State v. Oliver Iron Mining Co.
| Decision Date | 31 January 1934 |
| Docket Number | No. 30723.,30723. |
| Citation | 198 Minn. 385,270 N.W. 609 |
| Parties | STATE v. OLIVER IRON MINING CO. et al. |
| Court | Minnesota Supreme Court |
OPINION TEXT STARTS HERE
Dec. 11, 1936.
Appeal from District Court, St. Louis County; Martin Hughes, Bert Fesler, Edward Freeman, C. R. Magney, and Henry J. Grannis, Judges (Hughes, J., dissenting).
In the matter of proceedings to enforce payment of taxes on real estate delinquent January, 1934, for County of St. Louis by the State against the Oliver Iron Mining Company and others. After order for judgment, the State and the defendants filed motions for amended findings or for new trials, and, from orders denying their motions, all parties appeal.
Affirmed in part and reversed and remanded in part.
Syllabus by the Court.
1. The rule guiding this court in the review of findings of the trial court in tax proceedings is the same as that applied in ordinary civil actions. To justify interference here with such findings it must appear that they are clearly and manifestly against the evidence.
2. By 1 Mason's Minn.St.1927, § 2120, the right is given a taxpayer to defend against an assessment upon the ground that his property ‘has been assessed and taxed at a valuation greater than its real and actual value.’ And, while the burden rests upon him to show such overvaluation, this burden is met when competent and credible evidence comes into the case sufficient to overcome the prima facie case made for the State by introduction of the delinquent tax list.
3. The basis for assessment of property of the type involved here is fixed and defined by 1 Mason's Minn.St.1927, §§ 1992 and 1992-1. The ultimate question is: What was the sale or market price of each of the iron mines here involved at the time of the assessment? The evidence established that there were not sufficient sales to establish a sale or market price. Under such circumstances the court properly heard and considered the judgment and opinion of men acquainted with these properties, their adaptability for use, and all other facts and circumstances having to do with value.
4. The court as to 2 mines found actual values in less amounts than as assessed by the tax commission. Held that such finding is sustained by the evidence and as such is binding. The owner is entitled to have his assessment so reduced as to avoid overvaluation.
5. Evidence sustains findings made by court below except as to two mines.
DEVANEY, C. J., dissenting. H. H. Peterson, Atty. Gen., Frederic A. Pike, Asst. Atty. Gen., and Thomas J. Naylor, Co. Atty., of Duluth, for the State.
Charles E. Adams, of Duluth, Charles T. Wangensteen, of Chisholm, Patrick J. Ryan, of St. Paul, and Victor E. Essling, of Eveleth, for St. Louis County.
Wm. K. Montague and Mitchell, Gillette, Nye & Harries, all of Duluth, for St. James Mining Co., Snyder Mining Co., and Corrigan McKinney Steel Company.
Elmer F. Blu and Clarence J. Hartley, both of Duluth, and Kellogg, Morgan, Chase, Carter & Headley, of St. Paul, for Oliver Iron Mining Co. and affiliated companies.
Thomas F. Patton, of Cleveland, Ohio, and Kellogg, Morgan, Chase, Carter & Headley, of St. Paul, for Republic Steel Corporation.
We have for review orders of the trial court refusing new trials after findings and orders for judgment had been entered in proceedings brought by the State to enforce the unpaid taxes levied upon 43 iron ore mines on the Mesaba Range, St. Louis county, the issue being whether the trial court reached proper results in respect to the values of these mines for taxation purposes as of May 1, 1932.
Defendant Oliver Iron Mining Company and 14 other subsidiaries of the United States Steel Corporation declined to pay the last half of the 1932 taxes upon 36 iron ore mines in St. Louis county; 5 companies owning 7 different mines and occupying similar situations are the other defendants.
The tax commission, pursuant to statutory authority, fixed the valuations for assessment purposes upon these mines as of May 1, 1932. As permitted by and in conformity with the statute, the owners, for the purpose of raising the issue respecting valuations, refused to pay the second half of the taxes so levied, and the State proceeded to enforce judgment for the remaining portion. Proper pleadings were framed and issues joined. At the opening of the trial the State offered in evidence the delinquent list of real estate taxes for the year 1932, particular reference being had to the properties here involved. Having thus made a prima facie case, it rested.
The sole issue was the value of these several mines as of May 1, 1932. The cases were heard before five of the judges of the Eleventh judicial district. There was a lengthy and most thorough trial. Four of the judges joined in the findings made and therein fixed and determined the valuation to be placed upon each of these properties. As to 7 mines the court found that the valuations placed thereon by the tax commission were proper and ordered judgment for the payment of the unpaid portion of the taxes and for interest, penalties, and costs. Respecting the remaining properties the court determined the true value as to each thereof and ordered judgment for that part of the tax which the decreased valuations justified.
The State, excepting only the properties as to which it had prevailed, moved for amended findings or, if such were denied, for new trials. Except for certain relatively unimportant matters, the court denied the State's motions. The mining companies sought similar relief as to the properties against which the court had sustained the valuations of the commission. Their motions having been denied, they too appeal. So the contending forces are both appellants and respondents here.
There is and can be no question that the basis for taxation of mining property has for its foundation statutory authority and direction. 1 Mason's Minn.St.1927, §§ 1992 and 1992-1 provide:
‘1992. All property shall be assessed at its true and full value in money. In determining such value, the assessor shall not adopt a lower or different standard of value because the same is to serve as a basis of taxation, nor shall he adopt as a criterion of value the price for which the said property would sell at auction or at a forced sale, * * * but he shall value each article or description of property by itself, and at such sum or price as he believes the same to be fairly worth in money. * * * In valuing real property upon which there is a mine or quarry, the same shall be valued at such price as such property, including the mine or quarry, would sell for at a fair, voluntary sale, for cash.
‘1992-1 It shall be the duty of every assessor and board, in determining the value of lands for the purpose of taxation and in fixing the assessed value thereof, to consider and give due weight to every element and factor affecting the market value thereof, * * *.‘
In an exhaustive memorandum prepared and concurred in by four of the district judges, the theory and basis for the conclusions reached are fully and adequately stated. A dissenting memorandum was filed by the dissenting judge. A reading of the two memoranda clearly points out the issues presented here for determination. We shall take up first the theory upon which the majority proceeded. The court found that there was no cash market for sales of iron ore properties upon the Mesaba Range
The formula adopted by the majority is known as the Hoskold formula. This is now accepted, so the trial court found,
The court remarked that it had been working under ‘great difficulties'; that the ‘prosperity’ years were abnormal on that side and that the ‘depression’ years had been just as abnormal in the other direction. Hence, so the court thought, ‘in the use of the formula, we have had to compose differences, sometimes quite reluctantly, because no one of us could be certain how much of the past in the iron mining industry could be depended on to reflect the long future with which we had to deal.’
In fixing the value of iron ore it has been the custom over a period of more than 20 years to take the ‘Lake Erie price’ as a basis. In fixing values in the instant case the court took into account the actual Lake Erie price for the years 1929 to 1934. The court thought that in fixing the price as of May 1, 1932, it had a ‘right to consider subsequent years as a test of our conclusion that the base price that prevailed from 1929 to 1932 will continue into the future.’ During these years, so the court found, no Mesaba Range ore ‘has been sold above the Lake Erie price; and some ore has been sold below’ the same. The thought of the court was that this theory gave to the State ‘the highest possible profit spread under the Hoskold formula and therefore the maximum valuation insofar as the selling price determines it.’ Respecting the propriety of this formula the court said that at least since ...
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