The Pacific commercial advertiser. [volume] (Honolulu, Hawaiian Islands) 1885-1921, 1905-03-31
AGENTS MUST
PAY TAXES
Supreme Court Sustains
Assessor in Levy on
Plantation Agencies.

In a decision written by Justice Hart
well, the Supreme Court yesterday sus-
tanned the Assessors valuation of plan
tation agency contracts. The decision
was unanimous, Judge De Bolt sitting
in place of Justice Wilder.
The decision covers seven appeals of
the assessor from the Tax Appeal
Courts finding, in re the assessment
of taxes of H. Hackfeld & Co.. c.
Brewer & Co, Castle & Cooke, w. @.
Irwin & Co., Alexander & Baldwin,
Theo. H. Davies & Co. and F. a. Schae-
fer & Co, plantation agents.
These are appeals by the tax asses
sor from the tax appeal court invclv-
ing the assessors valuation of plan
tation agency contracts. Some of the
contracts are written, having definite
terms; others are oral without definite
date for termination. The tax appeal
court held that although under the de-
cision in Assessor V. c. Brewer & Co,
Is Haw. Sc, the contracts are taxable
within the meaning of the statute,
they have under that decision no cash
value when termina BILE at will or nav
ing a term of not more than one year.
The assessor valued the contracts
by taking the plantation estimate Of
their crops for 1904, deducting 20 per
cent for unforeseen contingencies,
reckoning the proceeds at $40 ton
and the agents commissions at 1 IL
per cent on sales. From these re-
ceipts he deducted so per cent for es-
timated expenses in connection with
the contract and then assessed each
contract at four times such net COM
missions, regarding all the contracts
as 4-year contracts all of the agents
but Castle & Cooke having refused to
allow him to see their contracts or to
give any information about them.
Says the syllabus of the decision:
plantation agency contracts, as held
in c. Brewer & Co.'S case, 10 Haw. Sc,
are taxable by statute. They also
have cash values which can be apprais-
ed after ascertaining the plantations
condition and prospects and consider
ing probable cost of production and
price of sugar, being a similar esti-
mate to that which purchaser of SUI
gar stocks makes in determining what
he will pay for them
Justice Hartwell writes the opinion
of the Court. He says, in part: Upon
the whole we think that while for va
rious reasons it may not be true that
every species and form of contract is
taxable, these contracts have such
distinctive, established and valuable
nature that they cannot be eliminated
from the statute, and that their reas-
onably approximate cash value may be
ascertained. Various methods of as
pertaining a cash value for time con-
tracts would be appropriate. One
method would be to ascertain the pres
ent worth of the yearly profit for a
Of yUhi nf
decrease in amount with a lapse of
each year of such term, and to make
allowances for any special features
that might exist. By applying such /
method of valuation, emitting from
the calculation all Incidental profits,
considering solely those arising from
commissions on sales, we consider
that the assessors valuation was not
too high in respect of H Hackfeld &
Co., Ltd, ($110, 615.40); of Castle &c
Cooke Ltd, 1891, 662.6O); and of F. A.
Schaefer & Co., (s1S,127.20). In those
instances the method of valuing by OBJ
tanning the present worth of estimated
annual profits for a term of years
would bring the assessors valuations
we'll within results so reached, and we
sustain those valuations. For various
considerations presented in the cases,
IOF INSTANCE, III respect OF the hc6TyQe
contract of Theo. H. Davies & Co,
Ltd, to which we attach no value, we
reduce the assessors valuations as
follows: c. Brewer & Co, Ltd, to
$4,000; w. G.. Irwin & Co., Ltd, to
$40, 600; Alexander & Baldwin, Ltd, to
$50, 900; Theo. H. Davies' & Co., Ltd,
to $15, 1000.
The decisions of the tax appeal
court are reversed and the assessors
valuations are sustained in the in
stances above mentioned and are re-
duced as above stated