Hakim v. Kosydar, 76-365

• Decision Date: 16 February 1977
• Docket Number: No. 76-365,76-365
• Citation: 49 Ohio St.2d 161,3 O.O.3d 211,359 N.E.2d 1371
• Parties: , 3 O.O.3d 211 HAKIM, Appellee, v. KOSYDAR, Tax Commr., Appellant.
• Court: Ohio Supreme Court

Page 161

49 Ohio St.2d 161

359 N.E.2d 1371, 3 O.O.3d 211

HAKIM, Appellee, v. KOSYDAR, Tax Commr., Appellant.

No. 76-365.

Supreme Court of Ohio.

Feb. 16, 1977.

Syllabus by the Court

R.C. 5703.38 prohibits a Court of Common Pleas from entering an order which has the effect of suspending or staying an order, determination, or direction of the Department of Taxation. (Torbet v. Kilgore, 6 Ohio St.2d 42, 215 N.E.2d 579, approved and followed.)

On November 30, 1971, the Tax Commissioner issued by certified mail to Vivian Hakim, taxpayer-appellee, a sales tax assessment in the amount of $1,256.52, including the statutory penalty. The following caption appeared on the assessment: 'Vivian Hakim, Officer of Lawrence Associates, Inc., 7812 New Bedford Avenue, Cincinnati, Ohio 45237.' The parties agree that the assessment was received by appellee and forwarded by her to the attorney for the corporation, because she had severed all business relations with the corporation before June 1, 1971. The assessment was for the mid-1970 period.

Appellee did not avail herself of the administrative appeal contained in R.C. 5739.13, and appellant obtained a judgment in the Court of Common Pleas of Hamilton County on January 7, 1972. Appellee was notified, by a letter dated March 24, 1972, that she had been personally assessed as the responsible corporate officer, that a personal judgment had been entered against her, and that action would be taken to collect the judgment if it was not promptly paid.

Appellee filed a complaint in the Court of Common Pleas on April 17, 1972, alleging principally that she had been denied her right to due process of law because of insufficient service of process. Appellee prayed for the vacation of the judgment against her and for the removal of the lien that had been filed thereon, and asked that appellant be enjoined from enforcing the judgment until the cause had been heard. Appellant moved to dismiss for lack of subject matter jurisdiction and for appellee's failure to exhaust her administrative remedies. On July 23, 1972, the Court of Common Pleas overruled appellant's motion and ordered him to answer the complaint.

On January 13, 1975, the Court of Common Pleas entered its judgment in favor of appellant. Appellee appealed to the Court of Appeals, and, on February 12, 1976, that court reversed the trial court's judgment and entered final judgment for appellee.

The cause is now before this court pursuant to the allowance of a motion to certify the record.

Robert Houston French and Richard J. Valleau, Cincinnati, for appellee.

William J. Brown, Atty. Gen., and John C. Duffy, Jr., Columbus, for appellant.

HERBERT, Justice.

R.C. 2723.01 reads:

'Courts of common pleas may enjoin the illegal levy or collection of taxes and assessments and entertain actions to recover them when collected, without regard to the amount thereof, but no recovery shall be had unless the action is brought within one year after the taxes or assessments are collected.'

R.C. 5703.38 states:

'No injunction shall issue suspending or staying any order, determination, or direction of the department of taxation, or any action of the auditor of state, treasurer of state, or attorney general required by law to be taken in pursuance of any such order, determination, or direction. This section does not affect any right or defense in any action to collect any tax or penalty.'

Statutorily prescribed procedures of the Tax Commissioner are set forth in R.C. 5739.13. The commissioner is required to give the person against whom a sales tax is assessed a written notice of the assessment. Unless the vendor or consumer (or corporate officer assessed under R.C. 5739.33) to whom the notice of assessment is directed files a written petition setting forth the items of the assessment objected to, within 30 days after service thereof, the assessment becomes conclusive and must be paid to the Treasurer of State. If no petition for reassessment is filed and the assessment remains unpaid, a certified copy of the entry of the commissioner making the assessment final may be filed in the office of the clerk of the Common Pleas Court of the county in which the place of business is located, or the county in which the person assessed resides.

The clerk of the Common Pleas Court must enter a judgment for the state against the assessee, in the amount shown on the entry, immediately upon its filing. The assessment (which includes taxes and penalty) has the same effect as other judgments from the date of the filing of the entry in the office of the clerk. Further, R.C. 2329.02 directs that any judgment or decree rendered by any court of general jurisdiction within this state constitutes a lien upon lands and tenements of each judgment debtor within any county of the state.

Torbet v. Kilgore (1966), 6 Ohio St.2d 42, 215 N.E.2d 579, contains an extended discussion of R.C. 5703.38 by this court. In Torbet, it was held that a judgment which enjoined the Tax Commissioner from collecting any personal property tax or penalty (for a particular year) on certain shares of stock was prohibited by R.C. 5703.38. The court held additionally that a judgment enjoining a county auditor or county treasurer from the collection of a personal property tax or penalty (for a particular year) on certain shares of stock might have the effect of suspending or staying an order, determination, or direction of the Department of Taxation and that, in the degree that the judgment produced such an outcome, it would be barred by R.C. 5703.38. The court expressly recognized in Torbet that the specific provisions against an injunction in R.C. 5703.38 limit the general authority of a...