Ohrbach's, Inc. v. Los Angeles County
Decision Date | 28 March 1961 |
Citation | 12 Cal.Rptr. 132,190 Cal.App.2d 575 |
Parties | OHRBACH'S, INC., a corporation, individually and on behalf of all others similarly situated, substituted as Plaintiff for Milliron's, a corporation, Plaintiff and Appellant, v. COUNTY OF LOS ANGELES, a body corporate and politic, and City of Los Angeles, a municipal corporation, Defendants and Respondents. Civ. 25029. |
Court | California Court of Appeals |
Loeb & Loeb, Frank M. Keesling and John S. Warren, Los Angeles, for appellant.
Harold W. Kennedy, County Counsel, and A. R. Early, Deputy County Counsel, Los Angeles, for respondents.
This is an action for refund of taxes. The complaint, filed December 7, 1959, was entitled, 'Milliron's, a corporation, Plaintiff, vs. County of Los Angeles * * * and City of Los Angeles * * * Defendants.'
On April 11, 1959, pursuant to stipulation, Ohrbach's, Inc., a corporation, 'individually and on behalf of all others similarly situated [as stockholders],' was substituted as plaintiff in place of Milliron's. On April 11, 1959, an amended and supplemental complaint was filed which was entitled, 'Ohrbach's, Inc., a corporation, individually and on behalf of all others similarly situated, substituted as Plaintiff for Milliron's, a corporation, Plaintiff, vs. County of Los Angeles, a body corporate and politic, and City of Los Angeles, a municipal corporation, Defendants.' Defendants demurred on the ground that said complaint did not state facts sufficient to constitute a cause of action. The demurrer was sustained without leave to amend, and judgment for defendants was entered. Plaintiff appeals from the judgment.
Appellant's contention is to the effect that the value of the possessory interest of the State of California in appellant's real property (under a sublease of a portion of the property), which interest of the state was exempt from taxation, was included in the assessed valuation of the portion of the property retained by appellant's assignor (Milliron's)--with the result that appellant's assignor was required to pay an excessive amount of taxes.
The amended and supplemental complaint alleges that: Milliron's was a corporation. About December 7, 1959, Milliron's filed the complaint in this action. About February 24, 1960, pursuant to a plan of liquidation of Milliron's the claim which is the subject of this action was assigned to the common shareholders of Milliron's in undivided interests proportionate to their respective shareholdings. On February 22, 1960, Ohrbach's, Inc., a corporation, was the owner of 150,565 shares, of a total of 191,800 shares outstanding, of the common stock of Milliron's. As of February 24, 1960, there were approximately 100 common shareholders of Milliron's. This action is being continued by Ohrbach's, Inc., individually and upon behalf of all persons who were common shareholders of Milliron's on February 24, 1960, and who were assignees of said claim. The question to be litigated is of common and general interest to all said assignees. The assignees are numerous, and many are not residents of California, and therefore it is impracticable to bring them before the court.
It is alleged further that the city of Los Angeles has authorized the county of Los Angeles to act as an assessing agent for the assessment and collection of property taxes for the city and that at all times pertinent hereto the county has acted in such capacity upon behalf of the city. The property upon which the taxes that are the subject of the action were levied is that certain improved real property in the city of Los Angeles described as: (Description omitted). In 1957 Milliron's was the assignee of the lessee's interest, in a portion of the land and improvements hereinabove described, under a lease dated August 8, 1922, between Central Properties Company, as lessor, and Fifth Street Building, as lessee, which lease is for the term commencing January 1, 1921, to December 31, 2019. In 1957 Milliron's was also the assignee of the lessee's interest, in the remainder of said land and improvements, under a lease dated May 20, 1921, between Fifth and Broadway Investment Company, as lessor, and Fifth Street Building, as lessee, for the same term. Under the terms of each of said leases the lessee is obligated to pay all taxes assessed against said land and improvements and is authorized to commence this action in the name of the lessor or in its own name. The provisions of such authorization are binding upon the successors and assignees of the parties to the lease. As a consequence thereof Milliron's was obligated to pay all taxes against said land and improvements and was authorized to commence this action in its own name. About October 30, 1956, Milliron's entered into a sublease of a portion of said premises with the State of California. Said sublease was amended on March 14, 1957, and was amended on April 16, 1957. Under the terms of said sublease, as amended, the state leased from Milliron's a total of 55,453.42 square feet of the usable office space in said premises for a total rental of $1,463,150.16 payable over a term of 10 years. The said area constituted 23.13 per cent of the total area of said premises. A copy of said sublease, marked Exhibit 'C,' and a copy of said amendment, dated March 14, 1957, marked Exhibit 'D,' and a copy of said amendment dated April 16, 1957, marked Exhibit 'E,' are attached to the amended and supplemental complaint and incorporated therein as if set forth in full.
The amended and supplemental complaint alleged further that: In 1957 the county assessor assessed the said land at a valuation of $614,000 and assessed the improvements at a valuation of $621,000. Thereafter, the county, upon the basis of said assessment, levied a tax of $68,173.24 on the land and improvements for the year 1957. In 1957 the city, upon the basis of said assessment, levied a tax of $23,197 on the land and improvements. In making the assessment the assessor 'included therein, and did not exclude therefrom,' the value of the possessory interest of the State of California under the sublease referred to above. The full cash value of the said possessory interest in the land was $244,991.22, and the full cash value of the said possessory interest in the improvements was $247,948.47. The taxes were based in part upon the assessment of the possessory interest of the state, to wit: $32,730.80 of the county tax of $68,173.24 was based upon the said possessory interest: $11,132.28 of the city tax of $23,197 was based upon the assessment of said possessory interest. The said possessory interest of the state was and is exempt from taxation by defendants. On July 3, 1957, Milliron's petitioned the County Board of Equalization to reduce said assessments on the ground that the value of said possessory interest of the state should be excluded therefrom. A copy of the said petition is attached to the amended and supplemental complaint, marked Exhibit 'A,' and incorporated therein as if set forth in full. On July 10, 1957, Milliron's appeared before said board in support of the petition. The board denied the petition and refused to reduce the assessments. On December 10, 1957, Milliron's paid to the tax collector for defendant county the sum of $45,685.12, representing the first installment of taxes. On April 10, 1958, Milliron's paid to the said tax...
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