[25] I herewith submit my individual views in the above styled cause.
[26] In this case the court is confronted primarily with a question of law as questions of fact are not in substantial dispute.
[27] The facts are these: On October 17, 1919, J.A. Hull and Lina J. Hull were issued shares of stock in the Oklahoma Central Oil Company. In March, 1922, the Hulls sold their stock for substantial sums in excess of the sum paid therefor. On April 12, 1923, the Hulls filed their separate 1922 Oklahoma Income Tax Returns as directed by the State Auditor. On June 7, 1923, the State Auditor advised Mr. Hull, by letter, the exact amount of his 1922 State income tax and advised him the tax was due and payable June 15, 1923, and that it became delinquent if not paid by July 1, 1923. He further advised that under the law he would be required to issue a tax warrant for the delinquent tax if the same was not paid. On June 12, 1923, Mr. and Mrs. Hull paid the tax claimed to be due in the sum of $19,943.21 and $18,976.15, respectively.
[28] In March, 1925, the Hulls determined that the profits from the sale of their corporate stock in the Oil Company was not taxable under the Income Tax Law for the year 1922, and that they should not have included the same in their respective tax returns for that year; they thereupon made demand upon the State Auditor, the predecessor to the Oklahoma Tax Commission, for a refund of the tax paid. The State Auditor opened a file covering the claim for the refund, designated No. 3811, which file number was carried forward by the Oklahoma Tax Commission as successor to the State Auditor. These claims were not acted upon by the State Auditor and at a subsequent date in 1937, the Hulls filed an amended claim with the Oklahoma Tax Commission for the refund in question and thereafter they filed an additional amended claim in 1947.
[29] On May 5, 1947, a hearing was held before the Oklahoma Tax Commission and the claims were disallowed in toto. The assignee of the Hulls thereupon brought an *Page 526 action in the District Court of Oklahoma County, which recited the foregoing facts and asserted that, under the Oklahoma Income Tax Act of 1921, Section 9938(d), the profits from the sale of the stock were not subject to the income tax for the reason that the stock was acquired by them in 1919, and not sold until 1922, and for the reason that they acquired said corporate stock more than one year prior to the sale of said stock, and that said Income Tax Law applies only where the taxpayer actually derived income from the sale of stock which was acquired within the period of one year immediately prior to the sale.
[30] The Oklahoma Tax Commission in answer to the plaintiff's petition alleged that the Hulls' claim was barred by the statute of limitation, and if not so barred the action could not be maintained by virtue of the delay, neglect and laches of the Hulls in not expeditiously pressing their claim to a finality. For further answer the Commission asserted that there is not now pending before it any claim for refund in substance or form, as required by law, sufficient to give the Commission or the Court, jurisdiction and power to grant the relief prayed for.
[31] Upon the trial the District Court found the issues generally in favor of the Oklahoma Tax Commission and denied plaintiff the relief prayed for.
[32] The tax statute here involved, Section 9938, subdivision (d), C.O.S. 1921, reads:
"All dividends or profits derived from stocks or from the purchase and sale of any property, or other valuables acquired within one year previous, or from any business whatsoever."
[33] The Oklahoma Tax Commission contends that the trial court's judgment must be sustained under the authority of the case of Phillips v. Oklahoma Tax Commission, 174 Okla. 401, 49 P.2d 805, 807. Phillips, the taxpayer, filed an original action in this court wherein he alleged that he filed his income tax return for the years 1925 to 1930, with the State Auditor; that the State Auditor acted thereupon, and the tax was paid in compliance with Ch. 44, S.L. 1921; that the Oklahoma Tax Commission, successor to the State Auditor, attempted to reopen the returns and assess additional taxes thereon. The taxpayer in support of the writ contended he was not taxable under the 1921 Act upon dividends received from stocks acquired and owned for more than one year previous to the year in which received.
[34] In the body of the opinion the court made reference to Section 9938, subdivision (d), C.O.S. 1921, and expressed the following view: "In other words, the condition `acquired within one year previous' applied only to the rather indefinite classification `or other valuables.'" However, in my view of the case, the court must look to the syllabus of the case for the law of the case. An examination of the syllabus shows that all the court decided as the applicable law was, that the statute of limitation did not bar the State in the collection of delinquent income taxes, and that a taxpayer who has omitted items of income from property which the taxpayer contends are not taxable, cannot prevent the State Tax Commission from conducting a hearing for the purpose of determining whether or not such income is in fact taxable, when the omitted items of income are brought to its attention.
[35] In the Phillips case the taxpayer was attempting to stay the hand of the Tax Commission in conducting a hearing as to whether or not he failed to make a true or complete return of his income. The Tax Commission had not been given an opportunity to investigate or pass upon the question of fact whether the return of the taxpayer omitted items of income for the years 1925-1930, and, if so, whether they were subject to the Income Tax Act. Neither did this court in the original proceeding for a writ of prohibition pass upon that question of fact or declare the applicable law to that transaction. So far as the opinion in the Phillips case throws any light upon the subject, it is limited to the question of whether or not the State is limited in the time it might proceed to collect a delinquent tax.
[36] Construing Ch. 44, S.L. 1921, this court held: The Act does not limit the State in the collection of its revenues. Therefore, *Page 527 the statement in the body of the opinion in that case, that the condition "`acquired within one year previous'" applied only to the rather indefinite classification "`or other valuables'" must be treated as obiter dictum and cannot be interpreted as binding upon the Tax Commission; neither is it an authoritative decision controlling the instant case.
[37] Title 12 O.S. 1951 § 977[12-977], reads as follows:
"A syllabus of the points of law decided in any case in the Supreme Court shall be stated, in writing, by the Justice delivering the opinion of the court, and filed with the papers of the case, which shall be confined to points of law arising from the facts in the case, that have been determined by the court; and the syllabus shall be submitted to the Justices concurring therein, for revisal before filing thereof, and it shall be filed with the papers, without alteration, unless by consent of the justices concurring therein; and a copy of such syllabus shall, in all cases be sent to the court below, by the clerk of the Supreme Court, with the mandate provided for by Section 5258."
[38] In Huston v. Scott, 20 Okla. 142, 94 P. 512, 517, 35 L.R.A., N.S., 721, this court stated:
"`Where a judge who writes the opinion of the court expresses a view upon any point or principle which he is not required to decide, his opinion as to such point or principle is obiter dictum.'"
[39] To the same holding see the case of Lausten v. Lausten,55 Okla. 518, 154 P. 1182.
[40] The record discloses that on March 7, 1917, the Attorney General of Oklahoma prepared an opinion at the request of the State Auditor, in which opinion he construed subdivision (d) of Section 5 of Ch. 164, S.L. 1915, which section is identical with subdivision (d) Section 9938, S.L. 1921. In that opinion he stated that the sale of any property acquired during the calendar year 1915 should be reported, as the sale of said property was made for a profit during the year 1916; that the words "acquired within one year previous" meant one year previous to the year for which the income tax report is to be made.
[41] On September 9, 1925, the Attorney General addressed a letter to the State Auditor in which letter he advised the Auditor that under Section 9938, subdivision (d), C.O.S. 1921, that such profits derived from such purchase in 1920 and sold in 1924, are not subject to an income tax for the year 1924, inasmuch as the same were not acquired within one year previous.
[42] Under date of December 22, 1924, the Attorney General wrote an opinion in which he held that if property is acquired in January 1923, and sold June 1, 1924, at a profit, such profit would not be required to be included in the taxpayer's income return under Section 9938, subdivision (d) of the C.O.S. 1921.
[43] Under date of February 9, 1927, the Attorney General advised a member of the State Legislature then in session, that he had investigated the claims of J.A. Hull and Lina J. Hull for a refund of income taxes for the year 1922, and that he was of the opinion that the Hulls were not subject to the income tax assessed for the year 1922.
[44] On March 26, 1925, shortly after the Hulls' claims were filed with the State Auditor, he wrote the Hulls, as follows:
"I am very sorry, indeed, that the legislature has refused to reimburse yourself and Mrs. Hull for the monies erroneously paid to the State."
"It is to be regretted that the legislature has assumed the policy that they have in failing to pay claims of this character. The principal excuse for the failure of the legislature to appropriate money for purposes such as your claim seems to be that the appropriations are heavy for the expense of maintaining the institutions and for other expense of state government and there is nothing left to make these refunds."
[45] The State Auditor agreed with these interpretations of the law, for under date of *Page 528 February 11, 1929, the State Auditor wrote a letter to Mr. H.L. Sullivan, in re J.A. Hull and Lina J. Hull, File No. 3811, in which he acknowledged the amended returns filed in their behalf, and to which amendment he makes no complaint. He enclosed several copies of opinions of various Attorney Generals of Oklahoma, and advised that the Auditor is without authority to make the refund and the Hulls' claim should be presented to the State Legislature.
[46] The Act as thus construed by the Chief Law Officer of the State was adopted as the administrative policy of the Tax Commission; that construction should be given great weight and should only be set aside if the legal conclusions and the administrative policy adopted in compliance therewith is palpably wrong.
[47] I find no ambiguity in the language of the Act. Clearly, the income tax is levied upon the class of property designated in subdivision (d) only if acquired within one year previous. I would pay the authors of the Act the compliment of saying what they meant, and that they meant no more than they said. It is only what they left unsaid that is left open for judicial decision.
[48] I do not think there is any merit in the Tax Commission's contention that the claims in question are barred by any statute of limitation. The claims were filed as early as March, 1925, and the amended claims were filed thereafter without objection from the Tax Commission. Neither is the claim of laches well taken. The taxpayer's claim as shown was recognized as valid, but the Commission did not formally reject it until May, 1947, when its final order was entered. The taxpayer could not act more expeditiously, for until the Commission formally denied the claim, he could not pursue his remedy in the courts.
[49] It is my view that under the statutes in effect at the time the question involved herein arose, the profits from the sale of the stock in question was not taxable as income, and the sums exacted by the state should be refunded.
[50] The majority opinion bases its affirmance of the trial court mainly on propositions not raised by defendant in error in its pleadings in the trial court, or urged in its briefs in this court.
[51] I think the judgment of the trial court should be reversed, with instructions to render judgment in favor of H.L. Sullivan, assignee of J.A. Hull, in the sum of $19,943.21 and in favor of H.L. Sullivan, assignee of Lina J. Hull, in the sum of $18,976.15. I therefore respectfully dissent, to the majority opinion.