Guardian Life Insurance v. State Board of Equalization , 134 Mont. 526 ( 1959 )

MR. JUSTICE ANGSTMAN:

Plaintiff, a New York corporation, brought this action in the district court for declaratory and injunctive relief.

The complaint alleged that in November 1949, it qualified and received a license to write life insurance policies in Montana; that each year thereafter it prepared corporation license tax returns upon forms supplied by the defendant Board of Equalization and paid its corporation license taxes as computed in the returns; that no complaint was made by defendant Board regarding the returns or the taxes paid until in the month of April 1956, when the Board demanded an additional $999.54; that the Board erroneously and unlawfully computed taxes for the years 1947 and 1948 during which years plaintiff was not authorized to do business in Montana and in truth, and in fact, did not do business in Montana during those years.

The complaint further alleges that defendant Board because of section 84-1505, R..C.M. 1947 is barred from questioning the tax for the years 1949, 1950 and 1951 because of the lapse of more than five years after the returns were due (a point which we since ruled on in State ex rel. Anderson v. State Board of Equalization, 133 Mont. 8, 319 Pac. (2d) 221).

It further alleged that the defendant Board in computing the income of plaintiff for the year 1952 included the sum of $8,752 as income from bonds issued by the Montana Power Company; that plaintiff did not in that year own any bonds of the Montana Power Company; that it purchased bonds of the Montana Power Company in May 1953, and did receive interest thereon that year which the Board included in its computation but plaintiff alleges this was erroneous since the Montana Power Company is a New Jersey .corporation; that the Board also included in its computation interest for the year 1954, in the sum of $12,245 from bonds issued by the State Board of Education, whereas the bonds were not purchased until July 13, 1954, and did not pay interest after purchase by plaintiff until January 1, 1955, and that no interest was received by plaintiff from that source in the year 1954. The complaint also charges other erroneous acts on the part of defendant Board.

Upon the filing of the complaint on May 18, 1956, the court issued an order to show cause and restraining order. The order to show cause was returnable on June 4th at 10:00 a. m. It recited:

“That in the meantime the defendants and each of them be restrained and enjoined from doing any acts attempting to in any way enforce the collection of the alleged deficiency tax referred to and described in plaintiff’s complaint on file herein and from attempting to enforce any penalties or deprive the plaintiff of any rights by reason of the attempted levy of said deficiency tax until the further order of the court. ’ ’

On May 29th defendants gave notice of a motion to dissolve the temporary restraining order based on several grounds. It was notice for hearing on June 4th the very day that the order to show cause was returnable. The motion was denied. Defendants filed a notice of appeal from that order.

Plaintiff has filed a motion to dismiss the appeal.

The question presented by the motion is whether a restraining order is an order “granting an injunction” and whether an order refusing to dissolve a restraining order is appealable within the meaning of section 93-8003 which permits an appeal from an order “granting an injunction” and from an order “refusing to dissolve an injunction.” That a restraining order is an injunction in a certain sense cannot be questioned. But is it an injunction within the meaning of section 93-8003 ?

This court answered in the negative in Wetzstein v. Boston & M. Consol. Copper & Silver Min. Co., 25 Mont. 135, 63 Pac. 1043, 1044. The court distinguished between a restraining order and an injunction by saying: “A restraining order is distinguishable from an injunction, in that a restraining order is intended only as a restraint upon the defendant until the propriety of the granting of an injunction, temporary or perpetual, can be determined, and it does no more than restrain the proceedings until such determination. Such an order is limited in its operation, and extends only to such reasonable time as may be necessary to have a hearing on an order to show cause why an injunction should not issue. [Citing cases.] ”

Here the order was limited to a reasonable time. In fact the order to show cause was returnable the very day that defendants noticed for hearing their motion to dissolve.

The ruling in the Wetzstein case was followed in Maloney v. King, 25 Mont. 256, 64 Pac. 668; State ex rel. Rankin v. Martin, 65 Mont. 323, 211 Pac. 210; Pack v. Carter, 9 Cir., 1915, 223 F. 638, and recognized as sound in State ex rel. Public Service Commission v. District Court, 103 Mont. 563, 63 Pac. (2d) 1032.

The ease was cited with apparent approval of the distinction between a restraining order and an injunction, temporary or permanent, in Sheridan County Electric Co-Op v. Ferguson, 124 Mont. 543, 227 Pac. (2d) 597, an opinion written by Mr. Chief Justice Adair.

The Wetzstein case was decided in 1901. Since that time section 93-8003 has been amended twice by the legislature, but no effort was made to change it so far as it was affected by that decision. If the legislature was not satisfied with the interpretation of the statute as made in the Wetzstein case, it certainly would have changed the statute so as to authorize appeals from restraining orders.

The case of Labbitt v. Bunston, 80 Mont. 293, 260 Pac. 727, at first reading may seem to take a view contrary to that of the Wetzstein case, but such is not the fact. In that ease the court drew a distinction between the Wetzstein case and the case before the court on the ground that in the Labbitt case the hearing on the motion to dissolve was tantamount to a hearing on the order to show cause. The court stated at page 302 of 80 Mont. at page 731 of 260 Pac.

“Where the matter is heard upon an order to show cause, the right to a temporary injunction is ‘adjudicated’ by the decision rendered after the hearing (Winnett Pacific Oil Co. v. Wilson, above [71 Mont. 250, 229 Pac. 850]); so here, as the motion to dissolve presented the question of plaintiff’s right to the restraining order, and the decision on the motion was equivalent to decision on the hearing on the order to show cause and rendered such a hearing needless, the order of September 24th was an ‘adjudication’ of the plaintiff’s right to an injunction pendente lite and an order refusing to dissolve an injunction, from which an appeal lies under section 9731 [Rev. Codes 1921, now R.C.M. 1947, see. 93-8003], above, and it is so declared by Mr. Justice Hunt, speaking for this court in Bennett Bros. Co. v Congdon, 20 Mont. 208, 50 Pac. 556, which decision is referred to in the Wetzstein opinion, but therein the distinction between an appeal from a restraining order and from an order refusing to dissolve such, injunction is not noted.”

Here there has as yet been no hearing on the merits of the case or on the issue as to whether plaintiff is entitled to an injunction pendente lite.

No record has as yet been made as to whether defendant Board seeks to tax plaintiff for years before it was doing business in Montana or for income it states it never received or what, if any, distinction exists between this case and that of State ex rel. Anderson v. State Board of Equalization, supra.

We do not yet know what the district court will do with the case on its merits so far as the issuance of a temporary injunction is concerned. That is the reason why there is no appeal from an order granting a temporary restraining order. Such an order simply holds everything in status quo until the matter can be heard and the judge’s views obtained.

We should not be called upon to assume jurisdiction of an appeal before the district judge had indicated his views. Those views could have been obtained, or at least hearing could have been held, the very day when defendant Board noticed its motion for hearing.

It is contended that this court entertained an appeal under circumstances similar to those here in Stalcup v. Cameron Ditch Co., 130 Mont. 294, 300 Pac. (2d) 511. That case is different from the case before us here. The opinion starts out by saying:

“Appeal by the plaintiffs (appellants) from an order made after hearing which denied a temporary injunction and dissolved a temporary restraining order theretofore issued.”

There the court had issued a temporary restraining order. A hearing was had and the court denied a temporary injunction and dissolved the restraining order. The appeal was from the order denying the temporary injunction and obviously was proper. If the appeal was proper also from the order dissolving the restraining order, it was so because there had been a hearing involving the merits within the reasoning of the Labbitt case.

On first reading the case of Marchi v. Brackman, 130 Mont. 228, 299 Pac. (2d) 761, would seem to militate against the conclusion we have reached here. That case differs from this in that the lower court had sustained the general demurrer to the complaint. It likewise granted a motion to strike much of the material from the complaint. Because of those facts, this court properly said at page 232, of 130 Mont. at page 764 of 299 Pac. (2d) : “The order granting the motion to strike and dissolving the restraining order was, in effect, an order refusing to grant an injunction,” and hence appealable. In that case there haci been a hearing within the ruling of the case of Labbitt v. Bunston, 80 Mont. 293, 260 Pac. 727, and nothing further could be .done in the trial court. It had ruled that the complaint was insufficient. That was a definite ruling that plaintiff was not entitled to an injunction. Here there has as yet been no hearing to ascertain the views of the trial court as to whether an injunction should issue.

The case of State ex rel. Thompson v. District Court, 132 Mont. 53, 313 Pac. (2d) 1034, does not treat of the question before us here. There had been a hearing in that ease touching the merits. There was no attempted appeal from a temporary restraining order or from an order refusing to dissolve it, as here.

The holding in the Wetzstein ease, which has never been overruled should be followed under the doctrine of stare decisis so elaborately defined in the dissenting opinion of Mr. 'Justice Adair.

It follows that the attempted appeal from the order must be and is dismissed.

MR. CHIEF JUSTICE HARRISON and MR. JUSTICE CASTLES concur.