Zoercher v. Agler

• Decision Date: 02 July 1930
• Docket Number: 25,554
• Parties: Zoercher et al. v. Agler et al. [*]
• Court: Indiana Supreme Court

172 N.E. 186

202 Ind. 214

Zoercher et al. v. Agler et al. ^[*]

No. 25,554

Supreme Court of Indiana

July 2, 1930

Rehearing Denied October 17, 1930, Reported at: 202 Ind. 214 at 229.

From St. Joseph Superior Court; Orlo R. Deahl, Judge.

Action by Robert B. Agler and others against Philip Zoercher and the other members of the State Board of Tax Commissioners and others. From a judgment for the plaintiffs, the members of the State Board of Tax Commissioners appealed.

Reversed.

James M. Ogden and Arthur L. Gilliom, Attorney-Generals, Louis B Ewbank, Samuel Dowden and Dale F. Stansbury, for appellants.

G. A Farabaugh, Theophilus J. Moll, Matson, Carter, Ross & McCord and Shively, Gilmer & Arnold, for appellees.

Martin, J. Willoughby, C. J., concurs in the reversal of the judgment only.

OPINION

Martin, J.

Appellees brought this action under ch. 81, Acts 1927, §§ 680.1-680.16 Burns Supp. 1929 (the Uniform Declaratory Judgments Act), as taxpayers, freeholders and citizens of the city of South Bend, against the State Board of Tax Commissioners, the city of South Bend, the auditor of St. Joseph County, and against certain persons (more than 10) on whose petition the auditor had certified the city tax levy for 1928 to the tax board in pursuance of ch. 95, Acts 1927, § 14239 Burns Supp. 1929. The complaint alleged that the proper city and county authorities had fixed the rate of tax assessment for the year 1928 at 73 cents per $ 100 worth of assessed property (a supplemental complaint being filed after the tax board had held a hearing in South Bend and had reduced the levy from 73 cents to 72 cents per $ 100); and that the tax board was proceeding to act (and had acted) under the supposed authority of ch. 59, Acts 1919 (particularly under §§ 169, 171, 177, 200, 201 and 202), and of laws amendatory thereof, particularly ch. 222, Acts 1921, and ch. 95, Acts 1927, (§ 14209 et seq. Burns 1926, § 14239 Burns Supp. 1929), but that such laws and each of them are unconstitutional and void in that they take from the city officers authority to administer the local governmental affairs of the city and assume to constitute the tax board a body with powers to "certify its action with respect (of any levy made by the city) to the auditor of the county . . . and the action of the State Board of Tax Commissioners with respect to said tax levies and such parts thereof as may have been in question shall be final and conclusive." The complaint further alleges that an actual controversy exists between the plaintiffs (appellees), in their own behalf and in behalf of those whom they represent, with regard to their rights as citizens, taxpayers and voters, they believing that the tax-board law is unconstitutional, and the defendants (including appellant tax board) believing that such law and the action taken thereunder are valid, and that it is necessary, in order to settle the controverted claims and the rights of the parties, that the court declare the rights, status and legal relations existing between the parties, and prays that the court declare the said acts to be unconstitutional, and the said action of the tax board to be null and void.

The issues were closed by general denials. The cause was tried by the court, the facts being stipulated. At appellant's request, a special finding of facts was made and conclusions of law stated thereon. The special finding shows that in August, 1927, the city, by its proper officers, pursuant to statute, formulated a proposed budget of anticipated expenses for the year 1928. The notice of the time of hearing on the budget (September 2, 1927), a copy of the same in full, a comparative statement of taxes collected in 1925, 1926 and 1927, and to be collected in 1928, together with a statement of the right of taxpayers to appeal to the tax board, are set out. It is then shown that a public hearing was had on the budget at the time fixed in the notice, at which time the petitioners (who were parties defendant at the trial but are not parties on appeal) appeared and remonstrated against the adoption of the budget and the levy of taxes thereby fixed; that these remonstrances were overruled, an ordinance (which is set out in full) was adopted (September 9, 1927) appropriating for the expenses of the municipal city government of South Bend the amounts contained in the budget (itemized with greater minuteness than the budget), and another ordinance (which is set out in full) was adopted (September 9, 1927) fixing the tax levy for the year 1927 for each of the city's nine funds, totaling 73 cents per $ 100 of assessed valuation of property (and fixing the amount of a poll tax), and that a certified copy of the last named ordinance was delivered to the county auditor as the certificate of the rate of the city levy.

It is then found that the petitioners, pursuant to the statute, on September 26, 1927, filed in the auditor's office their petition (Exhibit A of the complaint), which was two days later filed with the tax board; that said board fixed a time and place of hearing (October 18, 1927, in the office of the auditor of St. Joseph County), gave due notice thereof, held such hearing, and on October 28, 1927, made an order which is set out at length. This order of the tax board found "that practically the only objection to the budget . . . was the increase in the salaries of the city officials, policemen and firemen . . . pursuant to ch. 23, Acts 1927 (see §§ 10297, 10299.2 Burns Supp. 1929) . . . which, according to the opinion of the Attorney General, is one over which this board has no control." (After indulging in some gratuitous criticism of the city officers for making the increases, the order again stated "but it is a matter beyond the control of this board.") The order then found that, "in fixing the levies, the city council based the same on a valuation of $ 188,000,000 and the board now finds that the correct valuation is $ 191,000,000 and that such increase in valuation will enable a reduction of one cent on the total city levy without reducing any of the appropriations made by the city council." The order of the tax board thereupon slightly reduced the rate of the taxes for the year 1927, payable in 1928, for each of the city's nine funds, the total rate being 72 cents, amounting to a reduction of one cent per $ 100 assessed valuation.

The court then found that the county auditor proceeded to disregard the rate and levy of 73 cents and to spread upon the tax duplicates the 72-cent rate; that the city of South Bend and its officials are doing nothing to resist the order entered by the tax board; that, at the time of the passage of the two ordinances, the city council had before it tax valuations based upon an estimate in the sum of $ 188,000,000; and that, at the time of the hearing before the tax board, the correct amount was certified by the county auditor as $ 190,599,290. The court found that the plaintiffs (appellees) and that the petitioners subscribing to Exhibit 1 (defendants but not appellants) were all resident freeholders, voters and taxpayers of the city of South Bend, and that the defendants, who are members of the State Board of Tax Commissioners, were not residents of South Bend.

The 12th and last paragraph of the special finding of facts sets out that by virtue of ch. 222, Acts 1921, and ch. 95, Acts 1927, doubt and uncertainty have arisen concerning the legal status, force and effect of the ordinance fixing the tax rate and its certification to the auditor as to whether it is subject to revision and amendment by the tax board or whether it is binding upon the auditor without regard to the action of the tax board, and that, by virtue of such uncertainty and indefiniteness of said status and right in respect thereto, an actual substantial controversy existed between the parties as to the constitutionality of said acts of the General Assembly in so far as they assume to confer power upon the tax board to review, revise and amend the tax levy.

The court's conclusions of law were: (1) that so much of § 200, ch. 59, Acts 1919, as amended by § 3, ch. 49, Acts 1920, and as further amended by ch. 222, Acts 1921, § 14239 Burns 1926, and as further amended by ch. 95, Acts 1927, § 14239 Burns Supp. 1929, as assumes to confer upon the State Board of Tax Commissioners of Indiana the power, authority and duty to revise, review and decrease tax levies fixed by the city council of the city of South Bend, is violative of the Constitution and void; (2) that the action of the state tax board in making the order of October 28, 1927, is a nullity; and (3) that the correct and legal levy which it is the duty of the county auditor to place upon the tax duplicates is the rate and levy certified to him by the city council.

Upon these conclusions of law, the court rendered judgment, ordering, adjudging and decreeing that so much of ch. 222, Acts 1921 and the amendment thereof contained in ch. 95, Acts 1927, as assumes to confer power on the tax board to affirm or decrease the tax levy here involved is unconstitutional and void; that the rate and levy fixed by ordinance should prevail regardless of the order of the tax board. The court further ordered that the county auditor and his successor in office are in duty bound to certify to the county treasurer the rate and levy so certified to him by the common council of the city.

The errors assigned and relied on are that the court erred in its several conclusions of law and in overruling a motion for a new trial, wherein it was alleged that the decision of the court is contrary to law and not sustained by sufficient evidence.

The ultimate questions involved in this appeal are: (1) is there an actual controversy between the parties relative to some...