Robertson v. Shelton , 127 Miss. 360 ( 1921 )

Sykes, J.,

delivered the opinion of the court.

The state revenue agent prosecutes an appeal to this court from a final decree of the chancery court of Copiah county denying him twenty per cent, commission which he claimed to be due him from the collection of taxes from a large number of delinquents for state and county taxes for the year 1916. It is his contention that his investigation and activities resulted in the collection of these taxes, thereby entitling him to his commission under section 4748, Code of 1906 (section 7066, Hemingway’s Code), which section reads as follows:

“Neither the state nor any county, municipality, or levee board shall be chargeable with any fees or expenses on account of any investigation or suit made or instituted by the state revenue agent; and he shall not receive any salary; but he shall be entitled to retain, as full compensation for his services and expenses, twenty per centum on all amounts collected and paid over by him, and of the purchase money of all lands bid in for the state by him and sold by the land commissioner.”

The bill alleges that he made an investigation of the records on file in the office of the state auditor, and discovered that a large amount of taxes due for that year were past due and unpaid into the state treasury, and thereupon he sent some deputies to the county of Copiah, who made a careful investigation and audit of the books of the fiscal officers of that county and found therefrom on July 27, 1917, there were a large number of tax delinquents, a copy of which list is filed as an exhibit to the bill. It appears from the record in this case that this copy was made by the deputy of the revenue agent from a list of unsigned tax receipts already made out in the tax collector’s office. These receipts covered delinquent owners of real property, including in some cases all personal property of these real estate owners. No unsigned receipts had been made out for delinquents upon personal property alone, and no effort was made by this deputy to ascertain these delinquents. After this deputy had prepared this list he had some conversation with the tax collector, Mr. Shelton, about the collection of these taxes, in which conversation the tax collector declined to recognize the right of the revenue agent to supersede him, but stated that he would continue his efforts to collect all taxes, and declined to recognize the authority of the revenue agent to in any way intervene. A few days thereafter from his office in Jackson the revenue agent mailed out letters to these delinquent taxpayers, calling their attention to their delinquency, and demanding payment of the taxes to him. On July 28th he gave written notice to the board of supervisors of Copiah county that he had demanded payment of these taxes, therein giving an itemized list of the delinquents.

It is shown by the testimony that the county tax collector had been actively engaged in the collection of taxes since they became due, and had sent out a number of notices to the delinquent taxpayers, urging them to pay their taxes, one of which notices was sent out several days before the notice of the revenue agent. The record further shows that there had been no sales of lands for delinquent taxes in Copiah county on April 1st, nor at any other date before the revenue agent attempted to intervene in the matter. It is undisputed, however, that the county tax collector during all this time was actively collecting taxes and actively attempting to collect these delinquent taxes. These delinquent taxes as a matter of fact were paid directly to the sheriff. There is no testimony in the record showing that any of these taxes were paid because of the notice sent out by the revenue agent. The bill expressly charges that the payment of these taxes made to the county tax collector was “a direct and proximate result of the investigation and service of complainant’s acting in his official capacity as aforesaid.” These receipts for delinquent taxes when issued were all dated February 1st, though some of the taxes as a matter of fact were not paid until August.

Before the deputy of the revenue agent appeared upon the scene the tax collector had prepared a list of lands upon which taxes had not been paid to submit to the board of supervisors at its August meeting with a request that he be allowed to sell them. This list was submitted to the board, an order passed and some of the lands were actually sold for delinquent taxes. From the record in the case it is shown that taxes upon both real and personal property were being collected by the sheriff during every month after they were past due; that there was no appreciable increase in these payments during the month of July after the notice of the revenue agent had been mailed; that there was some little increase in August, especially on August 9th, when there were one hundred and seventy-nine collections made. Of this number,- however, only forty-one were upon the list of the revenue agent; the others being for personal property only.

The appellant also attempted to show that the custom had existed in this county for many years not to advertise for sale the real property on April 1st, as provided by the statute. The testimony of the sheriff and other witnesses was to the effect that he did not prepare this list for sale at that time because of certain discrepancies in the assessment roll, but made an oral request of the board of supervisors that the sale be pretermitted to a later date. This, however, constituted no legal excuse for the postponement of the land sale.

The narrow issue presented to the chancellor of the court below was whether or not the investigation of the revenue agent was the proximate cause of the payment of these taxes to the tax collector. To state this contention in the language of the learned counsel for the appellant as contained in his splendid brief:

“Appellant claims that his investigation and activities resulted in a collection of the taxes, entitling him to his commission of twenty per centum upon a total delinquency of between seven thousand dollars and ten thousand dollars.

“The revenue agent did not file any suits against the delinquents, nor did he personally collect the taxes, but he claims his commission by virtue of the fact that such delinquency was discovered by him the latter part of July, 1917, and he sent in due course of mail each delinquent a notice; further because said notices demanding payment were mailed at Jackson, Miss., on July 29, 1917, and that, beginning the next day and continuing on the subsequent days immediately thereafter, the delinquents paid the tax collector such delinquent taxes.

“That the presumption must be indulged that his investigation and the mailing of notices to the delinquents resulted in the taxes being collected, although the delinquents did not pay the money over to the appellant, but paid it to the indulgent tax collector, the appellee, who had, without warrant of law, failed to take any steps whatsoever as required by law to advertise the delinquent lands for sale, or in any respect to comply with the statute in such cases of delinquency.”

The chancellor held as a matter of fact that the investigation and activities of the revenue agent Avere not the sole and proximate cause of the payment of the taxes. In affirming the decision of the chancellor we are not here called upon to decide whether the state revenue agent is empowered under the statutes to attempt the collection of past-due and unpaid taxes when the uncontradicted record shows that the county tax collector is still attempting to collect these same taxes.

In this case the taxes were past due and unpaid. No effort had been made to advertise and sell the lands and no coercive measures had been taken by the sheriff to collect these taxes when the revenue agent made his investigation. Without setting out in detail, however, all' of the statutes relating to the duties of the county tax collector, it will be seen by an examination of them that he is required at all times to attempt to collect all past-due and unpaid taxes. He is chargeable with these taxes until he has presented to the board of supervisors at its August meeting a report of all insolvent and delinquent taxpayers of Ms county, and has attempted, as provided in that statute, to collect the taxes, but has failed to do so, and that these delinquents have no effects known to hint out of which these taxes can be made, and the board, under section 4351, Code of 1906 (section 6985, Hemingway’s Code), has examined this report and allowed the sheriff a credit for these delinquents. Even after this, under section 4354, Code of 1906 (section 6988, Hemingway’s Code), it is the duty of the tax collector, if possible, to collect these taxes from all insolvent and delinquent taxpayers.

In this case no insolvency report had been made by the sheriff, and he had not asked for any credits as provided for in these two statutes. Under these statutes it is primarily the duty of the county tax collector to collect these taxes. It is further to be noted that under section 4326, Code of 1906 (section 6960, Hemingway’s Code), lands cannot be sold for delinquent taxes until the first Monday in April, while personal property liable for a tax may be sold after December 15th by the tax collector, as provided by section 4315, Code of 1906 (section 6949, Hemingway’s Code). In this case the revenue agent did not bring suit for the collection of these past-due and unpaid taxes; neither were the taxes paid directly to him.

By section 4739, Code of 1906 (section 7057, Hemingway’s Code), it is made the duty of the state revenue agent to investigate the books, etc., of all 'fiscal officers of the state, county, municipality, etc., and to sue for, collect and pay over all money improperly withheld by any of these officers; and, further, that if the delinquency appears by correct open account on the books, the right of the revenue agent to sue shall arise only after he shall have given thirty days’ notice to the delinquent officer to pay over the amounts and he fails to do so. Under section 4744, Code of 1906 (section 7062, Hemingway’s Code), in the discharge of his official duties, he is given the power to examine and investigate the books, etc., of any state, county, or other officer. Section 4748, Code of 1906 (section 7066, Hemingway’s Code)., as construed by tbis court, provides for a compensation of twenty per cent, on all amounts collected and paid over by the revenue agent as the result of his investigation or suit.

The first question presented to us, conceding, but not here deciding, that the revenue agent had a right to intervene and attempt the collection of these delinquent taxes, is whether or not, since he did not collect them by suit or any other coercive statutory method, he can claim that they were paid to the sheriff as a direct result of his investigation or activity. We think, unquestionably, that under our statutes the primary duty of collecting these taxes rests upon the county tax collector, and when he is aetivelv attempting to collect taxes,' and is collecting taxes, and these taxes are paid to him, then the revenue agent cannot claim that they were paid because of his investigation.

In the case of Railroad Co. v. West, 78 Miss. 789, 29 So. 475 (relied upon by appellant), the revenue agent had brought suit for the taxes before the county tax collector had made any attempt to collect them. As is shown on page 811 of 78 Miss., on page 476 of 29 So.:

“The revenue agent having begun his suit before the sheriff began his procedure, and that suit being necessary to determine whether the exemption was valid, every reason of laAV and of public policy maintains the right of the revenue agent to conduct these suits to conclusion, and collect the taxes without interference from the sheriff.”

• In that case it was also necessary for the court to pass upon the question of the validity of the exemption before the sheriff was authorized to collect any taxes from the railroad company.

The case mainly relied upon by appellant is that of Adams v. Bolivar Gounty, 75 Miss. 154, 21 So. 608. That was a case where there was a defaulting tax collector. He had failed to pay over at the proper time into the county treasury taxes collected by him and due the county. This defalcation appeared upon the face of his books. The revenue agent, proceeding under section 4739 above referred to, made an. investigation, 'discovered tbis shortage appearing there, gave the defaulting tax collector the thirty days’ notice to pay over this amount to the county, and upon his failure to do so placed the claim in the hands of his attorneys to bring suit thereon, whereupon the tax collector paid this money into the county treasury. The declaration of the revenue agent in that case alleged that the time fixed by law for the payment of this money into.the treasury of the county had long since lapsed, and, further, that no steps had been taken on the part of the authorities of the county to collect it; that at the time the payment was made to the county authorities the right of the revenue agent to collect the same had accrued, and that he was proceeding to enforce the collection of it, and that the payment was the result of his investigation in the performance of his duty under the law. In that case, in construing section 4199, Code of 1892 (section 4748, Code of 1906; section 7066, Hemingway’s Code), it is stated in the opinion that — “Compensation for two things, an ‘investigation made’ or a ‘suit instituted,’ is provided for by section 4199 [Code of 1892], when either results in the collection of the money.”

And it was held that the revenue agent is entitled to his commission out of moneys not actually collected by him personally and paid over by him personally, but collected and paid over as a result either of his investigation without suit, or of a suit.

“He is to be paid, when successful, for both his ‘expenses and his services.’ Expenses might be incurred by him both in an investigation and in a suit. Services he could ordinarily render, in the meaning of this statute, chiefly, at least,-in the making of the investigation alone; for, that made, he has no ‘services’ to render, when a suit is instituted, except the merely incidental one of attending to the suit in its progress, conducted for him by attorneys. The legislature meant to pay him for ‘his services’ — compensate him for work done by him resulting in the collection.”

It will be noted in this case from an examination of tlie opinion that Bolivar county contended that the revenue agent must personally, or through one of his deputies, collect and pay over the money, and, further, that the demurrer admitted that the money was actually paid into the treasury as the result of the investigation of the revenue agent. The court declined to hold to this narrow construction of the statute. In that case the tax collector was- a defaulter, his time for making settlements had passed, and the county had taken no steps whatever to collect the money from him. Section 4739, Code of 1906, then in force as section 4191, Code of 1892, makes it the duty of the revenue agent to investigate the books, etc., of county officers, and it further sets forth the steps that he must take to compel a delinquent officer to make settlement, viz.:

“If the delinquency appear by a correct open account on the books of the proper accounting officer, the right of the revenue agent to sue shall arise only after he has given thirty days’ notice to the delinquent officer to pay over the amounts and he fails to do so.”

The revenue agent gave this notice, and the tax collector failed to pay the funds to the county within the thirty days, .after which the revenue agent placed the account in the hands of his attorney for the purpose of suing. In other Avords, every step as prescribed by section 4739 was taken by the revenue agent in that case except the actual filing of the suit. Though the time had passed for the tax collector to make settlement with the county, he had failed to do so, and neither the county nor any one was attempting to coerce a settlement from this delinquent tax collector at the time the revenue agent began his investigation.

In the case at bar the tax collector was not a defaulter under section 4739, Code of 1906 (section 7057, Heming-Avay’s Code). The investigation of the revenue agent was not made under this section. He was not proceeding under this section to try to collect the taxes from delinquent taxpayers. True he is given the authority to investigate the books of officers both under sections 4739 and 4744, Code of 1906 (sections 7057, 7062, Hemingway’s Code). The investigation made in this case was made to ascertain the delinquent taxpayers. In this case the delinquencies involved were shown by tax receipts made out in blank by the tax collector. These receipts had been prepared by the tax' collector for his convenience in collecting the taxes. There is no notice prescribed by the statutes for the revenue agent to give a delinquent taxpayer. The only coercive statutory provision which the revenue agent may take against this delinquent taxpayer is by suit. In the Bolivar County Case supra the steps to be taken by the revenue agent are prescribed by statute, and this statute was followed. All was done by him which the statute requires, except the actual bringing of the suit, and these statutory steps so taken were the cause qf the settlement of the delinquent tax collector.

In the case at bar the investigation of the revenue agent resulted in nothing that ivas not already known by the tax collector — in fact this investigation verified the work of the tax collector. It further showed that the tax collector knew of these delinquencies, and corroborates the testimony, which is in fact uncontradicated, that he was trying to. collect the taxes, doing everything in fact short of coercive measures to enforce the collection. There had been no abandonment of the collection of these taxes by him. Neither the tax collector nor the revenue agent in this case resorted to coercive measures. It was primarily the duty of the tax collector to collect these taxes. The record shows that he was attempting to do so, and that the taxes were actually paid to him. These facts emphasize the difference between this and the Bolivar County Case. The opinion in the Bolivar County Case states that the decision of that case falls strictly within the principle of Miller v. Delta & Pine Land Co., 74 Miss. 110, 20 So. 875, because “the tax collector had entered upon the doing qf the acts which entitled him to damages, so here the revenue agent had entered upon and done all that he could ordinarily do.” In the Miller Case the tax collector had begun his advertisement under the statute for the sale of the land before tbe proper amount was tendered Mm in payment of taxes. TMs section 2197, Code of 1906 (section 1882, Hemingway’s Code), provides for a fee of ten per centum on all taxes collected after the 15th of December by distress or otherwise. The advertisement made by the sheriff was one of the necessary coercive steps for the collection of these taxes or the sale of the lands, and in that case the court held that:

“A collection by resorting to any of the plans named in the statute entitles the officer to the per centum, even though the proceeding is interrupted by payment of the taxes. . . . There is no point in the proceeding, once begun, at which it may be said that the right to the compensation has attached rather than at another. The compensation is given as a unit; it cannot be apportioned. It is given Avhen the collection is made by distress or other proceeding provided by the law, and the proceeding is necessarily also to be viewed as a unit.”

In the Miller Oase, sufra, the “other proceeding” provided by the law clearly means some statutory coercive proceeding in the nature of distress proceedings. This is made manifest by examination of the case of Anderson y. Hawks, 70 Miss. 639, 12 So. 697, which is referred to in the Miller Case, wherein it was held that this ten per centum compensation allowed the tax collector was not in the nature of a penalty, but was allowed as compensation for additional services to be performed by the tax collector, and that when no action had been taken by the collector to coerce payment of the taxes he was not entitled to the per 1 centum. In the Anderson Case the taxes were paid to the collector after the delinquency had occurred, but before any coercive measures Avere taken by the collector. The collector claimed that he was entitled to the ten per centum because of the delinquency. The court denied this contention as follows:

“Keeping in vieAV the fact that the allowance is made as compensation for services, and that delinquent taxes may be collected: (1) By distress of personal property; . . . (2) by sale of land; . . . (3) by certifying tbe assessment to other counties in which the delinquent may have property; . . . (4) by suit; . . . (5) by action on the bond required of transient traders . . . — it is not difficult to discover the meaning of the Avords ‘or otherwise/ which, upon familiar rules, are to be construed as applying to matters ejusdem generis as the preceding particular words, a pontrary intention not appearing.”

The Bolivar County Case cites Avith approval the Miller Case. The Miller Case cites Avith approval the Anderson Case. From the Miller and Anderson Cases it is perfectly manifest that the tax collector is not entitled to his ten per centum unless he resorts to some of the coercive methods specifically enumerated in the Anderson Case, and when the Bolivar County case is considered in connection with these íavo cases it is plain that the revenue agent is not entitled to his tAventy per centum, unless he resorts to some statutory coercive method which results directly in the payment of the taxes. The only thing he did in this case which is prescribed by the statute was to make an investigation. This investigation resulted in'nothing that was not already known to the tax collector and delinquent taxpayers. In fact the tax collector already knew the facts, and had actually made out a list of those delinquents. The revenue agent obtained this knowledge from the books of the tax collector, consequently this investigation revealed nothing that Avas not already generally known. Under none of our decisions is the revenue agent entitled to any fees or commissions merely for an investigation.

In the case of Garrett v. Robertson, 120 Miss. 731, 83 So. 177, the revenue agent actually instituted suits against two banks for past-due and unpaid taxes, and as a direct result of this coercive action of the revenue agent these taxes Avere paid. In that case we held that the revenue agent was entitled to his commission because he had instituted suit (a coercive proceeding), and as a direct result of the institution of these suits the taxes were paid, citing the Miller and Bolivar County Cases. The principles enunciated in the case of Railroad v. Love, 69 Miss. 109, 12 So. 266, are applicable to this case. In that case, under certain statutes, the railroad company was empowered to pay its taxes either to the treasurer of the levee board or the county tax collector. The taxes of'the rail-roád company were past due and unpaid. The treasurer of the levee board notified the tax collector to this effect and requested him to proceed to collect these taxes. The sheriff gave notice to the attorneys of the railroad company of the delinquency, and demanded through them the payment of the taxes. He also wrote the treasurer of the levee board not to receive the taxes of the appellant railroad company unless the amount tendered included his ten per centum commission. The railroad company paid these taxes directly to the levee board, but did not include the ten per centum commission claimed by the tax collector. Suit was then instituted by the tax collector against the railroad for this ten per centum. The court, in holding that the tax'collector was not entitled to this additional compensation, stated that:

“The compensation provided by our laws for tax collectors was designed to cover cases where collections were actually made by those officers. The remuneration, whether upon taxes paid without default on the part of the taxpayer or upon taxes collected from delinquent taxpayers, is in the way of recompense for services actually performed. . . . The law never contemplated compensation for services never rendered. . . .

“An examination of our statutes shows clearly that there is no provision for commissions where no collections of taxes are made, with the one solitary exception hereinbefore noticed” — which is not in point in this case. This opinion concludes as follows: “We know of no such service by an officer as constructive service. There must be an actual collection of taxes, not a constructive collection, to entitle to compensation.”

In the Love Case, by statute, the railroad company could pay its taxes either to the levee board or to the tax collector. Tbe treasurer of the levee board expressly requested the tax collector to attempt the collection of these taxes, and this he did by calling upon the attorneys of the railroad company to pay the taxes to him and notifying the treasurer of the levee board not to accept payment of these taxes. However, no coercive proceedings were attempted by him in the matter. The railroad company actually paid the taxes to the levee board, and the court in denying the claim of the tax collector therein expressly held that there was no such thing as a constructive collection of taxes. The taxes must be actually collected by the party who is entitled to the commission. Where coercive measures are resorted to which result in the actual payment of the taxes to another than the one resorting to these coercive measures, but paid as a direct result of these coercive measures, then this is an actual collection of the taxes by the party resorting to the coercive measures. This is the holding of the Bolivar County Case, supra. ■ In the absence, however, of a resort to coercive measures, when the taxes may be' paid to two different officers, then the officer actually receiving the taxes is the one who actually ’collects them. This is the holding in the Love Case, supra.

The only coercive measure by which the state revenue agent can collect past-due and unpaid taxes which have been assessed is found in section 4738, Code of 1906 (section 7056, Hemingway’s Code), which empowers him “to proceed by suit . . . for all past due and unpaid taxes of any kind.” He did not do so in this case. The sheriff was attempting the collection of these taxes. He had not made his insolvency report and asked to be credited with these delinquent taxes as provided by statute. Primarily it was his duty to collect these taxes. He actually did so. Under these circumstances it was not proper to consider the question as to whether or not the taxes were paid to the sheriff as a result of the activities of the revenue agent which were not coercive statutory activities.

If this question had been proper to be considered in the lower court the burden of proof would have rested upon the revenue agent to show that the taxes were paid as a direct result of his activities. As a matter of fact, the bill so charged. The proof, however, absolutely failed to sustain this allegation. The only witness who directly testified upon this proposition stated that the notice he received from the revenue agent was not the cause of the payment of his taxes.

The chancellor rendered a decree in favor of the tax collector, and this decree is affirmed.

Affirmed.

Cook and Eti-iridge, JJ., dissenting.