Maricopa County v. Trustees Arizona Lodge No. 2
| Decision Date | 05 July 1938 |
| Docket Number | Civil 3951 |
| Citation | 52 Ariz. 329,80 P.2d 955 |
| Parties | MARICOPA COUNTY, ARIZONA; GEORGE FRYE, JOHN A. FOOTE and C. W. PETERSON, as Members of and Constituting the Board of Supervisors of Maricopa County, Arizona; and JIM BRUSH, as Assessor of Maricopa County, Arizona, Appellants, v. TRUSTEES ARIZONA LODGE No. 2, F. & A. M., a Fraternal Organization; GRAND LODGE, KNIGHTS OF PYTHIAS OF ARIZONA; G. J. CONRAD, Guardian of the Estates of ELWIN MILLER, RICHARD MILLER and LAWRENCE MILLER, Minors; SAMUEL GRAHAM; JOHN GRAHAM; O'CONNELL BROTHERS, INC., a Corporation; LEO V. SEAMAN; H. B. ST. CLAIRE; EDMUND W. WELLS; JOHN M. WILLIAMS and BARBARA WILLIAMS, Husband and Wife; JOHN B. GANNON and EMMA B. GANNON, Husband and Wife; NEIL B. McGINNIS COMPANY, a Corporation; KORRICK DRY GOODS COMPANY, a Corporation; H. G. WATSON; COULTER MOTOR COMPANY, a Corporation; DORRIS-HEYMAN FURNITURE COMPANY, a Corporation; PACKARD PHOENIX MOTOR COMPANY, a Corporation; STUCKEY AUTO SUPPLY COMPANY, a Corporation; L. G. VINSON and B. M. PRINGLE, Doing Business as a Co-partnership Under the Name of VINSON AND PRINGLE; ARIZONA LIVESTOCK COMPANY; LLOYD B. CHRISTY as Guardian of the Estates of GEORGETTE BARSA AND GEORGE W. BARSA, Minors; ALMA GRACE SEARS and W. P. SEARS, Husband and Wife; FANNIN HARDWARE COMPANY, a Corporation; CHRIS JOHNSON; PHOENIX AUTO SUPPLY COMPANY, a Corporation. FRANCIS T. ASHBROOK; FRED L. COOLEY; L. D. CROOK; CHARLES E. GOETZ; HARVEY S. HARELSON; JOHN LANDON and MATILDA LANDON, Husband and Wife; ARIZONA COTTON GROWERS FINANCE COMPANY, a Corporation, Appellees |
| Court | Arizona Supreme Court |
APPEAL from a judgment of the Superior Court of the County of Maricopa. C. C. Faires, Judge. Judgment affirmed.
Mr John W. Corbin, County Attorney, Mr. Lin H. Orme, Jr., Deputy County Attorney Mr. Allan K. Perry, Special Counsel, for Appellants.
Messrs Snell, Strouss & Salmon, and Mr. Terrence A. Carson, for Appellees.
This is an action to determine whether revenue laws of the state require the owner of intangible personal property to pay taxes thereon.
The plaintiffs, residents of Maricopa county, brought the action alleging that they were not the owners of real estate but that they are the owners of mortgages on real estate, chattel mortgages, and of conditional sales contracts in Maricopa county, and that defendants, members of the board of supervisors of said county, have ordered the assessor of said county to list and assess such intangibles for the tax years 1935, 1936 and 1937 and to collect the taxes for 1935 and 1936 at the rate fixed for 1935 and for 1937 at the rate for 1936. No serious contention is made as to the form of the action, both parties seemingly being anxious to have determined whether under the statutes plaintiffs' property is liable for taxes. While the relief in part asked was an injunction against the said defendants to restrain them from assessing plaintiffs' property, it may be said to be in fact an action for a declaratory judgment. We shall so treat it.
The defendants demurred to the complaint on the ground that it failed to state a cause of action. This demurrer was overruled and the defendants electing to stand thereon judgment was entered for the plaintiffs enjoining the defendants from listing for taxation plaintiffs' said intangible property, and the appeal is from such ruling.
The question is one of construction of the taxation laws of the state.
The legislature has divided property liable to taxation into real estate and interests in real estate and into personal property and has subdivided personal property into tangibles and intangibles. Section 3067, Rev. Code 1928.
It is provided by the Constitution that all property in the state not exempt under the laws of the United States or under the state Constitution or by law enacted pursuant to the state Constitution, shall be subject to taxation, to be ascertained as provided by law. Section 2, Art. 9.
Section 3066, Revised Code of 1928, enumerates the exemptions from taxation, which are immaterial to the issue in this case.
Section 11, article 9 of the Constitution, provides that the manner, method and mode of assessing, equalizing and levying taxes in the state of Arizona shall be such as may be prescribed by law.
The division of personal property liable to taxation into tangibles and intangibles without any provision for the listing and equalizing of intangibles or any method for collecting the taxes thereon is what, no doubt, has confused the taxing officers of the county and state and caused them to neglect or refuse to assess property of the kind involved in this case.
We may say here that, in a general way, since the revision of the laws in 1887 up to the present time, the statutes designating property as taxable in their terms have been practically the same, and since 1887 none of the intangible property of the territory or state has over been assessed or has ever paid taxes.
The plaintiffs' property is included in the class of property designated as intangible and is subject to taxation, like all other property, at its cash value. 61 C.J. 192, sec. 156. The law ought to authorize it to be assessed and valued and equalized, the same as tangible personal property or real estate. It should provide that it be listed by the county assessor and described in the assessment roll prepared by such officer for the use of the local board of equalization in equalizing valuations.
The equalization of taxes is as essential to a valid assessment as the listing and valuing of the same by the assessor. Beginning with the Laws of 1877, chapter 33, Complied Laws of that year, down to the present time the taxpayer has been given the right to appear before equalizing boards and protest his assessment as made and returned by the assessing officer. Since statehood, or 1912, that right, we take it, is a constitutional right, for when the organic law provides that the manner, method and mode of assessing, equalizing and levying taxes shall be such as the law prescribes, it is tantamount to saying that there must be a procedure or method for equalizing valuations of property before exacting the tax.
The taxation statutes at present require, and in the past have required, the assessor to enforce the collection of personal property taxes upon a valuation fixed by him at the time he makes the assessment, unless in his judgment the taxpayer is the owner of real property of sufficient value to pay the taxes on both his real and personal property so assessed. If the assessor's judgment is that the taxpayer's real property is adequate to meet the taxes on both classes, he lists the personal property on his assessment roll and it is equalized as other property. Section 3081, Id. When the taxpayer has no realty, or it is in the judgment of the assessor insufficient of insure his personal property tax, he must submit to the value fixed and pay the tax or have his property seized and sold. In such case there is no appeal under the statute to the courts from the valuation of the property fixed by the assessor. However, if the real property owner is dissatisfied with the valuation of his personal property as fixed by the board of equalization of his county, he is given the right of appeal to the superior court of the county and to offer evidence that his property has been overvalued, and, if he establishes that as a fact, to have the valuation reduced. Section 3090, Id.
The taxpayer, except the one without realty, dissatisfied with the amount of his assessment as fixed by the state tax commission or the state board of equalization may appeal therefrom and, upon a showing in the court that his property has been assessed excessively, secure the judgment of the court reducing it to its cash value.
Thus the taxpayer's right to a hearing before the board of equalization and his right of appeal to the courts from the decision of such board is dependent upon whether he owns real estate of a value sufficient in the judgment of the assessor to pay the taxes on both his realty and personalty, otherwise, although his intangibles may be many and very valuable, he is denied a hearing as to their cash value.
Property taxes are not personal debts; they are enforced contributions to the state or taxing unit for protection and unless otherwise provided are collectible only from the property assessed. 26 R.C.L. 25, sec. 11. Under our statutes, taxes on personal property may be enforced as against the taxpayer's general property but they are not made debts of the owner in the general sense of that word. The statutory procedure for their collection is therefore exclusive. Board of Commrs. of Ness County v. Hopper, 110 Kan. 501, 204 P. 536. Under section 3081, supra, the proceedings to collect taxes on personal property when the taxpayer has insufficient realty to pay his taxes is by distraint and sale by the assessor. Under section 3112 the method prescribed is by distraint and sale by the county treasurer. The whole context of both these sections refers to tangible personal property -- property that can be seen, seized and exhibited at public auction.
Intangibles like instruments and securities for the payment of money, such as bonds and promissory notes, are not the subject of seizure and sale under execution in the absence of express statutory authority. 23 C.J. 326, sec. 47. Neither are book accounts, interest in insurance policies, judgments and shares of stock, as these are all choses in action. 23 C.J. 327, secs. 48, 49 and 50. The taxing statutes do not provide for the seizure and sale of intangibles for taxes assessed against them. In section 3081, supra, it is provided that when a person has been assessed taxes for personal property and has insufficient real property to pay...
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