People v. United States Fire Insurance

Opinion

PARAS, J.

Plaintiff, the State of California, acting on behalf of the State Board of Equalization, brought an action to enforce the asserted liability of United States Fire Insurance Company (hereinafter “defendant”), under a written contract of surety by which defendant guaranteed the payment of sales and use taxes incurred by Gibson Products of Lodi, California, Inc. (hereinafter “Gibson Products”). The trial court held for defendant, ruling that plaintiff failed to file suit within the time period provided in the applicable statute of limitations, Revenue and Taxation Code section 6711.

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Plaintiff appeals.

The case was tried on the following stipulated facts:

“1. The State Board of Equalization made determinations pursuant to the Sales and Use Tax Law (Rev. & Tax. Code, § 6001 et seq.) that Gibson Products Company of Lodi, California, Inc., is liable through November 5, 1969, for sales and use taxes of the State of California in the sum of $12,690.83, which sum is comprised of $9,452.40 tax, $2,293.19 interest, and $945.24 penalties.

“3. Plaintiff has made demand upon Gibson for the payment of the stated amounts, but neither the whole nor any portion of these said amounts has been paid by Gibson to plaintiff.

“4. On February 28, 1967, United States Fire Insurance Company executed a Bond of Seller pursuant to demand for security under the California Sales and Use Tax Law. The Bond had an effective period from November 1, 1966 to November 5, 1969, and named Gibson Products of Lodi, California, Inc., as principal. The penal sum of the bond is $10,000.00.

“5. The bond cause of action arose on May 29, 1970, when the notice of determination became final.

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“6. A Certificate of Amount of Tax, Interest and Penalties Due was recorded in San Joaquin County on July 27, 1970 and filed with the Secretary of State at Sacramento on July 28, 1970. This certificate is numbered BE-98393 and encompasses the effective period of the bond. Copies of the certificate are attached as Exhibits “A” and “B” and are incorporated herein by reference.