Department of Treasury v. Reinking

• Decision Date: 24 March 1941
• Docket Number: 16518.
• Citation: 32 N.E.2d 741,109 Ind.App. 63
• Parties: DEPARTMENT OF TREASURY v. REINKING.
• Court: Indiana Appellate Court

32 N.E.2d 741

109 Ind.App. 63

DEPARTMENT OF TREASURY v. REINKING.

No. 16518.

Appellate Court of Indiana, in Banc.

March 24, 1941

Omer Stokes Jackson, Atty. Gen., and Jos. P. McNamara, Deputy Atty. Gen., for appellant.

Heaton Shiffer & McClain, of Fort Wayne, for appellee.

BLESSING Judge.

The appellant, Department of Treasury of the State of Indiana instituted this action in the Superior Court of Allen County by filing its claim in the receivership of one George O Thain. This claim alleged that George O. Thain was justly indebted to the Department of Treasury of the State of Indiana on account of taxes assessed pursuant to the Gross Income Tax Act, Chapter 50, Acts 1933; Chapter 117, Acts 1937. The receiver of George O. Thain objected to the allowance of said claim as preferred and the cause was submitted to said Superior Court as an agreed case.

The facts stipulated were these:

"It is agreed by and between the parties that the Department of Treasury of the State of Indiana is a department of the State Government of Indiana created by Chapter 4 of the Acts of the General Assembly of Indiana of 1933, to which has been assigned by an executive order of the Governor of the State of Indiana the administration and enforcement of the provisions of Chapter 50 of the Acts of the General Assembly of Indiana of 1933, and of that Act as amended by Chapter 117 of the Acts of the General Assembly of 1937 which Act is commonly known and designated as the 'Gross Income Tax Act'; and that Hugo M. Reinking is the duly appointed qualified and acting Receiver of George O. Thain, having been appointed receiver by the Allen Superior Court on October 8, 1938; and it is further mutually agreed that the 'Proof of Preferred Claim,' heretofore filed herein by the Department of Treasury of Indiana on March 24, 1939, be received as evidence in this proceeding; and it is further mutually agreed that the amounts set forth in the said claim are complete, true, and mathematically accurate, and that the said amounts were properly assessed under and by virtue of the Indiana Gross Income Tax Act (Chapter 50 of the Acts of 1933, Chapter 117, Acts of 1937), and that the said amounts are presently due, owing and unpaid; and it is further mutually agreed that the sole question to be determined in this proceeding is whether or not the claim of the Department of Treasury of Indiana above specified is to be allowed as a preferred claim entitled to priority under Subsection (h) of Section 8 of Chapter 117 of the Acts of 1937, or whether the said claim is to be allowed as the claim of a common creditor."

As a part of the facts the claim was put in evidence which shows that for the year of 1937, after deducting previous payments, there was due from George O. Thain a total tax of two hundred seventy-six dollars and eighty cents ($276.80); that payments had been made thereon in the sum of one hundred and eighty-four dollars and fifty cents ($184.50) leaving a balance due, including the interest to April 1, 1939, of ninety-four dollars and ninety-six cents ($94.96). That the total tax for the year of 1939 was seventy-four dollars and fifty-eight cents ($74.58) with no previous payments and this amount plus interest to April 1, 1939 made a total tax due of eighty-one dollars and seventy-five cents ($81.75) for the year of 1938.

Upon the agreed statement of facts the court entered judgment to the effect that the Department of Treasury of the State of Indiana recover of Hugo M. Reinking, receiver of George O. Thain, the sum of one hundred seventy-six dollars and twenty-one cents ($176.21) to be paid as a claim of a common creditor without preference or priority. Appellant filed its motion for a new trial, which motion assigned the statutory causes that the decision of the court is not sustained by sufficient evidence and is contrary to law. The court overruled the motion for a new trial and the ruling thereon constitutes the assignment of error in this court.

The sole question involved as set out in the agreed statement of facts is whether or not the claim of the Department of Treasury of the State of Indiana is a preferred claim entitled to priority under subsection (h) of section 8 of Chapter 117 of the Acts of 1937.

Subsection (h) of Section 8 is as follows: "No final report or account of any executor, administrator, or other fiduciary, or of any commissioner for the sale of real estate, or other officer acting under the authority and supervision of any court, shall be allowed or approved by the court unless such report or account shows, and the court finds, that all taxes imposed by this act have been paid, and that all taxes which may become due hereunder are secured by bond, deposit, or otherwise. A certificate from the department of treasury shall be conclusive as to the payment of the tax. Any liability for the tax hereunder shall constitute a preferred claim, and shall be prior to all other claims except judicial costs and the cost of administration."

It is the appellant's contention that the language in subsection (h) of Section 8 of said act includes taxes imposed on the debtor prior to receivership, while the appellee takes the position that the language of said subsection refers only to taxes imposed subsequent to the appointment of a receiver.

The respective contentions call for the interpretation of subsection (h) of Section 8.

In construing statutes, words and phrases are to be given their plain ordinary meaning unless a contrary purpose appears. Morrison et al. v. State of Indiana, ex rel. Indianapolis Free Kindergarten and Children's Aid Society, 181 Ind. 544, 105 N.E. 113; Woodsmall v. State, 181 Ind. 613, 105 N.E. 155, 899.

Another rule of statutory construction is that the meaning to be given to a phrase must be determined by a consideration of the entire act. Cooper v. Metzger, 74 Ind. 554; Clark's Laundry & Dry Cleaning Co. v. Department of Treasury et al. 103 Ind.App. 359, 5 N.E.2d 683.

The facts show that a receiver for George O. Thain was appointed October 8, 1938, and that the claim was for taxes under the Gross Income Tax Act for periods preceding the appointment of said receiver. In order to justify appellee's contention and to sustain the judgment of the lower court it is necessary in construing subsection 8 (h) to determine that the phrase "that all taxes imposed by this act" is confined and has reference only to Section 8 of the...