Illinois Central Railroad Company v. Adams

• Decision Date: 23 March 1901
• Citation: 29 So. 996,78 Miss. 895
• Court: Mississippi Supreme Court
• Parties: ILLINOIS CENTRAL RAILROAD COMPANY ET AL. v. WIRT ADAMS, STATE REVENUE AGENT. [*]

29 So. 996

78 Miss. 895

ILLINOIS CENTRAL RAILROAD COMPANY ET AL. v. WIRT ADAMS, STATE REVENUE AGENT. ^[*]

Supreme Court of Mississippi

March 23, 1901

March 1901

FROM the circuit court, first district, of Hinds county. HON ROBERT POWELL, Judge.

Adams state revenue agent, appellee, was plaintiff and the railroad company, appellant, was defendant in the court below. From a judgment in plaintiff's favor defendant appealed to the supreme court. The opinion states the case.

Judgment reversed and case remanded.

Mayes & Harris, for the appellant.

The declaration admits expressly that in this state interest is not recoverable on taxes. The appellees seek to avoid this principle by contending that while interest does not run on taxes merely because of failure to pay the same, yet nevertheless, if the collecting officer is proceeding to collect the taxes and is enjoined, interest is allowable on the dissolution of the injunction on the bond, as in the nature of damages. We respectfully submit that this is a mere juggling with terms. Noncontract interest is not allowable in any other way than as damages for nonpayment, and it cannot be material how the nonpayment comes about, the debt, whatever it may be, being once overdue. If interest is not demandable on overdue and unpaid taxes, why is it so? Such overdue and unpaid taxes are a liability to the state or to the state's subdivisions, and if interest is not demandable thereon, such condition of things comes about, not by any act or resistance of the delinquent taxpayer, but because the state, in the exercise of its sovereign prerogative, has abstained from imposing a liability for interest in such case. If the state desired or intended to collect interest, it would have so declared by enactments made to that end. But it has not so declared, and it is not for the courts, by construction of the ancient general terms of an injunction bond, or by decisions in the nature of legislation, to impose a tax liability, either direct or incidental, which the legislature has not seen fit to impose.

Grant the proposition that the law of the state is that interest is not collectible on delinquent taxes, how can it make any difference in substance, or why should it make any difference in reason, that such nonpayment is accompanied by the proper and legal resistance of an appeal to the courts on injunction for the purpose of ascertaining and testing in good faith the question of liability?

The argument of the appellees amounts to this: that in a case of confessed, unexcused and inexcusable delinquency there is no interest payable, but in a case in which there is claim of nonliability, and that claim is being in good faith contested in the courts, a liability for interest in the nature of a penalty is imposed, because the alleged assessee asserting his nonliability has recourse to the courts, such recourse in the precise form of an injunction being expressly sanctioned and made easy by the statutory law of the land.

To put it in brief: The delinquent, without excuse, is not liable for interest, but the delinquent with an excuse must pay a penalty in the shape of interest. That interest is not allowable on taxes, even by way of damages, is shown by the following cases: Louisville Railroad Co. v. Hopkins Co., 87 Ky. 605, 615; Shaw v. Peckett, 26 Vt. 482; Haskell v. Bartlett, 34 Cal. 281; Himmelman v. Oliver, 34 Cal. 246; Edmondson v. Galveston, 53 Texas, 157; Perry Co. v. Railroad Co., 65 Ala. 391; Danforth v. Williams, 9 Mass. 324.

Critz, Beckett & Kimbrough, for the appellee.

The condition of the injunction bond is that the obligors shall "well and truly pay and satisfy all such costs and damages as shall result from the wrongfully suing out of this injunction," "within thirty days after it is dissolved."

Interest is entirely statutory. Eastin v. Van Dorn, W. (Miss.), 214; Hamer v. Kirkwood, 3 C., 95; Brame & Alexander's Dig., p. 658, secs. 1-3.

And § 2348 of the Code of 1892 only provides for legal interest on "all notes, accounts, and contracts."

Taxes do not come under either of these designations, but 2350 provides that judgments and decrees shall bear interest at the rate of the debt sued on, and that "all other judgments and decrees shall bear interest at the rate of six per centum per annum."

Hence, taxes as such do not bear interest, but the judgment does from the date of its rendition. Western Union Tel. Co. v. Indiana, 165 U.S. 309, 310.

From which it is perfectly clear that interest was lost on the taxes by reason of the injunction for the time that they were prevented from being reduced to judgment. While the suit is in form an action of debt on the bond, still it is, in its essence, a suit for damages caused by a wrong. The condition of the bond is to pay damages for a wrong, for wrongfully suing out the injunction, and in suits to redress wrongs the measure of damages is full compensation for the injury occasioned by the wrong. Where there is no special damage and no element of malice or wilful oppression, the interest is ordinarily the measure of the damage occasioned by the delay. Weaver v. Williams, 75 Miss. 954, 955; 1. C. R. R. Co. v. Haynes, 64 Miss. 606, 609; Black v. Robinson, 62 Miss. 68. See generally George's Dig. (Damages), p. 167, sec. 4, and p. 168, secs, 8, 10, 10 (a).

In some cases it is loss of crops. Fleming v. Bailey, 44 Miss. 132, 135, 136. In others it is rents and profits, which correspond to interest. Richardson v. Callihan, 73 Miss. 4-6; Smith v. Wells, 46 Miss. 64. In others it is loss of fees or gains. In this case the court says: "Gains prevented are not to be distinguished in principle from losses sustained." Fairley v. W. U. T. Co., 73 Miss. 6, 12.

The same principle prevails in injunction cases. Says the court: "Where a party is prevented from working, the amount of wages pending the injunction is the measure of his damage." Muller v. Fern, 35 Iowa 420.

Where, pending the injunction, the subject-matter depreciates in value, the damage is the amount of the depreciation, with interest. Rubon v. Stephan, 25 Miss. 256, 257; Fourth Nat. Bank v. Crescent Min. Co. (Tenn. Ch. App.), 52 S.W. 1021; Fleming v. Bailey, 44 Miss. 132, 136; Levy v. Taylor, 24 Md. 282.

Where a party is enjoined from suing, and in the meantime the debtor or debtors become insolvent, the damage is both the principal of the debts and the interest. Fleming v. Bailey, 44 Miss. 132, 136; Allen v. Jones, 79 Fed. R., 698; Terrell v. Ingersoll, 10 Lea (Tenn.), 77.

Where an injunction delays the collection of a judgment, interest on the judgment during the delay is recoverable as damages. This is exactly the same principle here. Dodge v. Cohea, 14 App. (D. C.), 582.

It is said that if the corpus remains specifically the same the damage is such as results from a privation of the use. Fleming v. Bailey, 44 Miss. 135, 136; Smith v. Wells, 46 Miss. 64.

And, generally, it is laid down by this court that where there is no special damage "ordinarily the injury sustained by the party interrupted in the collection of his debt consists of the delay occasioned and the costs incident to the defense of his cause." Williams v. Bank, 71 Miss. 871.

We think the following cases specifically establish that interest can be recovered in such cases: Washington v. Parks, 6 Leigh (Va.), 581; Southerland v. Crawford, 2 J. J. Marsh. (Ky.), 369; Fears v. Riley, 147 Mo. 453-455; Harrison v. Balfour, 5 S. & M., 306, 307; Somerville v. Mayes, 54 Miss. 34, 35.

We think the gist of the whole matter may be summed up in a sentence like this: The damage is the loss which the injured party has sustained, without any contributory fault on his part, by the unjust act of another, perpetrated under the forms, but without the sanction, of law.

Green & Green, on the same side.

Was the interest on the assessment properly given as damages? The agreed state of facts sets out that the amount of these taxes is correct and that the assessments were in all respects perfectly regular. These two steps gave us the right to sue for and to distrain for the taxes. Code 1892, §§ 3747, 3748, to have immediate possession of the money, thus due us. About this there is and can be no dispute, But they contend that because assessments, as assessments, do not bear interest, that then we are not entitled to interest, because the money we claimed was due as interest on assessments.

The breach of the obligation whereby damages accrued happened on December 15, when suit or distress could be brought. The state has been damaged; what is the measure of that damage? The interest on the money. Code 1892, § 3747, expressly declares it to be a debt recoverable by suit in personam.

The state is entitled not only to the return of the money wrongfully detained, but also to interest by way of damages for its wrongful detention, and so all the authorities declare in the absence of statute. After 1892, interest accrued as an incident--statutory interest. As to the rule in Mississippi, see Howcott v. Collins, 23 Miss. 404; Jackson v. Whitfield, 51 Miss. 202; Eastin v. Vandem, Id., 214; Wiltberger v. Randolph, Id., 20; Hamer v. Kirkwood, 25 Miss. 95; Howcott v. Collins, 23 Id., 398; Houston v. Crutcher, 31 Id., 51; Work v. Glaskins, 33 Id., 539; Neill v. Neill, 31 Miss. 36; Railroad Co. v. Haynes, 64 Miss. 604.

The above cases are conclusive of what the law on this point is in Mississippi, and under the decisions of the supreme court of the United States, and the other federal courts, it is equally well settled. Redfield v. Iron Co., 110 U.S 176; Redfield v. Bartels, 139 U.S. 694; Jourolmon v. Ewing, 80 F. 604; Cooper v. Hill, 94 F. 538; Swinison v. Scaiven, 1 Dickins, 117; Redfield v. Iron Co., 110 U.S. 174; United States v....