Metropolitan Government of Nashville v. Hillsboro Land Co.

Mr. Justice Cresoh delivered the opinion of the Court. In this cause, the original bill for a declaratory judgment was filed in the Chancery Court, Part II, of Davidson County, by The Metropolitan Government of Nashville and Davidson County. Defendants were Hills-boro Land Co., Inc., Belz Investment Company, Nabco Corporation, U. Grant Browning, Arthur K. Hellermann, Attorney General George F. McCanless, and Metropolitan Tax Assessor Clifford Allen. The original bill seeks a determination of whether or not Chapter 325, Public Acts of Tennessee (1967), by implication, repeals Chapter 312, Public Acts of Tennessee (1967); or, alternatively, whether or not Chapter 312 violates Article II, Section 28 of the Constitution of Tennessee. The Metropolitan Tax Assessor filed an answer to the bill, joining in the prayer of the complainant that the — 434 — court below determine the validity and constitutionality of Chapter 312. By order the answer was withdrawn and Mr. Allen realigned as a party complainant. The defendant George F. McCanless demurred to the bill of the complainants only to the extent that it attacked the constitutionality of Chaper 312. All of the other named defendants, with the exception of Arthur K. Hellermann, demurred to the bill. Arthur K. Hellermann filed an answer to the bill; but, by order of the Chancellor, the answer was withdrawn and a demurrer of the same tenor and effect as that of the defendant Hillsboro Land Co., Ino. was substituted therefor. The demurrers of the defendants insist that Chapter 325 does not repeal Chapter 312, and that Chapter 312 does not violate Article II, Section 28 of the Constitution. Following realignment of the parties, the case was heard upon the demurrers. The Chancellor held (1) that Chapter 325 was comprehensive in nature and “specifically” covered the assessment of property, and (2) that Chapter 325, by implication, repealed Chapter 312. The question of whether or not Chapter 312 violates Article II, Section 28 of the Constitution of Tennessee was pretermitted. The demurrers of defendants were overruled. Thereupon, defendants prayed and were granted a discretionary appeal to this Court. The complainant below, the appellee in this Court, is a metropolitan government of the State of Tennessee, created pursuant to T.C.A. sec. 6-3701 et seq. Hereinafter, the complainant-appellee shall be described as The Metropolitan Government. — 435 — Tlie defendant Hillsboro Land Co., Inc. is a Tennessee corporation which owns an apartment complex, the “Versailles Apartments”, located in Nashville, Tennessee. The property on which the complex now stands was vacant as of January 10, 1967. After January 1, 1967, improvements which had an estimated value as of. January 1, 1968 of $1,700,000.00 were placed on the property. On January 1, 1968, the improvements were estimated to have been 70% complete, but construction was expected to continue until April, 1968. The defendant Belz Investment Company, a partnership, is the owner of a large tract of land in Nashville, Tennessee. The tract is the location of “100 Oaks”, a, large shopping center. As of January 10, 1967, the tract was largely vacant, but three buildings were partially or wholly complete. A construction permit for $3,250,-000.00 was issued January 24,1967, and construction was begun of a large mall building and other structures. More than forty establishments participated in a “grand opening” on October 26, 1967, and other firms have subsequently opened for business. It is estimated that approximately 80% of the shopping center was complete as of January 1, 1968. The defendant Nabco Corporation is a Tennessee corporation which owns “Parkway Towers”, an office building and parking garage in Nashville, Tennessee. This property was assessed as a vacant lot as of January 10, 1967. As of January 1, 1968, approximately $2,000,-000.00 had been invested in the improvements on the property. It is estimated that this investment represents 45% of the total to be invested. The defendant U. Grant Browning, and others, are the owners of the “Country Squire Apartments”, located in — 436 — Nashville, Tennessee. As of January 10, 1967, this property was assessed at $36,000.00. Construction of the apartment complex began February 1, 1967, and was from 90% to 95% complete as of January 1, 1968. As of that date, the estimated value of the partially completed apartment units was $625,000.00. The defendant Arthur K. Hellermann owns the “Edge-field Garden Apartments” in Nashville, Tennessee. The defendant acquired this property from the Nashville Housing Authority January 13, 1967. A construction permit was issued January 24, 1967, in the amount of $650,000.00. As of January 1, 1968, the buildings were virtually complete, except that exterior painting, landscaping and sidewalks were unfinished. It is estimated that the improvements were 70% complete on January 1, 1968. What is said above brings us squarely face to face with the questions (1) whether or not Chapter 312, Public Acts of 1967, is impliedly repealed by Chapter 325 of the Public Acts of that year, and (2) whether or not the postponement of assessment embodied in Chapter 312, Public Acts of 1967, of real estate in the process of improvement accords with the basic source of all taxation in Tennessee — Article II, Sections 28 and 29 of the Constitution. All legislative taxing authority in this State is vested by Article II of the Constitution of Tennessee. Sections 28 and 29 are those in focus here. They are, in substance as follows: Article II, Section 28 of the Constitution requires all property to be taxed according to its value, so that taxes shall be equal and uniform throughout the State. Au — 437 — thority is granted to the Legislature to except (1) such property as may he (a) held by the State, Counties, Cities and Towns, and (b) nsed for public or corporation purposes, and (2) such property as may be (a) held, and (b) used for purposes which are purely religious, charitable, scientific, literary or educational. Authority is granted to the Legislature to direct the manner of ascertainment of the value of property to be taxed. Article II, Section 29 of the Constitution grants to the Legislature power to authorize Counties and Towns to impose taxes for County and corporation purposes. Section 29 requires all property taxed thereunder to be taxed according to its value and pursuant to the principles established in regard to State taxation. Prior to 1967, the basic statutory enactments, pursuant to the above authority, with reference to ad valorem taxation, were embodied in the following sections: “67-601. Period of assessment. — In order to provide revenue for state, county, and municipal purposes, personal property, privileges, and polls shall be assessed annually, and real estate shall be assessed every two (2) years in the odd years.” “67-602. Reassessment of real estate to include improvements. — It shall be the duty of the assessor in making his annual assessment of personal property to ascertain whether or not any permanent improvements have been placed upon any real estate previously assessed, so as to increase the value thereof to the amount of two hundred dollars ($200) or more, and in such case he shall reassess such real estate, taking into consideration the value thereof resulting from permanent improvements, which assessments shall in all cases — 438 — be made as of the tenth day of January of the year of which the assessment is made.’ It becomes apparent that before the 1967 legislative enactments, assessment of real property for taxation in Tennessee was fixed on a biennial basis in odd years except that, where permanent improvements of a certain minimum value occurred, the statute directed reassessment in the following even year; this, so as to take into account the value of the land as improved. In 1967, on the same day, the General Assembly enacted Chapter 312 and Chapter 325. Chapter 312 amended T.C.A. sec. 67-602 so as to add the final proviso clause. That section, as changed, reads as follows: “67-602. Reassessment of real estate to include improvements. — It shall be the duty of the assessor each year to ascertain whether or not any permanent improvements have been placed upon any real estate previously assessed, so as to increase the value thereof to the amount of two hundred dollars ($200) or more, and in such case he shall reassess such real estate, taking into consideration the value thereof resulting from permanent improvements, which assessments shall in all cases be made as of the tenth day of January of the year of which the assessment is made, provided, however, no property shall be reassessed until the improvements therein have been completed or until eighteen (18) months have passed following the commencement of the construction of the improvement, whichever first shall occur; at which time the owner thereof shall notify the local county and/or city property assessor stating the date said improvements have — 439 — been completed, occupied or sold. The failure by the owner to comply with the above provisions shall constitute a misdemeanor punishable as in all other cases of misdemeanor.” (Emphasis supplied). Chapter 325 has the effect of amending T.C.A. sec. 67-601; that section, as amended, now reads as follows: “67-601. Period of assessment. — From and after May-26, 1967 all assessments of real property, and of personal property, including merchants’ ad valorem assessments, shall be made annually and as of January 10 for the year to which the assessment applies. (Emphasis supplied). No one can dispute that the 1967 enactments have affected change in the previously fixed basis of biennial assessment for ad valorem taxation of real property in Tennessee. Indeed, the parties to this cause not only concede, hut so insist. However, prior to the present amendments, T.C.A. see. 67-602 had, for many years, provided for intermediate assessment in the even year, in the event of improvement. . It is against this historical background of ad valorem taxation that the import, significance and substance of the amendatory statutes here in question must be tested. Both the briefs and oral arguments pose the present controversy in terms of whether there is or not irreconcilable conflict between Chapters 312 and 325, with the result that, if there is, the latter repeals the former; or, alternatively, whether or not Chapter 312 violates Article II, Section 28 of the Constitution, in that it creates an “exemption” from taxation of improved land not authorized by such Article and Section. — 440 — The first, contention requires delineation. Tlie real thrust of the insistence is (1) that Chapter 325 affects a change from biennial assessment to annual assessment, (2) that the creation of the system of annual assessment eliminates “reassessments”, and (3) stated otherwise, legislative Acts providing for “reassessment” are fatally enervated by another, which eliminates all necessity for the first. It has always been, and is now, the rule in this State that implied repeal is the offspring of manifest repugnance between an earlier and later statute dealing with the same substance; or, as sometimes stated, the two statutes must be in irreconcilable conflict. Unicoi County et al. v. Barnett (1944) 181 Tenn. 565, 182 S.W.2d 865. It is equally correct to say that this repugnance or irreconcilability must be one between ideas and not merely words. A repeal by implication is indicated, therefore, only when two statutes are manifestly repugnant or in irreconcilable conflict of substance; however, such repugnance or conflict will not be found where any fair and reasonable construction will permit the statutes to stand together. State v. Smith (1952) 194 Tenn. 582, 253 S.W.2d 758; Chicago & Southern Air Lines, Inc. v. Evans (1951) 192 Tenn. 218, 240 S.W.2d 249. Repeals by implication are not favored; and, if one statute is merely affirmative, cumulative or auxiliary, without inconsistency, the implication of a repeal does not arise. Bailey et al. v. State (1924) 150 Tenn. 598, 266 S.W. 122. Section 67-601, as amended by Chapter 325, and sec. 67-602, as amended by Chapter 312, both now provide — 441 — for assessment of real property for taxation in both, odd and even years. The time of assessment in both enactments is fixed as of January tenth. Then, it necessarily follows that snob assessments will be identical in time, purpose, basis, and are to be performed by the same person. It is obvious that there is no need for two statutes, but it is equally true that they are neither inconsistent nor repugnant. Multiplicity of provisions of the same substance, standing alone, is not synonymous with either inconsistence or repugnance. The pivot of all this, then, is the significance of that part of sec. 67-602 which postpones the time for assessment, as heretofore explained. This raises the question of constitutionality, not repeal by implication. In support of his demurrer, the Attorney General denied that T.C.A. sec. 67-602 and the Act amendatory thereof, Chapter 312, were in violation of the uniformity and equality requirement of Article II, Section 28 of the Constitution. The Attorney General insists that postponement of the assessment of property undergoing improvement until either completion of the improvements or expiration of eighteen months is a valid exercise by the General Assembly of its authority to establish the manner and mode of determining value for the purposes of ad valorem taxation. Prior to enactment of Chapter 312, sec. 67-602 read as follows: “67-602. Reassessment of real estate to include improvements — It shall be the duty of the assessor in making his annual assessment of personal property to ascertain whether or not any permanent improvements — 442 — have been placed upon any real estate previously assessed, so as to increase the value thereof to the amount of two hundred dollars ($200) or more, and in such case he shall reassess such real estate, taking into consideration the value thereof resulting from permanent improvements, which assessments shall in all cases be made as of the tenth day of January of the year of which the assessment is made.” Chapter 312 added the following language: U # * # # # * provided, however, no property shall be reassessed until the improvements therein have been completed or until eighteen (18) months have passed following the commencement of the construction of the improvement, whichever first shall occur; at which time the owner thereof shall notify the local county and/or city property assessor stating the date said improvements have been completed, occupied or sold. The failure by the owner to comply with the above provisions shall constitute a misdemeanor punishable as in all other cases of misdemeanor. ***** *>> The proviso added by Chapter 312, if it means anything, means precisely what its language says; that is, that no property undergoing the addition of permanent improvements shall be reassessed to include the value of the improvements in the assessment until completion of the improvements or the expiration of eighteen months following commencement of construction. The result of this provision is that, for some indeterminate period of time up to eighteen months, property — 443 — may have had valuable improvements affixed, and that these improvements will not be reflected in the assessment of the property in the interim because of the immunity created by Chapter 312. It is entirely clear, and it has been stated here before, that the Constitution grants to the Legislature the authority to direct the manner and mode of the ascertainment of the value of real property for taxation. The primary constitutional mandates governing property taxation in Tennessee are that all property shall be taxed, according to its value, and that taxes shall be equal and uniform. We are not here concerned with abstruse or evanescent definitions of “value”. Chapter 325 was passed expressly to repeal T.C.A. sec. 67-605. Chapter 325 contains, in the very first paragraph, a definition of value: “Basis of valuation.- — All property shall be assessed and taxed according to its value, which shall be ascertained from the evidences of its sound, intrinsic and immediate value, for purposes of sale between a willing seller and a willing buyer without undue consideration of speculative values. ” (Emphasis supplied). The Legislature, itself, thus has defined value as “immediate”. Chapter 312 works a postponement of the inclusion of increased value in these assessments, which is in violation of the mandates just above referred to. The Legislature may not exercise its authority to determine the manner and time of assessment so as to thwart the most basic constitutional principles of property taxation: — 444 — “Our Constitution requires all property to be taxed according to its value, that value to be ascertained in such manner as the Legislature may direct, so that taxes shall be equal and uniform throughout the State: Art. 2, sec. 28. Undoubtedly these fundamental principles of taxation are intended to apply to the time at which such taxes are assessed, so that the property taxed shall be so taxed at this value at the time at which the tax is imposed; and also the equality and uniformity of taxation required, are equality and uniformity with taxes on property of like character imposed at or about the same time. Nor do these requirements present any impediment to providing agencies to reduce assessments, which were, at the time they were imposed, excessive and unequal. But it is not competent to the Legislature to prescribe a rule for the reduction of assessments, which will violate the manifest object of the fundamental law. That object is that the property must be taxed at its value, at the time the tax is imposed. A tax for 1866 must be for the value of the property in that year, not its value five years before or after. This may be widely different from its value in the year for which it is taxed.” State v. Butler et al. (1888) 79 Tenn. 410, at 413-414. We are of opinion, and hold, that Chapter 312 is in violation of Article II, Section 28 of the Constitution of Tennessee. The court below overruled the demurrers of the defendants; holding that Chapter 325, by implication, repealed Chapter 312 because Chapter 325 was com — 445 — prehensive in natnre and covered the assessment of property for taxation. In substance, the court below held that Chapter 312, Public Acts of 1967, is not effective. We are thus in agreement with the result reached in the Chancery Court below, but not for the reason given. We affirm the result reached below, with the reservation stated. Costs are assessed against the appellants. If counsel deem it prudent so to do, a final decree may be entered in this Court; otherwise, the case is remanded to the Davidson Chancery Court. Dyer and Chattin, Justices, concur.