ON REHEARING. [En Banc. May 6, 1930.] In this case, since the opinion was filed, a petition has been presented by the water service company and the other parties on that side of the controversy similarly situated, in which we are asked to do two things: First, direct the superior court to strike from the judgment of condemnation and award a certain provision; and second, determine the manner in which the money shall be paid into court as related to the taxes which are to be deducted therefrom.
[14] Taking these questions up in the order stated, it appears that there is an inconsistency between the judgment and the opinion in one particular. In the judgment it is recited:
"That this judgment shall draw interest from August 27, 1929, against which interest shall be credited the net revenues from the operation of said *Page 697 water works system, up to and not exceeding the amount of said interest from said date August 27, 1929, up to the date of taking possession of said water works system by city of Hoquiam."
In the opinion, it is said:
"The property owner is entitled to interest from the date of the award and to the income of the property up to the time that the amount of the award is paid to the property owner or into court in the manner provided by statute for his benefit."
The trial court is directed to strike from the judgment that portion of the paragraph above quoted which is inconsistent with what is said in the quoted portion of the opinion.
[15] Upon the second question, two things are to be determined: (a) The manner in which the money is to be paid in, as related to taxes; and (b) what taxes are to be deducted.
Section 9229, Rem. Comp. Stat., provides:
"Such city or town may offset against any award of the jury or court for the taking or damaging of any lot, block, tract or parcel of land or other property, any general taxes or local assessments unpaid at the time such award is made. Such offset shall be made by deducting the amount of such unpaid taxes and assessments at the time of payment of the judgment or issuance of a warrant in payment of such judgment."
Under this section, the city is not authorized to pay into court the entire amount of the award and make it subject to a lien for the taxes which may be deducted, thus putting the burden of determining the amount of the taxes on the opposite party. It is the duty of the city to determine the amount of the taxes which may be deducted, pay the same and furnish evidence thereof, or pay the amount of the taxes into court subject to a lien therefor and then pay the balance into court without any limitation or restriction. *Page 698 [16] The question of what taxes may be deducted when the money is paid into court upon a condemnation award was fully considered in the recent case of Bethany Presbyterian Church v.Seattle, 154 Wash. 529, 282 P. 922, and it was there said:
"When did title to the land pass from the church to the city as the result of the eminent domain proceeding? In Rem. Comp. Stat., § 9231, relating to eminent domain proceedings by cities, we read:
"`The court, upon proof that just compensation so found by the jury, or by the court in case the jury is waived, together with costs, has been paid to the person entitled thereto, or has been paid into court as directed by the court, shall enter an order that the city or town shall have the right at any time thereafter to take possession of or damage the property in respect to which such compensation shall have been so paid or paid into court as aforesaid, and thereupon, the title to any property so taken shall be vested in fee simple in such city or town.'
"The record before us does not show when the formal order, as contemplated by that section, was entered by the superior court. We are warranted in assuming that it was entered simultaneously with the making of the payment of the award by the city to the church, that is, on January 16, 1929. In Port of Seattle v.Yesler Estate, 83 Wash. 166, 145 P. 209, we held that, under that section, then known as Rem. Bal. Code, § 7784 (Rem. 1927 Sup., § 11097-104), title passed to the Port of Seattle at the time it paid the award, it there exercising its eminent domain right as the city exercised it in this eminent domain proceeding under the same statute. Our later decisions in State ex rel.Struntz v. Spokane County, 85 Wash. 187, 147 P. 879 and Stateex rel. Moore v. Superior Court, 100 Wash. 481, are in harmony with that holding. We conclude that title to the land passed from the church to the city on January 16, 1929.
"When did the taxes for the year 1928 become a lien upon the land as between the church and the city, viewing them as grantor and grantee? In chapter 130, *Page 699 Laws of 1925, Ex. Ses., p. 293 (Rem. 1927 Sup. § 11087-104), relating to assessment, levy, collection and lien of general taxes, we read:
"`Sec. 104. The taxes assessed upon real property shall be a lien thereon from and including the first day of March in the year in which they are levied until the same are paid, but as between a grantor and grantee such lien shall not attach until the first Monday in February of the succeeding year.'
"This quotation is a reenacted provision of our previously existing statutes. Thus, it becomes plain that, viewing the church and the city as grantor and grantee, title to the land passed from the church to the city on January 16, 1929, without any obligation on the part of the church to the city to assume or pay the taxes levied upon the land for the year 1928.
"Does the law regard the church and the city as conventional grantor and grantee, as if a voluntary conveyance had been made by the church to the city instead of title to the land passing by virtue of the eminent domain proceeding and payment of the award as therein adjudicated? Our recent decision in AmericanCreameries Co. v. Armour Co., 149 Wash. 690, 271 P. 896, and the authorities therein noticed, we think, are decisive in favor of the church upon this question; that is that the title passed from the church to the city, in legal effect, as from grantor to grantee. Our decision in Port of Seattle v. Yesler Estate,83 Wash. 166, 145 P. 209, is in harmony with and lends support to this view. Here was a transfer of title from the church to the city as if by deed the church had warranted the title as against existing general tax liens such as would have entitled the city to satisfy such liens out of the purchase price, but not the tax of 1928, as a lien against the land, because, by the above express statutory provision, such tax, as between the grantor church and the grantee city, did not become a lien upon the land until the second Monday in February, 1929, four weeks after January 16, 1929, when the title to the land passed from the church to the city. In justice to the trial judge, we observe that our recent decision in American Creameries Co. v. Armour Co., supra, was decided but a short time prior to the entry *Page 700 of the order here appealed from, and manifestly was not called to the attention of the trial judge.
"Did the judgment in the eminent domain proceeding rendered July 5, 1928, award to the county, for the 1928 taxes, any portion of the $9,427.50 awarded for the taking of the land? There is nothing in the record before us so indicating. Indeed, so far as the record here advises us, it does not appear that the county was a party to the eminent domain proceeding in the superior court, or that it asserted any right to any portion of the award until it joined with the city in asking payment to it of the $343.63 in the hands of the clerk of the court. We cannot presume that the judgment award rendered July 5, 1928, adjudicated the right in the county to participate in the award to the extent of the amount of the general taxes against the land for the year 1928, to become payable more than six months thereafter, on the first Monday in February, 1929. Indeed, we think it would have been error, prejudicial to the rights of the church, to have so adjudicated in the judgment making the award, for, as we have seen, the church had the right to an award for the city's taking of the land, undiminished by the taxes of 1928, which, as between it as grantor and the city as grantee, would not become a lien upon the land until more than six months thereafter, on the second Monday of February, 1929.
"There is another matter which seems worthy of some note in our present inquiry, though but briefly mentioned in the arguments of counsel. In Rem. Comp. Stat., § 9229, we read:
"`Such city or town may offset against any award of the jury or court for the taking or damaging of any lot, block, tract or parcel of land or other property, any general taxes or local assessments unpaid at the time such award is made. Such offset shall be made by deducting the amount of such unpaid taxes and assessments at the time of payment of the judgment or issuance of a warrant in payment of such judgment.'
"This was enacted by chapter 210, Laws of 1909, p. 723, as part of an amendment to our statute providing for the exercise of the right of eminent domain by cities. Reading this provision in connection with *Page 701 the above quoted language of § 104, chapter 130, Laws of 1925, Ex. Ses., p. 293, we think it does not mean that a city acquiring land by an eminent domain proceeding shall have the right to offset and deduct from the eminent domain award the amount of general taxes against the land maturing and payable on the second Monday of February next following the city's acquiring title thereto by such eminent domain proceeding; since, as we have seen, such tax does not, as between the grantor and grantee, become a lien upon the land until such date. Such is the nature of the tax here in question, and therefore it did not become a lien upon the land as between the church as grantor and the city as grantee until after the passing of the title from the church to the city on January 16, 1929.
"We deem it proper to here make it plain that we do not express any opinion as to whether or not the county has the right of payment of the 1928 taxes against this land, either as a claim against the city or as an enforceable lien against the land in the hands of the city. We are only deciding that the church is entitled to the whole of the eminent domain award, because, at the time the city acquired title to the land by its eminent domain proceeding, the tax in question had not become a lien upon the land as between the church as grantor and the city as grantee."
In the case now before us, the city, in its answer to the petition, contends that the 1929 taxes, since they have become a lien upon the property, should be deducted, as well as the 1928 taxes. Under the doctrine of the case cited, this contention must be sustained. The city of Hoquiam has not yet paid the money into court, the title to the property has not passed, and, under § 104, ch. 130, Laws of 1925, Ex. Ses., p. 293 (Rem. 1927 Sup., § 11097-104), the 1929 taxes, as between a grantor and grantee, became a lien upon the property on the first Monday in February, 1930, and are therefore subject to be deducted from the award.
The petition, except as otherwise herein indicated, will be denied. *Page 702