Mandamus at the instance of petitioner to compel the county auditor and treasurer of Rice county to accept payment of certain taxes levied upon property owned by him in the city of Faribault at a discount rate and as authorized by L. 1933, c. 414, § 1. Being unsuccessful in the court below, the matter has been brought here for review. The majority opinion sustains the trial court upon the theory that, as a matter of law, there is a classification here made which is unreasonable and arbitrary and as such is contrary to art. 9, § 1, of the constitution, which requires taxes to be uniform upon the same class of subjects. As stated in the majority opinion, that is the only question before us.
This court recently in Reed v. Bjornson, 191 Minn. 254, 257,253 N.W. 102, 104, commented upon this phase of the constitution, and the following excerpts therefrom are deemed important here: *Page 254
"We approach the solution of the questions presented under the guidance of certain elementary and fundamental rules, among which is that which invokes every presumption in favor of the constitutionality of an act of the legislature, and that the court should not declare such an act unconstitutional except when satisfied after the most careful consideration that it conflicts with some provision of the state or federal constitution. State ex rel. Hildebrandt v. Fitzgerald,117 Minn. 192, 134 N.W. 728. On the other hand, we may not stretch the constitution to suit the convenience of the hour.
"It is elementary that the power of taxation is inherent in sovereignty and that under our system of government it reposes in the legislature, except as it is limited by the state or the national constitution. In other words, the constitutional provisions are not a grant of, but a limitation upon, this power, and except insofar as thus limited it is exhaustive and embraces every conceivable subject of taxation."
With these principles of law before us, it may be of value to note what the tax situation in Minnesota was at the time the law here under review was under consideration by the legislature. What brought about the enactment of this particular statute?
Taxation always has been, is now, and probably always will be a matter of grave concern to all people, rich and poor alike. The tax dollar is hard to part with for all of us. Taxation takes with a heavy hand and places burdens upon thrift, economy, and savings. It reaches those who have property as well as those who have not, in some form, directly or indirectly. The subject is one of daily conversation and almost universal condemnation. No citizen is satisfied with present conditions. Those who seek public office talk about taxes and tax relief as the vital and supreme question.
Tax delinquencies in Minnesota have reached enormous proportions. The situation confronting the legislature was undoubtedly considered by it to be, as it was, of very grave concern to the state and its inhabitants. Compilations made by the Minnesota tax commission indicate certain very important facts. Out of taxes upon real estate, levied to be collected in 1932, 20.18 per cent, or *Page 255 $23,355,808, was uncollected. The percentage in the various counties varies greatly. The smallest percentage of delinquency for that year was in Steele county, where the delinquency was only 5.45 per cent; the next lowest Carver county, where the delinquency was only 5.91 per cent; and the next Winona county, where the delinquency was 5.93 per cent. These are the exceptions. In many counties the tax delinquency ran from 20 per cent up to 78.46 per cent in Lake of the Woods county. Such counties as Aitkin with 69.98 per cent; Beltrami, 66.37 per cent; Cass, 65.4 per cent; Koochiching, 55.12 per cent; Clearwater, 54.41 per cent; Roseau, 54.22 per cent; Mahnomen, 54.09 per cent; Pine, 45.51 per cent; Marshall, 45.09 per cent; Red Lake, 41.36 per cent; Pennington, 34.86 per cent, and the rest varying in degree, had reached a situation requiring extreme remedies. Even such counties as Hennepin with 19.86 per cent and Ramsey with 19.99 per cent delinquencies indicate the very serious situation then existing. The total of all uncollected real estate taxes in Minnesota on January 1, 1933, amounted to the astounding total of $59,865,125. The total amount of real estate taxes payable in 1932, including special assessments, was $115,715,797. This is the background to the enactment of this particular statute.
The legislature has in many prior enactments sought solution for tax delinquency. It will not be necessary again to refer to the many acts cited in the majority opinion. By L. 1925, c. 208, it was made permissible for the county officers to dispose of taxes, delinquent over a period of years as in this act provided, at one-fifth of the total taxes originally assessed. L. 1927, c. 119, further enlarged upon the privileges of the taxpayer to meet situations such as have been described. Of a similar import is L. 1929, c. 415. L. 1931, c. 129, grants relief of a similar nature. The chapter here under consideration, L. 1933, c. 414, simply enlarges upon what was permitted in prior enactments.
It seems difficult for ingenuity to devise more potent means of enforcing taxes than those operative here and of many years' standing. *Page 256
The tax judgment is made a perpetual lien upon the land covered thereby "until such judgment and taxes are paid in full." 1 Mason Minn. St. 1927, § 2207. Taxes may be paid by "any person who has a lien, by mortgage or otherwise, upon any land upon which the taxes have not been paid." He is given an additional lien for the amount of such tax so paid by him, and the same is collectible with and as a part of the amount secured by his original lien. § 2209. An occupant or tenant may pay taxes upon the property occupied by him and by filing a notice in the office of the register of deeds may enforce the same as a lien against the land with interest at 12 per cent per annum, or "he may retain the same from any rent due or accruing from him to such owner." § 2210. Before any deed can be recorded it is necessary that taxes be first paid. § 2211. On April 1 of each year the state auditor is required to make a list of all government and railroad lands, including lands sold by the state, furnishing on or before April 15 a copy of the list applicable to each county in which such lands lie, all for the purpose of taxation. § 2220. Property producing rental income may be attached so that the income may be taken and used in payment and discharge of delinquent taxes. § 2150. Under given circumstances, the county auditor, with approval of the court, may enter into leases with tenants who occupy and use real estate upon which taxes are delinquent. L. 1929, c. 266. And there is always the danger facing the property owner that a tax certificate may be purchased by an investor, in which event he of course cannot get the benefit of any discount. It is only where the state has bid in the property because of lack of other bidders that the discount provisions can come into play. Real estate is listed for taxation as of May 1 of each year. Immediately after January 1 following the tax is due, but the taxpayer may pay the same in instalments without penalty, the first half before June 1 and the second half before November 1 following. But a penalty attaches in the event of failure to pay either of such. § 2104. A further penalty attaches immediately after the first of January next following. § 2105. If the tax is not paid, proceedings are instituted and judgment is rendered in March for the amount of the unpaid tax plus penalties and costs. *Page 257 §§ 2107-2126. In May of that same year the property is offered for sale to any person who may wish to invest. §§ 2127-2134. If there is no bidder the property is bid in for the state. § 2128. Such property so bid in by the state may be sold to any purchaser thereafter in which event the county auditor issues a state assignment certificate. § 2137. By such certificate the purchaser becomes an assignee of the state's interest and as such is entitled to receive the principal and accruing interest until paid, or, if no redemption is made, he may proceed to have title vested in himself by having proper notice of expiration of redemption issued and served. § 2137.
In the case here under review it appears that the petitioner did not pay the second half of the 1929 tax. The tax went to judgment in March, 1931, and the property was sold for taxes by the auditor in May of that year. The 1930 tax likewise went to judgment and sale. The taxes for 1931 and 1932 have gone to judgment, but no sale has been had thereunder. This is so for the reason that the state had already directly acquired the lien created by such sale, and the subsequent delinquent taxes are simply cumulative thereto. It is said in the majority opinion that the enactment favors the delinquent taxpayer and for that reason puts him in a favored class over the taxpayer who is prompt in meeting his obligations. In one sense that is true, but is it not equally true that all property upon which taxes become delinquent is in the same situation? Can it be said as a matter of law that the tax delinquencies existing in Minnesota at the time of the enactment of this law were not such as to permit the legislature to enact legislation to have these delinquent taxes reduced and thereby bring about a probability of future equality of burden on the part of the redeeming taxpayer? Bearing in mind that the property had been offered for sale, at bids open to the world, there being no bidder, can we as a matter of law say that the legislature was without power to grant to property owners the privilege of redeeming their properties at less than the full amount? Is it likely that any person who is so situated that his taxes become delinquent can foresee when the delinquency occurs that the legislature is going to favor him several years later? Is this court willing to go on record now and predict *Page 258 with any reasonable degree of assurance that at the next legislative session tax reductions will be enacted into law? The law may not be a wise enactment, but courts are not authorized on that account to set it aside. The question is for legislative determination exclusively. The power to enact legislation carries with it also the power of repeal. If the present enactment proves futile and does not bring satisfactory results it may be repealed. We have no right to assume otherwise.
What is to be done with regard to landowners or those who have purchased tax sale certificates in reliance upon this enactment? What about him who has purchased property in reliance upon certification that all taxes are paid? Millions of dollars have been placed in mortgage loans upon our homes and farms by the Home Owners Loan Corporation and Federal Land Bank, and undoubtedly much of the proceeds therefrom has gone into liquidation of taxes under and by virtue of the "discounts" permitted under this law. The situation is serious and deserves our most careful thought and sympathetic consideration.
The problem, as I see the situation, is not one of classification for taxing purposes but rather one of finding a remedy or the means of clearing up bad debts due the state. According to the majority opinion it is conceded that the state may, by appropriate legislative enactment, dispose of its delinquent taxes at less than the full amount "just as the state call sell its buildings or other property," and that as such these delinquent taxes "may be disposed of by the state in such manner as the legislative branch of the state government may deem fit." Apparently the reasoning employed should lead to a result directly the opposite of that here obtained. Perhaps failure to sell at public sale is the basis for the conclusion. If this be true, where is the constitutional limitation or direction that such sales must be so conducted?
By G. S. 1878, c. 11, § 101, it was provided:
"All pieces or parcels of real property bid in for the state under the provisions of this act, and not redeemed within two years from the date of sale, shall become the absolute property of the state, and may be disposed of by the county auditor, at public or private *Page 259 sale as the auditor of state may direct, subject to such rules and restrictions as he may prescribe." To the same effect is G. S. 1894, § 1616.
These sections have been before this court in several cases, but nowhere is there any question raised as to lack of constitutionality because a private sale instead of a public one was held. State ex rel. Coates v. Butler, 89 Minn. 220,94 N.W. 688.
Our decisions hold uniformly that the state may dispose of its delinquent tax claims at less than the full amount due it. In State ex rel. Kipp v. Johnson, 83 Minn. 496, 497,86 N.W. 610, 611, it is said:
"The legislature has the power to provide that the state may sacrifice one-half of the taxes in order to get the lands back upon the tax books for the purpose of producing revenue."
And in State ex rel. Coates v. Butler, 89 Minn. 220, 222,94 N.W. 688, the Johnson case is expressly approved, and this further statement appears:
"In the sale provided for in section 1616, supra, there is an obvious effort to obtain revenue by yielding a portion of the amount for which lands have been previously sold to the state for taxes, * * * by clearing up past forfeitures, in giving up a part of its claims, to secure the desired end, whereby the state is to make a new transfer of its acquired absolute rights upon favorable inducements to purchasers to bid, as well as to the landowners to redeem, in order that the lands may be again placed upon the tax rolls for assessment."
It was urged on the oral argument that this law afforded a convenient landing place for the tax dodger. But this court in State v. Camp, 79 Minn. 343, 347, 82 N.W. 645, 646, said:
"It is suggested that the 'tax dodger' may again find comfort here, for it is said, if the tax judgment or sale be defective, he will permit subsequent taxes to accumulate, and never pay them. In case of a defective judgment or sale this might prove true. To avoid it, the state must obtain valid judgments. The courts cannot *Page 260 be looked to to enlarge statutes, by construction and interpretation, to intercept and obstruct those who make a study to avoid the payment of taxes. The duty of enacting revenue laws is with the legislature, not with the courts."
If a distinction is to be drawn between the tax delinquency here involved and such as obtain under various cleanup sales, the following quotation from Rupley v. Fraser, 132 Minn. 311,316, 156 N.W. 350, 352, is pertinent:
"Though we use the term 'forfeited to the state' upon expiration of three years from the date of sale to the state, it is well understood that there is no forfeiture of title in fact. The owner still has title and a right to redeem, until there has been a sale by the state to a private person and notice of expiration of redemption given and the time fixed by statute thereafter has expired. Until such time neither the state nor the purchaser therefrom has more than a lien. Cole v. Lamm, 81 Minn. 463, 84 N.W. 329; Minnesota Debenture Co. v. Scott, 106 Minn. 32, 119 N.W. 391."
Laws of similar purpose to the act here under review have been upon our statute books for a period of more than half a century. The problem involved is purely legislative. As was recently said by Associate Justice Cardozo in Life Casualty Ins. Co. v. McCray, 291 U.S. 566, 572, 54 S. Ct. 482, 485,78 L. ed. 987:
"The presumption of validity which applies to legislation generally is fortified by acquiescence continued through the years. Corn Exchange Bank v. Coler, 280 U.S. 218,50 S. Ct. 94, 74 L. ed. 378; Ownbey v. Morgan, 256 U.S. 94,41 S. Ct. 433, 65 L. ed. 837, 17 A.L.R. 873."
For the reasons indicated, I respectfully dissent. In my opinion the writ prayed for should issue. *Page 261