
    [L. A. No. 2519.
    In Bank.
    June 2, 1911.]
    GUSTAVE BRENNER, Respondent, v. CITY OF LOS ANGELES (a Municipal Corporation), Appellant.
    Taxation—Assessment of Beal Property—Deduction of Value of Mortgage—Presumption of Performance of Official Duty.—In the absence of any request for a statement of Ms taxable property, a mortgagor of real property has the right to assume that the assessor, in assessing the mortgaged property for purposes of taxation, had properly performed Ms official duty and had deducted the value of the recorded mortgage from the assessed valuation of the property.
    Id..—Taxes Paid under Protest—Property not Liable to Assessment—Failure to Demand Correction of Assessment.—Money paid under protest for taxes on property not liable to assessment may be recovered, notwithstanding no application is made for correction of the assessor’s error before the period of equalization fixed by law has passed. (Henne v. County of Los Angeles, 129 Cal. 297, overruled.)
    Id.—Action May be Maintained after Expiration of Period for Equalization.—The remedy provided by section 3819 of the Political Code, of suing to recover void taxes paid under protest, is not limited, in its application, either by its language or by other statutes, to eases in which the taxpayer wishing to avail himself of it has vainly applied for relief before the assessor has closed his books and before the board of equalization has adjourned.
    Id.—Failure to Deduct Mortgage to Begents of University—City Taxes of Los Angeles—Payment of Excess under Protest.—In the absence of any request for a statement of his taxable property, a mortgagor of real property, which is subject to a recorded mortgage held by the regents of the University of California, and which is assessed against him for city taxes of the city of Los Angeles at its full value, without any deduction on account of the mortgage, is entitled, under section 63 of the ordinance of the city of Los Angeles, providing for the assessment and collection of city taxes, to recover the excess taxes levied on the value of the mortgage which had been paid by him under protest, upon presenting a verified claim therefor to the city council within six months after the payment. Such excess taxes are taxes “erroneously or illegally collected,” within the meaning of such section of the ordinance.
    APPEAL from a judgment of the Superior Court of Los Angeles County. George H. Ilutton, Judge.
    
      The facts are stated in the opinion of the court.
    Leslie R Hewitt, City Attorney, and Emmet H. Wilson, Chief Deputy, for Appellant.
    Denis & Loewenthal, for Respondent.
   MELVIN, J.

Plaintiff sued to recover certain taxes paid

under protest to the city of Los Angeles. A general demurrer to his complaint was overruled and defendant declining to answer, judgment by default was rendered in favor of the plaintiff. From said judgment the city of Los Angeles prosecutes this appeal.

The complaint is drafted in two counts both based on sections of an ordinance of the city of Los Angeles providing for the assessment and collection of city taxes and the said ordinance is fully set forth in the complaint. The essential facts disclosed by the complaint are that on the first day of March,

1906, plaintiff was the owner of certain real property in the city of Los Angeles upon which a recorded mortgage for sixty thousand dollars was held by the regents of the University of California. No part of this mortgage had been paid. The assessor in making his assessment for the year 1906 placed the valuation of the property of plaintiff at eighty-two thousand dollars and failed to deduct sixty thousand dollars for the mortgage although he had done so in his assessment of the year before. The ordinance provided that the city might exact from each taxpayer a statement under oath setting forth under appropriate headings his various kinds of property and the complaint contained an averment that no demand had been made upon plaintiff at any time by the city assessor of the city of Los Angeles for such declaration of his taxable possessions. There is also an allegation that not until May 28,

1907, did the plaintiff know that the assessor had failed to deduct sixty thousand dollars from the total assessable value of bis land. Then follow averments that the taxes were paid under protest on June 28, 1907; that on the same day plaintiff filed with the city council of Los Angeles a petition asking for a return of the portion of the said taxes improperly assessed against him; that on December 27, 1907, he filed with said city council a duly verified claim for the return to him of said taxes so erroneously charged against him; and that the city council refused such repayment. The second count contains all matters set forth in the first one and the additional allegation that the tax-collector of the° city of Los Angeles had erroneously and illegally collected from plaintiff the amount of taxes and penalties properly chargable against the mortgage held by the regents of the University of California.

Appellant’s attorneys rely upon the authority of Henne v. County of Los Angeles, 129 Cal. 297, [61 Pac. 1081], in which it was held that certain taxes paid under protest upon an assessment similar to the one here considered could not be recovered because steps for their repayment had not been taken by the taxpayer within the time provided by law. In that case, as here, the mortgage was held by the regents of the University of California as mortgagees and no part of it had been paid, yet the county assessor had placed a valuation upon the realty covered by the mortgage without reference to the security which, under the constitution (art. XIII, see. 4), was to be assessed to the owner thereof. The assessment was made March 1, 1898. On July 23, 1898, plaintiff, Henne, demanded that the assessor correct the assessment by deducting the amount of the mortgage. The assessor refused to comply with this demand. On November 23, 1898, plaintiff filed a verified petition asking the board of supervisors to refund the portion of the taxes which had been levied on the mortgage, and, this petition having been subsequently denied, the plaintiff paid the full amount of the taxes under protest. The reasoning of the court in that case in upholding the action of the assessor and the board of supervisors was based upon the fact that the taxpayer made application to the former for relief after the assessor’s books had been closed and a statement of his year’s work had been transmitted to the state board of equalization and that the board of supervisors had fully performed their duty of equalization according to the statute and had sent the completed assessment to the auditor before they were asked to refund the excessive amount paid for taxes. Assuming that the taxpayer had full notice of the assessor’s alleged mistake (and there was nothing in the pleadings to the contrary), the court held that he had failed to avail himself seasonably of the remedies provided by law. The last sentence of the opinion indicates the rationale of the decision. It is as follows: “It was the fault of the plaintiff himself in this case that he did not obtain relief by one or the other of the modes indicated, inasmuch as his application was too late in both cases.”

Respondent’s counsel point out several differences between the case of Henne v. County of Los Angeles, 129 Cal. 297, [61 Pac. 1081], and the case at bar. In the former case, as the opinion indicated, there was insufficient allegation with reference to the over-valuation of plaintiff’s interest by the assessor. The court said: “The value of the property, aside from the assessment, is not stated in the complaint, and for aught that appears, the assessment may have been for the value of such property over the amount of the mortgage.” In the ease before us there was not only the averment in the complaint that the assessor failed to deduct the amount of the mortgage, but there was the statement also that eighty-two thousand dollars was the full value of the property at the date of the assessment. Another difference between this and the Henne case is that in the latter it did not appear Avhether or not the assessor demanded a statement from the taxpayer, while in the case at bar there was an allegation that no statement had ever been required of plaintiff. In the Henne case the court said: “There is no averment in the complaint that the assessor failed to make a demand on the plaintiff as a taxpayer for a statement of his property as required by law, nor is there any averment that the plaintiff as a taxpayer made and delivered to the said assessor a statement under oath.” In the Henne ease it affirmatively appears that the plaintiff therein, after his demand on the assessor on July 23, 1898, waited until November 3d before seeking aid from the supervisors and that, therefore, there was probably time, after the discovery of the assessment of the property to himself without deduction for the mortgage, in which he might have brought his grievance before the board of supervisors sitting as a board of equalization. Here it appears that Brenner had no notice of the assessor’s error until long after the possibility of seeking relief from the board of equalization had passed. In the absence of any request for a statement of his taxable property he had the right to assume that the assessor had properly performed his official duty and had deducted the value of the recorded mortgage from the assessed valuation of plaintiff’s property.

Another marked difference between the two cases is that in Henne v. County of Los Angeles the court treated the applica-

tion as one made under the provisions of section 3819 of the Political Code, and even if we should regard that case as authority against the plaintiff’s claim as set forth in his first count in the case now before us, we would still have to examine the second count which is based upon section 63 of the ordinance attached to the complaint. But we are of the opinion that, in so far as Henne v. County of Los Angeles places in the same category the mere over-valuation of property in an assessment thereof, and the inclusion in such an assessment of property not taxable at all, that case should be overruled. The case was properly decided because the record failed to show that the property was not assessed for its value “over the amount of the mortgagebut we think it is time to renounce the doctrine that money paid under protest for taxes on property not liable to assessment cannot be recovered unless application is made for correction of the assessor’s error before the period of equalization fixed by law has passed. We think that perhaps the court in the Henne case adopted some language from the opinion of the supreme court of Massachusetts without a sufficient examination of the law of that state. The case was Osborn v. Inhabitants of Danvers, 6 Pick. (Mass.) 98. Plaintiff had properly submitted to the assessors a list of his possessions, but before acting, the assessors added items of property situated in another state. The court declined to decide the question as to the validity of the taxes but decided against the plaintiff strictly in accordance with the peculiar statute of Massachusetts. This language is used in the opinion:

“The remedy, and the only remedy, for an over-valuation and assessment is under the statute of 1785, c. 50, sec. 10, by which it is provided, that whenever any person shall be aggrieved by being overrated in the assessment of any tax, he may apply to the assessors to make a reasonable abatement; and if they refuse so to do, complaint is to be made, in nature of an appeal, to the court of general sessions of the peace, who are authorized to relieve him. This is an adequate and convenient remedy; but great mischiefs would follow, if we were to hold that an excess of valuation would render an assessment illegal and void. And it is immaterial whether the excess
is caused by including in the valuation, property of which the person taxed is not the owner, or that for which he is not liable to be taxed. In both cases the remedy is the same. As the plaintiff is liable to taxation for his personal property, the assessment was valid, although he was assessed for more than his due proportion. His only remedy is by application for an abatement; for when a new right is created by statute, which at the same time provides a remedy for any infringement of it, that remedy must be pursued.” the right of entering upon and locating and appropriating lands valuable for their mineral deposits was conferred upon every citizen of the United States and those who might declare their intention to become such citizens. By the discovery of mineral and marking of boundaries and compliance with such rules as local mining districts or state legislatures might enact not to conflict with the United States laws, the locator of a quartz mining claim was given the exclusive right to the possession of the lands and the mineral therein contained within the boundaries of his claim. Only one condition was imposed upon him and that was in every calendar year he must perform in work and labor and improvements upon his mine at least one hundred dollars in value. If he did not do this he was liable to lose his mine, in the event some other qualified locator made a location of the claim before the original locator had resumed work. His claim did not become forfeited to the government because of failure to do the work as he could resume operations and rely upon his original title by location at any time before another had located. Under these mere locations much of the valuable mining lands of the United States have been held and worked, and are still held and worked, and the title kept alive by the required work in each - year has always been regarded as a perfectly safe and secure title. No provision has ever been enacted compelling any miner to patent his claim, and time and again these locations have been held to have all the effect and incidents of a grant from the government. As said by the supreme court of the United States in Forbes v. Gracey, 94 U. S. 767, [24 L. Ed. 313], ‘Mining claims on public land are property in the fullest sense of the word/ In the case of Gwillim v. Donnellan, 115 U. S. 49, [5 Sup. Ct. 1112, 29 L. Ed. 348], the same court holds, ‘A valid location of mineral lands made and kept up in accordance with statute has the effect of a grant by the United States of .the right of present and exclusive possession of the lands located/ Mineral lands situated within the limits of railroad grants are subject to location up to the time of the issuance of the patent is clearly determined in the great case of Barden v. N. P. R. R. Company, 154 U. S. 288, [14 Sup. Ct. 1030, 38 L. Ed. 992], by the supreme court of the United States, and this court is the final arbiter of all the questions arising in eases like the one before this court, and this decision

The latter part of the quotation beginning with the words “but great mischiefs” was adopted in the Henne case, but the language preceding it shows that the real basis of the decision was the exclusive remedy furnished by the statute there considered. Osborn failed to invoke the only remedy given him by law within the time strictly limited in that enactment, Avhile in the case at bar, and in the Henne case, suit was brought in the tribunal having jurisdiction and under the very terms of the statute (Pol. Code, sec. 3819). That section is not limited, in its application, either by its language or by other statutes, to cases in which the taxpayer wishing to avail himself of it has vainly applied for relief before the assessor has closed his books and before the board of equalization has adjourned. That part of the opinion in Henne v. County of Los Angeles, 129 Cal. 297, [61 Pac. 1081], which seeks to limit a taxpayer in a case like this to the remedies open to him before the assessment has become final by the closing of the assessor’s books and by the termination of the period of equalization is overruled.

Returning now to a consideration of section 63 of the ordinance of Los Angeles, we find that this section, which is analogous to section 3804 of the Political Code, provides for the return of taxes “erroneously or illegally collected” upon a verified claim filed within six months after the payment of said taxes. In Stewart Law & Collection Co. v. County of Alameda, 142 Cal. 660, [76 Pac. 481], it was held that section 3819 of the Political Code did not furnish an exclusive remedy and that section 3804 might be invoked even when the taxes were paid without protest. (See, also, Lauman v. County of Des Moines, 29 Iowa 310.) The proper application of section 3804 of the Political Code was discussed in Pacifx Coast Company v. Wells, 134 Cal. 471, [66 Pac. 657]. In that case the problem

under consideration was the attempted repayment by the city and county of San Francisco of taxes upon one hundred thousand dollars erroneously levied by reason of a clerical error of plaintiff’s bookkeeper which was followed by the assessor. Although the taxes had been voluntarily paid, the board of supervisors, upon presentation of the facts, ordered the restoration of the sum charged against the taxpayer by reason of the erroneous assessment. The auditor refusing to allow the claim thus authorized by the supervisors, this court held that a writ of mandate should issue to compel his obedience to the resolution of the board directing such repayment. This language, which is very pertinent to the problem presented by the ease at bar, is used in the opinion: “Petitioner has paid all its just taxes, and this sum in addition. No doubt, if the assessor had called the attention of petitioner to the statement it had given in, the footings would never have been changed. It was a clerical error that could easily have been explained. When the attention of the assessor was called to it, he reeom-' mended that the mistake be corrected. The board of supervisors, representing the county, after investigation, made an order to correct it. Shall the city and county keep the $1,625 regardless of all this, It surely would be in violation of honesty and fair dealing for them to do so. Is it in violation of law for them to refund it? We think not. The board was authorized to order the money refunded, under section 3804 of the Political Code, which provides: ‘Any taxes, penalties, or costs paid more than once, or erroneously or illegally collected, may, by the order of the board of supervisors, be refunded by the county treasurer.’ This being a remedial statute, it should be liberally construed, so as to carry out its intent and object.” It is worthy of note that the opinion in Pacific, Coast Company v. Wells is signed by Mr. Justice Van Dyke, the author of the opinion in Henne v. Los Angeles County, and by Mr. Justice Harrison who concurred in that opinion.

In Hayes v. County of Los Angeles, 99 Cal. 74, [33 Pac. 766], the plaintiff was seeking to recover the amount of money paid upon a delinquent sale of property which had been doubly assessed, the taxes having been paid by the real owner, and the delinquent sale having followed the supposed default of the person to whom the property had been mistakingly assessed. In that case section 3804 of the Political Code' is

thus expounded: “Section 3804 was enacted to do justice in a class of cases where, but for its provisions, the application of the doctrine of caveat emptor would work a hardship to citizens who had paid money which it was inequitable for the county to retain. I am of the opinion that the doctrine of caveat emptor has no proper application to that class of cases in which the attempted sale of real property for taxes is absolutely void by reason of the tax having been previously paid. This view is sustained by a large number of late authorities, but for present purposes the question is not of moment, the inquiry being directed to plaintiff’s right of recovery under the statute. It is urged by respondent that the code, by providing that the board of supervisors may by order provide for refunding taxes, etc., paid more than once, made it optional with that body whether to do so or not, and that the board in this instance, having refused to refund, its action is conclusive upon the plaintiff. Where the public interest or private right requires that the thing should be done, then the word ‘may’ is generally construed to mean the same as ‘shall.’ (People v. Supervisors, 68 N. Y. 119.) Where the statute directs the doing of a thing for the sake of justice or the public good, the word ‘may’ is the same as the word ‘shall.’ (Rex v. Barlow, 2 Salk. 609). Where a statute directs a thing to be done for justice’s sake may means shall. (Silvey v. United States, 7 Court of Claims, 334.) Where persons or the public have an interest in having the act done by a public body, may in such a statute means must. (Phelps v. Hawley, 52 N. Y. 27; People v. Supervisors, 51 N. Y. 401. See Estate of Ballentine, 45 Cal. 696.)” See, also, Palomares Land Co. v. County of Los Angeles, 146 Cal. 537, [80 Pac. 931].)

It seems to us that taxes erroneously collected upon the state’s .own property which is exempt from taxation fall very properly and logically into the category of those paid because of a double assessment due to the mistake of a public servant. Ever since 1888 when the case of People ex rel Attorney-General v. Board of Supervisors of the City and County of San Francisco, 77 Cal. 136, [19 Pac. 257], was decided, it has been the settled law that a mortgagor is entitled upon proper application to a return of taxes paid in cases where the assessor has failed to notice a mortgage held by the state. In that case the court said: “But the state should not expect to collect taxes on her own property,—much less should she expect somebody else to pay them.”

By the judgment of the superior court herein the city of Los Angeles lost not a cent of taxes rightfully due upon plaintiff’s property, while upon the opposite conclusion, plaintiff would be mulcted, not for taxes due from some one else which through error or carelessness he had paid, but for a charge upon property free from any legitimate assessment by the city at all. In our opinion the plaintiff was entitled to recover the amount found by the court to be due.

The judgment is, therefore, affirmed.

Shaw, J., Angellotti, J., Sloss, J., Lorigan, J., and Henshaw, J., concurred.  