Kittredge v. Boyd

• Citation: 18 P.2d 563,136 Kan. 691
• Decision Date: 28 January 1933
• Docket Number: 30779,30778,30799.
• Parties: KITTREDGE v. BOYD et al. [*] MERIDEN TRUST & SAFE DEPOSIT CO. v. SAME. OLD COLONY TRUST CO. OF BOSTON, MASS., et al., v. SAME.
• Court: United States State Supreme Court of Kansas

18 P.2d 563

136 Kan. 691

KITTREDGE v. BOYD et al. ^[*]

MERIDEN TRUST & SAFE DEPOSIT CO. v. SAME.

OLD COLONY TRUST CO. OF BOSTON, MASS., et al., v. SAME.

Nos. 30778, 30779, 30799.

Supreme Court of Kansas

January 28, 1933

Syllabus by the Court.

Mandamus when timely instituted, is proper remedy to compel return of inheritance tax illegally exacted and paid under protest (Rev. St. 1923, 79--1501 et seq.).

Members of state tax commission held proper parties to mandamus proceeding to require return of inheritance taxes illegally exacted and paid under protest (Rev. St. 1923, 79--1501 et seq.).

Mandamus proceeding to obtain return of inheritance taxes paid under protest is not against state but against state treasurer (Rev. St. 1923, 79--1501 et seq.).

Stock in domestic corporation belonging to estate of nonresident decedent held not subject to state inheritance tax (Rev. St 1923, 79--1501 et seq.).

State inheritance tax, paid in order that federal inheritance tax could be paid and administration of decedent's estate proceeded with, held involuntary, hence taxes, being illegal could be recovered (Rev. St. 1923, 79-- 1501 et seq.).

Constitutional limitation on withdrawal of money from state treasury held not to preclude return of state inheritance tax paid under protest, and placed in protested account (Rev. St. 1923 79--1501 et seq.; Const. art. 2, § 24).

Under color of the Kansas Inheritance Tax Law, the state tax commission, acting as the inheritance tax commission, assessed a transfer and succession tax upon shares of a Kansas railroad corporation owned by a woman who lived and died a citizen of Connecticut. The executor paid the tax under formal protest, raising the specific objection that, in so far as it applied to the estate of a citizen of another state, it was unconstitutional. The state treasurer received the remittance, and placed it in an account designated "The Protested Inheritance and Special Tax Account," but neither he nor the state auditor credited the money to the general revenue fund. Shortly thereafter the United States Supreme Court, in the precisely parallel case of First Nat. Bank of Boston v. State of Maine, 284 U.S. 312, 52 S.Ct. 174, 76 L.Ed. 313, decided that an inheritance tax thus exacted was illegal; and plaintiff brought mandamus to require the repayment of the money paid under protest. Issues being joined on pleadings and an agreed statement of facts, it is held:

(a) Mandamus, when timely begun to require the return of the money illegally exacted and paid to the state treasurer under protest, is a proper remedy.

(b) The members of the state tax commission are proper parties to such action, following State v. Dolley, 82 Kan. 533, 108 P. 846.

(c) The action is not one against the state, and it is maintainable against the state treasurer under familiar precedents cited in the opinion.

(d) The tax exacted and paid under protest was illegal, following First Nat. Bank of Boston v. Maine, supra.

(e) The tax money sought to be refunded was paid involuntarily.

(f) The constitutional provision that no money can be drawn from the treasury except in pursuance of a specific appropriation made by law pertains to the disbursement of moneys which belong to the state and which are subject to plenary disposal by the Legislature. It has no bearing on moneys like that of plaintiff which the state treasurer holds ad interim but which do not belong to the state.

Original mandamus proceedings by Joseph Kittredge, by the Meriden Trust & Safe Deposit Company, etc., and by the Old Colony Trust Company of Boston, Mass., and others, against T. B. Boyd, etc., and others.

Writs allowed.

M. A. Gorrill and Henry H. Asher, both of Lawrence (Thomas Amory Lee, of Topeka, of counsel), for plaintiffs.

Roland Boynton, Atty. Gen., Everett K. Steerman, Asst. Atty. Gen., and Ernest E. Blincoe, of Topeka, Atty. for State Tax Commission, for defendants.

DAWSON J.

In these three cases plaintiffs invoke our original jurisdiction in mandamus to require the state treasurer to repay certain moneys exacted from defendants under color of the Inheritance Tax Law (R. S. 79--1501 et seq.) and paid under protest. The members of the state tax commission are impleaded for whatever concern they may have in this litigation.

The issues of law are developed by pleadings and an agreed statement of facts. In case No. 30779 it appears that on May 30, 1930, one Etta Warren Minuse, a resident citizen of Connecticut, died testate, seized of 107 shares of common stock and 120 shares of preferred stock in a Kansas corporation, the Santa Fé Railway, worth $36,582.63. The state tax commission, acting in its capacity as the inheritance tax commission, levied an assessment of $1,002.79 upon the right of the beneficiaries of the testator's estate to have these shares of stock transferred to them upon the books of the corporation. This sum was paid, under formal protest, by draft drawn in favor of the state treasurer and delivered to the inheritance tax commission, surrendered by that commission to the state treasurer, cashed by him, and the proceeds placed in a state depositary as a special account designated "The Protested Inheritance and Special Tax Account."

In case No. 30778, the action is to require repayment of $171.94 exacted and collected under similar circumstances from the executor of the estate of one Frances B. Kittredge, a resident citizen of Massachusetts, who died testate owning 22 shares of common stock and 2 shares of preferred stock in the Santa Fé Railway valued at $5,777.50.

In case No. 30799, the action is to require repayment of $176.51 similarly exacted and collected from the executor of the estate of Malcolm Graeme Haughton, a resident citizen of Massachusetts, who died testate owning 25 shares of common stock of the Santa Fé Railway valued at $5,425.

After these assessments were paid under protest, the Supreme Court of the United States decided that shares of stock in a corporation created in one state belonging to the estate of a decedent domiciled in another state is not subject to an inheritance tax in the state where the corporation was created, but only to such a tax in the state of the owner's domicile. First Nat. Bank of Boston v. State of Maine, 284 U.S. 312, 52 S.Ct. 174, 76 L.Ed. 313. It is not contended by counsel that the Maine Case is distinguishable from those at bar; and so it must be held that the shares of stock in the Santa Fé Railway, a Kansas corporation, which belonged to the estate of Etta Warren Minuse, who in her lifetime was a resident citizen of Connecticut, were not subject to an inheritance tax in Kansas, and the assessment of $1,002.79 imposed and collected on those shares of stock was illegal. Similar illegality inheres in the assessment and collection of inheritance taxes in cases No. 30778 and 30799, from the estates of the other Santa Fé stockholders who died resident citizens of Massachusetts. And, being illegal exactions and paid under protest, what is to prevent the return of those undistributed tax moneys now in the hands of the treasurer? Counsel for defendants urge various objections. These will be considered in order.

1. It is first contended that mandamus is not the proper remedy--that plaintiff has a plain and adequate remedy at law. In this jurisdiction, where the desideratum of the litigation is merely to obtain an authoritative determination of some purely legal question for the guidance of public officers, mandamus has become the familiar vehicle to accomplish that objective. In State ex rel. v. State Highway Commission, 132 Kan. 327, 334, 335, 295 P. 986, 990, it was said: "The use of mandamus to secure a speedy adjudication of questions of law for the guidance of state officers and official boards in the discharge of their duties is common in this state. R. S. 60--1701, 60--1702. Our conceptions of the proper use of mandamus to expedite the official business of the state have expanded far beyond the ancient limitations of matters justiciable in mandamus. [Citations.]"

Whether mandamus is available to plaintiff or not, it seems rather clear it has no other plain and adequate remedy at law. Should plaintiff bring an action against defendants officially or personally or in both capacities for moneys had and received under a mistake of law? Will an ordinary action lie for the recovery of money which has been paid under a mere mistake of law? And, if judgment were recovered, how would it be collected? By levy and execution on defendants' property? Or on state property? It occurs to us that these intruding questions answer themselves and effectively dispose of the suggestion that another adequate remedy is available. Having exacted this illegal demand from plaintiff, having accepted payment thereof under protest, having refrained from turning the money into the general revenue fund where it ought to have gone if it had been lawfully due and lawfully exacted, so far as this case turns on a mere question of procedure we must hold that mandamus is a proper remedy.

2. The next contention is that the members of the tax commission are not proper parties. The practice in cases analogous to this has been to bring in these officials, not particularly because they have been necessary parties, nor strictly proper parties, but on the broad view that important adjudications in matters of taxation cannot be safely and assuredly announced without their wise contribution to such matters of public concern which call for authoritative determination. Mayhap in this case the tax commissioners are not necessary parties. It can hardly be said they are not proper parties. State v. Dolley, 82 Kan. 533, 108 P. 846; Wolf River Drainage Dist. v. Nigus, 133 Kan. 742, 3...