Springer v. United States
ERROR to the Circuit Court of the United States for the Southern District of Illinois.
In June, 1866, the deputy assessor of internal revenue for the proper district in Illinois delivered to William M. Springer a notice in writing, with certain accompanying forms, requiring him within ten days to make out and return, according to those forms, a list of his income, gains, and profits for the year 1865. In compliance therwith, Springer made out the necessary statement, dated June 21, 1866, and delivered it to the deputy, together with a written protest against the authority of the latter to demand the statement, on the ground that the acts of Congress under which that officer acted were unconstitutional and void. The statement, showing that the net income received by Springer for the year 1865, and subject to taxation, amounted to $50,798, upon which the sum of $4,799.80 was assessed as tax, was transmitted to David T. Littler, the collector, who, Nov. 17, 1866, payment being refused, served a notice upon Springer demanding payment, and warning him that, unless it should be made within ten days, the law authorized the collection of the tax, together with a penalty of ten per cent additional by distraint and sale.
Payment being again refused, and Springer having no goods or chattels which were known to the collector or his deputy, the collector, Jan. 24, 1867, caused a warrant for $5,279.78, the amount of the tax and penalty, to be issued and levied upon certain real estate in the city of Springfield, Sangamon County, Illinois, consisting of two pieces of lots in the same enclosure without any division fence, and belonging to Springer, upon one of which pieces was located his dwelling-house and upon the other his barn. The property was advertised, and, on March 15, 1867, sold, the United States becoming the purchaser for the amount of the tax, penalty, and costs. On that day Littler, as collector, made and executed to the United States a deed of the property, which, Nov. 28, 1868, was recorded in the recorder's office of that county. Jonathan Merriam, his successor as collector, made and executed, April 17, 1874, another deed to the United States for the same property. This deed was duly recorded April 23, 1874. It recites the assessment of the tax, the demand therefor, the seizure and sale of the property 'by virtue of an act of Congress of the United States of America, entitled 'An Act to provide internal revenue to support the government, and to pay interest on the public debt,' approved July 1, 1862, and the act of March 30, 1864, as amended.'
Dec. 2, 1874, the United States brought this action of ejectment against Springer.
At the trial the plaintiff, having proved the foregoing facts, offered in evidence the deed of April 17, 1874; but the defendant objected thereto, on the ground that the deed is void, because the tax demanded of him was a direct tax, and, not being levied in the manner prescribed by the Constitution, was not a legal or valid demand upon him; that the summary levy upon and sale of his property without opportunity to him to be heard in court deprived him of his property without due process of law; that the acts of Congress purporting to authorize the assessment and levy of the tax, the sale of his property and the execution of the deed, were without force or validity; and that as the property was susceptible of division into separate tracts or lots, the laws of Illinois were disregarded by not selling it accordingly. He also for the same reasons objected to the introduction in evidence of the papers pertaining to the assessment, levy, and sale; but the court overruled the objection, and permitted them and the deed to be read in evidence. The defendant thereupon excepted.
It was proved by the defendant that he purchased the lots from different parties, that they are separately described, are susceptible of division, and would have sold to better advantage had they been sold separately; that they were assessed separately for the purpose of State taxation, and were, in 1866, worth between $10,000 and $12,000.
The court thereupon, at the request of the plaintiff, charged the jury: 1. That the deed in question is a valid instrument, and transferred to the United States the title of the defendant in and to the lots. 2. That the laws or acts of Congress mentioned in said deed were valid enactments at the time, and authorized the proceedings taken in the premises. To which instructions the defendant excepted, and asked the court to charge the jury,-- 1. That the tax on the income, gains, and profits of the defendant, assessed upon him, as appears by the evidence in this case, was a direct tax within the meaning of the Constitution of the United States, and that, in order to constitute such tax a valid claim upon the defendant, it should have been apportioned among the several States the same as representatives in Congress are. And if the jury believe from the evidence that such tax was not so apportioned among the several States, then such tax was levied in violation of the Constitution, and the sale of defendant's property to satisfy the same is void, and in that case they will find for the defendant.
2. That the sale of defendant's real estate to satisfy the tax assessed upon him in a summary manner, without first having obtained a judgment in a court of record, was a proceeding to deprive the defendant of his property without due process of law; and if the jury believe from the evidence that defendant's real estate was sold to satisfy the tax assessed upon him, without having first obtained a judgment in a court of record, or without giving said defendant an opportunity to be heard in court, then such sale was void, and they will find for the defendant.
3. That if the jury believe from the evidence in this case that a penalty of ten per cent upon the amount of said tax was assessed upon defendant by the collector of internal revenue, which penalty amounted to $479.98, without having obtained a judgment in a court of record, by due process of law, and that the defendant's real estate was sold to satisfy said penalty, together with said tax, then such sale was void, and they will find for the defendant.
4. That a party claiming title to land under a summary or extraordinary proceeding must show that all the indispensable preliminaries to a valid sale which the law and the Constitution prescribe have been complied with; and if they believe from the evidence that the plaintiff has failed to show that all the requirements of the law have been complied with in the assessment and levy of the tax, the service of the notice, the issue of the warrant, and the execution thereof, in the advertisement and sale of the property, in the making and execution of the deed, and in all the other requirements of the law, then they will find for the defendant.
5. That the sale of real estate to satisfy a personal tax not levied upon or a lien upon said real estate, without first having obtained a judgment in a court of record and an execution in pursuance thereof, is a proceeding to deprive a person of his property without due process of law; and if they believe from the evidence in this case that the tax levied upon defendant was not assessed in the first instance upon said real estate and made a lien thereon, and that said real estate was sold to satisfy said tax without a judgment of a court of record, then such sale is void, and they will find for the defendant.
But the court refused to so charge the jury, to which refusal the defendant excepted.
The jury found for the United States, and a motion for a new trial having been refused, to which refusal the defendant excepted, judgment was rendered accordingly. The defendant then sued out this writ, and here assigns for error,--
1. The admission in evidence of the deed and other papers in the court below.
2. The refusal of the court to charge the jury as requested by him.
3. The giving of the charge requested by the plaintiff.
4. The refusal to grant a new trial.
Mr. William M. Springer for the plaintiff in error.
The tax assessed against the plaintiff in error having been levied upon his income, gains, and profits, is a direct tax. 3 Smith's Wealth of Nations, 212, 213, 216, 220-228, 244-248, 271-274, 276-278; 2 Mill's Pol. Econ. 418-434; Say's Pol. Econ. 465-468, 480; Perry's Elements Pol. Econ. 443; 1 Chambers's Inf. for the People, 371; Brande's Dict. of Science, Literature, and Art, 1211; Wayland's Pol. Econ. 391, 392; Knight's Cyclopaedia (London, 1842), title 'Taxation;' Encyclopaedia Britannica, title 'Taxation;' Encyclopaedia Americana, title 'Taxes;' 4 Elliott's Debates, 433; Sir Morton Peto on Taxation, 50, 53; Goodrich's Science of Government, 251; Ricardo's Principles of Pol. Econ. 214, 221; 1 Pampletier, 557 (1816).
The tax on incomes not having been based, even professedly, upon population nor approtioned relatively among the several States, was in violation of the Constitution of the United States. Const. U.S., art. 1, sects. 2, 8, 9; 1 Kent, Com. 277; 2 Story, Const. 113, 143; Loughborough v. Blake, 5 Wheat. 317.
The acts of Congress by virtue of which the tax complained of was levied conferred no authority, for either its assessment and levy, the sale of his property, or the execution of a deed therefor.
The deed recites the act approved July 1, 1862, and that of March 30, 1864, as amended. No act of Congress bears the latter date. Consequently the deed was not admissible in evidence. But if it be contended by the United States that the act of June 30, 1864 (13 Stat. 218), was the one referred to, it is then submitted that that act, as amended by that of March 3, 1865, did not authorize the proceedings taken by the collector. The power to levy the tax is a limited one, and if the limits prescribed by law are transcended, the levy is void. West School District of Canton v. Merrills, 12 Conn. 437.
In every case where an individual tax is, upon trial, shown to be greater than the amount authorized, a sale of the land for the payment of such tax will be deemed void. Kemper v. McClelland, 19 Ohio, 324; Elwell v. Shaw, 1 Greene (Iowa), 335; Blackwell, Tax Titles, 160, 161.
The levy upon and sale of the property of the plaintiff in error was in violation of the provision of the Constitution of the United States declaring that 'no person shall be deprived of his life, liberty, or property without due process of law.' 3 Story, Const. 661; 1 id. 623-625; Murray's Lessee v. Hoboken Land and Improvement Co., 18 How. 272; Wynehamer v. The People, 13 N. Y. 378; People v. Berberrich, 11 How. (N. Y.) Pr. 289.
'Due process of law,' in its true and largest signification, means law in its regular course of administration by the courts of justice, and not the execution of a power vested in ministerial officers. Hake v. Henderson, 4 Dev. (N. C.) L. 15; Taylor v. Porter, 4 Hill (N. Y.), 146; Bank of Columbia v. Okely, 4 Wheat. 235; White v. White, 5 Barb. (N. Y.) 481; Reed v. Wright, 2 Greene (Iowa), 22; Hoocock v. Bennett, 2 Cow. (N. Y.) 740; Kenny v. Beverly, 3 Hen. & M. (Va.) 336; Brown v. Hummel, 6 Pa. St. 87; Ervine's Appeal, 16 id. 256; Arrowsmith v. Burlingame, 4 McLean, 498; 5 Webster's Works, 487, 488; Cooley, Taxation, 316-319.
The request to the court below to charge the jury that a party claimining title to land under a summary or extraordinary proceeding must show that all the indispensable preliminaries to a valid sale have been complied with, should have been granted. Games v. Stiles, 14 Pet. 322; Thatcher v. Powell, 6 Wheat. 119; Cooley, Taxation, 308, 328, 334, 353, 354; Rex v. Cooke, 1 Cowp. 26; Blackwell, Tax Titles, 214-216; Leland v. Bennett, 5 Hill (N. Y.), 286; Denike v. Rourke, 3 Biss. 39; Hardin v. Owings, 1 Bibb (Ky.), 214.
Mr. Assistant Attorney-General Smith, contra.
MR. JUSTICE SWAYNE, after stating the facts, delivered the opinion of the court.