Bd. of Com'Rs of Okla. Cnty. v. Ryan
| Decision Date | 02 December 1924 |
| Docket Number | Case Number: 15160 |
| Citation | 107 Okla. 278,1924 OK 1075,232 P. 834 |
| Parties | BOARD OF COM'RS OF OKLAHOMA COUNTY v. RYAN, County Treas., et al. |
| Court | Oklahoma Supreme Court |
¶0 1. Taxation--Foreign Corporations--Case Followed.
Syllabus 1, 2, 3, and 8 in the case of In re Indian Territory Illuminating Co., 43 Okla. 307, 142 P. 997, are adopted by reference.
2. Same--Legislative Power.
Property in all its forms is a creature of law. In the instant case it exists in divisible elements which are represented by evidence of an interest in the property itself. The classification of such elements of value for purposes of taxation lies with the Legislature of the state. The attempt of the Legislature to exercise its authority in this regard meets with no interference from the courts, unless an invidious and unreasonable distinction is made with reference to the things made taxable.
3. Same -- Property Subject--Stock of Foreign Corporation Owned by Resident--Construction of Statute.
Section 9583, Comp. Stat. 1921, is a legislative declaration of what shall be included as personal property subject to taxation. Within this section is included: Section 9599 requires that each resident of this state shall list with the assessor, among, other items of property, shares of stock of joint stock, or other companies or corporations, when the property of such company or corporation is not assessed in this state. Held:
4. Same -- Nonliability of Shareholder Where Property of Corporation is Assessed in State.
The Iten Biscuit Company is a corporation organized under the laws of the state of Nebraska, with an authorized capital of $ 10,000,000, more than half of which is paid up. The intervener, E. H. Seither, is a resident of Oklahoma City, Oklahoma county, Okla., and was in 1919-20-21-22-23. He was the owner of more than 400 shares of the capital stock of said corporation. Said corporation had long theretofore become the owner of property in this state of the taxable value of $ 250,000, or approximately 5 per cent. of its paid up capital, on which property it paid taxes each year, and was carrying on its business in the state of Oklahoma in good faith. Held, that the shares of stock owned by intervener Seither in said corporation are not subject to taxation by the laws of this state. Held, further, that this construction of the statutes involved herein does no violence to either sections 5 or 8, of article 10, or section 50 of article
J. K. Wright and John Howard Payne (R. W. Stoutz, Rainey & Flynn, and McPherren & Wilson, of counsel), for plaintiff in error.
Wilson, Tomerlin & Threlkeld and Shirk, Danner & Fowler , for defendants in error. W. P. Z. German and R. H. Hudson, amici curiae.
¶1 The board of county commissioners of Oklahoma county, as plaintiff, sought herein a mandamus against Martin S. Ryan, as county treasurer of Oklahoma county, and E. H. Seither, a stockholder in the Iten Biscuit Company, as intervener, defendants. The judgment of the district court was in favor of the defendants. The plaintiff appeals. Under the statute, the board of county commissioners has the power to employ by contract a tax ferret, whose compensation is a percentage of the tax collected on property omitted from the tax rolls which should have been listed and assessed. On the discovery of property not listed, the ferret notifies the county treasurer of the nature and character of the property, whereupon it becomes the duty of the county treasurer to cause a notice to be issued to the owner of such omitted property, to show cause on a certain date why such property should not be placed on the tax roll for the years indicated in the notice. Upon the hearing had, if the county treasurer finds that the property in question was subject to taxation, it becomes the duty of the county treasurer to place the same on the tax rolls. From his action in doing so, the taxpayer has the right to appeal. The board of county commissioners, which is the statutory name by which the county sues, and is sued, employed one Woodson as tax ferret of said county. Said tax ferret reported to the county treasurer that one E. H. Seither owned stock in the Iten Biscuit Company, of the value of $ 5,000 in 1919, $ 8,000 in the year 1920, $ 10,500 for the year 1921, and $ 15,000 for the year 1922, $ 16,000 for 1923, and that said stock had not been listed for either of said years for taxation, and that the said Seither was a resident and citizen of Oklahoma City, Oklahoma county, Okla., and that his said stock to the values set out was subject to taxation for the years mentioned in said city, county, and state, and requested the said Ryan, county treasurer aforesaid, to give the notice required by statute to the said Seither, to show cause why said property should not be placed on the tax rolls for said years and a tax levied against the same for state, county, municipal, and school district purposes, aggregating for the years mentioned approximately $ 2,500. The county treasurer, taking the position that the stock in question was not subject to taxation, refused to give the notice, or to list the stock, or to assess the same for taxes, whereupon this action was instituted by the county attorney. In support of its application for said writ, the plaintiff pleads that the Iten Biscuit Company is a foreign corporation, organized under the laws of the state of Nebraska, with an authorized capital stock of $ 10,000,000, more than half of which is paid up, and that it owns and possesses a large amount of property, valued at more than $ 5,000,000, as disclosed by its report, filed with the Corporation Commission of this state, in 1923, most of which property is outside of the state of Oklahoma, but that the said Iten Biscuit Company has located within this state property of the value of $ 250,000, on which said company has paid the state, county, municipal, and school district taxes where located. That said amount represents approximately 5 per cent. of the paid up capital, wealth, and property of said corporation. That the said stockholder Seither had owned stock to the value, and during the years set out above, and that the same was subject to taxation in Oklahoma City, and that the same had not been assessed by the county assessor, nor otherwise placed upon the tax rolls, but that the same had wholly escaped taxation, and that by reason of the county treasurer's failing to perform his duty necessary to list said property upon the tax rolls of said county, great damage was done the state, the county, the city, and the school district within which the said taxpayer lives, and for which there is no adequate remedy, save and except that mandamus be directed against said treasurer, compelling him to perform the duty imposed by law upon him as such officer. Attached to the petition is the report of said foreign corporation required by the statute of this state to be filed each year with the Corporation Commission. The exhibits further disclose that the said corporation paid its franchise tax required under the statute on that portion of its capital stock employed in Oklahoma, as a condition precedent to its domestication and freedom to carry on its business in this state. That it has paid its license tax each year thereafter, has paid its state, county, municipal, and school district taxes upon all of its property, in amount approximately $ 250,000, located in Oklahoma.
¶2 On being presented to the trial judge, it was stipulated between the parties that the facts substantially set out above were correct, and that the only question presented to the court for determination was the question of law as to whether, under the facts stated, the shares of stock owned by the said Seither were subject to be assessed in his name for taxation. The trial court denied the writ, which was tantamount to a finding that the shares of stock were not subject to taxation for the years mentioned, and the only question before us is the correctness of the determination of the trial court as to this question of law. This case turns upon the construction of certain sections of the Oklahoma statute on Revenue and Taxation, and as to whether or not these sections are within the constitutional power of the Legislature on the subject of taxation. We will quote the sections, and hereafter when necessary to refer to either, reference will be made by number. Section 9574, Comp. Stat. 1921, provides:
"All property in this state, whether real or personal, including the property of corporations, banks and bankers, except such as is exempt, shall be subject to taxation; provided, that no farm products while remaining in the raw state, such as cotton, corn, wheat, oats, and the like, shall be subject to ad valorem tax, but be subject to the income tax laws of the state."
¶3 Section 9583, Comp. Stat. 1921, provides:
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