Court Opinion

ID: 9725373
Source: CourtListenerOpinion
Date Created: 2023-08-26 11:43:46.801337+00
Date Added: 2024-06-11T13:12:06.764918
License: Public Domain

CHRISTIANSON, Judge
(concurring specially).
I concur in the result reached in the opinion prepared by Judge GRIMSON but do not agr.ee with all that is said in the opinion.
The plaintiff is the owner of a lot and a portion of an adjoining lot in the City of Hazen in Mercer County in this state on which there is a dwelling house. In assessing th.e property in 1947 and 1948 the value of the dwelling house was not considered but the assessment was based on the value of the land alone. Taxes were levied and extended against the lots and the plaintiff paid such taxes. Upon discovery of the fact that the dwelling had not been considered by the assessor in assessing the lots for the years 1947 and 1948 the county auditor made an assessment of said lots 7 and 8 based upon the value placed upon the dwelling, and taxes computed on such valuation at the rate prevailing in 1947 and 1948 were extended against the lots. Upon the merits, the sole question presented in this case is whether the county auditor had authority to make such assessment. I agree that the county auditor had such authority under Chapter 280, Laws 1931, which was codified and embodied in NDRC 1943, 57-14.
Real property consists not only of land, but also of that which is affixed to land, that which is incidental or appurtenant to land, and that which is immovable by law. NDRC 1943, 47-0103. A thing is deemed to be affixed to land when it is permanently resting upon it as in the case of buildings. NDRC 1943, 47-0105. Indeed, it is a general principle of law that a building permanently fixed to the freehold becomes a part of it and that prima facie a house is real estate belonging to the owner of the land on which it stands. 42 Am.Juris., Property, Sec. 18, pp. 199-200.
*686“Real property, for the purpose of taxation, includes the land itself, whether laid out in town lots or otherwise, and, except as otherwise provided, all buildings, structures, and improvements except plowing and trees, and all rights and privileges thereto belonging or in anywise appertaining, and all mines, minerals, and quarries in and under the same.” NDRC 1943, 57-0204.
NDRC 1943, 57-0227 provides:
“All property subject to taxation based on the value thereof shall be assessed at its true and full value in money. In determining the true and full value of real and personal property the assessor shall not adopt a lower or different standard of value because the same is to serve as a basis of taxation, nor shall he adopt as a criterion of value the price at which said property would sell at auction, or at forced sale, or in the aggregate with all the property in the town or district, but he shall value each article or description by itself, and at such sum or price as he believes the same to be fairly worth in money. In assessing any tract, or lot of real property, there shall be determined the value of the land, exclusive of improvements, and the value of all taxable improvements and structures thereon, and the aggregate value of the property, including all taxable structures and other improvements, excluding the; value of crops growing upon cultivated lands. * * * ” NDRC 1943, 57-0227.
The foregoing statutory provision was enacted as a part of a comprehensive measure on Revenue and Taxation enacted by the Legislative Assembly in 1897, Laws 1897, Ch. 126, Sec. 30, and has been retained in subsequent compilations and codes without substantial change.
The law provides for boards of equalization in cities and in counties to review and equalize assessments.
NDRC 1943, Chapter 57-11 provide* That the board of equalization of a citj shall consist of the members of the govern! ing body of the'city, and that such boarj shall meet at the usual place of meeting oa the governing body of the city, on the sec-1 ond Tuesday in June in each year. NDRCI 1943, 57-1101. That the city auditor as clerk shall keep an accurate record of all changes made in valuations and of all of the proceedings and after completion of the equalization of assessments shall deliver the assessments as equalized to the county auditor of the county in which the city is situated with his certificate that the assessments are correct as equalized by the city board of equalization. NDRC 1943, 57-1102. That “at its meeting, the board of equalization shall proceed to equalize and correct the assessment roll. It may change the valuation and assessment of any real or personal property upon the roll by increasing or diminishing the assessed valuation thereof as shall be reasonable and just to render taxation uniform, except that the valuation of any property returned by the assessor shall not be increased more than twenty-five percent without first giving the owner or his agent notice of the intention of the board to increase it.” NDRC 1943, 57-1103. That during the session of the board any person feeling aggrieved by anything in the assessment roll or list may apply to the board for correction of alleged errors in the list or valuation of his real or personal property and the board may correct the errors as it may deem just. NDRC 1943, 57-1104. That “the board of equalization shall place upon and add to the assessment roll any real or personal property subject to taxation which has been omitted by the owner or the assessor, and shall enter the property at a valuation which will bear an equal and just proportion of the taxation.” NDRC 1943, 57-1105.
NDRC 1943, Chapter 57-12 provides: That “the board of county commissioners, at its regular meeting in July of each year, shall constitute a board o'f equalization of the assessments made within the county.” NDRC 1943, 57-1201. That “the county *687board of equalization, when equalizing individual assessments, shall observe the following rules: 1. The valuation of each tract or lot of real property which is returned below its true and full value shall be raised to the sum believed by such board to be the true and full value thereof; 2. The valuation of each tract or lot of real property which, in the opinion of the board, is returned above its true and full value shall be reduced to such sum as is believed to be the true and full value thereof; * * NDRC 1943, 57-1205; C.L.1913, Sec. 2138.
During the whole history of the State provision was made for the correction of errors in assessment lists and for the assessment of omitted property. I‘n 1925 the Legislative Assembly enacted a statute for the correction' of assessments and the placing of omitted property which has escaped taxation upon the tax lists and repealed all former statutes relating to such matters. Laws 1925, Chapter 198. Section 1 of that act read as follows:
“Whenever the county auditor shall discover that taxable real or personal property has been omitted in whole or in part in the assessment of any year or years, or that any person has given to the assessor a false statement of his personal property, or that the assessor has not returned the full amount of all property required to be listed in his district, or has omitted property subject to taxation, he shall proceed to correct the assessment books and add such property and assess it at its full and true value.”
(The above quoted section was embodied in the Supplement to the 1913 Compiled Laws of North Dakota and appears there as Section 2304al.)
The Court had occasion to construe the above section in Marshall Wells Co. v. Foster County, 59 N.D. 599, 231 N.W. 542, 544. The plaintiff in that case was the owner of lots 7 and 8 in Block 4 in the village of McHenry in Foster County. There was a building upon such lots. Taxes were assessed and levied upon lots 7 and 8 for the years 1920 to 1924 inclusive but the building thereon had not been considered by the assessor in determining the value of the property, but the building had been considered and assessed as being on lot 5. The plaintiff paid all taxes that had been levied pursuant to the assessments made against lots 7 and 8. for the years 1920 to 1924 inclusive. In 1928 the county auditor proceeded to assess the building as omitted property and extend taxes against lots 7 and 8 for the years 1920 to 1924 inclusive for an additional amount based upon the value of the building. The county auditor based his authority so to do upon Chapter 198, Laws 1925. The plaintiff brought action against, the county to quiet title to said lots 7 and 8. The defendant county in its answer asserted that the taxes assessed by the county auditor against lots 7 and 8 for the years 1920 to 1924 inclusive were valid and constituted valid liens against said lots 7 and 8. This Court held that the assessment made by the county auditor was without authority and that the alleged lien for the assessment made by the county auditor was wholly invalid. In the opinion in the case this Court said:
“Under this section (Sec. 1, Ch. 198, Laws 1925) the county auditor has authority to assess only any real or personal property which has been omitted in whole or in part in the assessment of any years or year, or property of which the assessor has not returned the full amount, or has omitted property subject to taxation. The property involved in this case is real estate property.
“Under section 2076, C.L.1913, ‘Real property, for the purpose of taxation, includes the land itself, whether laid out in town lots or otherwise, and, except as otherwise provided, all buildings, structures and improvements.’
“It is true that, under section 2122, C.L.1913, ‘In assessing any tract or lot of real property the value of the land exclusive of improvements, shall be *688determined; also the value of all improvements and structures thereon, and the aggregate value of the property, including all structures and other improvements.’ While the land and the buildings are valued separately the aggregate value of the land and the buildings is assessed against the land, and payment is enforced agaiñst the land by sale as provided by law. * * *
“In the case at bar, the lots and the buildings were not omitted, but were assessed, and the auditor had no power to assess them.”
In a supplemental opinion on denial of the county’s petition for a rehearing this Court said:
“In a petition for a rehearing counsel for respondent insists that city real estate and the buildings situated thereon are separately assessed; that the Legislature has separated them, and made the improvements personal property for the purpose of assessment. We do not so construe the law. Section 2122, Comp.Laws 1913, provides that: ‘In assessing any tract or lot of real property the value of the land, exclusive of improvements, shall be determined; also the value of all improvements and structures thereon, and the aggregate value of the property, including all structures and other improvements.’ In other words, the assessor, in assessing any tract or lot of real property, first determines the value of the land, and then the value of all the improvements, and, when he has the value of the land, and the value of the improvements on the land, he adds the two together for the aggregate value of the property, and the land is assessed for that amount. There is but one assessment, and that is a land assessment, and in no sense an assessment against personal property.”
It will be noted that NDRC 1943, 57-0227, prescribes rules for the assessor in the determination of the value of both personal property and real property for the purposes of taxation. Under the express provisions of the law of this state a house permanently resting on land is real property for the purposes of taxation. As was said by this Court in Marshall Wells Co. v. Foster County, supra, "the assessor, in assessing any tract or lot of real property, first determines the value of the land, and then the value of all the improvements, and, when he has the value of the land, and the value of the improvements on the land, he adds the two together for the aggregate value, of the property, and the land is assessed for that amount. There is but one assessment, and that is a land assessment”.
That a lot and a building permanently resting thereon are assessed as realty and as an entirety, is in harmony with NDRC 1943, 57-1205, prescribing the rules for the county board of equalization, which provides that “the county board of equalization, when equalizing individual assessments, shall observe the following rules: 1. The valuation of each tract or lot of real property which is returned below its true and full value shall be raised to the sum believed by such board to be the true and full value thereof; * *
As has been noted, the law embodied in NDRC 1943, 57-0227, was enacted as a section of Chapter 126, Laws 1897. The same year that such law was enacted in North Dakota the Legislature of South Dakota enacted a comprehensive measure relating to assessment and taxation. Laws of South Dakota 1897, Chapter 28. Section 25 of the South Dakota law was identical with Section 30, ch. 126, Laws of North Dakota 1897, which, as said, is embodied in NDRC 1943, 57-0227. The provision of the South Dakota law was also continued in force without substantial change, and as embodied in SDC 1939, 57.-0334 provided:
“In assessing any tract or lot of real property, the value of the land, ex-elusive of improvements, shall be determined; also the value of all improvements and structures thereon, and the aggregate value of the property *689including all structures and other improvements, excluding the value of crops growing upon cultivated lands shall then he assessed against it.”
South Dakota Code of 1939, 57.1002 provided :
“If there shall be any error in the description or quantity of real property assessed or taxed such error may in like manner be corrected' and the tax collected in the proper amount as determined by computation.
“When the treasurer, after the tax list is committed to him, shall ascertain that any land or other property is omitted, he shall report the fact to the county auditor, who, upon being satisfied thereof, shall enter the same upon his assessment list and assess the value, and the treasurer shall enter it upon the tax list and collect the tax as in other cases.”
In Palmer v. Beadle County, 70 S.D. 99, 15 N.W.2d 6, the Supreme Court of South Dakota had occasion to construe and apply these provisions of the laws of South Dakota. The plaintiffs in that case were the owners of lots 3 and 4 in block 6 in Black and Sterling’s addition to the City of Huron. “Lot 4 was occupied by a house of some size, while Lot 3 was vacant, but by the assessor’s return to the assessment of Lot 4, this lot appeared to be a vacant lot, and a house standing on Lot 4 was assessed as a part of Lot 3.” This condition existed for a number of years. The county treasurer discovered the omission of the building on lot 4 on the assessor’s return of the assessments and notified the county auditor accordingly. Thereupon the county auditor proceeded to correct the assessment of lot 4 as made by the assessor by adding thereto an amount computed on the assessed value of the house standing on lot 4. The sole question presented for decision in that case was whether the county auditor had authority to make such assessment and include the value of the building in the amount of the valuation on which the tax was computed.
The syllabus in the case reads as follows:
“1. Where assessor undervalued lot in yearly assessments because of erroneously not including building erect-' ed thereon, county auditor was not authorized to make reassessment of lot including value of building, since lot was not ‘omitted property’ within meaning of statute permitting auditor to assess omitted property. SDC 57.1002.
“2. The statute providing that value of land for purpose of assessment should be determined by considering-value of land and also value of structure relates only to valuation and does, not make structures on real property a separate class of property for purpose of taxation. SDC 57.0334.
“3. Where in yearly assessments of' lot, building erected thereon was erroneously not included, error went only to valuation, but not to ‘quantity of real property assessed’, and hence-county auditor on notice from county-treasurer was not authorized to make a reassessment by including the building in the valuation. SDC 57.1002, 57-0312, 57.0334.”
In the opinion in the case the court saidi
“The authority of the auditor to make new assessments is limited to cases of ‘omitted property’ and Lot 4 was not ‘omitted property’ for the assessor had assessed it every year from 1931 to , 1942, inclusive. The assessor had greatly undervalued the assessment no doubt, but that did not authorize the auditor to make a reassessment of it. It is only property that the assessor has omitted that the auditor can reassess. This is the interpretation applied in a similar case under a similar statute in North Dakota, Marshall Wells Co. v. Foster County, 59 N.D. 599, 231 N.W. 542 * * *
. “Neither do we believe that there was any error in the ‘quantity of real *690property assessed’ within the meaning of the first paragraph of SDC 57.1002. Lot 4 in its entirety was assessed. The assessor undervalued the lot but the entire lot was assessed; there was no error in the quantity of real property! assessed, the error was in the valuation. Under the provisions of SDC 57.0312 real property, for the purpose of taxation, shall include the land and all buildings, structures and improvements thereon. The assessment of Lot 4, therefore, included the land and the structures. SDC 57.0334 relates to the method of fixing the valuation of real estate, by providing that the value should be determined by considering the value of the land and also the value of the structure. But this section relates only to valuation and does not make structures on real property a separate class of property for the purpose of taxation.”
The decision of this Court in Marshall Wells Company v. Foster County was rendered in 1930. The Legislative Assembly which convened in January 1931 by Chapter 280, Laws 1931, amended and reenacted Sec. 2304al Supplement to Compiled Laws of 1913, Section 1, Ch. 198, Laws 1925, to read as follows:
“Whenever the County Auditor shall discover that taxable real or personal property has been omitted in whole or in part in the assessment of any year or years or that any building or other structure has been listed and assessed against a lot or tract of land other than the true site or actual location of such building, or that any person has given the assessor a false statement of his personal property or that the assessor has not returned the full amount of all property required to be listed in his district, or has omitted property subject to taxation, he shall proceed to correct the assessment books in accordance with the facts in the case and shall correct such error or omission in assessment and shall add such omitted property and assess it at its true and full value, and if a building or other structure, assessed as real estate is in the assessment thereof, described as though situated upon a lot or tract of land other than that upon which it is in fact situated, the Auditor shall correct the description and add the assessment thereof to the assessment of the lot upon which it is actually located; provided, however, that the rights or a purchaser for value without actual or constructive notice of such error or omission shall- not be prejudiced by such correction, addition or assessment.”
In Section 2 of the Act, Laws 1931, chap. 280, the legislature declared the reason for the amendment then made as follows :
“Whereas the Supreme Court of North Dakota has held that a building assessed against an erroneous description does not constitute property omitted from taxation;
“Therefore, an emergency is hereby declared to exist and this Act shall take effect and be in force from and after its passage and approval.”-
Laws 1931, Chapter 280, was embodied in NDRC 1943, 57-1401.
It is obvious that the legislature intended to change the rule of the former statute as such statute had been construed in Marshall Wells‘Co. v. Foster County and intended to authorize the county auditor to make an assessment against a lot, based upon the value of a house permanently situated thereon, where the assessor in assessing the lot had failed to consider the house in fixing the valuation of the lot, although he had considered the house in fixing the value of another lot on which the house was not situated. While the language of the amendatory statute was directed particularly to the facts involved in Marshall Wells Co. v. Foster County, the object of the statute was to enlarge the authority of the county auditor and make the same applicable to a situation where the assessor in fixing the valuation of a lot has failed to consider thé value of a house permanent*691ly resting thereon and has based the assessment alone on the value of the lot and consequently has undervalued the property. When the overall object of the statute and the enlargement of the authority of the county auditor are considered I believe that where, as in this case, a building permanently resting on the lot and hence a part of the realty is hot considered at all by the assessor in making the assessment or by the local or county boards of equalization in equalizing the assessment that the county auditor has authority under NDRC 1943, Chapter 57-14 to correct the omission in the assessment and make an additional assessment based upon the valuation of the house as was done in this case.
BURKE, J., concurs.