In re W. Union Tel. Co.

• Decision Date: 26 September 1911
• Docket Number: Case Number: 2010
• Citation: 29 Okla. 483,1911 OK 306,118 P. 376
• Parties: In re WESTERN UNION TELEGRAPH CO.
• Court: Oklahoma Supreme Court

1911 OK 306

118 P. 376

29 Okla. 483

In re WESTERN UNION TELEGRAPH CO.

Case Number: 2010

Supreme Court of Oklahoma

Decided: September 26, 1911

Syllabus

¶0 1.TAXATION--Equalization--Appeal--Right. An appeal lies to the courts from the action of equalization boards in assessing property.

2.TAXATION--State Board Equalization--Issues on Appeal. Under Laws 1910, c. 87, § 1, on appeal from the State Board of Equalization to the Supreme Court, the issues are confined to those presented to the Board of Equalization.

3.SAME--Trial De Novo. Laws 1910, c. 87, § 1 provides that no matter shall be reviewed on appeal from the State Board of Equalization to the Supreme Court which was not presented to the board. Held that, on appeal to the Supreme Court from an assessment of the property of a telegraph company by the State Board of Equalization, there being no provision for certifying up the evidence taken by the board, the issues heard before the board are triable de novo, and the evidence may be introduced by both parties; it not being confined to that before the State Board.

In the matter of the Appeal of the Western Union Telegraph Company from the assessment of its property by the State Board of Equalization. On motions for the appointment of a referee to take evidence on trial in the Supreme Court and for the dismissal of the appeal. Motion to appoint referee sustained, and motion to dismiss overruled.

Cottingham & Bledsoe (G. H. Fearons and Francis N. Whitney, on the brief), for plaintiff in error

Chas. West (C. J. Davenport, on the brief), for defendant in error

PER CURIAM.

¶1 The plaintiff in error has moved for the appointment of a referee to take evidence on a trial de novo in this court in this proceeding. The Attorney General, in his oral argument, has conceded that a referee should be appointed, if all things have been done necessary to perfect this appeal. The motion to dismiss the appeal recites as follows:

"As shown by the record filed herein, no objection was presented to or decided by said board, and the only matters sought to be reviewed here are said objections which were not presented or decided below."

¶2 Plaintiff in error insists that this appeal presents for the consideration of this court the question as to whether the property of the Western Union Telegraph Company, subject to taxation in the state of Oklahoma for the fiscal year ending June 30, 1911, was of the value of $ 411,910.05, and no more, and that this question was presented to the Board of Equalization in the form of a return in detail, consisting of 334 pages, containing a detailed statement of the items of property in each of the counties, townships, cities, school districts, etc., and a summary or recapitulation of the same, which return was properly verified. That this return contains a history of the organization of the Western Union Telegraph Company, a statement of the amount of its capital stock, the amount paid up, the amount of its property upon which it should pay taxes in Oklahoma, the par value of its stock, the highest, lowest, and average selling prices thereof, the gross receipts of all sources for the year ending June 30, 1909, expense for repairs for the year ending June 30, 1909, the amount expended for improvements for the year ending June 30, 1909, and the interest on bonds for said year. That said return was made upon a form printed and sent out by the Auditor for and on behalf of the State Board of Equalization. That on the back of each of the pages are printed instructions, over the printed signature of the Auditor, and extracts from the laws under which the return is required to be made on the form provided by the Auditor. That said return presented to the board a complete statement of every material matter going to show the value of the property of the telegraph company in the state of Oklahoma, subject to taxation, and presented the contention of the plaintiff in error that its property, subject to taxation, was worth the sum of $ 411,910.05, and no more.

¶3 The notice of the intention of the plaintiff in error to appeal, filed with the Secretary of State, is as follows:

"You are further notified that the Western Union Telegraph Company insists that in the assessment of its property for the purpose of taxation by the State Board of Equalization for the fiscal year ending June 30, 1911, many errors were committed, to its prejudice and detriment, and to the increasing unlawfully of the burdens of taxation upon its property, among others, in the following particulars, to wit:

"First. That the State Board erroneously, without evidence, without justification or excuse, increased the value of the property of the Western Union Telegraph Company as returned by it to 200 per cent. of the amount of said return. The value so returned, and which is the fair and reasonable cash value of said property, being $ 411,410. The value at which same was fixed by said State Board being $ 1,235,730. That the State Board therefore assessed the property of the Western Union Telegraph Company for taxation in the state of Oklahoma for the fiscal year ending June 30, 1911, at the sum of $ 823,820 above the actual fair cash value of said property subject to taxation in the state of Oklahoma for said fiscal year.

"Second. That the Western Union Telegraph Company returned said property to the Auditor of the state of Oklahoma, as required by the statutes and Constitution of this state, at its fair cash value; that said return gave in detail each item of property owned by the Western Union Telegraph Company in the state of Oklahoma, and subject to taxation therein, and the fair cash value thereof, and the fair cash value of the aggregate thereof; that in increasing the value so returned by the Western Union Telegraph Company the said board did so arbitrarily, without evidence and without regard to the value of said property, and that the valuation so fixed is in excess of the true actual cash value thereof, as above stated, in the sum of $ 823,820.

"Third. The Western Union Telegraph Company says that the State Board of Equalization, in arriving at the value of its property subject to taxation in the state of Oklahoma for the fiscal year ending June 30, 1911, erroneously and unlawfully considered and used as a basis the value of the stocks and bonds and securities of the Western Union Telegraph Company upon a mileage basis; that the same was neither a lawful nor a just basis, for the reason that the stocks and bonds represent every element of value of the property of the Western Union Telegraph Company, including its federal franchise and its right to an interstate business; that the apportionment of the same, on mileage basis, places the miles of lines in the state of Oklahoma upon an equal footing with the lines in the older states with a better and larger established business, and in that way subjects to taxation by the state of Oklahoma property located outside said state, and not subject to taxation therein.

"Fourth. That the property of the Western Union Telegraph Company, in other states than the state of Oklahoma, is much more valuable than it is in the state of Oklahoma, as to both wire mileage and pole mileage basis; that the earnings per mile are much larger in other states than the state of Oklahoma, both gross and net, and the property of the Western Union Telegraph Company in other states is therefore of much greater value in proportion to the mileage thereof, both wire and pole, than it is in the state of Oklahoma, and that the State Board of Equalization, in apportioning the value of said property upon a mileage basis, fixed the value of the property in the state of Oklahoma far in excess of its actual value.

"Fifth. The Western Union Telegraph Company further says that its property in the state of Oklahoma is not worth a greater sum than would result from the capitalization of its net earnings in said state, including interstate business, Oklahoma's share of the interstate and transtate business, and miscellaneous revenue, such as wire rentals, etc., and other items received or earned in the state; that the total amount so received in the state of Oklahoma for the fiscal year ending June 30, 1909, figured out on the basis hereto attached and marked 'Exhibit A,' amounts to the sum of $ 227,829.46; that the total, fair, and necessary expenses, without deducting any sum whatever for deterioration upon its property, as per statement hereto attached and marked 'Exhibit B' and made a part hereof, is the sum of $ 211,071.27, leaving a balance of revenue over operating expenses of $ 16,758.19, without any allowance whatever for depreciation on the property of the Western Union Telegraph Company within the state; that in making said calculations, as will appear from said Exhibits A and B, most liberal allowances have been made in favor of the state, giving it credit for all sources of revenue that it could have any possible claim to, and crediting it with any minimum amount of expenses chargeable to Oklahoma business; that a reasonable and fair sum for the depreciation on the property of the Western Union Telegraph Company in the state of Oklahoma per annum would be not less than the sum of $ 35,000; that so allowing said sum, there was a deficit in the revenues of said company in the state, for the fiscal year ending June 30, 1909, of $ 18,241.81; that at no period of time within the last five years has there been any actual net revenue from the earnings of the company in the state of Oklahoma after deducting the necessary and fair expenses and allowing a fair and reasonable sum for the depreciation of the property; that at no time in the history of the company has its business in the state of Oklahoma shown a clear net revenue over and above expenses and depreciation; that therefore the State Board erred in increasing the value of the property of the Western Union Telegraph Company upon the theory that its earnings in the

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