Court Opinion

ID: 3997981
Source: CourtListenerOpinion
Date Created: 2016-07-06 10:55:41.362919+00
Date Added: 2024-06-11T09:26:02.534839
License: Public Domain

I disagree with the majority upon two phases of the case:
I. I am of the opinion that appellant's steam heating plant and its operation are so intimately and vitally connected with its electric system that, for assessment purposes, the two utilities are to be regarded as a single unit. The properties of the two systems are under one ownership; they are jointly mortgaged to secure about sixty million dollars of outstanding bonds; a portion of the steam is produced with electricity from appellant's intercounty electric system; the managerial, *Page 436 
executive, and accounting personnel perform the necessary services for both systems indiscriminately. In other words, the ownership, the activities, the sources of income, and the expense of operation of the two systems are unified. The mere fact that the steam heating plant itself is located wholly within King county and supplies steam to the business section of the city of Seattle only, is of minor importance when it is considered that appellant is engaged generally in the sole business of producing and distributing heat, light, and power in whatever form, over an area much larger than King county alone.
In valuing each county's proportion of an intercounty public service company's operating property, it is necessary to fix the value of the entire system. Northern Pac. R. Co. v. State,84 Wn. 510, 147 P. 45, Ann. Cas. 1916E, 1166. One of the favorite and most reliable criteria for determining the value of public service companies is known as the stock and bond method. That method is accurately described by Judge J. Stanley Webster in the case of Northern Pac. R. Co. v. Adams County, 1 F. Supp. 163,172, as follows:
"The authorities recognize as a relevant and highly important factor the value of the corporation's outstanding stock and bonds — the so-called `stock and bond' method. Under this plan, the average market quotations of the stock and bonds over a more or less arbitrarily fixed period of time is found, and this figure is multiplied by the total number of outstanding units of each class of securities. The result is supposed to reflect the value of all the stock and bonds outstanding, and consequently to evidence the value of all the corporation's property or assets. From this amount is deducted the value of the nonoperating property of the corporation, and the residue is taken as the value of its operating property — the property to be assessed. There is no dispute amongst counsel *Page 437 
that this is a proper element to be taken into account, but, if there were dispute, the authorities amply sustain it, and I shall leave it there."
In State Railroad Tax Cases, 92 U.S. 575, 605, 23 L.Ed. 663, appears the following statement:
"It is therefore obvious, that, when you have ascertained the current cash value of the whole funded debt, and the current cash value of the entire number of shares, you have, by the action of those who above all others can best estimate it, ascertained the true value of the road, all its property, its capital stock, and its franchises; for these are all represented by the value of its bonded debt and of the shares of its capital stock."
Since the value of the entire assets of a public service company functioning in several counties must be considered in order to determine the value of its operating property, the state tax commission is, in the very nature of things, the proper authority to determine the comprehensive value. Any other method would be found, as it has many times been found, to be productive of inaccuracies, inequalities, and general confusion.
Recognizing the advantages of a systematized plan for assessment and the disadvantages flowing from multiplied local assessments, the legislature in 1935 adopted a uniform method for the assessment and taxation of properties of transportation and utility companies, including electric light and power, and heating companies. Section 2 of chapter 123, Laws of 1935, p. 361, provides:
"In all matters relating to assessment and taxation the commission shall have jurisdiction to determine what is operating property and what is non-operating property."
Section 7, p. 363, of the act provides for assessment, by thetax commission, of the operating property of *Page 438 
such companies. Section 15, p. 368, of the act provides that the actual cash value of the operating property of such companies shall be apportioned by the commission to the respective counties and taxing districts wherein such property is located. Section 16, p. 370, provides that, when the state board of equalization shall have determined the equalized assessed value of the operating property of such companies, the commission shall certify such equalized assessed value to the county assessor of the respective counties, whereupon such value shall constitute the assessed valuation of the operating property in such county, upon which the taxes shall be levied and collected.
In Smith v. Northern Pac. R. Co., 7 Wn.2d 652,110 P.2d 851, we said:
"Under the authority vested in the tax commission by § 2 of the 1935 act (Rem. Rev. Stat. (Sup.) § 11156-2), that body has jurisdiction to determine what is operating property and what is non-operating property. In the absence of fraud, or of arbitrary and capricious action, its determination of such questions is controlling."
In view of the intercounty activity of appellant, I am of the opinion that the state tax commission is the proper authority to classify appellant's properties and to assess its operating property, and that the Redd case and the NorthwesternImprovement Company case, relied upon in the majority opinion, have no application here.
II. I am of the further opinion that appellant should have been allowed to recover on account of double taxes paid for the years 1936 and 1937. Although a literal interpretation of Rem. Rev. Stat., § 11315-6 (Laws of 1931, chapter 62, p. 204, § 6), quoted in the majority opinion, would bar this action in so far as it relates to those years, I am of the opinion that the *Page 439 
statute did not contemplate, and therefore does not affect, the situation presented by this case.
It is apparent, I think, from the language of Rem. Rev. Stat., § 11315-2 (Laws of 1931, chapter 62, p. 201, § 2), that the statute contemplated the usual situation where a person, deeming a tax levied against his property to be unlawful or excessive, might, nevertheless, pay the tax under protest and thereupon
sue for the recovery thereof. In such instances, the taxpayer knows, or is presumed to know, that the tax has been levied. In the case at bar, however, appellant neither knew, nor should be presumed to know, of the levy by the county assessor for the 1936 and 1937 taxes, because in the same year the identical property had been assessed by the state tax commission, and the taxes which were levied pursuant thereto had in good faith been paid. Appellant did not learn of the county assessor's former levy until 1940, at which time the literal wording of Rem. Rev. Stat., § 11315-6, would bar it from any relief whatever.
To hold that appellant was required to institute its action within the time specified by the statute would, under the circumstances of this case, have compelled it, and likewise would have enabled it, to bring the action before it had actually paid the tax, even though it had no knowledge that the tax had been levied. Certainly the legislature did not contemplate that situation, for the statute is to the contrary. Any action brought before payment of the tax would be premature. There is no contention here that there was any delay in bringing the action after the tax was actually paid.
If the language of the statute, taken literally, is nevertheless sufficient to cover the present case, then I think that it should be held to be unreasonable, unjust, and equivalent to taking property without due *Page 440 
process of law, because the taxpayer is thereby deprived of the right to a hearing in court.
For these reasons I dissent.
ROBINSON, C.J., concurs with STEINERT, J.