County of Washington v. Fletcher

Maxwell, J. In 1879 the defendant presented a claim to the board of county commissioners of Washington county for taxes — 357 — paid by bim upon certain school lands in that county purchased by him from the state. The lands seem to have been purchased from the state in 1869, and the legal title is still in the state. The commissioners rejected his claim. • On appeal to the district court judgment was rendered in his favor for the sum of $209.90. The county brings the cause into this court by petition in error. The county has filed no answer or other pleading setting up any defense. The action is brought under the provisions of the “Act to provide for the repayment of moneys paid as taxes on lands, the title of which rests in the state, by persons holding said lands under contract of sale or by lease,” which took effect February 20, 1879, The act reads as follows: “ Whereas, in the different, counties of the state of Nebraska, there are many persons holding school lands under contract of sale or under lease from the state of Nebraska, the title to said lands being now vested in the state; and whereas, said school lands have not been and ■are not now taxable for any purpose whatever, therefore— “ Be it enacted by the legislature of the state of Nebraska : “Section 1. That money heretofore received by the ■county treasurers of the several counties within the state of Nebraska, on account of taxes levied on lands, the title to which rests in the state of Nebraska, from persons holding said lands under contract of sale or lease, shall be repaid without interest to persons who have paid the >same, their heirs, executors, or assigns. “Sec. 2. That said moneys shall be repaid by the respective county treasurers, on orders in that behalf made ■by the county commissioners of the respective counties. “Sec. 3. That no order shall be made by the county ■commissioners of any county for the repayment of money — 358 — paid as aforesaid into the treasury except upon the production of a receipt from the treasurer of the county, acknowledging the payment of money as taxes aforesaid, on lands owned by the state of Nebraska. “Sec. 4. The county commissioners of any county whose school lands ha^e been wrongfully taxed, and the taxes have not yet been paid, shall order the county treasurer to cancel the same.” It is claimed on behalf of the plaintiff that the law above quoted is in conflict with sections 1, 2, 3, and 4, of article 10 of the constitution, which read as follows: “Section 1. The legislature shall provide such revenue as may be needful by levying a tax by valuation so that every person and corporation shall pay a tax in proportion to the value of his, her, or its property and franchises, the value to be ascertained in such manner as the legislature shall direct; and it shall have power to tax peddlers, auctioneers, brokers, hawkers, commission merchants, showmen, jugglers, inn-keepers, liquor dealers, toll bridges, ferries, insurance, telegraph, and express interests or business, vendors of patents, in such manner as it shall direct by general law, uniform as to the class upon which it operates.” Section 2 provides for the exemption of certain property. Section 3 provides for the redemption of real .estate sold at tax sale. Section 4 provides that the legislature shall have “no power to release or discharge any county, city, township, town, or district whatever, or the inhabitants thereof, or any corporation or property therein, from their or its proportionate share of taxes to be levied for state purposes or due any municipal corporation, nor shall commutation for such taxes be authorized in any form whatever.” The chief justice and the writer, as members of the legislature of 1865-6, assisted in forming and submitting to the people the constitution which was adopted in 1866. — 359 — Section 2, of article 7, of that constitution provided that: “ The university lands, school lands, and all other lands which have been acquired by the territory of Nebraska * * * * for educational or school purposes, shall not be aliened or sold for a less sum than five dollars per acre.” The object of this provision was to protect the school fund and prevent the sale of school lands at less than their value. The act of 1867 in relation to school lands, provides for appraising school lands, and provides that they are to be offered at public sale upon due notice and sold to the highest bidder; no bids to be received for less than seven dollars per acre, nor for less than appraised value. Under this law large quantities of land have been sold at very high prices. It is claimed, and, if the various acts passed by the legislature to grant relief to purchasers of school lands are to be taken as an indication of the popular belief upon that question, the opinion generally prevailed, that such lands were not taxable, which fact materially increased the price received for the lands sold. The case of Hagenbuck v. Reed, 3 Neb., 1, held that the revenue law of 1869 included school lands within its terms. Undoubtedly school lands are embraced within the letter of that act, as section 2 provides that this section “is intended to embrace lands and lots in towns, including lands bought from, or donated by, the United States and this state, and whether bought on credit or otherwise.” There was no provision in the law for the sale of the interest of the-purchaser as personal property, and while a sale for taxes-could not divest the state of its title, it had the effect toi encumber the title of such lands as reverted to the state,, and thereby tended to discourage a resale of the same. This, among other considerations, doubtless, induced the legislature to pass the act for the repayment of taxes'. Section 6, of article YIII of the constitution, requires the legislature to provide for the free instruction in .the — 360 — schools of the state of all persons between the ages of 5 and 21 years. This free instruction must be provided by taxation, unless by a sale of school lands a sufficient amount can be derived from the interest on the gross amount of such sales for that purpose. Hence the necessity of increasing such sales as rapidly as the lands can be sold for a fair price. Every dollar of interest derived from a sale of such lands decreases to that amount the sum necessary to be raised by taxation. It was clearly the duty of the legislature, therefore, by the enactment of just and proper laws, to encourage such sales and invite competition in order that the best possible price could be obtained. It will be conceded that lands owned by the state are not taxable. May not the legislature provide that such lands shall not be taxable until the state conveys the legal title ? This -would not preclude the interest of the purchaser from being taxed, but would limit taxation to such interest. This is but justice, and tends materially to enhance the value of school lands. If the legislature may lawfully exempt the amount of the interest of the state in such lands as have been' sold, but the title to which remains in the state, from taxation, may it not provide for the repayment of taxes levied upon such interest ? There is no doubt of its authority to do so. The exercise of such power does not come within the inhibition of the constitution. While I fully concurred in the able opinion of the chief justice in the case of Hagenbuck v. Reed as a correct exposition of the language of the legislature, still the action of the legislature since that time in declaring that school lands are not taxable, and providing for the repayment of taxes paid thereon, is entitled to respectful consideration as tending to show the popular belief that such lands were not taxable. The act for the repayment of taxes was passed in February, 1879, and an attempt seems to have been made — 361 — in the legislature of 1881 to repeal it, but although the bill passed the senate it' was indefinitely postponed in the house. While these circumstances cannot be, considered by the court in the determination of this case, they tend to sustain the defendant’s plea that he purchased under the belief that the lands were not taxable. There is a clear distinction between the repayment of taxes levied upon lands owned by the state — upon property which the taxpayer did not own, which taxes, in the opinion of the legislature, were unjust, and • a personal gift or donation. The record in this case is exceedingly meager. There is no copy of the assessment, nor does it appear what valuation was placed upon the land in controversy for any of the years for which taxes have been paid, and it is impossible to say from this record what taxes have been included in the judgment. In conclusion, we hold that the legislature may lawfully exempt the interest of the state in the school lands from •taxation. In other words, if lands are sold at a given price, and one-tenth of the purchase price paid, the purchaser may be required to pay a tax upon his interest in the land and improvements, while the amount owing to the state may be exempt; and if the state may thus exempt such interest, it may provide for the repayment of such taxes. It follows that the judgment must be affirmed. Judgment Affirmed,