Bellingham Community Hotel Co., Inc. v. Whatcom County
Decision Date | 12 July 1937 |
Docket Number | 26445. |
Citation | 190 Wash. 609,70 P.2d 301 |
Parties | BELLINGHAM COMMUNITY HOTEL CO., Inc., v. WHATCOM COUNTY et al. |
Court | Washington Supreme Court |
Appeal from Superior Court, Whatcom County; George A. Joiner, Judge.
Action for reduction of assessment and to recover taxes paid under protest by Bellingham Community Hotel Company, Incorporated against Whatcom County and Richard C. Atwood, its Treasurer. From a decree for plaintiff, defendants appeal.
Affirmed.
H. W Covalt and Frank W. Radley, both of Bellingham, for appellants.
Abrams & McCush, of Bellingham, for respondent.
This action was instituted to obtain a reduction of the assessment on the Bellingham Hotel building for the years 1933, 1934 and 1935 and to recover an alleged excessive amount of taxes paid under protest on that building on the assessment for the years 1933 and 1934.
Finding that the fair, reasonable value of the property for assessment purposes should be reduced from $250,750 to $125,375 for the years 1934 and 1935, the trial court entered a decree in favor of the plaintiff. Defendants appealed.
We cannot agree with the contention of counsel for appellants that the respondent is not entitled to any relief upon the first half of the taxes paid for the year 1933. The basis of that contention is that the respondent entered into a contract November 8, 1934, with Whatcom county, to pay, in installments, delinquent taxes upon the property in question for the year 1932, and that under the terms of that contract respondent obligated itself to pay the first half of the 1933 taxes Before delinquency when, as a matter of fact, the first half had not been paid until September 1, 1934, a time when it was already delinquent. It is insisted that, because of these facts, the first half of the taxes for 1933 must be deemed as having been paid without protest, and therefore cannot be considered in this action.
Paragraphs 4 and 5 of the contract provide that:
It should be borne in mind that at the time (November 8, 1934) this contract was made, no taxes for the year 1933 were delinquent, as the first half was paid under protest on September 1, 1934, and the last half would not become delinquent until December 1, 1934, which was subsequent to the date of the execution of the contract. This provision in the contract is authorized by the statute, under which the taxpayer agrees to pay, Before delinquency, the amount of the current taxes upon the property, payable in the year 1934, and refers to current taxes unpaid at the time the contract was executed; that is, the respondent agreed, as a condition to the execution of the contract, to pay the last half of the taxes for the year 1933 Before they became delinquent. The first half of the taxes for the year 1933 had already been paid.
This view of the statute is supported by the further provision of the contract, which is authorized by Rem.Rev.Stat. § 11273-4a, Supp. reading as follows: 'The agreement shall become effective upon the signing thereof accompanied by the payment of one installment of delinquent taxes and interest, if any, and the payment of such portion of the current taxes as are then due and payable or delinquent.'
As was aptly said in Bellingham Development Co. v. Whatcom County, 187 Wash. 15, 59 P.2d 920, 922: 'The contract was entered into under the terms of statutes for the enforcement and collection of taxes which contain no assertion of waiver against a taxpayer upon his availing himself of the terms and policy of the statutes.'
The next question is whether the trial court erred in finding that the assessment for the years in question exceeded the actual, fair, and reasonable value of the property.
The statute (Rem.Rev.Stat. § 11135) provides:
We have consistently construed this statute to mean that property shall be assessed at its fair market value at the time the assessment is made.
As we analyze, as did the trial court, the testimony of the witnesses in behalf of the appellants in arriving at the fair market value which would be used as a predicate for ascertaining the full cash value of the building, it appears that the factors considered by the witnesses, as well as the assessor were the estimated cost of the reproduction of the building, less depreciation. It fairly appears that they did not take into consideration any other factors affecting its value, such as the rental or income which can be derived from the building. The original cost of construction or the estimated cost of reproduction, less depreciation, may be considered, but only as an aid in arriving at the market value of the building. In valuing this hotel building for taxation purposes, the property should have been considered with all of its burdens as well as its benefits.
Metropolitan Building Co. v. King County, 72 Wash. 47, 129 P. 883.
The following language in the case of City of Tampa v. Colgan, 121 Fla. 218, 163 So. 577, 580, is applicable to the facts in the case at bar:
'Under an ordinance of the city, all real and personal property is required to be assessed for purposes of taxation at its full cash value, which is thereby defined as 50 per cent. of its fair market value. In arriving at the fair market value in this instance, to be used as a predicate for ascertaining the full cash value, it appears that the assessor used only the estimated cost of reproducing the building, less depreciation. He did not take into consideration any other factors affecting its value, such as location and surroundings, its character, its general utility, the rental or income which can be derived from it, and the probability of future development in the district where the property is located. This method of assessment was clearly erroneous. The original cost of construction of the estimated cost of reproduction, less depreciation, or, in other words, the structural value, of a building may be considered, but only as an aid in arriving at the market value. It is not to be adopted as the sole or conclusive criterion of value. 61 C.J. p. 646; People ex rel. Colgate Inn, Inc., v. Assessors of Town of Hamilton, Madison County, 132 Misc. 506, 230 N.Y.S. 134. * * * 'The method of ascertainment adopted by the city tax assessor in applying a valuation to the defendant's hotel was to calculate it almost entirely from an inflexible reproduction cost basis computed on a cubic foot price, after taking into consideration the physical condition of the improvement. Under such procedure the major factor considered was the cost of reproduction and the physical condition of the property. * * *
'By 'fair market value' is meant the amount of money which a purchaser willing but not obliged to buy the property would pay to an owner willing but not obliged to sell it, taking into consideration all uses to which the property is adapted and might in reason be applied. Claringbold v. Newark, 5 Boyce (28 Del.) 507, 94 A. 1102, L.R.A.1916E, 1101; Metropolitan Bldg. Co. v. King County, 62 Wash. 409, 113 P. 1114, Ann.Cas.1912C, 943; Branson v. Bush, 251 U.S. 182, 40 S.Ct. 113, 64 L.Ed. 215; Finch v. Grays Harbor County, 121 Wash. 486, 209 P. 833, 24 A.L.R. 644; Donovan v. City of Haverhill, 247 Mass. 69, 141 N.E. 564, 30 A.L.R. 358. * * *
'While exact similarity between different properties is unusual, and tax assessors generally have to take many matters into consideration in determining the fair market value, the intrinsic value of property, for purposes of taxation, is to be determined by taking into account not one, but all, favorable and unfavorable circumstances that would control the admeasurement of its present value were it placed upon the market to be sold by the owner.'
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