Frye v. Haas

• Decision Date: 07 July 1967
• Docket Number: No. 36549,36549
• Citation: Frye v. Haas, 182 Neb. 73, 152 N.W.2d 121 (Neb. 1967)
• Parties: Gary FRYE et al., Appellants, v. Kenneth HAAS, County Treasurer of Cherry County, Nebraska et al., Appellees.
• Court: Nebraska Supreme Court

Page 121

152 N.W.2d 121

182 Neb. 73

Gary FRYE et al., Appellants, v. Kenneth HAAS, County Treasurer of Cherry County, Nebraska et al., Appellees.

No. 36549.

Supreme Court of Nebraska.

July 7, 1967.

Syllabus by the Court

1. Within the meaning of the due process clause, laws for the levy and collection of general taxes stand upon a different footing than laws for the levy and collection of special assessments or special taxes.

2. The power to levy a general tax is inherent in the sovereign, is purely legislative in character, and due process does not require that the property subject to the tax or the amount to be levied should be subjected to judicial inquiry.

3. Tax proceedings are necessarily summary in nature, are not judicial in character, due process does not require notice and an opportunity to be heard at any particular stage of the proceedings, and notice by a statute itself is sufficient.

4. There is no constitutional command that notice of the assessment or levy of a tax, and opportunity to contest it, must be given in advance of the assessment or levy. It is enough that all available defenses may be presented to a competent tribunal before exaction of the tax and before the command of the state to pay it becomes final and irrevocable.

5. Section 77--1735, R.R.S.1943, creates a direct cause of action in the tax proceedings by which a taxpayer may test the validity, for any reason, of a tax or any part thereof.

6. If taxes are levied without authority of law, their collection may be enjoined.

7. There is no requirement of due process that a taxpayer must be given an opportunity to be heard before any particular stage of the taxation process.

8. The determination of the number of school age children in a joint school district residing in a county is not an adjudicative fact and requires no judicial hearing.

9. Article XII, section 1, of the Constitution of the State of Nebraska, provides by general law for the organization, regulation, supervision, and general control of all corporations. No corporations shall be created by special law, nor their charters be extended, changed, or amended, except those corporations organized for charitable, educational, penal, or reformatory purposes.

10. Rules of statutory construction are created to resolve ambiguities, not create them.

Wilson, Barlow & Watson, Lincoln, for appellants.

Clarence A. H. Meyer, Atty. Gen., Harold Mosher, Asst. Atty. Gen., Lincoln, Richard L. Spittler, County Atty., Valentine, for appellees.

Heard before WHITE, C.J., and CARTER, SPENCER, BOSLAUGH, SMITH, McCOWN, and NEWTON, JJ.

WHITE, Chief Justice.

In establishing 19 educational service units composed of different groups of counties and embracing all 93 counties, to supplement the services of school districts of the State of Nebraska (L.B. 301, sections 79--2201 to 79--2212, R.S.Supp., 1965), the Legislature authorized the units to certify a tax levy of not to exceed 1 mill directly to the county treasurers for collection, thus bypassing, the county boards of equalization who, under the statute, section 77--1601, R.S.Supp., 1965, within a fixed period of time, levy the taxes for cities, school districts, and other political subdivisions existing within the counties. The primary question involved is whether this procedure and the whole procedure provided for deprives the plaintiffs, taxpayers, of due process of law in that they are not given their constitutional right to a suitable notice and opportunity to be heard. The district court found the statute constitutional and we affirm the judgment.

The statute under attack, section 79--2210, R.S.Supp., 1965, provides: 'The board for each educational service unit may levy a tax of not to exceed one mill on the dollar on the assessed valuation of all property except intangible property within its geographical unit. The amount of any such levy shall be certified by the secretary of the board to the county treasurer of each county within the educational service unit who shall collect the same as other taxes are collected and remit the proceeds therefrom to the county treasurer who is exofficio treasurer of the board.'

In order to frame this problem in proper perspective some preliminary observations are necessary. This is a general and not a special tax, levied for public purposes under section 6 of Article VII of the Constitution of the State of Nebraska, directing the Legislature to provide for the common schools. Within the meaning of the due process clause, laws for the levy and collection of general taxes stand upon a different footing than laws for the levy and collection of special assessments or special taxes and are to be construed with the utmost liberality. In some cases no notice whatever is required. State v. Several Parcels of Land, 83 Neb. 13, 119 N.W. 21, L.R.A.1916E, 1; Turpin v. Lemon, 187 U.S. 51, 23 S.Ct. 20, 47 L.Ed. 70; Glidden v. Harrington, 189 U.S. 255, 23 S.Ct. 574, 47 L.Ed. 798. See exhaustive discussion of this distinction in Harmon v. Bolley, 187 Ind. 511, 120 N.E. 33, 2 A.L.R. 609. The power to levy a general tax is inherent in the sovereign, is purely legislative in character, and due process does not require that the property subject to the tax or the amount to be levied should be subjected to judicial inquiry. Tax proceedings are necessarily summary in character, may not be impeded by a due process requirement of notice and opportunity to be heard at any particular stage of the proceedings, are not judicial in character, personal notice is not necessary, and notice by a statute itself is sufficient. 16A C.J.S. Constitutional Law § 650(a)(2), pp. 971 to 977; 84 C.J.S. Taxation § 359, p. 692.

The decisions reveal that there are no categorical imperatives in this area. Taxation takes property. The balance must be struck between the time urgencies of governmental necessity and the taxpayer's right of resistance.

At the outset we observe that this is an ad valorem tax, the amount depending on the value of the taxpayer's property. Notice is given by statute, and he has a full opportunity to be heard and to appeal as to valuation and equalization. The power of the Legislature or the unit board to make the levy is not challenged. But, it is said, this power to levy may be illegally or improperly exercised and no notice and opportunity are provided and that therefore the proceedings lack due process. The statute here under consideration bypasses the statutory procedure, section 77--1601, R.S.Supp., 1965, in which the county board of equalization makes the levies for cities, school districts, and other governmental subdivisions within 14 days after the action of the State Board of Equalization and Assessment. A taxpayer may appeal from this action but it is noted that the grounds of appeal are restricted and the collection process may not be impeded. Sections 77--1606 to 77--1610, R.R.S.1943. It is this narrow or minimal deviation from established tax procedure that the plaintiffs attack. The rule is stated in Nickey v. State of Mississippi, 292 U.S. 393, 54 S.Ct. 743, 78 L.Ed. 1323, as follows: 'There is no constitutional command that notice of the assessment of a tax, and opportunity to contest it, must be given in advance of the assessment. It is enough that all available defenses may be presented to a competent tribunal before exaction of the tax and before the command of the state to pay it becomes final and irrevocable. Wells Fargo & Co. v. State of Nevada, 248 U.S. 165, 39 S.Ct. 62, 63 L.Ed. 190; Bristol v. Washington County, 177 U.S. 133, 146, 20 S.Ct. 585, 44 L.Ed. 701; McMillen v. Anderson, 95 U.S. 37, 23 L.Ed. 335; see American Surety Co. v. Baldwin, 287 U.S. 156, 168, 53 S.Ct. 98, 77 L.Ed. 231, 86 A.L.R. 298.'

The application of this rule is well stated in 16A C.J.S. Constitutional Law § 650(a)(2), p. 977, as follows: 'Due process is afforded if the taxpayer has an opportunity to question the validity or the amount of an assessment before the amount is determined, or at any subsequent proceedings to enforce its collection, or subsequent to collection in a suit for refund of taxes paid under protest, or at any time before liability for the tax becomes finally and irrevocably fixed.'

We have long followed this rule in Nebraska. In County of Douglas v. State Board of Equalization & Assessment, 158 Neb. 325, 63 N.W.2d 449, a general tax case, we said: 'The following language in the case of Hacker v. Howe, 72 Neb. 385, 101 N.W. 255, 256, is also pertinent: 'An owner is not deprived of his property without due process of law by means of taxation if he has an opportunity to question its validity or the amount of such tax or assessment at some stage of the proceedings either before that amount is finally determined or in subsequent proceedings for its collection. " That the right to collateral attack alone is sufficient to constitute due process is apparent from Hacker v. Howe, 72 Neb. 385, 101 N.W. 255. The State Board of Equalization and Assessment raised values and there was no appeal provided. Said this court: 'He certainly is not denied due process of law if the courts are open to him in which he may try the question of the scope of action and the power of the state board to equalize the valuation of properties as between the different counties so as to bring about uniformity and equality of taxation.'

Any doubt in this matter is laid to rest by State v. Several Parcels of Land, supra. There the required statutory notice of the meeting of the county board of equalization was not given and the taxpayer asserted that therefore he was denied his opportunity to be heard before the levy and the right to appeal. This court said: 'Again it cannot be said that due process of law is lacking, in proceedings for taxation, although the statutory notice is omitted at some particular stage, if the maxims of the law provide an alternative remedy, which is sufficient to correct any wrong done. ...