Reynolds v. Bowen , 138 Ind. 434 ( 1894 )

Howard, C. J.

On the 17th day of September, 1891, the appellee began this action against the appellants, by filing in the Carroll Circuit Court his complaint in three paragraphs, asking for the cancellation of certain taxes charged against his decedent’s estate.

The questions presented by the record arise upon the overruling of appellants’ demurrers to the complaint. The appellants refusing to plead further, judgment was rendered against them, and the auditor and treasurer were ordered to cancel and "strike from the tax-duplicate of Carroll county, Indiana, the several amounts so •placed upon said duplicate by said auditor as omitted property.”

From the transcript of the proceedings before the auditor, which is set out in the complaint, it appears that the auditor, having' received information that certain personal property of the decedent had not been listed for taxation for the years from 1881 to 1889, inclusive, issued to the administrator a written notice requiring him to appearand show cause why such omitted property should not be added to the tax-duplicate.

In response to this notice, the administrator appeared before the auditor, and moved to set aside the notice as insufficient, which motion was overruled by the auditor.

The administrator thereupon answered, first repeating his objection to the notice as not sufficiently specific in the description of the omitted property; stating also that the administrator had no means of knowing whether the sums charged as omitted were correct or not, and that, as administrator, it was his duty to deny, and he did deny each item so charged, and demanded that strict proof be made.

It was further stated in the answer, that for each of the years named "the deceased subscribed and swore to a tax list made out in due form of law and handed it to the proper assessor, wherein the deceased returned credits and money loaned” in the several amounts named; "That this valuation was approved by the assessor, who duly returned the same to the auditor of the county; that said valuations were duly submitted to the board of equalization, and duly approved by said board, and the auditor of the county duly placed the same upon the tax duplicate; that the deceased paid in full his State, county and school tax thereon.”

The administrator further answered that section 259 of the general tax law, approved March 6,1891 (p. 291), repealed all laws and parts of laws within the purview of that act, including section 1 of an act approved March 9, 1889 (p. 341), which was an act to amend section 147 of an act concerning taxation, approved March 29, 1881; that there is, therefore, no law now in force for the taxation of omitted property, but section 142 (p. 257) of the tax law of 1891, which last section is prospective only, and does not authorize the assessment of property so omitted prior to 1891.

The statement filed by the auditor continues: “In this investigation, I was embarrassed by the refusal of those who had the custody of the books, notes, mortgages and papers of the deceased, to produce them in evidence; and, hence, I am compelled to decide from the best evidence before me. It clearly appears from the evidence, that the notes and mortgages which are of record in this and surrounding counties are of the value shown by the records.”

“Many witnesses testified before me, relating to said alleged omitted property, and many records and documents were read in evidence.

‘ ‘The hearing was continued from day to day until the 10th day of April, 1891, when all the evidence having been given by agreement of all parties, I took the case under advisement.

“I now find that during all the years, 1881, 1882, 1883, 1884, 1885, 1886, 1887, 1888 and 1889, the said Abner H. Bowen was a resident of the city of Delphi, in Carroll county, Indiana; that he departed this life on the 10th day of February, 1890, and, at the time of the commencement of this proceeding, and until the 3d day of July, 1891, the said William R. Stewart was the administrator of Bowen’s estate; it being suggested that Natheniel W. Bowen succeeded Stewart as such administrator on the 3d day of July, 1891.

“I further find that for the said years the said Bowen’s personal property was not all listed for taxation, but, on the contrary, that property belonging to him was omitted from the assessment books and from the proper tax duplicates for the several years which is and was of the following value:

For the year 1881, moneys, money loaned and credits........................ $104,600 00

< ( For the year 1882, moneys, money loaned and credits........................ 134.000 00

< i For the year 1883, moneys, money loaned and credits........................ 146.000 00

For the year 1884, moneys, money loaned and credits........................ 162,500 00

For the year 1885, moneys, money loaned and credits ....................... 172.000 00

For the year 1886, moneys, money loaned and credits........................ 175.000 00

For the year 1887, moneys, money loaned and credits........................ 218,840 00

Eor the year 1888, moneys, money loaned and credits........................ 219.000 00

i i For the year 1889, moneys, money loaned and credits 252,000 00

“I find that the above omitted property was owned by said Bowen on the 1st day of April of the years above named; and I now assess the same as omitted property which has unjustly escaped taxation, and I now correct the proper tax duplicates of said county accordingly, and add said omitted property thereto.”

It was averred in the complaint that the tax duplicates, as so altered by the addition of such omitted property, had been placed in the hands of the county treasurer for collection; that the taxes alleged to be due thereon amount to about thirty thousand dollars, and that the treasurer is insisting on their payment.

The question has therefore been raised as to whether this is a suit for the cancellation of the alleged illegal taxes, or a suit to enjoin their collection. While the form of the pleadings shows an action for cancellation, yet the nature of the action and the result aimed at do not differ from those of a perpetual injunction; and we agree with counsel for appellee, that the question so raised is not important. Either form of action invokes the equitable jurisdiction of the court, and when all the necessary parties are before the court, such equitable relief may be granted as is consistent with the facts proved. Keifer v. Summers, 137 Ind. 106.

The objections to the auditor’s assessment, urged in appellee’s brief, are the same'as those made in the complaint, and the same as those made originally in the answer to the auditor’s notice to show cause why the omitted property should not be added to the duplicate. These objections we shall notice in order.

Appellee claims that “there was not, in the statement filed with the auditor, or the notice issued by the auditor to the appellee, or in the finding, any such identification and description of the alleged omitted property, as would authorize the auditor to assess it as omitted property.” The law authorizing the proceedings by the auditor has been on the statute book since the enactment of the tax law of 1881, where it stands as section 147. It is section 6416, R. S. 1881, section 2129 of Elliott’s Supplement, and section 142, supra, of the tax law of 1891; and, so far as necessary to set out, is as follows:

“Whenever the county auditor shall discover or receive credible information, or if he shall have reason to believe that any real or personal property has, from any cause, been omitted in whole or in part in the assessment of any year or number of years, from the assessment book, or from the tax duplicate, he shall proceed, to correct the tax duplicate, and add such property thereto, with the proper valuation, and charge such property and the owner thereof with the proper amount of taxes thereon, to enable him to do which, he is invested with all the powers of assessor under this act.

“But before making such correction or addition, if the person claiming to own such property, or occupying it, or in possession thereof, resides in the county and is not present, he shall give such person notice, in writing, of his intention to add such property to the tax duplicate, describing it in general terms, and requiring such person to appear before him at his office at a specified time, within five days after giving such notice, and to show cause, if any, why such property should not be added to the tax duplicate; and if the party so notified does not appear, or if he appears and fails to show any good and sufficient cause why such assessment shall not be made, the same shall be made, and the county auditor shall, in all cases, file in his office a statement of the facts or evidence on which he made such correction.”

As to the statement made to the auditor, and of which complaint is made, it would seem.that it is sufficient, under the statute, .if the auditor receive any information, written or oral, or even“if he shall have reason to believe ” that any property has been omitted from taxation. The statement, whether written or not, is sufficient if it inform the auditor that property has been omitted which should have been assessed.

Appellee considers that the written notice to the property owner should set out the omitted property by specific description. But the statute requires only that the auditor “shall give such person notice, in writing, of his intention to add such property to the tax duplicate, describing it in general terms.”

“Taxes,” as said in Barker v. Morton, 19 Ind. 146, “are not assessed against specific articles of personal property by description, but on the aggregate number, quantity and value. Take money, take a stock of goods, or manufactured articles, the taxpayer is assessed for what he owned on the first day of January [now April]. ’ ’

From the very nature of the case, it may well be that the auditor can give only a general description. The property-owner himself is the one who can give a particular description of his own property. This the tax law requires him to do in the first place, when he makes out his particular list and hands it to the assessor. It will be noticed, in the section which we are considering, that for the purpose of making the assessment of omitted property the auditor “is invested with all the powers of assessor under this act.”

This gives to the auditor very large powers. Section 51 of the tax law of 1891 (p. 213) requires the assessor, in case any person shall neglect or refuse to make out a proper statement of his property, “or if the assessor shall be in doubt whether such statement is correct, ” “to examine on oath any other person whom he believes to have knowledge of the amount, or value of any property owned or held by such person so neglecting or refusing; and such assessor is authorized to set down and assess to such person such amount of personal property as he may deem just.” The act of 1881 had similar provisions. Section 6340, R. S. 1881. The power to assess is a summary power; and, to secure uniform and just taxation, and protect the revenues of the State, both as to unscrupulous and dishonest evasion of the law, and also in the interests of honest taxpayers, it is necessary that assessment statutes should be liberally interpreted in aid of the taxing power.

Where title is sought through a tax sale, the statute is strictly construed in favor of the owner, but not where the owner is attempting to avoid the payment of his just taxes. Ricketts v. Spraker, 77 Ind. 371.

It was never intended that proceedings before the auditor, such as those objected to in this case, should be conducted with all the precision and formality of an action in court.

There is another fatal defect in the objections made by the administrator to the notice and other proceedings of the auditor in assessing the omitted property. Appellee comes into a court of equity and asks that equity be done him. He should, therefore, first show that he has himself done equity. His objections, made before the auditor and repeated on this appeal, are: 1, that the notice was not sufficiently specific; 2, that for each of the years named the decedent had subscribed and sworn to a tax list, made out in due form of law, and handed it to the assessor, wherein the decedent returned certain credits and money loaned; that the valuation made by the decedent was approved by the assessor, duly returned to the auditor, submitted to the county board, again approved and so placed upon the duplicate; 3, that the administrator is not the proper party .to notify in case of omitted property; and 4, that the act of 1891 repealed the law authorizing such action by the auditor. In short, the defense is that the decedent made his own assessment, swore to it, the assessing officers accepted the assessment so made, and now there is no help for it. The appellee makes no pretense that the assessment was fair or just, or that the decedent had, in fact, given in all his property for taxation. He says, in effect, to the State, “The thing is done, and what are you going to do about it?”

In taking' this position, appellee seems to rely upon Florer, Treas., v. Sherwood, Admr., 128 Ind. 495, and Woll, Treas., v. Thomas, Admr., 1 Ind. App. 232. We do not understand that these cases go any further than to hold that under the tax law of 1881 the county auditor, acting under his general authority to assess omitted property, has no right to increase the valuation of property returned by the assessor.

It may be admitted that if a dishonest property-owner make return to the assessor of a given note, or other obligation, at less than its true value, and by the mistake or connivance of the assessor such assessment is approved, and by like culpability of the county board it is finally placed upon the tax duplicate, and there is no appeal to the State Board, the State will have no redress except to prosecute the guilty parties criminally, and that the taxpayer in such case will escape the payment of his just taxes. But this has no bearing on a case where a property-owner fails to give in certain of his notes or other obligations, and is assessed only on the remainder. If he holds two notes, one for five hundred dollars and one for four hundred, each worth its face, and gives in for taxation, “notes, five hundred dollars,” there is a plain omission of four hundred dollars which the auditor should assess if he learns of the omission.

As for current money, that, being itself the measure of value, is always worth its face, so that what is not given in is omitted. If one has nine hundred dollars in money, on hand or on call, and he gives in for taxation seven hundred, there is a clear omission of two hundred. This consideration of itself would be sufficient to show that the complaint in this case is bad, for it is not claimed by appellee that his decedent listed any money, but only “credits and money loaned” for the several years named; whereas, the law requires that “moneys” should be listed, and the auditor finds that not only “money loaned and credits,” but also “moneys” were omitted from taxation during all these years. Both the tax law of 1881 and the present law make the distinction between money or “money on hand or subject to my order,” and “money loaned. ’’ But, in any view, the holding in Florer, Treas., v. Sherwood, Admr., supra, and Woll, Treas., v. Thomas, Admr., supra, can hardly avail to justify a property-owner who comes into a court of equity, admitting, substantially, that he has not made an honest return of his property for taxation, and not denying 'that the assessment, as corrected by the auditor, is a just one. Might not the State, in such a case, meet the taxpayer on his own ground and reply: “The assessment is now corrected and placed upon the duplicate. Plave you any reason to show why it is not a just assessment?”

Musselman v. City of Logansport, 29 Ind. 533, was an action to enjoin the collection of taxes on personal property on the ground that the sworn statement of the plaintiff was received by the assessor without question. The complaint was held bad. The court said that there was no averment that the personal estate of the plaintiff liaable for taxation was less in value than the corrected assessment, none that his own sworn list was correct, nothing from which the conclusion could be drawn that the increased assessment was not entirely proper and correct; that it was only claimed that the plaintiff was not notified of the increase, and that there was no proof before the council; in a word, that the plaintiff sought the extraordinary process of injunction from a court of equity to protect him from paying a tax which, according to his own showing, it does not appear but that he ought, in justice and conscience, to pay. There was no equity whatever as the basis of his application. City of Delphi v. Bowen, 61 Ind. 29; Ricketts v. Spraker, supra.

In Jones, Aud., v. Summer, 27 Ind. 510, it was sought to evade the payment of taxes because the assessments had been corrected by the auditor “without right and contrary to law;” but because it was not shown that the assessments, as corrected, were not in fact made upon the true valuation of the property, the injunction asked was refused. This court said further, speaking by Judge Frazer, that it would be difficult to imagine a case more utterly barren of equity. The property owner “committed serious errors in his lists, which in conscience, and as a good citizen, he ought voluntarily to have corrected, but did not. They were corrected, and now he asks to be secured in an advantage as the fruit of his own blunder, merely because the correction, though just, was directed by the wrong authority and without notice to him.” The able and upright judge who decided that case continues: “The decisions of this court heretofore, in restraining the collection of taxes, have gone to the utmost extent of authority. If we should now take the step required in this case to sustain the ruling below, we would be without the support of either reason or precedent, and the collection of public taxes would, upon the warrant thus given, be constantly arrested at the instance of those who seek to escape their just share of the public burdens.” Schmidt v. Wright, 88 Ind. 56; Cauldwell v. Curry,Treas., 93 Ind. 363.

In the case of Sturges v. Carter, 114 U. S. 511, appealed from the State of Ohio, the contention was “That a taxpayer who has been evading the payment of the taxes due from him by making false returns, can shield himself behind the annual settlement made by the auditor with the treasurer, in which his returns were assumed to be true, and that the Legislature can pass no act by which the falsity of the returns can for a limited period be exposed, and the payment of the taxes enforced — in other words, that the taxpayer has a vested right in the fruits of his false returns.” Such a proposition can. not be sustained. Foster v. President, etc., Essex Bank, 16 Mass. 245.

“In our opinion,” continues the court, “no right of the taxpayer was invaded by the act of 1878. His investments in bonds and stocks were subject to taxation; the taxes upon such investments were due to the State, and the act of 1878 merely provided a method by which the taxes might be assessed and collected in spite of the annual settlements made by the auditor. It gave a new remedy to the State for enforcing a right which it had all the time possessed, namely, the right to the taxes upon property liable to taxation.”

But the auditor, in this case, denies that his action was a mere re-valuation of the property already assessed. He says expressly, “That for the said years the said Bowen’s personal property was not all listed for taxation, but, on the contrary, that property belonging to him was omitted from the assessment books, and from the proper tax duplicates, for the several years. * * * And I now assess the same as omitted property which has unjustly escaped taxation, and I now correct the proper tax duplicates of said county accordingly, and add said omitted property thereto.”

We think, therefore, that the objections made by the administrator to the sufficiency of the information received by the auditor, concerning omitted property, and as to the sufficiency of the notice issued by the auditor to the appellee to show cause why this omitted property should not be placed upon the tax duplicate, were not well taken.

It is next urged that .the law does not authorize notice to the administrator as to omissions of property from assessment made by a decedent.

The property alleged to have been omitted in this case is personal property. On the death of the owner, the law puts this class of property in the hands of an executor or administrator, who is made the personal representative of the decedent. The administrator gives bond for all the personal property of the decedent; it is all regarded as in his possession and under his control.

The statute provides for notice to “the person claiming to own such property, or occupying it, or in possession thereof,” “if he resides in the county and is not present.” Notice to any one but the administrator would have been insufficient. But the administrator was present, he appeared and answered; no other notice was necessary.

It is claimed that the proceedings were ineffectual because the auditor did not “file in his office a statement of the facts or evidence on which he made such correction. ” We think such a statement is shown in the complaint, in which the whole proceedings before the auditor, as filed in his office, are set out. Irregularities do not affect the correctness of a tax assessment, provided the proceedings are substantially correct and the assessment is fair and just. Musselman v. City of Logansport, supra.

It is finally contended that “The tax law of 1891 repealed all former laws upon the subject of taxation, and took away all rights existing under former laws except such as are expressly saved.” And that “As the right of the auditor to assess omitted property for any year or years prior to its passage is not saved by the act of 1891, such right does not exist.”

This, again, is claiming equity without doing equity. If these taxes were unpaid, they belong to the State. They are the State’s property, and the right of the State to them never ceased. Appellee’s claim, then, in this contention, amounts to saying: “These taxes may belong to the State, but she has deprived herself of the means of collecting them.” But, as a matter of fact, the statute of 1891 has not repealed the law authorizing the assessment of omitted property by the auditor. The Legislature, in enacting the tax law of 1891, had no intention of giving delinquent taxpayers any such advantage over the honest people of the State. If there is any class of property more than another, which that law sought to have returned and appraised at its true value, it is such property as is concerned in this suit, and which had for so long a time escaped taxation in the hands of unscrupulous money lenders, to wit: money, notes, bonds and other credits, and choses in action.

The full title of the tax law of 1891 is: “An act concerning taxation, repealing all laws in conflict therewith and declaring an emergency.” The law authorizing the assessment of omitted property by the auditor is not in conflict with the tax law of 1891, for it is itself a part of that tax law, being, as we have seen, a re-enactment, word for word, of the former statute on the same subject. It stands as section 142 of the present law, and section 147 of the tax law of 1881. It has been in force,, without interruption, since'March 29th, 1881. Appellee says, however, that in the body of the present act there is a repeal of all laws in the purview of the act; that is, of all other laws on the subject of taxation. But by article 4, section 19, of the constitution, “If any subject shall be embraced in an act which shall not be expressed in the title, such act shall be void only as to so much thereof as shall not be expressed in the title.”

No laws in the purview of the tax law, therefore, except those that are in conflict with that law, have been repealed. If the repealing section of the tax law should be found to have the meaning given to it by appellee, then so much of that section as embraced any subject not expressed in the title of the act would be void. It is only laws in the purview of the tax law, which are in conflict with it that are repealed.

In the case of Barber Asphalt Paving Co. v. Edgerton, 125 Ind. 455, this court, citing numerous authorities, said: "Underlying all the rules for the construction of statutes is the cardinal and general one, that in construing a statute the court will seek to discover and carry out the intention of the Legislature in its enactment. In the search for that intention the court will look to each and every part of the statute; to the circumstances under which it was enacted; to the old law upon the subject, if any; to other statutes upon the same subject, or relative subjects, whether in force or repealed; to contemporaneous legislative history, and to the evils and mischiefs to be remedied.”

Guided by that broad rule, we could have little difficulty in concluding that the Legislature, in enacting a law which might, in some measure, relieve the people of the State from the evils of unequal taxation, would never think of repealing a law which provided for assessing property which had been for years dishonestly kept off the tax duplicate, particularly when we find the same law, word for word, re-enacted in the new statute. But even if there were an express repeal of the law in question, and at the same time, in the same statute which repealed it, a re-enactment of the law repealed, the reenactment would so far neutralize the repeal as to keep the old law in force without interruption. Sutherland Stat. Con., sections 133, 134, 156. The decisions of the courts are in harmony with the rule as stated by that author. Middleton v. New Jersey, etc., R. R. Co., 26 N. J. Eq. 269; Skyrme v. Occidental, etc., Co., 8 Nev. 219; Capron v. Strout, 11 Nev. 304.

Even where the repealing statute only substantially reenacts the law repealed, it is held that inchoate statutory rights accrued under the old law are not defeated. Moore v. Kenockee Tp., 75 Mich. 332.

In Scheftels v. Tabert, 46 Wis. 439, the rule is very emphatically stated: “When the revised and consolidated act reenacts in the same words the * act or acts so revised and consolidated, such revision and consolidation shall be taken to be a continuation of the former acts, although such former acts may be expressly repealed by such revised and consolidated act.” Citing numerous cases in the same court.

In State v. Wish, 15 Neb. 448, there is a like expression of the rule: ‘ ‘Where the reenactment is in the words of the old statute, and was evidently intended to continue in force the uninterrupted operation of such statute, that the new act or amendment is a mere continuation of the former act, and is not in a proper sense a repeal.”

The rule, as so stated, is quoted as authority by Judge Elliott in the case of Sage v. State, 127 Ind. 15. See, also, Wright v. Oakley, 5 Met. (46 Mass.) 400; Steamship Co. v. Joliffe, 69 U. S. 450; Mitchell v. Halsey, 15 Wend. 241; Douglas v. Douglas, 5 Hun, 140; Stafford v. His Creditors, 11 La. Ann. 470; Kesler v. Smith, 66 N. C. 154; United Hebrew Asso. v. Benshimol, 130 Mass. 325; Powers v. Shepard, 48 N. Y. 540; Cheezem v. State, 2 Ind. 149; Alexander v. State, 9 Ind. 337; Martindale v. Martindale, 10 Ind. 566; Cordell v. State, 22 Ind. 1; State v. Miller, 58 Ind. 399; Gorley v. Sewell, 77 Ind. 316; Sage v. State, supra; and City of Junction City v. Webb, 44 Kan. 71, where many of the foregoing .authorities, including Indiana cases, are cited.

There remains, therefore, no ground on which the complaint in this case can stand.

In Musselman v. City of Logansport, supra, it was said that the subject of taxation is one within the jurisdiction of the law-making power, and that it is not the province of the courts to interpose obstacles' to the execution of the legislative will, when clearly expressed.

Filed March 6, 1894.

It may be added that when we find honest officials, respecters of their oaths, as the auditor and ex-auditor, appellants in this case, it is the duty of the courts to uphold their efforts with the strong support of the law, as enacted by the Legislature of the State.

The judgment is reversed, with instructions to sustain the demurrer to each paragraph of the complaint, and for further proceedings not inconsistent with this opinion.