Washington Water Power Co. v. Kootenai County

• Decision Date: 01 February 1921
• Docket Number: 3546.
• Citation: 270 F. 369
• Parties: WASHINGTON WATER POWER CO. v. KOOTENAI COUNTY et al.
• Court: U.S. Court of Appeals — Ninth Circuit

270 F. 369

WASHINGTON WATER POWER CO. v. KOOTENAI COUNTY et al.

No. 3546.

United States Court of Appeals, Ninth Circuit.

February 1, 1921

Rehearing Denied March 9, 1921.

The Power Company, an electric power corporation, appellant, sued Kootenai county and certain of its officials for a determination of taxes due upon the property of the company for the year 1918, and that the county be required to accept the sum paid for taxes, and that all taxes in excess of 55 per cent. of the tax levied be declared void and that all penalties be declared null.

The plaintiff alleges that the Idaho state board of equalization assessed the property of the plaintiff for 1918 at $2,750,000, which was in excess of the full cash value of the property at that time; that before the assessment the company filed with the state board of equalization full reports disclosing the property, its value, income, and operating expenses; that at the meeting of the state board of equalization at which the assessment was to be made the company, by counsel, called attention to the value of its property and to an opinion of the Public Utilities Commission of Idaho which had valued the property of the company in Idaho for rate-making purposes as of December 31, 1917, which was just prior to the time when the board of equalization was charged with the duty of assessing property; that the judgment of the Public Utilities Commission showed the value of the property of the company in Idaho to be not in excess of $2,438,978. It is also alleged that plaintiff owned a distribution system in St. Maries, Idaho, which had not been valued by the Utilities Commission, and the actual value of which was $31,461; that the attention of the board of equalization was called to the fact that the assessors in Idaho, charged with the duty of assessing all property except that of public utilities, were not assessing in excess of 50 per cent. of full cash value, and that the Power Company demanded assessment upon the same basis and by the same rule that the total value of the operating property of the company in Idaho on the second Monday in January, 1918, did not exceed $2,470,430, and reproduction cost not in excess of $3,384,413. It is charged that the county assessors in Idaho and the county boards of equalization generally and intentionally assessed property at not to exceed 50 per cent of its full cash value, and that such assessments were made as the result of an understanding between assessors and the state board of equalization; that this rule prevailed in Kootenai county, but that the assessment made by the state board of equalization imposed upon the company in Kootenai county an unjust and undue burden, and the state board of equalization did not assess the property at 50 per cent. of its full cash value, but at 100 per cent. thereof and more that knowledge of the understanding that assessments should not exceed 50 per cent. of its full cash value was within the knowledge of the members of the state board of equalization, and that the defendant county, through its officers, proceeded to collect taxes upon the 100 per cent. valuation assessed by the state board of equalization on the property of the company. It is set forth that tender and refusal of 55 per cent. of the taxes assessed were had, and that the county officers issued a delinquency certificate, whereby a 6 per cent. penalty and an additional penalty of 1 per cent. per month is claimed. The answer denied the allegations of the complaint.

After hearing, the court decreed that the company owed the county a balance of $12,431.20, $23,080.84 having theretofore been paid, and that, of the sum of $12,431.20, $10,049.32 was the balance of taxes due, and $2,381.88 was penalty and interest, and that upon payment of such sum to the county, with interest from the date of decree, satisfaction of record should be entered by the county officials, and injunction should issue against the county officials from selling the property of the company on account of taxes for the year 1918, and the certificate of sale for taxes for 1918 should be canceled. Appeal from the decree was taken.

The corporation was under obligation to pay a tax in proportion to the value of its property (Const. Idaho, art. 7, Sec. 2) and all taxes levied must be uniform upon the same class of subjects within the territorial limits of the authority levying the tax (Const. art. 7, Secs. 2 and 5). The statutes which are material are as follows: By section 2471, Idaho Comp. Stat. 1919, the Public Utilities Commission of the state shall have power to ascertain the value of the property of every public utility 'and every fact which, in its judgment, may or does have any bearing on such value. ' For the purpose of ascertaining the matters specified in section 2471 concerning the value, the Commission may have a hearing at which the public utility affected shall the*** be entitled to be heard, and shall make and file its findings of fact in writing upon all matters concerning which evidence shall have been introduced, and which have bearing on the value of the property of the public utility affected. Section 2514. The findings of the Commission so made and filed shall be admissible in evidence in any action or proceeding before the Commission, or any court in which the Commission, the state, or any officers of any body politic and the public utility affected may be interested, whether arising under the provisions of the chapter of which section 2514 is part, or otherwise, and such findings shall be prima facie evidence of the facts therein stated as to the facts therein stated under conditions then existing, and such facts can only be controverted by showing a subsequent change in conditions bearing upon the facts therein determined.

By section 3097 of the revenue laws, all real and personal property subject to assessment and taxation must be assessed at its full cash value for taxation as of the second Monday in January. By section 3104 it is provided: 'By the term 'value,' 'cash value' or 'full cash value' is meant the value at which the property would be taken in payment of a just debt due from a solvent debtor, or the amount the property would sell for at a voluntary sale made in the ordinary course of business, taking into consideration its earning power when put to the same uses to which property similarly situated is applied. Section 3110 provides that in ascertaining the value of any property the assessor of the county shall not adopt a lower or different standard of value because the same is to serve as a basis of taxation; nor shall he adopt as a criterion any value or price for which the property would sell at auction or at forced sale, or in the aggregate with all the property in the taxing district; nor shall he adopt a speculative valuation, but he shall value each article or piece of property by itself and at such sum or price as he believes same to be fairly worth in money at the time such assessment is made.

The state board of equalization equalizes the assessment of property throughout the state by classes, as shown by abstracts submitted. Section 3171. In equalizing the board has power to increase the total value of any class of property in any county as shown by the abstract, when in the opinion of the board the value of that class is not just and equal as compared with the value of other classes of property in that county, or the value of property in other counties, because of its being less than the full cash value as determined by such comparisons; and the board may decrease the total value of any class of property in any county as shown by the abstracts when in the opinion of the board the value of that class appearing in such abstract is not just and equal, as compared with the value of other classes of property in that county, or the value of property in other counties, because of its being in excess of the full cash value as determined by such comparison. The board of equalization may add to or deduct from the aggregate value of all property in any county as shown by the abstract, such percentage of such aggregate values as in the opinion of the board may be necessary to establish uniformity and equality of value among the several counties in the state. Section 3172. Section 3175 provides that the valuation of all property which, according to the provisions of the chapter of which section 3175 is a part, shall be exclusively assessed for taxation by the state board of equalization and shall be equalized in relation to the valuation of other property in the state according to its full cash value. Section 3183 provides that the operating property of electric current transmission lines and the franchises of persons owning or operating as lessees electric current transmission lines, wholly or partly in Idaho, shall be assessed for taxes exclusively by the state board of equalization. The board of equalization shall ascertain and determine the full cash value of the lines in each county separately and shall determine the total value, total number of miles, and value per mile of each electric current transmission line in each county into or through which the line extends and the value per mile and number of miles of such line in any incorporated city, town, or taxing district into or through which the line extends. The value per mile of electric current transmission lines is to be determined by dividing the total value of such lines within each county by the number of miles of such line within each

county, and all operating property of such line shall be assessed as of and apportioned to the county in which the same is situated as a part of the transmission line in said county.

John P Gray and W. F. McNaughton, both of Coeur d'Alene,...