People v. Hibernia Savings & Loan Society

concurring:

It is not doubted, of course, that even though credits be not property in the sense referred to, and consequently, not to be taxed as property, the Legislature may, nevertheless, in its discretion, impose a tax upon such credits, as for instance, it may require stamps of graduated denomination to be affixed to each promissory note or evidence of indebtedness executed, which form of tax, when put in operation, would probably enable everybody (certainly all borrowers) *250 to realize the important truth, that a tax imposed upon credits, in whatever form it be imposed, must always be paid, not by the creditor, but by the debtor.

Returning, ■ then, to the question whether credits must be considered to be “property” in the sense adverted to, it will be remembered that the affirmative was maintained here in People v. McCreery ( 34 Cal. 432 ), and upon the authority of that case was assumed in People v. Eddy ( 43 Cal. 331 ). The question, however, involving as it does the correct construction of the text of the Constitution itself, in respect to a matter of such great and constantly recurring importance as the working of the general revenue system of the State, is not, in…

“Taxation shall be equal and uniform throughout the State. All property in this State shall be taxed in proportion to its value, to be ascertained as directed by law; but assessors and collectors of town, county and State taxes shall be elected by the qualified electors of the district, county or town in which the property taxed for State, county or town purposes is situated.” (Constitution of California, Article IX, section 13.)

. There is no provision in the Political Code which requires, in terms, that debts secured by mortgage shall be taxed. That Code requires that all property shall be taxed, and section seventeen declares: “The words ‘personal property ’ include money, goods, chattels, evidence of debt, and ‘ tilings in action.’”

Unless' the provision of the Constitution above quoted restrains or limits the power of the Legislature, so as to prohibit the taxation of “evidences of debt and things in action,” it is the duty of the assessors to assess not only *245 mortgages, but all debts “solvent” or not solvent, and also all rights of action, whether arising ex contractu or ex delicto.

And this, 1st, because it is the established law that all property must be taxed, and…

concurring:

But while holding that solvent debts are not “property” in the sense of Article XI, Sec. 13, of the Constitution, and therefore are not required to be taxed on the ad valorem principle, it does not follow that the Legislature is for that reason powerless to tax them in some other form. It exercises unquestioned the right to tax avocations, not because an avocation is property, but because the power and mode of taxation are unlimited, except in so far as they are restricted by the Constitution; and Article XI, Sec. 13, prescribes the method only in respect to such subjects of taxation as are “property” in the' sense of that clause. Solvent debts not being “property” in that sense, cannot be taxed as such under that provision, as was attempted to be done in the present case. But it might be competent for the Legislature to require a stamp tax on a mortgage or a promissory note, for the same reason that it may tax the avocation of an auctioneer. In that event it would be a tax on the transaction of making the note or mortgage, and not a tax on the debt as property.

Mr. Justice Bhodes dissented.