216 P. 631 | Cal. Ct. App. | 1923
Plaintiff paid under protest a tax levied against it on solvent credits assessed as property of the plaintiff. Plaintiff's demand for repayment of this tax having been refused, it brought this action. The defendant's demurrer to the second amended complaint was sustained, and the plaintiff failed to make any further amendment. Thereupon, judgment was entered in favor of the defendant. From this judgment the plaintiff appeals.
In the complaint it is alleged that in the assessment of plaintiff's property for the year 1919 by the county assessor of the county of Los Angeles there was wrongfully and unlawfully included as property belonging to the plaintiff solvent credits amounting to $1,559,850; that said assessment so set down was illegal and void in that plaintiff at 12 o'clock M., of the first Monday of March, 1919, owed debts and unsecured liabilities to bona fide residents of the state of California and firms, associations, and corporations doing business in said state in excess of said sum, "which said debts and liabilities had been claimed as a deduction from said assessment by plaintiff"; that thereafter, in July, 1919, plaintiff duly appeared before the board of equalization of said county and requested that said assessment be changed by reducing said assessment of solvent credits to nothing; that said board of equalization upon a hearing of said request did reduce said assessment of solvent credits to $798,780, but failed and refused to reduce said solvent credits to nothing. The assessment and levy having followed in due course, the tax was paid under written protest duly filed.
It is alleged that the assessment and levy and the tax so paid were illegal and void by reason of the failure to allow for and deduct from the amount of solvent credits returned by the plaintiff, said debts and deductions allowed by law and claimed by the plaintiff, which consisted of unsecured liabilities owing by the plaintiff to bona fide residents of the state of California and to firms, associations, and corporations doing business therein; and that *299 there were not at 12 o'clock M., on the first Monday of March, 1919, in the state of California, or subject to the jurisdiction of said county or state, any solvent credits owned by plaintiff subject to assessment or tax for said tax year 1919, had said debts and deductions allowed by law and claimed by plaintiff been allowed by said assessor and by said board of equalization.
[1] It is conceded by appellant to be the law that where the question at issue is solely a question of correct valuation in the assessment of property subject to taxation, the taxpayer who is dissatisfied with the assessor's valuation of his property must rely upon his right to apply to the board of equalization for a proper reduction thereof; and that the decision of the board of equalization, within the limits of a reasonable discretion, after a due hearing upon such application, is final and conclusive. (Los Angeles Gas Electric Corp. v. County of Los Angeles,
[2] We are of the opinion that the decision in the Columbia Savings Bank case is not applicable here. In that case, the plaintiff in February purchased certain United States bonds which were exempt from taxation. In the following April, it sold them. The assessor claimed that the bonds had been purchased with intent to evade taxation and that for that reason he had a right to ignore the purchase and assess the money as if such purchase had not been made. The court found that the purchase had not been made with intent to evade taxation, and the right to recover the tax paid under protest was sustained. Referring to *300 the contention of the county that the decision of the county board of equalization refusing to strike out of the assessment as made by the assessor the amount added by him to cover said investment in United States bonds was final and conclusive against the plaintiff, the court declared that this contention is unsound. "The taxpayer may have relief under the provisions of section 3819 of the Political Code, in cases where he claims the assessment, or any part of it, is void, by paying under protest the full amount of the tax as assessed, and within six months thereafter bringing an action to recover back such part of the tax paid as he claims to be void, as is done in this case."
Appellant herein cannot bring itself under the rule which applies to a void assessment, by the mere statement in its complaint that the assessment is void, unless the facts alleged in support of that conclusion exhibit a void assessment. But in this case, on the contrary, we think that the facts stated in the complaint show nothing other than a claim based upon an alleged excessive valuation of the solvent credits owned by appellant.
The nature of appellant's claim wherein it insists that the valuation should have been reduced to nothing is the same as if it had claimed that it should have been reduced to any other stated amount less than that shown by the valuation of the assessment. Appellant did have large solvent credits which primarily were subject to assessment, although in the valuation thereof it was entitled (on a proper application therefor) to a reduction measured by the amount of any debts due from it tobona fide residents of this state. (Const., art. XIII, sec. 1; Pol. Code, secs. 3628, 3629.)
In Southern California Hardwood Mfg. Co. v. County of LosAngeles,
[3] Respondent further calls attention to the fact that the complaint in this action does not allege that the debts and liabilities by reason of which it claimed a deduction from its assessment were solely owing "to bona fide residents of the state of California." The claim made was and is that those debts and liabilities were owing "to bona fide residents of the state of California and firms, associations and corporations doing business in said state." Said firms, associations or corporations may have been resident outside of the state of California. In that event, debts or liabilities owing to them could not be used in reduction of the assessment of solvent credits belonging to the plaintiff; unless, perhaps, such right might be established by proving that the debt was incurred in favor of a creditor who, though domiciled elsewhere, had established an independent "business domicile" (as it is sometimes called) in California. As to this possible exception, we express no opinion; merely noting that in Westinghouse Elec.etc. Co. v. Los Angeles County, *302
Respondent relies upon some other propositions to sustain the judgment, but we think it unnecessary to give them particular consideration at this time.
The judgment is affirmed.
Houser, J., and Curtis, J., concurred.