White River Lumber Co. v. State
| Decision Date | 09 January 1928 |
| Docket Number | (No. 92.) |
| Citation | 2 S.W.2d 25 |
| Parties | WHITE RIVER LUMBER CO. v. STATE ex rel. Attorney General. |
| Court | Arkansas Supreme Court |
Suit by the State, on the relation of the Attorney General, against the White River Lumber Company. From the decree rendered, defendant appeals, and the state cross-appeals. Decree modified.
Buzbee, Pugh & Harrison, of Little Rock, for appellant.
H. W. Applegate, Atty. Gen., and R. E. L. Johnson and John M. Rose, both of Little Rock, for appellee.
This suit was filed by the state of Arkansas, on the relation of the Attorney General, on July 25, 1925, against the White River Lumber Company, a foreign corporation, hereinafter referred to as the company, to recover, on behalf of the state and its political subdivisions, certain back taxes alleged to be due by the company. The suit was brought to recover back taxes alleged to be due upon the intangible value of the company's capital stock; but interrogatories propounded to the company developed the fact that it owned no property in this state except its real estate, and about that time the opinion of this court was delivered in the case of State ex rel. Attorney General v. Lion Oil & Refining Co., 171 Ark. 209, 284 S. W. 33, in which it was held that the capital stock of a foreign corporation, which is neither located nor used within the boundaries of the state, could not be assessed for taxation in this state.
An amended complaint was filed, in which it was alleged that the company owned large tracts of timbered lands in the counties of Desha, Phillips, Monroe, and Arkansas, which had been grossly underassessed for purposes of taxation for the years 1915 to 1925, inclusive. The amended complaint contained a list of the company's lands on which it was alleged that taxes had been paid at undervaluations. This list contains 191 descriptions, located in 105 different sections in the four counties named.
It was stipulated that the state tax commission had ordered an assessment of all property in the state at 50 per cent. of the market value, but the court found the fact to be that this direction had not been obeyed by the assessing officers, and that property in the counties mentioned had been assessed at only 30 per cent. of its value. Witnesses who testified on this feature of the case differed widely as to what per cent. of the value had been assessed, some placing it higher, and others lower than the 30 per cent. found by the court. Without reviewing this testimony we announce our conclusion to be that the finding of the court below on this question does not appear to be against the preponderance of the evidence.
A large amount of testimony was taken, and we have before us a voluminous record. The testimony on the part of the state was directed principally to a showing of the amount and value of the timber on the lands, which fixed the value thereof.
The testimony on the part of the company was to the effect that all timbered lands in the counties mentioned had been assessed at from $4 to $5 per acre, and that those of the company were of about the same average value as the lands of other owners, and that it would be discriminatory to assess the lands of the company at a higher valuation for purposes of taxation. It was also shown that during the years for which the state asks back assessments large quantities of the timber had been stolen, and that in recent years large quantities had been sold, and that the value of the lands was proportionately reduced.
The court, in fixing the value of the lands, divided them into five groups, those in Desha, Phillips, and Monroe counties comprising three of the groups. The fourth group was composed of all the lands in Arkansas county except the lands referred to as "Big Island," which last-mentioned body of lands composed the fifth group. The court found the value of the Big Island lands for the years 1915 to 1925, inclusive, to be $50 per acre, and the value of all the other groups to be $33.33 for each of these years, and directed that they be back assessed for all those years at 30 per cent. of the value stated, less credits for the timber stolen and sold. No attempt was made to show from what tracts of land timber had been sold or stolen, and the court directed that the total amount of these two items be apportioned to the entire acreage, and the valuations were credited with these apportioned amounts. The valuations thus fixed by the court were further reduced by the valuations upon which taxes had been paid.
As a result of this finding and decree taxes were charged against the entire body of land in the sum of $79,033.63, and it was ordered that the lien for the taxes which the court decreed be enforced against each separate tract. From this decree the company has appealed, and the state has cross-appealed, and it is now insisted on behalf of the state that the lien for the taxes should be enforced against the lands as a body or as a personal judgment against the company.
Before further reciting or discussing the testimony, we proceed to consider the legal principles which must be taken into account and be followed in passing upon the issues of fact:
The state is proceeding under the provisions of the back tax law, which appear as section 10204 et seq., C. & M. Digest. Section 10204 was enacted at the 1913 session of the General Assembly (Acts 1913, p. 724), as Act 169, the title of the act being: "An act to amend section 1 of Act No. 354 of the acts of 1911, approved May 30, 1911." This act of 1913 was passed shortly after the opinion of this court was delivered in the case of State ex rel. Attorney General v. Kansas City & M. Ry. & Bridge Co., 106 Ark. 248, 153 S. W. 614, and was, no doubt, intended to remedy certain supposed defects in the then existing back tax law.
In that case the suit was for back taxes alleged to be due upon the bridge owned by the defendant corporation, which the complaint alleged had been assessed for taxation at only about one-sixth of its true value. A demurrer to this complaint was sustained and the state appealed. Upon the appeal to this court it was held that where a corporation has paid the taxes on the annual assessments made on its property the state could not recover additional taxes where a mere mistake had been made in assessing the property too low, and that a review of the assessments by the courts would be permitted only when the assessing boards or officers had proceeded on the wrong basis of valuation, in omitting some property or element of value or in adopting the wrong basis in estimating value, and it was further held that the policy of the law was to treat the finding of the assessors, supervising boards and commissions as final except when otherwise expressly provided by the statute.
This opinion was delivered January 20, 1913, and the act of 1913, which appears as section 10204, C. & M. Digest, was approved March 12, 1913. By this amendatory act it was provided that:
"Where the Attorney General is satisfied * * * that, in consequence of the failure from any cause to assess and levy taxes, or because of any pretended assessment and levy of taxes upon any basis of valuation other than the true value in money of any property hereinafter mentioned, or because of any inadequate or insufficient valuation or assessment of such property, or undervaluation thereof, or from any other cause, that there are overdue and unpaid taxes owing to the state, or any county or municipal corporation, or road district, or school district, by any corporation upon any property now in this state which belonged to any corporation at the time such taxes should have been properly assessed and paid, it shall become his duty to at once institute a suit or suits in chancery in the name of the state of Arkansas, for the collection of the same, in any county in which the corporation owing such taxes may be found. * * *"
After the passage of the act of 1913, from which we have just quoted, a second suit was brought against the same bridge company to recover the taxes sued for in the first case. It was alleged in the second suit that the corporation owning the bridge had for a number of years paid taxes on the bridge "upon an inadequate and insufficient valuation and upon an undervaluation thereof," and that a large amount of taxes would be due by the corporation upon a proper assessment of its property.
A general demurrer to this complaint was sustained and the complaint was dismissed, from which order and decree an appeal was duly prosecuted to this court. The opinion upon the appeal, which was delivered by L. H. McGill, Esq., as special justice, reviewed the back tax legislation of the state and interpreted the amendatory act of 1913, and it will now suffice to restate the conclusions there announced without again reviewing this legislation. State ex rel. v. K. C. & M. Ry. & B. Co., 117 Ark. 606, 174 S. W. 248.
The act was held to be retroactive in its effect, and the right of the state to enact such a statute was declared. It was held that the purpose of the statute, as amended by the act of 1913, was to give the state a complete remedy for the recovery of back taxes due by a corporation upon any property in the state which belonged to any corporation at the time such taxes should properly have been assessed and paid, and that a proper exercise of this power was not in violation of the Federal Constitution as denying corporations the equal protection of the law or depriving them of property without due process of law.
It was further held that the fact that no statutory remedy existed for the correction of erroneous assessments at the time they were made did not preclude the Legislature from granting a remedy at a subsequent time, and that the owner of property which, for any reason, escaped payment of a part of its just share of taxation, does...
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