Petroleum Nav. Co. v. King County

• Decision Date: 29 November 1939
• Docket Number: 27539.
• Citation: 1 Wn.2d 489,96 P.2d 467
• Parties: PETROLEUM NAV. CO. v. KING COUNTY et al.
• Court: Washington Supreme Court

96 P.2d 467

1 Wn.2d 489

PETROLEUM NAV. CO. v. KING COUNTY et al.

No. 27539.

Supreme Court of Washington

November 29, 1939

Department 2.

Action by the Pertroleum Navigation Company against King County and another to enjoin the defendants from further attempting collection of a certain tax. From a judgment canceling the tax and enjoining defendants from further attempting its collection, the defendants appeal.

Reversed with instructions to dismiss the action.

Appeal from Superior Court, King County; Howard M Findley, judge.

B. Gray Warner and Lloyd W. Shorett, both of Seattle, for appellants.

Allen Froude & Hilen, of Seattle, for respondent.

JEFFERS Justice.

This is an appeal by King county et al., defendants, from a judgment entered on the 21st day of January, 1939, in favor of Petroleum Navigation Company, a corporation, plaintiff, whereby personal property taxes levied by defendants for the years 1933 and 1934 against the vessel 'Aleutian Native' were declared illegal and void, and defendants were ordered to cancel such taxes, and were also restrained and enjoined from collecting same.

Plaintiff's complaint, in so far as material, alleges: That on June 14, 1932, and up until about September 12, 1934, the Kanaga Ranching Company, an Alaska corporation, with its principal place of business at Kanaga Harbor, Alaska, was the owner of the vessel 'Aleutian Native;' that on June 14, 1932, the Kanaga Company entered into a conditional sale contract with plaintiff, wherein it agreed to sell, and plaintiff agreed to buy, the boat in question; that in the agreement was a clause reserving title in the seller until the full contract price had been paid; that the contract was not paid in full until about September 12, 1934, at which time a bill of sale of registered vessel was delivered to plaintiff, and recorded with the collector of customs at Juneau, Alaska; that during all of such period the registry of the vessel and the designated home port remained at Juneau, Alaska; that subsequent to the execution of the agreement, the vessel was delivered to plaintiff, and was used in continuous voyages as a carrier of petroleum products in intrastate and interstate commerce; that the vessel was not present within the territorial limits of King county on either the 1st day of March, 1933, or the 1st day of March, 1934; that notwithstanding the above facts, the assessor of King county, in 1934, purporting for the first time to have discovered the 'Aleutian Native' within the limits of King county, assessed the boat for the year 1934, in the value of fifteen thousand dollars, and placed a like assessment for the year 1933, upon the basis of an omitted assessment; that defendants have issued a final warning to plaintiff that unless the sum of $1,755.70, taxes for the two years in question, is paid, they will immediately issue a distraint order against the boat, and proceed to sell it to satisfy the taxes, unless restrained by the courts.

Defendants by their answer admit that the boat in question was in the possession of plaintiff on or about June 14, 1932, and that the vessel was assessed in the amount alleged in the complaint, but deny the other material allegations of the complaint.

After a trial to the court, findings of fact were made and entered, wherein, briefly stated, the court found that during the years 1933 and 1934, title to the 'Aleutian Native' was in the Kanaga Company, whose domicile was at all times in the territory of Alaska; that the vessel did not, during the years 1933 and 1934, acquire an actual situs for the purpose of taxation in King county, and was not subject to assessment and taxation by the taxing officer of King county for the years in question. Conclusions of law and judgment were entered, canceling the tax, and enjoining defendants from further attempted collection. This appeal followed.

Appellants' first contention is that this action will not lie to restrain the collection of a tax, because of the provisions of Laws of 1931, p. 201, chapter 62, Rem.Rev.Stat. §§ 11315-1 to 11315-8. Respondent, on the other hand, contends that the taxes in question are absolutely void, it appearing from the complaint that the attempted assessment was on property without the jurisdiction of King county; that this being true, it is the same as no tax; and that § 11315-1, supra, does not apply to or prohibit the granting of injunctive relief from a void tax.

We think it will be admitted that, if respondent's contention relative to a void tax be true, the complaint alleged facts sufficient to give the court jurisdiction.

Rem.Rev.Stat. § 11315-1, provides:

'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.'

Rem.Rev.Stat., § 11315-2, provides:

'Prepayment under protests, condition precedent. 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 * * *.'

Rem.Rev.Stat. § 11315-7, provides that this act shall be exclusive, except that it shall not be construed as preventing the defendants in any tax foreclosure proceedings from making any valid defense allowed by law to the tax sought to be foreclosed.

It is true that respondent is not attacking any law under which the purported levy was made, but it is respondent's contention that there is no law under which the levy could have been made, and that the effect is therefore the same as though the levy had been made under a void law.

We do not understand that respondent is contending, nor do we think it could contend, that the property in question is exempt from taxation. We think the term 'exemption,' as used in the statute, presupposes a liability, and is properly applied only to a grant of immunity to persons or property which otherwise would have been liable to assessment. 61 C.J. 382.

Since the legislature enacted Laws of 1931, chapter 62, this court has had occasion to construe this act in at least seven different cases: Casco Co. v. Thurston County, 163 Wash. 666, 2 P.2d 677, 77 A.L.R. 622; Bank of Fairfield v. Spokane County, 173 Wash. 145, 22 P.2d 464; Denny v. Wooster, 175 Wash. 272, 27 P.2d 328; Ballard v. Wooster, 182 Wash. 408, 45 P.2d 511; Western Machinery Exchange v. Grays Harbor County, 190 Wash. 447, 68 P.2d 613; In re Yakima Amusement Co., 192 Wash. 174, 73 P.2d 519, and Etter v. Kronlund, 198 Wash. 341, 88 P.2d 417. In none of the cases above mentioned was the question of the applicability of chapter 62, supra, to a void tax directly raised. However, in three cases, reference is made to a void tax, and it is at least reasonably inferable therefrom that the court would have jurisdiction to entertain an action to restrain the collection of a void tax.

In the Casco case, which was the first case decided after the passage of the act in question, an action was brought to enjoin the collection of a tax assessed against certain property in Thurston county, and in the first paragraph of the opinion we find the following statement: ' 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.' (Italics ours)

In Denny v. Wooster, supra, an action was instituted to enjoin the assessor of King county from spreading on the tax rolls a levy which it was claimed was illegal and void, and while it is true the court distinguished between the right to enjoin the collection of a tax from the right to enjoin a levy, we think some of the statements made in the opinion pertinent. We stated therein [175 Wash. 272, 27 P.2d 329]:

'It is not contended, indeed it could not well be argued, that there would be any lack of jurisdiction in the court in the absence of this statute. In Union Trust Co. v. Spokane County, 145 Wash. 193, 259 P 9, 10, we quoted, with approval, as being in harmony with the great weight of authority, from Gould v. Gould, 245 U.S. 151, 38 S.Ct. 53, 62 L.Ed. 211, as follows:

"In the interpretation of statutes levying taxes it is the established rule not to extend their provisions, by implication, beyond the clear import of the language used, or to enlarge their operations so as to embrace matters not specifically pointed out. In case of doubt they are construed most strongly against the government, and in favor of the citizen.'

'Following that rule, the principle of which applies here, we must not extend the provisions of the act of 1931 against the granting of restraining orders in cases of this kind 'beyond the clear import of the language used, or enlarge their operations so as to embrace matters not specifically pointed out.' * * *

' Reliance is had on Casco Co. v. Thurston County, 163 Wash. 666, 2 P.2d 677, 77 A.L.R. 622. That case, however, was well within the statutory rule against

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