Montana Attorney General Opinion 16-298

Opinion No. 298. Taxation-Assessment-County As- sessor-Debts, Deduction of- Credits, Assessment of. HELD: 1. The county assessor in assessing credit'3 to the taxpayer may not properly deduct bona fide debts owing by the taxpayer. 2. Subdivision 6 of Section 1996, R. C. M. 1921, is impliedly amended by Section 1999, R. C. M. 1921. Mr. Chris W. Demel County Attorney Billings, Montana June 5, 1936. You have asked us whether or not in our opinion the county assessor in assessing credits to the taxpayer may properly deduct bona fide debts owing by him. All property in this state, with cer- tain exceptions not necessary to men- tion here, is subject to taxation. (Sec- tion 1, Article XII, of the Constitution; Section 1997, R.C.M.1921; Homestake Exploration Corp. v. Schroegge, 81 Mont. 604.) Section 1996, Revised Codes 1921, which was first enacted at the legislative session of 1891, reads as follows: "Whenever the terms mentioned in this section are employed in deal- ing with the subject of taxation, they are employed in the sense here- after affixed to them. "First-The term 'property' in- cludes moneys, credits, bonds, stocks, franchises, and all other matters and things, real, personal, and mixed, capable of private ownership, but this must not be construed so as to authorize the taxation of the stocks of any company or corporation when the property of such company or corporation represented by such stocks is within the state and has been taxed. "Second-The term 'real estate' in- cludes: "I. The possession of, claim to, ownership of, or right to the posses- sion of land. "2. All mines, minerals, and quar- ries in and under the land, subject to the provisions of Section 2088 of this code, all timber belonging to in- dividuals or corporations growing or being on the lands of the United States, and all rights and privileges appertaining thereto. "3. Improvements. "Third-The term 'improvements' includes: "All buildings, structures, fixtures, fences, and improvements erected upon or affixed to the land, whether title has been acquired to said land or not. "Fourth-The term 'personal prop- erty' includes everything which is the subject of ownership, not includ- ed within the meaning of the term 'real estate' and 'improvements.' "Fifth-The terms 'value' and 'full cash value' mean the amount at OPINIONS OF THE ATTORNEY GENERAL 303 which the property would be taken in payment of a just debt due from a solvent debtor. "Sixth-The term 'credit' means those solvent debts, secured or unse- cured, owing to a person. "The term 'debts' means those se- cured or unsecured liabilities, owing by a person. "In making up the amount of credits which any person is required to list, he will be entitled to deduct from the gross amount the amount of all bona fide debts owing by him, but no acknowledgment of indebted- ness not founded on actual consider- ation, and no such acknowledgment made for the purpose of being so deducted, must be considered a debt within the intent of this section; and no person is entitled to a deduc- tion on account of an obligation of any kind given to an insurance com- pany for the premium of insurance, nor on account of any unpaid sub- scription to any institution or so- ciety, nor on account of a subscrip- tion to or instalment payable on the capital stock of any company or cor- poration; and no liability of any per- son or persons as surety for another must be deducted; and no deduction must be made in any case unless the party claiming such deduction dis- closes to the assessor, under oath, the name or names of the persons to whom such party is indebted, and the amount of such indebtedness to each, and also that such indebted- ness is not barred by the statute of limitations." The classification act was passed at the regular session of 1919. As amended it appears as Sections 1999 and 2000 in the Revised Codes of 1921. Section 1999 provides that "for the purpose of taxation the taxable prop- erty in this state shall be classified as follows: * * * Class Five. All mon- eys and credits, secured or unsecured, including all state, county, school dis- trict and other municipal bonds, war- rants and securities without any de- duction or offset; provided, however, that the terms, moneys, and credits as herein used shall not embrace the moneyed capital employed in the banking business by any banking cor- poration or individual in this state." Whether the rule that if there be any conflict between Section 1996 and Section 1999 the one later in enact- ment shall control, or the rule stated in Section 5525 that "if conflicting provisions are found in different sec- tions of the same chapter or part, the provisions of the section last in nu- merical order must prevail," be in- voked here the resUlt is the same, namely, that as there is a conflict between the last paragraph of Sec- tion 1996 and the quoted provisions of Section 1999, the said paragraph is no longer effective. (59 C. J. 1051, 1052; State v. Zorn, 99 Mont. 63.) Section 2511, Revised Codes 1907, provided that the county assessor "must require from each person a statement under oath setting forth specifically all the real and personal property owned by such person, or in his possession, or under his control, at twelve o'clock m., on the first Monday in March. Such statement must be in writing, showing separately, * * * 6. All solvent credits, secured or un- secured, due or owing to such person or any firm of which he is a member. or due or owing to any corporation of which he is president, secretary, cashier or managing agent, deducting from the sum total of such credits only such debts, secured or unsecured, as may be owing by such person, firm or corporation. No debt is to be so deducted unless the statement shows the amount of such debt, as stated under oath, in the aggregate. In case of banks, the statement is not re- quired to show the debts in detail, or to whom it is owing; but the assessor has the privilege of examining the books of such banks to verify said statement. Whenever one member of a firm, or one of the proper officers of a corporation, has made a state- ment showing the property of the firm or corporation, another member of the firm, or another officer, need not include such property in the state- ment made by him; but this statement must show the name of the person or officer who made the statement in which such property is included." Section 2511 now appears as Section 2003 in the Revised Codes of 1921. It is significant, however, that Section 2003 is a verbatim copy of Section 2511 with the exception of the words "deducting from the sum total of such credits only such debts, secured or un- 304 OPINIONS OF THE ATTORNEY GENERAL secured, as may be owing by such person, firm or corporation. No debt is to be so deducted unless the state- ment shows the amount of such debt, as stated under oath, in the aggre- gate. In case of banks, the statemp.~t is not required to show the debts m detail, or to whom it is owing; but the assessor has the privilege of examin- ing the books of such banks to verify said statement," which are omitted. It is thus brought into line with Sec- tion 1999 so far as necessary. Section 2002, Revised Codes 1921, as amended by Chapter 30, Laws of 1935, is as follows: "The assessor must, between the first :!.'[onday of March and the second Monday of July in each year, ascertain the names of all taxable inhabitants, and assess 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 persons by whom it was owned or claimed, or in whose possession or control it was at twelve o'clock m., of the first Monday of March next preceding; but no mistake in the name of the owner or supposed owner of real property renders the as- sessment thereof invalid. Credits must be assessed as provided in Section 1996, Subdivision 6." This section has been substantially in its present form since it was first enacted in 1891. In view of what has already been said, the phrase, "credits must be assessed as provided in Sec- tion 1996, Subdivision 6," can mean no more than that credits must be as- sessed as provided in Section 1996, Subdivision 6, as impliedly amended by Section 1999. (59 C. J. 857; People v. Phair, 31 Pac. (2d) 421.) Chapters 62, 63 and 64, Laws of 1929, being without the scope of the inquiry, have not been considered. See, however, Bank of Miles City v. Cus- ter County, 93 Mont. 291, and Mer- chants' National Bank v. Dawson County, 93 Mont. 310.