This is an appeal by plaintiffs, property owners within the incorporated town of Wahpeton, Dickinson County, from district court judgment denying their claim of invalid adjustment of property valuation assessments. They raise three issues which we consider infra.
On October 22,1971 plaintiffs commenced this equity action against the Iowa Department of Revenue, its Director and nominally, against Dickinson County Board of Review and Dickinson County Auditor. They sought to have the Director’s September 14, 1971 equalization order declared void. It included an increase of aggregate valuation of residential realty in the town of Wahpe-ton. They alleged that since a like increase was not ordered on lakeside residential realty located outside cities and towns in Dickinson County, plaintiffs had been denied equal protection of the law. The trial court held the Director’s equalization order was lawful and proper and dismissed plaintiffs’ action.
I. Plaintiffs-appellants first assert trial court erred in overruling their motion for default against defendants Dickinson County Board of Review and the County Auditor.
The Dickinson County Attorney entered a timely appearance for the Board and Auditor but failed to file an answer to the petition for several months and then only after plaintiffs’ motion for default. The answer was substantially the same as the timely answer filed by the attorney general for the Department of Revenue and its Director. Trial court thereafter overruled plaintiffs’ motion for default.
We have consistently held the question of allowing default is largely with
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in the discretion of the trial court. The policy of the law is to allow trial of actions on their merits.
Severson v. Sueppel,
II. Plaintiffs-appellants next assert trial court applied an improper rule of law regarding burden of proof in finding “The equalization duties of the Director [of Revenue] involve judgment and discretion which can not, in the absence of arbitrary and capricious conduct, be controlled by the courts.” They argue for application of Code section 441.39 which provides for removal of the “presumption as to correctness” of a valuation in an assessment appealed from the Board of Review under Code section 441.37. They assert plaintiffs were saddled with a tougher burden of proof than is required by law.
Passing the question of the retroactivity of Code section 441.49 which was amended to permit appeals from a Revenue Department ordered assessment increase after the equalization order but before trial of this action, we find that even if the amended statute applies, plaintiffs are not entitled to invoke the protective provisions of section 441.39 for at least two reasons.
We have recently recognized in
Milroy v. Board of Review of County of Benton,
Iowa,
III. Plaintiffs-appellants’ third assignment asserts the Director of Revenue’s equalization order of September 14, 1971 unconstitutionally denied plaintiffs equal protection of the law under the United States and Iowa Constitutions by imposing on the residents of Wahpeton an unreasonable property tax assessment classification system. The crux of their theory is that the classification system of the Department of Revenue, which divides for the purpose of tax equalization property located within (urban residential) from property located outside (rural residential) the corporate limits of a municipality, unfairly penalizes the residents of Wahpeton because the town provides no significant municipal services to it residents. From this they conclude there should be no practical or rational distinction between the assessed valuation of similarly situated residential property located within or outside the corporate limits of Wahpeton. On this basis, they argue the ordered 15 percent increase in aggregate valuation of urban residential property within Wahpe-ton creates a constitutionally invalid inequality between rural and urban property unless a similar increase is imposed upon the rural residential properties. The Revenue Department argues plaintiffs have wholly failed to present sufficient evidence *633 to support their claims of unequal treatment. We agree.
When a classification is challenged as being violative of the challenger’s equal protection rights, he has the burden of showing the classification clearly, palpably and without doubt infringes on the constitution; and every reasonable doubt will be resolved in favor of constitutionality.
Lee Enterprises, Inc. v. Iowa State Tax Com’n.,
Iowa,
The Revenue Department’s classification system at issue here is authorized by Code section 441.47. That section empowers the Director of Revenue to promulgate rules for the adjustment of property valuations among the various classes of property.
Des Moines Gas Co. v. Saverude,
In attempting to give full consideration to plaintiffs’ challenges, we have been hampered by a record virtually devoid of substantive evidence tending to prove plaintiffs’ claims.
Plaintiffs’ testimony consisted of depositions from three local real estate agents whose testimony was largely limited to their opinions that there is no practical difference between the selling price of property within or without the town of Wahpeton. Each testified he knew virtually nothing, about matters of assessment, equalization or assessment-sales ratio studies. In addition plaintiffs called the Dickinson County Assessor who described the procedures of his office relating to the equalization order, and testified that the municipal services offered by the town of Wahpeton were not significantly different from those available in the unincorporated areas. When asked on direct examination if the relative values of property inside and outside the corporate limits of Wahpeton had changed since the 1969 countywide commercial appraisal by the J. M. Cleminshaw Company, County Assessor Cook expressed the opinion that while both rural and urban properties had increased in value since 1969, the rural residential had probably increased at a slower rate than the urban due to the advantages of living in the incorporated areas.
In ruling plaintiffs’ evidence insufficient to establish violation of their equal protection rights, Judge Stillman expressed well our own view of the case when he said:
“ * * *. Plaintiffs made no attack on the assessment-sales ratio study or the data involved therein, and introduced no evidence to show the Director’s reliance on the study was arbitrary, capricious or illegal; nor do they make any showing that prior to the Director’s 15% increase in the aggregate valuation of residential realty within Wahpeton, the level of assessment within the incorporation and outside the town was equal; or that subsequent to said increase their property would be subjected to a greater taxable value than the 27% permitted by statute.”
The only evidence produced at trial dealing with the reasonableness of the classification system being challenged came from the defendant Department of Revenue. Its evidence demonstrated that the 15 percent increase in aggregate valuations of residential property within the corporate limits of the town of Wahpeton brought the aggre *634 gate valuation of that property to the same level as the rural residential property in the county. Even after the 15 percent increase, their witness’ testimony indicated that both the urban residential within Wahpeton and the rural residential property in Dickinson County were below the statutory assessment level of 27 percent required under the 1971 Code. In other words, not only did plaintiffs wholly fail to produce evidence of equal protection violation, but in addition, the Department of Revenue affirmatively established, without contradiction, that no such violation occurred. Plaintiffs-appellants’ counsel conceded at oral argument that the classification system in general was not unreasonable but insisted it was unreasonable when applied to lakeshore property in Dickinson County.
Without proof of unequal treatment, plaintiffs’ claims must fall. As noted in
Lunday v. Vogelmann,
supra, a classification does not deny equal protection simply because in practice it results in some inequality; practical problems of government permit rough accommodations.
IV. Under our de novo review we have considered the evidence and all issues presented by plaintiffs-appellants and find their claims to be without merit. Trial court did not err in dismissing plaintiffs’ petition. The ruling below is affirmed.
AFFIRMED.