65 F. 151 | 3rd Cir. | 1895
The first question which we will consider is whether the Adams Express Company is subject to taxation under the several acts of assembly of the state of Pennsylvania recited in the bill, namely of May 1, 1868, of April 24, 1874, of March 20, 1877, and of June 7, 1879, whereby an annual tax was imposed upon the “capital stock” of all companies “incorporated” by or under any law of the state of Pennsylvania, and of every company “incorporated” by any other state and doing business in the state of Pennsylvania. It appears that the Adams Express Company was formed by certain individuals, by articles of agreement dated July 1, 1854, signed in the city of New York, where the -principal office of the company was located, for the purpose of carrying on the express business for a limited period. The articles of association provide that the proportionate interests of the associated members shall be represented by shares of stock — having, however, no par or fixed money value — transferable on the books of the association; that the death of a shareholder shall not dissolve the association; that the business of the association shall be conducted by a board of managers, and its property held by three trustees. By statutes of the state of New York existing at the date of the formation of the Adams Express Company, it was enacted that any joint-stock company or association might sue or be sued in the name of the president or treasurer thereof, and that no suit should abate by reason of the death, removal, or resignation of such officer; that it should be lawful for such association to provide by their articles of association •that the death of any stockholder or the assignment of his stock should not work a dissolution of the association, and to devolve upon any three or more of the “partners” the sole management
It will be perceived that the question before us is one of construction. By the express provisions of the acts of assembly here' involved, a tax is imposed upon every “company incorporated” by or under the laws of Pennsylvania, or by or under the laws of any other state. It is, however, certain that the Adams Express Company is not incorporated. It is, therefore, without the terms of the acts. There is no language whatever in any of these acts to bring within their operation an unincorporated joint-stock company. This the legislature of Pennsylvania has recognized; for the act of June 1, 3.889, imposes for the future an aiinual tax upon the capital stock of “every corporation, joint-stock association and limited partnership whatsoever, now or hereafter
“The term ‘corporations,’ as used in this article, shall he construed to include all joint stock companies or associations having any of the powers or privileges of corporations, not possessed hy individuals or partnerships.”
The definition of the term “corporations” here, it will • be perceived, is expressly confined to that particular article of the constitution, and the section does not at all sanction, but rebuts, the suggestion that the term “corporations,” as used in general legislation, is to be construed as covering joint-stock companies or. associations.
. We discover nothing in the ruling of the supreme court of Massachusetts in Oliver v. Insurance Co., 100 Mass. 531, or in the ruling of the supreme court of the United States in that case upon error (Liverpool Ins. Co. v. Massachusetts, 10 Wall. 566), — especially in view of 'the later above-cited decisions of those courts, — -to excite any; doubt as to the correctness of our conclusion here. The Massachusetts statute expressly applied to every “insurance company incorporated or associated under the laws of any government, or state' other than one of the,United States”; and the Liverpool Company, although organized under a deed of settlement, had been invested by several acts of parliament with all essential rights of a corporate nature, and was empowered to act independently of the rules which govern an ordinary partnership. As, therefore, it came within the express terms of the Massachusetts statute, and had been permitted ■by the comity of the state to exercise its functions therein, it was held that no exemption from regulations appropriate to the action of the collective body could be claimed on account of the citizenship or nationality of individual members of the association. We fully concur with the court below in the opinion that the Adams Express Company was not chargeable with taxes under the acts of assembly in question, and that in proceeding to settle an account for taxes against the company from May 1, 1868, to the first Monday of November, 1868, and for each succeeding year thereafter dowm to the first Monday of November, 1888, together with a superadded penalty of 20 per cent, for default, amounting in all to the sum of $61,749.99, the defendant below, D. McM. Gregg, auditor general of Pennsylvania, acted without any lawful authority.
But it is objected that this was substantially a suit against the
“Another class of cases is where ¡in individual is sued in iort for some act injurious to another in regard to person or property, to which his defense is that he lias acted under the orders of tlie government. In these cases he is not. sued as, or because he is, the officer of the government, but as an individual, and Hie court is not ousted of jurisdiction because he asserts authority as such officer. To make out his defense, he must show that his authority was sufficient in law to protect him.”
Huits against persons holding office under a stale for illegal acts done under color of an unconstitutional law of the state are not suits against the state. Pennoyer v. McConnaughy, 140 U. S. 1, 10, 11 Sup. Ct. 699. In the last-eiled case the court:, speaking through Mr. Justice Lamar, reaffirmed the doctrine of the leading case of Osborn v. Bank, 9 Wheat. 738, that, where grounds of equity jurisdiction exist, an injunction from a circuit court will lie to restrain a person who Is a state officer from performing an official act directed by an unconstitutional statute of the state. In the case of Reagan v. Trust Co., 154 U. S. 362, 390, 14 Sup. Ct. 1047, the court said:
“A valid law may be wrongfully administered by officers of the state, aijd .so as to make such administration an illegal burden and exaction upon the individual. A tax law, as it leaves the legislative hands, may not he obnoxious to any challenge, and yet the officers charged with the administration of that valid tax law may so act under it, in the matter of assessment or collection, as to work an illegal trespass upon the property rights of Hie individual. They may go beyond the powers thereby conferred, and wixen they do so tlie fact that they ¡ire assuming to act under a valid law will not oust, tlie courts of jurisdiction to restrain their excessive and illegal acts.”
These authorities sufficiently answer the objection to jurisdiction based upon the eleventh amendment.
It is. however, further urged against the decree of the circuit court that' the complainants’ case, if tlie facts be as they allege, was not one for equitable relief; and it remains for us to consider this point. Here, in tlie first place, we may remark that, in a suit by a citizen of Pennsylvania in one of her own courts to enjoin the collection of a tax not authorized by law, this objection would have no force. The supreme court of Pennsylvaina. lias repeatedly held that where there is a want of power to tax, without anything more, equity will enjoin. Appeal of Conners, 103 Pa. St. 356; Harper’s Appeal, 109 Pa. St. 9, 1 Atl. 791; Banger’s Appeal, 16 Wkly. Notes Cas. 289, 295. Now, in Cummings v. Bank, 101 U. S. 153, 157, the fact that relief by injunction against the collection of illegal taxes was given in the state
“Even the cloud cast upon his title by a tax under which such a sale could be made would be a grievance which would entitle him to go into a court of equity for relief.”
In all the decisions of the supreme court relating to the general subject of the appropriate relief against the collection of taxes file-
We have not overlooked the act of assembly of April 14, 1827 (Purd. Dig. 1774), nor the rulings thereunder that, to give the commonwealth priority over other lien creditors, a certified copy of the settlement under the act of 1811 must be filed in the county where the land is. Wm. Wilson & Son Silversmith Co's Estate, 150 Pa. St. 285, 24 Atl. 636. Eo case, however, decides that a purchaser would not be affected by the lien expressly created by the twelfth sec lion of the act of 1811, and no prudent counsel would advise that the purchaser would take free of the lien. Moreover, the act of 1827 makes it the imperative duty of the auditor general to transmit to the prothonotaries of the respective counties where the lands lie certified copies of the liens. The filing of these transcripts is. a part of the procedure, and is positively enjoined by the act. Therefore, the suggestion that the defendant does not intend here to file transcripts amounts to nothing. In this court he defends his right to make the tax settlement, and impliedly asserts his right to do whatever may he necessary to make it an effective lien.
Having thus seen that the threatened cloud upon their title justified the complainants in seeking redress in an equitable forum, we need not consider the other alleged grounds for sustaining the bill, namely, the element of a trust, and the avoidance of a multiplicity of suits,
In conclusion, it may be observed that, if the taxes in question were paid, there is no way in which they could be recovered back, for the payment would be into the state treasury, and the statutes of Pennsylvania do not authorize a suit against the state. Aside from this bill, the only remedy open to the complainants was an appeal to the court of common pleas of Dauphin county; but the existence of that special statutory mode of redress did not bar the equity jurisdiction of the circuit court of the United States. Barber v. Barber, 21 How. 582, 592; Kirby v. Railroad Co., 120 U. S. 130, 138, 7 Sup. Ct. 430. The decree of the court below is affirmed.