BRAME v. WYATT

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No. 35727.

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Alexander, J., delivered the opinion of the court.

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BRAME v. WYATT.

Creekmore Creekmore, of Jackson, for appellant.

This case involves the determination of what commissions the tax collector is entitled to. On March 31, 1944, Chapter 179, Laws of 1944, found on pages 328-332 of the General Laws of 1944, became effective. This law provided the following schedule for commissions of tax collectors: 5% on the first $25,000; 3% on the next $25,000; 2% on the next $25,000; 1% on excess. During the first three months of office of appellant as tax collector his commissions were controlled by Chapter 24 of the Laws of the Extraordinary Session of 1938, which provided the following schedule: 5% on the first $10,000; 2% on the next $40,000; 1% on the excess. When the Act of 1944 became effective, the tax collector had already collected on state ad valorem taxes $38,126.91 and therefrom had deducted his commissions under the Act of 1938, or 5% on the first $10,000 and 2% on the next $28,126.91. Since he had not collected 5% on the first $25,000 as authorized by the Act of 1944, but only on the first $10,000, as he collected state ad valorem taxes after April 1, 1944, he deducted 5% thereon and intended so to deduct 5% thereon until he had deducted 5% during the year 1944 on the full $25,000, or on $15,000 additional to $10,000 on which he had collected 5% under the Act of 1938.

The commissions allowed the tax collectors are based on calendar years and appellant has not received during the calendar year 1944 his 5% commission on the first $25,000 collected.

We believe that the question here involved has been decided in favor of appellant by this court in the case of United States Fidelity Guaranty Company v. Gully, 168 Miss. 740, 150 So. 828. The statute construed in that case was one fixing salaries of supervisors and effected a change in the amount of salary during the calendar year. Under the old law, the salary was $1250 per year, provided it was earned on a per diem basis; under the new law, the salary as reduced to $1,000 per year. The new law became effective November 1. Prior to November 1, the supervisors had earned $1,074. The court held that the supervisors were entitled to the $1,074 earned under the old law but that since they had received for services rendered prior to November 1 this sum which was in excess of the salary under the new law, nothing could be paid the supervisors for services rendered during November and December. In this respect, the court said: "The validity of every allowance made by a Board of Supervisors should be tested by the law existing on the day the allowance is made. If, under the law then existing, the allowance was lawful, it must stand, although a subsequent change in the law, if applied, would render the allowance illegal.

When appellant retained the 5% commission sued for herein under the law then existing, the retention of such commission was lawful, although under the former law it would not have been lawful.

Exactly the same situation arose in 1938 in regard to the commissions of a tax collector. On March 3, 1939, the Attorney General, by J.A. Lauderdale, Assistant Attorney General, rendered an official opinion which is found on page 130, of the Attorney General's opinions for the years 1937-1938. We quote this opinion in full as follows:

"March 3, 1939

"Mr. Omer J. Bullen "Sheriff and Tax Collector "Iuka, Mississippi.

"Dear Sir:

"I have your letter of February 11th, in which you state that from Tuesday after the first Monday in January, 1938, to the first day of October, 1938, you collected county, county district and drainage district taxes in the total sum of $137,634.92; that you deducted as your commission from such collection the sum of $2,176.27; that from October 1st, 1938, to Tuesday after the first Monday in January, 1939, you collected county, county district and drainage district taxes in the total sum of $10,995.51.

"Your inquiry is how much commission you were entitled to retain for collecting the said $10,995.51.

"OPINION. "I advise that Chapter 201, Laws of 1932, provided that when a county tax collector is collecting county, county district and drainage district taxes he was entitled to commissions at the rate of 5% on the first $10,000.00 collected, 2% on the next $40,000.00 collected and 1% on the next $350,000.00 collected.

"Chapter 24, Extraordinary Session laws of 1938, amends said Chapter 201 so as to provide that a county tax collector shall be entitled to 5% on the first $20,000.00 of county, county district and drainage district taxes collected, and 2% on the next $30,000.00 collected.

"Inasmuch as prior to October 1st, 1938, you deducted 5% on $10,000.00 you would now be entitled to deduct 5% on $10,000.00 additional taxes collected after October 1st, 1938, and prior to Tuesday after the first Monday in January, 1939. It is true that you have already deducted 2% on $40,000.00, when under the present law you can deduct 2% on only $30,000.00. I am of the opinion, however, that the Legislature could not reduce your compensation that you had already collected after it was collected. Therefore, you would be entitled to deduct 5% on $10,000.00 of the sum collected after October 1st, 1938, and prior to Tuesday after the first Monday, in January, 1939, and then 1% on the remaining $995.51.

"Beginning Tuesday after the first Monday in January, 1939, you would deduct 5% on the first $20,000.00, 2% on the next $30,000.00 and 1% on the next $350,000.00, or fractional part thereof.

"Yours very truly, "GREEK L. RICE, Attorney General "By: J.A. LAUDERDALE, "Assistant Attorney General." "JAL/E"

The legislature is presumed to have had this interpretation of a similar statute, as made by the chief law officer of the state, in its mind in enacting Chapter 179, Laws of 1944. In addition to this, the opinion is sound in law and is determinative of this case, if followed.

Snow Covington, of Meridian, for appellee.

In the case of U.S. Fidelity and Guaranty Company v. Gully, 168 Miss. 740, 150 So. 828, our court laid down the rule that the validity of compensation of public officers must be tested by the law existing when the compensation was earned and when it accrued. It is our contention that this decision forever puts at rest all such questions and furnished an infallible guide for all cases where the amount or the rate of compensation is changed during a particular year.

It is our contention that the principle applying to the validity of salary of public officers applies with equal force to fees of public officers, as deductible fees like salary are simply compensation provided by law for services rendered by the officials. In the case at bar, the collector took office on the 1st Monday of January, 1944. On that day he began collecting the state ad valorem taxes involved in this case and became entitled to deduct the commissions provided by law on them. Chapter 24, Extraordinary Session Laws of 1938 was in force and he was entitled to deduct 5% on the first $10,000.00 collected. When that sum had been reached he was then entitled to deduct 2% on the excess over $10,000 and not exceeding $40,000.00. On March 31st he had collected $38,126.91. He took 5% on the first $10,000, which left $28,126.91 upon which he took 2%. This was certainly proper, for those commissions were lawful at the time they were earned and accrued to him. During this time he was taking the "excess commission over one per cent" referred to in the statute. At this stage the new statute, Chapter 179, Laws of 1944, came into play on April 1st with a new schedule of fees, viz: 5% on the first $25,000, 3% on the next $25,000, 2% on the next $25,000, and 1% on excess. Now during the month of April when this new statute was in force, he collected $1,366.49. Therefore the question is: How much commission was he entitled to deduct on this sum?

The view is held in some quarters that the new statute has the effect of raising the 5% bracket on the total collections for the year and that beginning with April 1st the collector may take 5% on the first $15,000 collected after that date so as to take in addition to 5% on the first $10,000 under the old statute, also 5% on the next $15,000, to make 5% on a total of $25,000 for the year.

It is our contention that the new statute cannot be retroactive in any respect and that each statute must stand on its own bottom, so to speak. Each of these statutes plainly says: "The excess commissions over one per cent allowed the tax collector by the foregoing clauses shall be collectible beginning on the first Tuesday after the first Monday in January of each year but nothing herein shall permit a tax collector to collect such excess commission more than once during any year beginning on the date aforesaid." Obviously there can be but one "first" $10,000 collected after the first Monday in January of each year. A commission of 5% is "excess commission over one per cent" and he may collect it only once. He did collect it and passed to the 2% bracket under the old statute. As the new statute is not retroactive, on April 1st this collector automatically fell into that bracket under the new statute where his previous collections since the first Tuesday after the first Monday in January placed him. He collected his first $10,000 and took 5% and the next $28,126.91 and took 2%, a total of $38,126.91 for which he was paid compensation under the old statute. When the new statute became effective, he could not deduct 5% on the first $25,000 bracket because he had already been paid 5% on the first $10,000 and 2% on the next $15,000 under the old statute. He could not deduct 3% on the next $25,000 bracket because he had already been paid 2% on $13,126.91 of that sum under the old statute. His previous collections of $38,126.91 placed him in the 3% bracket under the new statute. In other words, of the $50,000 limit of the first bracket under the new statute, he had already used up $38,126.91 for which he was paid under the old statute and had only $11,873.09 more to go, when the new statute became effective. The sum of $1,366.49 collected in April was a part of this latter sum, that is to say, was a part of this unused remainder of this new 3% — $50,000 bracket.

The test of the validity of compensation of a public officer is whether it was lawful at the time it was earned and accrued. It is true that the new statute provides a new and different schedule of commissions beginning with the fourth month of 1944, but that does not mean that the schedule provided by the old statute did not apply during the first three months of that year. The new statute simply picked up the collector where it found him. It did not add to nor take from the compensation that had already been earned and that had already accrued. The new statute is prospective strictly and begins working on its effective date upon a collector's situation that has been created already by his previous collections.

We submit that there is nothing in the new statute to warrant the view that this collector may deduct 5% on any collections after April 1st. Such a construction would make the statute retroactive just as effectively as if it contained a provision that it should be in force from January 1st. Such a construction would make the new statute one that granted extra compensation, fee, and allowance to a public officer after service rendered, in violation of Section 96 of the Constitution.

Greek L. Rice, Attorney General, by W.B. Fontaine, Assistant Attorney General, amicus curiae.

Chapter 137 of the Laws of 1944 was passed and approved on March 24, 1944, and took effect as of June 1, 1944, wherein privilege taxes on businesses located within a municipality were to be collected by the municipal authorities only, and all privilege taxes on businesses conducted outside of municipal corporate limits were to be collected by the sheriffs and tax collectors. As this would cause a great decrease in the amount of compensation heretofore received by sheriffs and tax collectors, the compensation of such officers was increased by Chapter 179 of the Laws of 1944 and was approved on March 31, 1944. Based on an opinion rendered by the Attorney General's office on March 3, 1939, and cited in brief for appellant, it was held that the excess commissions should be allowed to sheriffs on collections made thereunder from and after April 1, 1944.

In construing a statute, however, not only the language, but the purpose and policy, which the legislature had in view, must be considered. The court, in construing a statute, will give effect to such purpose and policy, though the interpretation may go beyond, or come within, the mere letter of the statute.

Smith v. Chickasaw County, 156 Miss. 171, 125 So. 96.

The legislature having taken away a considerable source of revenue enjoyed by sheriffs in the collection of privilege taxes, as most businesses paying privilege taxes are located within the boundaries of the municipalities of this state, it provided for an increase of compensation on the collection of other taxes and it would seem to have been the purpose and policy of the legislature to compensate at this time for the decrease in revenue which the sheriffs and tax collectors would have undergone but for the excess commissions allowed them on the collection of other taxes.

See Hartsfield v. Lafayette County, 185 Miss. 564, 189 So. 177; Floyd County v. Salmon, 151 Ga. 313, 106 S.E. 280.

It is to be noted that the extra compensation and ruling of the attorney general's office in regard thereto was that such extra compensation was not to be paid for taxes collected by the sheriff and tax collector prior to April 1, 1944, but applied only to taxes collected thereafter during the year 1944. If the sheriff had received the maximum amount allowed him under law for excess commissions on collections made during January, February and March, 1944, and had in fact fallen into the lower brackets of commissions permitted, it was held that on all taxes collected after April 1, 1944, through December 31, 1944, he would be entitled to receive the maximum percentages allowed by the new act just so he did not obtain and receive more than he would have been allowed if the new law had been in effect the whole year.

1. TAXATION.

The statute fixing fees of tax collector must be construed in the light of its purpose as gathered first from its letter and secondly from the circumstances of its adoption so far as these may interpret such purpose (Laws 1944, ch. 179).

2. TAXATION.

The purpose of act of 1944 relating to fees of tax collector was to provide increased compensation, and in effecting such purpose it was sought to amend the existing law so as to increase the existing basis and to make it presently effective (Laws 1944, ch. 179).

3. STATUTES.

The presumption is that views of Attorney General concerning effect of similar amendment to statute fixing fees of tax collector were known to the legislature, and that such views were consulted in the drafting of legislation of such great importance to the state (Laws 1944, ch. 179).

4. TAXATION.

The 1944 act increasing compensation of tax collector must be construed prospectively, since increased compensation for services theretofore rendered would violate the Constitution (Laws 1944, ch. 179; Const. 1890, sec. 96).

5. TAXATION.

The proviso in 1944 act fixing compensation of tax collectors that nothing therein should permit a tax collector to collect excess commissions more than once during any year beginning on the first Monday in January of each year expressed both a limitation and a privilege, and such privilege was not to be diminished by reviving provisions of the pre-existing act so as to create an inconsistency (Laws 1944, ch. 179; Code 1942, sec. 3938).

6. TAXATION.

Where tax collections for first three months of 1944 were $38,126.91 on which collector was entitled under then existing statute to 5 percent on first $10,000 and 2 percent on the next $30,000, and amended statute effective on April 1, 1944, provided for 5 percent on first $25,000, 3 percent on next $25,000, etc., and that excess commissions would be collectible beginning on first Tuesday after first Monday in January of each year but that nothing therein should permit tax collector to collect such excess commission more than once during any year beginning on such date, and during April, 1944, tax collections were $1,366.49, tax collector was entitled to continue the application of 5 percent to collections after April 1, 1944, not exceeding an additional $15,000 (Laws 1944, ch. 179).

GRIFFITH, J., dissenting.

Alexander, J., delivered the opinion of the court.

Bill was filed by appellee as a citizen and taxpayer to recover the sum of $27.32 alleged to have been unlawfully collected by appellant as tax collector of Lauderdale County under the provisions of Chapter 179, Laws 1944, and for injunction against the continuance of the practice followed in effecting such collection. It is alleged that the proper state officials had refused to sue, and complainant sues on behalf of the public and invites all other interested members of the public to join.

The applicable statute referred to provides for allowance of fees to the tax collector in the collection of state ad valorem taxes upon the following schedule: 5% upon the first $25,000 so collected; 3% on the next $25,000; 2% on the next $25,000; and 1% on all such taxes collected in excess of $75,000. The Act further provides:

"The excess commissions over one per cent allowed the tax collector by the foregoing clauses shall be collectible beginning on the first Tuesday after the first Monday in January of each year but nothing herein shall permit a tax collector to collect such excess commission more than once during any year beginning on the date aforesaid."

The briefs assume as we do that the effective date of the Act is April 1, 1944. For the first three months of 1944 the tax collector made state ad valorem tax collections in the sum of $38,126.91, to which he applied the fee schedule then made aplicable by Chapter 24 of the Laws of 1938 (Ex. Session). Under this schedule he was entitled to and collected fees on the following basis: 5% on the first $10,000; 2% on the next $30,000. Additional brackets are not here involved since his total collections for the first three months of 1944 did not exceed $40,000. During April 1944, he has collected from this source the sum of $1,366.49, upon which he deducted fees of 5%, pursuant to the 1944 Act. Complainant contends that the tax collector was entitled only to deduct fees on the basis of 3%, and that the excess of 2%, or $27.32, was unlawfully collected. The issue was heard upon answer, denying the illegality of the deduction, and asserting authority to collect fees upon the basis of 5% upon an additional amount collected after April 1, 1944. The prayer of the bill was granted and injunction issued, whence this appeal.

The Act of 1944 must be construed in the light of its purpose as gathered first from its letter, and secondly from the circumstances of its adoption "insofar as these may interpret such purpose." Smith v. Chickasaw County, 156 Miss. 171, 125 So. 96, 705. Fundamentally, its purpose is to provide increased compensation to the tax collector. In effecting this purpose, it sought to amend the existing law so as to increase the existing basis and to make it presently effective. The propriety of such increase could readily be assumed to be found in the reductions occasioned by the inroads upon such officials' compensation by the operation of homestead exemption laws, and the contemporaneous passage of Chapter 137 of the Laws of 1944 which denied fees upon the collection of privilege taxes collected within municipalities. Be that as it may, it was the expressed view of the state's chief legal advisor that an amendment similar to that effected by the 1944 law would operate to allow the tax collector to retain such fees as had been collected prior to April 1, 1944, under the preexisting basis, but that thereafter fees would be collectible upon the new schedule and that the collector would be entitled to collect 5% upon a total of $25,000 whether part had been collected prior and part after the passage of the amending law. See Opinions Attorney General 1937-38, p. 130, also id. 1929-31, p. 210. See also Hartsfield v. Lafayette County, 185 Miss. 564, 189 So. 177. It is no unreasonable assumption that the views of this official were consulted in the drafting of legislation of so great importance to the state, and that his expressed views were known to the legislature. It is true that the opinion was construing the effect of the 1938 Act upon the prior Act of 1932, but the principles and conclusions are such as would uphold the appellant's contentions, especially since Section 1790 of the Code of 1930, Code of 1942, Sec. 3938, was then upon our statute books. This Section is discussed later in our opinion. The right of the tax collector to retain all fees properly collected prior to the 1944 Act is clear. United States F. G. Co. v. Gully, 168 Miss. 740, 150 So. 828.

While it is contended that an amending act is held to have displaced a prior statute in the sense that the prior act is to be construed as if it had contained the new provisions, the 1944 Act must be construed prospectively, particularly since to increase compensation for services theretofore performed would violate Mississippi Constitution, Section 96.

A just and logical interpretation of the 1944 Act requires such application as would work an increase in the annual compensation of the tax collectors. In future years, the fees would be allowed upon the basis of 5% upon the first $25,000. It is inconceivable that the legislature was unwilling that such an emolument was not to apply during the transition year 1944, nor that a tax collector taking office April 1st, nor one in office who perchance had made no collections prior thereto, would be denied the right to apply such schedule. Yet, to allow an official to collect 5% upon $10,000 prior to April 1st, and an additional 5% on the first $25,000 collected thereafter, would contravene the quoted prohibition that "nothing herein shall permit a tax collector to collect such excess commission (over one percent) more than once during any year beginning on the date aforesaid" (the first Monday in January).

The proviso expresses both a limitation and a privilege. Such expressed privilege is not to be diminished by reviving the provisions of the pre-existing act, Code 1942, Sec. 3938, so as to create an inconsistency. If this section were integrated into the 1944 Act the appellant would be given a clean slate on July 1, 1944, and would be entitled to 5% on the first $25,000 collected thereafter, even during the year 1944, thereby receiving 5% on a total of $35,000 during the calendar year, contrary to the quoted prohibition. But for this prohibition the argument that Section 3938 required computation as of fiscal years would be plausible and it may be, but we do not so decide, that in the absence of this proviso the views expressed in the separate opinion of the Chief Justice would control.

Section 3938 provided that commissions above the 1% bracket be deducted based on the fiscal year. The 1944 Act states that such commissions "shall be collectible beginning on the first Tuesday after the first Monday in January of each year" and, as if this were not sufficient to supersede the former fiscal basis, which would have permitted a new invocation of the 5% schedule July 1, 1944, it adds, "but nothing herein shall permit a tax collector to collect such excess commission more than once during any year beginning" on the said first Tuesday after the first Monday in January. Nor does this refer solely to the said day in the then current year but "of each year."

It was the evident purpose to allow tax collectors to collect at least $1,250 (5% of $25,000) when his annual collections equaled that amount. Had the act been passed prior to the first Monday in January, there would of course have been no difficulty, and the delay in its passage was undoubtedly endured in spite of knowledge that it was daily becoming progressively inoperative as to collections being made in the interim, but on the assumption that so far as it could, it would compensate these disparities by applying its schedule to future collections. But for Section 96 of the Constitution, a consistent purpose would have made its provisions retroactive. The only way in which the legislative purpose could be effected was to recognize that since the statute could not operate retrospectively, the intended total compensation should ultimately be payable if earned. Retroactive effect is not given the law by taking into account a prior collection of 5% on an initial $10,000, whereby this amount is chargeable to the corresponding bracket under the amending statute. To gain, by a retrospective look, data by which to limit an incumbent's future compensation, is an entirely different matter from making the new provisions retroactive so as to readjust earned compensation to his advantage. The result is not to increase compensation for services performed, but to insure that the quoted limitation may not be ignored by disregarding the fact that the "excess commission" of 5% had already been applied to $10,000 of the maximum of $25,000. This is all that the appellant contends for.

We are of the opinion that he was entitled to continue the application of 5% to collections after April 1, 1944, not exceeding an additional $15,000, and are compelled therefore to reverse the finding of the chancellor, and to deny the relief prayed for, with dismissal of the injunction.

Reversed and decree for appellant.

L.A. Smith, Sr., J., took no part in this decision.

Alexander, J., delivered the opinion of the court.

SEPARATE OPINION.

Sidney Smith, C.J., delivered a separate opinion.

I am of the opinion that Chap. 179, Laws 1944, authorizes the sheriffs to retain for their services in the collection of taxes, "5% on the first $25,000.00 of the state ad valorem taxes collected" by them for the year 1944, after the first day of April of that year, without reference to what they had theretofore received for collections made prior to April first. To restrict them to 5% on $15,000 thereafter collected is to give the statute a retroactive effect which should not, and in my opinion cannot, be done.

DISSENTING OPINION.

Griffith, J., delivered a dissenting opinion.

Section 1790, Code 1930, has not been amended by any subsequent act and now appears as Section 3938, Code 1942. It reads as follows:

"Save as to the excess one per cent commissions mentioned in the foregoing section tax collectors in deducting commissions for the collection of ad valorem taxes shall deduct said commissions based upon the fiscal year and not the calendar year."

The chapter in question, Chap. 179, Laws 1944, does not touch Section 1790, Code 1930, does not mention it, but does refer to the "following fees and commissions each year." It follows that what is meant by each year as applicable to the amendatory act now under consideration, must find its answer in Section 1790, Code 1930, Section 3938, Code 1942, and nowhere else.

What, then is meant by Section 1790, Code 1930, when it says that the "tax collectors in deducting commissions for the collection of ad valorem taxes shall deduct such commissions based upon the fiscal and not the calendar year," and what is meant by the clause in all these statutes, "5% on the first $25,000.00" (or whatever the amount has been) "of the state ad valorem taxes collected"? If it does not mean the first $25,000 collected within the fiscal year, then Section 1790 is without any meaning at all.

Under Section 9993, Code 1942, the tax collector is required within twenty days after the close of any month to report and pay over all taxes collected by him during the month. In doing so he deducts his fees for making the collections. This section, in substantially the same form, has been in all our codes for nearly a century. Under that section it has been the consistent practice to deduct the higher bracket of fees on the first month at the beginning of the fiscal year. Formerly the fiscal year was from October 1 to September 30, as fixed by Section 115, Constitution 1890, but this was amended, Chap. 115, Laws 1935, so as to make the fiscal year from July 1 to June 30.

The admitted facts show that the tax collector had already made his deductions under the higher brackets, for the fiscal year, but his attempt here is to start a new year on April 1 for application of the higher brackets when this is neither the beginning of a fiscal year nor of a calendar year. So to do would be to allow thim to start another higher bracket on July 1 at the opening of the fiscal year, with the result that two series of the higher bracket would be applied during one fiscal year when the law has never allowed more than one such higher bracket in any one year, and more cannot be allowed, as was distinctly held in Hartsfield v. Lafayette County, 185 Miss. 564, 189 So. 177, and certainly not unless by an amendment to Section 1790, Code 1930, Section 3938, Code 1942, which, as already stated, the Act now in question does not touch. If the legislature did not intend that Section 1790 should be considered as applying to the new Act it could easily have said so, and, not having so said, it is not within the province of the Court, as is submitted with deference, to now say it for the legislature.

The Act here under consideration is amendatory of Section 1789, Code 1930, and from the date of the Act, it stands as if it had been in the Code of 1930, and Section 1790 immediately follows in the language first above quoted; wherefore it has the same effect upon the new Act as had Section 1789 been added to the new Act as the last section thereof — unless without legislative authority a plain section of the Code is to be stricken down, which is beyond the legitimate authority of any court to do.

BRAME v. WYATT.

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