In re Assessment of Taxes, Oahu College

DISSENTING OPINION OF

FREAR, C.J.

The question is whether in order to entitle itself to take-advantage of the exemption on appeal the appellant should have "claimed it in its return.

It is true that Sections 817, 836 and 837, which relate to-taxable property and exemptions, as well as most of the other sections of the statute, do not require this, for they have nothing-to do with returns or claims of exemption or appeals.

But Section 870 expressly provides that, “Each person liable-to pay taxes and every owner or possessor of any property,, real or personal, whether entitled to exemption or not” shall-make a return, and Section 875 expressly provides that, “Any person whose name may appear on such tax list, who shall have made his return to the assessor as hereinbefore provided, and, if entitled to exemption, shall have claimed such exemption/' and “whose claim for exemption shall not have been allowed, may appeal from such assessment,” &c. Of these two sections, 870, which relates to returns, is, it is true, when read-alone, somewhat ambiguous, because in specifying what shall-be included in the return it speaks of property “subject to-taxation.” But the appellant did in fact return the whole-property in dispute. The question is whether it should also-have claimed the exemption as required by the other of those sections (875), which is the one now involved. There would seem to be little, if any, uncertainty about this. The language-is clear. An appeal is allowed only on certain conditions, one-of which is, if the appeal is on 'a question of exemption, that the appellant, “if entitled to exemption, shall have claimed such exemption,” and no appeal can be entertained unless allowed by the statute, as this Court has held time and again.

*27The majority of the court come to an opposite conclusion but, in part at least, on different lines of reasoning. One of' the majority thinks that the view that the exemption must be-claimed, requires reading provisos into Sections 817 and 836. But that is not so any more than the contrary view requires-not only reading some provisos into but some express provisions out of Section 875. It is unnecessary to do either. All that is-necessary is to construe these sections together. As so construed, they mean, as it seems to me, that a party is entitled to exemption in certain cases but that if he wishes to take advantage of his special privilege he must claim it in his return. This member of the majority seems to make the exemptions mentioned in 875 relate only to those mentioned in 837 and not to-those mentioned in 836. No such distinction is made in the statute. The privilege is special under 836 as well as under 837. Under each, the exemption is of property and not of persons. Under each, the exemption applies in certain cases and not in others. I believe also the exemption under Section 837' lias in practice been allowed though not claimed. There is-as much reason, perhaps more reason, both in policy and so-far as the language of Sections 836 and S37 is concerned, for-requiring 'a return and claim of exemption of property covered by Section 836 as of property covered by Section 837. Property belonging to the Territory or the Board of Education would not be taxable anyway, whether expressly declared to be exempt or not. The argument that the language of 875 condemns the construction now contended for, is answered by a reading-of the whole section instead of only the part quoted in the prevailing opinion. To say that 875 applies to 837 and not 836 would seem to require a somewhat arbitrary construction.

The other member of the majority makes the exemption mentioned in Section 875 relate to personal exemptions as distinguished from property exemptions, and includes the exemption mentioned in Section 837 among the personal exemptions although it is expressed to be an exemption from the ordinary “tax of one per cent, herein imposed upon property” and is; *28'only a proviso of the preceding Section (836), which relates to property taxes, and contains in itself a proviso relating to what is unquestionably a property tax. There does not seem to me to be any sufficient reason to make Section 875, which is general In its terms, relate to exemptions of personal taxes and not to exemptions of property taxes. Perhaps the reason most relied on for making such a distinction is that Section 870 in enumerating what shall be set oiit in the return does not require exempt property to be set out. Put it just as clearly does not require anything to be set out in regard to the personal taxes of the party making the return. As a matter of practice no return for purposes of personal taxes is required or made, except that an employer is required in his return to set forth the names and .nationalities of his employees who are subject to taxation. But that is merely for the convenience of the collector. The -employer is not liable for the taxes of his employees nor can he in his own right claim an exemption or appeal for them. Indeed there is much in the statute to indicate, that returns were intended to have nothing to do with personal taxes. Por instance, such taxes have to be paid before March 31 and yet the assessment books, which are based on the returns, are not -open to inspection until July 1, and the time for appealing jls stated to be from July 1 to July 20.

The view that claims for exemptions have to be made, would not permit the assessment of non-taxable property of unknown •or non-resident owners (under Sec. 825) any more than it would permit the assessment of non-taxable property of known or resident owners in the absence of a return or appeal. There is a difference between property that cannot be taxed under any circumstances and property that is ordinarily taxable under the law but which for some special reason is exempt in a particular case. In the one case the property is not subject to taxation at all; in the other case, it may be taxed unless the party entitled to the exemption claims his special privilege and shows that he comes within the exception to the general rule. I presume *29that in any case the assessor would not assess exempt property if he knew that it was exempt, whether returned or not.

The statute is uncertain and inconsistent in a great many respects and while this may justify construing’ it more liberally than might otherwise be proper, at the same time it makes it. more uncertain as to just what the legislature really intended. Here in Section 815 there is a clear express provision and one-that seems to be reasonable and in harmony with the reasoning: of past decisions, and I do not see my way clear to construe it away.