S. S. Kresge Co. v. Jensen

• Decision Date: 14 June 1957
• Docket Number: No. 34193,34193
• Citation: 83 N.W.2d 569,164 Neb. 833
• Parties: S. S. KRESGE COMPANY, Appellant, v. Carl W. JENSEN, Treasurer, Douglas County, Nebraska, et al., Appellees.
• Court: Nebraska Supreme Court

Page 569

83 N.W.2d 569

164 Neb. 833

S. S. KRESGE COMPANY, Appellant, v. Carl W. JENSEN, Treasurer, Douglas County, Nebraska, et al., Appellees.

No. 34193.

Supreme Court of Nebraska.

June 14, 1957.

Syllabus by the Court

1. The state is not a necessary party in an action by a taxpayer for a declaratory judgment attacking the validity of an assessment brought against the county treasurer and the county in which the property was assessed.

2. The assessment of property is not final until acted upon by the county and state boards of equalization, and not until the action of the latter is certified to the county clerks of the different counties and by them extended upon the tax rolls.

3. Individual discrepancies and inequalities must be corrected and equalized by the county board of equalization.

4. One aggrieved by the action of a county board of equalization may appeal to the district court. One who fails to pursue this remedy is precluded from objecting to the valuation of his separate property for taxation purposes and a collateral attack may not be made thereon except where the assessment is void, willfully discriminatory, or the result of fraud.

5. It is the function of the county board of equalization to determine the actual value of property for tax purposes and give effect to the constitutional requirement that taxes be levied uniformly and proportionately upon all taxable property.

6. The right of a taxpayer, whose property alone is taxed at 100 percent of its actual value, is to apply to the county board of equalization to have his assessment reduced to the percentage of that value at which others are assessed, even though this is a departure from the requirements of the statute. Uniform and proportionate taxation is a constitutional requirement and consequently the prime consideration.

7. The State Board of Equalization and Assessment cannot deal with individual assessments, nor take into consideration inequalities as between individual taxpayers. It deals only with the values of the taxable property of a county in the aggregate.

8. When a taxpayer fails to exercise his right to a hearing before the county board of equalization regarding his individual property valuation for tax purposes, or to appeal therefrom if he is dissatisfied, he is precluded from attacking the amount of the valuation collaterally because of a valid order of the State Board of Equalization and Assessment raising the valuation in the aggregate of all property in the county to secure uniform and proportionate assessments. This is so even if it results in the assessment of his individual property in excess of its actual value.

Young, Holm & Miller, John E. North, Omaha, for appellant.

Eugene F. Fitzgerald, George C. Pardee, Edward F. Fogarty, Wm. Ross King, Bernard E. Vinardi, Omaha, Clarence S. Beck, Atty. Gen., Lincoln, John C. Burke, Omaha, for appellees.

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

CARTER, Justice.

This is an action for a declaratory judgment determining the rights and obligations of appellant with reference to its liabilities for personal property taxes for 1953. The parties defendant are Carl W. Jensen, treasurer for Douglas County, Nebraska; Metropolitan Utilities District of Omaha; the Municipal University of Omaha; the School District of Omaha; the City of Omaha; the County of Douglas; and the State of Nebraska. The trial court found against the appellant and dismissed the action. The appellant has appealed.

The appellant, whom we shall hereafter refer to as the company, is a Michigan corporation duly qualified to transact business in this state. It operates two retail stores in the city of Omaha. On April 20, 1953, the company filed its personal property tax return on its two stores covering the value of its stock inventories and the furniture and fixtures. The evidence is stipulated and consequently there is no question of fact to be here determined.

The company calculated the valuation of its inventory in its downtown store in the following manner: A physical inventory of all goods, wares, and merchandise in the store was taken as of the close of business on December 31, 1952. This inventory was extended to show its cost value in the amount of $134,699. The amount of merchandise purchased in January and February 1953, amounting to $127,959, was added thereto, making a total of $262,658. The sales for the months of January and February 1953, amounted to $173,835. The percent of gross profit for these 2 months was shown to be $65,119. This latter item was deducted from the gross sales for January and February 1953, leaving a cost inventory for those months of $108,716. This item was deducted from the total cost of purchases made, leaving a cost inventory of $153,942, which it returned for assessment purposes. The company also reported the cost price of all furniture and fixtures at $117,994. It returned this item for taxation purposes at 50% of its cost, the same being $58,997. The total valuation of inventory and furniture and fixtures for tax purposes amounted to $212,939. By a similar method of calculation the inventory and furniture and fixtures at the South Omaha store were reported at $43,146 and $19,014 respectively. The total taxable value of the South Omaha store was therefore returned at $62,160.

The record shows that on July 28, 1953, the State Board of Equalization and Assessment increased the valuation of business schedules in Douglas County by 40 percent. On November 3, 1953, the county treasurer demanded a personal property tax on the downtown store on taxable valuation of $149,060 and an actual valuation of $298,120 instead of the total valuation of $212,939 as reported by the company. On the same day taxes were demanded on the personal property of the South Omaha store upon a taxable valuation of $43,510 based upon an actual valuation of $87,020, instead of the total valuation of $62,160 as reported by the company. On December 10, 1953, the company tendered $4,717.78 in payment of all taxes due on the downtown store and $1,376.26 for all taxes due on the South Omaha store. The tendered payments were the amounts due on the 100 percent actual valuation fixed by the county board of equalization before the State Board of Equalization and Assessment made its order increasing the valuation of business schedules in Douglas County by 40 percent. The tenders were refused and this action commenced to compel their acceptance.

It will be noted that the company reported its inventories at its actual cost and the furniture and fixtures at 50 percent of cost. There is no evidence of any depreciated value of the furniture and fixtures. Assuming that the stipulated facts are sufficient to find that the furniture and fixtures were reported for assessment purposes at their actual value, the result would necessarily be the same as in the case of the stock inventories.

The State of Nebraska filed a special appearance by which it was asserted that it was subject to suit only in Lancaster County and that the district court for Douglas County was without jurisdiction. The special appearance was sustained. It is now contended that the State of Nebraska is a necessary party and that the district court for Douglas County was without jurisdiction to hear the action. This issue was determined in Offutt Housing Co. v. County of Sarpy, 160 Neb. 320, 70 N.W.2d 382, 384, wherein we said: 'Relying solely upon section 25-24,159, R.R.S.1943, defendants also argued that the state was a necessary party defendant, thus there was a defect of parties. We conclude that the contention has no merit. * * * This court has uniformly entertained jurisdiction in cases brought to enjoin the collection of void taxes wherein only the county in which the property is located and the county treasurer thereof have been made parties defendant. Rothwell v. Knox County, 62 Neb. 50, 86 N.W. 903; Y.M.C.A. of Omaha v. Douglas County, 60 Neb. 642, 83 N.W. 924, 52 L.R.A. 123. See, also, 28 Am.Jur., Injunctions, § 275, p. 450.' The State of Nebraska is not a necessary party in an action by a taxpayer for a declaratory judgment attacking the validity of an assessment brought against the county treasurer and the county in which the property was assessed.

It is the contention of the company that it reported its stock inventories and furniture and fixtures to the assessor of Douglas County at actual value and that the 40 percent increase ordered by the State Board of Equalization and Assessment had the effect of taxing the property included in its business schedules at 140 percent of actual value. It contends that this is...