Nims v. Grand Trunk Western R. Co., 48

• Decision Date: 07 December 1949
• Docket Number: No. 48,48
• Citation: 326 Mich. 371,40 N.W.2d 188
• Parties: NIMS v. GRAND TRUNK WESTERN R. CO.
• Court: Michigan Supreme Court

Page 188

40 N.W.2d 188

326 Mich. 371

NIMS v. GRAND TRUNK WESTERN R. CO.

No. 48.

Supreme Court of Michigan.

Dec. 7, 1949.

Stephen J. Roth, Attorney General Edmund E. Shepherd, Solicitor General, Lansing, Elbern Parsons, Chief Assistant, and T. Carl Holbrook, Assistant Attorney General, for plaintiff-appellant.

H. Victor Spike, Frederick V. Slocum, Detroit, Ballard, Jennings, Bishop & Ellsworth, Lansing for defendant, and appellee.

Before the Entire Bench.

BUSHNELL, Justice.

The State commissioner of revenue has appealed from an order of the Ingham county circuit court dismissing his petition for a declaratory judgment.

In 1941 the Grand Trunk Western Railroad Company, a Michigan corporation, obtained a decree in the district court of the United States for the eastern district of Michigan, southern division Grand Trunk Western R. Co. v. Brown, 32 F. Supp. 784, permanently enjoining the auditor general of the State of Michigan 'from taking any steps or proceedings whatsoever for the purpose of collecting any taxes in excess of $25,171.40 for the year 1940 or for any year thereafter until taxes for the year 1949 become due and payable.'

In April of 1949 the state board of assessors subjected the Grand Haven property of defendant company to an ad valorem tax and spread the same upon the tax roll. P.A.1905, No. 282, as amended, C.L.1948, § 207. et seq., Stat.Ann. § 7.251 et seq. The defendant declined to pay, claiming the tax was for the year 1948 and within the prohibition of the provisions in the Federal decree. In support of its position it filed a motion in the Federal court to cite the state commissioner of revenue and the attorney general for contempt. In the petition for a declaratory judgment filed by the commissioner the circuit court was asked to hold that the assessment of specific taxes was for the year 1949 and not for the year 1948.

When the contempt citation came on to be heard the Federal district judge determined that defendant's motion should be held in abeyance until a State court interpretation of the tax statute, supra, could be obtained.

The circuit judge filed a written opinion in which he held that plaintiff's petition for declaratory judgment should be dismissed because (1) there was an actual controversy pending between the same parties in another court where the question could be determined; and (2) a declaratory judgment would not be a final determination of the matter since the Federal court in the interpretation of its own decree would not be bound by the decision of the State court.

This is an actual controversy over the legality of a tax assessment and one which ordinarily permits adjudication by a declaratory judgment.

However, where there is another case pending between the same parties in another court in which the issues might be decided, a declaration of rights will not usually be rendered. P.A.1929, No. 36, C.L. 1948, § 691.501 et seq., Stat.Ann. § 27.501 et seq.; Updegraff v. Attorney General, 298 Mich. 48, 198, N.W. 400, 135 A.L.R. 931. Nevertheless in Mounty Clemens Savings Bank v. State Land Office Board, 309 Mich. 153, 14 N.W.2d 817, a declaration of rights was permitted where the Federal court held in abeyance a petition to distribute funds resulting from a Federal condemnation proceeding pending decision of the State court as to the ownership of such funds.

It appears to be preferable Federal practice to await the decision of State courts on the...