Bellingham Community Hotel, Inc. v. Whatcom County

• Decision Date: 15 January 1942
• Docket Number: 28206.
• Citation: 121 P.2d 335,12 Wn.2d 237
• Parties: BELLINGHAM COMMUNITY HOTEL, Inc., v. WHATCOM COUNTY et al.
• Court: Washington Supreme Court

121 P.2d 335

12 Wn.2d 237

BELLINGHAM COMMUNITY HOTEL, Inc., v. WHATCOM COUNTY et al.

No. 28206.

Supreme Court of Washington

January 15, 1942

Department 1.

Action for reduction of assessment and to recover taxes paid under protest by Bellingham Community Hotel, Incorporated, against Whatcom County and Richard C. Atwood, its Treasurer. From a judgment of dismissal, plaintiff appeals.

Affirmed.

Appeal from Superior Court, Whatcom County; Ralph O. Olson, Judge.

Abrams & McCush, of Bellingham, for appellant.

Edward E. Johnson, Pros. Atty., and F. M. Hamilton, both of Bellingham, for respondents.

DRIVER Justice.

In January, 1935, the Bellingham Community Hotel Company, Inc. the owner of the Bellingham hotel, brought an action against Whatcom county and its treasurer for reduction of the assessments on the property for the years 1933, 1934, and 1935. In Bellingham Community Hotel Co. v. Whatcom County, 190 Wash. 609, 70 P.2d 301, this court affirmed a judgment of the superior court, in favor of the plaintiff substantially reducing the assessed valuations for the stated years. In October, 1937, the hotel company brought the present action to obtain a reduction of the assessed valuation of $194,680 ($97,340 on a 50 per cent basis) placed on the property by the county assessor for the years 1936 and 1937 and to recover back that portion of the 1936 taxes claimed to be excessive and paid under protest. A trial to the court resulted in a judgment of dismissal, from which the plaintiff appealed.

At the outset, we are met by appellant's contention that the judgment in its prior action is res judicata in this one. The determination of assessed valuation, in that case, for the year 1934, appellant urges, was conclusive and binding upon the county assessor, and he should have adopted it as his valuation for the year 1936 unless, in the meantime, there had been some change in the property materially affecting its value.

Chapter 130, Laws of 1925, Ex.Sess. p. 234, § 8, Rem.Rev.Stat. § 11112, the governing statute in effect at the time the assessments in question were made, provided: 'All real property in this state subject to taxation shall be listed and assessed under the provisions of this act in every even-numbered year, with reference to its value on the first day of March of the year in which it is assessed. All personal property in this state subject to taxation shall be listed and assessed every year, with reference to its value on the first day of March in the year in which it is assessed: * * *.'

Manifestly, the statute contemplated that real property should be assessed in the even-numbered year and re-assessed in every succeeding even-numbered year with reference to its value on March 1st of the year in which it was assessed. The valuation of appellant's property for the year 1934, as fixed by the court in the prior action, became the assessed valuation to be used as the basis for tax levies for that year, and, of course, for the next succeeding odd-numbered year of 1935. It did not, however, become the valuation for the year 1936, and as to such year, the former adjudication of value was not binding upon either the county assessor or the trial court in the instant case.

In a discussion of res judicata in tax proceedings, it is stated in 34 C.J. 966, § 1381: 'The doctrine of res judicata applies as well to tax proceedings as to ordinary litigation between individuals. Hence a judgment in such proceedings is conclusive as to matters actually or necessarily determined; and, if the same taxes were involved, is also conclusive as to matters which might have been litigated and decided. But the rule that a judgment is not conclusive in a subsequent suit on a different cause of action as to matters not in issue applies to tax proceedings, and a judgment in such proceedings is not conclusive in a subsequent action to recover taxes for a succeeding year as to matters which might have been, but were not, litigated and determined; nor is it conclusive as to the validity of a new assessment or reassessment superseding the original assessment.' (Italics ours.)

A footnote cites the following Washington cases in support of the italicized portion of the foregoing text: Johnson v. City of Seattle, 53 Wash. 564, 102 P. 448; Allen v. City of Bellingham, 77 Wash. 469, 137 P. 1016; East Hoquiam Co. v. City of Hoquiam, 90 Wash. 210, 155 P. 754; Kuehl v. City of Edmonds, 91 Wash. 195, 157 P. 850, None of the cited cases is based upon a factual situation, such as we have here, but they are all generally analogous. They hold that a judgment declaring the validity or invalidity of city local improvement assessments is not res judicata upon a subsequent action pertaining to the re-assessment of the same property.

No cases directly supporting appellant's theory of res judicata have been brought to our attention with the exception of the following decisions of the New York courts: People ex rel. Warren v. Carter, 119 N.Y. 557, 23 N.E. 926; In re Rosenbloom, 254 A.D. 638, 3 N.Y.S.2d 261; In re Bloch, 254 A.D. 636, 3 N.Y.S.2d 260; In re Mitchell, 254 A.D. 637, 3 N.Y.S.2d 262.

The New York court of appeals distinguished and qualified the first of the cited cases and definitely overruled the other three in People v. Fahrenkopf, 279 N.Y. 49, 17 N.E.2d 765, 766. The court held that an order, in a certiorari proceeding, fixing the valuation of certain real property for taxation purposes, was not res judicata in a later certiorari proceeding to determine the valuation of the same property for the next ensuing tax year. We quote from the opinion as follows: 'It is of the essence of an assessment that it fixes value as of a certain time. Each annual proceeding is separate and distinct from every other. Year by year an assessor must use his own judgment and must verify the roll. Tax Law, § 28. From these considerations it results that a prior judicial determination of value does not legally bind successor assessors.'

In any event, appellant asserts, the adjudication of the value of the real property in its former case was evidence of the value for the succeeding assessment year, and should have been accorded great weight by the trial court in the present action. In support of this assertion, appellant cites People v. Fahrenkopf, supra, and other cases of the New York courts. The trial court admitted in evidence all the records and files in the prior suit offered by appellant, and the question of their admissibility, therefore, is not involved in the case at bar. The former adjudication, apparently, was not accorded much probative weight, it is true, but, for that, the lower court had what we regard as a sound and sufficient reason, which was stated in its memorandum opinion as follows: 'That the determination of the value by the Court cannot in any event be lightly cast aside is plaintiff's second and alternative view of the effect of the previous decision. However, a careful reading of the decision of the lower Court, as shown in the Memoranda of the Court in Plaintiff's Exhibit 'A' (the file of cause No. 23158, Whatcom County the same case settled on appeal in 190 Wash. 609 ) indicates that the decision rested upon the conclusion that the value placed upon the building by the county was computed upon a fundamentally wrong basis (page 5 of the Memoranda). The basis used by the county was so inadequate, and the methods of the witnesses for the respective parties so different as to cause the Court to conclude that there was no conflict in the evidence (page 6 of the Memoranda). The Findings of Fact (VI) and Conclusions of Law (I) support this analysis of the case as viewed by the trial Judge. The Supreme Court used the same basis of decision (190 Wash. at page 612 ) in affirming the decision of the lower court. The factors of value considered by the county were said to be inadequate. Being inadequate and the valuation being on a fundamentally wrong basis, there was no evidence submitted by the county to sustain the findings of its own officer of the ultimate fact of the case, i. e., the value of the property.'

We come now to the question whether, aside from the adjudication of value in the...