138 Va. 71 | Va. | 1924
delivered the opinion of the court.
The Carolina Cotton and Woolen Mills Company complains of a judgment denying its application for the correction of alleged erroneous assessments of taxes against it in the years 1920, 1921 and 1922.
The company’s plant consists of mill, bleachery, filter plant and power house, erected and used for the purpose of manufacturing cotton cloth, and is equipped with the necessary machinery for that purpose, most of which is heavy and bolted to the floors of the buildings.
In 1920 the assistant assessor of lands, according to his testimony, assessed the improvements on the company’s land, including the machinery in the buildings, at the aggregate sum of $210,000.00, but his land book shows no separate entry of the value of the machinery, but simply the $210,000.00 in the column for improvements. In 1921 the commissioner of the revenue for district No. 2 added nothing to the land book for that year on account of improvements, and it does not appear that any improvements had been made since the assessment of lands in 1920.
In the year 1922, the commissioner of the revenue added to the assessment of the company for additional machinery installed in its plant to February 1, 1922, the sum of $85,000.00, placing this sum in the column for machinery on the land book.
In the summer of 1922, the examiner of records being of the opinion that the machinery in the buildings should be assessed as capital invested in business, assessed the company with its value on the 1st day of February, 1920, $433,932.00, as omitted capital for 1920, and its value on the 1st day of February, 1921, $484,-347.00, as omitted capital for 1921, and also reported to the commissioner of the revenue for assessment for the year 1922, as capital, the sum of $686,685.00, in addition to the capital reported by the company, as the value of the machinery on February 1, 1922.
Upon the final hearing the court refused to grant relief against the assessments reported by the examiner of records and entered the judgment complained of.
The company contends that the machinery in the plant at Fieldale is real estate, assessable as such only; that it was so assessed, but if not assessed as real estate, it cannot now be assessed as capital.
The Commonwealth insists that the machinery was properly assessable as capital and not as real estate; that if it was assessable as real estate, it was not so as- - sessed for the years 1920, 1921 and 1922, and that the assessment of the machinery as omitted capital for these years is legal, valid and binding.
The assignments of error can be disposed of by the consideration of two questions:
1. Is the company’s machinery properly assessable as real estate?
2. If so, was it so assessed for the years 1920, 1921 and 1922?
Both questions must be answered in the affirmative.
As appears from the evidence, the company’s plant is located on its own land and was erected to be indefinitely and permanently used for the manufacture
In the case of Green v. Phillips, 26 Gratt. (67 Va.) 752, 21 Am. Rep. 323, Judge Christian, speaking for the court, quoted with approval from Lord Mansfield in Lawton v. Salmon, 1 H. Bl. 259, as follows: “Whatever is essential to the purpose for which the building is used will be considered as a fixture, although the connection between them is such that it may be severed without physical or lasting injury to either.’ ’ Proceeding, Judge Christian says: “In accordance with this doctrine, it has been repeatedly held that a steam engine, erected for the purpose of furnishing the motive power of a manufactory, is to be regarded as a fixture, or in other words, as a part of the manufactory itself; and there are numerous eases which hold that the machinery of a manufactory is to be regarded as part of the realty, whether it is attached to the body of the building, or merely connected with the other machinery by running bands or gearing, which may be thrown off at pleasure without injury to the freehold. See eases cited in note,
The doctrine laid down in Green v. Phillips, supra, has been specifically approved and followed by this court in Shelton v. Ficklin, Trustee, 32 Gratt. (73 Va.) 727, Morotock Ins. Co. v. Rodefer, 92 Va. 747, 24 S. E. 393, 53 Am. St. Rep. 846, and Haskin, Wood, etc., Co. v. Cleveland, etc., Co., 94 Va. 439, 26 S. E. 878.
The General Assembly of Virginia has the power to classify subjects of taxation and has provided in section 2298 of the Code as follows: “The commissioner in assessing the value of machinery and other fixtures' to real estate in mining, manufacturing or similar establishments, shall ascertain the value of all such machinery and fixtures attached thereto, and include the aggregate value thereof as improvements o.n real estate in the same manner and to the same effect as in case of buildings .and enclosures added to real estate, under the provisions of this chapter.”
It has also provided by section 2244 of the Code, as amended by the Acts of 1920, chapter 40, that “the assessors shall immediately after their appointment proceed to examine all lands and lots assessable by them
* * * they shall include in their reassessments all buildings, and in manufacturing, mining or similar establishments the machinery and fixtures attached thereto shall be assessed and shown separately-on the assessor’s books.” (Italics supplied.)
Counsel for the Commonwealth admits in his brief that the early cases in Virginia show a tendency “to lean strongly towards the classification of machinery as real estate.” But contends that this rule was relaxed in Monarch Laundry v. Westbrook, 109 Va. 382, 63 S. E. 1070. In this case the controversy was not whether certain engines, boilers and machinery used in the laundry were fixtures, but whether the reservation of the title to the boilers, engines and machinery was valid. 'The court held that the term “goods and chattels” used in section 2462 of the Code of 1887 is restricted to “visible, tangible and movable” personal property, and that the engines, boilers and machinery for a laundry were personal property, and if the terms of the statute (section 2462) are complied with, the title thereto may be retained by the vendor, although afterwards installed as part of the plant.
Counsel for the Commonwealth further contends that •this court in Buchanan County v. Ritter Lumber Co., 125 Va. 617, 100 S. E. 546, has “clarified the situation” and laid down a rule by which machinery attached to the buildings of a permanent manufacturing plant and used in the manufacture of its products is taxable as personal property. The Ritter Lumber Company Case did not, as does the instant case, involve the question whether machinery attached to the buildings of a permanent manufacturing plant should be assessed as real estate, but whether portable band sawmills and the machinery
While machinery and tools not properly taxable as real estate should be taxed as “capital,” the machinery in controversy being attached to the freehold is under the statute and the authorities properly taxable as real estate.
Was the company’s machinery assessed as real estate for the years 1920, 1921 and 1922?
According to the weight of the evidence it was. George Rangely, assistant assessor of lands for district No. 2, in Henry county, Virginia, who made the quinquenial assessment of lands in his district in 1920, testified that J. Frank Wilson, manager of the company, was present when he made the assessment and gave him sucb information in regard to the buildings, machinery and other improvements on the land as requested; that in assessing the improvements on the land he did not make a separate assessment of the machinery attached to the buildings, but included the value of the machinery in his assessment of the value of the buildings on the
W. H. Miner, assessor of lands in district No. 1, Henry county, in 1920, testified that in assessing a cotton mill and other manufacturing plants in bis district, he did not, in assessing the improvements, assess the machinery attached to the buildings separately, but included the value of the machinery in the value put upon the buildings, and placed the aggregate value of the buildings and machinery in the column for improvements, on the land book; that he did this because he understood the Auditor of Public Accounts had advised the assessors that they could do so; that he was present when George Rangely assessed the property of the plaintiff company, and that he assessed the machinery in the manner stated in his testimony; and that the Auditor of Public Accounts received and approved the books of the assessors in this form without objection.
The statement of Assessor Rangely that he included in the assessment of the buildings the machinery attached thereto at what he considered the fair market value thereof is also sustained by the testimony of J. Frank Wilson, manager of the Fieldale plant.
If those representing the Commonwealth thought the assessment made by Assessor Rangely was too low, the Commonwealth had the right, under section 2248 of the Code of 1919, at any time prior to February, 1922, to apply to the circuit court of the county to have the same corrected so as to show a proper assessment. Having failed to avail itself of this right within the time allowed by law, it cannot now do so, nor has the court the power to make any change in the assessment.
The judgment sustaining the assessments of capital and omitted capital based upon the report of the examiner of records is erroneous and will be reversed, ancL the company granted the relief prayed for.
Reversed.
