Court Opinion

ID: 7876316
Source: CourtListenerOpinion
Date Created: 2022-09-08 21:12:06.912682+00
Date Added: 2024-06-11T16:31:24.534857
License: Public Domain

MORGAN, Justice
(dissenting).
I cannot join in the majority disposition of this appeal because it relies upon our earlier decision, Bayer v. Johnson, 400 N.W.2d 884 (S.D.1987) {Bayer III), which I consider to be an ill-conceived and ill-advised decision that should be overruled.
The decision in Bayer III was grounded on the activities in which Bayer rendered the services that resulted in his purported tax liability. As the majority stated: “Bayer’s sales taxes paid under protest were based upon his business as a bookmaker. Since the payments were made upon an unconstitutional activity, we hold Bayer cannot recover.” Id. at 886. The decision then went on to hold that because the taxes were paid to engage in an unconstitutional and possibly criminal activity, Bayer would be denied access to the courts.
Rather than reiterate my dissent1 in Bayer III in extenso, I will merely summarize it with some additional comments. First, the only “unconstitutional” action was that of the legislature in enacting the provisions of SDCL 10-45-5.2, which imposed the sales or service tax on bookmakers in contravention of art. Ill, § 25 of the South Dakota Constitution, which prohibits the legislature from authorizing games of chance.
Secondly, on the issue of illegality of Bayer’s activities, conceding that they were prohibited under the provisions of SDCL ch. 22-25, they were, on the other hand, blessed under the provisions of SDCL ch. 10-45 (the sales and service tax laws). As this court said in Bayer v. Johnson, 349 N.W.2d 447, 449 (S.D.1984) (Bayer I): “In licensing bookmaking as a service subject to a retail service tax, the legislature is effectively authorizing a game of chance and treating it as a legitimate source of revenue.” (Emphasis added.) The Bayer III decision apparently concedes this dilemma when it said Bayer was engaging in “possibly criminal activities.” (Emphasis added.)
Next, the authorities upon which the Bayer III court relied for its so-called public policy position were totally inappropriate. The transactions involved in the premised authoritative cases were all illegal, in and of themselves. But, the payment of a service tax, even based on a clearly illegal activity, is patently one step removed from the illegal transaction itself.
Finally, I question the Bayer III determination that it is public policy to deny Bayer access to the courts under the circumstances that were present. Here, I find a most persuasive statement of public policy in the South Dakota Constitution, art. VI, § 20, the so-called open courts provision.2 Couple that with the provisions of art. Ill, § 27, providing for suits against the state and the legislative enactment of SDCL ch. 10-55A, and its predecessor ch. 10-55, providing for the recovery of taxes wrongfully paid (tax refund provisions), and I think that the Bayer III majority was presumptuous in determining that Bayer should be denied access to the courts “as a matter of public policy.”
*131This action involves only the $46,000 or so that Bayer paid under the threat of imprisonment in the criminal proceedings before the magistrate’s court. Bayer III involved those payments plus some additional payments. The trial court, in this case, did not rely on Bayer III and the doctrine of res judicata, but rather decided against Bayer on the grounds that the three-year statute of limitations, SDCL 10-45-53, had run. It further determined that the statute of limitations was not tolled because, although the payments made pursuant to the plea bargain were compulsory, Bayer was not precluded from seeking recovery pursuant to the provisions of the tax refund provisions.
If Bayer III stands, as I have no doubt it will, the trial court is probably correct in its analysis; but, if Bayer III is overturned as I fervently believe it should be, I would hold the trial court in error. In State v. Bayer, 378 N.W.2d 223 (S.D.1985) (Bayer II), Bayer first tried to recover this money by refund through the criminal court system, through which it was exacted. In Bayer II, we held that was improper, but that he should seek relief through the tax refund procedure. His action in Bayer III was clearly in response to that directive, but ran afoul of both the Department of Revenue and the circuit court when he refused to incriminate himself by admitting that he was a bookmaker; the aegis of the tax statute having then been struck down as unconstitutional. The Bayer III decision dispensed with that problem by invoking the law of the case doctrine; but, then, the public policy aberration set in.
I would, therefore, overrule our decision in Bayer III and reverse the trial court below upon the grounds that Bayer had indeed, in timely fashion, sought restitution of the taxes illegally and unconstitutionally exacted, by the Department of Revenue and the magistrate’s court.

. Bayer v. Johnson, 400 N.W.2d 884, 887 (S.D.1987).

. "All courts shall be open, and every man for an injury done him in his property, person or reputation, shall have remedy by due course of law, and right and justice, administered without denial or delay.”