193 P. 137 | Cal. Ct. App. | 1920
The appeal involves two cases between the same parties in which the same questions are raised, and which by stipulation are presented in one record and as one appeal. The actions were brought to compel the city of Los Angeles to refund taxes alleged to have been illegally and erroneously collected by the tax officers of said city during the years 1911, 1912, 1913, and 1914, from plaintiff, on assessments against "improvements" upon the tide-lands within the city of Los Angeles and fronting upon the navigable waters of Los Angeles harbor, and for the years 1915 and 1916 against plaintiff's leasehold interest in a certain wharf and two warehouses upon said tide-lands, and for the year 1915, against plaintiff's leasehold interest insaid tide-lands, said tide-lands being owned by the state of California and held by plaintiff under lease from the city of San Pedro, the municipal predecessor of the city of Los Angeles. The lease was made in February, 1906, and was approved and ratified by the legislature by an act of March 23, 1907. The lease was rewritten in July, 1907, in order to conform to certain changes in the harbor lines as made by the United States war department. The general scope and purpose of said lease may be gathered from the following quotation from Koyer
v. Miner,
The first point made by appellant is that "Plaintiff's leasehold interest in said tide-lands was not and is not a property to be assessed or taxed and the assessment and collection of taxes against the same for the years 1915-16 were, and each thereof was, erroneous and illegal." In support of its position appellant cites San Pedro etc. Ry. Co. v. Cityof Los Angeles,
How does the question appear in the light of the cases cited by appellant? In Kelley v. Rhoads,
In Taylor v. Ypsilanti,
The two California decisions, In re Dorris,
[2] But, as already intimated, we are not dealing with a case of contract, or contract rights acquired under the former decision. It is, rather, an instance of the payment of a just obligation to the government, although mistakenly supposed at the time to be unjust. Of course, if in such cases a decision of the supreme court is to have the full effect of a statute, the contention of appellant would be sound, but, as we understand it, that rule is to be applied only when considerations of justice and equity demand it. Such is not the case here.
It is perhaps unnecessary to add that if said decision in 167 Cal. had been rendered in this cause, it would, of course, constitute the law of the case and we would be bound by it, but since this is entirely different litigation, we are at liberty to apply the just and correct rule.
[3] Again, it is claimed that the "improvements" were improperly assessed, since they were exempt as a part of the realty. In response to the suggestion of respondent that the lease did not contain any agreement to that effect, or that they should become the property of the lessor, appellant points out that the complaints expressly allege that said improvements belong to the public and that, since it appears that the lessee affixed said improvements to the land of the lessor without any agreement permitting their removal, it follows as a matter of law, by virtue of section
The question then arises whether they are assessable. That the land and the improvements are to be separately assessed for purposes of revenue is not disputed. The constitution of the state so provides (art. XIII, sec. 2), and the legislature and the courts have recognized the validity of such procedure. (San Francisco v. McGinn,
As to the improvements a similar situation exists as to the assessments for 1915 and 1916. It is true that the complaint alleged "That within the time provided by law, the assessor of the city of Los Angeles, without authority or right so to do did assess the said leasehold interest in said lands and the improvements on said leased land, above described, to this plaintiff, . . . at and for the following sums," etc. But when we turn to the exhibits attached to the complaint containing the demand that was made upon the treasury for the return of the money claimed to have been illegally exacted we find it recited by appellant that the assessment was made upon and against "the possessory interest of claimant in and to two warehouses" and "against and upon the possessory interest of claimant in and to five thousand two hundred feet of wharf," etc. While the express *128 allegation of the complaint might leave the matter in doubt, therefore, whether it was the complete title or merely the possessory right that was assessed, taking in view the exhibits, we must conclude that the assessment was levied upon the interest that was subject to taxation, namely, the right to the possession and use of said improvements under the terms of said lease.
The case is different as to the assessments for the earlier years. The allegation as to 1911 is, "the assessor of the city of Los Angeles, without authority or right so to do, did assess the said improvements on said leased land above described, under the designation of 'improvements on leased land' to the plaintiff." The allegations are similar as to 1912, 1913, and 1914. The claims presented to the treasurer also recite that said taxes were levied and assessed against "said improvements on said leased tide-lands." It cannot be doubted that such assessment covers the entire title and interest in and to said improvements. If there had been a similar assessment of the land no one would dispute that it included the entire interest. If the leasehold or possessory right alone had been intended, it should have been so designated. The reversionary interest, however, both in the land and the improvements was not subject to taxation, and since the assessment of the improvements included this interest and is indivisible, it is difficult to see how it can be sustained.
Respondent, though, claims that the decision in 67 Cal. is to the contrary. Therein it was said: "It is not necessary to follow and answer in detail the various reasons given by defendant why he should not be held liable; it is sufficient to say that, for the purposes of revenue, the legislature of this state has observed a distinction between real estate and improvements, and that distinction has been recognized by this court. . . . We are of opinion that, for the purposes of revenue, the defendant was the owner of the property assessed and that he is liable for the taxes." But in that case attention was not directed to the distinction between the possessory right and the title to the improvements. Indeed, it was claimed by the city that McGinn was the owner of said improvements and entitled to remove them, and it was so found by the trial court. While ownership was denied by him, yet his counsel in their opening *129 brief filed in the supreme court declared: "There is no admission that the improvements belong to defendant, but that proposition is immaterial under the statutes," the main contention being that under the contract of the parties the city was obligated to pay the taxes.
A recent decision upon the subject is the case of City ofOakland v. Albers Bros. Milling Co.,
It was also emphasized in the briefs for respondent that in the McGinn case the trial court had found that the improvements therein belonged to McGinn, and the supreme court seemed satisfied with that finding. If the improvements belonged to McGinn, of course, they were taxable, and the conclusion of the supreme court based upon that premise is unassailable.
[5] But section 3804 of the Political Code, under which these actions were brought, provides that "no order for the refund of taxes, penalties or costs under this section shall be made except upon a verified claim therefor . . . which said claim must be filed within three years after the making of the payment sought to be refunded." It appears from the complaint herein that the claims for the repayment of the taxes for 1911 and 1912 were not filed within said three years, and hence as to those amounts the demurrer was properly sustained. The same objection does not apply to 1913 and 1914, but respondent contends that the whole action is barred by reason of section 3819 of the Political Code, providing that one claiming his assessment to be void "may, *130
at any time within six months after such payment, bring action against the county in the superior court to recover back the tax so paid under protest." But it was held by the supreme court in Stewart Law Collection Co. v. Alameda County,
[6] Another important contention of appellant is that the municipality was estopped from levying this tax. The theory is based upon the fact that in August, 1911, the city commenced a suit against the company to quiet title to and to obtain possession of said property, averring in the complaint that said city was the owner and entitled to the possession of the property and that the defendant had no interest therein or right to the possession thereof; that the trial of said action was had in the superior court in June, 1915, and that the decision of said court was in favor of said city as to a large portion of said property; "that, because of said claims of said city of Los Angeles to said property, and because of said litigation affecting the same, brought and instituted by the city of Los Angeles against this plaintiff, and still pending, said plaintiff has suffered great loss and damage in its possession thereof and in its operations thereon, and said property has been thereby at all of said dates and times herein mentioned, and still is, greatly depreciated in value, and rendered practically of no value for sale, rental or any other purpose, and should it be held by this honorable court that said property hereinabove described, or any part thereof, is or was, at any of the dates and times herein mentioned, taxable as against this plaintiff, plaintiff alleges that the assessed valuation placed thereon by said city assessor, as aforesaid, was and is greatly inflated and in excess of its said value, or any reasonable value, and that said value, if such or any assessment was or is lawful, should not be, nor should it be upon the whole thereof, fixed at more than the sum of $100,000." In support of its claim appellant cites Moore v.Morledge, 42 Iowa, 26; Iowa R. Land Co. v. Story Co., 36 Iowa, 48; Calhoun County v. American Emigrant Co.,
In the first of these the county was under obligation to convey the lands to the railroad company, but it refused to do so and in the meantime, and while the county was thus refusing to convey said lands to the railroad company, and was itself holding the title and denying the claim of the railroad company to it, the said county caused said lands to be taxed and afterward caused the same to be sold for such taxes. It was in view of this situation that the supreme court of Iowa said: "Under these facts we do not stop to inquire what would be the rule respecting liability for taxes, as between vendor and purchaser, in cases where the latter, by performance of his contract, has become the owner, though the legal title is in the former, because we grounded our support of the plaintiff's case upon this plain rule of fair dealing and the broad principle of equity, that a party shall not wrongfully withhold the title to property and the benefits of ownership thereof from one entitled thereto and at the same time subject the property to burdens for the benefit of the party thus wrongfully withholding the title. In other words, the county having, during those years, denied the right and title under which the plaintiff claims, is now equitably estopped from asserting that it then had the title."
The later case from Iowa involved similar facts and the supreme court based its decision upon the ruling in Iowa R.Land Co. v. Story Co., 36 Iowa, 48.
In the County of Calhoun case, supra, the county in levying the tax violated its stipulation and agreement that the property should not be assessed, and in view of the bad faith of the county the supreme court of the United States deemed it proper to say: "Corporations, quite as much as individuals, are held to a careful adherence to truth and uprightness in their dealings with other parties; nor can they be permitted, with impunity, to involve others in onerous obligations, by their misrepresentations or concealments, without being held to just responsibility for the consequences of their misconduct or bad faith."
In those cases, it is to be observed, that a degree of perfidy characterized the conduct of the taxing power, and that the burden was wrongfully and unjustly imposed; whereas, in the case at bar, there is no suggestion of mala fides or oppression. We must assume that there was an honest difference *132 of opinion as to whether appellant was entitled longer to remain in possession of the property, and we must remember that appellant actually did remain in possession all these years and enjoyed the fruits of its claim. This possessory right was subject to assessment, and while it was actually enjoyed by appellant, we can see no injustice in requiring the payment of the tax. The situation is somewhat like that of AmericanEmigrant Co. v. Iowa R. Land Co., 52 Iowa, 323, [3 N.W. 88]. Therein, after referring to certain decisions, including two of those cited by appellant herein, it is said: "We are now asked to go a step further, and hold, if the county brings an action to set aside a conveyance alleged to have been obtained by fraud, that it is estopped from levying taxes on the land conveyed. The proposition amounts to this: That if the county seeks to set aside the conveyance it is estopped therein by a levy of taxes and if it levies taxes it is estopped from bringing an action to set aside the conveyance. We do not believe the estoppel should work both ways. Under the circumstances the county had done all it contracted to do. It never agreed not to bring an action to set aside the conveyance on the ground of fraud. The intervener received the conveyance subject to this contingency. The lands were therefore taxable."
Of course, if there had been a final judgment in this case or if appellant had been deprived of the use and enjoyment of the property before the assessment was levied, we would have a different situation. But no judgment has been rendered and appellant has remained in possession. [7] There is an allegation, it is true, that the value of appellant's interest has greatly depreciated in consequence of said litigation, but manifestly, this was a consideration to be presented to the board of equalization. When a party believes that his property has been unduly assessed, in order to obtain relief, he must make application to the tribunal created for that purpose. (Fall v. City of Marysville,
[8] It may be added that the doctrine of estoppel is not to be lightly invoked against the exercise of the sovereign power of the state to levy and collect taxes for the support of the government. This authority is so important and commanding that, assuredly, it cannot be successfully challenged *133 upon the showing made herein. There may be instances of such gross injustice, as suggested by the decision cited, wherein it would be proper to say that the government is estopped to claim a tax, but, ordinarily, where a mistake is made in the assessment or levy or an unjust burden has been imposed, the aggrieved party, in order to obtain relief, must pursue the remedy provided by the statute.
We think the judgment in the case "No. B 52,531" is correct and should be affirmed; that the judgment in "No. B 38,539" is erroneous as to the assessments for 1913 and 1914, and that the complaint states a cause of action to recover the same, and that said judgment should be reversed and such further action taken as herein indicated.
It is so ordered.
Hart, J., and Nicol, P. J., pro tem., concurred.