Wolfenden v. Board of Commissioners

concurring in result: I concur in tbe disposition made of this case, for the reason tbat it appears tbat tbe amount of tbe notes, tbe consideration, tbe land held as security therefor and all tbe data affording information as to tbe true value of tbe notes in question were well known to tbe commissioners •at tbe time of their July meeting and bad been for more than a *93year, and where this is true the statute contemplates and provides that any increase in such valuation shall be made or proceedings looking to that end should be formally instituted at the July meeting referred to, and regularly pursued; and that an increase at any subsequent time arising from the fact, and that alone, that a subsequent sale of the land has disclosed that the valuation appearing on the tax list may have been too low; is without warrant of law. Where, as stated, all the data relevant to the inquiry are known to the authorities before the regular meeting provided for the pm-pose, a taxpayer has a right to rely on the valuation fixed at that time, and to provide for paying his taxes for the year on that basis. He should not be subjected.to the uncertainties incident to a subsequent raise of the valuation in the discretion of the commissioners, where, as stated, all the pertinent facts were fully known to them at the regular meeting specially provided by law for the purpose.

after stating tbe facts: Chapter 440, Raws 1909, designated as tbe Machinery Act, contains, as similar acts for many years past have done, a well-considered plan and procedure for determining tbe value of all property, tbe subject of taxation, in tbe earnest endeavor to make effective tbe mandate of sec. 3, Art. Y, of the Constitution. Tbe controlling purpose of tbe law is to reach all taxable property and to have it placed upon tbe list, as near as may be, at its actual value, tbat it may not require of tbe taxpayer any more than bis just proportion of tbe public burden, but that be shall certainly be .required to “render unto Caesar the things tbat are Caesar’s.”

Tbe particular section of tbe above act under wbicb tbe board *89of commissioners acted in tbe present case is section 68. Tbe corresponding section of tbe act of 1881, see. 18, ph. 117, being in language almost identical witb tbis, was construed by tbis Court in Commissioners v. R. R., 86 N. C., 542, in wbicb Smith, C. J., delivering tbe opinion of tbis Court, said: “Tbe notice required before tbe meeting in August (now, by section 68, to be beld in July) is general, and bas reference to a general revision of tbe lists of tbe whole county, witb a view to an equal and uniform assessment among tbe several townships, and it is to give opportunity to all who may be dissatisfied witb tbe valuation of tbeir property to make complaint and have it corrected. Tbis sitting must be protracted until tbe work is completed. But authority is expressly conferred ‘to raise tbe valuation upon such property as they deem unreasonably low’; and of tbis proposed increase special notice must be given to tbe owner or agent. As tbe commissioners do not meet after tbeir lists are delivered to tbeir clerk (section 16) before tbe second Monday in August, and then can only make tbe examination and ascertain that any property bas been valued unreasonably low, it is obvious that, in order to tbe giving notice, they must do so at a future day, when tbe owner can be present and can be beard before tbe matter can be determined. Nor can any reason be suggested why it should be earlier than tbe regular meeting in September. Tbe commissioners have complied witb tbe requirements of tbe act.” In that case tbe commissioners, at tbeir meeting in August — tbe time then fixed by tbe statute— determined to increase tbe valuation of defendant’s roadbed from $3,000 to $6,000 per mile, and ordered that notice issue to tbe company to appear at tbeir next meeting on tbe first Monday in September, and show cause why tbe valuation should not be fixed at tbe proposed increased amount.

It will be observed that tbe commissioners in that case began tbe procedure to increase tbe valuation at tbe meeting prescribed by law for that purpose, and followed up tbe matter so begun, without break or discontinuance, in tbe prescribed procedure to tbe final act. Tbe only action taken by tbe commissioners, in tbe present case, at tbe meeting on tbe second Monday in July, was tbe adoption of tbe following resolution: “It bas been reported to tbe county commissioners that Mr. Fred'. 'Wolfenden bas in bis possession, to wit, solvent credits that be bas failed to list for taxation for tbe year 1908. Tbe said board, upon receiving such information, requests Mr. Wolfen-den to list such property, if it bas not been listed, as tbe law requires.” If the commissioners were correctly informed that *90the plaintiff bad omitted to list any cbose in action, tbeir power was ample under section 12 of tbe act to secure tbe placing of such omitted property upon tbe tax list.

In botb cases' — tbat of undervaluation, under section 68, and of omitted property, under section 72 — tbe commissioners are vested", witb ample powers of inquiry by examining witnesses, calling for papers and calling upon tbe taxpayer bimself, and the machinery for obtaining information to increase tbe value of such property as they shall deem to be listed unreasonably low is ample. But tbe subsequent action of tbe commissioners in this case conclusively shows tbat it was not omitted property, but undervalued property, they were in search of. Property willfully omitted from tbe tax books or willfully concealed in order to evade its fair and just contribution to tbe public expense has small claim to the sympathy of tbe Legislature or judicial departments of the Government; but where tbe question at difference is one of valuation — a matter generally difficult of exact ascertainment and in ascertaining which there is gen'erally place for honest differences of opinion — we are of tbe opinion tbat tbe law in providing tbe procedure to determine this has fixed, botb by its letter and spirit, a defined time at which this shall be finally determined for each fiscal year. This would seem to be clear from this language of section 68, to wit: “and it shall be the duty of tbe register of deeds, without additional compensation, to complete tbe list by computing tbe tax payable to (by) each person, affixing tbe same opposite bis name”; and “The board of commissioners shall sit for one day at least, and, when necessary, shall sit until the revision is complete, etc.” It is evident that the time of this meeting was changed from August (under the older statutes) to July, to enable the- commissioners to complete tbe work of revision and give time to the register of deeds to make up the tax books and compute the taxes by the first Monday of September, when the tax books are directed to be delivered to the sheriff or tax collector, with order for collection of taxes.

Section 68 does not create the board of commissioners technically a board of equalization; this board is created by section 18 of the act and meets only once in four years — the year in which all real estate and personal property is valued by tbe [>oard of assessors; but the duty and power of revision is specifically imposed upon the board of commissioners by section 68, and the time definitely fixed when it is to begin tbe performance of this duty. If the board of commissioners is invested with tbe general power of revision, and can exercise it at any meeting in tbe year, why has the law fixed a definite time for it to meet to perform this particular duty? While it *91is important tbat tbe State and its several subdivisions invested witb tbe taxing power should receive from every species of taxable property its fair and just proportion to tbe public expense, it is equally important tbat tbe taxpayer should know and have definitely settled, at some prescribed time in each year, hoiv much bis contribution in taxes to this public expense shall, be. Especially is this important in view of tbe provision of tbe law tbat tbe tax constitutes a lien upon real estate from 1 June, and tbe tax lists, when delivered to tbe sheriff or tax collector, constitute a judgment and execution against personal property and require but tbe levy by tbe officer to completely subject it to tbe payment of tbe tax obligation. As was said by this Court in Wilson v. Green, 135 N. C., 343, at p. 348: “A thorough and complete system of procedure is established, by virtue of which tbe taxpayer can be beard upon all questions concerning tbe valuation of bis property for taxation, and be restored to any and all rights be may have lost by any irregular or fraudulent action of tbe assessors.” While in tbat case tbe Court was discussing tbe procedure prescribed by statute for use in that year, when there was to be a revaluation of all property, yet tbe statement of tbe Court above quoted is equally applicable to tbe other years.

To bold tbat tbe Board of Commissioners is invested witb tbe power of revision, to be exercised at any meeting, would lead to great confusion and uncertainty and would subject tbe taxpayer, who owned tbe land or personal property, to the risk of having tbe value of bis property increased for taxation at any time during tbe year, when by a sale of it it. bad brought a higher price than the value at which it was.listed. Tbe same result would follow to tbat ’ taxpayer whose credits depended for their value entirely upon the property pledged for their payment. It was not, in our opinion, contemplated by tbe statute under consideration tbat this doubt, confusion and uncertainty should exist. ¥e have examined similar statutes of other States and tbe decisions -of their courts construing them, and tbe construction we have placed upon our statute is in harmony witb tbe construction given by other courts to their statutes. Peterson v. Osage City Natl. Bank, 8 Kan. App., 508; Sumner v. Colfax Co., 14 Neb., 524; Wiley v. Flournoy, 30 Ark., 609; Yocum v. Brazil First Natl. Bank, 144 Ind., 272; Phillips v. New Buffalo, 64 Mich., 683; Auditor Gaul v. Chandler, 108 Mich., 569; Matador Land Co. v. Carter Co., 72 Pac. Rep., 662; Fowler v. Russell, 45 Kan., 425; St. Joseph Lead Co. v. Simms, 108 Mo., 222.

Concisely stated, then, in our opinion, tbe power of revision conferred upon tbe board of commissioners by section 68 is a *92special power, not one of its general and ordinary powers enumerated in section 1318, Revisal of 1905; that tbe board must meet on tbe second Monday of July to begin tbe exercise of tbe particular power of revision; tbat it must continue, its session until tbe work of revision is complete; tbat when it determines to increase tbe value of property already listed, it must give notice to tbe owner or bis agent, fixing a time for its bearing; that it may continue its session, by adjournment, as a board of revision until such time, and may further continue its session when necessary; tbat ample machinery and power is conferred upon it to obtain information to reach a just conclusion; tbat when it completes tbe work of revision thus begun, its duties and power ás a revising board cease and determine, and it cannot resume such . duties until tbe time appointed by statute in the next year; tbat in tbe fourth year, tbe year of revaluation of property, the powers and duties of equalization and revision are conferred by section 18 upon tbe board of equalization, and not upon tbe board of commissioners, as a distinct corporate body.

Applied to tbe present ease, tbe plaintiff listed solvent credits, which consisted entirely of tbe purchase-money notes of tbe land; tbat exact information was given to tbe board tbe preceding year and it valued them at $12,500, tbe tax value of tbe •land; tbat plaintiff valued tbe same notes tbe next year at •$11,000; tbat this valuation was not changed by tbe board of commissioners sitting as a board of revision; tbat tbe land was sold on tbe first Monday of March, 1909, and brought $22,500, and tbe proceeds' were applied to plaintiff’s notes; tbat tbe commissioners then increased tbe tax value of plaintiff’s solvent credits. We think this action of tbe board unwarranted by law. We do not wish to be understood as jmssing upon tbe power of tbe board of commissioners in cases of fraudulent undervaluation of property. Tbat question is not presented by .or involved in tbe decision of this case.

Upon tbe statement of agreed facts, bis Honor should, as we think, have rendered judgment for tbe plaintiff for tbe sum of '$116 — tbe tax collected on tbe increased amount of valuation — ■ and in declining so to do there was

Error.

dissenting: It appears from the facts agreed that in June, 1907, the plaintiff was owner of $25,000 in first-mortgage bonds secured on a tract of land which he had sold, and that he listed them for taxation at that sum. In February, 1908, on his application, the board of commissioners, of which the plaintiff was at that time a member, reduced the valuation to $12,500. In June, 1908, the plaintiff on his own motion listed the bonds for taxation in the sum of $11,000, deducting therefrom $3,000 for indebtedness due by him. At their meeting in July the board passed a resolution as follows: “It has been reported to the -county commissioners that Mr. Fred. Wolfenden has in his possession solvent credits that he has failed to list for taxation for the year 1908. The said board upon receiving such information, requests Mr. Wolfenden to list such property, if it has not been listed, as the law requires.”

The board then and there took notice that the property had not all been listed or had been listed for only a part of its value. It is not material whether the property had been listed at an undervaluation or part of the bonds had not been listed • at all. The effect is the same. The object of the statute is to require equality, to the end that all property shall bear its just share of the public burdens. But in fact there was here, according to language of above resolution, a failure to list, an omission to place $14,000 of these bonds upon the tax list, for he only listed $11,000, though he held $25,000, of the bonds. The plaintiff took no notice of the request of the board of commissioners to “list such property.”

*94In March, 1909, the property was sold under the mortgage, and brought $22,500. Thereupon the board, taking notice that the plaintiff had not. complied with their request, themselves raised the valuation to $22,500. The plaintiff appeared before the board and protested, whereupon four weeks’ notice was given him, and he was heard at the April meeting, when the valuation was fixed at $22,500. There is no suggestion in the record that this is more than the true value.

The plaintiff complains, not that the property was not worth $22,500, but because the board raised the valuation, or listed the omitted bonds, after the July meeting. He contends that to make a change after that meeting will cause confusion and instability in the tax list. He listed these bonds at $25,000 in June, 1907, and persuaded the board to reduce their valuation for taxation to $12,500 in February, 1908. It did not occur to him that this change would produce confusion and instability in the tax list. In June, 1908, he either listed them by undervaluation, or by omission of some of them, at $11,000, and it could not produce confusion to raise them to their true valuation in March, 1909, when it had not done so to reduce their valuation in February, 1908. The plaintiff’s valuation of the property was $25,000. when he sold it and took the mortgage bonds. At sale under the mortgage, the property brought $22,500; so it follows that for the year 1907 the plaintiff had at least $10,000 of bonds which were exempted from taxation, and now he is claiming in this action that $11,500 should be exempt from any share of taxation for 1908.

The plaintiff’s sole ground is that the board could only cor-, rect the tax list at the July meeting. He did not act upon that -theory when he caused the board to make a change of $12,500 in his favor in February, 1908. Besides, in 1908, the commissioners did take action at the July meeting by requesting the plaintiff to correct his valuation by either raising it or adding the omitted bonds, whichever it may be considered.

It is physically impossible for a board of county commissioners to discover and correct all the omissions and under-valuations upon the tax list at their meeting in July. The object of the statute is that all property which has been omitted or undervalued shall be put upon the tax list whenever discovered. That duty is as imperative when brought to the attention of the board at any subsequent meeting as at the July meeting. All that the delinquent taxpayer is entitled to is that he shall havé notice and an opportunity to be heard, and these this plaintiff has had.

It is true that the tax is a lien upon real property, and it may be that, if the land is sold before the correction of the tax *95valuation, a purchaser without notice would not be liable for the added taxation. But there is no such question here. There can be no inconvenience to the public, nor any injustice to the plaintiff, in requiring him at the April meeting to pay taxes upon the. true value of the property after due notice and hearing and proof that the property was worth $22,500, especially when he had been requested at the July meeting to list the property at its correct value. And more especially, since at his instance in February, 1908, the board had corrected the tax valuation of these bonds for 1907 by reducing them to about half of their true value, whereby he escaped taxation on $11,000 or $12,000 for 1907.

It has always been right and just that all property should bear its fair share of public burdens. With the increase in the objects and functions of government and the increase in revenue thereby necessitated, it has become vitally important that all property shall be listed at its true value. We know that the wealth of the State does not always bear its pro rata part of taxation. This throws the burden of taxation with crushing force upon those of moderate or humble means whose little belongings are visible and tangible and cannot escape the hand of the tax collector, while intangible and invisible property, such as bonds, notes, shares, stocks, and similar invisible or intangible property, are often either omitted wholly from the tax list by omission t’o list them, or partly so by undervaluation. The Legislature in passing this statute to correct this great and growing evil certainly never intended that the board of county commissioners, with many thousands of names before them on the new tax list at their July meeting, should, then and there, correct all omissions and undervaluations of property, and that if an evading taxpayer should escape their notice at that meeting the board should. be powerless to make the proper corrections when omissions or undervaluations are brought to their attention at any subsequent day.

In Switzerland; and some other countries, the statute provides that all estates of deceased persons go into the hands of a public administrator, who shall compare the value of the estate with the tax list, and, if there is any discrepancy, he shall go back several years, estimating as fairly as he can what ought to have been on the tax list for those years, and shall take out of the estate the taxes on omitted or undervalued property. In England the revenue act just approved at the polls requires that all increase in the value of real property since the last valuation shall pay one-fifth of such increase into the public treasury. Our statute has not gone to such an extent, but it is evident that the intention of our Legislature was that *96all property should be valued and taxed on an equality, and there was no intention that if an omission or an undervaluation should escape the attention of the board of commissioners at their meeting in July, that the inequality should not be corrected at any subsequent day during the year, even when brought glaringly to their attention by a public sale at which the property brought, as in this case, more than double the value at which the property was listed. This board of commissioners and the judge below should be commended, and not reversed, in seeking to subject such property to its fair and equable share of taxation.

The board of commissioners, however, in this case, did take action at their July meeting. They requested the plaintiff to list this very property “as, the'law requires.” They doubtless thought he would do so, without being compelled by further action on their part. On finding, later, that he had. not complied with their request, it was their duty to see that the property was properly listed, after giving him due notice and a hearing, as they did. They could not know till after the July meeting that he had failed to comply with the notice and request which they gave him at that meeting.

It'is an inherent power of the State at any and all times to collect the taxes due it by its citizens. The State may go back any number of years to collect taxes upon property which has not borne its share. Wilmington v. Cronly, 122 N. C., 383, and cases there cited. Sections 68 and 18, ch. 440, Laws 1909 (the Machinery Act), are directory, and not mandatory, in that the powers therein given can be exercised at any time.

Section 68 says: “They shall have power, after notifying the owner or agent, to raise the valuation-of such property as they shall deem unreasonably low.” This part of section 68 does not confine the board to the second Monday of July, even when construed with the remainder of said section, but leaves the time open, requiring only that notice be given to the taxpayer so that he may appear and be heard. In the present case all this was done, and it is certain from the record, and is not denied, that the valuation placed upon the property listed by the plaintiff was unreasonably low. This fact, as already stated, had been called to plaintiff’s attention-by the board in July, and it was placed beyond question by the property having-brought $22,500 at public sale.

Section 73 of the Machinery Act of 1909 gave the board of commissioners power, in any event, to put upon the tax list the unlisted valuation of the bonds in question. It can make no difference whether the shortage in the amount was caused *97by tbe omission to list part of tbe bonds or by tbe omission to place full and just value upon all of tbem. Tbe same power is also given by section 72.

Tbe object of tbe Legislature was to secure tbe placing of omitted or undervalued property upon tbe tax list. There could be no surer way to defeat tbis purpose than for tbe act to require that to be done on one certain day, and that if tbe board is not tben informed, or fails to act, tbat tbe tax dodger wbo escapes detection on tbat day can snap bis fingers at tbe board all tbe other 364 days of tbe year. Tbe Legislature intended no sucb futility. There are no words restricting tbe board to tbat day. Tbe duty is a general and a continuing one. Tbe essential thing is tbe duty, not tbe date.

Tbe board of commissioners after notice and bearing raised tbe valuation to $¡>22,500. Tbe plaintiff does not even suggest tbat tbis is too much, and could not, as tbe property when sold under bis mortgage brought tbat figure. He paid tbe $116 taxes due on tbe valuation which be bad not listed. He owed tbat sum to bis State and county.

His Honor properly held, as I think, tbat tbe plaintiff was not entitled to recover it back.