Opinion ID: 1771142
Heading Depth: 1
Heading Rank: 7

Heading: jurisdiction

Text: The first five assignments of error deal with the jurisdiction of the chancery court to enjoin or declare unconstitutional this statute. Generally courts of equity are prohibited from enjoining the assessment, appraisal or collection of taxes. Lewis v. Mass Appraisal Services, Inc., 396 So.2d 35 (Miss. 1981); Coulson v. Harris, 43 Miss. 728 (1871). However, injunctive relief is available in cases of equity jurisdiction or when specially authorized by statute. McDonald v. Murphree, 45 Miss. 705 (1871); see also, Stone v. Kerr, 194 Miss. 646, 10 So.2d 845, 847 (1942) (citing and affirming Murphree ); State Tax Commission v. Fondren, 387 So.2d 712, 723-24 (Miss. 1980) (equity may enjoin collection of taxes in certain cases). This Court must determine whether either of these bases of injunctive jurisdiction existed in the present case.
Subject matter jurisdiction ... the authority of a court to hear a given case at all  turns on the type of case at issue. Dye v. State, Ex rel. Hale, 507 So.2d 332, 337 (Miss. 1987). Jurisdictionally cases are generally classified by the nature of the primary right asserted or the remedy sought. Against this backdrop we consider the jurisdictional statute, Section 11-13-11, which provides: The chancery court shall have jurisdiction of suits by one or more taxpayers in any county, city, town, or village, to restrain the collection of any taxes levied or attempted to be collected without authority of law. To determine if we have before us a case within chancery court jurisdiction, as defined by § 11-13-11 we turn to the well pleaded allegations of the complaint which, for jurisdictional purposes, are taken as true. In Re City of Ridgeland, 494 So.2d 348, 350 (Miss. 1986); American Fidelity Fire Insurance Co. v. Athens Stove Works, Inc., 481 So.2d 292, 296 (Miss. 1985); Luckett v. Mississippi Wood, Inc., 481 So.2d 288, 290-91 (Miss. 1985). When we refer to the complaint, we find that the plaintiffs have sought an injunction to restrain the collection of taxes levied or attempted to be collected without authority of law. Plaintiffs thus appear to have asserted a claim within the subject matter jurisdiction of the chancery court. Subsequent interpretations of this statute appear to require that: (1) The aggrieved taxpayer in order to have standing must allege an inadequate remedy at law in his complaint. See Lewis v. Mass Appraisal Services, Inc., 396 So.2d 35-38 (Miss. 1981); (2) that in fact there exists no adequate remedy at law which the taxpayer may avail himself to. See Stone v. Kerr, 194 Miss. 646, 10 So.2d 845 (1942); Fondren v. State Tax Commission, 350 So.2d 1329, 1333-34 (Miss. 1977); (3) that the taxpayers allegations of fact, if proved, warrant a conclusion that the challenged taxes are being levied or collected without authority of law. Fondren v. State Tax Commission, 350 So.2d 1329, 1334-45 (Miss. 1977). Although Marx cites and recognizes the holdings in these cases, he nevertheless contends that § 27-65-71 expressly precludes the use of § 11-13-11 as a means of enjoining the collection of sales taxes under the sales tax chapter. See, Miss. Code Ann., § 27-65-71 (1972) [providing the provisions of Section 11-13-11, Miss.Code Annotated (1972) shall not apply to taxes imposed by this chapter (§§ 27-65-1, et seq.)]. This same argument was raised in Stone v. Kerr, supra , and the court declined to determine whether Section 430 of the 1930 Code, predecessor to § 11-13-11, vested constitutional authority in chancery courts to enjoin the collection or assessment of taxes pursuant to 159(f) of the Constitution even though the language of Chapter 113, Laws 1938, which like § 27-65-71, expressly exempted the application of Section 430 to that chapter. Stone, 10 So.2d at 846-47. Instead, the court found that the taxpayer had failed to avail himself to an adequate remedy at law, the refund statute provided that the circuit court could refund any portion of the tax which was improperly collected with interest. The court added that the taxpayers' suit involved a mere irregularity in the computation of taxes due and that Section 430 required that the taxes be collected without authority of law before the chancery court could properly enjoin the tax commission. Stone, 10 So.2d at 848. Although the court in Stone left unanswered the question concerning the application of 159(f), we are of the opinion that regardless of the constitutional arguments, once a complaint has been filed demanding relief of the sort contemplated by Section 11-13-11, the chancery court has subject matter jurisdiction. If the plaintiff proves his claim the chancery courts not only may, but generally ought to enjoin the collection or assessment of taxes. Section 11-13-11 and its predecessors were passed by the legislature in direct response to the judicial rulings denying chancery courts jurisdiction over matters such as are present in the current case. See Stone v. Kerr, 10 So.2d at 847. [Discussing the reasons for adoption of Section 1831 of the 1880 Code (subsequently codified at Section 420, 1930 Code and Section 11-13-11, Miss. Code Ann., (1972).)] The statute itself is nothing more than a codification of the traditional requirement of equity jurisdiction with the legislatively added requirement that the taxes must be collected without authority of law. This is borne out when one notes the following passage found in State Tax Commission v. Fondren, 387 So.2d 712 (Miss. 1980), wherein Justice Sugg writing for the court en banc, noted: We adhere to our former finding and state further that these suits could have been brought in equity absent section 11-13-11 under the maxim, Equity will not suffer a wrong without a remedy. ... Complainants have suffered a wrong; they are entitled to remedy for this wrong; no adequate remedy exists at law; therefore, they properly invoked the injunctive power of equity to remedy a wrong. State Tax Commission v. Fondren 387 So.2d at 723-24. In both the Fondren cases, jurisdiction was accepted under Section 11-13-11 because the complainant's case met the previously mentioned requirements of the statute. In the two cases found not within § 11-13-11 jurisdiction was denied, the taxpayer had an adequate remedy at law and therefore did not need the injunctive protection afforded by the statute. See Stone v. Kerr, 194 Miss. 646, 10 So.2d 845 (1942); Lewis v. Mass Appraisal Inc., 396 So.2d 35 (Miss. 1981). If the language of Section 27-65-71 were interpreted to bar the application of § 11-13-11 even though the requirements of the statute had been met, the effect would be to deny the taxpayer any remedy at all for an alleged wrong. Surely, the intent of the legislature was not to create a remedy and subsequently deny it. Thus, we are of the opinion that the language of § 27-65-71 which purports to bar application of § 11-13-11 is only effective if the case fails to meet the legislatively and judicially created requirements necessary to invoke jurisdiction under § 11-13-11. In the present case TRLA and the other plaintiffs have complied with the requirements of § 11-13-11. First, the complaint specifically alleges that there is an inadequate remedy at law. Further, while TRLA does not specifically cite § 11-13-11 as grounds for jurisdiction, the complaint does include sufficient allegations notifying both the court and opposing party that the case falls within the language of § 11-13-11. See Miss.R.Civ.P. Rule 8(a) and (f) (technical pleadings not required).
The next question to be resolved is whether there was an adequate remedy at law available to TRLA. Marx contends that the refund statute (§ 27-65-47) provides that where there is a dispute as to any tax imposed, the aggrieved taxpayer should pay the taxes and then seek a remittance plus interest for the amounts deemed to be improperly paid. This statute does provide an adequate remedy where there has been an error in the calculation of the taxes to be paid. However, TRLA and the other plaintiffs are not seeking a new calculation of their taxes or challenging the amount of the taxes. Instead, they are contending that the State may not tax them at all because the tax violates the commerce clause. This claim is identical to the claim in Fondren v. State Tax Commission, 350 So.2d 1329 (Miss. 1977), because TRLA does not allege mere error in computing the taxes, rather he alleges a constitutional violation and seeks injunctive relief to prevent a continuing trespass, injury, or other wrong. Fondren, 350 So.2d at 1334 (citing Stone v. Kerr ). The refund statute does not afford adequate relief from alleged constitutional violations and therefore this requirement has been met.
Finally, we must determine whether the allegations, if proved, warrant a conclusion that the taxes are being collected or levied without authority of law. This inquiry does not require a determination as to whether the allegations are in fact true, rather, it simply requires that this Court determine whether the allegations state a claim which, if proved, would entitle the taxpayer to relief. In the present case, if TRLA successfully proves that the challenged statute does violate the commerce clause, undoubtedly they would be entitled to relief and thus injunctive relief under § 11-13-11 is appropriate in this case. Furthermore the chancery court has authority to enjoin the tax commission under its general equity power as provided for by § 159(a) of the Mississippi Constitution (1890). One important maxim of equity provides equity will not suffer a wrong without a remedy. This has been construed to vest a taxpayer with a right that the collection of taxes be enjoined where the taxpayer has no adequate remedy at law. See State Tax Commission v. Fondren, 387 So.2d 712, 713-14. We previously noted that the refund statute within the sales tax statute does not provide an adequate remedy at law, and we additionally find that the chancellor also correctly found that he had jurisdiction under the chancery court's general equity powers.