Sawejka v. Morgan

• Decision Date: 31 October 1972
• Docket Number: No. 204,204
• Citation: 56 Wis.2d 70,201 N.W.2d 528
• Parties: Frank SAWEJKA et al., Appellants, v. James R. MORGAN, Respondent.
• Court: Wisconsin Supreme Court

Page 528

201 N.W.2d 528

56 Wis.2d 70

Frank SAWEJKA et al., Appellants, v. James R. MORGAN, Respondent.

No. 204.

Supreme Court of Wisconsin.

Oct. 31, 1972.

Niebler & Niebler, John H. Niebler, Menomonee Falls, for appellants.

Robert W. Warren, Atty. Gen., E. Weston Wood, Asst. Atty. Gen., Madison, for respondent.

CONNOR T. HANSEN, Justice.

As we view this appeal, the following issues are presented:

1. Does this court have jurisdiction to entertain this appeal?

2. Is it within the jurisdiction of the tax appeals commission to render a declaratory judgment concerning the applicability and constitutionality of sec. 77.52, Stats., as applied to plaintiffs' business?

3. Does the circuit court, under the provisions of sec. 269.56, Stats., have jurisdiction to render a declaratory judgment concerning the applicability and constitutionality of sec. 77.52, as applied to plaintiffs' business or does sec. 73.01 grant exclusive jurisdiction to the tax appeals commission?

4. If the circuit court has concurrent jurisdiction with the tax appeals commission, did the circuit court abuse its discretion in declining jurisdiction?

JURISDICTION OF THIS COURT.

The defendant argues that the plaintiffs should have appealed from the order sustaining the demurrer, and not having done so, this court has no jurisdiction to review the subsequent judgment dismissing the complaint on its merits.

An order sustaining a demurrer is an appealable order as provided in sec. 274.33(3), Stats. This is true whether or not the order sustaining the demurrer allows time to serve an amended complaint. This court, in Dick v. Shawano Municipal Hospital (1969), 43 Wis.2d 430, 433, 168 N.W.2d 824, 825 held:

'. . . The demurrers on behalf of the doctor and hospital were sustained but with an attached provision that plaintiff could file and serve an amended complaint within thirty days. To the extent that these orders were a granting of leave to amend pleadings, they would not be appealable. To the extent that such orders were a final disposition, the sustaining of a demurrer, they are appealable. . . .'

It is only that part of the order allowing the amendment of pleading which is not appealable. ¹ Although plaintiffs have appealed from the judgment and not the order sustaining the demurrer, the order can be reviewed under the provisions of sec. 274.34.

Section 274.34, Stats., provides:

'Upon an appeal from a judgment, and upon a writ of error, the supreme court may review any intermediate order which involves the merits and necessarily affects the judgment, appearing upon the record.'

An appeal from the judgment brings up for review the order sustaining the demurrer upon which it is based. ² The judgment dismissing the action on its merits disposes of the order sustaining the demurrer.

This court has jurisdiction in the instant case.

JURISDICTION OF THE TAX APPEALS COMMISSION.

Section 73.01, Stats., provides, in part:

'(4) Powers and duties defined. (a) Subject to the provisions for judicial review contained in the statutes, the commission shall be the final authority for the hearing and determination of all questions of law and fact arising under the tax laws of the state, except such as may be otherwise expressly designated. . . .

'. . .

'(5) Appeals to commission. (a) Any person who has filed an application for abatement or a claim for refund with the department of revenue or assessor of incomes and who is aggrieved by a determination of the department or assessor denying such application for abatement or claim for refund, may, within 30 days after such denial but not thereafter, file a petition for review of the action of the department or assessor and 4 copies thereof with the clerk of the commission. . . .'

'. . .

'(c) Whenever an appeal is taken from any determination of the secretary of revenue under sub. (4)(a) and no other procedure for appeal is specified in ch. 73 or ch. 76, the person feeling aggrieved by such determination shall file with the clerk of the commission. . . .'

Section 73.01(4), Stats., is a broad grant of authority to the commission to hear and determine all questions of law and fact arising under the tax laws of the state, except as may be otherwise expressly designated. In Neu's Supply Line v. Department of Taxation (1968), 39 Wis.2d 584, 159 N.W.2d 742, this court determined that the enactment of sec. 73.01(6)(c), renumbered sec. 73.01(5)(c) by ch. 276, sec. 333, Laws of 1969, gave the commission jurisdiction to review all question of law and fact arising out of determinations by the secretary of the department of revenue. Previous to the enactment of sec. 73.01(5)(c), the commission's review authority was restricted solely to review of applications for abatement and claims for refund. ³

In the present case we have a situation where the secretary of the department of revenue has determined that the provisions of the selective retail sales' tax (sec. 77.52, Stats.) are applicable to plaintiffs' business. This is a determination which adversely affects the plaintiffs. We are of the opinion that the commission has authority to hold declaratory proceedings arising from such a determination by the secretary of department of revenue.

Section 227.06, Stats. ⁴ does not, as contended by the state, provide for the institution of a declaratory judgment proceeding before the commission. Section 227.06 says in clear language that the 'agency' may make a declaratory rule with respect to 'any rule or statute enforced by it.' Section 73.01 does not define the duties of the commission to be 'enforcement' of the tax laws of the state. Section 73.03 provides that the 'enforcement' of the tax laws is delegated to the department of revenue.

The tax appeals commission is an independent tribunal exercising quasi-judicial functions. State ex rel. Thompson v. Nash (1965), 27 Wis.2d 183, 195,

133 N.W.2d 769;

Kaukauna v. Department of Taxation, supra

. CONCURRENT JURISDICTION OF CIRCUIT

COURT AND COMMISSION OF TAX APPEALS.

Defendant contends that, as a matter of subject-matter jurisdiction, the commission has exclusive jurisdiction over the review of any question of fact or law arising under the tax laws of Wisconsin. Whereas, the plaintiffs never actually challenge the jurisdiction of the commission, but argue, in effect, that the circuit court has concurrent jurisdiction under the provisions of sec. 269.56, Stats., which provides, in part:

'. . . (1) Scope. Courts of record within their respective jurisdictions shall have power to declare rights, status and other legal relations whether or not further relief is or could be claimed. No action or proceeding shall be open to objection on the ground that a declaratory judgment or decree is prayed for. The declaration may be either affirmative or negative in form and effect; and such declarations shall have the force and effect of a final judgment or decree.'

The trial court correctly determined that Metzger v. Department of Taxation (1967), 35 Wis.2d 119, 150 N.W.2d 431, was distinguishable and, therefore, inapplicable to the facts of the instant case. Metzger concerned a taxpayer's action in circuit court to declare 21 gift tax assessments null and void and to enjoin future assessments. The trial court sustained a demurrer interposed by the state. We affirmed. In Metzger, a timely application for abatement had been filed and the administrative process had begun but had not been completed. The Metzger decision was primarily based on the exhaustion-of-remedies doctrine, which will subsequently be considered in this opinion, and therefore, is not controlling in the instant case.

The plaintiffs direct our attention to Berlowitz v. Roach (1947), 252 Wis. 61, 30 N.W.2d 256; S. D. Realty Co. v. Milwaukee (1960), 9 Wis.2d 134, 100 N.W.2d 318; Racine v. Morgan (1968), 39 Wis.2d 268, 159 N.W.2d 129, as authority for their position that the circuit court has jurisdiction despite lack of review by the commission.

Berlowitz, supra, was a declaratory judgment action concerned with beverage tax stamps under sec. 139.26, Stats.1947. This case arose prior to the enactment of sec. 73.01(5)(c), at a time when review by the commission was limited to applications for abatement or refund. ⁵ The exclusive remedy for one aggrieved, under sec. 139.26, was an action in law for a refund. This court held that no inference could be found in the statute that sec. 269.56 could not be used for declaratory relief and to rule otherwise would force thousands of individual lawsuits. The Berlowitz Case is distinguishable on its facts.

S. D. Realty Co. v. Milwaukee, supra, was an appeal from a special tax assessment of the city of Milwaukee. There was no provision for review to the tax appeals commission as there is in the instant case.

In Racine v. Morgan, supra, the plaintiff sought declaratory relief in circuit court to determine the propriety of the commissioner of taxation's determination in applying the provisions of sec. 71.14, Stats., allocating the normal corporate income of S. C. Johnson & Son., Inc., among it and other municipalities in Wisconsin. This court, in considering a challenge to the circuit court's jurisdiction, stated on p. 290, 159 N.W.2d at p. 139:

'The respondent, town of Mt. Pleasant, challenges the jurisdiction of the court to consider the case. We find no merit in the respondent's argument. This is a declaratory judgment action brought against the departments of taxation and administration and against the department heads as individuals. The appellant contended that the statute governing the situation was being misconstrued and misapplied to its detriment. This is sufficient to establish jurisdiction for declaratory judgment. . . .'

We find Racine v. Morgan, supra, to be support for the determination that sec. 269.56, Stats., gives the circuit court concurrent jurisdiction with the tax appeals commission over issues arising under the tax laws. We, therefore, conclude that the...