17 Haw. 364 | Haw. | 1906
This case comes here by special leave of the circuit judge on exceptions to air interlocutory order overruling a demurrer. The action is assumpsit to recover back $500.license fees for the two years beginning July 1, 1903 and 1904, respectively,' and $250 penalty for previous nonpayment of the license fees, which sums were paid under protest by the plaintiff to the defendant on March 25, 1905, upon the latter’s demand for immediate payment thereof, under Section 2625 of the Revised Laws. That section, which has since been slightly amended (by Act 98, 1905), provides that no foreign corporation, except foreign insurance companies, which does not invest and use its capital in the Territory, shall have an office in the Territory unless it shall first have obtained from the treasurer an annual license to do so, for which license it shall pay into the treasury one-fourth of a mill on each dollar of its capital stock which it is authorized to have, but not less than $150 in any case. The treasurer is authorized to collect the amount of the fee, with a penalty of 50 per centum for failure to pay the same, but there is a proviso that no license shall be necessary for any corporation engaged in the business of fóreign or interstate commerce or while employed by the government of the United States. The plaintiff alleges that it is a foreign corporation organized under the laws of West Virginia and that during the period in question it invested and used its capital in this Territory and was engaged in the business of foreign and interstate commerce; also that it made the payment under protest in writing, contending that it was not liable because it was not one of the foreign corporations to which the statute was applicable and was engaged in the business of foreign and interstate commerce; and that at the same time it notified the defendant that it would institute suit to recover the money so paid under protest. In support of the demurrer it is contended (1) that the action, if it lies at all, should be brought against the Territory and not against the treasurer, and (2) that in any event no recovery can be had because the payment was voluntary and not under duress.
If the defendant had paid the money into the Territorial treasury and was justified in doing so and the action were against him in his official capacity for the purpose of reaching such money in the treasury, it would be a mere ruse for an action against the Territory, and, if it would lie at.all against him nominally, in order to reach the Territory really, it would have to be brought in the supreme court like other actions brought against the Territory by its consent, and payment of the judgment if the action were sustained would have to await an appropriation by the legislature. Smith v. Reeves, 178 U. S. 436; Flagg v. Bradford, 181 Mass. 315. The present action is sustainable, if at all, only as an action against the defendant in his personal or private capacity, based on the theory that the collection made by him was without authority of law and that therefore not only was he under no obligation to pay the money over to the Territory as against the plaintiff, to whom it rightfully belonged, but, being warned that the legality of the demand was denied and that the suit would be brought for the recovery of the money, he was in duty bound to refund it, and if he paid it ■over to the Territory after such warning he did so at his peril. There is no doubt that ordinarily a common law action for
But if the treasurer were required by statute to pay the money over to the Territory immediately and without awaiting the result of litigation notwithstanding the plaintiff’s protest, equity and good conscience, which is at the foundation of an action for money had and received, would not require him to refund, for that would be to require him to- pay twice through no fault of his own. If the statute required him to pay to the Territory the common law would not require him to pay to the plaintiff, — in which ease the action would lie, if at all, against the Territory and not against the defendant. Cary v. Curtis, 3 How. 236,—in which it was held that moneys illegally exacted for customs duties could not be recovered in an action against the collector in view of a statute, enacted after the decision in Elliott v. Swartwout, supra, which provided that.moneys paid for unascertained duties or for duties paid under protest against the rate or amount of duties charged should be disposed of as other moneys paid for duties and not held by the collector to •await the ascertainment of duties or the result of any litigation
The defendant contends that there are statutes applicable to the present case, similar in effect to those above mentioned, which make it the duty of the treasurer, as a public accountant under the audit law, to pay all moneys collected by him as treasurer into the treasury and not retain moneys paid under-protest to await the result of litigation in regard to them. Section 1515 of the Revised Laws provides that “All persons who, by any law, regulation or appointment are charged with the duty of collecting or receiving revenue or other moneys on account of the Territory, or with the duty of disbursing moneys on account of the public service shall become and be ‘public-accountants,’ and shall perform all such duties and render such accounts as this chapter prescribes, and as the treasurer and auditor shall from time to time direct.” Section 1520 provides that “Every such public accountant collecting or receiving-revenue or other moneys aforesaid in Honolulu shall pay weekly, or at such times as may be otherwise specially appointed, into the treasury all sums of money collected or received by him on account of the revenue or otherwise as aforesaid, accompanied by vouchers bearing his signature, and which such sums shall have been collected or received, and unless otherwise specially directed, shall not later than the tenth day after the expiration of each month, transmit to the auditor a return in the form contained in section 1545, with such particulars in each case as may be required by the auditor, of all moneys collected or received by him during the preceding-month, and shall make and subscribe to an oath in the form
Assuming that the treasurer is a public accountant within the meaning of sections 1515 and 1520, notwithstanding that-the former section permits him with the auditor to prescribe rules for public accountants and that the latter section would in such case require him to deal with himself, and assuming that these sections should be construed as covering collections under color of any law, regulation or appointment as well as under the authority of any law, regulation or appointment (see De Lima v. Bidwell, 182 U. S. 180), we are nevertheless of the opinion that these sections do not go to the extent contended. They do not, like the statutes in the Cary, Mallan and Peacock cases, contain express provisions requiring the payment of moneys into the treasury without awaiting the result of litigation. There would be an equal duty to pay such moneys into, the treasury sooner or later even in the absence of a statute prescribing the times at which they should be paid. The provisions of sections 1515 and 1520 have been in force during the period in which nearly all of the Hawaiian cases above cited were decided, and yet it has never been suggested that they prevented actions of this kind. They were sections 1 and 2 of chapter 23 of the Laws of 1882 and sections 29 and 30 of
The case of the treasurer is not different in principle from that of other officers, such as collectors of taxes or customs duties, although his connection with the treasury is closer. The theory of the case is that he acted without authority of law and therefore in his private capacity, in which case he as well as any other officer could retain moneys illegally exacted and paid involuntarily and under protest to await the result of litigation. In Scotttish U. & N. Ins. Co. v. Harriott, 109 Ia. 606, the statute provided that foreign insurance companies should pay certain taxes “into the state treasury” as a condition of their doing business within the state. A British company paid the taxes to the state treasurer under protest upon the demand of the state auditor. It was held that an action would lie against the treasurer for the recovery of the amount so paid if the law was invalid. In Ratterman v. Express Co., 49 Oh. St. 609, an action was sustained against a county treasurer to recover back moneys paid under protest by an express company under a statute which required express companies to pay certain taxes on their gross receipts from interstate business. See also Osborn v. U. S. Bank, 9 Wheat. 738, 837, 843, 845.
There are, no doubt, strong reasons why in point of policy officers should not be allowed to retain moneys collected under color of their offices to await the result of litigation, but, on the other hand, it would be a hardship to require persons who paid such moneys under duress and protest to await action by the legislature in order to recover them after judgment in an action against the Territory as now provided. A wise middle
The next question is whether the payment in this case was involuntary. As already stated the mere fact that the money was paid under protest would not authorize a recovery; nor would the mere fact that it was paid unwillingly or reluctantly. It is essential that it should have been paid under compulsion or duress within the meaning of the law of involuntary payments. Perhaps the same degree of duress would not be required as would be required for the purpose of setting aside a conveyance, the execution of which was alleged to have been procured by duress. Probably also forms of compulsion would be considered sufficient under present conditions of commercial activity which would not have been considered sufficient at some earlier periods. Actual or threatened seizure or detention of person or property is not indispensable to constitute duress under all circumstances. In the present case liability to the pecuniary penalty would not alone be sufficient, for even if under other circumstances it would be sufficient, as held by some courts and not by others, it had in the present instance already been incurred when demand for the license fee and the penalty for previous nonpayment was made. Nor is the fact sufficient that nonpayment is made a misdemeanor on the part of the corporation, for, even if making the corporation itself subject to prosecution for a misdemeanor and payment of a pecuniary penalty on conviction would be sufficient, the statute in question provided no penalty whatever and thus rendered the provision nugatory. It has since been amended so as to provide for a fine upon conviction of the corporation and also so as to make the agents of a delinquent corporation guilty of a misdemeanor and subject to fine or imprisonment or both. Act 98, 1905. The statute, however, provides that a delinquent corporation shall not have an office in the Territory for the use of its officers, agents, stockholders or employees, though it imposes no special penalty for having such an office without payment of a
“In that case, it is true, the fact that the importer aa'us not able to get possession of his goods Avithout making the payment complained of, Avas referred to by the court as an important circumstance ; but it Avas not stated to be an indispensable circumstance. The ultimate fact, of aaTúcIi that Avas an ingredient in the particular case, Avas the moral duress not jAistified by- law. When such duress is exerted under circumstances sufficient to influence the apprehensions and conduct of a prudent business man, payment of money wrongfully induced thereby ought not to be regarded as Aroluntary. But the circumstances of the case are always to be taken into consideration. When the duress has been exerted by one clothed with official authority, or exercising a public employment, less evidence of compulsion or pressure is required, — as where an officer exacts illegal fees, or a common carrier excessive charges. But the principle is applicable in all cases according to the nature and exigency of each.”
See also 2 Page, Contr., Sec. 798 et seq.; 22 Am. & Eng. Enc. of Law, 2nd Ed., 612 et seq.; 27 Id. 757 et seq. In our opinion the payment in question should be regarded as involuntarv.
Tbe exceptions are overruled.