Santee River Cypress Lumber Co v. Query, 13534.

Citation167 S.E. 22
Decision Date08 December 1932
Docket NumberNo. 13534.,13534.
PartiesSANTEE RIVER CYPRESS LUMBER CO. v. QUERY et al.
CourtUnited States State Supreme Court of South Carolina

167 S.E. 22

SANTEE RIVER CYPRESS LUMBER CO.
v.
QUERY et al.

No. 13534.

Supreme Court of South Carolina.

Dec. 8, 1932.


Appeal from Common Pleas Circuit Court of Richland County; W. H. Townsend, Judge.

Action by the Santee River Cypress Lumber Company against W. G. Query and others, as members of the South Carolina Tax Commission. From an adverse order, plaintiff appeals.

Reversed and remanded.

M. W. Seabrook, of Sumter, for appellant.

John M. Daniel, Atty. Gen., and J. Fraser Lyon, of Columbia, for respondents.

BLEASE, C. J.

The facts of this cause, agreed upon by counsel, are set forth in the opinion of Mr. Justice CARTER. It is not necessary to repeat here the whole statement. In brief, the differences between the parties arise out of their respective constructions of Act No. 574 of 1928 (35 St. at Large, p. 1089; sections 2521-2554, 1932 Code), as those statutes pertain to the documentary tax directed to be levied, collected, and paid for the support of the state government.

The members of the tax commission, defendants in the cause, who are respondents here, have been claiming that the plaintiff, who is the appellant, should pay a certain documentary tax, and have made efforts to collect the same. The appellant contends that the tax demanded is illegal, and it procured from his honor, Circuit Judge Town-send, an order restraining the respondents from attempting to collect the tax during the pendency of this action. On motion of the respondents, Judge Townsend dissolved the injunction he first granted, on the ground that the plaintiff had an adequate remedy at law, and there was no necessity for injunctive relief.

It is not only within the power of a court of equity, but the duty rests upon it, to enjoin the collection of an illegal tax in those cases where no adequate legal remedy is provided for the aggrieved taxpayer. Ware Shoals Manufacturing Co. v. Jones, 78 S. C. 211, 58 S. E. 811.

It Is conceded by the respondents that the appellant has no legal remedy for the recovery by it of the tax sought to be collected by the respondents, if paid by the appellant under protest, unless the right is given in section 29 of Act No. 574 of 1928 (section 2548, Code of 1932). So the only legislative enactment to be considered, pertaining to the issue here, is found in the section mentioned.

The identical question presented to this court was considered and passed upon by United States Circuit Judges Parker and Northcott and District Judge Cochran, composing a three-judge court, in the case of

[167 S.E. 23]

Graniteville Manufacturing Co. v. Query et al., in the District Court of the Eastern District of South Carolina. 44 F.(2d) 64, 67. That court decided in favor of the position of the appellant that the statute under consideration did not give the taxpayer "adequate remedy at law to recover any of these stamp taxes on documents."

In the decision of the three-judge court, the whole of section 29 of the 1928 Act was set out. The proviso to that section seems to us to be only necessary for consideration, and that is in this language:

"Provided, That the collection of the license taxes imposed under the provisions of this Act shall not be stayed or prevented by any injunction, writ or order issued by any Court or Judge thereon. In all cases in which any license or tax is required to be paid hereunder by any person, firm or corporation and the Tax Commission shall claim the payment of the taxes so assessed, or shall take any step or proceedings to collect the same, the person, firm or corporation against whom such license taxes are charged, or against whom such step or proceedings shall be taken, shall, if he conceives the same to be unjust or illegal for any reason, pay the said taxes notwithstanding, under protest, in such funds and monies as the South Carolina Tax Commission shall be authorized to receive, and upon such payment being made said South Carolina Tax Commission shall make proper note that the same was paid under protest and notify the State Treasurer that such taxes were paid under protest; that the person, firm or corporation so paying said license taxes may at any time within thirty (SO) days after making such payment, but not afterwards, bring an action against the said South Carolina Tax Commission for the recovery thereof in any Court of competent jurisdiction and/or in proper cases in the Federal Courts and if it be determined in said action that such taxes were wrongfully and illegally collected for any reason owing to the merits, then the Court before which the case is tried shall certify of record that the same were wrongfully collected and ordered to be returned with interest thereon at the rate of four (4%) per centum per annum. Whereupon the Tax Commission shall issue its warrant upon the State Treasurer for refunding the taxes and interest so paid, which shall be paid in preference to other claims against the treasury."

Touching the question if the language of the enactment gave the taxpayer an adequate remedy at law to recover taxes paid by it, the court had this to say:

"From the portions of this section which we have italicized, it appears clear that the remedy provided is only for the recovery of license taxes. It is true that in one place the language used is 'license or tax'; but when the whole section is read, it will be seen that only license taxes may be paid under protest and recovered, and the expression 'license or tax' is either an inadvertence or else the words 'license or tax' were used as...

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