Schlesinger v. State

CourtUnited States State Supreme Court of Wisconsin
Writing for the CourtSTEVENS
Citation218 N.W. 440,195 Wis. 366
Decision Date06 March 1928
PartiesSCHLESINGER v. STATE (THREE CASES). MACLAREN v. STATE (THREE CASES).

195 Wis. 366
218 N.W. 440

SCHLESINGER
v.
STATE (THREE CASES).

MACLAREN
v.
STATE (THREE CASES).

Supreme Court of Wisconsin.

March 6, 1928.


See, also, 190 Wis. 283, 208 N. W. 992.

Four original actions against the state begun in this court on August 15, 1927, to recover inheritance taxes, with interest, which were collected under an unconstitutional statue. The state demurred to each complaint on the ground that it did not state facts sufficient to constitute a cause of action. The four demurrers were argued together. Demurrers sustained.

Subdivision 3 of section 72.01 of the statutes of 1921 provided that all transfers of property within six years prior to death which were in the nature of a distribution of estate, if made without adequate valuable consideration, should be construed to have been made in contemplation of death and therefore to be subject to inheritance tax. This statute was declared by the Supreme Court of the United States to be in conflict with the Federal Constitution in that it denied equal protection of the laws. Schlesinger v. Wisconsin, 270 U. S. 230, 46 S. Ct. 260, 70 L. Ed. 557, 43 A. L. R. 1224.

Thereafter the state refunded the entire amount of the inheritance tax collected under this void law, less the 7 1/2 per cent. which the statute permits the county to retain. The county refunded all but a small portion of the 7 1/2 per cent. retained by it. All such refunds were made and accepted upon the express condition that the acceptance of such refunds should not prejudice the right of those receiving the refund to assert their claim to collect the balance of the illegal tax paid, together with interest upon the whole sum paid.

Claims against the state were filed with the Legislature which refused to allow the same. These actions were thereafter begun pursuant to the provisions of chapter 285 of the Statutes.

[218 N.W. 441]

Fawsett & Shea, of Milwaukee (Charles F. Fawsett, of Milwaukee, of counsel), for plaintiffs.

John W. Reynolds, Atty. Gen., and Franklin E. Bump, Asst. Atty. Gen., for the State.


STEVENS, J.

1. The chief question argued is the right to recover interest from the state.

Subdivision 2 of section 72.08 of the Statutes provides that when any inheritance tax “shall have been paid erroneously into the state treasury, it shall be lawful for the state treasurer upon receiving a transcript from the county court record showing the facts to refund the amount of such erroneous or illegal payment.” It will be noted that the statute does not authorize the payment of interest upon the amount refunded.

The great weight of authority on this question supports the rule established by the Supreme Court of the United States and by the English Court of Appeal that:

“Interest, when not stipulated for by contract, or authorized by statute, * * * is not to be awarded against a sovereign government, unless its consent to pay interest has been manifested by an act of its Legislature, or by a lawful contract of its executive officers. * * * Sir George Jessel, Master of the Rolls, speaking for the Court of Appeal, summed up the law of England in this short judgment: ‘There is no ground for charging the Crown with interest. Interest is only payable by statute or by contract.’ ” United States v. North Carolina, 136 U. S. 211, 216, 10 S. Ct. 920, 922, 34 L. Ed. 336, 338.

See, also, In re Gosman, L. R. 17 Ch. Div. 771, 772. Among the many cases that sustain this rule are Antero Reservoir Co. v. Board of Commissioners, 75 Colo. 131, 225 P. 269, 271;Eaton v. St. Louis Ry. Co., 122 Okl. 143, 251 P. 1032, 1039;Spencer v. Los Angeles, 180 Cal. 103, 115, 179 P. 163;Ohio v. Board of Public Works, 36 Ohio St. 409, 415;Garland County v. Hot Spring County, 68 Ark. 83, 93, 56 S. W. 636;Peterson v. State, 114 Neb. 612, 209 N. W. 221, 224;Proctor & Gamble Co. v. Sherman (D. C.) 2 F. (2d) 165, 166;Southern California Co. v. Hopkins (C. C. A.) 13 F.(2d) 814, 820;Board of County Commissioners v. Kaul, 77 Kan. 717, 96 P. 45, 17 L. R. A. (N. S.) 552, 557, and note. See, also, 3 Cooley, Taxation (4th Ed.) § 1308.

“The rule applies as well to a sovereign state as to the national government.” Seton v. Hoyt, 34 Or. 266, 273, 55 P. 967, 968, 43 L. R. A. 634, 635.

[1] When a tax refund statute is silent as to interest, it does not imply that interest should be paid. “On the contrary, the intention thereby disclosed is in denial of interest under it.” Kaemmerling v. State, 81 N. H. 405, 406, 128 A. 6, 7. Such a statute “plainly indicates that interest is not recoverable.” Antero Reservoir Co. v. Board of Commissioners, 75 Colo. 131, 135, 225 P. 269, 271. “If the Legislature had intended to provide for the payment of interest on taxes illegally collected, when refund was made, it would have said so in unequivocal language.” Home Savings Bank v. Morris, 141 Iowa, 560, 562, 120 N. W. 100, 101.

“A statute which in general terms requires the payment of interest does not apply to the state or county unless it expressly so provides. * * * There being no express reference to the state or county, they are by implication excepted from the operation of the general rule.” Salthouse v. Board of Commissioners, 115 Kan. 668, 673, 224 P. 70, 73;Clay County v. Chickasaw County, 64 Miss. 534, 544, 1 So. 753;Savings & Loan Society v. San Francisco, 131 Cal. 356, 363, 63 P. 665. “A sovereign is not bound by the words of a statute unless it is expressly named.” Seton v. Hoyt, 34 Or. 266, 273, 55 P. 967, 968, 43 L. R. A. 634, 635.

[2][3] The cases that have just been cited are based upon the universally recognized rule that a sovereign state cannot be sued in its own courts, unless its consent is given by law. The mandate of the Constitution, that “the Legislature shall direct by law in what manner and in what courts suits may be brought against the state” (article 4, § 27) “is not self-executing, and manifestly was not so intended. Otherwise, the mandate would have been to the courts instead of the Legislature, and the consent of the state to be sued for the same causes which would support actions against individual citizens, would have been expressly given.” Chicago Ry. Co. v. State, 53 Wis. 509, 513, 10 N. W. 560, 561.

While the overwhelming weight of authority sustains the rule that interest cannot be allowed upon taxes that were illegally collected,

[218 N.W. 442]

in the absence of a statute providing for interest, there are few jurisdictions where the contrary rule has been adopted. With a single exception, none of these cases, so far as we have found them, are against the state. None of these cases discuss the rule that the...

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39 practice notes
  • Holytz v. City of Milwaukee
    • United States
    • United States State Supreme Court of Wisconsin
    • 5 juin 1962
    ...State (1881), 53 Wis. 509, 10 N.W. 560; Houston v. The State (1898), 98 Wis. 481, 74 N.W. 111, 42 A.L.R. 39; Schlesinger v. State (1928), 195 Wis. 366, 218 N.W. 440, 57 A.L.R. Although the legislature created sec. 285.01, Stats., which authorized the commencement of suit against the state, ......
  • Lakefront Realty Corp. v. Lorenz, No. 35626
    • United States
    • Supreme Court of Illinois
    • 18 mai 1960
    ...91 Mont. 168, 6 P.2d 418; Mullaney v. Hess, 9 Cir., 189 F.2d 417. The contrary view, fully and ably set forth in Schlesinger v. State, 195 Wis. 366, 218 N.W. 440, 57 A.L.R. 352; is that interest cannot be allowed upon taxes that were illegally collected in the absence of a statute expressly......
  • Glass v. Prudential Ins. Co. of America, 3 Div. 430.
    • United States
    • Supreme Court of Alabama
    • 26 avril 1945
    ...State contends that provision for the payment of interest may be implied. We cannot agree with either contention. In Schlesinger v. State, 195 Wis. 366, 218 N.W. 440, 57 A.L.R. 352, the Wisconsin court treated this question and the holding was to the effect that when a tax refund statute is......
  • Com. v. Amec Civil, LLC, Record No. 2061-08-2.
    • United States
    • Virginia Court of Appeals of Virginia
    • 16 juin 2009
    ...overruled. See City of Milwaukee v. Firemen's Relief Ass'n, 42 Wis.2d 23, 165 N.W.2d 384, 390 (1969), overruling Schlesinger v. State, 195 Wis. 366, 218 N.W. 440 (1928). The dictum, however, continues to have considerable support from modern precedents. See, e.g., Kingston Constructors v. W......
  • Request a trial to view additional results
39 cases
  • Holytz v. City of Milwaukee
    • United States
    • United States State Supreme Court of Wisconsin
    • 5 juin 1962
    ...State (1881), 53 Wis. 509, 10 N.W. 560; Houston v. The State (1898), 98 Wis. 481, 74 N.W. 111, 42 A.L.R. 39; Schlesinger v. State (1928), 195 Wis. 366, 218 N.W. 440, 57 A.L.R. Although the legislature created sec. 285.01, Stats., which authorized the commencement of suit against the state, ......
  • Lakefront Realty Corp. v. Lorenz, No. 35626
    • United States
    • Supreme Court of Illinois
    • 18 mai 1960
    ...91 Mont. 168, 6 P.2d 418; Mullaney v. Hess, 9 Cir., 189 F.2d 417. The contrary view, fully and ably set forth in Schlesinger v. State, 195 Wis. 366, 218 N.W. 440, 57 A.L.R. 352; is that interest cannot be allowed upon taxes that were illegally collected in the absence of a statute expressly......
  • Glass v. Prudential Ins. Co. of America, 3 Div. 430.
    • United States
    • Supreme Court of Alabama
    • 26 avril 1945
    ...State contends that provision for the payment of interest may be implied. We cannot agree with either contention. In Schlesinger v. State, 195 Wis. 366, 218 N.W. 440, 57 A.L.R. 352, the Wisconsin court treated this question and the holding was to the effect that when a tax refund statute is......
  • Com. v. Amec Civil, LLC, Record No. 2061-08-2.
    • United States
    • Virginia Court of Appeals of Virginia
    • 16 juin 2009
    ...overruled. See City of Milwaukee v. Firemen's Relief Ass'n, 42 Wis.2d 23, 165 N.W.2d 384, 390 (1969), overruling Schlesinger v. State, 195 Wis. 366, 218 N.W. 440 (1928). The dictum, however, continues to have considerable support from modern precedents. See, e.g., Kingston Constructors v. W......
  • Request a trial to view additional results

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