Re: The Assessment of Shares of Stock of the Kanawna Valley Bank
Re: The Assessment of Shares of Stock of the Kanawna Valley Bank
Opinion of the Court
This is a statutory appeal from a judgment of the Circuit Court of Kanawha County under the provisions of Code, 11-3-25, as amended, by the taxpayer, The Ka-nawha Valley Bank, a corporation, by which the trial court found that the true and actual value of the taxpayer’s fifteen thousand shares of capital stock was $6,000,000.00, and assessed such shares at that amount for the purpose of levying an ad valorem tax thereon. On June 17, 1958, in a four to one decision of this Court,
Thus the sole issue for determination by this Court is whether the trial court erred in holding that this taxpayer suffered a constitutional discrimination by having its property assessed for the payment of ad valorem taxes upon the basis of one hundred per cent of its true and actual value. The burden of establishing that fact was upon the taxpayer, and, unless that discrimination is shown by the evidence, the taxpayer cannot invoke
Code, 11-3-1, as amended, provides that: “All property shall be assessed annually as of the first day of January at its true and actual value; * * *.” The verbatim language of this Section first appeared in the Acts of 1933, however, similar language had been used previously thereto and the substance has remained unchanged since Chapter 118, Acts of the Legislature, Regular Session, 1863.
This taxpayer can make no complaint of discrimination because property of the same species in Kanawha County is not assessed for taxation purposes in the same manner that its property is assessed. The record is clear that the stock of all other banking institutions in Kanawha County, and, indeed, in the State, with one possible exception, is assessed for taxation purposes at one hundred per cent of its true and actual value.
John M. Slack, Jr., at the time Assessor of Kanawha County, and now Congressman from the Sixth West Virginia Congressional District, testified at the hearing before the County Court. He was asked these questions and made these answers:
Q: “Having arrived at a value by the book value method, what percentage of that true and actual value have you assessed the stock?”
A: “One hundred per cent.”
Q: “What percentage of true and actual value have you assessed other property in Kanawha County for the year 1957 ?”
*351 A: “We have made an attempt to assess it at 40 per cent, according to Senate Bill 3.”
Q: “Have you made any effort to assess other property in Kanawha County at 100 per cent of its true and actual value ?” -
A: “None other than Class 1 property, and that, of course, we inherited from procedure carried on in the past. * * *”
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COMMISSIONER GLENN: “The question in my mind was whether it was clear that Class 1 property is all assessed at 100 per cent.”
THE WITNESS: “Cash on hand and money in the bank at 100 per cent, accounts receivable at 60 per cent, notes receivable at about 60 per cent, and the way you determine that is how they are supported, by deed of trust, security and so forth.”
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Q: “Do you know what percentage of true and actual value livestock is assessed at?”
A: “Frankly, I don’t.”
Q: “Is it very low?”
A: “It is very low.”
Q: “Then as I understand, you have used less than 100 per cent of true and actual value in other classes of propertry?”
A: “Yes, in case of inventories we assess inventories at 50 per cent. We assess machinery and equipment at 20 per cent of the original cost. We find that by using this method we come up with nearer the same figure that the Tax Commissioner uses in arriving at his values for State aid purposes.”
Q: “And real estate, what percentage of the true and actual value?”
A: “Of course, we have a gross inequality there, according to the State Tax Commissioner*352 our real estate runs from something like 9 to 130 per cent. As far as I know we are placing all real estate on the books at not less than 40 per cent of the Tax Commissioner’s appraisal, in order to qualify for State aid.”
Q: “Would you consider that not less than 40 per cent of true and actual value?”
A: “No, it is 40 per cent of the State Tax Commissioner’s appraisal, and he is basing his appraisal upon 1950 costs, which he states is about 25 per cent less than costs would be on today’s market.”
Q: “Do you consider that you are assessing real estate on the average in Kanawha County at 100 per cent of true and actual value ?”
A: “I do not.”
Q: “At about what percentage of true and actual value would you estimate you are assessing it?”
A: “There again we go back to the survey of the State Tax Commissioner, and he claims it is about 35 per cent of his appraisal, which would be 25 per cent less than the value as of 1957. Senate Bill 3 refers to true and actual value. However, for purposes of this survey the Tax Commissioner’s Property Evaluation Department is using replacement costs less depreciation, and they are based upon 1950 replacement costs, and according to them the replacement costs have increased from 1950 to 1957 by some 25 per cent.”
Q: “Then would that mean that if you were assessing at 40 per cent of the 1950 value that you would actually be assessing real estate at less than 40 per cent of the true and actual value today ?”
A: “I would say it would, yes.”
“Senate Bill 3” to which the witness refers is Chapter 1, Acts of the Legislature, 1955, First Extraordinary Session, which provides that a county cannot be eligible for
It is clear beyond doubt from this witness’ testimony that no species of property in Kanawha County was assessed for the year 1957 for taxation purposes at one hundred per cent of its true and actual value except bank stock and “money in the bank”. In November, 1958, the people of this State by their vote amended Section 1, Article X, of the Constitution, to exempt bank deposits from taxation. It is also clear from his testimony that each and every species of property subject to ad valorem taxes situate in Kanawha County, with the exceptions above noted, and real property in particular, was by a preconceived plan assessed for taxation purposes at less than its true and actual value. The only question that remains for determination is whether such a scheme of taxation is in violation of Section 1, Article X, of the Constitution.
Counsel for the taxing units say that that question has already been decided by this Court, cite several cases in support of this contention, and invoke the rule of stare decisis. As a prelude to a consideration of these cases, it should be noted that the first of them was not decided until 1896, whereas the Constitution of this State became operative on June 20, 1863, and on July 28, 1868, the XIV Amendment to the Constitution of the United States was adopted. There was an Amendment to the pertinent Section of our Constitution in 1872, and thereafter it read as follows: “Taxation shall be equal and uniform throughout the State, and all property, both real and personal, shall be taxed in proportion to its value, to be ascertained as directed by law. No one species of property, from which a tax may be collected, shall be taxed higher than any other species of property of equal value; but property used for educational, lit
Section 1 of the XIV Amendment provides: “All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside. No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.”
In Charleston & S. Bridge Co. v. Kanawha County Court, 41 W. Va. 658, 24 S. E. 1002, error dismissed 168 U. S. 704, 42 L. Ed. 1212, 18 Sup. Ct. 941, decided March 21, 1896, the owners of a toll bridge in Kanawha County had filed a petition with the County Court praying for the correction of an erroneous assessment of its bridge for the year 1893, alleging that for the year 1892 the bridge was assessed at $22,000.00, and that the same property in the following year was “assessed upon the personal property books of said county” at $50,000.00. The County Court dismissed the petition, but the Circuit Court upon appeal reduced the assessment to $25,000.00, and ordered that the property be placed upon the land books since it was real property. This Court reversed the Circuit Court, directed that the property be placed on the personal property books, and affirmed the “judgment of the County Court.” In the opinion, the Court said: “* * * The manner of ascertaining the valuation of a toll bridge is plainly prescribed in section 63 of chapter 29 of the Code. The assessor is thereby required to ascertain a just estimate of its annual value, and, for the purposes of tax
The next pertinent decision of this Court is West Penn Power Company et al. v. Board of Review and Equalization of Brooke County, 112 W. Va. 442, 164 S. E. 862. Perhaps it should be pointed out that appellees do not rely upon the decision of this Court in that case, but, on the contrary, the appellant avers that the decision supports its views. The Power Company complained that its property was assessed in excess of its true and actual value, and that, although its real property was assessed at one hundred per cent of its true and actual value, other real property in Brooke County was assessed at only eighty per cent of such value. The trial court denied
Christopher v. James, Tax Commissioner, 122 W. Va. 665, 12 S. E. 2d 813, was decided while there was in force in this State an income tax law. The taxpayer Christopher sought relief from a deficiency tax assessment laid by the State Tax Commissioner against the taxpayer on account of his income for the year 1937. The taxpayer had deducted from his gross income taxes paid to the Federal Government under the Social Security Act, the Bituminous Coal Act of 1937, and to the State of West Virginia under the Unemployment Insurance and Gross Sales Acts. This Court held that such deductions could not be made under the law then in effect, reversed the trial court and dismissed the petition. Near the end of the opinion, without any statement theretofore to indicate upon what it was based, appears this paragraph: “The taxpayer also draws into consideration the constitutional requirement of ‘equal and uniform’ taxation. Constitution of West Virginia, Art. X, Sec. 1. That provision means merely that as to classes of property, businesses or incomes there shall be uniformity of taxation. ‘A tax upon all business of the
At the general election in November, 1932, the voters pf this State ratified an amendment to Section 1, Article X, of the Constitution, usually referred to as the Tax Limitation Amendment. After the amendment was adopted, Section 1, Article X, insofar as pertinent, read as follows : “Subject to the exceptions in this section contained, taxation shall be equal and uniform throughout the State, and all property, both real and personal, shall be taxed in proportion to its value to be ascertained as directed by law. No one species of property from which a tax may be collected shall be taxed higher than any other species of property of equal value; except that the aggregate of taxes assessed in any one year upon personal property employed exclusively in agriculture, including horticulture and grazing, products of agriculture as above defined, including live stock, while owned by the producer, and money, notes, bonds, bills and accounts receivable, stocks and other similar intangible personal property shall not exceed fifty cents on each one hundred dollars of value thereon and upon all property owned, used and occupied by the owner thereof exclusively for residential purposes and upon farms occupied and cultivated by their owners or bona-fide tenants one dollar; and upon all other property situated outside of municipalities, one dollar and fifty cents; and upon all other such property situated within municipalities, two dollars; * * Pursuant to this Amendment, the Legislature, by Chapter 38, Acts of the Legislature, Regular Session, 1933, and by subsequent Amendments in 1933 and 1939, not here pertinent, enacted the following statute:
“Classification of Property for Levy Purposes. —For the purpose of levies property shall be classified as follows:
“Class I. All tangible personal property em*359 ployed exclusively in agriculture, including horticulture and grazing;
“All products of agriculture (including livestock) while owned by the producer;
“All moneys and all notes, bonds, bills and accounts receivable, stocks and any other intangible personal property;
“Class II. All property owned, used and occupied by the owner exclusively for residential purposes;
“All farms, including land used for horticulture and grazing, occupied and cultivated by their owners or bona fide tenants;
“Class III. All real and personal property situated outside of municipalities, exclusive of classes I and II;
“Class IV. All real and personal property situated inside of municipalities, exclusive of classes I and II.”
Thereafter, in 1943, this Court decided the case of In Re: Tax Assessments Against Hancock County Federal Savings and Loan Association, 125 W. Va. 426, 25 S. E. 2d 543. The principal question for determination in that case, and the only one to which the two syllabus points are directed, was the interpretation of Section 14-a, Article 3, Chapter 118, Acts of the Legislature, 1939, Michie’s 1955 Code, §683(1), relating to the assessment for the purpose of taxation of the property of building and loan associations and federal savings and loan associations. This was a three to two decision, two of the Judges of the Court writing separate dissents, and in neither of the dissenting opinions is there any reference to certain quotations from the majority opinion which will be set out herein. After quoting the statute and discussing its provisions, the Court said:
“* * * We hold that the assessor properly included in his assessment of the association’s property the sum of $650,903.35 covering the reported value of the association’s surplus, un*360 divided profits, reserves and uncollected interests.
“We are fortified in our conclusion by a study of the constitutional provisions relating to taxation which have guided us from the foundation of the state. That all property, both real and personal, shall be assessed, is one of the fixed stars in our system of taxation will be disclosed below.”
Immediately thereafter appears pertinent quotations from Section 1, Article VIII, of the Constitution of 1863, Section 1, Article X, of the Constitution of 1872, and Section 1, Article X, as amended by the Tax Limitation Amendment of 1932. That part of Section 1, Article X, of the Constitution, which, since the Constitution of 1863, has provided that: “* * * No one species of property from which a tax may be collected shall be taxed higher than any other species of property of equal value; * * for the second time made its way into an opinion of this Court, and, furthermore, on one page it was quoted three times. The first such case will be discussed later in this opinion. On the following page, the Court said: “The contention that we should reduce the assessment of the association’s property because, as contended, certain property of other classes, particularly real estate, is assessed at something less than its true and actual value is without merit. In West Penn Power Co. v. Board of Review, 112 W. Va. 442, 164 S. E. 862, it was held, in effect, that a taxpayer was entitled to have his property assessment reduced to the level at which other property of the same class was assessed in the same governmental unit. It will be noted' that this decision applies to property of the same class. It does not appear that intangible property in Hancock County is assessed at less than its true and actual value. There is, therefore, no basis for the application of the rule laid down in the West Penn case. This question was raised in Christopher v. James, 122 W. Va. 665, 12 S. E. 2d 813, 816, and it was stated in the body of the opinion that the requirement of equal and uniform taxation set out in Section 1, Article X of our Constitution ‘means merely that as to
In In Re: Tax Assessments Against Charleston Federal Savings & Loan Association, First Federal Savings & Loan Association, West Virginia Building and Loan Association and Empire Savings & Loan Association, 126 W. Va. 506, 30 S. E. 2d 513, this Court had before it for review a judgment of the Circuit Court of Kanawha County fixing the assessments 'of ¡the properties of the taxpayers for the imposition of ad valorem taxes in which it became necessary to construe the provisions of Code, 11-3-14-a, as amended, relating to the manner in which the value for assessment purposes of properties of building and loan associations should be ascertained. The Court said: “But we do not understand the appellants to contend that, admitting the power and efficacy of the legislative enactment of 1939, the same cannot be administered as directed, where to do so would discriminate against owners of other property of the same class in the same taxing district. This in reality is the paramount question presented on this appeal.” There follows this statement that must be given the gravest consideration in considering the issue before this Court in the instant proceeding: “Appellants have produced testimony tending to show that other classes of property, such as real estate, oil and gas properties, automobiles and household goods are assessed at less than their true and actual value in Ka-nawha County. We think this testimony must be disregarded. The ‘equal and uniform’ provision of our Constitution ‘means merely that as to classes of property, business or income there shall be uniformity of taxation.’ Christopher v. James, 122 W. Va. 665, 12 S. E. 2d 813, 816. See also Charleston & Southside Bridge Co. v. County Court, supra; in re Hancock County Federal Savings & Loan Association, 125 W. Va. 426, 25 S. E. 2d. 543. * * *” Thereafter there is quoted in the opinion several questions and answers directed to and made by the Chief Deputy Assessor of Kanawha County as to “the methods of assessment” of certain other types of Class
This Court had before it, in Bankers Pocahontas Coal Company, et al. v. County Court of McDowell County, 135 W. Va. 174, 62 S. E. 2d 801, the question of whether the lands of the taxpayers had been assessed for ad valorem taxation disproportionately “to the valuation of similar and adjacent lands.” That was the only question before the Court, and it affirmed the judgment of the Circuit Court of McDowell County, which, in turn had affirmed the action of the County Court, and, in effect, the Assessor of McDowell County that taxpayers had suffered no discrimination. The 2d Syllabus Point confirmed what this Court has held from its beginning that: “Arbitrary or unjust action by an assessor in fixing the value of land must be shown by clear and cogent proof in order that the complaining taxpayer may be
“With certain exceptions the organic law of this state requires that ‘taxation shall be equal and uniform throughout the State, and all property, both real and personal, shall be taxed in proportion to its value to be ascertained as directed by law * * Article X, Section 1, Constitution of West Virginia. Since the adoption of the classification amendment to the Constitution of this State on August 10, 1932, this Court has considered the question of uniform and equal taxation. In Christopher v. James, 122 W. Va. 665, 12 S. E. 2d 183, in which a deficiency assessment of State income tax was considered, the Court in relation to the constitutional requirement of equality and uniformity in taxation made the following pertinent statement: ‘That provision means merely that as to classes of property, businesses or incomes there shall be uniformity of taxation.’ The foregoing statement in the Christopher case was approved in In Re: Loan Association, 125 W. Va. 426, 434, 25 S. E. 2d 543. The same principle was likewise upheld in In Re: Tax Assessments, 126 W. Va. 506, 30 S. E. 2d 513. The judgment of this Court in In Re: Tax Assessments, supra, was affirmed by the Supreme Court of the United States. Charleston Federal Sav. & Loan Ass’n. v. Alderson, 65 S. Ct. 863, 324 U. S. 182, 89 L. ed. 857. It is well established law in this jurisdiction that the equality and uniformity of taxes are confined to a species of property rather than all taxable property in a taxing unit.
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“When there is a showing, as in the case of*366 Power Co. v. Board of Review, 112 W. Va. 442, 164 S. E. 562, that property has been taxed on the basis of one hundred per cent of its true and actual value, and that all other property of the same species in the same taxing unit is assessed on a basis less than the true and actual value the assessment on the lands of a complaining taxpayer should be reduced. The opinion in Power Co. v. Board of Review, supra, may be of doubtful force and effect, in view of the comment made in this Court’s opinion in In Re: Tax Assessments, supra, But, giving the opinion in the case of Power Co. v. Board of Review, supra, full force and weight, Bankers and Crozer have not brought their lands within the purview of the holding in that case. The evidence in this proceeding is not sufficient to show that there was a general plan relating to the valuation of lands similar to the lands here considered. Hence, no reduction of the valuation of Bankers’ and Crozer’s lands can be predicated upon the theory enunciated in Power Co. v. Board of Review, supra.”
Although further reference will be made to the decision of this case, it should be noted that, while the statement in Bridge Company v. County Court, supra, that a tax upon all businesses of the same class which is uniform as to that kind of business, is valid, was enlarged in Christopher v. James, supra, to read: “* * * that provision means merely that as to classes of property, businesses or incomes there shall be uniformity of taxation.” (Italics supplied.), such statement was converted in this case'to this language: “* * * It is well established law in this jurisdiction that the equality and uniformity of taxes are confined to a species of property rather than all taxable property in a taxing unit.” (Italics supplied.)
As heretofore stated, this Court held in In Re: Tax Assessments Against The National Bank of West Virginia At Wheeling and The Morris Plan Savings and Loan Company, supra, that under the provisions of Code, 11-3-14, providing for the manner in which the true and
In the recent case of In Re: Tax Assessments Against The Southern Land Company, Charles C. Dickinson, et al., 143 W. Va. 152, 100 S. E. 2d 555, the taxpayers assigned the following errors: “(1) Valuations on taxpayers’ properties are in excess of their true and actual values; (2) taxpayers are discriminated against by lower valuations of like adjacent property; (3) taxpayers are discriminated against by assessment of Class III property in Boone County at 61.75% of its value and Class II property and Class IV property at 28.45% and 25.85%,
It is interesting to note that in not one of these cases, and in no other pertinent decision of this Court, has the “no one species” provision of Section 1, Article X, of the Constitution, been discussed, or even mentioned. In a few cases, as heretofore noted, it was quoted along with the other provisions of the Section, but that was all. If, as contended by appellees, Section 1, Article X, of the Constitution, has been construed, and the provisions thereof that “all property, both real and personal, shall be taxed in proportion to its value”, and “no one species
The pertinent provisions of Section 28, Article II, of the Constitution of Tennessee, 1870, were construed in Taylor v. Louisville & N. Ry. Co., 88 F. 350, and the opinion therein was written by William Howard Taft, then Circuit Judge, who, of course, later became Chief Justice of the United States Supreme Court. Such provisions of the Constitution of Tennessee read: “All property — real, personal and mixed — shall be taxed, * * *. All property shall be taxed according to its value, that value to be ascertained in such manner as the Legislature shall direct, so that taxes shall be equal and uniform throughout the State. No one species of property from which a tax may be collected shall be taxed higher than any other species of property of the same value.” (Italics Supplied.) Judge Taft, in his opinion, said: “The sole and manifest purpose of the constitution was to secure uniformity and equality of burden upon all the property in the state. As a means of doing so (conceding that defendant’s construction is the correct one), it provided that the assessment should be according to its true value. It emphasized the object of the section by expressly providing that no species of property should be taxed higher than any other species. We have before us a case in which the complaining taxpayer, and other taxpayers owning the same species of property, are taxed at a higher rate than the owners of other species of property. This does not come about by legislative discrimination, but by the intentional and systematic disregard of the law by those charged with the duty of assessing all other species of property than that owned by complainant and its fellows of the same class. This is a flagrant violation
The Supreme Court of Arkansas, in White River Lumber Company v. State, 175 Ark. 956, 2 S. W. 2d 25, citing Taylor v. Louisville & N. Ry. Co., supra, held that it was a violation of the pertinent provisions of the Constitution of that state to tax the taxpayer’s property at fifty per cent of its market value, whereas other “property in the county mentioned had been assessed at only thirty per cent of its value.” It was therein held that the taxpayer’s assessment should be reduced to thirty per cent of its value in conformity with the assessment on other properties. This is the provision of the Arkansas Constitution in effect at that time: “All property subject to taxation shall be taxed according to its value, * * * that value to be ascertained in such manner as the General Assembly shall direct, making the same equal and uniform throughout the State * * *. No one species of property from which a tax may be collected shall be taxed higher than another species of property of equal value. * * *” (Italics supplied.)
In Greene v. Louisville & Interurban R. Co., (Ky.), 244 U. S. 499, 61 L. ed. 1280, 35 Sup. Ct. 673, this provision of the Kentucky Constitution was construed: “All property, whether owned by natural persons or corporations, shall be taxed in proportion to its value, * * Although the Constitution of that state has no “no one species” clause, it was held that the constitutional provision was violated by assessing the property of the taxpayer at seventy-five per cent of its actual value while taxable property in general was assessed systematically and intentionally at not more than fifty-two per cent of actual value.
In the Texas case of Porter v. Langley, 155 S. W. 1042, bank shares were assessed at one hundred per cent of true and actual value while real property of the value of $90.00 to $125.00 an acre was assessed at only forty per cent of actual value an acre. The collection of the
Section 1 of Article IX of the Constitution of Illinois provided that the legislative body of that state should provide revenue “by levying a tax, by valuation, so that every person and corporation shall pay tax in proportion to the value of his, her or its property * * *.” In First National Bank of Urbana v. Holmes, 246 Ill. 362, 92 N. E. 893, bank stock and other personal property were assessed at seventy-five per cent of their actual value while real property was assessed at forty-three per cent of its actual value, and the court held that such assessment was in violation of the Constitution of that state. In the opinion, it was said: “* * * It is not within the power of the Legislature to provide that different classes of property shall be valued differently, and, if moneys, mortgages, bonds, or securities are valued at a different proportion of their full value or on a different basis from other property, the Constitution and the law are both violated. * * *”
In Cummings v. Merchants National Bank, (Ohio), 101 U. S. 153, 25 L. ed 903, the Supreme Court of the United States, applying a provision of the Ohio Constitution, affirmed the judgment of the Circuit Court in enjoining excessive taxation attributable to the assessment of bank shares at one hundred per cent of their true value, whereas real property was assessed at about one-third of its actual value; ordinary personal property at about the same amount; and moneyed capital at six-tenths of its true and actual value. The Constitution of Ohio merely provided that: “* * * Laws shall be passed taxing by a uniform rule all moneys, credits, investments in bonds, stocks, joint stock companies, or otherwise ; and also all the real or personal property, according to its true value in money. * * *”
Although there may be found decisions from other
If this Court had at any time undertaken to construe the provisions of Section 1, Article X, of our Constitution, and read out of it the “no one species” and “in proportion to value” provisions, such a construction would certainly have led to a consideration of its origin in the Constitutional Convention of 1861-1863, in which it was adopted, and the legislative debate which led to the adoption of the resolution providing for the submission to the voters of this State the Amendment to Section 1, Article X, which was adopted in 1932, and, as heretofore stated, is often referred to as the Tax Limitation Amendment. Fortunately, the debates and proceedings of the First Constitutional Convention of this State were reported, preserved and have been printed at the direction of this Court in three volumes, containing more than twenty-five hundred pages of written material. It should be observed that insofar as the pertinent provisions of that Section are concerned, they remain as they were when adopted by that Convention, and approved by the voters of this State prior to June 20, 1863. There follows some quotations from the debate of the delegates to the Convention prior to its adoption. In commenting upon Section 1, in general, and the “no one species” provision in particular, the following delegates made the following observations: J. W. Paxton was the Chairman of the Committee on Taxation and Finance, and, in submitting the Section on taxation, including what became Section 1, Article X, said:
“* * * It is of this, sir, that the people of West Virginia have ever complained; and whilst the ordinance of secession may have been the occasion of this new State movement on the part of our people, I apprehend there can be little*373 doubt in the mind of any one that the fundamental cause for this division and desire for a new state may be found in the injustice and oppression which our people have suffered from unequal taxation, from oppressive taxation and unequal representation.
“It appears to me, sir, in framing a new constitution now for the people of West Virginia we should be particularly careful to guard against the liability in future of the perpetration of any such injustice on any portion of our own people.”
Delegate Van Winkle: “* * * Now, sir, in reference to the taxation clause, here comes the rule; it is defining the principle and giving the legislature and all other persons to understand precisely what is meant here, and there can be no escape from it. The language of the whole section is concise, and it appears to me there is no unnecessary repetition. Some that may not be very palateable, but nevertheless necessary. It says in so many words, that no one species of property from which a tax may be collected shall be taxed less than any other species of equal value. I trust the Convention will retain this clause precisely as it stands. * * *. I think this is the turning point, the test question of all this matter, and it is now on this question proposed for this Convention to decide whether they do want taxes that are really alike or leave the whole matter at sea again and be treated as we have been under the present Constitution, by which an unjust proportion of taxes, as everybody knows, has been paid by this western section of the commonwealth— taxed, sir, to pay for slaves that are hung; taxed to pay rewards for runaway slaves; and then the slaves themselves not taxed in proportion to their value. * * *
“* * * I cannot imagine that any other system can be called ‘equal and uniform’, and the Convention may depend that it is not a question of language here — not because these words may be simply superflous — that they want them*374 stricken out. It is because they want to get rid of the principle. And if it is a mere question of words, then I beg the Convention to let the words stand, and we shall know precisely what this section means. There can be no mistake about it if these words- are left in.” (Italics .supplied.)
-Delegate Lamb: “* * * The words here are so clear, so precise- that there is no misunderstanding the meaning,-and a common man as well as a lawyer can say exactly what is their effect. * *
Delegate Dille: “* * * Then the second sentence goes a. little further, and I think it is proper, especially as we have so long contended for that principle — not contended for it in one view of it but in every view — and that more clearly expresses our sentiments. Having for the first time in the history of our portion of the state had an opportunity to do so, we clearly fix upon the legislature a prohibition that they shall not in the exercise of any discretion or any power that they may conceive that they may possess, upon any species of property, in any way, violate this fundamental principal. It seems to me we ought to have that provision, and we ought to so impress, it, not only upon our people but upon our legislature that they may not under any circumstances, in reference to any species of property, violate that fundamental principle; * * *.
“Hence, I am in favor of the section as it stands; and I think it is really a provision that we ought to have and that we ought to abide by in detail for fear that the legislature might at some future period in its history feel disposed to violate in reference to some species of property this grand' and fundamental principle that taxation shall be uniform throughout the entire State on every kind of property according to its value.” (Italics supplied.)
Chairman Paxton: “* * * In regard to this second clause, ‘no one species of property from which a tax may be collected shall be taxed higher’ than another, I can assure gentlemen*375 that so far as I am concerned and the committee is concerned, there is no cat in the meal bag about it. It was simply intended to make just that much more specific, as I think it is, the first declaration that all property shall be taxed alike according to value. There cannot possibly be any misapprehension about that, it is so plain. ❖ * ❖
iji ij?
“A single remark I forgot is simply this; that this section does not in any manner restrict the legislature in the imposition of taxes on privileges or anything else that is not property. The legislature is at perfect liberty to tax in any manner, shape or form, or by any name it pleases, what they please, provided they do it in conformity to this principle; to which I think no exception can be taken.” (Italics supplied.)
Delegate Sinsel: “* * * In the second place, I understand all property shall be taxed in proportion to its value. That is, if one horse is worth $5, tax it on $5, and if another is worth $125, tax it on $125. And so on with every other species of property. Well, the mode of ascertaining the valuation, as I understand the section, the legislature is to prescribe — how it shall be done and who shall do it and so on. Well, now sir, in the first part of the second sentence, ‘no one species of property from which a tax may be collected shall be taxed higher than any other species of property of equal value.’ I presume this clause never would have entered into this Constitution had it not been that there is a clause in the present Constitution of Virginia which was in direct opposition to this principle; and I suppose the committee wished to remove all doubt from the mind of the most common reader that their property should be taxed in proportion to its value, no matter whether it was a horse, cow, sheep, hog, slave or whatever it might be. * * *” (Italics supplied.)
Delegate Van Winkle: “* * * If you want to make a constitution that is to confer the bene*376 fits we hope to derive from it, then make it equal in its privileges and purview and don’t give to one what you deny to another; don’t impose a burden on one that you don’t impose on another in proportion. That is the only fair and just rule; and if there is any cat in the meal, I should like to know where it lies. The cat must be in trying to make one pay more than his fair proportion if it lies anywhere.”
Delegate Brown of Kanawha County, soon to become a Judge of this Court, offered an Amendment as a substitute for Section 1, which, if adopted, would have read:
“ Taxation shall be equal and uniform throughout the State on all property both real and personal according to its value; but property used for educational, literary, scientific, religious and charitable purposes may by law be exempted from taxation.”
Delegate Brown’s Amendment was defeated by vote of thirty to seventeen. It is interesting and enlightening to compare Delegate Brown’s Amendment to the pertinent provisions of the Constitution of Virginia of 1851, which was in effect in that state, and in what is now the State of West Virginia, until after the beginning of the War Between The States. Section 22, Article IV, of the Virginia Constitution provided that: “Taxation shall be equal and uniform throughout the commonwealth, and all property other than slaves shall be taxed in proportion to its value, which shall be ascertained in such manner as may be prescribed by law.” Section 23, Article IV, provided: “Every slave who has attained the age of twelve years shall be assessed with a tax equal to and not exceeding that assessed on land of the value of three hundred dollars. Slaves under that age shall not be subject to taxation; and other taxable property may be exempted from taxation by the vote of a majority of the whole number of members elected to each house of the general assembly.”
If this Court had found ambiguity in Section 1, Article
Before evaluating the decisions of this Court that have heretofore been discussed, in the light of the principle of stare decisis, attention should be called to the decision of this Court in Chesapeake & Ohio R. Co. v. Miller, 19 W. Va. 408, decided on April 22, 1882. Although no question of the assessment of property for the levying of taxes was involved, this Court in that case did construe the provisions of Section 1, Article X, in finding that an Act of the Legislature was void as being in violation of the Section wherein it was attempted to exempt the Chesapeake & Ohio Railway Company from taxation “until the profits of said company shall amount to ten per cent on the capital of said company.” With reference to that portion of the Section which is here pertinent, the Court said: “* * * The section of the Constitution we have been considering declares, first, that ‘taxation shall be equal and uniform throughout the state.’
In view of the questions raised in In Re: Hancock County Federal Savings and Loan Association, supra, and Bankers Pocahontas Coal Company v. County Court, supra, as to the correctness of the holding in the West Penn Power Company case, because of the decision of the Supreme Court of the United States in Nashville, C. & St. L. Ry. v. Browning, et al., 310 U. S. 362, the decision in the Browning case should be carefully scrutinized. One of the complaints of the taxpayer in that case, and the only one here pertinent, was that it and all other railroads and public utility companies had been discriminated against by the taxing authorities of Tennessee in that such properties were assessed for ad valorem taxation purposes at actual value “while the property of all other taxpayers was assessed at two-thirds of its actual value.” In support of that contention, the taxpayer had submitted affidavits of assessors and members of county boards of equalizers to the effect that “affiants intention
In 17 M. J., Stare Decisis, Pages 185 to 197, the applicable West Virginia and Virginia cases are collected and commented upon. Reference is made to all of the cases there cited, but specific attention will be directed to only a few. The rule of stare decisis does not apply where the former decisions have misunderstood or misapplied the law or are contrary to reason. Simpkins v. White, 43 W. Va. 125, 27 S. E. 361. “* * * no legal principle is ever settled until it is settled right.” Weston v. Ralston, 48 W. Va. 170, 36 S. E. 446. “* * * it is better to be right, than to be consistent with the errors of a hundred years.” Lovings v. Norfolk & W. R. Co., 47 W. Va. 582, 35 S. E. 962. “Whenever a decision of this Court is found, on careful consideration, to be illogical, opposed to public policy, and subversive of the supreme law of the land, the public welfare, and the sovereignty of the people, * * * it is the solemn duty of this Court to disapprove it and end its evil influences.” Ralston v. Weston, 46 W. Va. 544, 33 S. E. 826. The 5th Syllabus Point of Burks v. Hinton, 77 Va. 1, follows: “The doctrine of stare decisis grows out of the necessity for a uniform and settled rule of property and definite basis for contracts and business transactions. If a decision is wrong, it is only when it has been so long the rule of action, that time and its continued application as the rule of right between parties, demand the sanction of its error, that this doctrine applies.. It does not apply to questions of the construction of organic law.” This Court does not, by quoting the syllabus point of this case, necessarily adopt that extreme view as its own. A question of law not brought to the attention of the Court, nor passed upon by it, cannot be considered as involving the same question. Southern Ry. Co. v. Childrey, 113 Va. 376, 74 S. E. 221. Obiter dicta or strong expressions in an opinion, where such language was not necessary to a decision of the case, will not establish a
It is the judgment of this Court that the final judgment of the Circuit Court of Kanawha County must be reversed for the reason that it imposes a discriminate burden of taxation upon the taxpayer that is forbidden by Section 1, Article X, of the Constitution of this State. This Court does not have the authority to fix the assessment of its property so that it may be relieved of that discrimination, but such is by statute invested in the trial court and the case will be remanded for that purpose. The provisions of Section 1, Article X, of the Constitution, are clear and unambiguous. Particularly is that true as to the provisions relating to the taxing of property, real and personal, which are pertinent to the issue before this Court in this case. In plain, simple language it provides that all property not exempt from taxation “shall be taxed in proportion to its value. No one species of property from which a tax may be collected shall be taxed higher than any other species of property of equal value.” The word “species” is defined in Webster’s New International Dictionary as: “A sight, outward appearance, shape, form, a particular sort, kind, or quality, * * *.” The word “class” is there defined as: “A group of persons, things, qualities, or activities, having common characteristics or attributes; a set; a kind, description, species, or variety.” Section 1 is composed of simple words that were in general usage a hundred years ago as well as the present time. Their meaning
The only ambiguity that attaches to this Section arises from certain former decisions of this Court. All have been heretofore discussed and the opinion in each has been quoted herein to an extent that is not usually desirable. Clearly what was said in some of those cases that is in conflict with the decision of this Court in the instant case is pure obiter dictum. In others, if what was said that is inconsistent with what is here held may be recognized as rising to the dignity of becoming the law of the cases, the decisions were predicated upon dicta in former decisions and it was accepted as controlling without question. But whether decision or dicta, this Court is impelled to strike down whatever is contained in those former decisions of this Court that is in conflict with the decision in this case. Therefore, the following cases are disapproved insofar as, and only insofar as, they are in conflict with the decision of this Court in the instant case: Charleston & S. Bridge Co. v. Kanawha County Court, 41 W. Va. 658, 24 S. E. 1002; Christopher v. James, 122 W. Va. 665, 12 S. E. 2d 813; In Re: Hancock County Federal Savings & Loan Association, 125 W. Va. 426, 25 S. E. 2d 543; In Re: Tax Assessments Against Charleston Federal Savings and Loan Association, 126 W. Va. 506, 30 S. E. 2d 513, 324 U. S. 182, 65 S. Ct. 624, 89 L. ed. 857; Bankers Pocahontas Coal Co. v. County Court, 135 W. Va. 174, 62 S. E. 2d
In four of these cases either the principal or the sole issue before the Court was the validity of an Act of the Legislature directing the manner in which the value of a certain type or species of property should be ascertained for the laying of an ad valorem tax against it. These Acts were passed pursuant to the provision in Section 1, Article X, that property “shall be taxed in proportion to its value to be ascertained as directed by law.” The action of the Court in finding the Act valid in each of those cases is approved. In two other cases, the trial court was affirmed in its decision that the taxpayer had failed to prove that his property had been assessed disproportionately to other property. Those decisions are likewise approved. The other case related to the construction and validity of the state income tax law then in effect, and did not involve the “property” provisions of Section 1, Article X, of the Constitution. It too is approved. We cannot accept the view that any of those cases would have been decided contrary to the principles herein enunciated if the evidence of discrimination between species of property had been as clear as it is in this case, and the taxpayer had relied solely upon the “property” provisions of Section Í, Article X, thus presenting to the Court the precise question that has been passed upon in this case. Our respect for the judgment and perspective of the Judges who participated in those decisions, and particularly of the Judges who wrote the opinions, is such that we must reject any suggestion to the contrary.
The XIV Amendement to the Constitution of the United States was adopted in 1868, five years after Section 1, Article X, of our Constitution. At that time many State Constitutions contained “equal and uniform” provisions
Four elements are necessary to the imposition of an ad valorem property tax: (1) A taxpayer; (2) taxable property; (3) an assessment of its value; and (4) a rate on the unit of valuation. In this State, the rate is based on each one hundred dollars of valuation. Under the provisions of Code, 11-8-5, as amended, property is divided into four classes, as heretofore noted, pursuant to the Tax Limitation Amendment of 1932. The constitutional amendment and the statute provide that the rate of taxation upon property of the different classes shall not exceed a designated sum of money upon each one hundred dollars of the assessed value of such property. The property of the appellant falls in Class I where the maximum rate is fifty cents on each hundred dollars of assessed valuation. It has no cause for complaint in that regard for the same rate was imposed upon all property of that class in Kanawha County for the year 1957. What this taxpayer complains of, and the evidence clearly shows that his complaint is valid, is that its property was taxed for that year upon an assessed value equal to the actual value of its property, whereas all other property except money was taxed upon an assessed value less than the actual value of such property. Neither the Tax Limitation Amendment, nor the enabling legislation enacted pursuant to it, purported to “classify” property by “species”. There are several different species of property in Class I, and, of course, many other species of property in the other three classes. The Amendment of 1932 of Section 1, Article X, did not purport to change the Section except to prohibit the taxing of certain designated properties above fixed rates. It did not destroy the guarantee of property taxation proportionate to value, or the “no one species” provision. Nor did it empower'any taxing official or the Legislature to do by indirection what it could not do directly. A horse used wholly for farm purposes and
This Court does not have the power to amend, alter, or repeal any provision of the Constitution of this State. That is a prerogative that the people have reserved unto themselves alone. It is within our power though, and our paramount duty, to prevent others from amending or repealing any part of the organic law of this State except in the manner provided in the document itself. It may be the will of the people of this State, after ninety-six years, that the pertinent provisions of Section 1, Article X, should be changed or removed therefrom altogether. If so, the time is opportune. There was recently created, and is now functioning, a Commission on Constitutional Revision whose purpose is possible revision of the Constitution of 1872, and the subsequent Amendments thereto. It may be that Mr. Justice Frankfurter was expressing the sentiment of a majority of the people of this State in Nashville, C. & St. L. Ry. v. Browning, et al., supra, when he said: “This Court has previously had occasion to advert to the narrow and sometimes cramping provision of these state uniformity clauses, and has left no doubt that their inflexible restrictions upon the taxing powers of the state were not to be insinuated into that meritorious conception of equality which alone the Equal Protection Clause was designed to assure.” Maybe so. Maybe not. The people of Virginia had some bitter experiences prior to the Revolutionary War with what King George III considered a “meritorious conception” of taxation. They found this system unpalatable in that it cast an unequal burden upon those least <abld to bear it. “Taxation without representation” was a principal cause of the King losing a very valuable part of his kingdom. The State of Virginia at first
We are not influenced by the testimony of the Assessor, to the effect that, according to the Tax Commissioner’s appraisal, isolated parcels of real property in Kanawha County may vary in assessment, as related to actual value, from nine per cent to one hundred thirty per cent. In a county of this size, or in any county, perfection is not expected of an assessor, or a county court, in performing his or its duties. We approve the views
In accordance with the foregoing, the judgment of the Circuit Court of Kanawha County is reversed and this case is remanded to that court for further proceedings, not inconsistent with the principles herein enunciated.
Reversed and remanded with directions.
Dissenting Opinion
dissenting:
Believing as I do that the decision of this Court reversing the judgment of the circuit court in this case is not supported by the evidence, is contrary to its prior decisions, is logically inconsistent and is legally unsound, I respectfully but emphatically express my dissent.
The evidence shows beyond question that there is no general assessment of property in Kanawha County for 1957 at forty per cent of its true and actual value. On the contrary it clearly appears from the undisputed evidence that the assessor is merely engaged in an effort to
Called as a witness by the plaintiff the assessor was asked these questions and gave these answers: “Q. Having arrived at a value by the book value method, what percentage of that true and actual value have you assessed the stock ? A. One hundred per cent. Q. What percentage of true and actual value have you assessed other property in Kanawha County for the year 1957? A. We
On cross-examination the assessor was asked these questions, among others, and gave these answers: “Q. You have also been advised by the Tax Commissioner that a spot check was simply their method of obtaining information, and that you were not completely bound by it in your assessment? A. Not bound by it except in my percentage for State aid purposes. * * *. Q. Yes, but their spot checks and the figures they give you with reference to particular pieces of property is simply their opinion, based on information they had of the value from sources which we don’t know, but which you are not completely bound by as to your assessment for tax purposes. Isn’t that right? A. I am only bound in order to qualify for State aid. * * (Emphasis supplied).
From the foregoing uncontroverted evidence it is obvious that there was no systematic or general assessment of property in Kanawha County in 1957 at forty per cent of its true and actual value but, on the contrary, the real estate assessments varied from “9 to 130 per cent” of such value; that the assessment of real estate “at not less than 40 per cent of the Tax Commissioner’s appraisal” shows that such assessment at least in some instances was more, without indicating how much more in any specific case, than forty per cent of its true and actual value; that bank stock was uniformly assessed at one hundred per cent of its value; and that numerous other classes of property were assessed at different percentages of their value. Under the evidence there has been no discrimination against the plaintiff in favor of other holders of bank stock, all having been assesed at one hundred per cent of its value, and there is no justification for reducing the stock of the plaintiff from one hundred per cent of its value to a nonexistent general or systematic valuation of forty per cent. In the absence of any showing of a general or systematic assessment of property at forty per cent of its true and actual value, which the plaintiff was required but has failed to es
The evidence merely shows “a systematic plan,” to use the language of the majority, to assess property in Ka-nawha County at approximately forty per cent of its true and actual value. “A systematic plan” to assess property does not constitute a general or systematic assessment of property and furnishes no basis for the determination of discrimination against the plaintiff in the valuation and the assessment of its property. (Emphasis suplied). In the light of the undisputed evidence any general assessment of property in the county at forty per cent of its true and actual value, which results in any prejudicial discrimination against the plaintiff in the assessment of its stock at one hundred per cent of its true and actual value, is completely eliminated from this case. The evidence demonstrates an utter failure to establish any uniform standard of valuations of forty per cent with which to compare the valuation at which the stock of the plaintiff has been assessed and unless such standard is established there can be no unlawful discrimination against the plaintiff in the assessment of its stock at a higher valuation than that placed upon other property in the county. See In Re: Tax Assessments Against Charleston Federal Savings and Loan Association, 126 W. Va. 506, 30 S. E. 2d 513, affirmed in Charleston Federal Savings and Loan Association v. Alderson, 324 U. S. 182, 65 S. Ct. 624, 89 L. Ed. 857. In that case, though the intangible property of the taxpayer, a Federal savings and loan association, was valued at approximately thirty per cent more than other property of the same class which was valued at approximately seventy per cent of its true and actual value, notes and accounts were valued at sixty five to seventy per cent and bonds at seventy per cent of their face value, livestock and agricultural products were valued at about fifty per cent of their purchase value, and accounts receivable and notes were valued at about
Inasmuch as all bank stock is assessed at one hundred per cent of its true and actual value and as its assessment at that percentage of its value is not discriminatory but equal and uniform among the members of that class of property owners, this Court should have adhered to and followed its former decisions and held valid the assessment as fixed by the circuit court on the basis of one hundred per cent of the true and actual value of the stock of $6,000,000.00.
In invalidating the assessment of the stock of the plaintiff for failure to conform to an imaginary standard of valuation of property at forty per cent of its value, this Court ignored and, I think erroneously, refused to follow its prior decisions which recognize the validity of assessments which are equal and uniform within the same type or class of property even though other and different types or classes of property are not taxed at the same valuation provided taxation within the particular class is equal and uniform. Until the decision in this case this Court, under Article X, Section 1, of the Constitution of this State, has upheld the validity of taxation of property in a particular class which is equal
That the present decision is in direct conflict with numerous prior decisions of this Court involving the validity of assessments of taxes based upon the value of the property against which the challenged tax was assessed and constitutes a surprising and, in my judgment, an entirely unwarranted disregard of the salutary principle of stare decisis, clearly appears from even a cursory examination of the cases in which those decisions were rendered.
In Charleston and Southside Bridge Company v. Kanawha County Court, 41 W. Va. 658, 24 S. E. 1002, error dismissed, 168 U. S. 704, 18 S. Ct. 941, 42 L. Ed. 1212, cited with approval in numerous later cases and never criticized or departed from until the present decision, the assessment of a toll bridge of the plaintiff in the manner required by a statute providing a particular method of assessing toll bridges and ferries was challenged as viola-tive of the provisions of Article X, Section 1, of the Constitution. It was contended that the bridge should be assessed as other real estate and not as personal property. This Court rejected that contention and recognized the validity of the valuation of any class of property where the value of the same class of property is ascertained throughout the State in the same manner. Points, 2, 3 and 4 of the syllabus in that case are expressed in this language: “2. The legislature has power to prescribe the method by which the valuation of any class of property may be ascertained, and, where the value of the same class of property is ascertained throughout the state in the same manner, such valuation can not be regarded as unconstitutional for lack of uniformity or equality. 3. The Constitution prescribes what property is to be taxed, and the legislature prescribes the manner in which it shall be taxed, which mode of taxation shall be equal and uniform as to all classes of property. 4. A tax upon all business of the same class, which is uniform
In Christopher v. James, 122 W. Va. 665, 12 S. E. 2d 813, involving the question of the right of the taxpayer to deduct certain items of expenses of business from taxable income under a statute then in force but since repealed, this Court, discussing the meaning of the requirement of equal and uniform taxation under Article X, Section 1, of the Constitution said: “That provision means merely that as to classes of property, businesses or incomes there shall be uniformity of taxation. ‘A tax upon all business of the same class, which is uniform as to that kind of business, is not unconstitutional.’ Charleston & S. Bridge Co. v. County Court, 41 W. Va. 658, 24 S. E. 1002.” That quotation again gives recognition to the validity of the asssessment of taxes upon property in different classes if the assessment is equal and uniform within the same class.
In the case of In Re: Tax Assessments Against Hancock County Federal Savings and Loan Association, 125 W. Va. 426, 25 S. E. 2d 543, involving the valuation of property of a Federal savings and loan association for
In the case of In Re: Tax Assessments Against Charleston Federal Savings and Loan Association, 126
With respect to Article X, Section 1, of the Constitution, the opinion contains these statements: “Recent radical changes in our tax system, brought about by the adoption of the tax limitation amendment, Section 1 of Article X of our Constitution, where property is classified, gives rise to the suggestion that once property has been classified, there can be no further distinction as to property within a given classification. Whether there
In Bankers Pocahontas Coal Company v. County Court
In In Re: Tax Assessments Against The National Bank of West Virginia at Wheeling and The Morris Plan Savings and Loan Company, 137 W. Va. 673, 73 S. E. 2d 655, the complaining taxpayers challenged the assessment of ad valorem taxes against the property of a national bank and an industrial loan company. The assessor made the original assessment on the basis of the book value of the shares of stock in each corporation. The county court upon review arrived at a different value by considering other relative methods and factors. The taxpayers contended that the valuation of the shares should be based on a sales price method. This Court reversed the assessment based on the book value method and in the opinion which was concurred in by two of the three judges who constitute the majority in the case at bar used this language: “Our State Constitution, Article X, Section 1, provides: ‘Subject to the exceptions in this section contained, taxes shall be equal and uniform throughout the State, and all property, both real and personal shall be taxed in equal proportion to its value to be ascertained as directed by law * * The exceptions made in the section have no application to the questions involved in the instant proceeding. Thus, the ultimate goal is ‘equal and uniform taxation’.
“Moreover, the uniformity required relates to property of a particular class. It is not required that property, businesses or income of different classes be taxed equally and uniformly. Bankers Pocahontas Coal Co. v. County Court, 135 W. Va. 174, 62 S. E. 2d 801; In Re: Tax Assessments Against Charleston Federal Savings & Loan Association, et al., 126 W. Va. 506, 30 S. E. 2d 513, affirmed 324 U. S. 182, 65 S. Ct. 624, 89 L. ed. 857; Arslain v. Alderson, 126 W. Va. 880, 30 S. E. 2d 533; In Re: Tax Assessments Against Hancock County Federal Savings and Loan Association, 125 W. Va. 426, 25 S. E. 2d 543; Bridge Co. v. County Court, 41 W. Va. 658, 24 S. E. 1002.”
“Subject to the limitations governing the jurisdiction of this Court, the question before us is raised by Article X, Section 1, of the West Virginia Constitution, which reads: ‘Subject to the exceptions in this section contained, taxation shall be equal and uniform throughout the State, and all property, both real and personal, shall be taxed in proportion to its value to be ascertained as*407 directed by law. No one species of property from which a tax may be collected shall be taxed higher than any other species of property of equal value * * V This requirement of equality and uniformity of taxation, as set forth in Article X, Section 1 of the West Virginia Constitution, means that as to all classes of 'property, business or incomes there shall be uniformity of taxation. West Penn Power Co. v. Board of Review and Equalization of Brooke County, 112 W. Va. 442, 164 S. E. 862; Christopher v. James, 122 W. Va. 665, 12 S. E. 2d 813; Charleston & Southside Bridge Co. v. Kanawha County Court, supra.” (Emphasis supplied).
The foregoing quotation “that as to all classes of property, business or incomes there shall be uniformity of taxation” shows conclusively that this Court, in considering both the “equal and uniform” provision and the “no one species” provision of Article X, Section 1, of the Constitution, which were quoted in the opinion in the Southern Land Company case and also in the opinion in the Hancock County Federal Savings and Loan Association case, recognized the validity, under both provisions, of classifications for the valuation of taxable property of different types or classes provided the valuation within each particular class was equal and uniform. If it did not do so it would not have expressly used the terms “all classes” which necessarily imply the existence of more than a single class or species of property the valuation of all of which must be the same to be equal and uniform. The application now made by the majority in the instant case of the “no one species” clause necessarily abolishes “all classes” of property and permits only the existence of one universal all inclusive single class of property within which the valuation for the assessment of ad valorem taxes must be the same for every kind of property, and this requirement of a universal all inclusive single class is in direct and irreconcilable conflict with its utterances in the foregoing series of cases beginning with Charleston and Southside Bridge Company v. Kanawha County Court, 41 W. Va. 658, 24 S. E. 1002,
Inasmuch as this Court in its decisions in the foregoing
The provisions that “taxation shall be equal and uniform throughout the State, and all property, both real and personal, shall be taxed in proportion to its value to be ascertained as directed by law” and that “No one species of property from which a tax may be collected shall be taxed higher than any other species of property of equal value,” have been a part of the Constitution since the formation of this State and each appeared, in the identical language just quoted, in Article VIII, Section 1, of the Constitution of 1863, and in Article X, Section 1, of the present Constitution adopted in 1872, and the same language remains in the same Article and Section notwithstanding the amendment to that Article and Section in November 1932 which authorized the division of all taxable property into four classes for the establishment of rates of taxation and imposed a limitation on the rate or amount of the tax which may be levied upon each class of property. The absence of any discussion of the provision that “No one species of property from which a tax may be collected shall be taxed higher than any other species of property of equal value;” did not eliminate it from the Constitution or remove or impair its operation or effect. It can not be contended, with any show of sound reason or any degree of convincing persuasion that the several judges of this Court who participated in the decisions in the cases of Charleston and Southside Bridge Company v. Kanawha County Court, 41 W. Va. 658, 24 S. E. 1002, error dismissed 168 U. S. 704, 18 S. Ct. 941, 42 L. Ed. 1212, West Penn Power Company v. Board of Review and Equalization of Brooke County, 112 W. Va. 442, 164 S. E. 862, Christopher v. James, 122 W. Va. 665, 12 S. E. 2d 813, In Re: Tax Assessments Against Hancock County Federal Savings and
It is pertinent to make particular mention of the seven prior decisions of this Court which the majority in the case at bar was required to disapprove in order to reach the conclusion that the assessment of the stock of the plaintiff at one hundred per cent of its true and actual value was violative of the “no one species”'clause of the Constitution. In the first of these cases, Charleston and Southside Bridge Company v. Kanawha County Court, 41 W. Va. 658, 24 S. E. 1002, error dismissed 168 U. S. 704, 18 S. Ct. 941, 42 L. Ed. 1212, decided in 1896, the opinion in which was written by Judge English, the decision was concurred in by the other three members of this Court who were Judges Holt, Brannon and Dent, although Judges Brannon and Dent filed separate concurring opinions. In the second case, Christopher v. James, 122 W. Va. 665, 12 S. E. 2d 813, decided in 1940, the opinion in which was written by Judge Maxwell, the decision was concurred in by the four other members of this Court who were Judges Riley, Hatcher, Kenna and Fox. In the third case, In re: Tax Assessments Against Hancock Federal Savings and Loan Association, 125 W.
The history of the incorporation in the Constitution of 1863 of the “no one species” provision and the reason for its adoption militate against and do not support the conclusion reached by the majority in this case. Prior to and at the time of the formation of this State the Constitution of Virginia of 1851, in Article IV, Sections 22 and 23, contained these provisions: “Taxation shall be equal and uniform throughout the commonwealth, and
If the “no one species” clause is now to be used to reduce the valuation of all property to the level recognized by “a systematic plan” to assess property at a specified percentage of its true and actual value to the exclusion of different valuations of different classes of property which are equal and uniform within each class, which, as I understand the majority decision, is the result which it requires, the value of the stock of the plaintiff should be reduced, not to forty per cent of its true and actual value, but instead to twenty per cent of its true and actual value to conform to the “systematic plan” followed by the assessor of Kanawha County who has actually assessed machinery and equipment at a valuation based upon twenty per cent of their original cost. And this principle must necessarily apply under the “equal and uniform” clause to the valuation of property in every county of this State.
In my opinion the present decision will inevitably result in confusion and uncertainty in the valuation of the property of utilities which own property and operate in
As heretofore pointed out, the present decision, instead of harmonizing the “equal and uniform” provision and the “no one species” provision in Article X, Section 1, of the Constitution, has rendered them apparently
It should be emphasized that, until the present decision, the prior decisions of this Court have consistently been considered binding authority to be followed and adhered to unless such prior decisions are found to be plainly erroneous or utterly unsound. By expressly disapproving the seven prior decisions of this Court cited and referred to earlier in this dissenting opinion, the majority has departed from that salutary and well established principle. Instead of adopting the reasons set forth and the conclusions reached by this Court in those decisions, the majority seeks to sustain its present decision by citing and relying upon numerous decisions by courts in other jurisdictions in disregard of the rule that such decisions should be accorded only persuasive but not controlling force and effect. I am unwilling to ignore the decisions of this Court and instead to apply the decisions to the contrary of the courts of other jurisdictions in the consideration and disposition of any case by this Court.
In my judgment, the present decision requiring all types of property, regardless of the natural diversities between them, to be placed in a single, universal and all inclusive class and to be given the same percentage of value for the assessment of ad valorem taxes, accomplishes the amazing and heretofore unheard of result of completely and permanently abolishing any classification of the different kinds of property into separate and distinct categories for the purpose of assessing ad valorem taxes against inherently different types of property in this State; and this result is accomplished by a bare majority consisting of three judges of this Court in the face of a heretofore unbroken line of well considered cases in which this Court reached an opposite and entirely different conclusion. Under the present decision, money, bills and notes, evidence of indebtedness, oil wells, railroad systems and equipment, shares of stock, livestock, farm machinery, merchandise, coal mines, house
As previously indicated the present decision is logically inconsistent and legally unsound. The assessed valuations in the cases of Charleston and Southside Bridge Company v. Kanawha County Court, 41 W. Va. 658, 24 S. E. 1002, error dismissed 168 U. S. 704, 18 S. Ct. 941, 42 L. Ed. 1212, In Re: Tax Assessments Against Hancock County Federal Savings and Loan Association, 125 W. Va. 426, 25 S. E. 2d 543, and In Re: Tax Assessments Against Charleston Federal Savings and Loan Association, 126 W. Va. 506, 30 S. E. 2d 513, affirmed Charleston Federal Savings and Loan Association v. Alderson, 324 U. S. 182, 65 S. Ct. 624, 89 L. Ed. 857, and In Re: National Bank of West Virginia, 137 W. Va. 673, 73 S. E. 2d 655, can not be valid and constitutional, as this Court held them to be in those cases, and at the same time be invalid and unconstitutional as violative of the “no one species” provision of Article X, Section 1, as they must be under that provision as applied to the valuation of the stock of the plaintiff in this case and, by the same norm, the valuation of that stock can not be valid and constitutional, as it is under the above cited cases, because of its uniformity within that class of property, and at the same time be invalid and unconstitutional under the “no one species” provision as applied by the majority in its decision of the instant case. In brief an assessed valuation of property for the collection of ad valorem taxes can not be valid and constitutional under the “equal
For the reasons stated and under the authorities cited and quoted from in this dissent I would adhere to the former decisions of this Court and affirm the action of the circuit court in assessing the stock of the plaintiff at one hundred per cent of its true and actual value of $6,000,000.00.
I am authorized to state that Judge BERRY concurs in the views expressed in this dissenting opinion.
Reference
- Full Case Name
- In Re the Assessment of Shares of Stock of the Kanawna Valley Bank
- Cited By
- 58 cases
- Status
- Published