Clatsop County v. Oregon American Lumber Co.

• Decision Date: 16 February 1937
• Citation: 65 P.2d 1,155 Or. 551
• Parties: CLATSOP COUNTY v. OREGON AMERICAN LUMBER CO. et al.
• Court: Oregon Supreme Court

65 P.2d 1

155 Or. 551

CLATSOP COUNTY v. OREGON AMERICAN LUMBER CO. et al.

Supreme Court of Oregon

February 16, 1937

In Banc.

Appeal from Circuit Court, Clatsop County; H. K. Zimmerman, Judge.

Suit by Clatsop County, a political subdivision of the state of Oregon, against the Oregon American Lumber Company and others, to foreclose tax certificates of delinquency. Defendant J. F. Hamilton answered, alleging pendency in the circuit court of Clatsop County of appeals from orders of State Tax Commission on appeals from orders of Boards of Equalization of Clatsop County, wherein the issue joined is the alleged fraudulent overvaluation of the property assessed herein. Defendant also alleged in his answer excessive and fraudulent appraisement and overvaluation of the property in the suit. From an order sustaining a demurrer to said answer and a decree of foreclosure, defendant J. F. Hamilton appeals.

Modified and affirmed.

Willis West, Dist. Atty., and Frank Spittle, both of Astoria, for respondents.

KELLY Justice.

The question here presented is whether a property owner, after pursuing the statutory method of petitioning the board of equalization for a reduction in valuation of his property and successively appealing, first, from the order of the board of equalization to the state tax commission, and, then, from the order of the commission to the circuit court, where the matter is pending when suit is instituted to foreclose delinquent tax certificates, may interpose the defense of fraudulent overvaluation in such suit.

Such defense was alleged in appealing defendant's answer; a demurrer was interposed thereto and the trial court sustained the demurrer.

Mere excessive valuation of property, for the purpose of assessment, is not available as a defense, but intentional or fraudulent disregard of the statutory requirement, in that regard, constitutes a defense in so far as the assessment is increased by such fraudulent overvaluation. 61 C.J. Subject: Taxation, p. 1145 § 1555, note 67, citing People ex rel. v. Chicago, L. S & E. R. Co., 286 Ill. 576, 122 N.E. 109, 110; People ex rel. v. Bourne, 242 Ill. 61, 89 N.E 690; People ex rel. v. Odin Coal Co., 238 Ill. 279 87 N.E. 410; Otter Tail County v. Batchelder, 47 Minn. 512, 50 N.W. 536, 538; Randals v. State (Tex.Civ.App.) 15 S.W.2d 715.

The trial court erred in sustaining the demurrer of plaintiff to this defense.

In the case of Otter Tail County v. Batchelder, supra, the Minnesota Supreme Court say:

"*** The law contemplates, as a necessary, indispensable step in the process of taxation, the honest exercise of the judgment of such officers, to the end that all taxable property may be assessed at its actual value, and so equality of taxation secured, so far as is reasonably practicable. If this requirement may be disregarded, and the mere will, prejudice, favor, or self-interest of the assessor, and not the certain and uniform rule prescribed by the statute, is to be allowed to control his action, the people would be subject to the grossest wrong, and the constitutional and statutory rule of equality in taxation would be of little avail. It may safely be concluded that under this law, recognizing the right to defend in respect to taxes 'partially, unfairly, or unequally assessed,' it was contemplated that a property owner might show in defense, or in reduction of the tax charged upon his property, that the requirement of a bona fide assessment had been intentionally disregarded by the taxing officers, to the prejudice of such landowner." Otter Tail County v. Batchelder, supra.

In the case of People v. Chicago, L. S. & E. R. Co., supra, the Supreme Court of Illinois say:

"The taxpayer is entitled to the honest judgment of the person or persons elected or appointed to fix the values, and a tax founded on an assessment which from corrupt and malicious motives is made excessive or is rendered unequal or unfair by fraudulent practices of the officers, or whereby property is...