267 F. 498 | M.D. Penn. | 1920
The plaintiffs, Alvan M^rkle and others, have filed this bill in equity to enjoin Fred C. Kirkendall, collector of
The bill alleges that the plaintiffs and numerous other persons are copartners doing business as the Hazelton Manufacturing Company, engaged in the business of manufacturing caskets and coffins, and general planing mill work; that they own certain described real and personal property used in connection with such manufacturing business, and that the defendant collector, claiming that the plaintiffs and associates in business “comprise a corporation and joint-stock association did on March 17, 1919, unlawfully and without legal warrant impose such income and excess profits tax against the Hazelton Manufacturing Company as a corporation; and that on April 15, 1919, the collector and his deputies entered upon their premises and threatened to seize and distrain upon all of plaintiffs’ personal property, and to proceed by bill in equity to sell their land owned and held by them as a copartnership in satisfaction of the taxes assessed against the corporation.
The hill further alleges that plaintiffs had tendered a partnership return to the collector, which he unlawfully refused, and that he then levied the tax in suit ex parte, and not in pursuance of any return made by them; that the colled or intends to sell their property to pay the tax levied, and .that if he does so it will cause them irreparable loss and damage; that plaintiffs have no adequate remedy at law, and they pray for relief.
The defendant has filed a motion to dismiss the complaint for lack of jurisdiction. One of the reasons assigned in support of the motion, and the only one that requires consideration, is that, being a suit to restrain the collection of a tax, it may not be maintained because it falls within the provisions of section 3224, R. S. U. S. (Comp. St. § 5947), which provides that—
“No suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court.”
That a suit can be maintained to restrain the collection of taxes is not questioned. Plaintiffs concede that it may not be done. They insist, however, that taxables are only disqualified from maintaining such suit. For instance, the Hazelton Manufacturing Company, against whom the tax is assessed as a corporation, if a taxable, and being aggrieved, could find redress only by pursuing the provisions of sections .3220, 3226, and 3227, R. S. U. S. (Comp. St. §§ 5944, 5949, 5950), in paying under protest, by appeal, and ultimately by suit at law; yet it is argued it did not apply to the plaintiffs, whose property was being seized for taxes not assessed against them, not being parties to the proceedings, hence being unable to avail themselves of the remedies provided by statute.
Plaintiffs’ bill further sets forth that the Hazelton Manufacturing Company was incorporated March 12, 1883, for a period of 20 years, and that by virtue of its limitation contained in its charter of incorporation its corporate existence expired April 12, 1903, and that no action
“If the plaintiff is within a class of persons against whom the commissioner may make assessments, though his proceedings be ever so irregular and erroneous, the court cannot interfere. * * * If by possibility he can be brought within the terms of the law, though the commissioner may have made an erroneous decision in that regard, the proceeding is not void. It is not a nullity, so as to authorize this court to arrest the collection * * * by injunction.”
It may be conceded that in the present case great hardship is imposed by demanding that the assessment be first paid before an action can be brought for its recovery. As much may be said for nearly all cases of this character, however, it is well understood 'that the court may not interfere with the collection of taxes on the ground of any such consideration, if at all. Mr. Justice Miller, delivering the opinion of the court in State Railroad Tax Cases, 92 U. S. 575, 23 L. Ed. 663, recognizing this fact, says:
“It shows the sense of Congress of the evils to be feared if courts of justice could, in any case, interfere with the process of collecting the taxes on which the government depends for its continued existence. It is a wise policy, [having reference' to the provisions of Rev. Stat. § 3224]. It is founded in the simple philosophy, derived from the experience of ages, that the payment of taxes has to be enforced by summary and stringent means against a reluctant and often adverse sentiment; and to do this successfully, other instrumentalities and other modes of procedure are necessary than' those which belong to courts of justice.”
Defendant’s motion is allowed. Plaintiffs’ bill is dismissed.