Title: Sandia Savings and Loan Association v. Kleinheim
Citation: 391 P.2d 324, 74 N.M. 95
Docket Number: 7356
State: new-mexico
Issuer: new-mexico Supreme Court
Date: April 6, 1964

391 P.2d 324 (1964) 74 N.M. 95 SANDIA SAVINGS AND LOAN ASSOCIATION, a Corporation, Plaintiff-Appellant, v. Mae KLEINHEIM, Treasurer of Bernalillo County, State of New Mexico, Defendant-Appellee. No. 7356. Supreme Court of New Mexico. April 6, 1964. *325 Cornell &amp; Clayburgh, Albuquerque, for appellant. Earl E. Hartley, Atty. Gen., Thomas A. Donnelly, Asst. Atty. Gen., Santa Fe, for appellee. John B. Speer, Sp. Asst. Atty. Gen., Santa Fe, amicus curiae. MOISE, Justice. Plaintiff is a capital stock building and loan association organized under the provisions of Chap. 279, N.M.S.L. 1959 (§§ 48-15-26 to 48-15-37, inc., N.M.S.A. 1953). For the year 1961 the state tax commission determined the actual value of the shares of capital stock of plaintiff and certified the same to the local assessor of Bernalillo County, as required by § 72-6-4, N.M.S.A. 1953. The value certified was determined in accordance with § 72-6-6, N.M.S.A. 1953, which provides the method for valuing shares of banks, trust companies and mortgage loan companies, and was done in compliance with the provisions of § 48-15-36, N.M.S.A. 1953, which reads: Plaintiff timely paid the first half of the taxes so assessed, stating that it was doing so under protest. Within 90 days of making the payment it brought this action seeking refund of the amount paid, alleging the tax was null and void for the following reasons: The district attorney, appearing on behalf of the defendant-treasurer, moved to dismiss the complaint for the reason that the assessment was made by the state tax commission, and the complaint failed to state a cause of action against the county treasurer. The following two sections are involved. The court below determined that plaintiff should have exhausted the administrative remedies provided in § 72-6-8.2, N.M.S.A. 1953, and having failed to do so had no standing to sue under § 72-5-4, N.M.S.A. 1953, and accordingly dismissed the complaint. Plaintiff appeals from this action. Rather than consider any questions of discrimination or valuation, it would seem appropriate that we first determine if plaintiff proceeded properly, or if the court correctly held that plaintiff was required to exhaust the administrative remedies provided in § 72-6-8.2, N.M.S.A. 1953. At the outset we note that § 72-5-4, N.M.S.A. 1953, was adopted as Chap. 27, N.M.S.L. 1945. However, it provided the method for obtaining a refund of taxes "erroneously or illegally charged," as did Chap. 143, N.M.S.L. 1933. In the case of In re Blatt, 41 N.M. 269, 67 P.2d 293, 110 A.L.R. 656, we said: The court went on to hold that relief from excessive assessments could not be obtained under the statute, stating: It seems quite apparent to us that allegations that a law upon which a tax assessment is based is unconstitutional raises a claim that the taxes were "erroneously or illegally charged" and is properly within the court's jurisdiction to consider under the statute and quoted language from In re Blatt, supra. Compare Lougee v. New Mexico Bureau of Revenue Commissioner, 42 N.M. 115, 76 P.2d 6. See also, Wheatland v. City of Boston, 202 Mass. 258, 88 N.E. 769; Commercial National Bank of Council Bluffs v. Board of Supervisors of Pottawattami County, 168 Iowa 501, 150 N.W. 704; Clay County v. Brown Lumber Co., 90 Ark. 413, 119 S.W. 251. This is true unless it was mandatory that plaintiff follow the administrative procedures of § 72-6-8.2, N.M.S.A. 1953, before it could question the constitutionality. At the outset of our consideration of this problem we note the cases of Associated Petroleum Transport v. Shepard, 53 N.M. 52, 201 P.2d 772, and American Refrigerator Transit Co. v. Shepard, 53 N.M. 271, 206 P.2d 551. These were actions seeking a declaratory judgment that a statute taxing plaintiffs on the rentals paid them by common carrier railroads operating in New Mexico and providing for withholding of such money, was unconstitutional, and that they were entitled to a refund of withheld sums. These cases are in no sense controlling. The statute there being considered fixed a tax in lieu of property taxes and did not authorize suit until protest had been made to the state tax commission. It was there determined that no protest had been timely filed and that plaintiffs had no standing in court. We are here dealing with an ad valorem tax and § 72-5-4, supra, specifically provides for payment under protest and suit to recover the same. In addition, we observe that § 72-6-8.2, supra, provides for protesting "valuation" and a hearing before the commission. The attack here is not on the valuation fixed, but rather on the power to tax at all. The situation is akin to that considered in State ex rel. State Board of Education v. Montoya, 73 N.M. 162, 386 P.2d 252, which upheld the court's right to proceed in a case without requiring that relief be first sought from the administrative agency, where the record disclosed an absence of allegations upon which jurisdiction in the agency could be predicated. If the tax imposed by § 72-6-6, N.M.S.A. 1953, is unconstitutional, as asserted, there could be no right or power in the state tax commission to assess it, and no jurisdiction in the commission to consider the complaint. The procedure of § 72-6-8.2, supra, which merely provides for protesting valuation, is not applicable. Orderly procedure and speedy disposition of the matter dictate by-passing of an administrative agency which has no power to pass upon the constitutionality. We are not aware of any consideration which would support a different conclusion. Compare City Bank Farmers Trust Co. v. Schnader, 291 U.S. 24, 54 S. Ct. 259, 78 L. Ed. 628. Professor Davis, in his Administrative Law Treatise, § 20.04, recognizes the distinction drawn by us: Following this quotation, the author discusses various cases from the Supreme Court of the United States, in order to show that that court's answer to the question is far from clear. However, the most recent pronouncements of the Supreme Court of the United States seem to support the rule that it is not necessary to exhaust administrative remedies in situations where the administrative agency could not pass upon the issue of constitutionality and relief therefrom would not be possible. See Public Utilities Commission of State of California v. United States, 355 U.S. 534, 78 S. Ct. 446, 2 L. Ed. 2d 470; City of Chicago v. Atchison, Topeka &amp; Santa Fe R. Co., 357 U.S. 77, 78 S. Ct. 1063, 2 L. Ed. 2d 1174. See also, 3 Davis, Administrative Law Treatise, § 20.09; 2 Am.Jur.2d 437, Administrative Law, § 603; Interior Airways, Inc. v. Wien Alaska Airlines, Inc. (U.S.D.C., Alaska 1960) 188 F. Supp. 107; Idaho Mut. Ben. Asso., Inc. v. Robison, 63 Ida. 793, 154 P.2d 156; Hernreich v. Quinn, 350 Mo. 770, 168 S.W.2d 1054; N.H. Lyons &amp; Co. v. Corsi, 3 N.Y.2d 60, 163 N.Y.S.2d 677, 143 N.E.2d 392. It follows from what has been said that the court correctly refused to pass upon any issues of application of the statute, but erred in dismissing the plaintiff's complaint without considering the constitutionality issue. We do not express any opinion on that question. The cause is remanded to the district court so that it can rule thereon. It is so ordered. COMPTON, C.J., and CARMODY, J., CHAVEZ and NOBLE, JJ., concur.