Opinion
No. 31352.
October 29, 1934.
LICENSES.
Taxpayer who had joined with others to obtain injunction restraining collection of privilege taxes for operation of billiard and pool halls held liable for own taxes only on dissolution of injunction and dismissal of bill, regardless of terms of injunction bond (Code 1930, section 420; Laws 1932, chapter 89).
ON SUGGESTION OF ERROR. (Division A. Dec. 10, 1934.) [157 So. 905. No. 31352.]1. APPEAL AND ERROR.
Contention based on fact that appellant's cocomplainants in trial court did not appeal, and that there was no summons and severance, could not be made for first time on suggestion of error (Code 1930, section 22).
2. LICENSES.
Unsuccessful contest of validity of privilege tax, though prosecuted in good faith, does not relieve taxpayer of penalty imposed for nonpayment thereof when due (Laws 1932, chapter 89, section 238; Code 1930, sections 420, 422).
APPEAL from the Chancery Court of Sunflower County.
Frank E. Everett, of Indianola, for appellant.
It is our contention that any number of taxpayers complaining of the same statute imposing taxes upon them can join in one bill of complaint and each receive an individual adjudication of his rights.
Sections 420 and 422, Code of 1930.
In Bullen v. Smith, 111 So. 454, this court held that the amount of taxes owing and ten per cent damages, as provided by statute, was the only amount that could be decreed against the taxpayer.
The statute authorizing taxpayers to bring a suit to enjoin the collection of taxes which they deem to be unlawful, gave these complainants the right to bring a joint suit.
This section 420, Code of 1930, authorizing suits by one or more taxpayers and the complainants each having grounds for equitable interference in the collection of this tax, they having a community of interest in the subject-matter, a common right involved and a common purpose in pursuit of a common adversary where each could resort to equity, had a perfect right to join in one bill of complaint as they did and it was the duty of the court to adjudicate the rights of each separately.
Tribbett v. Railroad Co., 70 Miss. 188, 12 So. 32; Telephone Co. v. Williams, 101 Miss. 1, 57 So. 559; Warren Mills v. New Orleans Seed Co., 65 Miss. 391, 4 So. 298; Roberts v. Burwell, 117 Miss. 469, 78 So. 357; Y. M.V. Railroad v. McConnell, 90 So. 321; Griffith's Chancery Practice, par. 139, p. 139.
The purpose of the Legislature in adopting section 238, chapter 89, Laws of 1932, was to prevent delinquencies in the payment of privilege tax, and cause them to be taken out in the very beginning of business, or renewed promptly upon the expiration of the prior license.
It was not the purpose of the Legislature to place a penalty upon any citizen engaged in business, which required a privilege tax, or to subject him to a criminal prosecution as is provided in section 238, chapter 89, Laws of 1932, relied upon by appellee for exercising his rights to attack as unconstitutional, a statute so oppressive in its nature and requirements, that, to comply therewith would close his business and visit upon him the injustices as the statute attacks in the bill of complaint in this case.
A law imposing a privilege tax should be liberally construed in favor of citizens sought to be assessed with the tax.
Vicksburg Meridian Ry. Co. v. State, 62 Miss. 105; State ex rel. Attorney-General, v. Grenada Compress Co., 123 Miss. 191, 85 So. 137; Board of Levy Commissioners v. Howze Mercantile Co., 149 Miss. 843, 116 So. 92; Ex parte Taylor, 58 Miss. 478; Bluff City R.R. Co. v. Clark, 95 Miss. 689, 49 So. 177; State v. Union Tankcar Co., 151 Miss. 797, 119 So. 310; Pan-American Pet. Corp. Co. v. Miller, 154 Miss. 565, 122 So. 393; McKenzie v. Adams-Bank Lumber Co., 157 Miss. 482, 128 So. 334; L.H. Conard Furniture Co. v. Mississippi Tax Commission, 160 Miss. 185, 133 So. 652; Gulley v. Jackson International Co., 165 Miss. 103, 145 So. 905; Town of Utica v. State, 166 Miss. 565, 148 So. 635; Mayor and Aldermen of Jersey City v. New York Bay Ry. Co., 13 F.2d 982.
J.A. Lauderdale, Assistant Attorney-General, for appellee.
The entry of the joint decree against the complainants was not error.
Bullen v. Smith, 111 So. 454, 146 Miss. 316.
Complainants in the court below have a matter of common cause, and having made and filed a joint bond, they cannot now be heard to say that the liability of each should be adjudged separately.
Appellant cites no authority to sustain his contention that he is only liable for the amount of the tax due by him, and under the holding of this court in the case of Johnson v. State, 122 So. 529, 154 Miss. 512, this cause should be affirmed.
My contention is that when Hamel failed to pay the three hundred dollars privilege tax due by him to the state during the month in which it was due that he thereby became and was liable for double the amount of the tax, or, in other words, six hundred dollars instead of three hundred dollars.
When Hamel failed to renew his license during the month in which it was due, then the amount due the state was six hundred dollars and the amount due the levee district was six hundred dollars, and under the provisions of section 421, Code of 1930, the tax collector was entitled to ten per cent of the amount due.
This is an appeal from a judgment awarding damages on the dissolution of an injunction. Hamel, Sealy, and Ganong each separately owned and conducted a billiard and pool hall in Sunflower county, on each of which the sheriff and tax collector was attempting to collect the privilege tax due thereon under chapter 89, Laws of 1932. Whereupon they filed a joint bill of complaint against the sheriff and tax collector, setting forth separate ownership of the three billiard and pool halls, the privilege tax that would become due thereon under the statute which they alleged violated certain sections of the Constitution, and praying for an injunction restraining the collection of the taxes against each of them. A preliminary injunction was granted and served on the appellee. Afterwards, on motion by the sheriff, an order was entered directing the complainants to execute a new bond, which they failed to do, and thereafter the injunction was dissolved, the cause dismissed, and a decree was rendered on the bond, awarding the sheriff and tax collector a judgment against the complainants jointly and severally and the sureties on their injunction bond for the full amount of the privilege taxes due by all of the complainants, with ten per cent. interest thereon. Hamel alone appeals.
The appellant's complaint is that the decree should have awarded a judgment against him only for the privilege taxes due by him, with the statutory ten per cent. damages added thereto. The writ of injunction enjoins the appellee from "collecting or attempting to collect from the complainants, or either of them, privilege tax for the operation of billiard and pool halls." The injunction bond recites that:
"We, E.E. Sealy, A.M. Ganong, and C.A. Hamel, principals, and Terry Wilson and Chas. Klingman, Sureties, are held and firmly bound unto W.D. Marlow, Jr., tax collector, in the sum of twenty-five hundred ($2,500) dollars. . . . The condition of the above obligation is such, that, whereas the above bound principals have this day obtained from the Honorable James L. Williams, Chancellor, a writ of injunction and supersedeas, enjoining and restraining the said defendant from levying upon any of the property of complainants, or either of them, and from collecting or attempting to collect privilege taxes from the complainants, or either of them, for the operation of their said billiard and pool halls, until the same can be heard and determined at the Honorable the chancery court of Sunflower county, state of Mississippi.
"Now, if the said principals in case the injunction shall be dissolved, shall pay all money and cost due or to become due to the tax collector, and also such cost and damages as shall be awarded against them, then this obligation shall be void, otherwise the same shall remain in full force and virtue."
On its face the bond seems to require each and all of the principals therein, in event the injunction should be dissolved, to pay all of the taxes the sheriff had been enjoined from collecting. It must be construed, however, in connection with section 420, Code of 1930, under which the bill of complaint was filed, which reads 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."
The manifest purpose of this statute was to prevent a multiplicity of suits by permitting a number of taxpayers to join in one bill of complaint for restraining the collection of taxes sought to be unlawfully collected from them, without which each of the taxpayers would be compelled to file separate suit. If each taxpayer who joins in such a bill for obtaining the injunction which the statute permits should thereby become obligated to pay the taxes due by all of his co-complainants in the event the injunction should be dissolved, the manifest purpose of the statute in most cases would be frustrated, because no taxpayer where the complainants are numerous and the taxes large could afford to join in such a bill. The purpose of the statute can only be carried out by construing it to subject each taxpayer to liability for his own taxes, in event the bill of complaint should be dismissed. The court below should have rendered separate judgments against each of the complainants for the privilege tax due by him with the statutory damages of ten per cent. added thereto.
The injunction bond, of course, secures the payment of the taxes due by all of the complainants. Since Sealy and Ganong have not appealed, the decree of the court below will not be disturbed as to them, but will be here modified so as to render the appellant liable only for his privilege tax and the statutory damages of ten per cent.
So ordered.
ON SUGGESTION OF ERROR.
On a former day of the present term of this court the decree of the court below awarding the appellee damages on the appellant's bond for an injunction was reversed, and a judgment for such damages as the court should have awarded was intended to be entered. This judgment included the amount of the privilege tax due by the appellant, but did not include the damages for the nonpayment of the tax, provided by section 238, chapter 89, Laws 1932. We will adhere to our former opinion on the merits and will here only specifically refer to one contention now made for the first time by counsel for the appellee, which is that the appellant's cocomplainants in the court below have not appealed, and there was no summons and severance, as provided by section 22, Code 1930. It is too late now to raise that question. Wilkinson v. Love, 149 Miss. at page 533, 115 So. 707, at page 709. This brings us to the omission in our former judgment of the damages provided by the statute above cited.
In his answer to the suggestion of error appellant says that section 238, chapter 89, Laws 1932, should be construed in connection with section 420, Code 1930, by which he was given the right to test the validity of the tax here in question by an injunction, and when so construed it will appear that the Legislature did not intend to penalize the taxpayer for delaying the payment of his taxes by the exercise of the right given him to contest the validity thereof. We do not think the two sections are susceptible of that construction. The penalty is imposed for the failure to pay the tax when due, and an unsuccessful contest of the validity of a tax, though prosecuted in good faith, does not, except in a few jurisdictions, relieve the taxpayer of the penalty imposed for the nonpayment thereof when due. 61 C.J. 1490, and the authorities there cited.
The judgment hereinbefore rendered will be set aside, and another judgment will be rendered in accordance therewith, except that the appellant will be charged with the payment of the tax enjoined, the penalty imposed by section 238, chapter 89, Laws 1932, and ten per cent. on both, as provided by section 422, Code 1930.
So ordered.