Northwest Light & Water Co. v. Alexander

• Decision Date: 02 November 1916
• Parties: NORTHWEST LIGHT AND WATER COMPANY, a Corporation, Plaintiff, v. MOSES ALEXANDER, Governor, GEORGE R. BARKER, Secretary of State, JOSEPH H. PETERSON, Attorney General, FRED L. HUSTON, State Auditor, and JOHN W. EAGLESON, State Treasurer, as the STATE BOARD OF EQUALIZATION, OF THE STATE OF IDAHO, Defendants
• Court: Idaho Supreme Court

160 P. 1106

29 Idaho 557

NORTHWEST LIGHT AND WATER COMPANY, a Corporation, Plaintiff, v. MOSES ALEXANDER, Governor, GEORGE R. BARKER, Secretary of State, JOSEPH H. PETERSON, Attorney General, FRED L. HUSTON, State Auditor, and JOHN W. EAGLESON, State Treasurer, as the STATE BOARD OF EQUALIZATION, OF THE STATE OF IDAHO, Defendants

Supreme Court of Idaho

November 2, 1916

WRIT OF REVIEW-DISCRETION OF CONSTITUTIONAL OFFICERS AND BOARDS-FINDINGS OF PUBLIC UTILITIES COMMISSION AS EVIDENCE BEFORE STATE BOARD OF EQUALIZATION-BASIS OF VALUATION-APPEAL.

1. Where state elective officers are invested with a certain discretion involving the exercise of judgment in the performance of their official duties, courts have no jurisdiction by writ of review to interfere with the exercise of such discretion.

2. The State Board of Equalization is a constitutional board clothed by statute with quasi-judicial functions with regard to the assessment of certain classes of property. It is required to value and assess the properties of public utilities, and is given the exclusive power to do so. It has the right to exercise a fair discretion in using its judgment as to the valuation of such property, and when it has once acted, and there is no fraud or abuse of discretion shown in its judgment, its action is not subject to review by the courts.

3. Under our statute (sec. 66, c. 61, 1913 Sess. Laws, pp. 290 291) it is provided that the findings of the Public Utilities Com- mission with regard to the valuation of property "shall be admissible in evidence in any action proceeding or hearing, before the commission or any court, in which the commission, the state," etc., may be interested. This provision has no application to the State Board of Equalization, as that board is not a court.

4. Under the law of this state, conferring a limited jurisdiction upon the Public Utilities Commission for the purpose of placing a valuation upon all property used or useful in conducting the business of public utilities, there is no provision, either by express terms or by implication to the effect that the findings as to value made by that commission shall be binding and conclusive on the State Board of Equalization, but upon a hearing had before said board upon application made for the reduction of the assessment of a public utility for purposes of taxation, such findings are admissible in evidence, and may be regarded by said board as prima facie just, reasonable and correct.

5. The basis of valuation for the purposes of taxation and for rate-making purposes are not necessarily identical, and the record in this case shows as a matter of fact that the commission, in valuing the property of the plaintiff for rate-making purposes, did not take into consideration certain property which was assessed by the State Board of Equalization for purposes of taxation.

6. If the value of plaintiff's property, as found by the Public Utilities Commission, was not in fact its cash value, either for rate-making purposes or for purposes of taxation, an appeal is provided by statute from the findings of said commission.

[As to questions reviewable upon writ of review, see note in 40 Am.St. 29]

Original application for a writ of review. Writ quashed and proceedings dismissed.

Writ quashed and proceedings dismissed. Costs awarded to defendant.

J. F. Ailshie and J. Ward Arney, for Plaintiff.

Under the constitutional and statutory provisions and the decided law of this state, the writ of certiorari is the proper mode of appeal from the action of this board. (Orr v. State Board of Equalization, 3 Idaho 194, 28 P. 416.)

"The State Board of Equalization, by the seeming mandatory language of the Public Service Commission law . . . . declaring the conclusive effect of a finding of value of corporate property by the Public Service Commission, is not deprived of the power to equalize property of a railroad after such finding, with other property in the state, even by finally reducing such value." (Spokane & I. E. R. R. Co. v. Spokane County, 75 Wash. 72, 134 P. 689.)

The contention we make would result in a uniform valuation of public utilities at their full cash value. Valuation for taxation should not exceed valuation for rate-making.

In this case we are confronted with the extraordinary situation that we are only permitted to earn interest on our investment upon a valuation of $ 107,500 and are taxed at a valuation of $ 135,000. (State v. Clausen, 63 Wash. 535, 116 P. 7, 11.)

The value of the property is the basis of taxation, and that value is dependent upon the use to which the property is put and its benefit to its owner. (Cleveland C. C. & St. P. R. Co. v. Backus, 154 U.S. 439, 14 S.Ct. 1122, 38 L.Ed. 1046.)

J. H. Peterson, Atty. Genl., D. A. Dunning and Herbert Wing, Assts., for Defendants.

The board had jurisdiction to make such order. That is the only question before us for determination. Mere irregularity, if such exists, in the exercise of such jurisdiction cannot be reviewed in this proceeding. (McConnell v. State Board etc., 11 Idaho 652, 83 P. 494; Murphy v. Board of Equalization, 6 Idaho 745, 59 P. 715; Hannibal & St. Joe R. R. Co. v. State Board, 64 Mo. 294.)

If plaintiff's position is correct, then the action of the State Board of Equalization in assessing a power plant becomes purely clerical. (Blomquist v. Board of County Commrs., 25 Idaho 284, 137 P. 174.)

Under the constitution, assessments for taxation must be made by elective and not appointive officers. (Cooley on Taxation, 3d ed., p. 778.)

BUDGE, J. Sullivan, C. J., and Morgan, J., concur.

OPINION

BUDGE, J.

This is an original application, brought against the State Board of Equalization, for a writ of review, requiring said board to certify to this court for review all of their proceedings had and done with reference to the assessment and equalization of the property of the plaintiff corporation.

The allegations in the complaint, briefly stated, are as follows The plaintiff is a corporation organized under the laws of the state of Nevada; it has complied with the constitution and laws of this state; it is doing, and is entitled to do, business in this state; it is the owner of an electric light and power plant and electric current transmission lines located in Shoshone county, where it supplies light and power to the city of Wallace and its inhabitants. During the year 1915, upon the application of the mayor of the city of Wallace to the Public Utilities Commission, in which it was alleged that the plaintiff corporation was charging unjust and unreasonable rates for its electricity, a hearing was ordered to be had before such commission, whereupon evidence was introduced by both of the parties to said proceeding and submitted to the commission. Thereafter the value of plaintiff's property, used and useful in furnishing light and power to the city of Wallace and its inhabitants, was found and fixed by said commission at $ 107,500 for rate-making purposes. The commission thereupon established new rates to be charged by plaintiff company, which rates it required to be put into operation and effect on the first day of December, 1915. The plaintiff corporation had acquired no additional property and had made no improvements upon, or extensions of, its property since the hearing had before the Public Utilities Commission and prior to the second Monday in January, 1916; and alleges that on the convening of the defendant board as a State Board of Equalization the actual cash value of its property was $ 107,500, as found by the Public Utilities Commission. It further appears that plaintiff's property was assessed by the State Board of Equalization for the year 1915, at $ 180,000. For the purpose of having its property assessed by the State Board of Equalization at the same valuation as found by the Public Utilities Commission, plaintiff corporation, by its counsel, appeared before the State Board of Equalization on August 26, 1916, to make application for a reduction of the valuation of its property to the amount found by the Public Utilities Commission, and in support of its application it introduced the findings and order made thereon by the Public Utilities Commission, wherein the valuation of its property for rate-making purposes was found and the new schedule of rates fixed by the commission; and two certificates by its secretary, one showing plaintiff's net earnings for the first six months under the new rate schedule fixed by the Public Utilities Commission, and the other showing in detail the items of property making up the valuation found by the Public Utilities Commission; which, together with the reports made by plaintiff to said board upon blanks furnished to plaintiff by the secretary of said board, and a report made to said board in the year 1914, by the now defunct tax commission, was the sole and only proof and evidence before said State Board of Equalization; and it is alleged that said board at the conclusion of the hearing, in violation of its power, authority and jurisdiction, arbitrarily assessed plaintiff's property for the sum of $ 135,000, and erroneously, arbitrarily and contrary to the true facts did value the said property for the purpose of taxation at said sum. Plaintiff alleges that it has no right of appeal from the action of said board, nor any plain, speedy and adequate remedy at law, and that it will suffer great and irreparable injury and damage if the action of said board is not reviewed, vacated and set aside. Wherefore the plaintiff prayed that a writ of review issue out of this court, directing and requiring the defendant board to certify up to this court the record of its proceedings that the same might be examined and reviewed, vacated and set...