The Scottish Union v. Herriott
| Decision Date | 27 October 1899 |
| Parties | THE SCOTTISH UNION and NATIONAL INSURANCE COMPANY of Edinburgh, Scotland, and London, England, Appellant, v. JOHN HERRIOTT, Treasurer of State |
| Court | Iowa Supreme Court |
Appeal from Polk District Court.--HON. C. P. HOLMES, Judge.
ACTION at law to recover taxes paid defendant as treasurer of state. Defendant, in his individual capacity, filed a motion to be dismissed from the case, and his motion was sustained. In his capacity as treasurer he filed a demurrer to the petition which was also sustained, and plaintiff appeals.
Affirmed.
McVey & McVey for appellant.
Milton Remley, Attorney General for the State.
Section 1333 of the Code of 1897 provides, in substance: No such law was in existence prior to the meeting of the extra session of the general assembly which passed that Code. Plaintiff is a corporation organized and doing business under the laws of the kingdom of Great Britain. Its stock is held by citizens and residents of that country, and at the time of the passage of the act in question it had a general office at Hartford, in the state of Connecticut, and was, and had for twenty years prior thereto been, doing business in the state of Iowa, having complied with all the laws permitting it to do business in this state. Plaintiff failed to make payment of the tax imposed by this act at the time it filed its annual statement, and in January of the year 1898 the auditor of state notified it of its delinquency, calling attention to the provisions of the act, and requiring payment of the amount imposed on or before January 31, 1898. He also notified it that, if the amount was not paid within the time mentioned, action would be taken for the collection of the tax by distress or suit, and that the company would be precluded from doing business in the state after the date named. On the last day of that month plaintiff paid the amount of the tax to the treasurer under protest, taking his receipt therefor, and received authority from the auditor to do business in the state for the year 1898. This action is to recover the tax so paid.
Some preliminary questions are to be disposed of before resorting to the merits. While error is assigned on the ruling dismissing the defendant in his individual capacity from the case, appellant does not argue the assignment in its original brief, and hence it will be deemed waived. It is insisted that the action against the state treasurer is practically an action against the state, and that, under familiar principles, it cannot be maintained. In re Tyler, 149 U.S. 164 (13 S.Ct. 785, 37 L.Ed. 689), seems to establish the rule by which to determine this question. There we find this language: "Where a suit is brought against defendants who claim to act as officers of a state, and under color of an unconstitutional statute commit acts of wrong and injury to the property of plaintiff, to recover money or property in their hands unlawfully taken by them in behalf of the state, or for compensation for damages, or in a proper case for an injunction to prevent such wrong or injury, or for a mandamus in a like case to enforce the performance of a plain, legal duty, purely ministerial, such suit is not, within the meaning of the amendment, an action against the state." Again, in the Virginia Coupon Case, 114 U.S. 269 (5 S.Ct. 903, 962), that court held, in effect, that when a defendant, sued as a wrongdoer, seeks to justify by the authority of the state, he is bound to establish that the law under which he assumes to act is a valid law; that, if the law under which he justified is unconstitutional, it is, in effect, no law, and that he then stands stripped of his official character, and must answer personally for the invasion of plaintiff's rights. In Smyth v. Ames, 169 U.S. 466 (18 S.Ct. 418, 42 L.Ed. 819), we also find this pertinent language: See, also, In re Ayers, 123 U.S. 443 (8 S.Ct. 164, 31 L.Ed. 216). Much more might be quoted from the cases already cited in support of the rule thus so clearly announced. The attorney general contends that no wrong is charged upon the treasurer. The record discloses, however, that the money was paid under threats from the auditor that he would enforce the collection of the tax, and revoke plaintiff's permission to do business in the state; and that it notified the treasurer, when it paid the money, that it did so under duress, and protested against paying the same; and that Herriott, as treasurer, collected and received said taxes without authority of law. True, there is no statement that defendant did any wrong other than to collect and receive the money, but it is averred that he had no authority of law either to collect or receive the same, and that he had notice and knowledge that plaintiff was paying the same under duress, and that the payment was not voluntary. If defendant were an individual receiving money obtained with his knowledge, through duress, and paid under protest, there would be no doubt of plaintiff's right to recover it back. The mere fact that he is the treasurer of state, acting under authority of law, will not relieve him if it should turn out that the law is unconstitutional, and therefore no law. We think an action will lie against the treasurer for money collected and received by him, provided it be established that the law under which he assumes to act is entirely invalid. That he may have placed the money to the credit of the state, and with other funds belonging to it, is no defense, unless he was authorized to do so under a valid law. Had he collected money wrongfully from an individual, without color of authority, we apprehend it would be no defense for him to say that he acted as treasurer, or that he had turned the money over to the state. Again, it is said that the money was paid voluntarily, and cannot be recovered back. The petition recites, in substance, that plaintiff had large property interests in the state, which it was in duty bound to preserve and protect, and that the letter from the auditor of state made it impossible for plaintiff to continue its business, or to protect its property, without paying the tax. At the time of the payment, plaintiff filed with both the treasurer and the auditor a written protest, in which it claimed that the tax was unconstitutional and invalid, and that by so paying it did not acknowledge its liability to pay the tax, or waive any of its right to contest the same. Plaintiff was bound to submit to the exaction or discontinue its business. Under such a state of facts it is clear that plaintiff's act was not voluntary, and that it may recover back the amount paid, provided it has established its claim that the act in question is unconstitutional. Swift Co. v. U.S., 111 U.S. 22 (4 S.Ct. 244, 28 L.Ed. 341); Cunningham v. Munroe, 15 Gray 471; Carew v. Rutherford, 106 Mass. 1; Beckwith v. Frisbie, 32 Vt. 559; Shelton v. Platt, 139 U.S. 591 (11 S.Ct. 646, 35 L.Ed. 273); and cases cited in State v. Nelson, 41 Minn. 25, 4 L.R.A. 300 (s. c. 42 N.W. 548).
II. This brings us to the merits of the controversy. Does the act in question violate the constitution of this state, which requires that all laws of a general nature shall have uniform operation, and that the general assembly shall not grant to any citizen or class of citizens privileges or immunities which, upon the same terms, shall not equally belong to all citizens; that the general assembly shall not pass local or special laws for the collection of taxes, nor in any case where a general law can be made applicable; that the property of all corporations for pecuniary profit shall be subject to taxation the same as that of individuals? Does it conflict with the provisions of the federal constitution to the effect that no state shall abridge the...
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