Gray v. Stiles, Treasurer , 6 Okla. 455 ( 1897 )

Concurring opinion by I concur fully with the conclusion reached by Justice McAtee in the foregoing opinion and with most of the reasoning therein contained; hence, were the question decided not one of extraordinary importance, and one which has heretofore been decided by a majority of this court, directly contrary to the position now taken, by a majority of the members thereof, I should content myself with merely concurring with the views so ably expressed by my brother, McAtee, without attempting to elaborate them or to give any additional reasons therefor. In this connection, however, I will be pardoned the statement that, in my judgment, both the foregoing and the majority opinion in Wallace v. Bullen go somewhat beyond the matters presented by the record and deal too much with supposed consequences and the alleged motives of those assumed to be peculiarly interested in the determination of the question involved, which, as I understand it, is solely one of statutory construction.

There is one proposition raised by the pleadings and urged by the defendants in this and the other similar cases, which has not been noticed in either of the prepared opinions. It is, in substance, that, the value of all the property in the Territory having been raised to a common plane, no tax payer is injured thereby, as the rate of taxation was correspondingly reduced and the amount of taxes levied in each county and the amount required of each tax payer were the same as they would have been had the raise not been made by the territorial board of equalization. In the answer of defendants in the case at bar, this proposition is sought to be raised by the following allegations:

"Defendants say that the rate of taxation in said Logan county, was fixed by the board of county commissioners, subsequent to said action by the territorial board of equalization, upon the basis of the increased valuation of the property in said Logan county, as fixed by the territorial board of equalization, as aforesaid; that the said board of county commissioners, at the time of fixing said rates, made a careful and conservative estimate of the expenses of said county for the current year, 1895, and levied only a sufficient rate of taxation to meet said expense; that the amount of money required to be paid as taxes for said county is no greater than as though said increase by the said territorial board of equalization had not been made; that if said increase in valuation had not been made the said board of county commissioners would have been compelled to increase the rate of taxation, in order to meet the actual and necessary expenses of said county."

Conceding that there are sufficient facts plead in said answer to properly present the point relied on, which, to say the least, is extremely doubtful, the contention, in my opinion, is not tenable for several reasons, among which are the following: First. It would be wholly impracticable for a court to determine, with any degree of certainty, that an individual's tax has not been increased by such raise; second, the statute authorizes an injunction "to enjoin the illegal levy of any tax, charge or assessment, or the collection of any illegal tax, charge or assessment, or any proceeding to enforce the same;" (sec. 265, Procedure-Civil;) third, to sustain this contention would be to give said board of equalization unlimited power in this regard and the value of all the property in the Territory, except railroads, might be raised to ten, or even ten thousand times its actual value, and, as this board is required to assess railroad property at "its actual cash value," any increase of the other taxable property beyond such value would necessarily impose an unjust burden thereon.

I heartily agree with what is said in the foregoing opinion as to its being utterly impossible, under the law, for the territorial board of equalization to ascertain the true, or actual, value of any classes of property except that which it is said board's duty to assess. This position is made perfectly apparent by the provisions of art. 4, ch. 43, Session Laws, 1895, which make it the duty of said board "to assess all the property of the railroads and railroad corporations in the Territory of Oklahoma at its actual cash value;" and in order that said value may be ascertained "every person, company or corporation operating or constructing a railroad in this Territory" is required to "return sworn lists or schedules of the taxable property of said railroad company or corporation as hereinafter provided."

It is then specifically provided, in sec. 5 of said article, how and by whom these lists or schedules shall be made, what they shall contain, etc. It will suffice here to say that said lists or schedules shall contain a sufficient statement of the amount, character and value of such railroad property to enable said board to determine, almost, if not quite, definitely, the actual cash value thereof. Then, in sec. 7 of said article, it is further provided that if the proper officers fail to make the required statements or schedules, the person, company or corporation owning such railroad property "shall forfeit, as a penalty, not less than five thousand dollars for each offense," etc. It is still further provided in sec. 8, of said article, that the board of railroad assessors shall have power to compel the attendance of the officers and other agents of a railroad company as witnesses to testify before said board concerning any necessary matters to enable said board to properly assess such property, and that, "any president, secretary, receiver, accounting officer, servant or agent of any railroad company, who shall knowingly make any false answer to any question put to him by such board or by its order, touching the business, property, money and credits and value thereof, of said railroad company, shall be guilty of perjury, and it shall be the duty of the president of said board to prosecute any person liable to the penalties of this section immediately upon the accruing of the liability of such prosecution."

How, then, can it be asserted that the legislature, which understood that all of the foregoing provisions were necessary to enable these officers, (when acting as the board of railroad assessors,) to determine the actual cash value of the railroad property of the Territory, could possibly have intended that said officers, (when acting as the territorial board of equalization,) should assume to fix the actual cash value of the other property of the Territory at a different amount from that fixed by the various assessors thereof, as equalized by the township and county boards of equalization, without any means whatever for ascertaining same, except abstracts of the assessment rolls of the different counties?

Another phase of the question, which seems to have been overlooked by the other justices who have prepared opinion herein is, that, if this court holds that said board of equalization has the power to raise the aggregate valuation of the taxable property of the Territory, as shown by the abstracts of the assessment rolls of all the counties, by a parity of reasoning we must also hold that it is vested with the power to reduce said aggregate valuation and, so far as the writer can discern, there will be no adequate means of correcting the action of said board, no matter to what extent it may, in the future, increase or decrease such aggregate value. It certainly will not be contended that a tax payer can maintain a proceeding in court to review and correct the action of said board in this regard upon the sole ground that his property has been over valued thereby and, as there is no appeal therefrom, I can see no possible remedy, if this power is conceded, that the tax payers of the Territory would have to correct such action, should the territorial board of equalization increase the aggregate valuation of their property to twice, or even many more times, its "true cash value." On the other hand, I can see no means with which to review and correct the action of said board should it decrease the valuation of the property, of the territory to one-half, or even a less portion, of its "true cash value." Can it be possible that the legislature ever intended to invest this body with such tremendous powers, to be exercised without the right of a hearing on the part of those affected thereby, by providing simply that "it shall be the duty of said board to examine the various county assessments and to equalize same?" The objections just suggested are not satisfied by saying that, as the territorial board of equalization is composed of sworn officers, it will be presumed that they will fairly and honestly perform the duties assumed by them, for this argument will apply with greater force to the local assessors who are also sworn officers, and whose duties are definitely prescribed by law, and heavy penalties provided for a failure, on their part, to honestly and faithfully perform them.

Confer this unlimited and absolute power and some future territorial board of equalization, surrounded by different environments and actuated by different considerations from those which seem in part at least, to have influenced the one whose action is now under consideration, may, by an arbitrary reduction of the aggregate assessed value of the property of this Territory, accomplish the very result which is sought to be avoided by the majority opinion of this court in Wallace v.Bullen, to-wit: "The violation of private rights, and the impairment of public faith, and might seriously impair the usefulness of territorial, county and municipal governments, by depriving them of the just revenue necessary for the proper discharge of their functions."

It may be urged that there is no possible danger of any board of equalization, in this Territory, ever reducing the aggregate assessed value of the property within its jurisdiction and, judging from precedents, there would seem to be considerable plausibility in this contention; but courts, when they look to consequences at all as an aid in interpreting the meaning of a statute and the intention of the legislature as expressed thereby, must take into consideration all such consequences as are made possible by a certain construction, and which can logically be expected to follow same.

I accede to the suggestion, in the opinion of the court inWallace v. Bullen, to the effect that the territorial board must necessarily be conceded the power to raise or lower the aggregate assessed value of the property of a county in order to properly perform its duties as a board of equalization; but, when used solely for the proper exercise of these functions, this power is not an arbitrary and unlimited one since it is confined strictly within established and well defined limits and, while restricted to such purpose, it can never be made an engine of oppression on the one hand or of repudiation on the other; and, although the proper exercise of said power may result in increasing the assessed valuation of the property of many tax payers, they must submit thereto in order that the burdens of taxation shall be so distributed as to require each to contribute to the support of government in proportion to the value of his property. To this extent the power to change valuations by boards of equalization is legitimate and proper, but to extend it beyond this scope, without providing those whose property is re-valued with an opportunity to be heard, is to remove all restrictions upon the power of the state to tax the property of the citizen. (See South Platte Land Co. v.Buffalo Co., 7 Neb. 253, wherein it is held: "The county commissioners, acting as a board of equalization, cannot raise the assessment in property without giving notice to the owner; and if they do so increase the assessment of property without notice, they act without jurisdiction of the person or subject matter, and their proceedings are void, and of no effect.")

In the body of the opinion, Chief Justice Gantt, speaking for the court, says:

"Therefore the main question presented for consideration is, whether the commissioners, acting as a board of equalization, can re-assess property without giving notice to the owner. * * But it is insisted that as sec. 27 constitutes the county commissioners also a board of equalization, and provides that the 'said board shall have the right to raise or lower the valuations of any or all property, (except property valued by the state board,) as may be deemed just and proper,' absolute power resides in this board to re-assess property as it may choose; and that as the statute fixes the time when the board shall meet, it may exercise this power without giving notice to the owner of the property. * * Certainly such absolute power to tax the property of the citizen without notice would establish a precedent too dangerous to be tolerated, and it is not to be supposed that it was the intention of the legislature to confer on the board a power so dangerous and so liable to abuse. * * Tax his property, and the constitution declares that no man shall be deprived of his property without due process of law. * * But if the proposition contended for is maintainable, then the board, by its arbitrary act, may, without due process of law, raise the tax on property of the citizen, without limit and without his knowledge. * * It seems to me that if the proposition contended for on the part of the defendants is to be maintained it must be at the sacrifice of those great principles upon which private rights repose for their security, and which are secured by the solemn guaranties of the constitution, and therefore I must conclude that the county commissioners, acting as a board of equalization, cannot interfere with those rights and re-assess property without first giving notice to the owner."

I fully agree with the conclusion of my associates, (Justices McAtee and Bierer,) that the action of the territorial board of equalization, in raising the aggregate assessed valuation of all the property of the Territory, (except railroad property,) more than $11,000,000, as shown by the record in this case, amounted to a re-assessment of all the property whose aggregate assessed valuation was so raised rather than an equalization thereof. While it is true that "the valuation of Kingfisher county was adopted as a basis for equalization," and the valuation of each of the other counties raised thereto, yet the same reasoning which will support this raise, to-wit: the power and duty of said board to see that "the law requiring all the property to be assessed at its actual cash value" is complied with, will also support a raise of the valuations of all the counties of the Territory to some common plane, entirely above that of any county, which, in the opinion of a majority of the members of this board, would come most nearly fulfilling the requirements of the law. In fact, such was the practical effect of the action of said board in this instance since the aggregate valuation of the taxable property of Kingfisher county, which was used as the basis for said action, had previously been increased, by the county board of equalization, in the sum of $382,335.75, being an increase of about 25 per cent. over and above the aggregate valuation fixed by the several assessors of the taxing districts of said county, as is shown by the record in the case of Lee v. Mehew, now pending before this court, and submitted, to abide the decision in the case at bar, and the other cases involving the same question. In other words, the majority of the members of this board have attempted to exercise the powers and duties conferred by law upon the assessors of the Territory, except that they have re-assessed the taxable property thereof by county, instead of individual assessments.

I also entirely agree with those of my associates who have reached the conclusion that the legislature never conferred, and never intended to confer, any such jurisdiction or authority upon this board; and I go still farther and hold that the legislature itself is not invested with the power to confer such authority, unless it also provide for a hearing before said board on the part of those whose property is to be re-assessed thereby. Fortunately for the property-owning citizen, under the sacred guaranty of our federal constitution, no person can be deprived of his property "without due process of law," and it has been the unanimous holding of the courts of this country that the attempted exercise of the power on the part of a state to provide for the assessing of the property of her citizens, or any portion thereof, for taxation, without an opportunity for them to be heard at the time, or after the date, of such assessment, is in violation of this constitutional provision and therefore nugatory. The fact that our law makes ample provision for such a hearing before the township boards of equalization is no compliance with said constitutional guaranty, if both the county and territorial boards of equalization (or either of them) can, subsequently thereto, re-assess the property listed for taxation. (The Railroad Tax cases, 13 Fed. 722, 8 Sawyer 270.)

Perhaps the leading and best reasoned case to be found upon this proposition is that of Stuart v. Palmer, 74 N.Y. 183, wherein the very able court of that state, per Earl, J., say, in part, the following:

"It will be observed that two assessments are provided for by the acts; one for the damages awarded to the owners of the land, under sec. 3 of the act of 1869, as amended, and another for the expense of regulating, grading, etc., under sec. 4, as amended. The former assessment was to be made and confirmed after proper notice to and hearing of the persons interested. The latter assessment could be made without any notice to or hearing of any person. The law requires no notice, and a provision for notice cannot be implied. Upon the assumption that the law was valid, there was ample authority for the commissioners to make the assessment without any notice or hearing; and the assessment, when once made in the exercise of the arbitrary discretion thus conferred, would be unassailable, and however unjust, unfair and oppressive, would be subject to no review, unless fraud or corruption could be shown.

"I am of the opinion that the constitution sanctions no law imposing such an assessment, without a notice to, and a hearing or an opportunity of a hearing by the owners of the property to be assessed. It is not enough that the owners may by chance have notice, or that they may as a matter of favor have a hearing. The law must require notice to them, and give them the right to a hearing and an opportunity to be heard. It matters not, upon the question of the constitutionality of such a law, that the assessment has, in fact, been fairly apportioned. The constitutional validity of law is to be tested, not by what has been done under it, but by what may by its authority be done. The legislature may prescribe the kind of notice and the mode in which it shall be given, but it cannot dispense with all notice.

"The legislature can no more arbitrarily impose an assessment for which property may be taken and sold than it can render a judgment against a person without a hearing. It is a rule founded on the first principles of natural justice, older than written constitutions, that a citizen shall not be deprived of his life, liberty or property without an opportunity to be heard in defense of his rights, and the constitutional provision that no person shall be deprived of these 'without due process of law' has its foundation on this rule. This provision is the most important guaranty of personal rights to be found in the federal or state constitution. It is a limitation upon arbitrary power, and is a guaranty against arbitrary legislation. No citizen shall arbitrarily be deprived of his life, liberty or property. This the legislature cannot do nor authorize to be done. 'Due process of law' is not confined to judicial proceedings, but extends to every case which may deprive a citizen of life, liberty or property, whether the proceeding be judicial, administrative or executive in its nature. (Weimer v. Bunbury,30 Mich. 201.) This great guaranty is always and everywhere present to protect the citizen against arbitrary interference with these sacred rights.

"It has always been the general rule in this country in every system of assessment and taxation, to give the person to be assessed an opportunity to be heard at some stage of the proceeding. That 'due process of law' requires this, has been quite uniformly recognized.

"No case it is believed can be found in which it was decided that this constitutional guaranty did not extend to cases of assessments, and yet we may infer from certain dicta of judges that their attention was not called to it, or that they lost sight of it in the cases which they were considering. It has sometimes been intimated that a citizen is not deprived of his property within the meaning of this constitutional provision by the imposition of an assessment. It might as well be said that he is not deprived of his property by a judgment entered against him. A judgment does not take property until it is enforced, and then it takes the real or personal property of the debtor. So an assessment may generally be enforced not only against the real estate upon which it is a lien, but as in this case against the personal property of the owner also, and by it he may just as much be deprived of his property, and in the same sense as the judgment debtor is deprived of his by the judgment."

The principles declared by the supreme court of New York in the case just cited and quoted from are recognized and affirmed in numerous decisions, both state and federal, among them being the following: South Platte Land Co. v. Buffalo Co., supra;People v. Union, 31 Cal. 138; Slaughter v. City of Louisville, (Ky.) 8 S.W. 917; Davidson v. Board of Admnr's of New Orleans,96 U.S. 97; Hagar v. Reclamation Dist. No. 108, 111 U.S. 701;Spencer v. Merchant, 125 U.S. 345; Winona St. Peter Land Co.v. Minnesota, 159 U.S. 526, and cases therein cited; the Railroad Tax cases, supra, and note.

The valuation or assessment of property for the purpose of imposing an ad valorem tax thereon is a judicial act which cannot be exercised by the legislature itself nor delegated by it to any other body or person to be exercised without due notice to, and a right to be heard by, those affected thereby. See Slaughter v. City of Louisville, supra, wherein it is held that: "The valuation or assessment of property is not only a judicial, but an indispensible, act, in order to levy advalorem taxes upon it. In the nature of the thing, there must be an assessment. * * Can the legislature, in order to authorize the collection of ad valorem taxes, fix the valuation upon the property to be taxed? It seems to be well settled that the legislature, as the law making department of the state government, has no constitutional power to fix the valuation of property which is to be taxed upon ad valorem principles. The reason for this rule is that the legislative department has no judicial or executive power; and, as the valuation is judicial, it follows that the legislature has no constitutional power to make the valuation. Taxes are not debts. 'Debts are obligations founded upon contracts, express or implied;' but taxes are impositions levied for the support of the state government, or for county or city purposes. When they are imposed by authority, they operate on the tax payer in invitum. When they take the form of a per centum, there must be a valuation as a basis of the power to levy and collect them. The tax payer is entitled to be heard in fixing this valuation. The basis of the right to collect taxes from him consists in the valuation of his property; and to deny him the right to be heard in making this valuation would be the taking of his property without due process of law. The valuation is the due process of law by which the right to take his property for taxation is begun; and, the legislature having no judicial or executive power, it cannot make the valuation; but the valuation must be made by some person authorized to exercise judicial power, and such person is an assessor."

The principles announced in the cases herein cited upon this constitutional question in no wise conflict with the decision of the supreme court of Missouri in Black v. McGonigle, 103 Mo. 78, 15 S.W. 615, which seems to have been relied upon as the sole support of authority for the conclusion of a majority of this court in Wallace v. Bullen. The decision in the Missouri case is based upon statutes amply providing for notice to, and the opportunity of a hearing by, all persons, the valuation of whose real estate had been increased by the county board of equalization to comply with the requirement "that each tract of land shall be entered on the tract book at its true value," and it appears that the board was not authorized to change the valuations of personal property for any such purpose. In addition to the authority given said board, by sec. 6672, Rev. St. Mo. 1879, "to hear complaints," sec. 6673 thereof, as amended by act of 1887, provides:

"But, after the board shall have raised the valuation of such real estate, it shall give notice of the fact, specifying the property and the amount raised, (to the persons owning or controlling the same, by personal notice through the mail, or by advertisement in any paper published in the county,) and that said board will meet on the fourth Monday of April, to hear reasons, if any may be given, why such increase should not be made."

In discussing the sufficiency of the notice given by the board of equalization in that case said supreme court of Missouri says, among other things, that, "the order of the board on the 3rd of April raised the assessed value of all lands in Lyon township 50 per cent., while the notice given by the clerk showed an increase of 50 cents on the $100 valuation. There is certainly a vast difference between the order as made and the notice given. The notice, as given cannot be said to specify the amount raised. The tax payer might well disregard the increase as specified in the notice, and yet have a serious and valid objection to the increase made by the board. The question then arises whether the board, on discovering the mistake, had the power to order a new notice."

Thus it is seen that Black v. McGonigle, supra, instead of supporting the conclusion of a majority of this court inWallace v. Bullen, is strictly in line with the many other able and well considered decisions holding that the owners must be afforded the right of a hearing, at some stage of the proceedings, relative to the assessment of their property before the same can be charged with an ad valorem tax.

I concede that, as the law of this Territory fixes the time and place for the meetings of the county and territorial boards of equalization, this would, probably, be a sufficient notice to the tax payers to enable them to appear before said boards for the purpose of adjusting any grievances they may have concerning the matter of the assessment of their property but, as the law gives them no right of hearing before such bodies, they are in no better position in this regard than if they had no notice whatever of the time and place of such meetings. (SeeHagar v. Reclamation Dist. No. 108, and Railroad Tax cases,supra.)

To sustain a law providing for the assessment or reassessment of the taxable property of our Territory, without the right of a hearing on the part of those whose property is to be so assessed thereunder, would be little, if any, less dangerous, as a precedent, than to uphold an enactment abrogating the right of trial by jury; and for this court to interpret a plain provision, authorizing and requiring the equalization of the assessed valuations of property, into such a law would, in my opinion, be to commit an error that it could never retrieve and one which, if not corrected by legislative action, must, almost inevitably, sooner or later, result in the oppression of those of our citizens who own the material wealth of the Territory, if not in the absolute confiscation of their property.

The question of whether or not the legislature has the power to authorize the territorial board of equalization to increase the assessed valuation of any county of the Territory, even for the sole and necessary purpose of equalization, without providing those whose property valuations are thereby increased with an opportunity to be heard in opposition thereto, and without any other evidence than abstracts of the assessment rolls of the various counties of the Territory, is not now before us, and I express no opinion whatever thereon.

As both Justices McAtee and Bierer have, from the same point of view as that occupied by the writer, heretofore prepared written opinions in this cause fully covering all of the other material points raised and presented, I deem it unnecessary to extend this concurring opinion further than to reiterate that the position now taken by this court upon this, undoubtedly, the most important question which has, as yet, been presented thereto, is not only sustained by the better reason but also by the great weight of authority.