Douglas v. McCurdy , 154 Ga. 814 ( 1923 )

Hines, J.

None of the rulings in the headnotes require any elaboration, except that set out in the 12th headnote. It is strenuously urged, that, as plaintiff made returns purporting to include all his money, notes, and accounts for the years 1910,. 1911, 1912, and 1913, which were received by the tax-receiver without protest, and paid the taxes due on this species of property on the basis of the amount embraced in these returns, except for the year 1913, which he tendered, he can not be required to pay additional taxes, although such returns did not embrace all his property of this class, it being, under such circumstances, a matter of undervaluation and not one of omission, when it is afterwards discovered that such returns were false and fraudulent. When the owner omits to make returns for the years in which such returns should have been made, he is required to do so for each year in which he is delinquent. Civil Code (1910), § 1055. When the omitted property is of that character which should have been returned to the tax-receiver of the county, this officer should notify in writing such delinquent, requiring that he shall make a return thereof within twenty days. § 1057. Beceivers and collectors are required to receive the returns and to collect the taxes thereon for former years, when any person is in default. § 1113. If a person fails to make a return, in whole or in part, or fails to affix a value to his property, it is the duty of the receiver to make the valuation and assess the taxation thereon, and in all other respects to make the return for the defaulting person from the best information he can obtain. § 1105. It is clear from these code sections that the owner of property, when in default, can be made to pay taxes for former years.

Now, when is the owner of property a defaulter in regard to returns of it for taxation? Must he wholly omit to make any return, to be a defaulter ? If he returns some property and fails to return other property, is he a defaulter pro tanto ? If he makes a false and fraudulent return, which does not embrace all of his property of a given class, is he a defaulter ? If property, embraced in a return made by the'owner for taxation, in the judgment óf the receiver is returned below its value, he shall assess the value at once or in thirty days. Civil Code (1910), § 1097. If he does not make such assessment at once, or within thirty days after notice to the taxpayer (§ 1098), he can not do so afterwards. Bohler v. Verdery, 92 Ga. 715 (19 S. E. 36); Douglas v. Forrester, 150 Ga. 57 (102 S. E. 347). These sections apply when the owner makes a return embracing all his property, but where it is returned below its value. But if the owner fails to make a return, in whole or in part, that is, if he omits to embrace in his return all of his property or all of a given class, it is the duty of the receiver to assess what is omitted, according to law in force at the time when he should have made his return, and collect the taxes due on the omitted property for former years. This is true although the return of the taxpayer purports on its face to embrace all of his property. If the taxpayer has $10,000 in money, and returns only $500 as all his money, he is a tax-defaulter as to $9,500; and when knowledge of the fact that the owner had the larger sum comes to the tax-receiver and tax-collector, it would be their duty to assess the same. So, if the owner of notes of the market value of $15,000 returns his notes for taxation in the amount of $1000, he is a defaulter as to $14,000 of his notes. This would not be a case of undervaluation of these instruments, but would amount to an omission to return all of his notes. For instance, the taxpayer is required to state how much money he has on hand, and to give the gross value of his notes, accounts, or other obligations for money, and the market value thereof. Civil Code (1910), § 1087. If the owner of notes of the gross value of $20,000 should return them at their gross value and at the market value of $5000, if these constituted all his notes, the tax-receiver should, if in his judgment these note's were returned below their value, assess their value at once, or within thirty days, in the latter case giving the taxpayer notice of his assessment. That would present a case of undervaluation. But if the owner of notes of the gross and market value of $20,000 should return $5000 of notes, that would present a case of omission to return his property, and not a case • of undervaluation. “ The requirement of candor in disclosing the ownership of property is really at the foundation of our tax system. So long as a citizen complies with that requirement, he is afforded every opportunity to dispute with the State the question of the value of his property, and the amount of tax to be levied thereon. When he fails to return in whole or in part, fraudulently or through honest mistake, he then and there becomes a defaulter.” Georgia Railroad &c. Co. v. Wright, 124 Ga. 596, 617 (53 S. E. 251). When there is omission to return, the taxpayer is a defaulter. So we are of the opinion that when the owner of money, notes, and accounts returns them in a lump sum, without disclosing their face or gross value, at a valuation far below their market value, he is a defaulter; and he can not claim, under these circumstances, exemption from having this species of property assessed by the tax-collector for taxation, when the true situation is discovered, on the theory that he had returned his money, notes, and accounts at a given sum; that it was the duty of the tax-receiver to reject his return, if this officer was dissatisfied with the valuation indicated by such return; and that when that officer failed to reject his return and when he paid his taxes for the years in which he made returns, he was not subject to further assessments for taxation upon this species of property.

When this case was here on demurrer (150 Ga. 57), this court construed "the allegation that the plaintiff had returned his taxable property as required by law, . . as against a general demurrer, to mean that the plaintiff had returned all his taxable property;” and tlms in effect held that, if the plaintiff had not returned all 'his taxable property, he was a defaulter in part at least. Judgment affirmed.

All the Justices concur.