Source: http://supreme.nolo.com/us/322/47/case.html
Timestamp: 2019-09-22 22:26:09
Document Index: 249150210

Matched Legal Cases: ['§ 10478', '§ 41', '§ 12665', '§ 12665', '§ 12665', 'Art. 1', '§ 7', '§ 12665', '§ 12651', '§ 12665', '§ 12665']

GREAT NORTHERN LIFE INS. CO. V. READ, 322 U. S. 47 - Volume 322 - 1944 - Full Text - US Supreme Court Center - USSC Cases - Nolo
US Supreme Court Center > Volume 322 > GREAT NORTHERN LIFE INS. CO. V. READ, 322 U. S. 47 (1944) > Full Text
Certiorari, 320 U.S. 726, to review the affirmance of a judgment dismissing on the merits a suit to recover sums alleged to have been illegally exacted as taxes.
This writ brings here for review the action of petitioner, a foreign insurance company, to recover taxes paid to respondent, the Insurance Commissioner of Oklahoma, which were levied by § 10478, Oklahoma Statutes 1931, as amended by Chapter 1(a), Title 36, Session Laws of Oklahoma 1941. This was an annual four percent tax on premiums received by foreign insurance companies in Oklahoma, and it, together with certain specified fees, was in lieu of all other taxes and fees in Oklahoma. Petitioner paid the tax under protest and, alleging diversity of citizenship, 28 U.S.C. § 41, brought suit against the Insurance Commissioner in the District Court of the United States. The procedure for recovery is laid down by § 12665, Oklahoma Statutes 1931. [Footnote 1]
Respondent challenged the right of petitioner to seek relief in the District Court by the defense in its answer that the complaint fails to state a claim upon which relief can be granted. R.C.P. 12(b) and (e). [Footnote 2] This challenge,
As the suit was against a state official as such, through proceedings which were authorized by statute, to compel him to carry out with the state's funds the state's agreement to reimburse moneys illegally exacted under color of the tax power, this Court held, p. 178 U. S. 439, it was a suit against the state. The state would be required to pay. [Footnote 3] The case therefore is plainly distinguishable from those to recover personally from a tax collector money wrongfully exacted by him under color of state law, Atchison, T. & S.F. R. Co. v. O'Connor, 223 U. S. 280; cf. Matthews v. Rodgers, 284 U. S. 521, 284 U. S. 528; to recover under general law possession of specific property likewise wrongfully obtained or held, Tindal v. Wesley, 167 U. S. 204, 167 U. S. 221; Virginia Coupon
Page 322 U. S. 51
Cases, 114 U. S. 269, 114 U. S. 285; United States v. Lee, 106 U. S. 196; to perform a plain ministerial duty, Board of Liquidation v. McComb, 92 U. S. 531, 92 U. S. 541; Rolston v. Missouri Fund Comm'rs, 120 U. S. 390, 120 U. S. 411, or to enjoin an affirmative act to the injury of plaintiff, Sterling v. Constantin, 287 U. S. 378, 287 U. S. 393; Tomlinson v. Branch, 15 Wall. 460; Davis v. Gray, 16 Wall. 203, 83 U. S. 220; In re Tyler, 149 U. S. 164, 149 U. S. 190. Only in Smith v. Reeves was the action authorized by statute against the officer in his official capacity. In the other instances, relief was sought under general law from wrongful acts of officials. In such cases, the immunity of the sovereign does not extend to wrongful individual action, and the citizen is allowed a remedy against the wrongdoer personally.
Oklahoma provides for recovery of unlawful exactions paid to its collectors under protest. § 12665 Oklahoma Statutes 1931. Note 1 supra. In our view of this case, it
By § 12665, Oklahoma creates a judicial procedure for the prompt recovery by the citizen of money wrongfully collected as taxes. It is the sovereign's method of tax administration. Oklahoma designates the official to be sued, orders him to hold the tax, empowers its courts to
The principle of immunity from litigation assures the states and the nation from unanticipated intervention in the processes of government, while its rigors are mitigated by a sense of justice which has continually expanded by consent the suability of the sovereign. The history of
sovereign immunity and the practical necessity of unfettered freedom for government from crippling interferences require a restriction of suability to the terms of the consent, as to persons, courts, and procedure. Antrim Lumber Co. v. Sneed, 175 Okl. 47, 52 P.2d 1040; Patterson v. City of Checotah, 187 Okl. 587, 103 P.2d 97; Beers v. Arkansas, 20 How. 527; Kawananakoa v. Polyblank, 205 U. S. 349; Minnesota v. United States, 305 U. S. 382, 305 U. S. 388; United States v. United States Fidelity & Guaranty Co., 309 U. S. 506, 309 U. S. 512. [Footnote 5] The immunity may, of course, be waived. Clark v. Barnard, 108 U. S. 436, 108 U. S. 447. When a state authorizes a suit against itself to do justice to taxpayers who deem themselves injured by any exaction, it is not consonant with our dual system for the Federal courts o be astute to read the consent to embrace Federal as well as state courts. Federal courts, sitting within states, are for many purposes courts of that state, Madisonville Traction Co. v. Mining Co., 196 U. S. 239, 196 U. S. 255, but when we are dealing with the sovereign exemption from judicial interference in the vital field of financial administration a clear declaration of the state's intention to submit its fiscal problems to other courts than those of its own creation must be found. [Footnote 6]
The Oklahoma section in question, 12665, was enacted in 1915 as a part of a general amendment to then existing tax laws. Session Laws 1915, p. 149, Chap. 107, Art. 1, subdivision B. § 7. [Footnote 7] This subdivision of the act of 1915 is
Petitioner urges that Smyth v. Ames, 169 U. S. 466, 169 U. S. 517, and Reagan v. Farmers' Loan & Trust Co., 154 U. S. 362, 154 U. S. 391-392, are precedents which lead to a contrary conclusion on this issue of the suability of Oklahoma in the District Court of the United States. The former is clearly inapposite. That case involved proceedings to enjoin enforcement of an allegedly unconstitutional state statute providing for intrastate railroad rates. Since the state act provided a remedy, the state took the position
This Court construed this to consent to an appearance in the Federal court and held its decision res judicata against the state, and added at p. 200 U. S. 287:
To avoid the imposition of penalties and other serious hazards, the plaintiff paid money under claim of a tax which Oklahoma, we must assume, had no power to exact. Concededly, he could sue to recover the moneys so paid to the defendant, a tax collector, in a state court in Oklahoma. But to allow the suit to be brought in a federal court sitting in Oklahoma would derogate, this Court now holds, from the sovereignty of Oklahoma. Such a result, I believe, derives from an excessive regard for formalism
To repeat, this is a simple suit to get back money from a collector who, for present purposes, had no right to demand it. So far as the federal fiscal system is concerned, this common law remedy has been enforced throughout our history, barring only a brief interruption. [Footnote 2/1] See United States v. Nunnally Investment Co., 316 U. S. 258. And if, instead of avoiding the serious consequences of not paying this state tax, the plaintiff had resisted payment and sought an injunction against the tax collector for seeking to enforce the unconstitutional tax, under appropriate circumstances, the federal courts would not have been without jurisdiction. See, e.g., Western Union Telegraph Co. v. Trapp, 186 F. 114; Ward v. Love County, 253 U. S. 17; Carpenter v. Shaw, 280 U. S. 363. Finally, as I read the opinion of the Court, even a suit of this very nature for the recovery of money paid for a disputed tax will lie against the collector in what is called his individual capacity -- that is, a suit against the same person on the same cause of action for the same remedy can be brought if only differently entitled. In view of the history of such a suit as this and of the incongruous consequences of disallowing
Assuming that the proceeding in this case to recover from the individual moneys demanded by him in defiance of the Constitution is a suit against the State, compare Ex parte Young, 209 U. S. 123, 209 U. S. 155; Atchison, T. & S.F.
Legislation giving consent to sue is not to be treated in the spirit in which seventeenth century criminal pleading was construed. Only by such overstrained rendering of the Oklahoma Statute does the court finally achieve exclusion of the right of the plaintiff to go to a federal court. To the language of that Statute I now turn. By § 12665, Oklahoma Statutes 1931, the State authorized an action to recover moneys illegally exacted as a tax, in a situation like the present, where the exaction is one "from which the laws provide no appeal." The relevant jurisdictional
Ex parte Schollenberger, 96 U. S. 369, 96 U. S. 377. This conception of a federal court as a court within the State of its location has ever since dominated our decisions. See, e.g., Madisonville Traction Company v. Mining Company, 196 U. S. 239, 196 U. S. 255-256; Neirbo Co. v. Bethlehem Corp., 308 U. S. 165, 308 U. S. 171. It is a conception which has been acted upon by state legislatures. For jurisdictional purposes, federal courts have been assimilated to the courts of the States in which they may sit. When we are dealing with jurisdictional matters, legislation should be interpreted in the light of such professional history. Even if an ambiguity could be squeezed out of a grant of jurisdiction which applies so aptly to a federal court in Oklahoma as to an Oklahoma state court -- "suits shall be brought in the court having jurisdiction thereof" -- neither logic nor history nor reason counsels an interpretation that attributes to the State hostility against a suit in a federal court on an exclusively federal right as to which the last say, in any event, belongs to a federal court. [Footnote 2/3]
In the past, even when the jurisdictional grant has been couched in language giving substantial ground for the argument of restriction of jurisdiction to the state court, this Court has not found denial by a the right to go to a federal court within that State when it in fact opened the door of its own courts. Thus, in Madisonville Traction Company v. Mining Company, supra, a Kentucky statute required, among other things, appointment of commissioners in a condemnation proceeding by the county court, examination of the report at its first regular term, issuance of orders in conformity with the Kentucky Civil Code of Practice, and allowance of appeals from the county courts. And yet this Court held, as a matter of construction, that it was "not to be implied from the statute in question that the state intended to exclude . . . the Federal courts." 196 U.S. at 196 U. S. 256. The section now under consideration is only one of several statutory provisions for challenging like tax assessments in courts. In all the other provisions, the jurisdiction is explicitly given only to state courts. See, e.g., §§ 12651, 12660, 12661. If, in § 12665, Oklahoma has seen fit to allow suits to be brought "in the court having jurisdiction thereof," which, as a matter of federal jurisdictional law, certainly includes the federal court in Oklahoma, and has not seen fit to designate the state courts for such jurisdiction, why should this Court interpolate a restriction which the Oklahoma Legislature has omitted? The fact that the Legislature has also provided that such suits "shall have precedence" is no more embarrassment to federal jurisdiction than to state jurisdiction. That is merely an admonition to courts of the importance of disposing of litigation affecting revenue with all convenient dispatch. Nor is there any other provision of the Statute giving this right of action that remotely requires a procedure to be followed or relief to be given peculiar to state courts or different from established procedure and relief in the federal
194 U.S. at 194 U. S. 591-592. The marked difference between the Michigan Statute and this Oklahoma Statute is further evidenced by the fact that § 12665 gives an action to recover not merely illegal state taxes, but also taxes of the "county or subdivision of the county" that have been illegally collected. But counties or their subdivisions do not enjoy immunity from suit. Lincoln County v. Luning, 133 U. S. 529; Port of Seattle v. Oregon & W. R. Co., 255 U. S. 56, 255 U. S. 71. If the other jurisdictional requirements are present, they can be sued in a federal court without the leave of Oklahoma. It is not, I submit, a rational way to construe the Oklahoma Statute, dealing with a particular type of illegal exaction raising the same kind of issue and involving the same procedure,
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