Opinion
October 11, 1934.
November 22, 1934.
Taxation — Real estate — Transfer of title to Federal Government — Exemption from taxation.
An announcement by the Federal Government of its intention to take real estate by condemnation does not exonerate the owner from paying taxes assessed against it, even though the announcement handicaps the owner in selling or leasing the property.
The taxable status of real estate is determined as of the time when the assessment is levied and the tax is due. If the property is transferred during a tax year to an owner in whose hands it is exempt from taxation the exemption does not commence until the next following date of assessment. The exemption is not retroactive.
Appeal No. 349, October T., 1934, by plaintiff from judgment of C.P. No. 2, Philadelphia County, March T., 1934, No. 1169, in the case of William G. Halkett Company, a Corporation v. City of Philadelphia and the School District of Philadelphia.
Before TREXLER, P.J., KELLER, CUNNINGHAM, BALDRIGE, STADTFELD, PARKER and JAMES, JJ. Affirmed.
Case stated to determine the liability of an owner of real estate for taxes. Before STERN, J.
The facts are stated in the following opinion of STERN, J.
We are not concerned in the present case with the question as to whether or not the award made to the plaintiff in the Federal Court included, or should have included, damages to the plaintiff due to the handicap on selling and leasing placed upon the owner during the pendency of the condemnation proceedings and comprising in such damages the taxes for 1932 which are the basis of the present controversy. All that the present issue involves is a determination of the question as to whether or not the City of Philadelphia was entitled to collect taxes on the property 220-222 Chestnut Street for the year 1932.
There would seem to be much reason for the opinion that the city was entitled to the taxes for that entire year, and was not bound to apportion them as of November 4, 1932, but since the city has voluntarily made such apportionment for the benefit of the plaintiff that point need not be discussed.
That the taxes due January 1, 1932 were collectible by the city is in the opinion of the court free from doubt. The law is certain to the effect that the taxable status of property is determined as of the time when the assessment is levied and the tax is due, and even if during the year the property is transferred to an owner in whose hands it is exempt, the exemption is not retroactive, but on the contrary does not commence until the next following date of assessment. There are many cases in Pennsylvania to this effect, as, for example, Philadelphia v. Pennsylvania Company for the Instruction of the Blind, 214 Pa. 138.
In the present case the facts agreed upon indicate the title to the property did not pass to the United States Government until November 4, 1932, when a formal declaration of taking was filed, the purchase money paid into court by the Government, and the Court entered a decree, vesting the title in the United States and ordering all persons in possession to vacate said land within thirty days thereafter. All the proceedings prior to that date were preliminary in nature and indeed were pursued under a different federal statute than the one under which title was finally taken.
It may well be that from the time when the secretary of the treasury first selected the site and agents of the government began negotiating with the owners for the purchase of the land, to wit, in the latter part of 1931, the plaintiff, as a practical matter, was not able to deal with his property by way of leasing or selling it as he would have been had the government's intention to take it under condemnation proceedings not been announced, and it may also be, as above stated, that that fact should have been considered (whether or not it was so considered does not appear in the case stated) as a factor of damage in making the award, but it is clear that the plaintiff was in possession of his property, either by himself or his tenants, and enjoyed the use and income from it until November 4, 1932, and it would seem impossible by any process of reasoning or any consideration of justice to escape the conclusion that the liability for local taxes therefore continued until the title to the property actually passed to the United States.
For the reasons thus stated the Court entered judgment on the agreed statement of facts in favor of the defendants, the City of Philadelphia and the School District of Philadelphia.
The court found for the defendants and entered judgment thereon. Plaintiff appealed.
Error assigned, among others, were the findings of the court.
Leo Belmont, for appellant. Mayne R. Longstreth, and with him David J. Smyth and Robert Von Moschzisker, for appellee.
Argued October 11, 1934.
The judgment is affirmed on the opinion of Judge STERN.