Opinion
No. 34105.
April 1, 1940.
1. TAXATION.
A taxpayer electing to invoke the statute authorizing refund of taxes pursuant to investigation by auditor of public accounts need not have paid taxes under protest, but is required to file proper application with the auditor (Code 1930, sec. 3276).
2. TAXATION.
The change in statute authorizing refund of taxes pursuant to investigation by Auditor of Public Accounts, so as to authorize refund whether taxes were paid under protest or not, did not change fact that such remedy was merely additional to the statutory remedy of presenting claim to Board of Supervisors, and hence taxpayer may recover taxes paid under protest by direct suit against county, without first presenting claim to auditor and Attorney General (Code 1930, secs. 253, 3276).
3. TAXATION.
A tax collector was not liable to taxpayer for taxes which collector had duly paid over to the proper authorities immediately after collection, notwithstanding that such taxes were paid under protest (Code 1930, secs. 1078, 3289, 3292-3297).
4. TAXATION.
It is mandatory duty of tax collector to pay over tax money to proper authorities on first day of month following collection, or within 20 days thereafter, though such taxes are paid under protest (Code 1930, secs. 1078, 3289, 3292-3297).
APPEAL from the circuit court of Adams county; HON. R.E. BENNETT, J.
E.C. Craig and R.C. Beckett, both of Chicago, Ill., Burch, Minor McKay, of Memphis, Tenn., and E.H. Ratcliff, of Natchez, for appellant.
Appellant contends that in the instant case it had a remedy by appeal from the order of the Board of Supervisors refusing to refund the alleged illegal taxes which plaintiff paid under protest or it had the choice of suing direct as it did, or it might have taken what some good lawyers regard as the very uncertain, dubious and circuitous route provided by Section 3276 of the Code of 1930. It has certainly been the established practice from time immemorial to use any one of several methods of procedure in such cases as the present. No one of several methods of procedure has ever yet been held or considered to be exclusive of others which the taxpayer might elect to adopt.
Since the enactment of Section 3276 by the Legislature in 1926 the practice has prevailed universally giving the taxpayer the right of appeal from the Board of Supervisors to the Circuit Court, or on refusal of the Board to grant relief, to sue directly as was done in this case.
Y. M.V.R.R. Co. v. Bolivar County et al., 191 So. 426; Bd. of Supervisors of Attala County v. I.C.R.R. Co., 190 So. 241; Schmittler v. Sunflower County, 125 So. 534.
The case of Pearl River County v. Lacey Lbr. Co., 124 Miss. 85, 86 So. 755, is the only case I have been able to find where the taxpayer chose to proceed as provided in Section 3276 of the Code, and while the court held, incidentally, that it was an easy and inexpensive method of obtaining refund for erroneous payment of taxes, it held that a decision against the Board did not bind the officers and it was not mandatory upon the treasurer or the Board of Supervisors to obey the order of the auditor and attorney-general. If this be true as to the treasurer and Board it certainly could not be held that the taxpayer could not also contest in the courts the action of the auditor and attorney-general if adverse to him, and in that case there was no intimation or suggestion that the aggrieved taxpayer was compelled to resort to that procedure for redress or that it was exclusive and no other method was open to the taxpayer.
There is a very interesting discussion of the whole subject-matter involved in this case as to the different methods of procedure an aggrieved taxpayer may employ to obtain his rights under the law, in the federal case of Matthews v. Rogers, reported in 284 U.S. 521, 76 Law Edition 448 et seq., and a number of other cases therein cited.
It is respectfully submitted that Section 3276 of the Code was never intended to be the sole and exclusive remedy to an aggrieved taxpayer to recover money illegally taken from him and arbitrarily shut him off from pursuing the remedies provided in other existing statutes to obtain redress for his grievances, but the purpose of the enactment of that statute was to give to the taxpayer what the Legislature deemed to be an easy method and less expensive method to obtain redress, but there appears, so far as the writer has been able to find, only one case where a taxpayer undertook to try out this method and the fact is, accordingly to the opinion of many good lawyers, the pursuing of this method would open up an interminable field of litigation because whatever action the auditor or attorney-general might take, neither the taxpayer nor the tax collecting agency of the state would be bound by their decision, as either party could take the case into the courts for final settlement if the decision of the auditor and attorney-general was adverse to their interest as was held in Pearl River County v. Lacey Lumber Co., 124 Miss. 85, 86 So. 755. W.A. Geisenberger, of Natchez, for appellee, Adams County.
Section 3276, Mississippi Code 1930, as amended by Chapter 260, Laws of 1938, is an evolution of Chapter 76, Laws 1900, which first appeared in the Code of 1906 as Section 4346. Prior to that time, the only refunds that were authorized to be made were of the purchase price of land erroneously sold for taxes.
While it is true that since the passage of Chapter 196, Laws of 1926, and since the adoption of the Code of 1930, a number of suits have been brought against different counties of the state under circumstances prevailing here, in none of those cases was the point raised as to whether or not that mode of procedure was proper. Therefore, they are not authorities for appellant's contention.
In the case of Schmittler v. Sunflower County, 156 Miss. 227, 125 So. 534, especially in the decision on the suggestion of error in 156 Miss. 227, 126 So. 39, the warning was given that the right to proceed by direct action against the county might not be permissible since the enactment of Chapter 196, Laws 1926.
Appellant cites Matthews v. Rogers, 284 U.S. 521, 76 L.Ed. 448, 52 S.Ct. 217, as upholding its contention that a suit for the recovery of such taxes may be brought against a county or other taxing authority in spite of Section 3276, Mississippi Code 1930. Such was by no means the holding nor import of the Matthews case. What the Supreme Court of the United States did decide in that case was that there being a full and adequate remedy at law, available to the complainant under the state law, he would not, in the federal courts at least, be permitted to enjoin the collection of taxes attacked as illegal. All of the four Mississippi cases cited by the Supreme Court in its discussion of the question as to whether or not the complainant had a full and complete remedy at law for the recovery of the taxes by him paid were decided many years before Chapter 196 of Laws of 1926 was passed, viz: Coulson v. Harris, 43 Miss. 728, decided in 1871; Tuttle v. Everett, 51 Miss. 27, 24 Am. Rep. 622, decided in 1875; City of Vicksburg v. Butler, 56 Miss. 72, decided in 1878; Pearl River County v. Lacey Lbr. Co., 124 Miss. 85, 86 So. 755, which was decided in 1920, but which was a case in which an application for refund was made to the Auditor of Public Accounts and to the Attorney-General under Section 4346, Code of 1906. The proceedings following a decision by the Auditor and Attorney-General are exactly the same under Section 3276, Code 1930, as they were under Section 4346, Mississippi Code 1906; and the decision of those officials is not in all events final, nor does it preclude either the county or the claimant from contesting it in court. Thus, by citing the Lacey Lumber Company case, the Supreme Court in effect held that the provisions of Section 4346, Mississippi Code 1906, brought forward into Section 3276, Mississippi Code 1930, gave the complaining taxpayer a full, complete and adequate remedy for the enforcement of his grievance.
I.C.R.R. Co. v. Bd. of Sup'rs of Attala County, 137 Miss. 408, 102 So. 265.
The Attala County case was decided on December 22, 1924; and when the Legislature next met in regular session in 1926, it passed Chapter 196, Laws 1926, amending the Code section which that case construed, by requiring a "proper application" by a claimant in order to entitle him to a refund upon audit, etc., by the State Auditor and Attorney-General. The Legislature in doing so is presumed to have had in mind the decision in the Attala County case. From the reasoning in the majority opinion in the Attala County case, it follows that if such application were required, then the method of procedure created by the statute would be mandatory upon any aggrieved taxpayer. When the action of the Legislature in amending Section 4346, Code 1906, is considered in the light of the reasoning embraced in the dissenting opinion of Judge Ethridge and the grounds on which the prevailing opinion was based, the conclusion is inescapable that the Legislature, in providing that the action of the Auditor and Attorney-General be taken upon "proper application" of any claimant, intended to supply the omission pointed out in that case. Reasoning by analogy, this is made apparent when Section 196, Laws 1926, is considered in connection with the case of Union Land Timber Co. v. Pearl River County, 141 Miss. 131, 106 So. 277, holding payment of taxes under protest was necessary in order that a taxpayer obtain relief under Section 4346, Code of 1906. This case was decided on December 14, 1925, just three weeks before Chapter 196, Laws 1926, was passed. In March of the following year the Legislature made relief available to the taxpayer whether the payment of his tax was made under protest or not.
Riley, State Auditor, v. Ammon, 143 Miss. 861, 106 So. 297; Schmittler v. Sunflower County, 156 Miss. 227, 126 So. 39.
We believe that a close analysis of both the prevailing opinion and the dissenting opinion in the Attala County case will reveal that the sounder logic is embraced in the construction placed by the dissenting Justice on Section 311, Code 1906, Section 257, Code 1930, as amended by Chapter 179, Laws 1932, that it is a restricting statute rather than an enabling statute, and that it gave no authority to the Board of Supervisors or other taxing board to make a refund of taxes that had been paid to the county, but laid restrictions upon anyone desiring to file suit or action against a county by requiring that his claim, made out to meet the requirements of the statute, be first filed with the Board of Supervisors. That section, if applicable to funds for refund of taxes applies as well when an aggrieved taxpayer has presented his application to the State Auditor as it does in other cases where a suit or action might properly and without question be instituted against the county in the first instance. For should his claim for refund be adjudged adversely by the Auditor and the Attorney-General, he could still and should then present his petition for refund to the Board of Supervisors; and if adversely acted upon by that Board, appeal from its decision or file suit against the county. The statute does not deprive the taxpayer of his right to his day in court, but does lay down the administrative procedure which must be followed by him in seeking refund of taxes which he claims to have been erroneously demanded of him and paid by him.
Except in cases that would violate some provision of the federal or state Constitution, neither the state nor its subdivisions can be required to make a refund for taxes; and when it establishes a method and procedure whereby this may be done, then unless it lays down an alternate method or procedure, the method established is exclusive.
G.H. Brandon, of Natchez, for appellee, Audley B. Conner, tax collector of Adams County.
The appellee, Audley B. Conner, tax collector of Adams County, Mississippi, adopts for the presentation of his cause in his behalf the brief herein by Adams County through Mr. W.A. Geisenberger, attorney, to the extent that said cause is covered by that brief.
In addition to the grounds of demurrer urged by Adams County, Audley B. Conner, tax collector of Adams County, presented the further and additional ground of demurrer that said suit could not be maintained against him, said tax collector, for the reason that the declaration affirmatively charged that said tax collector had reported the collection of the taxes paid by the appellant as he was required by law to do, and that he, said tax collector, had paid into the state and county treasuries the amount of taxes by him collected as he was by law required to do. Such being so, it follows that since the tax collector could not, after collection of the tax complained of, retain the same in his hands and had therefore disbursed the same as by law he was required to do, and had none of same yet in his hands, he could not be sued for recovery of the taxes which the appellant claims were illegally required of it by the levy made by the Board of Supervisors of Adams County.
Secs. 3289, 3293, 3294, 3296, 3297, Code of 1930.
The tax collector is an administrative officer only, lacking in judicial and discretional power; and, hence, having received money voluntarily paid to him, although "under protest," he is required to make reports and disbursements; and having so done he cannot be individually sued for refund of the taxes, and the only redress that an aggrieved taxpayer may have is to proceed by appropriate proceedings to recover whatever amount he may claim to be due from the county treasury or state treasurer.
The declaration having affirmatively shown by its averments that in the preformance of his administrative duties the tax collector had done those things required of him by law, and that he had paid over, distributed, and settled for all the money paid to him by the Yazoo Mississippi Valley Railroad Company, it is contended that the declaration stated no cause of action whatsoever against the tax collector, and, hence, the demurrer presented by the tax collector was properly sustained by the court below.
Argued orally by R.C. Beckett, for appellant.
The declaration filed herein by the appellant railroad company alleges that on or before the 1st day of February, 1939, the appellant, in order to prevent the imposition of penalties and the seizure and sale of its property, paid under protest to the appellee Audley B. Conner, as sheriff and tax collector of Adams County, the sum of $1,523.81 in ad valorem taxes, which is alleged, for reasons therein specifically set forth, to have been illegally levied and assessed. The said taxpayer seeks a recovery thereof from both the said County of Adams and the tax collector on his official bond on the ground that the said officer, after being advised that the taxes were paid under protest as aforesaid, made a distribution of said funds by paying the same over to the proper authorities. Separate demurrers interposed by the county and the tax collector were sustained, and the railroad company appeals.
The county invokes Section 3276 of the Code of 1930 as being the exclusive method of procedure for obtaining a refund of taxes paid under the circumstances set forth in the declaration, and contends that it was therefore necessary that the taxpayer should follow the method provided under said statute, as a condition precedent to its right to maintain this action against the county. This same ground of demurrer was set up by the tax collector, and he also assigned the further ground that the declaration shows on its face that, prior to the institution of this suit, he had already fully accounted to and settled with the County of Adams and the State of Mississippi for his collection of said taxes, as he was required by law to do.
The method prescribed by said Section 3276, supra, for obtaining a refund of taxes by having the Auditor of Public Accounts investigate such claims, and, if he shall find that taxes have been erroneously paid into the treasury of the state, county or levee boards, to audit the same against each separate fund in proportion to the amount paid over to such fund in each case, and submit such audit and the evidence on which the claim is based to the Attorney-General for his inspection and approval, was first adopted by the enactment of Chapter 76 of the Laws of 1900, which was brought forward in the Code of 1906 as Section 4346 thereof. There also appears in that Code another statute, Section 311, which reads as follows: "A person having a just claim against any county shall first present the same to the board of supervisors thereof for allowance; and, if the board shall refuse to allow it, may appeal from the judgment of the board to the circuit court, or may bring suit against the county; and, in either case, if such person recover judgment, the board of supervisors shall allow the same, and a warrant shall be issued therefor."
In the case of Illinois C.R.R. Company v. Attala County, 137 Miss. 408, 102 So. 265, 266, the court had under consideration the question of whether or not the remedy afforded the taxpayer by said Section 4346 of the Code of 1906, supra, for obtaining a refund of taxes illegally collected, was the exclusive method to be followed as a condition precedent to the right to sue the county, or whether the said remedy was an additional method afforded the taxpayer for such purpose, and the court said: "We are also of the opinion that it was not a condition precedent to the presentation of this claim to the board of supervisors that it first be presented to the auditor of public accounts for investigation and for submission to the Attorney-General for his inspection and approval, as provided in section 6980, Hemingway's Code (section 4346, Code of 1906). This section gives to one who has erroneously paid a tax an additional method of getting his claim first allowed by the auditor. It does not intend to prescribe an exclusive method of doing so. The only mandatory language used in the first part of this section is that which makes it the duty of the auditor to make a careful investigation. Nowhere does it make it the duty of the taxpayer to present his claim to the auditor." And, the court proceeded to hold, that, as an original proposition, the taxpayer had a right to proceed under either Section 4346 or 311, supra, of the Code of 1906. That case was decided in December, 1924. Thereafter, the said Section 4346 was amended by Chapter 196 of the Laws of 1926, brought forward as Section 3276 of the Code of 1930, supra, so as to afford such relief to the taxpayer when the taxes are paid through error or otherwise, and whether they were "paid under protest or not," and the statute as thus re-enacted, after having been so construed by the court in the Attala County case, supra, makes it the duty of the Auditor of Public Accounts to make the investigation of any such claims for a refund "upon proper application of any such claimant." In other words, if the taxpayer now elects to invoke this statute as a means of obtaining relief, he need not have paid the taxes under protest, but it is necessary that he shall file a proper application with the Auditor in that behalf. However, Section 311 of the Code of 1906, having been brought forward as Section 253 of the Code of 1930, remains in full force and effect, thus rendering the decision in the case of Illinois C.R.R. Company v. Attala County, supra, controlling in the case at bar. The fact that the taxes may be refunded under the statute, as re-enacted by Chapter 196 of the Laws of 1926, supra, "whether paid under protest or not," and only "upon proper application of [the] claimant," did not change the fact that this remedy is merely an additional method to that afforded by Sections 311, Code of 1906, 253, Code of 1930, nor do these changes in the statute serve to make it mandatory for the taxpayer to first present his claim to the Auditor and the Attorney-General.
In the case of Schmittler v. Sunflower County, 156 Miss. 227, 126 So. 39, 40, on suggestion of error, the court discussed the said Chapter 196 of the Laws of 1926, brought forward as Section 3276 as aforesaid, and held that the effect thereof was to render it unnecessary that the tax payment be made under protest to authorize such refunds, that is, refunds made upon, and as a result of, an audit and certificate of the Auditor of Public Accounts approved by the Attorney-General; and further held that this provision of the statute has no application to direct suits against the county for taxes erroneously paid into the county treasury. In the course of its opinion, the court said: "If, since the enactment of chapter 196, Laws of 1926 . . ., a suit can be maintained against the county for a refund of taxes erroneously paid, which we do not decide, it can only be maintained upon a showing that the payment was involuntary." In other words, the precise question decided by the court in that case was that if a suit can be maintained directly against a county for a refund of taxes erroneously paid since the enactment of the statute above mentioned, the same could be maintained only upon a showing that the payment was involuntary. We now hold that in such case of involuntary payment, a direct suit against a county for such refund may be maintained without first resorting to the remedy afforded by said statute. The declaration alleges that the taxes in the instant case were paid under protest, and hence it follows that the demurrer of the county should have been overruled.
However, the second ground of demurrer assigned by the appellee tax collector was well taken. Having received the tax money in question under an assessment and levy against the property of the appellant, even though the same was paid to him under protest as alleged, it was his plain duty under the positive mandates of Sections 3289, and 3292 to 3297, inclusive, and also Section 1078, of the Code of 1930, to pay over the same to the proper authorities on the first day of the month immediately following such collection, or within twenty days thereafter, under the penalty of being subject to suspension from office by the Governor, and the payment of thirty per cent per annum damages, et cetera. The requirements of these statutes contain no exception as to taxes paid under protest, but are applicable to all taxes coming into the hands of the tax collector by virtue of his office. This being true, it does not accord with right and justice that a sheriff and tax collector who has paid over funds under such circumstances, as expressly required by law, should be further liable for the refund thereof to the taxpayer; and in the absence of any statute imposing such liability, we decline to so hold.
It is true that in the case of Matthews et al. v. Rodgers et al., 284 U.S. 521, 52 S.Ct. 217, 76 L.Ed. 447, 448, where the taxpayer sought injunctive relief in the federal court against the collection of a state tax as being imposed in violation of the Constitution of the United States, the court seems to have held that the relief should be denied on the ground that the taxpayer had an adequate remedy by suit at law against the local tax collector by first paying the tax to him under protest and then suing for its recovery, and the court based its decision on that point upon the authority of Coulson v. Harris, 43 Miss. 728; Tuttle v. Everett, 51 Miss. 27, 24 Am. Rep. 622; Vicksburg v. Butler, 56 Miss. 72; and Pearl River County v. Lacey Lbr. Company, 124 Miss. 85, 86 So. 755; but, we are of the opinion that, even though it was correctly held that the taxpayer was not entitled to the injunctive relief prayed for in the case of Matthews v. Rodgers, supra, the foregoing decisions of this court cited in the opinion do not sustain the proposition that a tax collector in Mississippi would be liable to the taxpayer where he has already paid over the funds to the proper authorities under the positive mandates of our statutes hereinbefore cited in that behalf. In Coulson v. Harris, supra, the bill alleged that the tax collector had demanded money in excess of the amount of taxes levied and assessed. A demurrer to the bill for injunctive relief was sustained by the trial court, and it was contended on appeal that the injunction should have been perpetuated at least to the extent of the amount demanded by the collector in excess of the levy and assessment. That case is not applicable on the point now under discussion for the further reason that the taxes then in controversy had not been paid to the tax collector. He had only demanded payment. In the case of Tuttle v. Everett, supra, it was expressly decided that an illegal tax may be recovered from the tax collector to whom it has been paid, unless he has paid it over to his superiors, in which event suit must be brought against the authority to whom the tax has been paid by the collector. In that case, it so happened that the money was still in the hands of the tax collector, and the court held that "where the assessment and levy of the tax is illegal and void, the tax paid to the collector may be recovered back by the taxpayer from the tax collector, whilst the same remains in his hands." In the case of City of Vicksburg v. Butler, supra, the principal question discussed and decided was whether the payment to the city tax collector was voluntary or involuntary, and the court said "that principle disposes of this case." It was held that the payment in that instance was involuntary, and the court said that "some of the cases refer to a notice to the collector that suit will be brought to recover the money back. That notice is necessary, if the payer intends to sue the collector." The declaration in the case at bar alleges that the sheriff and tax collector was advised that the payment was being made under protest, but it is not alleged that he was notified that a suit would be brought against him for its recovery. The court in that case further held that after its receipt (meaning the notice that suit would be brought to recover the money) if he pays it over to the proper treasury, he does so at his risk, and does not relieve himself from responsibility. Further, that if he pays over the money without such notice, suit can only be brought against his principal — in that case, the City of Vicksburg. In view of the fact that the collector in that instance was a city tax collector, against whom the mandates and penalties of the statutes hereinbefore cited governing the duties of a sheriff and tax collector of a county were not then applicable, and the further fact that what was said by the court in that case applied only when the collector had been given notice while the money was still in his hands that a suit would be brought for its recovery, we are unable to agree that we are bound by that decision in this case. It is not decisive of the question here involved. Moreover, that case was decided during the year 1878 when the highly penal provisions of our present statutes governing the duty of a sheriff and tax collector of a county to promptly pay over all taxes collected by him were not in force.
Then too, if a tax collector should be held to act at his own peril in paying over to the proper authorities all taxes paid to him under protest, and be required to withhold the same at the will of the taxpayer, a situation could frequently arise where such payments would become sufficient in number and amounts to seriously interfere with the proper and orderly functions of governmental subdivisions, pending the determination of the legality of the levies and assessments under which the same may have been collected without regard to the merit of such claims. Aside from this consideration, however, such collector should not be required to incur the risk of being suspended from office or subjected to other penalties provided by law for failure to promptly pay taxes into the proper treasuries when collected; and this is especially true since the taxpayer has adequate remedy against the county receiving the same, if the levy and assessment thereof should be declared illegal.
It follows from the foregoing views that the demurrer of the sheriff and tax collector should have been sustained, and that of the county overruled.
Affirmed in part; reversed in part; and remanded.