No. 7,663 | Cal. | Jul 1, 1881
Lead Opinion
In this case we are asked by the petitioner, who alleges himself to be a tax-payer of the city and county of San Francisco, to grant a writ of mandate compelling the assessor of the said city and county to assess, upon the assessment roll thereof, to various holders of certificates of stock in various corporations the respective shares held by them, and to assess the various depositors in various savings banks the respective sums of money deposited by them. Whether the assessor has or has not assessed to the respective corporations all of their property of every character, and to the respective savings banks all of theirs, including all moneys deposited with them, does not appear from the petition; but as the Legislature has required the assessor to do these things, we must presume that he has or will perform his duty in this respect in due time.
The claim of petitioner, however, we understand to be this: That the assessor must assess to the respective corporations all of their property of every kind, including their franchise, and to the individual stockholders thereof the respective shares of stock held by them; and must assess to the respective savings banks all of their property, including all moneys deposited
If this would, in effect, be assessing the same property twice for the same tax, it cannot be done. The Constitution of the State does not require or authorize double taxation. On the contrary, its language clearly forbids it. Thus: “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.” (§ 1, art. xiii.) To tax a portion of the property more than once would certainly not be taxing all of it in proportion to its value.
A mortgage or trust deed securing a debt is, under the Constitution, to be deemed and treated as an interest in the property affected thereby, and assessable to the owner. The property itself is also to be assessed to its owner; but to prevent what would otherwise be double taxation, the Constitution requires that, in making the assessment, the value of the security shall be deducted from the value of the incumbered property. (§ 4, art. xiii.) So in the case of credits, not secured by mortgage of trust deed, the Legislature may provide that there shall be deducted therefrom debts due to bona fide residents of the State. Hot only does the language of the Constitution neither require nor permit double taxation, but we think it may be safely said that neither the framers of the instrument nor those who ratified it ever supposed that under its provisions there could be any such thins: for both in the debates on the floor of the convention which framed it, and in the arguments of those who advocated its adoption before the people, are to be found repeated disclaimers of any such intention.
But the important question remains, Would what the petitioner asks to have done be, in effect, assessing the same property twice for the same tax? The section of the Constitution which declares 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, also declares : “ The word ' property ’ as used in this article and section is hereby declared to include moneys, credits, bonds, stocks, dues, franchises, and all other matters and things, real, personal, and mixed, capable of private ownership; provided, that growing crops, property
Now, what is the stock of a corporation but its property— consisting of its franchise and such other property as the corporation may own ? Of what else does its stock consist ? If all this is taken away, what remains ? Obviously nothing. When, j therefore, all of the property of the corporation is assessed—its ' franchise and all of its other property of every character—then all of the stock of the corporation is assessed, and the mandate , of the Constitution is complied with. This property is held by the corporation in trust for the stockholders, who are the beneficial owners of it in certain proportions called shares, and which are usually evidenced by certificates of stock. The share of each stockholder is undoubtedly property, but it is an interest in the very property held by the corporation. It is his right to a proportionate share of the dividends and other property of the corporation—nothing more. When the property of the corporation is assessed to it, and the tax thereon paid, who but the stockholders pay it? It is true that it is paid from the treasury of the corporation before the money therein is divided, but it is substantially the same thing as if paid from the pockets of the individual stockholders. To assess all of the corporate property of the corporation, and also to assess to each of the stockholders the number of shares held by him, would, it is manifest, be assessing the same property twice, once in the aggregate to the corporation, the trustee of all the stockholders, and again separately to the individual stockholders, in proportion to the number of shares held by each. As well might it be contended that the property of a partnership should be assessed to the firm, and in addition, that the interest of each partner in the firm property should be assessed to him individually. If I have an interest in partnership property, my interest therein is property. It is the right I have to share in the profits and property of the firm, in proportion to the interest I own. But my property rights are confined to the property held by the firm, just as the property
Demurrer sustained and writ denied.
Sharpstein, J., McKee, J., and Thornton, J., concurred.
Concurrence Opinion
I concur in the judgment, and, in the main, in the views expressed in the foregoing opinion. In my view, however, it is not necessary to decide whether the Legislature (under the present Constitution) has power to impose what has been called “ double taxation.” The Constitution declares that “ stocks ” and “ franchises ” shall be included in the word “ property,” and that all property shall be taxed “ in proportion to its value.” -But the Constitution does not require that stocks or franchises shall be twice taxed. When the aggregate value of all the shares of stock is taxed to the corporation, the real and personal property and the franchise is ordinarily included in the tax; certainly when the stock, franchise, and other property are taxed to the corporation, everything required by the Constitution to be taxed is taxed; and this, whether one of these subjects of taxation includes the others or not. The statute provides that shares of stock shall not be assessed to the holders. Why should they be if the “ property ” which is assessed to the corporation includes the anticipated profits from the enjoyment of the franchise, and all other elements of value which go to give value to the shares of stock ? The suggestion of petitioner is, that the statute is unconstitutional, because it does not provide for taxing the shares of stock both to the corporation and to the individual holders. But I find no such mandate in the Constitution. I think the demurrer should be sustained, because the scope and purpose of the petition are to compel the assessor to perform an act which the Constitution does not command, and which the statute prohibits.
Concurrence Opinion
I concur in the views of Mr. Justice Boss, so far as they relate to assessments to savings banks and depositors therein. I am of the opinion that money deposited in savings banks should be assessed but once, either to the bank or to the depositor, and not to both. On the other question involved in the case (the taxation of shares of capital stock of corporations), I express no opinion.
Concurrence Opinion
I concur in the views expressed by Mr. Justice Ross, except as to the assessment to depositors of moneys deposited in the savings banks named in the petition. Upon that subject I express no opinion.