Rotan v. . State

CoNNOR, J. The sum paid by claimants as executors of George W. Elkins, deceased, and received by the State of' North Carolina, as admitted in the pleadings herein, was assessed and collected by the State Tax Commission as an inheritance tax or transfer tax due by said executors to the State of North Carolina, by virtue of the provisions of C. S., 7776. This sum was paid and collected on 2 December, 1920. In Trust Co. v. Doughton, 187 N. C., 263, decided at Spring Term, 1924, this Court held that said statute was valid, and that by virtue of its provisions the tax collected from the plaintiff in that case, as executor, was a lawful tax, and that plaintiff, suing to recover the same in the Superior Court upon the allegation to the contrary, as authorized by statute, could not recover. The question presented for decision, as stated in the opinion of this Court, was, whether the Legislature of this State can impose an inheritance or a transfer tax upon the right of nonresident legatees or distributees to take by will, or to receive under the intestate laws of another State, from a nonresident testator or intestate, shares of stock in the R. J. Reynolds Tobacco Company, and can require th@ payment of such tax as a condition precedent to the right to have said stock trans *295 ferred on the books of the corporation. Tbis question was answered in the affirmative, and in accordance with said decision the judgment of the Superior Court was affirmed. Tbe judgment of this Court, however, was reversed, on a writ of error, by the Supreme Court of the United States. Trust Co. v. Doughton, 270 U. S., 69, 70 L. Ed., 475. It was there held that the statute under which the tax was assessed and collected was invalid, upon the principle that the subject to.be taxed must be within the jurisdiction of the State, assessing and collecting the tax, and that this principle applies as well in the case of a transfer tax as in that of a property tax. Claimant’s contention made in this proceeding that the tax assessed and collected from them as executors of George W. Elkins, by the State of North Carolina was unlawful, for that it was not authorized by a valid statute, must be sustained. It must be held, now, since the decision of the Supreme Court of the United States, in Trust Co. v. Doughton, that the State Tax Commission was without authority to- demand of claimants herein payment of the sum of $17,909.62, on 2 December, 1920, as an inheritance or transfer tax. Claimants, however, bad the right, conferred by statute, in accordance with its provisions, to bring an action in the Superior Court of this State to recover the sum paid pursuant to the demand of the State Tax Commission. Upon facts identical with the facta of this case, plaintiff in Trust Co. v. Doughton, supra, brought an action in the Superior Court, as authorized by statute, and recovered judgment therein against the State. Claimants failed to bring such action, and now that they have lost the right to maintain the action, they invoke the original jurisdiction of this Court with respect to their claim. They pray that this Court adjudge that they have a legal claim against the State for the sum of $17,909.62, with interest from 2 December, 1920; they pray that this Court recommend to the General Assembly of North Carolina that provision be made for the settlement of their claim. Original jurisdiction is conferred upon this Court with respect to claims against the State, by the Constitution. It is expressly provided therein, however, that its decisions shall be merely recommendatory; no process in the nature of execution shall issue thereon. This Court renders no judgment in a proceeding in which this jurisdiction is invoked, nor has it power to enforce its decision made in such proceeding by process in the nature of execution. It decides only whether but for the exemption of the State from suit or action, by reason of its sovereignty, the claim would be valid and enforceable, in law, against the State; its decision, if favorable to the contentions of claimant, is transmitted to the General Assembly for its action upon the recommendation of the Court. The General Assembly alone has the power to determine that a claim against the State shall be paid or settled, and to provide by appro *296 priation or otherwise for the payment or settlement of the claim. Every person who enters into a .contract with the State, or who has any transaction with the State, or with any of its agencies, does so with knowledge that he has no right of action against the State to enforce such contract or to recover of the State by reason of such transaction. With respect to claims against the State, which may be presented to this Court, by proper proceedings, for its decision thereon, the State has not waived its exemption by reason of its sovereignty, from suit or action in any of the courts of the State. It is well settled that a State cannot be sued in its own courts, or in any other courts, unless it has expressly consented to such suit or action, except in the limited class of cases in which a State may be made a party in the Supreme Court of the United States, by virtue of the original jurisdiction conferred on that Court by the Constitution of the United States. 25 R. C. L., 412. Nor can a commission or board, created by statute, as an agency of the State, be sued. Dredging Co. v. The State, 191 N. C., 243; Carpenter v. R. R., 184 N. C., 400. It is manifestly in recognition of this principle that original jurisdiction is conferred upon the Supreme Court of this State, with respect to claims against the State; the jurisdiction, however, is clearly defined and carefully limited by the provisions of the Constitution. Neither the State nor the General Assembly is bound by any decision made by this Court, with respect to a claim against the State, whether such decision be favorable or unfavorable to the claimant. Our decisions are merely recommendatory. They may be accepted or rejected by the General Assembly, which alone has the power to determine whether or not the claim is just, or whether or not a sound public policy requires that it shall be paid or settled. At the time claimants herein, as executors of George W.. Elkins, deceased, paid to the State Tax Commission the sum of money which they now insist the State should repay to them, for the reason, that they were not liable for the tax assessed and collected by the State Tax Commission the State had expressly consented that an action might be brought and maintained in its courts for the recovery of the same, upon the allegation that the State was without power to require the payment of said sum as a tax; with respect to such action, the State had waived its exemption from suit or action by reason of its sovereignty. Statutes to that effect were then and have at all times since been in full force and effect. Actions have been repeatedly brought against the State or its agencies, by virtue of these statutes, and judgments have been rendered in such actions against the State. The Superior Courts of the State had ample jurisdiction with respect to an action by claimants herein to recover of the State or its agency, the Tax Commission, the money paid by them on 2 December, 1920. Claimants did not avail *297 themselves of the right, conferred by statute,-to bring such action. The fact that they have lost their right to recover said sum in an action against the State, prosecuted in the Superior Court, furnishes no ground upon which they are entitled to invoke the original jurisdiction of this Court, with respect to their claim. This Court, in the exercise of its original jurisdiction, conferred by the Constitution, will hear and consider a claim against the State only where the claimant has, or has had, no right of action against the State to recover upon his claim in a court of competent jurisdiction, by the consent of the State, expressly conferred by statute, to render final judgment against the State upon such claim and to enforce such judgment by process in the nature of execution. The jurisdiction of this Court, by virtue of which it may decide only issues of law involved in a claim against the State, its decisions then being only recommendatory, cannot be invoked by a claimant who has failed or neglected to pursue a remedy authorized by statute, which would have afforded him complete relief. Such remedy is exclusive. For the reasons stated in this opinion the proceeding is Dismissed.