City of Detroit v. Gould

• Decision Date: 20 November 1957
• Docket Number: No. 34397,34397
• Citation: 146 N.E.2d 61,12 Ill.2d 297
• Parties: The CITY OF DETROIT et al., Appellants, v. Irving GOULD et al., Appellees.
• Court: Illinois Supreme Court

Page 61

146 N.E.2d 61

12 Ill.2d 297

The CITY OF DETROIT et al., Appellants, v. Irving GOULD et al., Appellees.

No. 34397.

Supreme Court of Illinois.

Nov. 20, 1957.

Suekoff, Frost & Spiegel, Chicago (Raymond I. Suekoff, Morris D. Spiegel, Chicago, and Joseph Maisano, Detroit, Mich., of counsel), for appellants.

Scolnik & Lafferty, Chicago (Avern B. Scolnik, and Joseph S. Lafferty, Chicago, of counsel), for appellees.

HERSHEY, Justice.

The city of Detroit, Michigan, and its treasurer, plaintiffs in this cause, brought action in the circuit court of Cook County, Illinois, to recover personal property taxes for 1954 and 1955 based upon the Michigan general tax laws, the charter of the city of Detroit, and the municipal code of the city of Detroit. It was alleged that the defendant, now residing in the State of Illinois, did in 1954 and 1955 reside within the city of Detroit in the State of Michigan and the taxes were assessed against personal property owned by the defendant and located in the city of Detroit during those years. Defendants filed a motion to dismiss the complaint on the grounds that the revenue laws of one State have no force in other States, that the tax liability is not a contractual liability, that Illinois courts will not take jurisdiction of an action to enforce the revenue laws of another State, and that the complaint did not allege a judgment entitled to full faith and credit had been obtained in the Michigan courts against the defendant. The motion was sustained and the trial court dismissed the complaint. By this motion defendant did, in fact, present a constitutional question. Direct appeal is therefore prosecuted to this court.

It is provided by section 1 of article IV of the constitution of the United States: 'Full Faith and Credit shall be given in each State to the public Acts, Records, and Judicial Proceedings of every other State. And the Congress may by general Laws prescribe the Manner in which such Acts, Records and Proceedings shall be proved, and the Effect thereof.' A construction of the Federal constitutional provision was therefore in issue in the order of dismissal entered in the trial court. It is from that order of dismissal that this appeal is now taken.

It is true that this action is not brought from any judgment of the courts of Michigan to which Illinois is requested to give full faith and credit, but is grounded upon statutes of the State of Michigan and of municipal corporations of that State. The applicable statutes of the State of Michigan provide that personal property should be assessed in the township in which the owner resides on the first day of January of the year for which the assessment is made, the taxable status of persons and personal property shall be determined as of the first day of January and that said date shall be the tax day in all assessing districts including cities; the assessing officer of each city shall assess the taxes apportioned to his township or assessment district according and in proportion to the valuations entered by the board of review in the assessment roll of the city; and that the taxes thus assessed become a debt due the city at once from the person to whom they are assessed. Sections 7.13, 7.80 and 7.81, Michigan Statutes Annotated, Comp.Laws 1948, §§ 211.13, 211.39, 211.40, as amended. The charter of the city of Detroit (Compiled Laws of the State of Michigan, 1929, chapter 49) provides that a board of assessors shall assess all property liable to assessment, within the city and subject to taxation by the laws of the State. Charter of the City of Detroit, title 4, chap. 7, secs. 1 and 7A, and title 6, chap. 2, sec. 1. In addition, the municipal code of the city of Detroit provides that the taxable status of personal property shall be determined as of January 1 of each year, and that such taxes shall become a debt against the owner on January 1 each year, and that it is the duty of the city treasurer, to enforce the payment of such taxes by suit or otherwise. Municipal Code of the City of Detroit, chap. 81, sec. 1, and chap. 67, sec. 3.

It is provided in section 27.605, Michigan Statutes Annotated, Comp.Laws 1948, § 609.13, as amended, that a Michigan municipal corporation by its appropriate legal officers is empowered to bring suits in the courts of other States to collect taxes legally due to Michigan or its political subdivisions.

It is pursuant to these statutes that taxes were assessed against the personal property of defendants in the city of Detroit for the years 1954 and 1955, and it is pursuant to these statutes that the treasurer of the city of Detroit initiated this action in the circuit court of Cook County, Illinois.

It is a contention of the defendants in this cause that neither considerations of full faith and credit nor comity require or authorize the plaintiffs to bring this action in the courts of Illinois for the reason that the generally established rule that revenue laws of one State or country will not be enforced in the courts of another State or country precludes the action.

This time-worn and oft-repeated doctrine precluding the enforcement of revenue laws of sister States in the courts of another State first found expression in the ancient case of Boucher v. Lawson, 95 Eng.Rep. Rep. 53 (1734) wherein Lord Hardwicke refused to give effect to a Portuguese revenue law prohibiting the export of gold, interposed as a defense against delivery of a smuggled cargo of gold in England, for the stated reason that the gold was needed by England and to deny the delivery would have a detrimental effect upon English commerce. The principle was thereafter expanded and repeated both in dictum and as a rule of law governing actual determination in later English cases. Holman v. Johnson, 98 Eng.Rep. 1120 (1775); Planche v. Fletcher, 99 Eng.Rep. 164 (1779); James v. Catherwood, 3 Dow. & Ry. 190 (1823); Sharp v. Taylor, 41 Eng. Rep. 1153 (1848). None of these cases actually dealt with an attempt to collect a tax in the courts of a foreign State.

The doctrine was engrafted into the law of this country in the case of Ludlow v. Van Rensselaer, 1806, 1 Johns., N.Y., 94, where a defendant sought to avoid paying a promissory note executed in France upon the ground that the note contained no stamps as required by French law. The court, however, held the note valid, saying that the court did not sit to enforce the revenue laws of other countries. In State of Maryland v. Turner, 1911, 75 Misc. 9, 132 N.Y.S. 173, the first attempt was made by one State to sue for taxes in another and the doctrine was there applied to deny recovery holding that a foreign tax was a penal law. The principle thereafter found wide acceptance in the courts of this country, notable examples being in the cases of State of Colorado v. Harbeck, 1921, 232 N.Y. 71, 133 N.E. 357, and City of Detroit v. Proctor, 1948, 5 Terry 193, 44 Del. 193, 61 A.2d 412. A review of the many applications of this doctrine in this country and especially in the last cited Proctor case indicates that this doctrine has continued to enjoy wide popularity in this country.

However, in isolated instances decisions of courts in this nation began what might be termed a gradual chipping away of the effect and application of this age-worn doctrine. In the case of Holshouser Co. v. Gold Hill Copper Co., 1905, 138 N.C. 248, 50 S.E. 650, 70 L.R.A. 183, in a receivership proceeding for an insolvent New Jersey corporation in North Carolina, the State of New Jersey was permitted to prove its claim for franchise taxes from the insolvent corporation, accruing to the State of New Jersey under a statute providing that such tax should be a debt due from the corporation to the State. Subsequently it was established that where the tax...