Court Opinion

ID: 9548774
Source: CourtListenerOpinion
Date Created: 2023-08-07 18:08:36.507543+00
Date Added: 2024-06-11T15:19:24.797334
License: Public Domain

BISTLINE, Justice,
dissenting.
If the time were available, I could recover from the Idaho Reports an Idaho case of some vintage where, on a petition for rehearing which directly challenged the Supreme Court to justify its decision, the answer was simply to the effect that the Court sits to do equity and will do so and achieve justice when necessary.
At one of the oral arguments in this case counsel for the Tax Commission candidly stated that Harman’s had been entitled to a statutory refund had it made application therefore. By that, the understanding was gathered that Harman’s had paid into the state treasury more than it owed. Which in turn means that the state had received money, which it continued to hold, which Harman’s had mistakenly sent in along with what it did owe. Apparently there is not any requirement that the state make any effort to return the money in such circumstances. This would not put the state in the same category with Abraham Lincoln who, which I know for a fact, walked 12 miles each way in cold weather to refund two cents to a woman whom he had accidentally short changed while he was tending store. Of course, even as children many of us thought that Honest Abe could have made the refund when the woman returned to the store. Such seems to be the way the taxing system does operate.
What this case is all about seems to be a mix-up by reason of the taxpayer’s belief that the overpayment could be recouped in one direction and the state knowing that it had to be done in the other direction, i.e., amending returns for prior years.
For reasons not delved into by the parties, at least not to the extent of aiding in my education and edification, the legislature has set limitations of time for a taxpayer to recover or recoup monies which are still his, theoretically, but which are reposing in the state treasury. Probably this has been done as a matter of bookkeeping expediency, and anyone can understand what an annoyance would result if the state had to keep its books and records on hand to meet eventualities which might not come to pass for ten, fifteen, or more years. But there is no such long time lag as that in this case. There is no doubt that the circumstances here involved are of sufficiently recent origin that it was known by all concerned state employees and the taxpayers that the taxpayer has left his money with the state, and how much.
Now, there may be some statute on the books which requires the state, in such circumstances, to not pay back money which it is not equitably entitled to retain. Otherwise put, the state may be under a legislative mandate to invoke the statute of limitations against the taxpayer. But, on the other hand, if there is not, and where to the state the amount involved is trivial, but not likely so to the taxpayer whose money it is, then one might well wonder why the state has waged this battle to initially lose it. The Tax Commission’s brief in support of its petition for rehearing explains very frankly why the battle over $5000 of taxpayer’s money continues on:
The Court’s opinion in this case correctly observes that the doctrine of equitable recoupment is one of first impression in Idaho. We have asked this Court to reconsider its opinion not because we believe that the doctrine is inapplicable in Idaho, but because we believe the court’s decision creates precedent for an over-*746broad application. This precedent could have serious adverse and unintended effects on the application of the tax laws of Idaho.
Defendant-Appellant's Brief in Support of Petition for Rehearing, p. 1. The Tax Commission’s brief continues:
The State Tax Commission does not now argue that the doctrine of equitable recoupment should not apply in proper instances. The State Tax Commission only argues that this Court has enunciated too broad of a test for the application of the doctrine. The test is so broad that this Court has taken for itself the power to remedy a statutory provision, the correction of which (if it should be corrected) is the constitutional role of the legislature.
Defendant-Appellant’s Brief in Support of Petition for Rehearing, pp. 7-8.
The Court did not, in its initial decision, “remedy” a statutory provision. It did exactly what courts are constituted to do, and hopefully always endeavor to do, and historically have always done beginning with the courts of England, to wit, exercise equitable doctrines when necessary to achieve justice. Moreover, it acted on good authority. While the Tax Commission may be entirely correct in distinguishing the circumstances of the Bull case from this case, nothing restricted this Court from granting equitable relief which is fashioned on its own notions of fairness and justice. Contrary to what the Tax Commission seems to suggest, the Idaho legislature has not to my knowledge ever purported to occupy the field of equity.
The Tax Commission has advised us that it:
... is not concerned about the revenue effects that may be associated with the relatively rare circumstance in which the doctrine of equitable recoupment could be properly applied under the three criteria established in Kolom quoted earlier in this brief.
Defendant-Appellant’s Reply Brief in Support of Petition for Rehearing, p. 6. Of course, with this Court now siding with the Tax Commission, the answer will never be known, but I have difficulty in believing that our initial opinion in this case was not that much more drastic or unsupportable than Bull or Kolom that the sky would soon be falling.
I continue to adhere to the views of our unanimous 1987 opinion.