State ex rel. Mason County Logging Co. v. Wiley

• Court: Washington Supreme Court
• Writing for the Court: GERAGHTY, Justice.
• Citation: State ex rel. Mason County Logging Co. v. Wiley, 177 Wash. 65, 31 P.2d 539 (Wash. 1934)
• Decision Date: 02 April 1934
• Docket Number: 24609.
• Parties: STATE ex rel. MASON COUNTY LOGGING CO. v. WILEY et al.

31 P.2d 539

177 Wash. 65

STATE ex rel. MASON COUNTY LOGGING CO. v. WILEY et al.

No. 24609.

Supreme Court of Washington, En Banc.

April 2, 1934

Appeal from Superior Court, Grays Harbor County; J. M. Phillips Judge.

Action in mandamus by the State, on the relation of the Mason County Logging Company, against R. A. Wiley, as assessor of Grays Harbor county, and others. From a judgment dismissing the action, the relator appeals.

Judgment reversed, and case remanded in accordance with opinion.

W. H Abel, of Montesano, and T. H. McKay, of Aberdeen, for appellant.

E. E Boner, of Aberdeen, for respondents.

GERAGHTY Justice.

The 1931 session of the Legislature enacted chapter 40 (page 117), known as the Reforestation Act. Section 1 of the act is declaratory of its purpose, and follows:

'Public welfare demands that steps be taken to encourage reforestation and to protect and promote the growth of new forests on lands chiefly valuable for that purpose in order that they may be restored to the economic and industrial life of the state. To accomplish that end it is necessary that a system of taxation and assessment be devised for such lands, which will encourage the growth of new and immature forests on lands chiefly valuable for that purpose, and which will enable the owners thereof to bear the burden of taxation on such lands over the period of years necessary to produce forests of commercial value. Therefore the State of Washington, through its legislature, hereby exercising its police and sovereign power, declares and enacts that all logged-off lands and all unforested lands chiefly valuable for the production and growth of forests and all lands growing immature forests and forests of no commercial value shall not be assessed or taxed to a rate which will discourage or hamper the growth of forests on such lands, but shall be assessed and taxed at such rate and in such manner that owners of such lands may be encouraged to reforest, protect and grow forests of commercial value on such lands.'

In furtherance of this purpose, the act sets up a comprehensive plan for the classification, taxation, and management of lands chiefly valuable for the development and growth of forests. In relation to the taxation of such lands, the plan adopted embodies two elements: (1) Reforestation lands are to be carried upon the assessment rolls of the counties in which they are situated at a valuation fixed in the act; and (2) a yield tax equal to 12 1/2 per cent. of the market value of the timber or forest crop cut from the land, is to be assessed and taxed against the owner by the county assessor as the crop is cut. All taxes collected under the provisions of the act are to be paid to the county treasurer of the county in which the lands are situated and by him distributed to the various funds in the same proportions as general taxes on other property in the same taxing district. The act provides for the classification of reforestation lands by the state forest board after hearing, and the certification by the board of the lands so classified to the assessor of the county in which they are situated.

Section 7 of the act is as follows:

'All lands classified as reforestation lands as provided in this act and lying west of the summit of the Cascade range of mountains in the State of Washington shall, after the date of such classification, be assessed for purposes of taxation at one dollar ($1.00) per acre, which is hereby declared to be the assessed value thereof; and all lands so classified lying east of the summit of the Cascade range of mountains shall be assessed for purposes of taxation at fifty cents (50¢) per acre, which is hereby declared to be the assessed value thereof. The above values shall apply as the actual basis for taxation of such lands, without regard to any percentages of value which may apply for taxation of other classes of property; and the taxation of such lands on the basis herein provided shall be separate and distinct from and in addition to the cost of protecting such lands from fire as provided under the laws of Washington.'

Proceeding under authority of the act, the state forest board classified certain lands in Grays Harbor county owned by the Mason County Logging Company as reforestation lands, and certified them to the assessor of Grays Harbor county to be spread upon the assessment rolls of the county. The assessor refused to spread the lands upon the assessment rolls at the valuation fixed by the provisions of section 7, and instead proceeded to assess them for taxation purposes at values fixed by himself and higher than the statutory rate. Thereupon the logging company instituted an action for a writ of mandamus to compel the assessor to follow the legislative mandate. Later, the treasurer and commissioners of Grays Harbor county were made parties to the action. The trial court sustained a demurrer to the relator's amended complaint, upon the ground that section 7 of the Reforestation Act was unconstitutional, in that the Legislature was without power to fix the valuation of the lands for purposes of taxation, as provided in the section. The relator declining to plead further, judgment was entered dismissing the action. This appeal follows.

Chapter 40 (page 117), of the 1931 Session Laws, was enacted pursuant to the terms of the Fourteenth Amendment to the state Constitution, adopted by the people of the state at the 1930 general election. The Fourteenth Amendment repealed sections 1, 2, 3, and 4 of article 7 of the Constitution, and substituted in lieu thereof the following:

'The power of taxation shall never be suspended, surrendered or contracted away. All taxes shall be uniform upon the same class of property within the territorial limits of the authority levying the tax and shall be levied and collected for public purposes only. The word 'property' as used herein shall mean and include everything, whether tangible or intangible, subject to ownership. All real estate shall constitute one class: Provided, That the Legislature may tax mines and mineral resources and lands devoted to reforestation by either a yield tax or an ad valorem tax at such rate as it may fix, or by both. Such property as the Legislature may by general laws provide shall be exempt from taxation. Property of the United States and of the state, counties, school districts and other municipal corporations, and credits secured by property actually taxed in this state, not exceeding in value the value of such property, shall be exempt from taxation. The Legislature shall have power, by appropriate legislation, to exempt personal property to the amount of three hundred ($300.00) dollars for each head of a family liable to assessment and taxation under the provisions of the laws of this state of which the individual is the actual bona fide owner.'

For the purpose of reference, we have italicized that part of the amendment with which we are concerned here.

Repealed sections 3 and 4 of article 7 provided for the taxation of corporate property. Sections 1 and 2 provided for the taxation of all property in the state not exempt, in proportion to its value in money, so that every person and corporation should pay a tax in equal proportion to the value of his, her, or its property. In the language of this court in State ex rel. Atwood v. Wooster, 163 Wash. 659, 2 P.2d 653, 655, by the amendment, '* * * the requirements that a uniform tax be assessed against all property were swept away and in their place were adopted constitutional provisions which say nothing about uniformity, and do not provide that all property shall be taxed, but which do permit of the classification of all property, and provide that all taxes shall be uniform upon the same class of property, and also that such property as the Legislature may provide shall be exempt from taxation. So that the Legislature, freed from the former limitations, may now determine what property shall be taxed, the different rates upon which different classes of property shall be taxed, and what property shall pay no tax at all, subject only to the limitations found in the new constitutional provisions.'

It is a matter of common knowledge that the purpose of the Fourteenth Amendment was to permit a departure from the rigid requirement of uniformity and equality, making it possible to classify different kinds of property and levy different rates according to classes, to the end, largely, that the classes of property known as intangibles might be taxed at rates low enough to offer no inducement for concealment or evasion. While the rule prescribing general uniformity regardless of class of property was abolished by the amendment, uniformity is still required within the classes. The amendment upon its face indicates another purpose in its enactment, and a special exception from the rule of uniformity, in the proviso relating to the taxation of mines and mineral resources and lands devoted to reforestation. The amendment provides that real estate shall compose one class, and then by a proviso lifts out of that class mines and mineral resources and lands devoted to reforestation and provides for their special treatment as a distinct subclass.

The trial court reached the conclusion that the net result of the proviso was no more than to make available to the Legislature an additional method for the taxation of reforestation lands, namely, the yield tax; and that the reference to an ad valorem tax is not intended to confer any additional power, but is merely explanatory in the relation in which it is used.

At the outset, it will be observed that the challenged act is one highly remedial, having for its purpose the conservation and development of a basic resource of the state. We are...