88 F. 337 | U.S. Circuit Court for the District of South Dakota | 1898
Chapter 67 of the Laws of .1,897 of the state of North Dakota makes provision for the collection of delinquent taxes by a proceeding in the district court. The enactment is taken from a statute that has long been in force in the state of Minnesota. Section 1 provides that the county treasurer 'shall make a list of all taxes upon real estate in his county which have been delinquent for certain years. The list is required to contain a description of the parcels of land upon which the taxes have not been paid, and opposite such description the name of the owner to whom assessed, if known, and the amount of the tax, with penalty and interest. Such list is to be verified by the affidavit of the treasurer, and is then filed in the office of the clerk of the district court of the county. "The filing of such list shall have the force and effect of the filing of a complaint in an action by the county against each piece or parcel of land iu such list described, to enforce against it the taxes therein appearing against it, and the penalties and interest for the several years for which such taxes shall remain unpaid, and to obtain a judgment or decree of the court for the sale of such piece or parcel of land to satisfy the amount of such taxes remaining unpaid, with penalties, interest, and costs; and also the effect of notice of the pendency of such" action, to all persons interested in such lands.” Section 2 provides that, in case the land is rented, a writ of attachment shall issue, upon the application of the county treasurer, to seize such rents, and have the same applied in payment of the taxes. Sections 3 and 4 provide that the
Under the provisions of this act the treasurer of Stutsman county filed a list of delinquent taxes in the office of the clerk of the district court of that county. Among the lands appearing in this list are several hundred parcels formerly owned by the Northern Pacific Railroad Company, and now held by Edwin H. McHenry and Frank G. Bigelow, as receivers, appointed in an action pending in the circuit court of the United States for the district of Wisconsin, on the 25th day of May, 1896, and in the same action, in the circuit court of the United States for the district of North Dakota, on the 27th day of May, 1896. Within the time provided by the statute for answering, the receivers presented their petition, together with a bond, to the district court of Stutsman county, for the removal into this court of the controversy existing between them and the county. Thereafter motion was made by counsel for the county to remand the cause to the state court. Jurisdiction of this court is asserted upoii two grounds: (1) That the suit presents a controversy wholly between citizens of different states, to wit, between the county of Stutsman, a corporation organized under the laws of the state of North Dakota, and the petitioners, one of whom is a citizen of the state of Minnesota and the other a citizen of the state of Wisconsin. (2) That the suit arises under the laws of the United States. .Jurisdiction of this court is resisted upon the grounds: First, that the proceeding for the collection of delinquent taxes provided by the statute of North Dakota is not a “suit” within the meaning of the act of 1887 and 1888; second, that such proceeding, if it is a suit, is not a suit of which the federal courts are given original jurisdiction; third, that there is no separable controversy in the proceeding between the county of Stuts-man and the petitioners; fourth, that, the notice to answer being addressed to all persons having any interest in or lien upon the property, it may well happen that there are other persons who are residents of North Dakota who are entitled to answer and defend against the taxes, and that for this reason the action, even as to the taxes against the property of the petitioners, involves defendants whose presence would defeat the jurisdiction of this court: fifth, that there may be other persons who have a right to answer and defend against the taxes, who are either citizens of North Dakota or of other states, and who should join in the petition for the removal, and that the possible
In support of the first objection to the jurisdiction of this court it is urged that the proceeding is a purely administrative one for the enforcement'of taxes by a sale of the property. An examination of the statute will not sustain this position. Its primary object is to have the validity of the tax judicially determined, and all defenses cut off before the property is sold. The judgment of the court not only sustains such taxes as are found to be legal, it also cancels those that are found to be void. If the only object was to obtain a Sale of the property, there was already ample provision in the revenue laws for this, as the treasurer was authorized to sell all property against which taxes had been delinquent for a certain period. Such a sale, however, left the validity of the tax open to contest, and seriously impaired the efficiency of the proceeding as a means of securing the collection of the public revenue, and the object of the statute was to place the judicial determination of all questions affecting the legality of the tax before the sale, instead of after it. The proceeding has every element of a "suit,” within the meaning of that term as defined by the supreme court in construing the federal judiciary acts. It “involves the determination of questions of law and fact, and there are parties litigant to contest the case on the one side and the other.” Upshur Co. v. Rich, 135 U. S. 467, 477, 10 Sup. Ct. 654. “A claim of the parties, capable of pecuniary estimation, is the subject of the litigation, and is presented by the pleadings for judicial determination.” Gaines v. Fuentes, 92 U. S. 10-20; Pacific Railroad Removal Cases, 115 U. S. 19, 5 Sup. Ct. 1113. It has been expressly held by the supreme courts of Minnesota and North Dakota that the proceeding under this statute is a suit, and the same conclusive force is given to a judgment entered therein as to judgments and decrees in actions at law and suits in equity. Chauncey v. Wass, 35 Minn. 1, 25 N. W. 457, and 30 N. W. 826; Wells Co. v. McHenry (N. D.) 74 N. W. 241. It is difficult to appreciate the force of that reasoning which attaches to a proceeding in court, as to its effect upon the rights of the parties, all the consequences of a suit, but, for the purpose of determining the jurisdiction of the federal courts, holds the same proceeding to be purely administrative.
In support of the ground for the motion to remand, now under consideration, counsel rely mainly upon the case entitled In re City of Chicago, 64 Fed. 897. Whether that case was correctly decided must depend upon the effect to which the judgment of the county court, upon the report of the commissioners in the proceeding there under review is entitled. The supreme court of Illinois has repeatedly passed upon that question, and has uniformly held that such judgments possess the same force as judgments in ordinary civil actions, and are open to collateral attack only upon the ground that the court failed to acquire jurisdiction. They conclusively establish all matters affecting the validity of the assessment which precede their rendition, and forever bar a defendant from again litigating any matter which he might have presented by answer. Lehmer v. People, 80 Ill. 601; Clark v. People, 146 Ill. 348, 35 N. E. 60. It is true, as stated in
It has been held in several decisions that a, case cannot be removed into tbe federal courts unless it could originally have been begun there. Tennessee v. Union & Planters’ Bank, 152 U. S. 454, 462, 14 Sup. Ct. 654; Railroad Co. v. Davidson, 157 U. S. 201, 208, 15 Sup. Ct. 563; In re Cilley, 58 Fed. 977. An examination of these decisions, however, will show that the limitation mentioned is based, not upon matters of procedure, but upon those elements specified as essential to jurisdiction in the first section of the act of 1887-88. To confer original jurisdiction, the following facts, and no others, are necessary: (1) A suit of a civil nature at common law or in equity. (2) It must involve at least $2,000, exclusive of interest and costs. (3) It must arise wholly between citizens of different states, or present one of the other conditions mentioned in the last part of the first section. A proceeding which presents these elements is within the original jurisdiction of the federal courts, notwithstanding it may involve matters of procedure which would prevent its commencement in those courts. The section defining the right of removal makes no reference to suits which might have been begun in the federal courts, and the phrase, “of which the circuit courts are given jurisdiction by the preceding section,” ought not to be considered as requiring elements not mentioned in the preceding section. The jurisdiction of the federal courts cannot he made to depend upon formal or modal matters; otherwise it would be in the power of the states to defeat that jurisdiction entirely by hostile legislation hedging about the commencement of suits by a statutory procedure, which could not be employed in the federal courts. Railway Co. v. Jones, 29 Fed. 193; In re Jarnecke Ditch, 69 Fed. 161, 163. It has been uniformly held
The other grounds urged by counsel for the county in support of the motion to remand may be considered together. The matter which has been removed to this court is not a "separable controversy,” but a separate suit. By section 1 of the statute of North Dakota the proceeding presents as many suits as there are parcels of land, but a defendant owning several parcels would, be entitled to a consolidation, and by joining them in his answer,' he accomplishes that result. Section 7 of the act contemplates this by expressly providing for a separate trial of the issues raised by each answer, and thus, in effect, makes the controversy presented by each answer a separate suit. See, also, Pacific Railroad Removal Cases, 115 U. S. 1, 22, 23, 5 Sup. Ct. 1113.
The objection that there might be other parties than the petitioners entitled to defend as to the same parcels, whose presence would defeat jurisdiction, is more imaginary than real. In the case of Osborn v. Bank, 9 Wheat. 738, 857, Chief Justice Marshall lays it down “as a rule that admits of no exception, in a case where jurisdiction depends on the party, it is the party named, in the record.” In the proceeding under consideration there are no parties defendant named in the record except such as appear and answer, and the petitioners are the only defendants who have thus appeared with respect to the parcels of land mentioned in their petitions.
It is not necessary to decide whether the jurisdiction of this court can be maintained upon the ground that the suit is one arising under the laws of the United States. That would depend upon whether a formal complaint for the enforcement of the taxes would disclose the fact that petitioners hold the property as receivers appointed by a federal court. If such averment would be necessary, then its omission, by reason of the statute making the list a substitute for the complaint, could not avail to defeat jurisdiction. Railroad Co. v. Cody, 166 U. S. 606, 17 Sup. Ct. 703. But, if such an averment is not essential to a complaint for the enforcement of the taxes, then the suit is not one arising under the laws of the United States, so as to confer jurisdiction on the federal courts. Chappell v. Waterworth, 155 U. S. 102, 15 Sup. Ct. 34; Walker v. Collins, 167 U. S. 57, 17 Sup. Ct. 738.