B & D Inv. Co., Inc. v. Schneider

• Citation: 646 S.W.2d 759
• Decision Date: 23 February 1983
• Docket Number: No. 63976,63976
• Court: United States State Supreme Court of Missouri
• Parties: B & D INVESTMENT COMPANY, INC., et al., Appellants, v. Charles SCHNEIDER, et al., Respondents.

Page 759

646 S.W.2d 759

B & D INVESTMENT COMPANY, INC., et al., Appellants, v. Charles SCHNEIDER, et al., Respondents.

No. 63976.

Supreme Court of Missouri,

En Banc.

Feb. 23, 1983.

Rehearing Denied March 29, 1983.

Ronald N. Compton, St. Louis, for appellants.

Thomas W. Wehrle, County Counselor, Karen C. Moculeski, Asst. County Counselor, Clayton, for respondents.

ALMON H. MAUS, Special Judge.

This appeal involves the question of whether or not a taxpayer's failure to comply with § 139.031(1) bars recovery of ad valorem taxes paid as the result of an invalid increase in assessed valuation. Obviously, this appeal by the taxpayer involves the construction of a revenue law. Jurisdiction is in this Court. Mo. Const. art. V, § 3.

The action was commenced by the taxpayer's petition seeking recovery against the named defendants as Assessor and Collector of St. Louis County. After discovery, the motion of the defendants for a summary judgment was sustained. The propriety of that judgment will be measured by the facts developed in connection with that motion most favorable to the taxpayer.

A very simplified statement of the facts, established as aforesaid, will be sufficient for consideration of the points raised by this appeal. The real property in question consists of two separately assessed tracts in St. Louis County. For the year 1975 the Assessor valued the property at $806,230. However, on December 8, 1975, the State Tax Commission reduced the valuation to $634,218. Taxes on the real property for 1975 were calculated and paid upon the latter valuation. For 1976, the property was again assessed at $806,230. The Assessor gave the owner of the property no notice of the assessment at that figure. The 1976 taxes on the real property were calculated and paid upon a valuation of $806,230. This valuation was shown upon the tax statements. The taxes were paid before December 31, 1976. The owner at the time of paying the taxes did not file with the Collector a written statement protesting all or any part of the taxes so paid. § 139.031(1). The real property was assessed and taxes thereon were paid in like manner for the years 1977, 1978 and 1979.

While the real property had successive owners during those years, all are plaintiffs in this action. They will be collectively referred to as the taxpayer. By the petition in this cause, the taxpayer seeks to recover that portion of the taxes paid for those years resulting from the difference in valuation between $634,218 and $806,230, a total of $55,709.72 plus interest and costs. One named defendant was the Assessor of St. Louis County at the time the petition was filed. He had held that capacity since 1978. The other named defendant was the Collector of St. Louis County at the time the petition was filed. It does not appear how long that named defendant held that capacity. In addition to denials, the defendants by answer alleged recovery was barred by reason of the taxpayer's failure to comply with § 139.031(1).

The taxpayer's basic argument is as follows. The increases in valuation for 1976, 1977, 1978 and 1979 were made by the Assessor without notice and were void. Taxes imposed as a result thereof were illegal. John Calvin Manor, Inc. v. Aylward, 517 S.W.2d 59 (Mo.1974) is cited. In the absence of statute, taxes illegally imposed and paid involuntarily or under duress may be recovered in a common law action. The doctrine expressed in Manufacturer's Casualty Ins. Co. v. Kansas City, 330 S.W.2d 263, 80 A.L.R.2d 1035 (Mo.App.1959) is relied upon by the taxpayer. The taxpayer then cites the following language: "It does not appear, however, that the legislature intended to abrogate those remedies existing prior to the enactment of sec. 139.031 nor to make the procedure set forth in sec. 139.031 the exclusive remedy available to a taxpayer." John Calvin Manor, Inc. v. Aylward, supra, at p. 63. Therefore, it is argued the taxpayer's failure to comply with § 139.031(1) does not bar recovery of the taxes in question.

There are many questions that could have been raised concerning the taxpayer's right to recover under the common law doctrine. Without limitation, they include the following. Do the uncontroverted facts show the taxes in question were paid voluntarily within the meaning of the common law doctrine? Compare Franke v. City of St. Louis, 249 S.W. 379 (Mo.1923); Robins v. Latham, 134 Mo. 466, 36 S.W. 33 (1896) with State ex rel. S.S. Kresge Co. v. Howard, 357 Mo. 302, 208 S.W.2d 247 (banc 1947); McGraw-Edison Company v. Curry, 485 S.W.2d 175 (Mo.App.1972). Does the fact the taxes have been disbursed by the Collector bar the taxpayer's recovery? See Gas Service Company v. Morris, 353 S.W.2d 645 (Mo.1962); Annot., Illegal Tax--Liability of Collector, 14 A.L.R.2d 383 (1950). Conceding the valuation was invalidly increased for the first year in question, does it follow the same is true in regard to the subsequent years?

However, the defendants joined issue upon the taxpayer's theory and contend that § 139.031(1) does bar recovery. This appeal will be considered upon the theory adopted by the parties. Irwin v. Globe-Democrat Publishing Company, 368 S.W.2d 452 (Mo.1963). This opinion should not be construed as authority by implication upon any facet of the common law remedy that could have been questioned, but was not.

Section 139.031, which was a new section when adopted in 1969, must be reconciled with the remedies available to a taxpayer against the imposition of invalid property taxes existing at the time of its adoption. Xerox Corp. v. Travers, 529 S.W.2d 418 (Mo. banc 1975). It must be construed taking into consideration the problems created by those remedies. Person v. Scullin Steel Company, 523 S.W.2d 801 (Mo. banc 1975).

At the time § 139.031 was adopted, a taxpayer had three basic remedies. A remedy before an appropriate administrative agency. In regard to an invalid assessment, an appearance before the Board of Equalization with a subsequent appeal to the State Tax Commission. A similar remedy is an application for a refund of taxes paid by reason of a levy which has been declared to be illegal by this Court. § 139.290. While the scope of the remedy has not been definitively defined, the same is true of "any real or tangible personal property tax mistakenly or erroneously paid in whole or in part to the collector." § 139.031(4). A second basic remedy was a common law action to enjoin the collection of taxes invalidly imposed. St. Louis & S.F. Ry. Co. v. Epperson, 97 Mo. 300, 10 S.W. 478 (1889). The third basic remedy was a common law action to recover such taxes paid involuntarily or under duress. State ex rel. S.S. Kresge Co. v. Howard, supra.

In respect to the latter remedy, a taxpayer was faced with the problem of determining, at his peril, when the payment of such taxes was involuntary as distinguished from voluntary. On the other hand, that remedy could create serious problems for the taxing authority in that no statement of asserted invalidity was required at the time of payment of such taxes. Taxes for several years could be collected and disbursed by the taxing authority in reliance upon the apparent validity of such taxes. A subsequent refund of such taxes could create serious financial problems for the taxing authority. The purpose of statutes similar to § 139.031 has been summarized.

The essential purposes of such statutes are to furnish an adequate and sufficient remedy to the taxpayer, and at the same time to provide an expeditious method by which the various branches of government affected can obtain the revenue necessary for their maintenance without protracted delay or the hazards incident to the former procedure, since it is in effect a procedure to review the decisions of the taxing authorities. Moreover, the statutory requirement is intended not only to furnish proof that the payment was involuntarily made, but also to warn the tax collector that the tax is claimed to be illegal; and the filing of a protest has two purposes, to serve notice on the government of the dissatisfaction of the taxpayer, and to define the grounds on which the taxpayer stands. 84 C.J.S. Taxation § 638 (1974).

It is clear that an application for a refund is the exclusive method for recovery of invalidly imposed sales taxes from the Director of Revenue. Charles v. Spradling, 524 S.W.2d 820 (Mo. banc 1975). While that decision is primarily based upon the doctrine of sovereign immunity, it is also observed: "In addition, on grounds of public policy, the law discourages suits for the purpose of recovering taxes alleged to have been illegally levied and collected; and it is for this reason of policy that the remedy of a refund, including time in which it must be filed, is the exclusive remedy." Charles, at p. 823.

It is a firmly established principle that when an administrative remedy is adequate, ordinarily that remedy is exclusive. C & D Inv. Co. v. Bestor, 624 S.W.2d 835 (Mo. banc 1981). Of course, when because of lack of notice a taxpayer is denied an opportunity to employ an administrative remedy, he will not be denied a judicial remedy. McGraw-Edison. However, the availability of an administrative remedy does not bar other remedies under all circumstances. For instance, when a taxpayer does not question the valuation of his property, but asserts it is not subject to the tax, he need not appear before the Board of Equalization but may enjoin the enforcement of the tax. Washington University v. Baumann, 341 Mo. 708 108 S.W.2d 403 (banc 1937). Further, § 139.031 may provide an alternative remedy. Under circumstances similar to Washington University, a taxpayer may pay the tax in compliance with § 139.031(1) and recover the taxes so paid by filing suit in compliance with § 139.031(2). Mesker Brothers Industries, Inc. v. Leachman, 529 S.W.2d 153 (Mo.1975). Or, when a taxpayer alleges an unconstitutional discriminatory assessment, he may pay the tax imposed...