Casco Co. v. Thurston County

• Decision Date: 24 July 1931
• Docket Number: 23230.
• Citation: 163 Wash. 666,2 P.2d 677
• Parties: CASCO CO. v. THURSTON COUNTY et al.
• Court: Washington Supreme Court

2 P.2d 677

163 Wash. 666

CASCO CO. v. THURSTON COUNTY et al.

No. 23230.

Supreme Court of Washington, En Banc.

July 24, 1931

Appeal from Superior Court, Thurston County; John M. Wilson, Judge.

Suit by the Casco Company against Thurston County and others. Judgment for defendants, and plaintiff appeals.

Affirmed.

James P. Neal, of Olympia, for appellant.

Harold P. Troy, Smith Troy, John H. Dunbar and John A. Homer, all of Olympia, for respondents.

L. B Da Ponte, Thomas Balmer, Venables, Graham & Howe, Bogle Bogle & Gates, Robert H. Evans, A. R. Hilen, Geo. H. Rummens Chas. Paul, F. M. Dudley, I. S. Crawford, and A. J. Laughon all of Seattle, amici curiae.

TOLMAN C.J.

Appellant, as plaintiff, began this action in the court below, seeking to enjoin the collection of the tax assessed against certain real property in Thurston county. It is not claimed that the tax is void or that the property taxed is exempt from taxation, but the basis of the action is the alleged gross overvaluation of the property for taxation purposes, resulting in a greatly excessive tax.

It seems to be conceded that the complaint states what would be a cause of action but for chapter 62, page 201, Laws of 1931; and perhaps one purpose in bringing the suit was to obtain a construction of that statute.

A demurrer to the complaint was interposed and sustained; the plaintiff elected to stand on its complaint; and a judgment of dismissal followed, from which this appeal is prosecuted.

The act (Laws of 1931, chapter 62, page 201) provides:

'Section 1. Injunctions and restraining orders shall not be issued or granted to restrain the collection of any tax or any part thereof, or the sale of any property for the non-payment of any tax or part thereof, except in the following cases:

'(1) Where the law under which the tax is imposed is void; and

'(2) Where the property upon which the tax is imposed is exempt from taxation.

'Sec. 2. In all cases of the levy of taxes for public revenue which are deemed unlawful or excessive by the person, firm or corporation whose property is taxed, or from whom such tax is demanded or enforced, such person, firm or corporation may pay such tax or any part thereof deemed unlawful, under written protest setting forth all of the grounds upon which such tax is claimed to be unlawful or excessive; and thereupon the person, firm or corporation so paying, or his or its legal representatives or assigns, may bring an action in the superior court against the state, county or municipality by whose officers the same was collected, to recover such tax, or any portion thereof, so paid under protest: Provided, That this act shall not be deemed to enlarge the grounds upon which taxes may now be recovered: And provided further, That no claim need be presented to the state or county or municipality, or any of their respective officers, for the return of such protested tax as a condition precedent to the institution of such action.'

In the following sections of the act there is provision made in the event of recoveries for the payment of the judgments thus obtained, with costs and interest, where allowed, by the issuance of warrants against the fund created by the act, to be known as 'the county tax refund fund,' and for the levy of taxes to supply such fund with the means to retire all such warrants. Section 5 of the act (page 203) reads:

'Sec. 5. The action for the recovery of taxes so paid under protest shall be brought in the superior court of the county wherein the tax was collected: Provided, That where the property against which the tax is levied consists of the operating property of a railroad company, telegraph company or other public service company whose operating property is located in more than one county and is assessed as a unit by any state board or state officer or officers, the complaining taxpayer may institute such action in the superior court of any one of the counties in which such tax is payable, and may join as parties defendant in said action all of the counties to which the tax or taxes levied upon such operating property were paid or are payable, and may recover in one action from each of the county defendants the amount of the tax, or any portion thereof, so paid under protest, and adjudged to have been unlawfully collected, together with legal interest thereon from date of payment, and costs of suit.'

Three principal reasons are advanced, any one of which, if well founded, would be sufficient ground for holding the act to be unconstitutional. The reasons stated are:

'1. The procedure sought to be established constitutes an unlawful encroachment upon the powers and functions of the judiciary as determined by the constitution.

'2. It provides for and does create an unlawful discrimination against classes of taxpayers and favoring another class of taxpayers through an attempted classification of possible procedure.

'3. It attempts to deprive certain taxpayers of the inherent right to invoke the equity powers of the court and does not supply an adequate or speedy method as compensation for the loss of such inherent rights.'

We will consider these in their appropriate order.

1. We can see here no encroachment upon the constitutional power of the courts, but simply and solely a legislative attempt to provide an adequate legal remedy where, if a legal remedy Before existed, it was a doubtful or inadequate one, so that the courts, while retaining to the full all of the equitable powers inherent in them, will find only lessened occasions for the use of such powers. We venture to say that many of what were originally equitable rights have by statutes been made legal rights; and, so far as we are aware, there is no judicial authority for holding that the statutory transformation of an equitable right into a legal right is an encroachment upon the equitable powers of the courts.

The final answer to this question is therefore to be found in the answer to the third question, which is, Is the legal remedy afforded by the statute an adequate and sufficiently speedy one?

2. In natural sequence, the third question is next in order, and it appears to be one which has frequently engaged the attention of the courts of other jurisdictions.

A federal statute which has been in effect since 1867 (Rev. St. U.S. § 3224 [26 USCA § 154]) reads: 'No suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court.'

In passing upon this statute, the federal circuit court, in Pullan v. Kinsinger, 20 F. Cas. 44, No. 11,463, said: 'How far does it change the common law? By that law the citizen could not replevin property seized for the collection of a tax. It was deemed impolitic to suffer such a remedy, and the laws of the states nearly all of which have enacted them, declaring the same thing, are but assertions of this principle. According to the English equity, an injunction would not go in any case at all analogous to that at bar. Wide as the departures are from these principles in some of the state courts, all disclaim the jurisdiction per se. By the rarity and exceptional character of their interposition they authorize the assertion of the general rule that there was no remedy by injunction to prevent the collection of an illegal tax. Irrespective of all legislation, there was neither replevin nor injunction. The wrong must be submitted to and suit at law brought to recover damages for its infliction.

'In what, then, is the constitution or the general principles of good government violated? In order to save the citizen the delay and expense of a suit to recover back the payment which he deems unlawful, a speedy and inexpensive appeal is given to the commissioner, who is directed to refund all moneys paid upon illegal assessment. If dissatisfied with his decision, the citizen may sue in the courts, which, up to that of last resort, are open. He may sue his government as freely as his neighbor, and when judgment is recovered, the national treasury is devoted to its payment. Neither judicial forms nor trial by jury is denied.'

The federal Supreme Court has upheld this act. In Snyder v. Marks, 109 U.S. 189, 3 S.Ct. 157, 160, 27 L.Ed. 901, it is there said: 'The inhibition of section 3224 applies to all assessments of taxes, made under color of their offices, by internal revenue officers charged with general jurisdiction of the subject of assessing taxes against tobacco manufacturers. The remedy of a suit to recover back the tax after it is paid is provided by statute, and a suit to restrain its collection is forbidden. The remedy so given is exclusive, and no other remedy can be substituted for it. Such has been the current of decisions in the circuit courts of the United States, and we are satisfied it is a correct view of the law.'

To the same effect see Dodge v. Osborn, Commissioner of Internal Revenue, 240 U.S. 118, 36 S.Ct. 275, 60 L.Ed. 557, and also Thompson v. Schwaebe (C. C. A.) 22 F. (2d) 518, 519, written by the late Judge Rudkin, where it is said: 'This remedy would seem to be full, complete, and adequate.'

Colorado has a statute requiring the refund to any taxpayer, without abatement or discount, of any tax or portion thereof found to be excessive or illegal. Referring to this statute, the federal Supreme Court, in Union Pacific R. R. Co. v Board of County Commissioners of Weld County, 247 U.S. 282, 38 S.Ct. 510, 511, 62 L.Ed. 1110, said: 'If that section is still in force, unqualified and unmodified, the conclusion below that in this case there is a plain, adequate and complete remedy at law, and therefore that relief by injunction is not admissible, is fully sustained by our decisions. Singer Sewing Machine Co. v. Benedict, 229 U.S....