Territory of Alaska v. American Can Company, 15070.

• Decision Date: 29 July 1959
• Docket Number: No. 15070.,15070.
• Citation: 269 F.2d 471
• Parties: TERRITORY OF ALASKA, Appellant, v. AMERICAN CAN COMPANY, Fidalgo Island Packing Company, Libby, McNeill & Libby, Inc., Nakat Packing Corporation, New England Fish Co., P. E. Harris Company, Inc., Pacific & Arctic Railway & Navigation Co., and Oceanic Fisheries Co., Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

269 F.2d 471 (1959)

TERRITORY OF ALASKA, Appellant, v. AMERICAN CAN COMPANY, Fidalgo Island Packing Company, Libby, McNeill & Libby, Inc., Nakat Packing Corporation, New England Fish Co., P. E. Harris Company, Inc., Pacific & Arctic Railway & Navigation Co., and Oceanic Fisheries Co., Appellees.

No. 15070.

United States Court of Appeals Ninth Circuit.

July 29, 1959.

John L. Rader, Atty. Gen., Jack O'Hair Asher, Asst. Atty. Gen., State of Alaska, for appellant.

H. L. Faulkner, San Francisco, Cal., R. E. Robertson, Juneau, Alaska, W. C. Arnold, Seattle, Wash., John H. Dimond, Juneau, Alaska, for appellee.

Before HEALY and HAMLIN, Circuit Judges, and WOLLENBERG, District Judge.

HAMLIN, Circuit Judge.

In 1955 the Territory of Alaska brought suit against eight corporations, hereinafter called appellees, in the United States District Court at Juneau, seeking the collection of taxes and interest alleged to be due for the years from 1949 to 1952. The complaint alleged that the taxes were due under the provisions of the Alaska Property Tax Act, Chapter 10, Session Laws of Alaska 1949, as amended by Chapter 88, S.L.A.1949. The Alaska Property Tax Act was repealed in March, 1953, Laws 1953, c. 22. The Territory of Alaska, appellant herein, contended that the taxes levied under the Act prior to its repeal remained due and owing after the repeal and could be enforced by personal action in the nature of debt.

The United States District Court ordered the dismissal of the complaints in all of the actions, holding that no personal action would lie against the defendants therein for the recovery of the taxes involved, and that the plaintiff had not sought the proper remedy for foreclosure of the tax lien in the manner provided by law. The Court further held that the taxes levied for the years in question did not survive the repeal. It did not pass upon whether the actions were barred by the statute of limitations, although that question had also been raised by the defendants in the actions.

Appellant appealed to this Court from the order dismissing the complaints. This Court (Judge Healy dissenting) held that the taxes in question did not survive the repeal of the statute, and that it was therefore unnecessary to pass upon the question of whether or not a personal action could be maintained (Territory of Alaska v. American Can Co., 9 Cir., 246 F.2d 493). Certiorari was granted by the Supreme Court of the United States, and that Court held that the taxes did survive the repeal of the statute (Territory of Alaska v. American Can Co., 1959, 358 U.S. 224, 79 S.Ct. 274, 276, 3 L.Ed.2d 257). The Supreme Court stated:

"The judgment of the Court of Appeals is reversed and, as there are other questions which were raised by the appeal but not reached by that court, the cause is remanded to it for proceedings in conformity with this opinion."

The questions now before this court are those set forth in appellant's brief, as follows:

1. Whether the Property Tax Act is a tax upon the appellees for which they are personally liable, or is merely a tax upon their property.

2. Whether the appellant is without a remedy to collect and enforce taxes due under the Property Tax Act.

The Alaska Property Tax Act provided in Section 3 thereof as follows:

"For the calendar year of 1949, and each calendar year thereafter there is hereby levied, and there shall be assessed, collected and paid, a tax upon all real property and improvements and personal property in the Territory at the rate of one per centum of the true and full value thereof."

Various other pertinent sections of the Act are set out in the margin.¹ The Act provides, in § 12, for the annual assessment on property and that real property and personalty shall be separately assessed. In § 13(a) it is provided that property shall be assessed and taxed in the names of the owners, occupiers or claimants, jointly. It provides in § 14 for the preparation of an annual assessment roll by the assessor, and in § 15 it provides that the assessor, before the completion of the assessment roll, shall give to every person named thereon a notice of assessment. The Act provides in § 34(a) that the "taxes assessed upon property, together with interest and penalty, shall be a lien thereon from and after assessment until paid * * *." It provides in § 42 a method for the foreclosure of liens, providing therein that "the Tax Commissioner shall * * * proceed to foreclosure of said liens in substantially the manner prescribed in Sections 22-2-8 to 22-2-18, both inclusive, of Alaska Compiled Laws Annotated 1949, for the foreclosure of land registration liens * * *."

Section 42 is the only section of the Act which prescribes any method of collection of the tax.

No section of the Act specifically authorized the bringing of an action in the District Court against individuals or corporations for personal liability.

An examination of §§ 22-2-8 to 22-2-18 of the Alaska Compiled Laws Annotated 1949 discloses only a method for the foreclosure of liens against real property. The procedure for the "foreclosure of land registration liens" which is provided in said sections seems to provide in detail for the foreclosure of liens against real property for unpaid taxes, but appears to us to be wholly incompatible with an attempt to foreclose any liens upon personal property.

In this connection, it might be noted that while the validity of the Alaska Property Tax Act was upheld by this court in Hess v. Mullaney, 9 Cir., 1954, 213 F.2d 635, 640, the Court there said that the Act was "not only unique but wanting in evidence of good legislative workmanship."

As an illustration of the unworkability of the method provided for the collection of taxes upon personal property, it might be noted that in § 22-2-8 it is provided that on August first of each year there shall be filed "in the office of the Clerk of the division of the District Court in which the property subject to such liens is situated, a list of all parcels of property affected by unpaid liens, which on such date have been unpaid for a period of at least four years or more after the date the penalties and other legal charges represented thereby became due and payable. Such parcels shall be numbered serially."

The inadequacy of such a remedy for the collection of taxes on personal property is plain to be seen. Could all individual pieces of personal property be listed? Whether the property had been moved during the four-year period, whether it was still in existence after that time, whether it was within the Territory or out of it, or by whom it was owned, are all questions which readily present themselves. No provisions for these contingencies are found in § 22-2-8 et seq.

The method, however, provided in the above-mentioned sections of the Alaska Compiled Laws appears to be detailed and entirely adequate for the foreclosure of liens upon real property.

It is apparent that the adequacy of the statutory remedy is, in large measure, dependent upon whether the collection of real or personal property taxes is being sought.

Section 5 of the Alaska Property Tax Act simply provides that the tax levied under Section 3 "shall be assessed, collected and enforced as provided in this Act."

There was no allegation in any of the complaints filed by appellant segregating the amount claimed for taxes due upon real property from the amount claimed for taxes due upon personal property. The complaints contained a typical general allegation, as follows:

"That the said defendant between the years 1949 and 1952, inclusive, had certain taxable real and personal property within the Territory of Alaska. * * *

"That by reason of the fact that this property was in the Territory of Alaska during the years 1949 through and including 1952, defendant owes plaintiff * * * the sum of $31,712.67 plus interest, the same being property taxes due the plaintiff under the provisions of Chapter 10, S.L.A. 1949."

There are many conflicting rules in the various jurisdictions concerning the method of collecting taxes levied on real and personal property.

At the outset it must be remembered that it has generally been held that at common law a tax is not a debt, and therefore no personal action would lie for its collection.²

However, in some jurisdictions, a personal action may be brought for the collection of real property and personal property taxes. Alabama: see Wiggins Estate Co. v. Jeffery, 1944, 246 Ala. 183, 19 So.2d 769, but cf. Throckmorton v. City of Tuscumbia, 1945, 247 Ala. 209, 23 So.2d 547. Connecticut: see Worobey v. Sibieth, 1949, 136 Conn. 352, 71 A.2d 80. Indiana: see Prudential Casualty Co. v. State, 1924, 194 Ind. 542, 143 N.E. 631; Schofield v. Green, 1944, 115 Ind.App. 160, 56 N.E.2d 506. Kentucky: see Commonwealth ex rel. Martin v. Stone, 1939, 279 Ky. 243, 130 S.W.2d 750. Mississippi: see State v. Rogers, 1949, 206 Miss. 643, 39 So.2d 533. Missouri: see Jasper Land & Improvement Co. v. Kansas City, 1922, 293 Mo. 674, 239 S.W. 864. Pennsylvania: see Pennsylvania Co., for Insurances on Lives and Granting Annuities v. Bergson, 1932, 307 Pa. 44, 159 A. 32; Litmans v. O'Donnell, 1953, 173 Pa.Super. 570, 98 A.2d 462. Virginia: see City of Richmond v. Monument Avenue Development Corp., 1945, 184 Va. 152, 34 S.E.2d 223.³

Some jurisdictions have experienced less difficulty in holding that such actions lie for the collection of personal property taxes than for the collection of real property taxes. City of Salem v. Marion County, 1943, 171 Or. 254, 137 P.2d 977; People ex rel. McDonough v. Chicago, M., St. P. & P. R. Co., 1933, 354 Ill. 438, 188 N.E. 404, at page 406:

"A delinquent personal property tax differs from a delinquent real estate tax. There is no personal liability for a delinquent real estate tax, but there is a direct personal liability for a personal property tax properly levied and extended. A personal property tax can be collected by the usual collector\'s

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