John Calvin Manor, Inc. v. Aylward

• Decision Date: 16 December 1974
• Docket Number: No. 57376,No. 1,57376,1
• Citation: 517 S.W.2d 59
• Parties: JOHN CALVIN MANOR, INC., a Missouri Corporation, Respondent, v. James P. AYLWARD, Jr., Collector of Revenue, and John P. Sweeney, Assessor, Appellants
• Court: Missouri Supreme Court

Page 59

517 S.W.2d 59

JOHN CALVIN MANOR, INC., a Missouri Corporation, Respondent, v. James P. AYLWARD, Jr., Collector of Revenue, and John P.

Sweeney, Assessor, Appellants.

No. 57376.

Supreme Court of Missouri, Division No. 1.

Dec. 16, 1974.

Don M. Jackson, Kansas City, for respondent; Jackson & Sherman, Kansas City, of counsel.

Herbert M. Kohn, County Counselor, Donald B. Clark, Asst. County Counselor, Kansas City, for appellants.

BARDGETT, Presiding Judge.

Defendants-appellants are the collector of revenue and the assessor of Jackson County, Missouri. They appeal from a judgment entered in favor of plaintiff-respondent, a property owner, which judgment permanently enjoined defendants from collecting or attempting to collect real estate taxes which were based upon an increase in the assessed valuation of plaintiff's property from $500 to $225,500 and resulted in a tax bill in the sum of $15,536.95 for the year 1970. The appeal involves the construction of sections 137.180 and 139.031, RSMo 1969, V.A.M.S., which are revenue laws of Missouri. This court has jurisdiction. Art. V, sec. 3, Mo.Const.1945, V.A.M.S., as amended.

The only fact question in the circuit court was whether or not plaintiff had received notice pursuant to sec. 137.180 that defendant-assessor had raised the valuation of the property. The trial court found that the assessor did not give plaintiff the notice of increase as required by sec. 137.180 and that plaintiff did not otherwise learn of the increase until plaintiff received its tax statement from the collector in December 1970 which was less than thirty days prior to the date of delinquency (January 1, 1971), as to payment without penalties. That factual finding is not contested here.

Briefly stated the facts are as follows: Plaintiff is the record owner of certain real property in Jackson County, Missouri. Prior to 1969 its assessed valuation was $500. Early in 1969 the assessor raised the assessed valuation to $225,500 and notified plaintiff of the increase and of plaintiff's right to appeal to the county board of equalization. As required by sec. 137.385, RSMo 1969, plaintiff filed his appeal with the board of equalization prior to the third Monday in June 1969. On July 23, 1969, the board of equalization heard the appeal and entered its order nullifying the increase by reducing the valuation to the previous figure of $500 for 1969. Presumably plaintiff's 1969 real estate taxes were computed on an assessed valuation of $500 and were paid.

Sometime after the 1969 tax billings were mailed by the collector in December 1969 and prior to May 31, 1970, the assessor increased the valuation of plaintiff's property on the assessment books from $500 to $225,500 for 1970. ¹ The assessor's books were delivered to the collector prior to May 31, 1970. The collector mailed tax statements to the property owners on or about December 8, 1970, and plaintiff received its statement a day or so later. Plaintiff's tax statement for 1970 showed an assessed valuation of its land and improvements of $225,500 and upon that assessment the tax bill amounted to $15,536.95.

The first notice plaintiff had of the increased assessed valuation was when it received the real estate tax statement in December 1970. The increased valuation is not the result of an overall uniform percentage increase in valuation of all real property in Jackson County but rather pertains only to plaintiff's property. This case does not involve any issue with respect to the value of plaintiff's property as such, nor does it involve the question of whether plaintiff's property is entitled to the charitable exemption from real estate taxes under Art. X, sec. 6, Mo.Const.1945, and sec. 137.100, RSMo 1969. ²

On December 30, 1970, plaintiff instituted an action in prohibition in circuit court and subsequently plaintiff, believing prohibition was not the appropriate remedy, amended its petition to request relief by injunction. The cause was tried to the court and the court entered its order permanently enjoining defendant collector 'from collecting or attempting to collect taxes from the plaintiff, John Calvin Manor, Inc., or its successors in title, for the year 1970 in any amount in excess of the taxes which would be due and payable on said property for the year 1970 on the basis of an assessed valuation of $500.00.' The court ordered that defendant-assessor 'shall forthwith reduce the assessed valuation of plaintiff's said real property as shown on the books and records of Jackson County for the year 1970 from $225,500.00 to $500.00.' The foregoing injunctive order followed the determination by the trial court that the increased assessment and the tax based thereon was void because of the failure of the assessor to give plaintiff the notice of increased assessment required by sec. 137.180.

On this appeal defendants attempt to avoid the question of whether the increased assessment and the increased tax bill based thereon are valid and undertake to limit the scope of the inquiry to whether or not the remedies at law are adequate under the facts of this case. The remedies at law which defendants contend are adequate and arguably preclude equitable injunctive relief are (1) a suit by the taxpayer under sec. 139.031 which permits the taxpayer to pay the tax under protest and institute suit within ninety days for a refund, and (2) await suit for collection and defend that suit on whatever grounds the taxpayer has for claiming the increased assessment and consequent tax bill to be illegal.

By so defining the scope of this appeal, the defendants thereby avoid the substantive issue which is whether the failure to give the required notice under sec. 137.180 rendered the increased assessment void. That issue cannot be so easily avoid because the consequence of failing to give the required notice places the taxpayer in a markedly different position than if proper notice is given and bears directly on the adequacy of the remedies argued for by defendants.

The facts relating to the 1969 increased assessment with notice to the property owner and its appeal to the board of equalization have been set forth supra in order to show what can happen, and in this taxpayer's case what did happen, when the assessing and taxing authorities adhere to the orderly procedures mandated by the legislature. The facts of the 1970 increased assessment show what happens when the statutory procedures are not followed by the responsible authorities. It is apparent that the failure to give the notice required by sec. 137.180 completely frustrates the statutory scheme at the very outset. Without this notice to the taxpayer, the taxpayer remains ignorant of the increased valuation put upon the taxable property and consequently does not have the opportunity to appeal to the board of equalization during the limited period allowed for such appeals.

In the instant case the increased valuation, of which plaintiff was ignorant, was 450 times the previous assessed valuation and amounted to approximately a 45000% increase. The record does not reflect the amount of plaintiff's tax for 1969 nor whether the rate in 1970 was the same as 1969; but plaintiff's tax bill for 1970 was $15,536.95 and it is obvious that this was many times again the tax bill for 1969 on the same property, and that this increase in taxes was due to the increased assessed valuation.

Defendants argue that sec. 139.031, RSMo 1969, provides an adequate remedy at law. That statute permits a taxpayer to protest all or part of any taxes assessed against him, except taxes collected by the director of revenue of Missouri, by paying the tax and filing suit for refund in circuit court.

Sec. 139.031 provides the taxpayer with a procedure whereby he can obtain an adjudication of the legality of a tax imposed upon him. As applied to the instant case, a suit under sec. 139.031 would have placed the same issues before the court as were decided in this case, and insofar as providing a proceeding for the adjudication of these issues is concerned, such a proceeding would be wholly adequate.

Defendants acknowledge that prior to the enactment of sec. 139.031 a suit in equity for injunctive relief was allowed in cases similar to the instant one. Wymore v. Markway, 338 Mo. 46, 89 S.W.2d 9 (1935); Allen v. Roam, 308 S.W.2d 787 (Mo.App.1958); Boonville Nat. Bank v. Schlotzhauer, 317 Mo. 1298, 298 S.W. 732 (banc 1927); Bowman v. City of East Prairie, Mo.App., 240 S.W.2d 203 (1951). In Bowman the court held that a suit for injunctive relief was proper to restrain the collection of unauthorized taxes under the provisions of sec. 526.030, RSMo 1969, which authorizes such a proceeding in cases where a cloud would be put upon the title to real estate, the court holding that assessed taxes created a lien upon the real estate and constituted a cloud upon the title. The same is true of the real estate taxes assessed in the instant case. Chapter 141, RSMo 1969.

The question then becomes whether the enactment of sec. 139.031 was intended to abrogate the remedy for injunctive relief and to constitute a complete substitute therefor. Although this is not a suit for a refund but rather one to enjoin collection, we believe the issues presented by defendants should be met and decided.

Prior to the enactment of sec. 139.031, one of the issues in cases where a plaintiff paid the taxes and thereafter instituted suit contending the tax was illegal and sought a refund was whether the taxes were paid voluntarily or under duress. State v. Howard, 357 Mo. 302, 208 S.W.2d 247 (banc 1947); McGraw-Edison Company v. Curry, 485 S.W.2d 175 (Mo.App.1972). The enactment of sec. 139.031 removed this question from such cases by affording the taxpayer the right to voluntarily pay the tax and thereafter obtain a refund on a finding that the tax was unlawful without proving payment under duress.

Also prior to the enactment of sec. 139.031, a collector of...