State v. Mobile & O.R. Co.

• Decision Date: 15 March 1934
• Docket Number: 3 Div. 94.
• Citation: 228 Ala. 533,154 So. 91
• Court: Alabama Supreme Court
• Parties: STATE et al. v. MOBILE & O. R. CO. et al.

154 So. 91

228 Ala. 533

STATE et al. v. MOBILE & O. R. CO. et al.

3 Div. 94.

Supreme Court of Alabama

March 15, 1934

Rehearing Denied April 26, 1934.

Appeal from Circuit Court, Montgomery County; Walter B. Jones Judge.

Bill by the Mobile & Ohio Railroad Company and C. E. Erwin and T. M Stevens, as receivers thereof, against the State of Alabama the State Tax Commission, and S. R. Butler, State Tax Commissioner, to set aside an assessment for taxation made by the State Tax Commission, and a petition for injunction. From a decree overruling a demurrer to the bill and granting temporary injunction, respondents appeal.

Affirmed.

Thos. E. Knight, Jr., Atty. Gen., and Frontis H. Moore, Asst. Atty. Gen., for appellants.

Rufus Creekmore, of St. Louis, Mo., and Steiner, Crum & Weil, of Montgomery, for appellees.

FOSTER Justice.

The Mobile & Ohio Railroad Company, by its receivers, appointed by the United States District Court, whose jurisdiction is not questioned, undertook, by this proceeding, to have the benefit of section 73 of the Revenue Act of 1927 (Gen. Acts 1927, p. 185), in which it is provided that the owner of any property which is by law required to be assessed by the state tax commission, may appeal from said final assessment made by the said tax commission to the circuit court of Montgomery county, sitting in equity. The method of so doing is there provided and that method was pursued on this appeal.

Without here reciting the further progress of that appeal, as being now unnecessary, we merely observe that the state seriously questions such right under that statute on the contention that provision is made by sections 164 and 189, Gen. Acts 1919, pp. 329, 340, for public utilities to review assessments of their property made by the state tax commission. The contention is that the act of 1919 is applicable, and not that of 1927. The former provides for an appeal to arbitration of such controversies, and in the latter an appeal to the court is provided. But it is contended that the right of appeal is so set up as to apply only to the purposes of that act, and not to the ad valorem assessments of public utility property, where the only right of review is provided for in the act of 1919. The applicable sections of the two acts are: Gen. Acts 1919, section 164, p. 329, and section 189, p. 340; Gen. Acts 1927, section 73, p. 185. The purpose of the latter act is for the most part to provide for the levy and collection of licenses, franchises, and excise taxes. But it is not confined to that class of taxation. Section 25, p. 166, provides for the assessment for ad valorem taxation by the state tax commission of the shares of certain domestic corporations.

In respect to the act of 1919, in this connection, we note that it is a general revenue act, and is comprehensive in providing for the subjects of ad valorem taxes and exemptions and their assessment, and creates a state tax commission, and provides for assessments to be made by it of the tangible property of public utilities, beginning with section 157, p. 327, and the method of doing so, including the returns to be made to the commission. It also provides by section 164 (page 329), that the owner of property so assessed may demand an arbitration; whereupon an arbitration shall be held as provided. The act continues with provisions for the assessment by the state tax commission of the intangible property and franchises, including details of the requirements, and provisions for a hearing of all complaints.

And in section 189, p. 340, it is provided that if the owner of the property so assessed is dissatisfied, he may have an arbitration on demand (referring to intangible property).

There is no provision in the act of 1919 for an appeal to a court from any ad valorem assessments upon the property of public utilities, but provision is made in the act for such appeals to the circuit court from certain judgments of county commissioners or boards of revenue in respect to other property owners, not here applicable (section 104 et seq., pp. 316, 317). The right of appeal is also provided to be taken from an assessment of franchise taxes made by the state tax commission. That appeal is to the circuit court of Montgomery county, in equity. Section 22, p. 294, Gen. Acts 1919.

The provisions of section 73, p. 185, Gen. Acts 1927, for appeal to the circuit court, in equity, extend to "the owner of any property which is by law required to be assessed by the State Tax Commission." It is not limited to the assessments made in virtue of that act, though such were the characteristics of the act of 1919, declaring the right to appeal to arbitration.

We cannot overlook the fact that it extends to all property assessments required by law to be made by the state tax commission. It is not limited to that act either in terms or setting.

There is no inherent feature of section 73 which would fix a limitation on its effect. But all its terms are general and broad so as to include just what it starts out to enact, and to be applicable to all property taxes of persons or corporations, public utility or private enterprise, whose property tax is fixed by the commission.

There is no conflict between section 73 of the act 1927, and sections 164 and 189 of the act 1919. They each extend a right, and both rights continue to exist. The right to appeal to a court is not in conflict with a continued right to appeal to arbitration. There is an elective right in the taxpayer under the circumstances set forth in the 1919 act.

Since the circuit court, in equity, has had jurisdiction thereby conferred, it exercises that jurisdiction upon principles which apply in equity in the absence of statutes which confine the jurisdiction or procedure in that court to some certain course. Jones v. Boston Mills Corp., 4 Pick. (Mass.) 507, 16 Am. Dec. 358; Roy v. Roy, 159 Ala. 555, 48 So. 793; Anderson v. Steiner, 217 Ala. 85, 115 So. 4.

We think it should clearly appear from the statute that the chancery court was not intended to have the right to exercise its common law (so to speak) principles in conducting any power conferred upon it. It is significant that the appeal is to the equity side of the court. When so, that court, in the absence of restraint, exercises its own peculiar equity powers and remedies. If an injunction is appropriate, as a court of equity, it may issue an injunction. When a cause is thus removed to the equity court, the one doing so is the movant, and occupies the position of a complainant, and should file a complaint in that court in the nature of a bill in equity, setting out in detail the specific nature of the claim made by the complainant in respect to the tax and pray for appropriate relief, and may invoke any of the ordinary equity powers of that court. An issue should thus be made as in other equity cases. Cornelius v. Moore, 208 Ala. 237, 94 So. 57; Burns v. Lenoir, 220 Ala. 422, 125 So. 661. Appellee did file such a complaint in this suit.

We shall not discuss the general right to an injunction specially applicable to tax matters in connection with the claim of the insufficiency of the remedy to recover them when paid, by reason of insolvency of the counties and cities, absence of provision for interest, multiplicity of suits, or any other consideration which may be contended for by a taxpayer not in receivership, to justify an injunction.

This taxpayer is in receivership under appointment by a federal court, and was in that status at the time of the assessment here made from which the appeal was taken.

By such appeal the property of the taxpayer was not brought within the jurisdiction of the state court for it was then under the dominion and power of the federal court, and the state court could exercise no power over it.

The United States Supreme Court...