Sluder v. Mahan

• Decision Date: 06 August 1954
• Docket Number: No. 18509,18509
• Citation: 124 Ind.App. 661,121 N.E.2d 137
• Parties: SLUDER et al. v. MAHAN.
• Court: Indiana Appellate Court

Page 137

121 N.E.2d 137

124 Ind.App. 661

SLUDER et al. v.MAHAN.

No. 18509.

Appellate Court of Indiana, In Banc.

Aug. 6, 1954.

Walter F. Wood, Sullivan, for appellants.

J. Hurley Drake, Shelburn, for appellee.

ACHOR, Judge.

This is an action by appellants against appellee, Treasurer of Sullivan County, to enjoin the collection of additional taxes levied upon their separate tracts of real estate because of oil production therefrom.Appellants are owners of tracts of land in Sullivan County from which oil was produced during the years 1950, 1951 and 1952.

Appellee's demurrer to appellants' amended complaint was sustained.Appellants refused to plead over and the court accordingly entered judgment denying the injunctive relief sought by appellants.

The error relied upon for appeal is the sustaining of appellee's demurrer.

Appellants' amended complaint contained the following allegations:

'That in the year 1950 there was a general assessment of all the real estate in Sullivan County, Indiana, for State, County, and Township Taxes, including plaintiff's(') said several tracts of real estate.That said assessment against plaintiffs' said several tracts of real estate was placed on the tax duplicate in the office of said County Treasurer for the year 1952, at the rate of taxation for real estate of State, County, and Township purposes in the Township wherein said real estate is located, and said 1952 real estate taxes have been paid by plaintiffs(appellants).

'That at the time said general assessment was made in 1950, plaintiffs(') said several tracts of real estate were producing oil of as great value as was produced in 1952.

'That in addition to said Gross Income Tax, Indiana Conservation Tax, and said State, County, and Township Taxes, an assessment of sixty per cent of the amount of oil royalties received by each of these plaintiffs for the year 1952, has been made and placed on the tax duplicate in defendant's said Offices.That said oil royalty assessment was not made with plaintiffs' consent.

'That there is no statute in force in the State of Indiana authorizing or permitting assessing and taxing production, other than by gross income tax.That the other various production of other lands in said County has not been assessed for taxation for the year 1952, or any other year.

'That unless enjoined by this Court from so doing, the defendant will proceed to collect said illegal production tax, and is threatening to do so, to these plaintiffs' irreparable injury.

'That these plaintiffs have joined in this action to prevent a multiplicity of suits.'

The following questions were raised by the demurrer and are argued by the parties to this appeal:

1.Was there a misjoinder of partiesplaintiff?

2.Was there a defect of partiesdefendant?

3.Did appellants' complaint state a cause of injunctive relief?

Appellee contends first that the demurrer was properly sustained because the parties joined as plaintiffs did not have a common interest in the subject matter of the action, nor did each of them have an interest in the relief sought by the other.In support of her position, appellee cites the case of Jones v. Rushville National Bank, 1894, 138 Ind. 87, 93, 37 N.E. 338, 340.In that case the complaint alleged that the State Board of Tax Commissioners illegally increased the assessment of the two appellee banks by assessing each of them for certain stock of the respective banks, which stock was in fact not owned by said banks, but by private individuals.An injunction was asked against the County Treasurer.In that casethe court ordered a demurrer sustained on the ground that the parties-plaintiffs were improperly joined.In support of its decision, the court stated: 'There is absolutely no connection between the two appellees in this case.They were assessed separately.The tax assessed against one does not affect the property of the other.The relief to which one is entitled, if granted to it alone, does not affect the other.In the absence of some common interest, they could not unite in a suit.'

The statute provides that all persons having an interest in the subject of the action, and in obtaining the relief demanded, shall be joined as plaintiffs.§ 2-213, Burns'1946 Repl.It is also provided by statute that when the question is one of a common or general interest to many persons, or where the parties are numerous and it is impracticable to bring them all before the court, one or more may sue or defend for the benefit of the whole.§ 2-220, Burns'1946 Repl.In construing these statutes our courts have announced the general rule as follows:

'It is well established in this State by many decisions, that a number of taxpayers may unite to enjoin the collection of an illegal tax affecting them separately, * * * and that a number of individual owners of separate lots or lands may unite to enjoin the enforcement against such lots or lands of an assessment for a local improvement and to set aside such assessment because of its illegality.No adequate remedy can be granted at law to such taxpayers or owners, and in this State they may separately maintain the suit for injunction; or, to prevent a multiplicity of suits, they may unite.In such cases, the fact that the object of the suit on the part of each plaintiff is to protect his property, in which the others are not interested, does not prevent their joinder.The illegality of one act or proceeding which affects them all injuriously, in like manner, furnishes a sufficient community of interest to permit their joinder for the purpose of suppressing a multiplicity of suits.'

Heagy v. Black, 1883, 90 Ind. 534, 540.See also: Quick v. Templin, 1908, 42 Ind.App. 151, 85 N.E. 121;Tate v. Ohio & Mississippi Railroad Co., 1858, 10 Ind. 174, 71 Am.Dec. 309;Armstrong v. OgdenCity, 1897, 12 Utah 476, 43 P. 119, Ogden City v. Armstrong, 168 U.S. 224, 18 S.Ct. 98, 42 L.Ed. 444;Shira v. State, ex rel., 1918, 187 Ind. 441, 119 N.E. 833.

The question we are required to determine is whether, under the cases cited, there is such a community of interest between the plaintiffs to permit their joinder.In the language of Heagy v. Black, supra, such community of interest may exist in 'the illegality of one act or proceeding which affects them all injuriously, in like manner.'It occurs to us that the allegations of the complaint are sufficiently broad to permit proof that the assessments involved were the result of a single scheme, act or proceeding on the part of some public authority for the assessment of a tax upon the appellants, who were thereby all in like manner injuriously affected and, if the tax was illegal as alleged, they could, under the rule announced above, properly join as parties-plaintiffs in a single action in order to avoid a multiplicity of suits.

Secondly, appellee argues, in support of the sustaining of the demurrer to appellants' amended complaint, that there is a defect of parties-defendants.Section 2-219, Burns' 1951 Replacement provides that any person may be made a defendant who has, or claims, an interest in the controversy adverse to the plaintiff or who is a necessary party to the complete determination or settlement of the question involved.Appellee contends that the county assessor and the county auditor were also necessary parties-defendants to a complete determination of the question involved, and that plaintiffs' (appellants') failure to join them as parties-defendants made the complaint bad as against demurrer.However, this is an action solely to enjoin the collection of taxes already assessed and not to enjoin similar, future assessments by the assessor or auditor.The assessments on which the collection of taxes is sought to be enjoined is beyond the control of the county assessor and county auditor and is in the hands of the appellee county treasurer, who is exclusively charged by statute with the duty of their collection.Sections 64-1701,1702,1703,1704,1705,1706and2203, Burns' 1951 Replacement.No other person has any authority in the matter.Since neither the county assessor nor county auditor could enforce the collection of said taxes, no useful purpose could be served by making them parties-defendants.

Furthermore, it is contended by appellee that, regardless of the legality of eligibility of the assessment of the tax, the complaint is fatally defective because it does not allege that the tax was excessive or unjust.Appellants have cited numerous cases as supporting their position.These include Forsyth v. Board, etc., 1919, 74 Ind.App. 252, 123 N.E. 699;Citizens Nat. Bank v. Klauss, 1911, 47 Ind.App. 50, 93 N.E. 681;Hunter Stone Co. v. Woodward, 1899, 152 Ind. 474, 53 N.E. 947;Board of Commissioners of Howard County v. Armstrong, Guardian, 1883, 91 Ind. 528.

However, it is to be observed that in each of the above cited cases the relief sought was not injunctive relief under the common law to enjoin the collection of taxes, but that each of the above cited cases involved statutory actions for the recovery of taxes already paid, which remedy did not exist under the common law.Each of the above cited cases is grounded upon § 64-2819, Burns'1951 Repl. and similar prior statutes, all of which expressly provided for the recovery of taxes 'wrongfully assessed' and 'wrongfully paid.'

In construing these statutes our courts have considered the fact that they were in derogation of the common law and that therefore they were to be strictly construed.They have also considered the rule that such statutes should be construed to the end that all property should bear its just share of the cost of government.Consistent with these established rules of construction, our courts have held that the remedy provided by these statutes is exclusive and that whether the tax paid is the result of either a mere irregularity of assessment or even an assessment illegally made, having been paid a refund cannot be obtained...