W.E. Gore, of Jackson, and T.N. Gore, of Marks, for appellant.
This suit was brought by E.P. Rigby against A.H. Stone, who is Chairman of the State Tax Commission,
and two of his employees and the sheriff of Panola County, as individuals, for the unlawful sale of a stock of merchandise, the property of Rigby, under a warrant issued to collect "sales" taxes claimed to have been due and unpaid from January 1, 1939, to December 1, 1941, by Rigby on account of his having been engaged in the sale of general merchandise at Pope, Mississippi. Actual and punitive damages were demanded.
The sheriff's sale was made under a warrant issued in the name of the defendant, Stone, as Chairman of the State Tax Commission, which warrant was not based on any assessment of taxes by the chairman.
The declaration set up that this warrant was issued notwithstanding the plaintiff kept and preserved adequate records of the gross receipts and gross proceeds of sales, and the gross income of said business and such other books as were necessary to determine the amount of the tax for the payment of which he was liable, and kept and preserved all invoices of goods and merchandise purchased by him for resale. The declaration also set up that returns of taxes were made by the plaintiff quarterly, for the whole time, with the permission of the chairman to make quarterly instead of monthly returns.
The proof, undisputed, shows that the records of the plaintiff were so kept and the returns so made.
Two remedies for the collection of delinquent sales taxes are available to the chairman under the provisions of the statute. (1) To bring an action in debt or other appropriate judicial proceeding.
Laws of 1938, p. 97, Sec. 9, Ch. 113, amending Sec. 11, Ch. 119, Laws of 1934, p. 180, as amended by Secs. 13 and 14, Laws of 1936, p. 179.
(2) To issue a warrant for the collection of the taxes, after an assessment by the chairman, "from the best information available."
Sec. 6, Ch. 13, Laws of 1938, pp. 94, 95, amending Sec. 8, Ch. 119, Laws of 1934, p. 177 as amended by Sec. 11, Ch. 158, Laws of 1936, p. 177.
There are only two conditions under which a warrant may issue: (1) Where "adequate records of the gross income, gross receipts or gross proceeds of sales are not maintained or invoices preserved as provided herein, the commissioner may make additional returns and assessments, . . ." and, (2) where "no return is made by any taxpayer required to make returns as provided herein," and after notice so to do, "then such returns shall be made by the commissioner from the best information available."
Sec. 6, Ch. 113, Laws of 1938, pp. 94, 95, amending Sec. 8, Ch. 119, Laws of 1934, p. 177, as amended by Sec. 11, Ch. 58, Laws of 1936, p. 177.
The Chairman of the State Tax Commission possesses only such powers as are conferred on him by statute expressly or by implication, and he can make an additional assessment in only such cases as the statute permits. Viator v. State Tax Commission, 193 Miss. 266 , 5 So.2d 487 .
It is obvious that the same rule must be applied to the issuance of a warrant.
The defendant, Stone, admitted in his testimony, that only these two conditions justify the issuance of a warrant based on an assessment made from "the best information available."
The warrant should not have been issued at all, because neither of the two conditions obtained here. Nonpayment of taxes by Rigby is no defense here. The gravaman of this action is the unlawful issuance of the warrant and the consequent sale of the plaintiff's goods under it.
No complaint was ever made that Rigby's records were not adequate or that he refused to make any return required by law and the regulations promulgated by the chairman.
To make an assessment "from the best information available," there must be a failure to keep such records or to make any return and where such records are kept and returns are made, the remedy is to sue.
The power to make additional assessments and returns and to impose penalties is vested exclusively in the defendant, Stone, and the defendant, Stone, cannot delegate the power to perform these functions to anybody. Mr. Stone could not, and as a matter of fact did not, undertake to delegate this power.
No assessment or return was made or penalty imposed by anybody connected with the Tax Commission. No notice of any assessment was ever given to the plaintiff.
No assessment having been made, the warrant was issued unlawfully and the whole proceeding was void from the beginning.
Shewalter v. Brown, 35 Miss. 423 .
The returns or assessments and the imposition of penalties must be reduced to writing by the chairman, and this written statement must recite all the facts as to jurisdiction of the subject matter and the person, or any action taken is utterly void.
The sheriff is liable here for failure to advertise the sale ten days and for selling it on eight days' notice, which made the sale void and rendered him and the other defendants liable for the loss of the stock of goods sold and for such punitive damages as a jury might assess.
Vansant v. Dodds, 164 Miss. 787 , 144 So. 688 ; McSwain v. Young, 111 Miss. 686 , 72 So. 129; Code of 1930, Secs. 1398, 3037, 3038; Sec. 9, Ch. 113, Laws of 1938, amending Sec. 11, Ch. 119, Laws of 1934, as amended by Ch. 158, Laws of 1936.
See also Planters Mercantile Co. v. Braxton, 120 Miss. 470 , 82 So. 323; Crump v. Tucker, 149 Miss. 711 , 115 So. 397 ; Smith v. Deas, 158 Miss. 111 , 130 So. 105 ; Minor v. City of Natchez, 4 Smedes M. 602, 10 Smedes M. 246; Howard v. Walters, 2 Miss. Dec. 187.
The sheriff was under the duty to go behind the warrant and ascertain for himself that the chairman and his employees had followed the statute.
Seward v. Wales, 40 N.Y., Appellate Division, 539, 58 N.Y.S. 42; Shaffer v. Riseley, 114 N.Y. 23 , 20 N.E. 630; 57 C.J., Sheriffs, Sec. 530.
The warrant was not fair on its face in that it did not recite the facts on which an assessment could be made and a warrant be issued.
We maintained that the record shows as matters of fact: (1) That adequate records were kept by means of which the amount of the tax may be ascertained; (2) That the chairman made no assessment; (3) That nobody else made one; (4) That no notice of an assessment was given; and (5) That the warrant was issued without either of these preliminary and indispensable things having been done; (6) That the chairman did not undertake to delegate the power to assess Rigby's taxes and penalty; (7) That, no assessment order having been made, there is no recital of jurisdictional facts to support Cocke's issuance of the warrant or Whitten's use of it as the means to deprive Rigby of his property; (8) That the sheriff gave only eight days' notice of the sale; and (9) That the sheriff did not make any investigation to ascertain whether an assessment had been made, or notice of assessment given, to support the warrant and to justify his acting by its authority.
Counsel who represent the Tax Commission defendants have not controverted either of these propositions of law or fact, except to maintain that adequate records were not kept by Rigby, a position not taken by anybody until long after the warrant had been issued.
J.B. Boyles, of Batesville, for appellee, Sheriff Whitten.
The record does not show or disclose any evidence or facts that the appellant, Rigby, was in any way damaged by the sheriff in levying and executing the warrant that had been placed in his hands by the Tax Commission for service. However, the appellant admits in his declaration, and the transcript of the evidence shows, that Sheriff Whitten acted on what purported to be a good and valid warrant issued and placed in his hands by the Chairman of the State Tax Commission; and that in pursuance and by virtue of said warrant, the sheriff levied the same
upon the stock of merchandise of the appellant Rigby, advertising said stock of merchandise for sale upon an eight day notice instead of ten days as required by the statute governing sales under writs of execution.
Code of 1930, Sec. 3038.
There was no proof whatsoever offered by the appellant as to any damages sustained by him by reason of said sale having been made on an eight day notice instead of ten days as required by law. There is no proof anywhere in the record that Sheriff Whitten connived with A.H. Stone, Chairman of the State Tax Commission, or any of the other appellees, for the purpose of destroying the business of the appellant Rigby and to injure his reputation. As a matter of fact, he had nothing to do with any of the affairs of the Tax Commission in arriving at and determining the delinquency of the appellant for the sales tax, or with making the assessment. The sheriff just simply discharged a ministerial duty in making the levy and sale under the warrant, which purported to be on its face a good and valid warrant issued by the Chairman of the State Tax Commission.
As to the sale of appellant's stock of merchandise being made by the sheriff on an eight day notice instead of a ten day notice as required by Section 3038, Code of 1930, being an act of misfeasance or nonfeasance on the part of the sheriff in executing the warrant upon such illegal notice of the sale of the appellant's personal property, or if this act of misfeasance on the part of the sheriff is to be disregarded and the sheriff treated as a trespasser from the beginning, then it stands to reason under all rules of substantive law in either instance that the appellant would have to prove that he was injured or damaged in such unlawful sale or taking of his property before he would have a case for the jury to pass upon. The record wholly fails to show any proof whatsoever; in fact, none was even offered by the appellant showing any damages sustained by him by reason of the sheriff making the sale on a notice shorter than the ten day period required by the statute.
In an action against an officer for selling property without giving proper notice, the measure of damages is not the value of the property, but the difference between the price it sold for and the price it would have sold for if proper notice had been given.
Breithaupt v. Dean, 144 Miss. 292 , 109 So. 792 ; 57 C.J. 869, Secs. 408, 409.
If property be sold on execution without the legal advertisement or notice of sale, it is the improper performance of an act which might have been lawfully done; and the officer is guilty of a misfeasance or nonfeasance; or he may be regarded as a trespasser from the beginning, and not entitled to the protection of his writ. The measure of damages against an officer for failing to give proper notice of a sale, if it be shown that the plaintiff has not lost any title by the error, is no more than the fees which the officer has collected for the levy and sale.
Section v. Nevers (Mass.), 32 Am. Dec. 225; Brock v. Berry (Ala.), 31 So. 517; Johnson v. Reese (Ga.), 73 Am. Dec. 757; Wright v. Spencer (Ala.), 18 Am. Dec. 76; 24 R.C.L. 937, Sec. 29.
It is well established as a general rule that the process, judgment, or order of a court having apparent jurisdiction, if valid on its face, affords complete protection to a sheriff or constable from liability for any proper or necessary act done in its execution, but not where the sheriff acts wrongfully, or in other than his official capacity. Statutes protecting officers from liability in the execution of process are to be liberally construed.
57 C.J., Sec. 525.
The warrant was not void on its face but it purported to be a good and valid warrant, and was in fact a good and valid warrant as issued and placed in the hands of Sheriff Whitten, and he could do nothing more or less than execute the warrant according to law and in doing this the warrant afforded him protection in the performance of a ministerial duty.
Carroll v. Board of Police of Tishomingo County, 28 Miss. 38 ; Newman v. Elam, 30 Miss. 507 ; Hendricks v. Johnson, 45 Miss. 644 .
We submit that the sheriff did nothing more than his duty enjoined upon him by law in executing this warrant in question; and if the appellant sustained any damage by virtue of the sale made by the sheriff as charged in the appellant's declaration, then the appellant wholly failed to make any proof of such damage, and that the court below committed no error in granting the peremptory instruction as to all of the appellees in this cause.
J.H. Sumrall, of Jackson, for appellees.
This is a suit for damages, both actual and punitive. The court will also note that there is not one scintilla of evidence which, taken most favorably, proves that the plaintiff has been unlawfully dealt with in any respect. And there is nothing in the whole testimony introduced on behalf of the plaintiff to prove that the plaintiff has in any manner been damaged, or any measure whatsoever by which damages could be computed. All the testimony of the plaintiff conclusively shows that he had not complied with the law; that he had not properly made his reports; that he admittedly had not paid all the tax due by him. These admissions on the part of the plaintiff establish without question the right of the commissioner to take the various actions that were taken, and plainly negative any thought that the defendants or any of them had done other than carry out the provisions of the law to the best of their ability, based upon the best information available, which is all that is required when the taxpayer has failed to comply fully with the law by keeping proper records, making proper reports, and paying the proper tax when due. The whole testimony of the plaintiff clearly established the fact that he had been derelict in every duty required of him by the Sales Tax Law. And this fact is sufficient to justify the action taken by the commissioner and those serving under him, and
through the procedure that was followed in full compliance with the law.
The questions presented to this court on this appeal may be very simply stated, since the nature of the suit necessarily limits the question to be considered to those involved and designated by the declaration itself. The court will bear in mind that this is simply a suit for damages. No effort is made to recover taxes erroneously paid, as provided by statute in proper cases, nor is any claim made that an excessive amount of taxes has been paid. Indeed, the testimony of the plaintiff himself affirmatively shows that proper returns had not been made, and that the proper amount of taxes had not been paid, thus completely contradicting the facts alleged, and the only facts alleged in the declaration upon which this suit is primarily predicated, that is that all returns had been properly made and all taxes properly paid. The court will therefore realize that the burden of proof was on the plaintiff to establish by preponderance of evidence the preliminary, fundamental facts on which his suit was predicated, to-wit, that he had performed fully every duty imposed upon him by law as a taxpayer under the Sales Tax Law, and that, notwithstanding this fact, and while it was a fact, the principal defendant, A.H. Stone, Commissioner, through and in connivance with his subordinates, had willfully, wantonly, and with malice pretended to follow the provisions of the law to the great hurt of this plaintiff as a taxpayer; wherefore he demands damages actual and punitive.
In analyzing the testimony produced on behalf of the plaintiff, it is at once apparent that the plaintiff failed utterly in establishing a single fact on which his suit was predicated. And having failed in this important task, there is nothing on which this court or any other court, or the jury in the trial court, could have intelligently and definitely determined that any damage of any kind had resulted, except the failure of the plaintiff himself to comply with the provisions of the statute.
To warrant punitive damages, defendant's actions must be prompted by willful and conscious wrong, actual malice, or conduct so grossly negligent and inexcusable as to amount to reckless disregard of another's rights.
New Orleans, J. G.N.R. Co. v. Statham, 42 Miss. 607 , 97 Am. Dec. 478; Chicago, St. L. N.O.R. Co. v. Scurr, 59 Miss. 456 , 42 Am Rep. 373; Illinois Cent. R. Co. v. Dodds, 97 Miss. 865 , 53 So. 409; Yazoo M.V.R. Co. v. Hardie, 100 Miss. 132 , 55 So. 967, 34 L.R.A. (N.S.) 742; Yazoo M.V.R. Co. v. May, 104 Miss. 422 , 61 So. 449, 44 L.R.A. (N.S.) 1138; McCain v. Cochran, 153 Miss. 237 , 120 So. 823 ; Neal v. Newburger Co., 154 Miss. 691 , 123 So. 861 ; Illinois Cent. R. Co. v. Ramsay, 157 Miss. 83 , 127 So. 725 ; Yazoo M.V.R. Co. v. Mullen, 158 Miss. 774 , 131 So. 101 ; Bounds v. Watts, 159 Miss. 307 , 131 So. 804 ; Hudson v. Louisville N.R. Co., 30 F.2d 391 ; Malone v. Montgomery Ward Co., 38 F. Supp. 369 .
The chief complaint of the appellant on this appeal is necessarily the action of the court in sustaining the motion of the defendants for a directed verdict. Where there is no evidence to sustain an issue or establish a fact, it is the duty of the court to so inform the jury.
Garnett v. Kirkman, 33 Miss. 389 ; Thigpen v. Mississippi Cent. R. Co., 32 Miss. 347 ; Board of Mississippi Levy Commissioners v. Montgomery, 145 Miss. 578 , 110 So. 845 ; Great Southern Life Ins. Co. v. Campbell, 148 Miss, 173, 114 So. 262 , 56 A.L.R. 681; Carrere v. Johnson, 149 Miss. 105 , 115 So. 196 ; Mobile O.R. Co. v. Clay, 156 Miss. 463 , 125 So. 819 ; Truckers Exchange Bank v. Conroy, 190 Miss. 242 , 199 So. 301 ; Jakup v. Lewis Grocer Co., 190 Miss. 444 , 200 So. 597 .
The Tax Commissioner is not subject to a suit for damages claimed to have resulted from his official acts.
Dunn Construction Co. v. Craig, 191 Miss. 682 , 3 So.2d 834; DeWitt v. Thompson et al., 192 Miss. 615 , 7 So.2d 529 ; Bradley v. Fisher, 20 L.Ed. 646; Laws of 1934, Ch. 119.
Greek L. Rice, Attorney-General, by W.D. Conn, Jr.,
Assistant Attorney-General, for appellees.
Appellant's claim for damages in this case is predicated on the theory that he had reported all the sales which he had made during the three-year period here involved, had paid all the taxes which he was required under the law to pay, and had kept adequate records of his business; that in spite of all this the defendants, acting arbitrarily and with malice, assessed him with additional sales taxes which they knew he did not owe, either all or any part of it. Can the court say he properly reported his entire gross sales? Has he paid all taxes due? Did he keep adequate records? His own testimony conclusively shows that the allegations of his declaration have not been and cannot be sustained by the evidence contained in the record now before the court.
See Newton v. Homochitto Lumber Co., 162 Miss. 20 , 138 So. 564 ; Mobile O.R. Co. v. Johnson, 165 Miss. 397 , 141 So. 581 ; Thomas v. Williamson, 185 Miss. 83 , 187 So. 220 ; Truckers Exchange Bank v. Conroy, 190 Miss. 242 , 199 So. 301 ; Jakup v. Lewis Grocer Co., 190 Miss. 444 , 200 So. 597 .
The procedure which was followed by the State Tax Commission, which culminated in the issuance of the warrant involved in this case, complied with the law in all respects. This lawsuit was predicated on the malicious and wanton conduct of Mr. Stone, his agents, and the sheriff of Panola County. No malicious conduct has been shown anywhere. The law has been followed in all of its provisions.
W.E. Gore, of Jackson, and T.N. Gore, of Marks, for appellant, on suggestion of error.
The failure of Whitten to advertise the property for the statutory period is the same as the failure of a sheriff to file a return, within the time required by the statute, and it renders him a trespasser ab initio, liable for conversion,
and the measure of damages is the value of the property at the time of the conversion with interest to the time of the trial.
Vansant v. Dodds, 164 Miss. 787 , 144 So. 688 ; Hinds v. Terry, Walk. (1 Miss.) 80; Heard v. James, 49 Miss. 236 ; Sumrall Motor Co. v. Creel, 158 Miss. 262 , 130 So. 151 ; Briscoe v. McElween, 43 Miss. 556 ; Jamison v. Moon, 43 Miss. 598 ; Bank of Forest v. Capital National Bank, 176 Miss. 163 , 169 So. 193 ; Ingram Day Lumber Co. v. Robertson, 129 Miss. 365 , 92 So. 289; Skrmetta v. Clark, 180 Miss. 21 , 177 So. 11 ; Lancaster v. Jordan Auto Co., 185 Miss. 530 , 187 So. 535 ; Carrier v. Esbaugh, 70 Pa. 239 ; Shaffer v. Price, 260 N.W. 703 , 98 A.L.R. 689; 28 A. E. Ency. (2 Ed.), Sec. 14, p. 696; 26 R.C.L., Trover, p. 1120, sec. 31.
J.B. Boyles, of Batesville, for appellee, Sheriff Whitten, on suggestion of error.
We take the same position that we did in our original brief filed in behalf of Sheriff Whitten; that is, that there were no damages proved by the appellant against the sheriff, and for that reason we asked the court to instruct the jury to find for the sheriff.
For damages for misfeasance or nonfeasance in giving proper notice of the execution sale, the measure of damages would be the difference between what the property brought on an improper notice of sale and what it would have brought on a legal notice.
Breithaupt v. Dean, 144 Miss. 292 , 109 So. 792 ; Sexton v. Nevers (Mass.), 32 Am. Dec. 225; Brock v. Berry (Ala.), 31 So. 17; Johnson v. Reese (Ga.), 73 Am. Dec. 757; Wright v. Spencer (Ala.), 18 Am. Dec. 76; 57 C.J. 869, Sec. 409; 24 R.C.L. 937.
Argued orally by T.N. Gore and W.E. Gore, for appellant, and by J.H. Sumrall and W.D. Conn, Jr., for appellees.