Shelton v. Platt

delivered the opinion of the court.

The question whether, even if the act under which the tax in question was imposed were unconstitutional and the tax void, complainant on behalf of the express company was •entitled to the relief accorded, meets us on the threshold.

It was ruled in Dows v. Chicago, 11 Wall. 108 , 112, that a suit in equity will not lie to restrain the collection of a tax on the sole ground that the tax is illegal, but that there must exist, in addition, special circumstances bringing the case under some recognized head of equity jurisdiction, such as that the enforcement of the tax would lead to a multiplicity of suits, or produce irreparable injury, or, where the property is real estate, throw a cloud upon the title of the complainant. And Mr. Justice Field, speaking for the court, said: “ The equitable powers of the court can only be invoked by the presentation of a case of equitable cognizance. There can be no such case, at least in the Federal courts, where there is a plain and adequate remedy at law. And except where the special circumstances which we have mentioned exist, the party of whom an illegal tax is collected has ordinarily ample remedy, either by action against the officer making the collection or the body to whom the tax is paid. Here such remedy existed. If the tax was illegal, the plaintiff protesting against its enforcement might have had his action, after it was paid,

In Union Pacific Railway Co. v. Cheyenne, 113 U. S. 516 , 525, Mr. Justice Bradley declared that it was “well settled that there ought to be some equitable ground for relief besides the mere illegality of the tax; for it must be presumed that the law furnishes a remedy for illegal taxation.” And he quoted, with approval, the language of Judge Cooley on this subject: “To entitle a party to relief in equity against an illegal tax, he must by his bill bring his case under some acknowledged head of equity jurisdiction. The illegality of the tax alone, or the threat to sell property for its satisfaction, cannot, of themselves, furnish any ground for equitable interposition. In ordinary cases a party must find his remedy in the courts of law, and it is not to be supposed he would fail to find one adequate to his proper relief. Cases of fraud, accident or mistake, cases of cloud upon the title to one’s property and cases where one is threatened with irremediable mischief, may demand other remedies than those the common law can give, and these, in proper cases, may be afforded in the courts of equity.” Cooley on Taxation, p. 536. The same learned author says, (p. 538 :) “ When a tax is assessed as a personal charge against the party taxed, or against his personal property, it is difficult to suggest any ground of equitable jurisdiction. Presumptively the remedy at law is adequate. If the tax is illegal and the party makes payment, he is entitled to recover back the amount. The case does not differ in this regard from any other case in which a party is compelled to pay an illegal demand ; the illegality alone affords no ground for equitable interference, and the proceedings to enforce the tax by distress and sale can give none, as these only constitute

Irreparable injury is the sole ground upon which jurisdiction in equity can bd regarded as invoked in this casé. The jurisdictional averments are: “ That the property of said United States Express Company in Tennessee is employed in interstate commerce in the said express business, and necessary to-the conduct of it; that if seized by the said sheriff it will greatly embarrass the company in the conduct of such business and subject it to heavy loss and damage, and the public served by it to great loss and inconvenience.” And “that-your orator and the United States Express Company are-, without adequate remedy at law in the premises.”

The latter allegation is a mere matter of inference, and it is necessary that by facts averred or proven the conclusion should be made out. The answer denied, in the language of the previous motion, that any irreparable injury or other ground of equitable jurisdiction was shown in the bill, and asserted that, the plaintiff had full, adequate and complete remedy at law under the act of 1873. As the case was tried on bill, answer- and replication, it is taking the most favorable course for complainant to determine whether the decree must stand or fall by the averments of the bill alone. But testing it in that way, we do not see how it can be sustained. The trespass, involved in the levy of the distress warrants was not shown to be -continuous, destructive, inflictive of injury incapable of being measured in money, or committed by irresponsible persons. So far as appeared, complete compensation, for the resulting injury could have been had by recovery of damages in an action at law. There was no allegation of inability on the part of the express company to pay the amount of tÉe taxes claimed, nor any averments showing that the seizure and sale of the particular property which might be levied on,, would subject it - to loss, damage and inconvenience which would be in their nature, irremediable. The bill showed the company to be doing a vast business, and it was an unreasonable inference that it must submit to the sale of its wagons

This act has been sanctioned and applied by the courts of Tennessee. Nashville v. Smith, 86 Tennessee, 213; Railroad v. State, 8 Heiskell, 663, 804. It is, as counsel observe, similar to the act of Congress forbidding suit for the purpose of restraining the assessment or collection of taxes under the internal revenue laws, in respect to which this court held that th;e remedy by suit to recover back the tax after ’payment, provided for by the statute, .was exclusive. Snyder v. Marks, 109 U. S. 189 ; 14 Stat. 152 , 475. Legislation of this character has been called for by the embarrassments resulting from the improvident employment of the writ of injunction in arresting the collection of the public revenue; and, even in its absence, the strong arm of the Court of Chancery ought not to be interposed in that direction except where resort to that court is grounded upon the settled principles which govern its juris-, diction.

It is..asserted by counsel that a court of equity has jurisdic

In Allen v. Baltimore & Ohio Railroad, Allen was auditor of public accounts of Yirginia, and Hamilton, treasurer of Augusta County, in that State. The auditor had assessed certain railroads upon their real estate, not having any rolling stock, as being in default for non-payment of taxes assessed by the board of public works, and had placed copies of the assessment in the hands of the defendant Hamilton, as treasurer of Augusta County, for collection, in pursuance of which he had levied upon certain cars and locomotives belonging to complainant, and used by it in operating said railroads as lessee, for part of the taxes, and threatened to make further levy upon other cars and engines and sell them for payment of said taxes; and the bill prayed for an injunction on the several grounds of irreparable damage, avoidance of multiplicity of suits, removal of cloud upon title, etc. It was admitted in the case that if the property of the complainant levied on should be sold, great sacrifice and loss must result therefrom, and that the withdrawal of the rolling stock and machinery proposed to be sold would cause serious and prolonged embarrassment to complainant’s business; that much delay must accrue before said rolling stock and machinery, if sold, could be replaced; and that it would be difficult, if not impracticable, to ascertain and estimate with even proximate certainty the losses and damages which would result to complainant from the sale, so that although the estate of Hamilton might be sufficient to meet any verdict for damages if the sale should be adjudged to be illegal, the pecuniary value of complainant’s losses and damages could not be properly and adequately ascertained and fixed by the verdict of a jury. This admission made a case of irreparable injury.

In Cummings v. National Bank, the jurisdiction was maintained upon the ground of preventing multiplicity of suits, as well as that the remedy by injunction against an illegal tax was expressly granted by a statute of the State whose levy of taxes was drawn in question.

The ground upon which Dodge v. Woolsey proceeded was that a stockholder had a remedy in chancery against the directors of his corporation to restrain them from doing acts which would amount to a violation of the charter, or to prevent any misapplication of their capital or profits, which. might lessen the value of the shares, if the acts intended to be done amounted to a breach of trust or duty, and that the refusal of the directors to resist the collection of a tax, which they themselves believed to have been imposed upon them in violation of their charter, was in legal effect a breach of trust:

The Circuit Court held the act of 1873 inapplicable to an unconstitutional tax, upon the authority of Poindexter v. Greenhow, 1 1 4 U. S. 270 . That was an action of detinue brought by Poindexter, a taxpayer, against Greenhow, treasurer of Bfchmond, Virginia, for a desk belonging to plaintiff, seized and taken by Greenhow for the purpose of raising the tax claimed to be due from plaintiff after he had tendered coupons in payment thereof in pursuance of the Virginia act of 1871, making the coupons receivable for taxes. In 1882, Virginia passed an act providing that, in case of proceedings instituted against a taxpayer for the collection of his tax, notwithstanding his tender of coupons in payment thereof, he should pay the tax under protest in lawful money, and then

We are constrained to hold upon this'record that the decree cannot be sustained, and it is therefore

Reversed and the cause remanded to the cowrt below with a direction to dismiss the bill.

Mr. Justice Harlan dissented.