Court Opinion

ID: 9575669
Source: CourtListenerOpinion
Date Created: 2023-08-21 21:15:48.769674+00
Date Added: 2024-06-11T12:49:40.981339
License: Public Domain

Currie, J.
(dissenting). I respectfully dissent from the majority holding that plaintiff taxpayer, which involuntarily paid real and personal-property taxes illegally imposed upon it, is not entitled to recover interest on the refund of these payments. The thrust of this dissent is that the subsequent decisions of this court in Yawkey-Bissell Corp. v. Langlade (1952), 261 Wis. 524, 53 N. W. (2d) 174, and Associated Hospital Service v. Milwaukee (1961), 13 Wis. (2d) 447, 109 N. W. (2d) 271, which are in direct conflict with Schlesinger v. State (1928), 195 Wis. 366, 218 N. W. 440, 57 A. L. R. 352, leave this court free to repudiate the rule of the latter case. Furthermore, the interests of justice and precedents from other jurisdictions require that this be done.
It is true that in matters of statutory construction, the doctrine of stare decisis generally requires that prior deci*193sions of this court be followed. This is because the construction given to a statute by this court becomes part of the statute when the legislature does not subsequently amend the statute so as to effect a change. Hahn v. Walworth County (1961), 14 Wis. (2d) 147, 154, 109 N. W. (2d) 653; Meyer v. Industrial Comm. (1961), 13 Wis. (2d) 377, 382, 108 N. W. (2d) 556; Eau Claire Nat. Bank v. Benson (1900), 106 Wis. 624, 627, 82 N. W. 604. Nevertheless, this rule is inapplicable when there is a conflict in our decisions concerning the construction to be given a statute, and the legislature fails to act. This is because it is usually impossible to determine which of the conflicting decisions the legislature impliedly accepts by its failure to amend the statute.
The majority opinion points out that this court did not consider the issue of whether interest could be legally recovered when we approved its payment in the Yawkey-Bissell and Associated Hospital Service Cases. This would be a persuasive argument for following the rule of the Schlesinger Case if we were to conclude that it represented the sounder result. The very fact, however, that the Yawkey-Bissell and Associated Hospital Service Cases are in conflict with Schlesinger gives us a freedom of choice in the instant appeal.
The subject of the right of a taxpayer to collect interest on a tax refund is annotated in 57 A. L. R. 357, 76 A. L. R. 1012, and 112 A. L. R. 1183. While there is great conflict among the authorities on this issue, it appears from these annotations that a majority of jurisdictions do permit recovery of interest. Thus, even if the Schlesinger Case correctly stated that the majority rule was then to the contrary, this is no longer true today.1
*194In Philadelphia & Reading Coal & Iron Co. v. School Dist. (1931), 304 Pa. 489, 156 Atl. 75, 76 A. L. R. 1007, the Pennsylvania court considered a statute which provided for refund of taxes where excessive assessments of property were later reduced. This statute was silent on the matter of interest. The court held that interest could be recovered on the refund where the payment of tax was involuntary. The opinion stated (at p. 495):
“The precise point does not appear to have been raised before in this court, and we are thus free to deal with it unhampered by precedent. It is unnecessary to review the wealth of conflicting authorities in other jurisdictions; these are very fully summarized in a recent note in 57 American Law Reports, page 357. The weight of authority appears to be that where the taxpayer is entitled to a refund on an excess payment of taxes, whether such right accrues by virtue of statute or not, the taxpayer is entitled to interest on the refund if no statute or public policy militates against it.” (Emphasis supplied.)
The court noted that this was the law in the United States courts as well as in New York, Massachusetts, and several other states.
Similarly, in Chicago, St. P., M. & O. R. Co. v. Mundt (1930), 56 S. D. 530, 229 N. W. 394, the South Dakota court considered a statute allowing a refund of taxes wrongfully collected “for any reason going to the merits of the tax.” This statute also made no mention of interest. The court noted the conflict of authority, on the question of. recovery of interest on tax refunds, and concluded that the numerical weight of authority seemed in favor of allowing *195interest. The rationale of the opinion, which permitted taxpayer to recover interest, is found in this statement (at p. 533):
“It seems to us the fair, just, and reasonable rule that, when the sovereign submits itself to suit, unless the statute expressly provides to the contrary, it should come into court on the same basis as to liability for interest and costs, in the event of adverse decision, as any other suitor.”
The Montana court permitted recovery of interest by a taxpayer under a tax-refund statute that was silent as to interest. Williams v. Harvey (1931), 91 Mont. 168, 6 Pac. (2d) 418. Similarly, the United States district court for Alaska also permitted recovery of interest under a territorial statute, which provided for refund of taxes illegally paid but made no mention of interest. Ketchikan Spruce Mills v. Dewey (1957), 17 Alaska 336.
Principles of natural justice require this result where it can be achieved without disturbing settled legal principles. As Judge Learned Hand declared in Procter & Gamble Distributing Co. v. Sherman (D. C. N. Y. 1924), 2 Fed. (2d) 165, 166:
“. . . it is not an adequate remedy, after taking away a man’s money as a condition of allowing him to contest his tax, merely to hand it back, when, no matter how long after, he establishes that he ought never to have been required to pay at all.”
The Arizona court, in State Tax Comm. v. United Verde Extension Mining Co. (1931), 39 Ariz. 136, 146, 4 Pac. (2d) 395, states the policy reasons in favor of allowing recovery of interest where taxes, involuntarily paid, are later declared illegal and refunded:
“It is presumed that the sovereign state, in dealing with its citizens, intends to apply the same rules of abstract justice as it applies in actions between citizens. Certainly, it *196would be admitted to be both law and justice that, when A sues B to recover money wrongfully obtained, if he recover he is entitled, not merely to the principal sum paid, but also to interest from the date of payment. Arkadelphia Milling Co. v. St. Louis S. W. R. Co. 249 U. S. 134, 63 L. Ed. 517, 39 Sup. Ct. Rep. 237; 33 C. J. 203. And in reason and logic, when the state compels one of its citizens under pain of forfeiting all rights of recovery, to pay in advance of suit a sum of money which it is afterwards adjudged was illegally demanded, the same principle of common justice would require that the state, to make the citizen whole, should repay not merely the sum illegally so obtained, but interest from the date the money was paid to it. Were this a case of a small taxpayer, who, in order to maintain his suit, was compelled to borrow money to pay the illegal tax, it would be recognized at a glance that full justice could only be done by repaying to him, not only the sum so paid, but interest thereon, and in principle no difference exists because the taxpayer in this case happens to be a large corporation which presumably had in its treasury the funds to pay the tax.”
Prior to our recent decision in Holytz v. Milwaukee (1962), 17 Wis. (2d) 26, 115 N. W. (2d) 618, governmental units enjoyed immunity from tort liability. In the Holytz Case, we determined that such governmental units should bear the same responsibility for their acts, and those of their agents, as do other persons and corporations. If this is a sound principle to apply in tort law, it is equally sound to apply it where a government illegally exacts a payment from a citizen in a situation where the statute requires that the payment be refunded. It seems highly illogical to attempt to distinguish the two situations by saying one falls in the sphere of tort law and the other in the field of quasi-contract law. This is because the underlying consideration upon which recovery in quasi contract is permitted is “the universally recognized moral principle that one who has received a benefit has the duty to make restitution *197when to retain such benefit would be unjust.” Arjay Investment Co. v. Kohlmetz (1960), 9 Wis. (2d) 535, 539, 101 N. W. (2d) 700.
I would affirm the judgments below.
I am authorized to state that Mr. Justice DieteRich joins in this dissenting opinion.

 The author of the annotation in 57 A. L. R. 357, at page 364, points out an inaccuracy in the discussion, in the Schlesinger Case, of authorities from other jurisdictions. In addition to declaring *194that New York followed the “minority rule,” the Schlesinger Case stated that the holding in Matter of O’Berry (1904), 179 N. Y. 285, 72 N. E. 109, which allowed the recovery of interest, had been abrogated by legislative enactment. The annotation terms this statement “at least misleading” because the rule of the O’Berry Case had only been curtailed as to certain particular taxes, and then only to a limited extent.