Deere Mfg. Co. v. Zeiner

• Citation: 247 Iowa 1364,78 N.W.2d 527
• Decision Date: 18 September 1956
• Docket Number: No. 48953,48953
• Parties: DEERE MANUFACTURING COMPANY, Appellant, v. M. B. ZEINER, as chairman of the Board of Review for Polk County, Iowa, M. B. Zeiner, Chris Arild, and L. C. Strandberg, as the members of the Board of Review of Polk County, Iowa, Appellees.
• Court: Iowa Supreme Court

Page 527

78 N.W.2d 527

247 Iowa 1364

DEERE MANUFACTURING COMPANY, Appellant, v. M. B. ZEINER, as chairman of the Board of Review for Polk County, Iowa, M. B. Zeiner, Chris Arild, and L. C. Strandberg, as the members of the Board of Review of Polk County, Iowa, Appellees.

No. 48953.

Supreme Court of Iowa.

Sept. 18, 1956.

Rehearing Denied Nov. 16, 1956.

See 79 N.W.2d 403.

Gibson, Stewart & Garrett, Des Moines, and George E. Pike, Waterloo, for appellant.

Leo J. Tapscott, County Atty., J. R. McManus, and A. R. Shepherd, Des Moines, for appellees.

GARFIELD, Justice.

Plaintiff is a wholly owned subsidiary of Deere & Co., second largest manufacturer of farm machinery. Defendants are members of the Polk county board of review. Plaintiff operates a manufacturing plant about 10 miles north of the center of the Des Moines business district, adjacent to the town of Ankeny. The plant consists of about 507 acres of land and 24 buildings, all but one of which the federal government built in 1941 and 1942 for the manufacture of small arms ammunition. Deere purchased the property from a government agency and took possession September 30, 1947.

Plaintiff made complaint to the Polk county board of review from the action of the county assessor in assessing its plant for 1953, contending the valuations placed thereon were excessive and inequitable. The board confirmed the assessments. Plaintiff then appealed to the district court from the board's action. The court heard the appeal in equity, determined the assessor's valuations of plaintiff's land and buildings were excessive and inequitable and reduced them 12 per cent. (See sections 442.5-442.6-442.7, Code, 1954 I.C.A.) Both plaintiff and defendants appealed to us from the decree.

Two assessment rolls are involved. The principal one is No. 579 against parcel 737 containing about 446 acres. It lists the 100 per cent values as follows: land $151,170; buildings, including machinery and equipment, jigs, dies and tools, $6,838,705; total (sum of the other two figures) $6,989,875. The 60 per cent assessed value is $4,193,925. (See Code, § 441.13, I.C.A.)

The second assessment roll, No. 580, is against parcel 738, the sewage disposal plant and 60.75 acres of land, valued at $300 per acre. It lists the 100 per cent value of the land at $18,225, of the buildings at $10,500, and the total (sum of these two figures) at $28,725. The 60 per cent assessed value is $17,235. We are concerned only with the 100 per cent values as to both parcels, mainly 737.

Plaintiff's petition in district court, filed June 25, 1953, alleged the making of the assessments as stated above and that the 100 per cent values fixed by the assessor are excessive and inequitable, arbitrary, fraudulent and illegal; the land should not have been valued at more than $200 per acre, a total of $101,334, nor the buildings, machinery, equipment, jigs, dies and tools more than $4,299,656--total for both land, buildings, machinery, etc., $4,400,990.

After defendants answered the petition they filed 13 interrogatories to be answered by plaintiff, stating the answers were necessary to enable defendants adequately to prepare for trial. (See 58 I.C.A. Rules of Civil Procedure, rule 121.) Interrogatories 4 to 9 asked plaintiff to list its machinery, equipment, jigs, dies and tools, the dates of acquisition and cost thereof. March 13, 1954, plaintiff amended its petition by alleging: in assessing parcel 737 the assessor determined the value of the classes of plaintiff's property as follows: land $151,170; buildings and equipment $4,201,019; machinery $2,240,505; jigs and dies $397,181; total $6,989,875; plaintiff challenges only the valuations upon land, buildings and equipment and does not challenge the values of machinery, jigs and dies (which total $2,637,686); 'this action challenges the total assessments to the extent they are affected by the erroneous and illegal assessments of land, buildings and equipment' which should not be valued at more than $4,400,990.

The day plaintiff amended its petition it filed objections to defendants' interrogatories, stating Nos. 4 to 9 request information not then in issue since plaintiff does not challenge the assessor's values of its machinery, jigs and dies; 'the only issues are as to the assessor's valuations of the land and buildings set out in the petition as amended.' The objections state plaintiff is willing to submit such information as it had in answer to interrogatories 1 to 3. The court sustained plaintiff's objections to interrogatories 4 to 9 and overruled its objections to 10 to 13.

March 24, 1954, defendants filed their application for production of books and papers. (See Rule of Civil Procedure 129.) Paragraphs 5 to 7 sought about the same information requested in defendants' interrogatories 4 to 9. The court overruled paragraphs 5 to 7 with the statement, 'In view of plaintiff's amendment the question of the valuation of the machinery has been taken from the case.' Throughout the trial plaintiff objected to evidence bearing on the value of its machinery, jigs, dies and tools as not within the issues. It never furnished the information defendants sought in interrogatories 4 to 9 and paragraphs 5 to 7 of their application to produce books.

I. It seems best to determine first whether plaintiff is entitled to relief from the assessment against parcel 737 without showing the 100 per cent total value fixed by the assessor is excessive or inequitable. Plaintiff made no attempt to do so except, perhaps, by evidence the assessor in computing such total value placed too high values upon the land and buildings, exclusive of machinery, jigs, dies and tools. It appears the assessor informed plaintiff during the pendency of the appeal in district court that in reaching the total value shown on the assessment roll for parcel 737 he computed the values of the different items of property as subsequently alleged in the amended petition.

Code, § 428.22, I.C.A. provides 'Machinery used in manufacturing establishments shall, for the purposes of taxation, be regarded as real estate.' See Northwestern States Portland Cement Co. v. Board, 244 Iowa 720, 728, 58 N.W.2d 15, 20. We understand 'jigs, dies and tools' are also machinery and this seems to be conceded, but the point need not be decided. Certainly plaintiff's machinery is deemed real estate for the purpose of taxation.

We think the ultimate issue upon plaintiff's appeal to the district court from the assessment on parcel 737 was whether the total values fixed by the assessment roll were excessive or inequitable and plaintiff was not entitled to relief without a clear affirmative showing on this issue. It was not sufficient to offer evidence tending to show the buildings, exclusive of the machinery, were valued too high or inequitably. The manner in which the assessor computed total valuations placed upon the assessment roll is not of controlling importance provided the result reached was not excessive or inequitable.

In Iowa Building Corp. v. Zirbel, 237 Iowa 242, 248, 21 N.W.2d 576, 579, the assessor without using his own judgment accepted valuations by an appraisal company which had mistakenly assumed the property had a greater frontage than it actually had. We reversed the trial court's reduction of the assessment. This is from the opinion: 'But we must weigh the evidence to determine whether the assessment, however arrived at, was 'excessive' or 'inequitable.' * * *

'Regardless of the manner in which the assessment was made and without according it the usual presumption of correctness, we are still unable to say it was either excessive or inequitable.' (Emphasis added.)

In re Appeal of Bankers Life Co. v. Zirbel, 239 Iowa 275, 279, 31 N.W.2d 368, 371, involves another assessment in which the values were fixed in the same manner as in the first Zirbel case although there was no mistake in frontage of the property. We upheld the assessment. The opinion states: 'Nevertheless it is true here as it was in the Zirbel case that under the statute the burden is upon the appealing taxpayer to establish that the assessment is in fact excessive or inequitable, however it was computed.' (Emphasis added.)

Clark v. Lucas County Board of Review, 242 Iowa 80, 97, 44 N.W.2d 748, 757, follows the two Zirbel cases, supra, and quotes with approval from the first one. See also Haubrich v. Johnson, 242 Iowa 1236, 1246, 50 N.W.2d 19, 25.

The supreme court of Pennsylvania has at least twice approved this statement with which we agree: "When an appeal is taken from the decision of the board of revision * * * to the court * * * the question before the latter tribunal is not whether the value placed upon certain constituent elements properly entering into the value of the subject of taxation is just and equitable, but whether the assessment of the subject as a whole is just and equitable." In re Appeal of Wanamaker Philadelphia, 360 Pa. 638, 63 A.2d 349, 351, 353; Hammermill Paper Co. v. City of Erie, 372 Pa. 85, 92 A.2d 422, 427.

Since plaintiff's machinery was not assessed separately the valuation computed thereon is to be treated merely as an intermediate step in ascertaining the value of plaintiff's buildings as a whole. See Appeal of Susquehanna Collieries Co., 335 Pa. 337, 6 A.2d 831, 833.

When plaintiff appealed from the action of the board of review the trial court did not become an independent assessing tribunal. Its function was to determine the correctness of the assessment with reference to plaintiff's complaint before the board. Bennett v. Board, 234 Iowa 800, 811, 13 N.W.2d 351, 357; Iowa Building Corp. v. Zirbel, supra, 237 Iowa 242, 244, 21 N.W.2d 576, 577; 84 C.J.S., Taxation, § 558 b, pp. 1093-1094. Certainly such complaint was that the total valuations fixed by the two assessment rolls were excessive and inequitable.

It might be argued that if defendants contended the assessor, in reaching his total valuations,...