Court Opinion

ID: 7054355
Source: CourtListenerOpinion
Date Created: 2022-07-24 07:04:21.98459+00
Date Added: 2024-06-11T16:11:53.526138
License: Public Domain

Dowling, J.
After careful and impartial reflection I am constrained to withhold my assent from the reasoning and conclusions of the opinion adopted by the majority of the court. The importance of the questions presented upon this appeal renders it proper to state with some particularity the grounds of such dissent.
In determining the ease, the court is required to interpret certain provisions of the State Constitution. Those provisions relate to the highest function of government —the power of taxation. Vital to the commonwealth, its abuse or misdirection is disastrous to the citizen. The subject occupies a conspicuous place in the organic law of the State, and the language employed concerning it is clear, forcible, and, as it seems to me, unmistakable in its meaning.
The question for decision is the constitutional validity of an act of the legislature entitled “An act concerning the taxation of real estate encumbered by mortgage, and declaring an emergency,” which took effect, if valid, March 4, 1899. Acts 1899, p. 422, §§8417a, 8417b, 8417c, 8417d Burns 1901.
That portion of the act necessary to be considered is contained in the first three sections, and reads as follows: “Section 1. That any person being the owner of real estate liable for taxation within the State of Indiana, and being indebted in any sum, secured by mortgage upon real estate, may have the amount of such mortgage indebtedness, not exceeding $700, existing and unpaid upon the first day of April of any year, deducted from the assessed valuation of mortgage premises for that year, and the amount of such valuation remaining after such deduction shall have been made shall form the basis for assessment and taxation for said real estate for said year. Provided, That no deduction shall be allowed greater than one-half of such assessed valu*560ation of said real estate. Section 2. Any person desiring to avail himself or herself, of the provisions of this act shall, between the first day of March and the first day of May of each year, file with the auditor of the county wherein said real estate is situate a sworn statement of the amount of such mortgage indebtedness existing and unpaid on the first day of March of that year, giving the name and residence of the mortgagee, and shall also give the name and residence of the assignee or bona fide owner or holder of said mortgage, if known, and if not known, said person shall state that fact, and shall also state the record and page where said mortgage is recorded, and a brief description of the real estate upon which such encumbrance exists. Section 3. The county auditor with whom such statement is filed, in case the money, notes or credits evidenced by such mortgage indebtedness be liable for taxation in any county in the State of Indiana, other than the one wherein such real estate is situate, shall immediately certify and transmit a copy of such sworn statement to the auditor of the county wherein the mortgagee, assignee or bona fide holder or owner of said mortgage resides, or wherein the money, notes or credits evidenced by such mortgage is otherwise taxable.”
These sections, as I believe, are plainly and directly in conflict with three separate provisions of the State Constitution, namely: (1) Section 23, article 1, of the bill of rights. “The General Assembly shall not grant to any citizen, or class of citizens, privileges or immunities which, upon the same terms, shall not equally belong to all citizens.” (2) Section 22, article I. “The General Assembly shall not pass local or special laws in any of the following enumerated cases, that is to say: * * * For the assessment and collection of taxes for State, county, township or road purposes.” (3) Section 1, article 10. “The General Assembly shall provide, by law, for a uniform and equal rate of assessment and taxation; and shall prescribe such regulations as shall secure a just valuation for taxa*561tion of all property, real and personal, excepting such only, for municipal, educational, literary, scientific, religious, or charitable purposes as may be especially exempted by law.”
The act in question is subject to the following objections: (1) It violates the rule of the Constitution requiring uniformity and equality in the rate of assessment and taxation; (2) the act is a special law for the assessment of taxes for State, county, township, and road purposes; (8) it grants to one class of citizens privileges and immunities which upon the same terms will not equally belong to all citizens; and (4) it excepts from taxation real estate not held for municipal, educational, literary, scientific, religious, or charitable purposes. If it shall be found upon examination that any one or more of these propositions is true, then the statute must be held invalid.
All of the constitutional provisions referred to have been in force since November 1, 1851. Carefully prepared and comprehensive statutes regulating the assessment and collection of taxes have been adopted by the General Assembly from time to time; but from the taking effect of the State Constitution until March 4, 1899, a period of nearly half a century, no statute exempted from assessment for taxation any real estate on the ground that it was encumbered by the lien of a mortgage. This circumstance is not conclusive, but as evidence of a practical interpretation of the Constitution by the legislature, the failure for so great a length of time to recognize mortgage liens on lands as proper deductions from the value of the lands for the purposes of taxation is entitled to some consideration. It is to be observed, too, that this practical interpretation of the Constitution as prohibiting such deductions is perfectly consistent with the language of that instrument, and is reasonable and natural. Stuart v. Laird, 1 Cranch 299, 2 L. Ed. 115; Martin v. Hunter’s Lessee, 1 Wheat. 304, 351, 4 L. Ed. 97; Cohens v. Virginia, 6 Wheat. 264, 418, 5 L. *562Ed. 257; Bank of United States v. Halstead, 10 Wheat. 51, 63, 6 L. Ed. 264; Ogden v. Saunders, 12 Wheat. 213, 290, 6 L. Ed. 606; Minor v. Happersett, 21 Wall. 162, 22 L. Ed. 627; Bay City v. State Treasurer, 23 Mich. 499; McCullough v. Maryland, 4 Wheat. 316, 4 L. Ed. 579; Cooley v. Wardens, 12 How. 299, 13 L. Ed. 996; Pierce v. Fitzhugh, 12 How. 443, 13 L. Ed. 1058; Rodgers v. Goodwin, 2 Mass. 475; Bingham v. Miller, 17 Ohio 445, 49 Am. Dec. 471; Board, etc., v. Bunting, 111 Ind. 143.
Again, an examination of the act of March 4, 1899, discloses that it did not receive the approval of the Governor, but became a law without his signature. While the failure of the executive to approve a bill does not affect its validity if it becomes a law without his approval, the fact remains that one of the great departments of the State government has withheld its recognition of the statute. The non-approval of the act by the Governor is at least suggestive of doubt in the mind of the executive of the validity of the law.
It is also to be noted that the act under consideration is not a part of the general statute embracing a complete system for the assessment and collection of taxes, but is sporadic in its character, and stands separate and apart from all other legislation upon the subject of taxation. Such being its nature, the inference is not strained that it probably did not receive the attention which would have been accorded to' it if it had constituted a portion of a general statute regulating the assessment and collection of taxes. But, passing from these minor objections to those arising from the Constitution, it will be found that, if the statute is to stand, the Constitution. must give way. In other words, to sustain the act the court must, in the language of Judge Story, “abrogate the text, fritter away its obvious sense, and narrow down its true limitations.”
The first clause of §1, article 10, of the Constitution declares that “the General Assembly shall provide by law for *563a uniform and equal rate of assessment and taxation.” By this clause the principle which must govern all legislation on the subject of the assessment and collection of taxes is announced. At the very basis of every valid statute of this hind lies the condition that the rate of assessment and taxation must be uniform and equal throughout the district or locality in which the tax is levied. An assessment is defined to be a valuation made by authorized persons according to their discretion, as opposed to a sum certain or determined by law. It is a valuation of the property of those who are to pay the tax, for the purpose of fixing the proportion which each man shall pay. Under our Constitution the rule or ratio of valuation of real estate of those who are to pay the tax must be uniform and equal throughout the State, and the ratio of taxation must be uniform and equal throughout the district or locality affected. This is the first and paramount requirement.
The second clause of §1, article 10, is evidently subsidiary to the -first. It relates to the means by which a uniform and equal assessment' is to be obtained. The General Assembly is to “provide such regulations as shall secure a just valuation for taxation of all property, real and personal.”' The obvious meaning of this provision is that competent persons shall be appointed or elected as assessors to determine the valuation to be put upon property for the purpose of taxation, ánd that the general mode of procedure shall be fixed by law; but none of the regulations so prescribed can change the rule of uniformity and equality of valuation immovably established by the first clause of the 'section. The danger and abuse against which the Constitution was intended to guard was an arbitrary valuation of property by the State. Instead of an arbitrary and perhaps unreasonable assessment by the law itself, a just valuation was to be secured. In this connection the term just is the equivalent of correct, honest, true. Its use requires the valuation of all property of the same kind in the same taxing district *564by a -uniform and equal standard. By no rule of constitutional interpretation can tbe term “just,” as used in tbe second clause of §1, be said to qualify or limit or restrict tbe meaning of the words “uniform and equal”, used in tbe first. Under tbe act before tbe court, a lot or tract of land may be assessed for taxation at tbe rate of $1,400, while another lot or tract in tbe same taxing district and of the same value may be assessed for taxation at tbe rate of $700. Tbe pretext for this violation of tbe rule of uniformity and equality of assessment is that tbe second lot is subject to tbe lien of a mortgage to tbe amount of $700 or more, while tbe first is unencumbered. Tbe fallacy of this method becomes apparent when it is remembered that general taxes are assessed against property, and not against its owners. Tbe tax follows tbe thing against which it is assessed, and does not, in tbe ordinary sense, constitute a debt against tbe owner. Its claim for revenue being paramount, tbe State has nothing to do with questions of title, liens, or equities. Before tbe law, all property stands alike subject to taxation without regard to tbe title by which it is held, or the equities with which it is charged. A valid sale for delinquent taxes fuses all rights of ownership, extinguishes all equities, and transfers to tbe purchaser an unencumbered title in fee simple.
Tbe entire legal title being .in tbe owner of tbe lot or tract, and tbe value of tbe land for taxation being unaffected by tbe amount of liens upon it, tbe attempted regulation by which tbe valuation of tbe land is made to depend upon the accident of tbe existence of a mortgage lien destroys tbe uniformity and equality of assessment required by tbe Constitution, and therefore cannot be upheld. Tbe general doctrine upon this subject is clearly stated by Judge Cooley: “It is of tbe very essence of taxation that it be levied with equality and uniformity, and to this end that there should be some system of apportionment. Where tbe burden is common, there should be common contribution to *565discharge it.” Cooley’s Const. Lim. (6th ed.), 608; 2 Kent. Com., 231; Bright v. McCullough, 27 Ind. 223.
It is said in Cleveland, etc., R. Co. v. Backus, 133 Ind. 513, 535, 18 L. R. A. 729: “The first clause of this section [§1, Art. 10, supra] is certainly complied with when the same basis of assessment is fixed for all property, and the same rate of taxation is fixed within the district subject to taxation; that is to say, there is uniformity and equality of assessment and taxation when all the property is to be assessed at its true cash value, and the same rate is fixed on all property subject to assessment for the tax.”
And in Willis v. Crowder, 134 Ind. 515, the court say: “The taxable value of property is its fair cash value, a fair cash value being the.market or usual selling price, and if there be no market value, then it is the actual value that rules.”
The act of March 4, 1899, does not permit an assessment of the mortgaged real estate at its fair cash value, or at any value fixed by the judgment or discretion of the assessors; but it requires that arbitrary deductions shall be made of amounts fixed by the legislature, and which have no basis in or connection with the nature of the property assessed, or even with the encumbrances to which it is subject. Under this act, none of the property to which it relates can be assessed at its cash value, as other real estate is assessed.
The act does not attempt to divide the assessment for taxation between the mortgagor and the mortgagee, but stops short with the deduction allowed to the mortgagor or owner of the fee. It entirely relieves the mortgage interest from taxation if the mortgagee is a non-resident, or if the mortgage is a school-fund mortgage.
But it is claimed that absolute uniformity and equality of assessment cannot be attained, and therefore the law must be satisfied with something less. The answer to this proposition is that the obstacles to uniformity and equality contemplated by the courts which have used this language are *566those which inhere in the nature of things, such as the fallibility of men’s judgment as to values, the mistakes and omissions of public officers, and the frauds of owners. They are never such inequalities and differences as are created by the law itself. While the efforts of the law to produce absolute uniformity and equality may be- ineffectual, the Constitution demands that the taxing statutes shall aim at these objects, and ti\at such statutes themselves shall be free from provisions which destroy them.
2. The act of March 4, 1899, is a special law for the assessment and collection of taxes for State, county, township, and road purposes, and therefore falls within the prohibition of §22, article 4, of the Constitution. The very title of the act indicates its special character. It is not general either as to the property excepted from assessment and taxation, or the persons who are the objects of its discriminating bounty. It is entitled “An act concerning the taxation of real estate encumbered by mortgage”. It does not apply to real estate encumbered by liens generally, but, without reason therefor, is confined exclusively to such real estate as is encumbered by a particular kind of lien. In this respect it favors certain individuals and property, and discriminates against all others of the same class who are similarly situated. It cannot be defended on the ground that there are two separate estates in lands encumbered by mortgage, and that this fact constitutes a basis of classification. The law declares that for the purposes of taxation the mortgagor shall be deemed the owner of real property until foreclosure and possession taken by the mortgagee. “In cases of mortgaged real estate, the mortgagor shall, for the purpose of taxation, be deemed the owner until the mortgagee shall have taken possession of the mortgaged premises, after which the mortgagee shall be deemed the owner.” Acts 1891, §28, p. 205, §8438 Bums 1901.
It has been held repeatedly by this court that a mortgage conveys no estate in the lands mortgaged, but simply creates *567a lien. §1099 Burns 1901; Reasoner v. Edmundson, 5 Ind. 393; Francis v. Porter, 7 Ind. 213; Morton v. Noble, 22 Ind. 160; Grable v. McCulloh, 27 Ind. 472; Fletcher v. Holmes, 32 Ind. 497. This being so, what difference is there between the lien of a mortgage on lands and other liens ? And why should real estate subject to one particular kind of lien be separated from other property also subject to liens of equal dignity, and relieved from equal burdens of taxation ? The class to which the owners of the favored real estate belong is that of debtors and owners of real estate subject to liens. The class to which the property belongs is that of real estate encumbered by liens. Why should these classes be subdivided, and one subdivision favored,’ and the remaining members of those classes discriminated against? To illustrate the practical operation of the statute, let it be supposed that A, B, C, D, and E, each, is the owner of a lot of the value of $1,400 on the same street, in the same block, in the same town. A’s lot is subject to a mortgage lien of $700; B’s to a vendor’s lien of $700; C’s to a mechanic’s lien of $700; D’s to a street improvement lien of $700; and E’s to the lien of a judgment for $700. Can any reason, valid in law, be given why A should have the right to a deduction of $700 from the value of his lot, as the basis of assessment and taxation, but that B, C, D, and E shall be denied that privilege ? Why “the amount of such valuation, remaining after such deduction shall have been made, shall form the basis for assessment and taxation for said real estate” in A’s case, but that the full amount of the valuation of the lots owned by B, C, D, and E, without any deduction for the liens upon them, should form the basis of such assessment against them, it is impossible to discover.
But even as among the favored owners of real estate encumbered by mortgage liens, the classification is unequal and unjust. If A owns a lot valued for taxation at $1,400, encumbered by a mortgage lien of $700, he is allowed a *568deduction of $700. But if B owns a lot valued at $500, encumbered by a mortgage lien of $700, he is allowed a deduction of $250 only. Upon what natural or reasonable basis do these discriminations rest ? Is not the statute “discriminative between individuals of the” so-called “class, and does it not select some for an exceptional burden?” Suppose, however, the reasons urged in support of the statute in question are valid. That as it applies to all persons belonging to a class into which all property owners of the State may at some time enter, and as it is not in terms limited to individuals of a class, it is therefore not in conflict with the Constitution. All enactments having these qualifications, it is said, are to be regarded as within the limitations of the Constitution. The owners of all real estate encumbered by mortgage constitute a natural class, and legislation applying to all of them is general, and not special. It follows that the owners of all real estate encumbered by vendors’ liens constitute another class just as distinct and quite as natural; the owners of real estate encumbered by mechanics’ liens, another; the owners of real estate encumbered by street improvement liens, another; and the owners of real estate encumbered by judgment liens, still another. Therefore, no objection could be taken to a further act of the legislature declaring that the owners of real estate liable for taxation in the State of Indiana, being indebted in any sum secured by a vendor’s lien upon real estate, may have the amount of such indebtedness, not exceeding $1,000, deducted from the assessed valuation of the encumbered premises for the year, and that the amount of such valuation remaining after such deduction shall have been made shall form the basis for assessment and taxation for said real estate for that year. Then, other separate acts fixing deductions of $1,500 for indebtedness secured by mechanics’ liens, $250 for indebtedness secured by street improvement liens, and $100 for indebtedness secured by judgment liens, must also be unobjectionable. Could such legislation be *569defended? If not, by what argument can a classification which selects as the objects of its favoritism one set of debtors, and excludes all others, notwithstanding their situation is in every legal aspect undistinguishable from that of the favored individuals, be saved from condemnation, under the Constitution ?
The very just and sensible remarks of Dixon, C. J., in Knowlton v. Supervisors, 9 Wis. 410, 421, are entirely pertinent here: “It was contended in argument,” say the court, “that as those provisions fixed one uniform rate without the recorded plats, and another within them, thus taxing all the property without alike, and all within alike, they do not infringe the constitution. In other words, that, for the purpose of taxation, the legislature have the right arbitrarily to divide up and classify the property of the citizens, and, having done so, they do not violate the constitutional rule of uniformity, provided all the property within a given class is rated alike. The answer to this argument is, that it creates different rules of taxation to the number of which there is no limit, except that fixed by legislative discretion, while the constitution establishes but one fixed, unbending, uniform rule upon the subject. It is believed that if the legislature can by classification thus arbitrarily and without regard to value, discriminate in the same municipal corporation between personal and real property within, and personal and real property without, a recorded plat, they can also, by the same means, discriminate between lands used for one purpose and those used for another; such as lands used for growing wheat and those used for growing corn, or any other crop; meadow lands and pasture lands; cultivated and uncultivated lands; or they can classify by the description, such as odd numbered lots and blocks, and even numbered ones, or odd and even numbered sections. Personal property can be classified by its character, use or description, or, .as in the present case, by its location, and thus the rules of taxation may be multiplied to an extent *570equal in number to the different kinds, uses, descriptions, and locations of real and personal property. We do not see why the system may not be carried further and the classification be made by the character, trade, profession, or business of the owners. For certainly this rule of uniformity can as well be applied to such a classification as any other, and thus the constitutional provision be saved intact. Such a construction would make the constitution operative only to the extent of prohibiting the legislature from discriminating in favor of particular individuals, and would reduce the people, while considering so grave and important a proposition, to the ridiculous attitude of saying to the legislature ‘You shall not discriminate between single individuals or corporations, but you may divide the citizens up into different classes as the followers of different trades, professions, or kinds of business, or as the owners of different species or descriptions of property, and legislate for one class, and against another, as much as you please, provided you serve all of the favored or unfavored classes alike’; thus affording a direct and solemn constitutional sanction to a system of taxation so manifestly and grossly unjust, that it will not find an apologist anywhere, at least outside of those who are the recipients of its favors. We do not believe the framers of that instrument intended such a construction, and therefore cannot adopt it.”
I have been unable to find a single decision, state or federal, in which an arbitrary classification such as that created by the act of March 4, 1899, has been sustained. Neither is any decision of this character referred to in the prevailing opinion. On the other hand, the reported cases condemning such rules of assessment and taxation are numerous and emphatic. “This is a domain from which special and local legislation is utterly excluded whenever the legislative end can be effected by a general law.” Van Riper v. Parsons, 40 N. J. L. 1. “Interdicted local and special laws are all those that rest on a false or deficient classification; *571* * * .” Van Riper v. Parsons, supra. “There must be substantial distinction, having a reference to the subject-matter of the proposed legislation, between the objects or places embraced in such legislation, and the objects or places excluded. The marks of distinction on which the classification is founded must be such, in the nature of things, as will, in some reasonable degree, at least, account for or justify the restrictions of the legislation.” State v. Hammer, 42 N. J. L. 435, 440. “Such law must embrace all and exclude none whose condition and wants render such legislation equally necessary or appropriate to them as a class.” State, ex rel., v. Wood, 49 N. J. L. 85, 7 Atl. 286. “The classification must be so general as to bring within its limits all those who are in substantially the same situation or circumstances.” Lippman v. People, 175 Ill. 101, 107, 51 N. E. 872. “A law is not always general because it operates upon all within a class; There must be back of that a substantial reason why it is made to operate only upon a class, and not generally upon all.” Ex parte Jentzsch, 112 Cal. 468, 44 Pac. 803, 32 L. R. A. 664, 665. “The conclusion is, that although a law is general and constitutional when it applies equally to all persons embraced in a class founded upon some natural or intrinsic or constitutional distinction, it is not general or constitutional if it confers particular privileges or imposes peculiar disabilities or burdensome conditions, in the exercise of a common right, upon a class of persons arbitrarily selected from the general body of those who stand in precisely the same relation to the subject of the law.” City of Pasadena v. Stimson, 91 Cal. 238, 27 Pac. 604. “This classification, however, must be founded upon differences which are either defined by the constitution or natural, and which will suggest a reason which might rationally be held to justify the diversity in legislation.” Darcy v. Mayor, etc., 104 Cal. 642, 38 Pac. 500. “While the classification was in itself arbitrary, as in this case, the law did not include all who *572came within the arbitrary 'classification thus made.” Ex parte Jentzsch, 112 Cal. 468, 32 L. R. A. 664, 665. “Every one has a right to demand that he be governed by general rules; and a special statute that singles his case out as one to be regulated by a different law, from that which is applied in all similar cases, would not b.e legitimate legislation, but an arbitrary mandate, unrecognized by the law. * * * The state, it is to be presumed, has no favors to bestow, and designs to inflict no arbitrary deprivation of rights. Special privileges are always obnoxious, and discriminations against persons or classes are still more so, and, as a rule of construction, are always to be leaned against as probably not contemplated or designed.” Cooley’s Const. Lim., 393, 395. See, also; Bank v. Cooper, 2 Yerg. (Tenn.) 599, 24 Am. Dec. 517; Officer v. Young, 5 Yerg. (Tenn.) 320, 26 Am. Dec. 268; Griffin v. Cunningham, 20 Gratt. 31; Arnold v. Kelley, 5 W. Va. 446; Lewis v. Webb, 3 Greenl. 326; State, ex rel., v. Ellet, 47 Ohio St. 90, 23 N. E. 931, 21 Am. St. 772, and notes; State v. Hinman, 65 N. H. 103, 18 Atl. 194, 23 Am St. 22, and notes; State v. Sheriff, 48 Minn. 236, 51 N. W. 112, 31 Am. St. 650; Hogg v. Mackay, 23 Ore. 339, 31 Pac. 779, 19 L. R. A. 77, 37 Am. St. 682; State v. Gardner, 58 Ohio St. 599, 51 N. E. 136, 41 L. R. A. 689, 65 Am. St. 785; Washington University v. Rouse, 8 Wall. 439, 444, 19 L. Ed. 498.
The partial legislation of the act of March 4, 1899, is not sanctioned by anything said by this court in Florer v. Sheridan, 137 Ind. 28, 23 L. R. A. 278. The statute which was held constitutional in that case permitted every debtor in the State to deduct the amount of his debts from the sum of his credits, the excess of the latter only being subject to assessment and taxation. Whatever may be said of that statute in other respects, the classification of the' persons who might avail themselves of it was general, and in striking contrast with that of the act before us.
*5733. The privilege of the deductions authorized by the act of March 4,1899, is confined to a particular class of debtors, and does not, upon the same terms, equally belong to all the citizens of the State. The privilege granted is that of a special mode of assessment, which admits of a reduction of the valuation of real estate for the purposes of taxation. The terms upon which .this privilege may be claimed are such that only a very limited class of debtors comes within them. The great body of the citizens of the State are by those terms excluded from the benefit of the privilege secured to the few. All who are not indebted at all, and who own land, must be assessed upon the full valuation of that land. All landowners who are indebted, but whose debts are not secured by mortgage on their lands, are excluded. All who are indebted, and-whose lands are encumbered by liens, other than mortgage liens, are shut out. All citizens who own no real estate, but who hold mortgaged goods and chattels, are denied the privilege. The law . which grants the privilege to the few denies it to all others as certainly as if it declared in so many words that they should not enjoy it. And just in proportion as the terms on which such privileges are granted are made special and individual, the number of citizens who come within them is reduced. The vice of this statute, as has been-pointed out. elsewhere in this opinion, is in the classification. It attempts to create a class within a class. The terms upon which the privilege is granted are too narrow. It is not sufficient that any citizen of the State may possibly at some time fall within the description of the favored class. If this were so, classifications might be made which would not include a score of citizens in the State.
4. The practical effect of the act is to exempt from taxation property not used for municipal, educational, literary, scientific, religious, or charitable purposes, and for this reason it conflicts with §1, article 10, of the Constitution, and is void. The constitutional rule requires that all property, *574real and personal, shall he valued for taxation, excepting such only, for the purposes above named, as may be especially exempted by law. It seems clear that, if $700 may be deducted from the assessed valuation of each lot or tract of land in the State which is encumbered by mortgage, that proportion of the value of each lot or tract is exempted from its due share of the common burden. Calling it a deduction does not make it any the less an exemption. If two lots are valued at $1,400 each, one being encumbered with a mortgage for $700, and the other not; and the owner of the first is required to pay taxes on a valuation of $700 only, and the owner of the second on $1,400, then the first lot, by reason of the encumbrance, is exempted from taxation to the extent of $700. Call it what we may, the owner of the first lot enjoys an immunity which is denied to his less fortunate neighbors. He is exempted from a burden to which all others are subject. “The Constitution absolutely prohibits the exemption of any property, except for municipal, educational, literary, scientific, religious, or charitable purposes, and as no part of plaintiff’s property is included within any of these enumerated classes, any law which attempts to exempt it from taxation is void. And, ‘any law which indirectly produces such exemption must be equally void; that cannot be accomplished indirectly which the organic law declares shall not be done directly’.” Mr. Justice Field, in Huntington v. Worthen, 120 U. S. 97, 7 Sup. Ct. 469, 30 L. Ed. 588.
In addition to all that has been said, it may be added, that the act in question equally conflicts with the fourteenth amendment of the Constitution of the United States, in that it denies to a large part of the citizens of this State the protection it extends to a selected class.
It is said in the brief of counsel for the appellant that: “The deductions on account of mortgage indebtedness for the year 1900 aggregated over $35,000,000/ The amount claimed for the year 1901 will approximate $40,000,000.” *575For every dollar of valuation of real estate so withdrawn from assessment .the burden of taxation on what is left is increased by just so much. Every reduction of the aggregate assessment requires a proportionate increase in the rate of taxation. A law which works such stupendous and disastrous results to the great body of the taxpayers of the State should rest on solid and substantial foundations if it is to be sustained. Believing as I firmly do that the act of March 4,1899, is vicious and indefensible in principle, and that its application is destructive of uniformity and equality in taxation, I think that it should be declared unconstitutional, and that the judgment of the Marion Circuit Court should be affirmed.
Monks, J., concurs in dissenting opinion.