State v. Pollock

• Citation: 251 Ala. 603,38 So.2d 870
• Decision Date: 23 December 1948
• Docket Number: 6 Div. 731.
• Parties: STATE v. POLLOCK.
• Court: Supreme Court of Alabama

38 So.2d 870

251 Ala. 603

STATE v. POLLOCK.

6 Div. 731.

Supreme Court of Alabama

December 23, 1948

Rehearing Denied Feb. 17, 1949.

A. A. Carmichael, Atty. Gen. and H. Grady Tiller and W. W. Livingston, Asst. Attys. Gen., for appellant.

Wm. S. Pritchard, Winston B. McCall and Pritchard & McCall, all of Birmingham, for appellee.

FOSTER Justice.

Appellee Jacob Pollock, filed his return with the State Department of Revenue for his income tax for the calendar year of 1944. On the 26th day of February, 1947, the State Department of Revenue entered an assessment against him on account of income tax for the year 1944, for a deficiency of $249.33 interest thereon to be added; and on that day gave the taxpayer notice that he could appear before the department at the State Capitol on the 12th day of March, 1947, and show cause, if any, why said assessment should not be made final. By instrument dated March 11, 1947, the taxpayer filed a protest with the department, through his attorney, assigning several separate grounds of objection to the assessment, among them being that the assessment was void and barred by the statute of limitations, and that the assessment was not authorized by law, and that the statutory notice of fifteen days of the hearing was not given, as required by section 407, Title 51, Code.

The department had said protest before it on said 12th day of March, 1947, and on that day neither the taxpayer nor his attorney appeared in person before the department, but an order was entered by the department making the assessment final, not only for the $249.33 deficiency referred to above, but also added thereto a penalty of $203.01, which was fifty precent of the total tax assessed for the year of $406.03, the taxpayer having previously paid $156.70, which deducted from the $406.03 leaves a deficiency of $249.33. Notice was given the taxpayer by the department as of March 12, 1947, of such final assessment, including the penalty and interest, making a total of $482.26 deficiency. Thereupon the taxpayer filed notice of appeal with the secretary of the department, and gave a supersedeas bond; the appeal being to the Circuit Court of the Tenth Judicial Circuit, sitting in Equity. The taxpayer in due time filed in the circuit court his original bill pursuant to practice in such cases provided, in which it is claimed that the assessment violated section 384, Title 51, Code, by including as assessable income an amount of $5,000.00 paid by the taxpayer's employer for the purchase of annuity contracts of insurance, and that the assessment as made by the department on March 12, 1947, was void because it was made fourteen days from the date of notice, and not fifteen days, as required by law, and, therefore, that it violated section 407, Title 51, Code. The bill also complained that the final assessment erroneously included a penalty of fifty percent, and that the facts which justified such a penalty under section 413 (416?), Title 51, Code, were not made to appear.

The State of Alabama, through the Department of Revenue, made answer to the bill of complaint, insisting that the amount of the premium of $5,000.00 paid by the taxpayer's employer for annuity contracts of insurance was properly considered income by such taxpayer, and was not included in his return, and therefore it should be included in the computation of his income tax and, further, that the return by the taxpayer to the extent that said amount was omitted was willfully false and fraudulent within the terms of section 416, Title 51, Code.

The cause came before the Tenth Judicial Circuit Court on said bill and answer and testimony, and the court was of the opinion that since the notice was sent to the taxpayer on February 26, 1947, and the day set for hearing was March 12, 1947, he only had fourteen days' notice of the time when the hearing would be had upon the question of whether the assessment should be made final, and not having had fifteen days' notice, as required by section 407, Title 51, Code, the entire deficiency assessment was on that day beyond the power of the Department of Revenue, and was therefore void in its entirety, and especially in respect to the penalty of $203.01, when no notice had been given to the taxpayer of any intention to impose such penalty. The court thereupon entered a decree to the effect that the assessment made final on the 12th day of March, 1947, was illegal and void. From that decree, the State of Alabama has prosecuted this appeal.

The first question to be considered on this appeal, raised by the Attorney General for the State, is the insistence that by taking an appeal from the assessment made on March 12, 1947, the taxpayer waived the effect of the failure to give the fifteen days notice of such hearing upon the ground that on such appeal the proceeding is triable in the circuit court, in equity, de novo, and that legal status is a waiver of any claim that the taxpayer may have that he did not receive the fifteen days' notice, required by law.

We are constrained to agree with the State in such contention for the reasons which we will discuss. In the first place, we have held, and we think correctly so, that an appeal by the taxpayer under such circumstances as provided by section 140, Title 51, Code, contemplates a trial in the circuit court, in equity, de novo. State v. Louis Pizitz Dry Goods Co., 243 Ala. 629(11), 11 So.2d 342. It is provided in that statute as follows:

'The circuit court in equity, or the supreme court of Alabama on appeal to it may, if it be of the opinion from all the evidence that the assessment as made is either too high or too low, fix the amount of such assessment. The court shall hear such appeals according to its own rules and methods or (of) procedure so far as practicable and shall decide all questions both as to the legality of the assessment and the amount thereof.'

It is true that notice being required by the statute should be given. State Tax Commission v. Stanley, 234 Ala. 66(8), 173 So. 609.

The taxpayer was properly before the department as a court, and made a written protest as of that day. In that appearance he protested the merits of the deficiency assessment, and an absence of the full fifteen days' notice of the hearing, but made no personal appearance. By so doing, he did not waive the fifteen days' notice.

The trial court seemed to have assumed that the judgment was void on its face, and that no appeal would lie to the circuit court upon the authority of that line of our cases typified in Craig v. Root, 247 Ala. 479(12), 25 So.2d 147.

In that case the trial court did not acquire jurisdiction of the subject matter. Since the court did not acquire jurisdiction, it had no power to render any judgment except to dismiss the proceeding. Such also was the status in the case of Burgin v. Ivy Coal & Coke Co., 127 Ala. 657, 29 So. 67. But in this case the department had jurisdiction of the subject matter and of the person of the taxpayer. Campbell v. State, 242 Ala. 215(19, 20), 5 So.2d 466; Howell & Graves v. Curry, Com'r, 242 Ala. 122(2), 5 So.2d 105. True, he was entitled to fifteen days' notice of the hearing, and a failure to give such notice is an irregularity, but it does not deprive the court of jurisdiction. This theory has many applications. Powell v. Union Bank & Trust Co., 173 Ala. 332(2), 56 So. 123; Craft v. Simon, 118 Ala. 625, 24 So. 380; Jones v. Henderson, 228 Ala. 273(3), 153 So. 214. To support an appeal to another court for trial de novo, there must be a judgment of a final sort pronounced in respect to a matter over which the trial tribunal has jurisdiction. Francis-Chenoweth Hardware Co. v. Bailey, 104 Ala. 566, 18 So. 10; Wyatt v. Judge, 7 Porter 37; Little v. Fitts, 33 Ala. 343; Beach v. Lavender Bros., 138 Ala. 406, 35 So. 352.

But when jurisdiction of the subject matter has been sufficiently invoked and has not been denied to the justice by law and he renders a final judgment, a statutory appeal to a court required to try the case de novo renders immaterial any error or informality before the trial court or tribunal, unless it involves an entire change of parties, a change of the cause or form of action, as one of our cases expresses it. South & N. A. R. Co. v. Pilgreen, 62 Ala. 305; Croft v. Carter, 220 Ala. 464, 126 So. 101; Alabama G. S. R. Co. v. Christian, 82 Ala. 307, 1 So. 121; Burns v. Henry, 67 Ala. 209. A record may show on its face that the defendant against whom a judgment by default was taken was not duly served with process, and therefore the court was without jurisdiction of his person, and for that reason the judgment was void on its face. The rule is that under those circumstances, when the court has jurisdiction of the subject matter, if he appeals to a circuit court, wherein a trial is to be had de novo, he waives the invalidity of the judgment of the lower court. Of course he is not without remedy before the appeal is taken, and that remedy has been often pointed out in the decisions of this Court to be that of common law certiorari. Memphis & C. R. Co. v. Brannum, 96 Ala. 461, 11 So. 468; Independent Publishing Co. v. American Press Co., 102 Ala. 475, 493, 15 So. 947; H. H. Hitt Lumber Co. v. Turner, 178 Ala. 56, 65 So. 807; Beach v. Lavender Bros., 138 Ala. 406, 35 So. 352; Visible Measure Gasoline Co. v. McCarty Drug Co., 206 Ala. 588, 91 So. 383; Ex parte Allen, 166 Ala. 111, 52 So. 44.

We think the foregoing principles have direct application here. The Department of Revenue is the primary trial tribunal or court. It had jurisdiction of the subject matter and the parties (Campbell v. State, supra). To give the statutory notice of fourteen days instead of fifteen days was in the nature of an irregularity (Powell v. Union...