State ex rel. Park Falls Lumber Co. v. Stauber

Crownhart, J.

(dissenting). The opinion of the court seems to me to be out of harmony with former decisions of this court, and it makes it most difficult for the public officers to perform their duty in making a fair assessment for taxes. At the same time it makes it comparatively easy for owners of large properties, not dealt in on the market, to escape their just share of the burdens of government. I respectfully dissent as to each of the four cases involved, but I choose to write an opinion only in the case of reassessment of the tax on the Hines plant for the year 1923.

Sec. 70.32, Stats., determines how the assessor shall fix the value on real estate, to wit:

“ (1) Real property shall be valued by the assessor from actual view or from the best information that the assessor can practicably obtain, at the full value which could ordinarily be obtained therefor at private sale. In determining the value the assessor shall consider, as to each piece, its advantage or disadvantage of location. . . .”

This is a very plain statute. The village assessor made his assessment for 1923, but the tax commission was appealed to, to make a reassessment of the property of the village. The legislature, in creating the tax commission, intended to have a body of expert men to assist in making equitable assessments. The commission was therefore authorized to make reassessments in certain cases, and the statutes with particularity regulate the manner of making such reassessments. See ch. 73, Stats.

Complying with the statutes, the tax commission ap*318pointed one Laidlaw, who had had twelve years’ experience in supervising assessments in Rusk and Sawyer counties, where there were sawmills and lumbering operations going on. To assist the assessor, the tax commission appointed Charles Halbert, a civil engineer, who had had experience under the tax commission in determining values of sawmills and other property for assessment of taxes, and who had had large experience in fixing values of public utilities under the railroad commission. The assessor so appointed, with the aid of the civil engineer, made his assessment under his oath of office.

Then the tax commission appointed three disinterested persons from without the taxing district as a “board of correction and review” (sec. 73.06) — ex-Senator Pearce Tompkins, supervisor of assessments for Ashland county; John Fordyce, an attorney from Butternut; and Joel L. Davis, formerly supervisor of assessments in Price county. The members of this board took the oath of office and held hearings in the fall of 1924.

The assessor had fixed the value of the mill property at $500,000. After listening to the testimony the board of correction and review fixed the value at $325,000. From this determination the Lumber Company sued out a writ of certiorari in the circuit court. Judge Risjord, an able and experienced jurist in the lumbering field of Northern Wisconsin where tax litigation of this sort is notorious, sustained the findings of the board of correction and review.

The property, over the value of which this contest is staged, is a sawmill property in Park Falls, Price county. It is in evidence that sawmill property is valuable as such only as it is a going concern; otherwise it is valuable only as salvage. The evidence is conclusive that this mill property is a going concern. There seems to be no serious dispute that there is at least ten years’ timber cut available to the mill. Neither the assessor nor the civil engineer *319knew of any sales of sawmill property under similar conditions to this plant, so they figured out the sound values of the properties, taking into account all the elements of value, depreciated those values according to use and present conditions, and then considered the property as a whole as a going concern, as to market value under the statute quoted.

The witnesses in behalf of the appellant were Clubine, manager of the mill and operations in question; Coleman, occupying a like position with the Roddis Lumber & Veneer Company, one of the contestants on this appeal; and ex-Senator Werden, each of whom had had general experience in the sawmill and lumbering business and knew generally of sales of sawmill properties. But it is clear beyond cavil that neither witness had ever known of the sale of sawmill property under the conditions of the property in question. Their testimony was absolutely valueless other than opinion evidence in the broad field'of speculation as to probabilities or possibilities. Neither had any experience in assessing property for taxation; neither knew of a sale of property close in point of character, quality, location, time, or available supply of timber. The board of correction and review were not compelled to believe these interested witnesses who were giving opinion evidence not based on the necessary facts to qualify them to give a trustworthy opinion.

„ On the other hand, with reference to Mr. Laidlaw’s qualifications it appeared that he was forty-nine years old; had resided in Wisconsin since 1907; had been assessor of incomes of Rusk and Sawyer counties for twelve years; had acted also as member of the board of review in quite a number of other districts where reassessments had been made; as assessor of incomes his work had been closely associated with assessment work and valuation of sawmill and other properties; had had considerable experience with the assessment and valuation of sawmill properties; that *320there were two sawmills at Ladysmith, formerly three; the Menasha Woodenware Company was operating there for a number of years; there was the Flambeau River Lumber Company and the Fountain-Campbell Lumber Company, and outside of the city there was the Beldenville Lumber Company at Bruce and the Arpin Lumber Company at Atlanta, north of Bruce; then the Bekkedal Lumber Company at Couderay; the North Wisconsin Lumber Company at Hayward, and a few smaller plants; there was also a small sawmill at Weyerhauser, and there used to be one at Ingram, and other similar plants, — all in his assessment district; that he counseled with the assessors with reference to the assessment of these properties and also with others; had talked with the various owners of sawmill properties and discussed matters with .them for assessment purposes; had these matters up with the owners and assessors; attempted in his work to get information leading to proper values to be used for assessment purposes; the owners of the Bek-kedal plant at Couderay and the Flambeau River Lumber Company plant at Ladysmith and of the Fountain-Campbell Lumber Company at Ladysmith, each gave him the exact figures as to their properties; in addition to the Park Falls reassessment, had made a reassessment at Gull Lake in Washburn county; that he came to Park Falls on May 11, 1924, and remained until September 5, 1924, spending about ninety days in making the reassessment; that during that period he consulted the records of sales made in Park Falls at that time and a reasonable time previous; had records of sales of real estate in Park Falls; during the period of reassessment also consulted with William H. Lippels, the present assessor of incomes for Price county, as to his knowledge of sales made in Park Falls; consulted with E. J. Aschenbrenner as to his opinion of values of property and sales made in Park Falls in 1923 —r-Aschenbrenner was cashier of the State Bank and had resided in Park Falls *321many years, and had been engaged in the real-estate business there for about twenty years; during the period of his reassessment also consulted with J. B. Saunders, cashier of the First National Bank of Park Falls, and also in the real-estate business for many years; consulted also with the officers of the Park Falls Lumber Company and of the Rodáis Lumber & Veneer Company as to valuations, and with a great many other business and professional men who have been in Park Falls a great many years; consulted also with Mr. Halbert, the engineer employed by the Wisconsin tax commission to work with him in assessing the city; consulted with Mr. Roddis, one of the relators, and his manager, Mr. Ruhmer; in making his reassessment, talked with the owners of the plants and applied the information obtained in making his assessment; went through the Park Falls'Lumber Company plant very carefully and worked and consulted with Mr. Halbert; would not consider himself entirely competent to assess these plants,— wanted some help, received the help, and with it felt the assessment was fair and just.

Here was a specially appointed assessor, having special fitness to make a just assessment, and whose judgment of market values was far more competent than that of the witnesses for the appellant, and here was a specially qualified assistant to help the assessor.

Mr. Halbert was by profession 'a civil engineer, having graduated in 1908; had been with the Wisconsin railroad commission for about eleven or twelve years; before going with the railroad commission was with the capítol building commission and with a construction engineer at Madison and with a heavy construction contractor; while with this general contractor they built a heating plant, large store buildings, utility buildings, and structures of that kind; during the eleven or twelve j'-ears he was with the railroad commission he was called upon by the tax commission to *322aid in making assessments of taxable property, including four or five or six sawmill companies, and quite a few allied concerns like veneer plants; in these cases he was concerned with what property should be assessed at; had assessed or appraised about one hundred industries for assessment purposes; about forty per cent, of his time had been spent in making- appraisals of utility and other industrial plants,— fixing not only sound values but what the property was worth for one purpose or another; about fifty per cent, of his time during his eleven or twelve years with the railroad commission had been devoted to appraising properties of different kinds; had appraised other properties, besides sawmills, for the owners; had, to a certain extent, been called upon by private individuals and concerns to make valuations of manufacturing institutions on which to base sales; went over two paper-mills in the last four or five years,— one in Minnesota, and the other in Wisconsin, — more particularly to get values for setting up depreciation in connection with income tax matters, which has to do with the cost or sales value; had been called on by private individuals to appraise properties to give testimony in court proceedings, along water-power lines, connected with various kinds of machinery, structures, and power stations; during the last fourteen or fifteen years had to make a study of construction costs, estimates, etc., of machinery and cost of installation; had in connection with that sort of work furnished the tax commission values for their use, — supplied them with tables on costs of buildings of different kinds; all of the construction work of the state was supervised by the state engineering department of which he was a member or employee, and some parts of that work had gone through his office; the rates for public utilities are based on appraisals made by the engineers of the railroad commission; iri connection with his work he tried to keep up to date on prices that manufacturing institutions had been bought and *323sold for; there is nothing about a sawmill which a competent engineer cannot figure; he examined the industrial plants of the city of Park Falls twice, — the first time in 1920 under employment of the city for that purpose, and the second time in 1924 in assisting Mr. Laidlaw in making his reassessment of the city.

The law has been repeatedly declared in this state that if there is any competent evidence to sustain an assessment, the courts will not disturb the action of the assessing officers upon a review by certiorari. State ex rel. Pierce v. Jodon, 182 Wis. 645, 197 N. W. 189, and cases there cited; also, State ex rel. Giroux v. Lien, 108 Wis. 316, 84 N. W. 422; State ex rel. N. C. Foster L. Co. v. Williams, 123 Wis. 61, 100 N. W. 1048; State ex rel. Howe v. Lee, 172 Wis. 381, 178 N. W. 471.

How can it be said there was no competent evidence to sustain the assessment? The assessor viewed the property, interviewed the owners, had ah inventory, had access to the books, had the assistance of an able civil engineer who had had experience in fixing taxable values, inquired and found out about the timber supply, and both the assessor and his assistant testified that the values they fixed were in their judgment the full values that could ordinarily be obtained therefrom at private sale.

It is significant that the owner carried fire insurance on the property in excess of the value it gave to the assessor. Fire insurance does not cover land, basements, or underground work, and it is generally known that insurance companies will not insure this class of property at anywhere near its actual value.

There are properties on which no one in the world can estimate the market value based on sales of similar property under similar circumstances, because there are no such sales. This was such a property. And any witness who testified to such market value had no foundation on which *324to base it better than that of the assessors and the expert board of correction and review.

As said by Mr. Justice Owen in State ex rel. Gisholt M. Co. v. Norsman, 168 Wis. 442, at p. 450 (169 N. W. 429):

“It is matter of common knowledge that large manufacturing establishments such as this are not subject to frequent transfers so that the market value could be established in such way.”

And the president of the company, in that case, with commendable honesty, said: “I cannot testify as to what our plant is worth as a unit and as a going concern, because the purchases of anything of that kind are few and far between.” With equal candor, Werden, Clubine, and Coleman could have said the same thing in so many words. But what they did testify to, no doubt, satisfied the expert board of review and the learned circuit court that the witnesses at best were giving a guess, largely based on bias. This expert board of appraisers and the circuit court had a right to rely on what this court said is matter of common knowledge,— that the market value of large business concerns cannot be ascertained from sales of like industries. The sales of similar industries under similar circumstances are not to be found.

It is said in State ex rel. Pierce v. Jodon, 182 Wis. 645 (197 N. W. 189), at pages 648, 649:

“It may be admitted that the property is not such as is ordinarily found on the market for purchase and sale. There is always great difficulty in ascertaining the market value of property of this character for that reason. Nevertheless, the assessment officers must ascertain the market value of the property from the best evidence obtainable, and place the same on the assessment roll accordingly. All that can be asked of assessment officers is that they act on the evidence and facts before them, honestly and.without discrimination against such property. When this is done and the case is before us on appeal, we will examine the record to *325ascertain if there is any competent, credible evidence to sustain the valuations placed upon the property by the assessing officers, and if there be such, it is not our province to weigh the testimony to determine where the preponderance lies.”

The restilt of giving so much weight to mere opinion of interested parties leaves the owner, in a case like this, the opportunity to make his own assessment, or by long, expensive, and tiresome litigation he can ruin the taxing district where, as here, three powerful corporations own two thirds of the property in the district, and have not paid taxes for 1923 or 1924.

In Park Falls L. Co. v. American Appraisal Co. 189 Wis. 239, 207 N. W. 300, we commented on the efficient method the legislature had provided to secure equitable taxation, but here we deny the efficacy of the scheme altogether, and leave the municipality practically helpless.

For the reasons above stated, I respectfully dissent.

I am authorized to say that Mr. Justice Owen and Mr. Justice Stevens concur in this dissent.

The respondent moved for a rehearing.

In support of the motion there was a brief by C. E. Lovett of Park Falls, attorney, and Bundy, Beach & Holland of Eau Claire, of' counsel, the Attorney General and Franklin E. Bump, assistant attorney general, appearing for the State.

In opposition thereto there was a brief by W. K. Parkinson, of Phillips, attorney, and William S. Bennet of Chicago and Olin & Butler of Madison, of counsel.

The motion was denied, with $25 costs, on June 21, 1926.