Adams v. Clarke

80 Miss. 134

Opinions

Wi-iitfield, O. J.,

delivered the opinion of the court.

On two propositions involved the court is unanimous. As to these we hold: (1) A debt due to the vendor of land is a solvent credit, taxable to the vendor as a solvent credit, where the vendee has paid the taxes on the land for the year for which the debt is sought to be taxed; (2) the solvent credits arising from a mercantile businéss are taxable as such in years subsequent to that in which the debt was contracted, and do not, therefore, continue indefinitely to be covered by the assessment of “amount of money employed in merchandise;” (3) the majority of the court hold further: That, when one has been assessed for “amount of indebtedness which he regards as probably collectible,” but has not been assessed for “money on hand, or on deposit, or loaned,” he may be'additionally assessed therefor. Judge Calhoon dissents as to this, the third proposition, and will present his views in his dissenting opinion. The precise point on this third proposition can only be understood by a statement of the facts bearing on it. The appellee solemnly agrees, in the record, that, though he only gave in $5,000 as the amount of solvent credits which he regarded as probably collectible, “the other items than the one of $200 money loaned to J. C. Martin, appearing on the list representing the indebtedness now, and when the assessment hereinafter mentioned was made, are due to him, which he regarded as probably collectible for the whole amount,” which amount, it was conceded, was far in excess of $5,000 — to wit, $10,000. In other words, though returning only $5,000, the appellee admits that he actually had-a much larger amount than $5,000 of solvent credits, which were of their face value, to wit, $10,000, known,by him to be of that larger amount, and collectible. A more damaging admission conld hardly be made, but appellee had no alternative as to admitting it, since it was plainly true that he had intentionally undervalued his solvent credits. By way of salvo to his conscience, he did not make oath to the assessment, and the compliant assessor did not require him to. do so, both joining deliberately in this evasion of the law, and yet without having complied with the law — nay, whilst deliberately violating it, and whilst the assessor deliberately violated it — it is gravely argued that this assessment has passed into judgment, by the joint action of the citizen and the tax authorities, and is res adjudicabaand cannot be inquired into. The doctrine of State v. Simmons, 70 Miss., 490 (12 So., 477), is a most wholesome doctrine on this point, and will be firmly upheld by us in all proper cases; but the assessment which becomes res adjudicaba is an assessment made in conformity with law, and not in conscious and deliberate defiance of the law, on the part of both the taxpayer and the assessor. Courts do not sit to enable lawbreakers to profit by their own wrong doing. The proposition that the assessment in this case', made in intentional and willful disregard of all the sanctions required by law to make it an assessment, is res adjudicaba, is abhorrent to justice, and would put a premium on fraud. Authority is not wanting to sustain our view. See Lawrence v. City of Janesville, 46 Wis., 364 (1 N. W., 338; 50 N. W., 1102); Gager v. Proul, 48 Ohio St., 89 (26 N. E., 1013); Morris v. Jones, 150 Ill., 542 (37 N. E., 928). As to this proposition, also, however, our Brother Calhoon dissents.

This brings us to the chief point as to which we differ. The question is precisely this: Where a taxpayer actually has, say $100,000 of solvent credits, which are actually collectible for the full value, and he knows that fact, and so regards them, and intentionally undervalues them, by returning them, say at $5,000, as probably collectible, even supposing him to have sworn to his assessment, have not the $95,000 escaped taxation by reason of not having been assessed? It is earnestly contended that, in such case, the $95,000 have not escaped taxation by reason of not having been assessed, but that having given in, in a lump sum, under the clause “amount of solvent credits deemed probably collectible,” the sum of $5,000, and the board of supervisors not having raised it, the whole $100,000 of solvent credits have been assessed, and that.it is a case, true, of fraudulent and willful undervaluation, but that only; and that the state cannot have such outrageous fraud corrected. The fallacy of this reasoning -is patent. The board never had the other $95,000 brought to its attention. It never passed on that amount at all. It is said the appellee had all his solvent credits in mind when he returned the amount collectible as $5,000. If that were granted, it does not show that the board had them all in mind, or any amount beyond the $5,000. The board could know nothing of them except as declared. And it is not to be tolerated that a fraudulent taxpayer, who has deliberately and intentionally undervalued his solvent credits, shall succeed in this fraud on the law by the easy process of telling us that he had the whole $100,000 in mind. The board must have the $100,000 in mind as well as he. Counsel for appellant has put this so clearly that we quote this part of his argument to adopt it as a part of the opinion of this court. He says:

“It is conceded by the state that, in the absence of fraud as to property specified on the rolls, the valuation finally fixed by the board is conclusive both upon the state and the taxpayer. The taxpayer is advised by law of the time and place when the question of valuation will be finally settled, and he must then and there attend or take notice of the final action of the board, and if dissatisfied therewith, appeal to the next term of the circuit court of the county. When no appeal is taken, the statute •declares the roll to be conclusive. Code, § 3787. The question is conclusive of what ? It is not conclusive of the fact that the roll contains all the taxable property of the person named on the roll, although the list required to be made by the taxpayer, and the roll made by the assessor, contains a blank for nonennmerated personalty, under the head of ‘amount of all other personal property not otherwise mentioned,’ for the code expressly provided for the assessment of any property that escapes assessment. Code, § 3768. Since an assessment is the listing and valuation of property, and since the roll is not conclusive against the .public as to what property the taxpayer owns, it follows that the judgment of the hoard can only be conclusive of these two facts: Eirst, as against the taxpayer, that he is the owner, or taxable for the property shown on the roll; second, as against the taxpayer and the public, that the valuation of the enumerated property is as finally shown on the roll. The rule of res adjudicaba in reference to assessment for taxes rests upon the same basis as that of other judgments. Wells Res. Adj., sec. 483. One who relies upon the conclusive effect of a prior decision must be able to show that the precise point was-decided in that proceeding. If there are two issues, on either of which the judgment may have been given, and one would be conclusive, and the other not, there is no res adjudicaba. Greene v. Bank, 73 Miss., 542 (19 So., 350). Let us take the item of money. It is dealt with on the printed lists separately, and the assessment is to be of the ‘amount of money on hand, or on deposit, or loaned.-’ Suppose a taxpayer as to money returns the amount of ‘money on hand, on deposit, or loaned,’ $500. The revenue agent discovers that the party had on handln actual money $1,000, and assesses him for the additional $500. Is the first assessment res adjudicaba? Manifestly not; the taxpayer has simply made a false list. He has omitted $500 of the money he did have; it has escaped taxation, and under code, § 3768, the assessor can assess it, and under the act of 1894 the revenue agent can cause it to be assessed as money ‘which has escaped taxation.’ Either this is true or there is a difference between money and other property, or no other property can be thus assessed. If a man gives in for taxation ten mules when he has twenty, do the omitted ten escape taxation ? If they do, § 3768 of the code is obliterated. The learned trial judge accepted the view urged by counsel for appellee, that where any choses in action were assessed against the taxpayer, the state was thereafter precluded from making another assessment for choses in action which had,escaped taxation. Their argument was this: The statute, they say, does not require the taxpayer to furnish an itemized schedule of solvent credits, but to return only the aggregate amount (value) thereof. This they say leaves to the taxpayer the duty of canvassing and considering all his solvent credits, and of estimating them at their value, and when the roll is approved by the supervisors the judgment is conclusive on the taxpayer and on the state; that, first, the taxpayer has considered and valued all his solvent credits; and, second, that the value approved by the board is the true assessable value. This is a fair statement of counsel’s position. To this the reply is that the legislature never intended or provided that the judgment of the board should be conclusive as to the fact that all property had been assessed which the taxpayer owned. It did intend and provide that, as to the value of property brought to the attention of the board, its judgment should be conclusive.

But appellee’s counsel say the legislative scheme does not provide for bringing a list of the credits before the board, and therefore it was not contemplated that the board should exercise its judgment upon specific data. This proposition assumes a fact, and from that fact counsel proceed to a false conclusion. A judgment is conclusive because, and only because, the court by which it is rendered has been advised of the facts, and on those facts has announced its conclusion. The proposition of counsel is that the judgment here is conclusive because, and only because, there was no provision of law by which the facts could be submitted to the court. They concede that, if the statute required a list of the credits to be made, then that unlisted items could be assessed; but they contend that, no list being filed, it is to be conclusively presumed that things not brought to the attention of the board were by it adjudicated, or are to be treated as adjudicated. It is too clear for controversy that under the statute property which has escaped taxation can afterward be assessed. ' In reference to solvent credits the most that can be said is, that whether a particular credit has been omitted altogether or only undervalued cannot be discovered by an examination of the roll, and is known only to the taxpayer. The foundation of the claim that such property cannot be assessed in a subsequent year is that it has already been assessed, and the claim that it has been assessed rests, in its turn, upon the proposition that it cannot be told whether it has been or not. Take the two propositions as to which there cannot be ground for contention: (1) Property which has been assessed and valued cannot be reassessed; (2) property which has not been assessed can be subsequently put on the rolls and taxed. To which class shall be assigned $5,000 of solvent credits owned by the appellee in t1900, it being proven that he then had $10,000 of notes secured by mortgage, which he then knew to be worth their face value, and it further appearing that he paid taxes only on $5,000. Two things are certain: First, in no event can the appellee be required to pay on a greater amount than he justly ought; second, unless the additional assessment is upheld, he unquestionably escaped the payinent of taxes on one-half of his solvent credits. It must be borne in mind that our constitution is mandatory, and our statute presumably intends that he shall pay on the whole $10,000, and that whether the $5,000 which has not been taxed escapes or is subject to taxation depends upon the question whether the words of the statute shall be so construed' as to subject it to, or exclude it from, taxation. Did the legislature intend that accumulated wealth in the shape of bonds, notes, and stocks should stand upon the same footing with tangible, visible property, or that it should occupy a more favored position ? It is conceded by the state that, when property has been listed and valued, the valuation is conclusive, both upon the taxpayer and the state. State v. Tonella, 70 (14 So., 17; 22 L. R. A., 346); State v. Simmons, 70 Miss., 485 (12 So., 177). The appellee admits that under the statute all other property which has escaped taxation may be now assessed, but contends that, whenever any assessment of money or any credit has been made, there cannot be another assessment. The foundation of this contention, as it has been said, rests upon the proposition that, since the statute requires the taxpayer to return all his money or credits, when he returns any, the presumption is conclusive that he has returned all. But the statute requires that the owners of other property return it all for taxation, and if they do not, there is no such presumption in their favor. It is not a reply to say that other property is required to be specifically listed, while money or credits are not. The statute (code, § 3761), in prescribing the form of the lists, requires that each taxpayer, having scheduled his property therein enumerated, shall finally state generally the “amount of all other personal property not otherwise enumerated.” This other property is not to be individualized; it is grouped. The contention of the appellee would therefore lead to the conclusion that if a taxpayer should return generally, in response to the interrogatory, any amount, say $100, he would forever shield from taxation any imaginable species of personal property.”

This reasoning is sans replique. It is perfectly obvious that this construction carries out the intent and purpose of the constitution and laws, and that its effect is to make the dishonest taxpayer pay only what he justly owes. The law is not made in the interest of those who fraudulently attempt to evade their just share of the burdens of taxation. The case of the Bank of Oxford, 78 Miss., 532 (29 So., 402), is wholly inapplicable here. Banks do not pay on.solvent credits. All that was held in that ease was that, as the surplus of the bank had been assessed, it could not be reassessed. That surplus was an aggregated subject of taxation, a unit in itself, wholly unlike solvent credits. It was taxed just as a stock of merchandise would be, or jewelry, or gold ware, or tbe like, all which, are wholly unlike solvent credits.

We are warned in argument that our view will be, as it is said, “far-reaching and disastrous.” We are not to be “frighted from our propriety” by visions of “gorgons, hydras, and chimeras dire,” conjured up by the fraudulent and dishonest taxpayer, when the Tthuriel spear of the law shall make the toad squat and the fiend resume his native form. We are not concerned with consequences. That is no argument to address to a court- — -if that be all that there is to be said. We are concerned only to ascertain clearly what the right is, and, having ascertained it, to maintain it inflexibly. Every dishonest return of taxes is not only a violation of the law, and beside a wrong to the state, but it is the grossest injustice to those who honestly pay their taxes. If all citizens would take care to pay as they should, the tax rate would be lowered, probably one-half, and property in the hands of corporations and individuals would equally respond to its just burdens. We have held the law aloft as to corporate efforts at evasion, and we shall mete out the same equal justice to the fraudulent individual taxpayer.

Reversed and remanded.