60 W. Va. 483 | W. Va. | 1906
Lead Opinion
C. W. Dillon, State Tax Commissioner, suing on behalf of the State, seeks a peremptory writ of mandamus against B. E. Bare, Assessor of the First Assessment District of Fayette county, to compel him to assess and value twenty-one leasehold estates in his district at their true and actual values, according to his honest judgment, based upon such information relating to their value as the law requires him to consider. In another action, against S. T. Carter, Assessor
The alternative writ against Bare 'avers the total value of said twenty-one leases to be $1,340,000.00, and the assessed value, as entered upon the personal property book by said assessor, to be $'73,500.00. The writ against Carter avers the total valuation of the thirty-two leases in his district to be $5,635,000.00, and the' valuation entered in the personal property book against them by the assessor to be $506,-000.00.-
In each of the writs it is averred that the assessments so made have not been made in good faith and that they are merely colorable. Paragraph T of each petition as set out in the alternative writ reads as follows: “Petitioner further avers that the said pretended assessments are a fraud upon the state, county and districts in said assessment district, and upon all the other taxpayers of said district, and that said pretended assessment was fraudulently made, and does not represent the discretionary or judicial action of the said assessor, but that the said assessments were arbitrarily made that the said assessor might have the excuse that his duties had been performed. ”
It is further averred in each of said petitions that the petitioner had brought to the attention of the assessors, the respondents, what he, petitioner, conceived to be the value of said leaseholds, and the evidence from which he derived his estimate of the values, which evidence consisted of the price at which the properties in question had been sold but a short time before the assessments were made. In the petition against Bare, he instances the Hemlock Coal Company, which, three years ago, was sold for $163,000.00, is now worth at least $200,000.00 and is assessed at only $12,000.00, and he says he requested the assessor to assess it at not less than $100,000.00. Similar instances are set forth in the petition against Carter. Time and space do not permit a full statement of the facts set forth in the petitions. The assessors in their returns to the writs aver that the assessments made by them were made in good faith and according to their best judgment as to the value of the leasehold estates. Both the petitions and the. returns are under oath and some affida-
The only matter relied upon as evidence to sustain the .charge of fraud or lack of honesty and good faith on the part of the assessors is the vast difference in the valuation stated by the tax commissioner and those entered by the assessors, and the conduct of the assessors in disregarding the suggestions made, and the evidence produced, to them by the petitioner.
The first objection raised by the respondents is that the tax commissioner is not entitled to invoke the writ of mcm-da/mus against these assessors. It suffices to say in response to this that the case of Dillon v. Graybeal, the decision in which is announced simultaneously with this one, holds that, in respect to matters over which an assessor has no discretionary power and is governed by the law, mandamus lies to compel proper action in the name of the state at the instance of the tax commissioner. As the reasons for this holding are set forth in the opinion in that case, they need not be repeated here.
It is further objected that, though there is jurisdiction by oncmdamus to the extent above stated, the writ cannot go in either of these cases, because the valuation of property is a matter committed by the law to the discretion of the assessors, and is not reviewable otherwise than by the tribunal, and in the manner, prescribed by the statute, namely, by the county courts upon applications made by the owners of property, for the corrections of error. The exercise of such discretion is not subject to control by the writ of mandamus, but mandamus is a proper remedy to compel an officer, possessed of discretionary powers, to exercise them. If he refuses to act at all, he may be compelled to proceed, but the court which compels him to do so will not prescribe, in its order, how he shall proceed, or rather what his judgment and determination shall be. In other words, in a case like this, if an assessor should refuse to assess property that is taxable, any court having jurisdiction over him by mmidamus will compel him to assess, but will nbt determine the value at which he shall assess it. Wheeling B. & T. Co. v. Paull, 39 W. Va. 142; White v. Holt, 20 W. Va. 792; Cowan v. Doddridge, 22
The principle just stated applies, not only when the officer, absolutely refuses to act at all, but also when he has acted, and it appears to the court that he has not acted in good •faith, but has, on the contrary, set up as an excuse and' as a coyer for his disobedience of the law, a mere pretense of action. This the law holds equivalent to no action, no performance of duty. The requirement that an officer shall act to the best of his knowledge and judgment in the exercise of discretionary power is one which he cannot arbitrarily set aside. It is a rule of law over which he has no control and to which he must yield obedience, and courts will not allow remedies to be defeated by mere pretexts or evasions of duty. This legal proposition is sustained by a great many decisions.
The rule and its exceptions are stated in 19 Am. & Eng. Enc. Law 737, as follows: “The writ cannot be used for the correction of errors. If, however, such judgment or discretion is abused, and exercised in an arbitrary or capricious manner, mcmdamus will lie to compel a proper exercise thereof.” They are set forth in Merrill on Mandamus, section 40, in the following terms: “Againit may happen, that the person or tribunal charged with discretion or with a judicial decision of the matter has been influenced by fraud, passion, adverse interest or prejudice in its action. In such case justice requires that there should be some redress. Accordingly, when such parties have acted in bad faith or cor-ruptedly in reaching their decisions, the courts hold that their conclusions may be reviewed by the writ of mandamus. ” With the comprehensiveness and accuracy, characteristic of the work, Blackstone’s Commentaries, Book 3, p. Ill, says: “It issues to judges of anj^ inferior court, commanding them to do justice according to the powers of their office, whenever the same is delayed. For it is the peculiar business of the court of king’s bench to superintend all inferior tribunals, and therein to enforce the due exercise of those judicial or ministerial powers with which the crown or legislature have invested them: and this, not only by restraining their excesses,
There are, however, many decisions of the state courts in which the power has been exercised, under the principles stated. In Glencoe v. Peoples, 78 Ill. 382, a mmdamus was awarded to compel the council of a town to ignore its action in the fixing of a date for an election and to fix another date, on the ground that, although having discretionary power, under the statute, as to the fixing of the date, said body had fixed an unreasonable one. In State v. School Directors, 134 Mo. 296, the writ was awarded to compel a school board to give representation to one of two political parties in appointing officers to conduct a school election, although the statute made no such requirement, and the board had discretionary control and power in the naming'of the officers. The court held that in selecting all of them from one 'political party, and giving the opposite party no representation whatever, the school board had committed a gross abuse of the discretionary power conferred upon it by the statute. In State v. Kellogg, 95 Wis. 672, a mandamus was awarded to compel the common council of a city to revoke a license to sell intoxicating liquors after the council had refused, upon a hear
Next, it is said that, if mandamus be a proper remedy and the facts set up in the alternative writ establish grounds for the awarding thereof, it cannot go, because the several coal companies mentioned in the writ, and as to whose property derelictions of duty are alleged, are interested in the subject matter of these actions and should be made parties thereto. We think this contention is without merit. The action of the assessor will not be an adjudication against the owners of the property — at least, not a final adjudication, for if the assessments should be too high, they have the remedy above indicated for procuring reductions to proper valuations.
The question ultimately to be determined is largely one of fact, namely, whether the respondents have acted in good faith and made honest valuations, but, in determining whether the evidence submitted on that question is proper evidence, and whether it proves the fact which must be established as justification for the awarding of its writs, it is necessary to observe certain legal principles, to which the evidence must be reconciled, with reference to its admissibility and its probative value.
What is taxable under the designation of “leasehold” on the personal property book? My answer to that question is that it is the right to use the property upon which the lease is held for the purposes of the lease. It is an intangible property, one which the law recognizes as a thing of value, but is incorporeal and intangible in its nature. It is not the property upon which the lease is held, nor the propertj'' used in its exercise. Therefore, in determining the taxable value of the leasehold, the pecuniary value of the property used in connection therewith, or the use of which constitutes the leasehold estate, is not to be taken into consideration. The land which constitutes the subject of the leasehold is taxed not as a leasehold, nor in the name of the lessee, but as land, in the name of the owner, and is not to be taxed over again in the name of the lessee, on the theory, that it constitutes part of the leasehold. Nor are the improvements on the land, whether they belong to the land owner or the lessee, to be taxed under the designation of “leasehold.” If they belong to the owner of the land, they are charged to him. If they belong to the lessee and are chargeable to him, either as land or as personal propertj'-, they are to be assessed as tangible property, like horses, cattle, household goods, or land. Their value is not to be included in, or taken to make up, the value of the intangible thing, the leasehold.
These are all • incorporated companies, and the mode of assessing them is prescribed in sections IT and T8 of chapter 29 of the Code, as amended by chapter 35 of the Acts of 1905. Section TT requires the president or chief accounting
If such structures and things as have been mentioned above are not assessable as tangible personal 'property, under the clause of the statute above quoted, known as item (f), then they must necessarily be separately assessed, either as personal property or real estate, under section 43 of chapter 29 of the Code as amended by chapter 85 of the Acts of 1905, which reads as follows: /‘In assessing the values of buildings and structures, the assessor shall ascertain the value of all machinery and fixtures attached thereto, and include the same in the value of the building charged to the owner, unless it appears that such machinery and fixtures are owned by some person other than the owner of the building, in. which case the value of such machinery and fixtures shall be assessed to their owner as personal property; and the value of such machinery or fixtures shall be thereafter increased or reduced according as they may have increased or decreased in actual value. ” My present view of this section is that it
It is not pretended by anybody that the value of the land which constitutes the subject of the lease is to be included in the value of the leasehold. It is taxed in the name of the owner thereof. But there are some differences of opinion among counsel and members of the Court, as to what the land includes. It often happens that in the opening of a mine and putting it in condition for profitable use, very large expenditures must be made in the grading of roads and ways, the making of excavations and embankments, and the driving of entries and sinking of shafts. The coal, in some instances, is much more easily accessible than in others. In some cases what are known as “faults,” consisting of great masses of impending rock, hanging down almost or quite through the vein of coal, and so cutting it in two, are encountered. These have to be cut through, at enormous expense, in order to reach the coal lying beyond. Whether the improvements made in the form of excavations and embankments, entries and shafts, costing thousands and sometimes hundreds of thousands of dollars, are to be considered as parts of the real estate, and the value thereof included in the taxable value of the land, is one important question, concerning which there are differences of opinion. All improvements of this kind simply result in altering the condition of the land. It is none the less land after such alterations have been made than it was before. If it were within human power, to detach them from the land, they would be no longer excavations, embankments, entries and shafts. They are incapable of existing except as a part
As a matter of fact, it is perfectly clear to my mind that they are considered and included in the taxable valuation of the land. How is such value of land determined? The statute says it shall be taxed by the acre at its true and actual value, and the true and actual value is defined to be that price for which it would sell under certain favorable conditions, stated in the definition, which need not be repeated here. A purchaser of the land would naturally consider, in determining the price that he would pay for it, its condition. The most ordinal common sense would say that of two tracts of land, both containing coal, the one having the mines open, the entries driven, the shafts constructed, and the necessary roadways, excavations, embankments and drains made, all ready for laying the tracks, putting in the cars and sending in the miners, would be worth a great deal more money than the one which remains in its natural state, and upon which all these improvements would have to be made before the coal would be accessible. If the improved property were held under a lease, yielding the owner of the land, the lessor, a monthly royalty of ten cents a ton for every ton taken out by the lessee, amounting in the aggregate to several thousand dollars a year, standing in lieu of the rent which other kinds of property yield, such as business property in a city, which royalty would go with the land to the purchasers thereof, just as the rent of a city property would go to the purchaser of it, does it require any argument to convince anybody that this royalty would be taken into consideration by a purchaser, in determining
As the land and all that belongs to it is taxed in the name of the' land owner and includes the value of all road ways, drains, excavations, embankments, entries and shafts; and all tangible things used in connection with the mines, belonging to the lessee, are to be taxed as tangible property, no matter whether to the lesssee or lessor, what is left that can be taxed under the additional designation “leasehold?” Plainly, nothing but the naked intangible right of use of the land. The lessee is not to be taxed under this heading on the value of his own property consisting of tenement houses, incline planes, railway track, drum house, tipple, and all of those structures and mechanical devices which he has attached to the land for use in getting out the coal. All these things are taxed to themselves and by themselves in somebody’s name as I have shown, and if they belong to the lessee, as they do in many cases, he is not to be taxed again on his right to use them. Reason would say that the legislature never intended that a man’s property shall be taxed to him once, at its full value, and then his use of it taxed again at the full value of the property or any other value. Nor does the Constitution permit such an inequality of taxation, if the legislature did intend it. It is not pretended here, as I have said, that the land, or anything that belongs to it,
There are many ways in which large advantages are obtained by lessees in respect to the royalty. When a land owner leases his land for coal purposes, neither he nor the lessee knows exactly the quantity or quality of the coal in the land, nor the advantages or disadvantages to be encountered in mining it, after the property is prepared for mining operations. Some coal is pure and of high quality, commanding great advantages in price and other respects in the markets. Other coal is impure and is a drag on the market. Some mines are difficult and expensive to operate on account of water, faults, bad tops, bad air and many other things. In some instances, the coal crops out in full thickness at the surface. In others entries must be driven for hundreds of feet in the solid. rock. At the time of taking a lease, neither party can tell what the expense of putting that mine in operation will be, nor what the advantages or disadvantages in its operation. Supposed or anticipated expense and disadvantages induce the land owner to take a small royalty. When the lessee has entered upon the property and commenced work, he finds the expense much less than he had anticipated and that the disadvantages, which it was supposed might exist, amount to nothing. Under such circumstances, it is apparent that he has an immense advantage under this lease and would have been willing to pay double the royalty stipulated for in it, if he had known what the result would be, and would have been compelled to pay it, in order to obtain the lease, if the land owner had known at the time the conditions revealed by the operations of the lessee. The value of the lease at this
Similar results, produced by similar causes, are found in the great cities of the country where leases were taken years ago upon valuable property for long terms, such as ninety-nine years or nine hundred and ninety-nine years, at rentals which were then deemed to be all the use of the property was worth, but which have since, by reason of growth and development, become so ridiculously low that these leases have immense value in the hands of their owners. They are sublet and re-sublet over and over, each preceding holder deriving and receiving large annual returns from them or having taken immense lump sums for the bargains or advantages they had in the leases.
The legislature, fully aware of the existence of such values in the hands of coal lessees and oil and gas lessees, and realizing the difficulty of charging these values to the
. Not only is all tangible property to be excluded, but all money in hand or on deposit anywhere subject to the check or draft of the corporation and the amount of all credits and investments other than its own capital stock held by the corporation are to be taxed separately under distinct heads. These are not to be included in the value of the leaseholds.
It may be that the market value of the leasehold would include in addition to' the bonus for which the lease could be sold, its power of earning reasonable profit, besides the bonus. In applying this measure, as an element of value, a principle would be adopted which operates in determining the value of any other. property. We test the value of a farm by the income from it. It is not the only circumstance to be considered, of course, nor is it necessarily controlling, but it is to be considered. It may be that the same rule could operate in determining the value of a lease. As the determination of this question would necessitate a long and laborious consideration and analysis of the subject, and a decision thereof is not deemed necessary, I will not enter upon it. It must be apparent that the profits derived from the operation of a mine under lease involves something more than is inherent in the lease. Successful, profitable operation requires skill, capacity and judgment, not only in the operation of the mine, but in the disposition of the products. Did the legislature intend to tax that? Do we tax
Having thus ascertained to my satisfaction the nature of the things the assessors were required to value, and the standard by which the values are to be measured and ascertained, I come now to the evidence offered to prove them.
The petitioner swears to his estimate of the value and also to the manner in which he arrived at his conclusions. He instances the Hemlock Coal Company whose leasehold he says is worth $200,000.00, because the price paid for it three years ago was $163,000.00 and it has been considerably improved since that time. The answer of the respondent, Bare, made on oath, denies that he has any personal knowledge as to whether the coal company’s lease above mentioned was recently sold at $163,000.00, but he says if it was, the price was on account of the value of the improvements upon the land covered by the lease. He further avers that he caused the owners of the leases to report to him, in writing, as the law requires, the values of all their personal property, and that he went upon the leaseholds covered by the leases, personally examined the same, and made due and diligent inquiry of all persons who had information touching the value of the said leases, and obtained from them all the information he could obtain with respect to the fair valuation to be placed upon the chattels real so owned by said companies; and, after giving thorough consideration to each of said leases, and in all respects doing therein what he could do in the way of procuring information as to their respective values, he, acting in good faith, fixed and determined upon the value of each of said leases, as stated in the alternative writ of mandamus, except in the case of the Fire Creek Coal and Coke Company which, he had ascertained, was not the owner of any lease at all. The answer of Carter is to the same general effect concerning the leases in his district.
Several affidavits were filed by the respondents to the
In assessing the value of a leasehold, the personal property assessor takes no account of the value of the land and improvements. He, of course considers the acreage and quality of the coal, the extent and convenience of the fixtures and improvements and their adaptability to the purposes for which they are used. He must observe that a lease on a large tract of land is more valuable than one on a small tract, and that a lease which gives the use of good and extensive improvements which facilitate and render easy, the production of coal is worth more than one giving the right to use worn out and dilapidated fixtures of limited extent, and that a lease of good coal is worth more than one of bad coal; but these considerations do not involve any estimate or determination of the money value of the land, coal or improvements. Neither their cost nor value is involved at all. Their valuations are to be considered only when assessing them. The value of the lease is a separate and distinct thing, standing upon its own basis and to be determined by rules and elements peculiarly applicable to it. In fixing its value the personal property assessor cannot charge against it any value which the land assessor ought to have charged against the land or improvements, but erroneously failed so to charge, nor can he charge against it any value of tangible personal property which he himself ought to have charged against it but erroneously failed to charge. Could part of a farmer's live-stock value be charged against his household goods, because the live-stock is assessed too low? If such things could be done, what certainty would there be in anybody’s assessments?
If we could say, as possibly we may be able to do, the expenditures upon the land in making such improvements as belong to the land, excavations, embankments, entries, shafts, &c., is evidence of the value of the lease, because it is substantially the amount paid for the right of user, we have no evidence here which can be regarded as indicating, with any degree of certainty, how much money was expended by any of these companies for such purpose. I am inclined to
It has been suggested that we must presume the valuations of improvements, entered in the land books, to be the true and actual values, such as the law required the assessors to charge on account thereof, and assume, therefore, that all that remains of the aggregate value of both improvements and leasehold, is properly chargeable against the leasehold. The effect of that would necessarily jumble and mix things that the law requires to be kept separate, in order to prevent uncertainty and injustice. I repeat that, in assessing the leasehold, the pecuniary value of the improvements is not to be considered at all. Their utilitarian value alone is to be considered in this connection. Their value is one thing and that of the leasehold another, and if you dump them all into
The evidence offered here does not afford any indication of the value of the leasehold, considered separately. It goes to the combined value of the leasehold and the tangible property, without any apportionment between the two kinds of property, and it, therefore, utterly fails to show that the assessments complained of have been arbitrarily made, or are so low as to amount to mere evasive and colorable assessments — or, in other words, no assessments in the true sense of the term, wherefore, the writs prayed for must be refused.
What I have said here is applicable to cases arising under the provisions of the assessment laws to which I-have referred. It is not applicable to the assessments of banks, trust companies and probably some other institutions. Furthermore, I have expressed only my own views concerning these cases. Two of my associates concur in the conclusion that the writs must be refused, but I am not to be understood as presenting the grounds upon which they base their action.
Writ Refused.
Concurrence Opinion
(concurring.)
The peremptory writ of mandamus should be refused. However, I do not concur in the opinion of Judge PoffeN-barger, but will endeavor to give briefly my own reasons for the conclusion which I have reached. The case, as I regard it, does not call for a construction of the statute as to what shall be included under the designation “leasehold” on the
The first question arising is whether or not such case is made by the alternative writ as shows a clear legal right to mcmdamus. The” petitioner bases his right to the writ, not on the ground that the assessor has not acted, but because the valuation is so low that it amounts in reality to no assessment. There is no legal principle better settled and sustained by greater unanimity of authority than that mandamus will not lie to control the judicial or discretionary powers of an officer. It will lie to compel the exercise of such authority, but will not lie to control the exercise of it or compel a particular decision. Board of Supervisors v. Minturn, 4 W. Va. 300; Satterlee v. Strider, 31 W. Va. 781; State ex rel. County Court v. Herrald, 36 W. Va. 721; State ex rel. Miller v. Buchanan, 24 W. Va. 362. “ Mandamus will not lie to control the discretion of any court, board or officer, when the act is either judicial or guasi-judi-cial in its nature. The propriety of its action, in such case, however erroneous and improper, cannot be questioned or controlled by mandamus. ” Roberts v. Paul, Judge, 50 W. Va. 528; Eubank v. Boughton, 98 Va. 499.
The fundamental rule which underlies the entire jurisdiction by mcmdamus is that in all matters requiring the - exercise of the officer’s judgment, or resting in the sound discretion of a person, upon whom a duty is imposed by law, the writ will not lie to control that discretion. Officers will be set in motion by mcmdmius, but when matters are officially entrusted to their discretion, or judgment, courts will not interfere with the exercise of that discretion or judgment, nor attempt by mandamus to control or dictate the judgment to be given. An assessor valuing property acts quasi-judicially. He exercises his judgment and discretion as to the value of the property, and when he has once acted, his discretion in this regard cannot be reviewed by mamdamus. This principle is so elementary, and finds such universal support by the decisions of the various courts of the country that it is entirly useless to speak further with reference to it. But some of the authorities to support this position, in addition to the ones already cited, are: High, Extraordinary Legal Remedies, (3rd Ed.) section 842; Spelling on Injunc
It is claimed, however, that while the assessor has acted, yet that the valuation is so low as not to amount to an assessment, and that it is a fraud upon the State; and it is upon this theory that the petitioner endeavors to escape from the rule which prohibits the control of the judicial or discretionary powers of an officer by mandamus. Who is to determine whether or not the property is assessed too low? The assessor is a sworn officer, and in discharging his official duties he is acting under oath, and is presumed to have acted honestly and fairly, and the valuation fixed by him is presumed to be the true assessable value. There may be varied opinions as to the value of the property, and the assessment made may appear to some to be extremely low,yet the assessor is the person selected by law to discharge this duty, and he is clothed with discretionary powers. He it is who exercises his judgment as to the value of the property, and when he has done so, no court has the right to review his decision by compelling him to place a different value thereon. Where an assessor has acted in good faith, and is not guilty of fraud or collusion, no court has the power to compel him to place a valuation upon the property different from that at which he assessed it, no matter how low the assessment. To do so would be robbing him of that discretion which is vested in him by law. If the writ should be granted, what would be the second assessment? Will this Court think it amounts to no assessment, or will we think the property is assessed too high? And so, when the third or any future assessment is made, what will be our conclusion? Where will we draw the line? Shall we require the assessor to place such valuation upon it as in our opinion is the true assessable value? To do so would
Therefore, it is extremely doubtful whether the alternative writ, on its face, shows that the petitioner is entitled to the relief which he asks. This case may be disposed of upon another ground, however, without deciding this question. Admitting that the alternative writ states such a case as would entitle the petitioner to the peremptory writ, the assessor makes return by which all the material allegations of the writ are denied. He avers that he exercised his best judgment in endeavoring to place a true and correct valuation on the property. Upon this issqe the burden is upon the petitioner. The only material evidence furnished by the State