Adams v. Clarke

80 Miss. 134 | Miss. | 1902

Lead Opinion

Wi-iitfield, O. J.,

delivered the opinion of the court.

On two propositions involved the court is unanimous. As to these we hold: (1) A debt due to the vendor of land is a solvent credit, taxable to the vendor as a solvent credit, where the vendee has paid the taxes on the land for the year for which the debt is sought to be taxed; (2) the solvent credits arising from a mercantile businéss are taxable as such in years subsequent to that in which the debt was contracted, and do not, therefore, continue indefinitely to be covered by the assessment of “amount of money employed in merchandise;” (3) the majority of the court hold further: That, when one has been assessed for “amount of indebtedness which he regards as probably collectible,” but has not been assessed for “money on hand, or on deposit, or loaned,” he may be'additionally assessed therefor. Judge Calhoon dissents as to this, the third proposition, and will present his views in his dissenting opinion. The precise point on this third proposition can only be understood by a statement of the facts bearing on it. The appellee solemnly agrees, in the record, that, though he only gave in $5,000 as the amount of solvent credits which he regarded as probably collectible, “the other items than the one of $200 money loaned to J. C. Martin, appearing on the list representing the indebtedness now, and when the assessment hereinafter mentioned was made, are due to him, which he regarded as probably collectible for the whole amount,” which amount, it was conceded, was far in excess of $5,000 — to wit, $10,000. In other words, though returning only $5,000, the appellee admits that he actually had-a much larger amount than $5,000 of solvent credits, which were of their face value, to wit, $10,000, known,by him to be of that larger amount, and collectible. A more damaging admission conld hardly be made, but appellee had no alternative as to admitting it, since it was plainly true that he had intentionally undervalued his solvent credits. By way of salvo to his conscience, he did not make oath to the assessment, and the compliant assessor did not require him to. do so, both joining deliberately in this evasion of the law, and yet without having complied with the law — nay, whilst deliberately violating it, and whilst the assessor deliberately violated it — it is gravely argued that this assessment has passed into judgment, by the joint action of the citizen and the tax authorities, and is res adjudicabaand cannot be inquired into. The doctrine of State v. Simmons, 70 Miss., 490 (12 So., 477), is a most wholesome doctrine on this point, and will be firmly upheld by us in all proper cases; but the assessment which becomes res adjudicaba is an assessment made in conformity with law, and not in conscious and deliberate defiance of the law, on the part of both the taxpayer and the assessor. Courts do not sit to enable lawbreakers to profit by their own wrong doing. The proposition that the assessment in this case', made in intentional and willful disregard of all the sanctions required by law to make it an assessment, is res adjudicaba, is abhorrent to justice, and would put a premium on fraud. Authority is not wanting to sustain our view. See Lawrence v. City of Janesville, 46 Wis., 364 (1 N. W., 338; 50 N. W., 1102); Gager v. Proul, 48 Ohio St., 89 (26 N. E., 1013); Morris v. Jones, 150 Ill., 542 (37 N. E., 928). As to this proposition, also, however, our Brother Calhoon dissents.

This brings us to the chief point as to which we differ. The question is precisely this: Where a taxpayer actually has, say $100,000 of solvent credits, which are actually collectible for the full value, and he knows that fact, and so regards them, and intentionally undervalues them, by returning them, say at $5,000, as probably collectible, even supposing him to have sworn to his assessment, have not the $95,000 escaped taxation by reason of not having been assessed? It is earnestly contended that, in such case, the $95,000 have not escaped taxation by reason of not having been assessed, but that having given in, in a lump sum, under the clause “amount of solvent credits deemed probably collectible,” the sum of $5,000, and the board of supervisors not having raised it, the whole $100,000 of solvent credits have been assessed, and that.it is a case, true, of fraudulent and willful undervaluation, but that only; and that the state cannot have such outrageous fraud corrected. The fallacy of this reasoning -is patent. The board never had the other $95,000 brought to its attention. It never passed on that amount at all. It is said the appellee had all his solvent credits in mind when he returned the amount collectible as $5,000. If that were granted, it does not show that the board had them all in mind, or any amount beyond the $5,000. The board could know nothing of them except as declared. And it is not to be tolerated that a fraudulent taxpayer, who has deliberately and intentionally undervalued his solvent credits, shall succeed in this fraud on the law by the easy process of telling us that he had the whole $100,000 in mind. The board must have the $100,000 in mind as well as he. Counsel for appellant has put this so clearly that we quote this part of his argument to adopt it as a part of the opinion of this court. He says:

“It is conceded by the state that, in the absence of fraud as to property specified on the rolls, the valuation finally fixed by the board is conclusive both upon the state and the taxpayer. The taxpayer is advised by law of the time and place when the question of valuation will be finally settled, and he must then and there attend or take notice of the final action of the board, and if dissatisfied therewith, appeal to the next term of the circuit court of the county. When no appeal is taken, the statute •declares the roll to be conclusive. Code, § 3787. The question is conclusive of what ? It is not conclusive of the fact that the roll contains all the taxable property of the person named on the roll, although the list required to be made by the taxpayer, and the roll made by the assessor, contains a blank for nonennmerated personalty, under the head of ‘amount of all other personal property not otherwise mentioned,’ for the code expressly provided for the assessment of any property that escapes assessment. Code, § 3768. Since an assessment is the listing and valuation of property, and since the roll is not conclusive against the .public as to what property the taxpayer owns, it follows that the judgment of the hoard can only be conclusive of these two facts: Eirst, as against the taxpayer, that he is the owner, or taxable for the property shown on the roll; second, as against the taxpayer and the public, that the valuation of the enumerated property is as finally shown on the roll. The rule of res adjudicaba in reference to assessment for taxes rests upon the same basis as that of other judgments. Wells Res. Adj., sec. 483. One who relies upon the conclusive effect of a prior decision must be able to show that the precise point was-decided in that proceeding. If there are two issues, on either of which the judgment may have been given, and one would be conclusive, and the other not, there is no res adjudicaba. Greene v. Bank, 73 Miss., 542 (19 So., 350). Let us take the item of money. It is dealt with on the printed lists separately, and the assessment is to be of the ‘amount of money on hand, or on deposit, or loaned.-’ Suppose a taxpayer as to money returns the amount of ‘money on hand, on deposit, or loaned,’ $500. The revenue agent discovers that the party had on handln actual money $1,000, and assesses him for the additional $500. Is the first assessment res adjudicaba? Manifestly not; the taxpayer has simply made a false list. He has omitted $500 of the money he did have; it has escaped taxation, and under code, § 3768, the assessor can assess it, and under the act of 1894 the revenue agent can cause it to be assessed as money ‘which has escaped taxation.’ Either this is true or there is a difference between money and other property, or no other property can be thus assessed. If a man gives in for taxation ten mules when he has twenty, do the omitted ten escape taxation ? If they do, § 3768 of the code is obliterated. The learned trial judge accepted the view urged by counsel for appellee, that where any choses in action were assessed against the taxpayer, the state was thereafter precluded from making another assessment for choses in action which had,escaped taxation. Their argument was this: The statute, they say, does not require the taxpayer to furnish an itemized schedule of solvent credits, but to return only the aggregate amount (value) thereof. This they say leaves to the taxpayer the duty of canvassing and considering all his solvent credits, and of estimating them at their value, and when the roll is approved by the supervisors the judgment is conclusive on the taxpayer and on the state; that, first, the taxpayer has considered and valued all his solvent credits; and, second, that the value approved by the board is the true assessable value. This is a fair statement of counsel’s position. To this the reply is that the legislature never intended or provided that the judgment of the board should be conclusive as to the fact that all property had been assessed which the taxpayer owned. It did intend and provide that, as to the value of property brought to the attention of the board, its judgment should be conclusive.

But appellee’s counsel say the legislative scheme does not provide for bringing a list of the credits before the board, and therefore it was not contemplated that the board should exercise its judgment upon specific data. This proposition assumes a fact, and from that fact counsel proceed to a false conclusion. A judgment is conclusive because, and only because, the court by which it is rendered has been advised of the facts, and on those facts has announced its conclusion. The proposition of counsel is that the judgment here is conclusive because, and only because, there was no provision of law by which the facts could be submitted to the court. They concede that, if the statute required a list of the credits to be made, then that unlisted items could be assessed; but they contend that, no list being filed, it is to be conclusively presumed that things not brought to the attention of the board were by it adjudicated, or are to be treated as adjudicated. It is too clear for controversy that under the statute property which has escaped taxation can afterward be assessed. ' In reference to solvent credits the most that can be said is, that whether a particular credit has been omitted altogether or only undervalued cannot be discovered by an examination of the roll, and is known only to the taxpayer. The foundation of the claim that such property cannot be assessed in a subsequent year is that it has already been assessed, and the claim that it has been assessed rests, in its turn, upon the proposition that it cannot be told whether it has been or not. Take the two propositions as to which there cannot be ground for contention: (1) Property which has been assessed and valued cannot be reassessed; (2) property which has not been assessed can be subsequently put on the rolls and taxed. To which class shall be assigned $5,000 of solvent credits owned by the appellee in t1900, it being proven that he then had $10,000 of notes secured by mortgage, which he then knew to be worth their face value, and it further appearing that he paid taxes only on $5,000. Two things are certain: First, in no event can the appellee be required to pay on a greater amount than he justly ought; second, unless the additional assessment is upheld, he unquestionably escaped the payinent of taxes on one-half of his solvent credits. It must be borne in mind that our constitution is mandatory, and our statute presumably intends that he shall pay on the whole $10,000, and that whether the $5,000 which has not been taxed escapes or is subject to taxation depends upon the question whether the words of the statute shall be so construed' as to subject it to, or exclude it from, taxation. Did the legislature intend that accumulated wealth in the shape of bonds, notes, and stocks should stand upon the same footing with tangible, visible property, or that it should occupy a more favored position ? It is conceded by the state that, when property has been listed and valued, the valuation is conclusive, both upon the taxpayer and the state. State v. Tonella, 70 Miss., 701 (14 So., 17; 22 L. R. A., 346); State v. Simmons, 70 Miss., 485 (12 So., 177). The appellee admits that under the statute all other property which has escaped taxation may be now assessed, but contends that, whenever any assessment of money or any credit has been made, there cannot be another assessment. The foundation of this contention, as it has been said, rests upon the proposition that, since the statute requires the taxpayer to return all his money or credits, when he returns any, the presumption is conclusive that he has returned all. But the statute requires that the owners of other property return it all for taxation, and if they do not, there is no such presumption in their favor. It is not a reply to say that other property is required to be specifically listed, while money or credits are not. The statute (code, § 3761), in prescribing the form of the lists, requires that each taxpayer, having scheduled his property therein enumerated, shall finally state generally the “amount of all other personal property not otherwise enumerated.” This other property is not to be individualized; it is grouped. The contention of the appellee would therefore lead to the conclusion that if a taxpayer should return generally, in response to the interrogatory, any amount, say $100, he would forever shield from taxation any imaginable species of personal property.”

This reasoning is sans replique. It is perfectly obvious that this construction carries out the intent and purpose of the constitution and laws, and that its effect is to make the dishonest taxpayer pay only what he justly owes. The law is not made in the interest of those who fraudulently attempt to evade their just share of the burdens of taxation. The case of the Bank of Oxford, 78 Miss., 532 (29 So., 402), is wholly inapplicable here. Banks do not pay on.solvent credits. All that was held in that ease was that, as the surplus of the bank had been assessed, it could not be reassessed. That surplus was an aggregated subject of taxation, a unit in itself, wholly unlike solvent credits. It was taxed just as a stock of merchandise would be, or jewelry, or gold ware, or tbe like, all which, are wholly unlike solvent credits.

We are warned in argument that our view will be, as it is said, “far-reaching and disastrous.” We are not to be “frighted from our propriety” by visions of “gorgons, hydras, and chimeras dire,” conjured up by the fraudulent and dishonest taxpayer, when the Tthuriel spear of the law shall make the toad squat and the fiend resume his native form. We are not concerned with consequences. That is no argument to address to a court- — -if that be all that there is to be said. We are concerned only to ascertain clearly what the right is, and, having ascertained it, to maintain it inflexibly. Every dishonest return of taxes is not only a violation of the law, and beside a wrong to the state, but it is the grossest injustice to those who honestly pay their taxes. If all citizens would take care to pay as they should, the tax rate would be lowered, probably one-half, and property in the hands of corporations and individuals would equally respond to its just burdens. We have held the law aloft as to corporate efforts at evasion, and we shall mete out the same equal justice to the fraudulent individual taxpayer.

Reversed and remanded.

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Dissenting Opinion

Oalhoon, J.,

dissenting in part, delivered the following opinion.

It is too narrow a construction to hold that the validity of the assessment to charge the citizen with liability for taxes on personalty depends on conformity to the printed list, or on its being sworn to as required. The formula prescribed by the statute is one thing;.what is or is not a substantial conformity to it is quite another. The ¡minted list contains divers items, as, to instance, “Cattle valued at -,” “Horses valued at --,” and so forth; and it was designed to have it show the number and value of the various articles, and then, “Amount of money on hand, on deposit, or loaned --,” “Amount of indebtedness to the party assessed which he regards as probably collectible -,” this being clearly regarded by the lawmakers as its value. The object of this itemization is to reach the various forms of value for which the party is assessable, and should be observed in assessment. But if the party assessed lists cattle, horses, mules, etc., valuing them without giving the number, value being aimed at and the number being a mere means to that end, if the end is attained, the taxpayer cannot object that he is not liable for the taxes on such value, and, he being bound, must be protected by the assessment as fully as if the forms of the statute had been observed. “Amount of money on hand,” although joined with “Money on deposit or loaned” in the formula, is in its nature distinct and taxable specifically. Amount of money on deposit or loaned is clearly comprehended by “’amount of indebtedness to the party assessed which he regards as probably collectible,” and if, in fact, money deposited or loaned was given in or listed as “indebtedness to the party,” etc., no wrong would result to the revenue; for, while the form given was not observed, the amount taxable of the party assessed would be reached. These printed lists, on which the tax list is to be made out, are delivered, alphabetically arranged, to the board of supervisors, who are supposed to examine and approve them, and any person thought not to have “given in a correct statement of his credits, or choses in action, or other property,” may be properly assessed by the board. Observe that code, § 3767, characterizes as “credits or choses in action” all dues to the party. Thus the party giving in the list is liable to be proceeded against for omission or undervaluation, and he is bound by the assessment. Id., §§ 3787, 3788, 3791, 3793. The assessment is committed to the assessor and board of supervisors. They represent the state and county. They have large power in dealing with the subject, and when the assessment is completed, the matter is ended, except as to property omitted — that is, some specific thing not embraced. “Amount” means aggregation, a sum total made up of particulars, and where the “amount of money on deposit, or loaned, or other indebtedness to the party assessed,” is listed, “credits or choses in action” are embraced, and cannot be said to have “escaped taxation by reason of not being assessed.” It was assessed. It may have been undervalued, but it was assessed, however much undervalued. "When the assessment is concluded by being dealt with by the assessor and the board of supervisors, it is ended, except as to distinct things not included in the assessment. As “amount” is made up of particulars valued in the aggregate, each particular being a factor in the aggregation, escape from taxation or assessment cannot be predicated of any of the factors. Appellee was assessed on “amount of indebtedness to the party assessed which he regards as probably collectible, $5,000.” The evidence shows that, included in the indebtedness to him, was a note for $150 for land sold, a note for money loaned $150, and a mercantile account for $1,600. which was a balance due him on a former year’s business as a merchant, and that he, without designating any particular sort of indebtedness, but having reference to all indebtedness due him, gave in the amount shown by the list. The view is not maintainable that the mercantile debt, accrued in a former year’s business, was included in the capital stock invested in merchandise, but the view is maintainable that this debt and the debt for money loaned, being factors in making up the “amount of indebtedness to the party assessed,” etc., cannot be said to have “escaped taxation by reason of not being assessed.” They were assessed, not specifically, but as elements of the amount given as the aggregate. They were undervalued just as lands, horses, mules, jewelry, etc., often are. But they were assessed, not as they should have been, it is true, but by those charged by law with the duty of assessing, and, as the law now is, that concluded the matter. Credits or choses in action, including the land note and money loaned, are to be assessed, not specifically, but by amount. A party is not required to list them, but to give the amount of their aggregate value — that is, the sum or amount of what is regarded as probably collectible, This amount is the value to be assessed and taxed. The oath, re-enforced by the fear of the penalty of perjury, is intended to probe the conscience to ascertain the amount which is taken as the value of solvent credits. If the oath be omitted, or á false one made, still, if the “amount” has been made up from consideration of all the dues to the party, an assessment has been made. In no other view can the citizen be protected from injustice. There is a wide difference between not being assessed and being improperly assessed, between undervaluation and no valuation, between assessment and reassessment. The legislature has not provided for reassessment at the instance of its revenue agent, but only for assessment of persons and property which “escaped taxation by reason of not being assessed.” Acts 1894, p. 29, ch. 34, sec. 3, which repealed certain sections of the code (ch. 126), limits this officer to persons and property that have “escaped taxation by reason of not being assessed,” which does not include such as have been assessed by the proper authorities, even though not properly assessed. The printed list embraces: “Jewelry valued at-,” “Gold or silver plate valued at-,” “Amount of capital employed in merchandise. or manufacturing-,” “Household furniture (over $250 in value) -.” There is manifestly no contemplation that sundry articles of jewelry, such as rings, earrings, brooches, bracelets, etc., or divers pieces of gold or silver plate, or multitudinous articles of household furniture, shall be listed. It is well known that such enumeration is never, and never has been, made. It will hardly be contended that one who had given in “Jewelry valued at -,” “Gold or silver plate valued at -,” “Household furniture (over $250) valued at ——,” or “Amount of capital employed in merchandise or manufacturing -”, filling out the blanks with definite sums, is liable, years afterward, to be reassessed as to these things. The supposed distinction between “credits or choses in action,” and other values, is more fanciful than real. Amount of indebtedness is not different from amount of any other thing. Different forms of expression are used, but the object is to tax value in the various sorts of property. One may have $10,000 of credits not worth $1,000. Money is the standard of value, and is taxed as such, but money loaned, or on deposit, is simply a chose in action, and may be of less value than the sum loaned or deposited. There is no question here of what the legislature might authorize. The question is what it has authorized. It has authorized, not a reassessment, not a nunc pro tunc assessment, but “an additional assessment,” to embrace property which “escaped taxation by reason of not being assessed.” Only property not assessed may be proceeded against. If it was assessed, however improperly, it does not come within the law. Our policy commits to local authorities the matter of taxation. Lists of taxables are provided for, details are regulated, and revisory power is lodged with the boards of supervisors, both as to the subjects of taxation and their valuation. Assessors are to report undervaluation, and the boards are to correct. This correction is final, and this is admitted, as to certain kinds of .property, but denied as to “credits” of various sorts. There is no just distinction. The printed lists are subdivided so as to call attention to the various subjects. But “money on deposit, or loaned, and amount of indebtedness,” etc., embrace all forms of indebtedness other than corporate or quasi corporate indebtedness. All individual indebtedness must consist of deposits, or loans otherwise than as deposits, or claims of dues'. Code, § 3767, uses the phrase “credits or dioses in action,” which shows the legislative understanding that these terms cover the various subdivisions of rights in action of whatever sort, and this section provides for a proper assessment of these things at the proper time, before approval of the roll. How may we distinguish between the effect of assessment of any sort of property and the “amount” of credits of any sort? If there be greater liability to evasion or fraud whereby values may escape taxation, that is for the legislature to guard against. Doubtless millions have escaped, so far as values go, in lands, mules, horses, jewelry, etc., by deliberate undervaluation, but that cannot be what is meant in the statute of 1894 (Laws 1894, ch. 34, sec. 3) by the' words “escaped taxation by reason of not being assessed.” It was surely not intended that assessments should be overhauled and proper valuation made. That would perhaps involve nearly every assessment made. Amount of value is what is meant. Of course the amount of money on hand and its value are the same. But it is not so of money loaned, whose value fluctuates, and yet it, as other indebtedness, is assessed according to value. The amount of the value of the entire indebtedness, of whatever it may consist, is listed and taxed, and there is nothing but ingenuity in the attempted distinction between different kinds of taxables. If part of the just valuation of a farm cannot be said to have “escaped taxation by reason of not being assessed,” it is impossible to see how part of the sum making the “amount” of indebtedness can be said to have not been assessed. One can no more be said to have escaped taxation than the other. The fact that there was not exact conformity to the different items of the list, since several amount to the same thing — that is, indebtedness, and the fact that oath was not administered, can make no difference. Oath might be required at any time. No objection was made. Power must be lodged somewhere. It has been lodged with the ' ásséssors and board of' supervisors. The citizen is absolutely bound by their action, and must, necessarily, be protected by it, at least until the legislature provides for a general overhauling, if it can and will do so, whereby all the sinners are to be brought to judgment. It will not do to stretch the law to meet supposed or real cases of the escape of large sums of proper valuation for taxation. There must be a finality. There must be one rule for the individual and for the state and counties in reference to assessments, so far as the end of controversy about values is concerned. If not, there is no safety for any citizen, however honest. Property being given in, whether under or over valued, must be conclusive. The state cannot concern herself, except where property is not given in. She must be controlled, as the citizen must be, by the final action of her own tribunals. Is there any other tribunal on earth whose decision does not bind both sides ? Is there any tribunal where it is allowed to set up fraud after final judgment unless it was discovered after the investigation, and was not discovered sooner, or might not have been with reasonable diligence ? I cannot conceive a case between the state and a citizen where the citizen only, and not the state, will be bound by the adjudication.