State ex rel. Okl. Tax Commission v. Rodgers

• Decision Date: 16 April 1946
• Citation: 193 S.W.2d 919,238 Mo.App. 1115
• Parties: State of Oklahoma, ex rel. the Oklahoma Tax Commission, Appellant, v. George B. Rodgers and Bertha M. Rodgers, Respondents
• Court: Missouri Court of Appeals

193 S.W.2d 919

238 Mo.App. 1115

State of Oklahoma, ex rel. the Oklahoma Tax Commission, Appellant, v. George B. Rodgers and Bertha M. Rodgers, Respondents

Court of Appeals of Missouri, St. Louis District

April 16, 1946

Respondents' Motion for Rehearing or for Transfer to the Supreme Court Overruled.

Appeal from the Circuit Court of the City of St. Louis; Hon. E. M Ruddy, Judge.

Reversed and remanded.

E L. Mitchell, E. J. Armstrong and C. W. King for appellant.

John P. McCammon of counsel.

(1) Under the laws of Oklahoma, a suit to collect taxes is an action for debt or in the nature of an action for debt. Secs. 1464 and 907, Tit. 68, Okla. Stat. 1941; Secs. 4 and 8, Tit. 12, Okla. Stat. 1941; 1 C. J. S. 938, 940, 944 and 945. (2) The laws of Missouri authorize actions in this State upon claims existing under the law of another state. R. S. Mo. 1939, secs. 856, 901, 902 and 903, Laws 1943, pages 357, 360, secs. 4 and 14; State ex rel. Freeling v. National City Bank (Mo. App.), 274 S.W. 945; Burg v. Knox (Mo.), 67 S.W.2d 96, 99; State ex rel. Insurance Company v. Grimm, 239 Mo. 135, 143 S.W. 483. (3) An action to recover unpaid taxes lawfully assessed under the laws of another state is maintainable in the courts of this State and the court erred in holding the contrary. Massachusetts v. Missouri, 308 U.S. 1, 20, 60 S.Ct. 39, 84 L.Ed. 3; State v. Dalton, 353 Mo. 307, 182 S.W.2d 311; R. S. Mo. 1939, sec. 11367; Price v. United States, 269 U.S. 492, 46 S.Ct. 180; California ex rel. McColgan v. Bruce, 37 F.Supp. 811, 813; Moore v. Mitchell, 30 F.2d 600, 281 U.S. 18, 50 S.Ct. 175, 74 L.Ed. 673; Milwaukee County v. M. E. White Company, 296 U.S. 268, 56 S.Ct. 229, 80 L.Ed. 220; Holshouser Company v. Gold Hill Paper Company, 138 N.C. 238, 50 S.E. 650, 70 L. R. A. 183; Cases cited under point (2), supra. (4) Reading the Oklahoma and Missouri Statutes together in the light of the decisions interpreting the Missouri law, it is settled that the courts of Missouri are open to actions to collect Oklahoma taxes. Sec. 1483, Tit. 68, Okla. Stat. 1941; Laws of Missouri 1943, page 360, sec. 14 (or Sec. 856, R. S. 1939, which it supplants); Massachusetts v. Misouri, 308 U.S. 1, 20, 60 S.Ct. 39, 84 L.Ed. 3. (5) The public policy of both states authorizes the maintenance of this cause of action in the Missouri courts. Massachusetts v. Missouri, supra; State v. Dalton, supra; California ex rel. v. Bruce, supra; Missouri and Oklahoma Statutes, supra.

Wm. H. Biggs and Davis Biggs for respondents.

Biggs, Curtis & Crossen of counsel.

(1) The revenue laws of one state have no force in another state. Moore v. Mitchell, 30 F.2d 600; State of Colorado v. Harbeck, 232 N.Y. 71, 133 N.E. 157; Marshall v. Sherman, 148 N.Y. 9, 42 N.E. 419; 3 Beale, Conflict of Laws, sec. 610.2; Goodrich on Conflict of Laws, p. 116; A. L. I. Restatement, Conflict of Laws, sec. 610; 51 Am. Jur., sec. 993; Steckler v. Pennroad Corp., 136 F.2d 197; Lapinski v. Copacino, 131 Conn. 119, 38 A.2d 592. (2) A suit to recover taxes is an action to enforce revenue laws regardless of how it may be designated by the taxing authority. Huntington v. Attrill, 146 U.S. 657, 36 Law. Ed. 1123; State of Maryland v. Turner, 132 N.Y.S. 173; Moore v. Mitchell, 30 F.2d 600.

Anderson, J. Hughes, P. J., and McCullen, J., concur.

OPINION

ANDERSON

This is an action by the State of Oklahoma, at the relation of the Oklahoma Tax Commission, for the collection of an income tax obligation incurred by respondents while they were residents of Oklahoma. The petition filed was in words and figures as follows:

"The State of Oklahoma, on relation of the Oklahoma Tax Commission, for its cause of action against the Defendants, alleges and states:

"The Oklahoma Tax Commission is an agency created by the laws of the State of Oklahoma with power of collection and enforcement of taxes, including the taxes accruing under the net income tax laws of said state, and as such is vested with powers to sue and be sued in the courts of this and other states. Said Oklahoma Tax Commission, as now constituted, together with its powers, is defined in Chap. 1, Title 68, Secs. 1-12c, inclusive, Oklahoma Statutes, 1941, and also Chap. 32 of said Title 68, Oklahoma Statutes, 1941, being what is commonly referred to as the Uniform Tax Procedure Act.

"Under Section 1464 of Title 68, Oklahoma Statutes, 1941,

"'The taxes, fees, interest, and penalties, embodied by any State Law, or by this Act, from the time same shall become due, may be collected in the same manner as a personal debt of the taxpayer, to the State of Oklahoma; recovered in any court of competent jurisdiction in any action in the name of the State of Oklahoma, on relation of the Oklahoma Tax Commission. Such suit may be maintained, prosecuted, and all proceedings taken to the same effect and extent as for the enforcement of a right of action for debt. All provisional remedies available in such actions shall be, and are hereby made available to the State of Oklahoma in the enforcement of the payment of any State tax . . .'

"Section 1483 of said Title 68, Oklahoma Statutes, 1941, reads as follows:

"'The courts of this State shall recognize and enforce liability for taxes lawfully imposed by other states which extend a like comity to this State.'

"The laws of the State of Missouri applicable to this case are found in Sec. 856, R. S. 1939, Missouri Statutes Annotated, and read as follows:

"'Whenever a cause of action has accrued under or by virtue of the laws of any other state or territory, such cause of action may be brought in any of the courts of this state, by the person or persons entitled to the proceeds of such cause of action: Provided, such person or persons shall be authorized to bring such action by the laws of the state or territory where the cause of action accrued.'

"Plaintiff states that the Defendants, while residents of Tulsa County, State of Oklahoma, earned and received income taxable under the laws of the State of Oklahoma as follows, to-wit:

Date of Interest at 1%

Date

Notice and Per Month to

"Year

Assessed

Assessment

Demand

9-10-44

Total

1936

7-30-38

$ 593.91

9-3-38

$ 429.10

$ 1,023.01

1935

5-24-40

1,126.84

7-3-40

566.23

1,693.07

1934

5-24-40

616.20

7-3-40

309.64

925.84

1933

5-24-40

759.74

7-3-40

381.76

1,141.50

$ 4,783.42

"Copies of the respective Orders of Assessment and the Returns of the taxpayers for the years 1933 to 1936, inclusive, are attached hereto and marked "Exhibits 1-2-3 and 4" and said Returns and the Orders of Assessment are made a part of this Petition.

"Plaintiff further states that the said tax so computed, as aforesaid, is delinquent, due and unpaid, that the interest as hereinabove shown is likewise due and unpaid, that the total amount of tax and interest of $ 4,783.42 should bear interest from date of filing of this Petition at the rate of six percent (6%) per annum until paid.

"Wherefore, Plaintiff prays judgment against the Defendants in the sum of $ 4,783.42 with interest as aforesaid, at the rate of six percent (6%) per annum from the date of the filing of this petition and for such further orders in the premises as the court deems meet and proper, with all costs of suit in this behalf expended."

To this petition defendants filed a general demurrer, which the court sustained. Plaintiff then refused to plead further. Thereupon a judgment of dismissal was entered. From this judgment plaintiff has appealed. At the time the trial judge sustained the demurrer, he filed a memorandum which shows that he sustained the demurrer on the ground that the courts of Missouri will not entertain suits to enforce the revenue laws of a sister state. In this court appellant challenges the trial court's ruling and seeks a reversal of the judgment.

There are no Missouri decisions either way on the proposition presented. However, the weight of authority from other jurisdictions supports the ruling of the trial judge.

The first application of the rule that "one state will not enforce the revenue measures of another" is attributed to Lord Hardwicke, in Boucher v. Lawson, 1734, Cases Temp. Hardwicke 85, 95 Eng. Rep. 53. In that case plaintiff shipped gold from Portugal to England in defendant's ship. Under the law of Portugal, the exporting of gold was prohibited. This probably was a revenue measure. When the ship arrived in London, the master of the vessel refused to deliver the cargo to plaintiff, and the latter brought an action against the owner. The defense interposed was that since it was illegal to export gold under the laws of Portugal, the parties were participes criminis, and the law should refuse a remedy. This defense was denied on the ground that to allow it would "cut off all benefit of such trade from this kingdom, which would be of very bad consequence to the principal and most beneficial branches of our trade."

The next case, and the first which directly enunciated the rule was Holman v. Johnson, 1775, 1 Cowp. 341, 98 Eng. Rep. 1120. In that case plaintiff, a resident of Dunkirk, sold and delivered a quantity of tea to the defendant, knowing that defendant intended to smuggle the tea into England. When plaintiff sued for the purchase price, defendant resisted the suit on the ground that the contract for the sale of the tea was founded upon an intention to make an illicit use of it, and that therefore plaintiff was not entitled to the assistance of an English court to recover the price. The court held that since the contract and delivery were made abroad, no law of England had been transgressed. In the course of the opinion the court said that with regard to contracts legally made abroad, the laws of the country where the cause of action arose should...