Foster Bros. Mfg. Co. v. State Tax Commission of Mo.

• Decision Date: 08 December 1958
• Docket Number: No. 1,No. 46696,46696,1
• Citation: 319 S.W.2d 590
• Parties: FOSTER BROS. MFG. CO. and S. N. Long Warehouses, Inc., Respondents, v. STATE TAX COMMISSION OF MISSOURI, Assessor of The City of St. Louis, and The City of St. Louis, The Board of Education of The City of St. Louis (Intervenors), Appellants
• Court: Missouri Supreme Court

Page 590

319 S.W.2d 590

FOSTER BROS. MFG. CO. and S. N. Long Warehouses, Inc., Respondents, v. STATE TAX COMMISSION OF MISSOURI, Assessor of The City of

St. Louis, and The City of St. Louis, The Board of

Education of The City of St. Louis

(Intervenors), Appellants.

No. 46696.

Supreme Court of Missouri, Division No. 1.

Dec. 8, 1958.

Motion for Rehearing or to Transfer to Court en Banc Denied

Jan. 12, 1959.

Charles J. Dolan, Acting City Counselor, Thomas F. McGuire, Assoc. City Counselor, James J. Gallagher, Asst. City Counselor, St. Louis, for appellants, Assessor, City of St. Louis, and City of St. Louis.

Emmet T. Carter, Doris Banta, St. Louis, for appellant, Bd. of Ed. of City of St. Louis.

John M. Dalton, Atty. Gen., Donal D. Guffey, Asst. Atty. Gen., for appellant, State Tax Commission.

Chopin & Boisaubin, Alfred L. Boisaubin, St. Louis, for respondents.

HOLMAN, Commissioner.

In this case the defendants and intervenors (hereinafter refered to as defendants) have appealed from a judgment of the circuit court of the City of St. Louis which reversed an order of the State Tax Commission (hereinafter referred to as the Commission) fixing the assessment valuation of two tracts of land separately owned by plaintiffs. We have appellate jurisdiction because the case involves the construction of the revenue laws of the State. Article V, Section 3, Constitution of Missouri 1945, V.A.M.S.; State ex rel. Lindell Tower Apartments v. Guise, 357 Mo. 50, 206 S.W.2d 320.

Each of the tracts involved herein contains approximately four acres of land and is located on South Vandeventer Avenue in St. Louis, Missouri. One will be referred to as the Long tract and the other as the Foster tract. In each instance the land and the improvements thereon were assessed separately and no complaint has been made as to the valuation of the improvements. The dispute herein involves the valuation (as of January 1, 1956) of the respective tracts of land only.

The Long tract had an assessed valuation of $43,500 as of January 1, 1955. The assessment in question increased the valuation to $84,150. The 1955 assessment of the Foster tract was $51,000 which was increased in 1956 to $97,040. The increases in the assessed valuation of the said tracts resulted from a reappraisal thereof by the assessor as a part of a reappraisal program whereby all industrial land in St. Louis had been revalued for assessment purposes in accordance with an industrial land formula which had been adopted by the assessor of that city. The reappraisal program had been commenced in 1953 and completed prior to January 1956.

Each of the plaintiff appealed from the valuation fixed by the assessor to the Board of Equalization of the City of St. louis, but said board refused to reduce either valuation. Appeals were thereafter taken to the State Tax Commission. On September 11, 1956, the Commission held a hearing (consolidated by agreement) in St. Louis upon those appeals. At that time the members of the Commission viewed both tracts and heard evidence. We see no need of stating the evidence in detail. John D. Weber, a real estate broker and appraiser, fixed the value of the Long tract at $102,000 and the Foster tract at $111,250. Plaintiffs also called Joseph J. Backers, who testified that he was employed by the City of St. Louis as Valuation Engineer and that the tracts in question were assessed for 1956 under his direction. This witness gave the details concerning the increase in assessment valuation of the tracts in question as a result of a revaluation in accordance with the formula adopted by the assessor in connection with the reappraisement program heretofore mentioned. Upon cross-examination he expressed the opinion that the sale value of these tracts would be between 75cents and 80cents a square foot which would be approximately $132,000 for the Long tract, and $143,000 for the Foster tract. On November 8, 1956, the Commission made a finding that the evidence adduced at the hearing did not show that the assessments in question were 'unlawful, unfair, improper, arbitrary or capricious,' and ordered that the proper assessed valuation of the Long tract should be $84,150 and the Foster tract $97,040, which were the amounts of the original assessments.

Thereafter each of the plaintiff filed a petition in the circuit court of the City of St. Louis to review the order of the Commission and the cases were consolidated by proper order. The defendants named in those petitions were the State Tax Commission, the City Collector, and the City Assessor. Prior to trial the City of St. Louis and the Board of Education of the City of St. Louis were permitted to intervene as parties. Plaintiffs filed in the circuit court a transcript of the record of the proceedings before the State Tax Commission. Also, at the hearing, they offered the deposition of James M. Robertson, chairman of the State Tax Commission, which had been taken after the Commission had made its decision. Defendants objected to the deposition on the ground that there had been no showing 'that such evidence in the exercise of reasonable diligence could not have been produced' at the hearing before the Commission. See Section 536.140, subd. 4, as amended, Laws of Mo. 1953, p. 679, Sec. 2. (Unless otherwise indicated all statutory references are to RSMo 1949, V.A.M.S.) The court admitted the deposition. In his testimony Mr. Robertson identified three exhibits which are called Real Estate Ratio Studies. Exhibit 1 related to 1953 Sales--1954 Assessments. Exhibit 2 related to 1954 Sales--1955 Assessments, and Exhibit 3 related to 1955 Sales--1956 Assessments.

Those exhibits were not records of the Commission. They constituted a compilation of figures that had been prepared by some group of utility tax representatives and delivered to the Commission for its information. Using Exhibit 3 as an example, we will state that it purports to show (1) the number of real estate sales in each county in the State during 1955, (2) the aggregate consideration for those sales, and (3) the aggregate assessed valuation of those properties for 1956. The study then purported to give the percentage ratio of assessed valuation to the sales price. This ratio is given as to each county in the State and the City of St. Louis, as well as the average ratio for the State as a whole. According to this exhibit the real estate sold in St. Louis City in 1955 was assessed on January 1, 1956 at 36.24% of the sales price, while the average assessment as to all property sold in the State (computed on the same basis) was 29.77%.

The trial court found that 'Said order of the State Tax Commission of Missouri imposes a heavier tax burden on said petitioners than is borne by other taxpayers within the City of St. Louis and imposes a heavier tax burden on the taxpayers of the City of St. Louis than is borne by taxpayers in the several counties of the State of Missouri; * * * is unsupported by competent and substantial evidence upon the whole record * * *; is arbitrary and capricious; (6) Said petitioners offered at the trial competent and material evidence which, in the exercise of reasonable diligence, they could not have produced at the hearing before said Commission.' The court decreed that 'said order of the State Tax Commission of Missouri be and is hereby reversed, and that this consolidated cause be and it is hereby remanded to the State Tax Commission of Missouri for reconsideration of the assessment of said properties of petitioners for the year 1956, in the light of this judgment and said offer of evidence referred to in paragraph (6).'

Upon this appeal plaintiffs rely on one point only in support of the judgment of the trial court. Note the following from their brief: 'Respondents' position stated in concise terms is that their property had been assessed at a higher percentage of true value than other property of the same class situated, not in St. Louis where respondents submit all property has been assessed on an equal and comparable basis, but in other counties throughout the state; that their property has been assessed at a higher percentage of true value than the average of other property of the same class in other counties throughout the state.'

In reviewing the instant order of the State Tax Commission it should be borne in mind that this proceeding was an appeal by individual property owners from a ruling of the Board of Equalization of the City of St. Louis (hereinafter referred to as the Board) relating to the assessed valuation of their property. In that situation the Commission exercised a jurisdiction which was derivative or appellate in nature and hence the power or jurisdiction of the Commission was no more extensive than that possessed by the Board. Lusk v. Public Service...