Court Opinion

ID: 9451146
Source: CourtListenerOpinion
Date Created: 2023-08-04 17:07:55.702584+00
Date Added: 2024-06-11T17:32:35.360172
License: Public Domain

WASHINGTON, Circuit Judge
(dissenting) :
I cannot agree with the majority opinion or with the views stated in the separate comments of Judge Bazelon. These violate in my judgment two statutes enacted by Congress, Sections 16-628 1 and *69047-801a(a) 2 of the District of Columbia Code, and patently have their basis in the view, frequently expressed, that the United States equitably should pay realty taxes on the property owned by it in the District. While I have sympathy with that view, I cannot join in a holding that the United States can be made to pay its apportioned share of the taxes assessed against the condemned property for the year in which the condemnation occurred. To do so is to disregard the congressional mandate expressed in the two statutes.
1. On the dates of the talcing in these cases the United States deposited with the court the estimated “just compensation for the land taken,” pursuant to Section 16-628 of the D. C. Code. This statute does not provide that the United States shall pay anything other than just compensation for the land taken, i. e., “the value of the property as of the date of taking,” plus 6% interest from the date of taking to the date of payment. The majority says that the cases must be remanded to the District Court so that the former owners of the property, if that course is still open to them, may prove the amount of the damage suffered by having to pay the realty tax attributable to the portion of the taxable year during which the property was owned by the tax-exempt United States. If such a hearing has not been foreclosed and can still be held, I have no doubt that the court or a jury would find that the former owner is damaged by having to pay such part of the assessed taxes, but I fail to see how the District Court could order the United States, in the face of Section 47-801a(a) of the D. C. Code, to reimburse the former owner for such tax payment. Even if the order were cast in terms of “damage” rather than taxes, the United States is not required by Section 16-628 to pay “damage” of this nature.3 See cases cited in footnote 4. In this connection the United States has filed with us a memorandum, disclaiming any legal concern in the way the fund now deposited with the District Court is distributed, but firmly stating, supported by ample authority,4 that outstanding taxes or liens *691do not enlarge the liability of the United States to pay anything above the value of the property. In view of the position taken by the United States in this case, I think the solution proposed in the majority opinion will be no solution at all, since in my view the position of the United States would have to be sustained. Unless the majority is willing now to declare, contrary to the statute and without citation of any legal authority, that the United States would be liable to pay to the former property owners as damage its apportioned share of the District realty tax, in addition to the fair value of the property, and that collection of the “damage” from the United States can be enforced, the remand would only waste time and in the end accomplish nothing.
2. Recognizing this problem, Judge Bazelon purports to find that Congress has implicitly consented that the United States be required to pay its apportioned share of the District realty tax during the tax year in which it takes property in the District. I cannot agree in view of the complete exemption from taxation given to “property belonging to the United States” in Section 47-801a(a). The property involved here belonged to the United States from the date of the filing of the declaration of its taking and the deposit with the lower court of the estimated just compensation for it, since it acquired title and possession on th^t day. Had Congress intended to consent that the United States be liable for an apportioned share of the taxes assessed by the District for the year in which the condemnation occurs, it would have been simple to have provided so plainly. Congress did not do so but instead left the complete exemption of the United States untouched.
It is said that implicit consent to taxation in the year of the condemnation is to be found because the congressional policy favoring certainty of tax revenues in the District would be undermined significantly were consent not implied. We are not advised as to whether the undermining would be in a significant amount over-all, but Federal consent is hardly to be implied for such a reason and no authority is cited for so holding. Although Judge Bazelon states that “Courts have found Federal consent to State property taxes during the year of Federal purchase where the State had imposed a tax lien prior to the purchase,” the cases cited in footnote 2 of his opinion do not support the statement.5
3. Giving recognition to the fact that the United States has by statute been exempted from the payment to the District of Columbia of any realty tax on property owned by it in the District,6 the *692District Court in my view had the power under Section 16-628 of the Code to enter the order awarding to the District only that part of the realty taxes assessed for the whole fiscal year as is applicable to the period during which the taxable former owners held the property.7 It was specifically empowered by this section to make “just and equitable” orders in respect of taxes, and I think that the one on appeal was such an order.
Section 16-628 is concerned solely with condemnation by the United States of land in the District of Columbia, and when it speaks of “taxes” it must include taxes levied with respect to the condemned land by the District of Columbia.8 The most obvious occasion on which the District Court might be called upon to enter a “just and equitable” order with respect to such taxes is the situation presented here. Congress then must have had this situation in mind and have intended to empower the District Court to prorate realty taxes equitably as between the former owner and the United States— the two parties essentially involved in a condemnation suit falling under this section — at least where no lien has attached to the realty in respect of the tax, as I think is true here. See infra. Insofar as realty taxes go, the provision could have little other function.
The majority cites Collector of Revenue Within and for the City of St. Louis, Mo. v. Ford Motor Co., 158 F.2d 354 (8th Cir. 1946), as authority for its holding that the District Court was not authorized to prorate the realty tax for the entire year. That case was decided under 40 U.S.C. § 258a, enacted in 1931, which, like the previously enacted Section 16-628 of the District of Columbia Code, empowers the District Courts in other circuits to make jnst and equitable orders in respect of liens and taxes on real property condemned by the United States within their jurisdictions. There it was conceded that a lien for the St. Louis city taxes had attached to the condemned property prior to the taking of title and possession by the United States, and the holding was that the lien had been transferred to the fund deposited with the court upon the taking of the property and that in that situation the District Court was not empowered to reduce the amount of the lien on the fund.9
The majority opinion includes a quotation from the Ford Motor case stating that the statute there involved does not purport to empower a Federal court to fix the amount of taxes due to a state. This of course is a necessary conclusion on constitutional grounds but hardly pertinent to the decision under the facts there, and the court there continued with *693the statement that the statute “does not empower the court to invalidate in part a valid entire tax lien,” citing United States v. Certain Parcels of Land in Philadephia, supra. In any case, the majority’s quotation is not consistent with the views of other Federal appellate courts which have recognized under that statute that realty taxes, which have not become a lien under local law prior to the condemnation by the United States, may be apportioned.10 As will appear infra, the real estate tax in issue here had not become payable and no lien for the tax had attached to the condemned property prior to the date the United States took title and possession.
Moreover, in the Ford Motor case, not only had a lien attached to the property prior to the taking, but the state statute provided that the person owning or holding the realty on the assessment date is liable for the taxes thereon for the entire year. There is no such provision in the District statutes. Although property is to be assessed in the name of the owner (D. C. Code § 47-701 (1961)) and the owner is to be notified, subsequent to July 1 of the tax year, of the amount of the assessment and the dates for payment (D. C. Code § 47-1001a), this court long ago pointed out that the assessment does not create a personal liability, but only a charge upon the land. Tumulty v. District of Columbia, 69 App.D.C. 390, 395, 102 F.2d 254, 259 (1939). Furthermore, it is a customary practice here to prorate the assessed taxes on the basis of the pro rata part of the year owned, if the property changes hands during the tax year, and Congress had, prior to the condemnation statute concerning us, worked this practice into the statutory scheme in at least two comparable instances. See §§ 47-409, enacted in 1925, and 47-715, enacted in 1921.11 I think it clear that Congress was familiar with the general custom of apportioning taxes in the District; and that it must have intended that the power given in Section 16-628 to make just and equitable orders in respect of taxes is to include the power to prorate realty taxes equitably, at least to the extent they have not become a lien.
Finally, it is very significant that the statute under which the Ford Motor and similar cases were decided, insofar as liens for state or local taxes which have attached before the condemnation are concerned, involves a conflict between the powers of the Federal and state govern*694ments.12 In deciding those cases, the courts were undoubtedly influenced by that consideration. But our statute does not present this conflict between Federal and states’ rights. The District of Columbia is a Federal district. Congress is the legislative body which provides for the assessment and collection of District taxes and which enacted the condemnation statute in question in this case. Where Congress in this situation has given the District Court the power to make equitable orders with respect to taxes, I believe for reasons already given that — at least in the absence of a lien— that power includes the right, if not the duty, to require the condemnee to pay only the District realty taxes which are due for the part of the year during which he held the property. If the District revenue suffers to any alarming extent under such a rule, the remedy lies with Congress.
4. Although the real estate tax for the fiscal year beginning July 1, 1963, was assessed as of that date, it was not payable until later — one-half during September, 1963, and one-half in March, 1964. D.C.Code § 47-1209 (1961). We held in Cobb v. United States, 84 U.S.App.D.C. 228, 229, 172 F.2d 277, 278 (1949), that the lien for real estate taxes in the District “ ‘does not arise prior to the. occurrence of a delinquency' ” in payment. Our decision in Cobb rested on the holding in Commissioner of Internal Revenue v. Rust’s Estate, 116 F.2d 636, 638 (4th Cir. 1940), where the statutory provisions were thoroughly reviewed, and we quoted with approval the conclusion there reached. These decisions in my view are controlling, and are clearly correct.
“A lien for taxes on real estate is a creature of statute, and attaches only when the legislature prescribes.” Commissioner of Internal Revenue v. Rust’s Estate, supra at 638. The instant case must be judged in the light of this precept, which so far as I am aware has never been disputed and cannot be here, where the realty tax itself is dependent entirely on the statutory provisions. It is not open to this court to ignore the statutory lien provisions and to say, as the majority opinion does, that whether the statutory provisions relating to assessment of the realty tax add up to the existence of a lien “in the traditional sense, and for all purposes, we do not think it necessary to decide.” I find in the opinion no satisfactory reason for such a view, particularly since reliance is placed on the Ford Motor case, which indisputably turned on the fact that the state lien had attached prior to the taking by the United States. Moreover, I think it is necessary that there be a fixed rule as to when the District tax lien arises and takes effect, on which other persons may rely before they deal with the record owner. And I do not think that it is open to this court to suggest, in the face of the Cobb and Rust decisions and the statutes which I will next review, that the lien may arise before there is a delinquency in payment of the real estate taxes. Such a result would require specific legislative provision therefor.
The District of Columbia Code does not provide that real estate taxes generally shall be a lien as of any specified date on the real property on which they are assessed. The only references in the Code to a lien for such taxes are those in Sections 47-1003 and 47-1011. Section 47-1003, enacted in 1898, relates to the further procedure following a tax sale with respect to real estate taxes “levied and in arrears” (see Section 47-1001), and contains a proviso that failure on the part of the District “to enforce the liens acquired aforesaid shall not release the property from any tax whatsoever that may be due the District.” The reference to “liens acquired aforesaid” is ambiguous since there is no prior reference to the acquisition of a lien, but in the context it must relate to liens with respect to real estate taxes “levied and in arrears.” Section 47-1011, enacted in 1936, relates to en*695forcement of the lien for real estate taxes and in terms applies only to property not redeemed within two years after the District bid it in on a “sale for nonpayment of taxes or assessments of any kind whatsoever.” Neither Section 47-1003 nor Section 47-1011 fixes or suggests, as the effective date of the lien, any date prior to a delinquency in payment of an assessed tax.13 To be sure, neither section says in so many words that the lien does not arise before a delinquency in payment : but that is the only reasonable inference from the statutory terms, as we concluded in the Cobb case. And it is of some significance that Congress later provided with respect to the lien for personal property taxes,14 and for all other taxes,15 that the lien does not arise until after the date of payment arrives, until after the tax has not been paid within 10 days after notice and demand for payment, and until the collector of taxes has filed a certificate of nonpayment with the District Court. The legislative plan seems clear that the District shall have no tax lien of any kind until after there has been a failure to pay on the due date (or within 10 days after notice and demand for payment) and, in the case of all taxes except perhaps realty taxes, until after a notice or certificate of delinquency has been put on record in the District Court.
I would hold that the District had no lien on the real estate here when the United States took title and possession and that, whether or not the doctrine of Collector of Revenue within and for the City of St. Louis, Mo. v. Ford Motor Co., swpra, as to the apportionment of a state’s lien for real estate taxes would be pertinent with respect to the different statute involved here, that case has no application in our case because there was no lien when the United States acquired the realty.
5. In closing I note that in footnote 8 of the majority opinion, the majority has made a satisfactory resolution of the penalty and interest question there dealt with. I concur in this disposition.

. This reads;
“The real property exempt from taxation in the District of Columbia shall be the following and none other: “(a) Property belonging to the United States of America. # s}j sj; >j; s-t if

. In general, the value required to be paid by the United States is determined by the fair market value, absent special circumstances justifying another approach to ascex-tain the property’s value. See United States v. Miller, 317 U.S. 369, 373-374, 63 S.Ct. 276, 87 L.Ed. 336 (1943); United States v. Virginia Electric & Power Co., 365 U.S. 624, 633, 81 S.Ct. 784, 5 L.Ed.2d 838 (1961), and cases there collected. No authority is cited by the majority which would justify imposing an obligation on the United States to reimburse the former owner of the property for taxes, or damage suffered by having to pay taxes, not equitably owed.

. United States v. 25.936 Acres of Land, 153 F.2d 277 (3d Cir. 1946); Washington Water Power Co. v. United States, 135 F.2d 541, 543 (9th Cir.), cert. denied, 320 U.S. 747, 64 S.Ct. 50, 88 L.Ed. 444 (1943); United States v. 150.29 Acres of Land, 135 F.2d 878 (7th Cir. 1943); Cobo v. United States, 94 F.2d 351, 353 (6th Cir. 1938); cf. Cohen v. Wasserman, 238 F.2d 683, 687 (1st Cir. 1956.)

. United States v. State of Alabama, 313 U.S. 274, 61 S.Ct. 1011, 85 L.Ed. 1327 (1941), held that where the State had imposed a lien for taxes prior to the purchase by the United States, the lien could not be enforced against the United States without its consent (p. 281), and that proceedings in which the State undertook to hold tax sales of the property and to issue certificates of purchase of the property to itself were void (pp. 282-283). The United States was held, however, not to be entitled affirmatively to have the liens removed as clouds upon its title. United States v. Davidson, 139 F.2d 908 (5th Cir. 1943), is similar, the court holding that the State of Texas could not foreclose a tax lien imposed before the United States acquired the property without statutory consent by the United States, but that the United States was not entitled affirmatively to an injunction against collection. Collector of Revenue Within and for the City of St. Louis, Mo. v. Ford Motor Co., 158 F.2d 354 (8th Cir. 1946), was a case where the entire State tax lien was held payable from the fund paid into court by the United States as compensation for the land taken. The condemnee thus was required to pay the whole amount of the lien from the compensation it received, even though it owned and occupied the property for less than a year. See further infra. Moses Lake Homes, Inc. v. Grant County, 276 F.2d 836 (9th Cir. 1960), was concerned with a specific section (§ 511) of the Housing Act of 1956; whatever was there said related to the language contained in that statute.

. Since Congress created the statutory exemption from taxation, it is not to be supposed, as the majority appears to do, that in Section 16-628 it intended to em*692power the District Court to make equitable orders which would take away the statutory exemption.

. The Committee Reports shed no light on the intention of Congress with respect to the authority to make just and equitable orders regarding taxes and liens. H.Rep.No. 1693, 70th Cong., 1st Sess. (1928); S.Rep.No. 1431, 70th Cong., 2d Sess. (1929). And there was no debate on the floor which illuminates the matter. See 69 Cong.Rec. 10745-49 (70th Cong., 1st Sess.); 70 Cong.Rec. 3944 (70th Cong., 2d Sess.).

. I can conceive of no taxes on the condemned real estate which might exist, other than those levied in the name of the District. No state has the power to, and the United States does not, levy real property taxes, as such, on -realty located in the District of Columbia. However, the United States or a state might acquire a lien on District realty in some other manner.

. To the same effect are Cobo v. United States, 94 F.2d 351 (6th Cir. 1938); United States v. Certain Parcels of Land in Philadelphia, 130 F.2d 782 (3d Cir. 1942); United States v. 150.29 Acres of Land, 135 F.2d 878 (7th Cir. 1943); People of Puerto Rico v. Palo Seco Fruit Co., 136 F.2d 886 (1st Cir. 1943). Cf. also United States v. State of Alabama, 313 U.S. 274, 61 S.Ct. 1011, 85 L.Ed. 1327 (1941); City of Long Beach v. Aistrup, 164 Cal.App.2d 41, 330 P.2d 282 (1958); People v. Northcutt, 171 Cal.App.2d 620, 340 P.2d 1043 (1959); Petition of Suffolk County, 14 Misc.2d 1008, 183 N.Y.S.2d 836 (Suffolk County Ct. 1958); State v. Clyne, 175 Cal.App.2d 204, 345 P.2d 474 (1959).

. See United States v. Certain Parcels of Land in Philadelphia, 130 F.2d at 783-784. stating:
“The correct test as to whether there can be apportionment, we think, is whether the tax was a lien on the property at the time title vested in the government. In this case, it is admitted that taxes for the entire year 1941 were assessed on January 1, 1941. They were, by express terms of the statute, liens on the property from that date forth. This rule would seem to settle the question of apportionment in the negative.” (Footnotes omitted.)
See also People of Puerto Rico v. United States, 131 F.2d 151, 151-152 (1st Cir. 1942), cert. denied, 318 U.S. 775, 63 S. Ct. 832, 87 L.Bd. 1144 (1943), as follows:
“By force of the statuté, 40 U.S.C.A. § 258a, the money deposited in court by the United States Government at the time when it takes title under condemnation proceedings stands in the place of the land which has been taken and from it the claims of lienholders may be satisfied. This applies to taw liens as well as to liens of other kinds hut only to existing liens, not to potential ones.” (Emphasis supplied.)
And see United States v. 25.936 Acres of Land, 153 F.2d 277 (3d Oir. 1946), and cases collected in 45 A.L.R.2d 557.

. Section 47-409 provides in eifect that, when the United States sells real property in the District, the property “shall be liable to taxation by the District from the day of sale.” Section 47-715 deals with tracts of land not subdivided when taxes or assessments are levied or due, and provides that upon application therefor, such taxes or assessments levied or due against the entire tract “shall be redistributed so that the owner of * * * [a parcel of the tract] may pay the proportion of such entire taxes or assessments equitably chargeable thereon.”

. Indeed, the majority recognizes this and relies on a quotation from the Ford Motor case which points up the conflict.

. Clearly the tax could not be “in arrears” and there could be no sale for nonpayment of the tax or assessment until after the dates fixed for payment and until after the taxes assessed had not been paid at those times. This means there could be no arrearage and no sale for nonpayment prior to October 1 as to one-half of the assessed tax and prior to April 1 as to the other half of the tax. And it is only after nonpayment of one-half of the assessment during the month fixed for payment of that half that the Commissioners may under Section 47-1011 petition the District Court to enforce the lien.

. Section 47-1406, enacted in 1937, reads:
“In case of the neglect or refusal of any person to pay a personal-property tax within ten days after notice and demand, the collector of taxes, or the person designated by him, may file a certificate of such delinquent personal tax with the clerk of the United States District Court for the District of Columbia, which certificate from the date of its filing shall have the force and effeet, as against the delinquent person named in such certificate, of the lien created by a judgment granted by said court, which lien shall remain in force and effect until the taxes set forth in said certificate, with interest and penalties thereon, shall be paid and said lien may be enforced by a bill in equity filed in said court.”

. Section 47-312, enacted in 1954 reads: “In addition to any other methods or devices or both provided by law or regulation for the collection of various taxes (except real property taxes) due the District, any tax imposed by any law applicable to District taxes, and penalties and interest thereon, when such tax has become due and payable, may be collected in the manner provided by law for the collection of taxes due the District on personal property in force at the time of such collection; and liens for all such taxes, penalties, and interest may be acquired in the same manner that liens for personal property taxes are acquired.”