State ex rel Rice, Atty.-Gen. v. Allen

• Decision Date: 03 January 1938
• Docket Number: 33615
• Citation: 177 So. 763,180 Miss. 659
• Court: Mississippi Supreme Court
• Parties: STATE EX REL, RICE, ATTY.-GEN., v. ALLEN et al

177 So. 763

180 Miss. 659

STATE EX REL, RICE, ATTY.-GEN., v. ALLEN et al

No. 33615

Supreme Court of Mississippi

January 3, 1938

Division A

Suggestion Of Error Overruled January 31, 1938.

APPEAL from chancery court of Tishomingo county HON. JAS. A. FINLEY Chancellor.

Suit by the State, on the relation of Greek L. Rice Attorney-General, for an injunction against L. P. Allen and others. From a final decree of dismissal, plaintiff appeals. Reversed and remanded, with directions.

Decree reversed.

John F. Frierson, of Columbus, for appellants.

This act, Chapter 155, Laws 1936, is constitutional. The Supreme Court of the State of Mississippi in the case of Notgrass Drug Co. v. State, ex rel. Rice, Attorney-General, 165 So. 884, 175 Miss. 358, has completely upheld the constitutionality of the sales tax which is set out in Chapter 119, Laws 1934, and particularly section 2-c of the said chapter. This chapter had already been declared constitutional in the case of Southern Package Corporation v. State Tax Commission, 164 So. 45. 174 Miss. 212. Chapter 155, Laws 1936, is simply an addition to section 2-c, chapter 119, Laws 1934, and constitutes the rules and regulations promulgated by the Legislature, and set out in section 2-c of the said chapter 155, Laws 1936, "for the purpose of more efficiently securing the payment of and accounting for the tax imposed by this act."

The presumption is always in favor of the constitutionality of a law enacted by the Legislature, and the court must be slow and cautious to overthrow legislative action.

State v. Page, 130 S.E. 426, 44 A. L. R. 501; 3 Enc. Dig. Va. and W.Va. 161-164; id. 2 Cum. Supp. 36-39

Chapter 119, Laws 1934, has been declared constitutional. We therefore, ask wherein can it be claimed that chapter 155, Laws 1936, is unconstitutional? There is no lack of uniformity and equality in the tax imposed by Sec. 2-c, chapter 119, Laws of 1934, and this uniformity and quality has certainly not been disturbed, shaken, or thrown out of balance in any respect by the enactment of Chapter 155, Laws 1936.

If a tax is imposed directly by the Legislature without assessment, and its sum is measured by the amount of business done, or the extent to which the conferred privileges have been enjoyed or exercised by the taxpayer irrespective of the nature or the value of taxpayer's assets, it is regarded as an excise.

26 R. C. L. 35, section 19 and section 209; Alexander Theatre Ticket Office v. U.S., 56 F.2d 66.

If it should be claimed that it is a tax against the purchaser, instead of against the seller, I do not know of any prohibition against the sovereign power of any government to tax a purchaser. The transaction bears a tax. The trade bears a tax. Therefore, the purchaser always bears the tax and necessarily so.

It is well recognized t that "the power of taxation rests upon necessity, is an essential and inherent attribute of sovereignty belonging, as a matter of right, to every independent state or government, and it is as extensive as the range of subjects over which the power of that government extends."

61 C. J. 76, section 7; Clarksdale Ins. Agency v. Cole, 40 So. 228, 87 Miss. 637; Teche Line v. Bd. of Sup'rs., Forrest County, 142 So. 24, 165 Miss. 594, 143 So. 486; Miss. State Tax Comm. v. Flora Drug Co., 148 So. 373, 167 Miss. 1.

Injunction is not only the proper relief in the case at bar, but is the only adequate relief. There is no other relief. The injury is both present and prospective. It is irreparable, and it affects every citizen of the state. Whenever the property rights or the civil rights of an individual, much less of the state itself, are invaded and violated, and there is not a complete and adequate remedy at law, a court of equity can grant relief by injunction.

Griffith's Chancery Practice, section 434; Jansen Farms v. City of Indianapolis, 171 N.E. 199.

The fact that keeping a nuisance is a crime does not deprive a court of equity of the power to abate the nuisance.

Carlton v. Rug, 5 L. R. A. 193, 149 Mass. 550; Littleton v. Fritz, 68 Iowa 488, 54 A. L. R. 19; State ex rel., McCarter v. Fireman's Ins. Co., 29 L. R. A. (N. S.) 1194; People ex rel., Attorney-General v. Tool, 35 Colo. 225, 86 P. 224, 6 L.R.A. (N. S.) 822; Debs case, 158 U.S. 564, 39 L. Ed.1092, 15 S.Ct. 900.

In McMillan v. Live Stock Sanitary Board, 119 Miss. 500, 81 So. 169, the court upheld the statutory injunction which had been enacted in Chapter 167, Laws of 1916, requiring owners to dip live stock, when ordered so to do by the inspector. The court says in that opinion (170) "In the opinion of the court there is no doubt that the legislature has the power to confer upon the chancery court jurisdiction to enforce by injunction the lawful orders of the livestock sanitary board. . . . Taking the statute by its four corners, it seems clear to us that the legislature was impressed with the importance of the enforcement of this law, and, realizing that the local justices of the peace, inspectors, and owners of live stock might fail or refuse to cooperate in carrying out the legislative purposes, they conferred upon the chancery court the power, to enforce the performance of all the duties imposed upon officers and individuals as well."

Certainly in the case at bar it would be claimed that the Legislature would not have authority to confer upon the chancery court jurisdiction to enforce Chapter 155, Laws 1936, by injunction, if the act is constitutional. Our argument is that the chancery court has inherent jurisdiction in such matters, because there is no adequate remedy at law or relief at law to prevent or prohibit the future interference of these defendants with the functioning of one of its departments of state, and the department of vital importance.

State v. Marshall, 100 Miss. 826, 56 So. 792; State ex rel. Attorney-General v. Hasson Grocery Co., 170 So. 234.

J. M. Thomas, of Tupelo, and J. A. Lauderdale, Assistant Attorney-General, for appellant.

It is admitted that the bill does not charge the defendants as being in default of the payment of the sales tax to the state for which judgment is asked. While the bill does allege that the defendants were in default, it further alleges that they were audited and the debt found to be due was paid.

We do not conceive it to be the law that it is a prerequisite for equity jurisdiction that the state should have a claim for a debt due for unpaid taxes against the defendants. Should it be that there was a claim for debt and the presentation thereof was unaccompanied by other grounds of an equitable nature there would be ample remedy in a court of law or under the statutory procedure for enforcing the tax lien and the issuing of a warrant as provided by Sections 12 and 13 of Chapter 158 of the Laws of 1936.

On the contrary by careful reading of the bill, the gravamen thereof, it will be seen, was to compel compliance with the mandatory feature of the administrative provisions of the sales tax law; that is, compelling the person liable for the tax to add the tax to the sale price of the tangible property sold and in addition thereto, collecting same from the purchaser of the property sold. The breach of the duty is not in the failure to pay a debt but in violating the rights of the state and the public (other taxpayers liable for the payment of the sales tax) created by legislative act to better and more uniformly administer the revenue laws of the state, the breach of which duty and the violation of which right, result in a damage or injury that cannot be calculated or measured, are irreparable, and for which there is no adequate redress, by the process of the courts of law, the machinery set up by the statute or otherwise. The interference with the machinery as set up and prescribed by the statute, is quite a different thing from simple failure to pay a debt.

Chapter 155, Laws of 1936, is constitutional.

The basis of the office of a tax collector from a constitutional standpoint is found in section 135 of the State Constitution.

It has been held by our court that taxes assessed by the sheriff under this section of the Constitution had no application whatever to privilege taxes.

Enochs v. State, 133 Miss. 107, 97 So. 534; State v. G. M. & N. R. Co., 138 Miss. 70, 104 So. 689.

The sales tax law has been upheld as constitutional in the case of Notgrass Drug Co. v. State, 175 Miss. 358, 165 So. 884; Southern Package Corp. v. Tax Commission, 174 Miss. 212, 164 So. 45.

On the subject of reasonableness of the statute providing that the seller of property shall pass the tax on to the purchaser and in addition thereto it appears to us that if this court could uphold as it has done as reasonable a statute which required a merchant who lives 25 miles from a wholesale house to transport his merchandise to the nearest wholesaler and have it stamped before he can make a sale thereof, then the statute which we have to deal with in the sales tax law certainly meets the requirements as being reasonable.

Miss. State Tax Commission v. Flora Drug Co., 148 So. 373.

The chancery court had jurisdiction of this case.

14 R. C. L. 376, par. 78; 32 C. J. 275, sec. 438; Joy v. St. Louis, 138 U.S. 1, 34 L.Ed. 843; Re Debs, 158 U.S. 582, 39 L.Ed. 1102; U. S. v. San Jacinto Tin Co., 125 U.S. 273, 31 L.Ed. 747; City of New Orleans v. Liberty Shop, Lts., 157 La. 26, 101 So. 798; 40 A. L. R. Ann. 1136.

In the case at bar in applying the principles announced in the Debs case and in the Liberty Shop case and in the text of R. C L., and Corpus Juris all the elements of a violation of property rights, of public rights and irreparable damage without an adequate remedy at law is shown to exist. Whether it would be technically termed...