State Tax Commission v. United Verde Extension Mining Co.

• Decision Date: 04 November 1931
• Docket Number: Civil 3021
• Citation: 4 P.2d 395,39 Ariz. 136
• Parties: THE STATE TAX COMMISSION OF THE STATE OF ARIZONA, THE STATE BOARD OF EQUALIZATION OF THE STATE OF ARIZONA, E. A. HUGHES, FRANK LUKE and M. A. MURPHY, Members of Said State Tax Commission and Said State Board of Equalization, and THE COUNTY OF YAVAPAI OF THE STATE OF ARIZONA, Appellants and Cross-Appellees, v. UNITED VERDE EXTENSION MINING COMPANY, a Corporation, Appellee and Cross-Appellant
• Court: Arizona Supreme Court

4 P.2d 395

39 Ariz. 136

THE STATE TAX COMMISSION OF THE STATE OF ARIZONA, THE STATE BOARD OF EQUALIZATION OF THE STATE OF ARIZONA, E. A. HUGHES, FRANK LUKE and M. A. MURPHY, Members of Said State Tax Commission and Said State Board of Equalization, and THE COUNTY OF YAVAPAI OF THE STATE OF ARIZONA, Appellants and Cross-Appellees, v. UNITED VERDE EXTENSION MINING COMPANY, a Corporation, Appellee and Cross-Appellant

Civil No. 3021

Supreme Court of Arizona

November 4, 1931

APPEAL from a judgment of the Superior Court of the County of Yavapai. Fred W. Fickett, Judge. Judgment affirmed as amended.

Mr. K Berry Peterson, Attorney General, Mr. Charles L. Strouss Assistant Attorney General, Mr. W. E. Patterson, former County Attorney, and Mr. F. E. Flynn, County Attorney, for Appellants and Cross-appellees

Messrs Cornick & Crable, Messrs. Rice & Mathews, and Messrs Douglas, Armitage & McCann, for Appellee and Cross-appellant.

OPINION

LOCKWOOD, J.

United Verde Extension Mining Company, a corporation, hereinafter called appellee, is the owner of a valuable producing mine, situated in Yavapai county. The state tax commission, hereinafter called appellant, fixed the value of appellee's mine for the purpose of taxation for the year 1929 at $14,812,440. Appellee protested this valuation to the state board of equalization, which board, after hearing, denied the protest, and appellee, being dissatisfied therewith, appealed from such order to the superior court of Yavapai county, in accordance with the provisions of section 3065, Revised Code of 1928, paying the tax on the assessment as made under protest. A hearing was had before the court sitting without a jury, and on July 19, 1930, a judgment was rendered fixing the value of the property in dispute at $5,710,000, and ordering the excess tax paid by appellee refunded, together with six per cent. interest from the date of judgment. The state tax commission has appealed from the entire judgment, while appellee has cross-appealed on the ground that it was entitled to interest on the tax refunded from the date it was paid instead of from the date of judgment only.

The first assignment of error is that the court erred in fixing the value of appellee's producing mine at $5,710,000, for two specific reasons: (1) That it based its judgment upon the theory that the witnesses Cole and Calkins figured a value of copper at 18.11 cents per pound for all produced during the year 1929, while the evidence shows that these witnesses figured the value of copper at 17.51 cents during said period; and (2) that in determining the valuation of the mine it based its judgment on an average price of 15 cents per pound for copper over the time estimated for the exhaustion of the mine, and in so doing deducted from the valuation of $11,000,000 fixed by the witnesses Cole and Calkins the difference between the gross value of the total contents of the mine at a rate of 18.11 cents per pound for copper mined in 1929, and 16 cents per pound for copper to be mined thereafter, and the gross value of the entire contents of the mine as of January 1, 1929, at 15 cents per pound, without reducing said difference to its present worth.

Were we to decide the case on a strict construction of this assignment of error, we would be compelled to hold without further consideration of the evidence that it was not well taken, for the reason that it is predicated solely on the assumed adoption by the trial court of certain parts of the evidence as the only basis for its judgment, while the court in rendering judgment expressly stated that, though it referred to the testimony of the witnesses Cole and Calkins in its memorandum opinion, the final judgment was in no sense dependent upon the testimony of such witnesses, but was based upon all the testimony in the case, including the opinions and conflicting estimates of all the witnesses and the documentary evidence. We think, however, that in fairness to both appellant and appellee, we should consider the assignment as being in effect that the evidence taken as a whole does not support the judgment, rather than limiting our consideration to the specific parts of the evidence referred to by appellant in its subdivisions of the assignment. We discuss, therefore, the broad question as to whether or not the trial court was justified on the evidence, taken as a whole, in determining the true value for taxation of appellee's producing mine for the year 1929 to be the figure set forth in the judgment.

In passing on an assignment of this nature, we must remember that the cardinal rule of this court, adhered to without exception for many years, is that, where the evidence is in conflict, we will not substitute our opinion thereof for that of the trial court. Morgan v. Krook, 36 Ariz. 133, 283 P. 287; Peters v. Taylor, 31 Ariz. 169, 251 P. 446; First Baptist Church v. Connor, 30 Ariz. 234, 245 P. 932. And, if any reasonable evidence supporting such judgment appears in the record, the judgment will be sustained. Blackford v. Neaves, 23 Ariz. 501, 205 P. 587; Moeur v. Farm Builders Corp., 35 Ariz. 130, 274 P. 1043; Welker & Clifford v. Merrill, 32 Ariz. 90, 255 P. 991. It is further the rule that, where the amount of damages or the value of property or services is concerned, and a large number of witnesses fix varying sums as the proper estimate of the value of such damages, property or services, the trial court and jury are not bound to fix in the verdict or judgment the exact sum testified to by any one of the witnesses, especially when their conclusions are based upon a large number of factors, but may take part of the necessary factors from the testimony of one witness, and part from that of another, and a result anywhere between the highest and the lowest estimates which may be arrived at by using the various factors appearing in the testimony in any combination which is reasonable will be sustained by an appellate court. Adams v. Cohn, (Tex. Civ. App.) 28 S.W. 909; Houston, T. & L. Co. v. Hankins, (Tex. Civ. App.) 200 S.W. 237.

Section 3061, Revised Code of 1928, provides:

"The [tax] commission shall appraise and assess all patented and unpatented producing mines, within the state, and on or before the second Monday of July transmit to the several boards of supervisors the assessed valuation thereof."

Section 3068, which is the fundamental rule in Arizona applying to the valuation of all property, reads as follows:

"All taxable property must be assessed at its full cash value. The term 'full cash value,' when used in this chapter, shall mean the price at which property would sell if voluntarily offered for sale by the owner thereof, upon such terms as such property is usually sold, and not the price which might be realized, if such property were sold at a forced sale."

The first question which arises is as of what date the valuation is to be made. It is true that taxes are a lien on property, attaching on the first Monday in January of each year. (Section 3101, Rev. Code 1928.) But we think this does not necessarily imply that the valuation must be fixed as of that date, although such may be the usual custom. The general rule of law is that the valuation is to be made as of the date of the assessment itself which, as it appears, may, under our statute, be made any day between the first day of January and the second Monday in July, in the case of producing mines. Cooley on Taxation, 4th ed., par. 1062; Pennsylvania C. Co. v. Porth, 63 Wis. 77, 23 N.W. 105; In re Jones' Assessment, 105 Neb. 705, 181 N.W. 652. In fixing this assessment, the assessing body may make such investigations as may be necessary in order to determine all the facts bearing upon the true value of the property, but, no matter what methods they may use, or what evidence they have, the ultimate result must comply with the rule set forth in section 3068, supra. The question then arises whether, if an appeal is taken to the superior court, as provided in section 3065, supra, the court is confined in determining value to evidence as it existed as of the date of the assessment, or whether it may take into consideration other facts not then existing or known, in determining the true value as of the prior date.

We are of the opinion that the trial court is limited in determining the true value to evidence which was in existence at the time the assessment was made. This does not mean, of course, that it can only avail itself of the information actually known to or used by the assessing body, but it must be information which was in existence and relevant, and which could have been used if the assessing body had had knowledge thereof, and a desire to use it, and the result must be a reasonable inference from such existing and relevant evidence only. Any other rule would give rise to uncertainty, and be provocative of litigation. To illustrate A owns a piece of farming land which is assessed at $10,000. The land at the time, so far as anyone knows, is of no value except for farming purposes. He appeals to the superior court, under the provisions of section 3065, supra, and his case is heard a year later. Just before the date of trial a large and valuable oil-well is discovered on the property. Can this fact be shown to support a contention by the state that the property was under rather than over valued? B, on the other hand, has an equal acreage of similar character, except that thereon an oil-well is actually flowing in large quantities, and presumably, according to all indications then apparent, will continue producing for some time. He is assessed for $50,000, and takes the same appeal as A. Just before the date of trial the oil-well goes dry. May he show this as...