The HERTZ CORPORATION et al., Appellants (Plaintiffs), v. The STATE TAX COMMISSION of Missouri, ST. LOUIS COUNTY, Missouri, et al., Respondents (Defendants).
Nos. 58694, 58695, 58696, 58714, 58733, 58734, 58735, 58740, 58742, 58743, 58795, 58813 and 58730
Supreme Court of Missouri, En Banc.
Sept. 8, 1975
Rehearing Denied Oct. 13, 1975.
528 S.W.2d 952
The principal opinion reverses on the basis that the action of the Tax Commission in approving the assessment made by the assessor utilized an unapproved and impermissible formula and that in so doing its action was arbitrary and unreasonable. I cannot concur in that conclusion. St. Louis County did not hold that the bonus method of valuation is the only method useable in appraising possessory interests in tax exempt real estate. Missouri cases, as previously indicated, do not limit determination of market or true value to utilization of what a willing but unobligated buyer and a willing but unobligated seller would agree upon when special purpose property or property as to which there is no market is involved. In such instances some other method of determining value can and will be approved. In Union Quarry and in Mount Moriah, a formula which included capitalization of income was approved. In Reorganized School District No. 2, the court approved utilization of cost of replacement less depreciation. In this case the Tax Commission found that while at the date of assessment some of the tenants had no leases and were in the process of renegotiating leases, history disclosed that the airline tenants enjoyed continuous and continuing possession in the specially designed and dedicated premises and that they would continue to occupy the premises on a quasi-permanent basis, subject to adjustment at intervals which would not materially affect the beneficial use and enjoyment of the interests possessed. That was a reasonable conclusion, given the fact that they have occupied the terminal over the years and, unless and until changes in carriers certificated are made, are the only prospects for use of these airport facilities.
The principal opinion specifically approves the bonus formula as the required method for valuing these airport leasehold or possessory interests and in effect directs that on remand the assessments be determined on that basis. Necessarily, such a conclusion must be premised on the assumption that such a formula will accurately portray the “true value in money” of these interests and is, in fact, the only method which will accomplish that purpose. I cannot agree that such a conclusion is correct. In my judgment it is not realistic to say that the possessory interests in Lambert-St. Louis Municipal Airport have no “true value in money.” They do have. They are of substantial value to these appellants. Without them, appellants could not serve the air traveling public in St. Louis because there is no other property which they could lease and utilize for this unique purpose. The unique character of the property involved requires, for the reasons herein enumerated, the recognition, as in Union Quarry, Mount Moriah and Reorganized School District No. 2, that another method of determining value must be utilized. Accordingly, I dissent.
James Crowe, St. Louis, for appellant, The Hertz Corp.
Harold E. Goldberg, St. Louis, for appellants, Henry Binsbacher and Handley Products Co.
John T. Murphy, Murphy & Schlaprizzi, St. Louis, for appellants, Premier Service Corp. and Auto Rental Inc.
Jack L. Koehr, City Counselor, James J. Wilson, Associate City Counselor, St. Louis, for appellant, City of St. Louis.
Thomas C. Walsh, Franklin F. Wallis, Michael B. McKinnis, St. Louis, for appellant, Avis Rent-A-Car System, Inc.; Bryan, Cave, McPheeters & McRoberts, St. Louis, of counsel.
John C. Danforth, Atty. Gen., Walter Nowotny, Asst. Atty. Gen., Jefferson City, Thomas W. Wehrle, St. Louis County Counselor, Clayton, Boyle, Priest, Elliott & Weakley, Howard Elliott, Edward D. Weakley, St. Louis, for respondent, Berkeley School District.
This proceeding involves thirteen appeals by or on behalf of nine concessionaires who are tenants occupying space at Lambert-St. Louis Municipal Airport. The six tenants named as appellants in the caption filed separate appeals. The City of St. Louis filed separate notices of appeal in its own name in behalf of four of those tenants and three others, i. e., Red Arrow Corporation, Airborne Freight Corporation and Air Cargo Terminals, Inc. The appeals were or-
This is a companion case to Frontier Airlines, Inc. et al. v. State Tax Commission of Missouri et al., Mo., 528 S.W.2d 943, decided concurrently herewith. The evidence in each case was substantially the same and the basic issue is identical. Therefore, for reasons stated in Frontier we hold that the method or formula used by the Assessor in these cases is an improper method of valuation unauthorized by law and that its approval by the State Tax Commission was arbitrary and unreasonable.
There is, however, an additional point raised in these cases not raised in Frontier which we have concluded must be decided. This involves the question as to whether the City of St. Louis is a proper party in these proceedings and an “aggrieved party” within the meaning of
At the beginning of the hearing before the Commission the respondents moved to strike the City as a party because no assessment had been levied against it and it was therefore not a proper party or aggrieved party. The motion was taken with the case and sustained at the conclusion of the proceedings. The circuit court held that there was no statutory authority for the City‘s petition for review on behalf of certain of its tenants (which amounted to a vicarious appeal) and denied relief.
The City says it had a right to appeal from the board of equalization to the Commission because
A rather convincing argument is made by the City to the effect that it has an interest in this controversy. It points out that the assessments will create a lien on the leaseholds; that there is no personal liability for payment of real estate taxes; that if the taxes are not paid the county will likely try to sell the leaseholds; that such would create many legal problems and might result in it having some undesirable tenants. The City also suggests that if the assessments are upheld and the taxes are paid by the tenants that such will increase the tenants’ cost of doing business and decrease the amount of rent the City would be able to obtain in future lease agreements.
The general rule is that a party is aggrieved when the judgment operates prejudicially and directly upon his personal or property rights or interests and that such must be immediate and not merely a possible remote consequence. See 4 C.J.S. Appeal & Error § 183, p. 559, et seq. The Missouri cases are in accord with that rule. See, Schumacher v. Schumacher, 223 S.W.2d 841[12] (Mo.App.1949), Feeler v. Reorganized School District No. 4, 290 S.W.2d 102 (Mo.1956) and In Re Estate of Soengen, 412 S.W.2d 533 (Mo.App.1967).
We have concluded that although the City has an interest in this controversy that the judgments do not directly and immediately affect its property interests, no taxes having been assessed against same, and hence it is not an aggrieved party within the meaning of
As indicated by the foregoing, in the cases in which the City of St. Louis appealed the appeals are dismissed. In the cases in which the tenants appealed the judgments are reversed and the causes are remanded to the trial court with directions that it reverse its judgments of affirmance and remand the cases to the State Tax Commission for further proceedings not inconsistent with this opinion and the opinion in Frontier, supra.
BARDGETT, HENLEY and DONNELLY, JJ., concur.
FINCH, J., concurs in part and dissents in part in separate concurring and dissenting opinion filed.
SEILER, C. J., concurs in separate concurring and dissenting opinion of FINCH, J.
MORGAN, J., dissents in separate dissenting opinion filed.
FINCH, Judge (concurring in part and dissenting in part).
I concur in that portion of the principal opinion which dismisses the appeals taken by the City of St. Louis. However, I dissent from the remainder of the opinion for the reasons expressed in the case of Frontier Airlines, Inc. et al. v. State Tax Commission of Missouri et al., 528 S.W.2d 943 (Mo. banc 1975), decided concurrently with this case. I recognize that the character of the appellants and the premises they occupy differ somewhat from that of the airline companies in Frontier Airlines, but we still deal with a unique or special purpose facility and I do not believe that we should hold that the bonus method, based on a willing but unobligated seller and a willing but unobligated buyer, is the only permissible method of valuing possessory interests in such property.
MORGAN, Judge (dissenting).
I dissent for the reasons expressed in Frontier Airlines, Inc. et al. v. State Tax Commission of Missouri et al., 528 S.W.2d 943 (Mo. banc 1975), decided concurrently with this case.