Hamill v. Koontz, 766

• Decision Date: 31 May 1950
• Docket Number: No. 766,766
• Citation: 59 S.E.2d 879,134 W.Va. 439
• Parties: HAMILL et al. v. KOONTZ. C. C.
• Court: West Virginia Supreme Court

Page 879

59 S.E.2d 879

134 W.Va. 439

HAMILL et al. v. KOONTZ.

C. C. No. 766.

Supreme Court of Appeals of West Virginia.

Submitted April 18, 1950.

Decided May 31, 1950.

Syllabus by the Court

1. A proceeding by a taxpayer against the tax commissioner, under the provisions of Chapter 33, Section 8, Acts of the Legislature, 1933, First Extraordinary Session, to recover a judgment, payable from available funds in the state treasury, for taxes erroneously paid, is a suit against the State in violation of Article VI, Section 35, of the Constitution of West Virginia, and can not be maintained.

2. In enacting a statute which provides an action or a suit by a taxpayer against the tax commissioner to recover a judgment, payable from available funds in the state treasury, for refund of taxes erroneously paid, the Legislature exceeds its constitutional power; and to the extent that the statute, Chapter 33, Section 8, Acts of the Legislature, 1933, First Extraordinary Session, undertakes to authorize such action or suit, it is invalid as violative of Article VI, Section 35, of the Constitution of West Virginia.

No appearance for plaintiffs.

Burns Stanley, Charleston, Edwin McClelland, Charleston, for defendant.

HAYMOND, Judge.

This proceeding by notice of motion for judgment was instituted in the Circuit Court of Cabell County by the plaintiffs, E. L. Hamill and nineteen other persons doing business as Hamill Coal Sales Company, to recover from the defendant, C. H. Koontz, Tax Commissioner of the State of West Virginia, allegedly erroneous payments of taxes for the years 1944 and 1945 of the respective amounts of $256.01 and $481.21, which, with interest, aggregate the sum of $916.84. The circuit court sustained the demurrer of the defendants to the notice of motion for judgment of the plaintiffs and, on its own motion, certified its ruling to this Court.

The questions presented by the certificate of the circuit court are: (1) Whether a proceeding by notice of motion for judgment against C. H. Koontz, Tax Commissioner of the State of West Virginia, under Chapter 33, Section 8, Acts of the Legislature, 1933, First Extraordinary Session, incorporated in Michie's Annotated Code, 1949, as 11-13-8, to recover overpayments of business and occupation taxes, is violative of Article VI, Section 35, of the Constitution of West Virginia; and (2) whether other action of the plaintiffs to obtain a refund of such taxes is barred by their failure to invoke the remedy provided by Chapter 129, Article 1, Section 2a, Acts of the Legislature, 1939, Regular Session, incorporated in Michie's Annotated Code, 1949, as 11-1-2a.

The pertinent provisions of the statute upon which the plaintiffs base their right to maintain this proceeding, Chapter 33, Section 8, Acts of the Legislature, 1933, First Extraordinary Session, Michie's Annotated Code, 1949, 11-13-8, are couched in this language: 'Any person improperly charged with any tax and required to pay the same may recover the amount paid, together with interest, in any proper action or suit against the tax commissioner, and the circuit court of the county in which the taxpayer resides or is located shall have original jurisdiction of any action to recover any tax improperly collected. It shall not be necessary for the taxpayer to protest against the payment of the tax or to make any demand to have the same refunded in order to maintain such suit. In any suit to recover taxes paid or to collect taxes, the court shall adjudge costs to such extent and in such manner as may be deemed equitable. Upon presentation of a certified copy of a judgment so obtained, the auditor shall issue his warrant upon any funds in the treasury available for the payment thereof.'

The plaintiffs contend that they have the right to maintain this proceeding by virtue of the express provisions of the statute; that it is against the defendant individually and not in his official capacity; and that it is not within the ban of Article VI, Section 35, of the Constitution of this State which provides that the State of West Virginia shall never be made defendant in any court of law or equity, except in a garnishment or attachment proceeding as garnishee or suggestee. On the contrary, the defendant asserts that the proceeding is against him in his official capacity; that it is not within the terms of or authorized by the statute; and that it is in reality a suit against the State and, as such, is proscribed by Article VI, Section 35, of the Constitution of this State.

The controlling question is whether this proceeding against the defendant under the designation of Tax Commissioner of the State of West Virginia is, in reality, a proceeding against the State of West Virginia within the inhibition of the foregoing constitutional provision.

The office of tax commissioner was created by the Legislature by Chapter 4, Acts of the Legislature, 1904, Regular Session, and broad powers and duties were conferred and imposed upon the tax commissioner by that statute and by subsequent legislative enactments. See State ex rel. Dillon v. Graybeal, 60 W.Va. 357, 55 S.E. 398. By Code, 1931, 11-1-2, as amended, the tax commissioner is required 'to see that the laws concerning the assessment and collection of all taxes and levies, whether of the State or of any county, district or municipal corporation thereof, are faithfully enforced.' Numerous specific powers are given the tax commissioner by particular statutes which need not be enumerated or referred to but among which may be mentioned the collection of business and occupation taxes, under Article 13, Chapter 11, Code, 1931, as amended, gasoline taxes, under Article 14, Chapter 11, Code, 1931, as amended, and consumers sales and service taxes, under Chapter 108, Acts of the Legislature, 1937, Regular Session, as amended, which last mentioned statute is now incorporated in Michie's Annotated Code, 1949, as Article 15, Chapter 11. The Legislature has established a system of taxation and, as part of the system so established, has imposed upon the tax commissioner the duty of supervising its operation and of giving aid and assistance, in an advisory capacity, to the board of public works, and has given that officer ample authority to perform his supervisory and advisory functions. See Ohio Fuel Oil Company v. Price, 77 W.Va. 207, 87 S.E. 202. The legislation creating the office of tax commissioner is constitutional and the tax commissioner is an executive officer of the State. Blue, State Tax Commissioner v. Tetrick, 69 W.Va. 742, 72 S.E. 1033; Blue, State Tax Commissioner v. Smith, 69 W.Va. 761, 72 S.E. 1038. As a public state officer, the tax commissioner, in the performance of the duties imposed upon him by law, is engaged in a governmental function and exercises the sovereign power of the State.

The quoted portion of the statute on which this proceeding is based provides that upon presentation of a certified copy of the judgment obtained in any suit against the tax commissioner to recover taxes paid, the auditor shall issue his warrant upon any funds in the treasury available for the payment of the judgment. The purpose of any action or suit, under the applicable provision of the statute, is to recover, upon a judgment against the tax commissioner, funds of the State as a refund of taxes improperly paid by the taxpayer who seeks to obtain such refund. The taxes paid by the plaintiffs to the tax commissioner, as required by Chapter 33, Section 11, Acts of the Legislature, 1933, First Extraordinary Session, Michie's Annotated Code, 1949, 11-13-11, when received by him, were in the custody of the State and became its funds and property, even though the payments were in excess of the amount that may have been actually due and owing by the plaintiffs, and any refund of the excess would necessarily be made from the public moneys of the State.

This Court has held in several cases that proceedings against boards and commissions, created by the Legislature, as agencies of the State, are suits against the State within the meaning of Article VI, Section 35, of the Constitution of West Virginia, even though the State is not named as a party in such proceedings. An action against the State Road Commission to recover damages to private property caused by the construction of a public road is a suit against the State and can not be maintained. Mahone v. State Road Commission of West Virginia, 99 W.Va. 397, 129 S.E. 320. A proceeding in mandamus against the State Road Commission to compel the payment of a judgment obtained against it for compensation for land appropriated for road purposes without purchase or condemnation is within the constitutional provision which forbids a suit against the State. Stewart v. State Road Commission of West Virginia, 117 W.Va. 352, 185 S.E. 567. An action of assumpsit against the State Road Commission, for breach of contract, is a suit against the State in violation of the same constitutional provision and is not maintainable. Watts v. State Road Commission of West Virginia, 117 W.Va. 398, 185 S.E. 570. Proceedings against the West Virginia Liquor Control Commission, Spencer State Hospital, the State Board of Control, and the State Board of Agriculture, a formerly existing department or agency of the State, have been held by this Court to be suits against the State and as such are prohibited by Article VI, Section 35, of the Constitution of this State. Schippa v. West Virginia Liquor Control Commission, W.Va., 53 S.E.2d 609, 9 A.L.R.2d 1284; Barber, Adm'x, v. Spencer State Hospital, 95 W.Va....