Opinion
No 25422
Decided January 22, 1936.
Taxation — Statutes remedial and liberally construed, when — Instrumentalities for determining valuations, rectifying clerical errors or supplying omissions — Incorrect base measurement used in computing tax valuation — County auditor to correct tax list by adding omitted part of building, when.
1. Statutory provisions which do not relate to the creation of tax obligations, but merely to the instrumentalities by which tax valuations may be determined, clerical errors rectified or omissions supplied, or to the enforcement of tax obligations, are remedial in character and should be liberally construed.
2. The omission of an undivided fractional part of a building, as a result of unintentionally omitting a cipher from the base measurement of the structure in calculating the tax valuation thereof according to an accepted universal formula employed with reference to buildings of a designated class, constitutes an error, clerical in nature, and not fundamental, involving judgment and discretion, and by statute a duty rests upon the county auditor to correct the list of real property for the current and each and every preceding year, not exceeding five, by adding the omitted part of the building.
CERTIFIED by the Court of Appeals of Hamilton county.
The Cincinnati Model Homes Company, as plaintiff, instituted an action in the Court of Common Pleas of Hamilton county to enjoin the auditor of that county from placing the sum of $2,167.18 upon the tax list and duplicate against plaintiff's real property. The facts are embodied in the separate finding in the trial court. The property involved had on it a tenement or apartment building erected in 1910, to which no addition or substantial alterations have been made since 1924. For the years 1926 to 1930, inclusive, the property was valued on the auditor's tax list and treasurer's duplicate at $11,040.00, and of this amount $6,060.00 was on the building and $4,980.00 on the land. These figures were determined by the 1925 re-appraisement. The plaintiff was during all this time the owner of the property and paid the taxes for these years on this valuation. The valuation was determined by formulas by which the auditor fixed a unit price per square foot for each building of the class in which the tenement or apartment herein involved was classified. This unit price was multiplied by the total of the cost factors of the particular building and the product was multiplied by the number of square feet at the base of the building. To the amount thus obtained were added certain sums for extras, and deductions were made for depreciation according to the age of the building. The result thus obtained was the valuation for tax purposes.
The valuation fixed for the property involved in the re-appraisal of 1925 remained in effect during the period in question. In the process of determining the appraised value a "field card" was first employed. This card as made up correctly showed the base of the building to be 7,520 square feet. In completing the re-appraisal a "computation card" was used in arriving at and in computing the value, which was based on the information on the "field card." All figures and computations on the "computation card" were correct except the number of square feet at the base of the building which through a mistake in transferring the figures from the "field card" were incorrectly shown to be 752 square feet instead of 7,520 square feet. The formula was correctly employed, but due to the fact that 752 square feet were the basis for computation the valuation was placed at $6,060.00. Had 7,520 square feet been used in applying the formula the valuation would have been correctly fixed at $44,751.52. The valuation arrived at was then transcribed upon the "field card" from the "computation card," and the auditor's list and treasurer's duplicate were made up from the "field card." The error was not discovered by the auditor until on or about September 5, 1931, while he was engaged in making another re-appraisal. After notice to the owner, steps were thereupon taken by the auditor to make proper corrections on the auditor's list and treasurer's duplicate for the preceding five years, and the action by way of injunction followed.
The Court of Common Pleas held that the correction could not be made and judgment allowing a permanent injunction was entered. Error was prosecuted to the Court of Appeals and that court affirmed the judgment and certified the cause to this court because the judgment was in conflict with that of the Court of Appeals of Cuyahoga county in the case of Bool v. Collister, Treas., decided January 14, 1935, a motion to certify which was overruled March 20, 1935.
Mr. Louis J. Schneider, prosecuting attorney, Mr. Walter M. Locke and Mr. I. Jack Martin, for plaintiffs in error.
Messrs. Paxton Seasongood, for defendant in error.
May the error in using 752 square feet, the incorrect base measurement of the building, for computation of the tax valuation, instead of the true one, 7,520 square feet, be rectified and the correct valuation be put on the auditor's list and treasurer's duplicate for the years 1926 to 1930, inclusive?
Section 5571, General Code, provides that the auditor shall correct any "clerical errors" which he finds in the valuation, description or quantity of any "tract or lot" in the real property list.
Section 5573, General Code, provides that if the auditor "discovers that any building or structure, tract of land, or any lot or part of either, has been omitted, he shall add it to the list of real property," and requires further that in such case he shall add to the taxes of the current year the simple taxes of each and every preceding year in which such property has escaped taxation, not exceeding five years. (Italics ours.)
Section 5576, General Code, provides that the * * * county auditor, if he ascertains that a mistake was made in the value of an improvement or betterment of real property, or that the true value thereof was omitted, shall return the correct value, having first given notice to the owner or agent thereof, of his intention so to do."
Sections 2589 and 2590, General Code, provide for deductions of taxes erroneously charged, and for their refunder when paid, but limit the refunder to a period of five years prior to the discovery by the auditor.
Section 2593, General Code, provides for the charging of omitted taxes. It reads as follows: "When the county auditor is satisfied that lots or lands on the tax list or duplicate have not been charged with either the county, township, village, city, or school district tax, he shall charge against it all such omitted tax for the preceding years, not exceeding five years unless in the meantime such lands or lots have changed ownership in which case only the taxes chargeable since the last change of ownership shall be so charged."
These laws do not relate to the imposition and creation of tax obligations but wholly to the mechanics of tax valuation and enforcement. They are therefore remedial in their nature and require a liberal construction to the end that taxable real estate shall not escape just taxation. State, ex rel. Poe, v. Raine, 47 Ohio St. 447, 454, 25 N.E. 54; Gager, Treas., v. Prout, 48 Ohio St. 89, 108, 26 N.E. 1013.
Counsel for the defendant in error contend that there was no omission of the building or any part of it within the meaning of Section 5573, General Code, during the five years involved, but merely an undervaluation or mistake in valuation within the meaning of Section 5576, General Code, and that the auditor has no authority to assess a "back tax" for an undervaluation or a mistake in valuation. Their argument is that the entire building was in fact listed on the tax duplicate and valued and assessed thereon, and that the mistake made in 1925 was in the valuation itself and had nothing to do with the inclusion of the building on the tax list or its subjection to the tax.
If this meaning can be derived from these two sections at all, it is by a strict and narrow construction of them taken apart from all other related sections. These various sections cover both tax additions and refunders. It would be but logical to expect the legislature to treat the correction of an undercharge and overcharge in a similar manner. Obviously to take a few sentences literally and apart may mislead as to the spirit and intent of the law. While, by a broad construction of Section 5573, General Code, taken alone, it would seem that the omission of part of a building may be cured by adding the omitted part; yet all the sections referred to are in pari materia and must be construed together. When this course is pursued it is evident that a curable omission in valuation of a building is one which results from an error which is clerical and not fundamental; if fundamental there is no omitted property which may be supplied. In the latter case the valuation is in the exact amount that the taxing authorities intended. A change of valuation wrong fundamentally, would result, not in a corrected valuation, but in a now one. State, ex rel. Sisters of Notre Dame, v. Commissioners of Montgomery County, 31 Ohio St. 271; State, ex rel. Poe, v. Raine, supra; State, ex rel. Pulskamp, v. commissioners of Mercer County, 119 Ohio St. 504, 164 N.E. 755; 38 Ohio Jurisprudence, 1035, Section 253. Where a clerical error in computation results in a wrong or mistaken valuation which is not in accord with the universal class formula adopted for its determination, there is an omission of part of a building from the tax list and duplicate and the omitted part may be added. Any other construction would not be in accord with the policy of our law that no taxable real property should escape just taxation.
The error involved in the instant case was the omission of a cipher on the right of the number of square feet in the building at its base in the process of calculation so that the valuation arrived at was reduced accordingly in applying the formula. The result was that nine-tenths of the building escaped taxation through omission from the tax list and duplicate. It thus appears that the error was not fundamental, involving judgment and discretion, but was merely clerical in character. If the kindred statutory provisions are construed liberally to ascertain the intent of the legislature the logical conclusion is that it is the duty of the auditor to add to the list of real property a part of a building omitted through a clerical error of the kind involved here.
As the duty rests on the auditor to correct the error and add the omitted part of the real property, to such list, this court reverses the judgments of the courts below, and entering the judgment that the Common Pleas Court should have entered on the finding of facts dismisses the petition and dissolves the injunction.
Judgment reversed.
WEYGANDT, C.J., JONES and DAY, JJ., concur.
STEPHENSON, MATTHIAS and ZIMMERMAN, JJ., dissent.
Agreeing with both of the lower courts that the building in question was in no sense "omitted" from the county auditor's duplicate within the meaning of Section 5573, General Code, but that the auditor made a mistake in the valuation as contemplated by Sections 5571 and 5576, General Code, I am constrained to dissent from the majority holding.
Section 5573, General Code, particularly applicable to this case, was enacted by the legislature and only by the legislature may it be repealed or amended.
STEPHENSON and MATTHIAS, JJ., concur in the foregoing dissenting opinion.