Transcontinental Telegraph Co. v. Neylan

THE COURT.

This is an appeal from a judgment of the superior court rendered upon demurrer sustained to an application by the plaintiff for a writ of mandate, to compel the defendants, constituting the state board of control, to allow a claim against the state for the return to it of certain license taxes, pursuant to chapter 278 of the statutes of 1915, [Stats. 1915, p. 475], providing for the repayment of license taxes erroneously collected.

The license taxes paid by plaintiff and sought to be recovered were paid in and for the years ending June 30, 1912, June 30, 1913, and June 30, 1914. Plaintiff paid the corporation license taxes for each of the above periods, and during the same period filed with the state board of equalization

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reports as required by the so-called Corporation Franchise Act of April, 1911. Acting under such reports the board of equalization fixed the value of plaintiff’s franchise, and plaintiff paid the franchise tax for that period as so fixed. Such tax was fixed upon the value of the franchise, and not upon the gross receipts of plaintiff, as it appears that plaintiff was not during any of said periods, operating any telegraph lines, and that it showed no gross receipts for any of those periods.

In the year 1905 the legislature of the state enacted a law which was known as the Corporation State License Tax Act of that year, and which fixed an annual license tax upon every corporation, domestic or foreign, doing business in this state, the amount of such license tax being based upon the capital stock of the corporation. This act in its relation to foreign corporations engaged in interstate commerce was held to be unconstitutional and void in the case of

Mulford Co.

v.

Curry,

163 Cal. 276, [125 Pac. 236], Thereafter and before the decision in the case of

Albert Pick & Co.

v.

Jordan,

169 Cal. 1, [Ann. Cas. 1916C, 1237, 145 Pac. 506], reversing the Mulford decision and holding the act to be valid, the legislature, in the year 1913, repealed the Corporation State License Act of 1903, the repeal becoming effective in June, 1914 (Stats. 1913, p. 680). The license taxes, however, sought to be recovered in this proceeding were paid before such repeal became effective. In the year 1910 a constitutional amendment was adopted which worked a radical change in the system of taxation in the state, and the object of which was to separate state from local taxation, and to enable the state to impose upon persons, firms, or corporations engaged in certain kinds of business—such as public service corporations, insurance, banking, and trust companies-—the obligation to pay certain taxes to be applied exclusively to state purposes, the concerns thus engaged and the property employed in such undertakings to be to a greater or less degree free from the burden of local taxation.