Court Opinion

ID: 7059178
Source: CourtListenerOpinion
Date Created: 2022-07-24 07:15:14.745531+00
Date Added: 2024-06-11T16:12:06.129469
License: Public Domain

Arterburn, J.
Appellee has filed a petition to transfer this appeal from the Appellate Court as a result of an opinion by that court holding that the real estate purchased on an installment contract from the U. S. Government was taxable as to the interest held by the purchaser. (See Appellate Court Opinion at 245 N. E. 2d 853.)
We have come to the conclusion that the transfer should be denied not only for the reasons given in the Appellate Court opinion but for the reasons which we desire to elaborate more fully.
The Appellate Court opinion is based upon the proposition that the buyer on contract of real estate from the United States has an equitable interest of real value that should be taxed, and as a matter of law, this is correct. The Federal Government apparently felt the same way *553about it when it provided in the contract with this purchaser that he should pay all taxes, to wit: “Buyer will, while any of the indebtedness secured hereby remains unpaid pay before they become delinquent all taxes, both general and special, assessments and governmental charges lawfully levied or assessed against the above-described property or any part thereof . . .” That contract for the benefit of governmental taxing units is a third party beneficiary contract which the taxing units have a right to enforce against the appellee, and therefore the trial court had no right to issue an injunction against the enforcement of such a contractual right; nor may a party come to a court of equity and in the face of such a promise ask for a restraining order against the enforcement of his own promise to pay the taxes.
Further, all property should be taxed under our state law unless there is a special exemption provided by statute. This statute on exemption being Burns’ Ind. Stat. Ann. § 64-201 read as follows:
“Exemptions enumerated — The following property shall be exempt from taxation:
First. The property of this state; and the property of the United States, its agencies and instrumentalities to the extent that this state is prohibited by law from taxing said property of the United States, but any right, title, interest, lien claim or lease held in, on, to or of said property shall be assessed and taxed as other property is assessed, and taxed to the extent that this state is not prohibited from taxing the same by the Constitution of the United States.” (Emphasis added)
It will be noted that no property is exempt unless constitutionally it has to be. There is no provision in the Constitution of the United States that prevents taxation in this case. Therefore that provision has no relevancy here. At the same time it will be noted that this statutory provision does say in mandatory language “but any right, title, interest, lien claim or lease held in, on, to or of said property shall be *554asessed and taxed as other property is assessed and taxed . . .” (Emphasis added)
This language is the answer to the case and sustains the Appellate Court’s position that this property and any right therein, including contract rights, or equitable title shall be taxed. The taxing authorities were merely following the mandatory provisions of this statute.
The contention that the legislature should pass a law providing for the taxation of equitable interests owned by persons in U. S. lands is not sustainable, since the legislature has done that very thing under the statute cited above.
Finally, we point out that appellee has not exhausted its administrative proceedings and remedy before coming into court. Burns’ Ind. Stat. Ann. § 64-501 et seq. provide for filing applications for tax exemptions with the county auditor and for appeals and review thereof before the County Board of Review and the State Board of Tax Commissioners. This was not done by the appellee. All appellee did was file an untimely petition before the State Board “To establish % of true value,” not for an exemption from taxation.
Appellee says the attempt to tax is entirely “void” in this case and not merely voidable, and therefore it had the right to go directly into court and enjoin the act without following the administrative remedy first. To say that an act is void or voidable is a far too frequent refuge for an easy decision which has no real substance. No court or judge has yet been able to satisfactorily define adequately the distinction between these terms. To a large extent the attempt degenerates into a question of semati.es and not law. Here the statutes cited above gave jurisdiction to hear petitions for exemptions to the tax boards and they certainly had jurisdiction of the subject matter. Their proceedings .certainly had some validity and were *555not totally void. For the reasons stated the petition to transfer is denied.
Givan and DeBruler, JJ., .concur; Jackson, J., concurs in result. Hunter, C.J., dissents with opinion.