The Hawaiian star. [volume] (Honolulu [Oahu]) 1893-1912, 1905-01-10
AGENCY CONTRACTS
ARE NOT TAXABLE
CONTINUED from page So

taxable property within the meaning
and intent of the law?
Second. If taxable under the law,
what is the cash value of such con-
tracts?
Counsel of various appellants have
submitted briefs arguing with much
force and supported by various au-
thorities that none of these contracts
are within the purview and intent Of
the tax law.
The Supreme Court of the Territory
has, i'm the case of Assessor VS.. G.
Brewer & Co., Is Hawaiian, Page SO,
definitely set forth the view that
THE agreements whether written or
verbal and whether for a definite
period or terminable at will are GER
tainly all contracts within the mean
ing of Section $40 and are taxable.
As to the value of such contracts,
the Supreme Court has further given
opinion i'm Is Hawaiian, Page SO, that
or with their employees or officers or
for not more than a period of one year
have of themselves no cash value.
The decision futher reads Nothing
could be realized upon an attempted
sale of a privilege to act as an agent,
, which privilege, carried with it no as
, surance of its continuance for a de-
finite length of time.
The evidence shows that the agents
holding contracts with the Sugar Com
panies, invariably either themselves,
or with their employees or officers or
friends hold a majority control of the
stock of the sugar company and the
contracts are unquestionably of value
to the agents holding them.
Those contracts containing such that
they can be terminated by years
notice from either party are to a large
degree perpetual contracts for those
| interested are officers, directors and
stock holders i'm both companies to the
agreement and therefore so interviewer
with one another that it would be al
most impossible to dispose of the con-
I tract alone without transfer of the
control of the stock.
1t is difficult to imagine one of these
agency contract standing by itself
where the agency holding the contract
has no direct interest i'm the plantation
nor has any of the agency's own stock
holders or friends any direct interest
/ in said plantation, i'm which case the
control Of the plantation would be in
the hands of rivals of or opponents to
the agent holding the contract.
It is further difficult to imagine that
an agency contract under conditions
above outlined has much of a market
value, If any.
The Supreme Court decision i'm Is Ha-
waiian, page reads THE value at
which property is to be assessed under
| the tax law is the value for purposes
of sale and not the value to the owner"
No legislative enactment prescribes
| a mode of estimating the value of these
contracts.
The revenue I'm the form of COM
missions from these contracts might
form a basis for establishing a value
If the contracts could be brought I'M
der the head of an enterprise for pro-
fit" but this too has been excluded by
| the Supreme Court decision above re-
! ferred to-
The evidence shows that these agency
contracts by themselves have never
been bought or sold I'm this market
therefore no previous sales of contracts
can be used for establishing values.
Brewer & Co.. and Hackfeld & Co.,
have, indeed, returned certain of these
contracts at "A valuation but other
agencies, making sworn returns, have
assigned no cash value to the same
class Of contracts.
The return Of one contract and par
ticulary where such contract was cou-
pied with control Of plantation stock
could not serve to fix the value Of the
naked contract, stripped Of control OF
stock and incidental advantage I'm the
z case Of some other agency.
, The courtc annOt find any basis fo
= determining a cash value on these con-
tracts within the meaning and intent
= of the law, either from the evidence as
, given or from the laws enacted by our
> legislature,
The court therefore sustains the ap'
pellants.
(Signed THEO. f. LANSING,
j. +. BROWN,
j. r. GAIT.
January 6, 1905.