Signal Oil & Gas Co. v. Williams County

• Citation: 206 N.W.2d 75
• Decision Date: 08 March 1973
• Docket Number: No. 8863,8863
• Parties: SIGNAL OIL AND GAS COMPANY, Respondent, v. WILLIAMS COUNTY, North Dakota, a public corporation, Appellant. Civ.
• Court: United States State Supreme Court of North Dakota

Page 75

206 N.W.2d 75

SIGNAL OIL AND GAS COMPANY, Respondent, v. WILLIAMS COUNTY, North Dakota, a public corporation,

Appellant.

Civ. No. 8863.

Supreme Court of North Dakota.

March 8, 1973.

Rehearing Denied April 12, 1973.

Syllabus by the Court

Section 11--11--39, North Dakota Century Code, which provides that an appeal may be taken to the district court from any decision of the Board of County Commissioners by any person feeling aggrieved thereby, includes an appeal to the district court from a decision of the Board of County Commissioners sitting as the County Board of Equalization. The subsequent enactment of a law which gives to the taxpayer an additional right to request annulment or abatement of taxes and provides that no action shall be brought in the courts of the State for abatement or annulment of taxes until the issue shall have been submitted to the Board of County Commissioners for adjustment does not deprive a taxpayer of his right to appeal from a decision of the County Board of Equalization.

2. A taxpayer should not be required to present its claim to the Board of County Commissioners after that identical board, sitting as the County Board of Equalization, has denied its protest. The law will not require an idle act. Sec. 31--11--05, Subsec. 23, N.D.C.C 3. The parties to an appeal to the district court from a decision of the Board of County Commissioners, sitting as the Board of Equalization, may invoke the original jurisdiction of the district court by voluntarily submitting to it for a decision a related issue of law or fact, and where this is done the respondent in such appeal after an adverse judgment cannot attack such judgment on the ground that the trial court was without jurisdiction to try the issue.

4. An Act of the Legislature must be presumed to be constitutional, and any doubt as to its validity must, if at all possible, be resolved in favor of its validity.

5. Section 176 of the North Dakota Constitution grants to the Legislative Assembly discretion and authority to classify various subjects, including property and persons, for tax purposes. This authority is subject only to the limitation that such classification must not be arbitrary or discriminatory.

6. If the classification of property for taxation purposes rests upon some reasonable consideration of difference or policy, there is no denial of equal protection of the laws. Such classification is not arbitrary or violative of the Equal Protection Clause of the Fourteenth Amendment if facts can reasonably be conceived which would sustain it.

7. Where the law provides for the taxation of machinery and equipment, not including small tools and office equipment, used or intended for use in any process of refining products from oil and gas extracted from the earth, and not including equipment located on leased oil- and gas-production sites, but does not include taxation of machinery and equipment used or intended for use in any process of refining other natural fuels such as lignite coal, such classification is not arbitrary or unreasonable.

8. For reasons stated in the opinion, the judgment of the district court ordering abatement of all that portion of the total assessed valuation of Signal's property attributable to machinery and equipment is reversed, and judgment is ordered to be entered in favor of Williams County.

Bjella & Jestrab, Williston, for respondent.

Gerald Rustad, Asst. State's Atty., Williston, for appellant.

Kenneth M. Jakes, Sp. Asst. Atty. Gen., North Dakota State Tax Department, Bismarck, amicus curiae.

STRUTZ, Chief Justice.

Signal Oil and Gas Company, hereinafter referred to as Signal, owns and operates a gas-separation plant located in Tioga Township, Williams County. In 1971, the assessor for the Township assessed as real property all the land, buildings, structures, fixtures, machinery, and equipment of this plant. The land was assessed at $560 an the buildings, structures, fixtures, machinery, equipment, and other improvements were assessed at $2,724,222, for a total assessed valuation of $2,724,782. This assessment was protested by Signal before the Township Board of Equalization on grounds that it was illegal. The protest was disallowed by the Township Board of Equalization.

On July 1, 1971, Signal appealed to the Board of County Commissioners, sitting as the County Board of Equalization. This appeal was in the following language:

'. . . Specifically taxpayer protests the assessment as made by the Township Assessor and appeals from the decision of the Township Board of Equalization to the extent that said assessment specifically includes within the value of real estate for real estate tax purposes tanks and loading facilities having an actual value of $1,112,261, an assessed valuation of $266,942, and a taxable valuation of $133,471. Taxpayer requests that the proposed 1971 assessment be adjusted by deleting the value assigned to such tanks and loading facilities on the grounds and for the reason that said property is not real estate within the statutory definition and is not used or intended for use in any process of refining.'

This appeal was denied by the County Board of Equalization.

On August 24, 1971, Signal appealed to the State Board of Equalization, objecting to the appraisal, valuation, and assessment on grounds that the same were illegal. The State Board of Equalization denied this appeal.

Signal also appealed to the district court of Williams County from the decision of the Williams County Board of Equalization denying its protest. This appeal apparently was taken under the provisions of Section 11--11--43, North Dakota Century Code. At the trial, the issues and the relief demanded by Signal were broadened, and Signal not only requested an abatement of the assessed valuation of the tanks and loading facilities, which was its demand before the County Board of Equalization, but also demanded that the assessed valuation of all other machinery and equipment in the gas-separation plant be abated on the ground that such machinery and equipment were not taxable under Section 57--02--04, North Dakota Century Code. It further asserted--in the event that this property was held to come within the scope of the above section--that the law was unconstitutional.

The district court entered judgment for Signal, ordering the Board of County Commissioners, sitting as the County Board of Equalization, to abate the taxes of Signal for that portion of the total assessed valuation of its gas-separation plant which covered machinery and equipment. The court found and concluded that the machinery and equipment owned by Signal were, in fact, taxable under Subsection 3 of Section 57--02--04. It further held that that subsection was unconstitutional and in violation of Section 176 of the North Dakota Constitution, and that it violated the Equal Protection Clause of the Fourteenth Amendment of the United States Constitution. Neither the findings, conclusions of law, nor judgment of the court disclose whether any relief was granted by the district court with respect to Signal's demand for abatement of the total assessed valuation of storage tanks and loading facilities, which was its demand before the County Board of Equalization.

After the entry of judgment, Williams County moved for a new trial under Rule 59, North Dakota Rules of Civil Procedure, the County asserting that the trial court lacked jurisdiction to review the action of the County Board of Equalization, except as it related to the assessment of Signal's storage tanks and loading facilities, since that was the issue raised by Signal in its appeal to the County Board of Equalization. The court denied the motion for a new trial on the ground that the issue presented by Signal in the district court had been tried by the mutual consent of the parties, and the judgment which granted relief beyond that which had been requested by Signal in its appearance before the County Board of Equalization therefore was an appropriate exercise of the court's jurisdiction.

This determination by the trial court is claimed by the County to be error on this appeal. The County asserts that Signal's appeal to the district court was from a decision of the Board of County Commissioners sitting as the Board of Equalization, and that Signal first should have presented its claim to the Board of County Commissioners, as provided in Section 57--45--09, North Dakota Century Code. That section provides:

'No action shall be brought in the courts of this state to annul any taxes or tax assessments, . . . or to recover back taxes erroneously paid, or any part thereof, until the same first shall have been submitted to the board of county commissioners for adjustment in accordance with the existing law, and any action brought without having been first submitted to the board of county commissioners shall be dismissed without prejudice.'

We conclude that the trial court correctly denied the motion for new trial and properly refused to dismiss the appeal. Section 103 of the North Dakota Constitution provides, in part:

'The district courts shall have original jurisdiction, except as otherwise provided in this constitution, of all causes both at law and equity, and such appellate jurisdiction as may be conferred by law. . . .'

Section 11--11--39, North Dakota Century Code, provides that an appeal may be taken to the district court from any decision of the Board of Couny Commissioners by any person feeling aggrieved thereby. Signal chose to appeal from the decision of the County Board of Equalization on the ground that the decision upheld the Township's assessment of its property and refused to find any part of the tax invalid. This court in the early case of In re First National Bank of Hillsboro, 25 N.D. 635, 146 N.W. 1064 (1898), held that the provision of law which now is found in our Code as Section 11--11--39 permits an appeal to be taken to the district court...