JAMES LICK v. ALEXANDER AUSTIN; and CHRISTIAN REIS and GUSTAVE REIS v. ALEXANDER AUSTIN, 43 Cal. 590

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 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 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. The plaintiffs have favored us with an able argument, to show that choses in action are not property, within the sense of that term, as used ill

section thirteen,

Article XI, of the Constitution.

By tracing the law back to an early day in the history of the common law, it will be found, as is claimed by the plaintiffs, that choses in action were not regarded as property; and not far from the same period it will be found that a mortgage was regarded as a conveyance of the legal title to real estate; hut in the progress of commerce, aided by a more enlightened system of jurisprudence, both rules have been revised, and now a mortgage is regarded"as a mere security for the payment of a debt; and a chose in action has been so much elevated above its former status that the mortgage debt is regarded as the principal thing and the mortgage scarcely more than its attendant shadow.

Indeed, dioses in action have assumed such dignity, that we now find cases in which a plea of payment is held to be sustained by proof of the assignment of a bill or promissory note, Had the plaintiffs succeeded in sustaining their position, it is not perceived how it would aid them in maintaining 'their point as’to double taxation.

If the mortgage debts are not property, and if, notwithstanding that, the mortgagees have been assessed for their nominal value, and have paid the taxes thereon, the mortgagors are no more affected thereby, and have no greater cause of complaint, than they would have had the mortgagees been taxed for the assumed value of something which never had any existence. People v. Kohl, 40 Cal. 127, is not in point, for there the owner of the land was taxed, in the same fiscal year, on the value of the land and on the purchase money—the promissory note— received on the sale of the land.

In our opinion the real estate of the plaintiffs was properly assessed at its full value, without any regard to mortgages which were liens thereon, or without deducting the mortgage debts from the valuation of the real estate. Judgment affirmed. Mr. Chief Justice Wallace, having been of counsel in the Court below, did not sit in this cause. Mr. Justice- Ckockett did not express an opinion.