Brinkerhoff-Faris Trust & Savings Co. v. Hill

Background

A bank trustee acting for its shareholders sued a county treasurer to stop collection of part of the 1927 taxes on the bank’s stock. The trustee said the local assessor had intentionally assessed bank stock at full value while undervaluing or omitting other property, and it tendered payment of the 75 percent it admitted owing while seeking relief for the alleged 25 percent overassessment. The trial court refused relief, and the Missouri Supreme Court said an administrative appeal to the State Tax Commission was the proper remedy and that the trustee was too late to use it.

Reasoning

The central question was whether the state courts had denied the trustee a fair opportunity to be heard. The United States Court found that, because earlier state precedent had made the Tax Commission unavailable and the state court’s new construction came too late for this taxpayer to apply, the trustee had effectively had no administrative or judicial chance to defend its federal right to equal treatment. The Court held that this denial violated the Due Process Clause in its basic sense — an opportunity to be heard — and that the state court’s reliance on laches for failing to use an unavailable remedy could not stand. The Court reversed and sent the case back for further proceedings, without deciding whether the assessment was actually discriminatory.

Real world impact

The ruling protects taxpayers who face enforcement when administrative routes are unavailable or retroactively reinterpreted. It requires state courts to leave parties some real opportunity to defend property rights before allowing collection. The decision is a procedural, not a final merits, ruling and the case returns to the state courts for further action.