Weston Investment Co. v. State

GIBSON, C. J. After payment of the sum claimed due for delinquent taxes, plaintiff sued to recover the amount charged as redemption penalties, which was paid under protest. Defendants’ demurrer to the complaint was overruled, and no answer having been filed, judgment was entered for plaintiff. Defendants county and city have appealed.

Plaintiff was the owner of real property on March 2, 1942, when the taxes for the fiscal year became a lien. On October 26, 1942, the United States instituted condemnation proceedings against the property, and thereafter on March 19, 1943, filed a, “declaration of taking” and deposited $252,800 with the court as estimated compensation, which had the effect of vesting title in the government. Under the provisions of section 258a of title 40 of the United States Code taxes which are a lien on property when a declaration of taking is filed may be ordered paid out of the estimated compensation fund. (United States v. Certain Parcels of Land in Philadelphia, 130 F.2d 782, 783; Weber v. Wells, 154 F.2d 1004, 1005; Collector of Revenue v. Ford Motor Co., 158 F.2d 354, 357.) No effort was made, however, to take advantage of section 258a until June 10,1943, when defendants filed a claim in the condemnation proceedings for installments which were a lien on March 2, 1942, and which became in default on December 5, 1942, and on April 10, 1943. The record does not disclose why an order was not obtained forthwith for the payment of this [392]claim, thus preventing the accrual of additional penalties. (See United States v. Eddings, 50 F.Supp. 926; United States v. Certain Parcels of Land, 47 F.Supp. 333-334.) Instead, the property was sold to the state on June 30,1943, under the provisions of section 3436 of the Revenue and Taxation Code for nonpayment of taxes. Thereafter, defendants filed a second claim which included redemption penalties. This claim was paid in full in July, 1945, from the fund on deposit, the amount charged as redemption penalties being paid under protest.

The sole question to be determined is whether the condemnation fund was chargeable with the amount claimed as redemption penalties.

The federal courts have uniformly held that the nature and extent of the tax liability in a condemnation proceeding such as is involved here is to be determined by the applicable state law. (Collector of Revenue v. Ford Motor Co., 158 F.2d 354, 357; Weber v. Wells, 154 F.2d 1004, 1005; United States v. Certain Parcels of Land in Philadelphia, 130 F.2d 782, 783; United States v. Five Acres, 56 F.Supp. 628 [aff’d in Richard T. Green Co. v. City of Chelsea, 149 F.2d 927]; United States v. Certain Lands, 49 F.Supp. 225; United States v. Certain Parcels of Land, 47 F.Supp. 333; United States v. 53 1/4 Acres, 46 F.Supp. 875; United States v. Certain Land in City of St. Louis, 29 F.Supp. 92.)