Title: Masson, Inc. v. County Assessor of Wyandotte County

State: kansas

Issuer: Kansas Supreme Court

Document:

222 Kan. 581 (1977)
567 P.2d 839
ALEX R. MASSON, INC., Appellant,
v.
COUNTY ASSESSOR OF WYANDOTTE COUNTY, KANSAS; COUNTY TREASURER OF WYANDOTTE COUNTY, KANSAS; BOARD OF COUNTY COMMISSIONERS OF WYANDOTTE COUNTY, KANSAS, sitting as the COUNTY BOARD OF EQUALIZATION OF WYANDOTTE COUNTY, KANSAS; and STATE BOARD OF TAX APPEALS OF THE STATE OF KANSAS, Appellees.
No. 48,205

Supreme Court of Kansas.
Opinion filed July 11, 1977.
James G. Butler, Jr., of Wallace, Saunders, Austin, Brown & Enochs, of Overland Park, argued the cause and was on the brief for the appellant.
Lloyd G. Alvey, Associate County Counselor of Wyandotte County, was on the brief for the appellees.
The opinion of the court was delivered by
KAUL, J.:
The issue in this case is whether appellant's property was properly assessed for taxation as personal property.
The controlling facts are not in dispute and are set forth in a stipulation of the parties which, as pertinent to the issue herein, reads:
Appellant appealed from an adverse decision of the Wyandotte County Board of Equalization to the State Board of Tax Appeals (hereafter referred to as the Board). The Board found the subject property to be personal property and that appellant:
Appellant appealed to the district court which ruled:
Thereafter this appeal was perfected.
While the record is not entirely clear on the point, it appears from the Board's order that Wyandotte County had contended the property should be assessed as merchandise inventory pursuant to the provisions of K.S.A. 1976 Supp. 79-1001, et seq. In this connection, the Board, while finding appellant's flowers to be personal property, specifically determined that appellant was not a merchant and that the subject property was not merchandise inventory. In this connection the Board's order reads:
We agree with the Board's ruling that under the facts, appellant is not a merchant and that the subject property is not merchandise inventory under K.S.A. 1976 Supp. 79-1001, et seq.
In essence, appellant advances two arguments. It first contends the subject property is a "crop" and that crops of any sort including flowers are improvements to "land" or real property. Appellant contends, "that crops improve the land and enhance the value of the land whether the soil has been placed in individual pots or whether the soil has been left undisturbed." Appellant projects its contention by arguing that since the growing of flowers in pots must be deemed an agricultural pursuit it follows that it is subject only to real property ad valorem tax. Appellees, on the other hand, while conceding that appellant's operation is agriculture, contend that flowers growing in individual pots which are elevated and not attached to the land in any manner are clearly personal property and taxable as such under the statutory and case law of this jurisdiction. We are compelled to agree with appellees.
For purposes of taxation real and personal property are defined in K.S.A. 79-102 as follows:
We think it clear, under the stipulated facts, that appellant's flowers growing in individual pots do not form a part or parcel of appellant's real property, are "tangible things," and subjects of ownership. The flowers are not exempt under any of the provisions of K.S.A. 1976 Supp. 79-201, and hence are to be listed as "tangible personal property" subject to taxation pursuant to K.S.A. 79-301 [and 1976 Supp.], et seq.
*584 Appellees concede there are no decisions of this court directly in point. However, they direct our attention to the longstanding rule adhered to by this court that a crop which has become ripe or mature and is no longer drawing sustenance from the soil possesses the character of personalty even though it has not been actually severed from the soil. The applicability of the rule has been considered in various circumstances when the question whether crops, trees or plants are personal property has arisen. (e.g., Brendle v. Hudson, 146 Kan. 924, 73 P.2d 1013; Myers v. Steele, 98 Kan. 577, 158 Pac. 660; National Bank v. Beegle, 52 Kan. 709, 35 Pac. 814; and A.T. & S.F. Rld. Co. v. Morgan, 42 Kan. 23, 21 Pac. 809.)
While the cases cited are consistent with and lend support to appellees' position, we think the issue here is resolved by the language of K.S.A. 79-102 standing alone. This court has repeatedly stated that the entire matter of taxation is legislative and does not exist apart from statute. (Joseph v. McNeive, 215 Kan. 270, 524 P.2d 765; Board of County Commissioners v. Brookover, 198 Kan. 70, 422 P.2d 906; and Ray v. Board of County Comm'rs., 173 Kan. 859, 252 P.2d 899.)
Appellant cites Yoder Bros. v. Bowers, 169 Ohio St. 211, 158 N.E.2d 518; and Benken v. Porterfield, 18 Ohio St.2d 133, 247 N.E.2d 749, for the proposition that there is no distinction between plants or flowers grown in pots in a greenhouse and plants or vegetables grown in the soil by a nurseryman or truck farmer. Neither case supports appellant in the case at bar. The two cases dealt with an Ohio Statute (Page's Ohio Revised Code Annotated [Taxation] [now 1976 Supp.], § 5711.22), which at the time provided in substance that machinery and equipment used in agriculture and agricultural products should be assessed at fifty percent of true value while other personal property was required to be assessed at seventy percent of value. The taxpayer in both Yoder and Benken was engaged in a greenhouse operation and in each case the Ohio Board of Tax Appeals found the business of the taxpayer not to be agriculture and held the property in question to be subject to the seventy percent statutory assessment provision. In Yoder, on direct appeal to the Ohio Supreme Court, the ruling of the Board was affirmed by an equally divided court. In Benken the taxpayer's business was described as "planting, cultivating, harvesting and selling flowers and vegetables" in *585 air-conditioned greenhouses and outdoors in lath houses and several planting beds. In a four to three decision the Ohio court reversed the Board's ruling and held the taxpayer's business to be agricultural and that his machinery and equipment as well as crops and products of the greenhouse were entitled to the fifty percent assessment. The Berken case was not directly concerned with the issue whether flowers and vegetables were personal property, but the opinion indicates they were so assessed under the fifty percent statutory provision.
Appellant further contends that the assessment herein violates Article 11, Sec. 1 of the Kansas Constitution which mandates the legislature to prove a uniform and equal rate of assessment and taxation. Appellant's argument on this point is that his flowers should not be assessed as personal property when nurserymen and truck farmers are not so assessed in Wyandotte County. There is nothing in the record to support appellant's contention that its operation is exactly the same as a truck farmer or nurseryman who plants his crops in the field. Appellant offers no evidence that any other greenhouse business, which operated as appellant does, is assessed in a manner different from that ordered by the Board herein. This court has consistently adhered to the principle that the assessment and valuation of property are administrative functions, not judicial ones, and that courts will not substitute their judgment for that of the assessing authority in the absence of fraud, corruption or conduct so oppressive, arbitrary or capricious as to amount to fraud. (Northern Natural Gas Co. v. Williams, 208 Kan. 407, 493 P.2d 568, cert. den. 406 U.S. 967, 32 L. Ed. 2d 665, 92 S. Ct. 2408; Mobil Oil Corporation v. McHenry, 200 Kan. 211, 436 P.2d 982; and Symns v. Graves, 65 Kan. 628, 70 Pac. 591.)
We have carefully examined all of the arguments advanced by appellant and conclude that it has failed to establish any ground for judicial interference in the assessment as ordered by the Board of Tax Appeals in the instant case.
The judgment is affirmed.