City & County of San Francisco v. Spring Valley Water Works

McKinstry, J.

By the revenue law of 1861 (Stats. 1861, p. 420), all property was taxable; and by its fifth section the term .“personal property” was declared to include “the capital stock of all corporations.” The sixteenth section of the Act of 1861 provided: “The owner or holder of any stock .... in any incorporated company or association, the entire capital of which is invested in property which is, assessed, or the capital of which is assessed, shall not be assessed individually for his stock in such company or association. The thirteenth section required that the assessor should list and assess all property to the person, firm, corporation, association or company “owning or having possession, charge, or control of the same.”

In People v. National Gold Bank, 51 Cal. 509, it had been found by the District Court that the capital stock of the defendant was three hundred thousand dollars, divided into shares of one hundred dollars each; that such shares were owned by persons other than defendant. It was held by the Supreme Court that the defendant could be held liable for the taxes sued for only on the theory that a corporation was liable, under the provisions of the Revenue Act of 1861, for taxes assessed upon its capital stock—that is to say, the “capital stock” regarded as the aggregate of the stock issued by the corporation. That the revenue act referred to did not provide that a corporation should be so liable, or be assessed therefor; but on the contrary, the provisions of the thirteenth section of the act required that the assessor should list and assess all property to the person, firm, corporation, or association “ owning or having the possession, charge, or control thereof.” That the provision of the thirteenth (sixteenth) section providing that the owner or holder of any stock in any corporation, the entire capital of which was assessed, or invested in property which was assessed, should not be assessed for his stock, was in effect a provision that *527when the capital was not so assessed, the stock should be assessed to the owner thereof; that the provision of the thirteenth section, that the president of a corporation should furnish a statement of all the property “ owned, claimed by, or in possession or control of the corporation,” “tended strongly to show that the corporation should be assessed only for property owned, claimed by, or in possession or control of the corpora-! tian”; that the defendant, “not being the owner of the capital stock, the same having been issued to, and being held by other persons,” was not liable for the taxes assessed upon the same,

It is urged by appellant that it would only have been necessary to decide that, under the act of Congress, the National Bank was not liable to taxation on its capital stock—citing Bank Tax Cases, 2 "Wall. 200—but that this plain and decisive fact was ignored by the counsel who argued the case, and by the court in deciding it. The report of the case shows that counsel did cite the Bank Tax Cases to the point that the legislature had not the power to levy a tax on the capital stock of national banks, not owned by the bank. People v. National Gold Bank was decided upon the letter of the revenue act of the State of 1861. The construction placed upon that act determined the case. The Act of 1861 was relied upon by counsel for the people, and the judgment of the Supreme Court was made to rest, and could properly be made to rest upon its provisions. The decision in People v. National Gold Bank is therefore an authoritative exposition of the provisions of the Revenue Act of 1861.

There were provisions of the Political Code, as the same read in the years 1876,1877, and 1878, like those in the Revenue Act of 1861, referred to in People v. National Gold Bank.

Section 3628 directed the assessor to assess all property of the persons who “ own, claim, have possession or control thereof.”

Section 3640 read: “The owner or holder of any stock in any firm or corporation, the entire capital or property whereof is assessed, must not be assessed individually for his stock in such firm or corporation.”

Section 3629 required of the assessor that he exact from each person a statement in writing of “ all property belonging to, or claimed by, or in the possession of, or under the control or *528management of any corporation of which such person is president,” etc. '

It will be observed that the present action is based upon assessments levied before the adoption of the present Constitution.

In People v. National Gold Bank it affirmatively appeared that the shares of the capital stock of the bank were all owned by persons other than the bank. When the present action was here before (54 Cal. 571) it was held that the demurrer to the complaint had been improperly sustained by the Superior Court. The complaint is a special statutory complaint, and, in such case, the rule that averments are to be taken more strongly against the pleader has no application. When the plaintiff adopts the form of the statute he states every fact necessary to a recovery. Hence it was properly said it did not appear but that the defendant did own the capital stock assessed to it. But, by the agreed statement of facts, it now appears that the defendant did not on the first Monday of March, 1877, or on the first Monday of March, 1878, or at any time during the fiscal years 1877—78, 1878—79, own, or have in its possession, or under its control, any of the shares of the capital stock of defendant, but that all the shares of capital stock of said defendant were, on such dates, and throughout such fiscal years, owned and held by persons other than the defendant. And it further appears in the agreed statement, that all the tangible real and personal property of every kind, held by or belonging to the defendant, in the city and county or elsewhere, was assessed to said defendant” for the fiscal years 1877—78 and 1878-79 for city and county and State purposes, and such assessments were fully paid.

It follows that People v. National Gold Bank, supra, is decisive of this case.

Judgment and order affirmed.

Boss, J., Myricic, J., Sharpstein, J., and McKee, J., concurred.