Shriver v. Board of County Com'rs of Sedgwick County

• Decision Date: 07 April 1962
• Docket Number: No. 42647,42647
• Citation: 370 P.2d 124,189 Kan. 548
• Parties: Garner E. SHRIVER (Substituted) and Elizabeth S. Navas, Trustees of a Trust Fund Created by Louise C. Murdock, Deceased, Appellees, v. The BOARD OF COUNTY COMMISSIONERS OF SEDGWICK COUNTY, Kansas, and H. B. Scott, Vernon E. Reed, and Floyd Schroeder, as Members of Said Board (Substituted), and Earl Nethercot, County Treasurer of Sedgwick County, Kansas (Substituted), Appellants.
• Court: Kansas Supreme Court

Page 124

370 P.2d 124

189 Kan. 548

Garner E. SHRIVER (Substituted) and Elizabeth S. Navas Trustees of a Trust Fund Created by Louise C Murdock, Deceased, Appellees, v. The BOARD OF COUNTY COMMISSIONERS OF SEDGWICK COUNTY Kansas, and H. B. Scott, Vernon E. Reed, and Floyd Schroeder, as Members of Said Board (Substituted), and Earl Nethercot, County Treasurer of Sedgwick County, Kansas (Substituted), Appellants.

No. 42647.

Supreme Court of Kansas.

April 7, 1962.

Syllabus by the Court

The record in an action brought by testamentary trustees as the owners of a commercial office building to recover the first half of the 1937 and 1959 taxes assessed against the property and to enjoin the collection of the last half of the taxes for those years, upon the ground that it was exempt from taxation under Article 11, Section 1 of the constitution of Kansas, and G.S.1949, 13-1406, is examined, and, as more fully set forth in the opinion, it is held: The district court erred in overruling the defendants' motion to vacate the void portion of the judgment entered on June 7, 1938, and the void judgment entered September 7, 1960.

Peter F. Caldwell, Topeka, Attorney for the Director of Property Valuation of the State of Kansas, argued the cause, and Ralph E. Gilchrist, Wichita, County Counselor for Sedwick County, and Lewis C Carter, Topeka, Attorney for the Director of Property Valuation of the State of Kansas, were with him on the briefs for appellants.

Eugene G. Coombs, Wichita, argued the cause, and J. Edward Taylor, Jr., William H. Dye, and Russel N. Barrett, Wichita, were with him on the briefs for appellees.

FATZER, Justice.

This appeal is from the district court's order of March 31, 1961, overruling the defendants' motion to vacate the alleged void portion of a judgment rendered June 7, 1938, and to vacate the alleged void portions of a second judgment entered September 7, 1960, interpreting the effect of the former judgment. The basic question presented is whether an office building owned by the plaintiff testamentary trustees under the will of Louise C. Murdock is exempt from taxation under either Article 11, Section 1 of the constitution of Kansas, or G.S.1949, 13-1406. The plaintiff appellees concede that if the defendant appellants were not enjoined from assessing and taking the building by the 1937 judgment as interpreted and applied to the property by the 1960 judgment, the property is not exempt and should be taxed as other real property.

In 1915 Louise C. Murdock died intestate, a resident of the city of Wichita. Her will was duly admitted to probate and the estate was administered and closed according to law. The terms of the decedent's will here pertinent were considered in Parkinson, Executor v. Murdock, 183 Kan. 706, 332 P.2d 273, quoted on pages 706 and 707, and are incorporated herein by reference.

On November 7, 1937, the district court entered an order establishing the trust and as a part of its judgment, found that the beneficial interest therein was vested in the cestui que trust, the city of Wichita. It also found that it was unable to reach a satisfactory conclusion whether the property was exempt from taxation, but believed there was sufficient probability of its exemption to justify the trustees in presenting the question for final determination.

The property in controversy and the principal asset of the decedent's estate, is the Caldwell-Murdock office building in downtown Wichita, hereafter referred to as the building. At all times since the trust was vested in the cestui que trust, the trustees have operated the property as a commercial office building, renting space therein to commercial tenants, and after paying the necessary costs of operation and maintenance of the building and costs of administration of the trust, they have used the net proceeds for the purpose of purchasing works of art for the Roland P. Murdock Collection, owned by the city of Wichita.

On December 8, 1937, the trustees paid the first half of the 1937 taxes under written protest pursuant to G.S.1935, 79-2005, and on February 8, 1938, they commenced an action against the then county treasurer and board of county commissioners of Sedgwick County to recover the first half of the 1937 taxes, and to enjoin the defendants from collecting the last half of the taxes due for that year. The protest attached to the petition stated that since the beneficial interest of the trust was vested in the city of Wichita, the taxes must necessarily be paid out of the income of the property and they must be paid by the city, hence, the building was exempt under that portion of G.S.1935, 13-1406, which reads:

'Lands, buildings, money, debts due the city and all other property and assets belonging to the city shall be exempt from taxation, execution, and sale.'

The protest further stated the building was exempt from taxation under that portion of Article 11, Section 1 of the constitution of Kansas, which reads:

'All property used exclusively for state, county, municipal, literary, educational, scientific, religious, benevolent and charitable purposes * * * shall be exempt from taxation.'

It is unnecessary to quote at length from the plaintiffs' petition, but its allegations have been carefully considered and they disclose the fact that no mention was made of any taxes for any year except taxes for 1937 paid under protest in the amount of $2,695.56, and that,

'unless enjoined and restrained the defendants will compel the plaintiffs to pay the tax for the last half of the year 1937 * * * and that plaintiffs will suffer irreparable loss and damage unless the defendants are enjoined and restrained from collection of the taxes for the last half of the year 1937.' (Emphasis supplied.)

Relief beyond the taxes for 1937 was not prayed for, and the general prayer was 'for such other and further relief as the Court may seem just and proper in the premises and for the costs of the action.' The defendants filed no answer, but the parties stipulated to the facts framing the issues for decision, which likewise made no reference to any taxes other than those for the year 1937.

On June 7, 1938, the district court entered its judgment on the petition and stipulation of facts and found 'that the property * * * is exempt from taxation and that the prayer of the petition should be granted.' The judgemnt portion of the journal entry restrained the defendants from collecting ad valorem taxes on the property, including the last half of 1937, and directed them to repay the sum of $2,695.56 paid under protest. The court retained jurisdiction of the parties and the cause for the purpose of enforcing the decree.

No appeal was taken from that judgment and the building was removed from the tax rolls for 1938 and remained off until 1959, when it was placed on the rolls and assessed for that year. The plaintiffs paid the first half of the 1959 taxes under written protest pursuant to G.S.1949, 79-2005, and on January 15, 1960, filed an application for relief from a tax grievance with the board of tax appeals pursuant to G.S.1949, 79-1701 et seq., as amended. On April 20, 1960, the board heard the plaintiffs' application, and on September 2, 1960, it entered an order finding the building was not exempt from taxation, and denied the application.

On August 17, 1960, and prior to the decision of the board of tax appeals, the plaintiffs filed a motion in the original action commenced in 1938 for an order directing the defendants to (1) refund to the plaintiffs the first half of the 1959 taxes, (2) remove the building from the tax rolls of Sedgwick County on the ground the property was adjudged to be exempt from taxation as shown by the judgment entered on June 7, 1938, and (3) require the defendants to show cause why they should not be held in contempt of the court for failure to abide by and carry out the 1938 judgment.

On September 7, 1960, the district court sustained parts 1 and 2 of the motion, and found that the judgment rendered June 7, 1938, finding the building exempt from taxation and restraining the defendants from collecting ad valorem taxes on the property had never been appealed from, modified or reversed and that it was final and binding on all parties on that date and continued to be so long thereafter as the property retained its present status and ownership. The defendants were directed to refund the first half of the 1959 taxes in the amount of $5,739.80; to immediately remove the building from the tax rolls of Sedgwick County, and they were restrained from placing it on the tax rolls until the further order of the court. Part 3 of the motion was overruled. (The defendants appealed to this court from that judgment, case No. 42,376, but the appeal was dismissed on March 4, 1961, upon motion of the defendants.)

Thereafter, and on September 20, 1960, the defendants filed a motion in the 1938 action to vacate the void portion of the 1938 judgment and the void portions of the 1960 judgment. The motion alleged that the 1938 judgment, as construed and applied by the district court in its 1960 judgment, was outside the issues raised by the pleadings and the evidence; that the court was without jurisdiction in that action to enjoin the collection of taxes for the years subsequent to 1937 since no issue was there raised concerning subsequent taxes, and that the portion of the judgment which purpoted to enjoin the defendants from collecting taxes for years subsequent to 1937 was void, and Beach, Treas., v. Shoenmaker, Trustee, 18 Kan. 147, was cited and relied upon. The motion further alleged that the 1960 judgment was void and of no effect for the reason that the district court had no authority to entertain in the original action, the plaintiffs' motion filed August 17, 1960, for a refund of the first half of 1959 taxes and to remove the building from the tax rolls. It also alleged that the plaintiffs, having made application to the...