The Citizens National Bank and The Emporia National Bank v. The Board of County Commissioners of The County of Lyon

• Decision Date: 05 November 1910
• Docket Number: 16,685
• Parties: THE CITIZENS NATIONAL BANK and THE EMPORIA NATIONAL BANK, Appellees, v. THE BOARD OF COUNTY COMMISSIONERS OF THE COUNTY OF LYON et al., Appellants
• Court: Kansas Supreme Court

111 P. 496

83 Kan. 376

THE CITIZENS NATIONAL BANK and THE EMPORIA NATIONAL BANK, Appellees, v. THE BOARD OF COUNTY COMMISSIONERS OF THE COUNTY OF LYON et al., Appellants

No. 16,685

Supreme Court of Kansas

November 5, 1910

Decided July, 1910.

Appeal from Lyon district court.

SYLLABUS

SYLLABUS OF THE COURT.

1. TAXATION--Discrimination--Injunction--Petition. In an action by a bank to restrain the collection of a portion of the taxes levied against its property a petition alleging that by resolutions adopted by the township and city assessors in the year 1907 real estate in Lyon county was assessed at twenty-five per cent of its cash value, and personal property, including the capital shares and surplus of the plaintiffs, at forty per cent of their cash value, and that before commencing suit the plaintiffs tendered to the county treasurer the full amount of the state taxes and the amount they claimed was due the county, based upon the proper valuation, and averred a willingness to pay whatever sum the court should determine to be its valid share of taxes, states a cause of action for equitable relief.

2. TAXATION--Differences in Valuations Intentionally Made by Assessors. In such an action, where it appears from the evidence that the resulting differences in the valuations have not arisen from mere differences of opinion of the taxing officers as to the actual value of the different classes of property, but were the result of an arbitrary capricious and unlawful agreement by the assessors to list for taxation different classes of property at different rates of valuation, equity will afford relief by enjoining the collection of so much of the taxes as are in excess of the plaintiffs' fair and equal share of the whole amount of taxes to be raised.

W. C Harris, M. M. Suddock, and O. S. Samuel, for the appellants.

C. M. Kellogg, L. B. Kellogg, and R. M. Hamer, for the appellees.

OPINION

PORTER, J.:

This action was brought to restrain the collection of a portion of the taxes levied against the personal property of the plaintiffs for the year 1907. The court rendered judgment permanently enjoining the collection of so much of the taxes as we're adjudged to be invalid. The defendants appeal.

The petition alleged that real estate in Lyon county for the year 1907 was assessed at twenty-five per cent of its cash value--that being the valuation placed thereon in the year 1906, which, under the law, remained the same for two years--while personal property, by an agreement entered into by the township and city assessors, was assessed at forty per cent of its cash value. The evidence fully established these averments, and, in addition, showed that the assessors at their annual meeting in March, 1907, agreed to, and afterward did, assess all cattle, horses, live stock, farming implements and household furniture at certain fixed and arbitrary values, without reference to their actual cash value, so that these classes of personal property were assessed at less than thirty per cent of their actual value. There were, therefore, in the year 1907, three different rates employed in the valuation of property in Lyon county for the purposes of taxation. Real estate was assessed at twenty-five per cent, personal property other than real estate and for the most part owned by farmers at about thirty per cent, and all other personal property, including the capital and surplus of the plaintiff banks, at forty per cent of the cash value. These different rates of valuation were fixed and agreed upon by resolutions adopted by the township and city assessors.

It is apparent that the resulting differences in the valuations of the different kinds of property can not be said to have arisen from mere differences of opinion of the taxing officers as to the actual value of the different classes of property, but, on the contrary, they were the result of an arbitrary and unlawful agreement by the assessors to list for taxation different classes of property at different rates of valuation. There is, therefore, no force in the contention of the defendants that courts of equity will afford no relief against the kind of discrimination alleged, or that the petition failed to state a cause of action because it failed to show fraud or corruption on the part of the officers, within the doctrine of Symns v. Graves, 65 Kan. 628, 70 P. 591, and Finney County v. Bullard, 77 Kan. 349. The cases relied on differ very materially in their facts from the case under consideration.

This court has always adhered to the rule that it will not enjoin the collection of taxes upon the sole ground that the taxes are excessive or unequal, where the inequality arises from mere errors of judgment. Equity will grant no relief for errors and inequalities in assessments arising out of the accidental omission of property from the tax rolls or the accidental differences in valuations resulting from errors of judgment, however unjust or excessive the result may appear, if no fraud is shown on the part of the taxing officers or the statutory board of review. This is the doctrine of Symns v. Graves, 65 Kan. 628, 70 P. 591, and Finney County v. Bullard, 77 Kan. 349. In the latter case the first paragraph of the syllabus reads:

"Injunction will not be awarded to prevent the collection of a tax on the ground of an irregular or excessive assessment unless the case comes clearly under some acknowledged head of equity jurisdiction."

In Symns v. Graves, supra, it was said:

"The district court could not substitute its judgment for that of the board of equalization, and this court can not impose its notion of value on either." (p. 636.)

(See, also, Bank of Garnett v. Ferris, 55 Kan. 120, 39 P. 1042, and Electric Co. v. Jackson County, 81 Kan. 6.)

On the other hand, it was held in Symns v. Graves, supra, that courts have power to relieve against injustice resulting from fraud, corruption and conduct so oppressive, arbitrary or capricious as to amount to fraud. Again, it was said in Salt Co. v. Ellsworth County, 82 Kan. 203:

"If they assessed another salt plant at $ 45,000, knowing that it was of greater value than that of appellant, which was placed at $ 260,000, it was an intentional discrimination and a fraud upon appellant, and if the assessment against appellant is excessive it affords good grounds for the interposition of a court of equity." (p. 205.)

The situation here presents stronger grounds for the interference of a court of equity than the case just cited. The action of the officers in assessing one class of personal property at forty per cent, another at thirty per cent and real estate at twenty-five per cent of its cash value was the result of deliberation and intention, and was so arbitrary and capricious as to constitute fraud on the rights of the plaintiffs. The constitution declares that "the legislature shall provide for a uniform and equal rate of assessment and taxation" (art. 11, § 1), and section 2 of the same article reads:

"The legislature shall provide for taxing the notes and bills discounted or purchased, moneys loaned, and other property, effects, or dues of every description (without deduction), of all banks now existing, or hereafter to be created, and of all bankers; so that all property employed in banking shall always bear a burden of...