Commercial Waterway Dist. No. 1 of King County v. King County

• Decision Date: 27 December 1938
• Docket Number: 27169.
• Citation: 197 Wash. 441,85 P.2d 1067
• Parties: COMMERCIAL WATERWAY DIST. NO. 1 OF KING COUNTY et al. v. KING COUNTY.
• Court: Washington Supreme Court

85 P.2d 1067

197 Wash. 441

COMMERCIAL WATERWAY DIST. NO. 1 OF KING COUNTY et al. v. KING COUNTY.

No. 27169.

Supreme Court of Washington

December 27, 1938

Department 2.

Action by the Commercial Waterway District No. 1 of the County of King, a municipal corporation, and another against King County, to have the waterway district decreed an equitable and beneficial owner with the county of lands acquired by the county for taxes and to have the county and its officers enjoined from selling the beneficial title of the waterway district thereto. From a judgment dismissing the action after a demurrer to the complaint was sustained, plaintiffs appeal.

Affirmed.

Appeal from Suerior Court, King County; Roger J. Meakim, judge.

Shorett, Shorett & Taylor and Evans, McLaren &amp Littell, all of Seattle, for appellants.

B. Gray Warner and Wm. Hickman Moore, both of Seattle, for respondent.

BEALS Justice.

Commercial Waterway District No. 1 of the County of King, State of Washington, one of the plaintiffs in this action, is a municipal corporation of the state of Washington, organized and existing pursuant to law. The district, some years since improved the Duwamish river, a navigable stream in King county, and issued negotiable bonds in order to provide funds with which to pay for the improvement. Plaintiff Carl R Heussy is the owner of one of these unpaid bonds. In due course, the district levied against the land lying within its boundaries assessments in proportion to the benefits adjudicated by the court to have been received by the land because of the improvement, and issued its negotiable warrants and bonds in large amounts, all of which are past due, interest in large sums having accumulated thereon. For payment of these obligations, the district relies entirely upon the collection of the assessments above referred to. The assessments against many parcels of land within the district remained unpaid, together with general taxes. King county instituted tax foreclosure proceedings against these parcels of land, as provided by law, including in the foreclosure the total balance of unpaid waterway assessments, and pursuant to tax foreclosure sale, has acquired title in its name to many tracts of land within the district.

Under the law, when land, owned by a county pursuant to tax foreclosure, in the situation above described, is sold, the waterway district shall receive its pro rata share of the money paid for the land. Rem.Rev.Stat. § 9754 , provides that waterway assessments '* * * shall be placed upon the general tax-rolls in the office of the county assessor and shall be deemed for all purposes a part of the general taxes, and shall constitute liens against each such lot or tract of land of equal rank with state, county and city taxes and shall have the same priority over all other liens as state, county and city taxes have, and shall be subject to the same interest and penalties in case of delinquency as in case of general taxes, and for all purposes of delinquency, certificates of delinquency, foreclosure and other proceedings leading up to final payment, enforcement and collection, such assessments shall be deemed a part of the general taxes as aforesaid.'

Plaintiffs instituted this action against King county, alleging facts as above stated; that the county had, pursuant to tax foreclosure, taken title to many parcels of land within the waterway district; that the county held this property for the benefit of plaintiff district, in the proportion which the total amount of unpaid district assessments bore to the total amount of unpaid general taxes; that the county had no right, power or authority to sell the equitable and beneficial undivided interest of plaintiff district in the several tracts of land, but that the county and its officers proposed to sell the land without requiring the district to join in any conveyance thereof. Plaintiffs prayed that the waterway district be decreed to be an equitable and beneficial owner with the county of the lands hereinabove referred to, to the extent of an undivided interest therein in proportion to the amount of its unpaid assessments, and that the county and its officers be enjoined from selling, or assuming power to sell, the beneficial title of the waterway district in or to any of the lands.

To this complaint the county demurred upon two grounds: First, that it appears upon the face of the complaint that there is a defect of parties plaintiff, and second, that the complaint fails to state facts sufficient to constitute a cause of action. After argument, the trial court sustained the county's demurrer, and, plaintiffs electing to stand on their complaint, and having refused to plead further, judgment was entered dismissing the action, from which judgment plaintiffs have appealed.

Error is assigned upon the ruling of the trial court sustaining respondent's demurrer, and upon the entry of judgment dismissing the action.

The trial court was of the opinion that, under the law, the officers of respondent county have authority to sell the lands owned by the county as the result of tax foreclosure proceedings, upon which lands appellant district owned assessment liens. Appellants contend that the county commissioners have no such authority, and that appellant district owns a beneficial title or interest in such real estate, and that the county cannot sell the lands at the discretion of the county commissioners, or at all, unless the district joins with the county in the conveyance or in approving or authorizing the same.

The principle that the power of taxation is an essential and basic attribute of sovereignty, is well established. 61 C.J., § 7(A), p. 76; 26 R.C.L., § 12, p. 26. This principle has been repeatedly recognized in the decisions of this court.

In the case of State ex rel. Board of Commissioners v. Clausen, 95 Wash. 214, 163 P. 744, this court said [page 747]: 'The power of taxation is an incident of sovereignty, and is possessed by the state without being expressly conferred by the people. It is a legislative power, and when the people by their Constitution create the department of government upon which they confer the power to make laws, the power of taxation follows as a necessary part of the more general power.'

In the case of Everett v. Adamson, 106 Wash. 355, 180 P. 144, we said: 'We have held consistently that taxation is a matter involving the sovereign power of the state and subject only to the limitations which that sovereignty has imposed upon itself, either in the constitutional or positive law of the state.'

In the case of Shelton v. Klickitat County, 152 Wash. 193, 277 P. 839, this court, referring to tax foreclosure proceedings instituted by the county, said [page 841]: 'True we have held that, upon a county becoming the purchaser at a tax foreclosure sale for want of other bidders, the county, upon the deed being issued to it in pursuance of such sale, acquires title in fee as against the owner. But we have also held, in harmony with the abovequoted language of section 11309, Rem.Comp.Stat., that the title thereby acquired becomes vested in the county, not in its proprietary capacity, but in trust for the state for itself and for the other taxing municipalities within which the land is situated, with power and obligation on the part of the county to sell the land at some opportune time and justly apportion the proceeds to the state, municipal and other funds. Gustaveson v. Dwyer, 78 Wash. 336, 139 P. 194; Id., 83 Wash. 303, 145 P. 458. This is but a part of the statutory tax collecting process, which process is not completed until such sale is finally made by the county, to the end that the proceeds thereof be apportioned as prescribed by section 11309, above quoted.'

In the case of Love v. King County, 181 Wash. 462, 44 P.2d 175, we said [page 177]: 'We need not spend any time in discussing the elemental proposition that the power of taxation is an essential and inherent attribute of sovereignty and belongs to, and is possessed by, the government as a matter of right without being expressly conferred by the people.'

In the recent case of City of Walla Walla v. State of Washington, 85 P.2d 676, we held that a lien of the state upon real estate for an inheritance tax was barred by a county foreclosure of a lien for delinquent taxes. In the course of the opinion, we said: 'By repeated decisions of this court it has become settled law in this state that a general tax lien is paramount over every other lien or burden to which property may be subjected. [Citing cases.] Any exception to this rule must come through legislative enactment.'

Rem.Rev.Stat § 11290, a portion of the act relating to foreclosing liens for delinquent taxes, provides in part as follows: 'At all sales of property for which certificates of delinquency are held by the county, if no other bids are received, the county shall be considered a bidder for the full area of each tract or lot to the amount of all taxes, interest and costs due thereon, and where no bidder appears, acquire title thereto as absolutely as if purchased...