St. Louis county.

The court found that mineral lands of the aggregate value of $2,500,000 were intentionally and willfully either entirely omitted from the tax lists for 1895, or, if entered thereon, totally exempted from taxation; also, that part of these lands belonged to mining corporations which had accepted the provisions of Laws 1881 (Ex. Sess.) c. 54 (G. S. 1894, §§ 1689-1691), and paid into the state treasury one cent per ton on all ore mined and shipped or disposed of by them during the year 1895. The court further found that the various assessors and other tax officials had deliberately, intentionally and willfully assessed a large number of other mineral properties, of the fair cash value of $9,500,000, far below their actual and known value in money, to wit, $184,051; also that by reason of these omissions to assess, and these undervaluations, the county taxes imposed upon the lands of the objector were 3.70 per cent. higher than they should have been.

The court further found that the board of county commissioners took no action whatever with reference to the school tax levied by the board of education of the independent school district of Duluth; that the only action taken by any of the officials of the county was that of the county auditor, in extending it on the tax lists, and including the same in the taxes for 1895. Upon these facts the court held that the school tax was valid, but that the objector was entitled to a reduction of 3.70 per cent. on the county tax levied on its property.

The trial judge certifies to this court the following questions, as being of great public importance, and likely frequently to arise:

(1) Is the method of taxing mines and mining corporations provided by Laws 1881 (Ex. Sess.) c. 54, constitutional?

(2) Is a taxpayer in a particular county who would be obliged to pay more than his full share of taxes by reason of the gross and willful undervaluation, or the willful omission from the assessment roll entirely for purposes of taxation, of particular classes of property within the same county, whereby an unequal, unfair and partial assessment has resulted, entitled, under G. S. 1894, §§ 1584, 1588, to a reduction of his taxes to the amount of the injury which he shows himself to have sustained by reason of such unequal, unfair and partial assessment?

(3) Is it essential, in order to constitute a valid levy of taxes for general school purposes in the independent school district of Duluth, that the board of county commissioners of St. Louis county shall levy such tax, by resolution or otherwise, under the provisions of G. S. 1894, § 3693?

1. A comparison of the provisions of the act of 1881 with those of article 9, § 1, of the constitution of the state, will furnish the answer to the first question. The constitution provides that "all taxes to be raised in this state shall be as nearly equal as may be," and all property on which taxes are to be levied shall "have a cash valuation and be equalized and uniform throughout the state." The act of 1881 provides that all corporations organized under the laws of this state for the purpose of mining, etc., within this state, may pay into the state treasury annually, in lieu of all taxes and assessments upon the capital stock, personal property and real estate of such corporation, in or upon which real estate such business of mining may be carried on, or which is connected therewith and set apart for such business, the following amounts, viz.: For each ton of copper, fifty cents, and for each ton of iron ore mined and shipped or disposed of, one cent. It would be difficult to conceive of a system of taxation more obnoxious to the constitution. We answer the first question in the negative.

2. The second question requires more extended and careful consideration. In order to arrive at the correct solution of it it may be well to consider: First, the statute and the decisions of this court bearing on its construction; second, the consequences of admitting such a defense, either partial or total, to an application for judgment; and third, what, if any, other remedies a taxpayer has for such omissions or undervaluations. G. S. 1894, § 1584, merely provides who may appear and answer, but is entirely silent as to what defenses or objections may be interposed. The only section containing any provisions as to what defenses may be made is 1588. Aside from previous payment of the tax, or the exemption of the property from taxation, this section contains no affirmative enumeration of the defenses which may be interposed. Its other provisions are to the effect that no omission of any of the things provided by law, etc.,

"Shall be a defense or objection to the taxes appearing upon any piece or parcel of land unless it be also made to appear to the court that such omission has resulted to the prejudice of the party objecting, and that the taxes against such piece or parcel of land have been partially, unfairly or unequally assessed; and in such case, but no other, the court may reduce the amount of taxes upon such piece or parcel."

It must be presumed that the reduction of taxes authorized by the statute is one that will produce equality, and not one that will continue or increase inequalities. In County v. Batchelder, 47 Minn. 512, 50 N. W. 536, the facts were that the objector's land, which was unimproved, was worth only $2.75 per acre, but was assessed at $4.07, while the average valuation of other lands, improved and unimproved, was $4.44, which was less than half their cash value. It was held that these facts might be set up as a partial defense, and, if established, would entitle the objector to a reduction of the objector's tax so as to...