The Pacific commercial advertiser. [volume] (Honolulu, Hawaiian Islands) 1885-1921, 1903-06-06
too HIGHLY,
ASSESSED
Tax -Appeal Court
Ruling Set
Aside.
Leasehold Assessment
Declared to Be
Absurd.
Estate OF E. R. Newman-Di-
vorce Trial Under New Law. )
Assent to Foreclosure.

i Chief Justice Frear writes the opin-
ion of the Supreme Court, in which he
i is Joined by Justice Galbraith, regard
/ ing the tax assessment of Lam Wo
| Sing. The appeal of the taxpayer is
! sustained so far as reduction is con-
cerned, though the valuation fixed is
upon property returned as not having
value. Justice Perry concurs in part.
Holmes & Stanley Tor taxpayer. Ro-
bertson & Wilder for assessor.
| The taxpayer returned his rice plan
tation at Waikiki as separate items:
real property in fee, consisting Of
many small pieces, s14,3S2; leasehold
interests in many small pieces of land,
nothing; rice, paddy, etc., s19,152;
growing crops, $4,000, and live stock.
| $3.50. The assessor raised nearly all
the valuations to greater or less ex-
tent. The fee simple property was
raised about fifty per cent. The tax
payer acquiesced in all the increased
amounts except that of the leasehold in
terests, which the assessor had placed
at s19, 1921. As to that he appealed to
the Tax Appeal Court, which reduced
that valuation to 5000. from which he
appealed to the Supreme Court.
Omitting the land held in fee and
about thirty acres held at will, there
remained about 12O acres held under
thirty-one separate leases having from
about one to thirteen years to run.
The court has this to say:
1.-The assessor in nearly every in
stance adopted $500 per acre as the
value of the land without the lease,
deducted the amount of eight times the
rental as the value of the lessons in
terest and assessed the balance to the
lessee with, of course, absurd results.
For instance, one lease of less than
half an acre on which rent was paid
at the rate of sac per acre per annum
and which had only ten months to run
was valued at $50. That lessons in
terest cannot be valued in this arbitra
ry way is evident" CSix Hawaiian de-
cisions are noted. 1.-The assessor also
considered the value of a lease that
was about to expire as equal to that of
one having a long term to run, be-
cause the lessee could make out of it
during the year as much in the one
case as in the other. This, of course,
was erroneous. The tax was pro-
perty tax, not an income tax"
The court reviews the action of the
Tax Appeal Court, commenting on val
uations. AS to one leasehold of 5.3
acres with an artesian well, it is held
it must remain as assessed at $3.50
because, not having been returned,
there can be no appeal regarding it.
1t is stated that bad leases cannot be
used to offset good ones, when they
are returned and assessed separate
ly. The conclusion is this:
Without going into details We
think that such of the leasehold inter-
ests as have value, including the 53
acres unreturned, might properly be
assessed at $1,000, and it is so ordered"
Justice Perry says: II concur as to
the unreturned piece of land, but as
to the appellants leasehold interests in
the other pieces my finding, upon the
evidence, is that they have no salable
or taxable value
The syllabus of the ruling opinion
esta bHshes the following as law:
a lessee's interest cannot be arbit-
rarily valued for purposes of taxation
by fixing the value of the land with
out the lease and deducting therefrom
eight times the annual rental supposed
to be the value of the lessons inter
est.
THE value of a leasehold varies with
the length of the term of the lease
as well as with the income derived
therefrom.
AN assessment of unreturned pro-
perty is held unappealabIe."
COURT NOTES.
| B. L. Marx, guardian of A. NJ. More,
a minor, in his second annual account
shows receipts of s431.1O and payments
of s269.7O, leaving a balance of s161.40.
In the foreclosure suit of w. o.
| Smith ct al, trustees of the Lunalilo
estate, against H. ". Schmidt, the de-
| PENDANT admits the truth of the aIlega-
tions adding: Defendant consents TO
the appointment OF a commissioner 70