State ex rel. New Lisbon State Bank v. City of New Lisbon

• Decision Date: 05 February 1952
• Citation: 260 Wis. 607,51 N.W.2d 509
• Parties: STATE ex rel. NEW LISBON STATE BANK, v. CITY OF NEW LISBON et al.
• Court: Wisconsin Supreme Court

Page 509

51 N.W.2d 509

260 Wis. 607

STATE ex rel. NEW LISBON STATE BANK, v. CITY OF NEW LISBON et al.

Supreme Court of Wisconsin.

Feb. 5, 1952.

Rehearing Denied April 8, 1952.

Certiorari proceeding commenced on the petition of the New Lisbon State Bank to set aside the assessment of the bank's real estate for taxation. The court set aside the assessment and from the judgment entered to that effect, the city of New Lisbon appealed.

Donovan, Gleiss, Goodman, Breitenfield & Gleiss, Tomah, for appellants.

Curran & Curran, Mauston, for respondent.

FRITZ, Chief Justice.

The certiorari proceeding was commenced by the New Lisbon State Bank (hereinafter called the 'Bank') to review an assessment made for the purpose of taxation by the city of New Lisbon (hereinafter called the 'City') of the land and building owned and used by the Bank in operating its banking business in the City. The Bank alleged that the City assessor assessed the Bank's land at $2640.00 and its building thereon at $29,930.00--total $32,570.00. The Bank duly filed objections alleging that the assessments were in excess of the fair market value and contrary to law. Upon a hearing duly scheduled by the Board of Review, the Bank's president, H. J. Mortenson and its cashier, H. Gibson, testified under oath that the value of the Bank's land and its building did not exceed $20,000.00, and the sale value thereof did not exceed $18,000.00; that the building was erected in 1915 at a total cost of $12,485.00, and no improvements were made; that no mercantile building in New Lisbon, regardless of character, construction or size, was ever sold for more than $10,000.00, and that a bank building usually has a low sale value; that in previous years, the land and improvements had not been assessed for more than $12,070.00; and that the assessment of $29,930.00 was excessive and erroneous. It appears that in making the assessment the city assessor was assisted by the relied upon J. D. Semrad who in computing the value of buildings uses a formula based on the cubic space in the building and the cost per cubic foot. Semrad assessed the value of the Bank's property on the basis of 66cents per cubic foot as against 29cents and 32cents per cubic foot in computing the value of other mercantile buildings in the same business block and of like materials and costing no more at the time of construction or on a reconstruction basis.

The Bank contends that the assessment on the bank building is unfair, discriminatory, excessive and not in conformity with sec. 70.32, Stats.; that the assessor and his special assistant, Semrad, used an arbitrary formula in fixing the assessment, as evidenced by his statements before the Board of Review; that there was no evidence submitted to the Board of Review on which it could make an assessment in excess of $18,000.00; that in making the assessment the City authorities included safety deposit boxes and other bank equipment of a personal nature contrary to sec. 70.40, Stats., and included air space above the roof of approximately 10,080 cubic feet, at the rate of 66cents per cubic foot, amounting to $6,652.00. It appears that the hearing by the Board of Review was informal, neither party being represented by counsel; that some but not all of the testimony of the witnesses Mortenson, Gibson and Semrad was taken down by a stenographer, and later transcribed. The Bank claims the Board of Review disregarded testimony of Mortenson and Gibson and proceeded in an unlawful, arbitrary and wrongful manner in assessing the land at $2,640.00 and the improvements at $25,360.00; that the action of the Board was illegal and void because the undisputed testimony showed that the sale value of the improvements did not exceed $16,000.00 and there was no evidence on which a higher assessment could be fixed; that the assessment was not based on the fair market sale value as required by secs. 70.32(1) and 70.40, Stats.; and that all proceedings by the City were without jurisdiction, erroneous, illegal and of no effect for the following reasons: (a) the assessment is in excess of the full value which could ordinarily be obtained at private sale and is not supported by any evidence; (b) the valuation and assessment of petitioner's premises as compared with others is inequitable, illegal and void; (c) the Board ignored the sworn testimony of petitioner and all of the evidence; and (d) the rule of assessments applied to property of the petitioner was a different and higher rate than the rule applied to other property of the same class in New Lisbon. The City Clerk's minutes state that on September 20, 1950, the Board of Review 'granted relief to the relator in the amount of $4,570.00 on the building which made the total assessment $28,000.00.'

In its memorandum decision the trial court stated:

'The record reveals that pursuant to Sec. 70.055, Statutes, a Mr. J. D. Semrad was employed by the city to assist in making the assessment. The assessment, insofar as the record reveals, was made by Mr. Semrad and he was the only one appearing in behalf of the validity of the assessment. * * * There is no dispute as to the assessment of land at $2640.00. The building was determined by Mr. Semrad to contain 78,624 cubic feet at a unit replacement cost of 66cents per cubic foot, amounting to $51,891.00 with 'extras' of $1560.00 making his replacement or reproduction cost $53,451.00; he then determined the building to be in 70% 'condition' making a 'sound value' of $37,415.00 to this he applied an 80% 'Re-sale Factor' and thus arrived at the assessment value of $29,932.00. * * * It is apparent that Mr. Semrad placed considerable importance to the fact that the building in question was a bank. At the hearing he stated: 'I might say at the very beginning that this property, the bank building, cannot by any stretch of the imagination be compared with other buildings. This property was built for a bank.' 'I want to point this out. I think the bank is worth that amount of money in face of the fact that it is the only bank.''

Thus it is obvious that Semrad gave undue consideration to the intrinsic worth of the bank building rather than to its sale value.

Sec. 70.32(1), Stats., provides: 'Real property shall be valued by the assessor from actual view or from the best information that the assessor can practicably obtain, at the full value which could ordinarily be obtained therefor at private sale. * * *'

'Real estate must be assessed for the purpose of taxation at its fair market value, and the market value is the price which the property will sell for on negotiations resulting in a sale between an owner willing but not obliged to sell and a willing buyer not obliged to buy.' State ex rel. Hennessey v. City of Milwaukee, 241 Wis. 548, 6 N.W.2d 718, 719; State ex rel. Kenosha Office Building Company v. Herrmann, 245 Wis. 253, 14 N.W.2d 157, 910; Estate of Ryerson, 239 Wis. 120, 300 N.W. 782.

In State ex rel. Northwestern Mutual Life Insurance Co. v. Weiher, 177 Wis. 445, 188 N.W. 598, the court stated: '* * *...