Lick v. Austin

By the Court,

Rhodes, J.: These actions were brought against the Tax Collector to enjoin the sale of certain real estate for the non-payment of [594]taxes. It is alleged in the complaints that the real estate, when it was assessed, was subject to certain mortgages; that the Assessor was duly informed of that fact, but that he assessed the real estate without regard to, or making any deduction on account of, the mortgages; that applications were made to the Board of Equalization to reduce the assessment in each case, on account of the mortgages, but the applications were refused; and that in each case the plaintiff tendered to the Collector the amount that would be due for taxes on the valuation of the property, as made by the Assessor, less the amount of the mortgages upon the 'real estate, but the tender was refused. The demurrer to each complaint was sustained.

The question discussed by counsel is -whether the facts alleged in the complaint show cases of double taxation. It is not alleged that the valuation, as made by the Assessor, of the several parcels of land, was in excess of their real value. It is not, therefore, double taxation, in view of the real value of the land. It is not alleged that the taxes on the mortgages were paid; but if they were paid by the respective mortgagors, they were so paid, not by virtue of any statutory requirements, but voluntarily, or by virtue of a contract, and, therefore, the mortgagors could not complain either of the law or its administration in that respect by the revenue officers. If the taxes on the mortgages were paid by the mortgagees, the mortgagors cannot complain that their land was subject to double taxation. It was held in People v. McCreery, 34 Cal. 432, that a solvent debt secured by a mortgage is property, within the meaning of the constitutional provision in respect to taxation, and as such was subject to taxation as the property of the mortgagee. It being the duty of the mortgagee to pay the taxes assessed upon the mortgage debt, the mortgagor, when assessed for the land, has no legál cause of complaint, that the mortgagee [595]has paid, or is liable for the payment of, the taxes on the mortgage debt.

The only plausible ground assumed by the plaintiffs, is that real estate subject to a mortgage should be assessed at its value, less the amount of the mortgage debt, because the excess, if any, of the value of the land over the mortgage debt is the true value of the mortgagor’s interest in the land. The Constitution and laws might have been so framed as to work that result, but they were not. The Constitution, section thirteen, Article XI, provides that all property shall be taxed in proportion to its value; and the revenue law provides that the Assessor shall ascertain the value of each parcel of property, etc.; but it is nowhere provided that the aggregate amount of the taxpayer’s debts shall be deducted from the valuation of his property, nor that his indebtedness shall be deducted from the valuation of any of his property, except from his solvent debts. Whether that provision of the statute is valid is not a question in this case; but assuming that the statute in that respect is valid, it clearly shows that the solvent debts of the taxpayer are the only property from which he is permitted to deduct his indebtedness.