British Columbia Breweries (1918) Ltd. v. King County

• Decision Date: 05 April 1943
• Docket Number: 28737.
• Citation: 135 P.2d 870,17 Wn.2d 437
• Parties: BRITISH COLUMBIA BREWERIES (1918) LTD. v. KING COUNTY. (STATE, Intervener).
• Court: Washington Supreme Court

135 P.2d 870

17 Wn.2d 437

BRITISH COLUMBIA BREWERIES (1918) LTD. v. KING COUNTY. (STATE, Intervener).

No. 28737.

Supreme Court of Washington, En Banc.

April 5, 1943

Action by British Columbia Breweries (1918) Limited, against King County to recover personal property taxes for 1938, 1939, and 1940 which plaintiff had paid under protest. The State of Washington was allowed to intervene. From a judgment of dismissal, plaintiff appeals.

Affirmed.

STEINERT and GRADY, JJ., dissenting.

Appeal from Superior Court, King County; James T Lawler, judge.

Lewis &amp Black, of Seattle, for appellant.

B. Gray Warner, Wm. R. Bell, and Edwin C. Ewing, all of Seattle, for respondent.

Smith Troy and Stanbery Foster, both of Olympia, for intervener-respondent.

BEALS Justice.

British Columbia Breweries (1918) Limited, a corporation, instituted this action against King county, asking judgment for the amount of certain personal property taxes which it had paid under protest. After the institution of the action, the state of Washington was allowed to intervene because of certain interests which will be later referred to.

Plaintiff was the owner of several large buildings located on land owned by defendant, King county, but which had been leased during the year 1917 for the term of thirty-five years, which lease, after having been supplemented by other agreements, was assigned to Hemrich Brewing Company. The last named company, having applied to the county for the purchase of the property covered by the lease, August 16, 1937, received from the county a deed purporting to convey fee simple title to the land. By the decision of this court in the case of Commercial Waterway District No. 1 v. King County, 200 Wash. 538, 94 P.2d 491, decided September 26, 1939, the deed from the county was held void because the county held title to the land in its governmental capacity. After the delivery of the deed by the county, the property was assessed as privately owned real estate, unpaid taxes having been canceled after the decision of this court above referred to.

The plaintiff in this action became the owner of the lease from the county, and of the buildings which had been constructed thereon, through the foreclosure of a mortgage against Hemrich Brewing Company, that corporation having become insolvent. After the deed from the county was held void, personal property taxes against the buildings which had been erected on the land covered by the lease were levied in 1940, and included in the taxes to be collected during the following year. These taxes were levied not only for the year 1940, but for the years 1938 and 1939, as omitted taxes. Plaintiff paid the taxes under protest, and brought this action to recover a portion of the amount so paid, relying upon certain alleged irregularities in the course of the proceedings leading up to the spreading of the taxes upon the tax rolls, and also contending that the assessed valuation of the property was so grossly excessive as to entitle plaintiff to recover substantially one-half of the tax paid. By its answer, the county challenged the material allegations of plaintiff's complaint, and by its pleading in intervention, the state presented certain questions concerning the legal authority of the tax commission of the state.

The action was tried to the court sitting without a jury, and resulted in a judgment dismissing plaintiff's action, from which plaintiff has appealed.

Error is assigned upon several of the findings of fact and conclusions of law entered by the trial court; upon the failure of the trial court to consider certain evidence in connection with the value of the property; upon the refusal of the trial court to grant appellant any relief; and upon the entry of the judgment of dismissal.

The original lease from the county contained, inter alia, the following provisions:

'Said property shall be used by the lessee for the purpose of erecting and operating thereon commercial, manufacturing and industrial plants and buildings, and its use shall be limited at all times during the term of this lease to a use for commercial, manufacturing and industrial purposes. * * *

'It is expressly understood and agreed that all buildings and improvements constructed or erected upon said leased premises by the lessee during the term of this lease shall be subject to taxation and that the taxes thereon shall at all times during the term of this lease be paid by the lessee.'

During the years 1935 to 1937, inclusive, the buildings and improvements on the property which is the subject matter of this action were assessed at the valuation of $22,400, and taxes were paid thereon at that valuation by the holder of the lease. For the years 1938 and 1939, the buildings were assessed at approximately thirty thousand dollars, but these taxes were, of course, not paid, and were later canceled.

During the month of May, 1940, the assessor of King county, acting on his own motion, pursuant to Rem.Rev.Stat. § 11142, assessed the property for the current year (as personalty), and for the two preceding years as omitted property, delivering to the county treasurer a copy of the assessment. For the year 1938, he placed an assessed value on the property in the sum of $22,400, for the year 1939 a valuation of $25,230, and the same valuation for the year 1940. Pursuant to these valuations, the taxes levied for the three years amounted to $3,939.83.

The county board of equalization convened on the first Monday of July, 1940, pursuant to Rem.Rev.Stat. (Sup.), § 11220, and in due time adjourned, having performed its functions, without having taken any specific action in regard to the property above referred to, and having approved the assessment rolls and certified the same.

July 30, 1940, the county assessor, upon his own initiative, made a second assessment for the current year and for the two preceding years as omitted property, in which he valued the buildings and improvements with which we are here concerned, for the years 1938 to 1940, inclusive, at twelve thousand dollars. On receiving this second omitted property and current year assessment, the treasurer of King county, doubting the authority of the county assessor to make such a second assessment after the tax rolls had been approved by the county board of equalization, and after the adjournment of that board, referred the matter to the state tax commission, requesting that he be directed by that commission as to the procedure which he should follow. After consideration, the state tax commission advised the county treasurer that the valuations as fixed by the county assessor in his first assessment should stand. In thereafter preparing the tax rolls for delivery to the county treasurer, the county assessor, however, certified to the treasurer for collection a tax roll based upon the valuation of twelve thousand dollars for each of the years referred to, being the valuation contained in his second assessment.

The matter having been again referred to the state tax commission, a hearing was held, at which appellant was represented, and after hearing testimony, the state tax commission directed the treasurer to correct the tax rolls as delivered to him by the assessor, by making the same show a tax based upon valuations as contained in the first listing and assessment by the assessor.

The treasurer obeyed the order of the tax commission, and appellant paid under protest the taxes as computed upon the assessor's first valuation, and instituted this action.

Appellant's principal arguments are directed to two phases of the case:

'First: It was not within the power of the county treasurer to alter the certified tax rolls in his possession for collection, and the purported authorization by the tax commission to make the alteration was void.

'Second: Even if the alteration of the tax rolls by the county treasurer, pursuant to the order of the tax commission, was valid, the plaintiff is entitled, in any event, to a refund of the taxes which the plaintiff was compelled to pay under protest, based upon an arbitrary, illegal and grossly exorbitant assessed valuation.'

Appellant's first contention is that the state tax commission lacked authority to conduct the hearing in which the action of the county assessor in changing his first assessment was reviewed and ordered corrected. Appellant argues that the treasurer should have referred the matter to the county board of equalization, Rem.Rev.Stat. § 11268, providing that the treasurer shall report to that board any omissions from or errors in the tax rolls which come to his attention. In the case at bar, the act of the assessor in sending to the county treasurer his second assessed valuation did not constitute any error or mistake on his part, but rather an unwarranted attempt to alter the tax rolls as previously prepared by him. The situation was not one which the treasurer was required to refer to the county board of equalization.

In changing the valuation of the property, July 30, 1940, after he had formally acted upon the matter, and his action had been referred to the county treasurer, and the county board of equalization (which convenes the first Monday of July, and continues in session not more than two weeks, Rem.Rev.Stat. (Sup.) § 11220) has completed its July session, the assessor acted without warrant of law. In Lewis v. Bishop, 19 Wash. 312, 53 P. 165, 166, this court, referring to a somewhat similar situation, said:

'Passing to the merits, the first question to be considered is the right of the assessor to alter or change the assessment after he has returned it and filed the lists and books with the clerk of the board. Laws 1897, p. 160, § 54 [Bal.Code, § 1710], requires him to file the same on...