The Pacific commercial advertiser. [volume] (Honolulu, Hawaiian Islands) 1885-1921, 1894-05-10

tAo OcuLuTy OlCtiOHdIy, Oh
meaning of the word manifest"
the qualification applies IN favor
of the government as well as IN IaVoi
of the person taxed There is moth
ing in the statute to indicate con
trary intention; and, since the appil-
cation of the eight year rule mlgnt
be unfair In some cases to the pubic
as we'll as in other cases to the
person taxed, the qualification was
presumably made in favor of both
parties. This is also in harmony
with the general spirit and purpose
of the tax law, which is that all pro-
perty shall be equally taxed. The
statute, in Section IL, provides for a
tax of one per cent. upon all proper
! ty, real and personal, with certain
exceptions inapplicable to this case,
and in Section 81 and the first part
of Section 26, above quoted, it pro-
vides that every taxable interest
shall be taxed separately at its full
value, that is, at the sum which it
at sale by public auction for cash.
The proviso of Section 26 was not
intended as an exception to this rule,
but the legislature considering, as it
apparently did, that the value of
real estate is usually about eight
| times its fair yearly rental, and that
the fair yearly rental usually does
not vary much from the rental act
ually received, prescribed as a rule
of convenience and approximate cor
rectness In most cases, considering
how difficult it is to correctly esti-
mate values, that the value of the
landlords interest should be estima-
ted at eight years rental. It is ap
parent that the legislature intended
that the value of the landlords inter
est estimate in this way should be as
rule nearly equivalent to the value
at which it would probably be esti
mated in the absence of the rule
But while this might usually be the
case, it Is evident that in some cases,
by following the rule, the assessment
would be much too high or too low
manlfestly unfair or unjust either to
the person taxed or to the govern
ment. 1t was TO provide for such
cases, where the unfairness or I'M
business would be manifest, that the
qualification was added; and the un-
fairness to the Government might be
just as manifest as that to the person
taxed. This variation of the full
value from the eight years actual
rental, might be due to number of
causes, temporary or permanent.
One cause, suggested by the facts of
this case, is the gradual increase or
decrease In the value of land under
lease for long term of years, while
the rent remains constant. 1t was
argued by counsel that the question,
SO far as the government is concern
ed, is merely one of apportionment
of the tax between the landlord and
the tenant, and that therefore the
question of unfairness to the govern
ment could not arise, since what |
would not be obtained from the land |
land would be obtained from bhe !
tenant. But this is not so. The |
tenants interest must be assessed by |
itself at its true value, irrespective !
of the assessment of the landlords |
interest. Now if, for instance, (
during a long term the land should
greatly increase In value, the inter
ests of both tenant and landlord |
would increase in value, but while
the assessment of the tenants
interest would be increased, so far as
this cause is concerned, the assess
ment OF the landlords interest, if the
eight year rule were followed,
would remain the same, and the in
crease in the value of his interest
would not be assessed to anyone.
Suppose, for instance, the land is
worth, as agreed in this case, $4,000,
and suppose the term is about to
expire. The tenants interest would
then be assessed at only a nominal
value, if at all the landlords inter
est would be assessed at $4,000, and
a value of S11,SO0 would not be
to anyone.
1t Is unnecessary for us to decide
upon whom the burden of proof lies
to show that the valuation of eight
years rental is "manifestly unfair or
unjust" for, admitting for the pur-
poses of this case that the burden is
on the assessor, it seems to us that
this has been shown The defend
ant himself admits that the land un-
incumbered by the lease is worth
$4,000. Its fair yearly rental esti-
mated on the basis of the statutory
rule would be one eight of this
amount or $3.50, an excess of STATS
over the rent actually received. The
lease at the time as of which the land
was assessed, had about five and
5hree fourths years to run. Without
taking the present worth of S1475 a
year for this length of time but,
.avorably to the plaintiff, taking the
whole amount, five and three fourths
lines STATS, we find that not quite
$500 is the most that the plaintiff
could say that the value of his land
8 deprecated by reason of the lease
This would leave not less than $1,000
is the value of the land lpcumbered
~ the lease, or more than twice the
Imount at which it would be assess !
Vi ON the basis of aioht roarc rontal