Title: MUSKOGEE FAIR HAVEN MANOR v. SCOTT

State: oklahoma

Issuer: Oklahoma Supreme Court

Document:

MUSKOGEE FAIR HAVEN MANOR v. SCOTT  MUSKOGEE FAIR HAVEN MANOR v. SCOTT 1998 OK 26 957 P.2d 107 69 OBJ 1167 Case Number: 86993 Decided: 03/31/1998 Mandate Issued: 05/01/1998 Supreme Court of Oklahoma MUSKOGEE FAIR HAVEN MANOR PHASE I, INC., MUSKOGEE FAIR HAVEN MANOR PHASE II, INC., MUSKOGEE FAIR HAVEN MANOR PHASE III, INC., MUSKOGEE FAIR HAVEN MANOR PHASE IV, INC., Appellees, vs. JACKIE SCOTT, County Assessor of Muskogee County, Oklahoma, Appellant. CERTIORARI TO THE COURT OF CIVIL APPEALS, DIV. III APPEAL FROM THE DISTRICT COURT OF MUSKOGEE COUNTY, STATE OF OKLAHOMA HONORABLE THOMAS H. ALFORD, TRIAL JUDGE [957 P.2d 108] ¶0 In an action by real property owners for declaratory relief against a county assessor, following an adverse ruling by the county board of equalization regarding the status of their property as exempt from ad valorem taxation, the District Court, Thomas Alford, trial judge, found that the property is exempt. The county assessor appealed. The Court of Civil Appeals reversed, holding that the district court lacked subject matter jurisdiction. On the owners' petition we granted certiorari. THE COURT OF CIVIL APPEALS' OPINION IS VACATED; JUDGMENT BY THE TRIAL COURT IS REVERSED; CAUSE REMANDED WITH DIRECTIONS TO DISMISS. Angela M. Risenhoover, Assistant District Attorney, Muskogee, Oklahoma for Appellant. Clifford K. Cate, Jr. of Boesche, McDermott & Eskridge, Muskogee, Oklahoma and William K. Elias and Frank H. McGregor of McKenzie, Moffett, Elias & Books, P.C., Oklahoma City, Oklahoma for Appellees. LAVENDER, J. ¶1 The dispositive issue is whether the district court has jurisdiction to grant declaratory relief to a taxpayer who, without first invoking any judicial remedy provided in the Ad Valorem Tax Code, commences an action, challenging the county assessor's refusal to recognize an exemption claimed under a self-executing provision of the Oklahoma Constitution. We answer in the negative and hold that the legislatively prescribed judicial remedies afforded to these taxpayers under the Code are adequate and exclusive, and that the district court therefore lacked subject matter jurisdiction to entertain their declaratory judgment action. ¶2 Owners of an allegedly nonprofit housing project, providing subsidized and minimally-priced housing for elderly and handicapped people, were notified in 1994 by the County Assessor of Muskogee County, Jackie Scott, that their property would no [957 P.2d 10 ¶3 In response to the assessor's notice the owners lodged a complaint pursuant to ¶4 The owners complied with neither § 2880.1 nor § 2886. Instead, in October 1994, several months after the board's decision, they sought declaratory relief in the district court, alleging that the county assessor, "through [the] Muskogee County Board of Equalization," refuses to recognize the exempt status of their property, despite its [957 P.2d 1 ¶5 A hearing was eventually held in August 1995 to determine whether the property is exempt. Before evidence was introduced, however, counsel for the county assessor objected to the trial court's exercise of jurisdiction and argued that the county assessor had never agreed to the terms of the compromise that had earlier been approved by the court. The trial judge rejected counsel's assertions and allowed the owners to proceed. ¶6 At the hearing's conclusion the trial court declared the property exempt, finding that it is "used exclusively for charitable purposes and that the facilities operated by Plaintiffs are open to any person regardless of ability to pay." The court also found "no evidence that the owners received any remuneration." The county assessor appealed. ¶7 Only one issue was raised on appeal - whether the trial court had jurisdiction to resolve the exemption issue. The basis for asserting lack of jurisdiction was the owners' failure to appeal to the district court under § 2880.1. A. The proceedings before the county assessor, boards of equalization and appeals therefrom shall be the sole method by which assessments or equalizations shall be corrected or taxes abated. Equitable remedies shall be resorted to only where the aggrieved party has no taxable property within the tax district of which complaint is made. (Emphasis added.) The owners responded by arguing that the pre-trial agreement was merely procedural (analogous to waiving jury trial) and that the county assessor is either bound by the agreement or estopped from denying its effectiveness. ¶8 The Court of Civil Appeals, in a 2-1 decision, agreed with the county assessor, holding that "[b]y express language, the Legislature has chosen to deny jurisdiction to the District Court to hear such matters in the absence of compliance with these procedures." The appellate court also took note of an issue raised by the dissent - whether the self-executing constitutional provision upon which the claimed exemption is based frees [957 P.2d 1 ¶9 The owners sought certiorari, arguing that the statutory provisions to which the appellate court referred in its opinion, ¶10 The first issue raised by the owners is whether the statutorily prescribed avenues of complaint before the county assessor and the board of equalization (and appeals therefrom) are applicable to their claim. They are correct in their observation that the language of the statutory remedies to which they refer, in §§ 2876, 2877, and 2880.1 (quoted in part in notes 3, 4, and 5, respectively), indicates a primary concern with changes (or increases) in valuations of real property, as opposed to changes in taxable status. We note, however, that the owners themselves, in response to the county assessor's notice, asserted their exemption and sought a hearing. The county assessor, who is charged with the duty of preparing the tax rolls and listing exempt property, ¶11 Appealing from the board's ruling, then, was an option for the owners. They could have also complained to the board of tax roll corrections under § 2871(C)(2), the terms of which explicitly authorize the board to determine whether "[p]roperty exempt from taxation has been assessed. . . ." The right of the taxpayer and the county assessor to appeal from decisions of this board to the district court is authorized by § 2871(F). ¶12 With respect to § 2885(A) the owners rely on its reference to "[e]quitable remedies . . . where the aggrieved party has no taxable property within the tax district . . . ." They maintain that they qualify for equitable relief because the trial court declared their property to be exempt and therefore nontaxable. We reject this argument for three reasons. The first is that the owners did not seek equitable relief from the trial judge, and none was granted. Secondly, the "equitable remedies" to which the owners refer under § 2885(A) are affordable when the aggrieved party has no taxable property situated within the tax district, and even then, equity will not, for example, reverse the effects of a voluntary payment of taxes under a mutual mistake of fact, where the taxpayer could have earlier discovered the error and sought its correction. Edwards v. Board of Com'rs, 169 Okla. 87 , 36 P.2d 6 (1934) (the Court's syllabus). Finally, a judge's powers in equity are not invocable when clear and adequate statutory remedies are available. Whig Syndicate, Inc. v. Keyes, 1992 OK 95, 836 P.2d 1283 , 1288; Billingsley v. North, 298 P.2d 418 , 421-422 (Okla. 1956). We now address the main issue in this cause. ¶13 The "constitutionality of § 2885(A)," as the appellate court phrased the issue, is not at stake. The prime question is one of subject matter jurisdiction, which can be raised sua sponte, and this Court is duty-bound to inquire into the jurisdiction of the court from whence the decision came. Lincoln Bank and Trust Co. v. Okla. Tax Com'n, 1992 OK 22, 827 P.2d 1314 , 1318. Even if the constitutional issue were before us, our duty to address it would not depend on the public interest or welfare, because the [957 P.2d 11 ¶14 Although codified in § 2887 (see note 2, supra), the exemption claimed by the owners is mandated by the Oklahoma Constitution, Art. 10 § 6: (a) Except as otherwise provided in subsection (b) of this section, all property used for free public libraries, free museums, public cemeteries, property used exclusively for nonprofit schools and colleges, and all property used exclusively for religious and charitable purposes . . . shall be exempt from taxation . . . . (Emphasis added.) This Court has long held this provision to be self-executing. See Cox v. Dillingham, 199 Okla. 161 , 184 P.2d 976 , 980 (1947); City of Hartshorne v. Dickinson, 207 Okla. 305, 249 P.2d 422, 424 (1952); As such it is "operative without supplemental or enabling legislation," Independent School Dist. No. 9 v. Glass, 1982 OK 2, 639 P.2d 1233 , 1238, and its object is thus placed beyond the power of the legislature to nullify by failing to enact laws to carry it into effect. Wren v. Dixon, 40 Nev. 170, 161 P. 722, 730 (1916). ¶15 A tax upon property exempt from taxation by virtue of a self-executing constitutional provision is "illegal and void." Cox, supra; City of Hartshorne, supra; Glass, supra. Application of this principle in Cox produced the following holding, which might appear at first glance to support the owners' quest for declaratory relief: "If, by reason of the constitutional exemption, property is not taxable county officials have no jurisdiction or power to levy a tax against the same, and any levy so made is void. If the levy is void the statutory proceeding by appeal from the Board of Equalization is not exclusive." (Emphasis added.) 184 P.2d at 977 (the Court's syllabus ¶ 3). A closer look at this case, however, reveals that it provides no support for the owners' position. ¶16 In Cox the taxpayer, without appealing from the board of equalization's ruling, sued the county treasurer to recover taxes paid under protest on property claimed to be exempt under Art. 10 § 6. From an order dismissing the action for want of jurisdiction the taxpayer appealed. This Court reversed, rejecting the treasurer's contention that the taxpayer had an adequate remedy under ¶17 The record in the instant cause is devoid of any indication, and the owners do not contend, that § 2886, for example, would not have provided them a clear and adequate remedy. Self-executing constitutional provisions generally do not preclude the legislature from prescribing judicial remedies. Indeed, Oklahoma's statutory procedure for seeking judicial relief from an illegal tax has, [957 P.2d 11 ¶18 The instant controversy presents no occasion for this Court to create an alternative remedy. See R.R. Tway, Inc. v. Oklahoma Tax Commission, 1995 OK 129, 910 P.2d 972 , 979, where we refused to refashion a judicial tax-refund remedy, because the taxpayer failed to avail himself of his statutory (or administrative) remedies. This is not a case in which no statutory appeal process was available (see Cantrell v. Sanders, 1980 OK 43, 610 P.2d 227 , 229), nor is it one in which declaratory and injunctive relief was sought after paying an allegedly illegal tax under protest pursuant to § 2469 (currently § 2886) (see United Airlines, Inc. v. State Bd. of Equalization, supra). Here, the owners were faced with an allegedly illegal tax, and they neither appealed from the board's adverse ruling under § 2880.1 nor paid the tax under protest and sued for a refund pursuant to § 2886. The district court therefore lacked jurisdiction to grant them declaratory relief. ¶19 Today's pronouncement is consistent with our recent holdings in Stallings v. Oklahoma Tax Commission, 1994 OK 99, 880 P.2d 912 , 918, and Glass, supra. In Stallings the taxpayer instituted an action to recover taxes paid but allegedly collected in violation of federal constitutional and statutory law. We held that the district court lacked subject matter jurisdiction because the taxpayer failed to satisfy the statutory prerequisites for invoking the district court's cognizance. ¶20 In Glass the taxpayer brought a complaint before the board of tax roll corrections and prevailed in his quest for a refund based on the self-executing constitutional exemption in Art. 10 § 6A (for "goods, wares and merchandise" used for manufacturing [957 P.2d 11 ¶21 For the foregoing reasons, the Court of Civil Appeals' memorandum opinion is VACATED, the trial court's judgment is REVERSED, and the cause is REMANDED WITH DIRECTIONS TO DISMISS FOR WANT OF SUBJECT MATTER JURISDICTION. ¶22 KAUGER, C.J., HODGES, LAVENDER, HARGRAVE, WILSON and WATT, JJ., concur. ¶23 SIMMS and OPALA, JJ., concur in result. ¶24 SUMMERS, V.C.J., not voting. FOOT