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adjusting conflicting rights, the land is not liable to taxation.1 Neither is the title of the United States divested, nor does the land become taxable where important conditions remain to be complied with before the right to the legal title vests in the preëmptor or patentee, until they are performed, and where the certification to the performance of conditions by some officer or body is required by the terms of the grant, until the lands are so certified, the grantee has no taxable interest therein.3 Nor can the lands be

Price County, 33 U. S. 496. And see State v. Central Pac. R. Co. (Nev. 1889), 22 Pac. Rep. 237.

The filing of a map of the location of a railway, which determines the right of the company to land under a congressional grant, describing the land granted, is a sufficient identification. Kansas Pac. R. Co. v. Dunmeyer, 113 U. S. 639.

1. Iowa R. Land Co. v. Fitchpatrick, 52 Iowa 244; Grant v. Iowa R. Land Co. 54 Iowa 673; Iowa Homestead Co. で。 Webster County, 21 Iowa 221; Dickerson v. Yetzer, 53 Iowa 681; Pitts 7. Clay, 27 Fed. Rep. 635; Pitts v. Booth, 15 Tex. 453. And see Kohn v. Barr (Kan. 1893), 34 Pac. Rep. 880. But see Robinson v. Gaar, 6 Cal. 273. When a land warrant is cancelled before the issue of a patent, on the ground that the assignment was forged, no title passes, either legal or equitable, and no tax can be imposed thereon. Durham 7. Hussmann (Iowa, 1893), 55 N. W. Rep. 11. But the bringing of an action by a county to set aside a conveyance of land made by it, will not estop the county to levy taxes upon the property during the pendency of the action. American Emigrant Co. v. Iowa R. Land Co., 52 Iowa 323.

2. Union Pac. R. Co. v. McShane, 22 Wall. (U. S.) 444; Kansas Pac. R. Co. v. Prescott, 16 Wall. (U. S.) 603; Central Colorado Imp. Co. v. Pueblo County, 95 U. S. 259; Wisconsin Cent. R. Co. v. Price County, 133 U. S. 496; Northern Pac. R. Co. v. Traill County, 115 U. S. 600; Central Pac. R. Co. v. Howard, 51 Cal. 229; Pueblo County 7. Central Colorado Imp. Co., 2 Colo. 628; Henderson v. State, 53 Ind. 60; Missouri River, etc., R. Co. v. Morris, 13 Kan. 302; Parker v. Winsor, 5 Kan. 362; Douglas County v. Union Pac. R. Co., 5 Kan. 615; Cedar Rapids, etc., R. Co. v. Sac County, 46 Iowa 243; Tyler v. Cass County, 1 N. Dak. 369; White . Burlington, etc., R. Co., 5

Neb. 393. And see Calhoun County v. American Emigrant Co., 93 U. Š. 124; Sioux City, etc., R. Co. v. Robinson, 41 Minn. 452; Sioux City, etc., R. Co. v. King, 41 Minn. 461; Taylor v. Robinson, 72 Tex. 364; Cornwallis . Canadian Pac. R. Co., 19 Can. Sup. Ct. Rep. 702. This rule does not apply to conditions subsequent to the vesting of the title. North Wisconsin R. Co. v. Barron County, 8 Biss. (U. S.) 414.

Until United States lands are paid for they do not become liable to state taxation. Donovan v. Kloke, 6 Neb. 124: Diver v. Friedheim, 43 Ark. 203; Smith v. Hollis, 46 Ark. 17; People v. Shearer, 30 Cal. 645; Parker v. Winsor, 5 Kan. 362. And the same rule applies to expenses required to be paid by the grantee. Central Colorado Imp. Co. v. Pueblo County, 95 U. S. 259; Northern Pac. R. Co. v. Traill County, 115 U. S. 600.

In Cedar Rapids, etc., R. Co. v. Carroll County, 41 Iowa 153, it was held that when a railroad company becomes entitled to any portion of a a tract of land granted to it by act of Congress, conditioned upon the completion of its road, or the completion of any part of its road, as prescribed by federal or state legislation, a like proportion of the grant thereupon becomes subject to assessment and taxation.

3. Grant v. Iowa R. Land Co., 54 Iowa 673; Chicago, etc., R. Co. v. Woodbury County, 29 Iowa 247; Cedar Rapids, etc., R. Co. v. Carroll County, 41 Iowa 153; Iowa R. Land Co. v. Story County, 36 Iowa 48; Iowa Falls, etc., R. Co. v. Cherokee County, 37 Iowa 483; Sioux City, etc., R. Co. v. Osceola County, 50 Iowa 177. But see Iowa Homestead Co. v. Webster County,21 Iowa 221; Dubuque, etc., R. Co. v. Webster County, 21 Iowa 235. This rule is not affected by the fact that the refusal to certify was made under a mistake of law, and was subsequently withdrawn. Wisconsin Cent. R. Co. z.

nor when,

taxed, when the conveyance or certificate is improperly withheld, nor where the government repudiates the contract; through the fault or mistake of the officers of the law, no title to or interest in the land is passed to the purchaser.2 Where the lands are sold on credit, however, they may be taxed when the right of the purchaser is complete, even though they have not been paid for in full.3

Where the certificate is withheld on account of the neglect of the grantee to procure it to be issued, the lands are taxable from the time they are earned, although withheld from certification.4 Nor will a mere contingent right of the government to make another grant upon failure of the first grantee to sell the land within a specified time, exempt it from taxation; 5 and where the patent is actually issued, the lands are taxable, whether the conditions. have been complied with or not. Property owned by the state

Price County, 133 U. S. 496. And see Jackson v. La Moure County, 1 N. Dak. 238.

But when the determination of the performance of the conditions or of the existence of the required facts must be made upon extrinsic evidence, it is not necessary that the designated officer should pass upon the question before it can be judicially determined. Northern Pac. R. Co. v. Wright, 51 Fed. Rep. 68. And see Northern Pac. R. Co. v. Walker, 47 Fed. Rep. 681.

1. Moore v. Morledge, 42 Iowa 26. But this rule does not apply to a mere refusal to pass the title when the donee is not excluded from the use of the property. See Northern Pac. R. Co. v. Walker, 47 Fed. Rep. 681; Wisconsin Cent. R. Co. v. Price County, 133 U. S. 496.

2. Scott v. Chickasaw County, 46 Iowa 253; Reynolds v. Plymouth County, 55 Iowa 90.

In Northern Pac. R. Co. v. Wright, 54 Fed. Rep. 68, it was held that a present grant of public lands attaches to the specific sections as they become capable of identification by the definite location of the road, and on a report by the government surveyor that they are non-mineral lands, they become subject to taxation, though not segregated from the public domain and though the land commissioner refuses to issue patents therefor.

In Farnham v. Sherry, 71 Wis. 568, it was held that where a patent was withheld, upon the ground that the warrant and its assignment to the locator were forged, and no further action taken for six years, when it finally 25 C. of L.-8

was

113

turned out that the locator was entitled to the land, it was taxable to the locator for the six years in question.

3. Carroll v. Safford, 3 How. (U. S.) 441; Hagenbuck v. Reed, 3 Neb. 17; Edgington v. Cook, 32 Neb. 551; Dickinson County v. Baldwin, 29 Kan. 538. And see Logan v. Clark County (Kan. 1893), 33 Pac. Rep. 603; State v. Tucker (Neb. 1890), 56 N. W. Rep. 718.

Where one purchases lands of a municipality and holds them on contract, the stipulations of which have not been performed, the lands are taxable by the municipal government as the property of the purchaser. Wells v. Savannah, 87 Ga. 397.

4. Iowa R. Land Co. v. Fitch patrick, 52 Iowa 244; Grant v. Iowa R. Land Co., 54 Iowa 673; Iowa Homestead Co. v. Webster County, 21 Iowa 221; Chicago, etc., R. Co. v. Holdsworth, 47 Iowa 20; Dickerson v. Yetzer, 53 Iowa 681; Kansas State Agr. College v. Hamilton, 28 Kan. 376; Douglas County v. Union Pac. R. Co., 5 Kan. 615; Kansas Pac. R. Co. v. Culp, 9 Kan. 47; Price v. Lancaster County, 20 Neb. 252; State v. Central Pac. Ř. Co. (Nev. 1889), 22 Pac. Rep. 237. And see McGregor, etc., R. Co. v. Brown, 39 Iowa 655.

5. Union Pac. R. Co. v. McShane, 22 Wall. (U. S.) 444; Dickinson County v. Baldwin, 29 Kan. 538; Pueblo County v. Central Colorado Imp. Co., 2 Colo. 628. And see State v. Central Pac. R. Co., 21 Nev. 94.

6. See State v. Central Pac. R. Co. (Nev. 1889), 22 Pac. Rep. 237; North Wisconsin R. Co. v. Barron County, 8 Biss. (U. S.) 414.

or municipality, and used not for carrying on the government but for commercial purposes, is not within the exemption, unless expressly exempted,1 even though the profits are to be devoted to the proper purposes of the municipality.2 Private interests in government lands may be taxed.3 Possession and claim of title to public lands is property and taxable as such to the claimant ; and improvements upon public lands are taxable.5

f. INDIAN LANDS.-Treaties made between the government and Indian tribes generally protect the Indian lands against taxation.6

In Elkhorn Land, etc., Co. v. Dixon County, 35 Neb. 426, it was held that where the United States grants lands to a state for internal improvement, and a railway company earns the lands and the state parts with its title to the company, the lands are taxable, although the United States did not approve of the selection until after the levy.

1. Louisville v. Com., I Duv. (Ky.) 295; 85 Am. Dec. 624; West Hartford v. Board of Water Com'rs, 44 Conn. 360; South Congregational Meeting House v. Lowell, 1 Met. (Mass.) 538; Wayland v. Middlesex County, 4 Gray (Mass.) 500; Allegheny County v. McKeesport Diamond Market, 123 Pa. St. 164; Erie County v. Erie Water Works Com'rs, 113 Pa. St. 368. And see Athens City Water Works Co. v. Athens, 74 Ga. 413.

In Atlantic, etc., R. Co. v. Carteret County, 75 N. Car. 474, it was held that a constitutional provision exempting property belonging to the state from

taxation does not embrace the interests of the state in business enterprises, such as railroads and the like, but applies only to the property of the state held for state purposes.

2. Northwestern University v. People, So Ill. 333; Erie County v. Erie Water Works Com'rs, 113 Pa. St. 368. But see Mitchellville v. Polk County, 64 Iowa 554.

3. State v. Moore, 12 Cal. 56; People v. Shearer, 30 Cal. 645; Ross v. Outagamie County, 12 Wis. 26; Forbes v. Gracey, 94 U. Š. 762; Taylor v. Robinson, 34 Fed. Rep. 678. And see Traunnell v. Faught, 74 Tex. 557; People v. Tax Com'rs, 82 N. Y. 459; Allegheny County v.McKeesport Diamond Market, 123 Pa. St. 164.

The title of a vendee of a county may be assessed and sold for taxes, aÏthough the legal title remains in the county. Townsen v. Wilson, 9 Pa. St. 270. So may the interest of a lessee of the government. Garland County v.

Gaines (Ark. 1892), 19 S. W. Rep. 602; State v. Tucker (Neb. 1893), 56 N. W. Rep. 718; Taylor v. Robinson, 34 Fed. Rep. 678.

The title or interest of the United States in public lands is not affected where only the possessory claim is assessed, such assessment reaching the taxpayer's interest only. State v. Central Pac. R. Co., 21 Nev. 247.

In Estes Park Toll Road Co. v. Edwards, 3 Colo. App. 74, it was held that the right of way granted by the United States over public lands, which is accepted by a toll road company, and upon which it constructs and maintains a toll road, is taxable in the county in which it is located.

4. People v. Black Diamond Coal Min. Co., 37 Cal. 54; People v. Shearer, 30 Cal. 656; People v. Frisbie, 31 Cal. 146; People v. Cohen, 31 Cal. 210; People v. Donnelly, 58 Cal. 144; Ross v. Outagamie County, 12 Wis. 26; McKay v. Outagamie County, 12 Wis. 46.

5. Quivey 7. Lawrence, 1 Idaho N. S. 313; People v. Shearer, 30 Cal. 645; San Francisco v. McGinn, 67 Cal. 110; Oswalt v. Hallowell,15 Kan. 154; Chase County v. Shipman, 14 Kan. 532; Smith v. New York, 68 N. Y. 552; Bellinger v. White, 5 Neb. 399; Ivin son v. Hance, 1 Wyoming Ter. 270. And see People v. Ŏwyhee Min. Co., 1 Idaho N. S. 420; Luttrell v. Knox County (Tenn. 1890), 14 S. W. Rep. 802; Hall v. Dowling, 18 Cal. 619.

The improvements are not the property of the government. Crocker v. Donovan, 1 Õkl. 165.

In Chase County v. Shipman, 14 Kan. 532, it was held that improvements made on government lands, settled upon and occupied as a homestead, are not taxable before final proof of settlement and cultivation is made. But see contra, State v. Tucker (Neb. 1893), 56 N. W. Rep. 718.

6. In The Kansas Indians, 5 Wall. (U. S.) 737, the United States Su

NATIONAL BANKS.-(See NATIONAL BANKS, vol. 16, p. 143.) 5. Incomes; Income Taxes.-Taxes imposed upon incomes are not, strictly speaking, taxes upon property, and, consequently, not within constitutional requirements that property taxes shall be according to value. Nor are they direct taxes, within the federal constitution. They may be imposed upon all incomes, with such exemptions as the legislature may deem just. In the

preme Court held that the State of Kansas had no right to tax lands held in severalty by Indians of certain tribes under patents issued pursuant to treaties made with those tribes. In the same case it was said that in construing treaties with the Indian tribes, rules of interpretation favorable to them were to be adopted; and that, therefore, a provision exempting their lands from "levy, sale, and forfeiture," extended to exempt from levy and sale for non-payment of taxes.

In the case of The New York Indians, 5 Wall. (U. S.) 761, it was held that the state had no right to tax lands, the ancient home of Indians still in possession, either for ordinary municipal purposes or for road purposes, the right to the undisturbed enjoyment of such lands having been secured by treaty with the government; and that this was so, although the attempt to tax was under a statute providing that no tax sale should affect the Indians' right of occupancy. This case was before the United States Supreme Court on error to the court of appeals of the State of New York, and the judgment in that case was reversed. See Fellows v. Denniston, 23 N. Y. 420. And see further on the general subject of the exemption of Indian lands from taxation, Foster v. Blue Earth County, 7 Minn. 140; Goodell v. Jackson, 20 Johns. (N. Y.) 693; 11 Am. Dec. 351; Harrington v. Wilson, 29 Wis. 383; State v. Miami County, 63 Ind. 497; Fellows v. Blacksmith, 19 How. (U.S.) 366; Hilgers v. Quinney, 51 Wis. 62.

1. Glasgow v. Rowse, 43 Mo. 480. Such a tax is imposed upon the fruits of property, Waring v. Savannah, 60 Ga. 93; and of labor, industry, and skill rather than upon the property. Wilcox v. Middlesex, 103 Mass. 544

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resident aliens receiving incomes from property within the United States. The acts of March 10th, and July 13th, 1866, did impose a tax on non-resident alien bondholders. See Northern Cent. R. Co. v. Jackson, 7 Wall. (U. S.) 262.

3. New Orleans v. Fourchy, 30 La. Ann. 910; U. S. v. Smith, 1 Šawy. (U. S.) 277.

The power to lay an income tax is expressly conferred by the constitution of Texas. Texas Const. of 1872, art. 8, §§ 1, 2.

In Louisiana, an act of 19th of March, 1856, authorizing the taxing of incomes, clearly defined the incomes intended as "wages, commissions, brokerage, etc.," and did not authorize a tax upon incomes, the fruits of capital invested in merchandise, stock, etc. New Orleans v. Hart, 14 La. Ann. 815. Profits realized from the use of a cotton press, drays and slaves in carrying on the business of a cotton press, were not subject to taxation as income under that act. New Orleans v. Fassman, 14 La. Ann. 878.

In New Hampshire, a statute providing for taxing every person on the amount of all incomes received by him during the year, accruing from notes, bonds, or other securities not otherwise taxed under the laws of the state, might be valid as to other securities than those of the United States. Opinion of the Justices, 53 N. H. 637.

Salaries of Public Officers-Judges.— The tax imposed by a state upon the salaries of its judges, is not in conflict with the constitutional provision that the compensation for their services shall not be diminished during their continuance in office. Northumberland v. Chapman, 2 Rawle (Pa.) 72.

But a state cannot levy a tax upon the emoluments of an officer of the United States. Dobbins v. Erie, 16 Pet. (U. S.) 435. Nor, on the other hand, can Congress impose a tax upon the salary of a state judge. Buffington v. Day, 11 Wall. (U. S.) 113.

In City Council v. Lee, 1 Treadw. (S. Car.) 57, it was held that the sala

absence of constitutional restriction, incomes may be taxed even though derived from property which is also taxed, or from a business upon which a license tax is imposed.2

Unless otherwise provided, the income taxed includes only actual acquisitions of property within the year for which the tax is levied, and not anticipated profits; and the income is that of a previous and not of the current year.5

6. Legal Process.-Taxes are sometimes imposed upon legal process with a view to adjusting upon an equitable basis as between suitors and the public, the expense of the administration of

ries of public officers are not liable to be taxed under an ordinance imposing a tax on all profit or income arising from the "pursuit of any faculty, profession, occupation, trade, or employment."

Delegation of Power to Municipal Corporation. The power to tax incomes may be delegated to municipal corporations. See Glen v. Charleston, 1 McCord (S. Car.) 345. However, a charter authorizing a municipal corporation to tax real and personal estate, does not necessarily confer the right to tax incomes. Savannah v. Hartridge, 8 Ga. 23. See also Home Ins. Co. v. Augusta, 50 Ga. 530.

1. Memphis v. Ensley, 6 Baxt. (Tenn.) 553- See also Union Bank v. State, 9 Yerg. (Tenn.) 490.

It is no defense to a suit for the recovery of an income tax that the income has been applied in reduction of an indebtedness upon a purchase of real estate upon which a tax is paid. Lott v. Hubbard, 44 Ala. 593.

2. Drexel v. Com., 46 Pa. St. 31; Burch v. Mayor, etc., of Savannah, 42 Ga. 596.

In Wilcox v. Middlesex, 103 Mass. 544, it was held that a merchant's income from his business is taxable, though he is also taxed on his stock in trade, notwithstanding a statute prohibiting taxes on income and derived from property subject to taxation; income derived from dealings in merchandise not being an income derived from property. 3. The profit made upon bonds bought in one year and sold several years after, is not to be included in the estimate of the owner's "gains, profits, and income" for the year in which the bonds were sold under the act of 1867. Gray v. Darlington, 15 Wall. (U. S.) 63.

A merchant, under the Internal Revenue Act of 1864, may deduct from his gross profits such debts as become in solvent during the year to which the

return relates, but not such as become so after the expiration of that year, although before the date of the return. U. S. . Mayer, Deady (U. S.)_127.

Refusal to Give Income. - In Alabama, it is provided that if the taxpayer refuses to give his income, the assessor may ascertain it from inquiry and fix it to the best of his judgment. And if acting in good faith, he fixes it at an amount larger than the true income, the tax is valid and cannot be resisted. Lott v. Hubbard, 44 Ala. 593.

Penalty. The addition of one hundred per cent. to the tax as a penalty for return of a false or fraudulent list or valuation, is constitutional. Doll v. Evans, 11 Am. L. Reg. N. S. 315; 15 Int. Rev. Rec. 143.

Perjury. Although an act imposing a tax on incomes makes no provision for compelling a person to make oath to his return, yet if it permits him to do so, and he avails himself of the privilege, and makes a false return, he is guilty of perjury. U. S. v. Smith, 1 Sawy. (U. S.) 277.

4. Promissory Notes.-Whether promissory notes and book accounts received during the year are to be included in an estimate of income, depends upon whether they are collectible. If not so, a defendant cannot be convicted of making a false return for not including them. U. S. v. Frost, 9 Int. Rev. Rec. 41.

In U. S. v. Schillinger, 14 Blatchf (U. S.) 71, promissory notes made for articles sold in 1871, which were payable in 1872, were not included within the gains or profits of the year 1871, upon which the tax was imposed.

5. State v. Elfe, 3 Strobh. (S. Car.) 395.

Income of Person Dying Within the Year. An income tax is payable for that part of the year in which a person dies, preceding his death, to be collected from his estate. Mandell v. Pierce, 3 Cliff. (U. S.) 134.

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