The Pacific commercial advertiser. [volume] (Honolulu, Hawaiian Islands) 1885-1921, 1902-09-09
INJUNCTION
IS DENIED
The Territory Wins
Income Tax
Case.
FIRST VICTORY
IN FEDERAL COURT
CompIainants Must Bring Suits in
Equity After Tax Has
Been Paid.

Judge Estee yesterday sustained the
demurrer in the case of Peacock ct al.
VS.. Assessor Pratt and the bill of com
plant in the income a test was
thrown out of court. The plaintiffs will
now be compelled to file separate suits
to recover the tax already paid, If un-
der protest, or pay his years assess
ment under protest, then sue for re-
covery. The effort to prevent the col
lection of the income tax by injunction
has proved a failure, n some other
remedy will now be pursued by Col.
Fitch.
Judge Estee did not pass upon the
constitutionality of the law, simply de-
nying the right of the compliments to
proceed by injunction.
The court in passing upon the mat
ter said that the allegation as to the
condition of the Territorial treasury did
not appear material. The court
There is no question in this case as
to the power of the Legislature of the
Territory of Hawaii to pass general
taxation laws. Unoer the Act of Con-
gress entitled An Act to provide a
| government for the Territory of Ha-
wall, passed by the Fifty-sixth Con-
gress of the United States of America,
on the 9th day of April, 1900, and APP
proved on the 30th day of April, 1900,'
and which under it's terms took effect
on June IA, 1900. it is provided that
the legislative power of the Territory
shall extend to all rightful subjects of
legislation not inconsistent with the
Constitution and laws of the United
States locally applicable
"'Rightful subjects of legislation are
those subjects upon which Legisla-
lures have been in the practice of act
ing with the consent and approval of
the people they represent.
The power to tax is in it's very ma
ture inherent in all governments and
is under our political system, vested
in the various Legislatures, and in
Congress for certain national taxes,
limited only by Constitutional provi-
sions. And it has been held by the
Supreme Court of the United States
that a Territorial Legislature has all
the powers of a State Legislature ex-
cept as limited by it's Organic Act, the
Constitution of the United States, and
the Acts of Congress.
Therefore, taking into consideration
these general principles, and the deci-
sions of the courts, n in addition
thereto, the language of section SIS of
the Organic Act, which is the funda-
mental law of the Territory, there can
be no question as to the general power
of the Legislature of Hawaii to legis-
late upon all questions of taxation in
relation to providing a local system of
revenue to carry on the government of
the Territory of Hawaii; the only limi-
tation being thai such legislation shall
not be inconsistent with the Constitu-
ton and laws of the United States.
locally applicable The passage of the
Act complained of was undoubtedly
within such legislative power subject
to the constitutional and congressional
restrictions referred to.
This being clear it alone remains for
me to consider whether this court sit
ting as a court of chancery has the
power or jurisdiction to enjoin the col
lection of this Territorial tax which
was regularly levied under an Act of
the Territorial Legislature, while act
/ Ing WltIllU us SGIlSTdl pOWeIS SIdILeu
by Congress. Can this be done even if
such Act is unconstitutional and void?
l do not think it can. 1t certainly can
not be lone if there is an ADEQUATE
remedy at law; and it seems clear to
the court that in this case there is a
complete and adequate remedy at law.
"One of the chief reasons given for
equitable relief in this case is the
avoidance of a multiplicity of suits;
that each of the compliments would
! be obliged in the event that he were to
pay the "a under protest upon the
ground that the same was Illegal, to
bring an action for the recovery of the
sum so paid; or that in the event that
each of the compliments refused to
pay the taxes each would be subjected
to a suit by the Tax Collector M AS
SCISSOR for the collection of the same,
all of which might, as it is claimed, be
avoided by the determination of the
question of the legality of the tax by
a court of equity.
But is the multiplicity of suits that
compliments claim may be avoided by
his court taking action, such multi
plicity as is contemplated in equity?
No one of these compliments would
be subjected to more than one suit,
either upon d refusal ~ pay VI q pay
ment under protest and a consequent
suit to recover"
After quoting a number of authori-
ties in support of his finding as to
multiplicity of suits Judge Estee says:
THE law seems to be clear that when
a person, by the compulsion of the col
or of legal process, pays moneys un-
lawfully demanded. or is deprived of
his property by seizure, he may recover
it back"
Concluding the court holds:
The reason why he courts have SO
uniformly refused to restrain the col
lection of taxes whether illegally as
sessed or not unless it be shown that