United States v. Alberts

• Decision Date: 10 May 1944
• Docket Number: G—439.,157—1,No. 128—83,128—83
• Citation: United States v. Alberts, 55 F.Supp. 217 (E.D. Wash. 1944)
• Parties: UNITED STATES v. ALBERTS et al. UNITED STATES v. HALL et al.
• Court: U.S. District Court — District of Washington

55 F. Supp. 217

UNITED STATES v. ALBERTS et al.

UNITED STATES v. HALL et al.

Nos. 128—83, 157—1, G—439.

District Court, E. D. Washington, S. D.

May 10, 1944.

Lloyd L. Wiehl, of Yakima, Wash., for petitioning defendants.

Charles Powell, of Kennewick, Wash., for Benton County.

Smith Troy, Atty. Gen., and Jess N. Rosenberg, Asst. Atty. Gen., amici curiae.

SCHWELLENBACH, District Judge.

In these two condemnation actions, contests have arisen between the landowners and Benton County concerning the right of the County to receive from the award payments of sums sufficient to compensate the County for its 1944 taxes. The Salvini land was taken by the Government by the filing of declaration of taking on November 3, 1943. The date of the taking of the Bruggeman property was February 15, 1944. These two contests have been selected with the hope that out of them a determination may be reached which will control in a multitude of other contests. The reason for the selection of two will be apparent when I reach the discussion of an important change in the Washington State tax laws, effective January 1, 1944. These matters come before the Court under the provisions of the statute, 40 U.S.C.A. § 258a, providing "The court shall have power to make such orders in respect of encumbrances, liens, rents, taxes, assessments, insurance, and other charges, if any, as shall be just and equitable." Salvini contends he is entitled to the entire amount of the award without deduction for taxes. Bruggeman contends that he is entitled to the entire award except for the deduction for taxes prorated upon the basis of the percentage which the time from January 1, 1944, to February 15, 1944, bears to the entire calendar year 1944. As to each of these defendants, the County claims its right to be paid the entire amount of the tax.

The vital question for determination is whether the taxes involved were a lien on the property at the time title vested in the United States. United States v. Certain Parcels of Land in Philadelphia, 3 Cir., 130 F.2d 782. To determine when a lien for the taxes attached, resort must be had to the laws of the state. Magruder v. Supplee, 316 U.S. 394, 396, 62 S.Ct. 1162, 86 L.Ed. 1555. There is nothing in the Federal Constitution which prevents the States from fixing the time when a tax lien attaches to real property. United States v. Alabama, 313 U.S. 274, 280, 61 S.Ct. 1011, 85 L.Ed. 1327. In Washington, real property is subject to assessment of taxation on January 1 of each year. Rem.Rev.Stats. of Washington, Sec. 11111. The Board of County Commissioners is required to levy taxes at its October session and on or before the second Monday in October to certify to the County Assessor the amount of taxes levied. Sections 11238 and 11239. Taxes are not collectible prior to the first Monday of the following February. Section 11243. Prior to January 1, 1944, the Washington statute provided, Section 11265, "The taxes assessed upon real property shall be a lien thereon from and including the first day of January in the year in which they are levied until the same are paid, but as between a grantor and grantee such lien shall not attach until the fifteenth day of February of the succeeding year." By an amendment adopted in 1943, effective January 1, 1944, Laws of Washington 1943, Chap. 34, "The taxes assessed upon real property shall be a lien thereon from and including the first day of January in the year in which they are levied until the same are paid, but as between the grantor and the grantee of any real property, and as between the vendor and the purchaser of any real property, when there is no express agreement as to payment of the taxes thereon due and payable in the calendar year of the sale or the contract to sell, the grantor or vendor shall be liable for the same proportion of such taxes as the part of the calendar year prior to the day of the sale or the contract to sell bears to the whole of such calendar year and the grantee or purchaser shall be liable for the remainder of such taxes and subsequent taxes."

The precise question involved in the Salvini case was presented to the Washington Supreme Court in 1929, in Bethany Presbyterian Church v. Seattle, 154 Wash. 529, 282 P. 922. In that case, title passed on January 16. The County asserted its right to payment of taxes out of the award. Citing American Creameries Company v. Armour & Co., 149 Wash. 690, 271 P. 896, as authority for the conclusion that title passed from the church to the city in legal effect as from grantor to grantee, the Washington Supreme Court said 154 Wash. 529, 282 P. 924: "Here was a transfer of title from the church to the city as if by deed the church had warranted the title as against existing general tax liens such as would have entitled the city to satisfy such liens out of the purchase price, but not the tax of 1928, as a lien against the land, because by the above expressed statutory provision such tax as between the grantor church and the grantee city did not become a lien upon the land until the second Monday in February, 1929, * * * when title to the land passed from the church to the city. * * * We are only deciding that the church is entitled to the whole of the eminent domain award because, at the time the city acquired title to the land by its eminent domain proceeding, the tax in question had not become a lien upon the land as between the church as grantor and the city as grantee." This ruling of the Washington Supreme Court was accepted and followed by the Circuit Court of Appeals for the Ninth Circuit in Commissioner v. Plestcheeff, 100 F.2d 62, 64, in determining the right of a devisee to deduct from income an amount of real estate taxes paid by her on property received on December 31. Relying upon and accepting the reasoning of the State Supreme Court in the Bethany Presbyterian Church case, the Circuit Court of Appeals said: "In any view, the Supreme Court of Washington did not restrict the application of the statute to controversies solely between grantors and grantees. We think it is implied in these cases that such application is not so restricted. As thus construed, we think the lien did not attach until the February after respondents acquired the property, and they are entitled to the deduction."

In the light of these two decisions, the Salvini petition must be granted.

The Bruggeman petition presents the problem in a different posture. Regardless of the statutory change, the lien had attached prior to the filing of the declaration of taking. That being true, the award stands in the place of the property. Washington Water Power Company v. United States, 9 Cir., 135 F.2d 541; Nichols on Eminent Domain, 2d Ed., p. 353; 29 C.J.S., Eminent Domain, § 200; Port of Seattle v. Yesler Estate, 83 Wash....