Wilcox v. Olmsted County

• Decision Date: 17 June 1960
• Docket Number: No. 37930,37930
• Citation: 104 N.W.2d 297,258 Minn. 281
• Parties: Ronald H. and Lael M. WILCOX, Respondents, v. COUNTY OF OLMSTED, Appellant, City of Rochester, Intervener, Appellant.
• Court: Minnesota Supreme Court

Page 297

104 N.W.2d 297

258 Minn. 281

Ronald H. and Lael M. WILCOX, Respondents, v. COUNTY OF OLMSTED, Appellant City of Rochester, Intervener, Appellant.

No. 37930.

Supreme Court of Minnesota.

June 17, 1960.

Syllabus by the Court

Where the school board of Rochester Special School District No. 4 made levies pursuant to M.S.A. § 475.61 for the purpose of retiring bonds issued for school improvements providing that a definite amount be paid each year over a term of years, such levies were standing and continuing levies for the years during such term, and property which thereafter became a part of the school district by annexation became subject to the payment of its share of the unpaid portion of such indebtedness without the necessity of a new levy for that purpose.

D. P. Mattson, County Atty., George R. Kerr, Sp. Asst. County Atty., R. V. Ehrick, City Atty., Rochester, for appellant.

Plunkett & Plunkett, Rochester, and Duane M. Peterson, Winona, for respondents.

MURPHY, Justice.

This appeal is from a summary judgment of the district court that the respondents' land is not subject to certain taxes levied for the purpose of paying school bonds issued by the Rochester Special School District No. 4.

The facts are not in dispute. On December 18, 1944, Rochester Special School District No. 4 (then Special School District No. 8) levied a direct annual irrepealable tax 'upon all of the taxable property in the School District' to raise funds for the purpose of paying the principal and interest on school bonds issued January 1, 1945. This tax was to be spread in designated amounts each year through 1965. On September 8, 1954, the school district levied a similar tax to be spread each year through 1973 to pay the principal and interest on school bonds issued June 1, 1954. The boundaries of School District No. 4 are by law coterminous with the boundaries of the city of Rochester. On May 25, 1956, the Rochester City Council annexed certain lands to the city, upon the petitions of all the owners, and thus brought that land within School District No. 4. In 1957 the county auditor spread taxes, pursuant to the school district's 1944 and 1954 levies, over all the land within the district including that annexed to it in 1956. The respondents, owners of part of the land annexed at that time, raised an objection to these taxes, and the district court held that they could not be applied to the respondents' land.

The appellants, the county of Olmsted and the city of Rochester, assert that, although there are no Minnesota cases in point, most authorities rule that in the absence of a statute to the contrary property brought within the corporate limits of a municipality by annexation is subject to taxation to discharge municipal indebtedness previously incurred and existing at the time of annexation. In support of this proposition they cite Barnes v. Kansas City, 359 Mo. 519, 222 S.W.2d 756, 10 A.L.R.2d 553; Smith v. City of Saginaw, 81 Mich. 123, 45 N.W. 964; United States ex rel. Brown v. City of Memphis, 7 Otto 284, 97 U.S. 284, 24 L.Ed. 937; Peterson v. Swan, 231 Iowa 745, 2 N.W.2d 70; Gottschalk v. Becher, 32 Neb. 653, 49 N.W. 715; Kocsis v. Chicago Park Dist., 362 Ill. 24, 198 N.E. 847, 103 A.L.R. 141; Lowe v. City of Bowling Green, Ky., 247 S.W.2d 386; Toney v. City of Macon, 119 Ga. 83, 46 S.E. 80; Barber Asphalt Paving Co. v. Hayward, 248 Mo. 280, 154 S.W. 140; and several secondary authorities. We are inclined to agree with the rule adopted in these cases. The owners of property annexed to a municipality (or a school district) ordinarily should not be allowed to enjoy the benefits provided by the municipality without bearing a fair share of their cost.

The respondents do not particularly quarrel with the authorities cited by the appellants. They agree that annexed property may be subject to taxation after it is brought into a new district but argue that there must first be a valid levy therefor subsequent to the annexation. They point out that only one levy was made for each of the obligations issued by the district and by their brief concede that 'A Subsequent levy by the school district might effectively subject the newly annexed areas of the city to liability for past indebtedness, but in the absence of such New levies there seems to be no authority for the county auditor to merely extend a previous levy to these newly annexed areas.' They point out that their property was not a part of the district when the original levies were made and that the act of the county auditor in extending the tax to their property amounted to an unauthorized levy. They rely on Saxhaug v. County of Jackson, 215 Minn. 490, 10 N.W.2d 722, 725, where we held that the county auditor is without power to levy taxes and assessments. We pointed out there that the county auditor's function is merely the mechanical or clerical part of computing assessments regularly levied and of entering them on the records of the county against particular parcels of property and that 'the inclusion by him of an assessment, not levied by competent authority, as part of the taxes spread against property was unauthorized and void.'

The term 'levy' has a variety of meanings. In State ex rel. Minneapolis Fire Dept. Relief Ass'n v. City Council, 161 Minn. 103, 105, 200 N.W. 932, 933, we said:

'* * * As applied to the amount to be raised by taxation, it means the formal and official action of a legislative body, invested with the power of taxation, whether national, state or local, whereby it determines and declares that a tax of a certain amount, or of a certain percentage on value, shall be imposed on property subject thereto.'

The issue presented by this appeal requires an interpretation of the term 'levy' as used in M.S.A. § 475.61. That statute relates to tax levies for the purpose of paying general obligations of the taxing district. Subd. 1 of that section provides in part:

'The governing body of any municipality issuing general obligations shall, prior to delivery of the obligations, levy by resolution a direct general ad valorem tax upon all taxable property in the municipality to be spread upon the tax rolls for each year of the term of the obligations.'

It is clear from the foregoing that the legislature intended that but one levy be made and that, before the bonds are issued. ¹ The statute further contains the important provision that the tax is to be spread upon the tax rolls 'for each year of the term of the obligations.' (Italics supplied.) Section 475.61, subd. 2, so far as applicable here, provides:

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