46 F. 221 | U.S. Circuit Court for the District of Southern New York | 1891
In my judgment the tax, the collection of which is sought to be restrained by this suit, is in no sense a tax upon commerce, and its legality depends solely upon the question whether the collective body known as “Adams Express Company” is a corporation within the meaning of the state statute which subjects to taxation “all moneyed or stock corporations deriving an income or profit from their capital or otherwise.?’ If the company is a corporation or a partnership, having its domicile in this state, its capital is taxable by the state, notwithstanding it may be wholly invested in the business of interstate commerce, and in property used in other states for the transportation of goods. The present tax is assessed upon the capital stock of the company. The company is a copartnership, domiciled in this state, and constituted by written articles of association, whereby its capital is divided into shares. The shares are transferable. The death of a shareholder does not work a dissolution. The business is conducted by a board of managers. The
The reasoning of the opinion in People v. Wemple, 117 N. Y. 136, 22 N. E. Rep. 1046, Danforth, J., delivering the opinion of the court of appeals, undoubtedly tends to an opposite result. In that case it was decided that an association organized by contract substantially like that of the Adams Express Company was properly taxed under a statute subjecting to a franchise tax “every corporation, joint stock company, or association whatever, now or hereafter incorporated or organized by or under the laws of any other state or country, and doing business in this state.” The opinion adopts the view that the word “incorporated” is not to be taken in that statute in a technical or restricted sense, but embraces any combination of individuals so organized for conducting business as to enjoy the privileges of bodies corporate by providing for a permanent investment of capital-, the right of succession, the transfer of in
Upon the authority of Shelton v. Platt, 11 Sup. Ct. Rep. 646, (decided by th§ supreme court, April 6, 1891,) the present bill must be dismissed, because the case made is one in which there is plain, adequate, and complete remedy at law. It had been adjudged frequently by the supreme court prior to the cases of Reynes v. Dumont, 130 U. S. 254, 9 Sup. Ct. Rep. 486, and Brown v. Iron Co., 134 U. S. 354, 10 Sup. Ct. Rep. 604, that the objection that there is plain and adequate remedy at law is jurisdictional, and should be enforced bythe court ofits own motion; but in those cases the court indicated that the objection should not be entertained in a case where the relief sought is of an equitable nature, unless it is raised by the defendant before he enters upon his defense at large; that is, by a demurrer or plea. The defendants have not raised this objection even by answer. The averment of the answer that the law's of the state of New York provide a simple, speedy, and adequate method for the review and cancellation of an erroneous or illegal assessment does not present a defense. Parties who are entitled to resort to the federal courts to have their rights adjudicated cannot be turned away because state laws may give them an adequate remedy in the state court. In the case of Allen v. Car Co., 11 Sup. Ct. Rep. 682, (decided April 13, 1891,) the supreme court has dismissed a bill filed to restrain the collection of a tax, upon the ground that there was an adequate remedy at law, notwithstanding the objection was raised in that court in the first instance, and had not been taken by plea, demurrer, or answer in the circuit court. In the opinion the cases of Reynes v. Dumont and Brown v. Iron Co. are referred to, but the former rule, as declared in many adjudications, that the objection may be raised nowithstanding it has not been taken by demurrer or plea, is again applied.
I regret to be obliged to dismiss the bill, because it seems to me plain that the association is not subject to the tax which has been assessed against it; and the suggestions which have been urged by counsel for the complainants, to show that the remedy at law is not as practical and efficient as the remedy in equity, have been considered with an earnest desire to be convinced by them. The only one which requires any comment is the one that a suit at law could not be prosecuted with practical effect in a federal court, owing to the vast number of plaintiffs who would have to be joined; the stockholders of the association being over 1,000 in number. If it were necessary to make all the
The bill is dismissed.