People ex rel. Thain v. City of Palo Alto

• Decision Date: 27 May 1969
• Citation: 78 Cal.Rptr. 240,273 Cal.App.2d 400
• Court: California Court of Appeals Court of Appeals
• Parties: PEOPLE of the State of California ex rel. Janet A. THAIN, Plaintiff and Appellant, v. CITY OF PALO ALTO, Defendant and Respondent. Civ. 25862.

Page 240

78 Cal.Rptr. 240

273 Cal.App.2d 400

PEOPLE of the State of California ex rel. Janet A. THAIN, Plaintiff and Appellant, v. CITY OF PALO ALTO, Defendant and Respondent.

Civ. 25862.

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

May 27, 1969.

Atkinson, Farasyn & Smith, Mountain View, Thomas C. Lynch, Atty. Gen. of California, E. Clement Shute, Jr., Deputy Atty. Gen., San Francisco, for appellant.

James A. Hildebrand, City Atty. of the City of Palo Alto, Peter G. Stone, Robert Keith Booth, Jr., Asst. City Attys., Palo Alto, for respondent.

ELKINGTON, Associate Justice.

The People of the State of California, upon the relation of Janet A. Thain, have appealed from a judgment in favor of the City of Palo Alto (City) entered in an action in Quo warranto. By the action it was sought, without success, to have the annexation to the City, of property owned by the relator and others, declared void and of no effect. The annexation proceedings were taken pursuant to Government Code sections 35300--35326 (Annexation of Uninhabited Territory Act of 1939--which we shall refer to as the Annexation Act).

Appellant's contention is that the owners of more than one-half of the value of the territory proposed to be annexed by the City having protested the annexation, the proceedings were, therefore, invalid under Government Code section 35313.

As relevant here section 35313 provides:

'At the time set for hearing protests, or to which the hearing may have been continued, the legislative body shall hear and pass upon all protests so made:

'(a) If privately owned property and no publicly owned property is proposed to be annexed, further proceedings shall not be taken if protest is made by private owners of one-half of the value of the territory proposed to be annexed. The value given such property for protest purposes shall be that shown on the last equalized assessment roll if the property is not exempt from taxation. If the property is exempt from taxation, its value for protest purposes shall be determined by the county assessor in the same amount as he would assess such property if it were not exempt from taxation. * * *

'(c) As used in this article, 'value of the territory' means the value of land and improvements thereon. * * *' (Emphasis added.)

The 'last equalized assessment roll,' which furnishes the statutory basis for evaluating protests, is defined, as pertinent here, by Revenue and Taxation Code section 109 as follows:

"Roll' means the entire assessment roll. The 'secured roll' is that part of the roll containing * * * property the taxes on which are a lien on real property sufficient, in the opinion of the assessor, to secure payment of the taxes. The remainder of the roll is the 'unsecured roll.' * * *'

Traditionally, real property (defined by Revenue and Taxation Code section 104 as including improvements) has been placed by the assessor on the 'secured roll,' while personal property (unless sufficiently secured by real property) is carried on the 'unsecured roll.' (See Rev. & Tax.Code, §§ 109, 134, 2189, 4840.)

The case was tried on stipulated facts. Within the area proposed to be annexed are two parcels of land occupied by tenants of the landowners. Each of the tenants is the owner, by agreement with his landlord, of certain 'improvements' on the land. The nature of the 'improvements' is not divulged by the stipulation but their assessed valuations are $2,440, and $840. The corresponding 'land' assessed valuations are $22,250 and $12,470, respectively. The separate ownership of the 'improvements' was made known to the county assessor, apparently pursuant to Revenue and Taxation Code section 2188.2. ¹ The 'improvements' were then placed on the 'unsecured roll' and assessed to their owners, the tenants. In the annexation proceedings the tenants joined in the protests against the annexation. If the assessed value of the tenants' 'improvements' is to be included in 'the value of the territory proposed to be annexed' the total percentage of protests against the annexation would be 52.19 percent; if not included, the percentage would be 49.94 percent.

As we have noted, by agreement between the landowners and their tenants, the 'improvements' on the land were the property of the tenants. Under established law such 'improvements,' even if buildings or homes, lose their nature as real property and become the Personal property of the tenants. (See Teater v. Good Hope Dev. Corp., 14 Cal.2d 196, 207, 93 P.2d 112; R. Barcroft & Sons Co. v. Cullen, 217 Cal. 708, 712--713, 20 P.2d 665; Grupp v. Margolis 153 Cal.App.2d 500, 503, 314 P.2d 820; Jordan v. Reynolds, 108 Cal.App.2d 91, 94, 237 P.2d 1005; Bowman v. Union T. Co. of San Diego, 41 Cal.App.2d 397, 402, 106 P.2d 913; 35 Am.Jur.2d, Fixtures, §§ 16, 79, pp. 713, 762; 41 Am.Jur.2d, Improvements, § 3, pp. 481--482; 32 Words and Phrases (Perm.Ed.) 'Personal Property', pp. 490--491, 523--525.) ²

The first issue presented to the trial court and now to this reviewing court is stated by the parties as substantially follows: Are the personal property 'improvements' which appear on the 'unsecured roll' properly included in computing 'the value of the territory proposed to be annexed' for protest purposes under section 35313?

The trial court determined that such tenant-owned 'improvements' should Not be so included. Although the problem is beset with difficulties, our analysis convinces us that the lower court's conclusion was correct. We hold, that for the purpose of proceedings under the Annexation Act, the Legislature intended that such separately owned and separately assessed 'improvements' should be treated as any other personal property, and should not be considered in computing 'the value of the territory proposed to be annexed.'

On this question, whether the owners of such separately assessed 'improvements' on land within 'the territory proposed to be annexed' may protest, the language of the Annexation Act, beyond doubt, is uncertain. Government Code section 35310.1, an alternative method of commencing annexation proceedings, ³ provides that if an annexation petition has been filed by the owners of all of the 'land' ⁴ in the territory, then no protests may be filed against the annexation by persons owning 'property' in the territory. An inference may be drawn that in the absence, as here, of unanimity of Land owners, the owners of separately owned and separately assessed 'improvements' may protest. On the other hand the City invites our attention to Government Code section 35311, which requires the city clerk of the annexing city to cause written notice of such proposed annexation to be mailed to each person to whom Land within 'the territory proposed to be annexed' is assessed. It is unreasonable, the City states, to suppose that the Legislature intended that owners of separately assessed personal property 'improvements' have a right of protest, and yet provided that they need not be given express notice of the proposed annexation. Appellant says it is unreasonable to deny a right of protest so a tenant who may have a far greater stake (perhaps under a 75-year lease) in the proposed annexation than his landlord. The City argues that it would be just as unreasonable to allow a protest to one who in a relatively short time, perhaps at will, may remove his improvements and depart from the area.

The uncertainty of the Annexation Act is in no way dissipated by the provisions of the Revenue and Taxation Code relating to 'the last equalized assessment roll.' Instead, it seems to be compounded. Revenue and Taxation Code section 608 provides: 'Improvements shall be assessed by the assessor by showing their value opposite the description of the parcel of land on which they are located, If they are assessed to the same assessee.' (Emphasis added--the emphasized language was added in 1947.)

Under section 608 separately owned 'improvements' are not Required to be reflected on the 'secured roll.' When such improvements are not valued on that roll one finds only the Land description, the Land owner, and the value of the Land assessment; no indication being made thereon whether any separately assessed 'improvements' stand upon the property. In the search for such 'improvements,' if any, one must turn to the 'unsecured roll.' This roll is an alphabetical index of the names and addresses of the unsecured tax payers within the county, or, as in the case of Santa Clara County, within 'areas' into which the county is divided for assessment purposes. Following each name under column headings entitled 'improvements' and 'personal property and solvent credits' are entries of the assessed value, if any, of such items. Rarely--and obviously so since separately owned 'improvements' are the exception--are entries found in the 'improvements' column. When there are such entries one finds a dollar amount only; there is no key or reference to the location of the 'improvements' or the land upon which they lie. So, unless the assessor devises some cross-index or reference system not required by statute, one cannot determine from the 'last equalized assessment roll' whether separately assessed 'improvements' found to be valued thereon, are located within or without the 'territory proposed to be annexed.'

The paucity of such information is, of course, peculiar to those counties whose assessment rolls are kept within the minimum requirements of law; how many of such counties there are we do not know, but there are at least several. ⁵ Other assessors have fashioned bookkeeping aids of one kind or another which enable them to more readily find...