155 N.W. 666 | N.D. | 1915
Plaintiff brings this action to restrain the State Tax Commission from enforcing the provisions of chapter 255, Sess. Laws 1915. This legislation had its origin in the popular belief that moneys and credits had in the past escaped taxation, but that the owners of said property were morally, if not legally, justified in taking some measure to avoid the payment of a 7 per cent or 8 per cent tax, which necessity doled out to the inhabitants of some of our cities, when the banks and other reputable depositaries would pay but 4 per cent and 5 per cent for the use of said money. It was, therefore, suggested by some of the people who interest themselves in legal reforms that, if a special and lighter rate were imposed upon money and credits, this class of property and the assessor would be able to get better acquainted. The only obstacle that presented itself was the Constitution, which, it seems, favored the theory of taxing all classes of property at the same rate, and contained several provisions inconsistent with this new theory of taxation. The reformers, however, proceeded to meet these obstacles in the very commendable manner of a constitutional amendment, and in the fall of 1914 the voters adopted a concurrent resolution (chapter 103 of the Session Laws of 1913), changing § 176 of the Constitution of North Dakota. After the amendment, our Constitution read as follows: “Taxes shall be uniform upon the same class of property, in-
“Section 1. Definition. Tax Nate.— ‘Money’ and ‘credits’ as the saixxe are defined in § 2074 of the Compiled Laws of 1913, are hereby exempted from taxation other thaxx that imposed by this act and shall hereafter be subject to an anxxual tax of 2 mills on each dollar of the fair cash value thereof. But nothixxg in this act shall apply to money or credits belonging to incorporated banks situated in this state.
“Section 2. ITow Listed. — All ‘money’ and all ‘credits’ taxable under this act shall be listed in the manner provided in § 2095 of the Coxnpiled Laws of 1913, but such listing shall be upon a separate blank from that upon which other personal property is listed.
'“Section 3. Tax Coxnxnission to Prepax’e Instrxxctions. Forxn of Be-turn. , Blanks. — The North Dakota Tax Commission shall annually prepare instructions for bringing in the lists reqxxired by the preceding section. They shall prepare axxd distribute through the county auditors to the assessors, a form for the return which the taxpayers are reqxxired to xnake by this act, and this form shall state the rate of taxation and be printed on a separate sheet, and shall be entirely distinct froxn the forms prepared for the returns of other classes of property. Such forms shall require only aggregate suxns of credits and of moneys.
“Section 4. Litigated Taxes. — Any assessnxexxt of money and credits heretofore made, the legality of which has been placed in litigation axxd the collection of the tax thereon has been, enjoined and is now*309 pending in tbe court may be compromised and settled by payment at tbe rate of 25 mills on the assessed valuation of such moneys and credits.
“Section 5. Emergency. — Whereas, this act should be effective upon the assessment of taxes for the year 1915, an emergency exists and this laAv shall go into effect upon its passage and approval.”
Acting under this new law the Tax Commission of North Dakota took steps looking to an assessment of the moneys and credits of our taxpayers in general and of our relator, Mr. Amerland, incidentally, whereupon this action was instituted. It is claimed by relator that § 255, Sess. Laws 1915, violates clauses of the Constitution to which no amendments have been made. We will quote briefly from his brief: “The petitioner alleges that the said legislative act violates several of the provisions of the Constitution of the state of North Dakota, all of Avhich said alleged violations are set out in full in said petition. In said petition some ten alleged grounds of invalidity or unconstitutionality are set forth. While we respectfully insist upon the merits of each and every one of such propositions, there are, in our opinion, a limited number of questions Avhich are so conclusive as to the invalidity and unconstitutionality of this law that we shall not discuss all of said ground of invalidity. . . . We, therefore, present for consideration to this court what we contend to be three unquestionable and direct violations of the fundamental law' of this state. Eirst, the act in question provides a fixed and arbitrary rate of taxation upon one class and subject of property without reference to the amount of revenue necessary to derive from the citizens of the state for public purposes. Second, the act in question does not state distinctly the object of the same; third, the act in question is void and ineffective in that it does not provide for any application, apportionment, or distribution of the revenues raised thereby.” The Tax Commission and other defendants, instead of meeting this constitutional attack, dispute the right of plaintiff to maintain the action and the jurisdiction of this court to entertain the proceedings. This divides the controversy into two essential parts: Eirst, Can the action be maintained? second, Is the act unconstitutional?
Defendants maintain that the complaint itself shows that the relator 'has another reinedy, to wit, to pay the taxes and sue to recover the same. Cases cited by them, however, like Merchants’ State Bank v. McHenry County, 31 N. D. 108, 153 N. W. 386, show the law under which the tax is levied, constitutional.
It is claimed that the court has no jurisdiction to interfere with a coordinate branch of the state' government. However, it is not against
Our conclusion generally is that prohibition is the proper remedy, if under the facts of the case relator has any remedy in a court of equity. We are aware that the mere fact that relator is called upon to pay an illegal tax affords no grounds for equitable interference. In addition to his grievance, relator must show to this court other facts sufficient to bring the ease within the jurisdiction of a court of equity. The grounds appearing here which we think sufficient to answer this requirement are as follows: The matter is clearly piiblici juris. Every taxpayer of the state of North Dakota may have moneys and credits subject to the demands of this law. The state, every county, township, city, or village is directly interested, thus affecting the sovereignty of the state. Such being the case, this action may prevent a great multiplicity of suits. The action is timely brought by the relator upon his own behalf and upon that of all other persons similarly situated, thus preventing any defense to grow through laches. In cases where the sovereignty of the state is directly involved, this court is vested with large discretion in determining whether, under the particular facts of such case, a showing has been made which appeals to its original powers. The holdings of our court along this line began with: State ex rel. Walker v. McLean County, 11 N. D. 356, 92 N. W. 385; State ex rel. McDonald v. Holmes, 16 N. D. 457, 114 N. W. 367; State ex rel. Steel v. Fabrick, 17 N. D. 532, 117 N. W. 860; State ex rel. Shaw v. Harmon, 23 N. D. 513, 137 N. W. 427; and the later cases from our own court, already cited. See also State ex rel. Owen v. Donald, 160 Wis. 21, 151 N. W. 331.
Our conclusion then is that the matter is of sufficient public importance ; directly affects the sovereignty of the state; is calculated to prevent a multiplicity of suits, and the relator is timely in his action. Therefore, this court should exercise its powers and take original jurisdiction of the subject-matter. Further, that prohibition is the proper remedy to invoke these powers. :
*313 “In line five, § 1 of the printed bill, strike out tbe word ‘three’ and insert in lieu thereof the word ‘two.’
“Strike out all of said bill after § 2, and add the following:
“Section 3. Tax Commission to Prepare Instructions. Form or Return Blanks. — The North Dakota Tax Commission shall annually prepare instructions for bringing in the lists required by the preceding section. They shall prepare and distribute through the county auditors to the assessors, a form for the returns which the taxpayers are required to make by this act, and this form shall state the rate of taxation and be printed on a separate sheet, and shall be entirely distinct from the forms prepared for the returns of other classes of property. Such forms shall require only aggregate sums of credits and of moneys.
“Section 4. Litigated Taxes. — Any assessment of money and credits heretofore made, the legality of which has been placed in litigation, and the collection of the tax thereon has been enjoined and is now pending in the court, may be compromised and settled by payment at the rate of taxation as provided in § 1 of this act.
“Section 5. Emergency. — Whereas this act should be effective upon the assessment of taxes for the year 1915, an emergency exists and this law shall go into effect upon its passage and approval. And when so amended recommended the same do pass.”
This report was adopted, and upon the very last day of the session the bill was passed in both houses. This is a simple chapter from the history of the bill as disclosed by the public records of which this court can take judicial notice. Section 175 of the state Constitution reads as follows: “No tax shall be levied except in pursuance of law, and every law imposing a tax shall state distinctly the object of the same to which only it shall be applied.” In State v. Klectzen, 8 N. D. 286, 78 N. W. 984, 18 Am. Crim. Rep. 324, and at page 291 of the state report, it is said: “All taxes, whether state, county, city or school, are paid into the county treasury; . . . but the disposition to be made of the proceeds of taxes when collected depends wholly upon the terms of the law under which each is levied and collected. In this respect the statute in question is wholly silent. The provisions of § 175 of the state Constitution are clear and unambiguous, and the same are mandatory upon the legislature and hence we are compelled to hold that the statute is repugnant to the Constitution.”
The facts recited make it plain that the law clearly violated § 175 of the Constitution, and the writ of prohibition must issue.
We might add, in passing, that the attempt to attach an emergency clause to chapter 255, Sess. Laws 1915, was in contravention of the initiative and referendum amendment to the state Constitution, and that said law, even if constitutional, would not have applied to the taxes which were attempted to be collected.