International Harvester Co. v. Douglas County

• Decision Date: 16 November 1945
• Docket Number: s. 31948-31950.
• Citation: 20 N.W.2d 620,146 Neb. 555
• Parties: INTERNATIONAL HARVESTER CO. v. DOUGLAS COUNTY et al. (three cases).
• Court: Nebraska Supreme Court

20 N.W.2d 620

146 Neb. 555

INTERNATIONAL HARVESTER CO. v. DOUGLAS COUNTY et al. (three cases).

Nos. 31948-31950.

Supreme Court of Nebraska

November 16, 1945

Syllabus by the Court.

1. A motion for judgment on the pleadings, like a demurrer, admits the truth of all well-pleaded facts in the pleadings of the opposing party, together with all reasonable inferences to be drawn therefrom. The party moving for judgment on the pleadings necessarily admits, for the purposes of the motion the untruth of his own allegations insofar as they have been controverted.

2. If a person claims a tax, or any part thereof, to be invalid for the reason that the property upon which it was levied was not liable to taxation, he shall proceed as required by sections 77-1729 to 77-1734, R.S.1943.

3. The legislature is not authorized by the Constitution to exempt from taxation intangible property in this state.

4. The legislature in the 1921 Revenue Act included intangible property within the classifications of property that shall be taxed.

5. The 1921 Revenue Act requires that all intangibles in this state (not exempt) shall be returned, assessed and taxed in Nebraska, and that without regard to whether the owner is a resident or non-resident of this state.

6. The situs of such property controls except in those cases where the situs of the property is in one county and the domicile of the taxpayer in another county in Nebraska.

7. The rule of stare decisis has a limited application in determining whether settled legal principles are applicable to a particular fact situation; and the positive authority of a decision is coextensive only with the facts on which it is founded, and can apply only in subsequent cases in which the issues are similar.

8. The opinion in Massey-Harris Co. v. Douglas County, 143 Neb 547, 10 N.W.2d 346, is distinguished.

Kelso Morgan, Co. Atty., and Joseph D. Houston, Chief Dep. Co. Atty., both of Omaha, for appellant Douglas County.

Wm Ross King, of Omaha, for appellant School Dist. of Omaha.

H. C. Linahan, G. H. Seig, and E. F. Fogarty, all of Omaha, for appellant City of Omaha.

Ellick, Fitzgerald & Smith and Seymour L. Smith, all of Omaha, for appellee International Harvester Co.

Heard before SIMMONS, C. J., and PAINE, CARTER, MESSMORE, YEAGER and CHAPPELL, JJ.

SIMMONS Chief Justice.

Plaintiff in this action sued to recover taxes paid. Defendants answered separately. Plaintiff moved for judgments on the pleadings. The trial court sustained the motions and entered judgment as prayed. Defendants appeal. The appeals are consolidated here. We reverse the judgment of the trial court.

The rule is: 'A motion for judgment on the pleadings, like a demurrer, admits the truth of all well-pleaded facts in the pleadings of the opposing party, together with all reasonable inferences to be drawn therefrom. The party moving for judgment on the pleadings necessarily admits, for the purposes of the motion, the untruth of his own allegations in so far as they have been controverted.' Brown v. Royal Highlanders, 140 Neb. 54, 299 N.W. 467, 471.

In view of the above rule we state a summary of the facts material here, as gathered from the pleadings.

Plaintiff is a corporation, organized under the laws of New Jersey with its principal place of business in Chicago, Illinois. It does business in Nebraska. It has branch offices at Omaha, Lincoln and Grand Island for the purpose of selling machinery and parts at wholesale to dealers, and motor trucks and parts at both wholesale and retail.

Defendants are the County of Douglas, the City of Omaha and the School District of Omaha.

In May, 1942, plaintiff filed a personal property return of its taxable property on the prescribed foreign corporations form. This return was signed 'International Harvester Co. By W. H. Bedford, Branch Manager Agent.' It there listed class A intangible property in the amount of $1,931. It listed class B intangible property, notes secured and unsecured, except notes secured by mortgages on real estate situated in this state, in the amount of $288,000; and book accounts, open accounts, judgments, choses in action, contracts for cash, labor or any other valuable thing whether due or about to become due, in the amount of $85,000. Thereafter the county assessor raised the value of said class B intangibles to $500,000. Plaintiff then filed its complaint with the board of equalization, claiming that its personal property was assessed too high and asking that the assessment be reviewed. The board reduced the assessment to the amount originally returned. No appeal was taken from that action. On that basis plaintiff was taxes $2,984. Plaintiff on February 4, 1943, paid the tax with interest, without protest or notice of protest. The tax moneys so paid were allocated one-sixth to the state general fund, one-sixth to the county general fund, one-third to the city general fund and one-third to the school district general fund.

On February 24, 1943, plaintiff, pursuant to section 77-1923, Comp.St.1929, subdivision SECOND, filed a demand upon the county treasurer and ex officio treasurer of the other defendants demanding the repayment of the sums allocated to said defendants. Plaintiff stated in the demand that it had paid the tax in all respects as though it were legal and valid, and claimed the tax was null and void for the reason that plaintiff was a foreign corporation, did not reside in Nebraska and was not liable to taxation in Nebraska for any class B intangible property whatsoever. The payment demanded was refused and this suit was instituted.

The secured and unsecured notes and the accounts receivable were all payable in this state; they arose out of the sale of plaintiff's property in this state; they were taken, accepted and kept at all times in Nebraska, and were subject to collection in this state and were in this state on April 1, 1942, in the custody or control of plaintiff's agent and branch manager in his representative capacity. Among said notes were conditional sales contracts and chattel mortgages which were recorded in the counties of this state. Judgments included in the return were rendered by the courts of Nebraska. The cash in the bank so returned was the working fund for operating expenses and was subject to withdrawal by plaintiff's branch manager in Omaha.

The defendants contend that the intangible property so acquired and held had a taxable situs in Douglas County on April 1, 1942, and was liable for taxation under the provisions of section 77-703, Comp.St.Supp.1941 (now sections 77-713 and 77-714, R.S.1943). It further was contended that the form upon which plaintiff returned said property was one which had been in use since 1929 and that plaintiff and other foreign corporations had for a number of years paid taxes on property so held and returned, evidencing an administrative construction of the statute.

It was contended that plaintiff could not recover said taxes in an independent action, but was required to proceed under the provisions of subdivision FIRST of section 77-1923, Comp.St.1929. To these the county adds the contention that the plaintiff, having claimed and received relief from the board of equalization, and not having appealed the value, it is now res adjudicata and plaintiff is estopped from inquiring into the taxable value of said intangible property.

By their briefs, the parties here treat these various contentions as applicable to all the defendants.

Defendants, as appellants, contend that the trial court erred (1) in holding that the plaintiff had pursued the proper remedy, (2) in holding that the matter had not been finally determined when plaintiff failed to appeal from the action of the board of equalization, (3) in holding that the intangible property involved here was not assessable, and (4) was not subject to taxation in Nebraska.

We first take up the procedural question. The statute in effect when this action was brought was section 77-1923, Comp.St.1929. Subdivision FIRST of that section provides that if a person claims a tax or any part thereof to be invalid for the reason 'that the property upon which it was levied was not liable to taxation,' or that the property had been twice assessed in the same year and taxes paid thereon, he could pay the taxes under protest and receive a receipt showing payment under protest and the grounds therefor. It provided that the money so paid should be held by the county treasurer, subject to the order of the county board. The statute then provided for the filing of a statement, for a hearing before the board, and for an order refunding the money if it should be found that the property was not liable for taxation, or that it had been twice assessed in the same year and the taxes paid. If it was found that the grounds of the protest were not true, then the board was to order the disposal of the money as though not paid under protest. It contained a provision for an appeal and directions in that event.

Defendants claim that plaintiff should have proceeded under subdivision FIRST, and that not having paid under protest and not having proceeded as therein provided, this action cannot be maintained.

Plaintiff claims that it properly proceeded under subdivision SECOND, which provides that if any person claim the tax to be invalid for the reason that 'it was levied or assessed for an illegal or unauthorized purpose, or for any other reason except as hereinbefore set forth,' and he shall have paid the same as though it were legal and valid, he may then demand payment from the treasurer of the state or subdivision for whose benefit, or under whose authority, or by whose request it was levied, and if repayment is not made, he may sue.

Obviously the 'for any...