Opinion
No. 41430.
July 11, 1960.
1. Taxation — change of assessment — when property assessed for more than its actual value — burden of proof on taxpayer.
Under statutory provision authorizing change of assessment only if property has been assessed for more than its actual value and requiring proof by two or more competent witnesses who know of their own personal knowledge that property is assessed for higher sum than true value, burden is upon taxpayer so to show by such witnesses that property is assessed for higher sum than true value. Sec. 9815(12), Code 1942.
2. Taxation — change of assessment — phrases "actual value" and "true value" defined.
For purposes of statute authorizing change in assessment only if property has been assessed for more than its "actual value" and requiring proof that property is assessed for higher sum than "true value", the quoted phrases are synonymous and mean the same thing as market value or essentially the value property has in exchange for money but are not synonymous with cost of labor and materials used in constructing the property. Secs. 3742-20, 9815, 9815(12), Code 1942.
3. Taxation — change of assessment — when property assessed for more than its actual value — evidence — taxpayer not entitled to change in assessment.
Under statute authorizing change in assessment if property has been assessed for more than its actual value and requiring proof by two or more competent witnesses who know of their own personal knowledge that property has been assessed for higher sum than true value, taxpayer operating system for furnishing television service from signals received on its antennas was not entitled to have jury change assessment by offering proof of cost of labor and material expended in establishing system. Secs. 3742-20, 9815, 9815(12), Code 1942.
Headnotes as approved by Arrington, J.
APPEAL from the Circuit Court of Bolivar County; E.H. GREEN, Judge.
Valentine Valentine, Cleveland, for appellant.
I. Where all proceedings of the governing authorities of the municipality, including the assessment of personal property, resolutions and due notice thereon, and final resolution approving, ratifying and confirming the assessment roll and assessments therein, were in all respects in compliance with the statutes relating thereto, and no objection was made at any time during said proceedings and no appeal was taken from said final resolution and order duly adopted September 15, 1958, objection made for the first time on January 6, 1959, came too late and the assessment made on September 15, 1958, was final. Alexander v. Board of Aldermen, Natchez, 219 Miss. 78, 68 So.2d 434; Forsdick v. Board of Supervisors, Quitman County (Miss.), 25 So. 294; Yazoo Delta Investment Co. v. Suddoth, 70 Miss. 416, 12 So. 246; Secs. 3742-17, 3742-20, 9815, Code 1942.
II. Where the assessment of personal property by a municipality is not shown to be in excess of its true value, and unequal and inequitable in proportion to assessments of other property throughout the municipality, the assessment is not in violation of any constitutional or statutory provision, and should be affirmed. Alexander v. City of Natchez, supra; Batson v. Pearl River County, 204 Miss. 882, 35 So.2d 712; First Nat. Bank v. Board of Supervisors, 157 Miss. 197, 127 So. 686; City of Jackson v. McArdle's Estate, 189 Miss. 781, 198 So. 736; McArdle's Estate v. City of Jackson, 215 Miss. 571, 61 So.2d 400, 63 So.2d 101; Magnolia Bank v. Pike County, 111 Miss. 857, 72 So. 697; Redmond v. City of Jackson, 143 Miss. 114, 108 So. 444; Revenue Agent v. Lamb-Fish Lumber Co., 104 Miss. 48, 61 So. 6; Teche Lines, Inc. v. Board of Supervisors of Forrest County, 165 Miss. 594, 142 So. 24, 143 So. 486; Secs. 9759, 9769, 9818, Code 1942.
III. The trial court erred in modifying defendant's instruction number six by striking therefrom the words: "and also what income could be received if the property were fully utilized by increasing the number of customers availing themselves of its use." McArdle's Estate v. City of Jackson, supra.
IV. The Court erred in refusing defendant's instruction number seven, which is as follows: "The Court instructs the jury for the City of Cleveland that the actual cost of the property here involved is not the controlling evidence of its true value for taxation, and you may consider evidence as to the use to which such property is put, the income derived therefrom and also what income could be received if the property were fully utilized by increasing the number of customers availing themselves of its use, and any other circumstances which tend to enhance the value of such property."
V. The Court erred in granting instruction number one for the plaintiff, T.V. Cable Company. This instruction should not have been given in the first place for the reason that the peremptory instruction should have granted to the City, and there was no issue to be submitted to a jury. Second, the basis for assessment of appellee's property is not the same basis on which other property in the city should be or is assessed, there is no evidence it was assessed on a higher basis than other property, and the "higher percentage" than other property in the city is erroneous and misleading. This is especially true in view of the constant insistence throughout the trial that the city is bound by the alleged 20% valuation used by the county and the effect thereof as evidenced by the verdict of the jury in returning its verdict at exactly 20% of the alleged cost of the property, the county having used a basis of actual cost and the city assessing on a basis of value. McArdle's Estate v. City of Jackson, supra.
VI. The Court erred in granting instruction number two for the plaintiff, T.V. Cable Company. This instruction is erroneous for the reasons already given; and indicates that the jury may find in favor of the plaintiff, T.V. Cable Company.
Smith, O'Hare Smith, Cleveland, for appellee.
I. An application for reduction of an assessment may be made to the governing authorities of a municipality prior to the end of the fiscal year in which the taxes on such assessment are payable under the provisions of paragraph 12 of Section 9815 of the Mississippi Code of 1942 and Section 3742-20 of the Mississippi Code of 1942 and an appeal may be taken from the decision of the municipal authorities as to said application under the provisions of Section 1196 of the Mississippi Code of 1942. State v. Board of Supervisors of Noxubee County, 146 Miss. 345, 111 So. 594; Secs. 1196, 3742-20, 9815, Code 1942.
II. Where the assessed valuation and thus the assessment of personal property by a municipality is shown to be in excess of its true value, and unequal and disproportionate to assessments of other property throughout the municipality, the assessment is in violation of the federal constitution, state constitution and state statutes. Chicago R.I. P.R. Co. v. Robertson, 122 Miss. 417, 84 So. 449; Knox, Atty. Gen. v. Southern Paper Co., 143 Miss. 870, 108 So. 288.
III. The lower court was correct in modifying defendant's instruction number six by striking therefrom the words: "and also what income could be received if the property were fully utilized by increasing the number of customers availing themselves of its use."
IV. The Court did not err in refusing defendant's instruction number seven.
V. The Court properly granted instruction number one for the appellee, T.V. Cable Company.
VI. The Court properly granted instruction number two for the plaintiff, T.V. Cable Company.
VII. The verdict of the jury fixing the assessment value of property of appellee at twenty per cent of the actual cost of initial construction, and the judgment rendered was in conformity with the law and evidence in this case.
VIII. The Court committed no error in overruling the motion of appellant for a new trial.
This case involves the assessment of personal property of appellee, T.V. Cable Company, Inc., by the City of Cleveland, Mississippi, appellant. The appellee is engaged in furnishing television service through a system established partly inside the City of Cleveland and partly outside. It is now servicing approximately 1100 customers, using four towers and about 118,000 feet of coaxal cable and other facilities. It charges a monthly maintenance and service charge for television service to its customers. Taxes on the personal property of appellee for the year 1958 were duly and lawfully assessed and made final at a recess meeting of the mayor and board of aldermen on September 15, 1958, and no objection was made thereto and no appeal taken therefrom. The valuation of the appellee's personal property was fixed for tax purposes at $35,000. Thereafter on January 6, 1959, appellee made application for a change of assessment under Sections 3742(20) and 9815(12) of the Mississippi Code of 1942. Section 9815 authorizes changes in assessments upon application of the party interested for various reasons, including that set forth in subsection 12 of Section 9815, which is as follows:
"When the property has been assessed for more than its actual value; but in such cases the board shall require proof, under oath, of such excessive assessment by two or more competent witnesses who know of their own personal knowledge that the property is assessed for a higher sum than its true value."
The mayor and board of aldermen entered an order on January 6, 1959, upon application of appellee reducing the assessment from $35,000 to $30,000, and the taxpayer appealed to the circuit court under the provisions of Section 1196, Mississippi Code of 1942, which provides for a hearing de novo by the circuit court.
When the case came on for trial in the circuit court, the appellee, taxpayer, offered testimony that the cost of that portion of the appellee's system within the city limits of the City of Cleveland was $33,375.68, and introduced the invoices for the material and labor totaling said figure. It also offered testimony that the usual and customary method employed by the City of Cleveland in assessing taxes was to value the property at twenty percent of its value. It also offered some testimony indicating that the replacement of its system, insofar as labor and material was concerned, would be about the same as the cost. The City of Cleveland did not put on any proof and moved for a directed verdict at the conclusion of the plaintiff's case. The jury assessed the property of appellee at $6,667.00. The City appealed to this Court.
The question in this case is whether upon an appeal from an order in proceedings for a change of assessment under subsection 12 of Section 9815 of the Mississippi Code of 1942 the taxpayer is entitled to have the jury change the assessment under the applicable statutes by offering proof of the cost of the labor and material expended in establishing the appellee's system inside the City of Cleveland.
(Hn 1) No testimony was offered by appellee as to the actual or true value of the property owned by appellee within the City of Cleveland. The testimony was limited to the cost of labor and materials employed in constructing the system. Code Section 9815(12) authorizes a change in assessment only if the property has been assessed for more than its actual value and requires proof by two or more competent witnesses who know of their own personal knowledge that the property is assessed for a higher sum than its true value. Obviously, the statute uses the terms "actual value" and "true value" synonomously. The cost of labor and material is not necessarily the actual or true value of property. Nor does the statute make replacement value the test. Its actual or true value must be determined before it can be ascertained if the property is assessed for a sum which authorizes a change after the assessment has become final. And the burden is upon the taxpayer to show by two or more competent witnesses who know of their own personal knowledge that the property is assessed for a higher sum than its true value. The witnesses offered by appellee did not qualify as competent witnesses. They qualified only as being competent to testify as to the cost of labor and materials in constructing the system.
(Hn 2) As used in the statute in question, the terms "actual value" and "true value" are not synonomous with costs of labor and materials used in constructing the property. "Actual value" and "true value" mean in a tax statute the same as "market value", or essentially the value property has in exchange for money. E. Ingraham Co. v. Town and City of Bristol, 132 A.2d 563, 566, 144 Conn. 374; Gibraltar Corrugated Paper Co. v. North Bergen Tp., Hudson County, N.J., 119 A.2d 135, 137, 20 N.J. 213; City of Newark v. West Milford Tp., Passaic County, 88 A.2d 211, 214, 9 N.J. 295 ; National Folding Box Co. v. City of New Haven, Conn., 153 A.2d 420, 424; Buerger v. Board of Property Assessment, Appeals and Review of Allegheny County, 149 A.2d 466, 468, 188 Pa. Super. 561; McAdams v. Bolsinger, Ohio Prob., 129 N.E.2d 878, 882; Sibley v. Town of Middlefield, 120 A.2d 77, 80, 143 Conn. 100.
(Hn 3) We are therefore of the opinion that the learned trial judge erred in refusing to grant a directed verdict for the City of Cleveland.
It should be noted that this is not an appeal from an assessment of property done at the regular time and place for assessing ad valorem taxes. Appellee prosecuted no appeal from the assessment made in September 1958. This is an appeal from an order on an application for a change in an assessment that had already become final. Section 9815 authorizes changes in certain situations therein enumerated and under subsection (12) the terms thereof must be complied with before any change may be made. This the appellee failed to do, and until the taxpayer proves the property is assessed at a sum higher than its actual or true value, the assessment may not be changed.
Reversed and judgment rendered here for appellant.
Lee, Kyle, Holmes and Gillespie, JJ., concur.