The Hawaiian gazette. [volume] (Honolulu [Oahu, Hawaii]) 1865-1918, 1912-11-19
SUPREME COURT
FAVORABLE
Majority Opinion Cuts
Assessment on One
Property.
RF
Chief Justice Robertson
Opposes Wailuku
Findings.
tFrom Saturday Advertiserl

contention of the Waikiki Sugar Com
pany in its appeal from the tax appeal
court of the second judicial circuit
from the decision given in this court
unfolding an assessment on the pan
tation of $4,25O,000, and placing the
assessment at SO 100000, a reduction of
$650,0o0.
In the same decision Chief Justice
Robertson joins in the case of the Pa
huhau Plantation Company, but in this
case unfolding the findings of the tax
appeal court of the fourth judicial dis
trict, which placed the assessment at
81 1000, a decision from which the
Territory appealed, asking for an as
easement of 81 100000. In both cases
the Territory lost.
Chief Justice Robertson, however,
d;ssents in re the Wailuku Sugar Com
pany case, and in vigorous minority
decision expresses his opinion in the
case on law and fact in no uncertain
terms. stating that the $3,6o0,0OO is too
low an assessment on this property.
Altogether by these decisions re-
oarding the two plantations the Terri
torv loses the taxes on $75O,0O0. me
cases were argued on October 30.
The SYLLABUS of the majority decision
of Justices Perry and De Bolt is as
follows:
Finding for Plantations.
.eWhen a sugar producing plantation
has RECENTLY undergone extensive devei,
onment through the use of additional
lands or water supply, it would be un-
safe. in determining the value OF the
aggregate property of the corporation
for taxation purposes, to place entlre
reliance upon the profits and dlVldenus
received from the three crops harvested
since the extension, largely from virgin
aoil and at a time when prices of sugar
were unusually high. Reasonable al
lowance must be made, as an lntendlng
investor would make, for a possible de,
crease of profits and dividends for the
future due to possible reduction IN the
Yield of cane and in the price OF sugar
and increase in the most of productioh'
nIn valuing the property OF such
oornoration as an enterprise as whoie,
tbe earning power of the property IN
the long run as shown by its history ana
future prospects and possibilities. me
main consideration is the future, the
past being of Importance chleny IN oe
termining what the future Is hheiy W
be The conservative, not the specu-
Iative. spirit should control the matterS
of assessment. na
sIn making such valuations no one
rule can be justly followed IN all cases
50 varying are the FACTORS thaG ~ ~
Jetermine the values in different cases
crbe statute REQUIRES that in each case
there shall be taken into consldera
ton, besides certain matters especially
enumerated, all other facts and CON
alterations which reasonably and falrly
bear upon such valuation
t1ITpon the evidence a valuation OF
AZ 100000 is placed on the property OF
fhe Waikiki Sugar Company's sugar
plantation for taxation purposes for the
year 1912. ~
wear placed on the sugar plantation OF
the Paauhau Sugar Plantation Company
by the tax appeal court is sustained
and the appeal of the Territory is dis
missed.''
Judge Robertson's opinion.
In his dissenting opinion Justice Rob
ertson sid:
~ agree that the valuation of the
Paauhau plantation should remain, as
fixed by the tax appeal court, at 81 $780,
OOO but / think that $3,600,O00 is too
low valuation for Wailuku plantation,
and it is altogether out of proportion
to the Paauhau assessment.
"In deciding the cases reported in
III Haw 235 ct seq this court went
very carefully into the consideration
of the matter of assessing enterprises
for profit, particularly sugar planta-
tions. and laid down certain rules to be
followed in valuing sugar properties,
which I believe have ever since been
followed and which ought not to be de-
parted from now. Applying those rules
to the evidence in this case and giving
the appellant the full benefit of every
legitimate allowance, do not see how
its property can be valued at less than
100000.
"Ip Inter-Island Steam Navigation
Co. v. Shaw, 10 Haw. 624, $50, it was
held that while the earnings and the
market value of the stock of a corpora
tion should not be taken as the sole
test in the valuation of its property,
vet those are very important matters TO
be considered, and they finish in most
eases the best datum to start from.
And in IL Haw. PA, it was said that
Just as the effects of many factors
that 90 to determine the value of the
property is shown largely by the net
profits, so the effect of all the factors
is shown largely by the actual sales of
stock for this shows what persons who
actually invest consider the property
to be WORTH
s'The two sales of stock referred to,
one at $l65 and another at $172.50,
were of small blocks and it is not to
be supposed that the entire capital
stock of the corporation could have
been sold at those rates. Three hun
bred thousand shares at the first nam
ed rate would show a total valuation
of $4,950,000, and at the latter rate,
$5,l75,000. Assuming that the second
sale should not be taken into eonsidera-
ton, it would be fair and the appellant
should not complain, if from the Valua-