Bartlett & Co., Grain v. Board of County Com'rs of Baca County

• Decision Date: 03 June 1963
• Docket Number: No. 19841,19841
• Citation: 152 Colo. 388,382 P.2d 193
• Parties: BARTLETT AND COMPANY, GRAIN, a corporation, and Gano Grain Corporation, Plaintiffs in Error, v. The BOARD OF COUNTY COMMISSIONERS OF the COUNTY OF BACA, State of Colorado, Defendant in Error.
• Court: Colorado Supreme Court

Page 193

382 P.2d 193

152 Colo. 388

BARTLETT AND COMPANY, GRAIN, a corporation, and Gano Grain Corporation, Plaintiffs in Error, v. The BOARD OF COUNTY COMMISSIONERS OF the COUNTY OF BACA State of Colorado, Defendant in Error.

No. 19841.

Supreme Court of Colorado, En Banc.

June 3, 1963.

Gordon & Gordon, Lamar, for plaintiffs in error.

Schmidt & Schmidt, Springfield, for defendant in error.

HALL, Justice.

The parties appear here in the order of their appearance in the trial court. We refer to them as they there appeared, as plaintiffs, or Bartlett and Gano, and to the defendant as the Board.

Separate actions were commenced by Bartlett and Gano. Each sought relief from alleged illegal assessments and ad valorem taxes levied for the year 1958 against their properties situate in Baca County. Problems presented for adjudication are the same or similar in each case and the cases were consolidated for trial and one judgment entered.

From the record it appears that for several years prior to 1958, Barlett and Gano each owned and operated several grain elevators in Baca County. They had paid taxes on their various properties each year, including taxes for the year 1957. Valuations on the various properties for the year 1958 were increased twenty-five percent above the 1957 valuations.

Bartlett and Gano protested the increases to the assessor and the Board, sitting as The Board of Equalization. Their protests were denied.

Bartlett and Gano, having exhausted their administrative remedies whereby they sought to have their properties properly assessed, paid the taxes levied under protest, and commenced this action, claiming that the assessments were 'unreasonable, arbitrary, discriminatory, not uniform, unequal and void, and resulted in oppressive and illegal taxes.'

In their complaint they sought a complete review by the trial court of all proceedings culminating in the alleged illegal assessments and taxes and prayed for a determination that said assessments are void, and for judgments for refund of the amounts paid, together with interest and costs.

The Board by answer denied that the assessments were improper or void, and set up as an additional defense the fact that Bartlett and Gano had not exhausted their administrative remedies.

Trial was to the court. Plaintiffs, in order to establish the allegations of their complaint, offered the testimony of one Keats Soder, who dealt in, owned and operated grain elevators and qualified as an expert in determining the cash market value of grain elevators located in Baca County and of the type involved in this action. His appraisal of the properties involved was completed in May 1959. In making his appraisal he visited and examined each property, took into consideration the kind of materials used, the date of construction, the then condition of each property and determined whether there had been recent additions or deletions.

In arriving at the 1958 'full cash value' of each item of property under consideration, he computed 1958 replacement costs and considered the same together with the accumulated depreciation from date of construction, average yearly net income derived from the last ten years' operation of each facility, the amounts for which he thought the various properties could be sold to a willing buyer, based partially on sales of elevators in Baca County, and also capitalized the properties on an income basis.

Predicated on such factors, he expressed his opinion as to the 1958 full cash value of each property. His testimony was clear and convincing and not questioned by anyone, nor was there any evidence to indicate or even intimate that his procedures for arriving at actual cash values were not proper or the values assigned correct.

Bartlett and Gano also called for cross-examination Lee J. Winkleman, who was then, and for ten years and four months last past had been, employed as an 'Industrial Appraiser Engineer for the Colorado Tax Commission.'

He testified that in 1952 he examined the subject properties, and, following procedures contained in a manual (not made available to the trial court or this court) supplied to him by the Colorado Tax Commission, determined the 1941 replacement costs of each property and pursuant to manual procedures depreciated that cost to 1952. He testified:

'Q You don't pay any attention, then, for the purpose of arriving at the total value, of any business enterprise; you don't pay any attention, then, to the income or the sale value?

'A No.

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'A This appraisal was made in accordance with manual procedure, and I made no investigation of any profits.

'Q Now, the only thing that the manual does, that you used, comes up with the reproduction cost as of 1941, is that correct?

'A Correct.

'Q It does not take into consideration income, market value or sales, does it?

'A No.'

After completing this appraisal, Winkleman turned the same over to the Director of Appraisals of the State Tax Commission, who presumably sent copies of the same to the then assessor of Baca County.

Jimmy Patterson, the assessor for Baca County during the years 1955-1959, testified that he never examined the properties for additions, deletions or condition, nor for the purpose of arriving at the assessable value. He had never computed the values of the elevators. A portion of his testimony follows:

'Q Whose value did you use to arrive at the assessment, Mr. Patterson?

'A Tax Commission's.

'Q Then you do not know how the Tax Commission arrived at making the assessment?

'A No.'

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'Q Now, you testified, I believe, a while ago, that your assessment was made by direction from the State Tax Commission, is that correct?

'A Yes, sir.

'Q That is still correct?

'A Yes.

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'A I was using the basis of the Tax Commissioners.

'Q Pursuant to the Tax Commission's direction?

'A Yes.

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'THE COURT: What I am trying to find out is, what the State Tax Commission or its agent directed you to do with reference to these properties?

'A Use them figures that Winkleman had given it and the normal added depreciation which would bring a figure higher than what was on the assessment rolls in 1957.

'THE COURT: And you complied with that directive, is that correct?

'A That was my intention at the time.

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'THE COURT: And you took no other factors into consideration? You used solely this report to arrive at your assessed valuation?

'A Yes.'

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'THE COURT: And you used no other factors in considering the assessment, other than a change in the depreciation from Mr. Winkleman's report, is that correct?

'A Yes, sir.'

Patterson, the assessor, relied entirely upon Winkleman's appraisal setting forth 1941 reconstruction costs less depreciation through 1952. He had no idea as to the procedures used by Winkleman in arriving at reconstruction costs.

He further testified that, acting under instructions given to him in the spring of 1958, he raised the assessed value of each subject property in the amount of twenty-five percent for that year. These increases were not Patterson's but were clearly the handiwork of the State Tax Commission.

'THE COURT: * * * upon what did you base the increase, that is my question?

'A On the request of the Colorado State Tax Commission, and we agreed that was the assessed valuation.

'THE COURT: How was that request received by you?

'A A week's visit of the Tax Commission.

'THE COURT: In what years?

'A In 1958, the spring of 1958.'

The foregoing contains the pertinent facts established by testimony and documentary evidence in which there was no substantial conflict.

On January 25, 1960, the court made detailed FINDINGS OF FACT, CONCLUSIONS OF LAW AND ORDER. Pertinent portions thereof are as follows:

'That Plaintiffs, and each of them, have exhausted their administrative remedies before bringing this (consolidated) action; and the Court has jurisdiction.'

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'Patterson admits that the sole basis of his assessment for the year, 1958, was the Winkleman Report, using the 1952 Depreciated Value as computed, with further allowance for normal added depreciation; that no other factors were used by him in considering the assessment; that at no time during the year, 1958, did he personally inspect, or cause to be inspected the grain storage elevators to determine whether any additions or deletions had been made to said properties; that he assumed they were in the same condition as the previous years; that he had never personally computed their value.

'Both Patterson and Winkleman admit that the tax manual procedure as used by Winkleman at reaching his appraisals in the subject property, and Patterson's assessment procedures did not take into consideration other criteria of value such as income, location, cost, actual sale value, or any other factor other than 1941 Replacement Cost as provided by the manual.

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'With respect to market value, the Court finds that the only evidence submitted was by Plaintiffs through their expert witness, Keats Soder, who testified as to market value, actual cash value, or market cash value (the terms being used interchangeably to mean the highest possible price when there is a willing seller & buyer) on the subject properties.

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'* * * The evidence reveals that the properties herein involved were assessed from a low of 34.3% to a high of 134.8 of their true cash value.'

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'That while the Constitutional and Statutory standard of assessment is full cash value, since the 1952 reappraisal program, the custom in this state as followed by the Tax Commission and the assessors of the 63 Counties is to assess and equalize assessments of real property at a value based upon 1941 replacement costs or some per centage thereof.

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'That, generally, the 'uniformity' provision of the Constitution relates to uniformity of taxes and not to uniformity of procedures; however, in order...