Wallace v. Hughes Elec. Co.

• Decision Date: 31 January 1919
• Citation: 41 N.D. 418,171 N.W. 840
• Parties: WALLACE et al., State Tax Commission, v. HUGHES ELECTRIC CO. et al.
• Court: North Dakota Supreme Court

41 N.D. 418

171 N.W. 840

WALLACE et al., State Tax Commission,

v.HUGHES ELECTRIC CO. et al.

Supreme Court of North Dakota.

Jan. 31, 1919.

Syllabus by the Court.

The state tax commission, being a board created by legislative enactment, possesses such powers only as the Legislature has expressly conferred upon it.

The power conferred upon the state tax commission by subdivision 8 of section 2088, Compiled Laws 1913, to summon witnesses to appear and give testimony and produce records, books, papers, and documents is not an arbitrary or unlimited power, but one to be exercised reasonably and within proper limits.

In order to justify the entry of an order by a district court, under section 2089, Compiled Laws 1913, to compel obedience to an order of the state tax commission for the appearance of witnesses and the production of records, books, and documents, it must appear that the order was made in some manner before, and within the jurisdiction of, the tax commission, and that there was some reasonable basis for the action of the tax commission.

It is held that the petition in the instant case fails to state facts sufficient to justify the entry of an order, by a district court, to compel witnesses to appear and give testimony and produce records, books, and documents before the state tax commission.

Appeal from District Court, Burleigh County; Nuessle, Judge.

Proceeding by George E. Wallace and others, as members of the Tax Commission of the State of North Dakota, against the Hughes Electric Company, R. W. Dutton, C. B. Aasness, and E. A. Hughes. From an order commanding the individual defendants to appear before state tax commission and give testimony and produce books and records relating to value of property and general financial condition of the Hughes Electric Company, defendants appeal. Order reversed.

Birdzell and Grace, JJ., dissenting.Newton, Dullam & Young, of Bismarck, for appellants.

William Langer, Atty. Gen., and Edw. B. Cox, Asst. Atty. Gen., for respondents.

CHRISTIANSON, J.

This is an appeal from an order of the district court of Burleigh county, commanding the appellants, Dutton, Aasness, and Hughes to appear before the state tax commission and give testimony and produce books and records relating to the value of the property, the earnings, expenses, and general financial condition of the Hughes Electric Company.

The powers and duties of the state tax commission are defined by section 2088, Compiled Laws 1913, as amended by chapter 232, Laws 1917. The statute, so far as now pertinent, is as follows:

“It shall be the duty of the commission and it shall have the power and authority:

1. To have and exercise general supervision over the administration of the assessment and tax laws of the state, over assessors, town, county and city boards of review and equalization and all other assessing officers in the performance of their duties, to the end that all assessments of property be made relatively just and equal in compliance with the laws of the state.

2. To confer with, advise and give the necessary instructions and directions to local assessors as to their duties under the laws of the state and to that end call meetings of local assessors of each county to be held at the county seat of such county, for the purpose of receiving necessary instructions from the commission relative to the duties of their office and to the laws governing the assessment and taxation of all classes of property. * * *

5. To require township, village, city, county and other public officers to report information as to the assessment of property, collection of taxes, receipt from licenses and other sources, the expenditure of public funds for all purposes and such other information as may be needful in the work of the commission in such form and upon such blanks as the commission may prescribe.

6. To require individuals, copartnerships, companies, associations and corporations to furnish information concerning their actual funds or other debt, current assets and liabilities, value of property, earnings, operating and other expenses, taxes and all other facts, which may be needful to enable the commission to ascertain the value and relative burdens borne by all kinds of property in the state.

7. To summon witnesses to appear and give testimony and to produce records, books, papers and documents relating to any matter which the commission may have authority to investigate or determine.

8. To cause the deposition of witnesses residing within or without the state or absent therefrom to be taken upon notice to the interested party, if any, in like manner that depositions of witnesses are taken in civil actions in the district court in any matter which the commission may have authority to investigate or determine. * * *

10. To appoint a special assessor and deputies under him and cause to be made in any year a reassessment of all or any real and personal property or either in any assessment district when in the judgment of said commission such reassessment is desirable or necessary to the end that any and all property in such district shall be assessed equally as compared with like property in the county wherein such district is situated. Upon the completion of such reassessment the said assessor shall certify to such assessment and file the same with the county auditor, and the county auditor shall forthwith notify the members of the board of county commissioners who shall meet the first Monday in the following month of the year and then and there hear all grievances and complaints thereon, and proceed to review and equalize such assessments. Thereupon the said assessment shall be filed with the county auditor and such lists shall supersede and be in place of the original assessment made for such year upon such property and the county auditor shall extend and levy against said property so reassessed the taxes thereon for such year according to such reassessment in the same manner as though such list was the original assessment list of such property. * * *

13. To examine carefully into all cases where evasion or violation of the laws for assessment and taxation of property is alleged, complained of, or discovered, and to ascertain wherein existing laws are defective, or are improperly or negligently administered.

14. To consult and confer with the Governor of the state upon the subject of taxation, the administration of the laws in relation thereto, and the progress of the work of the commission, and to furnish the Governor from time to time such assistance and information as he may require.”

The omitted subdivisions of the section are not involved in this controversy.

Section 2089, C. L. 1913, provides:

“Oaths to witnesses in any matter under the investigation or consideration of the commission may be administered by the secretary of the commission, or by any member thereof. In case any witness shall fail to obey any summons to appear before said commission, or shall refuse to testify or answer any material question, or to produce records, books, papers, or documents when required to do so, such failure or refusal shall be reported to the Attorney General, who shall thereupon institute proceedings in the proper district court to compel obedience to any summons or order of the commission, or to punish witnesses for any such neglect or refusal. * * *”

This is a proceeding instituted by the Attorney General of the state under section 2089, supra, to compel the appellants, Dutton, Aasness, and Hughes, the respondents, to appear and testify before the state tax commission, and to produce certain books and records relating to the property, earnings, expenses, and financial condition of the Hughes Electric Company, a public utility corporation organized under the laws of the state of Minnesota, and engaged in the business of furnishing electricity and other commodities to the public in the city of Bismarck and elsewhere.

The Attorney General's petition in this case avers that the petitioners are members of the state tax commission, and that in performance of their powers and duties as such commissioners, as prescribed by section 2088, C. L. 1913, and the amendments thereof, “the said tax commission, for the purpose of ascertaining and securing the information concerning the value of the property of the Hughes Electric Company, and the capital fund, debts, current assets and liabilities, and operating and other expenses of such company, and such facts as might be needful to enable the commission to ascertain the value of the property of such Hughes Electric Company as provided by law, and for the purpose of performing their duties as members of such tax commission as prescribed by law,” in April, 1917, prepared and mailed to the Hughes Electric Company a notice, commanding said company to have its managing officers appear before said tax commission “at a stated time and place.” and then and there to testify as to the value of the property, the earnings, and general financial conditions of said company, and to “bring with them such books, papers, and records as may be necessary to consult or determine the above matters with reference to said company.”

It is further averred that the Hughes Electric Company and its managers and officers refused and neglected to appear before the tax commission, or produce the books, papers, and documents, as directed in said notice.

The petition further avers that the state tax commission, in May, 1917, issued a subpœna or subpœnas addressed to the above-named appellants, Dutton, Aasness, and Hughes, commanding them, and each of them, to appear before the state tax commission, at a designated time and place, and “then and there to testify generally before the said commission as provided for in sections 2088 and 2089 of the Compiled Laws of 1913 for the state of North Dakota as to such matters and things as you have knowledge of, concerning the actual value of the property, the...