WOLVERINE STEEL COMPANY v CITY OF DETROIT
Docket No. 13407
Court of Appeals of Michigan
Decided March 27, 1973
45 Mich App 671
Leave to appeal denied, 390 Mich 771.
1. TAXATION — ILLEGAL TAX — PAYMENT UNDER PROTEST — STATUTES.
An error made in determining the application of the United States Constitution to the tax laws of Michigan is not the type of mistake of fact covered by the exception in the statute providing for a recovery of taxes paid as a result of clerical error or mutual mistake of fact made by the assessing officer and the taxpayer notwithstanding that the payment was not made under protest (
Dissent by O‘HARA, J.
2. TAXATION — ILLEGAL TAX — PAYMENT UNDER PROTEST — STATUTES.
The statute permitting recovery of a tax paid because of a mutual mistake of fact made by the assessing officer and the taxpayer notwithstanding that the payment was not made under protest does not address itself to why the mistake was made; therefore, where there was a mutual mistake regarding the legality of a tax and a taxpayer paid a tax which it subsequently developed it did not owe and the taxing authority collected a tax which it subsequently developed it was not entitled to, both parties were mistaken as to the fact of a tax being owed and the taxpayer was entitled to reimbursement notwithstanding that the tax was paid without protest (
Appeal from Wayne, Bernard H. Davidson, J. Submitted Division 1 January 11, 1973, at Detroit. (Docket No. 13407.) Decided March 27, 1973. Leave to appeal denied, 390 Mich 771.
Complaint by Wolverine Steel Company against the City of Detroit, Robert J. Temple, its Treasurer, and the School District of the City of Detroit
Schmier, Schmier & Dakmak and Karbel, Eiges, Rothstein & Karbel, for plaintiff.
Michael M. Glusac, Corporation Counsel, and Lawrence W. Morgan and Arthur Yim, Assistant Corporation Counsel, for defendants City of Detroit and Robert J. Temple.
Ostrowski, Wilson, Belanger & Boman, P. C., for defendant School District of the City of Detroit.
Before: J. H. GILLIS, P. J., and BASHARA and O‘HARA,* JJ.
BASHARA, J. This is an action for the return of certain personal property taxes paid by plaintiff. Appellant claims these taxes were assessed in violation of
The appellant corporation paid personal property taxes, on August 31, 1968, on imported goods owned by it and stored in unopened boxes at various warehouses. It did so, relying on information provided to its controller in April of 1967 by an auditor from the personal property division of the Board of Assessors of the City of Detroit. While the appellant believed that it was the “efficient” cause of importation for the goods, see Detroit v Kenwal Products, supra, because of the
In December of 1968, this Court released its opinion in the Kenwal case. The appellant then initiated the current action claiming that under the holding of Kenwal its goods were unconstitutionally assessed. It further claimed that, under
Plaintiff relies on the case of Spoon-Shacket Co, Inc v Oakland County, 356 Mich 151 (1959), for the proposition that equity should intervene whenever one party, public or private, seeks unjustly to enrich himself at the expense of another as a result of his own mistake. Further, that a taxpayer should be able to recover mistakenly or inadvertently levied taxes.
In that case, however, the plaintiff had attempted to pay the tax under protest and such protest was refused. The facts of the instant case reflect that no such protest was made.
On the facts as presented, contrary to the trial court‘s ruling, we believe that a “mutual mistake” was made. However appellant is still not entitled to recovery under
* Former Supreme Court Justice, sitting on the Court of Appeals by assignment pursuant to
This interpretation can be confirmed by looking at
“As an alternative to section 53 [
MCLA 211.53 ; MSA 7.97], whenever there has been a clerical error or a mutual mistake of fact relative to the correct assessment figures, the rate of taxation or the mathematical computation relating to the assessing of taxes.” (Emphasis added.)
Statutes in pari materia are to be construed together. Sections
Case law in Michigan also indicates that the appellant may not recover, because if any mistake did occur it was not a mistake of “fact“. In Upper Peninsula Generating Co v Marquette, 18 Mich App 516 (1969), the plaintiff had paid ad valorem taxes for the years 1965 and 1966. Sometime in 1967 the plaintiff became convinced that the taxes had been illegally assessed because the millage had been in excess of the 15-mill limitation imposed by
The error made in the Upper Peninsula case was the same type of error that was made in the present case. In the Upper Peninsula case the City of Marquette levied taxes in violation of the Michigan Constitution. In the present case the appellees levied taxes in violation of the United States Constitution. In both cases the plaintiff and the defendants thought that the taxes were valid at the time they were paid. In the Upper Peninsula case this was held not to be an error of fact within the meaning of the statute. The same result must,
If it were within our province to decide solely upon equitable relief we would agree with plaintiff that recovery should be allowed. However,
Although, from the point of view of the appellant the result may seem harsh, the law in Michigan is clear. If a party believes that it is paying taxes illegally assessed and it does not pay them under protest as provided in
Affirmed.
J. H. GILLIS, P. J., concurred.
O‘HARA, J. (dissenting). I conceive the issue in this case somewhat differently than do my esteemed colleagues.
The majority opinion as I read it turns upon the failure of the taxpayer to pay the assessed tax under protest.
This is a strong indication of mistake. Had the company paid the tax under protest it would signify to me that the company knew exactly what it was doing and could not later be heard to claim the tax was mistakenly paid. It seems to me the company believed it owed the tax, and that the taxing authority believed it was entitled to pay-
The situation here presented is one which the Legislature intended to correct when it used the phrase “mutual mistake of fact” in the statute.1
All the components of the phrase must be present to afford the relief provided. That the mistake was generated by a subsequent judicial holding is not to the point. The statute does not address itself to the issue of why the mistake was made.
So we have the element of mistake. Next query is, was it mutual? Certainly the taxpayer was mistaken since it paid a tax admittedly it need not have. Certainly the city was mistaken or it would not have accepted payment of a tax it knew was not owed.
So now we have “mistake” and “mutuality“. The only question left is, was it a mistake “of fact“?
I know of no nice, clean, razor-sharp delineation between mistakes of law and fact in a generic sense. Nor is this to be wondered at, because law, as such, does not exist outside of a factual circumstance.
Black‘s Law Dictionary (4th ed), p 706, defines “fact” as: “A thing done; an action performed or an incident transpiring; an event or circumstance; an actual occurence“. All of the above fit what happened here. A taxpayer paid a tax which it subsequently developed it did not owe. The taxing authority collected a tax which it subsequently developed it was not entitled to. The composite of these two is a fact. It happened. It was a thing done. Both parties were mistaken as to the fact of a tax being owed.
I think the taxpayer should get his money back.
I vote to reverse; to order reimbursement of the tax paid without interest, and I would assess no costs.