160 P. 225 | Cal. | 1916
Plaintiff brought this action to recover taxes paid under protest, and recovered judgment for $7,479.68. The defendant appeals from the judgment, which was rendered on the pleadings.
The plaintiff is a banking corporation organized under the National Banking Act of the United States. It has a capital stock of eighty-five thousand shares, of the par value of one hundred dollars each. In the year 1911, the state board of equalization assessed these eighty-five thousand shares at the sum of $15,531,588 and assessed and levied a tax of one per centum thereon.
During the year 1911, the plaintiff was the owner of 2,501 shares of the capital stock of the National Bank of D. O. Mills Co., likewise a corporation organized under said National Bank Act. It was also the owner of 1,049 shares of the capital stock of the Mission Bank, a banking corporation organized under the laws of the state of California. The board of equalization, in assessing the eighty-five thousand shares of the capital stock of the plaintiff, included in its valuation the value of the 2,501 shares of stock in the National Bank of D. O. Mills Co. and the value of the 1,049 shares of stock in the Mission Bank.
The shares of stock of the National Bank of D. O. Mills Co. and of the Mission Bank were assessed in like manner by the state board of equalization, and the tax was levied upon all of the shares of these banks, including those owned by the plaintiff.
The plaintiff claimed that this course of procedure resulted in a double taxation of the shares of stock in the two banks owned by it, and applied to the board of equalization to exclude from the assessment of its shares the value of the said shares of the two other banks. This application having been denied, the plaintiff paid its tax under protest. The tax on the 2,501 shares of the stock of the National Bank of D. O. Mills Co. amounted to $6,278.67. The tax upon the 1,049 shares of the Mission Bank came to $1,201.01. These sums *400 having been paid under protest, the plaintiff brought this action to recover them.
The taxes here involved were levied in accordance with the provisions added to the constitution by the amendments adopted in November, 1910. (Art. XIII, sec. 14.) As we have heretofore said, these amendments "worked a radical change in the system of taxation in this state. Broadly speaking, the purpose of the change, as is well known, was to divide the subjects of state and local taxation by imposing upon persons and corporations engaged in certain callings — those of public service corporations, insurance companies, banks and trust companies — the obligation to pay certain taxes to be applied exclusively to state purposes. At the same time, the persons engaged and the property employed in these callings were, to a greater or less degree, to be free from the burden of local taxation. . . . Under the old system the property and franchises of the corporations above referred to were taxed for both state and local purposes. The amendment creates a new mode of taxing such property and franchises, and appropriates the revenue so raised to state purposes solely." (San Francisco v. Pacific Tel. Tel. Co.,
This subdivision contains a detailed and comprehensive scheme for the valuation of the shares of stock of banks. It declares that the value shall be taken to be the amount paid in on the stock, together with the pro rata of the accumulated *401 surplus and undivided profits. Provision is made for the deduction of one item of property, to wit, real estate taxed for county purposes. No other deduction is directed to be made, and it seems clear, under the most familiar rules of interpretation, that none other was contemplated. So far as the face of the constitutional provision goes, the value of the shares is to be computed by including, in addition to the amount paid in on the stock, every item of property embraced within accumulated surplus and undivided profits, with the single exception of real estate taxed for county purposes. The board of equalization acted, therefore, in strict compliance with the constitutional method when it fixed the value of the shares of stock in the plaintiff bank by taking the amount paid in, together with the pro rata of the accumulated surplus and undivided profits, subject to a deduction of the value of the designated real estate alone. The shares of stock in other corporations, whether engaged in banking or other business, were necessarily included in determining the amount on which this pro rata was to be reckoned. Similarly, in fixing the value of the shares of stock in the National Bank of D. O. Mills Co. and in the Mission Bank, the board was required to follow the same course. Its ascertainment of the value of the shares of stock in those banks, by whomever owned or held, was reached by adding to the amount paid in the pro rata of the accumulated surplus and undivided profits of the respective banks after making the deduction of real estate.
The respondent claims that, by a long line of decisions beginning with Burke v. Badlam,
We need not stop to inquire whether these decisions proceed upon a theory in conflict with the views announced by this court in Burke v. Badlam, and subsequent decisions to like effect. Let it be assumed that the assessment here complained of did result in double taxation. In the absence of express constitutional provision, there is, however, no necessary or inherent objection to taxing the same property twice *403
to different persons "so long, at least, as there is some kind of estate or right, in both persons taxed, to the taxed property." (Gray on Limitation of Taxing Power, secs. 1361, 1363; Cooley on Taxation, 3d ed., p. 389 et seq.) Such taxation does not contravene any provision of the federal constitution. "It is no doubt within the power of a state, when not restrained by constitutional limitations, to assess taxes upon them" (i. e., property of the corporation and shares of stock in the hands of the individual stockholders), "in a way to subject the corporation or the stockholders to double taxation." (Tennessee v. Whitworth,
Does the constitution of California prohibit such double taxation as may be involved in the assessment here complained of? No doubt our constitution, as it stood prior to the amendments of 1910, did contain such prohibition. Section 1 of article XIII, as it originally read, provided that "All property in the state, not exempt under the laws of the United States, shall be taxed in proportion to its value, to be ascertained as provided by law." This is the language which was held, in the cases above cited, to forbid double taxation. "All property" is not taxed in proportion to its value if some of it is taxed once and some of it more than once upon the ascertained value. (Burke v. Badlam,
The respondent makes a further point. Since national banks constitute an agency of the United States, created for the carrying out of governmental purposes, property of such banks and shares of stock in the same cannot be taxed by a state except in so far as such taxation is permitted by act of Congress. The requisite permission is granted by section 5219 of the Revised Statutes. That section authorizes the several states to include all the shares of national banks in the valuation and assessment of personal property of the owner or holder of such shares, subject to the restrictions (1) that the tax shall not be at a greater rate than is assessed upon other moneyed capital, and (2) that shares owned by nonresidents of the state shall be taxed in the city or town *405
where the bank is located. The claim is made that this statute does not authorize the assessment of the personal property of national banks to the banks, and that the state is not, therefore, authorized to assess to the plaintiff, through the Mission Bank, the plaintiff's shares in that bank. In Bank ofRedemption v. Boston,
The judgment is reversed.
Shaw, J., Henshaw, J., Melvin, J., Lorigan, J., Lawlor, J., and Angellotti, C. J., concurred.
Rehearing denied.