May Dept. Stores Co. v. State Tax Commission, 45943

• Decision Date: 13 January 1958
• Docket Number: No. 45943,No. 2,45943,2
• Citation: 308 S.W.2d 748
• Parties: The MAY DEPARTMENT STORES COMANY, a Corporation, Respondent, v. STATE TAX COMMISSION of Missouri, James M. Robertson, John A. Williams, J. Ralph Hutchison, Commissioners of the Missouri State Tax Commission; Phil G. Deuser, Assessor, St. Louis County, Missouri; Willis G. Benson, Collector, St. Louis County, Missouri; J. D. Massey, Collector, City of Clayton, Missouri, Defendants, School District of Clayton, Intervenor, Appellants
• Court: Missouri Supreme Court

Page 748

308 S.W.2d 748

The MAY DEPARTMENT STORES COMANY, a Corporation, Respondent, v. STATE TAX COMMISSION of Missouri, James M. Robertson, John A. Williams, J. Ralph Hutchison, Commissioners of the Missouri State Tax Commission; Phil G. Deuser, Assessor, St Louis County, Missouri; Willis G. Benson, Collector, St Louis County, Missouri; J. D. Massey, Collector, City of Clayton, Missouri, Defendants, School District of Clayton Intervenor, Appellants.

No. 45943.

Supreme Court of Missouri, Division No. 2.

Jan. 13, 1958.

John M. Dalton, Atty. Gen., Donal D. Guffey, Asst. Atty. Gen., for appellant State Tax Commission.

William Kline, St. Louis County Counselor, Clayton, John F. Molloy, Asst. County Counselor, for appellants Phil G. Deuser, Assessor, Willis W. Benson, Collector, St. Louis County.

F. William Human, Jr., City Atty. Clayton, for J. D. Massey, Collector of City of Clayton.

Ziercher, Tzinberg, Human & Michenfelder, by Erwin Tzinberg, Clayton, and George E. Schaaf, for School Dist. of Clayton.

Lewis, Rice, Tucker, Allen & Chubb, John Torrey Berger, J. L. Pierson, Stanford T. Meyer, St. Louis, for respondent.

EAGER, Judge.

This is an appeal from a judgment of the Circuit Court of St. Louis County, which, on review, set aside a decision of the State Tax Commission. Other component parts of the judgment will be referred to later. The case involves the assessment of a tract of land and improvements in Clayton, St. Louis County, which comprise the Famous-Barr store. We shall refer to the owner, May Department Stores Company, as the plaintiff, since it prosecuted the review proceedings. The defendants are the members of the State Tax Commission, the Assessor and Collector of St. Louis County and the Collector of the City of Clayton. The School District of Clayton was permitted to intervene, and it has joined with all the defendants in this appeal. Motions for new trial were filed and overruled and the appeals were duly taken.

The State Tax Commission heard the matter on appeal from the St. Louis County Board of Equalization, under authority of Sec. 138.060 (all statutory references are, unless otherwise indicated, to RSMo 1949 and V.A.M.S.); it heard certain oral evidence, which is included in our transcript, and it received, upon agreement of the parties, the oral evidence and exhibits offered and received in three appeals by other parties heard on the same day (September 12, 1955). We shall therefore consider as our record all this evidence, together with the other proceedings certified here by the Commission. The tract in question is described as follows: 'Survey 378 2 78/270 x 222/280 South on Forsyth, West on Jackson East University City, North Maryland 1.65 Acres. 106-CII School District and Code.' The improvements consist of a four-story reinforced concrete building, constructed in 1947-8. As of January 1, 1955, this real estate was assessed at: land, $16,830; improvements, $1,011,700. In 1954, the State Tax Commission determined, wholly or partly from a study of a 'Real Estate Ratio Study,' which was based on certain reported sale in 1953 and on 1954 real estate assessments, that an equalization of valuations as between counties was necessary; such is authorized and required by Sec. 138.390. This ratio study showed that in St. Louis County, based on 581 reported 1953 sales, 'Urban Property' was assessed (on the average) at 18.26% of actual value; it further showed, on the basis of 28 reported 1953 sales, that 'Rural Property' was similarly assessed at 15.38%; the study further showed that urban and rural real estate in certain other counties was assessed at even smaller percentages, but the majority at greater percentages; in all but four of the 115 counties and the City of St. Louis, rural real estate was assessed at higher percentages. The record also shows in detail the aggregate assesed valuations reported by St. Louis County for 1954 and 1955, and the relative aggregate valuations (classed as 'town lots' and 'farm lands') as fixed in 1953 and 1954 for each county by the local assessors and by the State Tax Commission. We shall hereafter refer to the State Tax Commission as the Commission. In June, 1954, the Commission determined that it would equalize in that year certain of the lowest counties, and on July 8, it issued percentage increases accordingly to 14 counties; it stated in its record that it was expected to take 'at least two or three years to complete the equalization,' but that the intent was to accomplish such at the earliest possible date. On July 6, 1955, the Commission ordered percentage increases on real estate in 26 additional counties, including St. Louis County; in that connection it found: '* * * that the following percentages of increase and decrease when applied to the valuations of the real and tangible personal property, by classes, of the respective counties will produce a valuation representing the true value of such property in money; * * *' The increases so ordered for St. Louis County were 85% on 'land,' and 60% on 'town lots,' which increased the aggregate St. Louis County land valuation to $769,891,919. This increase was in the form of an order that such percentages of increase be applied to the aggregate valuations in the respective counties. When the Commission's order of increase was received, the St. Louis County Board of Equalization (which we shall refer to as the County Board), on July 19, 1955, ordered the county clerk to adjust the valuations of real estate accordingly, and the record shows that the new aggregate figures were tnered on his 'aggregate abstract,' Form 11. Presumably the 60% increase was never specifically applied on the books to the land value of the tract in question, for reasons later shown.

In April, 1955, a special committee of the St. Louis County Council had recommended strongly against any blanket increase in real estate valuations and had specifically recommended a comprehensive revaluation by recognized appraisers, to begin immediately. The committee had met with the State Tax Commission and had been informed of the latter's intentions; at this meeting the Commission had also stated, as shown in the report, that members of its staff had visited each of the 26 counties in which 1955 increases would be made, verifying the sales and assessment figures, and that it did not have the financial means or the personnel to accomplish a state-wide equalization within a one-year period and had therefore proposed a three-year program. This committee report is in the present record without objection; it emphasized that a blanket increase would further aggravate already existing inequalities in assessments, particularly in view of the rapid and 'unplanned' growth in St. Louis County.

It further appears that the County Board had made some investigation of land values in the City of Clayton, with assistance from the city or from individuals in Clayton (whether official or unofficial we cannot tell) and that it determined to reassess the land values (only) in its 'commercially zoned' area in an effort to fix such assessments at 30% of actual value. This was said to be appropriate because that land had increased in value to a 'far greater' extent than the land in any other commercial area. The Board did not attempt any general revaluation for 1955 in any other area or areas because of the lack of time, facilities and money to do so, although it realized that a comprehensive reassessment of all county real estate was the only completely fair and equitable method, and it had approved the report of the St. Louis County Council Committee. Thus, on July 21, 1955, the County Board entered an order specifically increasing the assessed land valuations of several hundred tracts in the 'commercially zoned area of Clayton,' which included an increase in the land value of the tract here in question from $16,830 to $148,500; it was further ordered: '* * * that the assessments increased in this order shall not be included in the overall increase of County assessments made in the Order of the County Board of Equalization dated Tuesday, July 19th, 1955.' Hearings were set for July 29, 1955, and publication was ordered. It seems to be agreed that this order was published in two county newspapers but that no notice was mailed to or served upon plaintiff. The 60% increase was applied to plaintiff's (and other) improvements, for the final assessment on the tract was: land, $148,500; improvements, $1,602,720. The net result of the specific Clayton increases was said to be an aggregate increase in the valuations of these tracts from $1,739,430 to $6,914,680, or a net increase of $5,175,250. We note from an exhibit that the total aggregate increase in all 'town lots' was $4,726,516; it is apparent that the valuations on some property of this class elsewhere must have been reduced. The exact amounts are not material here; the increase (from either standpoint) was in the approximate amount of five million dollars. The new total aggregate of the values of 'land' and 'town lots,' after this increase, exceeded the total aggregate ordered by the Commission by the sum of $7,837,071. A substantial part of the total excess reflected new property added to the rolls.

We are unable to determine whether plaintiff actually appeared before the County Board on this increase; its appeal recited that it did. In any event it duly took an appeal to the Commission pursuant to Sec. 138.430, and a hearing was had on September 12, 1955. The evidence showed, among other things (omitting facts already related), that: the county sends out annually approximately 240,000 real estate tax bills; that there are 95 different municipalities in the county; that there are disparities in valuations, and the chief deputy assessor 'imagined' that some tracts were assessed at less than 10-12% of market value; that, in the opinion of the County Board, the commercially zoned property in...