Whatcom County v. Fairhaven Land Co.

• Decision Date: 31 July 1893
• Citation: 34 P. 563,7 Wash. 101
• Parties: WHATCOM COUNTY v. FAIRHAVEN LAND CO.
• Court: Washington Supreme Court

34 P. 563

7 Wash. 101

WHATCOM COUNTY v. FAIRHAVEN LAND CO.

Supreme Court of Washington

July 31, 1893

Appeal from superior court. Whatcom county; John R. Winn, Judge.

Action by the county of Whatcom against the Fairhaven Land Company and certain real estate to foreclose liens for taxes. From a judgment and decree in favor of plaintiff, defendant Fairhaven Land Company appeals. Reversed and remanded.

Kerr & McCord and H. Y. Thompson, for appellant.

Thos G. Newman, for respondent.

STILES J.

This was a proceeding to foreclose liens for taxes upon a large number of separate parcels of real estate, taken under the act of 1891 to cure defective titles to real estate, and the general revenue law of the same year, (Acts, pp. 166, 280.) The taxes in controversy were those assessed for the year 1890. Upon the return of the order to show cause, the appellant made it appear that the property assessed to it was of four classes: (1) Nonassessable tide lands; (2) lands which had no existence in fact; (3) lands which were of the actual value, at the time of the assessment, of $193,451, but which were assessed at the value of $409,081; (4) lands which had been conveyed by it to third parties since the assessment. The first two classes were stricken from the roll by order of the court, and there is no issue upon them. As required by the court, appellant filed a sworn answer to the complaint of the county, and the evidence was taken before a referee. The answer set up, as a defense to the taxes claimed upon the third class of lands, that the appellant had appeared before the board of equalization, and demanded that its assessment upon this class of lands be reduced from the amount assessed to the actual value, but that no relief had been given, and no order made, in the premises; and that afterwards, when the time for payment of taxes had arrived, it appeared before the same board as the board of county commissioners, and represented the facts showing the excessive valuation and the illegality of the assessment, and that thereupon a compromise was made and a settlement had of the whole matter of appellant's taxes whereupon, and in pursuance of the agreement for a settlement, and in full payment and discharge of its taxes appellant paid to the treasurer of the county $24,892.26, and took his receipt therefor. The payment thus made was based upon the values as admitted to be correct by the appellant. Upon the hearing before the referee he found that the values of the appellant's lands of the third class were as claimed by it, but that it had failed to take advantage of the remedy provided by law in case of excessive valuation of property for taxation, and had thereby waived its right to object in this proceeding to the valuation as permitted to stand by the board of equalization; that is, it was estopped, now, to say that the values were other than those fixed by the assessor. Before the court, upon due exceptions by the appellant, the view of the referee was adopted in this particular, and the respondent had judgment; and herein lies the main issue in this case, viz. whether, under the proceeding for the collection of delinquent taxes of former years, provided for in the two acts above mentioned, appellant was thus estopped.

There was some evidence in the case tending to show that the assessor had never made a legal assessment of these lands, but had merely set down arbitrary values in his office, without examination, inquiry, or knowledge of the condition, situation, or circumstances of the subject -matter. Town lots and blocks which, by reason of their being cut up by ravines, were far less valuable than others adjoining, were assessed at the same value; lots consisting of a narrow strip of upland, and the remainder tide flat, were assessed as all upland; and property remote from desirable locations was put down at the highest value; and, as a whole, the error was made of assessing the property at more than double its actual value. An arbitrary assessment of property without the exercise of the assessor's judgment, based upon knowledge or information, is an illegal assessment, and is a fraud upon the property owner, and may always be taken advantage of by the latter in some manner. But we do not think there was evidence sufficient in the case to establish the claim of constructive fraud, and shall decide it as merely one of palpably excessive overvaluation. In such a contingency, however, the respondent raises the point that tax laws do not generally afford any relief, except by appeal to a board of equalization, and that this particular law is not an exception to that rule. The proceedings subsequent to the work of the assessor were governed by the general revenue law of 1890, (Acts, c. 18, p. 530,) and section 73 of that act prescribes the powers of boards of equalization. The old revenue law (Code 1881, § 2877, as amended in 1886) provided that boards of equalization should have very full powers. They were to hear and determine all matters concerning assessments, and might subpoena witnesses, and raise or reduce all appraisements so as to make taxation equal and uniform; and there was a section reading as follows: "Sec. 2879. During the session of the board for the equalization of taxes and the correction of the assessment roll, any person or his attorney or agent may attend and apply for the correction of any alleged error in the listing and valuation of his property, and a failure to so attend and apply shall bar said person from further recourse in law, as to the valuation, but not as to error in description or to double assessment." But we look in vain for any of these provisions in the act of 1890, (Laws 1889-90, c. 18, pp. 530-592.) Every one of the board's duties is there put into mandatory language: (1) They shall examine and compare the returns of the assessment of property (not in the county, but) of the several towns or districts, so that all property shall be entered at its true and fair value. (2) They shall raise the valuation of land which, in their opinion, is returned below its true and fair value, after two days' notice. (3) They shall reduce the valuation of land where, in their opinion, the assessment is too high, but nothing is said about an appearance or complaint by any person; it is their opinion which is to dictate the change. (4) Upon complaint they shall reduce the valuation of certain personal property. (5) But, most important of all, they shall not reduce the aggregate value of the property of their county below the aggregate value thereof as returned by the assessor, except for manifest errors in his valuation. The substance of the old section 2879 is entirely absent from this law. There is no power in the board to subpoena witnesses, and the authority to hear and determine is not expressed. The property owner is nowhere, in this law, invited to appear and make objections, if any he may have, until we reach section 105, where he is accorded the right to appear and set forth, by answer, the facts constituting his defense or objection to the tax and the penalties thereon; and by section 109 there can be no refuge in technicalities, nor any escape from the payment of a proper tax, but, if the lands "have been partially, unfairly, or unequally" assessed, the court may reduce the amount of taxes, and give judgment accordingly.

Now the answer in this case did not set up facts showing either actual or constructive fraud on the part of the assessor, and respondent claims that the pleading was therefore insufficient to justify the argument which the appellant now urges, although it did allege facts showing an unfair assessment, and the evidence demontrated both its unfairness and its inequality. But this proceeding was not taken under the act of 1890, but under that of 1891, ^[1] which provides for an order to show cause why certain land should not be sold to pay registered taxes. An answer by the taxpayer is proper enough under this law, although it is not as clearly required as under the law of 1890; but...