Zangerle v. Evatt
| Citation | 41 N.E.2d 369,139 Ohio St. 563 |
| Decision Date | 22 April 1942 |
| Docket Number | 28923,28924. |
| Parties | ZANGERLE, County Auditor, et al. v. EVATT, Tax Com'r. AUSTIN, County Auditor, v. SAME. |
| Court | United States State Supreme Court of Ohio |
Syllabus by the Court.
1. The revisory jurisdiction of the proceedings of administrative officers authorized by Section 2, Article IV of the Ohio Constitution, contemplates quasi-judicial proceedings only.
2. Section 5611-2, General Code, authorizes appeals to this court from the Board of Tax Appeals in quasi-judicial proceedings only.
3. The Board of Tax Appeals possesses both quasi-judicial and administrative powers.
4. The making of rules by the Department of Taxation for the valuation for taxation of real and personal property is not a quasi-judicial proceeding.
5. Courts will not aid in making or revising rules of administrative officers, boards or commissions, being confined to deciding whether such rules are reasonable and lawful as applied to the facts of a particular justiciable case.
6. It is the duty of courts to insist that everything upon which they are to base an order or judgment must be before them in such a way that no one to be affected may be deprived of full opportunity to explain or refute such order or judgment or challenge its application to his case.
On June 27, 1939, the Tax Commissioner adopted a rule for the classification of property used in the refining of petroleum, such rule being known as Tax Commissioner's rule No. 2.
Rule No. 2 contains 39 subdivisions and covers about four legal cap pages of singlespaced, small-type mimeographed matter and is one of a series of rules for the valuation of real and personal property promulgated by the Tax Commissioner.
Rule-making powers are granted to the Tax Commissioner by Sections 1464, 1464-3, 1464-4, 1465-10, 5370, 5372-1, 5579 and 5624, General Code.
Section 1464-4, General Code, provides:
'The board of tax appeals shall not be required to hear an application for the review of any rule wherein the grounds of the allegation that the rule is unreasonable shall have been previously contained in an application for review and shall have been previously heard and passed upon by the board.'
On July 7, 1939, the Department of Taxation received from appellant Zangerle, as county auditor of Cuyahoga county, a communication containing a request for a review of rule No 2.
On December 11, 1939, George C. Guckenberger, county auditor of Hamilton county, applied to the Board of Tax Appeals for a review of rule No. 2.
On December 18, 1939, appellant Austin, as county auditor of Lucas county, applied to the Board of Tax Appeals for a review of rule No. 2.
These three applications for review were consolidated for hearing before the Board of Tax Appeals.
A great deal of testimony was taken and many exhibits introduced, involving principally the Cuyahoga county properties of The Standard Oil Company and the Lucas county properties of The Standard Oil Company, The Sun Oil Company and The Gulf Refining Company.
Both the auditors and the Tax Commissioner relied upon Teaff v. Hewitt, 1 Ohio St. 511, 59 Am.Dec. 634, as authority for their respective positions.
The Board of Tax Appeals, following the hearing and personal examination of some of the properties, made a finding that rule No. 2 of the Tax Commissioner is reasonable. Thereafter, appellant Zangerle, in cause No. 28923, and appellant Austin, in cause No. 28924, attempted to appeal to this court from the finding of the Board of Tax Appeals of the Department of Taxation, under Section 5611-2, General Code.
Frank T. Cullitan, Pros. Atty., and Saul S. Danaceau, both of Cleveland, for appellant John A. Zangerle, Auditor of Cuyahoga County.
Thomas J. O'Connor, Pros. Atty., J. S. Rhinefort, and Harry Friberg, all of Toledo, for appellant C. H. Austin, Auditor of Lucas County.
Thomas J. Herbert, Atty. Gen., and E. G. Schuessler and Perry L. Graham, Asst. Attys. Gen., for appellee.
In these appeals, the county auditors of Cuyahoga and Lucas counties seek to have the court review rule No. 2 promulgated by the Tax Commissioner under authority of Section 1464-4, General Code, and related statutes. The question at once arises both as to the propriety and jurisdiction of this court in the premises. Counsel were invited to and have submitted briefs in respect of this court's jurisdiction to entertain these appeals.
It has been strongly urged here that appeal as of right in these cases is granted by Section 5611-2, General Code. We are of the opinion that this section authorizes appeals only in quasi-judicial proceedings. Before the Board of Tax Appeals, counsel for appellants contended that they were not there engaged in an adversary proceeding.
We are of the further opinion that rule-making by administrative officials is not a quasi-judicial function. Counsel for both appellants contended before the board that the rule in question invaded the legislative power. Counsel for appellant Zangerle renew that contention here.
Section 2, Article IV of the Constitution, provides in part that this court shall have 'such revisory jurisdiction of the proceedings of administrative officers as may be conferred by law.'
It will be noted that the word 'proceedings' is used and not 'acts,' 'duties' or 'steps taken.' Before taking up the definition of 'proceedings,' it will be well to review the reason for the constitutional provision.
It was held by the Supreme Court of the United States in the case of Chicago, M. & St. P. Ry. Co. v. Minnesota, 134 U.S. 418, 10 S.Ct. 462, 702, 33 L.Ed. 970, as summarized in the headnotes of Lawyers' Edition:
'A law which, as construed by the Supreme Court of the State, allows a railroad commission to establish rates for railroads which are final, without issue made, or inquiry had, as to their reasonableness, and forbids the courts to stay the hands of the commission if the rates established by it are unequal and unreable, conflicts with the Constitution of the United States.
'So construed, it deprives the company of its right to a judicial investigation by due process of law, and substitutes therefor, as an absolute finality, the action of a railroad commission which is not clothed with judicial functions and does not possess the machinery of a court of justice.'
In the case of Hocking Valley Ry. Co. v. Public Utilities Commission, 92 Ohio St. 9, at page 14, 110 N.E. 521, at page 523, L.R.A.1918A, 267, Ann.Cas.1917B, 1154, Judge Johnson said: 'In order to give full validity to the proceedings and orders of the utilities commission, it was necessary that some adequate provision for their judicial review should be made; because if an administrative order results in the taking of property, such as the company claims results in this case, the defendant must not be denied the right to show that as matter of law the order was so arbitrary, unjust, or unreasonable as to amount to a deprivation of property in violation of the Constitution.'
Again, in the case of Hocking Valley Ry. Co. v. Public Utilities Commission, 100 Ohio St. 321, at page 323, 126 N.E. 397, at page 398, Judge Johnson further said: See, also, Stanton, Pros. Atty., v. State Tax Commission, 114 Ohio St. 658, 151 N.E. 760.
Counsel have cited the case of Raymond v. Cleveland, 42 Ohio St. 522, decided in 1885, as supporting their claim that the word 'proceedings' as used in Article IV, Section 2, of the Ohio Constitution as amended in 1912 is not confined to proceedings of a judicial or quasi-judicial nature. We cannot agree with counsel that when the term 'proceedings of administrative officers' was...
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