Winnipiseogee Lake Cotton & Woolen Manufacturing Co. v. Laconia

The foregoing opinion, as I understand it, overrules Winnipiseogee etc. Co. v. Laconia, 68 N.H. 284, on the ground that the valuation of the plaintiffs' property in the prior judgment was not, as was held in that case, res adjudicata within the meaning of the rule recognized and approved in King v. Chase, 15 N.H. 9. It seems to me that the opinion takes an erroneous view of the decision in King v. Chase, or rather, makes an erroneous application of it.

The statute provisions relating to the abatement of taxes read as follows: "Selectmen, for good cause shown, may abate any tax assessed by them or by their predecessors." P.S., c. 59, s. 10. "If they neglect or refuse so to abate, any person aggrieved, having complied with the requirements of chapter fifty-seven, may, within nine months after notice of such tax, and not afterward, apply by petition to the supreme [now superior] court in the county, at a trial term, who shall make such order thereon as justice requires." Ib., s. 11. To authorize the selectmen to abate *Page 86 taxes, "good cause" must be shown. It is only when they neglect or refuse so to abate — that is, to abate for "good cause" — that the court has jurisdiction of the subject-matter. In a petition to the court for an abatement, it would seem to be prudent, if not necessary, to allege the "good cause" relied upon by the petitioner. State v. Corron, 73 N.H. 434,457. That would seem to be the matter "technically in issue." A petition merely setting forth that the petitioner's taxes for the year in question were excessive and unequal, or were more than his fair share of the public expense, would, to say the least, be incomplete. It would resemble a declaration in an action at law which merely alleged that the plaintiff had suffered damage at the hands of the defendant, without stating whether it was from the breach of a promise or covenant, or from a tort. The "matter in issue," — "the matter directly in issue," — "the matter upon which the plaintiff proceeds by his action, and which the defendant controverts by his pleading," — in a petition for abatement, is the "good cause" relied upon for asking the abatement. Even if it is not specifically alleged in the petition and denied in the answer, it will be — must be — the issue to be tried. The fact that it is not specifically alleged and denied in the pleadings does not prevent the application of the rule as held in King v. Chase. "The declaration and pleadings may show specifically what this [the issue] is, or they may not. If they do not, the party may adduce other evidence to show what was in issue, and thereby make the pleadings as if they were special." King v. Chase, supra, 16; Simmons v. Goodell,63 N.H. 458, 459.

In the foregoing opinion the court, it seems to me, substitute the result or effect of the "good cause" for the cause itself, as the matter in issue. The excess in the tax — the subjection of the petitioner to more than his fair share of the public expense — is the effect of, or injury occasioned by, the cause relied upon to entitle the petitioner to an abatement, as the injury or damage alleged in an ordinary action at law is the effect or result of the breach of promise or the tort upon which the action proceeds. It is true that there may be many causes for an abatement of taxes — legal exemption from taxation, non-ownership of the property taxed, over-valuation of the property, etc., etc. A party seeking abatement because of the exemption of his property from taxation proceeds in his action on the matter of the exemption. He alleges, in effect if not in form, that he is entitled to exemption under the law by virtue of certain facts — a vote of the town exempting it, for example. In such case, the matter on which he proceeds — the "good cause" which he proposes to show to entitle him to the exemption — is the vote of the town. The matter in *Page 87 issue thus tendered to the defendant is the validity of the vote as respects both law and fact. If the issue is joined and tried, and judgment is rendered thereon, the parties are concluded by the judgment as to the efficacy of the vote, not only in that particular action, but in all subsequent actions of abatement in which the vote is in controversy. In Franklin Needle Co. v. Franklin, 65 N.H. 177, if the issue had been the question of fact whether the vote of 1886 exempting the property from taxation was duly passed and the judgment was in favor of the plaintiffs, and the selectmen assessed a tax upon the property the succeeding year notwithstanding the judgment, can there be any doubt as to the competency and conclusiveness of the judgment as evidence, under the decision in King v. Chase, in a petition by the Needle Company to abate the tax of the second year because of the exemption? If the excess of the tax or want of authority for imposing it — if the subjection of the petitioner to more than his fair share of the public expense — is the matter on which the petitioner's action in such case proceeds, and the vote is only an evidentiary fact with relation to such matter, within the meaning of King v. Chase, than a person claiming exception may be required to try the question of exemption de novo as may times as the selectmen may see fit to disregard the judgment of the court — an evil which the rule of res judicata was particularly designed to prevent.

Take the case of over-valuation. The statute requires the selectmen to appraise all taxable property for taxation "at its full and true value in money, as they would appraise the same in payment of a just debt due from a solvent debtor." P. S., c. 58, s. 1. It further requires them to make oath that, in performing the duty this imposed upon them, they "appraised all taxable property at its full value, and as we [they] would appraise the same in payment of a just debt due from a solvent debtor." Ib., s. 6. These redundantly explicit provisions — purposely made redundant to avoid the danger of misunderstanding or misconstruction — were enacted to secure the reasonable apportionment of the burden of taxation required by the constitution. If selectmen and assessors of taxes uniformly performed this duty, and all taxable property was taken into account, the burden of taxation would be distributed among taxpayers according to the true intent expressed in the constitution, and all reasonable grounds for the unrest now existing with reference to taxation would be removed. In that event, the "good cause" for abatement of taxes on account of over-valuation — the matter upon which the petitioner would proceed in his action — would be the excess in the valuation of the property above its "full and true value in money," or, in other words, the true value of the property; for that fact necessarily *Page 88 determines whether there is excess in the valuation and the amount of it. But it a well known and lamentable fact that these provisions of the statutes are not observed. Sometimes one class property in a town is appraised for taxation at one ratio of true value, — six tenths, for example, — while another class is appraised at another ratio, — say one third, — and another class is appraised at its full value. See Amoskeag Mfg. Co. v. Manchester, 70 N.H. 200, 204; Manchester Mills v. Manchester,57 N.H. 309. The ratio between the assessed and the true valuation also differs in different towns. When it appears in abatement proceedings that such violations of the law have been made, it is not practicable to reassess the entire taxes in the town according to law and in that way ascertain the petitioner's proportional share. The requirement of justice is satisfied by determining what ratio the assessed valuation of all the taxable property in the town excepting the petitioner's bears to its true value, and valuing the petitioner's property at the same ratio with reference to its true value. The proceeding for abatement being an equitable one, calling for "such order thereon as justice requires" the demands of justice are met in this way. P.S., c. 59, s. 11; Amoskeag Mfg. Co. v. Manchester, 70 N.H. 200. So it happens that a complication is introduced into proceedings for the abatement of taxes on account of over-valuation that would not be there if the statutory provisions relating to the appraisal of property were faithfully followed. But notwithstanding this complication, the true value of the petitioner's property continues to be the matter in issue in the proceeding. It is the only standard recognized by the statutes as the basis of taxation. It is the initial matter upon which the court works out equity in the case. Departure from it in its actual or relative state is the "good cause" which the petitioner must show to entitle himself to an abatement of a tax on account of over-valuation.

When the case of Winnipiseogee etc. Co. v. Laconia, 68 N.H. 284, was decided, the majority of the court consisted of the same persons (Doe, Clark, Blodgett, and Carpenter) as it did when Metcalf v. Gilmore,63 N.H. 174, was decided; and Carpenter, J., wrote the opinion in both cases. Although Metcalf v. Gilmore and King v. Chase are not cited in Winnipiseogee etc. Co. v. Laconia, it would be unreasonable to suppose that these cases were not in mind. The sentence containing the substance of the decision on this point — "No sufficient reason has been suggested or is perceived for denying to the judgment the same conclusive effect upon the question adjudicated that by law appertains to judgments in other cases" — clearly shows that these cases were in mind, and that the principles of them were regarded as familiar *Page 89 law requiring no citation of authority in their support. The decision merely applied the principles of these cases to the case in hand. I do not understand that the quotation from Metcalf v. Gilmore in the foregoing opinion was intended to limit or in any way modify the rule of King v. Chase. As appears from the quotation already herein made from that case, if the pleadings in a case do not specifically show what "the matter directly in issue" is, the party may adduce other evidence to show it, "and thereby make the pleadings as if they were special." The court, through Carpenter, J., spoke definitely on this point a year and a half after Metcalf v. Gilmore was decided, in Simmons v. Goodell, 63 N.H. 458, 459, as follows: "If the precise matter in issue does not appear upon the face of the record, extrinsic evidence may be received to show what facts were determined, — as, for example, to show that a particular item of account formed a part of a larger one" (citing King v. Chase).

The other reasons offered by the defendants in support of the superior court's ruling in their favor were submitted to and considered by the court in Winnipiseogee etc. Co. v. Laconia. No reasons have been presented in the arguments of counsel or the decision of the present case, or have been found, which seem to me to be of sufficient weight to justify overruling that case, and consequently I am compelled to dissent from the present decision.