and there is nothing in the constitution of the United States which prohibits a state from enacting a law by which property which has escaped taxation in previous years is assessed for such years. The only limit upon the power of a legislature to assess a tax in praesenti based upon a state of things existing in the past is that the measure of the tax must not be so remote that it is no indication of the taxpayers' present ability to pay, and there must be no interference with vested rights.3

The assessment of taxes of former years upon property which was subject to taxation by the provisions of statute during such years but which was omitted from the tax list by an oversight of the assessors deprives the owner of such property of no constitutional right. The completion of the tax list for a given year creates no vested right in the owners of property subject to taxation that the assessment shall not thereafter be modified or amended to their detriment. It can make no difference in such a case that property has been sold to a bona fide purchaser without notice and that the tax is to be collected by enforcing a lien on the property. So also omitted property may be constitutionally assessed after the owner has died. For similar reasons the legislature has power to provide for the revaluation and reassessment of property which has been undervalued in previous years."

If the assessment of a previous year was defective by reason of some informality or irregularity in the proceedings, the assessment may be validated by act of legislature, provided that the requirement of statute which has not been complied with was one which the legislature might constitutionally have dispensed with, or, if it is essential to the constitutionality of the tax, the legislature provides that it shall now be complied with." So also the legislature may provide that taxes defectively or illegally assessed shall be reassessed.10 Whatever the legislature

2 League v. Texas, 184 U. S. 161 (1902).

3 Kentucky Union Co. v. Kentucky, 219 U. S. 140 (1911).

Sturges v. Carter, 114 U. S. 511 (1885); Winona etc. Land Co. v. Minnesota, 159 U. S. 526 (1895); Florida Central etc. R. R. Co. v. Reynolds, 183 U. S. 471 (1902); Citizens National Bank v. Kentucky, 217 U. S. 443 (1910). 5 Citizens National Bank v. Kentucky, 217 U. S. 443 (1910).

6 Sturges v. Carter, 114 U. S. 511 (1885).

'Weyerhaueser v. Minnesota, 176 U. S. 550 (1900).

8 Mattingly v. District of Columbia, 97 U. S. 687 (1878).

9 Williams v. Albany, 122 U. S. 154 (1887).

10 Spencer v. Merchant, 125 U. S. 345 (1888); Lombard v. West Chicago

Park Commissioners, 181 U. S. 33 (1901).

could authorize as an original assessment it may authorize notwithstanding a previous invalid attempt to assess.'

11

40. Due Process of Law in the Collection of Taxes

It is well settled that due process of law in the collection of taxes is not necessarily a judicial proceeding. Probably there are few governments which do or can permit their claims for public taxes to become subjects of judicial controversy, according to the course of the law of the land. Imperative necessity has forced a distinction between such claims and all others, and they have sometimes been enforced by summary methods of proceeding, and sometimes by systems of fines and penalties, but always in some way observed and yielded to.1

3

Collection of taxes by distress, or the seizure and sale of personal property of the delinquent without judicial process, was a remedy in common use in this country when the constitution was adopted, and unquestionably constitutes due process of law.2 So also the arrest and commitment of the person assessed when he fails to pay the tax or to exhibit goods for the officer to distrain is a long-established and clearly constitutional method of collection. It is equally within the power of the legislature to provide that a person shall not exercise his right of voting while his taxes are in default. The payment of taxes may be expedited by the imposition of interest from the time they became delinquent and the costs of collection may be added to the amount of the tax." A statute providing for the imposition of a penalty, even as great as one half of the tax, if it remains unpaid after a certain date, is not unconstitutional.®

11 Wagner v. Leser, 239 U. S. 207 (1915).

1 Murray's Lessee v. Hoboken Land etc. Co., 18 How. 272, 282 (1855). A state has at common law a priority in its claims for taxes, Marshall v. New York, 254 U. S. 380 (1920).

2 Murray's Lessee v. Hoboken Land etc. Co., 18 How. 272, 282 (1855); Springer v. United States, 102 U. S. 586 (1880); Kelly v. Pittsburgh, 104 U. S. 78 (1881); Palmer v. McMahon, 133 U. S. 660 (1890); King v. Mullins, 171 U. S. 404 (1897). An automobile used in an attempt to transport liquor so as to evade a tax may be seized and forfeited, although the automobile was in the hands of a bailee and the owner was unaware of its unlawful use. GoldsmithGrant Co. v. United States, 254 U. S. 505 (1921).

3 Palmer v. McMahon, 133 U. S. 660 (1897).

4 Walker v. Whitehead, 16 Wall. 314 (1872).

5 League v. Texas, 184 U. S. 156 (1901).

• Western Union Tel. Co. v. Indiana, 165 U. S. 304 (1896). But a state

A tax on personal property is usually not a lien thereon;" but it is clearly within the power of the legislature to make the taxes on personal property of a taxpayer a lien on every article of his personal property taking precedence of prior mortgages and liens created by private contract. So also the practice is almost universal to make the taxes on real estate a lien thereon, although in the case of real estate the lien on each parcel of real estate does not usually include the taxes on other real estate of the same owner. It is held in most jurisdictions that the title created by a sale for non-payment of taxes is not merely the title of the person assessed, but is a new and paramount title created by the sovereign and is free from all pre-existing equities and incumbrances." A tax sale thus extinguishes all mortgages and other rights in the property sold.10 Nevertheless it is well settled that the exercise of the power of sale is not a violation of the constitutional rights of the holder of an interest in or lien on the property sold, although he is under no obligation to pay the tax and may lose valuable property rights through the delinquency of another.11

The collection of excises is commonly enforced by prohibiting the performance of the act which is the subject of the excise unless the tax is paid. This prohibition may be and frequently is enforced by the issuance of an injunction against the delinquent, restraining him from further performance of the act until payment of the tax, with penalties and costs.12 There is how

cannot impose a penalty when it has claimed title to the property assessed and not undertaken to collect the tax until its claim of title was decided against it. Litchfield v. Webster County, 101 U. S. 773 (1879).

Heine v. Levee Commissioners, 19 Wall. 655 (1873); Richmond v. Bird, 249 U. S. 174 (1918).

8 Central Trust Co. v. Minnesota, 174 U. S. 803 (1899).

9 Turner v. Smith, 14 Wall. 553 (1871); Osterberg v. Union Trust Co., 93 U. S. 424 (1876); Hefner v. Northwestern Mutual Life Insurance Co., 123 U. S. 747 (1887); Leigh v. Green, 193 U. S. 79 (1904); Langley v. Chapin, 134 Mass. 82 (1883); Hunt v. Boston, 183 Mass. 303 (1903); Weeks v. Grace, 194 Mass. 296 (1907).

10 Osterberg v. Union Trust Co., 93 U. S. 424 (1876); Hefner v. Northwestern Mutual Life Insurance Co., 123 U. S. 747 (1887). See also infra page 350. When the fee is not subject to taxation the lien is only upon the interest in the property that is taxable. Baltimore Shipbuilding etc. Co. v. Baltimore, 195 U. S. 375 (1904); Jeton v. University of the South, 208 U. S. 489 (1908).

11 Provident Institution v. Jersey City, 113 U. S. 506; Leigh v. Green, 193 U. S. 79 (1904).

12 New Jersey v. Anderson, 203 U. S. 483 (1906).

ever no constitutional objection to the collection of an excise by the enforcement of a lien upon the property used or enjoyed in connection with the act, privilege or occupation assessed,13 even if it is not owned by the person liable for the tax.1

14

The Fourteenth Amendment and the corresponding provision of the state constitution undoubtedly prohibit arbitrary and unreasonable discriminations in the manner of collecting taxes between persons and things similarly situated; but there is no requirement of uniformity among different classes when there is a reasonable ground for distinction. Thus a statute giving greater rights of redemption from sales for nonpayment of taxes to mortgagees of record than to those who hold unrecorded mortgages is not unconstitutional.15

41.. Retroactive Provisions Respecting Collection of Taxes

It is stated as a general rule that, as far as the federal constitution is concerned, the legislature may change the mode of collecting taxes which have already been assessed at any time before they have been paid or otherwise discharged or released.1 Even when a bona fide purchaser for value has acquired land with respect to which taxes are delinquent he cannot complain if the laws are changed to his detriment with respect to the collection of taxes.2

On the other hand vested rights cannot be impaired under the guise of a change in the remedy. A statute attempting to validate a void tax sale is unconstitutional. A statute modifying the law with respect to the redemption of land from sale for non-payment of taxes cannot be constitutionally applied to sales already made.*

13 McMillen v. Anderson, 95 U. S. 37 (1877); Hodge v. Muscatine County, 196 U. S. 276 (1905); Scottish Union etc. Insurance Co. v. Bowland, 196 U. S. 611 (1905).

14 Hodge v. Muscatine County, 196 U. S. 276 (1905).

15 Barry v. Lancy, 179 Mass. 112 (1901). So also penalties may be imposed, applicable only to certain classes of corporations, upon their failure to pay taxes when due. Western Union Tel. Co. v. Indiana, 165 U. S. 304 (1897).

1 League v. Texas, 184 U. S. 156 (1902); Kentucky Union Co. v. Kentucky, 219 U. S. 140 (1911). A statute relating to redemption from sale for nonpayment of taxes may constitutionally apply to taxes already assessed. Rogers v. Nicholls, 186 Mass. 440 (1904).

2 Citizens National Bank v. Kentucky, 217 U. S. 443 (1910); Kentucky Union Co. v. Kentucky, 219 U. S. 140 (1911).

3 Forster v. Forster, 129 Mass. 559 (1880). 4 Solis v. Williams, 205 Mass. 350 (1910).

Although a state cannot enact a law impairing the obligation of contracts, a statute applicable to the collection of taxes thereafter assessed which affects contracts entered into before its enactment is clearly constitutional, for the sovereign power to enact legislation cannot be affected or diminished by the contracts of private parties. When the only parties who can be unfavorably affected by a change in the tax laws are municipal corporations, a statute making such a change is not unconstitutional even if it impairs vested rights.

5

TERRITORIAL JURISDICTION

42. The Situs of Property for the Purpose of Taxation

It is well settled that no state can tax property that is not within its jurisdiction. It is an implied condition of all statutes relating to taxation that they have no extra-territorial effect. They can apply in the nature of things only to property within the jurisdiction of the sovereign state enacting the legislation, either actually through physical location or constructively through control over the person of one essentially connected therewith. This rule as a moral obligation is inherent to the very existence of a constitutional government and it is established by the Fourteenth Amendment to the constitution of the United States as a practical restriction enforced by the federal courts. An attempt by a state to require property not within its jurisdiction to contribute to the support of the government thereof would not be taxation but mere arbitrary spoliation; and it would deprive the owner of his property without the essential "due process of law." It is not however

5 Andrews v. Worcester etc. Insurance Co., 5 Allen 65 (1862).

6 Thus a statute allowing interest and costs in abatement proceedings successfully maintained may be applied to pending cases. Tremont & Suffolk Mills v. Lowell, 165 Mass. 265 (1896).

1 Walker v. Treasurer & Receiver General, 221 Mass. 600 (1915).

2 McCulloch v. Maryland, 4 Wheat. 316, 429 (1819).

3 State Tax on Foreign Held Bonds, 15 Wall. 300 (1872); Louisville, etc. Ferry Co. v. Kentucky, 188 U. S. 385 (1903); Delaware etc. R. R. Co. v. Pennsylvania, 198 U. S. 341 (1905); Old Dominion Steamship Co. v. Virginia, 198 U. S. 299 (1905); Union Refrigerator Transit Co. v. Kentucky, 199 U. S. 194 (1905); Metropolitan Life Insurance Co. v. New Orleans, 205 U. S. 395 (1907); Provident, etc. Society v. Kentucky, 239 U. S. 103 (1915).