State v. Cudahy Packing Co.

JAGGARD, J.

On petition for rehearing, defendant urges that the decision previously rendered in this case violates article 4, § 2, of the constitu*424tion of' the United States, by denying to the defendant, a citizen of Illinois; the privileges and immunities of a citizen of Minnesota, and also violates article 14, § 1, of the amendments to said constitution, by depriving the defendant of its property without due process of law, and by denying the defendant the equal protection of the laws. The questions thus involved have been fully presented to and considered by this court1. In so far as the petition for reargument is addressed to the interpretation by this court of the power of the Minneapolis board of equalization and its power to assess property not on the assessment roll, there appears to be no occasion for further discussion. The gist of the remaining argument is (1) that the action of the board of equalization is illegal and inequitable, for it discriminates against this defendant by making him bear a greater burden of taxes proportionately than other taxpayers in this state; (2) that it practically denies defendant a hearing on the question of whether this assessment should be' raised or not, by failing to give him due notice of its action.

. 1. It does not appear in this record that this defendant has been discriminated against. It is true that the state auditor directed an original assessment of fifty per cent, of the value of real and personal property, and that the city assessor testified that the assessment in Hennepin county was made on that basis as ordered. It might also be assumed, although it was not proved, that the assessors of 'other counties assessed in fact according to the same rule. The conclusion that in consequence there had been a "systematic, intentional, and illegal undervaluation of other property by the taxing officials” of the state does not at all follow. This order of the state auditor might appear to be in contradiction to the express statutory requirement that property should be assessed at its full value in money. As a matter of fact, on the contrary, however, it was designed and conduces to make possible literal obedience to the statute.

The result of the assessors’ labors is not the final listing or valuation of property, real or personal. It is merely a step to that result. After the assessor has made the survey, his list and valuation, the county auditor corrects the verified result of his labors, as by addition of omitted property (section 853, R. R. 1905), and various boards *425of equalization complete the work of creating a tax, conforming to statute, thereafter to be collected. More specifically, the state board of equalization is charged with the duty of equalizing the taxes between the various counties. A horizontal increase of a given percentage, covering all property of a specified kind assessed within a named county may be, and often has been, ordered. If such an increase were made, then property which had been returned by the assessor at its full valuation would ultimately bear a tax on one hundred per cent, plus the percentage of increase imposed by the' state board. In consequence, either a grave practical injustice would result in the collection of the excessive tax, or the courts of the state would be overwhelmed with the hearings of alleged overvaluations. There would, be imposed on the overtaxed individual the unnecessary and improper trouble and expense of appearing in court and defending. Inter alia, to give opportunity to the statutory boards of equalization to perform their functions, the instruction of the state auditor to assess at fifty per cent, of the value of the property was issued. The result of general obedience to the state auditor’s order is a presumptively uniform valuation — an even basis for an ultimately correct tax list. The essential question to the taxpayer is whether, as a consequence of the work in the first place of the assessor and in the second place of the county auditor and of the boards of equalization, he is called upon to pay a tax on a larger valuation than the law authorizes. The tax is not unequal, and he has suffered no prejudice, as these terms are employed in the law. The immediate case itself is' a good illustration. Defendant’s original assessment was in fact less than fifty per cent, of the total valuation, which he admits; albeit accidentally. Two boards of equalization added enough to make his final assessment' conform to the law. He has no cause for complaint.

It is urged that the court will take judicial notice of the fact that “it is the practice of assessing officials to (ultimately) return assessable property for taxation at one-half the cash value thereof.” Unfortunately courts must take judicial notice of the fact that the ultimate assessment of real and personal property is extremely uneven and erratic, and that no certain percentage of actual value is attained. Large amounts of property, aggregating enormous values, are as*426sessed for more than their market value. Smaller amounts are taxed for a fraction of their real value not susceptible of definite estimate. The cases presented to the courts of this state tend to show that, for example, personal property in the rural districts is taxed on a higher average than personal property in large cities, and that real estate in large cities is taxed at a much higher valuation than in rural districts, and often for much more than its actual value. To' a large extent these inequalities are inevitable. To exactly what extent, however, this condition exists, is a matter of controversy and conjecture. No definite knowledge on the subject exists, and no proof has here been adduced. We think no adequate proof could be practically produced.

It is elementary that, while a tax law must aim at equality, approximation to equality is all that can be had. Cooley, Taxn. (1st Ed.) 127; Davis v. City, 55 Iowa, 549, 8 N. W. 423. Absolute equality is not possible. “If equality were practicable,” said Chief Justice Gibson in Kirby v. Shaw, 19 Pa. St. 258, 261, “in what branch of the government would power to enforce it reside? Not in the judiciary, unless it were competent to set aside a law free from collision with the constitution, because it seemed unjust. It could interpose only by overstepping the limits of its sphere, by arrogating to itself a power, beyond its province, by producing intestine discord, and by setting an example which-other organs of the government might not be slow to follow. It is its peculiar duty to keep the first lines of the constitution clear, and not to stretch its power in order to correct legislative or executive abuses. Every branch of the government, the judiciary included, does injustice for which there is no remedy, because everything human is imperfect. The sum of the matter is that the taxing power must be left to that part of the government which is to exercise it.” The courts will not substitute their judgment as to valuation for that of the board of equalization. State Railroad Tax Cases, 92 U. S. 575, 23 L. Ed. 663. The local assessment cases recently decided by the supreme court of the.United States emphasize the extent to which the taxing power is legislative and executive in character, and how limited is the function of courts to interfere with its exercise, in a particular case. See, for example, French v. Barber *427Asphalt Paving Co., 181 U. S. 324, 21 Sup. Ct. 625, 45 L. Ed. 879. And see Meriwether v. Garrett, 102 U. S. 472, 26 L. Ed. 197.

The certain purpose of the law of this state requiring a full valuation to produce equality is evident in the intention of the very instruction of the state auditor to which objection has been so strenuously urged here. The result of the operations of the official bodies here was a tax at a rate applying uniformly throughout the state on a valuation admittedly less than the taxable property defendant owned. It is entirely clear that in this case no attempt whatever was made to discriminate between different classes of property owners. The same rule applied indifferently to residents and nonresidents.

2. Defendant was not denied a hearing, within the meaning of the state and federal constitutions. It is the lawmaking power, and not the judiciary, which is to determine all questions of discretion or policy in ordering or imposing taxes, and which must make all necessary rules and ■ regulations and decide upon the agencies by means of which a tax shall be created and collected. Mr. Justice Shiras, in Thomas v. Gay, 169 U. S. 264, 18 Sup. Ct. 340, 42 L. Ed. 740. It was not necessary that the board of equalization should have given notice of its increase. State Railroad Tax Cases, supra. It is unnecessary, however, to discuss the extent' to which such notice is necessary, because the property owner had the right to appear before the boards of equalization at definitely stated times, and was given certain opportunity to appear in court' and defend. Section 889, R. L. 1905. Indeed, it is natural to inquire, how did the defendant raise the objections now under consideration? The answer is clear: By embracing the opportunity afforded by statute to come into court and interpose the very defense which the demonstrated ingenuity of counsel has formulated. Moreover, the taxpayers’ remedy of paying under protest the tax claimed to be unjust or illegal, and of bringing an action for the recovery of the sum, is preserved by statute. Section 891. “What more [opportunity] ought to be given?” Mr. Justice Peckham, in Security Trust & Safety Vault Co. v. City of Lexington, 203 U. S. 323, at page 333, 27 Sup. Ct. 87, at page 90, 51 L. Ed. 204. Cf. Central of Georgia Ry. Co. v. Wright, 207 U. S. 127, 28 Sup. Ct. 47, 52 L. Ed. 47.

*428We conclude: No taxpayer' can successfully base a defense to a proper tax upon a charge of general official derelictions unproven and conjectural. The courts will not require, that assessments be made in violation of law, will not impose the duty of committing perjury on tax officers, and will not pervert their own functions by repealing a just and valid statute, which requires an assessment of all taxable property at its full value in money, by making the enforcement of that statute impossible.

Petition for reargument denied*