Sturges v. Carter

• Decision Date: 04 May 1885
• Parties: STURGES v. CARTER, Treasurer, etc
• Court: U.S. Supreme Court

114 U.S. 511

5 S.Ct. 1014

29 L.Ed. 240

STURGES v. CARTER, Treasurer, etc.

May 4, 1885.

C. H. Scribner, H. G. Riddle, H. E. Davis, and Jas. E. Padgett, for plaintiff in error.

John W. Jenner, for defendant in error.

WOODS, J.

This was an action brought by John A. Lee, as treasurer of Richland county, in the state of Ohio, against Stephen B. Sturges to recover taxes levied for the years 1874, 1875, 1876, and 1877, upon shares of stock of the value of $100,000 in the Western Union Telegraph Company, and certain credits and investments owned by Sturges, who, during those years, was a citizen of Ohio, residing in the city of Mansfield, in said county. The amount of the taxes sued for was $10,776.83, with the penalty thereon of 10 per cent., amounting to $1,077.68, making a total of $11,854.50. The controversy in this case relates only to the taxes on the stock of the telegraph company. Before the trial the term of office of Lee, the original plaintiff, expired, and Merchant Carter, his successor in office, was substituted as plaintiff in his stead. The parties waived a trial by jury, and submitted the case to the court upon the issues of fact as well as of law. The court made a special finding of facts, from which it appeared as follows:

For 10 years before the commencement of this suit the defendant was a citizen of said county; for the years 1874, 1875, 1876, and 1877 he made returns in accordance with law, purporting to contain full and accurate lists of all his personal property subject to taxation; the returns were received and acted upon as being correct until the twenty-third of June, 1878, when the county auditor caused defendant to be subpoenaed to appear instanter before him at his office, to give information, pursuant to the statute in that case provided, of all property within his knowledge which had not been duly returned for taxation. The defendant accordingly appeared and submitted to an examination. While undergoing examination the auditor exhibited to him a list of judgments and mortgages in his favor not included in his tax returns, and then and there told him that, under the advice of the auditor of state, he felt it to be his duty to make a supplemental assessment against him for the four years named, of all the property which he owned during that period, which was subject to taxation in said county, and not included in his returns; called defendant's attention to the statute under which he proposed to proceed; and requested such explanation as he might deem it proper to make. Defendant thereupon made such explanations as he chose to offer. This was the only notice given by the auditor to the defendant of his intention to assess him on all personal property owned by him during said period, and not included in his tax returns. The auditor then proceeded to assess the defendant on $100,000 of stock in the Western Union Telegraph Company for each of the years 1874, 1875, 1876, and 1877, and entered the same on a supplemental tax duplicate, and certified the same to the county treasurer for collection.

The defendant owned the telegraph stock so assessed during the four years aforesaid, and the same had not been included in his eturns for taxation, nor had he been theretofore charged with or paid any tax on the same. The Western Union Telegraph Company was organized under the laws of New York; it had a paid-up capital of $41,000,000; most of its property was situated outside of Ohio; it owns 4,950 miles of telegraph wires, with the chemicals and office furniture used in connection therewith, in Ohio, all which for 10 years past it had regularly returned for taxation, and paid thereon from $10,000 to $15,000 per annum of tax to the state of Ohio.

From the findings of fact the court deduced the following, among other conclusions of law: 'The auditors said supplemental assessment was authorized, and is regular and valid, and under the statutes of Ohio, as construed by the courts of the state, the defendant is liable in this action for the amounts assessed on his Western Union Telegraph stock, and judgment will therefore be rendered against him for the tax so assessed thereon, with the damages prescribed by statute, and interest and costs.' The court thereupon rendered judgment against Sturges for $10,727.65, 'the sum so as aforesaid found to be due,' and thereupon Sturges sued out the present writ of error to reverse that judgment.

The first contention of the plaintiff in error is that the court erred in holding that the notice give to him by the auditor of Richland county was sufficient, under the statutes of Ohio, to authorize the assessment of additional taxes, and in admitting evidence of what was said by the auditor to the plaintiff in error when the latter was under examination.

Section 2782 of the Revised Statutes of Ohio, originally section 34 of the act of April 5, 1859, (Swan & C. St. p. 1452), provides, in substance that if the county auditor shall have reason to believe that any person has given to the assessor a false statement of his personal property, moneys or credits, investments in bonds, stocks, joint-stock companies, or otherwise, which are by law subject to taxation, or that the assessor has made an erroneous return of any such property, he shall proceed, at any time before the final settlement with the county treasurer, to charge such person on the duplicate with the proper amount of taxes, and to enable him to do this, he is authorized to issue compulsory process and require the attendance of any person 'whom he might suppose to have a knowledge of the articles or value of the personal property, moneys or credits, investments in bonds, stocks, jointstock companies, or otherwise, and examine such person or persons on oath in relation to such statement or return; and it shall be the duty of the auditor in all such cases to notify every such person, before making the entry on the tax list and duplicate, that he may have an opportunity of showing that his statement or return of the assessor was correct. And the county auditor shall in all such cases file in his office a statement of the facts or evidence on which he made such correction.' These provisions of the statute have been in force ever since April 5, 1859.

The findings of fact show that the plaintiff in error was subpoenaed to appear before the auditor to give information of all property within his knowledge which had not been returned for taxation, and that, while in attendance before the auditor, he was informed by the latter of his purpose to increase the amount of the property returned by him for taxation. This was a substantial compliance with the statute, which required the auditor to notify the tax-payer, before making the entry of such increase on the tax-list and duplicate, of his purpose to do so, so that he might have an opportunity of showing that his statement or the return of the assessor was correct. The subpoena served on the plaintiff in error, and the conduct of the auditor under it, gave him he opportunity to which the statute entitled him. But the plaintiff in error contends that, besides service of the subpoena requiring him to attend upon the auditor and give testimony in relation to property not returned for taxation, he was entitled to written notice before the auditor could make an entry on the tax-list of any additional property omitted in his returns. The statute does not require any notice in writing, except the compulsory process of subpoena, to be served upon the person called to attend and testify. But if any further notice was required, it was waived by the plaintiff in error. The finding of the circuit court shows that he appeared and submitted to an examination touching the correctness of his returns; that the auditor told him during such examination that as auditor he was required by his duty to make a supplemental assessment against him of the property which he had not included in his returns for the four years mentioned in the findings of the court, and requested him to make such explanations of his returns as he thought proper, and that he did make such as he chose. It does not appear that he complained that he had not received notice of the purpose of the auditor to increase the assessment of his property, or that the notice was not in writing, or that it was too short, or that he asked further time for consideration, or to take the advice of counsel, or to produce further evidence. From all that appears by the record, there was no surprise; he had opportunity to establish the correctness of the tax returns, and to show the auditor that he was not liable to an additional assessment. He cannot, therefore, complain of want of notice.

The plaintiff in error next insists that the law of 1878, by which the auditor assumed to correct the returns of the plaintiff in error for the years from 1874 to 1877 inclusive, and place his omitted property on the tax-list, was retroactive, and therefore forbidden by section 28 of article 2 of the constitution of Ohio, which declares that 'the general assembly shall have no power to pass retroactive laws.' Before the passage of the act of 1878, the law of Ohio—section 1 of the act of April 5, 1859, (46 Laws Ohio, 175; 2 Swan & C. Rev. St. Ohio, 1438)—provided that all property, whether real or personal, in the state, all moneys, credits, investments in bonds, stocks, etc., of persons residing therein, should be subject to taxation and entered on the list of taxable property for that purpose; and section 6 of the same act required the owner to make out and deliver to the assessor a statement under oath of all the personal property, moneys, investments in bonds or stocks, required to be listed for taxation. This was the law in force during the years for which the taxes sued for were assessed and levied, and it is still in force.

Section 34 of the act of April 5, 1859, re-enacted as section 2782 of the Revised Statutes of Ohio of 1880,...