Court Opinion

ID: 9856773
Source: CourtListenerOpinion
Date Created: 2023-09-24 06:57:26.286697+00
Date Added: 2024-06-11T09:40:34.203140
License: Public Domain

NEELY, Justice,
dissenting:
The Allegheny Pittsburg Coal Company believed that it had been grossly over assessed for 7,374 acres of coal property in Webster County. It timely contested the assessments before the County Commis*130sion of Webster County. At the hearing the taxpayer introduced evidence that it was assessed at $3,000.00 per acre when comparable property in Webster County was being assessed at $60.00 per acre (a 5,000% overvaluation). The State Tax Department introduced evidence that comparable property was assessed at $360.00 per acre (an 833% overvaluation). We need not discuss whose evidence in closer to the mark. Under any view of the evidence, the assessment on the taxpayer’s property was wildly out of proportion. Nonetheless, after reviewing this evidence the Board of Equalization and Review affirmed the assessments.
The Allegheny Pittsburg Coal Company and the successor owner of the property, the East Kentucky Energy Company, appealed to the circuit court which enjoined the sale of the property for unpaid taxes pending the court’s ruling on the appeal.
Although it is well established in West Virginia that a suit cannot be brought in equity to restrain the collection of a tax on the sole grounds that the tax is improper or illegal, this Court has acknowledged that special circumstances can bring such cases within equity jurisdiction. Douglass v. Town of Harrisville, 9 W.Va. 162 (1870). Thus, standing alone, taxpayer’s claim that the Board of Equalization and Review and the Assessor violated the State Constitution should not enable the circuit court to issue an injunction. Christie v. Town of Malden, 23 W.Va. 667 (1984). But a showing of actual or constructive fraud does entitle a taxpayer to equitable relief.
When a tax is so grossly excessive or discriminatory that it constitutes actual or constructive fraud on the part of the assessors, an injunction will issue. Great Northern R. Co. v. Weeks, 297 U.S. 135, 56 S.Ct. 426, 80 L.Ed. 532 (1936). We have stated: “It may be that when the statutory method for correcting assessments and equalizing them has been exhausted in instances where no jurisdictional questions arise, and when it is apparent that fraud in fact, on fraud presumed by law has been perpetrated by the assessing officers and which fraud is alleged and fully proven, that a court of equity would give relief.” Pardee Curtain Lumber Co. v. L.P.B. Rose, 87 W.Va. 484, 492-93, 105 S.E. 792 (1921).
The taxpayer in the present case has exhausted the statutory remedy and.the gross over-assessment of the taxpayer’s property indicates constructive fraud. The Assessor and the Board of Equalization and Review have, in sustaining the assessments over a period of ten years, systematically and intentionally assessed the taxpayer’s real estate at a patently discriminatory rate. The taxpayer repeatedly brought the inequality to the attention of the assessor and the board of equalization. Although the taxpayer conclusively demonstrated that the assessment was erroneous, the assessor and the board of equalization refused to consider the evidence offered by the taxpayer.
Article X, § 1 of the W. Va. Constitution provides in part “taxation should be equal and uniform throughout the State ... no one species of property from which a tax may be collected shall be taxed higher than any other species of property of equal value.” And the U.S. Supreme Court has stated that taxing by a uniform rule requires uniformity, “not only in the rate of taxation but also in the mode of the assessment upon the taxable valuation.” Greene v. Louis & Interurban R.R. Co., 244 U.S. 499, 37 S.Ct. 673, 61 L.Ed. 1280 (1917). Uniform assessment is more than a rule of thumb,, it is a constitutional mandate.
Injunction is an extreme remedy, and should be rarely used. There are strong policy reasons that restrain courts from enjoining the collection of taxes. The majority is correct when it notes that municipalities are dependent on tax revenues and restraining payment of taxes until resolution may cause some hardships. But civic expediency must be tempered by our constitutionally mandated principles of taxpayer equity. Accordingly, in cases such as the present one, when the over-assessment is so large that it suggests a fraud, injunction is a proper remedy.