Herr v. Rudolf , 75 N.D. 91 ( 1947 )

This is an action for injunctive relief to prohibit the Bank of North Dakota from selling a certain piece of real estate to the defendant, Ferdinand Rudolf, at private sale pursuant to the provisions of § 6-0931, Rev Code ND 1943. The plaintiff brings this action in two capacities, as a prospective purchaser of the land and as a taxpayer of the State of North Dakota. The first is a purely private and personal capacity, the second is tinged with public interest. The standing that he may have to appear in these capacities rests upon separate and distinct principles of law. Let us not confuse them.

The plaintiff challenges the constitutionality of the statute on two grounds. He contends that by giving to the defendant Rudolf a preference to purchase the land at private sale the statute is discriminatory and violates Sec. 20 of the North Dakota Constitution. In his capacity as a prospective purchaser of the land he is estopped from challenging the constitutionality of the statute. It is a basic principle of constitutional law that one cannot both assail a statute and rely upon it in the same proceeding. State ex rel. Brontrager v. Mundy, 53 N.D. 249,205 N.W. 684; Hurley v. Commission of Fisheries, 257 U.S. 223, 66 L ed 206, 42 S Ct 83.

In his complaint the plaintiff alleges:

"That on May 7, 1945, the plaintiff Emanuel Herr caused to be served on the defendant, The Bank of North Dakota, a certain written demand that the said land be advertised for sale so as to afford bidders an opportunity to bid for and purchase the same at public auction. That the said demand stated inter alia, that it was the purpose and intention of the plaintiff to purchase said lands and to bid for the same a sum in excess of Twenty-five Hundred Dollars ($2500.00), if it should be necessary to bid that much in order to acquire said lands. That it now is the intention of this plaintiff to acquire said lands and that he is ready and willing to bid and to pay therefor the sum of Twenty-six Hundred Dollars ($2600.00), or as large a sum in excess of Twenty-six Hundred Dollars ($2600.00), as may be necessary to consummate acquisition of said land. That he has deposited with the defendant, The Bank of North Dakota, the sums of money required to be deposited with his said offer to buy of April 10, 1945, to make such offer, and the application embodied therein, legally effective. That the defendants have refused, and continue to refuse, to proceed pursuant to this plaintiff's offer to buy dated April 10, 1945, and his demand dated May 7, 1945, and that the said defendants intend to proceed with sale of said lands to the defendant, Ferdinand Rudolf, for the purchase price of Twenty-five Hundred Dollars ($2500.00), and will proceed with such sale and consummate the same for said purchase price unless prevented from so doing by order of the Court."

No other or prior law authorizes the procedure which the plaintiff sets forth in his complaint or directs a sale at public auction. Thus it is apparent that the plaintiff seeks to compel the Bank of North Dakota to offer the land in question for sale under the same statute which he challenges as providing an unconstitutional classification in favor of the defendant.

Plaintiff's challenge to the constitutionality of the statute must fall for a still further reason.

"It is well settled that a person who is seeking to raise the question as to the validity of a discriminatory statute has no standing for that purpose, unless he belongs to the class which is prejudiced by the statute. And where the class which includes the party complaining is in no wise prejudiced by the general rule, or the particular objectionable feature of the statute does not happen to prejudice the plaintiff, he cannot be heard to complain of the statute on the ground that it is unconstitutional." Olson v. Ross, 39 N.D. 372, 167 N.W. 385.

See also State v. First State Bank, 52 N.D. 231, 202 N.W. 391; Anderson v. Byrne, 62 N.D. 218, 242 N.W. 687; State ex rel. Hughes v. Milhollan, 50 N.D. 184, 195 N.W. 292; Minot Special School Dist. v. Olsness, 53 N.D. 683, 208 N.W. 968, 45 ALR 1337.

In Asbury Hospital v. Cass County, 72 N.D. 359, 7 N.W.2d 438, on page 392 of the North Dakota Report we quoted from 16 CJS pp 161, 162 as follows:

"One may attack the constitutionality of a statute only when and so far as it is being or is about to be applied to his disadvantage; and to raise the question he must show that the alleged unconstitutional feature of the statute injures him and so operates as to deprive him of a constitutional right."

In my opinion a classification with respect to lands obtained by the State through foreclosure proceeding which gives a preference of repurchase to the former owner, his widow or lineal descendants, is a reasonable classification and one for which the legislature may constitutionally provide. Preferences of this nature have become established legislative policy in this state. See § 15-0715, Rev Code ND 1943, and Ch 305 Sess Laws ND 1945. The statute in question may contain other discriminating classifications concerning which the plaintiff is in no position to complain because they do not affect him. The defendant Rudolf who seeks to assert a preference right to purchase is a lineal descendant of the first degree of the former owner and was in possession at the time of the passage of the act. As against the plaintiff who is a stranger to the title and unrelated to the former owner, the classification which gives the defendant a preference is valid. Under the authority above cited he is not entitled to challenge the constitutionality of the statute on the basis of other classifications which do not prejudice his rights.

The plaintiff further challenges the statute upon the ground that it is violative of § 185 of the North Dakota Constitution which prohibits the State from loaning or giving its credit or making donations except for the reasonable support of the poor. This challenge may be presented as a taxpayer under the authority cited in the majority opinion. For general authority to maintain a taxpayer's action, see note Ann Cas 1913C 884; 52 Am Jur Taxpayers' Actions, §§ 2 et seq. Thus is presented the question of whether the statute by directing the Bank of North Dakota to sell the property in question to preferred classes of persons at private sale for the appraised value thereof requires the Bank to thus make a donation of State property. I am unable to agree with the majority that such is the case. The legislature may provide by law for the disposal of property belonging to the State in any manner that does not conflict with constitutional provisions. State ex rel. Equity Farms v. Hubbard, 203 Minn. 111, 280 N.W. 9; People v. Monterey Fish Products Co. 195 Cal. 548, 234 P. 398, 38 ALR 1186. There is no constitutional provision which requires the land in question to be sold at public auction. The legislature may authorize or direct the Bank of North Dakota to dispose of lands under its control by private sale. Before the land can be sold the statute under consideration requires it to be appraised and it may not be sold for less than the appraised value. The appraisement presumptively fixes a fair value and in the absence of fraud on the part of the appraisers (and none is alleged in this action) the appraisement fixes what the land is worth. The mere fact that the legislature could have decided upon another method of sale, as a matter of policy, which might yield more money in some instances, does not stigmatize the private sale as a gift or donation. The statute is not violative of § 185 of the North Dakota Constitution.

The remaining question is whether the plaintiff as a taxpayer may challenge the statute upon the ground of discriminatory classification. I have above pointed out that as a private purchaser he is estopped from challenging the constitutionality of the act on the ground of discriminatory classification because he has elected to act under it and seek its benefits. As a taxpayer he cannot attack the statute upon grounds which his own conduct has barred him from raising in the private capacity of one who desires to purchase the land.

Furthermore, as the statute does not violate the constitutional prohibition against donations, the plaintiff as a taxpayer will suffer no injury. The state will receive the value of the property as determined by an appraisement made pursuant to legislative authority.

"It is a firmly settled principle of law that a court will not listen `to an objection made to the constitutionality of an act by a party whose rights it does not affect, and who has therefore no interest in defeating it.' Cooley, Constitutional Limitations 7th ed 232.

"Cyc (8 Cyc 788) states the rule thus: `All constitutional inhibition against the taking of private property without due process of law, and all constitutional guaranties of equal rights and privileges, are for the benefit of those persons only whose rights are affected, and cannot be taken advantage of by any other persons.'

"`A person who is seeking to raise the question as to the validity of a discriminatory statute has no standing for that purpose unless he belongs to the class which is prejudiced by the statute.' (6 RCL § 89,) And `where the class which includes the party complaining is in no wise prejudiced the general rule is that it is immaterial whether a law discriminates against other classes, or denies to other persons equal protection of the laws.' (6 RCL § 88.) But `a member of a particular class which may be discriminated against does not necessarily have the right to champion any grievance of that entire class in the absence of any actual interest which is prejudiced or impaired by the statute in question.' (6 RCL § 90.) This principle has repeatedly been announced by this court." State ex rel. Linde v. Taylor,33 N.D. 76, 156 N.W. 561, LRA1918B 156, Ann Cas 1918A 583.

As a taxpayer the plaintiff may not challenge the constitutionality of the statute on the ground that it discriminates between prospective purchasers whose rights, if any, are wholly personal and private. I am, therefore, unable to concur in the determination that the statute in question is unconstitutional.