Metropolitan Bldg. Co. v. King County

• Decision Date: 07 February 1913
• Parties: METROPOLITAN BLDG. CO. v. KING COUNTY et al.
• Court: Washington Supreme Court

129 P. 883

72 Wash. 47

METROPOLITAN BLDG. CO. v. KING COUNTY et al.

Supreme Court of Washington, En Banc.

February 7, 1913

Appeal from Superior Court, King County; King Dykeman, Judge.

Action by the Metropolitan Building Company against King County and others. From a judgment, the county appeals. Affirmed.

John F Murphy and Robert H. Evans, both of Seattle, for appellant.

Douglas Lane & Douglas and Kerr & McCord, all of Seattle, for respondent.

GOSE J.

This is an appeal from a judgment of the superior court of King county, modifying an assessment upon a leasehold interest in the old university grounds in the city of Seattle. The case is not a stranger here. See Metropolitan Building Co. v King County, 62 Wash. 409, 113 P. 1114, Ann. Cas. 1912C 943; Id., 64 Wash. 615, 117 P. 495. The law of the case was settled upon the first appeal. The second appeal presented substantially the same facts as this appeal. On the first appeal the judgment reducing the assessment on the leasehold for the year 1909 from $480,000 to $96,000 was affirmed. In the second case the trial court reduced the 1910 assessment from $810,000 to $225,000. On appeal this court reduced it to $90,000. The assessor valued it at $2,000,000 for the year 1911. This valuation on the adopted basis of 45 per cent. gave it an assessed valuation of $900,000. Despite the protest of the respondent, the board of equalization confirmed the assessment. The case was taken to the superior court by certiorari, where the valuation was reduced to $200,000, and the assessed valuation was placed at $90,000. The county has appealed.

The lease was made for a term commencing February 1, 1907, and ending November 1, 1954. The rent reserved is $15,000 per annum to November 1, 1912; $40,000 per annum for the succeeding 10 years; $80,000 per annum for the next succeeding 10 years; $100,000 per annum for the next succeeding 10 years; and $140,000 per annum for the remainder of the term, all payable quarterly in advance. When the lease was made, the property was many feet above grade and unimproved. Up to March 1, 1911, the respondent had issued and sold its mortgage bonds to the amount of $2,267,000. Of this sum it had expended $2,060,000 in productive improvements and $210,000 in nonproductive improvements, consisting of grading the property and the street, paving, sidewalks, water mains, sewer and gas mains, light, heat, power, etc. In giving the figures we have used round numbers. Both the fee and the improvements belong to the state. The gross income from March 1, 1910, to March 1, 1911, was $329,000. The gross expenses, not including taxes, during the same period, was $341,000.

The testimony shows that the leasehold measured by its burdens and benefits has no real market value, but that relieved of its burdens and measured only by its benefits it is of large value. Counsel for the appellant framed his hypothetical questions so as to ask...