This writ of error brings up for review a judgment of the Supreme Court of Minnesota affirming the judgment of the district court of Itasca county, assessing certain taxes for the years 1888 to 1893, inclusive, on the lands of the plaintiff in error.
The law upon which the proceedings in taxation were based, omitting parts not material to the pending controversy, is as follows:
It is provided in other sections of the law that the county auditor shall enter the lists on the assessment books, and that the assessor shall assess the property at its true value corresponding with the lists, and the auditor shall proceed as under the general law.
The taxes which are in controversy were assessed under this law, and proceedings were instituted for their recovery in accordance with the usual practice in collecting taxes against lands in Minnesota.
The plaintiffs in error claimed in their answer that the law of the state and the proceedings under it were repugnant to the Constitution of the United States, in that they impaired the obligation of the contracts made by plaintiffs in error with their grantors, deprived them of their property without due process of law, and denied them the equal protection of the laws. [176 U.S. 550, 552] The facts were stipulated as follows:
The trial court found in accordance with the stipulation, and further found, as a conclusion of law, that the proceedings for levying and assessing the taxes were in accordance with the provisions of chapter 151, General Laws of 1893, but that the said law and the proceedings therein provided were unconstitutional, and the taxes, therefore, not a legal charge against the lands.
The judgment was reversed by the supreme court, and the taxes sustained. 68 Minn. 353, 71 N. W. 265.
The court in its opinion confined its consideration to the validity of the law under the Constitution of the state, and did not pass upon the claim that it was also in violation of the Constitution of the United States. After the judgment was entered in compliance with its mandate by the district court the case was again certified to the supreme court in accordance with the practice of the state.
The certificate recited the facts which have already been set out, and 'that the points raised by the defendants [plain- [176 U.S. 550, 554] tiffs in error] herein are as follows, to wit: 1. Is chapter 151, General Laws of 1893, of the state Minnesota, and the assessment of taxes attempted to be made thereunder in this proceeding, constitutional and legal? 2. In particular, is said chapter 151 and the assessment of taxes attempted to be made in pursuance thereof in this proceeding, in violation of article 14 of the Amendments to the Constitution of the United States, providing that no state shall deprive any person of his property without due process of law, or deny to any person within its jurisdiction equal protection of the laws?'
The supreme court affirmed the judgment. 72 Minn. 519, 75 N. W. 718.
Messrs. George Welwood Murray and John B. Atwater argued, and Moses E. Clapp submitted the case for plaintiffs in error.
Messrs. W. B. Douglas and C. W. Somerby submitted the case for defendant in error.
Mr. Justice McKenna delivered the opinion of the court:
The procedure under the statute is as follows: A complaint to the governor of the state that a considerable amount of property has been grossly undervalued by the assessor or other county officials.
The appointment by the governor of a competent person to examine and report, and if he find undervalued property to prepare a list in duplicate showing its character, location, ownership, and valuation, one of which lists shall be filed with the county auditor.
The entry of the list on the assessment books by the auditor.
The assessment of the property at its value corresponding to the list.
Proceedings by the county auditor as under the general law. [176 U.S. 550, 555] This procedure was exactly followed, and it is stipulated that 'the taxes claimed in this proceeding are the proper amount of taxes due against said lands on account of said increased valuation. . . .' In other words, the lands have not been made to bear a greater burden than they would and should have borne if they had been originally assessed at their true valuation. It is, however, claimed that the increased taxation is illegal because the law authorizing it offends the Fourteenth Amendment of the Constitution of the United States.
The grounds of the contention are that the former assessments constituted judicial judgments, and hence to commit to the executive the power of setting them aside, or to set them aside without notice or opportunity to be heard, is not due process of law. And further, that the statute deprives the plaintiffs in error of the equal protection of the laws, in that it gives to owners of similar real estate an opportunity to contest the absolute assessed valuation of their property, and to plaintiffs in error only the opportunity are claimed to be, and as the statute ignores
Conceding, arguendo, that the former assessments were judicial judgments, the argument based on their immunity from executive power or attack is not supported by the statute. It does not commit to the governor control over them, and it does give opportunity to be heard. The governor only starts the inquiry upon which the reassesment may be based, and the statute directs the proceedings in an orderly course of inquiry, report, entry upon the assessment books, assessment by the assessor, and an action for the collection of the taxes levied in the regular judicial tribunals.
The complaint of plaintiffs in error seems to be that a hearing before the governor was not provided. If the basis of this is that the owner of property must have notice of every step in taxation proceedings, we agree with the supreme court of the state that it is untenable. Pittsburgh, C. C. & St. L. R. Co. v. West Virginia Bd. [176 U.S. 550, 556] of Public Works, 172 U.S. 32 , 43 L. ed. 354, 19 Sup. Ct. Rep. 90; Davidson v. New Orleans, 96 U.S. 97 , 24 L. ed. 616; Hagar v. Reclamation Dist. No. 108, 111 U.S. 701 , 28 L. ed. 569, 4 Sup. Ct. Rep. 663; Winona & St. P. Land Co. v. Minnesota, 150 U.S. 526 , 40 L. ed. 247, 16 Sup. Ct. Rep. 83. If the basis of the complaint is that the governor acts judicially, and plaintiffs in error were entitled to have notice, and be heard before he rendered judgment, it is also untenable. The governor does not act judicially-he determines nothing but that a complaint has been made in writing and under oath, or that it has been found by a court, or the legislature or any committee thereof, that a considerable amount of property in a county of the state has been grossly undervalued. If the perception of the fact of a complaint or a finding of a court or legislature is a judgment in the sense urged, every act of government is a judgment, and all of its exercises could be stopped, upon the reasoning of plaintiffs in error, by perpetual hearings. But supposing the governor's act is a judgment, it ends with the appointment of an examiner. What is substantial comes afterwards, and if against what may be detrimental in that the landowner can be heard, he is afforded due process within the rule announced by the authorities, supra.
That the landowner is provided with an opportunity to be heard is decided by the supreme court of the state. In the opinion in the case at bar the court said, quoting from 40 Minn. 512, 41 N. W. 465, 42 N. W. 473:
This court in Winona & St. P. Land Co. v. Minnesota, 159 U.S. 526 , 40 L. ed. 247, 16 Sup. Ct. Rep. 83, quoted the above extract as establishing that the property owner was afforded a hearing by the laws of the state, and declared the rule that the Constitution of the United States was satisfied if an opportunity be given to question the validity or amount of the tax 'either before that amount is determined or in subsequent proceedings for its collection.' And referring to the difference in the manner of assessment and the successive opportunities for review which were given to the property owner in one case and not in the other, said: 'But there is nothing in this difference to affect the constitutional rights of a party. The legislature may authorize different modes of assessment for different properties, providing the rule of assessment is the same. Kentucky Railroad Tax Cases, 115 U.S. 321 , 337, sub nom. Cincinnati, N. O. & T. P. R. Co. v. Kentucky, 29 L. ed. 414, 419, 6 Sup. Ct. Rep. 57; Pittsburgh, C. C. & St. L. R. Co. v. Backus, 154 U.S. 421 , 38 L. ed. 1031, 14 Sup. Ct. Rep. 1114.' The later cases of State v. Lakeside Land Co. 71 Minn. 283, 73 N. W. 970, and State v. West [176 U.S. 550, 558] Duluth Land Co. (Minn.) 78 N. W. 115, cited by the plaintiff in error, do not militate against the rule in any way substantial to the pending controversy.
The special objections of plaintiffs in error therefore cannot be sustained, nor the broader one that the first assessments are final against any power of review or addition by the legislature. We held in the Winona Case, supra, that the legislature had power to provide for the assessment of property which had escaped taxation in prior years, and, as we have seen, a special manner of assessment was sustained. We agree with the supreme court of the state that a gross undervaluation of property is within the principle applicable to an entire omission of property. If it were otherwise the power and duty of the legislature to impose taxes and to equalize their burdens would be defeated by the fraud of public officers, perhaps induced by the very property owners who afterwards claim its illegal advantage.
If an officer omits to assess property, or grossly undervalues it, he violates his duty, and the property and its owners escape their just share of the public burdens. In Stanley v. Albany Supers. 121 U.S. 535 , 30 L. ed. 1000, 7 Sup. Ct. Rep. 1234, we held that against an excessive valuation of property its owner had a remedy in equity to prevent the collection of the illegal excess. It would be very strange if the state, against a gross undervaluation of property, could not, in the exercise of its sovereignty, give itself a remedy for the illegal deficiency. And this is the effect of the statute. It 'merely sets in motion new proceedings to collect the balance of the state's claim, and there is no constitutional objection in the way of doing this,' as the supreme court of the state said in its opinion.
The other objections to the statute do not demand an extended consideration. That it deprives plaintiffs in error of the equal protection of the laws is based on the absence of a provision for notice in the progress of the proceedings, and is answered by the Winona Case, 159 U.S. 526 , 40 L. ed. 247, 16 Sup. Ct. Rep. 83.
The fourth contention, that the state is estopped to assert fraud in the former assessment if we should concede has any basis in law, lacks an essential basis of fact.
The plaintiffs in error purchased after the enactment of the statute, and the record affords no presumptions of ignorance or innocence. If plaintiffs had been attentive to the assessment of the land its gross undervaluation could not have escaped their notice. Besides, whether a party in a case has been given or refused the benefit of the law of estoppel involves no Federal question.