Gray v. Stiles, Treasurer

Realizing the great importance of this question, it being one which affects every tax payer in the Territory, as the legal assessments as approved by the township boards of equalization and returned to the county clerks have been, in every instance, raised, I feel it my duty to enter an affirmative, rather than a passive approval of the conclusions which have been reached, and which are so ably presented in the foregoing decision of my associate, Justice McAtee. The conclusion of the court in this case overrules the former conclusions of the court inWallace v. Bullen, decided at the June, 1896, term of this court, and as that case was an appeal from my decision in the trial court, I could not express my views upon the questions involved. But, as the former opinion in this case followed that, I did in this case dissent from the conclusions reached in the case of Wallace v. Bullen, and my dissenting opinion, then rendered in this case, is now, very agreeable to myself at least, changed into a concurring opinion.

I agree fully with the conclusions of Justice McAtee, and his opinion reviews the question so fully and extensively that I will be content with perhaps but an emphasis of one or two of the more important phases of the question, and a review of a few cases on the subject, and a limited number of additional citations from the text-writers.

The sections of the statute which are pertinent to this question are all set out in the opinions already rendered, and it will be unnecessary for me to repeat them here, but it will be sufficient for me to state my conclusions of what the law is from them.

The territorial board of equalization is clothed purely and solely with the power of equalization of assessments and not with the power to change valuations. It must take the valuations as returned by the county clerks, and has, in my judgment, no power whatever to change such valuations. So far as the territorial board of equalization is concerned, it makes no difference whether the assessments have been made, as they should be made, at the actual cash value of the property, or whether they have been made upon a basis greater or less than that. The statute makes it the board's duty "to examine the various county assessments and to equalize the same." The terms of this language is the sum total of its power with reference to equalization. It is to examine the county assessments. It has no power to examine anything else, nor to hear anything else, nor to review anything else, nor to decide from any other matter presented than the county assessments, and it must then equalize, and not re-assess, the same.

The statute is most complete and comprehensive in defining the mode and manner of making the assessments. The individual must give in his property under oath, and the assessing officer must also swear to the correctness of the valuations. The territorial board of equalization does not have the responsibility of determining the correctness of the valuations of the property. It hears nobody's statement under oath, and makes none of its own, and it is not presumed to know anything more about these valuations than the man who owns the property, or than the legal assessor who has imposed upon him the particular responsibility of ascertaining what these valuations are.

The returns made to the territorial board of equalization showed that the assessed value of the property of the Territory was twenty-eight millions of dollars. This board changed the sum of these assessments to over thirty-nine millions of dollars, a raise of more than one-third in the valuation of the property of the Territory.

The record in this case from the trial court does not tell us, in any of its findings or conclusions, whether the falsehood which it found lies at the basis of this assessment, consisted of perjury on the part of all the tax payers to the extent of one-third of the property, or on the part of one-third of the tax payers with reference to all of their property, or whether scattered indiscriminately throughout the Territory there have been such an undetermined number of false returns as involve one-third of the property of the Territory. But that the finding of the court involves some one of these conclusions is obvious, or else it is obvious that the decision of the court is wrong; for if the decision of the court is right, then some one of these three falsehoods must have been committed in making the returns, and we cannot escape from this conclusion except by saying the decision of the court is wrong. I think the latter is the correct conclusion, for the reason that there is nothing whatever in the record to show that any false returns of property or valuations were made, and the legislature has given to the territorial board of equalization no power to hear and determine the question as to whether or not there has been any lack of observance of the law in the assessment of property. It has only given it the power "to examine the various county assessments and to equalize the same." If the legislature had intended that the territorial board of equalization should determine whether or not the property was correctly assessed at its cash value, it would have given the board some means and power to determine this question. It has only given it, however, the power to equalize these assessments, the power to adjust differences made in the assessments in the various counties, as it has given to the county boards power to adjust differences in the assessments in county by the assessors of the different townships, in order that the provision of sec. 6 of the Organic Act that "all property subject to taxation shall be taxed in proportion to its value" should be enforced as the fundamental and just rule for the apportionment of the burdens of taxation. The conclusion of the court, in any event, instead of enforcing the one provision of the statute, that all property shall be assessed at its actual cash value, has manifestly violated this rule, and it has done it by the punishment of the innocent rather than the punishment of the guilty.

Suppose we take that construction most favorable to the honesty of those who have listed their property for taxation, and to the honesty of the assessors of the Territory, and we then have the conclusion that the falsehood that the court substantially finds in the return of the property only existed in one-third of the assessments. If that is true, than the other two-thirds must have been correctly returned. To the extent of the increase of the per cent. upon the assessments in the various counties, just so far, then, two-thirds of the property of the Territory, honestly assessed and returned, would, if the decision of the court were permitted to stand as the law, be now placed upon the tax rolls at an increased valuation. This, in my judgment, is the inevitable result of such a conclusion, and I believe if that were sustained many honest tax payers of the Territory would be required to pay a tax at a high rate upon the assessments now entered upon the tax rolls, at an amount much greater than represents the actual cash value of their property.

Suppose, in the case now under consideration from Logan county, a man owned property to the value of one thousand dollars; he honestly assessed it and swore to it, and the assessor honestly entered it and swore to it, at what it was actually worth, one thousand dollars. The increase in this assessment places his property on the tax rolls at fourteen hundred and fifty dollars, and this is done because the board, without evidence, without proof, with no power to determine the fact, has found that some other tax payers of that county have made a false return of their property. Is this equity? Is this justice? I say no. It is the punishment of the innocent in order that the guilty may be required to do what is right. This principle has never met the approval of an appellate court, and it cannot find sanction in this one.

My candid belief is that the property of the Territory was originally assessed at its fair cash value, and that few, if any, of the tax payers swore falsely with reference to their property; and if this were, in fact, done in isolated and very few cases, it was more than compensated for in the returns by the high assessment at which, owing to the peculiar conditions which existed, the assessors have insisted upon entering the citizens' property.

It is a part of the history of this Territory, that the courts have been, time and again, appealed to, to hold that the 4 per cent. limitation contained in the act of congress of July 30, 1886, was wholly inapplicable to this Territory, by reason of its organization subsequent to that legislation, and by reason of the fact that the counties of the Territory were all organized before there was a possibility of an assessment. But by the decision in Hoffman v. Commissioners of Pawnee County,3 Okla. 325, the question was settled in favor of the existence of the 4 per cent. limitation.

Prior to the 1895 assessment, as is well known by those who understand the history of this Territory, the judges of this court, then acting, all entertained the view that the 4 per cent. limitation was in force in this Territory, and either prevented any indebtedness to exceed 4 per cent. of the property, as shown by the assessment rolls when the same should be returned, or became operative from and after the first assessment, or prevented the contracting of any indebtedness until there should first be an assessment, and then not to exceed 4 per cent., and it was, as I believe, to escape the effect of this decision just named that the board of equalization was persuaded to make the raise in these assessments in the various counties, and not, in fact, to enter the property at its actual cash value because false returns had been made. And those persons who were unable to evade the force of this congressional limitation directly would, if the decision of the court below was sustained, be able to do it indirectly. This, in my view of it, would be the unwitting effect of the decision of the court below, and to a decision which would so operate of course I could not agree.

If this court sustains a raise of eleven millions of dollars in 1895, it must, if the board shall so choose, and the legislature should fail to be loyal enough to pass a statute that could not be construed into giving such power, sustain a raise of ten times that amount, this year or next year, and the congressional limitation which we have held to be in force here will amount to nothing more than a meaningless collection of words of the English language.

If there has been, however, any falsehood practiced in making these returns, I think the statute gives ample power to correct it. It provides for township and city boards of equalization who have power to hear complaints of parties who feel aggrieved at the assessments made, and that the decisions of these boards shall be final as to individual assessments. Before that board was the place to have made complaint if the assessed and the assessor had made false returns. That board had power to hear complaints, and therefore power to determine the complaints and had power to correct mistakes, errors and deception, if any was practiced in making individual assessments, and I can see no reason why the determination of that board ought not to be as final upon the officers whose duty it is to administer the law, as upon the individual whose duty it is to obey it. If these complaints had been made before that board, as the officers could well have made them if there was any ground therefor, then the one-third of the tax payers who made such false returns of their property could have been met by a proper raise thereof, and the trouble properly corrected instead of burdening two-thirds of the tax payers of the county with an illegal increase in their taxation.

The only authority cited in support of the former conclusion of this court, in following the decision in the case ofWallace v. Bullen, sustaining the claim that the territorial board of equalization had the power to make these assessments, is the case of Black v. McGonigle, (Missouri,) 15 Southwestern 615. That case, I claim, is no support whatever for the authority which the territorial board of equalization has attempted to exercise, and a citation from the opinion will show that it was upon an entirely different character of statute from that under consideration in this case. It is there stated:

"The first contention of the appellant is that the action of the board in raising the assessed values of real estate in all the townships, except one, by a single order on a per centum basis, is illegal and void. The propositions contained in this objection must, of course, be determined by the statute. Section 6672, Rev. St. 1879, gives to the board power 'to hear complaints, and to equalize the valuation and assessments upon all real and personal property within the county;' and it is then made the duty of the board 'to equalize the valuations and assessments of all such property, both real and personal, * * so that each tract of land shall be entered on the tax book at its true value.' According to the plain letter of the statute, the board has not only the power to hear complaints, but it has the power, of its own motion, to equalize the valuations for the purposes named in the law, namely, so that each tract of land shall be entered at its 'true value.' In performing these duties, the board acts judicially; this has been often held, and the very nature of the duty to be performed makes it a judicial one."

Now, there was an express power given to the board of equalization in that case "to hear complaints," and to equalize the valuation, as well as the assessments upon the property, and it was their duty to equalize the valuations and assessments "so that each tract of land shall be entered on the tax book at its true value." Under our statute, there is no power whatever given to this board to equalize any valuations. All they are given power to do is "to examine the various county assessments and to equalize the same." It seems to me too patent for argument that that case can be no authority in this.

The case of Kimball v. Merchants Savings, Loan TrustCompany, 89 Ill. 611, is a decision from one of the leading supreme courts of the country, which, if followed, would have led the court then to a different conclusion. I think it, in principle, is squarely in point. It is true that the raise which was objected to, and the only raise in the assessment which was objected to in that case, and therefore the only one under consideration, was that made by the county board of equalization. But what difference does it make whether it was a county board of equalization or a territorial board of equalization? The powers of these boards are purely legislative. They have no power whatever save such as the legislature grants, and the power granted to the territorial board of equalization can give no greater authority than a like grant of power to a county board of equalization. They both, in my judgment, stand upon the same principle, and must abide the same determination. The county board of equalization in that case added 20 per cent to the valuation of personal property in the town of South Chicago, but made no changes in any other towns. This per cent. made an increase in the aggregate value of the assessed property of that town of over two millions of dollars, and thereby increased by a large per cent. the aggregate assessed value of the the entire property of the county. This was done under a statute which provided that the board.

"Shall ascertain whether the valuations in one town or district bear a just relation to all the towns or districts in the county, and may increase or diminish the aggregate valuation of property in any town or district by adding or deducting such sum upon the hundred dollars as may be necessary to produce a just relation between all the valuations of property in the county, but shall, in no instance, reduce the aggregate valuations of all the towns or districts below the aggregate valuation thereof as made by the assessors, neither shall it increase the aggregate valuations of all the towns or districts except in such an amount as may be actually necessary and incidental to a proper and just equalization."

A majority of the court in the case of Wallace v. Bullen seem to take the view that this Illinois case is not in point, because of the provision of this Illinois statute prohibiting this board of equalization from making an increase in the aggregate valuations of a town or district. I think this entirely too narrow a view to take of this decision. It is true this limitation is mentioned in the opinion, but the decision is based as strongly upon the want of authority in this board to make an increase in the assessments, as it is upon the language of the limitation contained in the statute.

This court said in its opinion in that case:

"It follows, as a matter of course, that any material increase, beyond what was actually necessary or incidental, of the aggregate valuations of all the towns of the county, as was made in this case, is without authority of law, and must for that reason be void. It is not merely an irregular or erroneous exercise of powers conferred, but it is an imposition of taxes in a case where no authority is given by the statute, which is the source of all power a county board may rightfully exercise in such matters."

It will be seen that this part of the opinion, which is indeed the stronger language of it, absolutely omits any reference to the language in the limitation upon the power of this board, but squarely says that no authority to make this increase was given by statute, and that the statute is the source of all power that the county board could exercise in the case. And this principle, indeed, has been so often reiterated by the courts and law writers, that it ought not to be disputed. If it is a question, then, of want of authority, it does not lessen the effect of the opinion that it was made under a statute which also contained a limitation. Legislatures, in fact, often provide such a limitation where authority would not exist without it, and the fact that the limitation is omitted in a particular case is no argument that the authority exists except for such restriction.

I think a little addition to the extract which the court in that case took from this opinion may give us a better idea of what the court meant than that which was given. The part there quoted by the court, with the addition, is as follows:

"The case of Scammon v. The City of Chicago, 44 Ill. 269, cited, is not an authority in the case we are considering That case arose under a different law — one that conferred power on the board acting for the purpose of equalizing assessments 'to add to, take from, or otherwise correct and revise the same' without imposing any limitations upon their discretion in the matter. It is a misapprehension to suppose the present revenue law invests county boards, in the matter of equalizing assessments between the several town or districts of the county, with a discretion to diminish in any instance, or raise, the aggregate valuations made by the assessors beyond an amount that may be actually necessary or incidental to a proper and just equalization. Had the legislature invested county boards with a discretion as to the amount that should be added or deducted in any given case, in equalizing valuations, without imposing restrictions, then the rule declared in Law v.The People, 87 Ill. 385, as to reviewing such discretion, would apply. But the fallacy of the argument on this branch of the case lies in the assumption county boards have a discretion in such matters. Such is not the case. The powers such boards may rightfully exercise are defined, and limits fixed beyond which they may not go. All acts beyond the restrictions imposed are void, as being without warrant of law."

The syllabus of this case, on the point in controversy, says:

"If any material increase is made by a county board in the aggregate amount of all the towns or districts, in equalizing the valuation between the different towns beyond what is actually necessary or incidental, it is without authority of law, and void.

"Where a county board of equalization raised the tax on personal property in one town 20 per cent., without any corresponding deduction in other towns, so that the valuation of taxable property of the county was raised $2,000,000, and the state board, taking the aggregate valuation of the several counties as a basis, as the law required, raised the valuation of personal property in the same county 57 per cent., which was added to the increased valuation as made by the county board, it was held, that the proceedings of the county board increasing the valuation were not merely irregular, but without sanction of law, and void, and the tax on such increased valuation was enjoined."

It will be seen from this language taken from the syllabus, that not one word is said about the restriction contained in the statute, but it is based entirely upon the proposition that the board did not possess authority to make the raise, and therefore the raise was void. And this view of the case has been taken by several eminent tax writers on the question of taxation.

Desty, in his work on taxation, vol. 1, page 496, under the title "Board of Equalization," says: "An increase in the aggregate amount of all the towns or districts in equalizing the valuation between the different towns beyond what is actually necessary or incidental is without authority of law, and is void," citing this Illinois case as authority for this doctrine.

Cooley, in his work on taxation, page 418, says, under the title "Review of Assessments:" "Powers of Board. These tribunals are mere creatures of the statute, and must look to it for all their powers," citing, also, this case, and a large number of other authorities in support of the rule. I think, then, it is a fair statement to make, that the case ofKimball v. The Merchants Savings, Loan Trust Company, decided that a board of equalization has no power to make a material increase in the aggregate assessment of property, unless it is given authority so to do by the act which creates it.

The case of Law v. The People, referred to, was one in which the validity of the assessment of corporate property at one-half of its value was raised. The statute provided that the state board should assess corporate property at its fair cash value. The constitution required that the burden of taxation should be made to bear equally upon all property, whether owned by private persons or corporations. It was ascertained in making the assessment of corporate property, that the private property was assessed at one-half of its value, and for that reason the state board, also, in order to comply with the requirements of the constitution, assessed the corporate property upon the same basis; and it was held in this case that the state board had to act upon the valuations as returned to it by the local officers, notwithstanding it might be shown that the local officers had not complied with the requirements of the statute that the property should be assessed at its cash value. The opinion states:

"It was obligatory upon the state board to equalize valuations of property under the law, as the same had been certified by the local officers making the same, and it is difficult to appreciate the argument, the state board had no authority to equalize the valuations of property on the basis of 50 per cent. of its cash value. What possible difference could it make whether the state board regarded the valuations of property made by local assessors as having been made upon a basis of 50 per cent., or upon its fair cash value? In either case it was the duty of the state board to equalize the valuations as they came before them."

I think the same principle is applicable to the territorial board of equalization. It makes no difference, as a matter of fact, whether the property of the Territory has been assessed at its actual cash value or two-thirds of its cash value. The territorial board must equalize the county assessments, as returned, just the same. It has no power to change the aggregate of the county valuations. All it has to deal with is the assessments, and the assessments it must equalize, and not re-assess. The remedy for improper valuations, if they were made, of which the board of equalization had no proof, and no power to hear any proof whatever, was before other bodies and other officers.

It is not my opinion that a review of the decisions and authorities on this momentous question, all of which, on a statute similar to ours, are opposed to the former conclusion which this court reached, will convince either the bar or the people of the Territory that those who oppose this unlawful, as well as unjust, taxation laid upon them by the unauthorized act of the territorial board of equalization, are subject to the charge to which the court gave countenance by its approval in its former decision, written in the case of Wallace v. Bullen, that we have departed from the ordinary and common rules of construing statutes, and have resorted to a strained construction thereof, in violation of the public honor, faith and credit of the Territory. I think the court there might have been able to use more forcible and convincing language than it did upon this phase of the case, had it reviewed this charge as opposed to its own decision, instead of using it as an argument against the position then affirmed by a minority, and now by a majority, of the court. The withholding of the hand of the collecting officer from the enforcement of this illegal tax is but going effect to the plain and unequivocal language of the statutes, and certainly that ought hardly to be charged to be resorting to a strained construction. We have resorted to no strained construction of these statutes. In fact, they are so plain and certain in their language that there is nothing in them that admits of construction; but if that were a duty devolving upon us in this case, it has already been performed for us by many of the ablest courts and judges of the country, with whose opinions the majority of this court, in the case ofWallace v. Bullen, expressed the first effective, if not the only, dissent.

Is it a violation of the public honor, faith and credit of the Territory to say that the collecting officer must be clothed with the authority of the law before he lays his hands upon the property of the citizen? Is it a disregard of the public honor, faith and credit of these people to say that it is the duty of the courts of this Territory to permit the public officers to collect only such tax as the law has said they may demand? Is the giving effect to the enactments of the legislature a departure from the public honor, faith and credit? It seems to me the public honor, faith and credit can as well be maintained by the courts being guided by the law's ancient, time-honored and respected land-marks, and saying every official exaction must be based upon authority first given, as by saying that although the imposition may be illegal, unauthorized and void, yet it must be enforced to uphold the public honor, faith and credit. Let us enforce the law as it is plainly written for us, and no perverted sentiment of public honor, faith and credit, urged by those who have been their first violators, will ever makeJusticia blush because of what we have written.

A kindred argument was answered by the supreme court of the United States, in the case of Lake County v. Rollins,130 U.S. 662, by quoting the following magnificent language from Law v.The People, 87 Ill. 385:

"But, should it work hardship to individuals, that by no means warrants the violation of a plain and emphatic provision of the constitution. The liberty of the citizen, and his security in all his rights, in a large degree depend upon a rigid adherence to the provisions of the constitution and laws, and their faithful performance. If courts, to avoid hardships, may disregard and refuse to enforce their provisions, then the security of the citizen is imperiled. Then the will, it may be the unbridled will, of the judge, would usurp the place of the constitution and laws, and the violation of one provision is liable to speedily become a precedent for another, perhaps more flagrant, until all constitutional and legal barriers are destroyed, and none are secure in their rights. Nor are we justified in resorting to strained construction or astute interpretation, to avoid the intention of the framers of the constitution, or the statutes adopted under it, even to relieve against individual or local hardships. If unwise or hard in their operation, the power that adopted can repeal or amend, and remove the inconvenience. The power to do so has been wisely withheld from the courts, their functions only being to enforce the laws as they find them enacted."