Opinion
Hearing Granted March 23, 1960.
Opinions vacated 6 Cal.Rptr. 24, 545.
Harold W. Kennedy, County Counsel, Alfred Charles DeFlon, Deputy County Counsel, Los Angeles, Carroll H. Smith, Deputy County Counsel, San Diego, of counsel, for appellants John R. Quinn and others.
Holbrook, Tarr & O'Neill, W. Sumner Holbrook, Jr., Francis H. O'Neill, Los Angeles, O'Melveny & Myers, George F. Elmendorf, Bennett W. Priest, Lillick, Geary, McHose, Roethke & Myers, John C. McHose, John F. O'Hara, Luce, Forward, Hamilton & Scripps, Los Angeles, James O. Hewitt, San Diego, Ralph D. Sweeney, Los Angeles, Howard H. Taylor, San Diego, J. Kerwin Rooney, Port Atty., Oakland, Robert G. Cockins, City Atty., Santa Monica, of counsel, for appellants Forster Shipbuilding Co. and others.
Real & Real, M. L. Real, San Pedro, Bruce I. Hochman, Beverly Hills, for respondent Star-Kist Foods Inc.
Harold W. Kennedy, County Counsel, Alfred Charles DeFlon, Deputy County Counsel, Los Angeles, for respondents County of Los Angeles et al.
J. Kerwin Rooney, Port Atty., Oakland, Robert G. Cockins, City Atty., Santa Monica, O'Melveny & Myers, George F. Elmendorf, Bennett W. Priest, Lillick, Geary, McHose, Roethke & Myers, John C. McHose, Holbrook, Tarr & O'Neill, W. Sumner Holbrook, Jr., Francis H. O'Neill, John F. O'Hara, Horton & Foote, Joseph K. Horton, Ralph D. Sweeney, Luce, Forward, Kunzel & Scripps, Fred Kunzel, Los Angeles, Howard H. Taylor, Oakes & Horton, Robert A. Oakes, San Diego, for amici curiae on behalf of respondent Star-Kist Foods Inc.
ASHBURN, Justice.
These appeals mark another step in the settlement of a proper method of evaluation Blinn Lbr. Co. v. County of Los Angeles,
Hammond Lumber Co. v. County of Los Angeles, De Luz Homes, Inc. v. County of San Diego, Texas Company v. County of Los Angeles (Forster Shipbuilding Company, Inc. v. County of Los Angeles), Texas Co. v. County of Los Angeles,
'A possessory interest, when arising out of a lease of exempt property, consists of the lessee's interest under such lease and is hereby declared to be personal property within the meaning of Section 14 of Article XIII of the Constitution of the State of California.
'The full cash value of such possessory interest is the excess, if any, of the value of the lease on the open market, as determined by the formula contained in the case of De Luz Homes, Inc. v. County of San Diego (1955), 45 Cal.2d 546 [290 P.2d 544], over the present worth of the rentals under said lease for the unexpired term thereof.
'A possessory interest taxable under the provisions of this section shall be assessed to the lessee on the same basis or percentage of valuation employed as to other tangible property on the same roll.
'This section applies only to possessory interests created prior to the date on which the decision of the California Supreme Court in De Luz Homes, Inc. v. County of San Diego (1955), 45 Cal.2d 546 [290 P.2d 544], became final. It does not, however, apply to any of such interests created prior to that date that thereafter have been, or may hereafter be, extended or renewed, irrespective of whether the renewal or extension is provided for in the instrument creating the interest.
'This section does not apply to leasehold estates for the production of gas, petroleum and other hydrocarbon substances from beneath the surface of the earth, and other rights relating to such substances which constitute incorporeal hereditaments or profits a prendre.'
The Texas Company and Forster cases, supra, 52 Cal.2d 55, 338 P.2d 440, involved taxes for the years 1956 and 1957. The cases now before us are concerned with 1958 taxes. Each plaintiff company holds tideland leases (orders or permits) from the City of Los Angeles which were made prior to the De Luz decision and have not been extended or renewed. The assessor refused to follow § 107.1, deeming it to be unconstitutional. Forster paid the tax under protest and sued to recover; judgment went against it and hence the present appeal. Star-Kist sought mandate to compel the assessor to follow § 107.1; the lower court granted the writ; the county appealed. Two major questions arise upon the challenge to the constitutionality of § 107.1. First, is a tideland leasehold realty and hence not legislatively classifiable as personal property as attempted in the first paragraph of § 107.1? Second, was the legislature competent to reverse the De Luz theory of proper capitalization, to declare that its statutory definition of 'full cash value' did not have the meaning attributed to it by the Supreme Court and that (for leases made before De Luz changed the law, and not renewed or extended) 'full cash value' should be reached through capitalization of net income?
Our conclusion is that the first paragraph of § 107.1 is unconstitutional; that it is severable from the balance of the section; that the remaining four paragraphs are complete in themselves and effect a valid definition and formula for application of the phrase 'full cash value' which appears in the Constitution as well as the statute.
Fundamentally taxation belongs to the legislative field; constitutional provisions relating to it are not grants of power to the legislature but operate by way of limitation upon exercise of its inherent power. Delaney v. Lowery, 25 Cal.2d 561, 568, 154 P.2d 674. In the absence of such limitation questions of taxing policy and methods of valuation of properties for that purpose belong exclusively to the legislature for determination.
Study of pertinent constitutional and statutory provisions reveals that there is an implied constitutional inhibition upon the classification of leases of tax exempt property as personalty for tax purposes, as has been attempted in the first paragraph of § 107.1, supra.
In its original (1879) form § 1 of Article XIII of the Constitution provided: '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. * * *' Last amended in 1944, it now reads: '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. * * *' Except for matters further mentioned in § 1 which are immaterial here, this plainly means that the method of ascertaining value is to be prescribed by the legislature. Indeed, section 13 of Article XIII provides that 'The Legislature shall pass all laws necessary to carry out the provisions of this article.' And the legislature has provided since 1872 that "Value,' 'full cash value,' or 'cash value' means the amount at which property would be taken in payment of a just debt from a solvent debtor.' Rev. & Tax.Code § 110; see also, § 3617, subd. Fourth, Political Code of 1872.
Section 12 of Article XI of the Constitution deals with taxation for local purposes and directs the vesting of that power in local authorities by general laws. An amendment of June 27, 1933 added the following sentence: 'All property subject to taxation shall be assessed for taxation at its full cash value.' Thus was written into the Constitution a phrase that had been in the statute (Pol.Code § 3627) since 1872. Section 3617 Political Code (as originally enacted) had defined 'real estate' as including '1. The ownership of, claim to, possession of, or right to the possession of land.' Now section 104, Revenue and Taxation Code, contains the same definition. San Pedro, L. A. & S. L. R. R. Co. v. City of Los Angeles, 1919, 180 Cal. 18, 21, 179 P. 393, 394, holds that § 1 of Article XIII of the Constitution imposed 'upon the Legislature the duty of providing a mode whereby to ascertain the value of property to be taxed' and that the legislature through said § 3617, Political Code, had classified leaseholds (e. g. tideland) as Does this exclude tideland leaseholds from such special treatment and leave them within § 12 of Article XI, taxable only at 'full cash value'? It is to be noted that the 1933 amendments to § 12 of Article XI and § 14 of Article XIII were adopted on the same day.
Pol.Code § 3627 (1872): 'All property must be assessed at its full cash value.'
Rev. & Tax.Code § 104: '(a) The possession of, claim to, ownership of, or right to the possession of land.'
Though leaseholds are personal property as a matter of general law (Tiffany on The Law of Real Property (3rd Ed.), Vol. 1, pp. 5-8; People v. Shearer, 30 Cal. 645, 661; Kreling v. Walsh, 77 Cal.App.2d 821, 832, 176 P.2d 965; County of Ventura v. Barry, 207 Cal. 189, 195, 277 P. 333; Trabue Pittman Corp v. County of Los Angeles, 29 Cal.2d 385, 393, 175 P.2d 512), it appears that since the adoption of the original codes they have been definitely and consistently classified as real property for purpose of taxation, by both statute and court decision. Hence they were not within the concept of personal property which was written into § 14 of Article XIII in 1933.
City of Pasadena v. County of Los Angeles, 182 Cal. 171, 175, 187 P. 418, 420, says: 'The constitution does not define the terms 'land' or 'improvements.' It is to be presumed, in the absence of anything in the context to the contrary, that the words were used in the ordinary acceptation and as defined by the statutes in force at the time.' The court then quoted Political Code § 3617, subdivision 3 and Civil Code § 660, and added: 'From these descriptions it is clear that the property consists of fixtures, as that term is defined by the statutes above cited. [Citations.] The property, therefore, constitutes improvements for purposes of taxation.'
In re Estate of Roberts, 49 Cal.App.2d 71, 120 P.2d 933, dealt with a constitutional provision authorizing court commissioners to 'perform chamber business of the judges.' Const. art. 6, § 14. The court said, 49 Cal.App.2d at page 76, 120 P.2d at page 936: 'When this provision was first adopted, as a part of the Constitution of 1879, the Code of Civil Procedure contained definitions of 'chamber business,' and as this is obviously a technical term, this provision must be construed in the light of those definitions.'
Kiessig v. County of San Diego, 51 Cal.App.2d 47, 48, 124 P.2d 163, 164, required interpretation of the phrase 'more than fifty (50) tons burden' in § 4 of Article XIII of the Constitution dealing with exemption of certain vessels from taxation. The court said, in part: 'The words 'tons burden' are not words in common use by the people generally, or by those who do not deal with ships and shipping. Each of them, taken separately, has its own ordinary meaning, and each is in common, every-day use, but when they are found in this collocation they form a phrase which is decidedly a shipping term. 'Technical words are interpreted as usually understood by persons in the profession or business to which they relate, unless clearly used in a different sense. This rule applies to words which are not in common use or which have no very definite signification County of Los Angeles v. Craig, 38 Cal.App.2d 58, 100 P.2d 818, was concerned with the word 'registered' in the same section of the Constitution. At page 61 of 38 Cal.App.2d, at page 820 of 100 P.2d: "Where a word, having a technical, as well as a popular meaning, is used in the Constitution, the courts will accord to it the popular meaning, unless the nature of the subject indicates or the context suggests, that it is used in a technical sense.' (Treadwell's Constitution of California Annotated, 6th ed., p. vii, and authorities cited.)'
To the same effect see, State Mut. Bldg. & L. Ass'n v. Los Angeles, 30 Cal.App.2d 383, 385, 86 P.2d 372; Caulfield v. Stevens, 28 Cal. 118, 119; 11 Cal.Jur.2d § 48, p. 364.
In the present instance the 'nature of the subject indicates [and] the context suggests' that the term 'personal property' as used in § 14 of Article XIII excludes leasehold interests; they do not fit any of the phrases of the section and they had been classified as realty for taxation purposes long before the amendment to § 14 now before us. Taxation is in many of its aspects a technical subject and the matter of classifying possessory interests, generally considered chattels real, as real or personal property is highly technical and the constitutional phraseology concerning it should be construed in its technical sense.
Further light is thrown upon this subject by § 9a of Article XIII of the Constitution dealing with assessment of unsecured properties. As originally enacted in 1924 the first sentence read: 'The taxes levied upon personal property for any current tax year where the same is not secured by real estate shall be based upon the tax rate levied upon real property for the preceding tax year.' By amendment of 1936 the phrase 'assessments upon possession of, claim to, or right to the possession of land and upon taxable improvements located on land exempt from taxation' was inserted, making the first sentence read: 'The taxes levied for any current tax year upon personal property and assessments upon possession of, claim to, or right to the possession of land and upon taxable improvements located on land exempt from taxation, which are not a lien upon land sufficient in value to secure their payment, shall be based upon the rates for taxes levied for the preceding tax year upon property of the same kind where the taxes were a lien upon land sufficient in value to secure the payment thereof.' The insertion of this new phrase raises a presumption of a change in the law and argues that such possessory interests were not within the purview of 'personal property' as used in the original section. The argument submitted to the voters in favor of the amendment contained the following: 'The amendment here proposed will make clearer and extend to its logical conclusion the change intended when Section 9a was added to the Constitution in 1924. It will simplify the collection of taxes on these property rights which the law says are real property but which are not land and will contribute to the reduction of the cost of government by eliminating some clerical work, not large in amount perhaps but costing something and producing results not at all worth while the cost.' (Emphasis added.) If we can attribute to The decision in Roehm v. County of Orange, 32 Cal.2d 280, 196 P.2d 550, is not opposed to the foregoing views but is in harmony with the same.
Of much significance in this connection are the remarks of Mr. Justice Traynor in General Dynamics Corp. v. County of Los Angeles, 51 Cal.2d 59, 330 P.2d 794, which holds that possessory rights in personal property are not taxable in this State. At pages 64-65 of 51 Cal.2d, at page 797 of 330 P.2d, after quoting § 14 of Article XIII, it is said: 'Under these provisions the Legislature may provide for the taxation of 'all forms of tangible personal property' and 'any legal or equitable interest therein.' We have concluded, however, that the Legislature has not provided for the taxation of limited interests in tangible personal property. It has not defined personal property as including a right to its possession as it has real property (see Rev. & Tax.Code, §§ 104, 107), and this omission reflects not merely a lack of detail, but a consistent pattern of taxing tangible personal property as an entity or not at all.' 'It is true that from an economic view-point a bailee's right to use tax exempt personal property may be as valuable as the right to use tax exempt real property. In construing ad valorem tax legislation, however, we cannot overlook the historical distinction between real and personal property that is reflected not only in the statutory provisions but in common understanding of what sort of interest in property is necessary to qualify as property itself within the meaning of tax statutes.' 51 Cal.2d at page 65, 330 P.2d at page 797.
We conclude that § 14 of Article XIII does not cover possessory interests in real property but is confined to those interests which traditionally have been considered to be personal property for purposes of taxation. It follows that the first paragraph of § 107.1 here under consideration is void because unconstitutional.
However, we deem this portion of the section to be severable from the rest of the section which provides a complete chart for the determination of the 'full cash value' of possessory interests in tax exampt lands within the meaning of that phrase 'full cash value' as used in the statute and the constitution. 'It is a general rule supported by an unbroken line of decisions that a provision in or a part of an act may be unconstitutional and beyond the power of the legislature to enact, and still the whole act may not be void. The accepted doctrine in such case is that the constitutional portions of the statute may stand alone and remain in force if they can be separated from the portions which are void. The unconstitutional provisions will not vitiate the whole act, unless they enter so entirely into the scope and design of the law, that it would be impossible to maintain it without such obnoxious provisions.' People v. Lewis, 13 Cal.2d 280, 284, 89 P.2d 388, 390; see 5 Cal.Jur. 643, 644.' Danskin v. San Diego Unified School Dist., 28 Cal.2d 536, 555, 171 P.2d 885, 897. See also, People v. McCaughan, 49 Cal.2d 409, 416, 317 P.2d 974; 45 Cal.Jur.2d § 36, p. 560; 82 C.J.S. Statutes § 92, pp. 150-152.
This legislation was obviously intended to reverse the policy of evaluation enunciated in the De Luz and Texas Co. cases and to direct a capitalization of net income rather than gross with respect to leases which were made during the regime of the Blinn Lumber Company doctrine and which, in the view of its sponsors and the legislators, would be subjected to actual (if not legal) double taxation. This appears from the penultimate paragraph of § 107.1. Unless there is some constitutional limitation upon the power so to do the declaration of a new taxing policy (reversing the Supreme Court's reversal of the philosophy of its former Blinn decision) clearly This appears from the following passages of De Luz: 'The standard of valuation prescribed by the Legislature is that, '[A]ll taxable property shall be assessed at its full cash value.' Rev. & Tax.Code, § 401. 'Full cash value,' as defined in section 110 of the Revenue and Taxation Code, 'means the amount at which property would be taken in payment of a just debt from a solvent debtor.' It provides, in other words, for an assessment at the price that property would bring to its owner if it were offered for sale on an open market under conditions in which neither buyer nor seller could take advantage of the exigencies of the other. It is a measure of desirability translated into money amounts [citation], and might be called the market value of property for use in its present condition. Indeed, section 401 of the Revenue and Taxation Code, as originally enacted (Pol.Code, § 3627) contained the words 'market value' as the standard for valuation of the stock of domestic corporations, and after 'market value' was deleted in 1881 (Stats., 1881, ch. LIII, p. 57), this court stated that the term had been synonymous with 'full cash value.' * * *' 45 Cal.2d at page 561, 290 P.2d at page 554.
'This standard of value must be used in the assessment of all taxable property, for the Constitution of California states, '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.' * * *' 45 Cal.2d at page 562, 290 P.2d at page 554.
'Since nonexempt possessory interests in land and improvements, such as the leasehold estates involved in the present actions, are taxable property [citations], they too must be assessed at 'full cash value.' * * *' 45 Cal.2d at page 562, 290 P.2d at page 554.
'Since the possessory interest must be assessed in accord with the standard of valuation applicable to all other property, its estimated value is the price it would bring if offered on an open market under conditions in which neither buyer nor seller could take advantage of the exigencies of the other, and this hypothetical market price is its value even though a sale of the property has not been made or contemplated.' 45 Cal.2d at page 563, 290 P.2d at page 555.
Again, 45 Cal.2d at page 566, 290 P.2d at page 556, 'In valuing property, the assessor must adhere to the statutory standard of 'full cash value', and must therefore estimate the price the property would bring on an open market under conditions in which neither buyer nor seller could take advantage of the exigencies of the other. * * * [S]ince, however, the legislative standard of value is 'full cash value', it is clear that whatever may be the rationale of the property tax, it is not the profitableness of property to its present owner. If a purchaser would buy a given property on an open market, the property has a value equal to the price such purchaser might be expected to pay.
'The standard of 'full cash value' applies equally to a leasehold interest. Accordingly, the assessor must estimate the price a leasehold would bring on an open market under conditions in which neither buyer nor seller could take advantage of the exigencies of the other. He must therefore capitalize, not the anticipated net earnings of the present lessee, but those of a propective assignee.'
Speaking of the Blinn case, the court says, 45 Cal.2d at pages 569-570, 290 P.2d at page 559, 'Statements in the Blinn cases [Blinn Lbr. Co. v. Los Angeles Co.] 216 Cal. 474, 478-482, 14 P.2d 512, 84 A.L.R. 1304; Id., 216 Cal. 468, 472-473, 14 P.2d 516, requiring the assessing authorities The question of constitutionality of § 107.1 was left open by the Texas Company decision (see 52 Cal.2d at page 55, 338 P.2d 440).
The propriety of such legislation seems to be demonstrated by the opinion in Delaney v. Lowery, supra, 25 Cal.2d 561, 154 P.2d 674. It holds to be constitutional § 107, Revenue and Taxation Code, which specifies that leasehold estates providing for production of gas, etc., shall not be classified as possessory interests but shall be placed upon the secured roll; that this does not frustrate § 9a of Article XIII and is not an unreasonable or arbitrary legislative interpretation of the section. The court said, in part: 'Obviously, all the Legislature did by the 1943 amendment was to interpret and construe phrases used in the Constitution on the subject of taxation. By declaring that lessee interests shall not be classified as possessory interests, it was, by the definition of such interests, given in the forepart of the section (possession of, claim to, or right to the possession of land), declaring that such interests described by the phrase 'possession of, or claim etc.' do not embrace lessee interests. Those phrases are identical with those used in section 9a of article XIII and must be considered as an interpretation or definition of the scope of the meaning thereof. Hence, we are concerned with the extent of or limitation upon the legislative power in that respect. Generally the Legislature is supreme in the field of taxation, and the provisions on taxation in the state Constitution are a limitation on the power of the Legislature rather than a grant to it. [Citations.] Its power in the field of taxation is limited only by constitutional restrictions. [Citations.] Those principles are a part of the broader concept that '* * * Our Constitution is not a grant of power but rather a limitation or restriction upon the powers of the Legislature. * * *' [Citation.] As a result constitutional restrictions on the power of the Legislature must be strictly construed against the limitation. [Citations.] We said in Collins v. Riley, supra, 24 Cal.2d , at page 916, 152 P.2d at page 171: "If there is any doubt as to the Legislature's power to act in any given case, the doubt should be resolved in favor of the Legislature's action. Such restrictions and limitations are to be construed strictly, and are not to be extended to include matters not covered by the language used.' That rule is a corollary of the strong presumption of the constitutionality of an act of the Legislature. 5 Cal.Jur. 628 et seq. Those principles indicate the latitude and effect to be given a legislative construction or interpretation of the Constitution. When the Constitution has a doubtful or obscure meaning or is capable of various interpretations, the construction placed thereon by the Legislature is of very persuasive significance. [Citations.] In accordance with that principle and also with section 13 of article XIII of the Constitution that 'The Legislature shall pass all laws necessary to carry out the provision of this article', article XIII dealing with taxation, the Legislature is authorized to define the term 'improvements' as used in the constitutional provisions on taxation. [Citations.]' 25 Cal.2d at pages 568-569, 154 P.2d at page 677.
The immediate problem at bar is whether the legislature may determine and declare the method to be pursued in determining the value of a unique type of property or whether it is bound by the latest declaration of the Supreme Court upon the subject to such an extent that it may not revert to that court's prior formula in order to relieve the economic burden imposed Mr. Justice Traynor is Texas Co. v. County of Los Angeles,
Section 107.1 merely brings taxation of the specified leaseholds into harmony with the method of valuation which prevails in eminent domain. See, Orgel, on Valuation Under Eminent Domain, § 126, page 536; 5 Hastings Law Journal, pp. 34, 36, 38; 29 C.J.S. Eminent Domain § 143b, p. 988; 3 Am.Law Rep.2d 286, 291-294; 17 Cal.Jur.2d § 36, p. 616; § 99, p. 666. This is conceded by the Texas Company opinion to be the rule in eminent domain (see 52 Cal.2d 55, 338 P.2d 440).
It is argued by the County Counsel that § 107.1 as construed by us results in a partial exemption of tideland leases from their full tax burden because it contemplates their assessment at a figure less than the 'full cash value' required by § 12 of Article XI of the Constitution. Eisley v. Mohan, 31 Cal.2d 637, 645, 192 P.2d 5, is cited in support of this contention but it does not support the position. It holds that § 987, Revenue and Taxation Code, conflicts with the constitutional requirement of assessment at full cash value. The section (found in 1945 Stats., Ch. 324, p. 783) is set forth in the margin. Manifestly this provides for assessment at less than full cash value,--at specified percentages 'of the cash value.' Respondents' application of that case at bar necessarily presupposes that the De Luz method of capitalization is immutable, an hypothesis which we cannot accept.
'The cash value of a possessory interest in real estate of the Veterans Welfare Board is the following percentage of the cash value of the property during the following periods of the life of the contract covering sale of the property:
The briefs on behalf of the county also suggest that § 107.1 attempts an unlawful classification of leasehold interests in that it requires capitalization of net income in valuing leases made prior to De Luz (and not renewed or extended), while accepting the De Luz rule of capitalizing gross income as the formula applicable to all leases made after that decision and to all ante-De Luz leases which have been extended or renewed.
The Delaney case, supra, says in 25 Cal.2d at page 572, 154 P.2d at page 680, 'In regard to the contention that lack of uniformity and discrimination will exist if lessee interests are taxed at a rate different from possessory interests, such as the lessee's interest under an ordinary lease for use and occupation, it should first be observed that, as indicated by the foregoing discussion, such interests are in a class by themselves and are different from other species of property. The rate fixed is that for the current year, which is the normal situation, and it is primarily a legislative matter to determine whether such interests are not sufficient security for the payment of taxes thereon. Clearly, property may be classified for the purpose of taxation as long as the classification is reasonable, and that is especially true where, as seen, the effect We consider that language applicable here, for the purpose of § 107.1 plainly is relief to tideland lessees and lessors who fixed their rentals upon the basis of the Blinn decision and found themselves upon its reversal in De Luz to be subject to unexpected economic impacts which they and the legislators considered inequitable. The lessees had agreed upon higher rents than they otherwise would have done because they relied upon the application of the Blinn rule. When a gross income tax was imposed upon them it amounted as a practical matter to double taxation. On the other hand lessors, such as the Port Authorities who appear as amici curiae herein, found themselves obligated to reduce rents on new leases in order to compete with privately owned property; they were unable to reduce rents on existing leases because (so they believe) that would amount to a gift of public funds (see, County of Alameda v. Chambers, 35 Cal.App. 537, 170 P. 650; Conlin v. Board of Supervisors, 99 Cal. 17, 33 P. 753, 21 L.R.A. 474). The legislature heard their prayer for relief and granted it in the form of § 107.1. The reason for classification is plain and its reasonableness seems to us undeniable.
Though questioning the power of the legislature, the author of a discussion of Property Taxation of Limited Interests, in 47 Cal.Law Review, at page 486, says: 'The policy of the legislature in this respect is eminently fair, particularly when it is considered that prior to the De Luz case the practice of allowing a deduction for rent in the valuation of leases had been followed from time immemorial and, furthermore, had been specifically approved by the appellate courts of the State, including the supreme court.'
We are convinced that the last four paragraphs of section 107.1 provide an integrated, reasonable and lawful method of taxing the class of tideland leases therein mentioned.
The Forster judgment must be reversed. Counsel have stipulated that in such event 'the judgment of reversal by this Court should include a direction to the trial court to remand this case to the Los Angeles County Board of Equalization for hearing upon the matter of assessment of Appellants' possessory interests computed according to the terms and requirements of Rev. & Tax.Code, Sec. 107.1.' This stipulation will be effectuated.
The Star-Kist case presents the further question whether mandamus was a proper remedy in the circumstances there prevailing. There is no question of fact presented; the assessor refused to apply a statute which we find to be valid; the writ of mandamus issued while the assessment roll was still in his possession.
The claim of petitioner is that such an assessment is void because of violation of the statute and is not merely a case of over-valuation.
While the cases generally hold that there is an adequate remedy through payment of the tax under protest followed by action for refund where the attack is directed toward an assessment previously made (Security-First Nat. Bk. v. Board of Supervisors, 35 Cal.2d 323, 327, 217 P.2d 948; Vista Irr. Dist. v. Board of Supervisors, 32 Cal.2d 477, 478, 196 P.2d 926; Sherman v. Quinn, 31 Cal.2d 661, 665, 192 P.2d 17), there is a plain distinction between such cases and those which attempt to control the action of the assessor before the assessment is completed, especially where no factual question is presented. This distinction is developed in the dissenting opinion of Mr. Justice Shcauer in Sherman v. Quinn, supra, and his concurrence in Eisley v. Mohan, supra, 31 Cal.2d 637, 192 P.2d v. Mohan, supra, 31 Cal.2d 637, 192 P.2d 5.
Lockhart v. Wolden, 17 Cal.2d 628, 632, 111 P.2d 319, supports the Schauer view. It was mandamus to compel the assessor to allow petitioner's veteran's exemption. The writ was granted upon the theory that there was no other adequate remedy. Among other considerations stressed were San Diego & A. Ry. Co. v. State Board, 165 Cal. 560, 564, 566-567, 132 P. 1044. Mandamus was held proper to compel State Board of Equalization to assess as operative property certain assets of the railway company which the board had mistakenly decided as matter of law to be nonoperative. At page 564 of 165 Cal., at page 1046 of 132 P., it is said: 'It may be conceded, solely for the purposes of this case, that the decision of the state board upon the question whether property is operative or nonoperative for purposes of taxation would be conclusive against a review by the courts, in the absence of fraud, where the decision depended solely on a question of fact upon which there was a substantial conflict in the evidence. Doubtless this would be so in every such case, so far as the remedy by mandamus is concerned. But in this case there is no conflicting evidence, nor any dispute about the facts. The decision depends wholly upon a question of law. Where this appears and the law enjoins upon a board, as a duty, an act, the performance of which is refused, and there is no plain, speedy, and adequate remedy in the ordinary course of law, mandamus will lie to compel performance. Code Civ.Proc. §§ 1085, 1086.'
Action v. Henderson, 150 Cal.App.2d 1, 7, 309 P.2d 481, emphasizes the discretionary nature of mandamus.
Parr-Richmond Industrial Corp. v. Boyd, 43 Cal.2d 157, 272 P.2d 16, 20. Actions to recover taxes paid under protest. Complaint was that plaintiff had only 'a qualified and contingent possessory interest in the form of a gratuitous and revocable right to possession' which should not have been assessed as if plaintiff held the whole beneficial interest. Judgment for plaintiff was affirmed. Concerning failure to present a claim to Board of equalization, the court held that plaintiff's theory of illegality of the tax as a whole did not present a question of valuation and hence there was no necessity of making application to the board of equalization (43 Cal.2d at page 165, 272 P.2d 16). Parrott & Co. v. City & County of S. F., 131 Cal.App.2d 332, 341, 280 P.2d 881, is to same effect.
It seems reasonably clear that mandamus was an appropriate remedy in the Star-Kist case.
The judgment in Star-Kist Foods, Inc. v. Quinn, No. 23534, is affirmed.
The judgment in Forster Shipbuilding Co. Inc., et al. v. County of Los Angeles, No. 24323, is reversed with instructions to the lower court to remand the case to the Los Angeles County Board of Equalization for hearing upon the matter of assessment of appellants' possessory interests computed according to the terms and requirements of Revenue and Taxation Code § 107.1.
FOX, P.J., and HERNDON, J., concur.
'(a) Thirty per cent during the first quarter period of the life of the contract;
'(b) Forty-five per cent during the second quarter period;
'(c) Sixty-five per cent during the third quarter period; and
'(d) Eighty-five per cent during the fourth quarter period.'