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CHAPTER I. Property liable to taxation.

II. Definitions.
III. Assessment of property.
IV. Equalization of taxes.

V. Levy of taxes.
VI. Duties of the Auditor in relation to revenue.
VII. Collection of property taxes.
VIII. Collection of taxes by the Assessor on cer-

tain personal property.
IX. Poll taxes.
X. Settlements with the Controller and pay-

ments into State Treasury.



SECTION 3607. Property subject to taxation.

Proporty subject to taxation.


nor be

3607. All property within this State, except the property of the United States, of the State, and of municipal corporations, is subject to taxation.

NOTE.—The right to tax is a sovereign power and only limited in its extent by the State Constitution.Beals vs. Amador Co., 35 Cal., p. 624. No property is exempt under the Constitution. People vs. Gerke, 35 Cal., p. 677. Section 8 of Article I of the State Constitution, concluding with these words, deprived of life, liberty, or property without due process of law, nor shall private property be taken for public use without just compensation," has no application whatever to proceedings instituted under the revenue laws of the State to collect from its citizens contributions for the support and conduct of the State Government. So held in High vs. Shoemaker, 22 Cal., p. 370, referring to Blackwell on tax titles; cases cited, pp. 40, 41. The exception in the text is supported in People vs. Doe, G., 36 Cal., p. 220.

JURISDICTION TO TAX.-Taxes are a portion that each individual gives of his property in order to secure the perfect enjoyment of the remainder; and the owner of property within the limits of any State, no matter whether it be real or personal, and no matter where he has his domicile, since he is entitled in respect to it, to the protection of the State, is liable to taxes levied by such State.-Duer vs. Small, 7 American Law Register, p. 500; and see Bluntschli Droit. Intern. Codifié, Sec. 377. There are authorities, however, to the contrary, on the ground that double taxation, which this rule allows, is inequitable.—People ex rel. Hoyt rs. Commissioners of Taxes, 23 New York Rep., p. 224. And see report of Wells and others, Commissioners on local taxation in New York (Harper's ed.), pp. 43, 44, 65.

TAXES ON THE PERSON can only be imposed by the Government in which the person is domiciled. Bluntschli (Dr. Int. Cod., Sec. 378,) qualifies this by adding that the country of origin may levy certain taxes on its own members domiciled abroad (for example, tax for the assistance of the poor), but that the State of the

domicile is under no obligation in reference to the collection thereof.

CORPORATIONS.—The interests of owners of shares in the capital of a corporation are taxable as the personal property of such owners. It is usual in some countries to tax foreign corporations more heavily than domestic corporations. By the American law, the property of the corporations is distinguished from the interests of its shareholders for the purposes of taxation, as well as for other purposes. A State has no power to tax the interest of bonds (secured in this case by mortgage) given by a railway corporation, and binding every part of the road, when the road lies partially in another State; being one road owned by a company incorporated by the two States. The effect of allowing such tax would be to enable each State to tax property beyond its own limits.-Railroad Company vs. Jackson, 7 Wallace's U. S. Supreme Court Rep., p. 262. See Secs. 3640-3663, post. Upon considerations somewhat similar to those referred to, it may be suggested that shares in corporations, as distinguished from the property of the corporation, should not be taxed.-See Secs. 3640, 3641, post.

SHIPPING is taxable only by the Government whose character it bears. This is the rule laid down in Hays vs. Pacific Mail Steamship Co., 17 Howard's U. S. Sup. Ct. Rep., p. 596, as applicable at least so long as the vessel gains no situs in the foreign State. See, also, People ex rel. Hoyt vs. Commissioners on local taxation (Harper's ed.), p. 45. See Secs. 3644-5-6, post.

PROPERTY IN TRANSIT between different jurisdictions, whether actually in motion or awaiting directions or means of transportation, is only taxable under ordinary revenue laws applicable to importation or exportation, under the exclusive control of Congressbeing a commercial regulation. This rule we understand to be generally recognized. The power to tax property sent into a State, and lying there awaiting sale, seems clear, although the policy of it is questioned. Rep. of Wells and others, Commissioners, on local taxation (Harper's ed.), p. 45. See Sec. 3638, post. This note is frequently referred to under the sections of Chap. III, post.

OUR STATE LEGISLATION on the subject. The revenue system of the Code embraced in this Title will, it is hoped, prove a successful attempt to bring system out of confusion. It has been in force only & short time, and its authors and the Legislature adopting it have reason to congratulate themselves that so far at least it has been received and acknowledged as a vast improvement upon former enactments. Though the State has had an existence of more than twenty years, the Courts have been left to grope among the odds and ends of crude legislation, unsystematized and illy digested, for something tangible and worthy the name of " method" upon one of the most important subjects of government—taxation.It would be profitless, chronologically or otherwise, to recapitulate or refer to here the conflicting cases-necessarily very numerouswhich our Supreme Court have been compelled to decide under former revenue laws. A few of the later cases, where these questions are all elaborately discussed, will disclose not only the necessity which existed for the change made in these laws, but will also give the foundation for the change, and by presenting the existing difficulties, point out to a certain degree the means of avoiding them which were employed in the preparation of this revenue system under the constitutional provisions governing the subject. The case of The People vs. McCreery, 34 Cal., p. 434, et seq., was an appeal from the District Court, Fifteenth Judicial District, City and County of San Francisco. This was an action by the people of the State against defendant to recover the sum of eight thousand one hundred and sixty-four dollars and fifty cents, alleged to be due for taxes on certain personal property, levied in the City and County of San Francisco, for the fiscal years 1865-6 and 1866-7. The personal property on which the taxes were levied consisted of one hundred and twenty-five thousand dollars loaned at interest by defendant McCreery to James Lick, and secured to be repaid by a deed of trust of certain real property situated on the corner of Sutter and Montgomery streets, known as the “Lick House." In the Court below the trial was by the Court without a jury, upon an agreed statement of facts, coupled with a stipulation that defendant could interpose any defense he might choose. The defendant had judgment, and plaintiff appealed therefrom and from an order denying a motion for a new trial. The other facts and the issues presented by the pleadings and on appeal are sufficiently stated in the opinion of the Court.

In the first portion of this decision Justice Rhodes disposes of questions arising from numerous specific enactments. The revenue law then existing classified all property subject to taxation, and attempted a complete enumeration, which, it will be observed, is not attempted in the text of Section 3607 of this Title, but

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