This action is by appellants against appellees to recover certain amounts paid by appellants to the United States for income and excess profits taxes assessed against appellant Big Four Coal Company.
Prior to August 6, 1917, appellees owned forty-five out of a total of sixty shares of the capital stock of appellant coal company. On that date appellees sold said forty-five shares to appellants for $75,000. Such contract of sale was in writing and provided, among other things, as follows:
“The second parties bind and obligate themselves to pay all indebtedness owing by said Big Four Coal Company, of every sort and character, and cause to be released, of record, any mortgage or lien affecting the property of said Company, and the second parties shall receive and be entitled to collect, for their own use, all accounts payable to said Coal Company up to the date of this contract.”
Subsequent to the date of the contract appellants paid to the United States certain amounts representing in*433come and excess profits taxes owing by said company on account of its earnings prior to August 6, 1917.
The substance of so much of the complaint as concerns the assessment and payment of such excess profits taxes is that there was assessed against the coal company by the United States taxes amounting to $8,969.08, on account of profits earned by said company during the year 1917; said taxes were assessed under the provision of an act of Congress, approved October 3, 1917, and entitled: “War Excess Profits Taxes,” and which, act dated back to and became effective as of January 1, 1917, as the beginning of the taxable period covered thereunder. The coal company earned during the year 1917, the total sum of $61,703.13, which was subject to income and excess profits taxes under the provisions of said act. Of said total amount earned by said company there was earned from January 1, 1917, to August 1, 1917, the sum of $27,645.19, which represented the profits made by the said company from January 1, 1917, to August 1, 1917, and which was retained by appellees under the terms of said contract. The Big Four Coal Company was compelled to, and did pay, on and prior to May 21, 1919, income and excess profits taxes on said $27,645.19, which said taxes so paid amounted to $3,969.92, which represented an indebtedness owing by said coal company on and prior to August 6, 1917, and which appellees were obligated to pay under the provisions of said contract, and'which they have failed and refused to pay.
The government of the United States, prior to June 10, 1917, caused an examination to be made of such coal company’s books and accounts for the years 1914, 1915, and 1916, and ascertained thereby that said coal company was indebted to the government on account of income and excess profits taxes for the year 1914, *434$143.28; for the year 1915, $37.45; for the year 1916, $271.55, aggregating for the three years, $452.28, which sum represented an indebtedness of such coal company on and prior to August 6, 1917, for which appellees were liable under the contract aforesaid, but which they failed and refused to pay.
There was a demand for judgment for said, sum of $3,969.92, with interest, and for the further said sum of $452.28, with interest. Appellees separately demurred to the complaint for want of facts, which -demurrer was sustained, to which ruling appellants excepted, and failing and refusing to' plead further, judgment was rendered against them from which this appeal.
1. We first consider the averments of the complaint as to the income and excess profits taxes in the sum of $3,969.92, which were paid by appellants and which they seek to recover from appellees. The contract under which appellants claim the right of recovery is dated August 6, 1917, and, as has been heretofore pointed out, contains the provision by which appellees bound and obligated themselves to pay all indebtedness owing by said coal company of every sort and character. At the time this contract was entered into there was no law under which the tax aforesaid, amounting to $3,969.92, could be assessed, such law not having been passed until October 3, 1917, or about two months after the execution of the contract. Not only was there no assessment at the time of the contract, but there was no law authorizing such an assessment. We cannot reason that there could be any tax owing at the date of the contract when no lawful assessment therefor could be shown.
In Gallup, Exr., v. Schmidt (1900), 154 Ind. 196, 217, 56 N. E. 443, it was held that it was not a tax at all until after the assessment was made.. Before such as*435sessment the claim existed only in the right to tax. The mere inchoate right-to tax is not an indebtedness of any sort or character. See, also, Lathers v. Keogh (1888), 109 N. Y. 583, 17 N. E. 131.
In the instant case there was no statute authorizing the assessment of the tax involved until October 3, 1917. As there was no tax owing at the date of such contract, the mere inchoate right to create the same could not constitute an indebtedness under the terms of the contract. We are clear that there was no right of recovery as to the said item of $3,969.92. Appellants, in their able brief, presenting their theory of the law as applied to the facts in this case, say that when the acts contemplated by the statute are done, in this cáse accumulating the profits, the indebtedness in favor of the government then arises for which a personal action of debt will lie against the taxpayer at the hands of the United States, and that the later filing of returns and assessment are merely evidentiary facts- as to the amount of the taxes due. Supporting their conclusion they cite Savings Bank v. United States (1873), 19 Wall. 227, 22 L. Ed. 80, from which they quote as follows : “Nor is there anything in the objection that the taxes for which judgment has been recovered in this case had not been ássessed. No other assessment than that made by the statute was necessary to determine the extent of the bank’s liability. An assessment is only determining the value of the thing taxed, and the amount of the tax required of each individual. It may be made by designated officers or by the law itself. In the present case the statute required every savings bank to pay a tax of five per cent, on all undistributed earnings made, or added during the year to their contingent funds.. There was no occasion or room for any other assessment. This was a charge of a certain sum *436upon the bank, and without more it made the bank a debtor.”
2. They quote also to like effect from United States v. Chamberlin (1911), 219 U. S. 250, 31 Sup. Ct. 155, 55 L. Ed. 204, but each of these cases involved a, statute that was in force at the time the funds to be assessed were in hand. In each of these cases, it was held that no other assessment than that made by the statute was necessary in order to determine the extent of the liability. But the instant case is to be distinguished from those cases in this, that at the time of the contract in the instant case the statute, which within itself was sufficient to constitute an assessment, was not in existence. As we read the cases cited by appellant, however, it seems to us that they are directly in point as to the excess profits taxes for the years 1914, 1915, 1916, aggregating $452.28, which amount appellants seek to recover. An examination had been made of the coal company’s books June 10, 1917, or about two months before the contract involved was entered into, and by such examination it was ascertained that the coal company was indebted to the government for said preceding years in the total sum of $452.28. Said indebtedness grew out of a statute that was in existence before the contract was entered into, and, as held in the cases relied upon by appellant, the statute itself constituted a sufficient assessment to determine the coal company’s liability. Having reached this conclusion, we hold that the said sum of $452.28 constituted an indebtedness against the coal company at the time the contract was entered into for which appellees were liable. Such being the case, though the complaint did not state a cause of action as to the said sum of $3,969.92, it did state a cause of action as to the said sum of $452.28.
We are not unmindful of the Indiana authorities, *437as well as authorities elsewhere, holding a tax is not an ordinary debt.
The case of State v. Mutual Life Ins. Co. (1910), 175 Ind. 59, 85, 93 N. E. 213, 223, 42 L. R. A. (N. S.) 256, states the rule as follows: “Taxes levied or imposed by the State are not debts in the ordinary acceptation of the term so as to make them bear interest under the laws of the State.”
In the dissenting opinion, of Wiley, J., in the case of Cullop v. City of Vincennes (1904), 34 Ind. App. 667, 672, 72 N. E. 166, the statement was made that it is well-settled law of this state that a tax.is not an ordinary debt, and again in Thornburg v. Buck (1895), 13 Ind. App. 446, 448, 41 N. E. 85, it is stated that a debt in the technical sense is money due or owing on a. contract, express or implied; but in Hornbeck v. State (1904), 33 Ind. App. 609, 71 N. E. 916, it is stated that a debt in a broad and general sense is whatever one owes, and this is sustained by many authorities. Anderson’s Law Dictionary says: “The condition of owing money; also, the amount owed.” The Imperial Dictionary says a debt is that which is due from one person to another. Bouvier’s Law Dictionary says: “Any claim for money.” Rap. & L. Law Dict, says: “In the strict sense of the word a debt exists when a certain sum of money is owing from one person (the debtor) to another (the creditor).” Webster’s Dictionary says: “That which is due from one person to another — that which one person is bound to pay to another.” The word may be held to include liabilities of every sort. Commercial Bank v. Weinberg (1893), 25 N. Y. Supp. 235, 70 Hun. 597. Other definitions are found in some of these authorities, but these are given to show that, in addition to a technical meaning that- an indebtedness is an obligation growing out of contract, the word has a broader, more general and *438common meaning that it is anything due, or owing. Indebtedness of every sort and character must surely come within the definitions above given, as including any amounts at the time owing, and the company was certainly at the time owing excise taxes in the sum of $452.28, which if not an ordinary debt, was certainly a debt of some sort.
The case of Board of Com’rs., etc. v. Harrell (1897), 147 Ind. 500, 509, 46 N. E. 124, involved a special tax levied by the board of commissioners upon all property of the taxing district for the purpose of building a gravel road, and the court, on p. 509, said that such special tax levied by the board of commissioners “is not an indebtedness of the township or townships composing such taxing district, but is an indebtedness of the taxpayers.” (Our italics.) The obligation of the contract involved is “to pay all indebtedness oiuing of said Big Four Coal Company, (Our italics) of every sort and character.”
We do not need to determine as to whether there is any conflict in the Indiana cases above mentioned, for the taxes involved are federal special taxes, and by federal treasury regulations an income tax as in this case, is a status of a debt due to the United States, and it is a regulation of such department ’ that persons receiving property charged with such an indebtedness must answer for it.
The rule is thoroughly established in federal practice that an action of debt may be maintained in the name of the United States for the recovery of any sum due for internal revenue taxes. Billings v. United States (1914), 232 U. S. 261, 34 Sup. Ct. 421, 58 L. Ed. 596; United States v. Chamberlin, supra; Savings Bank v. United States, supra. It has also been held that under such a statute that indebatatus assumpsit was a proper form of action to be brought by the United *439States for the recovery of the taxes. United States v. Minneapolis Threshing Mach. Co. (1915), 229 Fed. 1019, and see Black, Income and Federal Taxes (4th ed.) §435, for a statement of the general principles above presented.
Where the tax with a fixed percentage, such as that imposed by the act involved in this case is so definitely described in the statute that its amount can be. ascertained and determined, on evidence by the court, suit will lie without an assessment of the tax. United States v. Grand Rapids & I. R. Co. (1915), (D. C.) 239 Fed. 153.
With these authorities holding that special federal taxes are an indebtedness that may be collected by suit in an action for debt, if there still be any doubt as to the interpretation that should be given the contract as to the said sum of $452.28, the rule of law, that where terms used have a doubtful meaning; or more than one meaning, then the court must look to the surroundings for aid in giving them the proper construction, must be called upon. In this case at the time of the contract involved these items of excise taxes had been definitely determined by an examination of the books-of the company, and the parties to the contract, both appellant and appellee, must be presumed to have known of the existence of such unpaid excise taxes and that under the law the Government had a right to collect them. Appellees, by the contract were receiving all of the earnings of the company up to the date of the contract, and were agreeing in consideration thereof that they should pay all indebtedness of every sort and character. We must, therefore-, presume that the parties used the term indebtedness in its broadest sense as intending to embrace all obligations of the company that were at the time legally imposed upon the company by law, without reference to any restricted meaning or use of the term *440indebtedness. We must hold that the parties intended by the terms of the contract that the appellees should pay said sum of $452.28, as an indebtedness of the company, and the demurrer to the complaint, should, therefore, have been overruled. The judgment is reversed, with instructions to the trial court to overrule the demurrer to the complaint, and for further proceedings.
Batman, J. — Dissents with opinion. Remy, C. J. — Dissents.