Dexter Horton Bldg. Co. v. King County
| Decision Date | 29 August 1941 |
| Docket Number | 28257. |
| Citation | 10 Wn.2d 186,116 P.2d 507 |
| Parties | DEXTER HORTON BLDG. CO. v. KING COUNTY. |
| Court | Washington Supreme Court |
Department 2.
Action by the Dexter Horton Building Company against King County for reduction of a tax assessment and recovery of excessive amount of taxes paid. From a judgment for plaintiff defendant appeals, and plaintiff cross-appeals.
Reversed on defendant's appeal, and affirmed on cross-appeal.
Appeal from Superior Court, King County; James T Lawler, judge.
B. Gray Warner and Lloyd W. Shorett, both of Seattle, for appellant.
Smith Troy and R. G. Sharpe, both of Olympia, amici curiae.
Evans McLaren & Lane, of Seattle, for respondent.
The county assessor for King county placed for the year 1938 an assessed valuation of $693,180 (true value $1,386,360) upon the Dexter Horton building, which is located on Cherry street between Second and Third avenues in the city of Seattle. The owner of that building, upon denial of its petition by the County Board of Equalization for a reduction of the assessment, appealed to the state tax commission which, after consideration of the factors of cost of reproduction less depreciation and income and expected income, reduced the assessed valuation of the building to $652,000 (true value $1,304,000). The owner paid the taxes under protest and instituted this action to obtain a reduction of the assessment to $700,000 true value (assessed valuation $350,000), and to recover the alleged excessive amount of taxes paid under protest on that building. The land value of $157,000 (assessed valuation $78,500) fixed by the assessor is not in dispute. Upon motion of plaintiff, defendant county's demand for jury trial was denied.
The trial court found 'that the true and fair value in money' of the building for the year 1938 was $1,021,440 (assessed valuation $510,720), a reduction of $141,280 in the assessed valuation and a reduction of $282,560 in the true value; that the taxing officials had proceeded upon a fundamentally wrong basis; and that the conduct of the taxing officials in fixing the value was so arbitrary as to constitute constructive fraud. Judgment was entered in favor of plaintiff for recovery of that portion of the tax based upon valuation in excess of the value found by the court. Defendant appealed. Plaintiff cross-appealed from the judgment insofar as the court found that the fair value was in excess of $700,000 or in excess of assessment valuation of $350,000.
The first question presented by this appeal is whether an action to recover illegally exacted taxes paid under protest, instituted under the provisions of Rem.Rev.Stat., §§ 11315-1 to 11315-8, Laws of 1931, chapter 62; Laws of 1937, chapter 11; Laws of 1939, chapter 206, is properly triable to a jury upon demand of a defendant county therefor.
Counsel for appellant contend that the constitutional provision, Art. I, § 21, state constitution, that 'the right of trial by jury shall remain inviolate,' and the statutory provisions, Rem.Rev.Stat., §§ 314, 369, that an issue of fact in an action for the recovery of money shall be tried by a jury, unless a jury is waived, guarantee a jury trial irrespective of the question whether the action is one at law or a suit in equity; that all cases which were properly triable to a jury at the time of the adoption of the state constitution are still properly jury cases; and that the case at bar would be one properly triable by a jury at the time of the adoption of the state constitution.
Laws of 1873, chapter XV, § 206, and § 204 of the Code of 1881, insist counsel for appellant, sustain the position that the case at bar is one which would have been properly triable by a jury at the time of the adoption of the state constitution as the sections cited provide that an issue of fact shall be tried by a jury, unless a jury is waived, or a reference is ordered.
'An issue of fact, in an action for the recovery of money only, or of specific real or personal property shall be tried by a jury, unless a jury is waived, as provided by law, or a reference ordered, as provided by statute relating to referees.' Rem.Rev.Stat., § 314. Cf. Laws of 1854, chapter XIV, p. 164, § 183; Laws of 1869, chapter XV, p. 50, § 208; Laws of 1873, chapter XV, [10 Wn.2d 190] p. 52, § 206; Code 1881, § 204; 2 H.C., § 337; Laws of 1893, chapter CXXVII, p. 416, § 33.
Laws of 1873, chapter XV, § 206.
'All or any of the issues in the action, whether of fact or law, or both, may be referred upon the written consent of the parties; but either party shall have the right in an action at law, upon an issue of fact, to demand a trial by jury.' (Italics ours.) Rem.Rev.Stat., § 369. Cf. Laws 1854, chapter XVIII, p. 168, § 206; Code of 1881, § 248; 2 H.C., § 381.
Section 248, Code of 1881, the language of which is the same as the present Rem.Rev.Stat., § 369, amended Laws of 1854, chapter XVIII, p. 168, § 206, by addition of the language 'but either party shall have the right in an action at law, upon an issue of fact, to demand a trial by jury.' This, clearly, restricts trial by jury, as of right, in a civil action to 'an action at law, upon an issue of fact.'
It must be conceded--citation of sustaining authority is unnecessary--that the taxpayer's right of recovery for excessive valuation has always been based upon the doctrine of constructive fraud. No change in this has been made by the statute, Rem.Rev.Stat. § 11315-2, which expressly recognizes, as follows, that the basis for recovery remains the same as Before : '* * * Provided, That this act shall not be deemed to enlarge the grounds upon which taxes may now be recovered * * *.'
The doctrine of constructive fraud is inherently and exclusively in equity. The very definition of constructive fraud implies a court of equity.
'Constructive fraud is simply a term applied to a great variety of transactions, having little resemblance either in form or in nature, which equity regards as wrongful, to which it attributes the same or similar effects as those which follows from actual fraud, and for which it gives the same or similar relief as that granted in cases of real fraud.' Pomeroy's Equity Jurisprudence, 3rd Ed., § 922.
When property has been acquired under such circumstances that the holder of the legal title may not in good conscience retain the beneficial interest, equity converts such holder into a trustee. Perry on Trusts, p. 309, § 183. Where the existence of the trust is established, the beneficiary is entitled to the aid of the court in enforcement of his rights of ownership against the trustee; the remedy is not one at law. 19 Am.Jur. p. 154,§ 168. All cases involving trusts, regardless of whether the trust be express or ex maleficio, are exclusively within the jurisdiction of equity.
The unlawfully collected taxes made returnable by the statute, Rem.Rev.Stat. §§ 11315-1 et seq., are impressed with a trust. This statute provides that injunctions and restraining orders shall not be issued to restrain the collection of any tax or the sale of any property for the nonpayment of any tax except where the law under which the tax is imposed is void, and where the property upon which the tax is imposed is exempt from taxation; that the act shall not be deemed to enlarge the grounds upon which taxes may now be recovered, and that no claim need be presented to the county for the return of the protested tax. Under this statute the county, instead of the taxpayer, has the tax during the litigation. The action is one for the restoration of money paid, instead of an action to restrain the collection of the tax. Section 3 of the statute describes the judgment which the taxpayer may obtain in case it be determined that the tax, or any portion of the tax, paid under protest was unlawfully collected.
In the matter of a levy from which funds are derived for the payment of the judgment for recovery of the tax, section 4 of the statute provides for a levy upon all of the taxable property within the county for the amount of all taxes collected by the county for county and/or state purposes held illegal and recoverable by such judgments, which levy shall include legal interest and costs. The statute also provides that the levy for the county tax shall be given precedence over all other tax levies. Throughout the statute the action is described as one for the recovery of taxes paid under protest or for the recovery of a tax. There is no reference in the statute to the recovery as of a debt. Section 7 of the statute provides that: 'Except as permitted by this act, no action shall ever be brought or defense interposed attacking the validity of any tax, or any portion of any tax * * *.'
In other words, by this statute, Rem.Rev.Stat., §§ 11315-1 et seq., as we held in Re Yakima Amusement Company v. Yakima County, 192 Wash. 174, 73 P.2d 519, the exclusive method provided of seeking a reduction of a claimed unlawful or excessive assessment for taxation purposes is by payment under protest, of the tax as levied and then...
To continue reading
Request your trial
-
Franchise Tax Bd. v. the Superior Court of The City
...P.2d 756, 762; C.W. Matthews Contracting Co. v. S.C. Tax Comn. (1976) 267 S.C. 548, 230 S.E.2d 223, 226; Dexter Horton Bldg.Co. v. King County (1941) 10 Wash.2d 186, 116 P.2d 507, 511; see also Jernigan v. Jackson (Tenn.1986) 704 S.W.2d 308, 309 [rejecting claim of right to jury trial witho......
-
Maziar v. Wash. State Dep't of Corr.
...¶ 38 Our Supreme Court has previously interpreted one of the inter-related statutes cited by DOC. In Dexter Horton Building Company v. King County, 10 Wash.2d 186, 116 P.2d 507 (1941), the court clarified the scope of Rem.Rev.Stat., § 314, now codified as RCW 4.40.060. In that case, the cou......
-
Peters v. Sjoholm
...prior to the imposition and enforcement of any tax liability. There is no such right to a trial by jury. Dexter Horton Bldg. Co. v. King County, 10 Wash.2d 186, 116 P.2d 507 (1941). We affirm the trial court's decision granting respondents' motion for summary judgment. STAFFORD, DOLLIVER, H......
-
Allard v. Pacific Nat. Bank
...in nature, however, there is no right to a trial by jury. Brown, 94 Wash.2d at 365, 617 P.2d 704. See Dexter Horton Bldg. Co. v. King Cy., 10 Wash.2d 186, 116 P.2d 507 (1941). The overall nature of a civil action is determined by considering all the issues raised by all the pleadings. Brown......
-
Table of Cases
...13.3(1)(c), 13.6(4)(a) Denison's Estate, In re, 23 Wn.2d 699, 162 P.2d 245 (1945): 13.3(2)(b) Dexter Horton Bldg. Co. v. King County, 10 Wn.2d 186, 116 P.2d 507 (1941): 13.7(5)(c) Diel v. Beekman, 7 Wn.App. 139, 499 P.2d 37 (1972): 13.3(3)(a) Dill, In re Welfare of, 60 Wn.2d 148, 372 P.2d 5......
-
§13.7 Causes of Action and Remedies Against Fiduciaries
...394, 396, 663 P.2d 104 (1983) (Allard I); Hubbell v. Ward, 40 Wn.2d 779, 787, 246 P.2d 468 (1952); Dexter Horton Bldg. Co. v. King County, 10 Wn.2d 186, 191, 116 P.2d 507 (1941); and Baker Boyer Nat'l Bank v. Garver, 43 Wn.App. 673, 686, 719 P.2d 583 (finding make-whole remedy appropriate w......