Hawi Mill & Plantation Co. v. R. T. Forrest, Tax Assessor. Hind Plantation Co.

• Decision Date: 20 December 1912
• Court: Hawaii Supreme Court
• Parties: HAWI MILL & PLANTATION COMPANY, LIMITED, v. R. T. FORREST, TAX ASSESSOR. HIND PLANTATION COMPANY, LIMITED, v. R. T. FORREST, TAX ASSESSOR. HIND ESTATE (JOHN HIND, TRUSTEE,) v. R. T. FORREST, TAX ASSESSOR.

21 Haw. 389

HAWI MILL & PLANTATION COMPANY, LIMITED,

v.R. T. FORREST, TAX ASSESSOR.

HIND PLANTATION COMPANY, LIMITED,

v.R. T. FORREST, TAX ASSESSOR.

HIND ESTATE (JOHN HIND, TRUSTEE,)

v.R. T. FORREST, TAX ASSESSOR.

Supreme Court of the Territory of Hawai‘i.

Argued December 6, 1912.

Decided December 20, 1912.

APPEALS FROM TAX APPEAL COURT, THIRD JUDICIAL CIRCUIT.

Syllabus by the Court

In the supreme court a tax appeal occupies about the same position as an equity appeal. The presumption is that the decision appealed from is correct and the burden is upon the appellant to show wherein it is erroneous. Where most of the evidence is documentary, and comparatively little depends upon the credibility of witnesses the presumption may be more readily overcome than it would be in a case turning largely on the weight of testimony.

The assessment of the property of Hawi Mill & Plantation Co., Ltd., as of January 1, 1912, by the tax appeal court at $1,200,000 held, upon the evidence, too high, and reduced to $1,100,000.

J. Lightfoot for appellants.

A. A. Wilder ( Thompson, Wilder, Watson & Lymer on the brief) for appellee.

ROBERTSON, C.J., PERRY AND DE BOLT, JJ.

OPINION OF THE COURT BY ROBERTSON, C.J.

These appeals were brought by the taxpayer in each case from decisions of the tax appeal court of the third judicial circuit.

In the case of Hawi Mill & Plantation Co., Ltd., the company returned the aggregate value of its combined property as the basis of an enterprise for profit as of January 1, 1912, at the sum of $700,000. The tax assessor assessed the property at $1,300,000 and the tax appeal court fixed the valuation at $1,200,000. From the decision of that court the company appealed as to so much of the assessment as exceeded the sum of $800,000.

The argument of the case involved the question as to what weight should be given the decision of the tax appeal court, and counsel for the assessor point out that as such courts are usually comprised of business men living in the district in which the property is situated, and who have actual knowledge of the property, considerable weight ought to be accorded to their findings. In support of the contention that the burden is upon the appellant to show that the decision appealed from was erroneous, and that the valuation fixed by the tax appeal court will not be changed if it appears to be fair and just and was not based on a wrong theory or defective data, are cited the cases of Tax Assessment Appeals, 11 Haw. 235;Tax Assessor v. Wilder, 17 Haw. 425;Tax Assessor v. Wailuku Sugar Co., 18 Haw. 422; and In re Taxes Makee Sugar Co., 19 Haw. 331. In the first case cited it was said that “A tax appeal occupies about the same position as an equity appeal in this court,” and reference was made to the case of Cha Fook v. Lau Piu, 10 Haw. 308, wherein it was said (p. 312) that “while great weight has always been given to the findings of fact of the judge who first heard the case, and this should be so, because he has seen and heard the witnesses, this court has also felt at liberty to review carefully all the evidence sent up in appeal cases, and to form such conclusions upon them as seems proper.” We think the language used in 18 Haw. 422, 424, was not intended to lay down a different rule than that which likened tax appeals to equity appeals. In cases turning wholly or largely on the credibility of witnesses, or on an inspection of the property, more weight naturally would be given the findings of the court below than where the evidence is mostly documentary or consists principally of tables of figures and estimates. In the case at bar, except as to the testimony relating to the values of the several items of property which go towards making up the basis of the enterprise for profit, the evidence consists almost wholly of documents, statements and tables of figures. The presumption is that the decision appealed from was correct, and the burden is upon the appellant to point out wherein it was wrong, but the presumption in a case such as this may be more readily overcome than in cases depending to a greater extent on the credibility of witnesses and the weight of testimony.

In 1897 the Hawi plantation, then owned by Mr. R. R. Hind, was assessed at the sum of $285,500. (11 Haw. 252.) The report of the case shows, among other things, that there were 1457 acres of cane land which gave an average yield of 2.55 tons of sugar per acre, and nearly one-half of which was held under lease; that in seven years the output varied from 1250 to 2881 tons; and that the annual profits over a number of years varied from $35,000 to $88,941. In 1900 this property was valued at $265,000 upon a showing that the yield for 1899 had fallen to 1 1/5 tons of sugar per acre; that there would be no profit but a possible loss on the year's business; that the rainfall in the district was decreasing each year; that irrigation by pumping was an experiment, and that the additional lands were leaseholds held at high rental, and that it was problematical whether they would be a source of profit or loss to the plantation. The present company was incorporated in 1904 with a paid up capital of $300,000. The stock is held by the family of the late R. R. Hind and there have been no sales of shares. The deputy assessor valued the separate items of property comprising the plantation at the aggregate sum of $1,120,441.55, while the company's manager valued the same at $606,289.55. The decision of the tax appeal court discloses no express finding on this point, but a fair valuation of the property based upon the separate appraisal of the different items would probably be somewhere between the totals given by the two witnesses. But the assessment of the...