People By and Through Dept. of Public Works v. Santa Clara County

• Decision Date: 01 August 1969
• Citation: 275 Cal.App.2d 372,79 Cal.Rptr. 787
• Court: California Court of Appeals Court of Appeals
• Parties: PEOPLE of the State of California acting by and through the DEPARTMENT OF PUBLIC WORKS, Plaintiff and Respondent, v. COUNTY OF SANTA CLARA, George E. Fowles, County Recorder of County of Santa Clara, Defendants and Appellants. Civ. 25947.

Page 787

79 Cal.Rptr. 787

275 Cal.App.2d 372

PEOPLE of the State of California acting by and through the DEPARTMENT OF PUBLIC WORKS, Plaintiff and Respondent, v. COUNTY OF SANTA CLARA, George E. Fowles, County Recorder of County of Santa Clara, Defendants and Appellants.

Civ. 25947.

Court of Appeal, First District, Division 1, California.

Aug. 1, 1969.

Rehearing Denied Aug. 28, 1969.

John R. Kennedy, County Counsel, Ralph F. Long, Deputy County Counsel, by Ralph F. Long, San Jose, for appellants.

Harry S. Fenton, Chief Counsel, Sacramento, John P. Horgan, Kenneth G. Nellis, William R. Edgar, Donald M. Velasco, San Francisco, for respondent.

MOLINARI, Presiding Justice.

The County of Santa Clara and the County Recorder of said county appeal from an order determining that the county stamp tax ordinance does not impose a tax on the recordation of a final order in a condemnation proceeding and that the State of California (hereinafter referred to as 'the State'), plaintiff and condemnor in this action, is entitled to have the final order recorded without payment of the tax by the condemnee.

The State, by and through the Department of Public Works, brought a condemnation proceeding in which the court entered a final order of condemnation which included a direction that a certified copy of the order be recorded in the office of the County Recorder of the County of Santa Clara. ¹ The recorder refused to record the certified copy of the order because the documentary stamp tax imposed by county ordinance NS--215 had not been paid. The State then moved for an order requiring the recorder to record the certified copy of the order. The trial court found that the recorder had the duty to accept the order for recordation without requiring the payment of the tax by the condemnee on the basis that the ordinance did not impose a tax for the recording of a final order in a condemnation proceeding.

The ordinance does not mention final orders in condemnation proceedings in any context. The language of levy, which is essentially the same as that set out in the enabling legislation provided for in Revenue and Taxation Code section 11911, ² reads as follows: 'There is hereby imposed on each deed, instrument or writing by which any lands, tenements, or other realty sold within the County of Santa Clara shall be granted, assigned, transferred, or otherwise conveyed to or vested in the purchaser or purchasers or any other person or persons by his or their direction * * *, a tax at the rate of 55 cents for each $500.00 or fractional part thereof.' ³

The ordinance further provides that 'The United States * * * any state or territory, or political subdivision * * * shall not be liable for any tax imposed pursuant to this ordinance with respect to any deed, instrument or writing to which it is a party, but the tax may be collected by assessment from any other party liable therefor.' ⁴ It also sets out liability for the tax in terms allowed by Revenue and Taxation Code section 11912, ⁵ as follows: 'The tax imposed * * * shall be paid by any person who makes, signs, or issues any document or instrument subject to the tax, or for whose use or benefit the same is made, signed or issued.' Both the ordinance and section 11933 provide that the recorder shall not record any instrument subject to the tax unless the tax has been paid. The ordinance provides, further, that the recorder interpret the provisions of the taxing ordinance consistently with the regulations of the federal Internal Revenue Service as they existed on November 8, 1967.

The parties agree that the State as condemnor is clearly exempted from the payment of the tax in question. The trial court did not reach the question of the potential liability of the condemnees. Rather, the court concluded that the final order of the court following a condemnation trial is not a Sale of realty within the meaning of section 11911 and the companion section of the Santa Clara County ordinance. ⁶ The court based its conclusion on the fact that the ordinance did not mention final orders in condemnation proceedings and observed, in its order, that 'The court must assume that those who drafted the ordinance were aware of the existence of such orders. * * * It would have been very simple to refer to such orders in clear, unambiguous language.'

The County contends that transfers of realty effected by a court order issued pursuant to an eminent domain judgment are Sales within the meaning of the state law and the ordinance; that the condemnee is liable for payment of the tax because he is a person for whose benefit the judgment and order are issued; and that the recorder may properly refuse to record the final order if the tax is not paid.

Before undertaking our consideration of the County's contentions it should be noted that it is well established that on appeal where there is presented a question of interpreting a statute, all of the facts being agreed upon, as is the case here, the court has before it a question of law only. (Estate of Madison, 26 Cal.2d 453, 456--457, 159 P.2d 630; Jones-Hamilton Co. v. Franchise Tax Bd., 268 A.C.A. 360, 364, 73 Cal.Rptr. 896; Aguirre v. Southern Pac. Co., 232 Cal.App.2d 636, 642--643, 43 Cal.Rptr. 73.) Accordingly, our function is to ascertain the intent of the Legislature so as to effectuate the purpose of the law. ⁷ (Select Base Materials v. Board of Equalization, 51 Cal.2d 640, 645, 335 P.2d 672.)

We turn first to the question whether a final order of condemnation is an instrument by which 'lands, tenements, or other realty sold' is 'granted, assigned, transferred or otherwise conveyed, to or vested in, the purchaser.' It is clear from the provisions of the Code of Civil Procedure section 1253 that title to the condemned property Vests in the condemnor on the date when a certified copy of the final order of condemnation is recorded in the office of the county recorder, and that such order cannot be made until payment has been made as required by the verdict of the jury or the judgment of the court. (See Russakov v. McCarthy Co., 206 Cal. 682, 687, 275 P. 808; Pool v. Butler, 141 Cal. 46, 50, 74 P. 444; City of Alameda v. Cohen, 133 Cal. 5, 7, 65 P. 127; People By & Through Dept. of Public Works v. Peninsula Title Guar. Co., 47 Cal.2d 29, 33, 301 P.2d 1.) Accordingly, it is apparent that a final order of condemnation is an instrument by which real property is vested in the condemnor. ⁸

Adverting next to the question whether transfers of realty effected by a court order issued pursuant to an eminent domain judgment involve a sale within the meaning of the ordinance, we observe that there is ample authority that a transfer of property by eminent domain is a 'sale.' (See Pedrotti v. Marin County, Cal., 152 F.2d 829, 831; Torrance Unified School Dist. etc. v. Alwag, 145 Cal.App.2d 596, 599--600, 302 P.2d 881; 51 Ops.Cal.Atty.Gen. 50, 51; Hawaiian Gas Products v. Commissioner of Internal Revenue, 126 F.2d 4, 5; Charleston & W.C. Ry. Co. v. Hughes, 105 Ga. 1, 30 S.E. 972, 976--977; American Creameries Co. v. Armour & Co., 149 Wash. 690, 271 P. 896; Jackson v. State, 213 N.Y. 34, 106 N.E. 758.) ⁹ In Pedrotti, supra, it was noted that a transfer of property by eminent domain is nevertheless a sale even though the transfer was involuntary (152 F.2d p. 831); and in Jackson, supra, it was observed that condemnation is an enforced sale whereby the state stands toward the owner as buyer toward the seller. (106 N.E. p. 758.) We note, moreover, that neither the ordinance in question nor the enabling legislation limit the applicability of the legislation to 'voluntary' as contrasted with 'involuntary' sales.

In view of the foregoing we conclude that a final order of condemnation is a type of instrument which is encompassed by the provisions of section 11911, and, therefore, is a taxable instrument within the meaning of the statutes and the ordinance ¹⁰. ¹⁰. Accordingly, since the state is not liable for the tax, our inquiry is directed to whether the condemnee is liable for its payment. As noted above, the tax is to be paid by the person 'who makes, signs or issues any document or instrument subject to the tax, or for whose use or benefit the same is made, signed or issued.' (§ 11912.) Here the court, rather than the condemnee, makes and issues the final order of condemnation as a part of its judicial function in the condemnation proceedings.

The County contends that although the court does make and issue the order vesting the title to the real property in the condemnor, it does so for the benefit of the condemnee because the latter receives the sales price. This is a strained construction in view of the involuntary nature of condemnation proceedings insofar as the condemnee is concerned. It appears to us, moreover, that the final order of condemnation is for the benefit of the condemnor, rather than the condemnee. In eminent domain proceedings the judgment of condemnation is the final judgment pursuant to which the condemnor has the right to take the property upon paying the value thereof as determined by the judgment within 30 days after such judgment, or to deposit the same in court. (Code Civ.Proc. §§ 1251, 1252; City of Alameda v. Cohen, supra, 133 Cal. 5, 7, 65 P. 127; Russakov v. McCarthy Co., supra, 206 Cal. 682, 687, 275 P. 808.) Before the expiration of 30 days after final judgment the condemnor may abandon the proceedings, and upon proper abandonment, the judgment of dismissal is entered awarding the condemnee his costs and disbursements. (Code Civ.Proc. § 1255a; Bellflower City School Dist., etc. v. Skaggs, 52 Cal.2d 278, 281--282, 339 P.2d 848.) The property condemned does not vest in the condemnor until payment has been made and an order of final condemnation is made and recorded in the office of the county recorder; and it is only After payment has been made that the court is required to make a final order of condemnation. (Code...