State v. Alden Mills

• Decision Date: 12 January 1943
• Docket Number: 36791.
• Citation: 202 La. 416,12 So.2d 204
• Court: Louisiana Supreme Court
• Parties: STATE v. ALDEN MILLS.

12 So.2d 204

202 La. 416

STATE v. ALDEN MILLS.

No. 36791.

Supreme Court of Louisiana

January 12, 1943

Rehearing Denied Feb. 1, 1943.

James C. Henriques, of New Orleans, for relator.

James B. Smullin, Stephen B. Rodi, and Joseph F. Deynoodt, all of New Orleans, for respondent.

Charles J. Rivet, of New Orleans, for intervenors.

O'NIELL Chief Justice.

This is a summary proceeding to collect additional corporation franchise taxes for the years 1933, 1934, 1935, 1936 and 1937. The suit was filed on December 8, 1941. The amount claimed, with the 20% statutory penalty and 10% attorneys' fees, is $1,961.82. It is admitted in the plaintiff's affidavit on which the suit is founded that the defendant paid the tax for each of the five years mentioned, amounting to $3,666.28, but it is claimed that the amount of the tax for those years should have been $5,152.41 and hence that the amounts paid left a shortage of $1,486.13 to which is added the statutory penalty and attorneys' fees.

The defendant, answering the rule to show cause why judgment should not be given for the amount claimed, denied that there was any balance due, and at the same time pleaded that the suit was barred by the prescription of three years under the provision in Section 19 of Article XIX of the Constitution 'that all taxes and licenses, other than real property taxes, shall prescribe in three years from the 31st day of December in [of] the year in which such taxes or licenses are due.' The Judge of the Civil District Court maintained the plea of prescription and dismissed the suit, but the Court of Appeal reversed the judgment overruled the plea of prescription, and remanded the case. State v. Alden Mills, 8 So.2d 98. The defendant obtained a writ of review.

The constitutional provision on which the plea of prescription is founded was added as a proviso to Section 19 of Article XIX of the Constitution and was adopted as a constitutional amendment in the congressional election held on November 8, 1938, pursuant to Act 35 of 1938, thus: 'and provided, further, that all taxes and licenses, other than real property taxes, shall prescribe in three years from the 31st day of December in the year in which such taxes or licenses are due.'

The Governor issued his proclamation on November 19, 1938, proclaiming that the amendment had been adopted. According to Section 1 of Article XXI of the Constitution the amendment became a part of the Constitution, effective twenty days after the issuance of the Governor's proclamation. The twentieth day after the 19th day of November is the 9th day of December. There might be some doubt whether the constitutional amendment became effective on that day of on the 10th day of December, 1938, if the question were at issue, but, as that is a matter of no importance in this case, we take it that the amendment became effective on the 10th day of December, 1938, as far as it had the effect of barring suits to collect license taxes which were due in or before the year which ended on December 31, 1934. But, as to the license taxes which became due in the year ending on December 31, 1935, the plea of prescription provided for in the constitutional amendment did not become available until January 1, 1939. According to the decision rendered by the Court of Appeal the constitutional amendment did not become effective as a bar to a suit to collect back taxes--no matter how long past-due--until the 10th day of December, 1941. That is to say, a suit to collect taxes which were past due for any number of years was not barred by prescription until the end of three years after the date on which the constitutional amendment became effective; that is, until December 10, 1941.

The attorneys for the plaintiff rely upon the general rule of statutory construction, stated in Article 8 of the Civil Code, that a law can prescribe only for the future, that it can have no retrospective operation, or impair the obligation of a contract. That rule, obviously, has no application to a case where the State adopts a statute of limitation against suits to recover debts which otherwise would be due to the State. The constitutional objection to the impairing of the obligations of contracts, or the divesting of vested rights, has no application to a statute by which the State bars by prescription an action to recover an indebtedness which otherwise might be due to the State. The attorneys for the plaintiff rely also upon the rule that every reasonable doubt as to the intent of the law-maker is resolved against rather than in favor of the retroactive operation of a statute. But that rule has no application to this case because to give this constitutional amendment the effect of barring by prescription all state claims for back taxes which were past due more than three years when the amendment became effective, on December 10, 1938, does not give the amendment a retroactive effect. What the plaintiff is contending for is not really that the constitutional amendment shall not have a retroactive effect; the contention really is that the effect of the amendment was suspended for three years after December 10, 1938,--the date on which, according to Section 1 of Article XXIof the Constitution, the amendment became effective. To hold that the amendment had the effect on December 10, 1938, of barring suits for license taxes that were then more than three years past due, would not be giving the amendment a retroactive effect. The Supreme Court of the United States expressed such an opinion in the case of Reynolds v. United States, 292 U.S. 443, 54 S.Ct. 800, 803, 78 L.Ed. 1353, thus:

'A statute is not rendered retroactive merely because the facts or requisites upon which its subsequent action depends, or some of them, are drawn from a time antecedent to the enactment.'

The suit of Reynolds v. United States was brought in the Court of Claims by an honorably-discharged veteran of the Spanish-American War, to recover from the United States money deducted from his pension fund on account of board furnished to him while he was an inmate of a government hospital in which he was entitled to hospitalization under an act of Congress, section 202(10) of the World War Veterans' Act of 1924, as amended, 38 U.S.C.A. � 484. He was committed to the hospital as an insane person on June 19, 1911, and remained there until April 25, 1930. During that period there was placed to his credit on the books of the hospital, under the certificate of the Bureau of Pensions the sum of $4,036, representing funds paid to the institution by the Bureau of Pensions for the relief of Reynolds. On his discharge the hospital deducted from his pension fund the sum of $3,259.17 on account of board furnished during the period of his confinement in the institution. On July 2, 1926, 44 Stat. 794, an amendment to the World War Veterans' Act was adopted, declaring that the pension of a veteran entitled to hospitalization should not be subject to deduction by a government hospital, for board, maintenance, or any other purpose incident to hospitalization. The government contended that the pension funds placed to the credit of Reynolds were subject to deduction for his board during the period of hospitalization, and particularly 'for board furnished prior to July 2, 1926, when the proviso first came into effect', exempting such funds from any such deduction. In rejecting the contention the court said:

'The final contention of the government is that, in any event, petitioner is not entitled to recover so much of the funds withheld by the hospital as equal the charges for board furnished prior to July 2, 1926, when the proviso first came into effect, since to allow him to do so, it is said, would be to give the proviso a retroactive operation contrary to the intention of Congress. * * *

'But in no aspect of the matter would the allowance of that portion of the amount sued for which was applicable to board furnished prior to July 2, 1926, cause the proviso to operate retroactively. A statute is not rendered retroactive merely because the facts or requisites upon which is subsequent action depends, or some of them, are drawn from a time antecedent to the enactment. Cox v. Hart, 260 U.S. 427, 435, 43 S.Ct. 154, 67 L.Ed. 332 [337], and cases cited.'

In Cox v. Hart [260 U.S. 427, 43 S.Ct. 157, 67 L.Ed. 332], it was said:

'A statute is not made retroactive merely because it draws upon antecedent facts for its operation.'

That principle was recognized by this court in the case of Hurry v. Hurry, 141 La. 954, 76 So. 160, where the court construed Act 269 of 1916, which allowed either party to a marriage to obtain a divorce 'when married persons have been living separate and apart for a period of seven years or more'. It was held that it was not necessary that the seven years of separation should commence after the statute went into effect, in order to avoid giving the statute a retroactive effect.

It is argued by the attorneys for the plaintiff that the word 'shall', in the declaration that 'all taxes and licenses, other than real property taxes, shall prescribe in three years from the 31st day of December in the year in which such taxes or licenses are due', shows the intention that the plea of prescription was not to be available in any suit filed within three years after the amendment would go into effect,--that is, within the three years commencing on December 10, 1938, and ending on December 10, 1941. Our opinion however is that the word 'shall' in the phrase 'shall prescribe in three years' does not indicate an intention that the plea of prescription was not to be available immediatley after the constitutional amendment would go into effect, on December 10, 1938, as a defense to a suit filed on or...