Auditor General v. Lake George & M.R.R. Co.

• Decision Date: 10 October 1890
• Citation: 46 N.W. 730,82 Mich. 426
• Parties: AUDITOR GENERAL v. LAKE GEORGE & M. R. R. CO. et al.
• Court: Michigan Supreme Court

46 N.W. 730

82 Mich. 426

AUDITOR GENERAL v. LAKE GEORGE & M. R. R. CO. et al.

Supreme Court of Michigan

October 10, 1890

Appeal from circuit court, Clare county, in chancery.

Smith, Nims, Hoyt & Erwin, for appellants.

B W. Huston, (Edward Bacon, of counsel,) for appellee.

GRANT J.

The defendant company was organized in 1876, under the general railroad laws of the state, built and operated its road till November 28, 1881, when it sold and conveyed by warranty deed all its property except bills receivable to defendant Woods. This sale was made to pay a mortgage indebtedness. January 2 1882, Woods conveyed the property to C. H. Hackley & Co. Hackley & Co. took possession and operated the road until 1883 when they took up and sold the track, and removed portions of the movable property to another road owned by them. The company made its annual reports for each year to and including 1881. Specific taxes were assessed against the company for each year based upon these reports. Such taxes were paid for the years 1877 and 1878, but were not paid for the years 1879, 1880, and 1881. The auditor general took no steps to enforce the collection of the taxes against the railroad company. At the time of the sale the company was evidently insolvent. After the sale to Hackley & Co., the auditor general demanded payment of the taxes from them, which was refused. The auditor general then issued his warrant and levied on the property purchased by Hackley &amp Co. This levy was held to be void, and was set aside. Hackley v. Mack, 60 Mich. 591, 27 N.W. 871. The court in that case held that the lien of the state, if it existed, could not be enforced by execution until the right had been adjudicated in a court of equity. Decree was entered for complainant for a perpetual injunction but without prejudice to the state or auditor general to take any action deemed proper and necessary. The auditor general subsequently brought this suit in equity to enforce the lien, praying that the defendants Hackley and Hume, the then owners of the property, might be declared personally liable; that they be decreed to account for the property received; and, in brief, that a proper decree might be entered to enforce the lien. Defendants Hackley and Home demurred. The demurrer was overruled, and they then answered. Issue was joined, proofs taken, and decree entered for complainant ordering the defendants to pay the taxes, and, in default thereof, that the property should be sold to pay the amount thereof, the sale to be made in the following order: (1) All the stock of the company. (2) All the real estate. (3) The four locomotives formerly belonging to the company and now to Hackley and Hume. (4) All such other movable property formerly belonging to the company and subsequently in control of defendants Hackley and Hume as they shall in writing designate. Defendants Hackley and Hume appeal.

1. Defendants contest the authority of plaintiff to file the bill. The statute provides that the auditor general shall examine, adjust, and settle the claims of all persons indebted to the state. How. St. � 275. The legislature passed a resolution in 1881 instructing the commissioner of railroads to ascertain what railroad companies had failed to pay the taxes assessed to them, and to compute and report in each case the amount of such deficiency for each year to the auditor general, who was directed to assess and collect the same in accordance with the provisions of the law. The statute further provides if any incorporated company shall neglect or refuse to pay the tax assessed against it, the state treasurer shall furnish the name of every such company to the attorney general, who shall thereupon file a bill in the court of chancery against every such company for the discovery and sequestration of its property. These provisions furnish ample authority for the maintenance of the suit in the name of the auditor general. The complainant is described in the bill as "William C. Stevens, auditor general of the state of Michigan, by the direction of Moses Taggart, attorney general of the state of Michigan." Aside from these statutory provisions it is the general rule that public officers need not be expressly authorized by statute to bring suit, but that their capacity to sue is commensurate with their public trusts and duties. Supervisor v. Stimson, 4 Hill, 136; Overseers v. Overseers, 18 Johns. 407; Todd v. Birdsall, 1 Cow. 260; County Treasurer v. Bunbury, 45 Mich. 84, 7 N.W. 704. The objection is purely technical, and were it of any force an amendment would be allowed, inasmuch as the bill shows the real party in interest, and defendants have not been surprised or prejudiced. The attorney general has fully complied with the above provision of the statute by filing the bill in the name of the auditor general. That provision does not necessarily mean that he should file the bill in his own name. It is fully satisfied when filed by his direction, and with his name subscribed as the attorney general of the state.

2. It is next insisted that railroad corporations are excluded from the operation of Act No. 64 of 1848, which provides for the institution of the suit in chancery to enforce the lien created by the statute. How. St. � 1224. The title of that act is as follows: "An act relative to specific state taxes on plank-road, mining, and other corporations not enumerated in the Revised Statutes of 1846." The body of the act provides that, "in all cases where any incorporated company hereinafter to be incorporated is made subject to the payment of the specific state tax, this state shall have a lien on all the property of such company, to secure the payment of said tax, which lien shall take precedence of all other liens or incumbrances whatever." At the time this act (Id. � 1223) was passed the constitution contained no provision requiring the object of the act to be expressed in the title, as does the constitution of 1850. Formerly no titles were prefixed to legislative acts, and, except as limited by constitutional provisions, the titles cannot control the express words in the body of the act. Rogers v. Windoes, 48 Mich 630, 12 N.W. 882; Stewart v. Riopelle, 48 Mich. 178, 12 N.W. 36; U.S. v. Palmer, 3 Wheat. 631; Cooley, Const. Lim. 141. The fact that this act has been incorporated in the subsequent revisions and compilations of our law does not render it subject to the constitutional provision of 1850, concerning titles to legislative acts. It follows, therefore, that this act of 1848 included all corporations thereafter to be incorporated. The defendant company was such a corporation, and subject to its provisions. 3. Does the remedy by a suit in chancery exist? The general railroad act of 1873, as amended in 1879, simply imposes the tax, and provides for the lien. It provides no method of collection. How. St. �� 3358-3362. We must therefore look to other provisions of the statute for the method of collection. How St. � 1293, provides a remedy by distress and sale, and defendant's counsel claim that this is the only remedy provided, but sections 1220 and 1221, Id., expressly provide for a suit in chancery upon the neglect or refusal of the company to pay the tax, while section 1222 provides that the tax may also be recovered from a delinquent company by action in the name of the people. In this case the auditor general issued his warrant for the collection of the tax, but no property belonging to the...