Tooley v. O'Connell, 75-408

CourtUnited States State Supreme Court of Wisconsin
Citation77 Wis.2d 422,253 N.W.2d 335
Docket NumberNo. 75-408,75-408
PartiesRussell TOOLEY et al., Appellants, v. Donald J. O'CONNELL et al., Respondents.
Decision Date03 May 1977

Syllabus by the Court

This appeal is from an order sustaining the demurrer of the defendants-respondents and dismissing the complaint on the merits without leave to amend or replead. Two amicus curiae briefs have been filed.

Robert E. Sutton, Milwaukee, on brief for appellants; and David L. Walther, Milwaukee, argued and of counsel.

Patrick B. McDonnell, Asst. City Atty., for respondents; James B. Brennan, City Atty., Bronson C. La Follette, Atty. Gen., and Allan P. Hubbard, Asst. Atty. Gen., on the brief.

Bruce Meredith, Madison, for Wisconsin Ed. Ass'n Council, and by David L. Walther, Milwaukee, for Wisconsin Civil Liberties Union Foundation, Inc., on brief amici curiae.


The plaintiffs-appellants are all residents of and property owners/taxpayers in the city of Milwaukee. Some have children enrolled in the public school system of Milwaukee; some do not. The defendants-respondents are various public officers invested by law with the implementation of property tax assessment, levy and collection, part of which tax revenues finance the public school system in Milwaukee. Suit was commenced against defendants, O'Connell, Brennan, Busalacchi, Connors, Darrow, Dinges, Farley, Larson, McSweeney, New, Pfeiffer, Potter, Radtke and Stacy, individually, and as members of the board of school directors of the city of Milwaukee; Adamany, as secretary of the Wisconsin Department of Revenue; 1 Schmidt, as tax commissioner of the city of Milwaukee; Krueger, as city treasurer; and McCann, as city comptroller.

The plaintiffs commenced action pursuant to sec. 269.56, Stats.1973, 2 for a judgment declaring the statutory plan for the financing of the Milwaukee public schools as set forth in ch. 119, particularly sec. 119.46, unconstitutional. 3 They alleged, generally, that the statutes which authorize the assessment, levy, collection and distribution of property taxes for the financing of the Milwaukee public schools violate their constitutional rights under art. I, sections 1, 9 and 17; art. VIII, sec. 1; and art. X, sections 2, 3, 4 and 5, of the Wisconsin Constitution.

The trial court sustained the demurrer of the defendants on the grounds that the complaint failed to state a cause of action.

The issue presented is whether the trial court erred in sustaining the demurrer.

Chapter 119, Stats., provides in part for the local financing of the Milwaukee school system. Operational control of the system rests with the board of school directors (hereinafter the board), the duties of which are set forth in sec. 119.16. One such duty, relating to finance, is stated in sec. 119.16(8), Stats.:

"(8) Budget. (a) Annually before adopting its budget for the next fiscal year and at least 5 days before transmitting its completed budget under par. (b), the board shall hold a public hearing on the proposed school budget at a time and place fixed by the board. At least one week before the public hearing, the board shall publish a class 1 notice, under ch. 985, of the public hearing.

"(b) The board shall transmit its completed budget to the common council on or before November 1 of each year on forms furnished by the auditing officer of the city. Such completed budget shall be published with the budget summary under s. 65.04(2) and budget under s. 65.05(7)."

Sec. 119.46, Stats., provides:

"119.46 Taxes for school operations fund. As part of the budget transmitted annually to the common council under s. 119.16(8)(b), the board shall report the amount of money required for the next fiscal year to operate all public schools in the city under this chapter, to repair and keep in order school buildings and equipment, to make material improvements to school property and to purchase necessary additions to school sites. The common council shall levy and collect a tax upon all the property subject to taxation in the city, which shall be equal to the amount of money required by the board for the purposes set forth in this subsection, at the same time and in the same manner as other taxes are levied and collected. Such taxes shall be in addition to all other taxes which the city is authorized to levy. The taxes so levied and collected, together with the other funds provided by law and placed at the disposal of the city for the same purposes, shall constitute the school operations fund."

Chapter 119, Stats., contemplates a local school funding scheme whereby the board determines its financial needs for certain purposes; the board submits its budgetary needs to the common council; the common council levies and collects a property tax sufficient to meet those needs; and the city treasurer distributes the proceeds in accordance with sec. 119.50.

Sections 119.47, 119.48 and 119.49, Stats., also provide for the levy and collection of property tax by the common council subsequent to the submission of a budget by the board or subsequent to other action taken by the board. In each case, except that presented by sec. 119.48, the levy and collection of the tax by the common council is mandatory upon the completion of the action taken by the board.

The complaint of the plaintiffs alleges in part:

"(a) The system of financing public education as heretofore set forth relies primarily upon local property tax and, therefore, produces a wide disparity in educational expenditure and thereby affords disparate educational facilities throughout the State of Wisconsin and taxes property owners at different rates throughout the State for the same public purpose.

"(b) The said statutes effectively nullify the authority constitutionally vested in the duly elected governing unit of the City of Milwaukee, to-wit: The Common Council of the City of Milwaukee and arrogates said power to the defendants.

"(c) The said statutes establish a discriminatory tax burden imposed upon owners of real property as distinguished from persons who do not own real property and imposes upon the plaintiffs and all persons like situated who own real property the burden of financial support for the public schools of the City of Milwaukee."

In its memorandum decision sustaining the demurrer of the defendants, the trial court stated:

"The thrust of the complaint by the plaintiffs herein appears to be that the enforcement of and operation of Chapter 119 Wis.Stats. and Section 119.43 (sic 119.46) in particular violate various sections of the Wisconsin Constitution. In support of such reasoning the complaint sets forth conclusions rather than allegations of fact. The plaintiffs pray for a declaration that Chapter 119 is unconstitutional and (sic) that it provides for the mandatory levy and collection of property tax upon plaintiffs.

"A Demurrer does not admit erroneous conclusions drawn from well pleaded facts even though such conclusions resemble statements of fact. See Northwestern Mutual Life Insurance Company v. State (1920), 173 Wis. 119, 180 N.W 138. While on Demurrer a complaint is to be literally construed and such Demurrer admits all facts well pleaded, a Demurrer does not admit legal conclusions or the legal consequences asserted. The complaint appears to be replete with legal conclusions and not ultimate facts.

"The plaintiffs' complaint would better be addressed to the legislature of the State of Wisconsin for a redress if indeed any redress is called for.

"The Demurrer of the defendants is sustained on the grounds that plaintiffs' complaint fails to state a cause of action. The complaint is dismissed."

From our examination of the pleadings, it appears that the complaint sufficiently states that the plaintiffs are property owners/taxpayers in the city of Milwaukee; that the defendants are officials immediately responsible for carrying out the provisions of ch. 119, Stats., as they pertain to the financing of the Milwaukee school system and the taxing of the plaintiffs' property; and that the plaintiffs' property has been taxed pursuant to the provisions of ch. 119.

The legal conclusions contained in the complaint are those that the taxing provisions of ch. 119, Stats., violate the plaintiffs' constitutional rights in the manner described. While those conclusions are not admitted on demurrer, their existence is not fatal to this complaint. Were the legal conclusions setting forth the alleged constitutional violations fatal to a complaint challenged by demurrer in a declaratory judgment action, no plaintiff could ever challenge the constitutionality of a statute by declaratory judgment.

When a declaratory judgment action is brought attacking the constitutionality of a state statute, the plaintiff, to survive a demurrer, must initially allege the existence of the statute and the fact that he is personally affected by it. The plaintiff must then further allege, or it must be readily inferable from his allegations, that he is affected to an extent so as to warrant the specific relief sought, i. e., declaratory judgment. See: Borchard, Declaratory Judgments, (2d ed.), pp. 48-56. The allegations establishing the latter may necessarily be conclusory in nature.

The question raised by demurrer to a complaint in a declaratory judgment proceeding challenging the constitutionality of a statutory enactment is not in all ways similar to the question presented in the usual civil action. In the case before us, the trial court appears to have proceeded under the rules applicable to the usual civil action.

In American Med. S., Inc. v. Mutual Fed. S. & L., 52 Wis.2d 198, 188 N.W.2d 529 (1971), this court stated, at p. 204, 188 N.W.2d at p. 532;

"A demurrer to a complaint in a declaratory judgment action normally does not present the question whether the complaint states a cause of action but rather presents the question of whether the controversy is one which...

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