Louisville Gas & Elec. Co. v. Coleman - 277 U.S. 32 (1928)
U.S. Supreme Court
Louisville Gas & Elec. Co. v. Coleman, 277 U.S. 32 (1928)
Louisville Gas & Electric Company v. Coleman
Argued October 26, 1927
Reargued February 29, 1928
Decided April 30, 1928
277 U.S. 32
1. A statute of Kentucky, where the recording of mortgages is essential to the protection of mortgagees against bona fide purchasers and creditors, conditions the recording of mortgages not maturing within five years upon the payment of a tax of 20¢ for each $100 of value secured, but mortgages maturing within that period it exempts entirely. Held that the tax is void under the equal protection clause of the Fourteenth Amendment. Pp. 277 U. S. 35-38.
2. The equal protection clause means that the rights of all persons must rest upon the same rule under similar circumstances. It applies to the exercise of all the powers of the state which can affect the individual or his property, including the power of taxation. P. 277 U. S. 37.
3. Classification must always rest upon some difference which bears a reasonable and just relation to the act in respect of which the classification is proposed. Id.
4. Discriminations of an unusual character especially suggest careful consideration to determine whether they are obnoxious to this constitutional provision. Id.
5. In the application of the equal protection clause to the tax here in question, it is immaterial whether it be called a privilege tax or a property tax. P. 277 U. S. 38.
6. The time within which the indebtedness secured by a mortgage is to be paid may be a proper element in fixing the amount of a tax for recording it, but this classification cannot be used to justify taxing some, while others, under circumstances identical in all respects save taxable value, are entirely exempt. Id.
7. Owing to the character and quasi-public purposes of building and loan associations in Kentucky, the provision of the statute in question exempting them from payment of the recording tax is not violative of the equal protection clause. P. 277 U. S. 40.
13 Ky. 762 reversed.
Error to a judgment of the Court of Appeals of Kentucky which affirmed a judgment dismissing an action to recover money exacted as a tax on the recording of a deed of trust.