Court Opinion

ID: 9605355
Source: CourtListenerOpinion
Date Created: 2023-08-22 02:34:46.260399+00
Date Added: 2024-06-11T12:59:50.011923
License: Public Domain

SHENK, J., Dissenting.
The conclusion in this case is neither required nor justified by the law of this state. It is contrary to the constitutional mandate that all property be taxed except such as is specifically exempt from taxation. Here there is no exemption of this and like property rights, enormous in value in the aggregate, except the exemption by judicial fiat.
It is the fact of which there is no denial that a liquor license issued pursuant to the Alcoholic Beverage Control Act is a valuable property right, owned privately as property is owned although subject to appropriate regulatory provisions in the exercise of the police power, is transferable for a cash consideration and therefore has an ascertainable valuation, is subject to levy of execution for the benefit of creditors, and may become an item of property in the estate of a deceased holder. The majority nevertheless conclude that this valuable property right is not within the category of ad valorem taxation, because, so it is stated, only the intangibles specified in section 111 of the Revenue and Taxation Code are to be regarded as personal property for purposes of taxation. The conclusion is conceived by implication from a statutory definition in turn based on a conceded implication from constitutional provisions, and the breath of life attempted to be given the exemption by the statement of a policy of expediency or practicality which cannot be invoked to enlarge statutory provisions for exemption.
The majority opinion alludes only in passing to section 1, article XIII, of the state Constitution which provides: “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, or as hereinafter provided. The word *292‘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 ...”
The subsequent provision in section 14 of article XIII quoted in the opinion, as granting power to provide for the assessment, levy and collection of taxes upon all forms of tangible personal property, all notes, debentures, shares of capital stock, bonds, solvent credits, deeds of trust, mortgages not exempt from taxation, in the absence of express limitation should not be read to exclude the existing constitutional power to tax items not listed, inasmuch as the obvious purpose of so enumerating the specific items was to place thereon the limitation as to the amount of tax appearing in the paragraph following. That this is so also appears from the language in the latter paragraph following the specified limitation reading “and no tax burden shall be imposed upon any personal property either tangible or intangible which shall exceed the tax burden on real property in the same taxing jurisdiction in proportion to the actual value of such property.” Par from being the clear implication stated by the majority, there is here no implication at all that the taxing power on intangibles was limited to the specified items. The limitation in respect to those items was only as to the amount of the tax. The inclusion of items for the purpose of that limitation furnishes no reason for implying the exclusion of unspecified intangible property from the taxing power. There is therefore no limitation of the taxing power to the specified items by implication or otherwise. The statement that there is no grant of power to provide for taxation of intangible items other than those listed is beside the point and an erroneous basis for the conclusion, since the Constitution is deemed not to be a grant of power but a restriction upon the powers of the Legislature (People v. Coleman, 4 Cal. 46, 49-50 [60 Am.Dec. 581]). As noted the fundamental law demands the exercise of the power to tax all property tangible or intangible capable of private ownership, not exempt under the laws of the United States, and the express limitation of the amount of the tax on specified items is not a. contradiction thereof.
The Legislature has the power to provide for exemptions, but such exemptions must be express. They will not be inferred or implied. The majority read definitions of “Intangibles” and “Intangible Personal Property” contained in section *293111 as an intention to include as exempt under section 212 an item of property not mentioned therein. Section 111 is contained in a chapter (§§ 101-128) entitled “Construction.” Section 101 provides: “Unless the context otherwise requires, the general provisions hereinafter set forth govern the construction of this division.” (Div. 1, Property Taxation, §§ 101-5143.) Section 103 reads: “ ‘Property’ includes all matters and things, real, personal, and mixed, capable of private ownership.” This is the all-inclusive definition of the Constitution. Section 106 provides: “‘Personal property’ includes all property except real estate.” Section 111: “ ‘Intangibles’ means intangible personal property of a type not exempt from taxation and any interest therein. ‘Intangible personal property’ means only notes, debentures, shares of capital stock, bonds, solvent credits, deeds of trust, and mortgages.” The purpose of statutory definitions is to indicate the meaning to be ascribed to certain words when used in the statute. The definition was desirable in order to follow the constitutional mandate regarding the limitation on the taxing power of specified intangible items. Therefore the word “intangibles” as so defined means only the specified items when that word is used in the code. Section 201 which begins article 1 (Ch.l, pt. 2, §§ 201-213), entitled, “Taxable and Exempt Property,” provides that all property in the state, not exempt under the laws of the United States or of this state, is subject to taxation under this code. This is a restatement of the constitutional provision in section 1, article XIII. Section 212 reads: “Notes, debentures, shares of capital stock, bonds, deeds of trust, mortgages, and any interest in such property are exempt from taxation.”
The lack of relationship between section 111 defining “Intangibles” and section 212 enumerating exempt items must be obvious. But the majority purport to vitalize the unrelated conclusion by seeking support in considerations of policy which may underlie distinctions in personal property taxation due to a tendency to conceal intangible assets or minimize the value thereof for the purpose of avoiding high taxes. Such distinctions, if any are to be made, are of legislative cognizance. In the absence of legislative direction, the problem becomes one primarily for the local assessment authorities in determining whether a specified class of intangible property not exempt has a sufficient ascertainable valuation to be included in the assessment rolls. In this connection the ma*294jority appears to be of the opinion that there is an evil which requires a remedy. If that be so, then it is also a matter of legislative rather than judicial responsibility. But the factual situation indicates that the Legislature is not greatly concerned in granting such an exemption. After the trial court entered judgment in this case (Jan. 3, 1947) upholding the tax, and during the 1947 session of the Legislature, the interests favoring exemption from ad valorem taxation of liquor licenses sought an amendment of the Revenue and Taxation Code to that effect (Assembly Bill No. 1839). The bill failed of passage, and the proper assumption is that the Legislature was satisfied that the exercise of authority by the local taxing officials in the present case was in accord with the Constitution and the statute and that an exemption was undesirable.
It also follows from the foregoing that the “in lieu” (income) tax discussed by the majority applies only to the items specified in section 3627a, Political Code, as amended, namely, notes, debentures, shares of capital stock, bonds, deeds of trust, mortgages and any legal or equitable interest therein. These are the same items exempted by section 212 of the Revenue and Taxation Code. To say that it is absurd to include in ad valorem taxation valuable intangible assets not specifically exempt, and particularly the valuable asset here sought to be taxed, will come as a comforting surprise to those abundantly able to bear their just share of the burden of taxation.
The majority opinion implicitly concedes that the tax involved, since it has strictly a revenue raising purpose as distinct from one that is regulatory or restrictive, is not an occupational tax or license fee the imposition and collection of which is reposed exclusively in the State Board of Equalization (Const., art. XX, § 22) with provision for apportionment thereof among local governmental bodies. (See Los Angeles v. Los Angeles etc. Co., 152 Cal. 765 [93 P. 1006]; Ingels v. Riley, 5 Cal.2d 154 [53 P.2d 939, 103 A.L.R. 1]; Flynn v. San Francisco, 18 Cal.2d 210, 215 [115 P.2d 3], citing Dawson v. Kentucky Distilleries & Warehouse Co., 255 U.S. 288, 292 [41 S.Ct. 272, 65 L.Ed. 638].) Occupational taxes and license fees, therefore, are not involved in the problem, nor are they affected by a decision in this case.
Certainly the Anderson case (San Francisco v. Anderson, 103 Cal. 69 [36 P. 1034, 42 Am.St.Rep. 98]) decided in 1894, *295holding that the ownership of a seat on the stock exchange was a personal privilege and the value thereof too uncertain to be included in any category of taxable property, should not here be accorded any controlling effect. The force of the decision in that case has vanished in view of the great weight of authority to the contrary since that time. Such privileges, inasmuch as they have large ascertainable market values, are now held to be property subject to ad valorem taxation unless expressly specified to be exempt. (See Citizens National Bank v. Durr, 257 U. S. 99, 108 [42 S.Ct. 15, 66 L.Ed. 149]; In the Matter of Hellman, 174 N.Y. 254 [66 N.E. 809, 95 Am.St.Rep. 582]; State v. MePhail, 124 Minn. 398 [145 N.W. 108, Ann.Cas. 1915C 538, 50 L.R.A.N.S. 255], referring to the “personal privilege” basis of California and Pennsylvania cases as unsound; 61 C.J. § 179, p. 203; 51 Am.Jur. § 421, p. 442 and additional cases cited note 11.)
In my opinion our constitutional and statutory provisions require a conclusion that the ad valorem tax on the property here involved should be upheld, and that the judgment of the trial court should be affirmed.
Carter, J., concurred.
Respondents’ petition for a rehearing was denied August 26, 1948. Carter, J., and Shenk, J., voted for a rehearing.