9 Haw. 407 | Haw. | 1894
Opinion of the Court, by
This is an action of assumpsit to recover $200 paid December 15th, 1893, under protest, by the plaintiff to the defendant as taxes alleged to have been illegally assessed upon a tract of land called “ Waihee,” in Koolaupoko, Oahu. The land which is leased for thirty years from March 15th, 1869, at a yearly rental of $400 was returned by the plaintiff at $3200, this being eight years rental; but the assessor increased the valuation to $20,000. The case comes here on plaintiff’s appeal from the District Court of Honolulu. At the trial in that Court the defendant was of the opinion that the property was worth $20,000, and the plaintiff admitted that if unincumbered by the lease it would be worth $15,000,
The defendant contends that this is at most merely a case of over valuation for which the only remedy is an appeal to the Tax Appeal Court provided by the statute (Laws 1892, Ch. LXL, Sec 49.) The plaintiff contends that the case is one in which the construction of a statute is involved, and therefore cognizable by a court of law, as decided in Knudsen vs. Stoltz, 8 Haw. 81. We are of the opinion that the view of the plaintiff on this point is correct, but that, it has not been shown that an erroneous construction was put upon the statute by the assessor.
The question is whether the assessment should have been based upon eight years rental, or upon the full value of plaintiff’s interest in the property. The tax law above cited prescribes the following rules for estimating the value of taxable property.
“ Section 26. The full cash value of all real property and all personal property, and of the interest of any person in real or personal property, within the meaning of this Act, shall be estimated at a sum which such real or personal property or such interest therein might reasonably be expected to bring at a sale by public auction for cash. Provided, always, that when any real estate or house is leased or rented, the sum of eight years rental shall be the assessment value of such real estate or house, unless such valuation shall be manifestly unfair or unjust.
“ Section 27. The interest of every person in any property shall be separately assessed (except as herein provided in respect to shareholders in or members of companies) and every person shall be liable to taxation in respect of the full value of his interest in such property.”
The proviso of Section 26 is the part of the statute to be construed. It is argued by the plaintiff that this is a positive rule of law requiring an assessment „ of eight years rental, subject only to the qualification “ unless such valuation shall be manifestly unfair or unjust; ” that this
It seems to us that the rule is something more than a mere guide. Under the tax law of 1882 (Ch. XLIII., Sec. 25) there was no qualification of this hind attached to the proviso. Under the law of 1886 ' (Ch. XXXYIL, Sec. 6) the proviso was altogether omitted. In 1892, as above shown, the proviso was again enacted, but, apparently to provide for exceptional cases, the legislature added the qualification in question. It will be noticed that a departure from the rule is authorized only when its application would be manifestly unfair or unjust. This shows that the rule was intended to be adhered to except in cases where to do so. would be evidently; plainly, obviously, unfair or unjust,— where, perhaps, there could be no reasonable difference of opinion. See Matter of Hermmance, 71 N. Y., 481, and the Century Dictionary, on the meaning of the word “ manifest.”
The qualification applies in favor of the government as well as in favor of the person taxed. There is nothing in the statute to indicate a contrary intention; and, since the application of the eight year rule might be unfair in some cases to the public as well as in other cases to the person taxed, the qualification was presumably made in favor of both parties. This is also in harmony with the general spirit and purpose of the tax law, which is that all property shall be equally taxed. The statute, in Section 11, provides for a tax of one per cent, upon all property, real and personal, with certain exceptions inapplicable to this case, and in Section 27 and the first part of Section 26, above
It is unnecessary for us to decide upon whom the burden of proof lies to show that the valuation of eight years rental is “ manifestly unfair or unjust,” for, admitting for the purposes of this case that the burden is on the assessor, it seems to us that this has been shown. The defendant himself admits that the land unincumbered by the lease is worth $15,000. Its fair yearly rental estimated on the basis of the statutory rule would be one-eighth of this amount or $1875, an excess of $1475 over the rent actually received. The lease at the time as of which the land was assessed, had about five and three-fourths years to run. Without taking the present worth of $1475 a year for this length of time but, favorably to the plaintiff, taking the whole amount, five and three fourths times $1475, we find that not quite $8500 is the most that the plaintiff could say that the value of his land is depreciated by reason of the lease. This would leave not less than $6500 as the value of the land incumbered by the lease, or more than twice the amount at which it would be assessed on the basis of eight years rental. It is obvious therefore that to apply the rule in this case would be manifestly unfair and unjust to the government. It would be to allow at least one half of the value of the plaintiff’s interest to escape taxation.
The assessment of $20,000 which was made in this case would seem to be very unfair and unjust to the plaintiff, and no doubt would have-been reduced by the Tax Appeal Court
The judgment of the District Court is affirmed.