State v. Rogers

• Decision Date: 06 July 1943
• Docket Number: 38427
• Parties: State of Missouri, Appellant, v. Harrison C. Rogers
• Court: Missouri Supreme Court

172 S.W.2d 940

351 Mo. 321

State of Missouri, Appellant, v. Harrison C. Rogers

No. 38427

Supreme Court of Missouri

July 6, 1943

Appeal from Jasper Circuit Court; Hon. Wilbur J. Owen Judge.

Affirmed.

Roy McKittrick, Attorney General, Flay E. Randle and Leo A. Politte, Assistant Attorneys General, for appellant.

Final judgment of assessment is not subject to collateral attack in proceeding to enforce lien thereof. Sec. 11366, R. S. 1939; 61 C. J., p. 777, sec. 1005, p. 899, sec. 1134; State ex rel. Gracy v. Neosho Bank, 120 Mo. 161; Trustees of Thayer Academy v. Board of Assessors, 232 Mass. 402, 122 N.E. 410; Town of Canaan v. Enfield Village Fire District, 64 A. 725; State ex rel. Ford Motor Co. v Gehner, 27 S.W.2d 1; First Trust Co. of St. Joseph v. Wells, 23 S.W.2d 108; Town of Farmington v. Downing 30 A. 345.

McReynolds & Flanigan, Allen McReynolds and George E. Phelps for respondent.

(1) It appears affirmatively on the face of the petition that the assessment upon which the action is based was in each instance undertaken to be made more than three years after the 15th day of the third month following the year for which the tax was sought to be imposed, and, the assessor being without authority, the assessment is void and the petition wholly fails to state a cause of action. Sec. 11354, R. S. 1939; Sec. 10125, R. S. 1929; Sec. 11363, R. S. 1939; Sec. 10132, R. S. 1929; State ex rel. Ford Motor Co. v. Gehner, 27 S.W.2d 1; Weyenberg Shoe Mfg. Co. v. Kelley, 246 N.W. 418; Sec. 11376, R. S. 1939; Sec. 10145, R. S. 1929. (2) The assessment being void, respondent was not relegated solely to the statutory proceeding for abatement or correction of the assessment but may raise the issue in defense to an action for collection of the tax based on the void assessment and may raise the issue of the lack of jurisdiction over the subject matter and the consequent failure of the petition to state a cause of action for the first time even in the appellate court. 61 C. J., sec. 1005, p. 781; Tobey v. Kip, 101 N.E. 998; Koch v. City of Detroit, 210 N.W. 239; Woodmere Cemetery Assn. v. Spring Wells Twp., 90 N.W. 277; Harrington v. Glidden, 61 N.E. 54; Hutchinson v. City of Omaha, 72 N.W. 218; Abernathy v. Mo. Pac. R. Co., 228 S.W. 486; 61 C. J., sec. 2335, p. 1585; State v. Lyons, 197 N.W. 578; United Cemeteries Co. v. Strother, 119 S.W.2d 762; St. Louis v. St. Louis-S. F. R. Co., 50 S.W.2d 637.

OPINION

Tipton, J.

This is an action to recover state income tax allegedly due from respondent for the years 1931 and 1937. The trial court sustained respondent's demurrer to appellant's petition and the cause was dismissed by the court after the appellant refused to plead further.

The petition was in two counts. In substance, the first count states the Assessor, on May 31, 1938, assessed $ 30,113.57 as the income of the respondent for the year 1931; and on June 30, 1938, certified the results of such assessment to the County Clerk of Jasper County, who computed the tax on that amount in the sum of $ 531.66; and on August 30, 1938, the County Clerk certified the result of that computation to the County Collector.

The second count states that the Assessor on April 25, 1941, assessed $ 20,828.01 as income of the respondent for the year 1937; that on the same date, the Assessor certified the result to the County Clerk of Jasper County, who computed the tax in the amount of $ 535.13; and on that date the County Clerk certified the result of such computation of tax to the County Collector.

It is well established that the right of the taxing authority to levy a particular tax must be clearly authorized by statute [State ex rel. Central Surety Fire Corp. v. State Tax Commission, 348 Mo. 171, 153 S.W.2d 43], and that all such laws are to be strictly construed against such taxing authority. State ex rel. National Life Insurance Co. v. Hyde, 292 Mo. 342, 241 S.W. 396.

Article 21, Chapter 74, Revised Statutes of Missouri 1939, deals with income taxes, and only Section 11363 of that Article says how an income tax may be assessed where the taxpayer fails to make a return, or how to determine the proper tax when a taxpayer makes a return that is deficient.

The pertinent parts of that Section read:

"In case any taxpayer shall fail to make return as required by law, the state auditor shall have authority to estimate the amount of such taxpayer's income, from such sources as he may be able to obtain including the business, records and books of any taxpayer, which business, records and books, the auditor is hereby given the right to examine during the usual business hours at any time within three years after the return of such taxpayer is required by law to be filed, and shall certify the amount of income to be used as a basis for the tax to the proper assessor. . . . and the assessor shall thereupon make the assessment in accordance with such certificate including all penalties provided. At any time within three years after any return shall have been filed the auditor shall have the right to examine, during the usual business hours, the business, records and books of any individual, corporation, joint stock company, joint stock association or partnership . . ., and to certify to the assessor any deficiency determined by the auditor, and not returned by the taxpayer; and thereupon the assessor shall make an additional assessment in accordance with such certificate of the auditor, including all penalties provided . . . ."

This section was first enacted in the year 1929, and will be found as Section 13123, page 420, the Laws of 1929, and is the same as Section 10132, Revised Statutes of 1929.

After the Auditor has certified the income of any taxpayer under this section, the County Assessor follows the procedure as outlined in Section 11357, R. S. Mo. 1939 (same as Section 10128, R. S. Mo. 1929), which is the procedure used if the taxpayer makes a correct tax return.

Under Section 11363, supra, before an additional income tax can be assessed against a taxpayer, or before an income tax can be assessed against a taxpayer who fails to file a tax return, it is first necessary for the Auditor to make an estimate of the taxpayer's income for the year to be assessed. Moreover, the Auditor must make the estimate and certify the same to the proper County Assessor within three years after the taxpayer's income tax return was due. Unless such a procedure is followed, the income tax assessment is void.

The three-year limitation on the Auditor is not in the nature of a statute of limitation. The limitation was on the Auditor's authority to go back and assess or re-assess beyond the three previous years. 61 C. J., p. 1585, par 2335; State ex rel. Globe Steel Tubes Co. et al. v. Lyons et...