Central Granaries Co. v. Lancaster County

Barnes, J. The appellant is a corporation organized and existing under the laws of this state. Its main office is in Lincoln, Lancaster county, Nebraska. It owns and operates about 50 elevators, mostly in this state, and its business is that of buying, cleaning, selling and shipping grain to the .various markets of the world. It owns and operates elevators at some 40 different towns, situated in several different counties throughout the state. It also owns elevators at Lincoln, Rulo and Holdrege, called cleaning elevators. The manner of conducting its business is such that in handling, disposing of and shipping its grain to market it all passes through the cleaning elevators at Lincoln, Rulo or Holdrege. It buys no grain at its Lincoln cleaning elevator, and the grain that goes through this elevator comes from some of its outside elevators, situated — 312 — in other counties in different parts of the state, where it is originally purchased. In 1904 appellant made its return under oath to the assessor of Lancaster county of its property subject to taxation in that county, which return was in substance as follows: Capital stock .f350,000 Surplus and profits. 70,000 Total valuation of stock. $420,000 Property assessable in Lancaster county (itemized) . $83,265 Property outside of Lancaster county otherwise assessed. 336,735 Total valuation of stock.'. $420,000 The assessor of Lancaster county raised the amount of the property scheduled as assessable in that county $10,000 to cover the grain in appellant’s elevator in the. city of Lincoln. Objections thereto were filed with the board of equalization. A hearing was had, the objections were overruled, and the case was appealed to the district court, where a trial resulted in the dismissal of the appeal, an aifirmance of the order of the board of equalization, and an appeal therefrom was taken to this court. The bill of exceptions establishes the following uncontro-verted facts: First. The appellant’s capital stock and surplus was $420,000, which represented all of its property. $83,265 worth of that property was situated and taxable in Lancaster county. The remainder of it, to wit, $336,735 worth, was not used in Lancaster county, but was located and used in other counties. Second. The appellant’s Lincoln elevator is a transfer and cleaning house, and no grain goes into that elevator except grain in transit, on its way from the company’s elevators situated in other counties. Third. That the item in controversy, to wit, $10,000 worth of grain in. appellant’s Lincoln elevator, was grain in transit. It is claimed by appellant that this grain in transit was purchased by, or represented a part of, — 313 — the $336,735 of capital located and used in counties other than Lancaster, and had theretofore been assessed in said counties. It is contended by the appellee that the testimony- does not sustain the foregoing claim. We find that F. D. Levering, appellant’s assistant treasurer, testified in substance that the capital stock and surplus of the company in 1904 Avas $420,000; that his company owned and was then operating from 45 to 52 elevators in Nebraska and Kansas, 8 or 9 in Kansas and the remainder in Nebraska; that the only elevator the company liad in Lancaster county, outside of Lincoln, was at Waverly; that the only place the company buys grain in Lancaster county is Waverly; that it was not using any of its capital in buying grain in Lincoln; that the company bought no grain in Lincoln; that all of the capital of the company other than the amount invested in permanent improvements was used in buying grain at points outside of the city of Lincoln; that all of its capital, except the listed items reported and assessed in Lancaster county, to Avit, $336,735, was invested in grain elevators and grain outside of Lancaster county; that all of this portion of the company’s capital Avas located and was being used by the company in other counties than Lancaster; that it was invested in elevators, cribs, scales, gas engines and grain. E. J. Herring, avIio Avas in the employ of the appellant company, and Avho has especial charge of the assessment of its property in this state and Kansas, testified as follows: “Q. At the company’s outlying elevators in other counties than Lancaster county, do you know what method the assessors of the various counties adopted in arriving at the amount of capital stock the Central Granaries Company Avas using at these elevators located in these various counties? A. Yes, sir. Q. State to the court whether or not the assessors where these various elevators were located arrived at the amount of capital that you had invested at that particular point by taking into consideration the Avhole year’s business, or volume — 314 — of business for the year, in getting at the amount, the average amount of capital invested to the first day of April? A.. Yes, sir. Q-. And for those computations do you furnish the boots to the assessors at these various places? A. Yes, sir; we did. Q. And did they take into consideration, in arriving at the amount of capital that you had invested there, all of the grain purchased during the year, from April 1, 1903, to April 1, 1904? A. Yes, sir.” On cross-examination the witness further stated: “A. They took the average capital, the com cribs, the elevator, the gas engine, and the bank account, and the horse power, and any other tangible property we had. Q. And added it to the average capital or subtracted it? A. Added it to the average capital. Q. Did they add the real estate? A. We have no real estate.- Elevators are personal property. Q. They added the personal property to the average capital? A. Yes, sir. Q. And the cash on hand? A. Yes, sir. Q. And the grain on hand? A. No, sir; I did not say that. Q. That is a part of your tangible property, is it not? A.. No, sir; that is figured in this average capital.” The only evidence introduced by the appellee was the testimony of the county assessor, the instructions of the state board to county assessors, and the intructions of the Lancaster county assessor to his deputies. None of this testimony in any way controverts the evidence above quoted. Prom the foregoing, we are of opinion that the evidence is sufficient to show, prima facie, that appellant was assessed in the various counties where it was engaged in business (outside of Lancaster county) to the amount of $336,375 as average capital employed in its business in said counties. The appellant contends that, the action of the taxing officers of Lancaster county in adding $10,000 to its schedule for grain in its Lincoln elevator subjects it to double taxation to that extent, and the district court erred in refusing to grant it the relief prayed for by its — 315 — petition. If its property in other counties had theretofore been assessed for taxation in the manner provided by law, then its contention is well founded. That appellant is a grain broker, within the meaning of section 66, ch. 73, Laws 1903, commonly called the “New Revenue Law,” and should be assessed in the manner therein pointed out, is beyond question. That section reads as follows: “Every person, company or corporation engaged in the business of buying and selling grain for profit, shall be held to be a grain broker, and shall, at the time required by this act, determine- under oath the average amount of capital invested in such business, exclusive of real estate or other tangible property, assessed separately, for the preceding year, and taxes shall be charged upon such average capital the same as on other property. For the purpose of determining the average capital of such grain broker the county assessor or deputy assessor shall have the right to inspect all books of account and the checkbooks of such grain broker and shall determine and fix the amount of such capital by such inspection.” As we have already seen, the appellant, before it returned its schedule to the assessor of Lancaster county, listed $336,375 of its average capital in other counties. And this brings us to the consideration of what is meant by, or included in, the words “average capital” as used in the section of the revenue law above quoted.. It would seem that the legislature recognized the difficulty which would arise in attempting to assess grain brokers on the amount of grain on hand on the first day of April. If that method of assessment should be adopted, then it is safe to say that grain dealers would have no grain on hand at that time. If-the plan of assessing the capital stock of corporations dealing in grain, wherever such company or corporation is located, should be adopted, we might find all of such capital was invested in’ grain, stored in various elevators throughout the state, which would have to be assessed where located and this would result in — 316 — double taxation. So, in order to adopt a method Avhich should he fair to the broker, and at the same time tax the whole of his property, the legislature, by the section in question, provided for taxing the average capital used in the business for the previous year, wherever such business Avas conducted. In order to properly carry out that plan, it further provided that the broker should furnish his checkbooks and all his books of account to the assessor, avIio is required to determine “by inspection” the amount of such average capital. The laAv does not, in terms, provide for the taxation of both the average capital used by the broker in his grain business and the grain purchased themvith, and such could not have been the intention of the legislature. The average capital used in the business evidently means the money used in buying grain, and all of the money so used. By taxing this average capital, it makes no difference what amount of grain is on hand on the first day of April of each year. On that day it may have all been sold, and yet, by taxing the average capital in the place of the grain, the broker would be required to contribute his just proportion to the public revenue. The average capital today may be represented by money, Avhile tomorrow it may be invested in grain purchased and on hand. Again, on the next day the grain may be sold, and the proceeds thereof Avill then constitute a part, or perhaps the AAhole, of the broker’s a Average capital. Again, it Avould seem that the legislature has made a clear distinction between that part of the .broker’s capital used in the business, that is to say, in buying, selling, shipping and handling grain, and that part of it invested in other tangible property convenient and necessary for the purpose of conducting such business.. We take it that by the words “average capital” is meant so much of the whole capital of the grain broker as is used in handling grain, and not that portion Avhich is invested in tangible property for the purpose of successfully conducting the grain business. In construing a statute the court should, if — 317 — possible, give a reasonable meaning to all of its words and phrases. All tangible property must be taxed as such, unless otherwise provided by law. The law in question clearly implies that all of the tangible property of the grain broker, except grain purchased and sold, must be taxed as such. And to hold that the grain which he may happen to have on hand must be taxed, ih addition to the average capital used in its purchase, would render the words “other tangible property assessed separately” meaningless. That grain is tangible property no one will dispute. But it seems clear that it was intended by the legislature that it should not be embraced in the words above quoted. So, we are of opinion that the average capital required to be listed by the grain broker was intended by the legislature to cover and stand in the place of all grain purchased and sold by him. To assess such grain, in addition to the assessment of his average capital, as above defined, amounts in fact to double taxation, which no one will contend is permissible. It is contended by the appellee that the' rule that a taxpayer who appeals to the district court from the action of the board of equalization in matters of assessment has the burden to show that the decision of the board is erroneous, requires us to affirm the judgment of the district court. It is a sufficient answer to this contention to say that the evidence contained in the record establishes prima facie, at least, the contention of the appellant; and where there is no dispute as to the facts, and the record shows forth the action of the board, together with the evidence on which such action is based, the matter then becomes a question of law to be determined by the reviewing court, and not one of fact. In such a case the presumption invoked has no application. It appears from the record that the reason given by the assessor for adding the $10,000 in question to the appellant’s schedule was that he was not satisfied that the appellant’s average capital had been properly assessed in other counties throughout the state. Neither the — 318 — assessor nor tbe board of equalization of Lancaster county has any power or jurisdiction to review the action of the assessors and boards of equalization in other counties, and when it was shown by the appellant’s evidence that it had listed its average capital in such outside counties, and it was there assessed, that fact raised the presumption that the taxing officers of such counties had correctly performed their duty. Lastly it is contended by the appellee that the tax on the average capital of grain brokers, provided for by the section in question, is a tax on the business, or, in other words, a business tax, and is not a property tax within the meaning of the constitution; that, in addition to such business tax, it was proper, and it had the right, to tax the grain in question. That the legislature has the power to provide for taxing the business of grain brokers is beyond question. But that it has not done so seems clear. A business tax is defined to be- a tax on the privilege of carrying on a business or employment, and is commonly imposed in the form of an excise tax on the license to pursue the employment. It is usually a specific sum, or a sum whose amount is regulated by the business done, or the income or profits earned. Such, for instance, as 2 per cent, on the gross premiums of an insurance company, or any given per cent, on the volume of the particular business conducted. The statute in question, however, makes no such provision. On the "contrary, it states in plain terms that “taxes shall be charged upon such average capital the same as on other property.” The average capital is thus treated as property, and the amount of the tax levied thereon depends upon the rate of taxation for all 'state, county and municipal purposes, the same as though levied on real estate, or other tangible property.. We are therefore of opinion that the district court erred in dismissing the appeal herein, and that the appellant is entitled to the relief sought. For the foregoing reasons, the judgment of the district — 319 — court is reversed and the cause is remanded for further proceedings according to law- Reversed. Letton, J., dissents.