Port Angeles Western R. Co. v. Clallam County, Wash.

• Decision Date: 09 February 1931
• Docket Number: No. 6115.,6115.
• Parties: PORT ANGELES WESTERN R. CO. v. CLALLAM COUNTY, WASH., et al.
• Court: U.S. Court of Appeals — Ninth Circuit

44 F.2d 28 (1930)

PORT ANGELES WESTERN R. CO. v. CLALLAM COUNTY, WASH., et al.

No. 6115.

Circuit Court of Appeals, Ninth Circuit.

October 6, 1930.

Rehearing Denied February 9, 1931.

A. C. Shaw, of Portland, Or., and Lewis & Church, of Port Angeles, Wash., for appellant.

John M. Wilson and Frank L. Plummer, both of Port Angeles, Wash., and John A. Homer, Asst. Atty. Gen., for appellees.

Before DIETRICH and WILBUR, Circuit Judges, and WEBSTER, District Judge.

The following opinion, prepared by DIETRICH, Circuit Judge, is adopted as the opinion of the court by WILBUR, Circuit Judge, and WEBSTER, District Judge:

PER CURIAM.

The appeal is from a judgment of dismissal following an order sustaining a motion by which defendants challenged the sufficiency of the bill of complaint. By the suit appellant seeks a decree adjudicating as void, and restraining the enforcement of, assessments of taxes made by the defendant county and its officers in the years 1927 and 1928, pursuant to the provisions of chapter 130 of the Washington Session Laws for 1925, p. 244, and particularly section 33 thereof, which is as follows: "A contract for the purchase of real property belonging to the United States, the state, or any county or municipality, shall for purposes of taxation be considered as personal property of the person holding the same, and no deed of the property described in such contract shall ever be executed and delivered by the state or any county or municipality until all taxes assessed against such contract and local assessments assessed against the land described therein are fully paid."

The assessments relate to rights arising out of an executory contract entered into on June 17, 1922, between the United States Spruce Production Corporation, as owner, and Fentress Hill and others, as vendees, for the sale of certain timber lands, but principally a railroad and other logging facilities, all within the defendant county. With the consent of the vendor the appellant thereafter became the assignee of the contract and succeeded to all the rights of the vendees as named therein. Admittedly, the spruce corporation was a mere agency of, and in contemplation of law all its property belonged and belongs to, the United States, subject to such rights as plaintiff acquired under the contract. The scope and material provisions of the contract are fairly set forth in the opinion of the court below, to which resort may be had for details. 36 F.(2d) 956. See, also, United States v. Clallam County (D. C.) 283 F. 645; Clallam County v. United States, 263 U. S. 341, 44 S. Ct. 121, 68 L. Ed. 328; Port Angeles Western R. Co. v. Clallam County (D. C.) 20 F.(2d) 202; and, as involving a similar contract, Lincoln County v. Pacific Spruce Corporation (C. C. A.) 26 F.(2d) 435, 436.

In view of these decisions, it is not to be assumed, in the absence of specific and unequivocal averments, that the defendant attempted to assess or claimed the right to tax the physical properties covered by the contract. True, there are in the bill some general allegations of such an assessment and of the assertion of such a right, but they are to be construed in the light of the more definite showing of what in fact was done. The general averments or conclusions so pleaded are probably to be attributed to a consciousness on the part of the pleader that successfully to invoke the aid of a court of equity plaintiff must show that the tax proceedings cast a cloud upon its title to real estate or disclose some other special consideration as a basis for extraordinary relief. The state statute above quoted contemplates only the assessment of the contract, which it declares to be personal property, and, as is clearly shown by the bill, defendants have not attempted to go beyond the statute. The assessment entered upon the county records is of "all the right, title and interest of the Port Angeles Western Railroad Co. in and to a certain contract of sale," language which is followed by a particular identification of the contract, but no description of any real estate or other personal property. Indeed, in one branch of its pleading and of its brief, plaintiff, recognizing the fact that the assessment is of the contract and nothing else, which we think is the only view that reasonably can be taken, forcibly argues that what defendants have attempted to assess has a situs for taxation purposes only in Delaware, the state of the owner's organization, under the general rule that intangible personal property follows the owner and can be taxed only where he resides. While there are some vague general averments that "proceedings have been taken by the defendants looking to the collection" of taxes, no specific act is alleged. In its recent decision in Henrietta Mills v. Rutherford County, 281 U. S. 121, 50 S. Ct. 270, 271, 74 L. Ed. 737, the Supreme Court, speaking through Mr. Chief Justice Hughes, reaffirms the rule, often stated, in the following language: "Section 16 of the Judiciary Act of 1789 * * * provided `That suits in equity shall not be sustained in either of the courts of the United States, in any case where plain, adequate and complete remedy may be had at law.' This explicit prohibition, continued in section 723 of the Revised Statutes and section 267 of the Judicial Code (U. S. C. tit. 28, § 384 28 USCA § 384), has clear application to proceedings to enjoin the collection of taxes upon the ground that they are illegal or unconstitutional. It must appear that the enforcement of the tax would cause irreparable injury, or that there are other special circumstances bringing the case under some recognized head of equity jurisdiction, before the aid of a federal court of equity can be invoked. The mere fact that the validity of the tax may be tested more conveniently by a bill of equity than by an action at law does not justify resort to the former."

In Arkansas Bldg., etc., Association v. Madden, 175 U. S. 269, 20 S. Ct. 119, 121, 44 L. Ed. 159, the court said: "It is quite possible that in cases of this sort the validity of a law may be more conveniently tested, by the party denying it, by a bill in equity than by an action at law, but...