Opinion
September 16, 1942 —
October 13, 1942.
APPEAL from a judgment of the circuit court for Milwaukee county: CHARLES L. AARONS, Circuit Judge. Affirmed.
A. W. Schutz of Milwaukee, for the appellant.
For the respondents there was a brief by the Attorney General and Harold H. Persons, assistant attorney general, and oral argument by Mr. Persons.
Charles A. Miller on June 18, 1937, appealed from an additional assessment of income tax by the Wisconsin Tax Commission to the circuit court for Milwaukee county under the provisions of sec. 71.16, Stats. The circuit court affirmed the assessment. Plaintiff appeals.
During the years 1926 to 1930, inclusive, the appellant and his wife had filed joint returns of their income, and the tax was computed on the aggregate net income pursuant to sec. 2, ch. 446, Laws of 1925 (sec. 71.09 (4) (b), Stats., — later numbered sec. 71.09 (4) (c)).
On November 30, 1931, the United States supreme court in Hoeper v. Tax Comm. 284 U.S. 206, 52 Sup. Ct. 120, 76 L.Ed. 248, reversing the decision in Hoeper v. Tax Comm. 202 Wis. 493, 233 N.W. 100, held that the above-mentioned section of the Wisconsin statutes was unconstitutional. Thereafter the assessor of incomes audited the tax returns filed by the appellant and his wife upon a joint-return basis and therefrom determined the separate incomes of the appellant Charles A. Miller and his wife. The combining of their incomes had resulted in a smaller taxable income by reason of the reduction of the appellant's income through the application of net losses of his wife. The separation of the incomes resulted in a larger taxable income of the appellant. On November 29, 1932, the assessor of incomes of Milwaukee county gave the appellant a notice of additional assessment, taxing the appellant on the difference between the net taxable combined income and his net taxable separate income as so determined. Objection was made thereto by the appellant. Upon review being taken to the Wisconsin Tax Commission said assessment, with some modification, was affirmed. Thereafter the appellant appealed to the circuit court.
This appeal is ruled by the decisions in the cases of Schuette v. Tax Comm. 234 Wis. 574, 292 N.W. 9, and Amerpohl v. Tax Comm. 225 Wis. 62, 272 N.W. 472.
Appellant relies heavily on Daniels v. Tearney, 102 U.S. 415, 26 L. Ed. 187, and Chicot County Drainage District v. Baxter State Bank, 308 U.S. 371, 60 Sup. Ct. 317, 84 L. Ed. 329, but both cases are readily distinguishable from the case at bar. The latter decision is based on res judicata and is not applicable here. In Daniels v. Tearney the plaintiff, in reliance on the defendant's actions under the statute, changed his position to his detriment and so the defendant was held estopped to assert the invalidity of the statute as a defense. This case involved the right of a private individual who had benefited at the expense of the other party to the action by relying on a statute, to assert a defense of the statute's invalidity. In the case at bar the respondent is not interposing such a defense nor has the appellant changed his position to his detriment. A distinction must be drawn between a benefit to an individual in a private transaction and the receipt of taxes by the state officers. The taxes represent a just debt to the state, and the people of the state have an interest in seeing that each taxpayer bears his fair share of the tax burden. In Daniels v. Tearney, at page 420, the court points out that the principle of estoppel is to promote fair dealing. The legislature has declared that it shall be proper to, correct any assessment within a certain period, regardless of why the mistake was made. Sec. 71.115 (1) (a), Stats. (See ch. 1, Laws of Sp. Sess. 1937). Appellant paid taxes which he and respondent believed were correct in amount, but he did not thereby acquire "any vested rights against the state as to assessments which properly should have been made." Schuette v. Tax Comm. 234 Wis. 574, 582, 292 N.W. 9.
"The payment of taxes is an obvious and insistent duty" and nothing happened in this instance to interfere with the timely correction of a previous and mistaken assessment, even though the mistake occurred because the commission first acted under what it considered a valid law which was later held to be unconstitutional in Hoeper v. Tax Comm. 284 U.S. 206, 52 Sup. Ct. 120, 76 L. Ed. 248. O'Brien v. Wheelock, 184 U.S. 450, 22 Sup. Ct. 354, 46 L. Ed. 636; Laabs v. Tax Comm. 218 Wis. 414, 261 N.W. 404.
By the Court. — Judgment affirmed.