Stone v. Kerr

• Decision Date: 07 December 1942
• Docket Number: 35100.
• Citation: 10 So.2d 845,194 Miss. 646
• Court: Mississippi Supreme Court
• Parties: STONE, Chairman of State Tax Commission, v. KERR.

10 So.2d 845

194 Miss. 646

STONE, Chairman of State Tax Commission, v. KERR.

No. 35100.

Supreme Court of Mississippi

December 7, 1942

Greek L. Rice, Attorney General, and W. D. Conn, Jr., Asst. Atty Gen., for appellant.

W E. Gore, of Jackson, and Richardson & Sandford, of Philadelphia, for appellee.

ALEXANDER Justice.

Appellee filed his bill for injunction against the Chairman of the State Tax Commission alleging that the latter was proceeding to enforce collection of the sum of $387 with interest and damages pursuant to Section 2-f of Chapter 119 of the Laws of 1934, as amended, which exacts a privilege tax equal to two percent of the gross income of his business. Appellee contends that he is liable at most for a tax equal to only one percent of the gross income of his business pursuant to the provisions of Section 2-e of the Act of 1934 and certain provisions of Section 57 of Chapter 154, Laws of 1936, as amended. No elaboration of the details of these provisions need be undertaken since it suffices for our present purposes to consider only that the disagreement between the parties involves the tax status of appellee as a fact issue.

Appellant's demurrer to the bill was overruled and defendant declining to plead further, the temporary injunction theretofore granted was made permanent.

The taxpayer seeks to justify his right to injunction by Code 1930, Section 420, which is as follows: "The chancery court shall have jurisdiction of suits by one or more taxpayers in any county, city, town, or village, to restrain the collection of any taxes levied or attempted to be collected without authority of law." To this, the Tax Commissioner interposes Section 10 of Chapter 119, Laws 1934 as amended by Section 8, Chapter 113, Laws 1938, which, after setting forth the procedural machinery for the hearing by the Tax Commission of petitions to correct assessments, provides that "No injunction shall be awarded by any court or judge to restrain the collection of the taxes imposed by this act, or to restrain the enforcement of this act. The provisions of section 420, Code of 1930, shall not apply to taxes imposed by this act." The answer of the taxpayer is that the quoted paragraph is ineffective to nullify the jurisdiction granted by Section 420 for the reason that at the time the Constitution of 1890 was adopted there was in force Section 1831 of the Revised Code of 1880 which was the forerunner of Section 420, Code 1930, and that the jurisdiction thereby conferred had become immune to statutory impairment by Section 159 of the Constitution. This section is as follows: "The chancery court shall have full jurisdiction in the following matters and cases, viz.: * * * (f). All cases of which the said court had jurisdiction under the laws in force when this Constitution is put in operation."

It is not necessary for us to examine to what extent Section 420 is merely declaratory of an existing constitutional right nor whether the quoted prohibition against the use of injunction in the 1934 Act is effective. The uncertainty as to the jurisdiction of equity to enjoin the collection of taxes was early set at rest by Coulson v. Harris, 43 Miss. 728, where it was held that in such cases the bill must show not only that the tax collector was proceeding to sell distrained property unlawfully but there was also threatened an irreparable injury. The court stated: "And to give equity jurisdiction in tax cases, it must be averred in the bill, and shown by the facts set out therein, that a sale would be an irreparable injury to the complainant taxpayer. Courts of equity ought not, except upon the clearest grounds, to interfere with the speedy collection of public taxes. That a writ of injunction can only be issued, where the complainant, in his bill, makes a case of equity jurisdiction; and in all cases, involving simply the question of taxation; the issue is strictly one of common law, and courts of equity can take no cognizance thereof; that a party aggrieved by an illegal taxation, has ample remedy at law, and need not, in any case, have recourse to a court of equity, unless the facts bring the case within some appropriate recognized head of equity jurisdiction, such as to prevent irreparable injury, to protect a party in the enjoyment of an exclusive franchise or privilege, or to prevent a continuing trespass or injury, or other wrong, for which there would be no adequate remedy at law." This view was reaffirmed in McDonald v. Murphree, 45 Miss. 705. The court's concession that "Writs of injunction may be issued in cases of equity jurisdiction, and when specially authorized by statute", undoubtedly led to the enactment of Section 1831 of the Revised Code of 1880, Section 420, Code 1930, whereby statutory jurisdiction was conferred in cases where the taxes were levied or attempted to be collected "without authority of law." Even though we concede, for the purpose of discussion solely, that this section dispenses with the necessity for showing an independent equity, it certainly does not do so when the taxes have been levied and are sought to be collected with authority of law. We are led therefore to consider whether the taxes here involved were so imposed.

The record discloses that the Commission proposed the additional assessment against the taxpayer, whereupon the latter filed his petition "for a hearing and a correction * * * of the tax so assessed" pursuant to the provisions of Section 10 of Chapter 119, Laws of 1934. The matter was duly and maturely heard by the Commission upon the issue of the status of the petitioner, which issue was resolved against him. Thereupon, the further provisions of this section became applicable to the case, as follows: "Any person improperly charged with any tax and required to pay the same may recover the amount paid, together with interest, in any proper action or suit against the commissioner, and the circuit court of the county in which the taxpayer resides or is located shall have original jurisdiction of any action to recover any tax improperly collected. It shall not be necessary for the taxpayer to protest against the payment of the tax or to make any demand to have the same refunded in order to maintain such suit. In...