State Mutual Building & Loan Ass'n v. County of Los Angeles

[384]

SPENCE, J.

Two actions were brought by plaintiff, pursuant to the provisions of section 3804 of the Political Code, seeking the refund of taxes alleged to have been illegally collected by defendant. In each of said actions, judgment was entered in favor of defendant after a trial by the court sitting without a jury. Plaintiff has appealed from each of said judgments and the two appeals have been consolidated pursuant to stipulation.

It appears that plaintiff invested large sums of money in mortgage loans—that is to say, in promissory notes secured by mortgages on land. Some of said notes were secured by mortgages on lands located in the state of California and others were secured by mortgages on lands located in the state of Arizona. All of said notes and mortgages were held by plaintiff at its office and principal place of business in the city of Los Angeles.

Plaintiff annually returned to the county assessor a financial statement showing its loans and designating the location of the lands securing said loans. No assessment has ever been made nor has any tax ever been collected on any of the notes secured by mortgages on lands located in the state of California. In each of the three years involved in these actions, to wit, 1932, 1933 and 1934, the assessor did assess the notes which were secured by mortgages on land in Arizona. These were assessed under the description “Arizona mortgages” or “Mortgages”. Thereafter plaintiff paid taxes thereon at the rate provided by section 3627a of the Political Code. The total amount paid was slightly in excess of $7,000 and plaintiff sought to recover said amount by these two actions.

There is no dispute concerning the material facts above set forth and the question presented is whether said taxes were “illegally collected”. It is plaintiff’s contention that they were and that the trial court erred in entering judgments in favor of defendant. In our opinion, this contention must be sustained.

Section 1 of article XIII of the Constitution provides: “All property in the state except as otherwise in this Constitution provided, not exempt under the laws of the United States, shall be taxed in proportion to its value, to be ascertained as provided by law, or as hereinafter provided. The word ‘property’ as used in this article and section, is hereby de