Omaha daily bee., 1902-09-22
POINTS IN THE TAX CASE
Abstract of the Opinion Written by Judge
Hsloomb Denying Writ.
QUESTION AS TO RIGHTS OF THE CITY
Uniformity of Assessment Not Secured
Under Present Method of Fixing
Value of Local Property
and Railroads.
tFrom a san CorrespondentO J

LINCOLN, Sept. H.-(Special FOLLOW
ing is an abstract Of the opinion of Judge
Holcomb in the case of The Bee Building
Company against the State Board OF Equali
zatiOn:
The dominant idea of the organic law
Is that needtul revenues for state and mu-
nicipal government shall be raised by levy
ing tax on property by valuation In such
subject to taxation shall pay taxes in
proportion TO the value of the property
owned. The word property is USED as
generic term and in its broad and compre-
hensive sense, and comprehends, no doubt,
az an lhtanslDle property OF whatsoever KIND,
including franchises, although the Stter Is
expressly specified, as well as bTu@cal or
tangible property.
In determining the value of property for
assessment purposes, We cannot take into
account the large amount or PROPERTY tnat
annually escapes taxation The only safe
and satisfactory rule, as we view the sub
Ject, is by comparison of values of prop
erty actually returned and listed for taxa
of valuation at which property is assessed
and thus conform to the constitutional
rule OF uniformity. The object of the law
of uniformity is reached If all property
within that taxing jurisdiction u assessed
at uniform standard of value, as com
pared with its actual market value, even
though there be great disparity between
values, as assessed for taxes and the value
as fixed In the open markets by barter,
exchanges or by buying and selling. 1t
would be unfair TO the railroad corpora
| tions TO assess their property at a greater
| valuation than that which prevails gem
orally and it would be unjust to the great
| body of taxpayers were the values for
assessment purposes of the railroad COM
| panies so disproportionatey low to per-
| NIT them to escape their just and fair
| public revenue
In the first return by respondents 1t was
franchises of the differept di1f coTporstion 5
| whose properties II was their duty to as
ssess for the reason that they did not be-
| lteve they were possessed with the
| thority and power to assess such fran
chises. In their, amended return they al,
] lege in detail what action was taken and
| from these allegations in the amended
| answer and the evidence adduced, ask us
fpa6chises Of the Siffere0t corporati s
! were considered, valued and actually as
sessed with the tangible property all as
Intent of the Law.
! II is obvious the legislative intendmant
was to have all the tangible property of
| all corporations other than railroad, tele-
panies assessed as other tangible property
and that the value of the remainder or in
tangible property was to be ascertained by
finding the value of its entire property as
represented by its capital stock and then,
by deducting the value OF the tangible
| represented by its franchise rights should
| be assessed as a separate and distinct item.
railroad s cerporations. ions @ but ts es cannoT o1 be
upheld. The legislature has provided an
other and different method for these cor
| method should be followed in the case of
railroad and kindred corporations it would
terms. The capital stock of such corpora
tions usually represents property and as
in several taxing jurisdictions and to COM
ply literally with the provisions in this
state would he utterly impracucable and
In the assessment OF such properties the
main object to be accomplished is to fix
the valuation with reference to uniformity
as regards assessments generally. In de-
termining this value 1t is the duty of the
| board to consider all factors having the
elements of property and which enter into
and form a part of the total property and
assets. Whether the property be tangible
or intangible or a valuable privilege or
contract right which enhances the value
of the corporate estate and adds to its
, income earning capacity, 1t should be con-
sidered and taken into account by the
Regarding the subject of uniformity OF
assessment II may be said that no fixed
or infeXible rule can be laid down. valid
assessment can result only in the exercise
of an honest Judgment. Much of the prop
erty of railroad companies is OF such a
nature and so situated that in the ascer-
tainment of its value the ordinary methods
: practical benefit. A railroad right-of-way
roadbed, ties, irons, etc, required for the
necessary and successful operation OF the
road and the conduct of the business are
of such character that II would be diff.
, cult indeed to say what its market value
is, determined alone by the consideration
of what ii would bring in cash IL exposed
to public sale Such a property cannot be
located % and % used Ind in different R taxing j jgris IS
dctions. The property can have but one
true valve, whatever may be the purpose
[ of the investigation.
Rule for Valuation.
Whether It be for the purpose of .fixine
reasonable rates for the transportation oi
passengers and freight or for the purpose
= of taxation. the rule to be applied shoulc
be the same II the railroads insist tina
! their DTOpeTtY Is OF certain value for the
purpose of determining what are reasonable
maximum charges for traffic, they have nC
ground of complaint If the same property
Is assessed at the same value for taxation
= purposes. In the maximum freight rate
! case from this state Mr.. Justice Brewer
: said that the basis of all calculations mus
Fbe the fair value of the property being useC
5 by IT for the convenience OF the public
\ What the company is entitled to ask is
fair return upon the value of that which
> 1t employs for the public convenience.
AS to the inclusion OF the value OF stocki
and bonds, IT is insisted and not without
merit that these are at times and I'm many
Instances more or less fictitious, occasionet
, by abnormal conditions and frequently re-
suit from manipulations on boards of trade
and in the stock markets. While concedinl
that market value may not always furnish
a the best evidence or the exclusive criterion
of the value of the corporate property, Il
! cannot be gainsaid that the amount and
ject to eXtraneous influences, would very
:. generally, II not uniformly be a most i'm
: portant factor in the determination of the
value OF the corporate property which they
b represent
= we do not wish TO be understood as say
. ing that a valid assessment may not b,
' made without resorting TO the method jus
discussed. There are no doubt other ave
| nues of information and other factori
proper TO be considered and when so con
| sdered cannot be treated a nulity moi
. can the deduction that property has beer
omitted which II is the duty of the boarC
> to assess properly be made. We have seer
| that the property should be assessed as
| unit and IL in making such assessment tn
board omitted no property which II wa
| required to assess We cannot issue a wrl
requiring them 10 do that which they hav
/ already done. even though the court be o
| the opinion that the method adopted Is no
= the one best calculated 10 produce NOR
| nearly the most accurate result.
Deductions from Testimony.
II the board acted honestly, II 1t assesse
| the Intangible with the tangible, II the al
e legations In the amended return are sus
= tained by the evidence, then such retuT
a Is conclusive and a peremptory writ O
: mandamus cannot issue. II Is fairly to b
e deduced from the testimony that the boar
n acted largely on the prior assessment
- without entering into any very eXtende
:, and exhaustive investigation on its ow
u behalf The only inference deducible froT
n the evidence Is that the boards valuatiO
was that which IL has used and by reasO
a | OF its use proven by the fact that ha
" Il considered only the physical value
N | the property, there would be such dis
n crepancles as appear In the valuations