In re the Tax Appeal of Hawi Mill & Plantation Co.

OPINION OF THE COURT BY PETERS, C. J. The Hawi Mill & Plantation Company returned all real and personal property belonging to it and of which [605] it had possession or control on January 1, 1922, including all animals subject to taxation in its possession on that day, as combined and made tbe basis of an enterprise for profit, at $600,000. Tbe tax assessor assessed tbe company’s property at $1,100,000. Tbe taxpayer appealed from tbe assessment to tbe tax appeal court of tbe third judicial circuit. Tbe tax appeal court fixed tbe valuation of tbe taxpayer at $985,000. Tbe taxpayer appealed therefrom to this court. It is undisputed that tbe taxpayer is an enterprise for profit. Evidence was submitted of tbe average annual net profits of tbe company for eight years next preceding tbe taxation period. This was no criterion, however, due to tbe unprecedented conditions obtaining during that period. (Re Taxes H. C. & S. Co., 26 Haw. 708; Re Taxes Oahu S. Co., 26 Haw. 780.) No evidence of any sales of stock of tbe company was produced, due as we understand it to tbe fact that tbe company is a close corporation, its stockholders few and its stock not quoted on tbe market. No facts and considerations which might reasonably and fairly bear upon tbe valuation of tbe company’s property were produced which would tend to show that tbe combined property of tbe taxpayer was of greater value than tbe aggregate of its several parts. On tbe other band it does not appear that tbe value of tbe several parts was depreciated by reason of their combination. (Re Taxes Waiahea Mill Co., 24 Haw. 333; Re Taxes Hawi M. & P. Co., 23 Haw. 46.) Under tbe circumstances tbe property of tbe company must be separately assessed for its cash value. (R. L. 1915, Sec. 1241 as amended.) Tbe taxpayer in its return valued its property separately at $562,142.22. Tbe tax assessor testified that separately assessed its aggregate cash value was $979,894.80. Tbe only items, tbe value of which was in dispute [606] between tbe taxpayer and tbe tax assessor, were tbe company’s fee simple lands, certain lands leased by it from the Territory, growing crops and capital stock in foreign corporations. First as to tbe valuation of tbe company’s fee simple lands. Tbe tax assessor testified that tbe fee simple cane lands owned by tbe taxpayer were worth $150 an acre and pasture lands owned by tbe taxpayer were worth $10 per acre. Tbe taxpayer produced two witnesses who testified that tbe company’s fee simple cane lands should not be assessed separately; that cane land was seldom if at all dealt in separately; that usually included.in lands denominated as cane lands was a certain proportion unsuitable for cane and suitable only for pasturage or of no use whatever, and that so dealt in tbe prevailing price was from $80 to $85 per acre throughout. No reason was given by tbe tax assessor for bis valuations other than that this court bad placed a valuation of $200 an acre upon cane lands of tbe Onomea Sugar Company. No similarity between tbe cane lands of tbe taxpayer and those of tbe Onomea Sugar Company was shown and under tbe circumstances we are compelled to adopt tbe evidence of tbe taxpayer and place tbe valuation of its fee simple lands at $85 per acre throughout, including in tbe category of cane lands such as may be pasture or waste land. As to tbe value of lands leased from tbe Territory. Lands held by tbe taxpayer under lease from tbe Territory must by reason of tbe provisions of section 385, R. L. 1915, be taxed tbe same amount as tbe value of tbe fee. See Re Taxes Waiohinu Agr. Co., 23 Haw. 621; Re Taxes Hawi M. & P. Co., 26 Haw. 46. Next as to the value of growing crops. Tbe only evidence submitted to tbe tax appeal court Was that of tbe tax assessor which tbe tax appeal court adopted. Under [607] the circumstances its finding in that regard must be sustained. G. F. Glemons and A. Lewis, Jr., for the taxpayer. H. R. Hewitt, First Deputy Attorney General, for the assessor. Finally as to the value of stock in foreign corporations. Stock held by the taxpayer in the California-Hawaiian Eefinery, a foreign corporation, was returned for taxation but its value was not separately stated. The tax assessor assessed it for its full par value. The company took exception to this assessment upon the ground that the stock had not been paid for by it. No evidence of the actual value of this stock was submitted by either the taxpayer or the tax assessor. Under the circumstances the finding of the tax appeal court cannot be disturbed. We find the cash value of the real and personal property of the taxpayer including animals subject to taxation, separately assessed, to be in round numbers $942,000. A decree conformable to the foregoing opinion will be signed upon presentation.