First Nat. Bank of Remsen v. Hayes

• Decision Date: 07 July 1919
• Docket Number: No. 32843.,32843.
• Citation: 186 Iowa 892,171 N.W. 715
• Parties: FIRST NAT. BANK OF REMSEN v. HAYES, COUNTY AUDITOR.
• Court: Iowa Supreme Court

186 Iowa 892

171 N.W. 715

FIRST NAT. BANK OF REMSEN

v.HAYES, COUNTY AUDITOR.

No. 32843.

Supreme Court of Iowa.

April 8, 1919.

Supplemental Opinion, July 7, 1919.

Appeal from District Court, Plymouth County; Wm. Hutchinson, Judge.

Appeal from the assessment of the value of shares of stock issued by a national bank resulted in confirmation thereof. The bank appeals. Affirmed.Kass Bros., of Sioux City, for appellant.

Nelson Miller, of Le Mars, for appellee.

LADD, C. J.

The capital stock of the First National Bank of Remsen, Iowa, consisted of 500 shares of the par value of $100 each, distributed in 1917 among 16 shareholders. These shares were estimated by the assessor to be of the total value of $38,357.38 and the auditor increased such amount to $76,720.33 and entered the shares at such increased value on the tax list before said list was transferred to the treasurer's office. At the same time the auditor undertook to correct the assessments of the assessor for the years 1916, 1915, 1914, and 1913. That the proceedings by the auditor were as prescribed by section 1385b, Code Supp. 1913, is not questioned. The several assessments were more than doubled. The bank objected to increasing the assessment when appearing before the county auditor in pursuance of notices to show cause why the errors in the several assessments should not be corrected on the grounds: (1) That the assessment was legally made by the assessor, and not subject to increase by the auditor for any of the years mentioned; (2) the auditor was without authority to make said increase; (3) no property of the bank subject to assessment was overlooked; (4) all its property having been assessed, there was no authority for increasing the assessment thereof; and (5) that its property was duly assessed, and such assessment was final and conclusive and not subject to any correction by the auditor. These objections were overruled, and the auditor computed from the capital, surplus, and undivided earnings the value of the stock, and, as he contended, by way of correction, increased the value of the shares in 1917 as stated and in the four preceding years.

Appellant contends: (1) That the auditor was without power to correct an assessment for any year previous to the current year; and (2) that what he did was really increasing the amount of said assessment of the several shares rather than correcting the same, as appellee says was done. These issues necessarily depend upon the construction to be given statutes relating to the assessment of bank stock.

I. The authority of the county auditor to correct any error in an assessment or tax list is not questioned, but it is argued that he may not so do after the tax list has been completed, passed to the county treasurer, and the taxes levied have been paid. In Ridley v. Doughty, 77 Iowa, 226, 42 N. W. 178, and 85 Iowa, 418, 52 N. W. 350, the taxes were found not to have been paid, and the correction of the auditor's mistake, in ignoring a resolution of the board of supervisors, reducing the assessments on real estate within an incorporated town 44 per cent. and entering the same in the tax list at the valuation fixed by the assessor, was a duty he was bound to discharge, and declared that in such a case he might be compelled to make the correction by mandamus. There the assessment was made in 1887, and the demand for correction, August 7, 1888, and the intimation is to be found therein that, but for the taxes not having been paid, the remedy would not have been available. The authority to correct the assessment and that to assess omitted property is found in the same section, and in Mead v. Story County, 119 Iowa, 69, 93 N. W. 88 (section 1385b, Code Supplement 1913), the county auditor was held to have no authority to list and assess omitted property except in the preparation and completion of the tax list for the current year. Section 1385 of the Code provided that:

“The auditor may correct any error in the assessment or tax list, and when such correction affecting the amount of tax is made after the books shall have passed into the hands of the treasurer, he shall charge or credit him, as the case may be, therefor, and report the same to the board of supervisors.”

This was repealed by chapter 47 of the Twenty-Eighth General Assembly (section 1385b, Code Supplement 1913) substituted therefor.

In the case last cited, Bishop, J., speaking for the court, said:

“It seems clear that under Code, § 1385, the county auditor was authorized to correct only errors of commission appearing in the assessment or tax list, and to which his attention might be called in any way. It is equally clear that by the act of the Twenty-Eighth General Assembly there was added to the powers of the auditor the right to correct errors of omission as well as of commission. There is nothing in the section of the Code, or in the later act of the General Assembly, however, from which the conclusion may properly be drawn that it was the legislative intention to invest the auditor with power to thus deal with any assessment or tax list save that of the current year. On the contrary, it seems to us that if, in the preparation of such list, or if, after the same had been prepared by him and passed to the treasurer, errors or omissions were discovered, it became his duty to correct the same. Such, we think, is the plain purport of the statute. Surely, there is nothing in the provisions thereof which gives the auditor the right, or, what is the same thing, makes it his duty, to take cognizance of any and all errors of omission and commission that it may be asserted or alleged exist in connection with the assessment and tax lists made up for and used in previous years. We think that within the contemplation of section 1385, and as applied to the current year the errors that might be corrected thereunder were such as had relation to the name of the person against whom the assessment was made, the description of the property assessed, or the valuation thereof and the amount of the tax extended. The section, as amended by chapter 47, etc., does not broaden the scope of the auditor's powers, save that, having first given notice, he may include in his assessment or tax list property which the assessor failed to assess and return, and may extend a tax thereon.”

[1] We are not inclined to recede from this view, and there is nothing in Ridley v. Doughty, supra, to the contrary. The error in the assessment or tax list is one relating to perfecting the tax list in the course of preparation or thereafter at any time prior to the payment of taxes levied. Retroactive authority is not expressly conferred on the auditor, and there is no good reason for saying that, after the tax lists have been perfected by the officers, in so far as they know, and accepted by the property owner in discharging the burden imposed, the auditor may go “back of the returns” and, by the correction of errors thereafter discovered, exact payment of additional sums as taxes which neither the public nor the taxpayer knew of or might reasonably have anticipated. There ought to be a time beyond which even an error, in name, description, or valuation, may not be corrected to the detriment of the taxpayer, and that time is when the proceedings relating to assessment listing and collection of the tax, always construed ad invitum, has been consummated by full payment of the amount exacted by the records as they then exist. It follows that the county auditor exceeded his authority in undertakingto correct errors in the assessments of shares of stock made prior to 1917.

II. Was the error in the assessment of 1917 such as the county auditor was authorized to make? The assessor estimated the value of each of the shares of stock at $76.71. The auditor computed the value thereof, from the sworn statement of an officer of the bank (giving data from which the capital might be computed), indicating the capital, surplus, and undivided profits, and raised the assessment of each share accordingly to $153.44. Had the statutes continued as they were prior to the enactment of chapter 63 of the Thirty-Fourth General Assembly, the assessment of the shares must have been in accordance with the assessor's judgment and discretion, and the remedy, if any, must have been by appeal. This appears from an excerpt from section 1322 of the Code:

“To aid the assessor in fixing the value of such shares, the corporations shall furnish him a verified statement of all the matters provided in the preceding section, which shall also show, separately, the amount of capital stock, and the surplus and undivided earnings, and the assessor, from such statement and other information he can obtain, including any statement furnished to and information obtained by the auditor of state, which shall be furnished him on request, shall fix the value of such stock, taking into account the capital, surplus and undivided earnings.”

As so holding, see First National Bank v. City Council of Estherville, 136 Iowa, 203, 112 N. W. 829. In this respect the statute was not changed until the enactment of chapter 63 of the Thirty-Fourth General Assembly, the purpose of which was to so modify...