Opinion ID: 1491721
Heading Depth: 1
Heading Rank: 1

Heading: Legal Remedy.

Text: It is contended that the statutes of Iowa afford an adequate administrative remedy which the banks must exhaust before they can resort to a federal court. Unquestionably, all adequate administrative remedies must be exhausted before resort can be had to the courts. Gilchrist v. Interborough Co., 279 U. S. 159, 208, 49 S. Ct. 282, 73 L. Ed. 652. One of the remedies here intended is that claimed to be given by sections 7129, 7132, 7133, 7134, and 7136 of the Code of Iowa, 1924. Section 7129 provides for a local board of review. Section 7132 permits complaint to the board by any person aggrieved by the action of the assessor in assessing his property. Section 7133 permits an appeal from the board to the district court. Sections 7134 and 7136 provide that such appeal shall be heard in equity de novo and that the court may increase, decrease or affirm the amount of the assessment appealed from. The above remedy of appeal from the assessor to the board of review is purely administrative and would appear to be adequate unless there are peculiar facts showing its inadequacy. This record contains no such facts and no such finding of fact by the trial court. The Munn Case (C. C. A.) 18 F.(2d) 269, is relied upon by appellees as governing this case and being an adjudication of such inadequacy. That decision was expressly based on the peculiar facts of these cases [page 272, of 18 F.(2d)], which were the difficulty of ascertaining the names of those competing with national banks and assessed on a different basis, and the shortness of time [page 273 of 18 F. (2d)] to make such investigation. This record seems to show the contrary as one of these banks took such an appeal  as to the tax for 1927. Unless we can say broadly that the above difficulties, pointed out in the Munn Case, are inherent in this statutory system of review under all circumstances, that case is not controlling. We think this would be an unwarrantable extension of that decision and that appellees must exhaust this administrative remedy of appeal to the board of review before they can come into court. Such a conclusion determines the case of the First National Bank as to both years (1926 and 1927) here involved. Also, it determines the case of the Security National Bank as to the year 1926, but as to the year 1927, that bank took such appeal, in vain. Whether the Security National Bank is precluded as to the tax for 1927 depends upon whether the further step  appeal from the board to the district court  is a part of the administrative remedy. The district court is the regular trial court of the State judicial system. A state may clothe its courts with purely legislative (administrative) powers and, when exercising those powers, the court is not acting as a court but its officers and machinery are being used in its legislative character. Federal Radio Commission v. General Electric Co., 50 S. Ct. 389, 74 L. Ed. 969, opinion of Supreme Court filed May 19, 1930; Prentis v. Atlantic, etc., Line Co., 211 U. S. 210, 29 S. Ct. 67, 53 L. Ed. 150. However, it is always a vital question whether the court is acting in a judicial or in an administrative capacity because different important consequences flow from each. As soon as the administrative stage of action is completed, the judicial may begin and not before if that administrative procedure affords adequate opportunities of protection. Where the judicial stage begins, the parties may resort to any tribunal (state or federal) open to them and cannot be confined to the state courts through the mandate of state statutes. If in this appeal from the board to the district court that court acts judicially, then the administrative stage has ended with the action of the board of review and thereafter the complaining party cannot be confined to the appeal to that court but can choose any forum available to him. We think the district court in such an appeal acts judicially. The reasons are as follows: the statute itself (section 7134) declares that the court shall hear the appeal in equity; it declares, also, that it shall determine anew all questions arising before the board which relate to the liability of the property to assessment or the amount thereof; such decisions by the District Court pass, as ordinary judicial proceedings, to the State Supreme Court by appeal (First Nat. Bank v. Board of Review, 200 Iowa, 131, 204 N. W. 223; First Nat. Bank v. Board of Review, 199 Iowa, 1124, 201 N. W. 769); the questions passed upon are as to existing matters and not as to future conditions. All of the above are characteristics of judicial action and some of them are inconsistent with legislative action. So far as this contention is concerned, the Security National Bank was (as to the 1927 tax) not precluded from the present action because it failed to pursue the remedy of appeal to the district court of the state. A further contention is that an adequate remedy at law was provided by section 7235 of the Iowa Code, 1924. That section provides for refund of any tax or portion thereof found to have been erroneously or illegally exacted or paid. This refund is secured through an order by the board of supervisors to the treasurer. The contention is that appellees should have paid the tax and then applied to the board of supervisors for refund. If this remedy were open to appellees, the argument would be very forceful (Henrietta Mills v. Rutherford County, North Carolina et al., 281 U. S. 121, 50 S. Ct. 270, 74 L. Ed. 737, April 14, 1930), but the Supreme Court of Iowa has recently (December, 1924) determined that the words found to have been erroneously or illegally exacted or paid, in the above section, are confined to taxes levied without statutory authority, or levied upon property not subject to taxation, or by some officer or officers having no authority to levy the same, or is in some other similar respect illegal and does not include cases where property was erroneously classified by the assessor, and listed for taxation on the basis of banks and loan and trust companies, and not on the basis of moneys and credits (Griswold L. & C. Co. v. County of Calhoun, 198 Iowa, 1240, 1245, 201 N. W. 11, 12), because, in the latter instance, the complaint is of an irregular not an invalid tax. Such remedy is not here adequate  in fact, is no remedy at all. Ohio Oil Co. v. Conway, 279 U. S. 813, 815, 49 S. Ct. 256, 73 L. Ed. 972. As to this branch of the case, our conclusion is that the appellees were precluded because of failure to appeal to the board of review, except as to the 1927 tax of the Security National Bank where such appeal was taken and, as to that tax, the action here is not precluded.