Opinion ID: 845821
Heading Depth: 2
Heading Rank: 1

Heading: Consumers and the Enactment of MCL 211.53a

Text: To fully understand the contours of these cases, I believe it is helpful to take note of the history surrounding the enactment of MCL 211.53a. This must necessarily begin with Consumers Power Co. v. Muskegon Co., 346 Mich. 243, 246-247, 78 N.W.2d 223 (1956), overruled by Spoon-Shacket, Co., Inc., v. Oakland County, 356 Mich. 151, 97 N.W.2d 25 (1959). Notably, Consumers was decided shortly before the enactment of MCL 211.53a. In Consumers, the plaintiff paid excess taxes and later claimed that it was entitled to a refund because its payment was due to a mistake of fact made by both it and the assessor  the assessor mistakenly calculated the tax and made an excessive assessment, and the plaintiff failed to discover the error until after it paid the taxes. At the time of the plaintiff's claim, the controlling statutory provision, 1948 CL 211.53, simply provided: [The taxpayer] may pay any tax or special assessment, whether levied on personal or real property, under protest, to the treasurer, specifying at the time, in writing, signed by [the taxpayer], the grounds of such protest, and such treasurer shall minute the fact of such protest on the tax roll and in the receipt given. The person paying under such protest may, within 30 days and not afterwards, sue the township for the amount paid, and recover, if the tax or special assessment is shown to be illegal for the reason shown in such protest. Despite the absence of any language in 1948 CL 211.53 pertaining to mutual mistake, the plaintiff nonetheless argued that it was entitled to a refund under equitable principles. This Court disagreed and refused to apply equitable principles in that case. The Consumers Court opined that taxation is controlled solely by statutory and constitutional provisions. Consumers, supra at 247, 78 N.W.2d 223, citing Langford v. Auditor General, 325 Mich. 585, 590, 39 N.W.2d 82 (1949). Because 1948 CL 211.53 did not permit a claim for taxes voluntarily paid because of a mutual mistake of fact, the Consumers Court rejected the plaintiff's claim. This Court reasoned that [t]o grant the relief requested by the plaintiff would require this Court to exercise legislative prerogativesnamely, to write into the statute the right to recover taxes paid under mutual mistake. This cannot be done. Consumers, supra at 251, 78 N.W.2d 223. Justice Smith, however, dissented and would have allowed the plaintiff to recoup its excess payments. For example, Justice Smith asserted that the plaintiff did not voluntarily pay the excessive tax, reasoning: It is my opinion that under existing Michigan law we require no legislative authority to order the restitution of moneys paid to and received by the taxing authorities through mutual mistake of fact. It is enough that we have no valid statute forbidding it. It seems beyond question that the excess moneys were paid involuntarily. One who pays 10 times as much in taxes as he should, because of a mutual mistake of fact, can in no real sense be said to be paying voluntarily. He pays in ignorance, under a misapprehension of the true facts. Had he known the facts, the tax paid would have been only the sum authorized. The point need not be labored. [ Consumers, supra at 260-261, 78 N.W.2d 223 (Smith, J., dissenting).] Accordingly, because the plaintiff paid the taxes involuntarily, the dissent opined that the plaintiff could recover on its claim. Further, Justice Smith disagreed with the Consumers majority that equitable powers may not be employed in taxation cases. The exercise of equitable powers in tax cases, Justice Smith reasoned, is not contrary to the principle that governmental powers of taxation are controlled by statutory and constitutional provisions. Rather, Justice Smith viewed the exercise of equitable power as complementary to this principle. Moreover, the dissent observed that the law on mistake was clear that it is inequitable and unconscionable to allow anyone to retain monies and unjustly enrich himself because of another's mistake. And it does not matter, according to Justice Smith, that the government is the entity retaining the money or that the taxpayer was careless in making the overpayment. Justice Smith argued that the law was well-settled on this point, and to hold otherwise, as the Consumers majority did, would result in a double standard of morality .... Id. at 256, 78 N.W.2d 223. Specifically, Justice Smith questioned the majority's rationale that individuals may not benefit through a mutual mistake of fact, but, at least in taxation cases, the government may benefit if the mistake is not timely discovered. Therefore, Justice Smith would have affirmed the judgment of the trial court and permitted the plaintiff to recoup the overpayment that resulted from the mutual mistake of fact. Just two years after this Court issued its opinion in Consumers, however, the Legislature amended the GPTA and enacted MCL 211.53a. In doing so, the Legislature responded to the Consumers decision by providing a remedy in cases involving a mutual mistake of fact and thereby broadening the types of situations under which a taxpayer could claim a refund for overpayment. Moreover, roughly three years after Consumers was decided, this Court overruled Consumers in Spoon-Shacket, supra, and in doing so implied that had MCL 211.53a been in place when the Consumers plaintiff filed its claim, the plaintiff would have been permitted to recoup its overpayment. Spoon-Shacket, supra at 168, 97 N.W.2d 25. [1] In light of the history surrounding the enactment of MCL 211.53a, what is at issue in these cases becomes clearer and, therefore, this Court's conclusion that Ford has stated valid claims under MCL 211.53a finds additional support. Further, this Court's conclusion that Ford has stated valid claims of mutual mistake of fact within the meaning of MCL 211.53a finds support and is consistent with our precedents.