State ex rel. Ayers v. Cline

• Decision Date: 18 December 1985
• Docket Number: No. 16911,16911
• Citation: 342 S.E.2d 89,176 W.Va. 123
• Court: West Virginia Supreme Court
• Parties: STATE of West Virginia ex rel. Ernest F. AYERS, Joe Adams and E.M. Cool, as Members of the County Commission of Webster County, Martha Dean, as Superintendent of the Webster County Schools; Harold B. Carpenter, Charles B. Cool, Sue Talbott, William R. Armentrout and Ken Johnson, as Members of the Board of Education of Webster County; and Caroline S. Clayton, as Sheriff of Webster County, West Virginia v. The Honorable Danny O. CLINE, as Judge of the Fourteenth Judicial Circuit, and East Kentucky Energy Company.

Page 89

342 S.E.2d 89

176 W.Va. 123

STATE of West Virginia ex rel. Ernest F. AYERS, Joe Adams and E.M. Cool, as Members of the County Commission of Webster County, Martha Dean, as Superintendent of the Webster County Schools; Harold B. Carpenter, Charles B Cool, Sue Talbott, William R. Armentrout and Ken Johnson, as Members of the Board of Education of Webster County; and Caroline S. Clayton, as Sheriff of Webster County, West Virginia v. The Honorable Danny O. CLINE, as Judge of the Fourteenth Judicial Circuit, and East Kentucky Energy Company.

No. 16911.

Supreme Court of Appeals of West Virginia.

Dec. 18, 1985.

Dissenting Opinion April 4, 1986.

Syllabus by the Court

1. The statutory scheme for relief from an excessive property tax assessment is for an owner of real property contesting the assessed value thereof to pay the tax assessment under protest, to appeal to circuit court and if the assessment is reduced, to obtain a refund of the overpayment. Payment may be withheld during an appeal in such a case only until the date of the sheriff's sale, or, at the very latest, until the end of the redemption period after such sale has occurred.

2. The statutory method of paying a property tax assessment under protest pending judicial review of the assessed value of real property is an adequate remedy at law precluding an injunction of a sheriff's sale of real property for nonpayment of taxes.

3. "A suit in equity will not lie to restrain the collection of a tax on the sole ground that it is improper." Syl. pt. 1, Chris[t]ie v. [Town of] Malden, 23 W.Va. 667 (1884).

4. "A writ of prohibition shall lie as a matter of right in all cases of usurpation and abuse of power, when the inferior court has not jurisdiction of the subject matter in controversy, or, having such jurisdiction exceeds its legitimate powers." Syl. pt. 1, State ex rel. UMWA International Union v. Maynard, 176 W.Va. 131, 342 S.E.2d 96 (1985).

Jack Alsop, Pros. Atty., Webster Springs, for appellants.

Callaghan & Ruckman, Richwood, for East Kentucky Energy.

McHUGH, Justice:

In this prohibition proceeding the petitioners, who are members of the County Commission of Webster County, West Virginia, members of the Board of Education of Webster County, the Superintendent of Schools for that County, and the Sheriff of that County, seek a writ from this Court prohibiting the Circuit Court of Webster County, one of the respondents [hereinafter "the circuit court"], from enforcing its injunction against the sale, for nonpayment of real property taxes, of real property in that County owned by East Kentucky Energy Company, the other respondent in this proceeding [hereinafter "the taxpayer"].

I

The taxpayer is the owner of the fee and mineral estates in Webster County tracts, totalling 7,374 acres, more or less. The taxpayer purchased the same, by deed dated July 15, 1982, from Allegheny Pittsburgh Coal Company for $29,842,500.00.

For the year 1983, the property was assessed in the name of Allegheny Pittsburgh Coal Company at about $12,500,000.00, or 50% of the purchase price paid by Allegheny Pittsburgh Coal Company in 1975. For the year 1984, the property was assessed in the name of the taxpayer at $14,921,250.00, or 50% of the purchase price paid by the taxpayer in 1982. The 1985 assessment was the same as the 1984 assessment.

Allegheny Pittsburgh Coal Company timely contested the 1983 assessment ¹ and the taxpayer timely contested the 1984 and 1985 assessments before the County Commission of Webster County sitting as the Board of Equalization and Review. The taxpayer introduced evidence before such Board on the mineability of the coal in question. The evidence showed that the taxpayer was assessed at about $3,000.00 per acre, based upon appraised values determined from the recent purchase price paid by the taxpayer. The evidence also showed that other taxpayers in the county having allegedly comparable property were being assessed at about $60.00 per acre. Finally, the evidence showed that the State Tax Department in the year 1975 had appraised the coal properties in Webster County at $360.00 per acre. After reviewing this evidence the Board of Equalization and Review affirmed the assessments.

Thereafter, the taxpayer and its predecessor in title, Allegheny Pittsburgh Coal Company, timely appealed to the circuit court. The taxes for the years 1983 and 1984 were not paid pending a ruling on the appeals. By an order entered on November 1, 1984, the circuit court enjoined the sheriff from selling, on November 4, 1984, the taxpayer's properties in Webster County for nonpayment of taxes for the year 1983, due to the imminency of the circuit court's ruling on the taxpayer's appeal.

At a hearing held on April 19, 1985, the circuit court informed counsel for the parties that it intended to reduce Allegheny Pittsburgh Coal Company's assessment for the year 1983 and the taxpayer's assessments for the years 1984 and 1985 to the values determined in 1975 by the State Tax Department. A final order was not, however, entered until more than seven months later.

In May, 1985, counsel for the taxpayers tendered to the Prosecuting Attorney for Webster County a check for $44,442.88, payable to the Sheriff of Webster County, in payment of the 1983 and 1984 real property taxes. This check was not to be delivered to the sheriff immediately but was to be held "in escrow" pending entry of the circuit court's order. The amount of the taxes to be paid by the check was apparently computed using the State Tax Department's 1975 appraisal.

As she had done a year earlier for the 1983 taxes (prior to the November 1, 1984 injunction), the sheriff again advertised the taxpayer's properties for sale at public auction, this time to be held on November 18, 1985, for nonpayment of 1983 and 1984 taxes amounting to approximately $488,000.00.

Upon the taxpayer's motion, and after a hearing held on October 24, 1985, the circuit court, over the petitioners' objections, again enjoined the sheriff's sale of the properties, for nonpayment of 1983 and 1984 taxes, on the condition that the taxpayer post a bond in the amount of $500,000.00. The taxpayer subsequently posted such a bond. On November 1, 1985, the petitioners filed their petition for a writ of prohibition.

On November 22, 1985, which was after we had issued a rule to show cause herein, the circuit court entered a final order on the merits of the taxpayer's appeal, fixing the appraised values of the properties in question (with a couple of minor exceptions) at $360.00 per acre, the value determined by the State Tax Department in 1975 for coal tracts in Webster County. The circuit court ordered the county assessor to issue new tax tickets to the taxpayer, using the appraised values set by the circuit court, and applying the 60% assessment ratio and the proper levy rate. ²

On November 29, 1985, the circuit court filed an answer and the taxpayer filed a motion to dismiss, alleging that this case was mooted by the circuit court's entry of its final order, on November 22, 1985, on the merits of the taxpayer's appeal.

II

At the outset we disagree with the respondents' assertion that this matter has been mooted by the entry of a final order on the merits of the taxpayer's appeal reducing the assessments and directing the issuance of new tax tickets "forthwith." In syllabus point 1 of State ex rel. M.C.H. v. Kinder, 173 W.Va. 387, 317 S.E.2d 150 (1984), this is Court held:

A case is not rendered moot even though a party to the litigation has had a change in status such that he no longer has a legally cognizable interest in the litigation or the issues have lost their adversarial vitality, if such issues are capable of repetition and yet will evade review.

See also Marshall v. Casey, 174 W.Va. 204, 205-206, 324 S.E.2d 346, 347-48 n. 4 (1984) (collecting cases). The possibility that a circuit court in the future may, in the absence of our ruling herein, enjoin a sheriff's sale of property for nonpayment of taxes in a valuation case, coupled with the important public interest in tax revenues, lead to the conclusion that this case is an appropriate vehicle to provide a definitive resolution of the question presented in this case, in order to furnish guidance on an issue capable of repetition.

III

The issue presented in this case is whether a circuit court may enjoin the sale of real property by a sheriff for the nonpayment of ad valorem taxes pending the court's ruling on an appeal by the owner of the property claiming that its property has been overvalued. We hold that the court may not enjoin such sale.

Within 30 days after the county commission (sitting as a board of equalization and review) adjourns (on February 28), that is, by March 30, a taxpayer who appeared before the board and contested the valuation of his property may appeal to the circuit court for review of the valuation. W.Va.Code, 11-3-25 [1967]. This statute provides for the circuit court to determine the true and actual value and states: "If it be ascertained that any property has been valued too high, and that the owner has paid the excess tax, it shall be refunded to him, and if not paid he shall be relieved from the payment thereof."

Similarly, W.Va.Code, 11-3-26 [1931] provides as follows in the case of an erroneous assessment:

Whenever the circuit court, on appeal, shall grant relief to any such applicant against the taxes, or any part of them, assessed against him either on the land or the personal property books, an order shall be made by such court exonerating such applicant from the payment of so much of such taxes as are erroneously charged against him, if the same have not been paid; and if paid, that the sum so erroneously charged by refunded to him. Such order, delivered to the assessor, sheriff or other collecting officer shall restrain him from collecting so much as is erroneously charged, and, if the same has been already collected,...