STATEMENT BY THE COURT.
This is the second appeal in this case. Reference is here made to the opinion of this court on the former appeal for a more concise statement of the facts. It will be found in State ex rel., etc., v. Chicago Mill Lumber Corporation, 184 Ark. 1011, 45 S.W.2d 26.
It is alleged by the State that the machinery and lumber at appellee's mill at West Helena in Phillips County and Blytheville in Mississippi County were so grossly underassessed for the years 1927, 1928, 1929 and 1930, inclusive, as to amount to fraud within the meaning of act 281 of 1931; that the machinery and lumber are always assessed jointly on the tax books under the heading of "Machinery and Manufactured Articles"; that appellee's machinery and lumber at each of said mills possessed a value of one million, five hundred thousand dollars throughout the taxable period of each of said years, when, in truth and in fact, the same should have been assessed at $450,000 for said period on the assessable basis of fifty (50) per cent. of its true value; that the actual assessments made by appellees have been for the Blytheville machinery and lumber, for the year 1927, $75,000; for 1928, $72,600; for the year 1929, $72,500 for 1930, $72,500, or at approximately 5 per cent. of the true value; that the assessment on the West Helena machinery and lumber for 1927 was $135,000 and a similar assessment was made thereon for each of the years 1928, 1929 and 1930, which was approximately only nine (9%) per cent. of its true value. It was further alleged that similar property in said counties and property generally throughout the State was assessed at an average of fifty (50%) per cent. of the true value, which basis was asked to be applied as the legal basis for assessment in this case.
It was further alleged by appellants that the assessments so made by appellees are so grossly inadequate as to shock the conscience and constitute an actual fraud by appellee on the State and on Mississippi and Phillips counties and the school districts in which said property *Page 67 is located; that the lumber and machinery aforesaid are extremely difficult to value, and that the taxing officials had no access to the record values thereof; that the tax officials have been compelled to rely in making assessments on the representations of appellees as to values; that the representations so made by the owners as to values to the taxing authorities have been too low and far below the assessments of other similar properties in said counties and throughout the State.
After the remand of the case by this court to the Phillips County Chancery Court, the appellee, Chicago Mill Lumber Corporation, filed its motion to require the State to make its complaint more definite and certain in many particulars, and in response thereto the complaint was amended in the following particulars: That the kinds, character and amount of lumber owned by the appellees for the years 1927 to 1930, inclusive, located at Helena and Blytheville, are matters within the sole and exclusive knowledge of the defendants and cannot be alleged by plaintiff; that plaintiff could not allege the officials or agents who made false or fraudulent representations to the assessors in reference to values; that the nature of the representations made by the corporate officials or agents of the appellees for the years 1927 to 1930, inclusive, to the assessor was by delivering certain statement of the valuation of the defendant's machinery and lumber in Mississippi and Phillips counties for each of said years, which sworn statement showing the valuation of said lumber and machinery for said respective years to be figures at which said property was actually assessed for said years respectively; that said sworn valuations were so grossly inadequate as to shock the conscience and constitute a fraud upon the State; that the valuations so made by the officials of said corporations were not made in separate items and no separate valuation of the different items was shown; that it was extremely difficult for the assessor and other taxing authorities of Mississippi and Phillips counties to appraise and value defendant's lumber and machinery for the years 1927 to 1930, inclusive, and therefore the assessors of Mississippi and Phillips counties were compelled *Page 68 to rely, and did rely, upon the alleged valuation of said lumber made by the corporate officials.
After the response and amendments to the complaint were filed, the appellee filed a general demurrer to the complaint, alleging that the complaint and amendments thereto did not state facts sufficient to constitute a cause of action against the defendants, etc.
On hearing of the demurrer the Phillips County Chancery Court sustained the same and dismissed the appellant's complaint for want of equity, and this appeal is prosecuted to reverse this decree. (after stating the facts). As indicated in the statement of facts, this is the second appeal in this case. By referring to the former opinion, it will be found that the State brought suit against the Chicago Mill Lumber Corporation and the Paepcke Corporation, two foreign corporations, to recover back taxes alleged to be due for the years 1927 to 1930, both inclusive, by reason of gross undervaluation in the assessments of the machinery and manufactured lumber at the mills of said corporation at West Helena and Blytheville, Arkansas. This court held that there was no personal liability of the Paepcke Corporation and that a recovery, in any event, could only be had for property now situated in the State of Arkansas which had passed into the hands of the Chicago Mill Lumber Corporation. The case was reversed and remanded for further proceedings in accordance with the principles of equity and not inconsistent with the opinion.
In this suit act 281 of 1931 was not argued by counsel on either side, and was not considered by this court.
After the rendition of the opinion of this court on the former appeal and on September 26, 1932, this court determined the case of State ex rel. Attorney General v. Anderson-Tully Company, wherein act 281 of 1931 was brought to the attention of this court. In the Anderson-Tully case, supra, which was an overdue tax proceeding *Page 69 on account of a gross undervaluation assessment on real estate, this court specifically held that a recovery could not be had by the State except for actual fraud of the taxpayer in making his assessment. The court held:
"This brings us to a consideration of the question as to whether the complaint charged actual fraud of the taxpayer and whether the proviso in 1 of the act, `That failure to assess taxes as required by law shall be prima facie evidence of fraud, is sufficient to put appellee on its proof and therefore to answer the complaint. We answer both questions in the negative, as did the learned trial court. The complaint charged no actual fraud of the taxpayer. It did charge that its land was greatly underassessed," etc.
It is insisted that the Anderson-Tully case, supra, is not authority in the instant case, because it is said that the property here in controversy is personal property, whereas the property involved in the Anderson-Tully case was real estate. It is difficult to see just why that the rule should be different in reference to the assessment of personal property and the assessment of real property. Under the statutes of this State the owner of real property is required to list his property for taxation. The same is true with reference to his personal property. The tax assessor is not bound by any value placed upon either real or personal property by the owner.
The court has reached the conclusion that act 281 of 1931 is conclusive of all the issues now presented, and for this reason no other question will be discussed or decided in the case. Prior to this enactment a showing by the State that the property of the taxpayer had been grossly under-assessed was sufficient to allow a recovery in behalf of the State. Section 1 of act 281 of 1931 reads as follows:
"That, after the assessment and full payment of any general property, privilege or excise tax, no proceedings shall thereafter be brought or maintained for the reassessment of the value on which such tax is based, except for actual fraud of the taxpayer, provided that failure to assess taxes as required by law shall be prima facie evidence of fraud." *Page 70
Evidently, it was the purpose of the Legislature to change the law in reference to, and to regulate the collection of, overdue taxes in this State.
In the case of White River Lumber Co. v. State,175 Ark. 956, 2 S.W.2d 25, this court used the following language:
"We are of the opinion that the statute (collection of overdue taxes) was intended to give the State the right to recover back taxes where there had been a gross undervaluation of the property in the hands of the corporation," etc.
Previous to the White River Lumber Company case, supra, this court had held in State v. K. C. Memphis Railway Bridge Co., 117 Ark. 606, 174 S.W. 248, as follows:
"It was evident that the statute was intended to afford a complete remedy for the collection of back taxes," etc.
The White River Lumber Company case, cited supra, was appealed to the Supreme Court of the United States, and is reported in 279 U.S. 692, 49 S. Ct. 457, where it was held that the overdue tax act did not violate the equal protection clause of the Fourteenth Amendment to the Constitution of the United States.
It is perfectly evident that the Legislature had in mind the White River Lumber Company case and all other decisions of this court in reference to the collection of overdue taxes when it passed act 281 of 1931.
If the Legislature said what it meant and meant what it said in 1 of act 281 of 1931, "That, after the assessment and full payment of any general property, privilege or excise tax, no proceedings shall thereafter be brought or maintained for the reassessment of the value on which said tax is based, except for actual fraud of the taxpayer," then it must be perfectly evident that the State cannot recover where the property owner has made an assessment of property with the county assessor of the county, and has paid the taxes regularly assessed thereon, unless it can be shown that actual fraud has been practiced by the taxpayer in making the underassessment. The only allegation in the complaint in this case *Page 71 is that the property was grossly underassessed, and no facts are alleged which would show or amount to actual fraud.
The proviso "that failure to assess tax as required by law shall be prima facie evidence of fraud" does not save the situation here presented. This proviso means exactly what it says. "Failure to assess taxes as required by law" does not mean that an underassessment has been made. It is perfectly natural for the property owner to appraise the value of his property for taxation at a lower sum than the county assessor would do. It is perfectly natural for people to have different opinions about the value of property. We think that this proviso means that, if the party fails to assess any article of property with the assessors, in so far as this article of property is concerned, such assessment would be fraudulent, but where an assessment is made and the complaint is about, and only about, the difference in value of the property, this would not amount to fraud.
This court took a definite and deliberate position in reference to the prosecution of overdue tax suits under act 281 of 1931 in the Anderson-Tully case, cited supra, wherein real estate assessments were involved, and we are of the opinion that all that was said by the court in the Anderson-Tully case in reference to real estate assessments should have full application in this case, and that the issues determined in the Anderson-Tully case settled and determine all issues presented in this case.
It is the opinion of the court that the complaint filed herein does not state facts sufficient to constitute a cause of action against the appellee, Chicago Mill Lumber Corporation, and that the chancellor was correct in sustaining a demurrer thereto.
Let the judgment be affirmed.
HUMPHREYS and MEHAFFY, JJ., dissent.