Automat Co. v. Yakima County, 509--III

• Decision Date: 26 May 1972
• Docket Number: No. 509--III,509--III
• Citation: 6 Wn.App. 991,497 P.2d 617
• Parties: AUTOMAT CO., Inc., a corporation, Appellant, v. YAKIMA COUNTY, Washington, Respondent.
• Court: Washington Court of Appeals

Page 991

6 Wn.App. 991

497 P.2d 617

AUTOMAT CO., Inc., a corporation, Appellant, v. YAKIMA COUNTY, Washington, Respondent.

No. 509--III.

Court of Appeals of Washington, Division 3.

May 26, 1972.

Ted Roy and Tim Weaver, of Hovis, Cockrill & Roy, Yakima, for appellant.

Lincoln E. Shropshire, Pros. Atty., and Paul D. Edmondson, Deputy Pros. Atty., Yakima, for respondent.

GREEN, Judge.

Plaintiff, Automat Co., Inc., brought this action against the defendant, Yakima County, to obtain a refund of penalties paid to the treasurer under protest. The penalties were levied pursuant to RCW 84.40.130(1) against the plaintiff because it failed to timely file a list of taxable personal property in the years 1968 and 1969. From a judgment for defendant, plaintiff appeals.

Assigned errors are directed to the trial court's findings and conclusions and present one basic question: Was plaintiff's failure to file a list of taxable personal property with the assessor in 1968 and 1969 due to reasonable cause?

The plaintiff was involved in the vending machine business in Yakima County. Paul Mercy was its secretary and manager. Although plaintiff's business office was at 220 South Second, Yakima, Washington, its mailing address was Post Office Box 46.

For 25 years prior to 1968, as then required by RCW 84.40.060, a deputy assessor would visit Mr. Mercy at plaintiff's office and require him to list all of the corporation's taxable personal property and, under oath, sign a written verification of its accuracy. In due course plaintiff would timely pay the personal property tax.

Effective July 1, 1967, RCW 84.40.060 was amended to remove the requirement that the assessor call upon the taxpayer and obtain the list of personal property. Instead, the legislature amended RCW 84.40.040, imposing the following procedures upon the assessor:

He (the assessor) shall make an alphabetical list of the names of all persons in his county liable to assessment of personal property, and require each person to make a correct list and statement of such property according to the standard form prescribed by the department of revenue, which statement and list shall include, if required by the form, the year of acquisition and total original cost of personal property in each category of the prescribed form, and shall be signed and verified under penalty of perjury by the person listing the property. Such list and statement shall be filed on or before the last day of March, but the assessor, upon written request filed on or before such date and for good cause shown therein, shall allow a reasonable extension of time for filing. The assessor shall on or before the 1st day of January of each year mail a notice to all such persons at their last known address that such statement and list is required, such notice to be accompanied by the form on which the statement or list is to be made: Provided, That for the years 1968 and 1969 a second notice shall be mailed on or before the 15th day of March: Provided Further, That the notice mailed by the assessor to each taxpayer each year shall, if practicable, include the statement and list of personal property of the taxpayer for the preceding year.

After this amendment was enacted and continuing into the winter of 1969, several articles appeared in the Yakima newspapers informing the public as to the change in the law. The defendant presented testimony that pursuant to this statute, the assessor in December 1967 prepared the notices required by the statute and mailed them with the listing form to all taxpayers who had filed a list of personal property in the year 1967. The same procedure was followed in December 1968, except the notice and form were mailed only to those who filed a list of personal property in 1968.

The evidence shows that in December 1967 the assessor's staff prepared a typewritten list of 10,000 names of persons who had filed a personal property list in 1967. The plaintiff corporation was included in this list. Pursuant to RCW 84.40.040, a notice and form were placed in separate envelopes for and addressed to each name on the typewritten list. The deputy assessor personally supervised this preparation, accompanied the envelopes to the mailing room and observed that they were mailed. Thereafter, as the lists of personal property were returned by the taxpayers, a check mark was placed in front of each name on the typewritten list. No check mark appeared beside plaintiff's name. The deputy assessor testified a second notice was mailed to those persons or corporations, including plaintiff, who had not returned the form. This notice informed them their list had not been received and that March 31 was the final date for filing without penalty.

Mercy testified it was his practice to pick up plaintiff's mail at Post Office Box 46 and take it to the business office where it was opened and read by him; no mail was delivered to the business office address; and neither the first nor second notice was ever received. Plaintiff's secretary confirmed this procedure and testified that she had never received any notices or forms from the assessor's office.

In August of 1969, Mercy was looking over plaintiff's financial statements and suddenly recognized that no personal property taxes had been paid in 1968. He confirmed this fact with plaintiff's accountants and immediately went to the assessor's office. The assessor informed Mercy that he should file plaintiff's list of property for each of the 2 years. This was accomplished by the middle of September 1969. Thereupon, the assessor determined that the penalty provisions of RCW 84.40.130 required that he levy a penalty against the plaintiff for failure to file the list in 1968 and 1969 in the amount of $965.96 and $1,278.59, respectively. The pertinent portion of this statute provides:

(1) If any person or corporation shall fail or refuse to deliver to the assessor, on or before the date specified in RCW 84.40.040, a list of the taxable personal property which he is required to list under this chapter, unless it is shown that such failure is due to reasonable cause and not due to wilful neglect, there shall be added to the amount of tax assessed against him or it on account of such personal property five percent of the amount of such tax if the failure is for not more than one month, with an additional five percent for each additional month or fraction thereof during which such failure continues not exceeding twenty-five percent in the aggregate. Such penalty shall be collected in the same manner as the tax to which it is added.

After hearing the foregoing facts which are substantially undisputed, the trial judge found that the notices required by law to be mailed by the assessor were in fact mailed to the plaintiff at its business address in December 1967; that on or before March 15,...