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State ex rel. Rice v. Hasson Groc. Co.

Supreme Court of Mississippi, Division B
Nov 23, 1936
177 Miss. 204 (Miss. 1936)


No. 32347.

October 26, 1936. Suggestion of Error Overruled November 23, 1936.


Where constitutionality of statute imposing mileage tax in addition to flat tag tax on motor vehicles, under certain conditions, was upheld, agreement made by motor vehicle owners who were members of association not to pay tax and to resist suits filed by state was an unlawful agreement and a conspiracy, and different owners could therefore be joined in one suit, since act was valid from time of its approval (Laws 1934, chap. 126, secs. 16, 17, 20).


Person is charged, at his peril, with knowledge of the law and is not relieved of duty to obey law because of his personal opinion that law is unconstitutional, nor can advice of counsel affecting validity of any act affect its validity.


State held not precluded from maintaining suit against motor vehicle owners to enjoin conspiracy not to pay motor vehicle mileage tax and make reports as required by statute imposing mileage tax in addition to flat tag tax on motor vehicles under certain conditions, on ground that state was not damaged, where state was hindered in collection of funds and penalty imposed for failure to pay, and was put to trouble and expense of filing suit, and by conspiracy of defendants others were encouraged not to pay such tax (Laws 1934, chap. 126).

APPEAL from chancery court of Lauderdale county. HON. A.B. AMIS, SR., Chancellor.

W.W. Pierce, Assistant Attorney General, for appellants.

The court had jurisdiction of all the parties because of the conspiracy.

12 C.J. 581, sec. 99; Ellzey v. State, 57 Miss. 826.

There was an unlawful conspiracy.

That the tax is lawfully imposed needs no argument because it has already been adjudicated.

State ex rel. Rice v. Evans-Terry Co., 159 So. 658, 80 L.Ed. 94.

The weight of authority seems to be to the effect that while an act of an individual may not give rise to civil liability, yet the same act committed by several acting in concert may be unlawful and constitute an actionable wrong, giving rise to civic liability.

Rocky Mountain Bell Tel. Co. v. Montana Federation of Labor, 156 Fed. 809; Arthur v. Oakes, 63 Fed. 310, 25 L.R.A. 414; Randall v. Lanstorf, 126 Wisc. 147; Atchison, etc., Ry. Co. v. Gee, 139 Fed. 528; Allis-Chalmers Co. v. Reliable Lodge, 111 Fed. 264; American Steel Wire Co. v. Wire Drawers' Union, 90 Fed. 608; Union Pacific Ry. Co. v. Ruef, 120 Fed. 102; In re Doolittle, 23 Fed. 545; Casey v. Cinn, etc., Ry. Co., 62 Fed. 803; Loewe v. California State Federation, 139 Fed. 71; Hawarden v. Youghiogheny Coal Co., 111 Wis. 545, 87 N.W. 472, 55 L.R.A. 828; Grenada Lbr. Co. v. Miss., 217 U.S. 433, 54 L.Ed. 828.

We think it is settled that an act lawful in an individual may be the subject of civil conspiracy when done in concert with others, provided that it is done with the direct intention to injure the public. It is not necessary, in order to maintain this suit, that an express agreement of the appellees be shown. It is enough that the individuals who have combined intended to use the means employed to accomplish an unlawful end and that they acted in concert.

United States v. Patten, 226 U.S. 525, 57 L.Ed. 333, 44 L.R.A. (N.S.) 325, 33 Sup. Ct. Rep. 141; Grenada Lbr. Co. v. Miss., 217 U.S. 433, 54 L.Ed. 826; Duplex Printing Press Co. v. Deering, 254 U.S. 461, 65 L.Ed. 354, 16 A.L.R., 196, 41 Sup. Ct. Rep. 172; Anderson v. Shipowners Asso., 272 U.S. 359, 71 L.Ed. 298, 47 Sup. Ct. Rep. 125; Monagahela Bridge Co. v. U.S., 216 U.S. 177; Globe Rutgers Fire Ins. Co. v. Firemen's Fund Fire Ins. Co., 97 Miss. 148; South Wales Miners' Fed. v. Glamorgan Coal Co., 2 Am. Eng. Ann. Cas.

What is lawful for an individual is not the test of what is lawful for a combination of individuals.

Gebardi v. U.S., 287 U.S. 112, 77 L.Ed. 206.

This record, we submit, conclusively shows that all of the appellees were undertaking to do the same thing by the same means and by reason thereof, their acts constituted a conspiracy.

Haas v. Hinkel, 216 U.S. 462, 54 L.Ed. 569; State v. Rickey, 9 N.J. Law 293; Erdman v. Mitchell, 53 A. 227, 207 Pa. 79, 63 L.R.A. 534.

The facts show a conspiracy. There is a presumption in favor of the validity or constitutionality of the statute imposing mileage taxes on motor vehicles.

Burnham v. Summer, 50 Miss. 517; Virden v. Bowers, 55 Miss. 1; Postal Telegraph Co. v. Robertson, 116 Miss. 204; Riley v. Ammon, 143 Miss. 861; State v. Edwards, 93 Miss. 704; Graves v. Minnesota, 272 U.S. 425, 71 L.Ed. 331; Life Cas. Ins. Co. v. McCray, 291 U.S. 566, 78 L.Ed. 987; Borden's Farm Products Co. v. Baldwin, 293 U.S. 194, 79 L.Ed. 281.

The presumption must prevail in the absence of some factual foundation of record.

O'Gorman Young v. Hartford Fire Ins. Co., 282 U.S. 251, 75 L.Ed. 324; Williams v. Baltimore, 289 U.S. 36, 77 L.Ed. 1015.

There is no factual foundation in this record overthrowing that presumption.

The constitutionality or validity of the statute was determined in the case of Hudson v. Stuart et al., 166 Miss. 339. This case was decided in the early part of the year 1933. But it might be said that the statute was re-enacted in 1934 and that Hudson v. Stuart, supra, did not settle the constitutionality, although practically in the same words. In answer to this anticipated and probable argument, we submit that the 1934 act, to-wit: Chapter 126 of the General Laws of 1934 was held constitutional in February 1935 (State ex rel. Rice v. Evans-Terry Co., 159 So. 658), yet, not a single one of the appellees have paid their mileage taxes or made their mileage reports as required by the statute.

If it be true that the appellees only wanted to test the act as to its constitutionality, and it was their purpose to rely on that theory to sustain them, then why have they not complied with the act since the validity of the statute was determined practically a year ago? The burden was on appellees to make that showing.

Ackerman v. Choctaw County, 157 Miss. 594; Price v. Haney, 164 So. 590.

Section 18 of Chapter 126, General Laws of Mississippi 1934, provides a complete scheme whereby any one or all of the appellees could have tested the constitutionality of the Motor Vehicle Privilege Tax statute by paying the tax under protest, and within thirty days bringing a suit to recover all or any part of it back. In this way all constitutional questions could have been raised and settled.

The testimony, in this record, shows a conspiracy and condemns the appellees.

A conspiracy rarely can be shown by direct evidence. Often times it can only be shown by many facts and circumstances taken and considered together, any one of which would be wholly insufficient to establish a conspiracy.

Pickett v. State, 139 Miss. 529.

The existence of a conspiracy can be established by proof of acts and conduct as well as by proof of an express agreement.

Osborn v. State, 99 Miss. 410.

The appellees are liable jointly because of the conspiracy.

Findlay v. McAllister, 113 U.S. 104, 28 L.Ed. 930; Ellzey v. State, 57 Miss. 827; State v. Baker, 27 R.I. 252, 61 A. 653; Commonwealth v. Waterman, 122 Mass. 57; State v. Buchanan, 9 Am. Dec. 534; Isaacs v. State, 48 Miss. 234; Globe Rutgers Fire Ins. Co. v. Firemen's Fund Fire Ins. Co., 97 Miss. 148; Lawrence v. Hand, 23 Miss. 105.

The finding of the chancellor on the question of a conspiracy is against the preponderance of the evidence.

Section 379, Code of 1930.

The chancery court had jurisdiction of the parties because of a like or common interest of the parties defendant in the questions of law and fact involved.

The appellees have a common interest in the question of law involved.

In answer to the chancellor's reasoning, we submit that the constitutionality of the statute has not any more become settled since the filing of the bill of complaint in this case than it was prior thereto. The cases of Hudson v. Stuart, 166 Miss. 399; Hicklin v. Coney, 290 U.S. 167, 78 L.Ed. 247; Continental Baking Co. v. Woodring, 286 U.S. 352, 76 L.Ed. 1155; Corley Hamilton v. Snook, 281 U.S. 66, 74 L.Ed. 704, authoritatively settle the question of the constitutionality or validity of the law involved and in virtue of which this suit was filed. These cases were decided long prior to the time the bill of complaint was filed in this cause.

The appellees have a common interest in the question of fact.

The appellees having a common or like interest in the questions of law and fact involved, the trial court had jurisdiction of the parties to avoid a multiplicity of suits.

Selleck v. Macon Compress Warehouse Co., 72 Miss. 1024; Weight v. Shelton, Sm. M. Ch. Rep. 399; Thames v. Mangum, 87 Miss. 575; Pollock v. Savings Institution, 61 Miss. 293; Bishop v. Rosenbaum, 58 Miss. 84; Crawford v. Railroad Co., 83 Miss. 708, 36 So. 82, 102 Am. St. Rep. 476; Tisdale v. Ins. Co., 84 Miss. 709, 36 So. 568; Barry v. Barry, 64 Miss. 709, 3 So. 532; Section 547, Code of 1892; Griffith's Mississippi Chancery Practice, sec. 142, page 142; Roberts v. Burwell, 117 Miss. 451; Middleton v. Howell, 127 Miss. 880; Humphreys Co. v. Cashin, 136 Miss. 476. S.B. Thomas, of Greenville, for appellees.

I have read with much interest the numerous cases cited by the appellant to sustain his position on point I.: "Where Was An Unlawful Conspiracy," but I do not find that any one of these cases is applicable to the case at bar. In each case cited there was a conspiracy to do an unlawful act or to do some act which constituted an actionable wrong.

The question which in my opinion is squarely presented to this court is whether or not the defendants named in the bill of complaint in this cause, by combining to employ mutual attorneys for the purpose of contesting the constitutionality of a law, committed in so doing an unlawful act, or conspired together to commit an actionable wrong, as well stated by the able chancellor in the lower court: "There has been no case before me in the argument at the bar, where if the doing of an act by one individual is lawful it constitutes any actionable conspiracy or any actionable wrong if it is done by more than one. It is only when the act itself is wrong, or the end to be accomplished is wrong, that the combining is unlawful. Because it must be wrong for the first man to do it before it can be wrong for the second one to do it; or the agreement must contemplate the doing of a thing that would result in wrong or injury. According to the allegations of this bill, and the proof, these men only confederated and conspired together to test the constitutionality of the law. That is all they have ever done so far as the allegations of this bill and the proof is concerned; and the state of Mississippi has not suffered the loss of a dime thereby."

I thereby earnestly urge that if the course of conduct adopted by the defendants named in this cause did not run contrary or did not violate any of the laws of this state, that no unlawful conspiracy existed, and if no unlawful conspiracy existed, certainly the chancellor was correct in his finding that he had no jurisdiction over the defendants on the ground of conspiracy.

In his second proposition, the Attorney General urges that the court had jurisdiction of the parties because of a like or common interest of the parties defendant in the questions of law and fact involved.

Certainly, the Attorney General could not be serious in his contention that the facts involved were similar, because the record conclusively shows that the defendants were operators of entirely different types of motor vehicles, engaged in different lines of businesses, and operating different numbers of miles over different sections of the state, under different circumstances and conditions.

The only common interest that it could have been said that the parties defendant had in this case, was the question of the constitutionality of chapter 126 of the Laws of 1934, but at the time of the trial of this case in the lower court, that was no longer a matter of doubt. The statute had been held constitutional by this Honorable Court and its decision had been affirmed by the Federal Supreme Court.

Equitable Life Assurance Co. v. Brown, 213 U.S. 25, 53 L.Ed. 682.

Brunini Hirsch, of Vicksburg, S.B. Thomas, of Greenville, Hannah Simrall, of Hattiesburg, for appellees.

The bill of complaint charges that the complainants were unable to collect this tax because of the particular acts of conspiracy that are detailed in the bill of complaint.

These acts as charged in the bill of complaint are contradicted in every detail by the testimony of R.W. Dunn, W.J. Rea, D.P. Cameron, Colonel FitzHugh, Ike Rosenbaum and the several other witnesses who testified on the plea of misjoinder.

The testimony of these witnesses shows that there was absolutely no conspiring or agreeing among each other. On the contrary, the testimony is positive and emphatic that each and every man who was at any meeting where this matter was discussed, not only declared that he was going to act independently of every other person, but admonished every person in said meeting to do whatever he pleased. The testimony of these respective witnesses further establishes the fact that each and every person in each and every one of these meetings was left to decide for himself as to whether he would keep the records, make and file the reports and pay the tax.

The bill of complaint charges that the complainants have been unable to collect the taxes from these defendants solely and only because of these respective acts of conspiracy; and since it is conclusively shown that the appellees have not been guilty of the commission of any one of said acts, the appellants can no longer be heard to say that they have lost anything whatever because of this alleged conspiracy. The testimony shows that each and every one of these appellees decided independently of every other one as to what course he would pursue, and there is no evidence in this record, and there is no charge in the bill of complaint, that the state of Mississippi would have collected one single, solitary cent more in taxes if these appellees had never met or seen each other.

In 12 C.J. 581, section 100, it is said: "For obvious reasons, however, civil liability rests on different grounds, and unless something is actually done by one or more of the conspirators pursuant to the scheme and in furtherance of the object, which act results in damage, no civil action lies against any one. The gist of the action is the damage and not the conspiracy, and the damage must appear to have been the natural and proximate consequence of defendant's act."

The proof shows that each and every individual defendant acted upon his own initiative and there is no suggestion or suspicion that these acts were done "with the direct intention to injure the public;" but they were done because these respective defendants were advised by their counsel that the money the complainants were seeking to extract was not a fund that belonged to the public, but belonged to these individuals.

While there is always the presumption that a statute is constitutional, both lawyers and laymen have a right to test this presumption through the courts. One of the things that renders a statute unconstitutional is to make this privilege or right of testing the constitutionality so burdensome as to practically deter the individual from testing it.

The appellees in this case called in three members of the legal profession who held from the state of Mississippi this evidence of their ability to advise on such subjects.

When these members of the bar advised the appellees that the act was unconstitutional, the presumption in favor of the constitutionality of the act no longer imposed any duty or obligation on these appellees.

The record further discloses that some of the appellees in this case, not only had the benefit of the counsel and advice of the particular attorneys above referred to, but they also had the benefit of the counsel and advice of their own personal attorneys; and that the counsel and advice of their own personal attorneys was exactly the same as that given by Messrs. Thomas, Brunini and Hannah.

But, we have not reached the stage in the United States of America yet where the ordinary citizen becomes either a criminal or liable in damages because he elects to contest the constitutionality of any statute.

The record in the case at bar is not only devoid of any evidence of malice or intention to wrong anyone on the part of any appellee; but, on the contrary, the record shows that the appellees were advised by their counsel that the state of Mississippi had no right to demand the money that it was demanding.

The law is, as universally announced, that even though all of these appellees may be guilty of a conspiracy, unless their joint or collective action has increased the amount of loss to the state of Mississippi over what it would have been if they had acted separately, there can be no recovery. Although we submit that the record in this case demonstrates beyond every doubt that there has been no conspiracy whatever among these appellees; yet, if we were to admit, merely for the sake of this argument, that the appellees had conspired together, it would still follow that the appellants in this case have no right of recovery. This is true because the bill of complaint conclusively shows that the combined action of these appellees has not increased the loss or damage to the state of Mississippi one iota over what it would have been if these appellees had acted individually, rather than collectively. It is fundamental and axiomatic that the appellants have no cause of action, unless they can show: first, that there was a combination of conspiracy; and, second, that as the result of said combination or conspiracy, that the state has sustained damages over and above what it would have sustained if these same parties had acted individually and separately. No such charge appears in the bill of complaint, but, on the contrary, the bill of complaint negatives every such fact and inference.

The appellants based their right to join these appellees in one suit on the broad charge of conspiracy. The appellants did not charge the acts of conspiracy as a fact, but charged them only on information and belief. And this charge on information and belief does not meet the requirements as set forth in Griffith's Mississippi Chancery Practice, in paragraph 175, and, particularly is this true with reference to the affidavit to the bill of complaint in this case.

These appellees have no common or like interest in the questions of fact involved. The appellees in this case, challenging the constitutionality of the act, have denied that they were required to file monthly reports or to pay the taxes. If it has now been determined that the act is constitutional and that these appellees must file reports and pay the tax, certainly no one of the appellees has any common interest in the report of any other appellee, or the amount of the tax liability of said appellee.

The Attorney General of the state filed a bill against the appellees, consisting of numerous persons, firms, and corporations, on September 1, 1934, seeking to compel them to file the reports and pay the mileage tax required on certain motor vehicles under chapter 126, Laws of 1934, said bill being filed in the chancery court, joined in by the then Auditor of Public Accounts, and invoking as grounds therefor: First, a mandatory injunction that daily records be filed with the auditor, on all motor vehicles operated by them showing the actual number of miles of public highway traversed by such vehicles, and the reading of the speedometer at the beginning of each month, and the termini of each day's run since January 1, 1934; and to also file a monthly report showing the permit number, tag number, motor or serial number, and the make, kind, size, and carrying capacity of each vehicle; the actual miles of highway traversed since January 1, 1934, and the amount of tax due or paid to the auditor. The bill sought an injunction commanding the defendant to refrain from operating each and all of the motor vehicles upon the public highways for failure to keep said reports. Second, the bill sought to require the defendants to discover the number of miles traversed upon and over the public highways by each motor vehicle since January 1, 1934, together with the weight of the greatest load carried at any one time, to the end that the complainants might make proper recovery of the amount of taxes due. Three, the bill alleged that it was filed for the purpose of preventing irreparable injury to the highways, and to prevent the inevitable destruction of public property in the furtherance of the pursuit of private business, and the loss of compensation to which the state is entitled. Fourth, to avoid a multiplicity of suits, and to enforce a common right against all of the defendants who have an interest in the questions of law and fact involved, and a common design to hinder, prevent, and defeat the payment of the tax due. Fifth, the bill alleges that complainants are without a full, complete, and adequate remedy at law. The bill then set forth that since January 1, 1934, the defendants named therein are required to file with the auditor each month a report showing the qualifications required by chapter 126, Laws of 1934, but that each of said defendants has failed, neglected, and refused so to do, and have likewise failed and neglected to pay the amount of tax due to the state on such motor vehicles, and that said defendants will continue to operate the aforesaid vehicles, or trucks, without complying with the law governing the same and without the payment of the proper privilege tax due thereon. The bill alleged that pursuant to the statute, the defendants were entitled to the privilege of operating said motor vehicles upon the highways of the state to the extent of six thousand miles, upon the payment of the flat road and bridge privilege tax thereon, but charged the truth to be that each of the defendants had during the year 1934 operated their motor vehicles upon the public highways of the state greatly in excess of the mileage for which they paid the tax, and that each of them now owe the state for taxes due in excess of the said mileage, the tax due being based upon the carrying capacity of said vehicles. It is further alleged by the complainants that the defendants are in possession of certain facts and data with reference to the mileage of each of the motortrucks mentioned in the bill, and that they know the number of miles traveled on the highways of the state in excess of that for which the privilege tax was paid during the year, and the amount of the greatest load actually carried, at any one time, by each of their motor vehicles; that said facts are exclusively within the knowledge of the defendants, and complainants have been unable to ascertain the number of miles each of defendants' trucks has traveled since January 1, 1934, to the present time, and defendants have failed, neglected, and refused to give such information to complainants. It is further alleged in the bill that the defendants have conspired and designed to hinder and prevent complainants from collecting the mileage taxes imposed by the statute, and by so doing have encouraged other motor vehicle operators from keeping daily and monthly records and filing same, and from paying the tax due, and have prevented the complainants from enforcing the filing of such reports with the auditor, and to that end the defendants have organized themselves into an association called "The Commercial Motor Vehicle Association, Inc., of Mississippi;" that said association is unincorporated, and is composed of the defendants and others unknown to complainants. Complainants further allege that the members of this association have selected officers, have drawn up and adopted a so-called "constitution and by-laws," and that the executive secretary thereof is in charge of all records, books, and files of said association, and that the defendants have agreed and conspired, and have refused to file daily and monthly records, and to pay mileage taxes on motor vehicles operated as aforesaid, and, acting through their officers and agents, have given out and circulated by letters, bulletins, and otherwise, advice to truck operators to refuse to keep records, and have employed attorneys to aid members in resisting the filing of records and prevent the payment of taxes, representing that these attorneys would represent any one becoming a member of said association without additional cost. The bill then prays for process to issue for each of the defendants commanding them to appear and plead, answer, or demur to the bill at the next regular term of the chancery court of Lauderdale county; that the defendants be required to make discovery of the actual miles of public highways traversed by the defendants' motor trucks during each preceding calendar year preceding this date since January 1, 1934, showing the reading of the speedometer on each of said trucks at the beginning of each month since January 1, 1934, together with the termini of each day's run, and the mileage traversed each day, and the tax due the state for the total mileage all of said motor vehicles have been operated on the streets and highways in this state in excess of the mileage for which a flat privilege tax had been paid. The bill then prayed for a temporary injunction, and for a decree against the defendants for the full amount of the privilege tax found to be due, together with a penalty of fifty per cent. of the tax found to be due thereon, and all expenses incurred, and prohibiting and enjoining the defendants from using said trucks upon the highways for any purpose whatsoever for a period of six months from the date of the decree, and for general relief.

The defendants filed a general answer admitting the allegations of the bill of complaint contained in paragraphs 1, 2, 5, 6, and 8, but denying the allegations of paragraphs 3, 4, 9, 10, 11, and 13, and neither admitting nor denying the allegations of paragraph 7. This answer was filed on or before November 1, 1934, and apparently nothing was done after the filing of the answer until after the decision of this court in the case of State v. Evans-Terry Co., 173 Miss. 526, 159 So. 658, decided by this court on February 25, 1935, from which an appeal was taken to the Supreme Court of the United States, where it was affirmed at the October term, 1935, and is reported in 296 U.S. 538, 56 S.Ct. 126, 80 L.Ed. 383, citing numerous decisions of that court.

On November 7, 1935, by leave of court, the defendants filed a plea of misjoinder denying that they had concerted to defraud the state of Mississippi, averring that there had been no agreement, and denying that they had a common interest. Certain witnesses were introduced on this plea who stated that they had not individually advised others not to report and pay the tax, but that each person acted on his own judgment in so doing. It also appeared that in a meeting to discuss the matter, the members of the association were advised, by attorneys employed to investigate, that the law imposing the mileage tax was unconstitutional, but that said attorneys would not advise making said reports; that some of the defendants, or persons present, felt like it would be better to pay the tax, but most of them expressed the opinion that they did not want to pay it unless it was legal. Among the witnesses introduced was one W.J. Rea, secretary of the association during 1934, and on cross-examination he admitted writing certain letters.

On June 16, 1934, upon stationery of the "Commercial Motor Vehicle Association of Mississippi," a letter signed by W.J. Rea among other things, contains the following statements: "An enthusiastic meeting was held Friday, June 15, at the offices of the Commercial Vehicle Association, which was attended by representatives of almost every industry from all sections of Mississippi. It was a great meeting, and those who failed to attend missed much information that is of vital interest to every truck operator in the state. A report of the attorneys retained by the Association to investigate the legality of the present truck and bus act was made. They advised us in view of the doubtfulness of the constitutionality of the Act, the attorneys did not advise the payment of the mileage tax. The secretary of the Association was directed by the President to advise the membership fully of this report made by the attorneys of the Association, and especially directed to advise the membership not to make any further payment of mileage tax, and also to pass this information to all truck owners in the state."

On August 4, 1934, on stationery of the Commercial Motor Vehicle Association, Inc., the secretary, W.J. Rea, in a letter to the members of the association, among other things, said as follows: "The attorneys of the Association again advise the membership not to report and not to pay the mileage tax, and in the event any member is cited to appear to resist an application for an injunction, they should immediately forward the citation to the secretary of the Association, and the matter will receive the prompt attention of the attorneys, but under no condition should they report and pay the mileage tax unless they are enjoined to make the report. In the opinion of the attorneys, no temporary injunction will be granted requiring the truck operators of the State to pay the mileage tax, nor will a temporary injunction be granted to restrain the operation of their trucks over the streets and highways of the State."

On July 14, 1934, said secretary wrote to the members, among other things, the following: "Numerous inquiries have been received at this office in regard to a circular letter of July 10, 1934, issued by the Attorney General's office in regard to the payment of the mileage tax. In this circular letter, you are given the choice of two courses, '1. That you make your mileage reports and pay the tax, under protest, and sue to recover it within thirty days, in which event the Auditor will impound the tax paid by you and return it to you if the court holds you are not liable for the tax. By following this procedure, you can preserve every right and privilege afforded you to test the law, and every right and privilege claimed by the Mississippi Truck Operators Association without incurring penalties and subjecting yourself to being enjoined from the use of the highways. 2. If you do not make the mileage reports and keep daily reports as required by statute and pay the tax, you will thereby force us to enter suit against you to require you to make the mileage reports, pay the mileage tax with a 50 per cent. penalty thereon, and to enjoin you from operating your trucks on the public highways for any purpose whatever for a period of from one to six months.' At a meeting of the officers and directors of the Commercial Motor Vehicle Association with their attorneys, held June 15, 1934, it was decided that the members of our Association submit themselves to a suit by the State Auditor before paying the mileage tax. The attorneys for our Association now advise all members to follow this course and not make any payment to the State Auditor for mileage tax. A large number of our members have been cited to appear before (a judge) for failure to report or pay the mileage tax. Citations are being prepared against many other firms and operators that will be served as soon as the Attorney General's office can prepare them and get service. Any members of our Association that have been cited or notice has been given that suit will be filed, please advise this office immediately in order that our attorneys may be in a position to handle your case along with all other such suits."

On July 17, 1934, among other things, said secretary said, in a letter to the members of the association, as follows: "The attorney general is now preparing injunction proceedings against truck operators in all sections of the state who have not reported and paid the mileage tax. . . . If you have not been summoned with a subpoena to appear in court, then it is only a question of time until you will be, just as soon as the Attorney General reaches your particular case; therefore, it is not a question of if suit will be filed, but when will suit be filed against you, and when will you be served with a subpoena. The purpose of this letter to the members of our Association is to advise you that our Association has employed able counsel to defend these suits for our members, and it is our intention to defend these suits for our members when suit is brought; therefore, if you have been served with a subpoena promptly send same into this office so that our attorneys can take charge of your case for you. If you have not been served with a summons, just as soon as same is served on you, kindly get in touch with this office and turn same over to us to handle for you. . . . You, of course, understand that there will not be any additional cost to you for attorney's fee, as the Association is furnishing the Attorney service to all its members."

The secretary testified that copies of the letters were sent to all officers and members of the association. None of the persons testifying denied the receipt of these letters from the secretary of the association written for the protection of the interests of the motor vehicle owners. The Commercial Motor Vehicle Association, Inc., was not incorporated, and it was an agency for each member thereof. Therefore the act of its secretary was the act of each member who joined with it in resisting the collection of the tax and the making of daily and monthly reports.

In the court below, the chancellor held that what the defendants did, they had a right to do, and that while there might have been a common interest in legal matters and questions of fact at the time of the filing of the bill, that interest disappeared with the upholding of the constitutionality of the law.

We are of the opinion that the chancellor was in error in holding that the defendants had a right to do what they did. By section 20, chapter 126, Laws of 1934 (amending Laws 1932, c. 135, sec. 21), it is provided that: "It shall be unlawful for any operator or driver of any bus or truck of two and one-half tons carrying capacity or more, to haul or transport any property or persons upon the highways of Mississippi without a permit as required hereunder, or to fail or refuse to present such permit for examination by any lawful officer, or to fail or refuse to make a true and correct report, as herein provided, or to make an untrue report, and shall subject such person to the penalties hereinafter imposed." This section requires suits for this violation to be brought in the chancery court, and that if, on a trial of the case, the chancellor be of the opinion that the violations were willful, he is authorized to enjoin the person so violating said act from using the streets and highways for a period of not less than one nor more than six months, and if there be a second violation, to prohibit such person from using the streets and highways for not less than six nor more than twelve months. The act imposes a penalty on failure to pay the tax, and makes this penalty a first lien on the vehicle.

By section 17 of the act (amending Laws 1932, c. 135, sec. 17), it is provided that every operator of a motor vehicle shall file with the auditor reports on forms containing the permit number, tag number, motor number or serial number, kind, size, and carrying or seating capacity as defined in the act, of each vehicle used by the operator during the previous calendar month on the public highways of the state.

Section 16 of the act (amending Laws 1932, c. 135, sec. 16) requires the keeping of daily record to be filed with the auditor with the monthly record required by the act.

Inasmuch as the constitutionality of the law was upheld in State v. Evans-Terry Co., 173 Miss. 526, 159 So. 658, and affirmed in the same case in 296 U.S. 538, 56 S.Ct. 126, 80 L.Ed. 383, it is clear that the act of each vehicle operator was unlawful. Therefore, the agreement made in regard to payment of the tax was an unlawful agreement and was a conspiracy. An act of the Legislature is given validity and vitality by its enactment, consequently the act involved in this suit was valid from the time of its approval, and it became the duty of the defendants to make reports and pay the tax.

The opinion of the defendants or their attorneys does not change the law in any respect. A person is charged, at his peril, with knowledge of the law, and is not excusable from obeying it by reason of his personal opinion that the law is unconstitutional, nor can the advice of counsel affecting the validity of any act affect its validity.

It has been held in the case of Globe Rutgers Fire Ins. Co. v. Firemen's Fund Ins. Co., et al., 97 Miss. 148, 52 So. 454, 29 L.R.A. (N.S.) 869, that private persons cannot conspire to illegally destroy the business of another, and where two or more conspire together, the conspiracy makes the wrongful acts of each the joint acts of all of them. See, also, Wesley v. Native Lumber Co., 97 Miss. 814, 53 So. 346, Ann. Cas. 1912d 796.

In the case of J.K. Orr Shoe Co. v. Edwards et al., 111 Miss. 542, 71 So. 816, it was held that where a bill charges a fraudulent conspiracy in obtaining goods belonging to complainants and prays discovery and for an accounting, it shows a case for equity jurisdiction. The bill there charged a conspiracy between the appellee and a codefendant to defraud the appellant, and it was held that where diligence was exercised to discover the fraud, the statute of limitations did not run against the complainant until the fraud was discovered.

The principles in a conspiracy to injure another person are ably and fully discussed in Employing Printers' Club v. Doctor Blosser Co., 122 Ga. 509, 50 S.E. 353, 69 L.R.A. 90, 106 Am. St. Rep. 137, 2 Ann. Cas. 694, and were also discussed, although the facts were different from those involved in the case at bar, in a number of cases in the federal court. Rocky Mountain Bell Telephone Co. v. Montana Federation of Labor (C.C.), 156 F. 809, 817, wherein the court held that: "According to the principles of the common law, a conspiracy upon the part of two or more persons, with the intent by their combined power to wrong others, or to prejudice the rights of the public, is in itself illegal, although nothing can actually be done in execution of such conspiracy. This is fundamental in our jurisprudence. So a combination or conspiracy to procure an employee or body of employees to quit service in violation of the contract of service would be unlawful, and in a proper case might be enjoined, if the injury threatened would be irremediable at law. It is one thing for a single individual, or for several individuals each acting upon his own responsibility, and not in co-operation with others, to form the purpose of inflicting actual injury upon the property or rights of others. It is quite a different thing, in the eye of the law, for many persons to combine or conspire together with the intent, not simply of asserting their rights or of accomplishing lawful ends by peaceable methods, but of employing their united energies to injure others or the public." See, also, Atchison, T. S.F. Ry. Co. v. Gee (C.C.), 139 F. 582; Allis Chalmers Co. v. Reliable Lodge (C.C.), 111 F. 264; American Steel Wire Co. v. Wire Drawers' Union (C.C.), 90 F. 608; Union Pac. Ry. Co. v. Ruef (C.C.), 120 F. 102; Arthur v. Oakes, 63 F. 310, 11 C.C.A. 209, 25 L.R.A. 414; Loewe v. California State Federation (C.C.), 139 F. 71; Hawarden v. Youghiogheny Coal L. Co., 111 Wis. 545, 87 N.W. 472, 55 L.R.A. 828; and Randall v. Lonstorf et al., 126 Wis. 147, 105 N.W. 663, 3 L.R.A. (N.S.) 470, 5 Ann. Cas. 371.

The chancellor, in his opinion in the case at bar, said that the state was not damaged, and that no showing was made to that effect.

It is manifest, from a reading of the law, chapter 126, Laws of 1934, that the state was damaged by being hindered in the collection of its funds and the penalty imposed for failure to pay, and the interest that accrued upon the sum due. The state was also put to the trouble and expense of filing suits and paying the costs thereof. The state is operated upon funds provided by taxation, and if such taxes are not paid, it cannot perform the functions assumed by it, viz., the construction of highways, letting of proper contracts, and the payment of bonds and other state debts, all of which constitutes sufficient damage. Furthermore, by reason of the conspiracy of the defendants, others were encouraged to do likewise, to the detriment of the state in its governmental actions, and judgment will be rendered, on a trial, for such amount as the several defendants may be shown to be due the state.

In view of the conclusion we have reached on the allegations of conspiracy, it is not necessary to discuss or decide the question of multiplicity of suits.

Consequently, the chancellor should have retained jurisdiction of the suit and granted the relief prayed for, inasmuch as the amount to be paid must be ascertained by discovery, and by such evidence as may be available in such cases, the judgment will be reversed, and the cause remanded, with directions to proceed in accordance with these views.

Reversed and remanded.

Summaries of

State ex rel. Rice v. Hasson Groc. Co.

Supreme Court of Mississippi, Division B
Nov 23, 1936
177 Miss. 204 (Miss. 1936)
Case details for

State ex rel. Rice v. Hasson Groc. Co.

Case Details

Full title:STATE ex rel. RICE, ATTY. GEN., et al. v. HASSON GROCERY CO. et al

Court:Supreme Court of Mississippi, Division B

Date published: Nov 23, 1936


177 Miss. 204 (Miss. 1936)
170 So. 234

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