Simmons Hardware Co. v. City of St. Louis

• Decision Date: 01 December 1916
• Docket Number: No. 18196.,18196.
• Citation: 192 S.W. 394
• Parties: SIMMONS HARDWARE CO. v. CITY OF ST. LOUIS.
• Court: Missouri Supreme Court

192 S.W. 394

SIMMONS HARDWARE CO. v. CITY OF ST. LOUIS.

No. 18196.

Supreme Court of Missouri. Division No. 1.

December 1, 1916.

Rehearing Denied February 20, 1917.

Appeal from St. Louis Circuit Court; Wilson A. Taylor, Judge.

Action by the Simmons Hardware Company, a corporation, against the City of St. Louis. Judgment for plaintiff, and defendant appeals. Reversed and remanded, with directions.

This is an action to recover back certain payments made by the respondent, a corporation, to the license collector of appellant to secure a merchant's license for the years 1908 and 1909, respectively. In each of those years there was a controversy between the respondent and the license collector as to the amount to be paid for the issuing of such license, and in each case the amount demanded by the latter was paid under protest in writing, and the respondent is seeking in this action to recover the difference between the amount so paid and the amount conceded by it to be due. The respondent claims that the excess was paid under coercion, consisting, so far as is shown by the record, of the rejection by the license collector of checks for the amount conceded to be due, accompanied in each case by the threat that unless the full amount demanded was paid the license applied for would not be issued and that unless that amount should be paid, and the license taken out, the collector would be compelled to proceed against the respondent for conducting its business without a license contrary to law and that each day's business would subject it to prosecution and fine.

The petition was in three counts. The first count referred to the tax of one dollar per thousand upon sales of merchandise for the year ending June 1, 1908. The difference between the parties with respect to the amount of this tax consisted (1) of an item of sales to branch houses located in other states than Missouri; (2) an item of sales of goods purchased from the Simmons Saddlery Company, a manufacturing corporation doing business in the city of St. Louis, which had paid the occupation tax of one dollar per thousand upon the amount of such sales; and (3) the tax on $1,260,052 of sales entered upon books of respondent at St. Louis but which related to property delivered from factories outside this state to the purchasers. Upon this last item there is no question that the tax was improperly charged, and it is directly admitted by the appellant that the controversy covered by the first count relates to "an occupation tax levied upon sales which included: First, sales made by the Simmons Hardware Company to other corporations closely allied with them; and, second, resales to the general public of goods purchased by the Simmons Hardware Company from the Simmons Saddlery Company."

With respect to the first of these items, the sales were made to four corporations each organized under the laws of states other than Missouri and located and doing business, respectively, in the city of New York, St. Paul, Minnesota, Sioux City, Iowa, and Wichita, Kan. These corporations were organized by the respondent or its officers or stockholders for the purpose of transacting the business of respondent at those points, and the stock of each was controlled by the respondent. Sales were made for cost at respondent's place of business in St. Louis and the merchandise shipped from that point.

The Simmons Saddlery Company was a corporation organized in this state and doing business in the city of St. Louis, having a common ownership through its stock with the respondent. The sales in question in the second item were all goods purchased by respondent from this corporation at cost, and afterward sold to the general public.

The second count is to recover an alleged excess of ad valorem tax levied on account of the value of merchandise in the possession of respondent between the first Monday in March and the first Monday in June of the year 1908. The return of the respondent made on June 22, 1908, began with the following item: "The largest amount of stock on hand between March and June 1st is $2,414,664.75." Various items of stock, in amounts which it was claimed should not be included, reduced the gross amount to $2,094,340.75. Then followed the entry: "Ret. based on a deduction of 33 1/3 per cent." $698,113.58, or 33 1/3 per cent., being deducted from the last preceding amount, left a remainder of $1,396.227.17. The license collector struck out the figures 33 1/3 per cent., inserting 25 per cent., and made the deduction accordingly, so that the return appeared to be based on a deduction of 25 per cent. The affidavit attached purports to have been made by Simmons Hardware Company and signed Simmons Hardware Company, Wm. Enders, Secretary, and contains the following:

"That the greatest amount in value of all goods, wares and merchandise owned at any time between the first Monday in March and the first Monday in June next preceding the date of this statement was (red figures) $1,579,437.93, (black figures and crossed out) $1,396,226.94 dollars."

The red figures represented the amount found by the deduction of 25 per cent., the black figures crossed out the amount found by the deduction of 33 1/3 per cent.

The testimony of Mr. William Enders, the secretary of respondent, who made and signed the return, explains this as follows:

"Q. Now, in regard to the ad valorem tax, you have stated the highest amount of stock on hand was $2,414,664.75? A. Yes, sir. Q. From which certain deductions are made, leaving $2,094,340.75? A. Yes, sir. Q. Now, how did you arrive at that value? A. Well, sir; we can by a card system that we have, we can tell on Monday, we can tell exactly how much goods we have got in our house to-day; and, as to the process by which we do it, this was all shown to the gentleman that made that out. Q. Was that amount the wholesale, actual, net value, or is that the wholesale value, less some percentage? Do you make deductions in figuring your values? A. No, sir; that was the amount of our stock. Q. No, sir; I mean the value? A. Yes, sir; the value. Q. That was the actual value of the stock? A. Yes, sir. Q. Then you say, return based on the deduction of 33 1/3 per cent? A. Yes, sir. Q. $698,113.58? A. Yes, sir. Q. That is, you deducted 33 1/3 per cent., leaving a balance of $1,396,227.17? A. Yes, sir."

The third count, although differing from the second in the amounts involved, is framed on a precisely similar cause of action to that stated in the second; that is to say, it seeks a recovery of the ad valorem tax assessed upon the difference between the actual value of the goods as stated in the return and the amount after deducting therefrom an arbitrary percentage, by which a less amount than the value of the merchandise as stated is fixed as the basis of the tax.

There was judgment on the first count for plaintiff for $4,713, with interest at 6 per cent. from August 13, 1908, the date of payment for the first license, amounting to $1,466.29, aggregating $6,179.29. The principal of this was made up of the following items: Direct shipments from factories outside of St. Louis, $1,260; sales to branch houses in other states, $3,080; sales of merchandise purchased from Simmons Saddlery Company, $372. Judgment for plaintiff on the second count was for $366.55, with interest at 6 per cent. from August 13, 1908, amounting to $114.05, aggregating $480.60. Judgment for plaintiff on third count for $1,051.55, with interest at 6 per cent. from August 16, 1909, amounting to $263.60, aggregating $1,315.15.

Charles H. Daues and Truman P. Young, both of St. Louis, for appellant. Judson, Green & Henry, of St. Louis (Lewis S. Haslam, of St. Louis, of counsel), for respondent.

BROWN, C. (after stating the facts as above).

1. It is contended by the appellant that the amounts which the respondent is seeking to recover were voluntarily paid, and therefore cannot be recovered back. That these payments were made under legal duress we have no doubt. The respondent is shown by the record to have been engaged in a very large mercantile business in the city of St. Louis, which it could not lawfully conduct without a license from the city. The withholding of these licenses would destroy it. Any attempt to preserve it without the license was forestalled by threats of daily prosecution under the statutes and ordinances authorizing the imposition of the tax and making its payment a prerequisite to the issue of license. The remedy provided for the collection of the tax was the destruction of the business. The only alternative was its payment. That this pressure amounted to such compulsion as will authorize the recovery back of the amount so unjustly exacted is now the general doctrine, firmly established in this state. Westlake v. St. Louis, 77 Mo. 47, 46 Am. Rep. 4; Brewing Co. v. St. Louis, 187 Mo. 367, 86 S. W. 129, 2 Ann. Cas. 821; Brewing Ass'n v. St. Louis, 140 Mo. 419, 37 S. W. 525, 41 S. W. 911; Ex parte Young, 209 U. S. 123, 28 Sup. Ct. 441, 52 L. Ed. 714, 13 L. R. A. (N. S.) 932, 14 Ann. Cas. 764; Railway v. Tucker, 230 U. S. 340, 33 Sup. Ct. 961, 57 L. Ed. 1507; Railway v. O'Conner, 223 U. S. 280, 32 Sup. Ct. 216, 56 L. Ed. 436, Ann. Cas. 1913C, 1050. The line of demarcation between such cases, and those in which one voluntarily and without threat of injury pays an imposition of doubtful legality as the price of peace, or to obtain an advantage resulting from the elimination of a doubtful question from his title, was considered by this court in the late case of Railroad v. Public Service Commission, 192 S. W. ___ (not yet officially reported). We hold that payment of the several amounts in controversy in this case was made under such circumstances of duress as to authorize their recovery back if they were illegally imposed, and wrongfully exacted as a condition of the issue of the license. 2. Taking up the questions in the order in which they appear in the pleadings and...