Robertson v. Bank of Yazoo City

Smith, C. J.,

delivered the opinion of the court.

This is a proceeding begun by the .revenue agent to back-assess the appellee banks on the shares of their capital stock, surplus, and undivided profits for the years 191.0 to 1915', inclusive, under the provisions of .section 4740, Code of 1906 (section 7058, Hemingway’s Code). The additional assessment directed by the revenue agent to be made sets forth the number of the shares of stock of each of the banks, his (the revenue agent’s) valuation thereof, and the amounts of their surplus and undivided profits for each of the years. The appellees each filed protests with the board of supervisors against this assesment, setting forth, among other things, that the shares of their capital stock and their surplus and undivided profits Avere assessed against them for each of the years included in the present back-assessment and the taxes due thereon were paid, and it appears from these protests that the assessments then made and those now sought to be made are identical, except the valuation of the shares of the appellees’ capital stock and their surplus and undivided profits Avas less in the original assessment than in the one here sought, to be made. This back-assessment was disapproved by the board of supervisors, and its order in so doing was affirmed by the court below. When the cause reached the court below the appellant, apparently proceeding on the theory that it was an ordinary eommon-laAV action, governed by the rules of pleading in such cases, filed what is styled in the record a “replication” to the appellees’ protest, setting forth that the original assessments of the property here in question were fraudulent and of no .validity whatever; the replication filed in the case of the Bank of Yazoo City, of which the others are substantial copies mutatis mutandis, being as follows:

“For replication to the objection of the Bank of Yazoo City, the state revenue agent says: The original assessment mentioned, set up as res adjudicada, and in bar of the assessment sought to be validated and approved in this *393case, was a fraudulent one and of no validity whatever; because the bank of Yazoo City did not deliver to the assessor for any one of the years involved in this suit a sworn statement as required by law (Code 1906, Section 4273), but the said taxpayer rendered, as private persons usually render assessments, the assessment pleaded by it to the tax assessor of Yazoo county, the same not being under oath; knowing that the value placed by it on its shares of capital stock was not its par value nor its true and actual value, and knowing .that the true and actual cash vlue and the par value of its said stock at the time said assessment was rendered was not less than its par value, $100 per share, and that tlie par value of its said share of stock at said time aggregated a sum not less than $400,000., it nevertheless rendered the same to. the assessor at the aggregate value of $300,000, a much less sum than the par value of said shares and much less than its true and actual value at said time; and this the said Bank of Yazoo City did knowingly, willfully, and fraudulently, with the intent, purpose, and design to cheat and defraud the state of Mississippi and the county of Yazoo of their revenue and to. enable the said bank to escape the payment of taxes justly due from it to the state and county aforesaid.
“This the state revenue agent is ready to verify.”

These replications were demurred to by the appellees, their demurrers were sustained, and the revenue agent declining to plead further, judgment final was rendered against him.

Judges Sykes, COok and Smith are of the opinion that the judgment of the court below should be affirmed, but Judges Ethridge,, Holden and Stevens are of the opinion that it should be reversed. We are therefore unable to reverse the judgment of the court below; consequently it must be affirmed.

Prodeeding- now to set forth the reasons for the opinion of Judges Sykes, Cook and Smith, section 4740, Code of 1906 (section 7058, Hemingway’s Code), under which this proceeding was begun, and which is the measure of the *394appellant’s power to cause property to be back-assessed for taxation, provides that— “Should the revenue agent discover that any . . . property . . . has escaped taxation by reason of not being assessed, it shall be his duty” to cause the tax collector to assess it, etc.

The question here presented, therefore, is, Has the property which the appellant seeks to have back-assessed escaped taxation by reason of not being assessed? The admission of the appellant that the property has been assessed would seem to answer the question, if it were not for his contention that although it has been in fact assessed the assessment is void in the eyes of the law; consequently the property has escaped taxation within the meaning of the statute. The grounds on which the contention that the original assessment of this property is void rests are, first, that the statement of the appellees’ property filed with the assessor was not sworn to by its officers as required by section 4273, Code of 1906 (section 6907, Hemingway’s Code); and, second, that the property listed in this unsworn statement was knowingly, willfully, and fraudulently undervalued, with the intent, purpose, and design to cheat and defraud the state.

The fact that the statement of the appellees’ property filed with the assessor on which the original assessment was made was not sworn to cannot be held to invalidate the assessment, for the filing of such a statement is not at all necessary to the making of an assessment. The assessor has the power and it is his duty to assess property, although not listed with him at all by its owner. Sections 4265 and 4281, Code of 1906 (sections Q899 and 6915, Hemingway’s Code).

Nor does the intentional undervaluation of his property by the taxpayer when listing it with the assessor invalidate the assessment thereof. Neither the assessor nor the board of supervisors in passing on the assessment roll is bound by the taxpayer’s valuation of his property. If in the opinion of the assessor the property has been undervalued, it is his duty to report that fact to the board of supervisors when *395he files the assessment roll with the hoard for approval. It then becomes the board’s duty to inquire into the correctness of the taxpayer’s valuation of his property and to increase it if in its judgment it is just to do so, and where the undervaluation appears to have been willfully made to escape taxation it is the board’s duty to report that fact to the grand jury. Section 4268', Code of 1906 (section 6902, Hemingway’s Code). Moreover section 4305, Code of 1906 (section 6939, Hemingway’s Code) provides that— “At the meeting for the hearing of objections to assess-' ments, the board of supervisors shall not only hear and determine all objections that shall be filed, but it shall as well carefully examine the roll or rolls, and shall then and there cause to be assessed any person or thing that may be found to be omitted, and anything found to be undervalued may be correctly valued.”

The identical property here sought to be back-assessed was enumerated and valued on the assessment roll when the original assessment was passed on by the board of supervisors, and the correctness veil non of that valuation was a question which it was the duty of the board to then determine, and when determined it became final and conclusive against both the public and the appellees. Section 7, section 135, Laws of 1918; Yazoo, etc., Investment Co. v. Suddoth, 79 Miss. 416, 12 So. 246; State v. Simmons, 70 Miss, 501, 12 So. 477; Adams v. Bank, 108 Miss. 346, 66 So. 407; Darnell v. Johnson, 109 Miss. 570, 68 So. 780. To hold otherwise would not only violate the statute but would subject the citizen to the inconvenience and uncertainty of having his assessment reopened at any time in the future, within the period of limitation, upon the charge that he had intentionally undervalued his- property when listing it with the assessor. Such a condition of affairs would be intolerable and not within! the contemplation of the law.

But if we should hold that the original assessment of this property is void, the result would be the same, for the assessment was in fact made and the property did not in fact escape taxation. This point was expressly decided in *396Adams v. Luce, 87 Miss. 220, 39 So. 418, where it was' said:

“The words 'escaped taxation/ under the construction of the revenue law, should receive the meaning usually and popularly accorded to them. The evil to he remedied demonstrates this. The object of the law, in respect to the back-assessment of property by the revenue agent, was to prevent property which had not been actually assessed at all from escaping its proper portion of the public burden of taxation. Property may escape taxation in varied ways, as, for example (a) by being willfully withheld from assessment by the owner; (b) by being inadvertently or accidentally omitted by the owner in returning his property to the assessor. , In either of these two cases, and in others which may be conceived, there has been in fact — there has been actually — escapé of such property from taxation; it has never been assessed at all as a matter of fact. And it was the purpose of the law, in cases like these, where the regularly constituted fiscal officers had failed to assess all property liable to taxation, to authorize the revenue agent to back-assess .such property never heretofore in fact assessed at all, and which ivas, therefore, described as property which had in fact escaped taxation. But where an assessment has in fact been made, where the.assessment roll shows on its face all that it ought to show — the name of the owner, the description of the property, the valuation of the property, the tax, etc. — but that assessment is irregular or imperfect or defective, or even absolutely and utterly void, by reason simply of a failure to comply with some vital and fuhdamental requirement of the law, such property cannot, within the meaning of these words, 'escaped taxation,/ be said to be property which has escaped taxation in fact. In such cases, manifestly, there has been an: assessment — an assessment in fact, an actual assessment. The property has not been withheld from the assessment roll. It has not been omitted by inadvertence, accident, or for any other reason. It is there on the assessment! roll. It is assessed at a certain rate. It is all assessed. But the whole roll is void because of such failure to comply with such. *397fundamental requirement of the law. There is, in such latter case, no assessment in the eye of the law; but there has been an actual assessment in fact, though not valid in the eye of the law.
We think it far safer to hold, in view of the evil to be. remedied by the statute on the subject, and in view of the canon of construction that words not technical, as these words, ‘escaped taxation,’ ought to be given their usual, ordinary, popular signification!, that property can never be said to have escaped taxation, within the meaning of the revenue law on that subject, save only in those cases where there never has been any actual assessment at all of such property. The original thought in the statute authorizing the revenue agent t;o back-assess property which has escaped taxation was to furnish machinery, not initiating assessment primarily, but to supply the defects in an assessment already made. It will not do to say that, because an assessment is utterly void in the eye of the law, though once actually made, such property has escaped taxation. The very term ‘escape,’ ex proprio vigore, implies that it had never been found or known or listed for taxation. That escapes detection which never has been seen in fact. That .escapes assessment which never has in fact been assessed in any way. That which, as a matter of fact, has been returned by the owner, placed upon the assessment roll by the assessor, dealt with by the board of supervisors and by the tax collector, cannot be said, in any proper sense of the words ‘escaped taxation’ or within the scope of the evil to be remedied by the revenue law, to have escaped taxation.”

The case of Adams v. Clarke, 80 Miss. 134, 31; So. 216, is not in conflict, but, on the contrary, is in accord, herewith. The contention here is, not that all of the property sought to be back-assessed ivas not enumerated and valued when originally assessed, but simply that it was then undervalued. And it was expressly stated several times in the opinion in that case that the approval of the assessment roll by the board of supervisors is conclusive, “as against *398the taxpayer and the public, that the valuation of the enumerated property is as finally shown on the roll.” The property which the court there held had escaped taxation by reason of not having been assessed was not property that had been enumerated but undervalued on the assessment roll, but was property that had not been enumerated on the roll at all, to-wit, a part1 of the taxpayer’s solvent credits.

Affirmed.