Enochs v. State ex rel. Roberson

• Decision Date: 13 March 1922
• Docket Number: 22086
• Citation: 91 So. 20,128 Miss. 361
• Court: Mississippi Supreme Court
• Parties: ENOCHS et al. v. STATE ex rel. ROBERSON, Atty. Gen

91 So. 20

128 Miss. 361

ENOCHS et al. v. STATE ex rel. ROBERSON, Atty. Gen

No. 22086

Supreme Court of Mississippi

March 13, 1922

1 TAXATION. Statutory provision for collecting taxes held not to apply to inheritance tax.

Section 4256, Code 1906 (section 6887, Hemingway's Code) providing that every lawful tax imposed is a debt due by the person or corporation owning the property or doing the business upon which the tax is levied or imposed, and may be recovered by action in the courts, does not apply to an inheritance tax created by chapter 109, Laws 1918 (chapter 122a et seq., Hemingway's Code, Supp. 1921.)

2. TAXATION. Special remedy provided by statute creating tax is exclusive.

Where a statute creates a tax and provides also a special remedy for its collection, such remedy is exclusive, and an action to recover the tax will not lie, in the absence of legislation authorizing it.

3 TAXATION. Inheritance tax not recoverable by action unless so made by statute.

No tax is a recoverable debt by action unless made so by statute and, if it be assumed that our Inheritance Tax Act imposes personal liability, it is not a personal liability until after it is assessed in the exclusive manner prescribed by the act.

4. TAXATION. Remedy for assessment or collection provided by Inheritance Tax Act is exclusive.

The Inheritance Tax Act creates a tax and provides a coercive remedy for its assessment and collection, which remedy is exclusive; it gives a right to the Tax Commission to assess a tax, and to this extent is an obligation imposed upon the taxpayer, but the tax must be assessed in the exclusive manner provided by the act.

ETHRIDGE and COOK, JJ., dissenting.

HON. V. J. STRICKER, Chancellor.

APPEAL from chancery court of Hinds county, HON. V. J. STRICKER, Chancellor.

Suit by the state, on the relation of Frank Roberson attorney-general, against Martha C. Enochs and other executors and heirs of I. C. Enochs, deceased. Decree for the plaintiff, and the defendants appeal. Reversed, and bill dismissed.

Decree reversed and bill dismissed.

Green & Green and Niles Moseley, for appellant.

Is an inheritance tax a debt within the meaning of section 4256, Code of 1906, . . . prior to the determination by the state tax commission of the full and fair cash value of the net estate, on which the tax is to be computed?

Whereunto, answering brief of attorney-general, we submit no. because: (A) Prior to filing suit herein payment was made of an amount which discharges the tax liability. (B) Section 4256 does not apply to inheritance taxes. (C) Assessment in accordance with the mandate contained in the inheritance tax by the functionary designated by the legislature a condition precedent to the imposition of an obligation. House v. Gumble & Co., 78 Miss. 259.

We invite especial attention to the exhibits; they demonstrate that the commission had before it everything possessed by Mr. Enochs when this payment was accepted; the only point in controversy is as to the value of oue thousand, two hundred shares in now Enochs & Flowers, Ltd. This was fixed by the executors upon the basis of a capitalization of earnings; that basis was accepted by the tax commission, as appeared specifically from the reports submitted, and where the specific thing, the value of one thousand, two hundred shares has been submitted to and passed by the commission; taxes accepted by the commission as due from these parties on the right to transmit and on the right to receive these one thousand, two hundred shares, thus valued them as to such one thousand, two hundred shares, so thus made the basis of affirmative action by the commission, it is without power. Robertson v. Bank, 85 So. 178; Darnell v. Johnston, 68 So. 738; Adams v. Luce, 87 Miss. 224; State v. Simmons, 70 Miss. 501; Original Brief, 68.

Section 24, Hemingway's Code Supp., 1921, sec. 4987, provides: "If any inventory or statement filed in accordance with the provision of this act shall be considered by the state tax commission to be an erroneous or incomplete inventory or statement of the property, real, tangible, and intangible, or any part thereof of the decedent, the said state tax commission shall within thirty days after the filing of said inventory or statement give notice to the executor."

This is the sole authority of the commission to proceed. The averment is not, as it could not be, that the inventory is either erroneous, or incomplete, but is that it was complete and though complete, there was thereby a gross undervaluation of the same. Here, therefore, is a case where the specific property has been brought before the commission and assessed by it, and having been so assessed, is there now a right to redetermine that which was then passed on because a new method of valuation is desired? Robertson v. Bank, 85 So. 178; Darnell v. Johnson, 68 So. 783; Adams v. Bank, 66 So. 409; Adams v. Luce, 87 Miss. 224; State v. Simmons, 70 Miss. 485; Bank v. Oxford, 78 Miss. 532; Investment Co. v. Suddoth, 70 Miss. 416.

Section 4256 does not apply to inheritance taxation. This section appears first in the Code of 1892. Prior to that date taxes did not constitute a personal liability and therefore no action could be brought. Delat, etc., v. Adams, 93 Miss. 340.

We have examined the original Code section in the office of the secretary of state and it varies somewhat from the Code as written. It reads thus: "Taxes a debt recoverable by action--every lawful tax levied or imposed by the state, or by a county, city, town, or village or levee board, is a debt due by the person or corporation owning the property, or doing the business upon which the tax is levied or imposed, whether assessed or properly assessed or not. And may be recovered by action, and in all actions for the recovery of taxes the assessment-roll shall only be prima-facie correct.

It will be seen that there is a comma after the words, owning the property, and as originally introduced the section stopped after whether assessed or properly assessed or not, whereat a period occurred, and thereafter, in the handwriting of R. H. Thompson, in red ink, appears the interlineation, and may be recovered by action, and in all actions for recovery, of taxes the assessment roll shall only be prima-facie correct. At the date of the integration of this section into our statutory law there were but two forms of taxes known, ad valorem taxes and privilege taxes. Statutes imposing obligation upon the citizens are to be strictly construed. If the state desires to tax them, let it expressly so declare. Vicksburg, etc., R. R. v. State, 62 Miss. 105; Ex parte Taylor, 58 Miss. 482; Wilby v. State, 93 Miss. 767; Johnson v. Refining Co., 108 Miss. 416. Furthermore statutes in derogation of the common law are likewise construed strictly. Hopkins v. Sandidge, 31 Miss. 668; McKenzie v. Boykin, 111 Miss. 256; Johnson v. Reeves, 112 Miss. 227; Bullock v. Sneed, 13 S. & M. 293; Glen v. Thistle, 23 Miss. 42; Rucker v. Dyer, 44 Miss. 591; Richardson v. Neblett, 54 So. 695.

See section 1721, Hemingway's Code, defining assets as personal property with a right to recourse to the land to pay the debts; section 4256 makes the tax a debt due by the person owning the property. This act could not apply because the administrator never owns the property under any conceivable situation. Therefore, as ownership is the criterion for the creation of the debt, where there is no ownership, of necessity the statute cannot apply. If this act is to create property taxation against a person owning the property, then it will fall within section 112 of the Constitution.

But this tax cannot be a privilege tax upon the doing of business and falls clearly without the purview of section 4256. This section says further: whether assessed or properly assessed or not, what is the meaning of this phrase?

We cite Powell v. McKee, 81 Miss. 232, where Justice TERRAL said: "By section 3747, a tax upon personal property is made a debt due by the person owning the property when assessed, whether properly assessed or not."

This is entire harmony with the preceding section 4255 which makes the tax a charge upon the thing taxable, whether rightfully or wrongfully assessed. In short, as did Justice TERRAL, we construe sections 4255 and 4256, as being in prai materia, and thereunder is a definition of what is meant by wrongful assessment, and here the liability of the owner to the tax is determined solely by the ownership at the date of the assessment. In short, if I am the owner of land, and a tax is levied thereon, I become liable as such owner to suit for the tax. Should I sell this land, the vendee is not liable under section 4256, because he was not the owner of the property at the time the assessment was made. Ownership at the date of assessment measures personal liability under this section. Powell v. McKee, 81 Miss. 229.

Assessment in accordance with the mandate contained in the inheritance tax by the functionary designated by the legislature a condition precedent to imposition of obligation. Johnson v. Puffer, 71 So. 377. Thus where the legislature designates the person to make an assessment the court cannot substitute the chancery court in its place. This contention is exactly that made in Railroad Company v. Adams, 83 Miss. 315, 5 C. J. 813.

The case of Johnston v. Puffer, 71 So. 377, completely and perfectly supports this theory, and counsel's effort to distinguish is futile, because the imposition of taxes for either ad valorem or privilege must first exist as a tax law fully levied and imposed, before such tax so thus lawfully levied and imposed can be transmuted, into a personal obligation of the person owning the property or doing the business. Hattiesburg Grocery Co. v....