Gange Lumber Co. v. Henneford

I am unable to concur in either the reasoning or the result of the prevailing opinion for many reasons, but can state only a few of them.

I agree that there is a striking unanimity of authority respecting inquisitorial powers by taxing officers and tribunals, but not such as are here in question. The overwhelming weight of authority is to the contrary. However, it would be a useless waste of time and space to examine and review the authorities on the question, since the majority has followed this opinion.

I do not agree with the statement in the majority opinion that

"Essentially, the only additional power delegated to the commission by chapter 127, Laws of 1935, p. 378, Rem. 1935 Sup., § 11091 [P.C. § 6874-5a], is that of authorizing it to inspect and require the production of the taxpayer's `records, books, accounts, papers and memoranda.'"

That statement disregards the further provision of § 2:

". . . and for these purposes their records, books, accounts, papers and memoranda shall be subject to production and inspection, investigation and examination by said commission, orany employee thereof designated by said commission for such purpose, . . ."

In other words, the tax commission can send any mere clerk or office boy to inspect records, books, accounts, papers and memoranda of any taxpayer of any county, and such taxpayer is obliged to submit.

In my opinion, there has never been such an arbitrary delegation of legislative power to any administrative tribunal as has been granted by chapter 127, Laws of 1935, p. 378, Rem. 1935 Sup., § 11091 [P.C. § 6874-5a].

Tolerance or judicial approval of legislation conferring upon administrative officers or boards unlimited, arbitrary and dictatorial power against the private rights of persons easily lead, as here, to the wholly unjustified legislative attempt to empower administrative officers or boards to in turn delegate that same power to others, not officers of any kind whatever.

I wish to call the attention of the majority concurring in this opinion that not one of the cases cited and so confidently quoted as sustaining the opinion, sustains it, even remotely.

This court and all other reputable courts have always followed the principles as to the taxing power enunciated in McCulloch v.Maryland, 17 U.S. 315 (4 Wheat. 316), where the end was legitimate. The early case of In re Meador, 16 Fed. Cas. No. 9,375, p. 1294, cited in the majority opinion, bears no resemblance to the case at bar. In that case, the supervisor was authorized to and did issue a summons to Meador Brothers requiring them to appear before him, to testify under oath and to produce their books, papers, etc. That was the power granted under the old state tax commission acts of 1905 and 1907 which was always sustained.

That case has been followed by other Federal courts. It was also followed in the case of Washington Nat. Bank v. Daily,166 Ind. 631, 77 N.E. 53, an early case from Indiana cited in the majority opinion. That also was a case where a proper taxing officer had required the bank to submit the books and papers specified for inspection by the officer.

In this state, the only taxing officer of property wholly within a county is the county assessor, inasmuch as this court has held in recent cases that the state tax commission cannot assess or re-assess intracounty property. State ex rel. StateTax Commission v. Redd, 166 Wash. 132, 6 P.2d 619;Northwestern Improvement Co. v. Henneford, 184 Wash. 502, 51 P.2d 1083.

The case of In re Edge Ho Holding Corp., 256 N.Y. 374,176 N.E. 537, so extensively and confidently quoted and relied upon in the majority opinion, bears no resemblance to any feature of this case. That case involved a provision of the charter of New York City authorizing the commissioner of accounts to

". . . make such special examinations of the accounts and methods of the departments and offices of the city . . . as the said commissioner may deem for the best interest of the city, and report to the mayor and the board of aldermen the results thereof." (Italics mine.)

Although adopted as a ruling case on this question, there is not the slightest analogy between that law and chapter 127, p. 378, supra. That ordinance was one providing for inspection of public offices, similar to our law providing for inspection and accounting of all public offices. It was not a law for inspection of accounts and affairs of private taxpayers.

The case of In re Chase Nat. Bank, 155 Misc. 595,280 N.Y.S. 440, relied upon by the majority as "of special importance to us," is, as stated, by a New York court of first instance, predicated almost entirely upon the decision in In re Edge HoHolding Corp., supra.

In the last cited case, a subpoena had been issued directing the assistant comptroller of the bank to appear for examination and to produce all books, records and papers of every kind, character or description, appertaining to the receipt of rents of certain property from the time of its erection to the present day and also all copies of leases for all tenants for the same period.

We have always sustained the power of a proper taxing tribunal to compel the appearance of any taxpayer with necessary books and papers. It must, however, be a proper taxing officer or tribunal. This law goes much further than that.

Clearly, the majority opinion is at variance with the holding or principle announced in State ex rel. State Tax Commission v.Redd, supra, and Northwestern Improvement Co. v. Henneford,supra.

It was admitted by the assistant attorney general in the trial below:

"That said information, returns and reports are not sought for the purpose of placing property on a supplementary tax list which the assessor has failed to list or assess, nor to require any board of equalization to raise or lower the value of any taxable property under Remington's Revised Statutes, section 11091."

It was also admitted by the assistant attorney general:

"I admit that if plaintiff is required to prepare and submit to the State Tax Commission such return and report of said property, it will be put to substantial and irreparable loss and expense and be irreparably injured. I admit, in connection with that — I admit it will cost an appreciable amount to prepare the reports and returns that are required and if the law is declared unconstitutional and these reports are unauthorized, the loss to the plaintiff will be irreparable."

It thus conclusively appears that the action of the commission is unwarranted and arbitrary.

There is no action pending nor contemplated before the state tax commission to assess any property of respondent, and under our rules of decision it cannot be first assessed by the state tax commission.

The terms of this law authorize the invasion of the home of any citizen and disturbance in his private affairs, without authority of law, contrary to Art. I, § 7, Washington constitution and amendment IV, United States constitution.

For these and other reasons not necessary now to state, I dissent.

MILLARD, C.J., MITCHELL, and GERAGHTY, JJ., concur with HOLCOMB, J.