Court Opinion

ID: 7937483
Source: CourtListenerOpinion
Date Created: 2022-09-08 23:11:10.619724+00
Date Added: 2024-06-11T16:33:31.965862
License: Public Domain

Grant, J.
(dissenting). After the decision of Eyke v. Lange, 90 Mich. 592, the city of Muskegon instituted this, suit to recover against the defendant, who was the cashier of the bank, the amount of the tax assessed against its. stockholders who had not paid. The court directed a verdict for the defendant upon the ground that defendant, the cashier of the bank, was not liable for the taxes assessed against its stockholders.
It is the policy of the tax law to provide expeditions methods for collecting the public revenue. The method of collecting the tax is not always confined to a direct proceeding against the party whose property is assessed. *23Those in charge of the property taxed are often made the medium for collection. This method should be sustained unless there is some insurmountable legal obstacle in the way. Bank stock is held by both residents and non-residents. It is subject to taxation in the municipality where-the bank is located. Under our tax law, shares in banks; should be assessed to their owners in the town where the-bank is located, provided that shares owned by a person, residing within the county where the bank is located should! be assessed in the town where he resides. Act No. 195,. Laws of 1889, § 11, subd. 3. The law usually provides-for the collection of this tax from the banks, which are then authorized to charge it against the stockholders, and upon whose stock they have a lien. In this State the provision for collection is as follows:
“In case of any tax assessed upon the shares of the-capital stock of any bank, he [the treasurer] shall call upon the cashier of such bank, and demand payment, thereof; and thereupon it shall be the duty of such cashier to pay the same, and charge the amount so paid against, the shares of stock so taxed.”
While this statute in terms imposes this duty upon the-cashier, yet it is done for the bank, and when the entries, are made upon the bank books it becomes a bank transaction. This method of procedure is sustained by Mr. Justice-Cooley in his work on Taxation (2d ed., page 432), in. the following language:
“For the most part, the taxes levied by the states are-collected of the persons taxed, or enforced against the property in respect to which they are imposed. In a few cases, however, in which no injustice could result from such a course, the state may reach the party taxed by indirection, and collect in the first instance from some one else, who in turn will become collector from the person on whom the tax is really imposed. The reason for this is that in such cases it is more convenient to the state, and perhaps makes more certain the collection; and it could be *24resorted to only when the case is such that injustice could result to no one. A case of the kind is where *a tax is imposed on the dividends or other receipts of shareholders from the profits of corporations, or upon their shares, and the corporation is required to make the payment, which it would then deduct from the payments to be made to shareholders. There is no doubt of the right to do this, except as to payments to be made to non-residents, nor even as to them, if the statute under which their interests were acquired provided for the levying and collection of taxes in that manner.”
The authorities cited by him fully sustain the text, and we need not cite them here. See, also, Cook, Stock, Stockh. & Corp. Law, § 566.
I see no difference in principle between making the bank or the cashier thereof a medium for collection. The same principle is applicable to both. The tax-payer is not injured. He is chargeable with knowledge of the law, and that his stock will be taxed, and of the time when due. He knows the means provided for its collection. If he desires to contest the validity of the tax, he can notify the cashier, and be allowed to come in and defend any suit that may be instituted against him. Referring to the record in Eyke v. Lange, I find it stated there that the stockholders had notified Mr. Lange to contest the tax. Under that decision, and under the contention of the defendant in this suit, the above provision of the statute, would be nugatory, and the collector would be compelled either to seize the stock under his warrant or to bring suit against the individual stockholders. The latter would be impracticable and expensive, and is the very thing which the statute sought to avoid. The express duty is imposed upon the cashier to pay. In doing this he represents the stockholders. He has in his possession the means of payment. Whatever judgment is rendered against him is binding upon the stockholders. He can pay the judgment out of the funds in the bank which belong to them, and which *25are under his control. If there are no accrued dividends out of which to pay, the bank, through him, has a lien upon the stock which it can enforce to reimburse itself. The tax law of 1853 provided that, if any person refused or neglected to pay the tax imposed, the treasurer should levy the same by distress and sale of his goods and chattels, or of any goods and chattels in his possession; and no claim of property by any other person should be available to prevent the sale. It further provided that, if the property so seized should be owned by any other person, such owner might recover, of the person for whose tax the same was sold, the value of such property in an action of assumpsit as for goods sold and delivered. This law was sustained by this Court. Sears v. Cottrell, 5 Mich. 251. It certainly follows from the principle of that case that the Legislature may direct that the person having charge, possession, and control of the property assessed, shall pay the tax, and collect the amount by suit or otherwise from the person against whom it is assessed. It follows, also, that the legal duty to pay carries with it the right to bring suit. I am of the opinion that the ruling of the learned circuit judge was wrong.
The judgment should be reversed, and, inasmuch as no fatal defect is shown in the tax proceedings, judgment should be entered in this Court for the amount of the tax, with the costs of both courts.
I am convinced, after mature deliberation and a more extended examination of the authorities, that there is doubt as to the correctness of the decision of Eyke v. Lange. The writ of mandamus will lie in some cases where there is a remedy at law. In many cases a speedy determination of legal questions is of great importance. This is especially true in the collection of the public revenue. The following authorities sustain the proceedings by mandamus: Barney v. State, 42 Md. 480; McVeagh v. City of Chicago, *2649 Ill. 318; Town of St. Albans v. National Car Co., 57 Vt. 68. An able discussion will be found in this last case upon pages 84 and 85.
I concur with my brethren in holding that a rehearing should be ordered in the case of Eyke v. Lange, since they have held that the present suit cannot be maintained.
Montgomery, J., did not sit.