Devaney, Chief Justice.
Proceedings instituted by the county of Eice against relator herein to enforce payment of taxes for the years 1929, 1930, and 1931 on certain property in the city of Faribault, Minnesota. L. 1933, c. 414, § 1, 3 Mason Minn. St. 1934. Supp. § 2139%, provides:
“In the event that the taxes of 1926 and all prior years against any parcel of land have been paid^ or sold or assigned to a purchaser other than the state, but the taxes for 1927 or 1928, or any part thereof remain delinquent and held by the state, the county
auditor and treasurer are authorized and directed to accept in full payment and discharge of all taxes and assessments and interest and penalties thereon, or for an assignment thereof, an amount equal to three-fifths of such taxes and assessments as originally assessed and taxed, without penalty or interest. In the event that the taxes for 1928 and all prior years against any parcel of land have been paid, or sold or assigned to a purchaser other than the state, but the taxes for 1929 or 1930 or any part thereof remain delinquent and held by the state, the count3r auditor and treasurer are authorized and directed to accept in full payment and discharge of all taxes and assessments and interest and penalties thereon, or for an assignment thereof, an amount equal to four-fifths of such taxes and assessments, as originally assessed and taxed.”
August 29, 1933, relator duly tendered payment of the taxes for the years 1929, 1930, 1931, and 1932, deducting a fraction from the amount originally assessed in accordance with the discount provision of this statute. This tender was refused by A. W. Luecke, county auditor of Nice county. Thereupon relator petitioned the district court and obtained an alternative writ of
mandwmus
directing said A. W. Luecke to accept the offered payment in full satisfaction of the taxes for those years. Answer to the writ was duly interposed, and upon trial the district court made an order discharging the writ and denying the peremptory writ. From this order relator appeals.
The case squarely puts in issue the constitutionality of L. 1933, c. 414, § 1, by which it is provided that under certain circumstances delinquent taxes may be satisfied in full by the payment of a fraction of the amount originally assessed. This is the only question in the case;
The discussion divides itself into two parts:
(1) Is this a statute allowing a discount or remission to a delinquent taxpayer, or is it merely a statute permitting the state to sell forfeited land or to satisfy at a discount and on public sale a claim represented by a judgment which' it holds for delinquent taxes against any certain property?
(2) If this is a statute allowing a discount or remission to a delinquent taxpayer, does it violate the uniformity clause of Minn. Const, art. 9, § 1?
It is patent at the outset that the section of the statute here under consideration differs radically from all previously enacted statutes of this general character with the exception of L. 1931, c. 129, § 2. Our attention has been called to the following statutes : L. 1893, c. 150; L. 1899, c. 322; L. 1907, c. 430, L. 1911, c. 30; L. 1913, c. 333; L. 1917, c. 303; L. 1919, c. 337; L. 1921, c. 386; L. 1925, c. 208; L. 1927, c. 119; L. 1929, c. 415. All of these enactments are concerned with delinquent tax sales and with the disposition of property held by the state. They deal with the state’s disposal of property which has been forfeited to it or against which it holds a judgment. When the state secures a judgment for delinquent taxes, it holds a claim against such realty, which claim is property of the state in the same sense as the buildings and personalty used and operated by the various departments of the state government are also the property of the state. So, just as the state can sell its buildings or other property, this claim may be disposed of by the state in such manner as the legislative branch of the state government may deem fit. The state may keep it, or, if it so chooses, it may satisfy such claim at a public sale for a fraction of the amount represented thereby. The same applies to sale of propeifiy forfeited to the state. True, when a tax delinquency sale is had, the owner is allowed to bid the property in himself under certain circumstances. Further, if he does not bid it in, he is allowed to redeem from whomsoever purchases. Thus he receives a remission. But, he is assuming- the risk that at such public sale someone will bid the property in for more than the amount of the claim. Nowhere in any of these statutes (except the 193.1 and 1933 enactments) is the owner or anyone else given a prior right to come in and to satisfy the claim for delinquent taxes by paying a fraction of the amount represented thereby. All must stand alike at a public sale. That statutes such as these tax sale statutes are valid no one can doubt. By virtue of these-the state is allowed to realize upon and to satisfy a legitimate obligation owing to it. But
it is clear beyond need for further elucidation that the provision of the statute in the case at bar is quite different from those above discussed, for the statute in the case at bar permits an owner to pay merely a fraction of his delinquent taxes and to secure thereby a full satisfaction without there being held a public sale or without any further procedure. While it is true that in an individual case the result may be the same whether the delinquent owner pays a fraction of the0 originally assessed taxes directly or whether an annual tax judgment sale is had and he bids the property in for the same fraction, yet the result is not necessarily always the same. The very cogent possibility that the result might well be otherwise controls and serves as a basis for distinguishing the two types. The theory underlying the two types of statutes is different and easy of distinction, and the fact that the result may be the same in a particular case is not of importance. •
Having decided that this statute, L. 1933, c. 414, § 1, is a statute allowing a remission or discount to a delinquent taxpayer, the next consideration is whether such statute violates .Minn. Const, art. 9, § 1, which provides in part:
“Taxes shall be uniform upon the same class of subjects * *.”
It is well settled that the legislature may make such classes of taxable subjects as it chooses and that the same will not be disregarded by this court unless clearly unreasonable, fanciful, or arbitrary. Raymond v. Holm, 165 Minn. 215, 218, 206 N. W. 166; State ex rel. Youngquist v. Common Sch. Hist. No. 78, 180 Minn. 44, 47, 230 N. W. 115; Reed v. Bjornson, 191 Minn. 254, 253 N. W. 102.
“A classification must be reasonable, and such as is suggested by essential differences of nature, situation, or circumstances, or by characteristics which make it desirable on grounds of public policy to apply to the members of the class a particular method of taxation, and impracticable to apply thereto the ordinary methods of taxation.” Mutual Benefit L. Ins. Co. v. Martin, 104 Minn. 179, 181-182, 116 N. W. 572, 573.
It is clear to us that the statute being considered (and the similar provision of L. 1931, c.
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Devaney, Chief Justice.
Proceedings instituted by the county of Eice against relator herein to enforce payment of taxes for the years 1929, 1930, and 1931 on certain property in the city of Faribault, Minnesota. L. 1933, c. 414, § 1, 3 Mason Minn. St. 1934. Supp. § 2139%, provides:
“In the event that the taxes of 1926 and all prior years against any parcel of land have been paid^ or sold or assigned to a purchaser other than the state, but the taxes for 1927 or 1928, or any part thereof remain delinquent and held by the state, the county
auditor and treasurer are authorized and directed to accept in full payment and discharge of all taxes and assessments and interest and penalties thereon, or for an assignment thereof, an amount equal to three-fifths of such taxes and assessments as originally assessed and taxed, without penalty or interest. In the event that the taxes for 1928 and all prior years against any parcel of land have been paid, or sold or assigned to a purchaser other than the state, but the taxes for 1929 or 1930 or any part thereof remain delinquent and held by the state, the count3r auditor and treasurer are authorized and directed to accept in full payment and discharge of all taxes and assessments and interest and penalties thereon, or for an assignment thereof, an amount equal to four-fifths of such taxes and assessments, as originally assessed and taxed.”
August 29, 1933, relator duly tendered payment of the taxes for the years 1929, 1930, 1931, and 1932, deducting a fraction from the amount originally assessed in accordance with the discount provision of this statute. This tender was refused by A. W. Luecke, county auditor of Nice county. Thereupon relator petitioned the district court and obtained an alternative writ of
mandwmus
directing said A. W. Luecke to accept the offered payment in full satisfaction of the taxes for those years. Answer to the writ was duly interposed, and upon trial the district court made an order discharging the writ and denying the peremptory writ. From this order relator appeals.
The case squarely puts in issue the constitutionality of L. 1933, c. 414, § 1, by which it is provided that under certain circumstances delinquent taxes may be satisfied in full by the payment of a fraction of the amount originally assessed. This is the only question in the case;
The discussion divides itself into two parts:
(1) Is this a statute allowing a discount or remission to a delinquent taxpayer, or is it merely a statute permitting the state to sell forfeited land or to satisfy at a discount and on public sale a claim represented by a judgment which' it holds for delinquent taxes against any certain property?
(2) If this is a statute allowing a discount or remission to a delinquent taxpayer, does it violate the uniformity clause of Minn. Const, art. 9, § 1?
It is patent at the outset that the section of the statute here under consideration differs radically from all previously enacted statutes of this general character with the exception of L. 1931, c. 129, § 2. Our attention has been called to the following statutes : L. 1893, c. 150; L. 1899, c. 322; L. 1907, c. 430, L. 1911, c. 30; L. 1913, c. 333; L. 1917, c. 303; L. 1919, c. 337; L. 1921, c. 386; L. 1925, c. 208; L. 1927, c. 119; L. 1929, c. 415. All of these enactments are concerned with delinquent tax sales and with the disposition of property held by the state. They deal with the state’s disposal of property which has been forfeited to it or against which it holds a judgment. When the state secures a judgment for delinquent taxes, it holds a claim against such realty, which claim is property of the state in the same sense as the buildings and personalty used and operated by the various departments of the state government are also the property of the state. So, just as the state can sell its buildings or other property, this claim may be disposed of by the state in such manner as the legislative branch of the state government may deem fit. The state may keep it, or, if it so chooses, it may satisfy such claim at a public sale for a fraction of the amount represented thereby. The same applies to sale of propeifiy forfeited to the state. True, when a tax delinquency sale is had, the owner is allowed to bid the property in himself under certain circumstances. Further, if he does not bid it in, he is allowed to redeem from whomsoever purchases. Thus he receives a remission. But, he is assuming- the risk that at such public sale someone will bid the property in for more than the amount of the claim. Nowhere in any of these statutes (except the 193.1 and 1933 enactments) is the owner or anyone else given a prior right to come in and to satisfy the claim for delinquent taxes by paying a fraction of the amount represented thereby. All must stand alike at a public sale. That statutes such as these tax sale statutes are valid no one can doubt. By virtue of these-the state is allowed to realize upon and to satisfy a legitimate obligation owing to it. But
it is clear beyond need for further elucidation that the provision of the statute in the case at bar is quite different from those above discussed, for the statute in the case at bar permits an owner to pay merely a fraction of his delinquent taxes and to secure thereby a full satisfaction without there being held a public sale or without any further procedure. While it is true that in an individual case the result may be the same whether the delinquent owner pays a fraction of the0 originally assessed taxes directly or whether an annual tax judgment sale is had and he bids the property in for the same fraction, yet the result is not necessarily always the same. The very cogent possibility that the result might well be otherwise controls and serves as a basis for distinguishing the two types. The theory underlying the two types of statutes is different and easy of distinction, and the fact that the result may be the same in a particular case is not of importance. •
Having decided that this statute, L. 1933, c. 414, § 1, is a statute allowing a remission or discount to a delinquent taxpayer, the next consideration is whether such statute violates .Minn. Const, art. 9, § 1, which provides in part:
“Taxes shall be uniform upon the same class of subjects * *.”
It is well settled that the legislature may make such classes of taxable subjects as it chooses and that the same will not be disregarded by this court unless clearly unreasonable, fanciful, or arbitrary. Raymond v. Holm, 165 Minn. 215, 218, 206 N. W. 166; State ex rel. Youngquist v. Common Sch. Hist. No. 78, 180 Minn. 44, 47, 230 N. W. 115; Reed v. Bjornson, 191 Minn. 254, 253 N. W. 102.
“A classification must be reasonable, and such as is suggested by essential differences of nature, situation, or circumstances, or by characteristics which make it desirable on grounds of public policy to apply to the members of the class a particular method of taxation, and impracticable to apply thereto the ordinary methods of taxation.” Mutual Benefit L. Ins. Co. v. Martin, 104 Minn. 179, 181-182, 116 N. W. 572, 573.
It is clear to us that the statute being considered (and the similar provision of L. 1931, c. 129, § 2) is violative of this provision of
our constitution. The classification oí subjects here attempted is unreasonable and fanciful. Realty owners are divided into two classes, those who pay taxes promptly and those who do not. The latter pay a smaller amount than the former. No reasonable basis founded on essential differences of nature or circumstances suggests itself for this classification. In determining the reasonableness of a classification set up by the legislature, the court will not concern itself with the question of public policy involved and the expediency of the measure. Reed v. Bjornson, 191 Minn. 254, 253 N. W. 102. Yet, in determining the reasonableness of a classification, a legitimate object for the court’s consideration is the practical effect the classification is bound to have on business and organized society generally. In this connection it readily can be seen that the statute here concerned encourages and fosters tax delinquencies in the state. Taxpayers are prompted to allow taxes to become delinquent in order thereafter to be able to satisfy them in full by the payment of a fraction of the amount originally assessed. Such result is not desirable and demonstrates the unreasonableness of the classification. While several courts have determined that statutes remitting interest and penalties on delinquent taxes before the period of redemption has passed are constitutional, State ex rel. Pierce v. Coos County, 115 Or. 300, 237 P. 678; Jones v. Williams, 121 Tex. 94, 45 S. W. (2d) 130, 79 A. L. R. 983; State ex rel. Crutcher v. Koeln, 332 Mo. 1229, 61 S. W. (2d) 750;
contra,
Sanderson v. Bateman, 78 Mont. 235, 253 P. 1100, such cases are based on the grounds that the interest is not payment for the use of money but rather a penalty and that, since a penalty is not part of the tax, the uniformity requirement did not apply to remissions thereof.
Of note here is the case of LeDuc v. City of Hastings, 39 Minn. 110, 38 N. W. 803, where the court held unconstitutional a statute which required the issuance of an order upon the treasurer for the amount of taxes assessed on the land of those who had been in the service of the United States and honorably discharged. The court was there of the opinion that the.legislature had no power to relieve property by releasing or refunding taxes after such have been levied.
A very interesting and recent comment on the statute here under consideration is to be found in 18 Minn. L. Rev. 849, 859, where it is said:
“To the extent that the Minnesota statutes allow a remission of taxes and charges constituting a lien on land by allowing the owner of the land to redeem from the purchaser at a forfeiture sale by payment of the sum paid at the forfeiture sale plus interest, the statutory provisions seem to be constitutional. But the constitutionality of the laws permitting reductions of taxes before the period of redemption has expired is more doubtful because they in effect give exemptions to delinquent taxpayers which are not granted to those who pay their taxes promptly. Insofar as those statutes allow remissions of penalties and interest, however, most of the authorities that have considered the problem hold them valid. Although the principal statute allowing reduction of taxes before the period of redemption has expired, Minnesota Laws 1933, ch. 414, sec. 1, is a temporary enactment, applying only to payments made before December 31, 1934, it is difficult to sustain its validity on the ground that it is an emergency measure. Certainly, it is questionable whether statutes of this type do not tend to put a premium on tax delinquency rather than to encourage tax payment.”
We are not here called upon to decide whether the state has any lien for taxes after giving its receipt in full under the statute herein discussed. The legislature may, if it so desires, clarify the question by declaring such payments, sales, or assignments of the said taxes to constitute payment in full and thus relieve property in this state of any possible cloud on title.
We hold here that L. 1931, c. 129, and L. 1933, c. 414, are invalid only insofar as they provide that taxes which are current or merely delinquent may be satisfied in full by the payment of a fraction of the amount originally assessed. We think the various sections of the two chapters are severable and that the reasoning which leads to the conclusion that part thereof is invalid does not apply to nor invalidate the other parts thereof on the same ground.
Though apparently there is but little judicial authority on the precise question, we perceive that a law permitting a delinquent taxpayer to pay a portion of delinquent taxes in full satisfaction thereof might be valid under certain circumstances. If, for instance, the amount to be paid in full satisfaction of delinquent taxes' was made to depend upon' the value of the property, an investigation of the owner’s ability to pay, and perhaps other considerations, such a law might be sustained despite the fact that the period of redemption had not expired. There would then be no unreasonable classification, and the evil of the case at bar would be avoided. There would and could be no voluntary delinquencies. The taxing authorities under such a law as is suggested should endeavor to collect by all legal and proper means the amounts due in full; but, having exhausted such means, it follows that such officials would not be forbidden to collect any amount whatsoever simply because they could not collect all, as long as delinquencies are not deliberately and effectively fostered and encouraged.
Affirmed.