Court Opinion

ID: 9595105
Source: CourtListenerOpinion
Date Created: 2023-08-22 00:35:49.626835+00
Date Added: 2024-06-11T10:58:13.889503
License: Public Domain

EDMONDS, J., Concurring.
I concur in the order of reversal, but as I read the record it is unnecessary to consider whether a certificate of delinquency under the Retail Sales *738Tax Act is prima facie evidence of all of the facts necessary to support a judgment for taxes, and the court may not properly decide that question in the present case.
The evidence before the court at the time the defendant’s motion for a directed verdict was granted shows that in 1934 he applied for a permit to operate a cafe. He admitted that he conducted this business for some months after that date. He then bought a near-by lot, which is located across the street from a large industrial plant, and eventually erected three booths or stands upon this property. The defendant admits that for some of the time in controversy he conducted a retail business in one of these units. According to his testimony he sold cigars, tobacco, ice cream, soft drinks and newspapers. In another unit sandwiches and coffee were sold. Apparently the third unit was built much later than the other two and there is scant evidence concerning its use.
The state claimed taxes upon the sales made in the three units for the period from April 1, 1934, to June 30, 1937. In defending this claim Mr. Mahoney contended that he had operated one of the units for a portion of the time and that he had reported and had paid all amounts due it upon the sales made by him. At all other times during the taxable period in controversy, he testified, each of two units had been rented by him upon an agreement that he should be paid a share of the net profits, and, consequently his lessees were solely responsible for taxes due the state upon the sales made by them. However, the application of one of these persons for a permit to conduct a retail business as the successor of the defendant was denied.
Also, in contradiction of the defendant’s contentions, the persons to whom he leased the premises and girls who worked in one or the other of the units at different times testified to facts from which the jury might reasonably have inferred that Mr. Mahoney, as alleged by the state, was conducting all of the business being transacted on the lot owned by him. Moreover, all of the units were under one roof and from the description of them by the witnesses, it is difficult to believe that they were more than departments of one business.
Under these circumstances there was sufficient evidence aside from the certificate of delinquency relied upon by the state, to support a judgment against the defendant upon the ground that he was conducting all of the business done in *739the three units. Much of this evidence was offered by the state, apparently for the purpose of proving the defendant’s ownership of a business in which taxable sales were made. The right of the state to rely entirely upon the certificate to prove the existence of taxable transactions is, therefore, not a question properly before the court upon the record in the present case. However, not only is the judgment reversed upon that ground, but a construction is placed upon the statutory provision with which I cannot agree.
Proceedings under tax statutes are in invitum and the statute will be strictly construed in favor of the taxpayer and against the state. (Barker Bros. v. Los A.ngeles, 10 Cal. (2d) 603, 608 [76 Pac. (2d) 97]; Uhl v. Badaracco, 199 Cal. 270 [248 Pac. 917]; United States v. Merriam, 263 U. S. 179 [44 Sup. Ct. 69, 68 L. Ed. 240, 29 A. L. R 1547] ; Gould v. Gould, 245 U. S. 151 [38 Sup. Ct. 53, 62 L. Ed. 211].) In an action to collect taxes the plaintiff must establish every fact essential to his right of recovery. “Any attempt on the part of the state ... to take the property of an individual for public purposes by way of taxation must find an express statutory warrant, and all laws having this object are to be construed strictly in favor of the individual as against the state. Whether his property is to be taken by seizure or by suit the rule is the same. In the one ease the officer must show his warrant for the seizure, and in the other the plaintiff must establish every fact essential to the maintenance of his right of recovery. In either case the proceeding is in invitum and no presumption is to be indulged in favor of the right to take the property, or of any intention that is not distinctly expressed in the statute under which it is sought to be taken. ’ ’ (Merced County v. Helm, 102 Cal. 159, 165 [36 Pac. 399] ; see, also, Estate of Potter, 188 Cal. 55, 64 [204 Pac. 826].)
Under the statutory construction adopted by my associates, when the Board of Equalization issues a certificate of delinquency the state may sue thereon and rely entirely upon it to establish a cause of action. As against this certificate the defendant may show by the most conclusive evidence that he was not the owner of the business as claimed by the state and that he had no connection with it. Yet the trial judge or a jury may only consider this evidence as contradictory of the ex parte certificate of the administrative board and an appellate court would be required to uphold a judgment in favor of the state.
*740This is contrary to all fundamental principles. The existence of taxable property or taxable transactions is necessary to the validity of a levy and assessment (Brenner v. Los Angeles, 160 Cal. 72, 76 [116 Pac. 397]), and is a basic and fundamental fact which must be proved when put in issue in any action to collect a tax. This rule was applied in an earlier case where the effect of an assessment affirmed by the Board of Equalization was considered and the court said: “Even a body possessing powers so enormous and in certain instances final jurisdiction, may not validate an assessment upon nonexistent property”. (Kern River Co. v. County of Los Angeles, 164 Cal. 751, 755 [130 Pac. 714].)
Unquestionably the legislature has the power to make official tax records or certificates prima facie evidence of a taxing body’s right to recover amounts claimed to be delinquent. Such a provision affects only the remedy by shifting the burden of going forward with the evidence to the party who usually has a superior opportunity for knowledge of the facts. However, none of the decisions cited and relied upon in the opinion of my associates hold that evidence concerning the existence of transactions subject to a tax may be dispensed with. The validity of a statute allowing an assessment book or delinquent list, properly certified, showing amounts unpaid upon certain real property, to be offered as prima facie evidence of unpaid taxes, is determined by principles entirely different from those which apply to excise taxes. Moreover, all of the statutes which have been upheld by this court contain -language much more definite and comprehensive than that used in the Retail Sales Tax Act.