Chicago, Milwaukee, & Puget Sound Railway Company v. Bowman County

• Decision Date: 19 June 1915
• Citation: 153 N.W. 986,31 N.D. 150
• Court: North Dakota Supreme Court

153 N.W. 986

31 N.D. 150

CHICAGO, MILWAUKEE, & PUGET SOUND RAILWAY COMPANY v. BOWMAN COUNTY, NORTH DAKOTA

Supreme Court of North Dakota

June 19, 1915

Appeal from the District Court of Bowman County, Nuessle, J.

Action to recover taxes illegally levied, which were paid under protest. Judgment for plaintiff. Defendant appeals.

Affirmed.

Theo. B. Torkelson, for appellant.

Before recovery back of taxes paid, it is necessary that it be shown that the taxes were paid involuntarily and under compulsion and protest. St. Anthony & D. Elevator Co. v. Bottineau County (St. Anthony & D. Elevator R. Co. v. Soucie) 9 N.D. 346, 50 L.R.A. 262, 83 N.W. 212.

The payment of taxes under mere protest is not sufficient; there must be compulsion. These taxes were paid while the county treasurer still had them in his hands for collection. Such officer has no authority to employ any form of compulsion. The payment was voluntary. Louisville v. Becker, 139 Ky. 17, 28 L.R.A.(N.S.) 1045, 129 S.W. 311; St. Louis v Dreisoerner, 243 Mo. 217, 41 L.R.A.(N.S.) 177, 147 S.W 998; Louisville v. Anderson, 79 Ky. 334, 42 Am. Rep. 220.

Payment of taxes to a mere passive agent who has no right or authority to compel payment is a voluntary payment, even though made under protest. Payment merely to avoid the penalty is also voluntary. Atchison, T. & S. F. R. Co. v O'Connor, 28 Ann. Cas. 1052, and cases cited in note.

The rebate and penalty provisions of taxation laws are to induce and encourage property owners to pay their taxes before they become delinquent, or before the date fixed by law when the right of rebate is lost, or the penalty, as in this state, attaches. Louisville v. Becker, 28 L.R.A. (N.S.) 1045, and cases cited in note, 139 Ky. 17, 129 S.W. 311; St. Louis v. Dreisoerner, 243 Mo. 217, 41 L.R.A.(N.S.) 177, 147 S.W. 998.

Where part of a tax is legal and part illegal, the proper method is to pay or tender the legal portion, and resist payment of that portion which is illegal. Farrington v. New England Invest. Co. 1 N.D. 102, 45 N.W. 191; Bode v. New England Invest. Co. 1 N.D. 121, 45 N.W. 197; Douglas v. Fargo, 13 N.D. 467, 101 N.W. 919; Orlando v. Equitable Bldg. & L. Asso. 45 Fla. 507, 33 So. 986; Rev. Codes 1905, § 5259, Comp. Laws, 1913, § 5815.

William G. Porter, Ed. L. Grantham, and Emil Scow, for respondent.

In this appeal there is no specification of errors; there is no specification of facts which appellant desires this court to review, nor is there a demand for a review of the entire case, or of any specified facts. Therefore all questions of fact are deemed to have been properly decided by the trial court, and the sufficiency of the evidence is not before this court for determination. Ricks v. Bergsvendsen, 8 N.D. 578, 80 N.W. 768; Security Improv. Co. v. Cass County, 9 N.D. 553, 84 N.W. 477; State ex rel. McClory v. McGruer, 9 N.D. 566, 84 N.W. 363; Douglas v. Glazier, 9 N.D. 615, 84 N.W. 552; Teinen v. Lally, 10 N.D. 153, 86 N.W. 356.

The payment of an illegal tax to avoid an onerous penalty is generally held to make the payment involuntary. 28 Ann. Cas. 1052; Atchison, T. & S. F. R. Co. v. O'Connor, 223 U.S. 280, 56 L. ed. 436, 32 S.Ct. 216.

The payment of the tax was not voluntary so as to estop the plaintiff to recover back. Plaintiff had no equitable remedy. Farrington v. New England Invest. Co. 1 N.D. 118, 45 N.W. 191; Schaffner v. Young, 10 N.D. 245, 86 N.W. 733; Minneapolis, St. P. & S. Ste. M. R. Co. v. Dickey County, 11 N.D. 107, 90 N.W. 260; Chicago & N.W. R. Co. v. Rolfson, 23 S.D. 405, 122 N.W. 343; Gaar, S. & Co. v. Shannon, 223 U.S. 468, 56 L. ed. 510, 32 S.Ct. 236; Atchison, T. & S. F. R. Co. v. O'Connor, 223 U.S. 280, 56 L. ed. 436, 32 S.Ct. 216, Ann. Cas. 1913C, 1050; Arkansas Bldg. & L. Asso. v. Madden, 175 U.S. 269, 44 L. ed. 159, 20 S.Ct. 119.

The right to pay and recover back is the remedy which precludes the right of injunction, or other proceedings in equity. Dows v. Chicago, 11 Wall. 108, 20 L. ed. 65.

Taxes paid under protest may be recovered back. Erskine v. Van Arsdale, 15 Wall. 75, 21 L. ed. 63; Malin v. Lamoure County, 27 N.D. 140, 50 L.R.A.(N.S.) 997, 145 N.W. 582.

Payment to avoid onerous penalty is not voluntary, but if paid under protest, taxes may be recovered back. Maxwell v. Griswold, 10 How, 242, 13 L. ed. 405; Gaar, S. & Co. v. Shannon, 223 U.S. 470, 56 L. ed. 512, 32 S.Ct. 236; Robertson v. Frank Bros. Co. 132 U.S. 17, 33 L. ed. 236, 10 S.Ct. 5; Swift Co. v. United States, 111 U.S. 22, 28 L. ed. 341, 4 S.Ct. 244; Atchison, T. & S. F. R. Co. v. O'Connor, 223 U.S. 280, 56 L. ed. 436, 32 S.Ct. 216, Ann. Cas. 1913C, 1050; Oceanic Steam Nav. Co. v. Stranahan, 214 U.S. 320, 53 L. ed. 1013, 29 S.Ct. 671.

Immediate danger of levy or seizure is not necessary to render the payment involuntary. The laws of this state require the county treasurer to deliver a list of delinquent taxes to the sheriff on the first day of October following delinquency. They require the sheriff to immediately collect all such personal property taxes, and to distrain and sell sufficient goods and chattels of the persons charged to pay the taxes with interest, penalty, and costs. The mere lapse of time during which no action could be begun by the taxpayer to restrain collection, or to cancel the tax, or to avoid the acts of the taxing power, will not of itself require the taxpayer to await the arrival of such date at which penalties and interest are added; but at any time after delivery of the tax record to the treasurer, the taxpayer has all the remedies available to him prior to a distraint for such taxes. Stowe v. Stowe, 70 Vt. 609, 41 A. 1024; Kansas P. R. Co. v. Wyandotte County, 15 Kan. 587; Atchison, T. & S. F. R. Co. v. Atchison County, 47 Kan. 722, 28 P. 999; Atchison, T. & S. F. R. Co. v. Atchison, 47 Kan. 712, 28 P. 1000; Wyandotte County v. Kansas City, Ft. S. & M. R. Co. 4 Kan.App. 772, 46 P. 1013.

Payment under protest and action to recover back has all sanction of the courts. Gaar, S. & Co. v. Shannon, 223 U.S. 468, 56 L. ed. 510, 32 S.Ct. 236; Atchison, T. & S. F. R. Co. v. O'Connor, 223 U.S. 280, 56 L. ed. 436, 32 S.Ct. 216, Ann. Cas. 1913C, 1050; Swift Co. v. United States, 111 U.S. 22, 28 L. ed. 341, 4 S.Ct. 244; Dows v. Chicago, 11 Wall. 108, 20 L. ed. 65; Arkansas Bldg. & L. Asso. v. Madden, 175 U.S. 269, 44 L. ed. 159, 20 S.Ct. 119; Louisville v. Anderson, 79 Ky. 334, 42 Am. Rep. 220; Chicago & N.W. R. Co. v. Rolfson, 23 S.D. 405, 122 N.W. 343; Stowe v. Stowe, 70 Vt. 609, 41 A. 1024; Robertson v. Frank Bros. Co. 132 U.S. 17, 33 L. ed. 236, 10 S.Ct. 5; Harold v. Kahn, 86 C. C. A. 598, 159 F. 608; St. Anthony & D. Elevator Co. v. Bottineau County (St. Anthony & D. Elevator R. Co. v. Soucie) 9 N.D. 346, 50 L.R.A. 262, 83 N.W. 212; Preston v. Boston, 12 Pick. 7; Claflin v. McDonough, 33 Mo. 412, 84 Am. Dec. 54; Parcher v. Marathon Co. 52 Wis. 388, 38 Am. Rep. 745, 9 N.W. 23; Rumford Chemical Works v. Ray, 19 R. I. 456, 34 A. 814; Malin v. Lamoure County, 27 N.D. 140, 50 L.R.A.(N.S.) 997, 145 N.W. 582; Fourth Nat. Bank v. Greenville, 91 S.C. 81, 74 S.E. 126; Whittaker v. Deadwood, 12 S.D. 608, 82 N.W. 202; American Brewing Co. v. St. Louis, and notes, 2 Ann. Cas. 825, 187 Mo. 367, 86 S.W. 129; 22 Am. & Eng. Enc. Law, 2d ed. 613, and cases cited; Cooley, Tax. 568, et seq.

OPINION

Statement of facts by

BRUCE J.

This is an action to recover excess taxes to the amount of $ 451.79, which were paid by the plaintiff railway company under protest to Bowman county, the excess levy being due to the levy of 20 mills for school purposes, when a levy of 17 mills would have produced more than the amount certified to the county auditor by the officers of said school district, and to the levy for general county purposes of a tax of 9 mills upon the dollar, in violation of the provision of § 1539, Rev. Codes 1905, § 2150, Comp. Laws 1913, which places the limit at 8 mills.

The illegality of the excess tax is conceded, and the only defense which is offered by the county is that such excess was voluntarily paid, and therefore cannot be recovered.

It appears from the testimony that when the assessment was first reported by the county auditor to the tax commissioner of the railway company, the 2-mill levy for the county poor was omitted; that when the tax levy was reported the 2-mill levy for the county poor was included that immediately upon being notified of this 2-mill levy and the 20-mill school levy upon property within the village of Gascoyne, the tax commissioner reported to the county auditor his discovery that the taxation for county purposes exceeded the authorized levy of 8 mills, and that the levy upon the property inside of the village of Gascoyne for school purposes exceeded the amount required to raise the revenue needed for school purposes and exceeded the levy upon property within the same school district outside the village of Gascoyne; that in reply thereto and on January 16th, 1912, the county auditor advised the tax commissioner that he had no authority to make any change inasmuch as his books had been turned over to the county commissioner, and requested the company to correspond with the treasurer; that on January 22d, 1912, the tax commissioner wrote to the county treasurer as requested, and asked him to take the matter up with the county commissioners, and have the correction made, and that in this letter and with reference to the mode of paying the tax he said: "Will it be satisfactory to you if remittance is made of the entire amount of the taxes less the amount which should be canceled, pending the action thereon by the county commissioners? Of course it will be perfectly satisfactory to us to have on the receipts that the entire amount was not remitted. Making the corrections...