Michels v. Watson

• Court: California Court of Appeals
• Citation: 229 Cal.App.2d 404,40 Cal.Rptr. 464
• Parties: Bruce A. MICHELS, Plaintiff and Appellant, v. Philip E. WATSON, Assessor of the County of Los Angeles, Defendant and Respondent. Civ. 27835.
• Decision Date: 31 August 1964

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40 Cal.Rptr. 464 229 Cal.App.2d 404 Bruce A. MICHELS, Plaintiff and Appellant,
v.
Philip E. WATSON, Assessor of the County of Los Angeles, Defendant and Respondent. Civ. 27835. District Court of Appeal, Second District, Division 1, California. Aug. 31, 1964.
Hearing Denied Oct. 28, 1964.

[229 Cal.App.2d 405] Stanley Milton Sapiro, Hollywood, for appellant.

Harold W. Kennedy, County Counsel, by A. R. Early, Deputy County Counsel, for respondent.

LILLIE, Justice.

Defendant, Assessor of the County of Los Angeles, announced his intention to assess all property in the county at 25 per cent of its fair market value; plaintiff, a resident taxpayer and owner of a double-family dwelling, filed an action for declaratory relief to compel him to assess at full cash value. There were no oral proceedings before the trial court except argument. Determining the issues in favor of defendant, the judge concluded: 'Article XI, section 12, of the California Constitution does not prohibit the assessment of taxable property by a county at a uniform fraction of its full cash value.' Plaintiff's appeal from the judgment comes to this court on an Agreed Statement.

The sole issue before this court is whether locally assessable tangible property may be legally assessed at a uniform fraction of its full cash value. Appellant contends that all property must be assessed at full cash value; respondent claims that constitutional and statutory provisions permit assessment of property subject to taxation at a uniform fraction of its full cash value as long as full cash value is the standard or basis of each assessment. In support of his position appellant has advanced extended argument based primarily[229 Cal.App.2d 406] upon discussions

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found in numerous out-of-state cases; while it might be apposite and reasonable enough in the absence of controlling authority in California, or as an original proposition in the early stages of the administration of our revenue law, it is hardly persuasive now when, for almost a century, administrative, legislative and judicial authorities in this state have been in accord in the administration of our system of raising revenues to support local government. We seek neither to defend nor indict the property tax and its administration; our sole concern is with the legality of fractional assessments. It should be noted that while he criticizes al length the practice of assessing all property at a fraction of its fair market value, plaintiff has neither pleaded nor offered to prove that he has suffered or might suffer any detriment or discrimination as a result of assessment at 25 per cent or any other uniform fraction of the full cash value of his property. He claims that the only true way to achieve equality in assessment is by assessment at full cash value, but he has not complained of lack of equality in the assessment of his or any other property.

The following constitutional and statutory provisions set up the standard of valuation of property for assessment purposes for taxation in California.

Section 1, Article XIII (previously contained in § 13, Art. XI, Constitution of 1849) adopted in 1879, provides: 'All property * * * shall be taxed in proportion to its value, to be ascertained as provided by law * * *' Section 12, Article XI, adopted in 1933, reads: 'All property subject to taxation shall be assessed for taxation at its full cash value.' Similarly, section 401, Revenue and Taxation Code, enacted in 1939, provides: 'Except as provided in this part, all taxable property shall be assessed at its full cash value.' Section 110, Revenue and Taxation Code, (once contained in § 3617, Political Code) defines 'value,' 'full cash value' or 'cash value' as 'the amount at which property would be taken in payment of a just debt from a solvent debtor.' 'Full cash value' is synonymous with 'market value.' (De Luz Homes Inc. v. County of San Diego, 45 Cal.2d 546, 561-562, 290 P.2d 544; Michael Todd Co. v. County of Los Angeles, 57 Cal.2d 684, 686, 21 Cal.Rptr. 604, 371 P.2d 340.)

Section 3627, Political Code, predecessor of Section 401, Revenue and Taxation Code, was enacted in 1872 and, except for the addition of the word 'taxable' (1881), remained unchanged until it became Section 401 in 1939 and 'shall' [229 Cal.App.2d 407] was substituted for the word 'must.' While Section 3627 specifically provided that '[a]ll taxable property must be assessed at its full cash value,' during its 67 years of existence, administrative and legislative authorities uniformly held to the view that it permitted property to be assessed at a uniform fraction, rather than 100 per cent of cash value, as long as full cash value was the standard or basis of each assessment. This view, acknowledged and accepted by appellate courts in this state, grew out of the early consistent practice of those administering our revenue law--the State Board of Equalization and assessor of each county--of assessing property at a uniform fraction of cash value, as reflected in biennial reports (since 1878) made by the State Board of Equalization to the Governor under Section 3692, Political Code, ¹ and in annual reports of results of certain studies (since 1921) by the State

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Board of Equalization to the California Legislature, ² of which we take judicial notice. (Watson v. Los Altos School District, 149 Cal.App.2d 768, 772, 308 P.2d 872.)

Legislative approval followed the administrative practice of fractional assessments. At least since 1921 the California Legislature had been directly aware of the administrative interpretation Section 3627 had uniformly received; and in 1933, as part of the 'Riley-Stewart Tax Plan,' it proposed the incorporation in the California Constitution of a provision based upon, and almost identical with, Section 3627. Thus, [229 Cal.App.2d 408] this amendment, Article XI, section 12, provides: 'All property subject to taxation shall be assessed for taxation at its full cash value.' (Senate Constitutional Amendment, 30 Stats.1933, c. 63, pp. 3072-73.) This amounted to an inclusion in the Constitution of what had been the law since 1872; it is apparent that no change in assessment procedure was intended or contemplated. The Legislature carried over into the constitutional amendment the substantially identical language of Section 3627, under which it knew that market value was being used as a standard for fractional assessments. (See Footnote 2.) Moreover, since 1890, numerous judicial opinions had recognized and recited the practice being employed under the administrative construction of Section 3627. (San Jose, etc., Railroad Co. v. Mayne (1890), 83 Cal. 566, 570, 23 P. 522; Southern Pacific Land Company v. County of San Diego (1920), 183 Cal. 543, 545, 191 P. 931; Birch v. County of Orange (1921), 186 Cal. 736, 740, 200 P. 647; Wild Goose Country Club v. County of Butte (1922), 60 Cal.App. 339, 343, 212 P. 711; Birch v. County of Orange (1927), 88 Cal.App. 82, 87, 262 P. 788; Hammond Lumber Co. v. County of Los Angeles (1930), 104 Cal.App. 235, 244, 285 P. 896; Blinn Lumber Co. v. County of Los Angeles, 216 Cal. 474, 477, 479, 14 P.2d 512, 84 A.L.R. 1304.) In the absence of contrary indication in a constitutional amendment, terms used therein must be construed in the light of their statutory meaning or interpretation in effect at the time of its adoption. (Forester Shipbuilding Co. v. County of Los Angeles, 54 Cal.2d 450, 456, 6 Cal.Rptr. 24, 353 P.2d 736.) Persuasive, too, is the absence of mention of any basic change in the administrative practice of assessing at a fraction of full cash value in the 'address' to the voters printed on the ballots used in the election in which this amendment was adopted. (Proposed Amendments to Constitution, Special Edition, June 27, 1933; Pasadena v. County of Los Angeles, 182 Cal. 171, 174, 187 P. 418.) Shortly after the adoption of Article XI, Section 12, but on facts arising prior thereto, the case of Rittersbacher v. Board of Supervisors (1934), 220 Cal. 535, 32 P.2d 135 (Cert. den. 293 U.S. 592, 55 S.Ct. 107, 79 L.Ed. 686) was decided, and therein no mention of any contemplated change was made by the court.

That the Legislature four years later, in 1939, again intended no change in the administrative practice of fractional assessments under Section 3627, Political Code, and Article XI, Section 12, California Constitution, is reflected in its adoption [229 Cal.App.2d 409] of Section 3627 as Section 401, Revenue and Taxation Code. At this time administrative authorities, as before, were construing Article XI, Section 12, as permitting the use of market value as the standard or basis for assessment. Continuous, consistent

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and contemporaneous administrative interpretation of constitutional and statutory provisions is a persuasive force in their construction (Pearson v. State Social Welfare Board, 54 Cal.2d 184, 210, 5 Cal.Rptr. 553, 353 P.2d 33; City of Los Angeles v. Rancho Homes Inc., 40 Cal.2d 764, 770, 771, 256 P.2d 305) and, while not necessarily controlling, 'is entitled to great weight, and courts generally will not depart from such construction unless it is clearly erroneous or unauthorized.' (Coca-Cola Co. v. State Board of Equalization, 25 Cal.2d 918, 921, 156 P.2d 1, 2.) In the face of the many decisions in this state herein referred to, we cannot say that the administrative construction resulting in the assessment of taxable property by a county at a uniform fraction of its full cash value is 'erroneous or unauthorized.' Similarly, contemporaneous construction of the Constitution by those charged with the duty of collecting taxes has been given great weight in Select Base Materials, Inc. v. Board of Equalization, 51 Cal.2d 640, 647, 335 P.2d 672; and Coca-Cola Co. v. State Board of Equalization, 25 Cal.2d 918, 921, 156 P.2d 1. The pratcice continued as before, ³ and today, throughout California assessors assess property for...