Public Service Co. of N.H. v. State

• Decision Date: 07 April 1959
• Citation: 102 N.H. 54,149 A.2d 874
• Parties: PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE v. STATE.
• Court: New Hampshire Supreme Court

Page 874

149 A.2d 874

102 N.H. 54

PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE v. STATE.

Supreme Court of New Hampshire.

Argued March 4, 1959.

Decided April 7, 1959.

Sulloway, Hollis, Godfrey & Soden and Ian R. MacNeil, Concord, for plaintiff.

Louis C. Wyman, Atty. Gen., Warren E. Waters, Dep. Atty. Gen., and Dort S. Bigg, Law Assistant, Concord, for defendant.

KENISON, Chief Justice.

The plaintiff electric utility paid a franchise tax to the State under protest which upon appeal was determined to be unlawfully levied under an unconstitutional statute. RSA ch. 83. Public Service Co. v. State, 101 N.H. 154, 136 A.2d 600. The amount of this tax was refunded by the State to the utility without interest, and the issue to be decided in this case is whether the State is liable for interest on a franchise tax refund.

Although the doctrine of sovereign immunity has been subject to a barrage of cogent criticism from commentators over a long period of time, the doctrine still survives with considerable vitality except as modified by federal or state legislation. Wiseman v. State, 98 N.H. 393, 101 A.2d 472; Moore v. Dailey, 97 N.H. 278, 86 A.2d 342. See Third Report of N.H. Judicial Council, p. 40 (1950) and Fourth Report of N.H. Judicial Council, p. 34 (1952) which recommended legislation permitting judgments to be rendered against the State in actions founded on express and implied contracts enacted as RSA 491:8. In a survey of the doctrine of sovereign immunity in the states, New Hampshire was classified in the following manner: 'Consistent adherence to the standard view that neither the state nor its subdivisions may be sued without legislative consent, and strict construction of legislative consent when given characterized the New Hampshire law.' Leflar & Kantrowitz, Tort Liability of the States, 29 N.Y.U.L.Rev. 1363, 1389 (1954). This characterization was accurate when made and has been reaffirmed in subsequent decisions. Reconstruction Finance Corp. v. Faulkner, 100 N.H. 192, 122 A.2d 263; Opinion of the Justices, 101 N.H. ----, 134 A.2d 279, and cases cited. While the doctrine of sovereign immunity plays only a peripheral part in this decision, it is material to the extent that it is recognized that the plaintiff can recover interest only if the Legislature has provided for it by statute, either expressly or by reasonable implication. Manchester v. Manchester Teachers Guild, 100 N.H. 507, 511, 131 A.2d 59; Moore v. Dailey, 97 N.H. 278, 86 A.2d 342. Consequently, the issue before us is primarily one of statutory construction.

RSA 83:13 provides that upon appeal if the taxpayer is entitled to a reduction of the tax the State Treasurer 'shall refund to the taxpayer the amount of any overpayment of the tax from any funds not otherwise appropriated.' No provision is made in this chapter for the allowance of interest. However in RSA 83:10, allowing an appeal, the Superior Court is given authority to 'make such orders or decisions concerning all matters involved in or collateral to the proceedings, as justice may require.' It is claimed by the plaintiff utility that this statute is authority for the allowance of interest. Reliance is placed on Boston & Maine R. R. v. State, 63 N.H. 571, 4 A. 571, an Amoskeag Mfg. Co. v. City of Manchester, 70 N.H. 336, 47 A. 74. The State places its reliance on Kaemmerling v. State, 81 N.H. 405, 406, 128 A. 6, where it is said that a taxpayer is entitled to interest on a refund on taxes wrongfully collected 'only as the statute authorizes it.' None of these cases involved the right to interest on a refund of franchise taxes and to ascertain the legislative intent it is necessary to examine the legislative history of RSA ch. 83.

The franchise tax was first enacted by Laws 1931, c. 124. It was introduced as House Bill No. 26 (Journal of the House 1931, p. 86) and in its original draft made no provision for interest in the event the tax was to be reduced. Approximately two months later it appeared in new draft with the specific provision that any reduction of the tax was to be credited against later taxes 'with interest upon any sum actually paid thereon.' The statute remained in this form in the enactment of the Revised Laws. R.L. c. 84, § 13. A minor change was made by the reorganization act but it had no bearing on the question of interest. Laws 1950, c. 5, Part 8, § 34. In 1953 (Laws 1953, c. 107) the provision as to interest was eliminated. RSA 83:13.

The utility argues that the provisions of RSA 83:10 which gives the Superior Court on appeal the right to make orders and decisions on all matters involved in or collateral to the proceedings 'as justice may require' is legislative consent to the payment of interest on a tax refund. Neither Boston & M. R. R. v. State, 63 N.H. 571, 4 A. 571, nor Amoskeag v. City of Manchester, 70 N.H. 336, 47 A. 74, placed reliance upon the statutory language now appearing in RSA 82:18 and RSA 83:10 cited by the utility. Both cas...