General Tel. Co. of the Southwest v. State Tex Commission

• Decision Date: 04 January 1962
• Docket Number: No. 6801,6801
• Parties: GENERAL TELEPHONE COMPANY OF THE SOUTHWEST, a corporation, Plaintiff-Appellee, v. The STATE TAX COMMISSION of the State of New Mexico; F. Wayne Laws, Chief Tax Commissioner; Felipe Sanchez Y Baca and D. D. Monroe, Associate Commissioners, Defendants- Appellants.
• Court: New Mexico Supreme Court

Page 711

367 P.2d 711

69 N.M. 403

GENERAL TELEPHONE COMPANY OF THE SOUTHWEST, a corporation Plaintiff-Appellee, v. The STATE TAX COMMISSION of the State of New Mexico; F Wayne Laws, Chief Tax Commissioner; Felipe Sanchez Y Baca and D. D. Monroe, Associate Commissioners Defendants- Appellants.

No. 6801.

Supreme Court of New Mexico.

Jan. 4, 1962.

Phil R. Lucero, Tax Commission Atty., Santa Fe, Melvin T. Yost, Alfred P. Whitaker, Santa Fe, for appellants.

W. D. Girand, Hobbs, Don S. Holdridge, San Angelo, Tax., for appellee.

CHAVEZ, Justice.

The State Tax Commission of New Mexico, defendants below, appeals from the decision and judgment of the district court of Santa Fe County, invalidating the tax commission's order sustaining the assessment and valuation by the commission of the property of appellee, General Telephone Company of the Southwest, for the year 1958 in the amount of $3,774.250.00.

Due notice of the assessment and valuation was given to appellee and appellee filed its protest. Thereafter, a hearing was held before the tax commission and following said hearing the tax commission entered its order sustaining the valuation and assessment in the amount above stated.

Appellee filed in the district court of Santa Fe County, its 'Appeal and Application for Writ of Certiorari.' On this pleading the trial court ordered and issued the writ of certiorari. Appellant, tax commission, then filed its motion for dismissal of the appeal and discharge of the writ of certiorari. The motion was heard by the trial court and in the course of the hearing appellee filed in open court its 'Appeal and Amended Application for Writ of Certiorari.' Over appellants' objection, the trial court permitted the filing of the amended pleading and treated the pending motion as applying to the amended pleading. Counsel for appellants asked appellee to elect between appeal and application for writ of certiorari and appellee elected to stand on its application for the writ. Appellee then sought to withdraw such election, over appellants' objection, and the trial court granted appellee leave to withdraw its election to proceed in certiorari alone. The trial court then denied appellants' motion to dismiss the entire proceedings for failure to state a cause of action, quashed the writ of certiorari as improvidently issued, and allowed the matter to proceed on the amended pleading.

Appellants, by answer, denied the allegations of the complaint and among other defenses alleged: (a) That the court lacks jurisdiction in the absence of a statute creating such right of appeal; (b) that appellee's pleading fails to allege facts sufficient to show that appellants, in entering the order attacked, acted either without jurisdiction or in excess of its jurisdiction; and (c) that the court lacks jurisdiction since appellee's pleadings fail to allege facts to show that the assessment and valuation made by appellants' action is so excessive as to be constructively fraudulent.

The cause proceeded to trial, at which time the trial court heard arguments on the legal defenses raised by the answer and overruled them.

The entire record of proceedings before the tax commission was introduced in evidence, together with instruments filed by appellee with appellants, as the complete record for purposes of the proceedings before the trial court. The trial court then rendered its decision, invalidating appellee's 1958 assessment and valuation; entered judgment setting aside appellee's 1958 assessment and valuation; and remanded the cause to appellants, tax commission, for further proceedings as provided by law. Appellants then prosecuted this appeal.

The pertinent findings of fact made by the trial court are That appellee's report to the tax commission for 1958 showed the original cost of its plant and properties to be $8,346,415.60.

That the tax commission for 1958 established the assessed valuation at $3,774.250.00, said valuation being 45.22% of the original cost of appellee's plant and properties, undepreciated.

That the tax commission in arriving at the assessed valuation of certain utilities computed the same on the following percentages:

Eastern New Mexico Rural Telephone Coop., 11.58% of gross book cost of plant, materials and supplies.

Pipeline companies assessed valuation varied from 15.96% to 23.9% of gross book cost of plant, materials and supplies.

Pipeline storage tanks valuation varied from 11.76% to 16.64% of gross book cost of plant, materials and supplies.

Gas utility property of Southwest Public Service Company assessed at 18.53% on depreciated book value of gas utilities properties.

That the percentages applied to the cost of appellee's plant, materials and supplies, and of other utilities of its class, have been arbitrarily arrived at by the commission and do not have any relation to the true or actual value of the tangible properties assessed.

That the tax commission's method of valuation is confiscatory and results in a deliberately devised plan of inequality.

That the tax assessors for the counties of Curry, Eddy and Lea, certified that no properties assessed by their office for 1958 were assessed in excess of one-third of the actual value.

That no facts are shown in the evidence to justify the application of different percentages to taxpayers of the same class.

Appellants raise three points upon which it relies for reversal:

I. That the trial court should have dismissed the proceeding for lack of jurisdiction over the subject matter, for the reasons that no statutory appeal was then provided; certiorari does not lie; and appellee failed to state facts sufficient to invoke the jurisdiction of a court of equity on grounds of constructive fraud.

II. That the trial court's erroneous resolution of constitutional questions allegedly presented by appellee requires reversal.

III. There is a lack of substantial evidence in the record to show that the state tax commission, in valuing appellee's taxable properties for 1958, violated the Fourteenth Amendment to the United States Constitution, Article VIII, Section 1, of the New Mexico Constitution, or any of the statutory enactments applicable thereto.

We will consider appellants' point I involving the question of whether the district court had jurisdiction to entertain an appeal from the order of the state tax commission.

Appellants contend that insofar as the proceedings purport to be an appeal, the trial court lacked jurisdiction thereof in the absence of statutory authorization. Appellants further argue that although the trial court took no definite position as to the precise nature of the action before it, that the trial court merely held that appellee's amended complaint stated a cause of action and overruled the legal defenses challenging the sufficiency of the complaint.

Our review of the record leads us to the view that probably appellee had exhausted all its administrative remedies. This would seem to bring it within the exception stated in In re Blatt, 41 N.M. 269, 67 P.2d 293, 110 A.L.R. 656, that a court of equity may review upon facts specifically set forth showing the assessment to be so excessive as to be constructively fraudulent, 'and then only upon a showing that all other remedies designated by the statute have been exhausted.'

A review of appellee's amended complaint, and particularly paragraph five thereof, also leads us to the conclusion that appellee's allegations were sufficient to state a claim for relief in equity. Michelet v. Cole, 20 N.M. 357, 149 P. 310; Pillsbury v. Blumenthal, 58 N.M. 422, 272 P.2d 326.

This, however, does not dispose of the problem before us. The question remains as to whether appellee had an adequate remedy at law. This particular matter was not argued in the briefs and normally we would not consider it. However, the questions involved in this case are of great public interest and concern the state's administration of our taxing statutes. Under these circumstances we will consider the question, even though not argued in the briefs.

In First National Bank of Raton v. McBride, 20 N.M. 381, 149 P. 353, this court said:

'* * * The complaint contains no allegation that they requested the assessor to perform any of these acts, or that they appeared before either the county or state board of equalization, and requested that the omitted property be listed and taxed, and that the undervalued property be raised to a value proportionate to that of the complainants. One of the principal difficulties with this proposition is that the defendant in the court below failed to call attention to these facts by his demurrer, and the question is not even argued in the briefs for the defendant in this court. If this were an ordinary controversy between private persons, we would feel justified and required to ignore it. But the question in this case involves a proper understanding of the law of taxation as it is to be administered in this state, and the question is one of general public interest in which the state at large is concerned. Under such circumstances, we feel justified in discussing the question from the standpoint of the general welfare of the state. It is a general and well-recognized proposition that no taxpayer may appeal to a court of equity for relief against discriminatory taxation unless he has no legal or statutory remedy which is adequate, or unless he has first exhausted his legal or statutory remedy without avail. 2 Cooley on Taxation (3d Ed.) 1412; 2 Desty on Taxation, 661, 662.'

See also Price Shoe & Clothing Company v. McBride, 20 N.M. 409, 149 P. 362.

In State ex rel. Attorney General v. Tittmann, 42 N.M. 76, 75 P.2d 701, the statute (Ch. 7, N.M.1934 Sp.Sess.), providing for the collection of the school or sales tax, was involved. Section 313 of the act sets out one of the remedies of a taxpayer who feels aggrieved by any action taken by the tax commission under the act. The aggrieved taxpayer can...