Alfred J. Sweet, Inc v. City of Auburn

• Decision Date: 29 August 1935
• Citation: 180 A. 803
• Parties: ALFRED J. SWEET, Inc v. CITY OF AUBURN.
• Court: Maine Supreme Court

180 A. 803

ALFRED J. SWEET, Inc

v. CITY OF AUBURN.

Supreme Judicial Court of Maine.

Aug. 29, 1935.

Report from Superior Court, Androscoggin County.

Action by Alfred J. Sweet, Incorporated, against the City of Auburn. On report from the superior court of an appeal from a decision of the tax assessors of the City of Auburn.

Appeal dismissed.

Argued before PATTANGALL, C. J., and DUNN, STURGIS, BARNES, THAXTER, and HUDSON, JJ.

Skelton & Mahon, of Lewiston, for plaintiff.

Donald W. Webber, of Auburn, for defendant.

THAXTER, Justice.

This case is before us on report from the superior court. It is an appeal to that court, authorized by Rev. St. 1930, c. 13, §§ 76, 77, from a decision of the tax assessors of the city of Auburn refusing to grant an abatement to the petitioner on account of taxes assessed for the year 1933.

The petitioner on the date of the assessment was the owner of a piece of land lying between Minot avenue and South Goff street in Auburn. This measured 773 feet on Minot avenue and 825 feet on South Goff street. It varied in width from 159 feet at its southerly end to 225 feet at its northerly end, and contained 151,112 square feet. On this land was a large three-story brick building which had been built for a shoe factory and used as such for approximately twenty years, a wooden storehouse, two tenement houses, and a stable. This real estate, the valuation of which is in controversy, was assessed for the year 1933 at $191,000. The petitioner complains only as to the assessment on the land of $60,700, and on the factory building of $120,000.

In December, 1932, the petitioner purchased this property at public sale from the receiver of Alfred J. Sweet Company, together with certain equipment and materials worth from $10,000 to $15,000, paying for the whole the sum of $100,000. Alfred J. Sweet Company had in turn in 1927 bought the property and the business from the original owner, Alfred J. Sweet, Inc., which received therefor 1,200 shares of the common stock of the purchasing corporation and $1,320,000 in preferred stock. To the time of this purchase the business had been very profitable.

The original building was constructed in 1908; a second section was added in 1912, and in 1914 more land was bought and a third section was built. The total net book value of land and buildings December 1, 1916, was $184,646.95. The factory was well built, in fact much better than the average shoe factory, and undoubtedly would not be duplicated today in so costly a form, assuming that there were a demand for an additional plant. It is conceded that the modern trend in the shoe business is to operate in much less substantial buildings, and thereby tie up less capital in fixed assets. This tendency is properly alluded to by the petitioner, and unquestionably has a bearing on the consideration which must be given to reproduction costs in determining the true value of the property.

The petitioner bases its claim for an abatement on two grounds: First, that the valuation was greatly in excess of the just value of the property; and second, that it was fixed unequally and on a greater per cent. of the true and full value than the rate at which other property, subject to like taxation in said city, was assessed.

Every property owner understands the obligation that he must bear his just share of the public expense. If that burden is too heavy, his remedy lies not in the courts. It is only when he bears a disproportionate share of the load that he has a just claim for judicial redress. The real gravamen of his complaint is the lack of equality and uniformity. Spear v. City of Bath, 125 Me. 27, 130 A. 507; City of Roanoke v. Williams, 161 Va. 351, 170 S. E. 726. If, however, he shows that his property is assessed substantially in excess of its true value, a presumption arises of inequality, and he has made out a prima facie case for relief. Spear v. City of Bath, supra.

The Constitution of Maine provides, article 9, § 8, that "All taxes upon real and personal estate, assessed by authority of this State, shall be apportioned and assessed equally, according to the just value thereof."

It has been said that the term "just value" is the equivalent of "correct," "honest," or "true" value. 4 Words and Phrases, First Series, page 3904. Such definition is, however, not particularly helpful in the solution of the problem before us. It has been held that "market value" is the equivalent of "real value," Bangor & P. Railroad Company v. McComb, 60 Me. 290; and in Chase v. City of Portland, 86 Me. 367, 29 A. 1104, "value" is said to be synonymous with "market value." Such being the case, it is difficult to conceive of any substantial difference in the words "value," "just value," and "market value."

The real problem lies not so much in defining terms as in applying them; and particularly during the chaotic conditions of the last few years have the difficulties of tax assessors been enhanced, when they must, as it were, catch values which are on the wing. In an appraisal for tax purposes, due consideration must be given to all the uses to which such property may be put by an owner. Lodge v. Inhabitants of Swampscott, 216 Mass. 260, 103 N. E. 635. Its value is measured by the highest price that a normal purchaser, not under peculiar compulsion, will pay for it. National Bank of Commerce v. City of New Bedford, 175 Mass. 257, 56 N. E. 288. It is what it will bring at a fair public sale, when one party wishes to sell and another to buy. Chase v. City of Portland, supra; Lawrence v. City of Boston, 119 Mass. 126; Blackstone Manufacturing Co. v. Inhabitants of Blackstone, 200 Mass. 82, 85 N. E. 880, 18 L. R. A. (N. S.) 755. Assessors are not, however, obliged to follow the fleeting, speculative fancy of the moment; they should recognize that the true value of a fixed asset, such as real estate, is fairly constant and must be gauged by conditions, not temporary and extraordinary, but by those which over a period of time will be regarded as measurably stable. Tremont & Suffolk Mills v. City of Lowell, 271 Mass. 1, 170 N. E. 819; Central Realty Co. v. Board of Review, 110 W. Va. 437, 158 S. E. 537; Somers v. City of Meriden, 119 Conn. 5, 174 A. 184, 95 A. L. R. 434. Violent fluctuations in municipal income are not desirable, and assessors in listing values may, to a certain extent, disregard the excesses of a boom as well as the despair of a depression.

If, during a time of crisis, it is impossible to determine the true worth of real estate by reference to the price which such property will bring in the market, resort may be had to other factors. Consideration may be given to the original cost of construction less depreciation, although perhaps this is less important than other things, to reproduction cost with an allowance for depreciation, to the purchase price, if not sold under stress or unusual conditions, to its capacity to earn money for its owner. No one of these elements is controlling, but each has its place in estimating value for purposes of taxation. Spear v. City of Bath, supra; Central Realty Co. v. Board of Review, supra; Underwood Typewriter Co. v. City of Hartford, 99 Conn. 329, 122 A. 91; Massachusetts General Hospital v. Inhabitants of Belmont, 233 Mass. 190, 124 N. E. 21; Somers v. City of Meriden, supra; 2 Cooley, Taxation (4th Ed.) 1147.

The burden is on the petitioner to show that the valuation is unjust, not on the assessors to establish that their figures are correct. The presumption is that the assessment is valid. Penobscot Chemical Fibre Co. v. Inhabitants of the Town of Bradley, 99 Me. 263, 59 A. 83; Spear v. City of Bath, supra; City of Roanoke v. Williams, supra; Sunday Lake Iron Co. v. Township of Wakefield, 247 U. S. 350, 38 S. Ct. 495, 62 L. Ed. 1154.

It is furthermore generally recognized that it is not sufficient to show merely that the taxing board has made an error, even though such mistake may result in a lack of uniformity. Penobscot Chemical Fibre Co. v. Inhabitants of the Town of Bradley, supra; Maish v. Territory of Arizona, 164 U. S. 599, 17 S. Ct. 193, 41 L. Ed. 567; Sioux City Bridge Co. v. Dakota County, 260 U. S. 441, 43 S. Ct. 190, 67 L. Ed. 340, 28 A. L. R. 979. The reason for such a doctrine is obvious. Mathematical precision is impossible in dealing with taxable values. Uniformity can only be approximated. The court is not a board of review to correct...