The Pacific commercial advertiser. [volume] (Honolulu, Hawaiian Islands) 1885-1921, 1901-11-27

been n tendency in 1900 toward a lowering
Of values. y lot in an adjoining block
nearer the center of the town. with a
frontage on King street. but not a corner
lot. containing about 1900 square feet
was sold in July, 1899, at auction at the
rate Of little less than 81 a square foot
The Tax Appeal Court state In their de-
cision that two lots. not corner lots adj
joining the lot in question. had been as
sessed at $40 and 1925 a square foot
though we do not find this I'm the tran
script of the evidence. The evidence is
rather meager on which to base an esti-
mate of the value of the lot. While the
decision of the Tax Appeal Court has
not the conclUsiveness of a jury verdict
IL Is entitled to some weight We do not
find sufficient req son in this instance for
disturbing the finding of that court and
accordingly it is affirmed.
| The other lot Is one of about eleven
! acres situated at Pawaa. in Honolulu
with a frontage on the lower side of Kin,
street between Sheridan street and the
! Waikiki road. II was returned at $500
assessed at $4,000 and valued by the Tax
| Appeal Court at $500. The peculiar feat
ure is that the tract is subject to a lease
/ for forty years at rental of only 500
a year, the lease having twenty-one and
half years yet to run. There seems TO
\ be no dispute that the land unincumbered
! is worth $4,000 as held by the Tax APP
peal Court. But as ii is rented for only
800 year, that court valued the land,
subject TO the lease, at only $S90-presum-
] ably under the provisions of the statute
/ (CiV. l.. Sec. 500 that when any real
estate or house is leased or rented, the
sum Of eight years rental thereof shall
be the assessment value OF such real es-
tate or house, unless such valuation shall
be manifestly unfair unjust" This
eight year rental rule was discussed in
Parker VS.. Shaw, g Haw 407, and Chi
+ fn, how
under that rule Is generally ''manifestIy
unfair and unjust" when, as here, the
1 property was leased years ago at a small
er rental than could now be obtained.
Just what the valuation of the landlords
interest in such a case should be, depends
principally on the length of the unex-
p!red term of the lease and the difference
between the stipulated rental and the
market rental value. The value of the
landlords interest increases and that of
the tenants interest decreases as the ex-
piration of the term approaches, other
things remaining constant. OF course,
the value of the property a whole may
change so that the values of both inter
ests may increase or decrease absolutely
though the values may change in differ
ent directions relatively to each other.
Presumably when the lease was made,
the stipulated rental was the market
rental value. If that were so, the value
of the land at that time on the eight
year basis was $500 1t has now increased
to $4,000 A portion of this increase be-
longs 10 the landlord, who should pay
taxes on that portion. This is a property
tax, not an income tax. The Tax Appeal
Court, by following the eight year rule, !
practically released from taxation a |
property worth 1920 $3.50, 000-$S00), to |
come into possession twenty-one years |
hence. The trustees of the Bishop estate |
themselves consented to an assessment of |
hfnf IN T1Nr A In
our opinion 1t may safely be placed at |
81, 800. This would be less than $500 plus |
a sum that would at seven per cent. COM |
pound interest amount to SO. 200 in TWEEN |
ty-one years. that is. the present value (
of SIS, 200 to be received at the end of |
of seven per cent. per annun, compound !
interest
Counsel for the assessor urge, however, |
that the owner cannot set up the fact |
that there Is an outstanding lease for a |
long term at a low rental, for the reason /
that the lease was not mentioned in the |
return. The statute requires that the re-
turn shall be made in the month of jan
uary, and that it shall enumerate among
other things all leases with the names
and residences of the persons to whom
the leases are made Civ. L., Sec. 500, |
and provides (Sec. SID that If any person
shall refuse or neglect to make said re-
turn, etc, the assessor may make the
assessment according to the best infor-
nation within his reach. and the some
shall be conclusive. and not subject to
appeal 1t appears that the return was
made within the time prescribed by the
statute, and that the land in question
was described therein. but mention was
not made that it was subject to the lease;
but the assessors predecessor gave fur
Their time for the filing of a schedule of
the leases of the estate, and such
schedule was prepared and handed to
him in the month of May, and was ac-
cepted by him as one of the documents
10 go with the return. but the present
assessor did not know of this. The as
SCISSOR then found this schedule. and pro-
iuced II before the Tax Appeal Court.
The person making the return should
AXE care that he complies with the stat
ute and properly describes his interest
n the property. II may be that the re-
urn blanks furnished by the assessor
should be more explicit. The only COL
INN provided in those blanks for descrip-
ions of leases by landlords IS that which
$ headed Description and Situation of
land and improvements" There is no |
specific reference to leases or special in
erests in land. But If a person omits to
properly describe his interest in a tract
IF land, he cannot complain If the as
lessor assesses him as sole owner in the
lbsence of other information as to out ,
standing leases or other interests On
he other hand, II is to be observed that
ven when a person refuses or neglects
o make any return whatever, the asses
or cannot act arbitrarily or capricious- I
v He must mike the assessment 'ac- {
ording to the best information within +
lis reach" His valuation, even though f
realty excessive, may not be subject to i
ppeal, but there may be other remedies, s
n case it could be shown that he had T
cted fraudulently capriciously or q
nth gross carelessness. and not accord I
1g TO the best information within his b
each II may be a question how far the Q
equirements OF the statute can be waiV- Y
d by the assessor. 1t is clear that there y
re some provisions that he cannot a
awe. as, for instance. that which adds f
IN per cent to the tax after 1t becomes :
eIinquent. But there would be nothing g
D prevent him from using, In making an !;
har 7i-b g