The issue in this case is whether the operating property of the plaintiff was assessable for taxation for the calendar year 1955 under the provisions of Chap. 57-06, NDRC, relating to public utilities or under the provisions of Chapter 57-34, NDRC 1943, relating to mutual aid and cooperative telephone companies.
The plaintiff, a mutual aid corporation, in February 1954, entered into an agreement with the North Dakota Telephone Company, a public utility, for the purchase of its operating property in Langdon. The North Dakota Telephone Company remained in possession of the property and continued to use such property in the operation of a public utility until March 2, 1955, when the contract of sale was fully executed and a bill of sale and possession of the property were delivered to the plaintiff. In August 1955, the State Board of Equalization assessed the property as that of a public utility under the provisions of Chapter 57-06, NDRC 1943.
The plaintiff brought this action under the provisions of Chapter 57-08, NDRC 1943, seeking a cancellation of the assessment made and a reassessment under the provisions of Chapter 57-34, supra. The district court decreed that the assessment was void and directed a reassessment as prayed for in the complaint. The State has appealed from the judgment.
The first question in the case is whether the status of a telephone company for assessment purposes for any calendar year is fixed by the nature of its ownership and operation as of January 1st of the year or as of the date in the year upon which the assessment is made. Public utilities including commercial telephone companies are assessed pursuant to the provisions of Chapter 57-06, NDRC 1943. Section 57-0606 of this chapter requires each such utility to file with the tax commissioner on or before the first day of May of every year a complete inventory of all of its assets as of January 1st of the year in which the inventory is filed.
Section 57-0611 provides:
Section 57-0605 is as follows:
Mutual or cooperative telephone companies are assessed according to the provisions of Chapter 57-34, NDRC 1943. Section 57-3402 of this chapter requires all
Section 57-3403 provides:
Section 57-3404 reads:
A consideration of these statutes makes it clear that the basis of assessing public utility telephone companies is the value of the property of such companies as of January 1st of the year in which the assessment is made. It is also clear that mutual and cooperative telephone companies are to be assessed upon the basis of the number of telephones they had in service on December 31st of the year preceding the year in which the assessment is made. The interpretation of these statutes as they relate to a continuous operation of either type of telephone companies presents no difficulty. Here, however, we have a situation where the title and possession of the property and the character of the operation changed in the interim between the date to which the assessment was referable and the date upon which it was actually made. The Board of Equalization concluded that the applicable statutes fixed January 1st, as the date, not only for determining value, but also for determining taxability and ownership, and accordingly assessed the property as that of the North Dakota Telephone Company, the public utility which held title to, and possession of, the property on January 1st prior to the assessment.
The statutes with which we are concerned are not unusual. In Cooley on Taxation, 4th Ed., Sec. 1062, it is stated:
Also in Sec. 546, Ibid. it is said:
51 Am.Jur. (Taxation, Sec. 442) 458 it is said:
This court has had occasion to interpret statutes similar to those we have under consideration. In Gaar, Scott & Co. v. Sorum, 11 N.D. 164, 169, 90 N.W. 799, 800, we said:
Conformable to foregoing opinion and to what we believe is a general rule for the construction of similar assessment statutes we hold that Section 57-0605, NDRC 1943, in providing that the property of utilities shall be assessed "with reference to the value thereof on the first day of January of that year" implies that the taxability and ownership of the property shall also be determined as of that day.
The plaintiff, however, urges that since it had entered into a contract for the purchase of the property of the North Dakota Telephone Co. in March 1954, it was the equitable owner thereof on January 1, 1955, and that therefore the property should be taxed as the property of a mutual or cooperative telephone company for the year 1955.
This contention cannot be sustained. If we concede that plaintiff is correct in its assertion that it was the real owner of the property, the property was nevertheless in the possession of and used by a commercial telephone company in its business on January 1, 1955. The basis upon which plaintiff was given a favored classification for tax purposes was the nature of its business and it could not permit a part of its property to be used in another type of business and be entitled to the preferential tax rate on that property. To permit such a result would remove pro tanto any real or substantial difference upon which the legality of the classification depends. Gamble-Robinson Fruit Co. v. Thoresen, 53 N.D. 28, 204 N.W. 861, 42 A.L.R. 1039; Eisenzimmer v. Bell, 75 N.D. 733, 32 N.W.2d 891.
It is therefore immaterial whether we consider the North Dakota Telephone Co. or the plaintiff the owner of the assessed property on January 1, 1955. At that time the property was in use in the operation of a regular commercial telephone business
GRIMSON, C. J., and JOHNSON, SATHRE, and MORRIS, JJ., concur.