Opinion
No. 38341.
April 21, 1952.
1. Privilege taxes — voluntary payment.
In the absence of a statute providing otherwise, taxes or license fees voluntarily paid without protest cannot be recovered, although assessed and collected without legal authority.
2. Taxes — voluntary payment.
A payment is voluntary in the sense that no action lies to recover back the amount not only where it is made willingly and without objection, but in all cases where there is no compulsion or duress or any necessity of making the payment as a means of freeing the person or property from legal restraint or the grasp of legal process.
3. Privilege taxes — payment on demand of officer who had no authority to make or enforce collection.
Where the city marshal who had no authority to collect the privilege taxes or to enforce its collection nevertheless demanded that a taxicab operator pay $200 as privilege taxes for the operation of his taxicab stating at the same time that he had better pay it if he wanted to run his car, and when the city tax collector had done no more than mail a notice to the operator that the privilege taxes in the stated amount would be due on a named date, the payment of the amount by the operator without definite protest constituted a voluntary payment although the amount actually due was only $5.00.
Headnotes as approved by Arrington, J.
APPEAL from the circuit court of Grenada County; HENRY L. RODGERS, Judge.
W.H. Fedric, for appellant.
Appellant submits that the City of Grenada, as required by law, has to send and does send notices, 30 days in advance, of the expiration of all privilege licenses, as it did in these cases; that in response thereto appellee paid their licenses prior to their due date, at a time when the City could not possibly have forced them to have done so even it it had attempted to do, which it did not.
Appellant further submits that regardless of whether Burns Tatum, the city marshal, said anything to appellee or not, same is of no consequence in these cases for the following reasons: (a) As city marshal he is not the city tax collector and has absolutely no connection therewith, and was in no different position, in talking to the appellee than an employee of the street department or the janitor at the city hall, for that matter. (b) That by the appellee's own testimony, Burns Tatum, the city marshal, talked to him before the tax was due, at a time when not only was there no warrant or distress in existence, but there could be none for the taxes were not even due, and thus there could not have been any duress, force, compulsion, etc. City of Jackson v. Washington Newman, 59 Miss. 385.
At most, the statement alleged to have been made by the city marshal, and the cards mailed out as mentioned in the record, constituted nothing more than a notice of what the law was and no duress of person or of property was threatened; no payments were requested or demanded, and the payments when made, were voluntarily made.
The facts of the present cases seem to speak for themselves on the point of the taxes having been paid under duress, force, compulsion, etc., in that the appellee paid them freely and voluntarily and never mentioned the fact that he protested the payments, that he was coerced into payment of them, that duress or compulsion caused him to pay them, and went along for years, satisfied, then for some reason they decided to seek to recover them and sought to show such compulsion or rather involuntary payment as to enable them to recover.
26 R.C.L., Taxation, Sec. 411, states the following: "In accordance with the general Mississippi rule governing voluntary payments, a person who voluntarily pays an illegal tax, even though he pays it under considerable actual pressure, cannot maintain an action to recover it back (Jackson v. Newman, 59 Miss. 385). The fact that the tax was paid under a mistake of law is not itself a ground for allowing the maintenance of an action to recover it back. (Citing Tuttle v. Everett, 51 Miss. 27)."
48 A.L.R. 1381, and 74 A.L.R. 1301, state the following rule: that under Mississippi statutes it is necessary that payment be made under protest, or that the tax shall be collected under coercive proceedings so as to render the payment involuntary, before a recovery of the tax levied under an unconstitutional law may be had. Citing Union Land and Timber Co. v. Pearl River County, 141 Miss. 131, 106 So. 277; Pearl River County v. Lacey Lbr. Co., 124 Miss. 85, 86 So. 755; Hattiesburg v. New Orleans N.E.R. Co., 141 Miss. 497, 106 So. 749. All three of these cases deal with a tax paid under protest.
Schmittler v. Sunflower County, 125 So. 534, held the payment is voluntary where there is no duress or necessity of making payment to free the person or property from legal restraint, which, appellant submits, is the situation in the cases now at hand.
51 Am. Jur., Sec. 1167, states the following: "On the grounds of public policy, the law discourages suits for the purpose of recovering back taxes alleged to be illegally levied and collected. Taxes voluntarily paid without compulsion, although levied under the authority of an unconstitutional statute, cannot be refunded or recovered back without the aid of a statutory remedy.
Sec. 1184 of said volume 51, states the following: "The general rule is that one who voluntarily pays an illegal tax, even though he pays it under considerable actual pressure, cannot maintain an action to recover it back. (Citing Jackson v. Newman, 59 Miss. 385).
Sec. 1195, of said volume 51, states the following: "The payment of a tax before it becomes delinquent, and before its collection can be enforced by compulsory process, is generally held to be voluntary."
Stone Stone, for appellee.
The case of City of Vicksburg v. J. T. Butler, 56 Miss. 72, is of the highest importance. We quote: "The doctrine accepted as sound by the Supreme Court of the United States as late as October 1877, (Radich v. Hutchins, 95 U.S. 213, 24 L.Ed. 409) that compulsion or duress which will make a payment involuntary is that there must be actual or threatened exercise of power possessed, or believed to be possessed, by the person exacting or receiving the payment on the person or property of another, for which the other has no other means of immediate relief than by making payment."
Quoting further: "If the parties are upon an equality, neither party having the advantage of the other, a payment is voluntary unless there is some application of force or threats, which makes the act compulsory. But if the party demanding the money is an officer clothed with authority to enforce payment, the parties are not on equal terms and there need not be the application of physical force or threats which constrain the conduct of the party."
We have the plain proposition: The City of Grenada without any possible semblance of a showing of right and justice exacted taxes each year of $200.00 which was exactly $195.00 more than they had a right to charge. When sued for it they said that the payment was voluntary and that some of it was caught by the three year statute of limitations. Both these claims have been blighted by the facts showing duress, coercion and compulsion and threats by the city authorities, and the plain law as to all the claims being cognizable under the six year statute of limitations. All this shows the proof as to all this went in without the slightest conflict, not even a semblance of cross-examination.
The appellee, H.B. Andrews, plaintiff below, brought suit in the Circuit Court of Grenada County and recovered a judgment against the City of Grenada, defendant and appellant here, in the amount of $1,125 including legal interest for excess payments of privilege taxes wrongfully collected from him, and from this judgment the City of Grenada appeals.
The declaration as amended alleged that the City of Grenada under a void ordinance, had unlawfully collected from appellee a privilege tax license in the amount of $200 a year for a period of five years, 1947 to 1951 inclusive, for the privilege of operating a taxicab; that the lawful privilege tax fee as provided by ordinance was $5 a year; that the said taxes were paid on account of compulsion by the officers and agents of the appellant and were involuntary. The city in its answer admitted the appellee had paid the privilege tax of $200 per year from 1947 to 1951 inclusive; that the ordinance was void and that the lawful tax was $5 a year, but denied owing the amount claimed, contending that the privilege taxes were voluntarily paid by the appellee without protest, objection, or compulsion on the part of the city tax collector or the city.
The main assignment of error argued is that the court erred in overruling the motion for a directed verdict. The testimony of the plaintiff was that he received a notice from the city tax collector as follows: "Your privilege tax license will expire during the month of January, 1948, and must be paid before the end of the month in which it expires or 100 percent will be added, * * * one taxicab, $200.00"; that he paid the taxes because he thought it was right and what it was supposed to be; that he also talked to the city marshal about the payment of the tax and the marshal told him that he better pay it if he wanted to run his car; and that if he didn't pay it by the end of the month, to stop the car and not move it. Three other witnesses, who were also plaintiffs in similar suits against the city, testified to the same effect.
The sole question for determination on this appeal is whether the payments of taxes were voluntary or involuntary. In the case of Schmittler v. Sunflower County, 156 Miss. 227, 125 So. 534, 126 So. 39, the Court said: (Hn 1) "It is the settled law of this state that, in the absence of a statute providing otherwise, taxes or license fees voluntarily paid without protest cannot be recovered, although assessed and collected without legal authority. It was so held in the case of Union Land Timber Co. v. Pearl River County, 141 Miss. 131, 106 So. 277 * * *."
The appellee contends that the payments were involuntary and relies on the case of City of Vicksburg v. Butler, 56 Miss. 72. In this case the Court held:
"If the collector of taxes is clothed with authority under the law, at the time he demands the money from the taxpayer, to enforce payment by the arrest of the person or distress of property, and an illegal tax is paid to avoid the one or the other, and the payer brings to the notice of the collector, in any mode, that the tax is illegal, or that it is objected to for that reason, such payment is clearly a compulsory payment. It is not necessary for the payer to wait until his person has been arrested, or his property seized, before he makes the payment. He may anticipate the extreme course that the officer is compelled by his authority to take, and pay to avoid that alternative. That principle disposes of this case.
"Butler, in his testimony, states that the collector pressed him for the money, — called several times. The firm objected to the tax as illegal, and paid because of a threat to shut up their shop.
"The taxpayers brought to the notice of the collector that the tax was illegal, and the money was paid to avoid the extreme measures which might have been taken against them. We do not think this, within the just principle applicable, was a voluntary payment."
The evidence in the instant case does not show that the city tax collector did anything more than mail the notice that the privilege license would expire as was required to be done under the statute, Sec. 9696-212, supp. Mississippi Code of 1942. The evidence further shows that the appellee had paid his tax for several years, without objection and without protest. The record shows that the city marshal was not the city tax collector and it follows that he had no authority under the law to force or compel payment of the taxes in question. We do not think that the case of City of Vicksburg v. Butler, supra, is applicable.
In the case of City of Jackson v. Newman, 59 Miss. 385, the Court said: "The evidence shows that the appellee was spoken to by the tax collector of the town, and requested to pay the license fees as they became due under the ordinances; and that the tax collector stated to him that he would have to stop his team if the taxes were not paid, and thereupon the appellee went to the office of the collector, and paid the license fees, complaining, however, that the amount charged was exorbitant. Under what circumstances the payment of an illegal or unwarranted tax will be considered to have been made under compulsion, the authorities in the different States are widely divergent. In this state it is settled that, if at the time the demand is made the collector is armed with authority of law to seize the goods or arrest the party if the tax is not paid, and the party objects to its collection because of its illegality, but pays to prevent a seizure of his goods or the arrest of his person, the payment is compulsory and may be recovered back. City of Vicksburg v. Butler, 56 Miss. 72. On the other hand, if the payment is made by the party without objection, it cannot be recovered, although non-payment would have subjected him to criminal prosecution. Town of Tupelo v. Beard, 56 Miss. 532. In the case at bar, the collector had no authority, at the time he called the appellee for payment, to seize his property or arrest his person, nor was any suggestion made that either would be attempted. At most the statement was that the appellee would not be permitted to pursue his business unless the licenses were obtained. No duress of person or of property was threatened, and the payments were voluntarily made, and the appellee was not entitled to recover the same." In Schmittler v. Sunflower County, supra, it is also stated: "The question of voluntary payment may be raised, however, under the plea of general issue, because the plaintiff must allege and prove that the payment of the tax was involuntary on his part, and, as said in 37 Cyc., p. 1179(b), (Hn 2) `a payment is voluntary, in the sense that no action lies to recover back the amount not only where it is made willingly and without objection; but in all cases where there is no compulsion or duress nor any necessity of making the payment as a means of freeing the person or property from legal restraint or the grasp of legal process.'"
(Hn 3) We are of the opinion that under the evidence in this case and the above-cited authorities, the payments were voluntary and that the lower court erred in overruling the motion for a directed verdict.
Reversed and judgment here for appellant.
McGehee, C.J., and Hall, Lee, and Ethridge, JJ., concur.