H. E. Verran Co. v. Town of Stamford

• Decision Date: 18 June 1928
• Citation: 142 A. 578,108 Conn. 47
• Court: Connecticut Supreme Court
• Parties: H. E. VERRAN CO. v. TOWN OF STAMFORD.

142 A. 578

108 Conn. 47

H. E. VERRAN CO. v. TOWN OF STAMFORD.

Supreme Court of Errors of Connecticut.

June 18, 1928

Appeal from Superior Court, Fairfield County; John Richards Booth Judge.

Action by the H. E. Verran Company against the Town of Stamford to recover money alleged to have been paid as taxes by mistake. Judgment for plaintiff, and defendant appeals. Error judgment directed for defendant.

Thomas J. Ryle, of Stamford, for appellant.

Raymond E. Hackett, of Stamford, for appellee.

Argued before MALTBIE, HAINES, HINMAN, BANKS, and AVERY, JJ.

BANKS J.

The plaintiff, whose business is that of manufacturing silks built a factory in Stamford, which was completed shortly prior to October 1, 1925, and during that month filed with the assessors of that town a list of its property subject to taxation. The valuations placed by plaintiff upon both the real and personal property upon its list were those appearing upon its books as of October 1, 1925, and totaled the sum of $2,102,887.55. The assessors reduced these values, and assessed and valued the property for purposes of taxation at $1,679,690. Plaintiff appealed to the board of relief without success, and took an appeal from the decision of the board of relief to the superior court. While this appeal was pending, the tax collector, on May 1, 1926, sent the plaintiff a tax bill in the amount of $23,347.69, which was computed at the legally adopted tax rate of 13.9 mills upon the assessed valuation of $1,679,690. The bill contained a statement that interest at the rate of 9 per cent. from May 1, 1926, would be added if the tax was not paid on or before June 1, 1926. On May 29, 1926, plaintiff paid the defendant on account of this tax bill the sum of $13,934.27. On September 17, 1926, the superior court rendered a judgment that the total value of plaintiff's property subject to taxation was $827,622.67. The true amount of taxes owed by plaintiff in accordance with this judgment was only $11,503.96, being $2,430.31 less than the amount paid by it, and this action was brought to recover such overpayment.

The complaint alleges that this overpayment was made under a mistake as to plaintiff's rights and duties. The plaintiff in its brief seems to make the broader claim that the taxpayer in any case may pay his tax, and then bring an action to recover it as money illegally received and retained. We have found no case which has gone that far. In Connecticut L. & P. Co. v. Oxford, 101 Conn. 383, 126 A. 1, upon which plaintiff relies, in a discussion of the remedies open to an aggrieved taxpayer, we said (page 391 ):

" We have held theretofore that the remedy by appeal from the action of a board of relief is not exclusive, and that the tax may be paid and an action brought to recover it as money illegally received and retained, and that in extreme cases an injunction may be granted restraining the collection of the tax."

We were not then attempting to define the conditions under which a payment made by a taxpayer could be recovered any more than we attempted then to state the nature of the extreme case which would justify the issuance of an injunction to restrain the collection of a tax. All the cases there referred to in which actions had been brought for the recovery of taxes paid were cases where the payment had been made under a threat of a levy upon the property of the taxpayer, or where the tax had actually been collected by distress, or the property sold by the collector under the tax warrant. The cases cited in support of the statement in 1 Swift's Digest, p. 405, that, " where a person pays taxes that are illegally imposed upon him, whether paid by compulsory process or not, he may recover back the money," are all cases of this character. In the present case there was no threatened levy upon the plaintiff's property. Its appeal was pending, which suspended all proceedings for the collection of the tax. General Statutes, § 1242. The plaintiff therefore, at the time it made this payment, was under no compulsion to make it, and the payment was purely voluntary. The only penalty it would have incurred for failing to make the payment prior to the decision of its appeal would have been the liability to pay interest at the rate of 9 per cent. from May 1, 1926, upon the amount ultimately found to be due. Such liability did not make the payment an involuntary one. Morris v. New Haven, 78 Conn. 673, 63 A. 123.

In Underwood Typewriter Co. v. Chamberlain, 92 Conn. 199 102 A. 600, the plaintiff paid an income tax assessed against it under chapter 292 of the Public Acts of 1915 under protest, and to avoid irreparable injury through the enforcement of the onerous penalties and coercive features of that act, which provided for a penalty of 5 per centum of the unpaid tax, interest at the rate of three-quarters of 1 per centum per month, and that the unpaid tax became a lien upon the real estate of the company from the time it became due and was unpaid upon the filing of a certificate by the state treasurer. We held that the payment in that case was not voluntary, but one made under moral duress arising from the coercive features of that act. The same coercive features are not here involved, and, indeed, the plaintiff's complaint is not based upon any...