11 N.W.2d 203 | Mich. | 1943
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *460 General Discount Corporation, plaintiff, a Michigan corporation, is the assignee of Federal *461 Discount Corporation, a Delaware corporation, which on December 1, 1932, gave the General Discount Corporation a bill of sale of all of its assets. This would include any claims the Federal Discount Corporation had against the defendant city of Detroit. On February 18, 1936, the Federal Discount Corporation petitioned the common council of the city of Detroit for a refund of $122,792.11 and claimed that for the years from 1921 up to and including the year 1932, the Federal Discount Corporation had paid personal taxes illegally assessed against it for large amounts and that it had only $5,000 of tangible personal property assessable in the State of Michigan during each of these years. The record does not show why the petition was denied on May 1, 1936, though it does show that the Federal Discount Corporation had disposed of all of its assets in 1932. The General Discount Corporation then waited until January, 1938, before it filed a petition for refund claiming that the board of assessors of the city of Detroit had placed discriminatory, fraudulent and illegal assessments upon intangibles belonging to it, a foreign corporation, from the years 1921 to and including 1932, and that petitioner had paid taxes on account of such assessments in the sum of $122,792.11. In the petition the General Discount Corporation did not state, as in the first petition, of its assignor, that each year it had $5,000 of tangible personal property. The petition was denied January 31, 1938. Plaintiff thereupon began a law action against the city of Detroit and its treasurer to recover the foregoing amount. Plaintiff appeals from a judgment for defendants.
It appears that the board of assessors of the city of Detroit had for years made it a practice to assess the intangible personal property of foreign corporations *462
having an office and doing business in the city of Detroit and where the intangibles were allocated as being in Michigan. In 1929, when the Reliable Stores Corporation, a Maryland corporation, sought a reduction of its personal property tax for the year 1927 because it had been assessed on its intangibles, the corporation counsel's office rendered an opinion upholding the legality of assessing intangible assets arising out of business done in Michigan and belonging to a foreign corporation having an office in the city of Detroit. In a suit brought by the Reliable Stores Corporation, this court, on September 16, 1932, held that such intangible property belonging to a foreign corporation was not taxable in the State of Michigan. ReliableStores Corp. v. City of Detroit,
The present suit was not instituted until February 15, 1938, so that all claims for refund of taxes paid up to 1932 would be outlawed* unless there had been a fraudulent concealment from plaintiff or its assignor of the cause of action, giving plaintiff an additional two years after discovering the fraud in which to bring suit.8224 We find no fraud in the fact that an illegal tax was levied. The assessors at most were mistaken as to the law, and it was not until a final decision was obtained from this court that they ceased making this error. Plaintiff claims, however, that the fraud consisted of discrimination and concealment of the fact that certain other foreign corporations were not assessed on intangibles *463 arising from business done in Michigan. While a disparity of assessments may create a presumption of fraud, the record shows neither such inequality as to amount to discrimination nor actual collusion between the taxing officials and the allegedly favored corporations. In most instances the annual reports of such corporations are set forth in the record rather than the returns made to the board of assessors. A few of the reports, which are somewhat incomplete, disclose what should have been taxable intangibles under the construction of the law at that time, but in other reports of the same corporations the accounts and notes payable arising from business done in Michigan more than offset the receivables. Plaintiff makes the blanket charge of discrimination against the assessments for each year from 1921 to 1932 but inasmuch as the record does not disclose many such instances, we cannot find such fraud as to toll the statute of limitations as claimed by plaintiff. Except in a few instances no effort was made during the trial to support the charge of fraud with a detailed analysis of the financial structure of the corporations affected and their tax returns. It was shown that the assessment against a large corporation was reduced in 1932 from $500,000 to $7,500 following our decision in the ReliableStores Case without a similar reduction of plaintiff's assessment. But the annual report of that corporation for 1932, submitted in the record, showed no intangibles subject to assessment. Although the city of Detroit did not tax the "Michigan" intangibles of every foreign corporation during some of the years in which plaintiff's assignor was taxed, nevertheless a member of the board of assessors listed in his testimony 13 large foreign corporations against whom such intangibles had been assessed. Plaintiff, in relying upon a few instances *464 of disparity without rebutting the defense of the city of Detroit, has failed to sustain the burden of proof, or excuse its delay in filing petition to refund. Notwithstanding our decision in Reliable Stores Corp. v. City of Detroit, supra, on September 16, 1932, plaintiff paid the second half of the city taxes in December, 1932.
Plaintiff claims that since a denial of its petition for refund by the common council was a condition precedent to its bringing suit, the statute of limitations was tolled until January 31, 1938, or at least until May 21, 1936. The statute could not be tolled, however, when, before the petition was presented, the six-year period had already expired. Where a demand is necessary to create a cause of action, it must be made within a reasonable time which, by analogy to the statute of limitations, is six years. Freeman v. Ingerson,
The statutory period, however, had not run against the 1932 taxes paid by plaintiff when the 1938 petition was filed. However, taxes for 1932 and for all the preceding years had been promptly paid by plaintiff without protest. 1 Comp. Laws 1929, § 3444, provides that a person may pay any tax, whether levied on personal or real property, *465
under protest to the treasurer, specifying at the time in writing signed by him the grounds of such protest, and the treasurer shall minute the fact of such protest on the tax roll and receipt given, that thereupon the person paying under such protest may within 30 days and not afterwards, sue for the amount paid and recover, if the tax is shown to be illegal, for the reasons shown in the protest. We have held that taxes paid without protest may not be recovered. National Bank of Detroit v. City ofDetroit,
At common law payment under protest was voluntary unless accompanied by duress. The effect of 1 Comp. Laws 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,
Judgment for defendants affirmed, but without costs as a public question was presented.
BOYLES, C.J., and CHANDLER, NORTH, STARR, WIEST, BUSHNELL, and SHARPE, JJ., concurred.