Bower v. American Lumber & Export Co.

• Decision Date: 03 February 1916
• Docket Number: 6 Div. 213
• Citation: 71 So. 100,195 Ala. 572
• Court: Alabama Supreme Court
• Parties: BOWER, Tax Collector v. AMERICAN LUMBER & EXPORT CO.

71 So. 100

195 Ala. 572

BOWER, Tax Collector v. AMERICAN LUMBER & EXPORT CO.

6 Div. 213

Supreme Court of Alabama

February 3, 1916

Appeal from City Court of Birmingham; H.A. Sharpe, Judge.

Bill by the American Lumber & Export Company against P.B. Bower, as Tax Collector, to recover a sum of money paid voluntarily to defendant, as Tax Collector. Decree overruling demurrers to the bill, and defendant appeals. Reversed and remanded.

As last amended, the bill shows that complainant has always returned its property for taxation fully and without evasion, but prior to July, 1914, it did not list separately its solvent credits, which were included in and taxed as a part of the value of its capital stock, and that the solvent credits were not deducted therefrom as provided by law; that for each of the six years last preceding the filing of the bill, as well as for the current year, the complainant made its return of property and shares of stock for assessment according to the instructions of the tax assessor, and, acting upon his advice and according to his instructions in making the same, it had never failed to make return of any of its property for the purpose of evading or avoiding or escaping taxation upon the same; that prior to the decision of the Supreme Court of Alabama holding the solvent credits law as constitutional it was generally believed that the law did not require solvent credits to be listed for taxation, and that the tax assessor shared this erroneous belief, and therefore misled and improperly advised complainant by instructing it to make its returns, without separately listing its solvent credits thereby causing the value of such solvent credits not to be deducted for the value of its shares of capital stock, as the same might have been under the law. Paragraph 6 of the bill alleges that during the month of July, 1914, or about that time, the back tax commissioner of Jefferson county sent out a great number of mandatory notices requiring the taxpayers of said county to come to his office and make returns of their solvent credits; that complainant received such a notice, and in answer thereto its president, Fred Larkin appeared before said back tax commissioner, and stated substantially the matters hereinabove averred, and explained the manner in which the complainant's solvent credits had been taxed as aforesaid, but the said deputy then and there instructed Larkin that it would be necessary for said solvent credits to be listed as escaped property, and said back tax commissioner did then and there order and require said Larkin, as president of the complainant, to make return of complainant's solvent credits, which said Larkin accordingly did, as president of said corporation. The bill further alleges that, having made the return of the solvent credits voluntarily, it has no adequate remedy at law for the recovery of the money paid, and for not deducting same from its capital stock assessment. The bill further alleges that the payment of this sum, along with the penalty provided for failure to make the same, deprives complainant of its property without due process of law. The prayer is for general relief, and specially that the court order and decree that the said sum of money paid to respondent as aforesaid be returned to complainant.

Frank S. White & Sons, of Birmingham, for appellant.

Allen Fisk & Townsend, of Birmingham, for appellee.

McCLELLAN J.

The matter of controversy here brought under review results from the ruling of this court sustaining the validity of the statute subjecting "solvent credits" to taxation. Code, § 2082, par. 1, subd. 7; State v. Alabama Fuel &amp Iron Co., 188 Ala. 487, 66 So. 169, L.R.A.1915A, 185. Before that deliverance was made the expression to the contrary in the opinion in Barnes v. Moragne, 145 Ala. 313, 41 So. 947, was generally regarded as decisive of the invalidity of the provision subjecting "solvent credits" to taxation. The expression was found upon full consideration to be obiter dictum. At the recent session of the Legislature "solvent credits," other than those specially therein excepted, were exempted from taxation. Acts 1915, p. 107.

The complainant (appellee), a corporation, filed this bill against the tax collector, Bower. The bill was twice amended. As finally constructed, the prayer of the bill is that the court order and decree the return to complainant of a certain sum of money which it has paid to the tax collector as taxes charged against the complainant, together with prayer for such other, different, or additional relief as to the court might seem just and proper. The object sought to be attained is the return to the complainant of money paid by it to the tax official in discharge of an exaction made of it under the tax laws of the state. The complainant's assessments for the years 1909 to 1914, inclusive, were governed by the provisions of subdivision 9, Code, § 2082. The system therein provided requires the corporation to make return to the assessor of its capital stock and its value per share together with possible data serviceable in arriving at its value, and also to make at the same time a return to the assessor, duly verified, of all taxable personal and real property owned by the corporation and its value or values, whereupon the assessor, if the values noted were satisfactory to him, must deduct the aggregate amount of the assessment of real and personal property from the aggregate of the assessment on all the shares of the capital stock of the corporation, and the remainder, if any, affords the assessed value of the entire capital stock of the corporation; but, if the aggregate value of the shares does not exceed the aggregate value at which the real and personal property is assessed, then no tax is demandable or collectible on the shares. The complainant regularly assessed at value the shares of its capital stock for the years 1909 to 1914, inclusive, but did not for those years make return of the "solvent credits" owned by it, thus rendering impossible the deduction of the aggregate assessed value of this personal property from the aggregate value of all shares of its capital stock. After notice and in response to the urgent solicitation of the tax commissioner of Jefferson county, the corporation's president made a verified return of its "solvent credits" for the years 1909 to 1914, inclusive, at an agreed like value for each of these years. On this assessment, as for escaped or omitted subjects of taxation, the corporation has been required to pay the collector, notwithstanding protest, it is averred, $720, being the principal...