179 P. 393 | Cal. | 1919
Lead Opinion
The plaintiff is lessee of certain tide-lands situated in the city of Los Angeles and belonging to the state. The city assessed this leasehold estate and levied a tax thereon, which plaintiff paid under protest and in due time brought this action to recover the same. Judgment went for plaintiff, from which the defendant appealed.
On a hearing heretofore had of the case, it was considered in connection with L. A. No. 4504, entitled San Pedro, Los *20 Angeles Salt Lake R. R. Co. v. City of Los Angeles (Cal.),
[1] The question to which the court on the former consideration of the case addressed itself and to which the chief argument of counsel was directed was whether the laws of this state authorize the taxation of leasehold interests in the tide-lands of the state. Upon this point, holding that municipalities have such power, we adopt the opinion of Mr. Justice Sloss, filed at the former hearing of the appeal, which is as follows:
"That a leasehold interest is property is a proposition not open to dispute. 'The thing of which there may be ownership is called property.' (Civ. Code, sec.
"Is it property for the purposes of taxation? Our constitution declares (art. XIII, sec. 1): 'All property in the state except as otherwise in this constitution provided, not exempt under the laws of the United States, shall be taxed in proportion to its value, to be ascertained as provided by law. . . . The section exempts property belonging to the state, and certain other kinds of property, not including interests like the one here involved. [2] With respect to all property not so exempted, the provision of the constitution that it shall be taxed in proportion to its value, to be ascertained as provided by law, is direct and mandatory. (Const., art. I, sec. 22.) The provision for the taxation of all property not exempt is repeated in section 3607 of the Political Code.
[3] "The constitutional provision is not self-executing. It imposes upon the legislature the duty of providing a mode whereby to ascertain the value of the property to be taxed. (McHenry v. Downer,
[5] "It is true that the code makes no specific provision for separate assessments of leasehold and reversion to the lessee and the owner of the fee, respectively. The usual procedure in this state, as elsewhere, has been to assess the entire value of the land to the owner of the reversion. Such assessment covers the value of the leasehold as well as of the reversionary interest, the sum of the two being comprised in the value of a complete ownership of the land. (Graciosa OilCo. v. Santa Barbara,
"An illuminating discussion of the question is found inTrimble v. Seattle,
" 'In ordinary cases the whole property is taxed and which party shall bear the burden is not a matter of public concern. But when the state makes the lease, the supposed obligation would be an obligation not to tax — a restriction of public import not lightly to be imposed (citing cases). It is urged that to deny the state's obligation discriminates unconstitutionally against this class of lessees, since all others are free from the burden. But that is not true. Whether landlord or tenant *23 shall pay a tax is a matter of private arrangement, and the practice one way or the other has no bearing on the matter. The argument from inequality really works the other way. If these leaseholds are not taxable, they are a favored class of property; for ordinarily leaseholds are taxed even if they are lumped and included in the value of the fee. When an interest in land, whether freehold or for years, is severed from the public domain and put into private hands, the natural implication is that it goes there with the ordinary incidents of private property and therefore is subject to being taxed.'
"In Graciosa Oil Co. v. Santa Barbara,
[6] "The principle that a possessory right in public land is private property, and that it may be assessed for purposes of taxation to the person in possession, although in point of law he may have no right as against the state or government owning the land, has long been settled in this state. (People v.Shearer,
"This conclusion was reached regardless of whether the person in possession was intending to claim as pre-emptioner or homesteader, or whether his possession could ever have ripened into a fee. Nor was the decision in People v. Frisbie,
"We do not agree with the suggestion made in the closing paragraph of the decision in
Upon the views thus expressed, it follows that the decision in
[7] The improvements upon the leasehold were assessed at the sum of $92,850, upon which a tax of $1,151.35 was levied. As described in the assessment-book, the property assessed was: "Improvement on a tract of land leased from Long Beach city to S. P., L. A. S. L. R. R. Co., dated October 2, 1905, for 46 years, for land and water rights in 61.90 acres, being that part of fill lying south of Terminal Island and north of *26
strip reserved by city, in section 18, T. 5 S., R. 13 W." The court found, as alleged in the answer of defendant, that after the execution of said lease, but prior to the assessment, plaintiff constructed a breakwater of rocks upon said premises and along the southerly line thereof, and filled or caused to be filled with earth and sand the lands lying between the mainland and said breakwater, by dredging in such manner that all of the lands described in said lease were at the time of such assessment no longer submerged, but dry lands lying above the line of high water. It thus appears that the improvements consisted of a stone retaining-wall or breakwater built of rock and the filling in of the submerged land by depositing thereon earth and sand to a depth or thickness sufficient to raise the level of the surface above the line of high tide. In its supplemental brief, counsel for the city, which is the appellant here, concede that respondent is correct in its contention that the fill so made upon the land is not an improvement within the meaning of section 3617 of the Political Code, which defines improvements as "all buildings, structures, fixtures, fences and improvements erected upon or affixed to the land, except telephone and telegraph lines." We are in full accord with this agreed view of the subject of the parties. The fill was not an "improvement erected upon or affixed to the land," but, when made, was a part of the realty — indeed, it was the land itself, the surface of which was changed by bringing it to a higher grade. Surely, it could not be said the tenant would be entitled to remove this fill at the expiration of the lease by virtue of a provision contained therein to the effect that it might remove all improvements made. In the case of Kern Valley etc. Co. v. County of Kern,
While appellant concedes the fill is not subject to assessment, it insists that as an abstract proposition of law the breakwater constructed of rock is an improvement within the meaning of section 3617, and as such assessable for taxation. It is unnecessary to determine such question. The assessment was not merely for improvements upon the leasehold; hence we can indulge in no presumption that the assessor in making the assessment included therein only such property as was legally assessable. (Western Union Tel. Co. v. Los Angeles,
The judgment, in so far as it declares the assessment upon the improvements void, is affirmed, and in so far as it in effect adjudges the assessment of the leasehold estate void, is reversed, and the trial court is directed to modify the judgment in accordance herewith.
Sloss, J., Wilbur, J., Richards, J., pro tem., and Angellotti, C. J., concurred.
Dissenting Opinion
I dissent from that part of the foregoing opinion which readopts the opinion of Mr. Justice Sloss filed at the former hearing of the appeals, and I adhere to the views expressed in the opinion in San Pedro etc. R. R. Co. v. Los Angeles,
One reason for the "rule of property" is the presumed dependence upon judicial decisions. In 11 Cyc. 755, the principle is thus stated: "Where judicial decisions may fairly be presumed to have entered into the business transactions of a country and have been acted upon as a rule of contracts and property it is the duty of the court, on the principle ofstare decisis, to adhere to such decisions without regard to how it might be inclined to decide if the question were new. And this rule obtains, although the court may be of the belief that such decisions are founded upon an erroneous principle and are not sound, for when parties have acted upon such decisions as settled law and rights have been vested thereunder, their inherent correctness or incorrectness in the abstract are of less importance than that the rule of property so established should be constant and invariable. So such a rule controls as to decisions involving questions of constitutional law and the construction and operation of statutes." The text is supported by a wealth of citation, including such cases as SacramentoBank v. Alcorn,
In the opinion of Mr. Justice Sloss, approved by the majority of the justices of this court, the following paragraph seems to me to be particularly erroneous:
" 'We do not agree with the suggestion made in the closing paragraph of the decision in
This reasoning takes advantage of a statute intended only to cover cases of misnomer and excuses that which, if the rest of the opinion is correct, is an absolute misassessment of property to the wrong owner, for the assessor knows in every case in which there is a landlord and a tenant that the leasehold and the reversion belong to different individuals. The opinion contains nothing which, in my judgment, logically overcomes the following portions of the opinion in
And in the future assessors may not keep their official oaths if they continue to assess leasehold interests to the owners of the fees. They cannot plead mistake and so take advantage of section 3628 of the Political Code, because they must know, as everybody knows, that commonly leaseholds and reversions belong to different individuals. I sincerely regret that in this later decision the majority of this court is thus disturbing our fiscal system. *31