Consumers Power Co. v. County of Muskegon

Kelly, J.

Plaintiff and appellee, Consumers Power Company, paid- $30,659.36 excess personal property tax to defendants- during the years 1951 and 1952. Defendants appeal from judgment for plaintiff in an amount equal to the excess taxes paid.

The statutory provision in regard to a taxpayer’s right to institute suit to recover paid taxes is found in CL 1948, § 211.53 (Stat Ann 1950 Rev § 7.97),.and the portion applicable to this appeal is as follows:

“He may pay any tax or special assessment, whether levied on personal or real property, under protest, to the treasurer, specifying at the time, in writing, signed by him, the grounds of such protest, and such treasurer shall minute the fact of such protest on the tax roll and in the receipt given. The person paying under such protest may, within 30 days and not afterwards, sue the township for the amount paid, and recover, if the tax or special assessment is shown to be illegal for the reason shown in such protest.”

*246Plaintiff did not pay the 1951 and 1952 excess taxes under protest and did not sue until December 29, 1953. Its brief discloses that an exhaustive study of the law has been made endeavoring to find some way this Court would be justified in sustaining the trial court’s judgment.

Plaintiff is a corporation engaged as a public utility in the business of generating, transmitting, delivering and furnishing electric power and energy to residents of the State of Michigan and has property assessed in 63 counties of the State. On or about December 1st, each year, plaintiff receives at its Jackson office approximately 1,200 separate tax statements, and a staff of 5 clerks, check the statements after which payments are made.

Plaintiff claims that its payment of excess taxes was due to a mistake of fact, both on the part of the assessor, who figured the tax and made the levy, and on the part of plaintiff, who failed to discover the error until after the taxes had been paid.

In its brief plaintiff calls attention to the provisions set forth in 51 Am Jur, Taxation, § 1191, p 1023:

“A payment of taxes under a mistake of fact (as distinguished from a mistake of law) has been held not to be voluntary, and is therefore recoverable.”

On this point, plaintiff also cites from 84 CJS, Taxation, § 637, p 1284, as follows:

“In the absence of a statute to the contrary, it is generally held that taxes voluntarily paid under a mistake of law, with full knowledge of the facts, cannot be recovered back, while taxes paid under a mistake of fact may ordinarily be recovered back.”

Plaintiff’s brief sets forth several Michigan cases dealing with the general equitable principle that money may be recovered back when paid under mu*247tual mistake. In this connection we note that the trial court in his opinion said:

“It is well-settled law that a payment, although voluntarily made, if made under a mistake of a material fact may be recovered even if the mistake be due to lack of investigation.
“Does payment of taxes under similar circumstances present different questions? Upon principle it would not appear that it does.”

It is not possible under the statutory provisions and the interpretation of same by this Court to sustain the trial court’s opinion and the plaintiff’s theory herein, and we set forth 2 cases to sustain our conclusion in this regard.

Contrary to the theory that we should apply the general equitable rules in a taxation case of this nature are the cases of Langford v. Auditor General, 325 Mich 585; and Bateson v. City of Detroit, 143 Mich 582. In the Langford Case we stated (pp 590, 591):

“Governmental powers of taxation are controlled by constitutional and statutory provisions. C. F. Smith Co. v. Fitzgerald, 270 Mich 659. Hence, it is not possible to adjudicate issues arising under taxation laws by the general application of equitable principles. This phase of the law seems to have been overlooked by plaintiffs who stress their right to relief in the instant case on equitable, rather than legal, grounds.
“ ‘The collection of duly levied taxes for governmental purposes is a governmental function and the collection officer cannot, by mistake or misinformation, work an estoppel, enforceable in a court of equity. The fact, and not the misinformation, controls.’ Lovett v. City of Detroit, 286 Mich 159, 161, 162.”

In the Bateson Case, supra, the city assessor made a mistake in the description of the property owned *248by Bateson and sent Mm a tax bill on which a description appeared which, included more land than Bateson owned. Bateson, like the plaintiff in-the instant case, did not notice the error and paid the tax without protest and then sued to get it back. This Court, commenting on the rule that a tax voluntarily paid cannot be recovered back, said (pp 583, 584):

“It is apparent that the plaintiff, when he made the payments in question, had before him the description assessed, and could have determined by a comparison of the same with the description in his deed that such assessment covered more land than he or his wife owned. The tax was voluntarily paid. The rule that a tax voluntarily paid cannot be recovered back, and that the taxpayer cannot aver a mistake of fact which results from his own neglect to consult the record, is too well settled to require extended citation of authorities. See 2 Cooley on Taxation (3d ed), p 1495; Manistee Lumber Co. v. Township of Springfield, 92 Mich 277.”

A rather general discussion of a taxpayer’s ’ right to recover back taxes paid was set forth in General Discount Corporation v. City of Detroit (1943), 306 Mich 458. General Discount Corporation paid taxes for many years by mistake and without duress or protest and finally brought an action for the recovery of same. This Court denied recovery, and stated (pp 465, 466):

“At common law payment under protest was voluntary unless accompanied by duress. The effect of CL 1929, § 3444, was merely to make payment of an invalid tax under protest involuntary irrespective of any question of compulsion. When taxes are paid under actual duress the rule both before and since the statute is that protest is unnecessary. Pere Marquette R. Co. v. City of Ludington, 133 Mich 397, where there was an actual levy by the city treasurer under a warrant. * * *• This gap in the tax law *249may account for the broad definition of duress laid down in the special assessment cases. In all other cases, however (except special assessments), protest is unnecessary only where there is some actual or threatened exercise of the power possessed from which the party indebted has no other means of immediate relief than by making payment. Plaintiff makes no claim that its intangibles were actually seized or threatened with seizure. There being neither payment under duress nor payment under protest, plaintiff may not recover.”

Plaintiff sets forth cases from the States of New York, Minnesota, Connecticut, South Dakota, Ohio, and Wisconsin. It particularly calls attention to the Wisconsin case of State, ex rel. Pabst Brewing Company, v. Kotecki, 163 Wis 101 (157 NW 559). In this case the assessor entered an erroneous item of plaintiff’s personal property on the assessment roll, resulting in an overpayment of taxes in the amount of $8,739.32. The court said (p 104):

“It is obvious that the excessive tax was the result of a purely clerical error of the assessor, who had no intention to insert these 2 items twice each on the assessment roll. * * * The facts alleged show clearly that the payment of this amount was the result of a mistake of fact due to an error committed by the city officers, and plaintiff’s payment thereof as a lawful tax constitutes, under the circumstances, a fraud, which entitles plaintiff to recover. * * * Tt surely would be in violation of honesty and fair dealing’ for the city to keep it.”

The Wisconsin legislature provided for the filing of a claim against the city by a taxpayer who was aggrieved by the levy and collection of any unlawful tax assessed against him. The statute did not define what should constitute an unlawful tax but gave the city the right to .refund the tax if a court found *250the same to have been unlawful. There is no such provision in Michigan.

Plaintiff sets forth several Michigan cases dealing with the general legal principle that a levy in excess of the legal limit is invalid and void. We will not review these cases, however, as none of them deals with a suit to recover taxes back that have been paid.

We cannot agree with plaintiff’s claim that “windfall” or “unjust enrichment” is material to this issue because they are equitable principles that cannot be applied in this action at law.

Defendants contend that they are powerless to return or refund the taxes even though they.desire to do so, and they cite the case of People, ex rel. Eitel, v. Lindheimer, 371 Ill 367 (21 NE2d 318, 124 ALR 1472), where the supreme court in discussing recovery back of taxes erroneously paid said (p 371) :

“The obligation of the citizen to pay taxes is purely a statutory creation, and taxes can be levied, assessed and collected only in the method pointed out by express statute. (People v. Sears, 344 Ill 189 [176 NE 273]; Cooley on Taxation [2d ed], p 15.) So, also, any right to a refund or a credit of taxes is purely of statutory origin, and in the absence of an authoritative statute, taxes voluntarily, though erroneously, paid, cannot be recovered, nor even voluntarily refunded by a county, although there may be justice in the claim. (LeFevre v. County of Lee, 353 Ill 30 [186 NE 536].) Therefore, section 268b of the revenue' act is the exclusive source upon which any claim of a right by appellees to a refund or a credit must necessarily be based.”

In In re Clayton Estate, 343 Mich 101, 107, this Court quoted with approval the principle enunciated in 21 CJS, Courts, § 214, pp 388, 390, as follows:

*251“ ‘The doctrine of stare:'decisis applies' with full force to decisions construing statutes or- ordinances, especially where the construction has been long acquiesced in. * * *
“ ‘This rule is especially applicable where the construction placed on a statute by previous 'decisions has been long acquiesced in by the legislature, by its continued use or failure to change the language of the statute so construed, the power to change the law as interpreted being regarded, in such circumstances, as one to he exercised solely by the legislature.’ ”

Many sessions of the legislature have convened since this Court was called upon to construe a taxpayer’s right to recover paid taxes. The legislature did give the taxpayer a cause of action against the owner of the land upon which he paid the taxes by mistake by PA 1931, No 218 (CL 1948, § 211.381 [Stat Ann 1950 Rev §7.771]). The legislature in this State, except as specified by CL 1948, § 211.53 .(Stat Ann 1950 Rev § 7.97), hereinbefore quoted, has not provided for a taxpayer’s right to recover taxes paid, as has been provided in several other States.

To grant the relief requested by the plaintiff would require this Court to exercise legislative prerogatives — namely, to write into the statute the right to recover taxes paid under mutual mistake. This cannot be done.

Judgment reversed. No costs, a public question being involved.

Dethmers, C. J., and Sharpe, Boyles, and Carr, JJ., concurred with Kelly, J.