146 Ky. 218 | Ky. Ct. App. | 1912
Opinion of the Court by
Affirming.
In this proceeding instituted by a -revenue agent in the Jefferson County Court against the appellee company, the amended statement set out that the appellee company .on September 1,1909, had notes, and mortgages of the value of $31,000, which it listed for assessment at $3,100; that it had accounts of the value of $1,339,000, which it listed at $72,000; that it had in cash $62,000, which it listed at $10,000; that its stock of goods which was worth $819,000 was listed at $224,000, and it was charged that the property thus described was undervalued by the appellee for the purpose of escaping táxr ation. A motion to make the statement more specific was sustained as to all of the items except the one relating to the cash-on hand, and the charge as to this item was controverted of record. An answer was also filed, pleading that all of the property sought to be assessed and each item thereof had-been assessed for taxation as of September 1, 1909, at its real value,- which corresponded with the amounts given in the statement filed of the value at which the property was assessed. When the motion to make more specific was sustained, the revenue agent declined to introduce any evidence, and the proceeding which had -been appealed from the county court to the circuit court was dismissed in the circuit court.
Without relating further the proceedings in the lower court, it may be stated that there are two questions presented for our consideration on this appeal. First, taking for example the item of accounts that the statement charged was of the value of $1,339,000, and which had been listed at $72,000, was it proper-for the lower court to require the revenue agent to -specify the accounts claimed to be omitted from taxation and give the name of each debtor and the amount he owed? And second, when a taxpayer has listed any particular item of property for taxation, although he may have listed it at less than its assessable value, as for example if a stock of
The Constitution of the State provides in section 172 that:
‘.‘All property, not exempted from taxation by this Constitution shall be assessed for taxation at its fair cash value estimated at the price it would bring- at a fair voluntary sale.”
The same provision is found in section 4020 of the Kentucky Statutes, in the chapter relating to Bevenue and Taxation, in which chapter elaborate provision is made for the assessment of property. Section 4.115 provides for the appointment of a board of supervisors in each county, and a like provision is found'in the charter of many of the cities. The general powers and duties of the board of supervisors, as described in section 4120, of the Kentucky Statutes, are as follows:
“They shall make a careful examination of the assessor’s books and each individual list thereof, and may increase or decrease any list; but the board shall not reduce or raise any assessment unless the evidence be clear and unmistakable that the valuation is not a fair cash value, and shall list all property omitted by the assessor which may be subject to taxation in the county, and shall correct any errors of the assessor; and in cases where the property has not been correctly valued, they shall fix the value thereof, and correct the assessor’s books, so as to show the true value of the property, as herein provided; but should any property escape assessment by the assessors or supervisors, in whole or in part, it may be assessed as provided in section 3, article 15 (which is section 4241, of the Kentucky Statutes.)”
This section (4241) provides in part that:
“It shall be the duty of the sheriff or auditor’s agent to cause to be listed for taxation all property omitted, or any portion of property omitted by the assessor, Board of Supervisors, Board of Valuation and Assessment or Bailroad Commission, for any year or years. * *
Section 4260, in the article relating to Bevenue
“It shall be the duty of the revenue agent, and the sheriff in each county shall have like power and authority as the revenue agent for said county, to cause to be listed for taxation all property omitted by the Assessor, Board of Supervisors, Board of Valuation and Assessment or Railroad Commission, for any year or years. The officer, proposing to have the property assessed shall file in the clerk’s office of the county in which the property 'may be liable to assessment, a statement containing a description and value of the property proposed to be assessed, * * * but no judgment by default or otherwise shall be rendered against such alleged owner unless the statement filed shall contain such a description of the property sought to be assessed as will enable the court to identify it. * * * ”
• Under these various statutes it is the duty of the .assessor to assess all property subject to taxation “at its fair cash value estimated at the price it would bring at a fair voluntary sale,” and it is the duty of the Board of Supervisors to examine carefully the returns made by the assessor and correct the assessments made by him by increasing or reducing them as ■ in its judgment seems right and it has the further power to assess any property that has been omitted by the Assessor. In short, the Board of Supervisors is vested with all the authority necessary to secure a full and fair assessment of all the property within its jurisdiction. But, it came to the notice of the Legislature that much property in the State that was subject to taxation was not reported by the Assessors or discovered by the Board of Supervisors, and to secure an assessment of this omitted property the provisions relating to auditor’s or revenue agents were enacted. These agents are merely gleaners of the field that has been gone over by the Assessors and Boards of Supervisors; and they are vested with authority, not to assess property that had been theretofore assessed by the Assessors or Boards of Supervisors, but to assess property that had been omitted to be assessed by the Assessors and Boards of Supervisors. The revenue agent was not intended to take the place of the Assessor or the Board of Supervisors. His office was created merely to supplement their work and to gather in the property they had omitted or that had escaped assessment by them. The act of 1906, which
“Under the provisions of this act, two things must appear before the revenue agent 'can proceed with hope of success: First, that the taxpayer owns certain property, and, second, that he has failed to list it. Now, if the-agent is not able to describe the property, his information in regard thereto must be very meager, and such information is in the language of the 'statute too meager to authorize even a default judgment. This statutory provision is not directory, as suggested by appellant, but‘it is mandatory, and was enacted to subserve a most useful purpose, and, while there is much reason in the argument of appellant that the ‘statement’ should not be required to bfe more explicit than the schedule which the taxpayer is required to make out for the Assessor, we are of opinion that this is a matter which properly addresses itself to the Legislative Department of government, and that neither revenue agents nor courts may properly concern themselves with either the wisdom or the policy of the statute. * * * We are at a loss to understand how the agent could charge that appellee was the owner of accounts of a stated valué, and not be able to state from whom such accounts were due and owing, and- the amount owing by each. The fact that he refused to so state was evidence that he could not do so, and was- simply pursuing the ‘dragnet’ policy which the Legislature sought to condemn by the enactment of the very law under which appellant was proceeding. The same is true as to the items in the*223 ‘statement’ of ‘notes, secured and unsecured.’ The items wherein it is sought to charge appellee with the ownership of stocks and bonds in foreign railroads and other corporations are very objectionable, and bear strong evidence that appellant was not proceeding in good faith along statutory lines, but was simply attempting to discover if appellee was, in fact, the owner of any of the many properties set out in these 'items in his ‘statement.’ It was the duty of the agent to set out in the ‘statement’ the number of shares which ap-pellee owned in each of the corporations and the fair cash value of each. Any description short of this fails to comply with the requirements of the statute, and, as heretofore stated, this provision of the statute as to the description of the property and its fair cash value must be complied with before any judgment can be entered declaring the property subject to taxation.”
Adopting the principles announced in this opinion, which we approve as a fair interpretation of the statute, and applying them to the facts of the case before us, it is manifest that the statement filed by the revenue agent did not conform to the requirements of the statute. It is plain that the statement that the “fair cash value of the accounts of said defendant company on September 1,1909, for the year 1910, was $1,373,000, and that this amount was omitted from assessment, except as to $72,000” is as general and as indefinite a statement as could well be made. It shows upon its face that the revenue agent did not know what accounts were omitted or their value, and that he was, as said in the Glover case, “simply pursuing the ‘dragnet’ policy which the Legislature sought to condemn by the enactment of the very law under which he was proceeding.” If statements like tihis should be treated as containing “such a description of t!he property sought to be assessed as will enable the court to identify it,” then the purpose of the Legislature in amending the law so as to better define the procedure would be entirely defeated, and revenue agents would be left'at liberty to subject to trouble and expense every taxpayer in the State. No merchant or business man, or owner of property of any kind, however fair his assessment might be, would be safe from proceedings that might be instituted by them. For example, every merchant has accounts due him, and if the “statement” in this case was sufficient it would only be necessary for the revenue agent to file in the
Tfie second question — to briefly restate it — is, Gan a revenue agent have property that has not been omitted from assessment but that has been undervalued, re-assessed? Tfie argument of counsel for tfie revenue agent is that property that is undervalued is in fact omitted, or, in other words, has never been assessed, and therefore it is tfie right of tfie revenue agent to have it assessed as omitted property. It is said in effect that if A owns a horse worth a thousand dollars, and assesses him for two hundred dollars, that eight hundred dollars of his value is to be treated as omitted property subject to assessment by tfie revenue agent, or, if B owns a hundred-acre farm, tfie fair cash value of which is $100 an acre, or $10,000, and fie assesses it at $50 an acre, or $5,000, that fie has omitted $5,000 of assessable property that may be assessed by tfie revenue- agent; or, if C owns 50 head of cattle worth $3,000, and fie assesses them at $1,000, fie has omitted from taxation property
“The county court and the Circuit Court both held that the property had been li sted for taxation, that nothing had been omitted; and if an error had been made in valuing it, this error could not be corrected in a proceeding to list omitted property. It has often been held that the fact that the assessing officers assess property too low is no ground for relief in a proceeding such as' this, as the court has no supervisory jurisdiction of assessments which have been examined and approved bv the boards provided by law. It is only where the question is not one of valuation, but of omission to list at all that the court may take jurisdiction in a case like this. ’ ’
In First National Bank v. Hopkinsville, 128 Ky., 383, the bank attempted in an action instituted in the court to obtam relief upon the ground that the assess
“In order to hold that the appellant is entitled to recover, we wonld have to say that the assessment was too high. This we have no power to do after the assessing officers have passed apon the question and no complaint has been made to them within the time prescribed by law. ’ ’
' In short, the conclusion reached in both these cases was that as the law had provided a means by which errors in the assessment of property at too high or too low a value might be corrected, the right to seek relief was limited to the agencies established for that purpose, and the courts could not grant relief, as to do so would be to substitute the courts for the officers or tribunals created for the purpose of correcting errors in assessments. The tribunal created by our laws for the purpose of increasing the value of property that has been assessed at too low a rate, and diminishing the value of property that has been assessed at too high a rate, is the board of supervisors. If the taxpayer feels aggrieved because his property has been assessed too high by the assessor, he must appeal to the board of supervisors or be without remedy. On the other hand, if the Commonwealth or any taxing district complains that the property is assessed by the owner or assessor at too low a value its remedy is likewise by an appeal to the board of supervisors. This question was considered in Royer Wheel Company v. Taylor County, 104 Ky., 741. In that case the Wheel Company brought an action to have its tax list corrected, upon the ground that the valuation placed upon its property was excessive. In denying it relief, the court said:
“It had a right to a hearing before the board of supervisors, and if it felt itself aggrieved by the action of the board of supervisors, it could have appealed to the County Judge within ten days after the final adjournment of that board. This is the remedy provided by the statute.”
To confer upon revenue agents authority to re-assess property would be to take from the board of supervisors the power confided to them by the Legislature and transfer it to revenue agents. The law making department has the widest latitude in selecting the agents to take charge of the assessment and taxation of property. And when the Legislature has selected any person or body
“It would be very strange if a State, against a gross under-valuation of property, could not in the exercise of its sovereignty give itself a remedy for the illegal deficiency; and this is the effect of the statute. It merely sets in motion new proceedings to collect the balance of the State’s claim, and there is no constitutional .objection in the way of doing this.”
In the Mississippi case of Revenue Agent v. Clarke, 80 Miss., 134, also relied on by counsel for appellant, the court in a divided opinion ruled that a revenue agent under a statute quite similar to ours had authority to have property re-valued, but we do not concur in the reasoning by which a majority of the court reached the conclusion that a revenue agent could exercise powers delegated to another tribunal.
It results from the views expressed that the decision of the lower court was correct, and it is affirmed.