Source: http://supreme.nolo.com/us/76/567/case.html
Timestamp: 2019-04-25 15:47:44+00:00

Document:
In which the first two points adjudged in the preceding case, and the points adjudged in Insurance Company v. Ritchie, 5 Wall. 541, are affirmed, including the point adjudged in this last case, to-wit, that where jurisdiction depends wholly on a statute, suits brought during the existence of the statute fall with its repeal.
In this case, which came on error from the Circuit Court for the Northern District of New York, the same condition of enactment and repeal of statutes presented itself as in the last case. It is set forth, supra, pp. <|76 U.S. 560|>560-562. It makes the fundamental part of this case as of that. And the reader who desires to read the report of this case as well as the report of that will please to recall it thence or refer to it there.
"The plaintiffs, for several years past, have been manufacturers of reaping and mowing machines at the City of Auburn and within the 24th Collection District of the State of New York,"
and in another clause that "the defendant, as the assessor of the 24th district, did require of the plaintiffs that they should return &c., the number of tons," &c.
"And whereas the said D. M. Osborn & Company, so being the exclusive manufacturers &c., at their said manufacturing establishment in the said City of Auburn and within the said 24th Collection District of the said state. . . ."
The court gave judgment for the plaintiffs, and the government brought the case here on error.
MR. JUSTICE CLIFFORD stated the particulars of the case and delivered the opinion of the Court.
Damages are sought to be recovered by the plaintiffs of the defendant, as the Assessor of Internal Revenue Taxes for the Twenty-fourth District in the State of New York, because, as they allege, he illegally assessed against them certain internal revenue taxes upon certain articles which they manufactured during the period specified in the declaration.
They brought their suit on the twentieth of July, 1866, and the declaration contains forty-one counts. Twenty-eight of the counts relate to certain internal revenue taxes alleged to have been illegally assessed by the defendant against the plaintiffs upon certain iron castings of two classes therein described. One class consisted of castings of iron exceeding ten pounds in weight for each casting, and the other class consisted of castings of iron of ten pounds weight for each casting or less, as more fully set forth in the first fourteen counts.
Machines in a finished condition for reaping and mowing were also manufactured by the plaintiffs during the same period, and the remaining thirteen counts relate to assessments made by the defendant against the plaintiffs upon reaping and mowing machines which were in a finished condition, and the charge is that the last-named assessments were also illegal and that the defendant, as such assessor, transmitted the lists to the collector of the district, and that the plaintiffs paid the taxes under protest, as in the case of the assessments upon the castings of iron, which were in fact used as component parts of the finished machines.
and Mower at Auburn, within that collection district. They were the exclusive licensees for the manufacture and sale of those machines under the several patents granted for that invention, and the agreed statement shows that they make the castings used as parts of the machines as well as the machines in their organized and finished condition, and it is admitted that the castings which they make cannot be used for any other purpose than as component parts of their machine, nor as parts of any different machine made by any other manufacturers.
Castings manufactured by the plaintiffs are made from pig iron, upon which the internal revenue duties imposed under the acts of Congress have been fully paid. All of the castings, after being taken from the moulds, require to be polished, examined, and tested to see if they are perfect and fit for the purpose before they can be used as component parts of a reaper or mower, and many of them have also to be painted and varnished.
Reapers and mowers, when sold by the plaintiffs, include as parts thereof all the necessary pieces of castings and of woodwork to constitute a complete working machine; but they do not put all of the several parts together until the purchaser is ready to use the machine in the field, as it is much more convenient to transport the several parts in their separate condition than the embodied machine.
(1) That the castings of ten pounds weight or less each casting might be taxed at the rate of five percent ad valorem.
(2) That the castings exceeding ten pounds in weight each casting might be taxed at the rate of three dollars per ton.
percent ad valorem, without any deduction's being made for the castings used as component parts of the machines.
Hearing was accordingly had before the court and judgment was rendered for the plaintiffs in the sum of nine thousand eight hundred and five dollars and twelve cents, besides costs and charges. Whereupon the defendant sued out a writ of error and removed the cause into this Court.
Actions of the kind may under some circumstances undoubtedly be maintained against the collector, and it may be that an assessor acting in a case where he has no jurisdiction may be liable to the injured party for an illegal assessment of internal revenue taxes, but neither the collector nor the assessor can be sued in the circuit court of the United States by any party who is a citizen of the same state with such collector or assessor. Suits in such cases -- that is, where the plaintiff and defendant are citizens of the same state -- may be brought in the state courts, but such suits cannot be maintained in the circuit courts under existing laws unless the plaintiff and defendant are citizens of different states. Consequently, where the parties are citizens of the same state, the action must be brought in the state court, but the defendant, if he sees fit and seasonably takes the proper steps, may remove the cause into the circuit court for trial.
Unquestionably the effect of that proviso was to confine the original act to the purposes for which it was passed and to limit its scope and operation, standing alone and unaffected by the fiftieth section of the subsequent act, to cases arising under the acts of Congress providing for the collection of import duties. But that proviso left the fiftieth section of the act of the thirtieth of June, 1864, untouched and in full force, and if legislation had stopped there, persons duly authorized to assess, receive, or collect internal revenue duties would still have been entitled to the same exemptions, immunities, benefits, rights, and privileges under the original act as persons employed to assess, receive, or collect import duties. Legislation, however, did not stop there, but the sixty-eighth section of the Act of the thirteenth of July, 1866, repealed the fiftieth section of the Act of the thirtieth of June, 1864, altogether, subject to the proviso contained in the same repealing section, which enacts that any case removed, from a state court, into the circuit court, under the former regulations upon the subject, shall be remanded unless the justice of the circuit court shall be of the opinion that the same, if pending in the state court, might be removed into the circuit court under the new provision contained in the sixty-seventh section of that act.
Assumpsit for money had and received is the appropriate remedy to recover back moneys paid under protest for internal revenue duties illegally assessed, and, if commenced in a state court, the action may be removed, on petition of the defendant, into the circuit court for the district where the service was made, and in that state of the case the jurisdiction of the circuit court is clear beyond doubt, irrespective of the citizenship of the parties, but if the action is originally commenced in the circuit court, the cause must be dismissed for the want of jurisdiction unless is appears that the parties were citizens of different states.
(1) They contend that it does not appear that the case was not removed from the state court into the circuit court, as required to give the circuit court jurisdiction under existing laws.
(2) That it does not appear that the plaintiff and defendant in the case are not citizens of different states, as required to confer jurisdiction upon the circuit court.
(3) That the case was properly cognizable in the circuit court at the time it was commenced, and that the subsequent repeal of the provision conferring such jurisdiction does not impair the right of the plaintiffs to maintain the suit.
Unsupported in fact as the first proposition is, it does not seem to be necessary to enter into any argument to refute it. Suffice it to say that the record shows that the suit was commenced in the circuit court, and that it was not removed into that court from the state court, which is all that need be said in reply to the first proposition.
Applying these principles to the present case it is clear that the circuit court has no jurisdiction of this case. Usually where a court has no jurisdiction of the case, the correct practice is to dismiss the suit, but a different rule necessarily prevails in an appellate court in cases where the subordinate court was without jurisdiction and has improperly given judgment for the plaintiff. In such a case, the judgment in the court below must be reversed, else the plaintiff would have the benefit of a judgment rendered by a court which had no authority to hear and determine the matter in controversy.
Judgment reversed and the cause remanded with directions to dismiss the case for want of jurisdiction.
13 Stat. at Large 5.
14 Stat. at Large 149.
Philadelphia v. Collector, 5 Wall. 731.
Barhyte v. Shepherd, 35 N.Y. 238; Weaver v. Devendorf, 3 Denio 117; Swift v. Poughkeepsie, 37 N.Y. 511; Dickinson v. Billings, 4 Gray 42; Railroad v. Charlestown, 8 Allen 245.
13 Stat. at Large 241.
14 Stat. at Large 172; Philadelphia v. Collector, 5 Wall. 728; Insurance Company v. Ritchie, 5 Wall. 541.
14 Stat. at Large 171, § 67.
Sheldon v. Sill, 8 How. 449; Turner v. Bank, 4 Dall. 10; McIntire v. Wood, 7 Cranch 506; Kendall v. United States, 12 Pet. 616.
Norris v. Crocker, 13 How. 438; Yeaton v. United States, 5 Cranch. 281; The Rachel, 6 Cranch 329; The Irresistible, 7 Wheat. 551; Maryland v. Railroad Company, 3 How. 534; 1 Kent (11th ed) 465; Butler v. Palmer, 1 Hill 324.

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