Rich Mfg. Co. v. Petty

• Decision Date: 19 June 1950
• Docket Number: No. 47659.,47659.
• Citation: 241 Iowa 840,42 N.W.2d 80
• Parties: RICH MFG. CO. v. PETTY et al.
• Court: Iowa Supreme Court

241 Iowa 840

42 N.W.2d 80

RICH MFG. CO.

v.PETTY et al.

No. 47659.

Supreme Court of Iowa.

April 4, 1950.

Rehearing Denied June 19, 1950.

Action by the Rich Manufacturing Company, also known as Rich Illinois Manufacturing Company, against O. P. Petty, and others, members of the Local Board of Review of Assessments for the City of Clinton, and others, for a declaratory judgment that assessment was invalid because Board of Review was not composed of qualified members. A motion by the defendant taxing bodies to dismiss was overruled by the Clinton District Court, W. L. Keck, J., and because of the important question of public concern involved, the Supreme Court allowed an appeal in advance of final judgment. The Supreme Court, Mulroney, J., held that an assessment by a de facto Local Board of Review is not invalid because the board is not composed of properly qualified persons.

Cause reversed with instructions to sustain motion to dismiss.Jasper W. Morgan, John W. Carlsen, and Homer I. Smith, of Clinton, Herrick & Langdon, of Des Moines, for appellants.

Holleran & Holleran, Prentice W. Shaw, E. C. Halbach, of Clinton, Lane & Waterman, of Davenport, for appellee.

MULRONEY, Justice.

Plaintiff corporation sued the members of the local board of review for the city of Clinton, the members of the Clinton County board of supervisors, the mayor and the members of the city council of the city of Clinton, and the members of the school board for the independent school district of the city of Clinton. The petition alleged that plaintiff had appealed to the local board of review from the assessor's valuation of its city realty, and received some reduction, but the board's assessment was invalid because the board was illegally constituted in that the board was composed of members who were ‘not properly qualified or proper persons to be appointed to said board’, within the provisions of section 405.13, Code 1946, I.C.A.¹ The petition alleged one board member was not a freeholder, all three were residents of Clinton township (and there are three townships in the City of Clinton), and no member was a licensed real estate broker. There was also an allegation that the board should consist of five instead of three members. The plaintiff prayed that the court declare the board's assessment invalid because the purported local board of review was illegally, improperly, and wrongfully constituted and that the court declare that there is no validly appointed and existing local board of review in Clinton. In addition to the declaratory relief plaintiff prayed for a writ of injunction against all of the defendants to restrain them from proceeding to levy or collect any tax based upon the assessed valuation fixed by the purported local board of review. We will refer to other allegations of the petition later.

The petition was met with a motion to dismiss, filed by all of the defendants. The trial court overruled the motion and because it was felt that decision involved important questions of public concern we allowed appeal is advance of final judgment.

I. Plaintiff urges that the city assessor exceeded his authority by assessing plaintiff's property May 31, 1949, and later (on June 6th) reassessing it at a still higher figure. Section 405.20, Code 1946, I.C.A., provides: ‘The assessment shall be completed not later than April 30. * * * No changes shall be made on the assessment rolls after May 1 except by order of the local board of review or by decree of court.’

This and other preceding and following sections were enacted in 1941, 49th G.A. Chapter 202. In Younker Bros. v. Zirbel, 234 Iowa 269, 12 N.W.2d 219,151 A.L.R. 542, we held what is now Code section 405.20 (and other related provisions) to be directory and not mandatory. That case involved the legality of the acts of the local board of review (beyond the statutory time limitation) rather than of the assessor. However, we deem the reasoning applicable here despite the closing mandatory language: ‘No changes shall be made * * * after May 1 except by order of the local board of review or by decree of court.’ Under it any untimely act of the assessor in raising or lowering an assessment would be subject to the approval of the board just as any such action by the board could be reviewed by appeal to the court. Younker Bros. v. Zirbel, supra, 234 Iowa at page 276, 12 N.W.2d 219,151 A.L.R. 542.

II. The plaintiff alleges in its petition that ‘the defendants, O.P. Petty, A. H. Morrell and Alfred Mommsen are the alleged or purported acting members of the alleged Local Board of Review of Assessments of the City of Clinton, Iowa for the purpose of exercising powers conferred by the Iowa 1946 Code § 405.21 [I.C.A.] as respects assessments for taxes for the year 1949 and following years' and that said defendants ‘purport to be and act as members of the Local Board of Review * * * and claim appointment by the appointive board authorized by law to so act as such board in the city of Clinton.’

In other words the petition shows on its face that the above named defendants were the board that was appointed and did act and exercise the powers conferred by law on the local board of review. The only attack is that they were not ‘qualified or proper persons to be appointed to said board of review.’ They were at least de facto officers, under the allegations of the petition, in possession and discharging the duties of their offices under color of authority. State v. Central States Elec. Co., 238 Iowa 801, 28 N.W.2d 457.

The statutes provide for the appointment of the members of the local board at a joint meeting of the members of the school board, board of supervisors, and city council. Chapter 240, Acts of the 52nd G.A., sec. 17 I.C.A. § 405A.3, and Section 405.13, Code 1946, I.C.A. Because of the reference in said section 17 to the earlier statute for procedure for selection there might be some doubt as to the number and qualification requirements of board members. And there might be some doubt as to whether the statute with respect to the qualifications of board members is mandatory or directory. But the question is quite immaterial in the view we take of the case. The question as to whether the appointing tribunal heeded statutory direction in deciding qualifications, need not be determined for a declaration on that question would decide no contested right of the plaintiff.

III. Plaintiff in effect admits the petition shows on its face that the board members were de facto officers. But plaintiff claims the right to assert the invalidity of their acts even though they were de facto officers and asks the court to declare ‘that the plaintiff has been wrongfully deprived of its rights to have its protest heard and acted upon by a duly and properly constituted’ board. Plaintiff recognizes the general rule as to the validity of the acts of de facto officers but states, ‘the usual rule relative to the validity of the actions of a de facto officer does not apply in tax proceedings founded upon an assessment and collection of taxes as such cases are an exception to the de facto rule or doctrine.’

We discover no such exception in the law with respect to the acts of de facto officers. The general rule as stated in 61 C.J., Taxation, sec. 740, is:

‘As a general rule, notwithstanding an irregularity in his title to office arising from his election or appointment thereto, or in the matter of his qualification, if an assessor of taxes is in actual possession and administration of the office so as to be entitled to the character of an officer de facto the assessment which he makes is valid and legal. This rule applies to acts of deputy assessors, disqualified by reason of holding another office, or otherwise. Generally this rule applies to the acts of a board of assessors, but it has been held that a de facto board of assessors, or a board, a member of which is a de facto assessor, cannot assess a valid tax.’

The cases plaintiff cites in support of its argument for the ‘exception’ are Inhabitants of Springfield v. Butterfield, 98 Me. 155, 56 A. 581, and Inhabitants of Otisfield v. Board of Scribner, 129 Me. 311, 151 A. 670. These early Maine cases are the cases cited in the foot-note to the Corpus Juris rule above quoted, for the last statements in the quotation to the effect that some courts have held contra to the general rule that the acts of de facto assessors and boards are valid. Perhaps the decisions could be accounted for by the particular provisions of the Maine statutes involved. It would seem Maine recognizes the validity of a de facto tax collector. See Inhabitants of Greenville v. Blair, 104 Me. 444, 72 A. 177. In any event we do not find where these authorities have engrafted an exception that allows the acts of assessors to be challenged if they were de facto instead of de jure officers.

In 51 Am.Jur., Taxation, sec. 1246, the rule is stated that ‘the validity of a tax cannot be contested on the ground that the assessors were not regularly appointed if it appears that they acted and were recognized as such.’

In Howard v. Burke, 248 Ill. 224, 93 N.E. 775, 777, it is stated: ‘Judicial decisions are practically a unit in holding that the acts of officers de facto, so far as they affect third parties or the public, in the absence of fraud, are as valid as those of officers de jure. This is a wise and salutary rule. This being so, equity will not enjoin the collection of a tax levied in proper form by officials who are acting as de facto officers. Schofield v. Watkins, 22 Ill. 66;Merritt v. Farris, 22 Ill. 303;Metz v. Anderson, 23 Ill. 463, 76 Am.Dec. 704;Union Trust Co. v. Weber, 96 Ill. 346;Sharp v. Thompson, 100 Ill. 447, 39 Am.Rep. 61.’

In Blewett v. Richardson Independent School District, Tex.Civ.App., 230 S.W. 255, 256, the opinion states: ‘There being a de jure office, and he having discharged the duties of it, holding possession, having color of title, and the public generally...