H/K Co. v. Board of Equalization of Lancaster County, 35390

• Decision Date: 26 April 1963
• Docket Number: No. 35390,35390
• Citation: 175 Neb. 268,121 N.W.2d 382
• Parties: H/K COMPANY, Appellant, v. BOARD OF EQUALIZATION OF the COUNTY OF LANCASTER of the State of Nebraska and County of Lancaster, Nebraska, Appellees.
• Court: Nebraska Supreme Court

Page 382

121 N.W.2d 382

175 Neb. 268

H/K COMPANY, Appellant, v. BOARD OF EQUALIZATION OF the COUNTY OF LANCASTER of the State of Nebraska and County of Lancaster, Nebraska, Appellees.

No. 35390.

Supreme Court of Nebraska.

April 26, 1963.

Syllabus by the Court

1. An appeal to the district court from the action of the county board of equalization is heard is equity, and upon appeal to this court is tried de novo.

2. The burden of proof is upon the taxpayer to establish his contention that his property has been unreasonably valued in an amount greater than its actual value, or that its value has not been fairly and properly equalized with all other property resulting in a discriminatory and unfair assessment.

3. The valuation of property made by an assessor for taxation purposes is presumed to be correct if it reflects his own information and judgment.

4. However, if he does not inspect the property and accepts the valuation fixed by another person, this presumption does not exist.

5. All tangible property and real property in this state, not expressly exempt therefrom, shall be subject to taxation, and shall be valued at its actual value which shall be entered opposite each item and shall be assessed at thirty-five percent of such actual value. Such assessed value shall be taken and considered as the taxable value on which the levy shall be made. Section 77-201, R.R.S.1943.

6. Actual value of property for taxation shall mean and include the value of property for taxation that is ascertained by using the following formula where applicable: (1) Earning capacity of the property; (2) relative location; (3) desirability and functional use; (4) reproduction cost less depreciation; (5) comparison with other properties of known or recognized value; and (6) market value in the ordinary course of trade. Section 77-112, R.R.S.1943.

7. The Constitution of Nebraska requires taxes on all tangible property to be levied by valuation, uniformly and proportionately. Art. VIII, § 1, Constitution of Nebraska.

Mason, Knudsen, Dickeson & Berkheimer, Lincoln, for appellant.

Paul Douglas, County Atty., William D. Blue, Ronald D. Lahners, Floyd A. Sterns, Walter D. Weaver, Lincoln, for appellees.

Heard before WHITE, C. J., and CARTER, MESSMORE, YEAGER, SPENCER, BOSLAUGH and BROWER, JJ.

SPENCER, Justice.

This is an appeal from a judgment of the district court involving issues of tax valuation and equalization for the tax year 1959 on improved commercial property in Lincoln, Lancaster County, Nebraska.

The appellant, H/K Company, a Nebraska corporation, which will hereinafter be referred to as plaintiff, is the owner of two separate but contiguous properties, referred to as tracts I and II. Tract I is described as Lot 1, and the east 10 feet of Lot 2, Original City, Block 39, Lincoln, Lancaster County, Nebraska. Tract II covers the west 40 feet of Lot 2 and all of Lot 3, Original City, Block 39, Lincoln, Lancaster County, Nebraska.

The county assessor of Lancaster County determined the actual values of the land and improvements for tax purposes for the year 1959 to be as follows:

                               Tract I  Tract II     Total
                Land          $106,270   $74,875  $181,145
                Improvements    62,710   117,885   180,595
                TOTALS        $168,980  $192,760  $361,740
                

The county assessor determined the assessments on these values to be as follows:

                              Tract I  Tract II     Total
                Land          $33,475   $23,585   $57,060
                Improvements   19,750    37,130    56,880
                TOTALS        $53,225   $60,715  $113,940
                

Lot 1 is the corner lot at the southwest corner of Fourteenth and P Streets in the city of Lincoln, Nebraska, with a frontage on Fourteenth Street of 142 feet and a frontage on P Street of 50 feet. The improvements during 1959 consisted of an old three-story brick building with wood joists. The building was in poor condition but was being rented. The second and third floors of the building were maintained as a rooming house. The first floor of the building was leased to small stores and shops. The east 10 feet of Lot 2 consisted of a stairway and entrance to another building which was situated on the balance of Lot 2 and on Lot 3 which adjoin Lot 1 on the west. The improvements on Lots 2 and 3 are a two-story building which during 1959 was occupied by a cafeteria, a sport shop, and the offices of the American Bus Lines which were on the second floor. The stairway on the east 10 feet of Lot 2 led to the offices of the American Bus Lines.

The district court found that the valuation of the building improvements on Tract I, as determined by the county assessor, was unreasonable, excessive, and arbitrary, and reduced the actual value of the improvements to $25,835, which, allowing for adjustment for the stairway, is the actual value of the improvements as determined by the plaintiff's expert. The district court further determined that the actual value of the land in tract I, as determined by the assessor, was arbitrary and unreasonable because evidence did not disclose that the same percentage of reduction had been applied to tract I as to tract II, and reduced the actual value of the land to $89,498, which is a little over $20,000 above the figure given by plaintiff's expert. It then found that the assessed value should be determined by taking 31.5 percent of the actual value of the said property, so that the assessed value of the land in tract I was reduced to $28,191.87, and the assessed value of the improvements to $8,138.03, making a total assessed value of tract I of $36,329.90.

No change was made by the district court in the actual or assessed values of tract II, so that the total assessed value of both tracts I and II was determined by the district court to be $97,044.90.

Plaintiff perfected an appeal to this court, alleging five assignments of error, which may be grouped as follows: The court erred (1) in failing to equalize the assessments with other property in Lancaster County; (2) in determining the assessed values of tracts I and II exceeded $65,972; and (3) in refusing to admit certain evidence of ratio studies.

The evidence discloses that this property was purchased by the plaintiff in June 1959, for a total consideration of $275,000. For the purpose of securing a loan on the property, the plaintiff was required to obtain two independent appraisals of the loan value of the property. One of these appraisers testified for the plaintiff. It was his opinion that the fair market value of the property when he appraised it in 1959 was $280,590, which, broken down for comparison with tracts I and II, would be approximately as follows:

Tract I Tract II Total

Land $69,000 $81,000 $150,000

Improvements 20,590 110,000 130,590

TOTALS $89,590 $191,000 $280,590

E. T. Wilkins & Associates completed a mass appraisal of all urban and rural property in Lancaster County in the spring of 1954. This appraisal was undertaken to equalize the assessed valuation on real estate and improvements in Lancaster County. All the findings by the Wilkins company were turned over to the county assessor of Lancaster County. There is extensive testimony as to the methods employed by the Wilkins company to determine the values fixed by it. Because the actual value figures used by the assessor are the same as the Wilkins company figures, the plaintiff complains that the assessor made no independent appraisal, but merely accepted the Wilkins' figures. However, the testimony of the county assessor is that the actual figures on his books are based on his own opinion of the valuations. When the Wilkins appraisers were present on a portion of this property in 1954, he was there with them. When the data was put on the Wilkins' card, he checked each item on the card. He did not personally inspect the property in 1959, but did send his chief deputy to do so, and the deputy reported back to him that there had been no changes in the property.

An appeal to the district court from the action of the county board of equalization is heard in equity, and upon appeal to this court is tried de novo. See LeDioyt v. County of Keith, 161 Neb. 615, 74 N.W.2d 455. The burden of proof is upon the plaintiff to establish its contention that its property has been unreasonably valued in an amount greater than its actual value, or that its value has not been fairly and properly equalized with all other property resulting in a discriminatory and unfair assessment. See Newman v. County of Dawson, 167 Neb. 666, 94 N.W.2d 47.

Generally, the valuation of property made by an assessor for taxation purposes is presumed to be correct if it reflects his own information and judgment. However, if he does not inspect the property and accepts the valuation fixed by another person, this presumption does not exist. See Baum Realty Co. v. Board of Equalization, 169 Neb. 682, 100 N.W.2d 730.

It is the plaintiff's position that the valuations fixed for tracts I and II are those of the Wilkins company and not those of the assessor. The assessor did inspect the property personally, checked the individual items appearing on the Wilkins' cards which went into the valuation, agreed with the figures, and adopted them as his own. While the assessor did not inspect the property in 1959, he did send his chief deputy to do so. We do not accept the plaintiff's premise that the county assessor gave no opinion based on his own analysis. We find the evidence to indicate otherwise.

To prove the property to be valued in an amount greater than its actual value, plaintiff proved its sale price in 1959, and produced witnesses who fixed its actual value...