Union Pac. R. Co. v. Board of Com'rs of Weld County, Colo.

• Decision Date: 12 October 1914
• Docket Number: 4136.
• Citation: 217 F. 540
• Parties: UNION PAC. R. CO. v. BOARD OF COM'RS OF WELD COUNTY, COLO., et al.
• Court: U.S. Court of Appeals — Eighth Circuit

217 F. 540

UNION PAC. R. CO. v. BOARD OF COM'RS OF WELD COUNTY, COLO., et al.

No. 4136.

United States Court of Appeals, Eighth Circuit.

October 12, 1914

C. C Dorsey, of Denver, Colo. (N. H. Loomis, of Omaha, Neb., and Gerald Hughes and E. I. Thayer, both of Denver, Colo., on the brief), for appellant.

Charles F. Tew, of Greeley, Colo. (Walter E. Bliss, of Greeley Colo., on the brief), for appellees.

Before HOOK and SMITH, Circuit Judges, and AMIDON, District Judge.

AMIDON District Judge.

This is a suit by the Union Pacific Railroad Company against the commissioners of Weld county, Colo., and its tax-collecting officers, to restrain the collection of state, county, and municipal taxes levied for the year 1912. The complaint charges, in substance, that the property of the railroad company was assessed at one-third of its actual value, while all other property was assessed at not to exceed one-fifth of its value. It is also charged that some classes of property which should properly have been assessed for purposes of taxation were wholly omitted by the assessors. These discriminations are alleged to have been systematic and deliberate. Application was made to the trial court for a temporary injunction. This was heard upon bill, answer, and affidavits, and a large volume of oral testimony, and was denied. The present appeal is brought to review that order.

The trial court based its decision upon section 5750 of the Revised Statutes of Colorado, which reads as follows:

'In all cases where any person shall pay any tax, interest or costs, or any portion thereof, that shall thereafter be found to be erroneous or illegal, whether the same be owing to erroneous assessment, to improper or irregular levying of the tax, to clerical or other errors or irregularities the board of county commissioners shall refund the same without abatement or discount to the taxpayer.'

Following the decision of the Supreme Court in Singer Sewing Machine Co. v. Benedict, 229 U.S. 481, 33 Sup.Ct. 942, 57 L.Ed. 1288, the trial court held that this statute affords a complete and exclusive remedy for the wrongs here complained of. The appeal raises two questions: (1) Has the statute been repealed as to the tax levy of 1912? (2) If the statute applies to the taxes of 1912, does it afford an adequate remedy?

Plaintiff claims that section 5750 above quoted was repealed by section 5 of chapter 134 of the Session Laws of 1913, which reads as follows:

'No abatement, rebate or refund of taxes shall be allowed by the county commissioners, unless a hearing shall be had thereon and a notice of such hearing and an opportunity to be present being first given to the assessor; and in case any abatement, rebate or refund of taxes shall be recommended by said county commissioners, they shall certify to the Colorado tax commission their findings, giving the amount of such abatement, rebate or refund, and their reasons therefor, and such abatement, rebate or refund, shall become effective upon the indorsement thereon of the approval of the Colorado tax commission; and in case the said Colorado tax commission shall disapprove the recommendations of the county commissioners, they shall indorse their disapproval thereon and return it to the county commissioners with a statement of their reasons therefor, and no abatement, rebate or refund of taxes shall be allowed by the said board of county commissioners if the application is disapproved by the said Colorado tax commission.'

In our judgment this statute has nothing to do with the subject embraced in section 5750. It is confined wholly to the administrative functions of county commissioners. By numerous statutes of Colorado, those bodies are vested with power to revise tax proceedings, and, if assessments or taxes are found to be illegal, to abate or refund the same. See sections 5691 and 5641 of the Revised Statutes; section 13, subdivisions 1, 5, and 7, and section 14 of chapter 216 of the Session Laws of 1911. It is also probable that county commissioners, by virtue of their general control over the fiscal affairs of counties, would be vested with power to abate or refund taxes found by them to be illegal. There are numerous provisions in the statutes of the state which give color to such an authority. Section 5 of chapter 134 of the Laws of 1913, above quoted, is intended to place this power of county commissioners under the supervision of the Colorado tax commission. It simply forbids county commissioners to abate or refund taxes as the result of their own investigation and judgment without the consent of the state commission. It is not intended to take away their duty to pay any judgment recovered in court against the county under section 5750. The right created by that section is not dependent upon any action of county commissioners or other taxing agencies. It is quite plain that such bodies, exercising their administrative power to relieve against erroneous or illegal taxes, would, if they found any tax to be erroneous or illegal, grant relief themselves, and in such a case there would be no occasion to resort to the courts under section 5750. The phrase in that section, 'shall thereafter be found to be erroneous or illegal, ' relates to a finding by a court in a judicial proceeding, and not to the action of administrative boards. To be sure, a taxpayer feeling aggrieved by the assessment of his property, or the levying of a tax, would be bound to seek redress by application to administrative boards clothed with power to grant him relief, before resorting to the courts; but the door to the court is not confined to an appeal from such administrative bodies. Any taxpayer aggrieved by taxing authorities, having exhausted the steps pointed out by statute to obtain relief from such bodies, may then pay the illegal exaction, and institute an independent action under section 5750 to recover any payment which he claims to be erroneous or illegal within the provisions of that section. It seems to us plain, therefore, that section 5 above quoted was not intended as a repeal of section 5750.

But if such had been its purpose it would not affect the tax levy for 1912. By section 5666 of the Revised Statutes of Colorado, the tax list and warrant for its collection must be delivered to the county treasurer not later than January 1st following the year for which the tax is levied. By section 5675 no demand by the treasurer is necessary, but it is made the duty of every person against whom a tax is levied to pay one-half of the same on or before the last day of February, and the remaining half on or before the last day of July of the year following the one in which the tax is levied. Under these statutes the tax for 1912 was complete on the 1st day of January, 1913. The rights and duties of the public and of taxpayers were fixed at that time. This being the case, the remedies which the law then afforded ought to follow the tax until it is collected. The statute of which section 5 above quoted is a part was not approved until May 1, 1913, five months after the tax of 1912 became complete. It should be given a prospective operation only. That is the cardinal rule of construction, which cannot be departed from except in obedience to the express language of the statute. Union Pacific R.R. Co. v. Laramie Stock Co., 231 U.S. 190, 34 Sup.Ct. 101, 58 L.Ed. 179. The statute here involved contains no language of that import. As a rule, statutes relating to taxation are thus construed. Lewis' Sutherland on Statutory Construction, Sec. 645; Matter of Miller, 110 N.Y. 216; ^[1] American Investment Co. v. Thayer, 7 S.D. 72, 63 N.W. 233; Hall v. Perry, 72 Mich. 202, 40 N.W. 324. Statutes in force at the time a tax is levied continue in force for its collection, notwithstanding their amendment or repeal. City of Indianapolis v. Morris, 25 Ind.App. 409, 58 N.E. 510; Leonard v. Indianapolis, 9 Ind.App. 262, 36 N.E. 725; Oakland v. Whipple, 44 Cal. 303; Smith v. Kelly, 24 Or. 464, 33 P. 642; Smith v. Humphrey, 20 Mich. 398; Blakemore v. Cooper, 15 N.D. 5, 106 N.W. 566, 4 L.R.A.(N.S.) 1074, 125 Am.St.Rep. 574; Cooley on Taxation (3d Ed.) p. 499. Section 6298 of the Colorado Statutes supports this view. It provides that the repeal, revision, or amendment of any statute shall not have the effect to release, extinguish, or modify, in whole or in part, any penalty, forfeiture or liability, civil or criminal, which shall have been incurred under such statute. The liability of the county to refund any tax found to be illegal was a part of the levy of 1912. It was a right which the taxpayer had with respect to the tax, as well as a liability of the county, and was not taken away or impaired by the subsequent revision contained in the act of 1913. In our judgment, therefore, the remedy granted by section 5750 was open to the plaintiff.

Is the remedy given by section 5750 adequate? It is difficult to follow the reasoning which would hold that it is not adequate. The evil caused by suits in equity to restrain the collection of taxes is grave, and has often been set forth by courts. Dows v. Chicago, 11 Wall. 108, 112, 20 L.Ed 65; State Railroad Tax Cases, 92 U.S. 575, 23 L.Ed. 663; Indiana Mfg. Co. v. Koehne, 188 U.S. 681, 23 Sup.Ct. 452, 47 L.Ed. 651; Boise Artesian Water Co. v. Boise City, 213 U.S. 276, 29 Sup.Ct. 426, 53 L.Ed. 796. To correct this evil, statutes of similar import to section 5750 have been passed in many of the states of the Union. The highest court of Colorado has frequently declared the correction of this evil to have been the object of its statute. Board of Commissioners of Bent Co. v. Atchison, T. & S.F. Ry. Co., 52 Colo. 609, 125 P. 528. The statute is not attacked upon the ground that it is unconstitutional, nor could such an...