Sandia Sav. & Loan Ass'n v. Kleinheim

• Decision Date: 06 April 1964
• Docket Number: No. 7356,7356
• Citation: 1964 NMSC 67,74 N.M. 95,391 P.2d 324
• Parties: SANDIA SAVINGS AND LOAN ASSOCIATION, a Corporation, Plaintiff-Appellant, v. Mae KLEINHEIM, Treasurer of Bernalillo County, State of New Mexico, Defendant-Appellee.
• Court: New Mexico Supreme Court

Page 324

391 P.2d 324

74 N.M. 95

SANDIA SAVINGS AND LOAN ASSOCIATION, a Corporation Plaintiff-Appellant, v. Mae KLEINHEIM, Treasurer of Bernalillo County, State of New Mexico, Defendant-Appellee.

No. 7356.

Supreme Court of New Mexico.

April 6, 1964.

Cornell & Clayburgh, Albuquerque, for appellant.

Earl E. Hartley, Atty. Gen., Thomas A. Donnelly, Asst. Atty. Gen., Santa Fe, for appellee.

John B. Speer, Sp. Asst. Atty. Gen., Santa Fe, amicus curiae.

MOISE, Justice.

Plaintiff is a capital stock building and loan association organized under the provisions of Chap. 279, N.M.S.L.1959 (Secs. 48-15-26 to 48-15-37, inc., N.M.S.A.1953).

For the year 1961 the state tax commission determined the actual value of the shares of capital stock of plaintiff and certified the same to the local assessor of Bernalillo County, as required by Sec. 72-6-4, N.M.S.A.1953. The value certified was determined in accordance with Sec. 72-6-6, N.M.S.A.1953, which provides the method for valuing shares of banks, trust companies and mortgage loan companies, and was done in compliance with the provisions of Sec. 48-15-36, N.M.S.A.1953, which reads:

'All capital stock building and loan associations shall be listed and assessed for taxation in the same manner as state banks are listed and assessed.'

Plaintiff timely paid the first half of the taxes so assessed, stating that it was doing so under protest. Within 90 days of making the payment it brought this action seeking refund of the amount paid, alleging the tax was null and void for the following reasons:

'A. That Section 72-6-6, New Mexico Statutes Annotated is unconstitutional as creating a discrimination between capital stock savings and loan associations and mutual building and loan associations, who are exempt from the operation of the Act.

'B. That the method of valuing shares of stock in the Association was an invidious assessment, and did not follow the method of assessment followed in Bernalillo County in assessing other real estate and personal property.

'C. That the assessment is discriminatory as against other property owners who are assessed on the basis of 16% of true or market value, whereas this assessment was upon 100% of value.

'D. That the tax is discriminatory and contrary to the provisions of Article VIII, Section 1 of the Constitution of New Mexico, which reads as follows:

"Taxes levied upon tangible property shall be in proportion to the value thereof, and taxes shall be equal and uniform upon subjects of taxation of the same class.'

'E. The assessment and tax levy was and is unlawful, invalid, and unfair for the reason that it constitutes an arbitrary, wilful and intentional scheme and method of discriminating against one class of property, to-wit: permanent capital stock of state chartered savings and loan associations as against other forms and types of stock and personal property.'

The district attorney, appearing on behalf of the defendant-treasurer, moved to dismiss the complaint for the reason that the assessment was made by the state tax commission, and the complaint failed to state a cause of action against the county treasurer.

The following two sections are involved.

72-5-4. 'Ad valorem taxes paid voluntarily to any officer authorized to collect the same shall not be refunded or rebated in any instance, unless such person presents a claim to the district court by petition within ninety (90) days from the date of the payment thereof, claiming the same to have been erroneously or illegally charged. It shall be the duty of the district attorney, upon notice, to appear in response to such petition without the necessity of the issuing or service of the process, and the court shall hear and determine the matter and enter such judgment as the facts may require. All taxes paid under protest shall, by the treasurer or other collecting agency, be held in a suspense fund until legal proceedings for the determination of the right thereto shall have been concluded, at which time they shall be disposed of in accordance with the final judgment in such proceedings; Provided, that in case no legal proceedings shall be effectively begun within ninety (90) days from the date of the payment thereof, such moneys shall thereupon be funded and distributed as other taxes, and shall thereafter not be subject to repayment.'

72-6-8.2 'Any owner of property subject to valuation by the state tax commission may protest the valuation fixed by the state tax commission on his property, by filing with the commission a written application for hearing and protest of such valuation within fifteen days from the date of mailing of notice of valuation as provided in section 1[72-6-8.1] of this act * * *.'

The court below determined that plaintiff should have exhausted the administrative remedies provided in Sec. 72-6-8.2, N.M.S.A.1953, and having failed to do so had no standing to sue under Sec. 72-5-4, N.M.S.A.1953, and accordingly, dismissed the complaint. Plaintiff appeals from this action.

Rather than consider any questions of discrimination or valuation, it would seem appropriate that we first determine if plaintiff proceeded properly, or if the court correctly held that plaintiff was required to exhaust the administrative remedies provided in Sec. 72-6-8.2, N.M.S.A.1953.

At the outset we note that Sec. 72-5-4, N.M.S.A.1953, was adopted as Chap. 27, N.M.S.L.1945. However, it provided the method for obtaining a refund of taxes 'erroneously or illegally charged,' as did Chap. 143, N.M.S.L.1933. In the case of In re Blatt, 41 N.M. 269, 67 P.2d 293, 110 A.L.R. 656, we said:

'The phrase 'erroneously or illegally charged' has a well-established meaning as found in such statutes.

"Statutes expressly provide for refunding in many states. Some of these statutory enactments contain provisions which call for the refunding of taxes in those cases in which taxes illegally assessed are paid under a mistake of fact, or where there has been some clerical mistake in the assessment or collection of taxes. The term 'erroneously assessed,' as used in such a statute, means an assessment illegal because of a jurisdictional defect and does not include a mere error of judgment in valuing the property.' Section 1259, c. 20, Cooley Taxation, vol. 3 (4th Ed.) pp. 2501 to 2506, inc.'

The court went on to hold that relief from excessive assessments could not be obtained under the statute, stating:

'That Laws 1933, c. 143, does not contemplate the relief of reduction of assessment on the mere determination that it is excessive we have sufficiently demonstrated. Its purpose is not to enable a judge to substitute his opinion of property values for the opinion of the assessing authorities, and that the statutory criterion 'erroneously or illegally charged,' correctly interpreted means only such assessments or excesses in assessments as are 'illegal and void."

It seems quite apparent to us that allegations that a law upon which a tax assessment is based is unconstitutional raises a claim that the taxes were 'erroneously or illegally charged' and is properly within the court's jurisdiction to consider under the statute and quoted language from In re Blatt, supra. Compare Lougee v. New Mexico Bureau of Revenue Commissioner, 42 N.M. 115, 76 P.2d 6. See also, Wheatland v. City of Boston, 202 Mass. 258, 88 N.E. 769; Commercial National Bank of Council Bluffs v. Board of Supervisors of Pottawattami County, 168 Iowa 501, 150 N.W. 704; Clay County v. Brown Lumber Co., 90 Ark. 413, 119 S.W. 251. This is true unless it was mandatory that plaintiff follow the administrative procedures of Sec. 72-6-8.2, N.M.S.A.1953, before it could question the...