State Tax Commission v. Spanish Fork , 99 Utah 177 ( 1940 )

When did plaintiff's cause of action accrue? What was the earliest moment at which an action could have been maintained to enforce it? For at that time the statute of limitations began to run. Said this court in Sweetser v. Fox, 43 Utah 40,134 P. 599, 602, 47 L.R.A., N.S., 145, Ann. Cas. 1916C, 620:

"It is a rule of universal application that a cause or right of action arises the moment an action may be maintained to enforce it and that the statute of limitations is then set in motion. The test, therefore, is, Can an action be maintained upon the particular cause of action in question? If it can, the statute begins to run."

It may also be stated as axiomatic that a cause of action for money accrues and an action therefor may be maintained at the time the money is due and payable in the absence of express statutory provisions providing a different remedy.

The statute expressly provided that a sales tax due and unpaid shall constitute a debt due the state from the vendor and may be collected by an action at law. That is, any time after it is due and unpaid an action at law to recover the same may be instituted. Section 11, Chap. 63, Laws Utah 1933. When is the tax due and payable? By Sec. 5 of Chap. 63 it is provided that the seller shall collect the tax and shall "on or before thefifteenth day of each month, make a return to the state tax commission for the pr[e]ceding month and shall remit the taxesso collected to the state tax commission." (Italics added.) It is further provided that if the total tax to be remitted shall not, during any month, exceed the sum of $10, a quarterly returnand remittance may be made on or before the fifteenth day of the month succeeding the end of the quarter. Sec. 8, relative to overpayments and deficiencies, declares, "If the amount paid is less than the amount due, the difference, together with interest thereon at the rate of one half of one per cent per month, fromthe time the return was due, shall be paid by the vendor * * *" (Italics added.) It further provides that if any part of thedeficiency [amount due and unpaid] is due to negligence or intentional disregard of rules, without intent to defraud, there shall be added a penalty of 10 per cent of the total amount of the deficiency, and interest on such amount shall be collected at the rate of one per cent per month from the time the return wasdue. And if any part of the deficiency is due to fraud with the intent to evade there shall be added not more than one hundred per cent of the deficiency and an additional one per cent per month from the time the same was due. The next section declares that if the return is not made by the seller, the Tax Commission may make a return and the whole amount due thereon shall bedeemed a deficiency and subject to the penalties and interest provided in Sec. 8. Secs. 10 and 11 contain further references indicative of the tax being due on the 15th of the month succeeding its collection by the seller, and delinquent and subject to penalties and interest after that date.

We believe it is elemental that penalties for nonpayment cannot be added to any obligation until after the same is due and unpaid. Likewise it is established that interest cannot be charged on taxes until after they are delinquent. As shown above, the act expressly provided not only that the tax is due and payable to the state on the 15th of the month succeeding its collection by the seller, but also provided for interest on the tax, penalties, and interest on the penalties from such date. I must conclude therefore that the tax is past due and delinquent on the 16th of the month following its collection by the seller; that an action at law for collection would lie from that date, and therefore upon such date, each month, the statute of limitations begins to run against tax for the previous month. It seems to me that the effect of the prevailing opinion is simply to relieve an administrative body from the responsibility of doing its statutory duty, by surrounding it with a shroud inscribed "As long as we do nothing, limitations cannot run against us." I believe that a public officer is under obligation to discharge his duties with the same diligence as would be required of him in private service.

It is next urged that Sec. 104-2-26, R.S.U. 1933, being the one-year statute, was amended by Chap. 138, Laws Utah 1937, changing the time to bring an action on a liability founded on statute to three years, and therefore this action was timely brought. This amendment became effective May 11, 1937, so any causes of action accruing before May 11, 1936, were barred before the amendment took effect. This court and courts generally are committed to the doctrine that when an action is barred it is beyond the power of the legislature to revive the same. In reSwan's Estate, supra. and cases there cited. See annotation 36 A.L.R. 1316. And when a statute of limitations has run against a part of an obligation the bar is effective as to that part.Buell v. Duchesne Mercantile, 64 Utah 391, 231 P. 123; 36 C.J. 854. This rule bars recovery on all taxes except those of April, May, June and July of 1936. Does the amendment extend the time for bringing action for these months? The amendment to the statute is silent as to affecting existing causes of action. The cases are not harmonious as to whether such statute affects existing causes of action, or only those which accrue thereafter. An examination of the cases reflects generally the distinction that where the change in the statute affects only the remedy the Legislature may change the time or manner of enforcing a right or existing cause of action as long as it does not extinguish or wipe out an existing right. Parties to contracts have no vested interests in particular limitation laws or methods of procedure for the enforcement of rights. But where changes in statutes attempt to create or set up new causes of action or new legal rights or relationships which did not theretofore exist, they are generally held to affect or apply only to matters or relationships springing up after the act takes effect. An excellent discussion and annotation is found in 46 A.L.R. pp. 1095-1108, 77 A.L.R. 1347. It would seem therefore that the amendment of 1937, extending the period of limitations should apply to the causes of action for the four months indicated, such causes not being barred prior to the effective date of the act. The judgment should be reversed and the cause remanded to the District Court with directions to determine the taxes due for the months of April, May, June and July, 1937, and award plaintiff judgment for such amount with interest from the due dates; and to determine whether plaintiff is on the facts entitled to penalties on amounts due for those months, and if so to include the proper penalties in the judgment.