Town of Magnolia v. Sharman & Co.

ITon. O. B. Moore, Sp. J. On the-,'1879, the town council of the town of Magnolia adopted an ordinance requiring a license tax to be paid for the purpose of selling liquors by the quart as a druggist in said town for the year 1880. The license tax for that year appellees paid under formal protest, as recited in the receipt therefor, dated January 1, 1880, to the constable and revenue collector of the town, amounting to the sum of $50, as stated in the account sued on, and on the 3d of January,- 1881, the town council adopted another similar ordinance, numbered 50, requiring license from persons selling liquors in the town; and appellees, under formal protest, recited in the receipt, then paid the license for the year 1881, amounting to the sum of $100. On the 29th of June, 1882, appellees brought this action before Thomas S. Mullins, one of the justices of the peace of Magnolia township, to recover back the license taxes amounting to the sum of $150 and interest, which they claimed had been illegally exacted from them and against their protest made at the time of paying the same. Judgment was rendered in favor of Sharman & Co. An appeal was taken to the circuit court, where judgment was again rendered against the town of Magnolia. Motion for a new trial overruled, and an appeal taken to this court. There are two questions involved in this case: 1. Liquor: Power of town to license sale of. First — Had the town council of Magnolia authority to adopt and enforce the ordinance and collect the license taxes thereunder demanded and paid ? Second — If the exactions were unlawful, did or did not appellees pay the same voluntarily; that is to say, was the compulsion, shown by the pleadings and testimony, sufficient to render the payment involuntary in the legal sense ? The first of these can hardly be considered a question. Independently of the “ local option law,” or of any special prohibitory liquor law for the town of Magnolia, neither this town, nor any other town in the.state, has authority to deal with the liquor question, in any other way than to “license, regulate, tax or suppress tippling houses and dram shops, and other places of habitual resort for tippling.” This is candidly admitted by the learned counsel for appellant. It was definitely and authoritatively set at rest by this court in Tuck v. Town of Waldron, 31 Ark., 462. 2. When illegal taxes paid, recoverable. As to the second question presented, R. R. Sharman, the only witness in the case, testified that he paid the license taxes referred to under protest, after they had been demanded by the collector for the town of Magnolia three several times. The constable was the collector, and at'the time of demanding the taxes made threats of arrest, and other penalties, if payment was not made — and that the payments were made after appellees had taken legal advice on the subject. It is a general proposition that an action may be maintained to recover money paid under an illegal and void tax, if paid involuntarily or under compulsion. There are certain elements or conditions, however, which must exist in order to the maintenance of such an action. The Supreme Court of Georgia, in the case of National Bank v. The Mayor of Americus, etc., 68 Ga., 119, thus states these conditions: “ Three elements are essential and must concur to sustain an action to recover back money on the ground of the illegality of the tax. “jFirst — The authority to levy the tax must be wholly wanting. “ Second, — The money sued for must have been actually ■received by the defendant corporation. “ Third — The payment of the plaintiff must have been made upon compulsion, to prevent the immediate seizure ■of his goods, or the arrest of his person, and not voluntarily made; unless these conditions concur, paying under protest will not give a right to recovery.” Judge Cooley, in his work on Taxation, p. 565, says: “The authorities warrant us in specifying the following as the conditions on which any such action may be main-tained: “First — The fax must have been illegal and void, not merely irregular. “ Second — It must have been paid over by the collecting ■officer, and have been received to the use of the municipality. “ Third — It must have been paid under compulsion. “And to these should be added, perhaps, “ Fourth — The party must not have elected to proceed in .any remedy he may have had against the assessor or collector.” This doctrine is supported by reason and the weight of •authority as found in numerous decisions of the courts of last resort in many of the states of the union. Sandwich Glass Co. v. Boston, 4 Metc., 181; Joyner v. School District, 3 Cush., 567; Hubbard v. Brainard, 35 Conn., 563; First National Bank v. Watkins, 21 Mich., 483; Tuttle v. Everett, 51 Miss., 27. The Supreme Court of the United States, in the case of Erskine v. Van Arsdale, 15 Wallace, p. 75, states the rule in these broad terms: “ Taxes illegally assessed and paid may always be recovered back if the collector understands from the payer that the taxes are regarded as illegal and that suit will be instituted to compel the refunding of them.” This court has recognized the doctrine in its fullest extent in the case of Drew Co. v. Bennett, 43 Ark., 364. The county court of Drew county exacted from Bennett $450-for liquor license, when only $400 was the legal tax. Bennett paid under protest, and sued to recover the excess of' $50. This court said, in passing on the question: “ The-excess over $400, which Bennett was made to pay as a county tax, was an illegal exaction, and he was entitled to-recover it.” The record in this case shows, beyond question, that the license tax was illegal and void, was received to the use of the municipality of Magnolia, and was paid under threats- and compulsion. All the elements concur to make it a proper case for maintenance of an action to recover an illegal and void tax. • The judgment of the Columbia circuit court is affirmed. Hon. B. B. Battle did not sit in this case.