Gas Service Co. v. Morris

Decision Date12 February 1962
Docket NumberNo. 48577,No. 1,48577,1
Citation353 S.W.2d 645
PartiesThe GAS SERVICE COMPANY, a corporation, Appellant, v. M. E. MORRIS, individually and as Director of Revenue of Missouri, Warren E. Hearnes, individually and as Secretary of State of Missouri, Milton Carpenter, individually and as State Treasurer of Missouri, Haskell Holman, individually and as State Auditor of Missouri, and John W. Schwada, individually and as State Comptroller of Missouri, Respondents
CourtMissouri Supreme Court

Kyle D. Williams, Jefferson City, John B. Gage, John H. Kreamer, Laird P. Bowman, Kansas City (Gage, Hodges, Moore, Park & Kreamer, Kansas City, of counsel), for appellant.

Thomas F. Eagleton, Atty. Gen., Joseph Nessenfeld, Asst. Atty. Gen., for respondents.

COIL, Commissioner.

The Gas Service Company has appealed from a judgment dismissing its action against the Missouri Director of Revenue, Secretary of State, Treasurer, Auditor, and Comptroller, both in their official capacities and as individuals. Appellant company sought to recover the sum of $17,490 as the amount of domestication tax which allegedly had been illegally assessed against and collected and withheld from the company.

Company's petition alleged in substance: that about January 1, 1959, the then secretary of state, purportedly under the provisions of section 351.595(2), 1 requested the payment by company of an additional domestication tax in an amount indicated by an affidavit to be filed showing the value of company's property in Missouri and the proportion of company's stated capital and surplus represented by its property located in Missouri; that company filed the affidavit and tendered the sum of $85 as additional domestication tax due; that the tendered amount was returned by the secretary of state with the advice that the tax due amounted to $17,575 and that unless it was paid within sixty days company's authority to transact business in Missouri would be forfeited; that company thereafter paid the tax by a check marked 'Paid Under Protest,' which was delivered to the director of revenue accompanied by a letter of protest as to the amount assessed in excess of $85; that company filed a claim for refund with the director of revenue pursuant to the provisions of section 136.035 and the claim was denied.

Company's petition averred further: that the additional domestication tax (in excess of $85) assessed and collected apparently was based upon a provision of section 351.595(2), supra, providing that the base for the assessment of the tax should, in no event, be less than the value of the corporation's property located in Missouri; that Missouri domestic corporations are required to pay an additional organizational tax only in the event of an increase in their authorized shares and are not required to pay an amount based upon the increased value of their property located in Missouri; that company's authority to transact business in Missouri was granted in 1926, at which time it paid all proper taxes and fees and complied with all the conditions for its entry into this state, among which was the condition that any domestication tax was to be calculated upon the same basis as for domestic corporations and that such right of equality of treatment thereby became and was a vested contract right; that, consequently, the assessment and collection of a tax based upon an increase in the value of plaintiff's property located in Missouri was unconstitutional in that it impaired the obligation of contract between company and the State of Missouri and denied company the equal protection of the laws of Missouri; and further, that the provisions of section 351.595(2), supra, were inapplicable to company by virtue of the provisions of section 351.695, providing that the rights, privileges, immunities, and franchises vested or accrued under the provisions of any law prior to the enactment of chapter 351 should not be impaired or diminished or affected thereby or by the repeal of any such prior law.

Company alleged further: that by reason of the above-stated averments $17,490 of the tax was wrongfully assessed, collected, and had been wrongfully diverted to the 'general use of the State of Missouri' and that company was entitled to a judgment against the named persons in their respective official capacities and as individuals in the sum of $17,490 with interest thereon; that plaintiff had exhausted its administrative remedies; that the judgment should direct the comptroller to approve the refund and certify the claim and that the auditor, treasurer, director of revenue and secretary of state should pay over the refund to the company. A copy of the claim for refund filed with the director of revenue was attached to the petition and essentially set forth company's position as reflected by the above-stated averments of its petition.

Respondents' (defendants') motion to dismiss contained the grounds that the petition failed to state a claim upon which relief could be granted; that the action against the named defendants in their official capacities was in reality a suit against the state and that the state had not consented to be sued in an action such as company's present one; and that the petition failed to state a claim for relief against any of the defendants individually. As noted, that motion to dismiss was sustained.

Company's first contention on this appeal is that the amount of the additional domestication tax (in excess of $85) was illegally and unconstitutionally assessed and collected for the reasons alleged in its petition. We do not reach that question because, in our view, for the reasons hereinafter set forth, the company could not maintain this action against defendants in either their official or individual capacities.

Company does not concede but assumes arguendo that its action, in so far as it sought relief against named defendants in their official capacities, was actually a suit against the State of Missouri, although company has suggested no reason why the assumption is not true. Inasmuch as the averments of the petition compel the conclusion that the money collected as additional domestication tax was paid into the coffers of the State of Missouri, and inasmuch as the judgment sought against defendants in their official capacities could be satisfied only from money in the state treasury, it seems apparent that the relief sought is against the state. Under such circumstances it is clear and we so hold that in so far as the petition attempts to state an action against the named defendants in their respective official capacities, the action is one against the State of Missouri. Kleban v. Morris, 363 Mo. 7, 247 S.W.2d 832, 837(6-8), 839(9).

Company contends, however, that even if the action in the respect noted is against the state and even if the well-settled proposition that the state may not be sued without its express consent is applicable, the state has consented to be sued in this action for money had and received. We have the opinion that company's position is untenable and that its contention has been ruled adversely to it in Kleban v. Morris, supra.

We have heretofore noted that company filed a claim for refund under the provisions of section 136.035, supra. That section provides in part:

'1. The director of revenue from funds appropriated, shall refund any overpayment or erroneous payment of any tax which the state is authorized to collect. The general assembly shall appropriate and set aside funds sufficient for the use of the director of revenue to make refunds authorized by this section or by final judgment of court. * * *

'3. No refund shall be made by the director of revenue unless a claim for refund has been filed with him within two years from the date of payment. Every claim must be in writing under oath and must state the specific grounds upon which the claim, is founded.'

Company contends that the words contained in the above statute, 'by final judgment of court,' considered in connection with the fact that the word 'shall' is used in the first sentence above-quoted, and that the statute applies by its terms to any tax, are tantamount to an express consent by the state to be sued in this action. Those same words, i. e., 'by final judgment of court,' were construed in Kleban v. Morris, supra, in connection with a similary contention there made by appellant. The Kleban case was to recover use taxes assessed and collected under a law which was subsequently declared unconstitutional. The use tax law was part of the Sales Tax Act and that act provided in part (section 144.200): 'It shall be the duty of the general assembly to appropriate and set aside funds sufficient for the use of the director of revenue to make any refund of taxes required by this chapter or by final judgment of court.' The court in the Kleban case pointed out that the Sales Tax Act also provided (section 144.190(2)) that any tax illegally collected should be refunded provided a claim for refund was filed within one year and provided (section 144.260) that a circuit court had power to review all questions of law and fact determined by the director of revenue in administering the provisions of the act on writ of certiorari commenced within thirty days after notice of director's final decision in any such matter. The court, at 247 S.W.2d 837, after pointing out that statutes waiving immunity of the sovereign from suit are strictly construed, held that the 'final judgment' referred to in section 144.200, supra, of the Sales Tax Act was a final judgment obtained in the pursuit of the remedy provided by the act, viz., a claim for refund and judicial review thereof, and that such language did not refer to a 'final judgment' obtained in an original action such as the one there for the recovery of the taxes illegally collected.

In the present case, company's claim for refund from the director of revenue under section 136.035 was denied. Section...

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