Appeal of Kliks

• Decision Date: 01 March 1938
• Citation: 158 Or. 669,76 P.2d 974
• Parties: APPEAL OF KLIKS ET AL.
• Court: Oregon Supreme Court

158 Or. 669

76 P.2d 974

APPEAL OF KLIKS ET AL.

Supreme Court of Oregon.

Argued December 14, 1937.

Affirmed March 1, 1938.

Rehearing denied March 29, 1938.

Taxation — Valuation — Uniformity

1. Relative uniformity is the basic requirement of property valuation for tax purposes.

Taxation — Assessment and appraisement

2. The ultimate objective of appraisement and assessment of property for taxation is to bring about the distribution of the cost of government in just relationship to the value of each taxpayer's property, and unless the assessment exceeds the property's value, the individual taxpayer is not injured by an assessment which is too high or too low, provided the same error in proportionate degree is made throughout the tax levying district.

Taxation — Assessment

3. Taxpayers had burden to prove that assessment of their property for taxation was too high, since error in assessment could not be presumed.

Taxation — Appeal from assessment

4. In proceeding on appeal from a tax assessment, the presumption existed that the tax assessor correctly assessed the property in performance of his official duty, and did not violate the rule requiring relative uniformity of property valuation.

Taxation — Evidence — Presumptions

5. The courts attach great weight to the presumption that a tax assessor has faithfully performed his duty, and clear and convincing evidence is required to overcome the presumption.

Taxation — Pleading

6. A protesting taxpayer, who claims favoritism, need not describe each specific item of taxable property in the district, but must describe a reasonable number of typical and representative properties.

Taxation — Assessment — Evidence

7. Evidence of taxpayers whose apartment building was allegedly excessively assessed held insufficient to overcome presumption that assessment effected relative uniformity required, and to sustain burden to prove excessiveness of assessment.

Taxation — "True cash value"

8. Under statute requiring property to be valued at "true cash value" for taxation purposes, quoted words require a valuation based upon many factors including cost price, rentals, cost of reproduction, and market value, and not a valuation based solely upon liquidating or market value.

Taxation — "True cash value"

9. Under statute requiring property to be valued at "true cash value" for taxation purposes, which defined "true cash value" as amount property would sell for at voluntary sale, taking into consideration earning power and usefulness under "normal conditions," quoted words were employed to seek a constant value which would level the effects of depressions and booms and to avoid possibility of costly improvements of value only to owner and, therefore, possessing no market value, escaping taxation or being assessed only as "tear down" propositions.

Taxation — "True cash value"

10. Under statute requiring property to be valued at "true cash value" for taxation purposes, the "true cash value" is not determined by market value alone, even under normal conditions, although market value is entitled to consideration, nor by "tear down" values where the improvement is useful to its owner or is likely to be purchased if placed upon the market.

                  See 26 R.C.L. 365 (8 Perm. Supp., 5765)
                  61 C.J. Taxation, § 44
                

In Banc.

Appeal from Circuit Court, Yamhill County.

HALL S. LUSK, Judge.

Proceeding in the matter of the assessment of property of B.A. Kliks and another, which was made by the county assessor of Yamhill county, and affirmed by the County Board of Equalization. The taxpayers appealed to the State Tax Commission, which assessed the property as worth $8,300 for the purposes of the 1935 tax levy. From a decree of the circuit court holding the State Tax Commission's order assessing the property valid, the taxpayers appeal.

AFFIRMED. REHEARING DENIED.

C.W. Redding, of Portland, and B.A. Kliks, of McMinnville (Dorothy L. Kliks, of McMinnville, on the brief), for appellants.

Earl A. Nott, District Attorney, of McMinnville, and James G. Smith and Charles V. Galloway, of the State Tax Commission, for respondents.

ROSSMAN, J.

The appellants challenge the validity of an assessment made March 1, 1935, of an apartment house property situated in the city of McMinnville and owned by them. The assessor of Yamhill county appraised the building as worth $18,800, and, since he assessed property of that kind at approximately 45 per cent of its appraised value, assessed the building in the sum of $8,450, to which he added $450 as the value of the lot, total $8,900. Upon the appellants' petition for a review the Yamhill County Board of Equalization affirmed this assessment. Appellants then appealed to the State Tax Commission, the three members of which are the respondents in this proceeding, and requested the commission to reduce the assessment upon the lot to $300 and that upon the building to $4,000, total $4,300. The commission found that the value of the entire property was $18,160, and reduced the assessment to $8,300 — lot $450, building $7,850. An appeal was next taken to the circuit court which, in a written opinion, deemed the assessment of $8,300 "fair and just." It denied the appellants' prayer. The appellants then appealed to this court.

The petition which the appellants presented to the Board of Equalization is the only instrument which assumes the form of a pleading. Referring to the building, it avers:

"Said property is now assessed in the sum of $8,450. The petitioners herein set out that such assessment is unjust in that such assessment is too high, and that the assessment is out of proportion entirely from that of any other building in the city of McMinnville. The petitioners represent that the assessment on this building is due to an error by which it was thought that the building was a concrete building, but, in fact, it is a frame building covered with stucco. * * * Before purchasing this building, the petitioners carefully instructed architects and builders to make an appraisement of the property and their conclusion was and is that it can be reconstructed for $10,000 with a better and more serviceable building. Petitioners allege that such building can be replaced at any time during this year from January 1, 1935, for less than $10,000 with a better and more serviceable building."

It will be observed that the appellants claim that the assessing officials mistook the exterior of the structure for concrete. We have read the transcript of testimony carefully and find no warrant for this contention. We shall consider it no further.

Before considering the contentions (1) that "such assessment is too high" and (2) that "the assessment is out of proportion entirely from that of any other building in the city of McMinnville," we shall first review briefly the parts of our laws that are applicable to this proceeding.

Article I, § 32, Constitution of Oregon, provides:

"All taxation shall be uniform on the same class of subjects."

Section 69-101, Oregon Code 1930, directs that all non-exempt real and personal property

"shall be subject to assessment and taxation in equal and ratable proportions."

Section 69-231, Oregon Code 1930, as amended by 1933, Session Laws, chapter 142, page 158, recites:

"* * * Said assessor shall enter in such assessment roll a full and complete assessment of such taxable property * * * on March 1 of said year * * *; and said lands or town lots shall be valued at their true cash value, taking into consideration the improvements on the land and in the surrounding country and also the use and usefulness of such improvements, and any rights or privileges attached thereto or connected therewith, the quality of the soil * * * True cash value of all property shall be held and taken to mean the amount such property would sell for at a voluntary sale made in the ordinary course of business, taking into consideration its earning power and usefulness under normal conditions."

Sections 69-301 to 69-308, Oregon Code 1930, as amended by 1933 Session Laws, chapter 446, page 837, provide that in each county the county judge, county clerk and the county assessor shall constitute a board of equalization; that public notice shall be given of the board's annual meetings; "and that it shall be the duty of persons interested to appear." These sections also state that if it shall appear to the board that any property is "assessed under or beyond the actual full cash value thereof, said board may make proper correction of the same." Section 69-401 creates the State Tax Commission composed of three commissioners, and adds that "each commissioner shall be skilled and expert in matters of taxation." Section 69-402 requires that each commissioner shall be assigned to one of the three departments therein mentioned, one of which is "(b) valuation and assessment." Section 69-404, in defining the duties of the commission, states that it shall be the commission's duty "to require all assessments of property in this state to be made according to law." Section 69-501 provides that the commission shall "do and perform any act, to give any order or direction to any county board of equalization or to any county assessor as to the valuation of any property or class or classes of property, in any county, which in the commission's judgment may seem just and necessary to the end that all taxable property in this state shall be listed upon the assessment rolls and valued and assessed according to the provisions of law, and equalized between all taxpayers." Section 69-502 provides that if the commission "shall ascertain that any taxable property is omitted from the assessment list, or not assessed or valued according to law, it shall bring the same to the attention of the assessor." Section 69-503 follows: "The tax commission shall have the power to direct and to order any county board of equalization to raise or lower the valuation of any taxable property and * * *."...