Montana Ore Purchasing Co. v. Maher

ME. JUSTICE HOLLOWAY

delivered the opinion of the court:

This is an appeal from a final judgment. It is alleged in the complaint that after the 1st day of June, 1903, the Montana Ore Purchasing Company furnished to the county assessor of Silver Bow county a verified statement of the net proceeds of its mines for the year immediately prior to June 1, 1903, showing such net proceeds to be $601,250.23; that the county assessor extended the assessment on the rolls without change, and in the due course of his business turned over the assessment-roll to the county clerk; that afterward the county commissioners met, and organized as a board of equalization, and adopted rules, as provided by section 3781 of the *485Political Code. Pule 1 is as follows: “That a notice of ten days from date in writing be given to property owners or their agents, to appear before the board of equalization, and show cause why assessments for the current year should not be increased.”

It is further alleged that, without giving the respondent company any notice whatever, its assessment was increased to $843,346; that respondent tendered the amount of taxes due upon the assessed valuation of $601,250.23, but this was refused, and the taxes computed upon the valuation of $843,346 demanded; that the county treasurer afterward advertised the property of the respondent company for sale to pay the taxes then delinquent. Ability, readiness, and willingness to pay the tax admitted to be due is alleged. The prayer is that it be adjudged that the increase in respondent’s assessment, together with the tax levied upon such increase, be declared void, that the court adjudge that the amount tendered is the correct amount due for its taxes, and that an injunction issue to prevent the sale of its property.

The answer raises but few issues. It is alleged that the return made by the respondent company to the assessor contained information from which it appeared that a mistake in calculation had been made, and that according to such return the sum of $843,346.24 was the actual value of the net proceeds of respondent’s mines. It is also alleged that the re-spondent appeared before the board of equalization and sought a reduction of its assessment.

The cause was tried to the court, which found in favor of respondent, and entered a decree adjudging that the tax levied upon the increased assessment of $242,096.01 was void, and that the amount tendered by the plaintiff company was the amount of taxes legally levied upon its property, and enjoined the treasurer from proceeding further in the matter of the sale of its property. From this judgment the county treasurer appeals.

*486Only three questions are presented for determination: 1. Was the act of the board of equalization in correcting the respondent’s assessment and raising the valuation of -its property for the purpose of taxation from $601,250.23 to $843,346.24, without first giving notice to the respondent, illegal, and the tax on such increase void? 2. Did the voluntary appearance of the respondent before the board, after the change had been made, cure the lack of notice in the first instance? 3. Did the respondent pursue the proper remedy? These questions have all been determined by comparatively recent decisions of this court.

1. The authority of the county board of equalization to make any increase in the assessed valuation of property, or to order the assessor to make any correction in an assessment which has the effect of adding to the amount of taxes which the taxpayer will be called upon to pay, is found in sections 3781 and 3789 of the Political Code, which sections read as follows :

“Sec. 3781. ' The board has power, after giving notice in such manner as it may, by rule, prescribe, to increase or lower any assessment contained in the assessment-book, so as to equalize the assessment of the property contained therein, and make the assessment conform to the true value of such property in money.”

“Sec. 3789. During the session of the board of county commissioners it may direct the assessor to assess any taxable property that has escaped assessment, or to add to the amount, number, or quantity of property when a false or incomplete list has been rendered, and to make and enter new assessments (at the same time canceling previous entries) when any assessment made by him is deemed by the board so incomplete as to render doubtful the collection of the tax; but the clerk must notify all persons interested, by letter deposited in the postoffice, postpaid, and addressed to the person interested, at least ten days before action is taken, of the day fixed when the matter will be investigated.”

*487As the board by its rule No. 7, prescribed that ten days’ previous notice should be given before an increase in an assessment should be made, it becomes entirely immaterial whether this change be considered as one made by the board for the purpose of increasing the assessed valuation of this company’s property, as provided by section 3781 above, or whether it be considered as a correction which the board ordered the assessor to make under the provisions of section 3789 above; for in either event ten days’ previous notice to the taxpayer was essential to confer upon the board power to make the change in the one instance, or to order it done in the other.

This question was lately fully discussed by this court and determined in Western Ranches, Ltd., v. Custer County, 28 Mont. 278, 72 Pac. 659, and that case' is decisive of this question. In that case the board proceeded under section 3789. There was a failure to give notice to the taxpayer, as in this instance, and respecting the action of the board in making such change without previous notice to the taxpayer this court said: “It is patent that the board had no jurisdiction to increase the plaintiff’s assessment without first giving the ten days’ notice provided by statute,” and then quoted with approval the following language from the case of the same title in 89 Fed. 577: “Did the failure to give the notice before the listing of the property invalidate the tax? I think it did. The notice required by this section was for the protection of the taxpayer, and intended to give him a hearing before the listing of his property in a supplemental list, and was jurisdictional. Without such notice the board of equalization has no right to order the assessor to make the supplemental list: Cooley on Taxation, 2d ed., 362-366; French v. Edwards, 13 Wall. 506, 20 L. Ed. 702; Powder River Cattle Co. v. Board of Commissioners of Custer Co. (C. C.), 45 Fed. 323; Dykes v. Mortgage Co., 2 Kan. App. 217, 43 Pac. 268.” (See State v. Equalization Board, 18 Mont. 473, at 477, 46 Pac. 266, 267; 27 Ency. of Law, 2d ed., 704, 705, and numerous cases cited.)

*4882. Was the failure to give notice cured by tbe company’s voluntary appearance on August 7 th and 10th, after tbe raise bad been made? Tbis question also was determined by tbis court in tbe case cited above, where it is said: “The failure to give plaintiff tbe required notice having rendered tbe tax illegal because tbe board bad acquired no jurisdiction to act with reference thereto, tbe fact that tbe plaintiff voluntarily appeared on August 8th, and asked a reduction of its assessment, which, was partially granted, did not obviate or waive tbe want of jurisdiction in tbe board’s original action. Tbis question was not raised in Cosier v. McMillan, 22 Mont. 484, 56 Pac. 965, cited by defendant. Plaintiff was seeking a reduction of its assessment, and therefore properly appeared before tbe board to ask tbe same. (Barrett v. Shannon, 19 Mont. 397, 48 Pac. 746.)”

Some contention is made, however, that final action in tbe matter of tbis change of valuation was not taken until after tbe voluntary appearance of tbe company’s representatives; but there is no merit whatever in tbis. Tbe minutes of tbe board show tbe following entry respecting tbis change, made on July 29, 1903: “In tbe matter of tbe assessment of tbe M. O. P. Co., for 1903: Whereas, it appears that said company has made returns to tbe assessor showing 293,332 tons extracted at a cost of $3.54 per ton, or a total of $1,039,028.88; and whereas, tbe total amount is incorrect, as tbe figures should read $1,038,-395.28; and whereas, tbe cost of reduction per ton is figured wrong, tbe figures returned to tbe assessor showing $3.62 per ton for reduction, or a total of $1,303,564.69, according to tonnage returned, tbe figures should read $1,061,861.84; and whereas, the'above errors show a discrepancy in tbe net proceeds as returned by said company of $242,096.01: Now, therefore, it is hereby ordered that tbe county assessor make tbe proper correction in said assessment of tbe net proceeds of tbe said M. O. P. Co., and assess said company with tbe full amount of tbe nét proceeds, as shown by their returns on tbe tonnage extracted and reduced.” And tbe pleadings admit *489that the board made, or caused to be made, these entries with respect to the company’s assessment, to wit: “Increased by board of equalization, $242,096. * * * Total assessed value as equalized by county board of equalization^ $843,346.” So far as this record discloses, these were the only changes made and the only records of the same.

Defendant in the court below, over the objection of the plaintiff company, sought to show by the oral examination of the chairman of the board that final action was not actually taken on July 29th; but the effect of such testimony was'to vary or contradict the recitals in the minute entries of the board’s proceedings by parol testimony, and this cannot be done. (State v. Crookston Lumber Co., 85 Minn. 405, 89 N. W. 173; 27 Ency. of Law, 2d ed., 717.) Furthermore, as the board of equalization, acting on assessments of property, is a special tribunal of limited and inferior powers, the facts showing its jurisdiction to act in any given instance must appear affirmatively from the record of its proceedings. (Copper Queen Con. M. Co. v. Board (Ariz.), 65 Pac. 149; 27 Ency. of Law, 2d ed., 717.) There is no pretense that the minutes of the board show that any notice was given; nor is it even contended that any notice in fact was given to the company before the raise was made. Those minutes do show that the raise was made on July 29th, and before any appearance on the part of the company, and before ten days’ notice could possibly have been given, for the board did not meet until July 20th. The decision in the Guster Gounty Case above is conclusive here. That decision in this particular is reaffirmed, and the doctrine therein announced applied.

3. Did the plaintiff pursue the proper remedy? Section 4023 of the Political Code provides: “No injunction must be granted by any court or judge to restrain the collection of any tax or any part thereof, nor to restrain the sale of any property for the nonpayment of taxes, except: 1. Where the tax, or the part thereof sought to be enjoined, is illegal, or is not authorized by law. * * * 2. Where the property is exempt *490from taxation.” This section was adopted as a part of the Code. At the same session of the legislature at which the Oodes were adopted, an Act was passed and approved March 18, 1895, :and by direction of the legislature the sections of this last-named Act were incorporated in the Political Code, and became sections 4024, 4025, and 4026. Sections 4024 and 4025, above, provide for the payment under protest of taxes demanded, and for a suit at law to recover back the whole, or -any part thereof, deemed by the taxpayer to be unlawful, and of this statutory remedy section 4026 says: “The remedy thereby (hereby) provided shall supersede the remedy of injunction and all other remedies which might he invoked to prevent the collection of taxes or licenses alleged to be irregularly levied or demanded, except in unusual cases where the remedy hereby provided is deemed by the court to be inadequate.”

A consideration of sections 4023 and 4026 leads us to believe that the phrase “irregularly levied or demanded” was used by the legislature advisedly, and as prescribing the limits wherein the statutory remedy is exclusive, as distinguished from those cases of illegal taxes the collection of which may be restrained by injunction. In other words, if the action of the •assessor or board of equalization was such that the tax complained of is manifestly void under any circumstances, injunction will lie to restrain its collection; but, if the error complained of is only an irregularity on the part of the assessor, the board of equalization, or the treasurer, which may be subject to explanation so as to, cure the apparent defect, or, in other words, where the tax complained of is not necessarily void under all circumstances, then the remedy provided by sections 4024 and 4025, namely, payment under protest and an action to recover back is exclusive, except in those unusual cases mentioned in section 4026. This is the effect of the decision in Cobban v. Hinds, 23 Mont. 338, 59 Pac. 1, where it is said: “Sections 4023 to 4026, inclusive, of the Political Code, prohibit courts and judges from enjoining the collection of any *491tax, and from restraining the sale of the property for nonpayment of any tax, except in those instances where the tax is illegal, or not authorized by law, or where the property is exempt from taxation, and provide the means and remedies whereby the rights of persons who deem the taxes irregularly or improperly demanded of the owners, or sought to be enforced against the property, may be guarded and protected.”

At the time of the decision in the Custer County Case, above, the decision in Cobban v. Hinds seems to have been overlooked, and language is to be found in the opinion in the Custer County Case which might seem to support a view contrary to the one held in the Cobban Case; but the conflict in the decisions is more apparent than real, and, while we think that some of the language in the Custer County Case is too broad, these decisions are easily reconcilable. So far as this branch of the case was concerned, the only question involved in the Custer County Case was: May one whose assessment has been increased by the board of equalization, without notice to him, where the increase is without authority and the tax on such increase illegal, pay the entire .tax charged against him and sue to recover back the illegal portion, under sections 4024 and 4025, supra, or is his remedy one in equity exclusively, as provided by section 4023 above? We held that the complaining taxpayer might pursue the statutory remedy, and this was all that was necessary to decide in that case respecting this subject. We think the decision in this regard correct. It simply means that, while one may have a sufficient cause of action to justify him in proceeding in equity, if he elects to proceed at law, he may do so. Of course, the converse of that proposition is not true; for if one has a remedy at law, which is plain, speedy and adequate, he cannot have any standing in a court of equity. In the Custer County Case the board of equalization directed the assessor to add to the plaintiff’s assessment a large amount of property which the plaintiff did not own. This increase was made without notice to the taxpayer, but the entire tax was paid, and a statutory action brought to recover back the *492portion of the tax which was illegal. In this court the question was raised as to whether the plaintiff could pursue the statutory remedy, or whether the remedy was not one in equity. [Respecting this we said: “We think the plaintiff pursued the proper remedy in paying the taxes demanded under protest, and afterward bringing suit to recover them.” We might more properly have said that the plaintiff pursued a proper remedy at its disposal; and, had we done so, the decision would have appeared more completely in harmony with the decision in the Oobban Case. But, when read in the light of the particular question presented for determination, the language used is not misleading, and there was no intention on the part of this court to announce a rule different from the one in the Oobban Gase.

In the Custer County Case it is said that if there is any conflict between tlqe provisions of section 4023 and the Act of March, 1895, the latter provisions control. It is to be observed that we did not say that there is in fact any conflict; and upon further consideration, and in view of the decision in the Cobban Case, we think there is in fact no conflict whatever, and that the construction placed upon section 4023 and the Act of March 18, 1895, by this court in the Cobban Case, is logical. By this construction section 4023 and the provisions of the Act of March 18, 1895, remain in full force and effect, and this conclusion satisfies the rule of statutory construction, which requires such a result, if possible.

4. The decree: The decree entered in this case is erroneous in enjoining the county treasurer from proceeding to sell the property of the respondent company without requiring the payment of the tax admitted to be due as a condition precedent. The cause is remanded to the district court, with directions to modify the decree by adding a provision requiring payment of the tax admittedly due within ten days after such modification is made and the respondent notified thereof, and upon failure by respondent to make such payment within the time limited the injunction be dissolved and the action dismissed. With *493this modification, the judgment will be affirmed; but each party will be required to pay his own costs of this appeal.

Modified and affirmed.

Mr. Chief Justice Brantly and Mr. Justice Milburn concur.