Fullerton Oil Co. v. Johnson

Defendant appeals from a judgment in favor of plaintiff rendered by the trial court upon defendant’s refusal to further plead after a demurrer to the complaint had been overruled. Defendant insists that the demurrer should have been sustained without leave to amend and judgment entered in favor of the state.

The action was instituted by the Fullerton Oil Company to regain a portion of the taxes for the year 1931 assessed to it, under the Bank and Corporation Franchise Tax Act (Stats, of 1929, p. 19) and paid by it under protest. Respondent’s objections to the amount of the tax exacted from it for the year 1931 arise out of the fact that the state applied to respondent in computing its tax for that year a 1931 amendment to section 8 (g) of the act (Stats, of 1931, p. 61), which amendment became effective February 27, 1931.

Before discussing the specific contentions of the parties hereto, it is first necessary to briefly refer to the constitutional and legislative background of the Franchise Tax Act. Prior to 1928 franchises of corporations were taxed under the provisions of article XIII, section 14, of the state Constitution, that section providing that all franchises of…