Russman v. Luckett

• Decision Date: 08 June 1965
• Parties: Milton Z. RUSSMAN et al., Appellants, v. James B. LUCKETT et al., Appellees.
• Court: United States State Supreme Court — District of Kentucky

Page 694

391 S.W.2d 694

Milton Z. RUSSMAN et al., Appellants, v. James B. LUCKETT et al., Appellees.

Court of Appeals of Kentucky.

June 8, 1965.

Rucker Todd, Louisville, Donald H. Wollett, New York City, for appellants; Brown, Ardery, Todd & Dudley, Louisville, Kaye, Scholer, Fierman, Hays & Handler, New York City, of counsel.

William S. Riley, Larry A. Carver, Cyril E. Shadowen, Dept. of Revenue, Frankfort, Ky., for appellees.

Hogan, Taylor, Denzer & Bennett, Louisville, for Board of Education, amicus curiae; E. P. Sawyer, Jefferson County Atty., Louisville, James O. Overby, Calloway County Atty., Murray, Sam F. Kibbey, Carter County Atty., Grayson, William A. Young, Franklin County Atty., Frankfort, of counsel.

Lucian L. Johnson, Louisville, amicus curiae for Kentucky Education Ass'n and Board of Education of Jefferson County, Ky.

Morton Holbrook, Owensboro, amicus curiae for Kentucky School Boards Ass'n; Sandidge, Holbrook, Craig & Hager, Owensboro, of counsel.

CLAY, Commissioner.

This suit, along with two others which have been considered together on this appeal, assails and seeks to rectify a tax assessment condition which has existed in Kentucky for many years by reason of the flagrant violation of section 172 of our Constitution and statutes implementing it. That section, and KRS 132.450(1) and KRS 133.150, require the assessment for taxation of all property (not exempted by the Constitution) at 'its fair cash value'. It is not only admitted but has become a matter of common knowledge that real estate and tangible personal property in Kentucky are assessed for tax purposes at varying percentages substantially less than 100 percent of fair cash value. The record indicates that in different taxing districts such property is assessed at percentages ranging from 33 to 12 1/2 percent of such value. The statewide median real estate assessment ratio is approximately 27 percent.

It is perhaps unnecessary to detail the many serious problems that have arisen and will continue to arise by reason of the disparity in the tax burden upon taxpayers in different counties and taxing districts, and the extreme difficulties encountered by certain taxing authorities whose maximum rates are limited by the Constitution or statutes. It is apparent the situation is bad from almost any standpoint, is becoming worse, is unfair, is administratively inefficient, and gives tax Commissioners an unwarranted and arbitrary control of the tax base. More significant than all of these considerations, however, is the fact that the current method of assessment is in direct violation of clearly written mandatory laws. The perennial questions are raised in this case: Who can challenge the status quo, and what should and can be done about it?

This suit was brought in the Franklin Circuit Court against the Commissioner and the Department of Revenue by residents of Louisville and Jefferson County who are respectively taxpayers, parents of school children, and students who attend school, for a declaration of rights and injunctive relief in the nature of mandamus.

McDevitt v. Luckett, Ky., 391 S.W.2d 700, was brought in the Franklin Circuit Court by taxpaying owners of intangible property against the Commissioner of Revenue and the tax commissioners of six counties, seeking a declaration of rights and raising the question of equal protection of law. In that action and the present one the trial court dismissed the complaints on the grounds that the plaintiffs could not maintain the actions because no justiciable controversy was presented, or other remedies were available, or the court should not interfere with the discretion of a member of the executive department of government.

The third suit, Miller v. Layne, Ky., 391 S.W.2d 701, was brought in the Jefferson Circuit Court by a resident property owner and taxpayer of Jefferson County against the tax commissioner of Jefferson County to have the latter removed from office under the provisions of KRS 132.370(3). The trial court dismissed that complaint on the ground the tax commissioner had not violated the law.

Many procedural questions are raised in this suit and the McDevitt case. We have carefully considered them all but do not consider it necessary to detail the arguments. Suffice it to say that in our considered judgment a justiciable controversy is presented. There are no other adequate remedies which may be invoked by these plaintiffs and they have a right to bring these two actions and to obtain a declaration of rights. On the right to bring this suit, we refer the reader to the following authorities: Gay v. Haggard, 133 Ky. 425, 118 S.W.2d 299; Elam v. Salisbury, 180 Ky. 142, 202 S.W. 56; State Text-Book Commission v. Weathers, 184 Ky. 748, 213 S.W. 207.

Let us turn to the merits of the controversy. Section 172 of the Kentucky Constitution, in its entirety, provides:

'All property, not exempted from taxation by this Constitution, shall be assessed for taxation at its fair cash value, estimated at the price it would bring at a fair voluntary sale; and any officer, or other person authorized to assess values for taxation, who shall commit any willful error in the performance of his duty, shall be deemed guilty of misfeasance, and upon conviction thereof shall forfeit his office, and be otherwise punished as may be provided by law.'

KRS 132.440 requires the county tax commissioner to administer an oath to every person listing property in which the taxpayer certified that 'a fair cash value has been placed on all such property required to be valued'.

KRS 132.450(1) provides in part: 'Each county tax commissioner shall assess at its fair cash value all property which it is his duty to assess'. (The remaining part of this subsection provides a method by which this shall be done.)

KRS 133.150 (as amended in 1964) contains the following provisions: 'The Department of Revenue shall equalize each year the assessments of properties among the counties. * * * The Department or Revenue shall fix the assessment of all property at its fair cash value. When the property in any county, or any class of property in any county, is not assessed at its fair cash value, such assessment shall be increased or decreased to its fair cash value by fixing the percentage of increase or decrease necessary to effect the equalization.'

KRS 131.020(1) designates the Commissioner of Revenue as head of the Department of Revenue and as its executive officer who shall have sole charge of the administration of the Department and shall perform all its functions.

Obviously the constitutional provision and the cited statutes exhibit a very specific purpose and a practical plan by which all property in the Commonwealth (not exempted by the Constitution) shall be assessed for taxing purposes at its fair cash value. Nothing in this record suggests any uncertainty, impracticability or inequity in either the purpose or the plan. We will consider briefly the three principal arguments made on behalf of the defendant, the Commissioner of Revenue.

It is said that the constitutional provision and the statutes (KRS 132.440, 132.450 and 133.150) no longer have any legal effect because abrogated by a contrary custom or public policy of 75 years standing. That their mandatory directions have been flagrantly violated for a long time is unquestionable. In 1917 the United States Supreme Court in Louisville & Nashville Railroad Co. v. Greene, 244 U.S. 522, 37 S.Ct. 683, 61 L.Ed. 1291, recognized that for several years prior to 1913 the Kentucky assessing authorities had 'intentionally, systematically and notoriously' assessed property far below its actual cash value. In recent years surveys have been made and the record shows that these violations have been continued and aggravated.

Our attention is called to no authority which would recognize an implied repeal of a constitutional provision because of its continued violation by public officials. The suggestion is appalling. Defendants cite Hill v. Smith, Iowa, 1 Morris 95 (1840), wherein the opinion states that it was contrary to Anglo-Saxon liberty 'to revive, without notice, an obsolete statute' where there was long disuse and a contrary policy. The soundness of such a theory may well be questioned. In District of Columbia v. John R. Thompson Co., 346 U.S. 100, 113, 73 S.Ct. 1007, 97 L.Ed. 1480, the United States Supreme Court held that failure of the executive branch to enforce a law does not result in its modification or repeal, even though there has been long continued disregard of a statute.

Defendants cite Adams v. Norris, 64 U.S. 353, 23 How. 353, 16 L.Ed. 539, and Poe v. Ullman, 367 U.S. 497, 81 S.Ct. 1752, 6 L.Ed.2d 989, but they do not support the proposition contended for.

In any event, we are dealing with our fundamental law. It is not outdated, or obsolete, or contrary to any policy we know of. The public has acquiesced in its nonobservance simply because private rights were not adversely affected and citizens heretofore have not been inclined to take the initiative to compel executive compliance. This law today is just as vital and enforceable as it was the day it was written into the Constitution.

Defendants next contend this Court has in effect nullified section 172 and the implementing statutes by substituting the test of 'uniformity' in place of 'fair cash value'.

After the decision in Greene v. Louisville and Interurban Railroad Company, 244 U.S. 499, 37 S.Ct. 673, 61 L.Ed. 1280, this Court found itself in a dilemma. A taxpayer complained that his property was assessed at 100 percent while other taxpayers in the same taxing district were assessed at a lesser percentage. Under the first amendment to the Federal Constitution, which provided for equal protection of the law, it was obvious the taxpayer was unjustly discriminated against. There were only two ways to equalize the assessments. Either the assessments of other property owners must be...