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Peterson v. Sundt

Supreme Court of Arizona

June 28, 1948

PETERSON
v.
SUNDT et ux

Appeal from Superior Court, Pima County; J. Mercer Johnson, Judge.

Judgments reversed and causes remanded for new trials.

Evo De Conconi, Atty. Gen., and Charles D. McCarty, Asst. Atty. Gen., for appellants.

Darnell, Robertson & Holesapple, of Tucson, for appellees.

Udall, Justice. Stanford, C. J., and La Prade, J., concur.

OPINION

Udall, Justice.

Page 159

[67 Ariz. 314] This is an appeal by the Arizona State Tax Commission and the State Treasurer from identical decisions of the Superior Court in two cases involving refund of income taxes paid to the State of Arizona. These two suits were separately filed by John S. Sundt and Marion S. Sundt, his wife (appellees), being suits numbered 28037 and 28038 in the Superior Court of Pima County. Since the issues of fact and law were identical, the cases were consolidated for trial and are jointly brought here on this appeal.

Page 160

It appears from the abstract of record that on December 31, 1945, both taxpapers [67 Ariz. 315] filed claims under section 73-1544, A.C.A.1939, for refunds from income taxes paid for the year 1942, each taxpayer claiming a refund in the amount of $ 11,453.96. The Commission, after reviewing the applications, entered an order on December 26, 1946, approving a refund to each taxpayer in the sum of $ 4,948.17. The taxpayers did not appeal from these orders, as they are permitted to under sections 73-1544(d) and 73-1539, nor did the Commission, before losing jurisdiction, take any further steps with reference thereto. The refund being for an amount in excess of $ 1,000, the appellees brought separate suits, pursuant to the provisions of Chapter 15, Session Laws of 1943, section 73-1549(d), A. C. A. 1939, as amended, alleging the facts as heretofore stated and praying that the court approve the refunds as allowed by the Commission.

We take judicial notice of the fact that between the date of the entry of the order here in question and the filing of the instant suits there was a change in the elected personnel of the Commission, resulting in the appointment of a new Director of the Income Tax Division. At the trial of this matter the plaintiff taxpayers introduced evidence of the payment of the tax and of the Commission's order for refund, and rested. The State, in an attempt to show the impropriety of the refund, sought to elicit testimony from Mr. Lockwood, the new director and the only witness in the case, to the effect that there had been a further audit of the taxpayers' rates, subsequent to the entry of the Commission's order, which disclosed that an error had been made. This testimony was objected to on the ground that "The decision under section 73-1538 becomes final and conclusive upon the Tax Commission or anyone else, and is not subject to collateral attack." The objection to this line of testimony was sustained by the court upon the ground that the court was without any right to inquire into the propriety or correctness of the Commission's order for a refund. Judgment was entered for both taxpayers as prayed for, and the Attorney General in behalf of the State has prosecuted this appeal from both of such judgments.

There are two assignments of error:

(1) The court erred in refusing to admit evidence offered by the State for the purpose of showing the impropriety of the tax refund.

(2) The court erred in ruling that the court was without right to inquire into the propriety of a tax refund under section 73-1544, A.C.A. 1939, where the amount of refund exceeds the sum of $ 1,000 and suit is filed ...


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