Stratton, Secretary of State of Illinois, v. St. Louis Southwestern Railway Co.
284 U.S. 530
SCOTUS
1932
Check Treatment
Mr. Justice Stone

delivered the opinion of the Court.

This сase is here on appeal, Jud. Code §§ 238, 266, from a final decree of a District Court of three judges for the Southern District of Illinois, enjoining the assessment and collection from аppellee of the minimum annual corporation franchise tax of $1,000, under §§ 105, 107, 112, 114, of the Illinоis Corporation Act, as an unconstitutional burden on interstate commerce, and аs violating the due process clause of the Fourteenth Amendment. After argument here оn the merits, the cause was again argued *532 by direction, of the Court, argument being limited to the quеstion of the jurisdiction of the district court, both with respect to the amount involved in the suit and its iurisdiction as a court of equity.

The bill sets up as ground for equitable relief the threat of revocation of appellee’s certificate of authority to do business within the statе for failure to pay the tax, pursuant to §§ 92 and 94 of the Act, and the • consequent irreparable ‍‌​‌‌‌‌‌​​‌​​​‌​‌‌‌​​‌​​​​​‌‌‌​​‌‌​​​​‌‌‌​‌‌​​​​​‍injury to its business. The equity jurisdiction of the district court was challenged by appellant’s motion below to dismiss the bill of complaint, and by the assignments of error here, and the question presented, like that in Matthews v. Rodgers, ante, p. 521, is whether, under state laws, the appellee is afforded such аn adequate remedy, by payment of the tax and the maintenance of a suit at law to recover it, as to preclude resort to the preventive jurisdiction of equity.

By the lаws of Illinois, as appellant argues, a tax paid under duress and protest that it is illegally еxacted, may be recovered at law in an action of assumpsit, brought either agаinst the taxing body, the state excepted, see Harvey & Boyd v. Olney, 42 Ill. 336; or against the collecting officer, see Yates v. Royal Ins. Co., 200 Ill. 202; 65 N. E. 726; School of Domestic Arts and Sciences v. Harding, 331 Ill. 330; 163 N. E. 15. See also German Alliance Ins. Co. v. Van Cleave, 191 Ill. 410, 413-414; 61 N. E. 94, and Hawkins v. Lake County, 303 Ill. 624, 629; 136 N. E. 487, in each of which the court entertained bills by numerous taxpayers to enjoin the collection of taxes or to ‍‌​‌‌‌‌‌​​‌​​​‌​‌‌‌​​‌​​​​​‌‌‌​​‌‌​​​​‌‌‌​‌‌​​​​​‍compel their refund, on the express ground that to do so would avoid a multiplicity of suits at law. ■

Reсovery of the tax may not be had, even though illegally exacted, unless its payment is procured by duress. See Richardson Lubricating Co. v. Kinney, 337 Ill. 122; 168 N. E. 886. But where the payment is of a corporate franchise tax like the present, made to avoid forfeiture *533 of the franchise, which would result from nonpayment, there ‍‌​‌‌‌‌‌​​‌​​​‌​‌‌‌​​‌​​​​​‌‌‌​​‌‌​​​​‌‌‌​‌‌​​​​​‍is such duress as entitles the taxpayer to recover. O’Gara Coal Co. v. Emmerson, 326 Ill. 18, 21; 156 N. E. 814; Western Cartridge Co. v. Emmerson, 335 Ill. 150; 166 N. E. 501; see Chicago & Eastern Illinois Ry. Co. v. Miller, 309 Ill. 257; 140 N. E. 823.

By the Illinois statute, applicable to the present tax, Smith-Hurd’s 1931 Revised Illinois Statutes, c. 127, par. 172, §-2 (a),.it is provided that:

“ It shall be the duty of every officer, board, commission, commissioner, department, institute, arm оr., agency brought within the provisions of this Act by Section 1 hereof to hold for thirty days all moneys rеceived for or on behalf of the State under protest and on the expiration оf such period to deposit the same with the State Treasurer unless the party making such payment shall within such period file a bill in chancery and secure a temporary injunction restraining the making of such deposit,, in which case such payment shall be held until the final ordеr or decree-of the court.”

This statute, for reasons stated at length in Matthews v. Rodgers, supra, can neither enlarge nor diminish the equity jurisdiction of the fеderal courts. It does not purport to confer any new remedy for the recovery of the tax. Nor does it impair the existing legal remedy, but supplements ‍‌​‌‌‌‌‌​​‌​​​‌​‌‌‌​​‌​​​​​‌‌‌​​‌‌​​​​‌‌‌​‌‌​​​​​‍it by providing a method under'the local procedure for staying payment over of the tax money, so that it may be available for the satisfaction of any judgment obtained against the collector. See Interstate Iron & Steel Co. v. Stratton, 340 Ill. 422; 172 N. E. 705; O’Gara Coal Co. v. Emmerson, supra; Hump Hairpin Mfg. Co. v. Emmerson, 293 Ill. 387; 127 N. E. 746; 258 U. S. 290.

These cases recognize the continued existence in Illinois of the right tо recover the tax. The fact that- in them the suits brought were denominated “ equitable,” *534 althоugh the only relief of an equitable nature, sought or allowed, was the injunction against pаyment over of the tax, which was but incidental to the Recovery of the money, cannot alter the character of the right as one enforcible at law. In determining what, is a lеgal remedy and its adequacy .to defeat their equity jurisdiction, the federal courts arе guided by the historic distinction between law and equity in those courts, not by the name given to remedies or to distinctions made between them by the state practice. Scott v. Neely, 140 U. S. 106, 110-111; Hollins v. Brierfield Coal & Iron Co., 150 U. S. 371, 379. By. this test the remedy by suit to recover a tax which has been paid is essentially a legal remedy, and it is ‍‌​‌‌‌‌‌​​‌​​​‌​‌‌‌​​‌​​​​​‌‌‌​​‌‌​​​​‌‌‌​‌‌​​​​​‍not any the less so nor any the less adequate because, the state practice has annexed to it an equitable remedy.

There being a legal remedy, for the recovery of the tax, no case is made for invoking the jurisdiction of equity to enjoin collection of it in the absence of allegations setting up special circumstances which would render the legal remedy inadequate. See Matthews v. Rodgers, supra; Arkansas Bldg. & Loan Assn. v. Madden, 175 U. S. 269; Atchison, Topeka & Santa Fe Ry. v. O’Connor, 223 U. S. 280; Singer Sewing Machine Co. v. Benedict, 229 U. S. 481.

Reversed.