property are not debts of the owner thereof. | the most benefit from the act in the future. Thompson v. McCorkle, 136 Ind. 484, 34 N. E. 813, 36 N. E. 211. But it is neverthe less competent for the legislature to so provide. Snipe v. Shriner, 44 N. J. L. 206. If it can be fairly said that the equality limitation in the Constitution was designed to prevent inequalities in the assessment of different tracts of real estate, considered as a matter wholly apart from the interest of their owners therein, then there would be room for serious doubt as to the justification of legislation that discriminates within the class, and which permits a deduction of $700 in the assessment on one tract of mortgaged real estate, while that right is wholly denied as to an adjoining unencum bered tract of real estate. We do not think, however, that the people of Indiana, in adopting the Constitution of the state, had any such view. Taxes must be paid by persons, unless property is sacrificed there for; and, moreover, the whole idea of values is one of the artificialities of life. It therefore follows that, when the people put the equality limitation upon the power to tax, they intended thereby to protect the owners of property. We must therefore regard the limitation that taxation must be equal as being satisfied when there is no discrimination as between taxpayers. Clear ness is necessary here, however; and we therefore suggest, by way of emphasis, that our present statements relate only to the requirement of equality in taxation. Still dealing with this particular portion of the limitation, we next call attention to the fact that the selection of some objects for taxation, and the omission of others, or even the selection of but a few objects for taxation, does not necessarily disturb the rule of equality, provided that the result of the imposition of the burden is to so diffuse itself ultimately among those who ought to bear their share of it as not unreasonably to lay it on particular classes of taxpayers, to the ease of the rest. "Let it reach all of a class," says Judge Cooley, "either of persons or things, it matters not whether those included in it be one or many, or whether they reside in any particular locality, or are scattered all over the state. But when, for any reason, it becomes discriminative between individuals of the class taxed, and selects some for an exceptional burden, the tax is deprived of the necessary element of legal equality, and becomes inadmissible." Cooley, Taxn. 169.

We may freely grant that, with this act in force, it will produce inequalities as between taxpayers in any given year, but we confidently affirm that it is beyond the ken of the most astute to say who will receive

If one man gains an advantage over his neighbor this year by means of this statute, it cannot be said that the latter's property affairs may not hereafter be in such condition that he will receive more of benefit from the statute than the former. As the act is presumed to represent a constitutional exercise of the legislative power, it devolves upon those who would assail it as unequal or class legislation to point out what class of persons will hereafter be prejudiced thereby. Laws are rules of action projected through and beyond the multifarious interests and affairs of mankind, and it is too much to affirm that they must at all times operate fairly, as applied to any individual; and particularly, as we have shown, is it too much to affirm that a tax law must always so operate. If the power of taxation is a legislative function, and if it be true that in any system of taxation, however wisely framed, disproportionate shares of the public burden will occasionally be thrown on some persons, it must needs follow that the courts must admit that there exists in the general assembly a large measure of discretion in the enactment of a scheme of taxation. To borrow something from the language and thought of another court, it is the peculiar duty of a court to keep the first lines of the Constitution clear, and not to stretch its power to correct legislative abuses. We do not mean to hold that statutory provisions relative to the levying of taxes might not so far on their face manifest, by invidious discriminations between persons and property, their unequal and unjust character, as to call on the courts to refuse to enforce them; but as observed by Gibson, Ch. J., in Kirby v. Shaw, 19 Pa. 258, 261, "it is illogical to argue from an extreme case, or from the abuse of a power to a negative of it. Every authority, however indispensable, may be abused; and, if it might not, it would be powerless for good." As to the requirement of uniformity, we have to say that the act in question purports to be a law that is uniform throughout the state, and, as it permits all persons to take advantage of it when their circumstances bring them within its operation, we are of the opinion that it does not violate that requirement of the Constitution. Cleveland, C. C. & St. L. R. Co. v. Backus, 133 Ind. 513, 18 L. R. A. 729, 33 N. E. 421; Pittsburgh, C. C. & St. L. R. Co. v. Backus, 133 Ind. 625, 33 N. E. 432; Gibson v. Rush County, 128 ind. 65, 11 L. R. A. 835, 27 N. E. 235.

It is our judgment that every limitation upon the power to tax that is found within the limits of § 1 of article 10 of our Constitution was intended, at least primarily,

to protect the taxpayer; but it must be ad- | able to some public and nontaxable fund. mitted that the latter part of the section, May the general assembly enact such legisrequiring the general assembly to prescribe lation in its endeavor to be just? We do such regulations as shall secure a just val- not mean to intimate that no law can be upuation for taxation of all property that the held that in its operation may result in Constitution does not authorize to be ex- duplicate taxation. As stated by Judge empted, looks to still further protecting the Cooley in his work on Taxation (p. 223): taxpayer in the matter of equality, by pre- "We make out, therefore, no conclusive scribing a duty upon the general assembly case against a tax when we show that it to provide for the securing of a just valua- reaches twice the same property for the tion for taxation of all property, except as same purpose. This may have been inaforesaid. The decisions of this court have tended, and in many cases, at least, is adthoroughly committed it to the proposition missible." But if A sells a tract of land that legislative enactments that purport to to B for $1,000, and takes a mortgage back grant exemptions not falling within the class for the entire purchase money, and if the of exemptions mentioned in the Consti- mortgagee be a resident of this state, there tution are void. State ex rel. Morgan v. is brought into existence, in the absence of Workingmen's Bldg. & Loan Fund & Sav. the enactment in question, additional taxAsso. 152 Ind. 278, 53 N. E. 168; Harn v. able property to the amount of $1,000, alWoodard, 151 Ind. 132, 50 N. E. 33; Den-though it is apparent that by such transaciston v. Terry, 141 Ind. 677, 41 N. E. 143; Warner v. Curran, 75 Ind. 309; State ex rel. Tieman v. Indianapolis, 69 Ind. 375, 35 Am. Rep. 223.

tion the state's wealth has not been increased a farthing. To what extent the state's assessment sheet is augmented by duplicate taxation, courts, that act on evi

could not enter on an inquiry, unless, like a legislature, it was authorized to act on common repute and opinion. We are disposed to place stress upon the fact that the lien which may be made the basis of a deduction is a mortgage lien, as distinguished from other liens upon real estate, general and special. While it is true that for most purposes a mortgage will be treat

The enactment in question cannot be sup-dence, cannot ascertain. A public tribunal ported as an exemption law. It is to be remembered, however, that the regulations that the general assembly are required to enact must look to the securing of a just valuation, as well as to a valuation of all property that the Constitution subjects to taxation. We cannot subordinate the one requirement to the other. Indeed, it is a rule of construction that a constitution is an instrument of such high and solemn im-ed as a mere security for a debt, yet, whenport that every word thereof is to be regarded as though it was hammered into place. The question therefore arises whether it is competent for the general assembly to enact a law that provides for the taxation of real estate according to the actual interest of the owner therein, or that at least partially effectuates that object, under that provision of the Constitution that requires that the regulation shall be just. Many cases uphold the right of a state to enact a law that apportions the value of land for taxation upon the basis of the actual interests of the mortgagor and mortgagee, respectively, therein. Savings & Loan Soc. v. Multnomah County, 169 U. S. 421, 42 L. ed. 803, 18 Sup. Ct. Rep. 392, and cases there cited. This amounts, in effect, to taxing a mortgage at the situs of the land, and such a statute has been held valid even as against nonresident mortgagees. Savings & Loan Soc. v. Multnomah County, 169 U. S. 421, 42 L. ea. 803, 18 Sup. Ct. Rep. 392. The enactment in question, although it does not operate to transfer the situs of the debt, amounts to an apportionment of the land value for taxation, as between the mortgagor and the mortgagee, except when the mortgage is held by a nonresident, or is pay

ever it is necessary to render effective the rights of the parties, the courts will treat mortgages as forms of defeasible sales. Vinnedge v. Shaffer, 35 Ind. 341; United States Sav. Fund & Invest. Co. v. Harris, 142 Ind. 226, 40 N. E. 1072, 41 N. E. 451; Citizens' State Bank v. Harris, 149 Ind. 208, 48 N. E. 856; Savings & Loan Soc. v. Multnomah County, 169 U. S. 421, 42 L. ed. 803, 18 Sup. Ct. Rep. 392. As observed by the Supreme Court of the United States in the case last cited: "If the law treats the mortgagee's interest in the land as real estate for his protection, it is not easy to see why the law should forbid it to be treated as real estate for the purpose of taxation." In our opinion, the general assembly may enact a statute like the one in question without violating the provision that it shall prescribe such regulations as shall secure a just valuation for taxation of all property except such property as the Constitution authorizes to be exempted. Gross valuations are not required. As said by this court in Florer v. Sheridan, 137 Ind. 28, 41, 23 L. R. A. 278, 36 N. E. 365, 369: "Section 1, art. 10, supra, does not say the gross [our italics] amount of all notes, accounts, and other choses in action shall be taxed, and we can

not so construe it without perverting its those that rest upon a false or deficient language and obvious meaning." In our classification. Their vice is that they do opinion, the case last cited is entirely in not embrace all the class to which they point, for as it is well settled that, under a are naturally related. They create preferconstitutional provision requiring all prop-ences and establish inequalities. They aperty to be taxed, it is not competent to ex-ply to persons, things, or places possessed of empt solvent credits; yet this court there certain qualities or situations, and exclude held that the legislative authority was suf- from their effect other persons, things, or ficient to warrant the deduction of bona places which are not dissimilar in these refide indebtedness from the total amount of spects." Granting, but not deciding, that the notes, accounts, and other choses in ac- § 1 of article 10 of our Constitution and § tion embraced within the taxpayer's sched-22 of article 4 of that instrument overlap ule. We therefore perceive no difference in in the effort to put checks upon the otherprinciple between this case and the Florer wise supreme and peremptory power of taxCase. As the court there said: "Deductions | ation, we feel that this opinion has already and exemptions are two separate and dis- vindicated the act from the claim that it is tinct things, having no connection. A de- discriminative as between taxpayers. The duction is the taking of the subtrahend first words in the boly of the act are: "Any from the minuend. It is a subtraction. Ex-person desiring to avail himself, or herself, emption is an immunity or privilege. It is of the provisions of this act, shall," etc. freedom from a charge or burden to which The words import universality. They are others are subject." Upon the subject of broad enough to include all persons. In an allowance for debts, Judge Cooley says: Gilson v. Rush County, 128 Ind. 65, 11 L. "Revenue laws sometimes permit taxpayers R. A. 835, 27 N. E. 235, we find the followto deduct from the property to be taxed the ing: "It is held that a statute which is of debts owing by them. Sometimes the de- general and uniform operation throughout duction is from credits only, sometimes the state, and operates alike upon all perfrom mortgages, sometimes from the sons under the same circumstances, is not aggregate of personal estate. subject to the objection that it is special or The allowance is not in any proper local legislation. State ex rel. Hargrave v. sense an exemption, but is made by way of Reitz, 62 Ind. 159, 30 Am. Rep. 203; Mcreaching the just amount of taxable prop- Laughlin v. Citizens' Bldg. Loan & Sav. erty." Cooley, Taxn. 174. This general doc- Asso. 62 Ind. 264; Heanley v. State, 74 Ind. trine is also recognized by Mr. Desty. 199; Elder v. State, 96 Ind. 162." Again, it Desty, Taxn. 551. The enactment in ques- was said by Frazer, J., in Hingle v. State, tion, while it does not go as far as it might 24 Ind. 28, 31: "What is a special act? It possibly do in the direction of subjecting is such as at common law the courts would mortgages to taxation, does not, it is to be not notice unless it were pleaded and proved observed, relieve any mortgage credit from like any other fact." Mr. Sutherland, in taxation that was taxable before; and the his work on Statutory Construction, collects mere fact that there may have been an omis- a large number of cases relative to prohibsion to extend the power of taxing mort-ited special legislation, and his text enungages will not invalidate the provision for ciates opinions in accord with those exa deduction from mortgaged lands, any more than the adjudged omission to provide for the taxation of paid-up life insurance policies will avoid the entire legislative scheme of taxation.

We have now reached the question whether the act violates § 22 of article 4 of the state Constitution. That section provides that "the general assembly shall not pass local or special laws in any of the following enumerated cases, that is to say:

.

pressed in State ex rel. Van Riper v. Parsons, 40 N. J. L. 1. This act does not, however, amount to a special law, if we accept the view of that learned author as to what constitutes special legislation, for he says (§ 129): "The prohibition is in the way of legislation for individual cases. It is equally fatal to such legislation, though it be general in form. If a statute is plainly intended for a particular case, and looks to no broader application in the future, it is For the assessment and collection of taxes special or local, and, if such laws are profor state, county, township, or road pur-hibited on the subject to which it relates, is poses." It cannot be claimed that the act unconstitutional. The lineaments by which is local, but the question whether it is special challenges our consideration. This court, in Indianapolis Street R. Co. v. Robinson, 157 Ind. 232, 61 N. E. 197, 198, quoted the following statements found in the case of State ex rel. Van Riper v. Parsons, 40 N. J. L. 1: "Interdicted special laws are

such cases are to be distinguished are usual ly so special that a law confined thereto would be anticipated to have no effect, from the antecedent improbability of such a case arising. When, therefore, it is found to fit such a special case, it is deemed to have Even if we been enacted solely for it."

vania.'"

tion

of inequality in the burdens resulting from | to be considered is contained in the first the operation of the law is put at rest by three sections, and reads as follows: the decision in Bell's Gap R. Co. v. Pennsyl- "Sec. 1. Be it enacted," etc., "that any See also, as bearing on the ques-person being the owner of real estate liaas to the application of the 14th ble for taxation within the state of InAmendment, Cass Farm Co. v. Detroit, 181 diana, and being indebted in any sum, seU. S. 396, 45 L. ed. 914, 21 Sup. Ct. Rep. cured by mortgage upon real estate, may 644, 645; Detroit v. Parker, 181 U. S. 399, have the amount of such mortgage indebted45 L. ed. 917, 21 Sup. Ct. Rep. 624, 645; ness, not exceeding $700, existing and unCleveland, C. C. & St. L. R. Co. v. Backus, paid upon the 1st day of April of any year, 133 Ind. 513, 18 L. R. A. 729, 33 N. E. 421; deducted from the assessed valuation of Pittsburgh, C. C. & St. L. R. Co. v. Backus, mortgage premises for that year, and the 133 Ind. 625, 33 N. E. 432. amount of such valuation remaining after It may be a matter of grave doubt wheth- such deduction shall have been made shall er public policy is conserved by an enact-form the basis for assessment and taxation ment that substitutes net values for gross for said real estate for said year. Provided, values, upon a species of property upon that no deduction shall be allowed greater which the state must largely depend for its than one half of such assessed valuation of maintenance, but we cannot run a race of said real estate. opinion with the legislature upon this subject.

Counsel for appellee dwelt at some length upon some of the crudities of the act in question. We do not deem it necessary to consider such matters. What we affirm is that the act is valid. It follows, therefore, that the court below erred in sustaining appellee's demurrer to the application and alternative writ.

Judgment reversed, with instructions to the court below to overrule the demurrer to the application and alternative writ, and for further proceedings not inconsistent with this opinion.

Dowling, J., dissenting:

After careful and impartial reflection I am constrained to withhold my assent from the reasoning and conclusions of the opin ion adopted by the majority of the court. The importance of the question presented upon this appeal renders it proper to state with some particularity the grounds of such dissent. In determining the case, the court is required to interpret certain provisions of the state Constitution. Those provisions relate to the highest function of the 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 (§§ 8417-8419 et seq., Burns's Rev. Stat. 1901). That portion of the act necessary

"Sec. 2. Any person desiring to avail himself or herself, of the provisions of this act shall, between the 1st day of March and the 1st 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 1st 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.

"Sec. 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 that 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: First. Section 23, art. 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." Second. Section 22, art. 4: "The general assembly shall not pass local special laws in any of the following enumerated cases, that is to say: assessment and collection of taxes for state, county, township, or road purposes." Third. Section 1, art. 10: "The general assembly

or

For the