Source: https://supreme.justia.com/cases/federal/us/284/521/case.html
Timestamp: 2016-08-30 09:21:18
Document Index: 542098891

Matched Legal Cases: ['§ 238', '§ 24', '§ 41', '§ 237', '§ 304', '§ 420', '§ 11', '§ 24', '§ 251']

Matthews v. Rodgers :: 284 U.S. 521 (1932) :: Justia U.S. Supreme Court Center Log In
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Matthews v. Rodgers 284 U.S. 521 (1932)
U.S. Supreme CourtMatthews v. Rodgers, 284 U.S. 521 (1932)Matthews v. RodgersNo. 84Argued December 1, 2, 1931Reargued January 11, 1932Decided February 15, 1932284 U.S. 521APPEAL FROM THE DISTRICT COURT OF THE UNITED STATES
5. Such legal remedy, although against the collecting officer, rather than the state or municipality, is to be deemed adequate, where the bill does not allege special circumstances showing inability of the plaintiff to pay the tax, or of the collecting officer to respond to judgment. P. 284 U. S. 528. Page 284 U. S. 522
This is an appeal, §§ 238, 266 of the Judicial Code, from a decree of a District Court of three judges, for the Northern District of Mississippi, enjoining the collection from the several appellees of a state tax, as an unconstitutional burden on interstate commerce. After argument here on Page 284 U. S. 523 the merits, the cause was restored to the docket
The bill, which is in the form of a class bill, filed by the numerous appellees for the benefit of themselves and others similarly situated, alleges that they are engaged in interstate and foreign commerce, in the course of which they purchase cotton within the state and sell and ship it in interstate or foreign commerce to purchasers outside the state; that the business of each of the several appellees and the right to conduct it is of a value of more than $3,000, the jurisdictional amount for suits brought in a District Court of the United States; that the tax imposed by the state statute is, as to them, an unconstitutional burden on interstate commerce, and that appellants, state officers, charged with the duty of collecting the tax, threaten to enforce its collection by criminal proceedings and the imposition of penalties. The bill states that resort to equity to prevent collection of the tax is either Page 284 U. S. 524 necessary or authorized for the following, among other, reasons:
The right of appellees, if any, to maintain the present suit, is conferred by § 24(1) of the Judicial Code, 28 U.S.C. § 41(1), which, regardless of the citizenship of the parties to the suit, vests in district courts of the United States jurisdiction over suits at law or in equity "arising under the Constitution or laws of the United States" where the matter in controversy exceeds $3,000. Although the present suit arises under the Constitution of the United States, see Davis v. Wallace, 257 U. S. 478, and it be assumed, without deciding, that the jurisdictional amount is involved, it cannot be maintained if not within the equity jurisdiction of the district court. The want of equity jurisdiction, if obvious, may and should be objected to by the court of its own motion. In other cases, this jurisdictional requirement, unlike the others mentioned, Page 284 U. S. 525 may be treated as waived if the objection is not presented by the defendant in limine. Duignan v. United States, 274 U. S. 195, 274 U. S. 199; Singer Sewing Machine Co. v. Benedict, 229 U. S. 481, 229 U. S. 484; Thompson v. Railroad Companies, 6 Wall. 134; compare Matson Navigation Co. v. United States, ante, p. 284 U. S. 352; Hilton v. Dickinson, 108 U. S. 165, 108 U. S. 168; Grace v. American Central Ins. Co., 109 U. S. 278, 109 U. S. 283-284; Boers v. Preston, 111 U. S. 252, 111 U. S. 255. Here, the objection to the equity jurisdiction of the district court was properly raised by appellants' motion to dismiss the bill, and is preserved by their assignments of error in this Court.
The reason for this guiding principle is of peculiar force in cases where the suit, like the present one, is brought to enjoin the collection of a state tax in courts of a different, though paramount, sovereignty. The scrupulous regard for the rightful independence of state governments which should at all times actuate the federal courts, and a proper reluctance to interfere by injunction with their fiscal operations, require that such relief should be denied in every case where the asserted federal right may be preserved without it. Whenever the question has been presented, this Court has uniformly held that the mere illegality or Page 284 U. S. 526 unconstitutionality of a state or municipal tax is not, in itself, a ground for equitable relief in the courts of the United States. If the remedy at law is plain, adequate, and complete, the aggrieved party is left to that remedy in the state courts, from which the cause may be brought to this Court for review if any federal question be involved, Jud.Code § 237, or to his suit at law in the federal courts if the essential elements of federal jurisdiction are present. See Boise Artesian Hot & Cold Water Co. v. Boise City, 213 U. S. 276; Shelton v. Platt, 139 U. S. 591; Dows v. Chicago, 11 Wall. 108, 78 U. S. 110-112.
From an examination of the decisions of the highest court of the state, we conclude, as the Attorney General Page 284 U. S. 527 of the state insists, that that procedure is open to the appellees in Mississippi, if the tax is paid under protest, to avoid penalties or criminal proceedings. In Coulson v. Harris, 43 Miss. 728, the Supreme Court of Mississippi denied the jurisdiction of equity to enjoin the collection of an illegally assessed tax on the sole ground that the taxpayer might pay the tax to the collecting officer and sue at law for its recovery. In Tuttle v. Everett, 51 Miss. 27, recovery was allowed of a tax thus paid in a suit at law brought against the collector before he had paid over the tax to the proper treasury. In Vicksburg v. Butler, 56 Miss. 72, and Pearl River County v. Lacey Lumber Co., 124 Miss. 85, 86 So. 755, suits at law for recovery of a tax were maintained against the city, in the first case, and the county, in the second, to which the collector had paid the taxes. But, in the former, the court was at pains to point out at pp. 75-76:
"We do not think that the county can shield itself from repayment of money collected under an unconstitutional law, paid under protest on the ground that the county had disbursed the money so collected into various taxing districts, or has expended the money which it wrongfully collected. The fact that the county might not be able to recover from the taxing districts the amount of money paid to such districts would not exempt it from liability to the taxpayer from whom it wrongfully collected it. "Page 284 U. S. 528
The suit in equity to enjoin an illegal tax, authorized by § 304 of Hemingway's Code for 1927 (§ 420, Mississippi Code of 1930), appears not to be available when there is any other adequate remedy. See Anderson v. Ingersoll, 62 Miss. 73; Noxubee County Board of Supervisors v. Ames, Page 284 U. S. 529 3 So. 37. In any case, the section cannot affect the jurisdiction of federal courts of equity. The equity jurisdiction conferred on inferior courts of the United States by § 11 of the Judiciary Act of 1789, 1 Stat. 78, and continued by § 24 of the Judicial Code is that of the English court of chancery at the time of the separation of the two countries. Payne v. Hook, 7 Wall. 425, 74 U. S. 430; In re Sawyer, 124 U. S. 200, 124 U. S. 209-210. While local statutes may create new rights, for the protection of which recourse may be had to the remedies afforded by federal courts of equity, if the remedy at law is inadequate and the other jurisdictional requirements are present, state legislation cannot enlarge their jurisdiction by the creation of new equitable remedies, nor can it avoid or dispense with the prohibition against the maintenance of any suit in equity in the federal courts, where the legal remedy is adequate. Henrietta Mills v. Rutherford County, supra, pp. 281 U. S. 127-128; Pusey & Jones Co. v. Hanessen, 261 U. S. 491, 261 U. S. 500.
In general, the jurisdiction of equity to avoid multiplicity of suits at law is restricted to cases where there would otherwise be some necessity for the maintenance of Page 284 U. S. 530 numerous suits between the same parties, involving the same issues of law or fact. It does not extend to cases where there are numerous parties plaintiff or defendant, and the issues between them and the adverse party are not necessarily identical. St. Louis, Iron Mountain & Southern Ry. Co. v. McKnight, 244 U. S. 368, 244 U. S. 375; Kelley v. Gill, 245 U. S. 116, 245 U. S. 120; Francis v. Flinn, 118 U. S. 385; Scott v. Donald, 165 U. S. 107, 165 U. S. 115; Hale v. Allinson, 188 U. S. 56, 188 U. S. 77 et seq., and see Pomeroy, Equity Jurisprudence (4th ed.1918), §§ 251, 251 1/2, 255, 259, 268.