Calhoun County Assessor v. Consolidated Gas Supply Corp.

• Decision Date: 29 May 1987
• Docket Number: No. 17003,17003
• Citation: 358 S.E.2d 791,178 W.Va. 230
• Parties: CALHOUN COUNTY ASSESSOR, et al. v. CONSOLIDATED GAS SUPPLY CORP., etc., et al.
• Court: West Virginia Supreme Court

Page 791

358 S.E.2d 791

178 W.Va. 230

CALHOUN COUNTY ASSESSOR, et al. v. CONSOLIDATED GAS SUPPLY CORP., etc., et al.

No. 17003.

Supreme Court of Appeals of West Virginia.

May 29, 1987.

Rehearing Denied July 16, 1987.

Syllabus by the Court

1. Statutes governing the imposition of taxes are generally construed against the government and in favor of the taxpayer. However, statutes establishing administrative procedures for collection and assessment of taxes will be construed in favor of the government.

2. "An assessor, in the fulfillment of his legal obligation to assess property at its true and actual value, may prepare and submit to taxpayers forms which constitute a request for information which he deems necessary in determining a proper valuation of the properties and so long as the information requested is reasonable such information constitutes a statement required by law as contemplated by Code, 1931, 11-3-10, as amended." Syllabus Point 1, In Re Shonk Land Co., 157 W.Va. 757, 204 S.E.2d 68 (1974).

3. A county assessor may make reasonable inquiry to parties in those relationships identified in W.Va.Code, 11-3-2 and -3, which include the lessees of real property or the owners of other interests in real property who may be asked reasonable questions relating to the interest of other persons in the property and the value of property itself.

Lewis, Ciccarello & Friedberg, (Brickford Y. Brown) Charleston, for appellant.

Robinson & McElwee, Charleston, Richard A. Hayhurst, Parkersburg, Kenneth Coleman, Ashland, Ky., Lawrence Nydes, Pittsburgh, Pa., Thomas N. Hanna, Charleston, for appellee.

MILLER, Justice:

This appeal involves the narrow issue of whether a county tax assessor (assessor) has the authority to require utility companies conducting operations within the county to provide information relating to property owned by third parties with whom the utilities have oil and gas leases. The circuit court generally concluded that the assessor did not have such authority.

The assessor relied on W.Va.Code, 11-3-2 (1983), and W.Va.Code, 11-3-3 (1961), when he requested the respondents to furnish information regarding their oil and gas operations within the county during the 1983 tax year. When the respondents refused to provide the information, the assessor instituted an action in the Circuit Court of Calhoun County seeking to compel the disclosure of the requested information. ¹

I.

We begin our analysis by noting that statutes governing the imposition of taxes are generally construed against the government and in favor of the taxpayer. E.g., Consolidation Coal Co. v. Krupica, 163 W.Va. 74, 80, 254 S.E.2d 813, 816 (1979); Ballard's Farm Sausage, Inc. v. Dailey, 162 W.Va. 10, 246 S.E.2d 265 (1978); In Re Evans' Estate, 156 W.Va. 425, 194 S.E.2d 379 (1973); N. Singer, 3A Sutherland Statutory Construction § 66.01 (4th ed. 1986). However, an opposite rule of construction is recognized for statutes governing assessment procedures: "[A]s a general rule, courts have been tolerant in construing statutes prescribing the procedure for assessments ... [and] [t]he factor of administrative convenience in the enforcement and collection of taxes is taken into consideration by the courts." N. Singer, supra at § 66.06.

The Supreme Court of Arkansas in Ragland v. Alpha Aviation, Inc., 285 Ark. 182, 184, 686 S.W.2d 391, 392 (1985), recently recognized this important distinction and stated: "It is a general rule of construction that statutes establishing procedures for collection and assessment of taxes will be construed in favor of the government.... see also 84 C.J.S. Taxation, § 393 [ (1954) ]; R.J. Reynolds Tobacco v. Carson, 187 Tenn. 157, 213 S.W.2d 45 (1948); Southern Pac. Ry. Co. v. State, 34 N.M. 479, 284 P. 117 (1930)."

We addressed the question of a county assessor's authority to require a taxpayer to answer questions relevant to an assessment of property in In Re Shonk Land Co., 157 W.Va. 757, 204 S.E.2d 68 (1974). There two coal companies refused to answer questions that had been asked by the county assessor on a standardized form designed to elicit information relevant to an assessment of their coal properties at true and actual value. The assessor placed a value on the coal properties without the benefit of the information requested, and the coal companies sought to challenge the valuation before the county commission, sitting as a board of equalization and review.

The board refused to consider the application for review based on W.Va.Code, 11-3-10, which generally provides that a taxpayer forfeits any right to challenge the correctness of an assessment, if the taxpayer has refused to answer any question asked by the assessor or has failed or refused to submit any statement required by law.

The companies appealed unsuccessfully to the circuit court and we affirmed. They contended among other things, just as the respondents have here, that the assessor lacked statutory authority to promulgate the standardized form and, as a ministerial officer, could not demand any information other than that prescribed by the State tax commissioner. The Court rejected these arguments and upheld the assessor's authority to design a reporting form and require its completion and submission, holding in Syllabus Point 1 of Shonk Land Co.:

"An assessor, in the fulfillment of his legal obligation to assess property at its true and actual value, may prepare and submit to taxpayers forms which constitute a request for information which he deems necessary in determining a proper valuation of the properties and so long as the information requested is reasonable such information constitutes a statement required by law as contemplated by Code, 1931, 11-3-10, as amended."

We explained in Shonk Land Co., 157 W.Va. at 761-62, 204 S.E.2d at 70, that the assessor's obligation was independent of the duties of the tax commissioner:

"The county assessor, a constitutional officer, is charged with the responsibility of assessing properties in the county at their true and actual value. Code, 1931, 11-3-1, as amended. See George F. Hazelwood Company v. Pitsenbarger, Assessor, 149 W.Va. 485, 141 S.E.2d 314 (1965). In the accomplishment of that required endeavor it is incumbent upon the assessor to seek out all information which would enable him to properly fulfill his legal obligation. See Younger v. Meadows, 63 W.Va. 275, 59 S.E. 1087 (1907).... Code, 1931, 11-3-10, as amended, clearly provides that the taxpayer shall answer any question 'asked by the assessor or by the tax commissioner'. (emphasis supplied)....

"Each county has its own problems and circumstances which may require the assessor to make inquiries which would not occur to the state tax commissioner.... In view of the foregoing we are of the firm opinion that Form KCM 170 contains reasonable and lawful questions by the assessor, that such questions are contemplated in the fulfillment of his duties and that Form KCM 170 constitutes a statement required by law as contemplated by Code, 1931, 11-3-10, as amended."

Shonk Land Co. dealt with the primary obligation of the assessor to secure relevant information by way of forms. It established that this right was independent of any authority vested in the State tax commissioner. It did not deal with the assessor's right to seek information from third parties.

The obligation of a third party to disclose information was discussed in Hannis Distilling Co. v. Berkeley County Court, 69 W.Va. 426, 71 S.E. 576 (1911). There, we construed the term "trustee" in the 1905 version of W.Va.Code, 11-3-3, ² to include a warehouseman who held several thousand barrels of whiskey as a bailee. Because the company had refused to list the names of the owners of the whiskey barrels stored in its warehouse, this Court affirmed the assessor's action in assessing the value of the personal property against the warehouse company and held in Syllabus Point 2: "Under section 55 of chapter 35 of the Acts of 1905, it was the duty of every agent, having the custody of personal property, to list the same for taxation in the name of the owner. A warehouseman is a trustee within the meaning of clause 'd' of said section." In interpreting the statute in this manner, this Court stated:

"Neither of these two provisions, found in clauses 'a' and 'g' of said section 55 [now W.Va.Code, 11-3-3, set out in note 2, supra ], covers the case we have here in express terms, but they disclose the spirit and purpose of the section. Clause 'd' of that section says property held in trust must be listed by the trustee if in possession thereof, otherwise by the party for whose benefit it is held. Giving effect to the presumed intention of the Legislature, we must give the word 'trustee' its broadest and fullest meaning. While the applicant was a bailee, and not technically a trustee, a bailment involves a trust in the broad sense of the term. The bailee is a custodian of property which clearly embraces a trust." 69 W.Va. at 431, 71 S.E. at 578-79.

The historical significance of Hannis is this Court's willingness to construe the statute in favor of disclosure to effectuate the legislature's objective that all real and personal property be assessed and taxed. Furthermore, Hannis concluded that the legislature did not intend the statutory designations of who must list property owned by another person to be viewed restrictively. In considering the term "trustee," the Court stated: "[W]e have a word here, which, taken in its broad, nontechnical sense, expresses the intent of the old statute, and makes the new one accord with it as well as the mandate of the Constitution requiring taxation of all property." 69 W.Va. at 432, 71 S.E. at 578.

We note that the information requested by the assessor is limited to real property or leasehold and royalty interests on real property located in Calhoun County in which the respondents have some ownership or operational interest with others. ³...