Home Fire Insurance v. Lynch

BaseiN, J. Said plaintiff, during-the year 1897, being engaged in the business of fire insurance, had written certain policies of insurance for which it had claims for unearned premiums, consisting of notes and accounts against the insured, to the amount of ten thousand dollars. Said ¡notes and accounts were uncollectable in the event of the insured exercising his option to cancel said insurance; or in the event of loss, by fire, to the property insured, the plaintiff was obligated to pay to the insured such damage, up to the amount for which the same was insured. The assessor of Salt Lake County for the year 1897 assessed said notes and accounts, and in such assessment valued the same at ten thousand dollars. The plaintiff duly presented the foregoing facts to the Board of Equalization for said county, and “protested against said assessment on said alleged personal property, and demanded that said tax be stricken from the assessment rolls on the ground that the plaintiff was not the owner of such property, that the same was not legally assessable, and that said assessment was illegal and unwarranted, and if said property were assessable, plaintiff should be credited in making said assessment, with its said liabilities incurred on account thereof. That said assessment was illegal, unauthorized, and void.” The Board having refused to grant the demands of the plaintiff, the plaintiff refused to pay the tax on said property, which in amount was 1275.00, until the 20th day of November, 1897, when, to prevent a levy and sale of [193] plaintiff’s real property, which the defendant threatened and was about proceeding to make, the plaintiff paid said taxes under protest. Said plaintiff alleges the foregoing facts in his complaint, and prays judgment for the amount of said taxes, with interest. The defendant demurred to the complaint on the ground that the facts stated are not sufficient to constitute a cause of action. The court below sustained the demurrer; the plaintiff rested, and judgment was entered for the defendant. The only question presented for our decision is whether the demurrer was rightfully sustained. Plaintiff’s counsel claim a reversal on two grounds: 1. That the liability of the insured on said notes and accounts is contingent, and therefore not subject to taxation. 2. That if taxable, the plaintiff, under the provisions of Sec. 2518, Rev. Stat. 1898, is entitled to a deduction of ninety-five per cent, of the face value of said notes and accounts, that percentage having been paid out by plaintiff for losses by fire and on cancellations of policies during the year 1891. Regarding the first ground, the Constitution, Sec. 2, Art. 13, provides that “All property in the State not exempt under the laws of the United States, or under this Constitution, shall be taxed in proportion to its value, to be ascertained as provided by law. The word ‘ ‘ property, ’ ’ as used in this article, is hereby declared to include moneys, credits, bonds, stocks, franchises, and all matters and things (real, personal, and mixed) capable of private ownership.” These notes and accounts are personal property, owned by the plaintiff, and not being exempt either under the laws of the United States or the Constitution, are subject to taxation. [194] Sec. 3, Art. 13, of tbe constitution, provides, “The Legislature shall provide by law a uniform and equal rate of assessment and taxation on all property in the State, according to its value in money, and shall prescribe by general law such regulations as shall secure a just valuation for taxation of all property; so that every person and corporation shall pay a tax in proportion to the value of his, her, or its property.” In pursuance of this authority, the Legislature enacted that ‘ ‘ all taxable property must be assessed at its full cash value.” Sec. 2506, Rev. Stat. 1898. Sec. 2516, Rev. Stat. 1898, provides that “The assessor must before the first Monday of May in each year, ascertain the names of all taxable inhabitants, and all property in his county subject to taxation, except such as is required to be assessed by the State board of equalization, and must assess such property to the person by whom it was claimed or owned, or in whose possession or control it was at twelve o’clock m., of the first Monday of February, next preceding, and its value on that date.” Said notes and accounts being personal property belonging to the plaintiff, and not exempt from taxation, it was the duty of the assessor, under the constitution and the provisions of the statutes just quoted, to assess such property at its true value. In the absence of fraud or the exercise of bad faith upon the part of the assessor, his judgment of the value of said property was conclusive, .unless changed on the application of the plaintiff, by the Board of Equalization. Application was made by the plaintiff to said Board. They had the authority under Sec. 2576, Rev. Stat. 1898, to correct said assessment, but upon the showing made by plaintiff refused to do so. It is left to the Legislature, by the constitution, to provide for the assessment and valuation for taxation of all [195] taxable property in the State. The Legislature has provided the method for doing this, and has also provided a' mode of correcting any oyer-valuation by the assessor. Th|s remedy for the correction of assessments is exclusive and not subject to review by the courts under the facts presented in this case. The second objection presents a question of greater complexity. Sec. 2518, Rev. Stat. provides that, “In making up the amount of credits which any person is required to list he will be entitled to deduct from the gross amount of such credits the amount of all bona fide debts owing by him.” The plaintiff, under this provision, was entitled to a deduction of all bona fide debts owing by him. But, in the case at bar, the plaintiff, at the date of the assessment, was not indebted to the insured. An indebtedness could only arise upon the happening of the contingency on which the liability of the plaintiff depended. The deduction claimed by plaintiff is not such as the constitution and the statute allows. Insurance Co. v. Cappellar, 38 Ohio St., 561-570; State v. Board of Assessors, 18 So. Rep., 462; Illinois Insurance Co. v. Pollock, 75 Ill., 292-300; The Kansas Mutual Asso. v. Hall, Treasurer, etc.; 51 Kan., 636-649, and cases cited; The People ex rel. West F. I. Co. v. Davenport et al., 91 N. Y., 574. The contingency did not deprive said notes and accounts of their character as personal property, but it materially affected both their intrinsic and marketable value, and in the assessment that fact should be considered. But if the assessor fails to do so, and the Board of Equalization refuses to reduce the assessed valuation, the courts are powerless, in an action like the present one, to grant any relief. [196] We are of the opinion that the demurrer was properly sustained. j The judgment of the court | below is affirmed, with costs. Baktoh, C. J., and Minee, J., concur.