Opinion
No. 36268.
January 13, 1947. Suggestion of Error Overruled February 24, 1947.
1. TAXATION.
The constitutional provision that legislature may provide for special mode of valuation and assessment for particular species of property belonging to persons, corporations, or associations not situated wholly in one county relates, not to identity of separate items, but to character of persons, corporations, or associations operating their property as a unit (Const. 1890, sec. 112).
2. MUNICIPAL CORPORATIONS.
Where State Tax Commission assessed electric company's property located in more than one county, city wherein was located part of such property could not also assess such property, since Commission has exclusive authority to assess such property as a single operation (Code 1942, secs. 9825, 9826, 9829, 9833, 9836; Const. 1890, sec. 112).
ON SUGGESTION OF ERROR. (In Banc. Feb. 24, 1947.) [ 29 So.2d 313. No. 36268.]1. TAXATION.
Assessment of electric company's property for ad valorem taxes is in rem and not in personam, but the company is the sum total of its properties and is therefore appraised and assessed with reference to its status as an integrated, homogeneous unit which includes all component items of property necessary or expedient to operation of such unit (Code 1942, sec. 9833).
2. MUNICIPAL CORPORATIONS.
Record did not sustain contention that items of property assessed by city had been discontinued as operating components of electric company so as to be subject to assessment by city notwithstanding exclusive authority of State Tax Commission to assess electric company's property located in more than one county as a single operation (Code 1942, sec. 9833).
APPEAL from the circuit court of Jones county. HON. F.B. COLLINS, J.
Eaton Cottrell, of Gulfport, for appellant.
Appellant is an electric light and power company owning property not situated wholly in one county. In fact, it operates in twenty-three counties of the State. Jurisdiction to value and assess all appellant's property is vested exclusively, under the statutes of the State of Mississippi, in the State Tax Commission, acting as state railroad assessors.
Gully v. Eastman-Gardiner Lumber Co., 168 Miss. 100, 151 So. 170; State ex rel. Robbins v. Southern Natural Gas Corp., 174 Miss. 192, 164 So. 1; Illinois Cent. R. Co. v. Miller, 141 Miss. 223, 106 So. 636; Thompson v. Craig, 196 Miss. 465, 17 So.2d 439; Teche Lines v. Board of Sup'rs of Forrest County, 165 Miss. 594, 143 So. 486; Yazoo M.V.R. Co. v. Adams, 77 Miss. 764, 25 So. 355; Gulf S.I.R. Co. v. Draughon, 148 Miss. 433, 114 So. 269; Gully v. Mississippi Valley Co., 181 Miss. 669, 180 So. 745; Code of 1942, Secs. 3709, 3711, 9825-9833, 9835; Constitution of 1890, Secs. 112, 135, 181.
Under the facts, the City of Laurel, appellee, had no jurisdiction either to make an initial assessment of appellant's property in the City of Laurel, Mississippi, or to attempt to change an assessment of appellant's property actually made by the State Tax Commission.
Gully v. Mississippi Valley Co., supra; Illinois Cent. R. Co. v. Miller, supra; Yazoo M.V.R. Co. v. City of Vicksburg, 95 Miss. 701, 49 So. 185; Code of 1942, Secs. 3711, 9825, 9852.
The valuations which appellee placed on the disputed items of property in its attempted assessment thereof are incorrect, and the valuations made thereof by the State Tax Commission are correct.
The assessment made of appellant's property by appellee and its approval by the circuit court of second district of Jones County, Mississippi, are contrary to the law and facts and void. Buchanan Harper, of Laurel, for appellee.
Section 112 of the Constitution of 1890 places limitations upon the legislature in the matter of ad valorem taxation, which limitations have been heeded by the legislature in the enactment of Sections 9825 through 9833 of the Code of 1942.
Gully v. Eastman-Gardiner Lumber Co., 168 Miss. 100, 151 So. 170; Code of 1880, Secs. 597-608; Code of 1930, Secs. 3201-3205; Code of 1942, Secs. 9825-9833; Constitution of 1869, Sec. 20, Art. 12; Constitution of 1890, Sec. 112; Laws of 1932, Ch. 291; Laws of 1944, Ch. 138, Sec. 29.
Power to assess taxable property for ad valorem taxation is vested in the local taxing authorities (county and municipal) as to all such property which is not of the character or species of which the exclusive power to assess has been conferred by the legislature upon the State Tax Commission.
State ex rel. Greaves v. Henry, 87 Miss. 125, 40 So. 152; Teche Lines v. Board of Sup'rs of Forrest County, 165 Miss. 594, 143 So. 486; Maris v. Lindsey, 124 Miss. 742, 87 So. 12; Gunter v. City of Jackson, 130 Miss. 637, 94 So. 844; Dunn Construction Co. v. Craig, 191 Miss. 682, 2 So.2d 166; Code of 1942, Secs. 9825-9833; Constitution of 1890, Secs. 112, 135, 181.
The State Tax Commission has no power other than that granted it by statute, and is limited in the assessment of property for taxation to the species of property designated in the acts of the legislature granting such powers.
Adams v. First National Bank of Greenwood, 103 Miss. 744, 60 So. 770.
An assessment made by a taxing body without authority of law is a violation of due process, and is a nullity, whether made by the local taxing authorities of the county or municipality, or made by the State Tax Commission.
Seals v. Perkins, 96 Miss. 704, 51 So. 806; Gully v. Mississippi Valley Co., 181 Miss. 669, 180 So. 745; Gully v. J.J. Newman Lumber Co., 178 Miss. 312, 172 So. 740; Long Bell Co. v. McLendon, 127 Miss. 636, 90 So. 356; Adams v. Luce, 87 Miss. 220, 39 So. 418; Gulf S.I.R. Co. v. Draughon, 148 Miss. 433, 114 So. 269; Adams v. Clarke, 80 Miss. 134, 31 So. 216; Robertson v. Bank of Yazoo City, 123 Miss. 380, 85 So. 177; Miller v. Copeland's Estate, 139 Miss. 788, 104 So. 176; City of Greenwood v. Humphreys, 157 Miss. 879, 127 So. 694; Laws of 1918, Ch. 138; Laws of 1926, Ch. 127.
The taxing authorities of the City of Laurel had the power to make an independent assessment of this property, unless the power to do so had been exclusively conferred by the legislature upon the State Tax Commission.
Gully v. Eastman-Gardiner Lumber Co., supra; Code of 1942, Secs. 3708-3709; Laws of 1938, Ex. Sess., Ch. 19; Laws of 1944, Ch. 138, Sec. 29.
A municipality which makes its own independent assessment is required by statute to assess all taxable property within its boundaries, which is not required by law to be assessed by the State Railroad Assessors, and it is the duty of the assessor in making the assessment of railroad property and other property required by law to be assessed by the State Railroad Assessors to copy from the assessment roll of such property prepared by the State Tax Commission only such property as is required by law to be assessed by the State Railroad Assessors.
Thompson v. Craig, 196 Miss. 465, 17 So.2d 439; Teche Lines v. Board of Sup'rs of Forrest County, supra; State ex rel. Robbins v. Southern Natural Gas Corp., 174 Miss. 192, 164 So. 1; Gully v. Mississippi Valley Co., supra; City of Greenwood v. Humphreys, supra; Code of 1942, Secs. 3708-3709, 3747, 9829; Constitution of 1890, Sec. 112.
A species of property not situated wholly in one county as described in Section 112 of the Constitution of 1890, refers to a continuous line of property such as tracks or wires extended into or through more than one county as a homogeneous unit.
Gully v. Eastman-Gardiner Lumber Co., supra; Code of 1930, Secs. 3200-3208; Code of 1942, Secs. 9829, 9833; Laws of 1932, Ch. 291; 51 Am. Jur. 781, Sec. 877.
A subdivision of the State, such as a municipality, should not be subjected to the provisions of a disabling statute nor should it be denied any of its privileges unless the intention to do so is clearly expressed in the statute.
City of Jackson v. State, 156 Miss. 306, 126 So. 2; City of Jackson v. Wallace, 189 Miss. 252, 196 So. 223; 44 C.J. 1471, Sec. 4680.
Green Green, of Jackson, amicus curiae for appellant.
The State Tax Commission having adjudged, pursuant to due return, Mississippi Power Company's ownership, this was not collaterally assailable by the City of Laurel.
Western Union Tel. Co. v. Kennedy, 110 Miss. 73, 69 So. 674; Yazoo M.V.R. Co. v. Adams, 81 Miss. 90, 32 So. 937; Yazoo M.V.R. Co. v. Adams, 73 Miss. 648, 19 So. 91; Morris Ice Co. v. Adams, 75 Miss. 410, 22 So. 944; Nickey v. State, 167 Miss. 650, 145 So. 630; Code of 1930, Sec. 3120; 31 Am. Jur. 102, Sec. 450; 34 C.J. 1171, Sec. 1660.
Adjudication by Tax Commission of value of property adjudged to be property of a utility is not collaterally assailable after due conformity by the utility with the sections conferring power as to it upon the Commission.
New Orleans, M. C.R. Co. v. State, 110 Miss. 290, 70 So. 355, 357; City of Hattiesburg v. New Orleans N.E.R. Co., 141 Miss. 497, 106 So. 749.
Double taxation is never permissible.
Thompson v. Craig, 196 Miss. 465, 17 So.2d 439, 441; State ex rel. Knox v. Union Tank Car Co., 151 Miss. 797, 119 So. 310; Middleton v. Lincoln County, 122 Miss. 673, 84 So. 907; 13 Mississippi Digest, "Taxation," Key No. 47.
Tax statutes are to be construed strictly against the taxing power and liberally in favor of the taxpayer.
State v. Union Tank Car Co., supra; Broom's Legal Maxims (7 Ed.), 353 passim.
Unit taxation of extensive corporate organization, almost state-wide in scope, is a prerequisite to proper compliance with Section 112, Constitution of 1890.
Gulf S.I.R. Co. v. Draughon, 148 Miss. 433, 114 So. 269; State ex rel. Greaves v. Henry, 87 Miss. 125, 40 So. 152; Thompson v. Craig, supra; Illinois Cent. R. Co. v. Miller, 141 Miss. 223, 106 So. 636; State ex rel. Knox v. Union Tank Car Co., supra; State ex rel. Robbins v. Southern Natural Gas Corp., 174 Miss. 192, 164 So. 1; People's Warehouse Co. v. Yazoo City, 97 Miss. 500, 52 So. 481; Mississippi Railroad Commission v. Western Union Tel. Co., 107 Miss. 442, 65 So. 505; McLeod v. Civil Service Commission of Jackson, 198 Miss. 721, 21 So.2d 916; Cleveland, etc., v. Backus, 154 U.S. 429, 38 L.Ed. 1031, 1038; Pocatello v. Ross (Idaho), 6 P.2d 481; State v. Back, 72 Neb. 402, 100 N.W. 952; Arkansas State Tax Commission v. Crittenden County, 183 Ark. 738, 38 S.W.2d 319; State ex rel. Morton v. Back, 72 Neb. 402, 100 N.W. 952, 956, 958, 69 L.R.A. 454; Pleasant v. M.K.T.R. Co., 66 F.2d 842, 847; State v. Stone, 119 Mo. 668, 25 S.W. 211; New Jersey, etc., R. Co., v. Mayor, 63 N.J.L. 120, 43 A 577; Appeal Tax Court v. Western Md. R. Co., 50 Md. 301; Chicago, St. L. N.O.R. Co. v. Commonwealth, 115 Ky. 278, 72 S.W. 1119; Schmidt v. Galveston H. S.A.R. Co. (Tex.), 24 S.W. 547; State v. Louisiana M.R. Co., 215 Mo. 479, 114 S.W. 956; State v. Hannibal, etc., R. Co., 97 Mo. 34, 10 S.W. 436, 438; Rowley v. Chicago, etc., R. Co., 68 F.2d 527, 79 L.Ed. 222, 293 U.S. 102; People v. Grand Trunk W.R., 357 Ill. 493, 192 N.E. 645; Northern Pacific R. v. Adams County, 1 F. Supp. 163; Norfolk Western R. Co. v. Board of Public Works, 3 F. Supp. 791, 795; Los Angeles, etc., v. Railroad Commission, 289 U.S. 287, 77 L.Ed. 1180; Union Tank Line Co. v. Wright, 249 U.S. 275, 282, 283, 63 L.Ed. 602, 607; Fargo v. Hart, 193 U.S. 490, 500, 48 L.Ed. 761, 765; Railway Co. v. Kentucky, 274 U.S. 76, 71 L.Ed. 934; Code of 1880, Sec. 597; Constitution of 1869, Art. XII, Sec. 20; Constitution of 1890, Sec. 112; 51 Am. Jur. 744, Sec. 834, p. 781, Sec. 877, pp. 827, 828, Sec. 941; 2 Cooley on Taxation (4 Ed.), p. 1918, Sec. 958; 14 Fletcher Enc. of Corporations 1021, Sec. 7036; 61 C.J. 595, Sec. 734.
There was no violation of Section 135, Constitution of 1890.
State v. Henry, supra; Natchez S.R. Co. v. Crawford, 99 Miss. 697, 55 So. 596; State v. Louisville N.R. Co., 97 Miss. 35, 51 So. 918, 53 So. 454; Hart v. State, 87 Miss. 171, 39 So. 523; Chrisman v. Brookhaven, 70 Miss. 477, 12 So. 458; Ellis v. Greaves, 82 Miss. 36, 34 So. 81; Schulherr v. Bordeaux, 64 Miss. 59, 8 So. 201; Wyatt v. Harrison-Stone-Jackson Agr. High School Junior College, 177 Miss. 13, 170 So. 526; State Teachers College v. Morris, 165 Miss. 758, 144 So. 374, 377; State ex rel. Barron v. Cole, 81 Miss. 174, 32 So. 314; Washington County v. Board of Mississippi Levee Commissioners, 171 Miss. 80, 156 So. 872; Mississippi Railroad Commission v. Western Union, supra; French v. State, 52 Miss. 759, 762; State v. Tonella, 70 Miss. 701, 14 So. 17; Hawkins v. Mangrum, 78 Miss. 97, 28 So. 872; Thompson v. Craig, supra; Illinois Cent. R. Co. v. Miller, supra; People's Warehouse Co. v. Yazoo City, supra; State v. Union Tank Car Co., supra; Gulf S.I.R. Co. v. Draughon, supra; Lawrence v. State Tax Commission, 286 U.S. 276, 76 L.Ed. 1102, 87 A.L.R. 374; Constitution of 1890, Sec. 112.
There was no violation of Section 112 by the sections vesting this power in the Commission.
State ex rel. Knox v. Union Tank Car Co., supra; Mississippi Railroad Commission v. Western Union, supra; Chicago, R.I. P.R. Co. v. Robertson, 122 Miss. 417, 84 So. 449; Town of New Albany v. Kansas City, M. B.R. Co., 76 Miss. 111, 23 So. 546; Yazoo M.V.R. Co. v. City of Vicksburg, 95 Miss. 701, 49 So. 185; Thompson v. Craig, supra; Yazoo M.V.R. Co. v. Adams, 77 Miss. 764, 778, 25 So. 355; Yazoo M.V.R. Co. v. Adams, 81 Miss. 90, 105, 32 So. 937; People's Warehouse Co. v. Yazoo City, supra; Gulf S.I.R. Co. v. Draughon, supra; Gully v. Eastman-Gardiner Lumber Co., 168 Miss. 100, 151 So. 170; Code of 1880, Sec. 606; Code of 1930, Secs. 3200, 3204, 3208; Code of 1942, Secs. 9829, 9834; Constitution of 1869, Art. XII, Sec. 20; Constitutional Convention Journal, 1890, p. 215, Miscellaneous, Sec. 69; Laws of 1918, Ch. 138; Laws of 1942, Ch. 127; Broom's Legal Maxims (7 Ed.), p. 682.
There was no violation of Section 181, Constitution of 1890.
Yazoo M.V.R. Co. v. Adams, supra.
Argued orally by James S. Eaton, for appellant, and by J.R. Buchanan, for appellee.
There is here involved the right of the City of Laurel to assess the property of an electric utility company which operates and holds property in more than one county. The items involved include land used as a garage, office building, and a steam plant building and equipment. This property had been regularly assessed by the State Tax Commission for the year 1945 at a total valuation of $39,470, along with other items not here involved. The City of Laurel, acting upon the assumption that the location of the specific items in Jones County and the City of Laurel authorized assessment by it, fixed same at $111,014. The question involves a construction chiefly of Constitution 1890, Section 112, and Code 1942, Sections 9825, 9826, 9829, 9833 and 9836.
Section 112 of our Constitution provides as follows: "The legislature may provide for a special mode of valuation and assessment for railroads, and railroad and other corporate property, or for particular species of property belonging to persons, corporations or associations not situated wholly in one county. But all such property shall be assessed at its true value, and no county shall be denied the right to levy county and special taxes upon such assessment as in other cases of property situated and assessed in the county."
Code Section 9825 provides that: "The members of the state tax commission are constituted state assessors of railroads and other public service corporations, and they shall . . . assess the property of . . . electric power and light companies . . . liable to taxation in the state."
Code Section 9826 provides for the assessment, by the said assessing body, of railroads and Section 9835 provides that a ". . . corporation owning or operating a . . . electric power and/or electric light company owning property not situated wholly in one county" shall file the same schedule required of railroads. Section 9829 requires the State Railroad Assessors to make out assessment roll for each county having "any . . . electric power and/or electric light company property not situated wholly in one county . . ." This section provides for the apportionment of assessed valuations in the following cases (1) when all the property of such public utility is located within the limits of a county; (2) when such property is located in more than one county; and (3) when such property is located in more than one state. The appellant is disclosed to own and operate such public utility in twenty-three counties in this State and the office building located in the city of Laurel is supervisory headquarters for five counties.
After, and in disregard of, the assessment by the members of the State Tax Commission acting as railroad assessors, the appellee made its own assessment, fixing same at the figures applicable the preceding year. Objections filed by appellant were overruled by the City Commissioners, whose finding that the City had authority to assess such items located therein was affirmed by the Circuit Court. Code 1942, Section 1196. The power company appeals.
The record shows that appellant had constructed during 1944 a large steam generating plant in Forrest County which commenced operations about January 1st, 1945. In the meantime the old plant located at Laurel was used as a "stand-by" adjunct facilitating the change over to the new plant. In this transition stage with complete dismantling imminent the valuation of the steam plant equipment was estimated by the railroad assessors on the basis of discarded or junk material. It was in fact disconnected from the company's line during 1944 and sold. However, if the appellee had no authority to assess this property the matter of valuation is put out of view.
At the threshold we are faced with the necessity for construing the language of Section 112, Constitution 1890, ". . . the legislature may provide for a special mode of valuation and assessment for . . . particular species of property belonging to . . . corporations. . . . not situated wholly in one county." And from the cited Code Sections 9825 and 9835 the phrase common to both, "electric power and/or electric light company owning property not situated wholly in one county." Attention is again invited to Section 9829 which provides that the State Railroad Assessors shall make out an assessment roll of the property of such utilities "not situated wholly in one county."
We need not document extensively our conclusion, reached after following the able reasoning of the skilful briefs of both parties, that the "particular species of property" referred to in Section 112 relates not to the identity of the separate items but to the character of the "persons, corporations, or associations" operating their "property" as a unit.
The legislature, thus enabled, unquestionably had in mind the rationale which provoked and supports the assessment by the State Railroad Assessors of railroad property as a unit. In Teche Lines v. Forrest County, 165 Miss. 594, 617, 142 So. 24, 143 So. 486, bus lines operating in more than one county were held assessable only by the State Railroad Assessors. Although not specifically mentioned they were comprised within the phrase "other public service corporations." Code 1942, Section 9825. It is significant that in the original opinion it was pointed out that "property situated in two or more counties may have a value as a unit different from the segregated items thereof." Despite the overruling of the opinion by the sustained suggestion of error, such fact remains an obvious truth. Such fact has throughout our jurisprudence been recognized in dealing with railroads and pipe line companies whose properties are for the most part continuous lines. Typical holdings are seen in Yazoo M.V.R. Co. v. Adams, 77 Miss. 764, 25 So. 355, and State ex rel. Robbins v. Southern Nat. Gas. Corp., 174 Miss. 192, 164 So. 1; Thompson v. Craig, 196 Miss. 465, 17 So.2d 439, 441. We forbear to cite further authorities upon the point, many of which appear in briefs of counsel.
The contrary view draws unwarranted significance from the circumstance that all fixed property has a definite locale. Yet even the poles of a telephone and telegraph company, the tracks of a transportation company, or section of a pipe line have a fixed location in some county or city. Such truism is made the basis for the allocation to the several counties of the respective assessment of items thus geopraphically identifiable. The intolerable situation of multiple and conflicting assessments suggested in Yazoo M.V.R. Co. v. Adams, supra, would result in all cases involving operations carried on by public utilities as an integrated system. Taylor v. Secor, 92 U.S. 575, 23 L.Ed. 663, 671; State ex rel. Morton v. Back, 72 Neb. 402, 100 N.W. 952, 69 L.R.A. 447. See 51 Am. Jur., Taxation, Secs. 877, 941. The instant case emphasizes, as does the Adams case, that it is the class of property, i.e. electric systems, that is being dealt with.
We shall discuss only one further case, relied upon by both parties, Gully v. Eastman-Gardiner Lumber Co., 168 Miss. 100, 151 So. 170, 171. This Court was dealing with the assessment of an electric light plant all of whose property and operations were in Jones County. We affirmed the power of the State Tax Commissioners to assess such a utility "only when their property is `not situated wholly in one county.'" We put aside the incident that any language therein used could be distorted to sustain the right of the local assessors to segregate and assess separate items of a unified system, would be a mere dictum.
We note again the language of the applicable statutes. Section 9833 provides for the assessment by the State Railroad Assessors of an electric power or light "company owning property not situated wholly in one county." It is the company which primarily is assessed, provided that it operates in several counties. Section 9829 (a) provides for the apportionment of values when "all the property of such public utility is located within the limits of a county," and paragraph (b) covers the situation when "the property" of such utility is located in "more than one county."
We shall not belabor the point but conclude that the policy of the legislature acting under constitutional authority was to divest local taxing authorities of the right separately to assess segregated items of an integrated and unit operation of the class mentioned, and that the members of the State Tax Commission have exclusive authority and power to assess this electric utility as a single and individual operation whose value is not the sum total of the several assessments of each county or city authority which views each item as an isolated unit, but whose reasonable appraisal takes into account not only convenience and orderly procedure, but also the fair evaluation of a chain whose integral links, regardless of the incident of their chance location, are but components.
We are compelled, therefore, to reverse and vacate the city's assessment.
Reversed and judgment here for appellant.
Sydney Smith, C.J., did not participate in this decision.
ON SUGGESTION OF ERROR
Counsel for appellee have suggested an inadvertence in our holding that "it is the company which primarily is assessed," as indicating that ad valorem assessments are in personam rather than in rem. If the premise were correct so would be also the conclusion. The statute, Code, 1942, Sec. 9833, uses this language both in its title and in its text, stating, ". . . an electric light company owning property not situated wholly in one county, shall be assessed . . ." By borrowing this language neither we nor the legislature were ignoring the fact that the assessment is in rem. On the other hand, it is thereby emphasized that the "company" is the sum total of its properties, and is therefore appraised and assessed with reference to its status as an integrated, homogeneous unit, which includes all of the component items of property necessary or expedient to the operation of such unit.
The contention still insisted upon, that the assessed items had been discontinued as operating components, is not borne out by the record, and if sustained, would of itself suggest the impropriety of an assessment thereof on the basis of valuation applicable to its appraisement as a functioning component of an operating unit. However, the matter of valuation is not for decision, but only the competency of the City to assess.
Overruled.