Opinion
No. 30420.
March 27, 1933.
1. OFFICERS. Statute respecting liability of officer improperly withholding public funds from state or county treasurer is penal in nature and cannot be extended by construction ( Laws, 1924, chapter 328, section 1).
Laws 1924, chapter 328, section 1, provides that any officer who shall improperly withhold public funds from state or county treasurer shall be liable on bond for all cost of collection or recovery of money or property, including in such costs the commissions, if any, of revenue agent.
2. TAXATION.
State auditor withholding from state treasurer taxes paid under protest and subsequently refunded, and therefore not rightfully belonging to state, held not liable for tax collector's commission of twenty per cent. (Code 1930, section 6987; Laws 1924, chapter 328, section 1).
3. TAXATION.
Deputy state tax collector held not entitled to commissions on money he discovered being withheld by officer from state treasury, which did not belong there (Code 1930, section 6987; Laws 1924, chapter 328, section 1).
APPEAL from the Circuit Court of Hinds County.
Chalmers Potter, of Jackson, for appellant.
Under the Acts of 1924 in reference to the disposition of gasoline tax, the third paragraph under subsection B, of section 4, chapter 119, provides as follows: "All moneys received by the auditor of public accounts during each month shall be distributed by him in the manner herein provided on or before the 15th day of the subsequent month."
A public officer receiving public moneys illegally may be charged with the duty of restitution and he cannot refuse to pay it over because it was illegally exacted from the person from whom it was collected, nor can he question the regularity of the proceedings by which the money came into his hands.
46 C.J. 1038.
Although it has been held that a public official who has collected fees under statutory authority in violation of the constitution cannot be compelled to turn them over to the state where the legislature has made no provision to that effect, the money collected under color of office without authority of law must usually be accounted for and paid to the state in whose name and by whose authority they were pretended to have been collected.
22 R.C.L. 466; Ex parte Cowart, 77 So. 348; Mason v. School District, 34 Mich. 228; People v. Van Ness, 79 Cal. 85, 12 Am. St. Rep. 135; State v. Harvey, 57 Miss. 863; Wolf v. City of Philadelphia, 27 Pa. 497; Placer Co. v. Foster, 8 Cal. 303; Waters v. State, 1 Gill 2d 302; O'Neal v. School Commissioners, 28 Md. 288; People v. Myers, 13 N.Y. Supp. 182.
Assuming the court to be with us on the two provisions that the money belonged to the state of Mississippi and was improperly withheld by White, then if, as a result of the investigation and demand of the plaintiff, White paid this money and the investigation and demand was the sole reason that White did so, White could not defeat plaintiff's right to his lawful commissions by the payment of this sum to the body entitled thereto instead of paying same through the state tax collector.
Adams v. Bolivar County, 75 Miss. 154, 21 So. 608; Robertson v. Shelton, 90 So. 83; Miller v. Henry, 103 So. 203.
"The limitation as to the compensation of deputies shall not apply to commissions collected from defaulting public officers in addition to recovery of principal, in which event the deputy, at whose instance such receiver is made, must be paid such amount out of the commissions collected from such defaulting officers as the state tax collector may deem proper."
Section 6999, Code of 1930.
The Integrity Act provides that any custodian of proper funds who shall improperly withhold same or who shall in anywise be in default as to any money held by him as custodian in any capacity shall be liable for the commission for the revenue agent.
Butler Snow, Lotterhos Travis and Wells, Jones, Wells Lipscomb, all of Jackson, for appellees.
The state tax collector is without authority to maintain this suit.
Sec. 6987, Code of 1930.
The state tax collector has no power to maintain a suit of this kind involving the proper conduct of a public official of the state without the consent of the attorney general.
Capital States v. State, 157 Miss. 576, 128 So. 759; White v. Lowry, 162 Miss. 751, 139 So. 874; Furgess v. Russell, 270 Ill. 304, 110 N.E. 130.
Chapter 212, Laws of 1932, has abated this suit if the state tax collector ever had the right to maintain it.
There was no statute in existence at the time of the plaintiff's demands requiring the auditor to pay over the moneys in question at any particular time.
The so-called Integrity Statute, which originally appeared as chapter 328, Laws of 1924, is a penalty statute and should be strictly construed. It imposes upon an officer in default for some amount due the state, liability over and above the true amount due, for commissions to the state tax collector and other expenses. These commissions so charged against the officer are in the nature of penalties. The moneys involved in the present case, as shown by the declaration, and by the appellant's brief, were not gasoline tax moneys lawfully due the state, but were sums of money which were erroneously paid by distributors of gasoline, and paid under protest when the state of Mississippi had absolutely no right to demand such payment. It was subsequently held in Pan-American Petroleum Corporation v. Miller, 154 Miss. 565, 122 So. 393, that these moneys were not lawfully due as taxes.
Adams v. Saunders, 93 Miss. 520, 46 So. 960.
When the auditor received these moneys under protest, because it was in doubt whether the tax was owed or not, it was his duty to hold the moneys subject to the claims of the taxpayers until the courts had passed on the question of liability.
37 C.J. 257, 258; 26 R.C.L., Taxation, sec. 421; 26 R.C.L., Taxation, sec. 426; Poindexter v. Greenhow, 114 U.S. 27, 29 L.Ed. 185; Hattiesburg v. Railroad Co., 141 Miss. 497, 106 So. 749; Pearl River County v. Lacey Lbr. Co., 124 Miss. 85, 86 So. 755; Union Land Co. v. Pearl River County, 141 Miss. 131, 196 So. 277; Tuttle v. Everett, 51 Miss. 27; Vicksburg v. Butler, 56 Miss. 72; Preston v. Boston, 29 Mass. 7; First National Bank v. Watkins, 21 Mich. 483; Home Tel. Co. v. Los Angeles, 40 Cal. A. 492, 181 P. 100; Dennison Manufacturing Co. v. Wright, 156 Ga. 789, 120 S.E. 120; Rath v. Chicago, 207 Ill. App. 117; Hill v. District of Columbia, 18 D.C. 481; Stewart v. Atlantic Beef Co. (Ga.), 18 S.E. 981; Scottish Union Insurance Co. v. Herricott (Iowa), 80 N.W. 665; Atchison, etc., Ry. v. O'Conner, 223 U.S. 280, 56 L.Ed. 436; Gaar v. Shannon, 223 U.S. 468, 56 L.Ed. 510; Ward v. Love County, 253 U.S. 17, 64 L.Ed. 751; St. Johns Electric Company v. City of St. Augustine (Fla.), 88 So. 387; Robertson v. Frank Bros., 132 U.S. 17, 33 L.Ed. 263.
W.J. Miller, former state tax collector, filed a declaration against Carl C. White, state auditor at the time the suit was filed, to recover a twenty per cent commission allowed the state tax collector, for money recovered from public officers by suit or by the activities of the state tax collector.
The suit grew out of the fact that certain gasoline taxes, for gasoline on hand at the time of the enactment of the statute, had been paid to the auditor by several companies under protest, the companies claiming that they were not liable for taxes on gasoline on hand at the time of the enactment of the statute. This gasoline tax so paid under protest amounted to two hundred twenty-two thousand two hundred sixty-one dollars and seventeen cents, of which sum one hundred ninety thousand eight hundred fifty-three dollars and fifty-eight cents was collected by the then attorney general from certain taxpayers and paid over to the state auditor. All of these taxes were paid under protest, and the auditor did not pay them into the state treasury on or before the 20th day of the following month, the taxes having been collected in June, 1928. The state tax collector had employed a deputy on a basis of fifteen per cent of the amount of funds collected by the activities of said deputy, provided it should not exceed five thousand dollars per year. On or about November 1, 1928, the state tax collector having discovered from the books of the auditor that this money had been paid to him, and had not been turned into the state treasury, demanded that such funds be paid into the state treasury. On November 6, 1928, another demand was made, specifying each collection, that same be paid into the state treasury, and on November 20, 1928, the state auditor paid into the state treasury said money. Demand was then made upon the auditor for the commission of the state tax collector which was twenty per cent thereof, of which fifteen per cent was to be paid to the deputy. Subsequent to the payment of this money to the auditor under protest, as stated, suit was brought to test the legality, and it was held that the tax did not apply to gasoline on hand at the time of the passage of the act, and that the companies so paying said tax under protest were entitled to recover it back. See Pan-American Petroleum Corp. v. Miller, 154 Miss. 565, 122 So. 393.
Consequently, the state was never entitled to the legal title to said money, and never had the legal custody thereof.
It is insisted, however, that under the authorities a public officer collecting money must pay same into the proper treasury whether the collection was legal or not; that when an officer collects by virtue of his office, he must turn the funds into the proper treasury; and that he cannot refuse to so do, and raise an issue as to the rightfulness of the state to the funds so collected, as against his principal, the state, county, or other body entitled to the taxes.
Under section 6987, Code 1930, it is the "duty of the state tax collector to investigate the books, accounts and vouchers of all fiscal officers and depositories of the state, and of every county, municipality and levee board and taxing district of every kind, and to sue for, collect and pay over all money improperly withheld by such fiscal officer or depository and he has the power to sue and right of action against all such officers and depository and their sureties to collect any such moneys; but if the delinquency appear by a correct open account on the books of the proper accounting officer . . . the right of the state tax collector to sue shall arise only after he has given thirty days' notice to the delinquent officer or depository to pay over the amounts and he fails to do so."
As stated, the money was paid within thirty days, after demand, as provided by the statute.
By chapter 328, Laws 1924, it is provided that: "Any officer . . . who shall improperly withhold same [public funds] from the state or county treasurer or other authority whose duty it is to receive same . . . or who shall in any wise be in default as to any money or property held by him as a public official in this state, or in any other capacity as custodian of such funds or property, shall be liable on his bond for all cost of collection or recovery of money or property, including in such costs the commissions, if any, of the revenue agent."
This statute is not to be extended by construction beyond its terms, as it is penal in its nature and imposes liability upon public officials not theretofore existing.
We do not think the state auditor was subject to the penalty under this statute, because, in fact, the state was not entitled to the money which had been collected. This money had been paid to the auditor under protest, and he was liable to the companies therefor in case it should turn out, as in the case here, that the state did not have the right to funds so paid to the auditor. In other words, the provisions of the statute quoted above are not applicable to the case at bar. When a person pays a tax under protest, he should, before the time the collector is required to pay it into the treasury, institute his action to test the right of the taxing body thereto, and to prevent the officer from paying it into the treasury. If the necessary proceedings are not taken within the required time, the officer should pay the funds into the treasury. But, in case of default, he is not liable for the state tax collector's commission of twenty per cent, unless the money paid over is rightfully the money of the state, county, or other public body.
We are of the opinion that the circuit court was correct in sustaining the demurrer to the declaration in this case.
The deputy tax collector is in no better position than his principal, the state tax collector, for money he discovers being withheld from the treasury which does not belong there. He is not entitled to a commission on such money, and has no vested right to a commission on the mere fact that he discovers money had been collected and should be paid into the proper treasury.
The judgment will be affirmed.
Affirmed.