*1 paid would be required appeal and abandoned from his portion of the district court order. hearing upon
After the return to the filed alternative writ per this court issued a curiam reciting order that no further being regard contention had temporary to the support fea- ture, question remaining the sole attorneys’ would be that of expedite appeal fees. In order to we ordered briefs to be filed and set No. 10044 argument, holding cause for oral this matter under until advisement had decision been made therein. provided appellant We further that the in cause No. 10044 con- monthly support payments tinue make to relatrix as provided district order until the further order of this court. On this date a decision has been made filed in and disposes appeals cause No. which therein, taken (2d) 136 Mont. Pac. 168. attorneys’
As to fees we feel that reasonable allowances have already been made to counsel in No. 10044 cause and no addi- granted fees should be proceeding. tional BOTTOMLY, ANGSTMAN, MR. JUSTICES ADAIR and CASTLES, concur. PIPE LINE COMPANY, STATE
TREASURE a corporation, v. COUNTY TOOLE, OF Respondent, Plaintiff political Corporation Montana, State County LYON, P. County MALCOLM Treasurer and THE Toole, Montana, Defendants, State and THE OF MONTANA STATE STATE BOARD OF EQUALIZATION Montana, Intervenors Appellants. No. 9825. September 29,
Submitted 1959. Decided October 1959. (2d) 345 Pac. 162. Taxation, C. J. S. 410. See § *2 Schroeter, Tax Anderson, Atty. Gen., C.
Forrest H. Edward Helena, appellants. Ed- Counsel, Equalization, State Bd. of for argued orally. ward C. Schroeter Jr., Falls, respondent. for Mr. Smith Smith,
LaRue Great orally. argued
MR. CHIEF JUSTICE HARRISON: appeal judgment
This is an from a of district court of the judicial Montana, ninth district of in the State of and for the County Toole, day rendered on the 8th of March adjudging* plaintiff corporation, engaged in the business transporting gas underground pipe natural lines Toole $1,842.20 County, was entitled to recover sum of from de- County, paid protest. fendant Toole as taxes excessive under The plaintiff’s district found the assessment of disregard County was made in total action County, Montana, of Toole and was made fundamentally wrong principle on a of assessment and consti- gross or mistake tuted error to inconsistent with judgment, and, therefore, totally unlawful; exercise of honest plaintiff thereby compelled pay and that the sum of $1,842.20 excess of the amount levied, which shoidd have been paid and that the same was the time within allowed law protest. under written gave litigation
The rise facts which to the are these: Monday 1954, plaintiff On the 1st March was the owner in possession, management control and types of different which, used, County lines in Toole for were in its business transporting storage for use. gas, as well as line future day May 1954, plaintiff
On 15th delivered County County, Montana, Assessor of statements wherein Toole specifically it personal property set forth its real forms on provided by alleged assessor full value cash $91,831. day 19th said line was amount of On the July Equalization adopted the State Board of a resolution plaintiff’s set forth that the estimated of its wherein was than full and true less than line was less value and adopted by evaluating such schedule Board Monday of the first in March 1954. directing County The Board made an order Assessor County plaintiff’s property the 1st of Toole to assess as of Monday aggregate $192,915. of March amount of notified the same
Plaintiff was of the resolution and order on date. day July, plaintiff the 30th filed
Thereafter, or about *3 County, County Toole sit- Commissioners of Board of with the Equalization, application a written County Board of as the ting property valuation of the said in the assessed a reduction for it was claimed such reduction the facts on which forth setting 84-603, 1947. R.C.M. made, pursuant to section be should County August, the Board of Com 14th about the of On or County Equalization, Board of after as a missioners, sitting hearing concerning at a the witnesses plaintiff’s the examining adopted whereby the a resolution property, of said valuation equipment field by plaintiff for its oil contended valuation ££Supplemental and the Assessment sustained County was Toole Equalization” was disallowed. Board of by the proposed State Equalization filed notice 16, the Board August On plaintiff. thereof on On October copy and served a appeal Equalization the State held before hearing 5, a appeared plaintiff time the appeal at which Helena on said support of its valuation submitted evidence and its witnesses Toole Equalization of County Board of and of the action of the County. Board day October, the 27th the State
On plain- valuation aggregate an order that the assessed entered Thereafter $192,915. remain at property question tiff’s $1,842.20 pro- under plaintiff paid alleged the excessive sum to recover brought this test and action district amount. complaint contention, alleged in principal as its
Plaintiff’s this assessments made of urged appeal, and is the property. full said represent did the cash arbitrary, they were so alleged grossly excessive and were discriminatory error or mistake so as to constitute and unfair any judgment, gross of honest as be inconsistent with exercise wrong adoption fundamentally represented and also of a original in total of the principle disregard of assessment pipe, pipe, age pipe, weight of the of the the condi- pipe, replace- pipe, present tion of the sale value of the by ment made pipe, cost of new return of valuation plaintiff, style and the the assessed valuation for alleged bearing All full pipe. of which factors had a on the by statute. cash value defined allegations
These were denied the defendants. After hear- trial, court, jury, at the found ing sitting without a evidence plaintiff, that the assessments its decree found full grossly but were not cash value said were arbitrary, discriminatory thereof unfair as excess and so gross error or mistake as to be inconsistent with constitute judgment. of honest exercise specified holding appeal, On the defendants this error may disposed point appeal alone, appellants’ as this of on specifications need not be other considered.
The evidence showed that assessments attacked *4 in plaintiff up were based a on schedule of valuations drawn county meeting 1953 at a held between a number of assessors and companies representatives a oil subse- number of various 112 adopted by
quently Equalization. tbe State Board of This sched- ule is known as “1954 schedule.”
The evidence that showed further set in the valuations forth represented fifty percent the schedule replacing of the cost of types year of property various in the return is made. This valuating pipe ground. method was used in Line for line pipe stored for use was valued future at the book value shown taxpayer’s books.
Testimony adopted showed that the first schedule on oil field equipment, including* lines, was in 1927. That schedule was in 1939, again revised in in in 1953 in 1955. All purposes of these schedules reflected valuation fifty percent replacement of current line cost for ground. Secretary-Treasurer Mr. Lowry,
Cross-examination of Del corporation, plaintiff showed that valuation sub- plaintiff corporation mitted to the assessor was based was in that time. schedule which effect at No evi- by plaintiff plaintiff to- dence was introduced show that felt arbitrary method or unfair at that that such of valuation time. fact, he Lowry, testified, redirect examination of Mr.
On effect, had that certain increased value fair represented the 1946 schedule an honest and valuation. controversy It is evident that this arose for two' reasons. The schedule, complained under which the assessments of were a valuation made, reflected considerable increase of cer- 1946 schedule. tain over the Also schedule by, effect, incorporated principle depre- a new valuation prior had which been laid to 1940. ciating the factor in the had been a earlier schedules and Depreciation never representatives of different oil showed that various evidence depreciation in- be factor had not but companies desired “fifty replacement percent of current promoted had stead as the basis for valuation. cost” this, is simply here Did the resolved lower question
The
113 complained of was holding court err in that an fundamentally wrong principle on a and constituted made any exercise gross error or so as be inconsistent with mistake to it was upon of honest which judgment because the schedule substantially in- based, is, schedule, represented the 1954 sched- prior schedules, prior when such creased valuation over is, valuation, that principle ules had been on same based “fifty percent replacement had been drawn of current cost” and representa- up through joint efforts of assessors industry oil itself? think so. tives We dealing plaintiff’s may preface In with contention be well to principles respect our discussion rules and with to with certain state. assessment valuations which are well-established this early 558, 562, Livingston, In the case of Danforth v. 23 Mont. “* * * 916, weight 59 this 917, great Pac. court said: under the authority, ordinarily interfere courts will with the action [assessing of these officers to mere correct errors of officers] judgment. only fraudulently they maliciously, where act or or the gross error mistake is so as be inconsistent * * * judgment, honest grant exercise of that courts will relief. cited, Under the [overvaluation], standing authorities this fact alone, sought. is not sufficient to warrant the relief There is not justify an pre- such excess valuation as to a conclusive sumption part of fraud or malice assessing on the officer. opinion, The value of is a matter of and there must necessarily opinion. be left a wide room for the exercise of this accuracy always Absolute cannot be attained. Courts cannot be upon, every instance, called opinion to settle differences of regard assessing this between officer and the Otherwise, courts assessing owner. would be converted into boards, and, in assuming such, to act usurp powers would ’’ lodged lawmaking- government. elsewhere branch of the set principles
The forth in the Danforth case were well sum Security Moore, 400, marized in Investors v. 113 404, Co. Mont. (2d) 225, along 227, many 127 Pac. with the Montana cases principle. which have reiterated the same In the Moore case 114 substitute
court said: “It is well court will not settled taxing not notice judgment for that of the will officials made, grant relief over honestly but will overvaluation only gross when it is be inconsistent with valuation Equaliza judgment. honest State State Board of exercise of v. 708, v. tion, 413, 697; 56 Mont. Pac. Pac. Danforth 185 186 ex Livingston, 558, 916; 23 Mont. 59 Pac. rel. Schoonover Johnson, 476; Mont. 297 Pac. Stewart, 257, v. Johnson v. 842; Machine (2d) Mont. Pac. International Business (2d) County, Pac. Corp. Lewis and Clark 111 Mont. v. *6 477.” 448, 413, In Equalization, of Mont. State v. State Board “* * # 713, 697, said further:
185 Pac. 186 Pac. adopted by so far as the be them means to [State may not Equalization] arriving concerned, at we values are board, the Those are within the discretion of interfere. matters they fraud, adopt a long guilty and so not not are of do fundamentally wrong assessment, inter principle we cannot pose, judgment or our for theirs.” substitute plaintiff assessing
Has acted proven the here that the officers fraudulently maliciously they that or mis- or or made error of honest gross take as to be inconsistent with exercise judgment fundamentally principle wrong that a or record ? There was direct evidence shown in the used no part assessing the of the officer. indicate malice or fraud on by showing that attempted support this Plaintiff contention the over greatly the increased assessed value had the year. plaintiff fact alone that preceding From this asserts incon- proven arbitrary capricious and assessment was to be judgment. sistent the exercise reasonable pre- the the assessment in But record also indicates that the com- ceding 1946 schedule. The assessment year was based on a only rea- the plained here was based on 1954 schedule. is assume that the increased valuations sonable to inflationary between trend which occurred schedule reflected assessing is officials acted proof 1954 and that the 1946 and arbitrarily honest capriciously or in the exercise of other than judgment. a assessing pursued assertion that officials
Plaintiff’s that wrong method of assessment based on their contention in the 1954 bore relation to valuations as shown schedule no original age pipe, weight pipe, cost of the of the pipe, sale of the pipe, present the condition of the pipe, replacement return pipe, cost new of the of valuation by plaintiff, preced- made for the next the assessed valuation ing year, style pipe. and the of the that
The evidence did show in the 1954 sched- valuations but, these ule were not based on factors like all the valuations preceded fifty it, percent had was based of current re- placement year return. “funda- This contended mentally wrong principle assessment” had been since used representatives had been concurred in number industry, principle of the oil and the same was utilized plaintiff making itself in its return for 1952. The correct valuating widely method of is a matter of such di- vergent opinion between the State Board of plaintiff. may valuating property
There be numerous methods of other equally than that used here which are as reliable or more even so, disputed valuating prop- it cannot the method but *7 erty by establishing replacement deducting cost of and then fifty percent depreciation recognized lieu of is a method of valuating Bonbright, Property 1 of property. See Valuation (1937). certainly This method cannot be classified as a fun- damentally wrong principle. may very promulgated
It be that schedule well the valuation by the Board of was revised in 1955 for the adjustment allowing pipe, of value on older but purpose of even adjustment the though plaintiff’s the was not allowed at time assessed, might which have resulted in some over- property was proof assessing property, of its there was no that the valuation arbitrarily, capriciously, fraudulently or in the acted officials or funda- judgment, than utilized a exercise other honest mentally case, In the lower wrong method of assessment. such assessing of the judgment could substitute its for that official, doing and erred so.
We find for the lower court’s action no basis record Equaliza- interfering' with the assessments of the State cause remanded to the judgment tion. Its is reversed and this judgment for appropriate enter district court with directions to defendants.
MB,. JUSTICES ANGSTMAN and CASTLES concur. ADAIR, specially MB. BOTTOMLY con- JUSTICES curring : counsel, appears arguments
It to us from the briefs and county case, the instant procedure followed pipe involved and regard assessing assessor with to lines sys- very unique lying wholly adopted his has within ascertaining tem establishing the “assessed value” for pipe properties. “taxable line value” of such appears county assessors, that, many years past, counties, having respective met gas industry in their oil and representatives industry at various times, consulted agreements repre- agreement and then reached an with such adopted particular sentatives as method or formula to be employed in deter- assessing properties line pipe mining the used for tax assessment. value to be such agreement
The line been as follows: The pipe seems have average deter- cost of the delivered Montana to be ; percent average mined the was to be at assessed new, taxpayer cost, year; each was to allowed depreciation cost; no state was not to assess m from such percent year; new each and neither the excess way where the line had been right cost of or easement acquired sources, nor the value the interest in private from estate, installation, profit nor from the real nor the cost
117 in pipe line business were to be assessor facts considered tbe making gave up bis assessment. All sucb factors tbe assessor tbe at forgave taxpayer returning in consideration for tbe percent an 50 its market assessed value value without depreciation, provided by instead of tbe full casb law. R.C.M. sec. 84-401. possibly people represented
While not all line at were meetings these consultations and unique where this method of up, it yet appears most, all, assessment was set if not fol- prepared according tbe schedules agreements lowed to tbe tbe Pipe made and Treasure State Line one that was followed accepted these agreed upon. schedules and tbe assessment so appears changed year Now it sucb assessment was to be each percent reflect of tbe cost new tbe pipe to be assessed. However, taxpayers tbe assessors, soon found that some tbe adjusting yearly merely instead tbe costs would continue using adopted tbe schedule first as tbe formula or schedule for succeeding year. Obviously, each rising prices times of pipe, many for as was tbe case for years, this method resulted advantage tax taxpayer. decided this class Thus, case, tbe instant taxpayer pro- tbe contended tbe posed assessment list for 1954 it which it submitted that should only upon percent be taxed tbe cost of new back year tbe 1946. taxpayer
In tbe this, following was even not tbe agreement formula and reached tbe pipe companies between and tbe assessors. Tbe reason of course for following clear, resulted in a saving. most substantial tax —it
In tbe taxpayers, subject assessors determined tbe above-mentioned, agreement to tbe using were still tbe Thereupon schedules. tbe assessors revised tbe schedules to bring up them date. This is tbe schedule tbe State proposed taxpayer, tbe case, in tbe instant should pay upon. follow tax
Tbe 1953 schedule revised resulted tax- increase in tbe year, whereupon able assessment this one taxpayer tbe im- *9 arbitrary mediately contended such increase constituted an taxpayer yearly adjust- agreed assessment. However the had to the percent not more than 50 value was provided ments adjust yearly had failed to his assess- but the assessor assessed last, agreed upon. When, long the assessor ment heretofore at agreement, it adjusted make conform to the the the schedule to became, case, in asserted the assessment taxpayer, the instant arbitrary. is was, and arbitrary taxpayer’s it to the assess- would be increase
While year an showing without the previous ment from that of the yet years, if the in value the two increase between agreed an amount of the fair market upon be made were to year year, taxpayer the specified property by still would value complain if assessment does not the the exceed have cause to no agreed upon. amount theretofore arbitrary to increase assessments one would be Of course might year appreciation of values which take into account to years ten fifteen five, the last instead have over occurred upon appreciation the basing the increased assessment year year prior question, taxable value between to value is be determined yet the increase or decrease when here, taxpayer formula, then the cannot com- agreed enforced, irrespective is agreement of whether plain when party agree- the other followed before to or not it was company bound itself to to the pipe line had submit ment. The ad- taxation. It had a decided tax agreed method of' obtained agreement strictly many years vantage in the when was against it. asserted only depreciation in order have take to
It not to> agreed taxed. Yet the market value when percent rising pipe pinch a bit because of began to the shoe arbitrary trying Board to assess was it then asserted however, appears, It that agreement. according the so-called to in 1955. At to the formula anxious taxpayer was fix pipe people line made between the agreement time a new wherein the line com- of the counties assessors and the panies property. companies had Now such are assessed only percent of the market value such com- panies get depreciation pipe acquired what amounts to on all year before 1940.
The line companies gave up depreciation get assessment at then came cmd in addition back one-half depreciation. took appears It these taxpayers have not proved a case that entitled them For relief. this reason agree majority we with the result opinion. reached upon clear the record us that neither before assessors nor the State Board plain followed governing mandate of the statutes the determination of the “full cash value.” 84-401,
B..C.M. sec. declares: *10 “All taxable must be assessed at its cash value. full Land improvements and the must separately thereon be ’’ Emphasis supplied. assessed. 84-101,
B.C.M. see. states: subd. “The terms ‘value’ and ‘full cash value’ mean the amount at which the payment would be just taken of a debt due from debtor.” solvent
Such procedure unauthorized as above set forth allows the companies judge of the full cash value of their property instead of being bound, as taxpayers all other bound, by are interpreted applied law as by proper public charged duty constitutional officers with the of making such determination. of adopting allegedly
Instead the formula so by arrived at private negotiations parties, of the plain mandate of law, by the written enacted legislature, should be followed taxpayers order that all shall be provided by taxed law private dickerings parties and not end people all of the will retain their confidence and trust their taxing courts, officials and in their and in the assurance that all observe, shall follow and abide law written and enacted.