1. After services have been rendered by a public officer under a
law specifying his compensation, there arises an implied contract
under which he is entitled to have the amount so fixed. P.
276 U. S. 179.
2. The protection of the Contract Clause of the federal
Constitution extends to such contracts.
Id.
3. Relator, while a revenue agent in Mississippi, brought suits
for recovery of past due taxes, and, by the law then in force, was
thereupon entitled to a specified percentage of the taxes, payable
upon their collection, and was authorized, upon his retirement, to
prosecute the suits in the name of his successor. An Act passed
after his retirement which authorized any suits brought by an
outgoing agent to be conducted in the name of his successor upon
petition of the latter showing to the court that he had
investigated its merits and believed that it was just and should be
maintained, and which provided that the commissions derived from
such suits, when the successor had thus joined therein, should be
shared equally between him and his predecessor, was construed
retroactively by the state court as requiring that commissions due
the relator from the suits brought by him should be so shared,
albeit the successor had performed no services in the matters
beyond receiving payment of the taxes from the taxpayers.
Held violative of the relator's rights under the Contract
Clause of the Constitution. P.
276 U. S.
178.
144 Miss. 614 reversed.
Error to a judgment of the Supreme Court of Mississippi which
affirmed a judgment giving the relator but one-half of the amount
of certain commissions claimed as compensation for services
rendered by him as a revenue agent in investigating and suing for
past due taxes. This suit was against his successor in office, to
whom the taxes had been paid.
Page 276 U. S. 175
MR. JUSTICE BUTLER delivered the opinion of the Court.
The record presents for decision the question whether, as
applied in this case, c. 170, Laws 1924, amending § 7068 of
Hemingway's Annotated Code of Mississippi contravenes the clause of
§ 10 of Article I of the Constitution, which declares that no state
shall pass any law impairing the obligation of contracts.
The suit was brought by the state in the Circuit court of Hinds
County for the use of Robertson, hereinafter called plaintiff, who,
in 1923 and prior years, had been the state revenue agent. It is
against his immediate successor in office, Miller, whom we shall
call defendant, and the surety on his official bond. The purpose is
to recover commissions on certain amounts collected by defendant on
account of past-due taxes for which plaintiff, while in office, had
brought suits. Plaintiff claims under statutory provisions that
were in force while he was in office, and defendant claims under
the act here in question, which was passed after the expiration of
plaintiff's term. Section 7056 of the Code authorized the state
revenue agent to appoint deputies and to sue for past-due taxes.
Section 7066 declared:
"Neither the state nor any county, municipality, or levee board
shall be chargeable with any fees or expenses on account of any
investigation or suit made or instituted by the state revenue
agent, and he shall not receive any salary; but he shall be
entitled to retain, as full compensation for his services and
expenses, twenty percentum of all amounts collected and paid over
by him. . . ."
Section 7068 directed the successor to allow suits theretofore
commenced to be conducted in his name and provided that: "The
person who commenced the suit shall pay all attorney's fees and
expenses thereof, and receive the commissions, if any."
Acting under these sections, plaintiff appointed deputies to
assist in making collections, and agreed to pay them one-half the
commission allowed by law. He employed
Page 276 U. S. 176
an attorney to bring suits, and agreed to pay him one-fourth of
such commissions. There remained a fourth for plaintiff, 5 percent
of the amounts collected. Certain suits which were brought by
plaintiff to collect past-due income taxes and privilege taxes,
were pending when his term expired. He notified defendant of the
agreements he had made with his deputies and attorney. Some amounts
sued for remained unpaid until after the passage of c. 170 on
February 29, 1924. That act amends § 7068. Section 1 authorizes
every suit brought by the outgoing agent and then pending to be
conducted in the name of the successor upon the motion and petition
of the latter directed to the court showing that he has
investigated its merits and believes it is just and should be
maintained, and the section declares that contracts of the former
agent with his attorneys and employees shall be binding on the
successor. Section 2 provides that:
"The expenses of all suits where the successor of the revenue
agent has joined therein as above provided shall be paid by them
equally, and all fees and commission legally derived therefrom
shall be shared equally between them."
After the passage of that act, there was paid by various
taxpayers to the defendant $9,784.07 on account of past-due taxes
claimed in suits brought by plaintiff. It does not appear that
defendant took any step to have any of these suits carried on, but,
claiming to be entitled to a part of them under c. 170, he refused
to pay over the commissions for the use of plaintiff, his deputies,
and attorney. Then plaintiff brought this suit to recover 5 percent
of the amount so collected by defendant, that being the portion of
the commissions remaining for him after deducting the amounts which
his deputies and attorney were entitled to have under their
agreements with him. The circuit court gave plaintiff judgment for
one-half the amount sued for. He appealed to the Supreme Court, and
there contended that, if applied in this case,
Page 276 U. S. 177
c. 170 would impair the contract obligation of the state that he
be paid for services rendered before its enactment, and would
therefore violate the contract clause of the federal Constitution.
The court overruled his contention, applied the enactment
retroactively, and affirmed the judgment. 144 Miss. 614.
If c. 170 had not been passed, plaintiff, his deputies, and
attorney would have been entitled to 20 percent of the amounts
collected by defendant. Under the statutes in force in 1923, the
commissions were earned by the investigation to discover past-due
taxes and the institution of suits to coerce delinquent taxpayers,
and such commissions became payable upon the collection of taxes
sued for. In its opinion in this case, the Supreme Court said (p.
623):
"It is the law, as contended by appellant, that, where the
revenue agent brings a suit for taxes due the state or any of its
political subdivisions, and afterwards the taxes are paid by the
defendant taxpayer, the revenue agent is entitled to the
commissions allowed him by the statute"
-- citing
Garrett v. Robertson, 120 Miss. 731;
Robertson v. Shelton, 127 Miss. 360;
Miller v.
Henry, 139 Miss. 651;
Miller v. Johnson, 144 Miss.
201.
And c. 170 did not operate to take from plaintiff's deputies and
attorney any part of their shares of the commissions.
Miller v.
Johnson grew out of the suits and collections that form the
basis of this case. Johnson (Johnston) was the attorney who brought
plaintiff's suits against taxpayers. He sued Miller, defendant
here, and was given judgment for his 5 percent of the amounts
collected. The Supreme Court decided that, under c. 170, Miller was
authorized to prosecute the suits brought by plaintiff, that the
taxes sued for having been paid, it must be held that there was
merit in the suits, and that those employed by plaintiff were
entitled to compensation under their contracts.
Cf. Miller v.
Hay, 143 Miss. 471.
Page 276 U. S. 178
The state court had to determine whether defendant was entitled
to one-half the commissions remaining after deducting the shares of
plaintiff's deputies and attorney. Plaintiff was authorized under §
7068 before amendment, to carry on in the name of his successor the
suits he had commenced, and was required to pay all expenses. In
the absence of c. 170, defendant would have had no authority in
respect of the suits. That enactment authorized the revenue agent
to look into the merits of pending suits brought by his predecessor
and "submit to the courts in which the same were pending the
question whether such suits should be prosecuted or not." 144 Miss.
626. In the interval between the bringing of the suits by plaintiff
and payments by taxpayers to defendant, the legislature conferred
on his successor an authority not theretofore given, and,
apparently deeming the contemplated services to be necessary and
valuable, declared that expenses should be borne and commission
divided equally between the revenue agent who brought the suit and
his successor. The act did not empower defendant to do anything
upon which plaintiff's right to the commissions depended. It
authorized something not contemplated by the statute in effect when
plaintiff brought the suits and became entitled to the commissions.
As it does not appear that defendant took any step authorized by c.
170, presumably the collections resulted from the bringing of the
suits without more.
See Johnson v. Miller, supra; Garrett v.
Robertson, supra, 743. As applied by the state courts, the new
law operated to take part of the commissions earned by plaintiff
and to hand it over to his successor on account of an unexerted
authority to apply to the court to have the suits carried on -- a
step never before deemed necessary or contemplated in connection
with collections of such taxes.
It is well understood that the contract clause does not limit
the power of a state during the terms of its officers to pass and
give effect to laws prescribing for the
Page 276 U. S. 179
future the duties to be performed by, or the salaries or other
compensation to be paid to, them.
Butler v.
Pennsylvania, 10 How. 402. But, after services have
been rendered by a public officer under a law specifying his
compensation, there arises an implied contract under which he is
entitled to have the amount so fixed. And the constitutional
protection extends to such contracts just as it does to those
specifically expressed. The selection of plaintiff to be the
revenue agent amounted to a request or direction by the state that
he exert the authority and discharge all the duties of that office.
In the performance of services so required of him, plaintiff made
the investigations and brought the suits to discover and collect
the delinquent taxes. Under the statutes then in force as construed
by the highest court of the state, he thereupon became entitled to
the specified percentages of the amounts subsequently collected on
account of the taxes sued for. The retroactive application of c.
170 would take from him a part of the amount that he had
theretofore earned. That would impair the obligation of the implied
contract under which he became entitled to the commissions. This
case is ruled by
Fisk v. Jefferson Police Jury,
116 U. S. 131.
Judgment reversed.