Court Opinion

ID: 5441013
Source: CourtListenerOpinion
Date Created: 2022-01-08 18:03:08.140849+00
Date Added: 2024-06-11T08:32:00.278112
License: Public Domain

Thornton, J.:
This is an appeal from a judgment of the Superior Court of the City and County of San Francisco, denying the application of the Spring Valley Water Works for a writ of review, and confirming the action of the Board of Equalization of the city and county above named. The writ was sued out to review the action of the Board of Equalization in raising the assessment of the franchise of the Water Works above named from five thousand dollars to five million dollars, and to have it vacated and set aside as being in excess of the jurisdiction of the Board.
It is contended, on behalf of the appellant, that no notice, as required by law, was given to the Water Works, inasmuch as it was not given in accordance with a rule prescribed in advance by the Board. This Court has recently decided that these rules are no part of the record and proceedings to be brought up on certiorari. (Garretson v. Supervisors, 9 Pac. C. L. J. 685.) This point will not, therefore, be further considered.
The next point relates to the service of notice. The transcript shows that notices to appear and show cause before the Board of Supervisors, at their chambers in the City Hall, on Friday, June 24, at ten o’clock A. M., why the assessment of the Spring Valley Water Works should not be raised to fourteen million dollars, addressed to the President and Secretary of the Spring Valley Water Works, were served on June twenty-third and twenty-fourth on these officers, by leaving them (the notices) “at the office of the Spring Valley Water Works, at its principal place of business in the City and County of San Francisco.” It also appears from the record that a notice addressed “to the Spring Valley Water Works Company, Charles Webb Howard, President, and William Morris, Secretary,” was served on the twenty-fourth of June, 1881. This notice bore date the day just named, was entitled “In the matter of the equalization of the assessment of the Spring Valley Water Works Company,” and the tenor of it was to inform and notify the Water Works Company that the petition to have the assessment on its franchise raised, then on file with the Board of Equalization, would be taken *101up and acted on by the Board at its chambers at the New City Hall, on Saturday, June 25, 1881, at ten o’clock A. M., and it was thereby cited to appear and then and there show cause why the petition referred to should not be granted. This notice issued by an order of the Board made on the twenty-fourth of June, 1881, and was served on the same day by leaving it at the office of the company, as stated with regard to the notice first mentioned.
On the twenty-fourth of June, 1881, the Board took up the application to increase the valuation of the franchise of the Spring Valley Water Works. Charles N. Fox, Esq., attorney, then appeared and protested on behalf of the Spring Valley Water Works against a consideration of the application made in reference to said Water Works at that time, for want of jurisdiction on the part of the Board, inasmuch as the Board had adopted no rule prescribing the form and manner of notice, and therefore any further action by the Board would be in violation of law; and that sufficient time was not allowed the Spring Valley Water Works as contemplated by law to prepare and present its case. He (Fox) stated that a notice had been served upon the Secretary of the company on the afternoon of the preceding day, at four o’clock, just at the time of the closing of the office, to appear before the Board this morning. Afterwards, on the same day, Mr. Fox reiterated his objections to the Board’s proceeding, and stated that the President of the company was out of town when the notice was served on the Secretary, and the notice to the president to appear was not received by him until this morning—meaning the morning of the twenty-fourth.
The Board determined the question of jurisdiction adversely to the contention of Mr. Fox. He (Fox) then requested that the hearing of the case be postponed until the next day (Saturday) or the Monday following, so as to give the company an opportunity for preparation and consultation. A like request for postponement on behalf of the San Francisco Gas Light Company was also made (the cases of these two companies were heard together), and on motion further action in the cases of the Spring Valley Water Works and the San Francisco Gas Light Company was postponod until the fore*102noon of the next day, Saturday, twenty-fifth of June, at ten o’clock. On the next day (twenty-fifth of June) at the request of R P. Clement, Esq., who appeared on behalf of the San Francisco Gas Light Company (the case of the company last named being heard with that of the Spring Valley Water Works), and requested a further postponement of the cases of both companies until two o’clock on that day, for the purpose of allowing the respective counsel to have a consultation with the officers of the companies as to these cases. The eases of the above mentioned companies were afterwards on same day taken up for hearing, when the attorneys were called on to make an admission as to the value of the stock of the companies mentioned. Thereupon Mr. Fox stated that on yesterday he agreed, if ever the case reached that point, that he would admit that the market value of the stock (refering to the Spring Valley Water Works stock) on the seventh day of March, 1881, was par, reserving the right to object to its relevancy, but that on reflection he declined to appear for the water company further than to make the point made at the preceding meeting to the jurisdiction of the Board for want of notice to the company, and to repeat that no notice had been yet given the company. After this the Board proceded to act upon the case of the Spring Valley Water Works, and raised the assessment as above stated.
It thus appears that after the Board had passed on the question of jurisdiction, Mr. Fox, who represented the Water Works, asked for a postponement of the case of the Water Works, which .was granted, and that subsequently another postponement was granted. After this he declined further to appear, announcing his determination to rest on the question of jurisdiction.
It also appears that a notice addressed to the company was served on it on the twenty-fourth of June, to appear on the next day and show cause why the assessment of its franchise should not be raised, and that on request, two postponements were granted the company.
It is urged that the company was entitled to ten days’ notice that the Board would act, by virtue of the provisions of Section 3681 of the Political Code. But that section has *103no application to such a case as this, as a careful perusal of it will show.
Mr. Fox appeared for the company on the notices served, and by such appearance we hold that all objections of mere form to the notice are waived. As to the reasonableness of the time given by the notice to the corporation to show cause, that is in a great measure left to the discretion of the Board of Supervisors. We can not, under the circumstances, hold it unreasonable. The Board has but a limited period under the law, to act on the assessment book, and the range of inquiry is within narrow limits. In determining the point as to the time allowed, we think it proper to take into consideration the fact that postponements were granted to the corporation whenever asked, up to the time that Mr. Fox withdrew from the case and declined to act further for the company. This withdrawal and declination took place under circumstances which indicate that every reasonable request for time would have been granted by the Board. Even after the withdrawal of Mr. Fox, distinguished gentlemen (F. G. New-lands and R P. Clement, Esquires), learned in the law, were by the Board heard at length as taxpayers in regard to the matter. It was claimed by them “that there was no franchise enjoyed by the Water and Gas companies.” It is a fair inference from this, that these gentlemen were heard in support of the pretensions of these companies. We refer to this last action by the Board as a clear indication that every reasonable request for the time would have been allowed.
In our opinion (as intimated in Patten v. Green, 13 Cal. 330), such tribunals as the Boards of Supervisors ought not to be held to any great strictness of procedure in the matters above discussed herein; and if, under a rule or an order of such Boards, a party has notice of the intended action of a Board of Supervisors sitting as a Board of Equalization in regard to the assessment of his property, in time to have a full and fair hearing during the sessions of the Board, we shall hold such notice to be sufficient, unless it appears affirmatively that a full and fair hearing was denied him by the action of the Board. Of course, the rule as to time here laid down, is not intended to apply to a case where the law requires a notice of a definite number of days to be given, and *104no such notice has been given. We think the contentions of the appellant as to notice are untenable.
But it is said that there is a lack of jurisdiction of the subject-matter, that the Spring Valley Water Works has no property liable to assessment of the character of that upon which the increased valuation was placed by the Board of Equalization.
It appears from the petition, that the Spring Valley Water Works was a corporation prior to the seventh day of March, 1881, organized and existing under the laws of this State, having its principal place of business and doing business in the city and county of San Francisco. All corporations organized under the laws of this State, are, by the general law, vested with certain powers by express grant. This has been so since the passage of the first Act, in 1850, in relation to corporations. (See Sections 1 and 2 of the Act of 1850, in Hittell’s Gen. L., 114, 115, as to corporations created prior to the Codes; as to those since, see Civil Code, §§ 354, 355.) They are invested with further powers by the particular Act under which they are incorporated, or by the title of the Code under which they are formed.
It appears from the statement of one of the counsel for petitioner, that the Spring Valley Water Works is a corporation formed and doing business under an Act passed April 14, 1853, for the formation of corporations for business and commercial purposes, and an Act passed April 22, 1853, entitled “An Act for the incorporation of water companies.”
Under the laws of the State this corporation has power to have succession by its corporate name for a period of time (which must not exceed fifty years), to sue or be sued in any Court, to make and use a common seal and alter the same at pleasure, to hold, purchase, and convey such real and personal estate as the purposes of the corporation shall require, to appoint such subordinate officers and agents as the business may require, to make by-laws, not inconsistent with any existing law, for the management of its property, the regulation of its affairs, and the transfer of its stock, as well as all power necessary to the exercise of the expressly granted powers. (See sections of Act of 1850 above cited, and § 4 of Act of 1853 above referred to; Hittell’s Gen. Laws, pp. *105147, 148.) It has also the power under the Act of 1858 (see Stats. 1858, p. 213), to purchase or to appropriate and take possession of, and to use and hold, all such lands and waters as may he required for the purposes of the company, upon making compensation therefor. This last power enables the corporation to purchase the land and waters required for its business against the will of the owner, by availing itself of the provisions of the laws for the condemnation of land; in other words, to acquire such lands by the exercise of the power of eminent domain. It has the right also under the Act of 1858, subject to the reasonable direction of the Board of Supervisors, to use so much of the streets, ways, and alleys, of the City of San Francisco, as may be necessary for laying pipes for conducting water into the city, or any part of it, and also .the right to furnish water to the inhabitants of the City and County of San Francisco, and, as this Court has recently determined, to the city also. The water so furnished is to be paid for at rates to be fixed each year in a mode established by law. A further power or right inhering in this company by the laws of the State, was the power or right to divide its capital stock into a number of shares, which are personal estate, each share representing a minute fractional part of such stock, and each share capable of ownership, of being sold and bought and transferred by a simple process of passing by will, or to one’s heirs after his death through the medium of an administration, and each share securing to the owner a right to participate in the profits and property of the company.
The Spring Valley Water Works, on and prior to the seventh day of March, 1881, existed and had the right given by law to exist, with the powers and rights above set forth. It should be added here that the before mentioned powers or privileges were supplemented by a further grant, which inured to the advantage of the petitioner, which will be found in the third section of the Act of 1858, by which all the privileges, immunities, and franchises that might be thereafter granted to any individual or corporation relating to the introduction of fresh water into the City and County of San Francisco, or into any city or town in this State, for the use of the inhabitants thereof, were also granted to all companies *106incorporated before or after the passage of that Act. This last grant is a very important and valuable privilege, and, in fact, has been very valuable to the Spring Valley Water Works.
Blackstone says, in relation to franchises: “ Franchise and liberty are used as synonymous terms; and their definition is a royal privilege, or branch of the king’s prerogative, subsisting in the hands of a subject. Being therefore derived from the crown, they must arise from the king’s grant; or in some cases may be held by prescription, which as has been frequently said, presupposes a grant. The kinds of them are various, and almost infinite;” and adds, “ that they may be vested in either natural persons or bodies politic; in one man or in many.” And again on this subject he says: “To be a county palatine is a franchise, vested in a number of persons. It is likewise a franchise for a number of persons to be incorporated, and subsist as a body politic, with a power to maintain perpetual succession, and do other corporate acts; each individual member of such corporation is also said to have a franchise or freedom.” (2 Bl. Com. 37.)
Kent defines franchises as “ privileges conferred by grant from government, and vested in individuals.” (3 Kent’s Com. 458.) He also says: “ Corporations or bodies politic are the most usual franchises known in our law.” (Id. 459.)
In Pierce v. Emery, 32 N. H. 507, Perley, C. J., speaking for the Court remarks: “A corporation is itself a franchise belonging to the members of the corporation; and a corporation being itself a franchise, may hold other franchises as rights and franchises of the corporation.” And further: “A corporation, being itself a franchise, consists and is made up of its rights and franchises.”
In City of Bridgeport v. N. Y. & N. H. R. R. Co., 36 Conn. 266, Butler, J., speaking for the Court, uses this language in regard to a railroad corporation: “ The term ‘franchise’ has several significations, and there is some confusion in its use. The better opinion deduced from the authorities, seems to be that it consists of the entire privileges embraced in and constituting the grant.” (See Title “ Franchise” in Abbott’s Law Diet., and cases there cited.)
It is true that the privileges so granted by the Government *107clo not pertain to the citizens of the State by common right. But what is the " common right” here referred to ? Is it not a right which pertains to the citizens by the common law, the investiture of which is not to be looked for in any special law, whether established by a Constitution or an Act of the Legislature ? Coke says: “Be commvm droit—of common right— this is by the common law, because the common law is the best and most common birthright that the subject hath for the safeguard and defense not only of his goods, lands, and revenues, but of his wife and children. * * * This common law of England is sometimes called right, sometimes common right, and sometimes communis justitia.” (Coke’s Inst. 142a,.) The definition of franchises as special privileges conferred by Government upon individuals, and which do not belong to the citizens of the country generally of common right, had its origin in Bank of Augusta v. Earle, 13 Pet. 575. A very learned and accurate writer, Mr. Emory Washburn, in his work on Real Property (2 vol. 267), adopts this definition and cites as authority the case above referred to from 13 Peters. The same definition is quoted by Angel! & Ames in their work on Corporations, from the case referred to. (See Ang. & Ames on Corp., § 4.)
In the case in 13 Peters it was contended that under the laws and Constitution of Alabama the right of banking was a franchise. The Court refused to so hold, on the ground that the right of banldng, at common law, belonged to every citizen. (See also Curtis v. Leavitt, 15 N. Y. 170, opinion of Shankland, J.) The discussion on the point in the opinion shows clearly that “ common right” is used with the signification of common law.”
We are of opinion that the common right refers to the right of citizens generally at common law. Such rights of citizens, though frequently spoken of as franchises, are not the franchises here meant; and it may be conceded that where such rights are granted to corporations, they are not franchises. But independent of the right to exist as a corporation, and. to exercise powers in its corporate capacity, there are privileges granted to the Water Works, which do not, by the common law,belong to citizens generally; such as the right to lay down pipes in the streets, ways, and alleys *108of a city, and to collect rates for water furnished, which was held to be a franchise in San Francisco v. Spring Valley Water Works, 48 Cal. 493, and in San José Gas Co. v. January, 57 id. 616. Conceding for the argument that the Constitution, by Section 19 of Article xi., grants this right to every person, it does not follow that it is not a franchise. They are vested by a grant of the sovereign power, and not by the common law; and the generality of the grant does not deprive them of the character of franchises.
The right to collect rates for use of water supplied to the City and County of San Francisco, or the inhabitants thereof, which the appellant has possessed at least ever since the Act of 1858 went into effect, is expressly declared to be a franchise by the Constitution of the State in the second section of Article xiv. thereof. As has been said above, the very existence of a corporation as such is a franchise, and it exercises its franchise in every act which it performs as a corporation. In The Bank of Augusta v. Earle, above cited, the Supreme Court of the United States, speaking through Taney, C. J., in relation to the making of contracts by corporations, which, by common right, individuals could make, said: “ In making such contracts, a corporation, no doubt, exercises its corporate franchise. But it must do this whenever it acts as a corporation, for its existence is a franchise.”
A corporation, whose existence is a franchise, may possess powers and privileges, which, in themselves, are not franchises (such as the right to bank, discussed in Bank of Augusta v. Earle, above cited, or the right to buy and sell property, real and personal), but it usually owns, along with such privileges, some that are franchises; but whether the powers be entirely of the kind which are franchises or not, its existence and right to employ its corporate powers is a franchise. This we think abundantly established by the cases above cited.
We have no doubt that it was the intention of those who framed and ratified the Constitution to place such franchises in the category of property to be taxed. The word “franchises,” as used in the first Section of Article xiii., is used generally without any qualifying words, and is intended to embrace all franchises of the character above referred to, *109whether vested in individuals or bodies politic. A franchise conferred on an individual to lay down pipes in the streets of a city and to collect rates for water furnished a city or its inhabitants is to be taxed in the same way as when vested in corporations. The law in this respect is the same in regard to all persons, whether natural or artificial.
It is contended that the clause “and all other matters and things real, personal, and mixed, capable of private ownership,” in Section 1 of Article xiii. qualifies the word “ franchises,” which precedes it. We do not think so. The structure of the sentence forbids any such construction. What is said before the employment of these words is complete of itself, and needs nothing to show what was signified. The words used show clearly that they were intended to add something to what preceded them, to refer to kinds of property not previously mentioned, not to qualify anything. They were doubtless inserted out of abundant caution to show that all kinds of property, whether specifically enumerated or not, were intended to be included in the property to be taxed, though not embraced in the specific classes previously mentioned. They constituted a declaration. that in enumerating the property to be taxed it was not intended to confine the enumeration to “ moneys, credits, bonds, stocks, dues, franchises,” but to include all other kinds of property, and that by no construction of the word property, as used in the section, were any kinds of property to be left out.
But it is immaterial whether these words qualified “ franchises ” or not, for the reason that the franchises so referred to are capable of private ownership. To hold that a private corporation does not own its franchise right, power, and privileges would be both novel and untenable. Admitting that under the law of the State there may be legislation which might impair their value, it does not follow that it is not owned as property, with all the rights which attach thereto. All these rights exist until the legislative authority has acted so as to impair them or take them away; and until such legislation is enacted the rights of property remain unimpaired. There has been no legislation yet of the character as regards the appellant that has been called to our attention, or that we have been able to discover.
*110This franchise of a corporation is sometimes classed as real estate—of that kind styled incorporeal hereditaments. (Enfield Toll Bridge Co. v. Hartford and New Haven R. R. Co., 17 Conn. 40; S. C., Id. 462; Price v. Price’s Heirs, 6 Dana, 107; 1 Blackstone’s Com. 20—22, 37, 38.) In the case cited from 17 Conn. 40, this was said of a bridge corporation. The shares of stock of the Water Works are by statute made personal estate. (See Act of 1853.) But whether real or personal estate, they are property. Such franchises, as long as they exist, are protected as property by the guarantee universal in the States of the Union, which forbids their being taken except for public purposes and on compensation being made. (1 Cooley’s Con. Lim., 4th ed., 655, and cases cited in note 4.) During their existence they are as fully protected by law as any other species of property. On this subject see Wilmington R. Co. v. Reid, 13 Wall. 268; 3 Kent’s Com. 458; Hamilton Co. v. Massachusetts, 6 Wall. 633; People v. Selfridge, 52 Cal. 331; T. & T. R. Co. v. Campbell, 44 id. 89; O. R. R. Co. v. O. B. & F. V. R. R. Co., 45 id. 365. (See cases just above cited from 17 Conn., and Norwich Gas. Light Co. v. Norwich City Gas Co., 25 Conn. 36.)
The franchise of a corporation is and can be well defined to be the right of the corporation to exist and exercise the powers and privileges vested in it by its charter. (Burr. on Tax., § 83.) The franchise is the faculty of the corporation. As said by Bedfield in his work on Railways: “ The faculty of a corporation is its organic life; its corporate existence by which it is enabled to carry on business; that which it derives from its charter of incorporation, its corporate franchise.” (2 Redf. on Railways, 3d ed., 452.) In this State, the charter is the statute or statutes granting and defining the powers of the corporation, under which it is constituted and exists, together with the instruments required to be executed by the provisions of such statute or statutes. These are sometimes called the constating instruments. (Field on Corp., § 34, n. 3.) Such franchises are legal estates, not mere naked powers, and are powers coupled with an interest, which vest in the corporation by virtue of its charter or constating instruments. (Society for Savings v. Coite, 6 Wall. 606; Provident Institution v. Massachusetts, id. 622; Hamilton Co. v. Massachusetts, id. *111638; Porter v. R. R. I. and’ St. L. R. R. Co., 76 Ill. 561.) That the State has full power to tax them, see same cases, and State R. R. Tax Cases, 92 U. S. 603. In the case from 76 Illinois, above cited, it is said: “It is clear upon authority that the franchise of a corporation is property, and as such it may be a proper object of taxation.” (P. 573.) In Veazie Bank v. Fenno, 8 Wall. 547, Chase, C. J., used this language: “Franchises are property, often very valuable and productive property, and seem to be as properly objects of taxation as any other property.” Daniel, J., delivering the opinion of the Court in West River Bridge Co. v. Dix et al., 6 How. 529, said: "We are aware of nothing peculiar to a franchise which can class it higher, or render it more sacred than other property. A franchise is property, and nothing more.” (See also Wilmington R. R. Co. v. Reid, 13 Wall. 264, and Monroe Savings Bank v. The City of Rochester, 37 N. Y. 367.) In this last case Fullerton, J., delivering the opinion of the court, said, in regard to a statute declaring the privileges and franchises granted by the Legislature to savings banks or institutions for savings, personal property, and liable to taxation as such: “ In declaring the privileges and franchises of a bank to be personal property, the Legislature has adopted no novel principle of taxation. The powers and privileges which constitute the franchise of a corporation are in a just sense property, and quite distinct and separate from the property, which, by the use of such franchise, the corporation may acquire. They are so regarded by the law, and so regarded by common acceptation.”
That such franchises can be taxed according to the valuation arrived at through an assessment is recognized in The Case of the Freight Tax, 15 Wall. 282, and in the case of The State Tax on Railway Gross Receipts, id. 296. In the case of the State Railroad Tax Cases, above cited from 92 U. S. Reports, a tax on the assessed value of franchise and capital stock by the State of Illinois was sustained, approving the decision to that effect in Porter v. R. R. I. & St. L. R. R. Co., above cited from 76 Illinois. (See also Gordon v. Appeal Tax Court, 3 How. (U. S.) 133, and Judge Redfield’s comment on this case in 2 Rcdf. on Railways, 453.) As to the extent of the power of the State to tax, see Providence Bank v. Billings, 4 Pet. *112562, and Hamilton Co. v. Massachusetts, 6 Wall. 639. In the case in 4 Peters, Marshall, C. J., said: “All powers * * * over which the sovereign power of a state extends are subjects of taxation. The sovereignty of a State extends to everything which exists by its authority, or is introduced by its permission.” (4 Pet. 563.) The same doctrine was declared in Osborne v. Bank of the U. S., 9 Wheat. 738. From the foregoing cases, it would seem that there can be no doubt of the power of a State to tax the franchise at its assessed value. There may be more difficulty in arriving at its value than that of a-parcel of land or personal chattels, but still its value may be estimated. When it is condemned for public use, the compensation to be paid can be fixed. As is justly said in Porter v. R. R. I. & St. L. R. R. Co., 76 Ill. 578: “We have never known it to be asserted that the value of a franchise is so indefinite and uncertain that it can not be made the measure of a recovery when it is wrongfully invaded; or that when it is taken and condemned for public use, it can not be ascertained what compensation shall be made to its owner. It is recognized in those respects as being capable of a definite valuation. * * * If its value may be ascertained for those purposes, it may as readily be ascertained for the purposes of taxation.” As to value of franchises, and that they possess a value beyond that belonging to the tangible property of the corporation, see cases just above cited. (Commonwealth v. Hamilton Mfg Co., 12 Allen, 298, and Commonwealth v. Cary Improvement Co., 98 Mass. 23.)
In this State, the Constitution having declared that franchises are property, and that all property in the State not exempt from taxation shall be assessed in proportion to its value, to be ascertained as provided by law (Const., Art. xiii., § 1), it would seem to follow that the tax must be according to the valuation made by the officer appointed for that purpose. If the State can impose a tax on the franchise of a corporation in the nature of an excise or duty, it does not exclude the taxation by a valuation made by an Assessor.
That such a franchise as that held by the appellant was taxable in this State, we think has been held by this Court in two cases: Burke v. Badlam, 57 Cal. 594; and San José Gas Company v. January, id. 014. In Burke v. Badlam, an *113application was made to this Court for a writ of mandate to compel the Assessor of the City and County of San Francisco to assess to certain holders of certificates of stock in various corporations the respective shares held by them in such corporations, respectively, etc. The corporations mentioned in the petition for the writ were the llevada Bank of San Francisco, the San Francisco Gas Light Company, the Golden City Chemical Works, the Selby Smelting and Lead Company, and the Virginia and Gold Hill Water Company. This proceeding was with reference to the assessment of 1881—82.
In deciding the case, the Court properly assumed, as it had a right to do, nothing appearing to the contrary, that the Assessor would assess in due time, to the various corporations, all of their property of every character, as required by the law.
It was claimed by the petitioner, according to the report of the case, 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 the capital stock held by them. “ If this would, in effect,” said the Court, per Ross, J., “ be assessing the same property twice for the same tax, it can not be done.” (57 Cal. 600.) The Court then proceeds to declare that under the Constitution double taxation was neither required nor permitted, but was forbidden, and then passes to the consideration of the question whether an assessment as contended for (stated above) would be, in effect, assessing the same property twice for the same tax.
In discussing this question, the Court, after referring fully to the first section of Article xiii. of the Constitution, said: “How, 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 this is taken away, what remains ? Obviously, nothing. When, therefore, all of the property of the corporation is assessed—its franchise, and all 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.” Further on in the opinion, this is said: “ To assess all of the eor*114porate 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 he 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 rights of the stockholder in the corporation are confined to the property held by the corporation. In the case of the partnership, take away all the property of the firm, and I have no longer any property as a partner. In the case of the corporation, take away all its property, which, it must be remembered, includes its franchise, and the stockholder has no longer any property. (57 Cal. 601-2.)
The conclusion is reached, that when the law is complied with by assessing all the property of the corporation, which property includes the franchise of the corporation, to assess the shares would be double taxation; because it would be, in effect, to assess the same property twice for the same tax, which the Constitution forbids. It is held in the judgment pronounced, that the franchise of a corporation of the character of those named in the petition, is the property of the corporation, and that, as property, it is taxable.
In San José Gas Company v. January, 57 Cal. 614, this Court held, that the tax of a franchise was legal. The franchise in that case pertained to a corporation for manufacturing and selling gas to the city and inhabitants of San José. The particular franchise to which the attention of the Court seems to have been directed in that case, was, that of using the streets, and laying pipes therein, for supplying a city with gas. The Court said this was a franchise, and by Section 1 of Article xiii. of the Constitution, franchises are deiclared to he property for purposes of taxation. It was ar*115gued for appellant that such a franchise, as the one mentioned, had no value. It was said by the Court, per Myrick, J., in reply to this contention: “ The method of assessment, and by whom, was to be and was provided by law. Therefore, it does not rest with the plaintiff, nor with the Courts, to determine that its franchise had no value. In a pecuniary sense, the value of franchises may be as various as the objects for which they exist, and the methods by which they aro employed, and may change with every moment of time; but that franchises are property, and are to be taxed in some method in proportion to value, is a part of the paramount law of this State.”
At the time that the action to which this case relates was taken by the Board of Equalization, and at the time at which the matters in controversy in Burke v. Badlam originated, the Legislature had acted in regard to the assessments of property, and enacted as follows:
“ Shares of stock in corporations possess no intrinsic value over and above the actual value of the property of the corporation which they stand for and represent, and the assessment and taxation of such shares and also of the corporate property would be double taxation. Therefore all property belonging to corporations shall be assessed and taxed, but no assessment shall be made of shares of stock; nor shall any holder thereof be taxed therefor.” (Pol. Code, §3608.) (It may be remarked here that the constitutional validity of this section was affirmed in Burke v. Badlam. See 57 Cal. 602.)
“All property in this State not exempt” (stating the exemptions allowed by the Constitution, etc.) “is subject to taxation as in this Code provided.” * * * (Pol. Code, § 8607.) In Section 3617 Political Code, which is a definition of terms employed in relation to revenue and taxation, it is provided that “the term ‘property’ includes moneys, credits, bonds, stocks, dues, franchises, and all other matters and things, real, personal, and mixed, capable of private ownership.” It is further provided in the same section, that “the terms ‘value’ and ‘full cash value’ mean the amount at which the property would be taken in payment of a just debt due from a solvent debtor;” and that “the term ‘personal property’ includes everything which is the subject of ownership *116not included within the meaning of the term real estate.” In the Political Code the word person includes a corporation, as well as a natural person. (§ 17.) Each person (which includes corporations) must furnish a statement of property, real and personal. Each person must insert in the statement of his property “all property belonging to, or claimed by, or in the possession, or under the control or management of any corporation of which such person is President, Secretary, Cashier, or Managing Agent.” (Pol. Code, § 3639, Subs. 1, 2, 3.) As property includes franchise, the latter must be inserted in the statement.
The Assessor must prepare an assessment book, with appropriate headings, etc., in which must be listed all property within the county., In this assessment book must be specified in a separate column, under its appropriate head, all personal property, showing the number, kind, amount, and quality, and also the cash value of all personal property, exclusive of money. (Pol. Code, § 3650, Subs. 4 and 10.)
In subdivision 15 of the same section if is provided that “ each franchise must be entered on the assessment roll, without combining the same with other property, or the valuation thereof.”
The Assessor must complete the assessment book on or before the first Monday in July in each year (Pol. Code, § 8652), and as soon as completed he must deliver this book, with the map book (see § 3653) and statements, to the Clerk of the Board of Supervisors, who must immediately give notice thereof and of the time the Board will meet to equalize assessments, * * * and in the mean time the book must remain in his office for the inspection of all persons interested. (§ 3654.) The section in relation to the power of the Board to equalize, so far as material herein, has been already quoted. (§ 3673.)
The power to act on each and every assessment is conferred on the Board, and to increase or lower it so as to make it conform to the true value in money of the property mentioned therein.
The above citations from the Political Code show that the Board has full power to act on the assessment of the franchise and increase or lower it as provided in section 3673.
*117It appears from the record in this case that the Board of Supervisors, in the exercise of its power of equalization, assessed the franchise of the Water Works by taking the aggregate of the market value of the shares of stock in the company on the seventh of March, 1881, and deducting therefrom the value of the real and personal property of the company, and held the difference to be the value of the franchise. The market value of the shares was shown to the Board by the testimony of witnesses. Such a mode of arriving at the value of the franchise appears to have been adopted by the Assessor in San José Gas Co. v. January, 57 Cal. 614, and this mode was held to be within the powers vested in the Assessor. It was also impliedly approved as a correct mode in Burke v. Badlam, above cited. (See Commonwealth v. Hamilton Mfg. Co., 12 Allen, 306.)
If such power is vested in the Assessor, it was also vested in the Board of Supervisors in exercising their powers under the Constitution and statute of this State. (See Pol. Code, § 3679, as to what the Board, may use in its function of equalization.)
In addition to what has been said above as to the action of the Legislature, it should be stated that on the same day on which it passed Section 3608 of the Political Code above quoted, it repealed Section 3640 of the same Code, which was as follows: “Each person, firm, or corporation, owning or having in his or its possession any of the shares of the capital stock of any corporation, association, or joint stock company, shall be assessed therefor. If the corporation, association, or joint stock company has its principal place of business in this State, the assessable value of each share of its stock shall be ascertained by taking from the market value of its entire capital stock the value of all property assessed to it, and dividing the remainder by the entire number of shares into which its capital stock is divided. The owner or holder of capital stock in corporations, associations, and joint stock companies whose principal place of business is not within the State, must be individually assessed for such stock. Shareholders, in the statement required by Section 3629 of this Code, shall specify the number of shares of stock held by them, and the name of the corporation. The owner of *118shares of stock, to be entitled to the deduction provided for in this section, must produce to the Assessor a certificate of the assessment of the property of the corporation, association, or joint stock company.”
By this section, which was repealed as above, it will be seen that the whole property of the corporation including franchise and other assessed property, would have been taxed. This was by the operation of the section to have been brought about by taxing the shares to each owner of shares in the manner indicated by its provisions. But by declaring, as was done in Section 3608, that shares of stock were not to be taxed because they possessed no intrinsic value over and above the value of the property of the corporation which they stand for and represent, and as taxing of the shares and property both, would be double taxation, and therefore the shares should not be assessed, but the property should, no doubt it was their intention to tax everything in the shape of property owned by the corporation; that everything entering into and giving-value to the shares should be taxed. It can not be doubted that the Legislature in acting on the subject of revenue and taxation during the Session of 1881, did not intend to leave the system in relation to so important a matter in such a shape, that so large an amount of property as indicated by the difference between the market value of the shares of cor■porations and.the value of the tangible property of such corporations, should escape taxation. To come to any other conclusion, would be to impute to that body a most culpable dereliction of duty.
There is a further point which we think it proper to notice. It is.contended that good-will enters into and forms an element in the value of the shares of stock. No case has been produced to us, nor have we been able to find any holding or even intimating that this is so. We find no such element of value in the least hinted at, by any one who has written on the subject, nor has any such been called to our attention. We can not recognize any such element as giving value to shares in a trading corporation. It would be ■ strange to predicate good-will as pertaining to or extending to an abstraction, to an “ artificial being, invisible, intangible, and existing only in contemplation of law.”
*119Our conclusion is that the Board of Supervisors in its capacity of a Board of Equalization, had jurisdiction of the person and subject-matter in the matters involved in this cause, and the judgment of the Court below is affirmed.
Boss, Myrick, McKinstry, McKee, and Sharpstein, JJ., concurred.
Morrison, C. J., took no part in this decision. •