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Southern Ry. Co. v. Clement, 57 Tenn.App. 54, 415 S.W.2d 146

Facts

The Southern Railway Company operates in 25 counties in Tennessee and has properties assessed for ad valorem taxation by the Tennessee Public Service Commission. In 1964 and 1965, the company petitioned the State Board of Equalization to raise the assessments of locally-assessed properties in Hawkins and Loudon Counties to 100% of actual cash value. The Board dismissed these petitions, claiming the railroad failed to show its properties were assessed at full cash value and lacked the right to petition in a non-assessment year.

Petitioner, Southern Railway Company, does business and has properties subject to ad valorem taxation in twenty five (25) counties in Tennessee. These properties are assessed by the Tennessee Public Service Commission and the State Board of Equalization on a statewide basis and the assessment is then allocated to the respective counties in which the petitioner does business on the basis of the miles of track in said county, along with other factors as provided by statute.

Issue

Whether the Southern Railway Company's property tax assessments for the years 1963-64 and 1965-66 were at less than actual cash value, and whether the company had standing to petition for equalization of assessments of other properties.

Whether appellee railroad's ad valorem property tax assessments for the biennium 1963—64 and the biennium 1965—66 were at less than actual cash value; Whether one whose properties are assessed at less than actual cash value has standing to maintain before a board of equalization or in the court's a petition to have the assessments of other properties raised to actual cash value; Whether a board of equalization has the right to consider in a non-assessment year a petition by a taxpayer to equalize with his own assessment the assessments of real properties other than his own.

Rule

All property must be assessed at its actual cash value as required by Tennessee law, and taxpayers may petition for equalization if their property is assessed at a higher percentage of actual cash value than that of other properties.

The uncontradicted proof is that properties assessed by the County Tax Assessors of Hawkins and Loudon Counties in the years 1963 and 1965 were assessed at about ten (10%) percent of their ‘actual cash value’. The State Board of Equalization having certified the value of petitioner's property for the years 1963 and 1965 to the Public Service Commission, it is presumed, and the Court finds, that petitioner's property was assessed at its ‘actual cash value’ as is required by law.

Analysis

The court determined that the evidence supported the finding that the Southern Railway Company's property was assessed at actual cash value, as it represented the judgment of the Public Service Commission. The court noted that the assessments of local properties were significantly lower than those of the railroad, thus justifying the company's standing to seek equalization. The court also emphasized that the State Board of Equalization had a duty to ensure all properties were assessed fairly and uniformly.

We are of opinion that the evidence in this record supports the Chancellor's finding, or it certainly does not preponderate against his finding, that petitioner's property was assessed at actual cash value in the sense that it represents the judgment of the Public Service Commission exercised in an effort on the part of the Commission members to perform their statutory duty with respect to the assessment.

Conclusion

The court modified the decree to prevent retroactive reassessment of past taxes while affirming that the railroad's property was assessed at actual cash value. The court held that the orders of the State Board of Equalization dismissing the appeals were illegal and void.

The Court is further of the opinion that the orders of the State Board of Equalization dismissing the appeals in the respective causes are also illegal and void, because the Board failed to carry out the mandate of the law requiring that all property of every kind shall be assessed at its ‘actual cash value.’

Who won?

Southern Railway Company prevailed in the case because the court found that its property was assessed at actual cash value, and the State Board of Equalization failed to fulfill its legal duty to ensure fair assessments.

The court is of the opinion that there is no basis under the laws of the State of Tennessee for the assessment of property at less than its ‘actual cash value’, and, therefore, since the County Tax Assessors of Hawkins and Loudon Counties made assessments of the properties in said counties at less than ‘actual cash value’, said assessments are illegal and void.

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