State ex rel. W. K. Henderson Iron Works & Supply Co. v. Jeter , 151 La. 1011 ( 1922 )

OYERTON, J.

The W. K. Henderson Iron Works & Supply Company instituted this suit against John W. A. Jeter, tax assessor for the parish of Caddo, praying for a writ of mandamus commanding him to strike from the assessment rolls for that parish, as null and void, an assessment of accounts amounting to $173,590.

The petition sets forth that the accounts mentioned consist of debts due and owing plaintiff for merchandise, and for other articles of commerce and for services, and, in the words of the assessment, declares the accounts to be:

“Credits consisting of accounts and bills receivable, less a deduction 'for amount of accounts and bills payable, as of January 1, 1921, $173,590.”

The petition then declares that plaintiff made due and seasonable demand on defendant to erase and cancel, as null and void, said assessment, on the ground that it is in contravention of section 4 of article 10 of the Constitution of 1921 of the state of Louisiana, as said accounts by that section are exempt from taxation, but that the assessor refused "to cancel it; and that, unless said illegal assessment should be annulled and erased, the assessor will, in due course, complete the same by filing said rolls in the mortgage office and with the tax collector; and that the tax collector will proceed to enforce payment of the taxes based thereon.

Defendant answered, admitting that said debts due relator are for merchandise and other articles of commerce sold and for services rendered, and that they are listed and assessed, as set out in relator’s petition, but defendant denies that they are exempt from taxation, and avers the validity of the assessment.

The case was then tried. In addition to the admitted facts already stated, the evidence shows that at the time of the trial the tax rolls had not been submitted to the Louisiana Tax Commission for review, nor filed with the tax collector or the recorder of mortgages. The evidence, however, shows that public notice, as required by law, had been given that the listing of all assessable property in the parish had been completed, and that the assessment rolls would be open for inspection and correction from and including June 11 to June 30, 1921. The evidence also shows that at the time of the filing of the suit, no authority had been received by the tax collector from the Louisiana Tax Commission to proceed with the collection of taxes for the year in question.

At the conclusion of the evidence the ease was taken under advisement. While it was under advisement, defendant filed an exception of no cause of action. The trial resulted in judgment for the plaintiff, and defendant has appealed.

Under the exception, above mentioned, it is urged that a mandamus should not issue against the assessor alone to strike from the assessment rolls property listed for taxation, on the ground that it is exempt; at least, it is urged that such writ should not issue after the assessor has completed the rolls, and has given the notice required by law, advising the public that the listing of property has been completed, and that the list will be exposed for inspection and correction for a period of twenty days, beginning at the expiration of the 10 days’ notice required. This is urged upon the ground that, at least, after the lapse of the period named for inspection and correction, the assessor alone is without authority to strike the property from the rolls as exempt, and may do so only with the concurrence of the board of equalization of his parish, and the Louisiana Tax Commission.

[1] Section 7 of Act 170 of 1898 makes it the duty of the assessor to place upon the assessment list all property in his parish that is subject to taxation.. Paragraph 11 of section 1 of Act 211 of 1918 empowers the Louisiana Tax Commission to fix the time when the assessor shall conclude listing property and fixing values, and when he shall submit the assessments to the board of reviewers of his parish for review. Paragraphs 1 and 2 of the same section empower the Louisiana Tax Commission to assess, for state purposes, all property subject to taxation in tbe state, and to fix and equalize tbe value of sucb property for purposes of state taxation, at not to exceed its actual cash value, leaving "it to tbe local authorities, for local purposes, to assess sucb property at not less than 25 per cent, of the value fixed by said Commission as tbe basis for state taxation; sucb percentage to operate uniformly on all property subject to taxation throughout tbe parish. Paragraph 9 of tbe same section authorizes tbe Louisiana Tax Commission to require assessors to place on tbe rolls, at any time before filing them, property omitted therefrom. Section 22 of Act 170 of- 1898 provides that immediately after tbe assessor has completed listing and estimating tbe value of property in his parish that be shall give 10 days’ notice, by publication, that tbe rolls will be open for inspection and correction for 20 days, beginning at tbe expiration of said notice. Section 14 of Act 140 of 1916 provides for the giving of notice to the taxpayers that tbe rolls are open to inspection in respect to the values fixed by 'the Louisiana Tax Compassion, after tbe assessor has forwarded tbe assessment rolls made by him, and reviewed by the board of reviewers, to that Commission, and they have been returned, and after be has extended on them tbe valuations for purposes of state taxation. This and tbe section following provide that when complaint is made by a taxpayer, in respect to tbe valuation of bis property as fixed by tbe state Commission, after this second notice has been given, tbe complaint shall be disposed of before tbe board of reviewers, which board shall make sucb findings as it shall deem just and proper, and submit them to tbe Louisiana Tax Commission for approval or rejection. Act 231 of 1920 merely creates boards of equalization for tbe respective parishes, and authorizes sucb boards to examine tbe assessment of property as made by tbe assessors of their respective parishes; to equalize tbe assessments within their parishes; to bear complaints from taxpayers; and to advise and assist tbe assessors in fixing tbe value of property.

Tbe above is an outline of tbe statutory provisions of tbe duties of tbe assessors, of tbe boards of review and of equalization, and of the Louisiana Tax Commission, in so far as those duties may affect tbe point under consideration. From those statutory provisions it appears that tbe assessor is the official charged with ■ tbe duty of listing the property for taxation; that, in discharging that duty, be should omit from tbe rolls all property not subject to taxation; that, after be has completed that work and valued the property and has given notice to that effect to tbe taxpayers, before submission of the rolls for review, and before tbe submission of them to tbe Louisiana Tax Commission, be is authorized, during tbe 20 days allowed for public inspection, to correct any error, upon complaint of any taxpayer, that may exist in them, not only as to tbe amount of tbe assessment, but also in respect to tbe listing of property.

These are bis duties and powers, in those respects, when no change has been made in tbe law, pending tbe making of tbe assess-^, ment, and when a change, if one has been made, has not become operative so as to affect tbe assessment that is being made.

If, however, after tbe assessor has completed tbe rolls to tbe extent stated, and has given tbe notice mentioned, tbe law should be changed before tbe tax becomes a charge against tbe property that be, in conjunction with others, is assessing, so as to exempt some of tbe property from taxation that be has listed, which we find to be tbe case here, who would have tbe authority, and whose duty would it be, to make tbe change, and' thereby carry out tbe mandate of tbe law? The answer would seem to be that it would be tbe duty of tbe assessor to do so, and that he has tbe requisite authority for that purpose, for each year it is his duty to list for taxation such property as the law says shall he listed, and to omit such as the law says shall he omitted, and when, after listing the property, the law is so changed as to affect the listing made, it then becomes the duty of the assessor, as the official charged with making a correct list of property for assessment, in the first instance, to so revise the list as to make it conform to the new law. The taxpayer has the right to look to him to discharge that duty, and if he should refuse to discharge it by striking from the rolls property of the taxpayer that has been made exempt, the taxpayer may force him to do so by means of the writ of mandamus.

[2] That the writ of mandamus will issue, in a proper case, to enforce such a right appears from the following quotation from High on Extraordinary Remedies (3d Ed.) § 139-A, where it is said:

“ * * * When certain lands are by law exempt from taxation, and it is made the duty of the Auditor General of the state to reject the taxes upon such lands, the duty being plain and'unmistakable, its enforcement may be had by mandamus.”

Eor the same reason, when it is the duty of the assessor to strike from the rolls, or to omit therefrom, property of a taxpayer that is exempt from taxation, the duty being plain, the right may be enforced in a similar way.

The writ of mandamus, to require that exempted property be stricken from the rolls, has been recognized as proper in this state, though the propriety of so using it was not in contest, as appears from the following decisions rendered by this court, in which the writ was issued: State ex rel. Da Ponte v. Board of Assessors et al., 35 La. Ann. 651; State ex rel. Administrators of Tulane Educational Fund v. Board of Assessors, 35 La. Ann. 669; State ex rel. Fredericks v. Board of Assessors, 41 La. Ann. 534, 6 South. 337; State ex rel. Gelpi & Bro. v. Board of Assessors et al., 46 La. Ann. 145, 15 South. 10, 49 Am. St. Rep. 318; State ex rel. Louisiana Improvement Co. v. Board of Assessors et al., 111 La. 982, 36 South. 91.

In resorting to the writ of mandamus for this purpose, it is not necessary that the Louisiana Tax Commission, or the board of equalization of the parish, or any other board," or officer, be made a party to the proceeding, for the assessor himself has the power, and it is his duty, as we have seen, to strike exempted property from the rolls, and there is no occasion or reason to make any other officer, or any one of the boards, a party to the suit. The. power that the Louisiana Tax Commission has to order the assessor to place on the rolls property omitted therefrom does not make it a necessary party to a suit to strike from the rolls property exempt from taxation.

[3] It is also suggested that the relator, in this case, might have waited until the assessment was completed, and the rolls filed with the recorder of mortgages, and with the tax collector, and until the latter made an effort to enforce payment, and then proceed by injunction. That relator had such a remedy does not deprive him of his right to a writ of mandamus. He was not called upon to wait until then, or until the seizure of his property, and then enjoin. It was better, and less injurious, for him to proceed by applying for a writ of mandamus at once, rather than to permit matters to go that far, in order to avail himself of another remedy.

[4] It is urged that credits, accounts, and bills receivable are not exempt from taxation under the Constitution of 1921; and hence that relator’s suit is without any basis on which to rest.

Section 4 of article 10 of that Constitution provides that “the following property, and no other, shall be exempt from taxation.”

Then follows an enumeration of the property made exempt, among which is the following: “Debts due for merchandise or other articles of commerce, or for services.”

It is urged that this provision of the Constitution does ñót exempt accounts and bills receivable for merchandise sold and for services rendered, but only debts due therefor, and debts, it is urged, are directly opposite in meaning to accounts and bills receivable. It is, however, obvious that the framers of the Constitution by “debts,” in the above provision, meant debts due ihe taxpayer, and not debts due by him. The framers of the Oonstitution, in providing for taxation, had in view the levy of taxes- on those things that go to make up the wealth of a person, and not his poverty; and, in providing for exemptions from taxation, they were excepting certain of that wealth from taxation. They were not dealing with those things that go to make up one’s poverty, in providing for the levy of taxes; and hence, there was no occasion to withdraw one’s liabilities from taxation, in specifying the exemptions. The expression, therefore, “debts due for merchandise,” etc., found in the above-quoted provision, can mean but one thing: Debts due the taxpayer, and not debts due by him;

Immediately prior to the adoption of the Constitution of 1921, such debts due the taxpayer were subject to taxation; and it is urged that, at the time the Constitution went into effect, the taxes for the year 1921 had become a charge on those debts, and that it was not contemplated that the constitutional provision exempting them should become operative until after 1921.

It is pointed out by defendant, in support of the above position, that the Constitution, after providing for the above exemption, also provides, in article 22, § 1, that—

“All * * * taxes * * * due, owing or accruing to the state of Louisiana, or to .any parish * * * under the Constitution and laws heretofore in force * * * except as herein otherwise provided, shall continue and remain unaffected by the adoption of this Constitution.”

And it is also pointed out, in support of that position, that the Constitution in the same section and article provides that—

“This Constitution, * * *, shall be in full force and effect on and after July 1, 1921, save and except as otherwise provided in and by this Constitution.”

It is argued, from the above provisions, that it is clear, if taxes on credits, of the description mentioned, were due, owing, or accruing at the time the Constitution went into effect, that they were not affected thereby, because the Constitution provides that it (the Constitution) shall go into effect on July 1, 1921, save and except as otherwise provided therein; and as it is provided therein that taxes due, owing, or accruing shall not be affected thereby, and as these taxes were, at that time, accruing and owing, that therefore they remain unaffected for the year 1921.

This argument, however, overlooks the fact that the Constitution, in saving taxes due, owing, or accruing, expressly excepted, in this saving provision, those concerning which a contrary provision had been made by it. When we look to see what contrary provision had been made, we find, as above stated, that debts due for merchandise, and for other articles of commerce, and for services, which before had been subject to taxation, had bden made exempt, and therefore they were not to be assessed thereafter, nor the assessment continued, if begun, but not completed. When we look to see when the exemption became effective, we find that it was on July 1, 1921, for the Constitution, by its terms, became effective on that date, except as otherwise provided therein, and we find nothing providing that the exemption mentioned should not become effective then.

On July 1, 1921, the date the exemption became effective, the assessment rolls had not been completed, nor could they possibly have been, for while, as appears from a resolution of the Board of State Affairs, now the Louisiana Tax Commission, passed under the authority vested in it by law, the time had arrived and passed for each assessor to send to the Commission abstracts of the rolls made by bim for tbe purpose of reviewing assessments of tbe various parishes and assessment districts throughout tbe state, and of fixing tbe actual cash value on all taxable property, yet after tbe completion of that work by tbe Tax Commission, it became necessary, as provided by section 14 of Act 140 of 1916, to expose tbe rolls for public inspection for 20 days. Before those 20 days could have possibly expired, even assuming that tbe rolls, or abstracts thereof, bad been returned to the assessor on tbe date fixed by tbe Commission for forwarding them to it, tbe exemption became effective. From that time on, that is, the date from which the exemption became effective, tbe taxing machinery was arrested as to tbe property made exempt, and tbe assessment which was to form tbe basis of taxation, in so far as this property was concerned, could not be completed legally.

This inability to proceed further affected not only the completion of tbe assessment for state purposes, but likewise for local purposes, for under paragraph 1 of section 2 and under section 3 of Act 211 of 1918, the actual cash value of property, as fixed by the Louisiana Tax Commission, as a basis for state assessments, must form the basis for local assessments, and until that value is finally fixed by the state Commission, and an opportunity given the taxpayer to inspect the values thus fixed, and to complain before the board of review, the local assessment cannot be said to be completed to such an extent as to form the basis for taxation.

Cyc. in volume 37, p. 890, in this connection says:

“When a constitutional or statutory process exempting property from taxation goes into operation on a certain date in the year before the taxes for that year have been assessed, or before the date when by law they become a fixed charge on the property, the exempted property is free from taxation for the current year, but it is otherwise when the assessment is completed and the tax books closed before the date when the statute takes effect.”

See, also, Gachet v. City of New Orleans, 52 La. Ann. 813, 27 South. 348.

Afe “Ehe answer of the defendant admits that the accounts and bills receivable are debts due relator for merchandise and other articles of commerce sold and for services rendered, there remains nothing to do but to hold that they are exempt for the year 1921, and that the writ of mandamus properly issued ordering the assessor to strike them from the rolls.

For the reasons assigned, the judgment appealed from is affirmed.

O’NIELL, J., is of the opinion that exemption did not become effective in 1921.