Opinion
No. 33118.
May 9, 1938.
1. STATES.
Commissions collected by state tax collector become a part of the state's general fund when paid into the state treasury (Code 1930, section 2915).
2. STATES.
A state tax collector could not pay commissions into state treasury conditionally, and his request that the commissions be held in a special account for outstanding obligations and liabilities accruing during his term and attempt of auditor and treasurer to comply therewith were of no legal efficacy, but the commissions became a part of the general fund of the state treasury (Code 1930, section 2915).
3. TAXATION.
A state tax collector and his bondsman were not liable to city for commissions paid by collector to state treasurer at expiration of collector's term, notwithstanding that commissions were unlawfully paid to collector and that demand was made on collector for repayment of commissions to city while commissions were under collector's control, where commissions had become a part of the general fund of the state treasury (Code 1930, section 2915).
4. STATES.
The state auditor would not be directed to issue a warrant on state treasurer for return of commissions unlawfully paid to state tax collector and paid by collector to state treasurer, notwithstanding that commissions were paid to treasurer conditionally to pay absolute and contingent outstanding obligations and liabilities accruing during collector's term, where commissions became a part of general fund of state treasury immediately upon collector's payment of them to state treasurer (Code 1930, section 2915).
5. APPEAL AND ERROR.
A case would not be remanded with leave to file amended bill of complaint by Supreme Court affirming decree sustaining demurrer to bill and dismissing the cause, where decree was final and not interlocutory and no request was made for leave to amend bill when demurrer thereto was sustained (Code 1930, section 14).
APPEAL from the chancery court of Hinds county; HON. V.J. STRICKER, Chancellor.
Ford Ford, of Pascagoula, for appellant.
The position of the appellee is, while admitting in effect that the money was wrongfully collected, it cannot be reached because the State cannot be sued. One of the leading maxims of the law is ubi jus, ibi remedium. Certainly appellant should be entitled, as a matter of justice and equity, to reach this fund, once we admit that the money was wrongfully collected. In this connection, we may say that no affirmative relief is sought against the State in the way of requiring it to pay a money judgment, nor even to take away from the State any property that it owns or even claims.
Only one new question worthy of discussion is presented by this appeal, and that may be presented in two phases, first, can this be considered as a suit against the State, and, secondly, can such suit be maintained?
Addressing ourselves to the first branch of the question, it may be conceded that if the appellee, Gully, had paid over this collection to the State of Mississippi without any strings on it and before notice of the claim of the appellant, and the money had thus been mingled with the general funds of the State, not only would appellant have no right to sue Mr. Gully, but it would have no right to sue the State to collect this money, as a matter of right. We do believe, however, that appellant even in such case would in any event be entitled to an adjudication of the question of whether this money was rightfully or wrongfully received by Mr. Gully, and if found to be wrongful appellant would be entitled to a decree so finding, and which decree it could then take to the Legislature for an appropriation. This statement is based on the holding of the Supreme Court of Mississippi in the cases of Woodruff v. State, 170 Miss. 744, and State Mineral Lease Commission v. Lawrence, 171 Miss. 442.
The money collected by the State Tax Collector by way of back taxes in the first instance of course goes to the State, the County or City for whom the tax is collected; the twenty per cent commission collected by the State Tax Collector goes into the twenty per cent fund, and the State Tax Collector has absolute control of it; in the first place, he pays his expenses, his deputies, his own salary, and if there is a balance at the end of his term of office, such balance, if any, is to be paid into the State's General Fund (Section 6999, Mississippi Code of 1930).
Miller v. White, 157 Miss. 114, 159 Miss. 598, 162 Miss. 296.
This case is radically different therefore from one which might seek to recover a money judgment against the State or to recover back from the State generally money which has been improperly collected and paid into the General Fund of the State.
We should not forget either that the State is not even claiming this money so far as this record shows and as was pointed out in White v. Miller, 162 Miss. 296, its interests in the 20% fund is merely incidental, its prime interest being in the 80% collected for it; as to the 20% collected from municipalities the State has no interests whatsoever. The State Treasurer is a mere stakeholder under the circumstances.
We respectfully submit that the Woodruff case, 170 Miss. 746, and the Lawrence case, 171 Miss. 442, are decisive of the point here involved. Manifestly, if the State received this money at all, which we deny, it was as trustee for the true owner. We will not forget that the State Tax Collector was not here collecting any specific taxes, fines, or privileges, or other property that belonged to the State, nor claimed by the State, but he went out on an expedition of his own and collected certain moneys from the City of Biloxi and wrongfully received or retained certain commissions.
It is our contention that appellant is entitled to a decree against the appellee, Gully, for the return of this money, or at least an order requiring him to make requisition on the Auditor for proper return. However, if mistaken in that, the bill in this case raises a question that must be settled somewhere. It must be adjudicated by some tribunal, somewhere, that the money here involved either belongs to the State or belongs to the appellant. We would, at least, be entitled to a decree adjudicating that question, and if found favorable to the appellant, the judgment could be taken to the Legislature and presented for an appropriation.
We appreciate that the general rule is that the State is sovereign and can only be sued in cases where it has granted its consent for that purpose. With this in view Section 5997 of the Mississippi Code of 1930 was enacted. This section which authorizes suit to be brought against the State is as follows: "What The State May Be Sued. — Any person having a claim against the state of Mississippi, after demand made of the auditor of public accounts therefor, and his refusal to issue a warrant on the treasurer in payment of such claim, may, where it is not otherwise provided bring suit therefor against the state, in the court having jurisdiction of the subject matter which holds its sessions at the seat of government; and if there be no such court at the seat of government, such suit may be instituted in such court in the county in which the seat of government may be."
We believe that this is one of the cases which is authorized by the above section.
Kittredge v. Boyd, 93 A.L.R. 574; Gully v. White, 167 Miss. 690.
It may be argued that the State Tax Collector has no authority to pay any money out of this twenty percent commission fund, except his own salary and that of his deputies, and the expense of administering the office. That contention is unsound. It is only necessary to refer to the decision of the case of Miller v. White, 157 Miss. 123, and White v. Miller, 159 Miss. 598, which cases held that the auditor has no discretion in the matter of honoring the State Tax Collector's requisition on the Special Fund, even to the full amount of same, but that he must honor them. These announcements from the Supreme Court answer the contention. We submit that all this money received from the City of Biloxi belongs to the City and should be paid back. Certainly it is a political subdivision of the State. The money has never been commingled with the general funds of the State but is in a special fund to take care of this very liability.
Stokes v. Newell, 164 Miss. 629.
This money of the City of Biloxi is still under the control of the State Tax Collector.
Tuttle v. Everett, 51 Miss. 27; Atchison, etc., R.R. Co. v. O'Conner, 223 U.S. 280, 56 L.Ed. 436.
On the general question of whether or not a public officer may be sued for the collection and retention of illegal fees, we respectfully call the court's attention to the following authorities:
22 R.C.L. 466, par. 133; Ripley v. Gelston, 6 Am. Dec. 271; Scottish, etc., Ins. Co. v. Herriott, 77 A.S.R. 551; 43 A.L.R. 405; Townshend v. Dyckman, 2 E.D. Smith 226, 15 L.R.A. (N.S.) 185; 46 C.J. 1030, sec. 285; Boss v. County Board of Education, 196 Ky. 366, 244 S.W. 793.
May Byrd, of Jackson, and S.L. McLaurin, of Brandon, for appellees, Gully and Hartford Accident Indemnity Company.
This court on the former appeal said: "We have arrived at the conclusion that no decree for a personal judgment can be here rendered against the State Tax Collector." And the court also said: "The appellee seems to admit that payment to the State Treasurer would absolve the appellants from liability, for its says that, under its prayer for general relief, `The court, if it should deem proper, could direct the issuance of a warrant on the State Treasurer, in payment of the sums found by it to be due to the appellee.' No authority is cited therefor, and we know of none."
The opinion on the former appeal is not only good law but is binding on the court on this appeal.
State v. Woodruff, 170 Miss. 765.
The complainant by its amended bill made the State of Mississippi, the State Auditor and the State Treasurer parties defendant. The suit not only makes the State of Mississippi party defendant by name, but any legal action that would taken money out of the State Treasury would necessarily be a suit against the State. The suit cannot be maintained under Section 5997, Code of 1930. It is expressly held by the court that this section only applies to cases where the State Auditor has the authority to audit or allow claims.
State v. Dinkins, 77 Miss. 874, 27 So. 832; Hall v. State, 79 Miss. 38, 29 So. 994; State v. Woodruff, 83 Miss. 111; Gulf Export Co. v. State, 112 Miss. 452, 73 So. 281; Brown v. Ford, 112 Miss. 678, 73 So. 722.
W.W. Pierce, Assistant Attorney-General, for the State of Mississippi, State Auditor of Public Accounts, and State Treasurer, appellees.
Under the facts stated in the bill of complaint, the State is not liable to suit in this cause.
Section 5997, Code of 1930.
Under the provisions of the statute, the Mississippi Supreme Court, in the case of State v. Dinkins, 77 Miss. 87, held that, under this section of the statute, suits can be maintained only upon claims which the auditor is empowered to audit. The court in that case was construing Section 4248 of the Code of 1892 which is the same as Section 5997 of Mississippi Code of 1930.
In Hall v. State, 79 Miss. 38, there was involved the right of Hall to sue the state for damages inflicted upon the plantation of Hall which was, at the time of the alleged damage, rented to the Board of Control of the State Penitentiary. In that case the court held that a sovereign state cannot be sued without its consent, and again laid down the proposition that the statute did not embrace claims which the auditor of public accounts is not empowered to audit and allow.
Gulf Export Co. v. State, 112 Miss. 452; National Life Accident Ins. Co. v. State, ex rel. Mitchell, 159 Miss. 513.
In addition to the above authorities directly in point, there are an abundance of authorities from our court that hold that even a state agency, created for a governmental purpose, is not liable to suit in the absence of express statutory authority authorizing a suit to be maintained against it.
Miss. Centennial Exposition Co. v. Luderbach, 123 Miss. 828; Corinth to Gulf Highway et al. v. Carothers Co., 129 Miss. 645; Miss. Livestock Sanitary Board v. Williams, 133 Miss. 98; Brabhan v. Hinds Co., 54 Miss. 363; Anderson v. State, 23 Miss. 459; Freeman v. Lee, 66 Miss. 1; Ayres v. Board of Trustees, 134 Miss. 363; Nabors v. Smith, 135 Miss. 608; Stringer v. Roper, 152 Miss. 559; City of Grenada v. Grenada County, 115 Miss. 831; State Highway Commission v. Gully, 167 Miss. 631.
From the above decisions it is clear that the claims against the state are (1) that the auditor is not authorized by statute to audit and allow, because Section 5997 of the Code of 1930 is the limit of authority to sue the state, and (2) that Section 5997 has been construed by the court to authorize suit against the state in those cases only where the auditor is authorized to audit and allow the claim, so that a statute must be found that would authorize the auditor to audit and allow the claim before a suit can be maintained.
The only statute which authorizes the auditor to examine, state, settle and audit claims against the State is Section 3727 of the Code of 1930.
When the claim now before the court is measured by that statute, it is clear that the claim of the City of Biloxi does not come within the purview of that statute, in that the claim does not arise under legislative authority and would require "evidence and counter-evidence for its adjustment and the adjudication of some tribunal for fixing same."
Hall v. State, 79 Miss. 38; State v. Dinkins, 77 Miss. 874; Gulf Export Co. v. State, 112 Miss. 452.
There is no equity shown on the face of the bill as against Carl N. Craig, State Auditor, and Newton James, State Treasurer, or either of them.
White v. Miller, 157 Miss. 114; White v. Miller, 159 Miss. 598.
The alleged cause of action is prematurely brought against Carl N. Craig, State Auditor, and Newton James, State Treasurer.
Hodges v. Trantham, 171 Miss. 374.
The bill of complaint does not state facts sufficient to constitute a cause of action against the defendants, Craig, State Auditor, and James, State Treasurer.
The bill of complaint shows upon its face that it is to recover money paid into the State Treasury and to require the appellees, Carl N. Craig, State Auditor, to issue a warrant therefor, and to require Newton James, State Treasurer, to pay such warrant out of money alleged to have been paid into the State Treasury, and, as such, is an action against the State in its sovereign capacity which cannot be maintained without the consent of the State.
Stanley v. Schwalby, 147 U.S. 508, 37 L.Ed. 529; Stanley v. Schwalby, 162 U.S. 255, 40 L.Ed. 960.
Argued orally by E.J. Ford, and J.I. Ford, for appellant, and by S.L. McLaurin, for appellee.
On February 5, 1936, the appellant exhibited an original bill of complaint against J.B. Gully, state tax collector, and the surety on his official bond, for the recovery of 20 per cent. commissions alleged to have been wrongfully paid him by the city on municipal taxes collected by it. A demurrer to the bill of complaint was overruled and, on appeal to this court, the decree so doing was reversed and the case remanded ( 177 Miss. 782, 171 So. 698), the ground of the reversal being that Gully was not personally liable to the city for the commissions paid to him by virtue of his office, and by him paid into the state treasury; and there being no allegation that the money had not been paid by him into the state treasury, the court would presume that he had discharged his duty relative thereto, and had paid the money into the state treasury. The opinion then rendered states the case more fully than will be here done, and must be read in connection with this opinion for a correct understanding thereof.
On return of the case to the court below an amendment was made to the bill of complaint, from which the following appears, in substance: In 1935, when Gully had these commissions under his control, a demand was made on him for the repayment thereof, but he refused so to do. On January 20, 1936, Gully made the following application to the auditor for permission to pay money into the state treasury:
"To the Auditor of Public Accounts:
"Sir — I have the honor to apply for a receive warrant to pay into the State Treasury, the sum of Fifteen Thousand Five Hundred Twenty-three ....... $15.523.15 ...... and 15/100 Dollars. KIND OF TAX OR FEE: Being the balance of the 20% commission collected by this office for the term from January 18, 1932, to January 20, 1936, and to be held in special account to pay outstanding obligations and liabilities, absolute and contingent, accrued during above term. Credit Account: J.B. Gully, State Tax Collector's Special Commissions Account.
"Yours truly, "[Signed] J.B. Gully, State Tax Collector."
The auditor issued to him the following receipt warrant:
"Received of J.B. Gully, State Tax Collector, $15,523.15, Fifteen Thousand Five Hundred Twenty-three 15/100 Dollars on account of J.B. Gully, State Tax Collector's Special Commission Account. Transfer from old account to special account, and for so doing this shall be your warrant. Given under my hand and seal of office, this the 20 day of January, 1936. This receive warrant must be presented to the State Treasurer on the day of issuance. "To the State Treasurer.
"Carl N. Craig, Auditor Public Accounts, "By R.H. Steele, D.A."
This receipt warrant was delivered to the treasurer, and the following receipt was issued by him to Gully:
"Received of J.B. Gully, State Tax Collector, $15,523.15. The sum of Fifteen Thousand Five Hundred Twenty-three 15/100 Dollars in full of Auditor's receipt warrant (of like number and date as this receipt), in his favor on account of J.B. Gully, State Tax Collector's Special Commission Account. Transfer from old account to Special Account. Given under my hand and seal of office the 20 of January, A.D. 1936.
"State Treasurer, By Newton James."
The state auditor and treasurer and the state itself were made parties defendant to the amended bill of complaint, and its prayer is for either (1) a personal judgment against Gully and his bondman; or (2) an order directing Gully, by requisition through the auditor, to withdraw from the treasury a sufficient amount of the money paid thereinto by him for the payment of the commissions here in question, and to apply the same to the payment thereof; or (3) an order directing the auditor to issue, and the treasurer to pay, a warrant on the treasury for the amount of the commissions here sought to be recovered by the appellant.
A demurrer to the amended bill of complaint was sustained and the cause dismissed.
It is the duty of the state tax collector, on the expiration of his term of office, to pay into the state treasury the balance remaining of all commissions collected by him during the term, after deducting therefrom his office expenses, including his own salary, whether the commissions were collected "in the proper performance of his official duties, or otherwise," section 2915, Code of 1930, and when so paid into the treasury this money becomes a part of the state's general fund. White v. Miller, 162 Miss. 296, 139 So. 611.
On January 20, 1936, the term of Gully's office, during which the commissions here in question were collected, had expired; and he then applied to, and obtained permission from, the auditor to pay into the state treasury the sum of $15,523.15, "being the balance of the 20% commission collected by this office for the term from January 18th, 1932, to January 20th, 1936." This permission the auditor gave by issuing to him a receipt warrant, which was presented to, and acted on by, the state treasurer. Gully was without the right to pay this money into the treasury conditionally; consequently, the request by him in his application to the auditor, that the money "be held in special account for outstanding obligations and liabilities, absolute and contingent, accrued during above term," was of no legal efficacy; as also was the attempt of the auditor and the treasurer to comply therewith. The money became, and is, a part of the general fund of the state treasury.
It follows, therefore, from our former opinion herein, that this suit cannot be maintained against Gully and his bondman, and the money having been paid into the general fund of the treasury, we are without authority to direct the auditor to issue a warrant on the treasury therefor, no statute so authorizing having been called to our attention.
The appellant requests that in event the decree of the court below be affirmed the case "be remanded with leave to file an amended bill." The ground of this request is that twenty-four days after the decree was rendered the appellant applied for, but was refused, an interlocutory appeal under section 14, Code 1930. One sufficient answer to this request is that the decree appealed from is a final and not an interlocutory decree, and it does not appear that when the demurrer was sustained any request was made for leave to again amend the bill of complaint.
Affirmed.