Home Owners' Loan Corp. of Washington, D. C. v. Polk County

• Decision Date: 20 January 1942
• Docket Number: 45727.
• Citation: 1 N.W.2d 742,231 Iowa 661
• Parties: HOME OWNERS' LOAN CORPORATION OF WASHINGTON, D. C., v. POLK COUNTY et al., Members of Board of Supervisors of Polk County.
• Court: Iowa Supreme Court

1 N.W.2d 742

231 Iowa 661

HOME OWNERS' LOAN CORPORATION OF WASHINGTON, D. C., v. POLK COUNTY et al., Members of Board of Supervisors of Polk County.

No. 45727.

Supreme Court of Iowa

January 20, 1942

Francis J. Kuble, Co. Atty., James P. Irish, Asst. Co. Atty., and Charles Hutchinson and Bruce J. Flick, all of Des Moines, for appellants.

Lappen & Carlson, of Des Moines, for appellee.

WENNERSTRUM Justice.

The plaintiff, Home Owners Loan Corporation brought an action wherein it asked for a writ of mandamus to compel the Board of Supervisors of Polk County, Iowa, to order a refund of a certain portion of the taxes paid by plaintiff. The plaintiff claims that a part of the taxes paid by it for the years 1937 and 1938 were erroneously or illegally exacted or paid and that a refund should be made as contemplated by section 7235, 1939 Code of Iowa. The district court entered a judgment and decree granting the writ of mandamus as prayed for in plaintiff's petition. The defendants have appealed.

The factual situation may be briefly summarized as follows:

The Home Owners Loan Corporation paid the taxes on properties owned by them in Polk County for the years 1937 and 1938 upon the basis of the assessment valuation placed upon these properties by the assessor and as finally fixed by the local board of review for the 1937 assessment period. In making these payments the plaintiff caused the tax receipts and the treasurer's books to be stamped "paid under protest." They did not, however, appeal to the local board of review and in turn to the district court, claiming that the assessed valuation of the properties owned by them was improper or excessive. It is the plaintiff's contention that it should have the benefit of the general reduction ordered by the state board of assessment and review, now the State Tax Commission and affecting the 1937 assessment period in Des Moines. That board had ordered a general change of tax valuation for the 1937 taxing period and in the main, a reduction of the tax valuations of properties generally. This general change in tax valuation, as ordered by the state board of assessment and review, was approved in our opinion in the case of State of Iowa ex rel. Iowa State Board of Assessment and Review v Local Board of Review of Des Moines et al., 225 Iowa 855, 283 N.W. 87. That case sets forth the facts that are of historical interest in connection with this opinion. By reason of the litigation that occasioned the appeal in the Local Board of Review case, supra, the right of the state board of assessment and review to make general changes in valuation was not settled until during the year 1939. It is the plaintiff's contention that the difference between the tax based upon the claimed illegal original valuation and the valuation that was finally decided upon, after the order of the state board of assessment and review was finally carried out, was erroncously or illegally exacted or paid. It is asserted that the claimed excessive payment of taxes should be refunded to this plaintiff under the provisions of section 7235 of the Code.

The first claim of any wrongful valuation or illegal exaction of taxes was made when plaintiff filed a petition for refund of taxes with the Board of Supervisors, wherein it was claimed that the plaintiff should have the benefit of the general change in valuation as made by the state board of assessment and review in their general order affecting the 1937 assessment period.

The defendants plead several specific defenses that may be noted under two classifications. First, that the taxes were not illegally or erroneously exacted or paid, as contemplated by section 7235 of the Code, and second, that if they were so illegally or erroneously exacted or paid, the appellee is still not entitled to the relief prayed for in its petition.

The statutory provision under which this action is brought is found in Code section 7235, 1939 Code of Iowa, which is as follows: "7235 Refunding erroneous tax. The board of supervisors shall direct the treasurer to refund to the taxpayer any tax or portion thereof found to have been erroneously or illegally exacted or paid, with all interest and costs actually paid thereon."

Our first consideration naturally must be as to whether or not the taxes paid on plaintiff's property were "erroneously or illegally exacted or paid."

As previously noted the plaintiff's action is based upon the reduction in valuation of plaintiff's properties as a result of the general order of the state board of assessment and review and which was confirmed and approved in the case of State of Iowa ex rel. et al. v. Local Board of Review of Des Moines, et al., supra [225 Iowa 855, 283 N.W. 94]. However, in the above-cited case it should be kept in mind that the concluding paragraphs of that opinion are as follows: "The order here made was not equivalent to a new or original assessment nor a revision of individual assessments, but dealt with the aggregate valuation in the several zones. It conformed to and corrected the unequal discounts which it determined had resulted in discrimination and is the kind of an order which the State Board of Assessment and Review has authority to make." (Citing cases).

The case of Hammond v. Winder, 100 Ohio St. 433, 126 N.E. 409, 412, 24 A.L.R. 318, 323, 324, is somewhat similar to the present one. In the Ohio case valuations were increased as a result of general orders of the tax commission of Ohio. It is there stated:

"The manifest purpose of the Legislature was to confer upon the tax commission the duty of equalizing aggregate tax values of various classes of property in the manner stated. It has no power under those sections to make any order with respect to the particular property of any taxpayer in the district. Its authority and its action must be taken with respect to all the property of the particular class as units, and concerns the aggregate value of the property in the particular class dealt with.

"From what has been said it will be seen that the plan contemplates the tax commission as a directing and supervising authority, and that its orders are general, except in the cases of appeal specially provided for as heretofore set forth."

Further in the same opinion the following statement is made: "The taxpayer is afforded full opportunity for relief against improper valuations by appearing before the county board of revision in the exercise of its function of correcting tax valuations on complaint, and on appeal to the tax commission under the provisions of section 5610, and by the action in common pleas court above referred to."

It will be observed from our quoted portions from the case of State of Iowa ex rel. et al. v. Local Board of Review of Des Moines, et al., supra, and the case of Hammond v. Winder, supra, that changes in valuation as ordered by a state tax commission apply to the general mode and manner of assessment in the several districts and thus provide for an equalization as to districts. These general changes in valuation as made by a tax commission do not make it possible for individual property owners to avoid the necessity of following the statutory procedure if they deem their property has been excessively valued.

The contention of the plaintiff that its payment of taxes was "erroneously or illegally exacted or paid" again presents to this court a question that has received our consideration on numerous occasions. It must be kept in mind that it is the plaintiff's contention that because the general order of reduction, as to the 1937 assessment period made by the state board of assessment and review, reduced property valuations in certain districts in Des Moines, in which its particular property was located, that it should have the benefit of this revaluation and lower assessment and that the taxes paid on the excess valuation should be refunded.

In regard to the provisions of the statute relative to the repayment of taxes claimed to be illegally or erroneously exacted or paid the following statement taken from Cooley on Taxation, Volume 3, 4th Edition, par. 1259, page 2502, is applicable.

"Some * * * statutory enactments contain provisions which call for the refunding of taxes in those cases in which taxes illegally assessed or paid under mistake of fact, or where there has been some clerical mistake in the assessment or collection of taxes. The term 'erroneously assessed,' as used in such statutes, means an assessment illegal because of a jurisdictional defectand does not include a mere error of judgment in valuing the property." (Italics supplied).

In the case of Stanley v. Supervisors of Albany County, 121 U.S. 535, 549, 7 S.Ct. 1234, 1239, 30 L.Ed. 1000, we find the following statement: "* * * It is only where the assessment is wholly void, or void with respect to separable portions of the property, the amount collected on which is ascertainable, or where the assessment has been set aside as invalid, that an action at law will lie for the taxes paid, or for a portion thereof. Overvaluation of property is not a ground of action at law for the excess of taxes paid beyond what should have been levied upon a just valuation. * * *."

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