MR. JUSTICE BREWER, after stating the case, delivered the opinion of the court.
Two questions are presented: First, has the State of Minnesota, in disregard of section 10 of article 1 of the Constitution of the United States, passed any law impairing the obligation of contracts; and, second, were the tax proceedings in violation of that clause of the Fourteenth Amendment, which prohibits a State from depriving any person of property without due process of law?
With respect to the first question, it may be noticed that since the grant in 1862 to the Winona and St. Peter Railroad Company the legislature of the State has passed no statute in terms referring to the lands, or attempting to repudiate or break the contract of exemption. The act of 1881 is one making general provision for putting upon the tax roll all lands that have escaped taxation in prior years. Of the validity
Assuming, but not deciding, that this law of 1881, enacted subsequently to the contract created by the acts of 1857 and 1862, as practically applied by the officers of the State to the taxation of these lands, presents the question of a violation of the constitutional inhibition — and the contention of plaintiff in error is that it does, and that the question was distinctly presented to the state court and by it decided — we are of opinion that the judgment of that court was correct, and that it must be affirmed. The contract of exemption was by the terms of the act to continue until the lands were "sold and conveyed." Plaintiff in error insists that these words extend the exemption until the legal title is conveyed, which was not done until the decree of 1887. The state court held that the exemption was continued only until the full equitable title was transferred, and that the railroad company could not thereafter, by neglecting to convey the legal title, postpone indefinitely the exemption. This question was first presented to that court in State v. Winona & St. Peter Railroad Co., 21 Minnesota, 472, and the decision in the present case was simply an affirmance of the prior ruling. See also Brown County v. Land Company, 38 Minnesota, 397; Brown County v. Land Company, 39 Minnesota, 380.
It is familiar law that statutes exempting property from taxation are to be strictly construed. Bank v. Tennessee, 104 U.S. 493; Railroad Company v. Dennis, 116 U.S. 665;
Section 4 of the act of 1857, after providing that the lands should be exempted from taxation until "sold and conveyed," added that, in consideration of the grant of land and other franchises, the railroad company should pay into the treasury of the Territory or State three per cent upon all the gross earnings, and that this three per cent, when paid, should be in lieu of all taxes whatever. Construing the entire section, the Supreme Court of the State held that the manifest object was to apply the full value of the land to the construction of the road; that when that object was secured, the purpose of the exemption ceased; that it could not have been the contemplation of the legislature to have created an exemption dependent wholly upon the will of the grantee and entirely irrespective of the complete accomplishment of the object for which the lands were granted; that it was not to be expected that a sale could be made of the entire body of lands at once; that sales would progress slowly and from time to time as purchasers could be found, and that it would obviously detract from the value of the grant if, while holding these lands only for purposes of sale, the company was compelled to pay taxes thereon, but that when the company had received full payment for the lands, its interest in the matter ceased, and the purpose of the grant was accomplished. It could not be supposed that the legislature purposed to bestow an exemption upon purchasers from the railroad company. The company, and not its grantees, was the intended beneficiary. The matter of exemption was between it and the State. It was to pay three per cent of its gross earnings, and this in lieu of all other taxes, including those upon these lands. No such equivalent was suggested as between the purchasers and the State. No contract of any kind was expressed as between them. Reference was made in the opinion to Carroll v. Safford, 3 How. 441, and Witherspoon v. Duncan, 4 Wall. 210, in which this court held, as to lands purchased from the United States, that after the full equitable title had passed and the government simply held the naked legal title as trustee for the purchaser, they became subject to state taxation.
It is now earnestly contended by plaintiff in error that the Barney contract did not operate to transfer the full equitable title. Two propositions are relied upon: First, it is said that the contract contained dependent covenants, and that the covenant to convey the lands depended upon the performance of certain conditions by the contractors; and, second,
But a conclusive answer to the contention is this: The proceedings in the District Court were commenced to enforce the payment of taxes delinquent and unpaid on the first Monday of January, 1888, and the final decision of the Supreme Court limited the right to recover such delinquent taxes to the period of six years prior thereto. The decree in the Circuit Court of the United States was entered on March 7, 1887. The findings of fact show that the suit in which this decree was entered was commenced in 1879. The decree relates back to the time of the commencement of the suit, and adjudicates the rights of the parties as of that date. It was, therefore, an adjudication that in 1879 Barney and his associates held the full equitable title to these lands; but the lands were held subject to no taxes prior to those of 1880. It is, therefore, unnecessary to enter into any elaborate discussion of the terms and stipulations of the contract, or to seek to determine what are or are not dependent covenants. It is enough to rest upon the fact that by conclusive decree of a competent court it is established that the full equitable title had passed to the plaintiff in error prior to the time at which the lands were adjudged taxable. The case, therefore, in this direction is narrowed to the single question, as to the scope and meaning of the exempting statute of May 22, 1857; and for the reasons stated, we agree with the Supreme Court of the State in its construction thereof.
The other contention of plaintiff in error is that in these tax proceedings there was a lack of due process of law. That they were in substantial conformity with the provisions of the Minnesota statutes, and that there is nothing in those statutes in conflict with the state constitution, is settled for this court adversely to the plaintiff in error by the decision of the
We pass, therefore, to consider the claim that the Minnesota statutes, so far as they attempt to provide for the subjection of property which has escaped taxation in prior years, to the taxes of those years violate that clause of the Fourteenth Amendment to the United States Constitution which forbids a State to deprive one of property without due process of law. What are the provisions of those statutes? The general tax law of the State is found in the statutes of 1878, commencing at page 2. Section 113 contemplated the collection of unpaid back taxes. This section was amended in 1881, (Laws of 1881, page 24,) so as to read as follows:
"If any real or personal property shall be omitted in the assessment of any year or years and the property shall thereby escape taxation, when such omission shall be discovered, the county auditor shall enter such property on the assessment and tax books for the year or years omitted, and he shall assess the same and extend all arrearage of taxes properly accruing against such property with seven (7) per cent interest thereon, from the time said taxes would have become delinquent, and the same shall be extended against such property on the tax list for the current year."
This being an amendatory statute places the amended section as part of the general tax law, and it is to be construed accordingly. The section provides that if any property shall have been omitted from the assessment of any year it shall, upon discovery of that fact, be entered upon the assessment and tax books for that year, that all taxes for that year be charged thereon against it, with interest, and then extended against it on the tax list for the current year. In other words, for the purposes of collection, it stands on the tax list for the current year the same as any other property, and all taxes thereon are to be collected in the same manner. The amount of the tax for the omitted year is the same as that which was enforced against all other properties for that year, so that the only difference is in the mode of assessment and the charge of interest.
With reference to the collection of taxes it may be remarked generally that the Minnesota statute authorizes such collection by suit in court. By section 70 the county auditor is required, between June 1 and 15, to file in the office of the clerk of the district court of the county a list of the delinquent taxes upon real estate, which shall contain a description of the land, the name of the owner if known, and if unknown so stated, and the amount of the delinquent tax for each year, which list shall be verified by his affidavit; and the filing of this list is to be considered as the filing of a complaint by the county against each piece or parcel of land therein described to enforce payment of the taxes and penalties appearing against it. Publication is then to be made of this list, together with a notice in the form prescribed by statute, for at least two weeks in some newspaper of general circulation in the county. (Secs. 71 and 72.) Upon the final publication of this notice the jurisdiction of the court over the property attaches. (Sec. 73.) Within twenty days after the last publication any person having an estate, right, title, or interest in or lien upon any parcel of land described in such list may file in the office of the clerk of the court an answer setting forth his defence or objection to the tax or penalty, which shall describe the piece or parcel of land and state the facts constituting his defence or objection to such tax or penalty, and thereupon the court is to hear and determine the questions raised by this complaint and answer, as it hears and determines any other action. (Sec. 75.) It is a full defence that the taxes have been paid or that the property is not subject to taxation. (Sec. 79.) The list is prima facie evidence of compliance with all provisions of law in relation to the assessment and levy of taxes. No omission of any of the things required
We think this opens to the property owner full opportunity for defence, and that he can raise every objection to which in law he is entitled. If he has paid his taxes, or if the land is not subject to taxation, the property is wholly discharged. If there has been any irregularity in the proceedings which worked to his prejudice he can show such irregularity, and, so far as it has injured him, secure a reduction in the amount. In reference to this matter we quote from the opinion of the Supreme Court of the State in this case, which shows fully the extent to which a party can, under the statutes of the State of Minnesota, make defences to these tax proceedings:
"Within twenty days after the last publication of the delinquent list any person may, by answer, interpose any defence or objection he may have to the tax. He may set up as a defence that the tax is void for want of authority to levy it, or that it was partially, unfairly, or unequally assessed. Com'rs of St. Louis Co. v. Nettleton, 22 Minn. 356. He may set up as a defence pro tanto that a part of a tax has not been remitted, as required by some statutes. Com'rs of Houston Co. v. Jessup, 22 Minn. 552. That the land is exempt, or that the tax has been paid. County of Chisago v. St. Paul & Duluth Railroad, 27 Minn. 109. That there was no authority to levy the tax, or that the special facts authorizing the insertion of taxes for past years in the list did not exist, or any omissions in the proceedings prior to filing the list, resulting to his prejudice. County of Olmsted v. Barber, 31 Minn. 256. The filing of the list is the institution of an action against each tract of land described in it, for the recovery of the taxes appearing in the list against such tract, and tenders
All the privileges which are secured to the property owner in respect to the taxes of the current year are also secured to him in reference to those imposed under amended section 113. He is, therefore, notified and given an opportunity to be heard before his property is taken from him. Questions of this kind have been repeatedly before this court, and the rule in respect thereto often declared. That rule is that a law authorizing the imposition of a tax or assessment upon property according to its value does not infringe that provision of the Fourteenth Amendment to the Constitution, which declares that no State shall deprive any person of property without due process of law, if the owner has an opportunity to question the validity or the amount of it either before that amount is determined or in subsequent proceedings for its collection. McMillen v. Anderson, 95 U.S. 37; Davidson v. New Orleans, 96 U.S. 97; Hagar v. Reclamation District, 111 U.S. 701; Spencer v. Merchant, 125 U.S. 345; Palmer v. McMahon, 133 U.S. 660; Lent v. Tillson, 140 U.S. 316; Pittsburg, Cincinnati &c. Railway v. Backus, 154 U.S. 421. That the notice is not personal but by publication is not sufficient to vitiate it. Where, as here, the statute prescribes the
With respect to the next inquiry, it is true there is a difference in the mode of assessment. Section 113 authorizes the county auditor to make the assessment, while as to property generally the assessment is made by the county assessor. The latter also acts upon actual view, (sec. 33,) while there is in section 113 no such direction to the county auditor. The assessment made by the assessor comes before a town board of review, (sec. 39,) and subsequently before a county board of equalization. (Sec. 44.) Neither of these provisions is found in section 113. So that the difference between the two modes of assessment may be stated thus: in the one case there is an assessment by one officer, with a right to review his action; in the other, there is an assessment by a different officer, and no provision for a review except as the matter comes before the court in the proceedings for the collection of taxes. But there is nothing in this difference to affect the constitutional rights of a party. The legislature may authorize different modes of assessment for different properties, providing the rule of assessment is the same. Kentucky Railroad Cases, 115 U.S. 321, 337; Pittsburg, Cincinnati &c. Railway v. Backus, 154 U.S. 421.
One other suggestion is made by counsel for plaintiff in error. Section 113 contemplates the assessment and taxation of both real and personal property. It is claimed that the taxation of personal property is manifestly void because, even under the general tax law, there is no provision for notice to
These being the only matters presented, and in them appearing no error, the judgment of the Supreme Court of the State will be