Northern Pac. Ry. Co. v. Clearwater County

• Decision Date: 04 November 1914
• Citation: 26 Idaho 455,144 P. 1
• Parties: NORTHERN PACIFIC RAILWAY CO., a Corporation, Appellant, v. COUNTY OF CLEARWATER et al., Respondents
• Court: Idaho Supreme Court

144 P. 1

26 Idaho 455

NORTHERN PACIFIC RAILWAY CO., a Corporation, Appellant, v. COUNTY OF CLEARWATER et al., Respondents

Supreme Court of Idaho

November 4, 1914

COMPLAINT-ALLEGATIONS OF-DEMURRER-ILLEGAL ASSESSMENT-OVER-VALUATION-UNDER-VALUATION-ARBITRARY TAXATION-INJUNCTION AGAINST-REMEDY-EQUITY JURISDICTION.

1. Where a railroad company is the owner of about 4,000 acres of land consisting of about one hundred 40-acre tracts distributed over a county and in many different sections, and it is alleged in the complaint that the assessor "by a systematic, intentional and illegal method of assessing said land placed thereon a valuation and assessment which after being equalized by the state board of equalization exceeded the full cash value of the property by 25 per cent," and that other and similar land of the same value in said county was assessed and valued at 75 per cent less than the appellant's lands, and that said valuation and assessment were placed on appellant's lands by the assessor without making any investigation whatever and in violation of law and of the rights of appellant, and said valuation and assessment were made with the design, systematic and illegal effort on the part of the assessor to unjustly and unlawfully discriminate against appellant and its property, held, that said allegations show an unlawful, illegal and fraudulent discrimination by the assessor in assessing said property.

2. In this class of cases courts of equity will not interfere to correct mere errors of judgment as to valuation of property since value is a matter of opinion; but where the allegations of the complaint show that the officer refused to exercise his judgment and by an arbitrary and capricious exercise of official authority has fraudulently attempted to defeat the law instead of enforcing it, a court of equity will relieve against such illegal and fraudulent actions of an assessor.

3. Held, that the facts alleged in the complaint, if proven would establish fraud as a conclusion of law.

4. Held, that where an assessor by a systematic, intentional and illegal method assessed property at more than double what he assessed other property of the same class and value, he perpetrates a fraud from which a court of equity, upon proper application, will relieve.

5. In this case it is not a question of a mere difference of opinion as to the value of the property, but it is a question of no opinion or judgment at all as to the value, since it is admitted by the demurrer that the assessor did intentionally and illegally assess said property at more than double what other property of the same kind and value was assessed, and the law presumes that he intended the natural, inevitable effect of his acts in assessing said property.

6. Equity will not relieve against an assessment merely because it happens to be at a higher rate than that of other property of the same class or kind, for the reason that absolute uniformity under an honest judgment may not be obtained; but where it is made to appear that honest judgment was not used and that an illegal and unlawful value was placed upon the property by the assessor, the injured party may obtain redress in a court of equity.

7. In a case where the valuation is so unreasonable as to show that the assessor must have known that it was wrong and that he could not have been honest in fixing it, held, that such a valuation is clearly a fraud upon the owner.

8. In a case of this kind, the trial court should require the plaintiff to pay the amount of taxes which the allegations of the complaint show are reasonable and just before issuing any restraining order against the collection of the portion of the tax alleged to have been illegally assessed.

APPEAL from the District Court of the Second Judicial District for Clearwater County. Hon. Edgar S. Steele, Judge.

Action to restrain the collection of a tax alleged to have been illegally made. Demurrer to complaint sustained by trial court. Reversed.

Reversed and remanded, with instructions. Costs awarded to the appellant.

Cannon & Ferris and James E. Babb, for Appellant.

The facts pleaded in the case at bar, admitted as they are by the demurrer, establish fraud as a conclusion of law, and the allegation that these acts were fraudulent would not strengthen the complaint or be in any way essential. (Louisville Trust Co. v. Stone, 107 F. 305, 46 C. C A. 299; Andrews v. King County, 1 Wash. 46, 22 Am. St. 136, 23 P. 409; Raymond v. Chicago Union Traction Co., 207 U.S. 20, 28 S.Ct. 7, 52 L.Ed. 78, 12 Ann. Cas. 757.)

The appellant has shown that its property has been unfairly assessed by the assessor, and that it has been assessed in excess of its full cash value. It is therefore entitled to relief at the hands of a court of equity. (Atchison etc. R. Co. v. Sullivan, 173 F. 456, 97 C. C. A. 1; Humbird Lumber Co. v. Thompson, 11 Idaho 614, 83 P. 941; Chicago etc. R. Co. v. Board of Commissioners, 54 Kan. 781, 39 P. 1039; Albuquerque Nat. Bank v. Perea, 147 U.S. 87, 13 S.Ct. 194, 37 L.Ed. 91; Otter Tail County v. Batchelder, 47 Minn. 512, 50 N.W. 536; Dickson v. Kittitas County, 42 Wash. 429, 84 P. 855.)

The discrimination between the property of appellant and all other property in the county is of such a character as to constitute constructive fraud, and therefore a court of equity should grant relief. (The Railroad Tax Cases, 13 F. 722, 8 Saw. 238; Santa Clara County v. Southern P. R. Co., 18 F. 385; Cincinnati Southern Ry. v. Guenther, 19 F. 395; Northern Pacific Ry. Co. v. Pierce County, 77 Wash. 315, 137 P. 433; Louisville etc. R. Co. v. Bosworth, 209 F. 380, 452; First Nat. Bank v. Board of Commrs., 36 Colo. 265, 84 P. 1111; First Nat. Bank v. Holmes, 246 Ill. 362, 92 N.E. 893; Citizens' Nat. Bank v. Board of Commrs., 83 Kan. 376, 111 P. 496; Savage v. Pierce County, 68 Wash. 623, 123 P. 1088; 2 Cooley on Taxation, 3d ed., p. 1459; Exparte Ft. Smith & Van Buren Bridge Co., 62 Ark. 461, 36 S.W. 1060; Randell v. City of Bridgeport, 63 Conn. 321, 28 A. 523.)

A. A. Holsclaw, G. W. Tannahill, J. H. Peterson, Atty. Genl., J. J. Guheen, T. C. Coffin and E. G. Davis, Assts., for Respondents.

No appeal lies from the decision of the board of county commissioners, sitting as a board of equalization. (Feltham v. Board of County Commissioners, 10 Idaho 182, 77 P. 332; Olympia Waterworks Co. v. Board of Equalization, 44 P. 267; General Custer Min. Co. v. Van Camp, 2 Idaho 40, 3 P. 22; Humbird Lumber Co. v. Ramey, 10 Idaho 327, 77 P. 433.)

Nor can mere irregularity in the rightful exercise of the powers of the board of equalization be reviewed by certiorari. (Murphy v. Board of Equalization, 6 Idaho 745, 59 P. 715; Braden v. Union Trust Co., 25 Kan. 362.)

The judge of the district court had not jurisdiction of the subject matter. (People ex rel. Alexander v. District Court, 68 P. 242; State Railroad Commission v. People, 98 P. 7; Speer v. People (Colo.), 122 P. 768.)

A taxpayer is not entitled to relief in equity, except upon condition of doing equity on his part, which requires payment of all the taxes assessed, or which should be assessed against him. (Tacoma Ry. & Power Co. v. Pierce Co., (Wash.) 193 F. 90.)

Courts of equity are not prone to move for the relief of an individual or single corporation in cases like the one at bar. (Andrews v. King County (Wash.), 23 P. 409; Raymond v. Chicago Union T. Co., 207 U.S. 19, 52 L.Ed. 78; Taylor v. Louisville Ry., 88 F. 350; Washington Water Power Co. v. Kootenai County, 210 F. 867.)

The fact that a valuation is excessive does not entitle the party to relief at equity, such a relief being granted only in cases of fraud or a clear adoption of a fundamentally wrong principle. (Chicago B. & Q. R. Co. v. Babcock, 204 U.S. 585, 598, 27 S.Ct. 326, 51 L.Ed. 636, 640.)

Equity will relieve against discrimination in valuation and assessments where the uniformity of taxation guaranteed by the constitution is violated in two cases only: First, where the statute of the state operates to cause a large class of persons or species of property to be assessed or taxed at a higher rate than all other property; and second, where the revenue officers by a system or scheme adopted in making valuations and assessments discriminate, with the effect of destroying uniformity against a large class of persons or species of property. (State Railroad Tax Cases, 92 U.S. 575, 612 23 L.Ed. 663, 673; People ex rel. Williams v. Weaver, 100 U.S. 539, 25 L.Ed. 705; Pelton v. Commercial Nat. Bank, 101 U.S. 143, 25 L.Ed. 901; Cummings v. Merchants' Nat. Bank, 101 U.S. 153, 25 L.Ed. 903; Board of Supervisors v. Stanley, 105 U.S. 305, 26 L.Ed. 1044, 1120; Hills v. National Albany Exchange Bank, 105 U.S. 319, 26 L.Ed. 1052; Evansville Nat. Bank v. Britton, 105 U.S. 322, 26 L.Ed. 1053; Boyer v. Boyer, 113 U.S. 689, 5 S.Ct. 706, 28 L.Ed. 1089; German Nat. Bank v. Kimball, 103 U.S. 732, 26 L.Ed. 469; Exchange Nat. Bank v. Miller, 19 F. 372; Wagoner v. Loomis, 37 Ohio St. 571; Stanley v. Board of Supervisors, 121 U.S. 535, 7 S.Ct. 1234, 30 L.Ed. 1000.)

SULLIVAN, C. J. Truitt, J., concurs.

OPINION

SULLIVAN, C. J.

This action was brought by the Northern Pacific Railway Company against Clearwater county, its assessor, treasurer, taxpayer and auditor, to restrain the collection of certain taxes alleged to have been illegally assessed for the year 1913, on about 4,000 acres of land owned by the appellant in Clearwater county, and for other relief; also for a preliminary writ of injunction to restrain the tax collector of said county and his successors in office from extending said property upon any delinquent list or delinquency certificates, and enjoining the defendants from advertising said property for sale and from selling the same and...