Case Name: PRAIRIE OIL & GAS CO. v. CRUCE, Governor, et al.
Court: Oklahoma Supreme Court
Jurisdiction: Oklahoma
Decision Date: 1915-03-09
Citations: 45 Okla. 774
Docket Number: No. 7024
Parties: PRAIRIE OIL & GAS CO. v. CRUCE, Governor, et al.
Judges: KANE, C. J., concurs. TURNER AND SHARP, JJ., concur in conclusion; BROWN, J., dissents.
Reporter: Oklahoma Reports
Volume: 45
Pages: 774–798

Head Matter:
PRAIRIE OIL & GAS CO. v. CRUCE, Governor, et al.
No. 7024.
Opinion Filed March 9, 1915.
(147 Pac. 152.)
1. TAXATION — Taxing Officials — Time for Performing Duties — Directory Statute. The various provisions of the statute (Rev. Laws 1910) and chapter 152, Sess. Laws 1911, relating- to assessments, levies, extending on the tax rolls, etc., and prescribing the time in which these acts shall be performed, are for the benefit I of the state, providing, an orderly system regulating the conduct \ of the taxing officials, and are, so far as they relate to the time 1 within which such duties are to be performed, merely directory, and are not limitations upon the power of the taxing officials.
2. TAXATION — Assessment by State Board — Power to Reassess, Where the state board of equalization has assessed property of all railroad and public service corporations, and has equalized the various county assessments and computed the amount of the ■ state levy, and caused the same to be certified by the state auditor to the several county clerks, said state board is without jurisdiction or authority to reconvene and reassess said property, or any part thereof.
3. TAXATION — Assessment—Omitted Property. If any property, real or personal, of any railroad or public service corporation, [ be omitted in the assessment of any year or years, and thereby escape taxation, when such omission is discovered the state board may assess such property and extend against the same on the tax list all arrearages of taxes properly charged against it in connection with the assessment for the next or some subsequent year.
4. TAXATION — State Board — Power to Reassess. The Legislature may make provision by law for a reassessment of property of railroads and public service corporations which has been assessed at less 'than its fair value, but, in the absence of such provision by the Legislature, no authority exists in the state board to do so.
5. PROHIBITION — Grounds—Unlawful Assessment. Where the state board has assessed the property of all railroads and public service corporations and has equaiized county assessments, determined the amount of the state levy, and caused the state auditor to certify the same to the various county clerics, and taken a recess subject to the call of the Governor, and thereafter reconvenes and attempts to reassess any of the property previously assessed, or to add to the assessment already made property which it is claimed had been omitted, prohibition will lie, and is the proper remedy to restran said board from so doing.
Brown, J., dissenting'.
(Syllabus by the Court.
Original action fax writ of probibitioii by the Prairie Oil & Gas Company against Lee Cruce, Governor, and others* as the State Board' of Equalization.
Writ granted.
W. ,S. Fitzpatrick j Ames, Chambers, Loioe &. Richardson; 'N. A. Gibson and- N. E. Van Tmfl, fox -plaintiff.
iClmdesi W.est, Atty. Gen., and Ledbetter, Stucu-t & Bell and Stua/rt, Cruce & Cruce, for defendants.

Opinion:
HARDY, J.
This is an original proceeding against defendant's as a member of tlie state- board of equalization, praying for a writ of prohibition, prohibiting defendants, as such board, from reassing property -of plaintiff or adding to the assessment previously made the property which it is claimed was omitted. The material facts in plaintiff's petition, which are admitted by the answer, asre: That plaintiff on the 30th 'day of Mlarch, 1914, filed with the state auditor a sworn statement of its property subject to tax-ation in -this state, -of the approximate value of $31,220,-665.33, -and o-n the-day of August -the state board of equalization raised the valuation thereof to $35,329,904.70, land that thereafter, during -the month of August, said board completed the assessment of plaintiff's property, and of a-11 public service corporations in the state for said year, -and completed the equalization -of all other property in the state, and on September 3d levied a tax for the fiscal year of 1.3 mills; that on the 28th -day of August the state auditor certified the assessment so made to- the county assessors of the various counties in which taxable property of plaintiff was located, and thereafter said -board took recess subject to the call of tbe Governor; that thereafter, on complaint bf one C. H. Pittman, 'as tax ferret, the board reconvened, and, after various proceedings, on December 10th increased the assessment of plaintiffs property in the sum of $10,500,000.
These facts are admitted by the answer, and defendants seek to justify their action by reason of the fact, as they allege, that the assessment in August of $35,000,000 was induced by fraud of plaintiff in concealing the fact that it had .property of more than $10,500,000 invested in oil and gas leases, and that plaintiff concealed from .the defendants .the true value of its capital stock, surplus, and undivided profits, and .allege that plaintiffs taxable property in the state is approximately the sum of $64,000,000. There is no reply to. the answer, and for tire purposes of this proceeding the material affirmative allegations thereof are to be taken as true.
There are presented to* us for our consideration two questions: (1) If the allegations of plaintiff are true, and defendants were without jurisdiction in tire premises, is. prohibition tire proper remedy? (2) Were defendants, as members, of .the state board of equalization, without jurisdiction to hear .and determine matters considered at the time the proceeding® in question were had?
The right of the. plaintiff to. the relief sought is denied by (the defendants,; and in support of their position they cite the court to, section 7370, Rev. Laws 1910, which is as follows:
"The proceedings before the board of equalization and appeals /therefrom shall be the sole method by which assessments or equalization shall be corrected or taxes abated. Equitable remedies shall be resorted to only where the aggrieved party has no taxable property within tire tax district of which complaint is made."
Plaintiff contends that the action of the state board in the premises is not governed by tins statute, because the board was not legally in session, and .therefore clothed with no- legal authority, and their acts >a nullity. If this contention be true, section 7370 is not 'applicable, because that evidently has reference to- proceedings when the board is legally in session, and the procedure there provided is for the correction, of assessments so made. If the defendants were not lawfully in session as the board of equalization, their .acts, so far as they affect the rights, of plaintiff, would not be governed by this statute, although they may claim to. have been acting as public officers in the exercise of some legal duty. The right to a writ of prohibition under these circumstances has been determined by this court in the recent case of Osage & Okla. Co. v. Millard et al., ante, 14S Pac. 797, where prohibition was granted restraining the defendant, as county treasurer, from 11 siting for taxation, or extending on the tax rolls, the property of plaintiff in that case. See, also, People ex rel. N. Y. Edison Co. v. Feitner et al., 45 Misc. Rep. 12, 90 N. Y. Supp. 826; Layman v. Iowa Telephone Co., 123 Iowa, 591, 99; N. W. 205, and cases cited there; Hutchinson et al. v. City of Omaha, 52 Neb. 345, 72 N. W. 218; Cooley on Taxation, p. 1391.
The second question involves the considteration of the various statutes of this -state, for the assessment of the property of railroads and public service corporations. Section 21, art. 10, Const. (Williams' Ann. Const, sec. 286), creates the state board of equalization, and prescribes its duties a.s follows:
"The duty of said board shall be to adjust and equalize the valuation of real 'and personal property of the several counties in the state, and it shall .perform such further duties as may be prescribed by law, and they shall assess all railroad and public' service corporations property."
Section 7373, Rev. Laws 1910, prescribes addirional duties for this board, as follows:
"It -shall be the duty of said [state] board to examine the various county assessments and to equalize; correct -and adjust the te-ame as between the counties by increasing or decreasing the aggregate assessed value of the property or any class thereof, in any or all of them, to conform to' the fair cash value thereof, as herein defined, and to order and direct the assessment noils of any county .in this state to be so. corrected as to. adjust and equalize the valuation of the real and (personal property of the several counties.'5
The manner of exercising the -powers conferred upon said board by the constitutional provision above referred to- is contained in article 4, c. 7£, Eev. Laws 1910, sees. 7336-7349, inclusive. By section 7337 it is provided that the property of all public service corporations- shall be assessed annually -by the state board of equalization in the manner prescribed in said chapter. Section 7338 requires every public service corporation, on or before the last day of February of each year, to furnish! sworn, lists or schedules of its taxable property, as may be required by •the state bo>ard o-f equalization, and makes such property subject -to taxation for state, county, and -o-ther public p-urposeis to- the same extent as the real -and personal property of private persons. Section 7348 provides that the returns so made shall not be conclusive as to the value or amount of said -property, and authorizes -the state board -of equalization ito make 'an -assessment -of such property at its fair ea-sh valuation, estimated at the price it would bring at a fair voluntary ¡sale, and givesi the board power to examine the books, records, and papers -and files of any corporation, -to- compel ithe attendance- of witnesses- and -the production of books and -papers so- as to enable it .to- -properly discharge its duties in these matters. Section 7349, is as follows:
"The state board of equalization, after -having valued and lassessed -all the property of public service -corporations in this (Sitíate according to the provisions o-f this article, shal-l cause the same to -be- certified by the state auditor to- the -county clerks- of each and every county in which -any portion of the property of any -such public service corporation may -be located. Such returns shall show the various- portions -of the property o-f such corporation located and taxable in each -county, and in every city, town, township, school 'district -or other municipal subdivision thereof, -and shall include a full and particular -statement of all and every species of property of such corporation located in each, of the said several subdivisions, together wiith the assessed value of every item thereof. Said return shall be certified by the state auditor to the clerks of the several counties wherein such property is located on or before the first Monday of May of each year."
The constitutionality of this legislation was sustained in Western Union Telegraph Co. v. Trapp, 186 Fed. 114, 108 C. C. A. 226, and it was there held that said legislation had the effect of constituting -the state board of equalization a board of assessors for the purpose of assessing the character of property over which they were given jurisdiction.
After the state board bias assessed all of the property of public service corporations in the state, and caused the same to be certified by the state auditor to the county clerks, the said county clerics are required .to do certain things which are prescribed by section 7350, -as follows:
"The county clerk, as soon as he -shall have -received the certificate from the state .auditor of the property of public service corporations -and the valuation -thereof assessed for -taxation in his county, shall certify siame to the proper -officers of the -different school districts, cities, towns and townships in his county -in which any portion of the property of any such public service corporation is located, 'and the amount of such assessment shall he 'placed on the tax rolls for tire benefit .of the respective school districts, cities, towns, or townships, and he shall, at the proper time, place such assessment on the proper tax roll of his •county, subject to tire same levy for different purposes, as is other properly."
The various county -assessors -are required by séction 12, c. 152, Sess. Laws 1911, p. 335, to make an abstract of ¡his assess-' ments to the state board, -after the sitting of the county board of equalization, not later than Saturday preceding the third Monday in June, and the third Monday in June is fixed as the time of the meeting of the state board of equalization, which is required •by section 7373 to meet in session at the state capital, commencing >on the -third Monday in June of each year, .and requiring it to examine the various county assessments, to equalize, correct, and adjust the same as between the counties. Section 7374 levies an annual ad valorem tax, and prescribes ithe duties of the board in connection therewith. After the board has discharged its •duties under this section, and the same has been certified to the clerks in the several counties in this state, tire county excise board is required by section 7380 to meet at the county seat on the last Saturday of July for the purpose of examining the various estimates and revising and correcting same and ascertaining the assessed valuation of the property in the county, and each municipal subdivision thereof, .and making a levy of taxes required for p-ublic purposes and the levy eo made by them miusifc be certified to the county clerk, who shall extend the same upon the tax rolls.
The foregoing presents the general scheme of taxation in this state, whereby revenues of the state 'and of its various municipal ' subdivisions .are levied and collected. The various provisions of! the statute' fix the time at which each of the several duties shall be performed by the different officers in the assessment of property and levy of taxes, but we do- not think .these provisions constitute a limitation upon the powers of the officials so as to render invalid 'any acts performed by them •after the time so fixed. There is no doubt that 'these provisions were intended to put into, force an orderly .and systematic procedure governing the conduct of the various officers whose duties it is to. see to the assessment of the property and the levy and collection of the revenues of the state; and it seems clear that these provisions1 are not mandatory, but are merely directory; and 'if a -taxpayer has failed to perform his full duty as a citizen by disclosing all of his property subject to taxation, and .this fact is discovered by the taxing officers before the time has expired in which property may lawfully be assessed, that such officers may proceed, after proper notice and opportunity to be herad, to assess said property so that it may bear its just- proportion of the burdens of the government. It is a matter of no material importance to. ia taxpayer whether his property is assessed within the particular .times prescribed by law or thereafter. This aoustruceion of the law is conceded to be correct by counsel for plaintiff in the petition for a rehearing and ¡the oral argument in support .thereof. Wells v. Burbank, 17 N. H. 393; Anderson, etc., v. Mayfield, 93 Ky. 230, 19 S. W. 598; Buswell Respt., v. Board Sup. Alameda County et al., 116 Cal. 351, 48 Pac. 226; People v. Eureka Lake & Yuba Canal Co. et al., 48 Cal. 143; Atlantic & Pacific R. Co. v. Yavapai County, 3 Ariz. 117, 21 Pac. 768; Hort v. Plum, 14 Cal. 149; Barkley v. Dale, 213 Ill. 614, 73 N. E. 325; Willard v. Pike, 59 Vt. 202, 9 Atl. 907.
It is further urged by plaintiff that after the said hoard had assessed the property of .plaintiff and all other public service corporations, and had equalized the assessments of the various counties* and caused the state auditor to certify such action to ithe clerks of the several counties of the state wherein property was located, that the board had exhausted its jurisdiction, and was without authority to take any further action in the premises, and should be held in law to Have adjourned and to be functus officio• We are of the opinion that, when said board had valued and assessed all the property of public service corporations in the state, and had caused the same to' be certified by the state auditor to the county clerks, as required by section 7349, they were withou .authority to reconvene and reconsider -their action by reassessing property already assessed, or by .adding thereto1 property which it was claimed had been omitted, except 'as we shall hereinafter point out. What we mean by this last statement may he illustrated thus: The board, having completed its assessment and valuation of the property, and certified the same to the county clerks, during the year 1914, could not during that year make an additional assessment and certify the additional amount to the county clerks in the same maimer and with like effect as the original 'assessment and certification was. made. These various provisions of the law, in our opinion, contémplate some finality of action by the board at some time during tire year, so that the result of their labors may be certified to the various county clerks, and so that the various municipal subdivisions of the state, through their proper officers* may make suitable provisions .for revenue to. meet their -current expenses and obligations. If this were not so* the board at any time might reconvene and reconsider their action, ¡and thereby 'disarrange the entire fiscal system of the state and all o-f its subdivisions; 'and if they could do this as to one corporation or as to- one item of property, tire same action could be taken with reference to- -every public service corporation and railroad company,-and as - often as the board in its judgment should determine. the necessity therefor. The powers of the board with reference -to assessing ¡property, and its other duties in relation to the revenues of the state, are statutory, ¡and no .authority exists for any action to he taken by the board unless the same is expressly conferred or included. by clear implication; and in case of -doubt the rule of construction is that the doubt must be resolved -against the existence of the power. McGannon v. State rel, Trapp et al., 33 Okla. 145, 124 Pac. 1063, Ann. Cas. 1914B, 620.
Another reason • why we think this must necessarily be so is that hv section 7368, Rev. Laws 1910, provision i-s m-ade for an appeal in matters .of this' kind, .and it is provided that appeals from the state' board may be taken to- the. Supreme Court within 60 days after the .adjournment of said bo-ard, but n-ot afterward. An appeal necessarily carries with it the idea of some finality to the act appealed from, and, if it he held -that the action of the hoard is not final when the result is certified to the county clerics, and that the board retains jurisdiction in the premises until it shall finally adjourn at its .pleasure, then no right of ¡appeal would accrue from any assessment until the adjournment was* in fact, had; or, if it be held that ¡an ¡appeal must be taken within 60 days from the date the board took final action upon the partieidar matter appealed from, then we would hia,ve this condition presented, or an appeal in a matter which was still within the jurisdiction and under -the control of the board, and, should they see fit to do so> the rnatteT appealed from might be reconsidered and a different result .arrived ait, from which <an additional appeal could be taken, and so on from every order .they might make. This, in our judgment, would lead to. intolerable confusion, and would put it within the power of persons and corporations seeking to dodge their taxes to suspend payment thereof by neglecting to apnea! until payment was sought to. be enforced; when, if it be held the board still had jurisdiction, they could give notice of appeal under the provisions of the sections above referred to, and suspend the payment of taxes.
We have made careful examination of the authorities cited in the brief of counsel for both .parties, 'and have arrived at the conclusion above stated, .that When the board bias, valued and assessed all of the property of public 'service corporations, and bas discharged its other duties, and caused the same to' be ceritified by the state auditor to the county clerks, that said board is without jurisdiction or authority to take any further action in the premises. Cooley on Taxation (2d Ed.) pp. 351, 352; City of Hannibal ex rel. v. Bowman, 98 Mo. App. 103, 71 S. W. 1122; Auditor Gen. v. Sparrow, 116 Mich. 574, 74 N. W. 881; Auditor Gen. v. Sessions, 100 Mich. 343, 58 N. W. 1014; Ferton et al. v. Feller, 33 Mich. 199; Common Council v. Smith, 99 Mich. 507, 58 N. W. 481; Wells v. Smyth et al., 55 Pa. 159; Lewis v. Bishop, 19 Wash. 312, 53 Pac. 165; Bialy v. Bay City, 139 Mich. 495, 102 N. W. 1033; Barkley v. Dale, 213 Ill. 614, 73 N. E. 325; Sullivan v. Peckham, 16 R. I. 525, 17 Atl. 997; Willard v. Pike, 59 Vt. 202, 9 Atl. 907; Downing v. Roberts, 21 Vt. 441; State v. Manhattan Silver Min. Co., 4 Nev. 318; People v. Supervisors of Westchester, 15 Barb. (N. Y.) 607; Overing v. Foote, 65 N. Y. 263; City of N. Y. v. Smith et al., 61 App. Div. 407, 70 N. Y. Supp. 702; People ex rel. v. Forrest, 96 N. Y. 544.
The legislature may make provision by law for a re-assessment of property which has already been assessed at less than its fair value, but, in the absence of such, provision by the Legislature-, no authority exists in the bo-ard to- do- so ; -and we find no- provision in the- laws of this state -conferring any authority upon any of the officers of the -state whose duty it -is -to- assess- property to -reassess the same after it h-as once been -assessed. Anderson v. Ritterbusch, 22 Okla. 761, 98 Pac. 1002. By section 7309, Rev. Laws 1910, authority is -conferred upon the assessors to- add property which has escaped taxation in previous years to- the assessment for the current year; and this, we think, is sufficient warrant of -authority for the state board to add to- the fax rolls property which has been omitted and which has escaped taxation. Counsel for plaintiff admit this section authorizes -action by the state board, and we- think thi-s construction is -also sustained by -the decision in Western Union Telegraph Co. v. Trapp, supra. This section does not' -authorize the- revaluation -of property w-Mcli has already been assessed, but simp-ly authorizes the- -assessment of property which h-as been omitted and thereby escaped taxation, and directs the,assessor to assess the property and extend against the -same on the tax rolls for the -current year -all -arrearages of taxes properly accruing against it. The defendants urge that under -this section -they have -authority, after having assessed property -for ,a certain year and -caused the state auditor to- certify the same to the co-unty clerks, that if they discover during that year property omitted, -they m-ay -assess the- s-ame and cause the auditor to -certify their action to- the county clerks to -be collected in -addition to-, -and in connection with, the valuation already made. I-f we -are -correct in our first proposition — that when the -state board has assessed -and valued tire property o-f all p-ub-lic service corporations and railroad companies, -and the state auditor has -certified the same to the- various county clerks, they are without further authority — then undoubtedly they would have no authority ,to act under this section unitil the time for making 'the assessments in the next or some subsequent year; at which time, and in connection with the assessment for that year, the omitted property may be added, and all arrearages accruing against said property extended against the same on the tax rolls. We think this is the correct construction to be given to this section ; iand if the action of the board in this case is sought to be justified as a reassessment of property already assessed, the same' was without warrant or authority of law; and if it he an addition of property omitted, then they are without jurisdiction, because, having fully completed their labors, they have noi power to further act until the assessment for the succeeding or some subsequent year is to be made, when, by virtue of section 7309, the property so' omitted may be added.
We are of the opinion that the writ should issue as prayed for.
KANE, C. J., concurs. TURNER AND SHARP, JJ., concur in conclusion; BROWN, J., dissents.