Valley National Bank of Phoenix v. Apache County

• Decision Date: 30 June 1941
• Docket Number: Civil 4342
• Citation: 114 P.2d 883,57 Ariz. 459
• Parties: THE VALLEY NATIONAL BANK OF PHOENIX, Appellant, v. APACHE COUNTY, COCHISE COUNTY, GILA COUNTY, GRAHAM COUNTY, MARICOPA COUNTY, MOHAVE COUNTY, PIMA COUNTY, PINAL COUNTY, and YAVAPAI COUNTY, and D. C. O'NEIL, FRANK LUKE and THAD MOORE, as Members of and Constituting the State Tax Commission and State Board of Equalization of the State of Arizona, Appellees
• Court: Arizona Supreme Court

114 P.2d 883

57 Ariz. 459

THE VALLEY NATIONAL BANK OF PHOENIX, Appellant, v. APACHE COUNTY, COCHISE COUNTY, GILA COUNTY, GRAHAM COUNTY, MARICOPA COUNTY, MOHAVE COUNTY, PIMA COUNTY, PINAL COUNTY, and YAVAPAI COUNTY, and D. C. O'NEIL, FRANK LUKE and THAD MOORE, as Members of and Constituting the State Tax Commission and State Board of Equalization of the State of Arizona, Appellees

Civil No. 4342

Supreme Court of Arizona

June 30, 1941

APPEAL from a judgment of the Superior Court of the County of Pinal. John P. Clark, Judge. Judgment reversed and cause remanded with instructions.

Messrs Gust, Rosenfeld, Divelbess, Robinette & Coolidge, for Appellant.

Mr. Joe Conway, Attorney General, for Appellee State Tax Commission.

Mr. M V. Gibbons, County Attorney, for Apache County.

Mr John Pintek, County Attorney, Mr. Alfred C. Stoddard, Mr John F. Ross, and Mr. Henry Beumler, Deputy County Attorneys, for Cochise County.

Mr. Edward Y. Weeks, County Attorney, and Mr. Frank E. Tippett, Deputy County Attorney, for Gila County.

Mr. Max T. Layton, County Attorney, for Graham County.

Mr. Richard F. Harless, County Attorney, and Mr. Leslie C. Hardy, Deputy County Attorney, for Maricopa County.

Mr. J. Mercer Johnson, County Attorney, and Messrs. Conner & Jones, Special Counsel, for Pima County.

Mr. W. C. Truman, County Attorney, and Mr. Ronald J. Ellis, Deputy County Attorney, for Pinal County.

OPINION

LOCKWOOD, C.J.

This is an action by Valley National Bank of Phoenix, a corporation, plaintiff, against Apache, Cochise, Gila, Graham, Maricopa, Mohave, Pima, Pinal and Yavapai Counties, and D. C. O'Neil, Frank Luke and Thad Moore, as members of and constituting the state tax commission and state board of equalization of the state of Arizona, defendants.

The facts set forth in the amended complaint necessary for a determination of the appeal may be stated as follows: Plaintiff is a banking corporation having its principal place of business in Maricopa county, and branches in each of the other counties defendant. On January 1, 1937, the assets of the bank amounted to something over $35,000,000, being composed of real and personal property, cash, and various intangible securities. These assets were located in the several counties in which it maintained banking houses, in amounts as shown by the complaint, 14.51% thereof being in the city of Tucson, in Pima county. The tangible assets of plaintiff were distributed among the several counties in different proportions, that in Pima county having a book value of some $396,000, which was almost 50% of the total value of such assets. It had outstanding common capital stock of 65,000 shares distributed among approximately 425 shareholders, and 198,400 shares of preferred stock of the par value of $6.25 a share, all of which was owned by the Reconstruction Finance Corporation of the United States of America. Between January 1 and the first Monday in May, 1937, an officer of plaintiff made and delivered to each of the assessors of the respective counties defendant a statement showing various facts regarding the ownership and value of plaintiff's stock, and the proportion of its assets situate in each of the counties defendant and the respective incorporated cities and towns of said counties. After the filing of these statements, the different county assessors fixed values on that portion of the common capital stock of plaintiff which was by law required to be assessed in their respective counties. The method of arriving at such valuation was different in the different counties. The valuations fixed by the assessors of Pinal and Yavapai counties were acceptable to plaintiff and no objection was made to them either before the county boards of equalization or before the state board. The value fixed by the assessor of Greenlee county was not acceptable, but the amount of the tax was so small that plaintiff voluntarily paid it is assessed without protest. The assessors of Apache, Gila, Maricopa, Graham, Mohave, Cochise and Pima counties fixed valuations on a different basis, and these valuations were protested with the county boards of equalization of each of said counties, but the protests so made were overruled. On August 4 plaintiff filed with the state board of equalization written objections to the valuations made on its stock in each of the counties where protests had been made as aforesaid, and urged that it had been valued at an amount in excess of its actual cash value and that thus there had been discrimination between plaintiff's stock and other kinds of property. The board had previously notified plaintiff that it proposed to increase the assessments made by the assessors of Pinal and Yavapai counties, and plaintiff appeared and objected to such increase. After all this, and before the final adjournment of the board, it reviewed the statement filed by plaintiff in regard to its stock and assets and determined the actual cash value of all of plaintiff's common stock to be $880,448.01. After making this valuation the state board then apportioned the assessment among all of the counties defendant. In so doing it apportioned to each county and the municipalities thereof the percentage of the total assessment aforesaid which the assets of plaintiff in said county and municipality bore to the total valuation of its common stock fixed by the board as above, with the exception that it did not fix the value of the stock assessable in the city of Tucson on this basis, which would have amounted to $127,753, but allowed the assessment attributable to that city, as made by the county assessor, to stand at the sum of $333,460, which was the reasonable valuation of the real and personal property owned by plaintiff in that city. The result of this method of apportionment was that while the total valuation of all the common stock of plaintiff had been fixed by the state board at $880,448.01 as above, the total amounts apportioned to the different counties defendant, when added together equalled $1,086,154. In other words, the separate apportionments added together amounted to more than $200,000 in excess of the value fixed by the board on all of the stock. Thereafter taxes were levied in accordance with the apportionments made by the state board as aforesaid, and plaintiff paid them under protest, and then brought this suit, asking that it be adjudged that there has been collected from it taxes on a valuation of $205,705.99 in excess of the actual cash value of its stock, and that plaintiff be entitled to recover from the counties which had received such taxes in excess of the true amount due them.

The counties demurred each specially and generally to the complaint and pleaded in bar that the proper and exclusive method provided by law for testing the amount of the assessment and the validity of the tax involved in plaintiff's action was by appeal from the orders of the state or county boards of equalization, under the provisions of either sections 73-110 or 73-419, Arizona Code 1939; that plaintiff had failed to follow either of these methods, and it had thereby waived any objection it might have to the taxes involved herein. The demurrers were sustained, and plaintiff electing to stand on its amended complaint as aforesaid, judgment was rendered in favor of defendants, whereupon this appeal was taken.

There are two questions before us. The first is whether plaintiff has chosen the proper remedy to present its objection to the tax in question, and, second, if it has, is it entitled to recover the excess taxes which it claims to have paid. Both questions involve an investigation of certain portions of our tax laws. The procedural question is determined by the interpretation of three sections of the code of 1939, which read so far as material as follows:

"73-110. Appeal from state board of equalization. Any taxpayer dissatisfied with the amount of his assessment as fixed by the tax commission or as reviewed by the board, may appeal therefrom as herein provided, and not otherwise...."

"73-419. Appeal from board. -- Any person dissatisfied with the amount of his assessment as fixed by the [county] board, may, on or before the fifteenth day of September following, appeal to the superior court of the county in which said board holds its sessions,..."

"73-841. Contest of taxes -- Injunction -- Recovery and refunds. -- No person upon whom a tax has been imposed under any law relating to taxation shall be permitted to test the validity thereof, either as plaintiff or defendant, unless such tax shall first have been paid to the proper county treasurer, together with all penalties thereon. No injunction shall ever issue in any action or proceeding in any court against this state, or against any county, municipality, or officer thereof, to prevent or enjoin the collection of any tax levied. After payment an action may be maintained to recover any tax illegally collected and if the tax due shall be determined to be less than the amount paid, the excess shall be refunded in the manner hereinbefore provided."

This action is obviously brought under section 73-841, supra, and it is the claim of plaintiff that this is the only proper method of seeking relief under the circumstances involved herein. It is the position of defendants that this is an attempted review of the "amount of his assessment... as reviewed by the board," and that section 73-110, supra, gives the exclusive remedy when the objection is to the amount of the assessment as fixed by the state board of equalization.

In the case of State Tax Commission v. Yavapai County Savings Bank, 52 Ariz. 374, 81 P.2d 86, we discussed the general principles of taxation applying to banking interests and pointed out that what was assessed was not the...