218 Wis. 414 | Wis. | 1935
Lead Opinion
During the years 1912 through 1925, plaintiff invented and developed certain methods and equipment for the disposal of dead animals. Pie obtained letters patent therefor in 1925, and assigned his rights to Allbright-
The first and principal question upon this appeal has to do with the effect of the overruling of the decision in Long v. Rockwood, supra, by the subsequent Fox Film Corp. Case. This raises the question whether a decision overruling and repudiating an earlier decision operates prospectively or retrospectively. The Blaclcstonian doctrine, which is generally held, is that the later decision is retrospective in operation for the reason that courts declare but do not make law. In consequence, when a decision is overruled, it does not merely become bad law, — it never was the law, and the later pro
In this case the precise question is not what attitude this court shall take with respect to the effect of its own later decisions upon earlier decisions thereby repudiated. The question is whether the decision of the United States supreme court in the Fox Film Corp. Case was retrospective in operation and effect. The determination of this question is for the supreme court. So far as we can discover, the court has never expressly passed upon this question, and we can only resort to the general rule and to such analogies as are to be drawn from cases which, while not in point, may disclose the attitude of the court upon the question. All of the cases cited, and hereafter to be discussed, deal with the effect to be given to the decisions of a state supreme court repudiating its earlier decisions.
It has been held in cases involving state law, but originating in a federal court, that the supreme court is not bound
“The sound and true rule is, that if the contract when made was valid by the laws of the state, as then expounded by all the departments of its government, and administered in its courts of justice, its validity and obligation cannot be impaired by any subsequent act of the legislature of the state, or decision of its courts, altering the construction of the law.”
The court adds: “The same principle applies where there is a change of judicial decision as to the constitutional power of the legislature to enact the law. To this rule, thus enlarged, we adhere. It is the law of this court. It rests upon the plainest principles of justice. To hold otherwise would be as unjust as to hold that rights acquired under a statute may be lost by its repeal. The rule embraces this case.”
The Gelpcke Case seems to have given rise to considerable misunderstanding as to its scope. In a dissenting opinion in Muhlker v. New York & Harlem R. Co. 197 U. S. 544, 25 Sup. Ct. 522, 529, Mr. Justice Holmes refers to its rule as “a doctrine which it took this court a great while to explain.” While this case was for a time thought to rest upon the contract clause, it was explained in subsequent decisions as limited to cases originating in federal courts and as giving to such courts the right, for the purpose of avoiding injustice, but without invoking the contract clause, to decide and enforce the state law as laid down by decisions.of the state court governing when the contract was made, rather than by its later decisions. Mississippi & M. R. Co. v. Rock, 4 Wall. 177; Bacon v. Texas, 163 U. S. 207, 16 Sup. Ct. 1023; Fleming v. Fleming, 264 U. S. 29, 44 Sup. Ct. 246;
In addition to the foregoing cases, three cases have come to our attention in which state courts have determined whether a decision by the United States supreme court, overruling an earlier decision, was to be given retrospective operation. In Harris v. Jex, 55 N. Y. 421, a mortgage was executed before the passage of the Legal Tender Act. After the decision of the United States supreme court in Hepburn v. Griswold, 8 Wall. 603, 605, 19 L. Ed. 513, declaring the
“It is insisted on the part of the defendant that notwithstanding the fact that at the time the tender was made the supreme court of the United States, the ultimate judicial authority on all questions arising under the constitution and laws of the United States, had decided that the Legal Tender Act, so far as it applied to debts like that of the plaintiff, was void, and that he was entitled to demand payment of his debt in coin, yet he was bound to know the law tO' he as it was subsequently declared, and that a refusal to accept the tender involved the loss of his security. I think the law did not impose upon the plaintiff so unreasonable a burden. . . . The plaintiff had a right to repose upon the decision of the highest judicial tribunal in the land. It was, as applied to the relations between these parties and to- this case, the law, and not the mere evidence of the law.”
The New Jersey court,- in Stockton v. Dundee Mfg. Co. 22 N. J. Eq. 56, on virtually the same facts, held that the later decision was retrospective in operation. The case of People v. Graves, 242 App. Div. 128, 273 N. Y. Supp. 582, involving the effect of the Fox Film Corp. Case upon the doctrine announced in Long v. Rockwood, likewise held the effect of the later decision to be retrospective and the state entitled to assess an income tax during the years that the Long Case was accepted as law.
An examination of these three cases will disclose that in each the court assumed, without discussing the matter, that
In the instant case, there is no such situation as existed in the Gelpcke or Muhlker Cases. Plaintiff did not contract or acquire other property rights in reliance upon the doctrine of Long v. Rockwood. To compel him to pay a tax which, by the doctrine of the Fox Film Corp. Case, the state was entitled to collect, does not seem to us to produce injustice or undue hardship. To deprive the state of revenue to which it was justly entitled upon a correct view of the law would produce injustice.
It is suggested that the retrospective operation of the Fox Film Corp. Case will result in the enforcement against plaintiff of unconscionable penalties, but the record does not sustain this contention. It is true that plaintiff will be compelled to pay interest at the usual legal rate for taxes withheld in reliance upon the decision in Long v. Rockwood supra. Under the authorities, interest, even at the legal rate, exacted for nonpayment of taxes is usually denominated a penalty. 3 Cooley, Taxation (4th ed.), § 1274. However, we see no occasion to hold that its payment will produce such a hardship as will warrant application of the exception, heretofore referred to, with respect to crimes. The state has not had the use of the money and plaintiff has. See Chicago &
It is next claimed that the assessment is neither the result of an office audit of plaintiff’s returns, nor of new facts disclosed by a field investigation. From this it is contended that the commission is not authorized under sec. 71.11, Stats., to collect the assessment, since the latter section requires the collection to be based upon information and new facts. State ex rel. Schuster Realty Co. v. Lyons, 184 Wis. 175, 197 N. W. 585, 199 N. W. 48. Plaintiff’s contention is doubtless sound in fact. The assessment resulted when the decision in 'the Fox Film Corp. Case came to the attention of the taxing authorities. However, plaintiff’s conclusion does not follow. The original failure to assess was based solely upon an erroneous view of the law, and a corrected assessment may be made within the time limited by the statutes. Chicago & N. W. R. Co. v. Tax Comm. 199 Wis. 368, 226 N. W. 293; Armory Realty Co. v. Olsen, 210 Wis. 281, 246 N. W. 513.
Plaintiff’s next contention is that the court erred in finding that the fair cost of developing the patent was $6,977.52, rather than $25,572.52, as claimed by plaintiff. Plaintiff’s claim for deduction from the amount for which his patent was sold outright embraces expenditures during the years 1912 through 1925. Plaintiff lists the sum of $13,300 for
In this state of the record the burden was upon plaintiff to isolate from the general expenses of the business such items as were properly chargeable to the development of the patent, and it cannot be said as a matter of law that plaintiff sustained this burden. The evidence is extremely unsatisfactory and inconclusive, and, having the burden of proof, plaintiff cannot now complain that the doubts were resolved against him by the trier of fact.
By the Court.- — -Judgment affirmed.
Dissenting Opinion
{dissenting). It is stated in the decision: “It is suggested that the retrospective operation of the Fox Film Corp. Case will result in the enforcement against the plaintiff of unconscionable penalties, but the record does not sustain this contention.” But it is conceded that the exaction of an additional amount because of the failure to pay taxes when due “is usually denominated a penalty. 3 Cooley, Taxation (4th ed.), § 1274.” The taxpayer, in good faith, paid the tax in 1926 and 1927. He was also willing to pay this tax in subsequent years, but was prevented by the an
A serious question would arise were the state to attempt to give or loan its credit, because of the provisions of our state constitution, whereas the imposition of penalties for failure to pay taxes when due, or the permitting of a discount to induce prompt payment, may be properly justified.