In Re Hancock County Federal Savings & Loan Ass'n.
| Decision Date | 02 March 1943 |
| Docket Number | No. 9382.,9382. |
| Citation | 25 S.E.2d 543 |
| Court | West Virginia Supreme Court |
| Parties | In re HANCOCK COUNTY FEDERAL SAVINGS & LOAN ASS'N. |
Rehearing Denied May 11, 1943.
1. Under Section 1, Article X of the Constitution of West Virginia, all property not exempt by legislative action thereunder, is required to be taxed.
2. Section 1, Article III of Chapter 118, Acts of the Legislature, 1939, relating to the assessment of property of building and loan and federal savings and loan associations for purposes of taxation, properly construed, requires that the surplus, undivided profits and reserves of such association be taken into consideration and included in the assessment of its property by the assessor of the county in which its principal office is located.
Error to Circuit Court, Hancock County.
Proceeding in the matter of tax assessments against Hancock County Federal Savings and Loan Association. From a judgment reducing the assessment to $2,267, 839.96, the State Tax Commissioner appeals.
Reversed and assessment fixed at $2,838, 700.
William S. Wysong, Atty. Gen, Kenneth E. Hines, Asst. Atty. Gen, and Howard J. Gibson, of Charleston, for petitioner.
W. W. Ingram, of Chester, and Handlan, Garden & Mathews, of Wheeling, for appellee.
This appeal involves the interpretation and application of Section 14-a, Article 3, of Chapter 118 of the Acts of the Legislature, 1939, relating to the assessment for the purposes of taxation of the property of building and loan associations and federal savings and loan associations. The particular question at issue is the assessment for the year 1941 of the property of the Hancock Federal Savings and Loan Association, the principal office of which is in Hancock County, West Virginia.
The assessment complained of was made upon a consideration of the following statement stipulated in the record, and was reached by an examination of the books of the loan association. We copy the stipulation:
"It is stipulated and agreed by counsel representing the respective interests in these proceedings that instead of the original return used by the Assessor in making up the personal property books for 1941, and testified to by said witnesses Robert A. Douglass and Kenneth Hill, being filed as an exhibit herein, that same be copied into and made part of the record, and read and considered as part of the evidence in this cause, which said return reads as follows:
Name--Hancock County Federal Savings and Loan Association of Chester--Hancock County.
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|Capital Stock Optional saving Sharer |$1,887, 689.96 | |
|Shares | | |
|------------------------------------------|---------------|------------------|
|Free Shares |658, 300.00 |$2,545, 989.96 |
|------------------------------------------|---------------|------------------|
|Other Capital Surplus |360, 540.33 | |
|------------------------------------------|---------------|------------------|
|Undivided Profits |145, 735.05 | |
|------------------------------------------|---------------|------------------|
|Federal Ins. Reserve |140, 000.00 | |
|------------------------------------------|---------------|------------------|
|Uncollected Interest |4, 627.97 |650, 903.35 |
|------------------------------------------|---------------|------------------|
|Total | |$3,196, 898.31 |
|------------------------------------------|---------------|------------------|
|Deductions | | |
| |278, 150.00 | |
|Assessed value of real estate | | |
|------------------------------------------|---------------|------------------|
|Other Deductions |30, 000.00 |Total |
|------------------------------------------|---------------|------------------|
|Borrowed Money |50, 000.00 |358, 150.00 Deduc.|
|------------------------------------------|---------------|------------------|
|Net Value |$2,838, 743.31"| |
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Another stipulation, not entirely clear to us, immediately follows the above, and reads:
We proceed on the assumption that these stipulations represent the contentions of the parties, although the record discloses that the association claims that there should be a further deduction of $139,162.02 representing the difference between the amount at which its real estate was carried on its books, and its assessed value, and at one point in the testimony the claim is made that the assessment value should be fixed at $1,332, 152.77. The principal points of difference are $650,903.35, being the aggregate of surplus, undivided profits, reserves and uncollected interest, and the arbitrary deduction of thirty per cent from what is termed the "Net Capital Value" of the stock or shares being assessed, and amounting to $656,651.99, and based on the contention that other property in Hancock County, particularly real estate, was not assessed in excess of seventy per cent of its value.
The assessor, disregarding the odd figures under $100.00, assessed the property of the loan association at $2,838, 700.00 under classification No. 1. An appeal from this assessment was prosecuted before the county court, acting ex officio as a Board of Review and Equalization, which body sustained the action of the assessor. The Circuit Court, on appeal from the board's ruling, reduced the assessment made by the assessor to the sum of $2,267, 839.96, or a net reduction of $570,803.35, by disallowing the deductions of $30,000.00 and $50,000.00 designated in the stipulated statement above as "Other Deductions", and "Borrowed Money", and allowing a deduction of $650,903.35 covering the items of surplus, undivided profits, reserves and uncollected interest. From this finding and order, the State Tax Commissioner prosecutes this appeal.
The question of the assessment of the property of building and loan associations has been twice before this Court. In 1896, in Ohio Valley B. & L. Ass'n v. County Court, 42 W.Va. 818, 26 S.E. 203, we held: In Charleston Federal Savings & Loan Ass'n v. James, 120 W.Va. 781, 200 S.E. 845, we held: The decision in this case was reached on a consideration of decisions from other jurisdictions, rendered subsequent to the decision first above referred to, and by reasons of fundamental changes in our tax laws which, in our opinion, made our first decision inapplicable. Charleston Federal Savings & Loan Ass'n v. James, supra, was decided in December, 1938, and the Legislature, at its session next following, enacted a statute specifically providing for the assessment of the property of building and loan and federal loan associations. The pertinent provisions of this statute read as follows:
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