This appeal involves the assessed valuation for taxation of certain lands in Saline county. Plaintiffs, who are the owners of 18 tracts of land situate in school district No. '68, in Saline county, complained to the board of equalization that their lands were assessed 20 to 25 per cent, higher than other lands of the same value, and higher than the lands, of like value, generally in the county and state. The board of equalization denied relief. Plaintiffs appealed to the district' court, and that court reduced the assessment of plaintiffs’ lands to the extent of 15 per cent. The county of Saline has appealed.
Upon a careful examination of the entire record, it clearly appears that plaintiffs’ lands are not assessed for more than their actual value. It further appears that the lands' in Saline county and in the state generally are assessed at not more than 70 per cent, of their actual value, and that the lands of plaintiffs are assessed at a greater proportion of their actual value than other lands in Saline county and in the state.
*57It was formerly the rule in this court that one could not complain that his lands were assessed too high, unless assessed at more than their actual, value, and that he could not have his assessment reduced because other lands generally were assessed at less than their actual value. It was held that his only relief was to complain of the properties that were assessed too low. Lincoln Telephone & Telegraph Co. v. Johnson County, 102 Neb. 254; Sioux City Bridge Co. v. Dakota County, 105 Neb. 843. The latter case was taken to the United States supreme court on writ of certiorari and the judgment of this court there reviewed, wherein the holdings of this court were reversed (Sioux City Bridge Co. v. Dakota County, 260 U. S. 441, 67 L. Ed. 340), following which this court overruled its former decisions and now holds that one whose property is assessed at less than its actual value may complain if it is assessed at a higher proportion of its actual value than other property in the state. Sioux City Bridge Co. v. Dakota County, 110 Neb. 597.
The principal controversy here is with reference to the cause which affects the value of plaintiffs’ lands. It appears that for many years school district No. 68; in Saline county, has levied a tax, for school purposes, running from 14 to 17 mills annually on the dollar of assessed valuation, and that a like; levy will be necessary and will continue in said district for years to come. It also appears that the tax levy for school purposes on lands of the same character and quality, situate outside of and adjacent to the district, is from 4 to. 5 mills on the dollar of assessed valuation. This has resulted in imposing a tax on an average quarter section of land within district No. 68, for several, years last past, of about $350 per annum, while on a quarter section of land of the same quality and character, lying adjacent to but outside the district, the tax is about $175 per annum. ' This situation has caused a decrease in the actual value of the lands within the district, for sale and loan purposes, of 20 to 25 per cent.
It is earnestly and strenuously contended by the defend*58ant county that the question of school taxes cannot be taken into consideration in fixing the value of the lands; that the value of lands within the district, of the same quality and character as those immediately without and adjacent thereto, should be assessed on the same basis. We cannot agree with this contention.
Section 1, art. VIII of the state Constitution, is in part as follows: “The necessary revenue of the state and its governmental subdivisions shall be raised by taxation in such manner as the legislature may direct; but taxes shall be levied by valuation uniformly and proportionately upon all tangible property and franchises.” I It will thus be seen that taxes must be uniformly and proportionately levied upon property on the basis of valuation.
Section 77-201, Comp. St. 1929, provides: “All property in this state, not expressly exempt therefrom, shall bé subject to taxation, and shall be valued and assessed at its actual value. ‘Actual value,’ as used in this act, shall mean its value in the market in the ordinary course of trade.” Pursuant to this statute, all tangible property should be assessed at its actual value for purposes of taxation, but, if tangible property is generally assessed at less than its actual value, then all of it should be assessed at the same proportion of its actual value.
In 26 R. C. L. 365, sec. 322, it is said:, “By fair market value is meant the amount of money which a purchaser willing but not obliged to buy the property would pay to an owner willing but not obliged to sell it, taking into consideration all uses to which the property is adapted and might in reason be applied.”
It is urged by defendant county that the value of the land.should be determined by the fact that the land within the district will produce as much in crops as land of the same character without the district. This, however, calls for the application of. the gross income' principle in determining the value. The better rule and the one generally recognized is: “If the property is devoted to the use for which it was designed, and is in a condition to produce *59its maximum income, one very important element for ascertaining its present value is the net profits derived therefrom.” 26 R. C. L. 367, sec. 324. See, also, note to. Wells Fargo & Co., v. Johnson, L. R. A. 1916C, 529, 532; 3 Cooley, Taxation (4th ed.) 2308, sec. 1146.
In Railroad & Telephone Cos. v. Board of Equalizers, 85 Fed. 302, it was held, in effect, that, under a constitutional provision requiring that all property shall be taxed according to its value, the earnings of railroad and tele-phone companies may be considered in determining the value of the property for purposes of taxation, but earnings of such companies furnished a safe basis on which to estimate values only when net earnings are considered. Gross receipts do not constitute a proper basis for determining the value of such companies.
The same principle is applicable to real estate prudently used for the purpose to which it is best suited and adapted. The lands in question are agricultural and are used for that purpose. The net income which they will produce to the owner is a factor in determining their actual or market value. The fact that a tract of land is subjected to an annual burden of $350 for taxation, while another tract, of like character and quality, lying adjacent thereto, ip subjected to an annual burden of but $175 for taxation, has a tendency to, and no doubt does, affect the respective market or actual value of the two tracts. The one having the greater burden produces the smaller net income and, naturally, would be of less market value. Since taxes must be levied according to actual value, the taxing authorities are only concerned in determining what the actual value is, regardless of the causes which produce it, and to see that taxes are levied proportionately, according to the actual value, on all property.
The record justifies the reduction made by the district court in the assessment of plaintiffs’ lands, and the judgment is
Affirmed.
Eberly, Day, and Paine, JJ., dissent..