in the property affected thereby. Except as to railroad and other quasi public corporations, in case of debts so secured, the value of the property affected by such mortgage, deed of trust, contract or obligation, less the value of such security, shall be assessed and taxed to the owner of the property, and the value of such security shall be assessed and taxed to the owner thereof, in the county, city, or district in which the property affected thereby is situate. The taxes so levied shall be a lien upon the property and security, and may be paid by either party to such security; if paid by the owner of the security, the tax so levied upon the property affected thereby shall become a part of the debt so secured; if the owner of the property shall pay the tax so levied on such security, it shall constitute a payment thereon, and to the extent of such payment a full discharge thereof; provided, that if any such security or indebtedness shall be paid by any such debtor or debtors, after assessment and before the tax levy, the amount of such levy may likewise be retained by such debtor or debtors, and shall be computed according to the tax levy for the preceding year.

The right of mortgagor to retain amount of mortgage tax according to rate of previous year, is not exclusive, but he may afterwards recover same by action, if the mortgagee does not pay it and the mortgagor is obliged to relieve his land from the tax lien. (S. G. V. L. & W. Co. v. Witmer, 23 Pac. Rep. 500, affirmed) 96 Cal. 623, Beatty, C. J., and Harrison, J., dissenting. See Political Code, section 3627.

An assessment levied by irrigation districts, although referable to the power of taxation, is distinct from a tax, and is not subject to the provision requiring mortgages, etc., to be deducted from value of land, but may be levied upon all the real property within the district without such deductions. Tregea v. Owens, 94 Cal. 318, affirming In re Bonds Madera Irr. Dist., 92 Cal. 296.

The assessment of the interest of the mortgagor must be complete within itself, so as to show upon its face, without reference to the assessment of the interest of the mortgagee, that the value of the mortgage interest is deducted. Knott v. Peden, 84 Cal.

Assessment of mortgage interest is assessment of an interest in the land itself, and a tax sale under such assessment conveys an interest in the land. Such sale is not merely a sale of the mortgage. Dorland v. Mooney, 72 Cal. 34.

Under this constitution the mortgage security is assessed as an interest in the land to the mortgagee, and either party can pay the tax thereon. (Considered with reference to payment of taxes under adverse possession.) Brown v. Clark, 89 Cal. 196, 202. A clause in a mortgage to the effect that the mortgagee may pay taxes assessed against the land, and that money so paid with interest thereon shall be included in and secured by the mortgage, does not render void the agreement to pay interest on the mortgage debt. Mayre v. Hart, 76 Cal. 291.

All mortgagors except railroads are given the benefit of the deduction of mortgage from value of land, and if the mortgage belongs to the state, the mortgagor is still entitled to the deduction, although the mortgage cannot be assessed. People v. Supervisors, 77 Cal. 137.

A mortgage given in November, 1879, to secure a promissory note, contained no special covenant as to payment of taxes. The mortgagor having paid taxes assessed against the mortgage interest after the adoption of this constitution, was entitled to deduct the amount thereof, when he paid up the note in 1883. Hay v. Hill, 65 Cal. 383. (Approving, McCoppin v. McCartney, 60 Cal. 371.)

Mortgages, deeds of trust, contracts or other obligations secured upon the property of railroad and other quasi public corporations are not to be deemed or treated as an interest in the property for the purpose of taxation, and such mortgages, etc., are not to be deducted, but railroads operated in more than one county must be assessed only by the State Board of Equalization, (Sec. 10, Art. XIII), C. P. R. R. Co. v. State Board of Equalization, 60 Cal. 35.

A mortgagee, prior to the adoption of this constitution, did not have a vested right of exemption from taxation which extended beyond the life of the for

mer constitution. Even if he had a contract with his mortgagor by which the latter agreed to pay all taxes, a change in the law which imposed the duty on him to pay the tax in the first instance, would not violate the obligation of the contract. The plain intent of the constitution is to subject to taxation classes of property previously exempt, McCoppin v. McCartney, 60 Cal. 367.

A mortgage made in 1879 prior to the adoption of the constitution contained a clause that the mortgagee might pay any tax, etc., levied against the land and the mortgagor would repay the same, and that the amount so paid would be secured by the mortgage. In 1880, the mortgage was assessed separate from the land. The mortgage was an interest in the land, the mortgage tax was a tax upon an interest in the land. The contract was valid when made and the mortgagee was entitled to recover the tax paid by him on the mortgage. Beckman v. Skaggs, 59 Cal. 541.

It would be double taxation to assess all the tangible property and franchise of a corporation and also assess to each stockholder the value of his shares of stock. Burke v. Badlam, 57 Cal. 594. See cases collected under section 9, this article.

SECTION 5. Every contract hereafter made, by which a debtor is obligated to pay any tax or assessment on money loaned, or on any mortgage, deed of trust, or other lien, shall, as to any interest specified therein, and as to such tax or assessment be null and void.

Evidence of parol agreement by which the borrower agrees to pay taxes levied on the money borrowed, or on the mortgage, tends to establish illegality under section 1856, C. C. P. Daw v. Niles, 33 Pac. Rep. 1114.

As to contract made before the constitution, and which was valid Beckman v. Skaggs, 59 Cal. 541.

adoption of this when made, see

A cotemporaneous agreement between mortgagor and mortgagee, to the effect that mortgagor shall be entitled to a credit of two and one-half per cent if he shall produce receipts showing payment of all taxes

against the mortgaged property, even if construed to mean the mortgage tax, is not invalid, because the constitution (Sec. 4, Art. XIII) permits the mortga gor to pay the mortgage tax, and to deduct the amount so paid from the debt. Hewitt v. Dean, 91 Cal. 5.

A clause in a mortgage to the effect that the mortgagee may pay taxes assessed against the land, and that money so paid, with interest thereon, shall be included in and secured by the mortgage, does not render void the agreement to pay interest on the mortgage debt. Mayre v. Hart, 76 Čal. 291.

A provision in a mortgage that the mortgagee may include in the foreclosure "taxes on the interest of the mortgagee therein by reason of this mortgage, ," is substantially the same as that considered in Harralson v. Barrett, 99 Cal. 607, and its effect is not to impair the lien of the mortgage, as to the principal of the debt; but as to the interest, and the agreement to pay the tax, it is void. Garnis v. Jensen, opinion filed July 17, 1894.

SECTION 6. The power of taxation shall never be surrendered or suspended by any grant or contract to which the state shall be a party.

SECTION 7. The legislature shall have the power to provide by law for the payment of all taxes on real property by installments.

SECTION 8. The legislature shall by law require each taxpayer in this state to make and deliver to the county assessor annually a statement, under oath, setting forth specifically all the real and personal property owned by such taxpayer, or in his possession, or under his control, at twelve o'clock meridian, on the first Monday of March.

The provision of the charter of the city of Stockton, adopted prior to the adoption of this constitution, required the city council to assess, levy, etc., taxes upon all taxable property within the city, and required the city assessor to prepare a list of such property between the first day of January and the

first Monday in April of each year. Held, said provisions were not repealed by section 8, article XI, of this constitution; and an asseesment of a mortgage made in conformity with the provisions of the charter is not invalid, although the mortgage was not executed until after the first Monday in March. City of Stockton v. Ins. Co., 73 Cal. 621.

Sections 3633 and 3629 of Political Code, by which the assessor is required to make an assessment after the taxpayer has neglected or refused to furnish a statement, and to note the refusal on the assessment book, are not unconstitutional. Oreña v. Sherman, 61 Cal. 101.

SECTION 9. A state board of equalization, consisting of one member from each congressional district in this state, as the same existed in eighteen hundred and seventy-nine, shall be elected by the qualified electors of their respective districts, at the general election to be held in the year eighteen hundred and eighty-six, and at each gubernatorial election thereafter, whose term of office shall be for four years, whose duty it shall be to equalize the valuation of the taxable property in the several counties of the state for the purposes of taxation. The controller of state shall be ex officio a member of the board. The boards of supervisors of the several counties of the state shall constitute boards of equalization for their respective counties whose duty it shall be to equalize the valuation of the taxable property in the county for the purpose of taxation; provided, such state and county boards of equalization are hereby authorized and empowered, under such rules of notice as the county boards may prescribe as to the county assessments, and under such rules of notice as the state board may prescribe as to the action of the state board, to increase or lower the entire assessment roll, or any assessment contained therein, so as to equalize the assessment of the property contained in said assessment roll, and make the assessment conform to the true value in money of the property contained in said roll; provided, that no board of equalization shall raise any mortgage, deed of trust, contract, or other obligation by which a debt is secured, money or solvent credits, above its face value. The present state board of equalization shall continue in office until their successors