117 Minn. 192 | Minn. | 1912
The relator presented to the district court for Ramsey county a
Respondent answered, admitting the allegations of the petition, but alleging as bis reason for refusing to register the mortgage that the registration tax thereon provided by chapter 328, p. 448, Laws 1907 [R. L. Supp. 1909, §§ 1038 — 25 to 1038 — 33], bad not been paid; that'the mortgage bad not been presented to the county treasurer for the payment of such tax, or for the placing on the mortgage of the indorsement of the county treasurer that the mortgage is exempt from sucb tax; and that neither the indorsement that tbe tax bad been paid nor tbat tbe mortgage was exempt was ever placed upon tbe mortgage.
To tbis answer relator demurred. Tbe trial court sustained tbis demurrer, and judgment was entered tbat a peremptory writ of mandamus issue. From tbis judgment, respondent appealed to tbis court.
Tbe question for our decision is tbis: Is a mortgage for $50 or less taxable under chapter 328, p. 448, Laws of 1907 ?
Tbe decision of tbe trial court tbat tbe mortgage in question was not taxable under tbis law was based upon tbe language of section 2 of tbe act, reading as follows: “A tax of fifty cents is hereby imposed upon each one hundred dollars, or major fraction thereof, of the principal debt or obligation which is or in any contingency may be secured by any mortgage of real property situate within tbe state which mortgage is recorded or registered on or after April 30, 1907.” It is not only admitted by both counsel, but asserted, tbat if tbe construction placed on tbe law by tbe trial court is correct, tbe law is unconstitutional, because there is no basis for a classification of
This law was held constitutional after exhaustive arguments in Mutual Benefit Ins. Co. v. County of Martin, 101 Minn. 179, 116 N. W. 572. The chief attack made against the law in that case was that' it provided for a classification that was improper and illegal under the amendment to the Constitution adopted in 1906 providing that “taxes shall be uniform upon the same class of subjects.” This court held that the law declared that “mortgages upon real estate shall constitute a class,” and that such a classification was a reasonable one, suggested by essential differences of nature, situation, or circumstances, between a mortgage on real estate, and notes, bonds, or unsecured debts. The contention in that case that the tax was not uniform upon all subjects of the same class was held unfounded. Justice Elliott said:
“Under this provision all property belonging to the same class must be treated alike. There must be no discrimination between the subjects of that class. The same means and methods must be applied impartially to all the constituent elements of the class. The amount of the debt secured by the lien furnishes the normal and natural standard for measuring the amount of tax which shall be paid when a mortgage is recorded under this statute.”
While it does not appear to have been urged in the above case that the law did not apply to mortgages securing debts of $50 or less, the decision clearly proceeds upon the basis that the act provides a uniform tax upon all mortgages, and therefore that the constitutional requirement that “all taxes shall be uniform upon the same class of subjects” was satisfied. It is to us quite apparent that this constitutional requirement is not satisfied if any mortgages are omitted from the operation of the act. It was again held that chap
We approach the construction of the act in question under the guidance of certain familiar rules. In the first place, the intent of the legislature is to be ascertained from the language of the entire act, read in the light of the object evidently in view; that is, doing away with the inequality and injustice that often resulted under the old system. Secondly, the elementary rule that every presumption is in favor of the constitutionality of an act of the legislature, and that the court should not declare it unconstitutional, except when satisfied after the most careful consideration that it conflicts with some provision of the state or Federal Constitution. Thirdly, the rule, peculiarly applicable here, that if the act is reasonably susceptible of two different constructions, one of which will render it constitutional and the other unconstitutional, the former construction must be adopted.
Applying these rules to the construction of chapter 328 and for the present leaving section 2 out of consideration, it is plainly apparent from the language of the entire act that the legislature intended to constitute mortgages on real estate a class for the purposes of taxation, and did not intend to exclude from the class any subject that properly came within it; that is, did not intend to exclude mortgages given to secure an indebtedness of $50 or less. No reason has been or can be suggested for omitting such mortgages from the operation of the act, and no language used either in the
The title is: “An act to provide for the taxation of mortgages of real property.” By section 1 the word “mortgages,” as used in the act, is defined: 'It “shall mean any instrument creating or evidencing a lien of any kind” upon real estate. Section 3 provides that' “all mortgages upon which such tax has been paid” shall be exempt from all other taxes. Section 4 provides that, in case of mortgages made to a mortgagee in trust to secure the payment of bonds or other obligations to be issued thereafter, a statement may be included therein of the obligations issued and to be issued, and that the tax shall be computed upon the amount so stated. Section '5 provides how the tax shall be paid, -that the treasurer’s receipt shall be indorsed on the mortgage, or, if the mortgage is exempt from taxation, that such fact shall be so indorsed thereon. Section 6 provides that, when the real estate described in the mortgage is not taxed by direct tax upon the assessed valuation thereof, the registration tax-shall he paid to the State Treasurer; hut as to all real property described in any mortgage taxed upon an assessed valuation the registry tax shall be paid as provided in section 5 hereof.” Section 7 provides that no such mortgage shall be recorded after April 30, 1907, unless said tax shall have been paid. Section 8 provides that “all mortgages of real estate recorded or registered prior to April 30, 1907, shall be taxable as provided by law under the provisions of law relating thereto prior to the enactment hereof: Provided, that the holder of any such mortgage may pay * * * the tax herein prescribed. * * Thereafter such mortgage debt shall not be otherwise taxable.”
The provisions quoted above are sufficient to indicate clearly an intention to. impose a registration tax upon all mortgages. All that is lacking to make the act complete is the amount of the tax, and the measure by which the amount to be paid on each mortgage shall be ascertained. Section 2 was intended to fix the rate and the measure. The language of that section is unfortunate: “A tax of fifty cents is hereby imposed upon each one hundred dollars, or
It would have saved trouble had the legislature simply fixed the rate, and left the computation to the officials upon whom the duty of collecting the tax was imposed; but it was apparently thought that it would economize labor or save making change to establish a unit of $100 as a measure or yardstick. In making the unit “one hundred dollars, or major fraction thereof,” the lawmakers apparently did not have in mind that mortgages might be given to secure $50 or less, and thus that the measure provided could not be used. But as there was no reason whatever for not taxing these small mortgages, as well as larger ones, as the entire act indicates an intention to tax all mortgages, and especially as it would otherwise be unconstitutional, we think that the language of section 2 is reasonably susceptible of the construction that it does not exclude from the operation of the act mortgages of $50 or less, and that we should so construe the law in order to avoid declaring it unconstitutional. That it would be unconstitutional if construed as it was by the trial court, and that it is constitutional as we construe it, is, we think, clear.
A mortgage of $50 or less is either taxable under the law or not within its operation at all. If not within its operation, the security or lien is not taxed at all, though the indebtedness is subject to a' tax of three mills as a credit under chapter 285, p. 397, Laws 1911.
It may be suggested that the rule “de minimis non curat lex” could be applied to save the law. But the trouble is, not a lack of substantial equality of taxation, but a classification for which no basis can be suggested. That the omission from a class of subjects that clearly belong to such class would make the law invalid is plain. In justice to the trial court it should be stated that the effect of the construction of the law on its constitutionality was not argued or considered in that court, and we do not intimate that the construction adopted by the trial court would not be justified, if such construction did not make the law violate the Constitution of this state. We hold merely that the act is fairly susceptible of- the construction we have given it, and that, as so construed, it is a valid law. The classification is a proper one, if, as we hold, all mortgages are included in the class, and the adoption of the unit system of ascertaining the amount of the tax on each mortgage, though it may result in slight inequality in a few cases, brings substantial equality and does not render the law void. This unit or measure can be legally used when the amount secured by the mortgage is more than $50, but is inapplicable when it is attempted to apply it to a mortgage of $50 or less, because the measure is too large.
This leaves only the question of what tax a mortgage of $50 or less is to pay. We think that the act shows an intent to fix a rate of one-half of one per cent applicable to all mortgages; that the unit or measure may be used, where it can be applied; but that, as to mortgages that are too small to be measured by the unit provided, the rate of one-half of one per cent, was intended to apply. This seems more logical than holding that every mortgage of $50 or under shall pay a tax of fifty cents. Such a holding would be inconsistent with saying, as we have said, that the legislature did
We hold that a mortgage securing an indebtedness of $50 or less is within the operation of the law in question, and taxable, and that, as so construed, the law is constitutional.
Judgment reversed.