S. W. Straus & Co. v. County of Los Angeles

THOMPSON (IRA F.), J.

This action was commenced to recover $14,607.96, being the amount of taxes paid under protest. Judgment went for the defendants and this is an appeal therefrom.

The facts giving rise to the question may be recited as follows: On the first Monday in March, 1926, the appellant had in its possession certain bonds and interim certificates which had been deposited with it for safekeeping by patrons residing in the county of Los Angeles. Shortly after that date a deputy assessor called at appellant’s office and upon an examination of its books noticed an item “Bonds in safe keeping”. Straus & Co. gave a statement of its own taxable property and a description of the bonds deposited with it, as already mentioned, but in response to the request of the deputy for the names and addresses of the owners of the particular bonds, the tax upon which is herein involved, it declined to give the information and told the deputy “they could not afford to give the names of the customers because if they did it would ‘bust them up in business’ ”. The county assessor told the representatives of the appellant that if they failed or refused to furnish the names of the

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owners of the bonds he would be obliged to assess them to appellant as agents or trustees, having the property in possession. He accordingly placed a value upon the bonds and interim certificates in the sum of $394,810, designating that they were “bonds in possession belonging to others”. It is not argued that the valuation placed upon the bonds is other than a reasonable cash value.

The appellant insists that the assessment of the bonds and interim certificates was illegal and void for the reason that the assessor had no right to tax upon the theory of possession when it was made clear to him that possession was not accompanied by ownership. It relies in particular upon the case of

Weyse

v.

Crawford,

85 Cal. 196 [24 Pac. 735], a case which it is said “is in all essentials controlling as to the law applicable to the facts” of the instant case. Weyse and the other plaintiffs were the owners of a warehouse, and in response to the demand of the assessor they gave him a statement of the taxable property belonging to them and a description of the quantity and character of the property stored with them so far as the quantity and character was known, but the plaintiffs explained that they had issued negotiable warehouse receipts and they could not give him the names of the persons to whom the stored property belonged for the reason that they had no way of determining the owners. The assessor then assessed “Miscellaneous merchandise and grain in Naud’s warehouse, fifty thousand dollars”, and opposite the item the deputy made the following notation: “Neglected to return statement as required by section 3633’.” The tax upon the foregoing property was charged against the real property of plaintiffs and they brought an action to enjoin its sale on the theory that the assessment was void. The court upheld the plaintiffs in their contention, determining that it was the duty of the assessor under the particular facts of that case to assess the property to the unknown owners; that it was not true that the plaintiffs had refused to give a statement; that their possession of the property was not accompanied by “the usual marks and indications of ownership” and therefore was not assessable to them. In