People v. Hochwender

SHENK, J.

The plaintiff and the defendants have appealed from a judgment for the plaintiff in an action to recover additional sales taxes.

Fred Hochwender died testate May 1, 1936. During his lifetime he operated a retail used car business under permits issued to him by the State Board of Equalization. Returns were filed for the period from July 1, 1934, to June 30, 1936, showing taxable sales of $72,435.72, and the sales tax thereon was paid.

On May 28, 1936, the first publication of notice to creditors • was made by the then acting executor, and the six months period for presentation of claims against his estate under section 700 of the Probate Code expired November 28, 1936. No claim for sales taxes was filed in the probate court or presented to the legal representative of the estate within that time.

More than a year after Hochwender’s death, and in September, 1937, the State Board of Equalization made an audit of his books which disclosed a total of taxable sales for the aforesaid period, July 1, 1934,.to June 30,1936, of $188,886.43, or $116,-450.71 more than the total reported by the retailer. The State Board of Equalization mailed a notice of additional assessment, dated October 6, 1937, seeking to impose a further tax of $4,634.78. On October 8, 1937, sixteen months after the first publication of notice to creditors, the claim for the latter amount was presented against the estate. The claim was rejected on March 11, 1938.

Thereafter, on June 9, 1938, the plaintiff commenced this action for the enforcement of the claim including interest and penalties. The state thereby sought to collect taxes on sales

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from July 1,1934, a period commencing more than three years and eleven months prior to the filing of the complaint. Section 30 of the California Retail Sales Tax Act as amended (Stats. 1935, page 1265; Peering’s Gen. Laws, 1937, Act 8493) provides that an action to collect delinquent sales taxes must be brought within three years after delinquency.

The trial court rendered judgment in favor of the plaintiff for $3,239.04, but denied recovery for any taxes on sales during the taxable period ending prior to June 9, 1935, or more than three years before the suit was filed.