City & County of San Francisco v. County of Alameda

THE COURT.

This is an appeal from a judgment in favor of the defendant in an action to recover taxes paid under protest.

Prior to the first Monday in March, 1930, the Spring Valley Water Company owned approximately 37,500 acres of land in Alameda County with improvements thereon, which land and improvements were held by the company as properties useful in supplying water to the inhabitants of San Francisco and contiguous territory. At the same time the company was the owner of rights to take and divert water from Alameda Creek and its tributary branches in Washington and Pleasanton Townships in Alameda County. These rights the company had acquired by purchase or condemnation from owners of land riparian to Alameda Creek for business, commercial and nonriparian purposes.

Before noon on the first Monday in March, 1930, the City and County of San Francisco acquired the above-described lands, improvements and water rights by purchase from the Spring Valley Water Company. While the ownership thereof was in the company the assessor of Alameda County regularly assessed to the company those lands, improvements and water rights and pursuant to said assessments taxes were paid by the company to that county. For the fiscal year 1930-1931 said property was assessed and taxes thereon were collected from

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the plaintiff City and County the same as theretofore from the plaintiff’s predecessor in interest.

No question was raised by the plaintiff as to the propriety of the taxation of the 37,500 acres of land and improvements thereon in Alameda County, but it took the position that the water rights which had been acquired from riparian owners on Alameda Creek were neither “lands” nor “improvements thereon” as contemplated by the amendment of section 1 of article XIII of the Constitution in 1914, and accordingly paid the tax on said water rights under protest and now seeks to recover the same, contending that said water rights are exempt from taxation.

Prior to 1914 subdivision 1 of article XIII of the state Constitution provided that all property in this state, with certain exceptions not here pertinent, should be taxed in proportion to its value to be ascertained as provided by law; that the word “property” should include “moneys, credits, bonds, stocks, dues, franchises, and all other matters and things, real, personal, and mixed, capable of private ownership”; but provided that certain other designated property “and such as may belong to the United States, this state, or to any county, city and county, or municipal corporation within the state shall be exempt from taxation”. In 1914 the section was amended by adding immediately. after the last-quoted words the following: “except such lands and the improvements thereon located outside the county, city and county, or municipal corporation owning the same as were subject to taxation at the time of the acquisition of the same by said county, city and county, or municipal corporation; provided that no improvements of any character whatever constructed by any county, city and county or municipal corporation shall be subject to taxation. All lands or improvements thereon, belonging to any county, city and county, or municipal corporation not exempt from taxation, shall be assessed by the assessor of the county, city and county, or municipal corporation in which said lands and improvements are located, and said assessment shall be subject to review, equalization and adjustment by the state board of equalization.”