Case Name: B. F. Hudson and another v. Commissioners of Atchison Co. and others
Court: Kansas Supreme Court
Jurisdiction: Kansas
Decision Date: 1873-07
Citations: 12 Kan. 140
Docket Number: 
Parties: B. F. Hudson and another v. Commissioners of Atchison Co. and others.
Judges: (All the justices concurring.)
Reporter: Kansas Reports
Volume: 12
Pages: 115–122

Head Matter:
B. F. Hudson and another v. Commissioners of Atchison Co. and others.
July term, 1873.
1. Parties: Joinder of Plaintiffs: Injunction: Taxes. Where a tax— such as an ordinary state, county, school, or other tax — considered in the abstract, is legal and valid, but when applied to the separate property of two or more particular persons, becomes as to such property illegal and invalid, sucli persons have no joint action for an injunction to restrain the collection of said tax. Each lias his separate action for such injunction. [State v. McLaughlin, 15 Kan. 252; Center Tp. v. Hunt, 16 Kan. 439.]
2. -: The statute authorizes a joint action only where the property of different plaintiffs is affected by tiie same illegal tax, and not where their separate property is affected by the illegal application of an otherwise-legal tax.
Error from Atchison district court.
B. E. Hudson and David Johnson, members of “The Perpetual Building and Savings Association of Atchison,” brought their action in the court below, against the board of county commissioners, and David Baker, as county treasurer of Atchison county, to restrain the collection of a tax assessed by said commissioners against said plaintiffs respectively, on certain shares of stock in said corporation held and owned by said plaintiffs severally, and money paid in thereon. The case was tried at the November term, 1872, of the district court, before J. G. 0., judge pro tern., on an agreed statement of facts, substantially as follows: That the Perpetual Building and Savings Association of Atchison, Kansas, was duly incorporated in April, 1871, under the laws of Kansas, with a nominal capital stock of one million dollars, but the real capital stock of said corporation consists of a monthly contribution on each share of two dollars, which is immediately loaned to members and secured by notes and mortgages, so the only real capital stock of said corporation consists of its notes and mortgages, which, by section 2, p. 93, Laws 1870, it is not required to list for taxation; that plaintiffs are stockholders in said corporation, and that said corporation fully complied with the law in listing for taxation for the year 1872 the *entire amount of dues, fines and interest paid at the March meeting 1872; that said plaintiffs, nor either of them, were notified by the clerk of Atchison county that the board of county commissioners qf said county had raised or was about to raise their assessment; neither had they, nor either of them, any opportunity of showing that their assessment or return of personal property to the assessor for 1872 was correct. The court refused to decree an injunction.
A. F. Martin, for plaintiffs in error.
The action is properly brought. There is no misjoinder of parties plaintiff. Code, §§ 35, 253.
The court erred in refusing to grant the injunction as prayed for. The law of 1870, p. 93, § 2, having been fully complied with by the Building and Savings Association, the court erred in holding that the shares of stock owned by plaintiffs respectively, or the moneys paid into said corporation on said shares of stock, were subject to taxation for the year 1872. Gen. St. e. 107, § 12. The capital stock of the corporation may, in the discretion of the legislature, be taxed as an aggregate to the corporation, or to the stockholders on account of their separate ownership of it, but cannot be taxed at the same time in both modes. Ang. & A. Corp. §§ 459, 460, 461; Abb. Dig.. Corp. 834, § 13; State v. Hogg, 5 Ind. 516; Indiana Cent. Ry. Co. v. Bradley, 7 Ind. 55; Gordon v. Mayor, etc., 5 Gill. 231; M’Gulloch v. State, 4 Wheat. 316; Marby’s Ex’rs v. Bullock, 7 Dana, 343. Sucha tax would be double taxation, once to the corporation, and again to the stockholders — which would be unjust, oppressive and unconstitutional, and the collection of the same should be restrained. Ang. & A. Corp. § 460; Smith v. Burley, 9 N. H. 423; Union Bank v. State, 9 Yerg. 490; State v. Berry, 17 N. J. Law, 80; Olmstead v. Henry Co., 24 Iowa, 33; State v. Hannibal & St. J. Rl Co., 37 Mo. 266.
Plaintiffs in error were entitled to notice from the county clerk before the making of the entry on the duplicate, of the action of the commissioners in raising their assessment, in order that they might have had an opportunity of showing that their statement or return made to the assessor was eor*reet, and the action of the said board without such notice was illegal and void. Gen. St. c. 107, § 65; Kansas Pac. Ry. Co. v. Russell, 8 Kan. *558.
S. TI. Glenn and Everest S Greenaivalt, for defendants.
It was not necessary that the board of equalization should have personally notified the plaintiffs to be present or in attendance before them at such examination, but only that the county clerk, after such examination, was required to notify them before making entry on the duplicate. Gen. St. p. 1042, last part § 65. There is nothing in the agreed statement of facts that shows that the clerk omitted to perform such duty, but only “that the plaintiffs were not personally notified that the said board had raised, or was about to raise, their assessment, nor were either of said plaintiffs before said board at said time.” But the agreed statement shows that the officers of said corporation, of which the plaintiffs were stockholders and members, were present before said board with the pay-rolls and records thereof, and that all the parties interested were heard by the board by themselves and their attorney. Can it be said under this state of facts that the plaintiffs were ignorant of such proceedings, and had no notice thereof, and that the action of said board was void t The law will certainly presume that the county clerk, thereafter, notified such persons before. making any entry on the duplicate, for it cannot be presumed that he has neglected to perform his official duty. The law provides no particular form or requisites of the notice that the clerk is required to give before making entry on the duplicate. It does not even require a written notice. Any reasonable notice of the proceedings of the board would be sufficient.
But it can make no difference under the questions submitted to the court below whether the plaintiffs had notice -of the action of the board or not, as that question is not in this ease. The questions submitted were three: whether or not the shares of stock owned by the plaintiffs respectively, or the moneys paid into said corporation on said shares of *stoek, are subject to taxation; whether or not, under the agreed statement of facts, the said plaintiffs were entitled to an injunction; and whether (if so entitled) they could maintain a joint action. Were the moneys of the plaintiffs paid into-said corporation, and which were not liable to taxation in any other manner, subject to taxation as their individual property? Is there anything in this unjust or inequitable? The plaintiffs claim that by the laws of 1870, e. 43, § 2, that such moneys, notes, etc., were exempt from taxation. We contend that said section does not and was not intended to exempt the moneys, notes, etc., of the plaintiffs from taxation; but if said section makes any such exemption, it is certainly unconstitutional. The title of the act itself, as required by the constitution, must clearly express the “subject of the bill.” Const, art. 2, § 16. Under this title of the bill, the legislature could have-no authority to include therein any other subject. State v. Kinsella, 14 Minn. 624, (Gil. 395;) People v. McConviil, 35 N. Y. 449; People-v. O’Brien, 38 N. Y. 193; People v. Mahaney, 13 Mich. 494; Indiana Cent. By. Co. v. Potts, 7 Ind. 683; People v. Starne, 35 111. 121; State v. Miller, 45 Mo. 495; Weaver v. Lapsley, 43 Ala. 224; Prothro v. Kendall, 12 Ga. 36; State v. Squires, 26 Iowa, 340; Dwar. St. 103. If section 2, c. 43, Laws 1870, was intended to exempt property from taxation, it contravenes the provisions of article 11 of the state constitution.
The agreed statement of facts does not show that the plaintiffs are entitled to the relief demanded, or that the defendants are doing, threatening, or about to do, any act in violation of the plaintiffs’ rights respecting the subject of the action, or which would tend to render a judgment ineffectual. It does not show that the plaintiffs’ property was ever entered upon the duplicate for taxation. It does not show what steps defendant Baker has taken, or by what authority he is about to take and sell plaintiffs’ property to pay said taxes, or that he has ever had in his official custody any tax-roll upon which plaintiffs’ property or the plaintiffs’ names were entered for taxation, or that he has ever issued any warrant to collect said taxes of the goods and chattels of the plaintiffs. Gen. St. c. 107, §§ 65, 76, 123.
Where S. executed to A. two promissory notes, and a mortgage on real estate to secure the payment of the notes, and A. afterwards assigned one of the notes to M., held, that A. and M. cannot sue jointly as plaintiffs on the note and mortgage. Swenson v. Plow Co., 14 Kan. 387. Where two or more persons have separate causes of action against the same defendant, arising from the obstruction of a natural water-course, they cannot join in the same petition to recover damages for injuries to their land and crops, which are plainly distinct and unconnected. Palmer v. Waddell, 22 Kan. 352. Same principles applied. Dobbs v. Stauffer, 24 Kan. 128. Under section 35 of the Code, in order that parties may properly unite as plaintiffs, they should each have not only an interest in the subject of the action, but also in obtaining the relief demanded. Jeffers v. Forbes, 28 Kan. 174. See, also, McGrath v. Newton, 29 Kan. 364.

Opinion:
*Valentine, J.
This was an action brought by B. F. Hudson and David Johnson to restrain the collection of certain taxes levied against each of them, respectively, as stockholders in "The Perpetual Building and Savings Association of Atchison." The first question arising in the case is whether the plaintiffs below, who are also plaintiffs in error, had any right to prosecute an action jointly for any such purpose. If this question should be determined in the negative, it would not be necessary to determine any of the other questions that-have been presented to us, as, if we should affirm the judgment, then the present action will be finally disposed of. The judgment of the court below was that the plaintiffs' action should be dismissed at the plaintiffs' costs — and this was just the judgment that should have, been rendered if the plaintiffs had no right to sue jointly. In the court below the case was tried by the court, without a jury, upon an agreed statement of facts; and upon these facts and the pleadings, the court was asked in the following words to decide the following questions, to-wit:
"It is agreed that the questions to be submitted to the court for determination, are — (1) Whether or not the shares of stock owned by plaintiffs, respectively, or the moneys paid into said corporation on said shares of stock, are subject to taxation after the said corporation has listed for taxation all the dues, fines and interest paid into said association at the March meeting thereof, as provided for by section 2, c. 43, p. 93, Laws 1870 9 (2) Whether or not, under this agreed statement of facts, the said plaintiffs are entitled to an injunction ? (3) Whether or not, the said plaintiffs are entitled to sue jointly in the premises ?"
This court is now asked to decide these same questions. The first two include several other questions. Is the stock, or the property, owned by said corporation, or both, taxable? Would it be valid to tax both the stock and the property of the corporation, or would the .same be double taxation, unconstitutional and void? Const. art. 11, § 1; Ang. & A. *Corp. § 459, 460, 461; Abb. Dig. Corp. 834, § 12, 13. But see State v. Branin, 23 N. J. Law, 484. If only one is taxable, is it not the property, and not the stock ? Section 29 of the tax laws, as amended; Laws 1869, p. 244, § 1; Laws 1869, p. 239, § 1. If both are taxable, are they both taxed to the corporation, or to the stockholders, or one to each; and if one to each, w'hieh one to the stockholders, and which to the corporation? If the stock is taxable, is it taxable to the stockholders, (Gen. St. 1024, § 12,) or to the corporation? Said sections 12 and 29, and Laws 1870, p. 93, § 2, and Laws 1869, p. 239, § 1. Who lists the property for taxation, and from whom is the tax collected ? Laws 1869, p. 239, § 1. The foregoing sections would seem to indicate that if the stock of a corporation is taxable at all, it is taxable to the corporation, and not to the individual stockholders; and the property of the corporation is unquestionably taxed to the corporation. Can it make any difference, so far as this case is concerned, whether said section 2 (Laws 1870, p. 93) is valid, or not? Does the act which contains this section contain but one subject, and is that subject clearly expressed in the title? Const, art. 2, § 16. Does said section exempt certain property, from taxation ? and if so, is such exemption constitutional and valid? Const, art. 11, § 1. And is the-property to be assessed under that section assessed at an equal and uniform rate with other property? Const, art. 11, § 1; Gen. St. c. 107, § 15; § 12 and 29, supra. The statutes seem to require that other property should be assessed at its true value on the first of March. Adams v. Beman, 10 Kan. *37; Gen. St. c. 107, § 11. But it can hardly make any difference so far as this case is concerned whether said section 2 is constitutional or not, for it, as well as the other statutes, provides for taxing the corporation, and not the stockholders. When the county commissioners assess property under section 65 of the tax law, (Gen. St. 1041; Lappin v. Nemaha Co., 6 Kan. *403,) is the notice there required a notice of a jurisdictional character, which must necessarily be given, or would it be only an irregularity for the county commissioners to assess the property without the clerk giving said notice ? And if the notice is not given, is the tax void, or only voidable ? Commissioners Leavenworth. Co. v. Lang, 8 Kan. *284; Kansas Pac. Ry. Co. v. Russell, 8 Kan. *558. Will the assessment by the commissioners without notice be held absolutely void, where no assessment had previously been made; or will it be held void only where an assessment had previously been made, and the assessment of the commissioners conflicts with such previous assessment, as in the cases last cited? Is notice to the corporation a sufficient notice to the individual stockholders, so as to assess them ? If the tax is void, should the owner of the property taxed pay or offer to pay all the tax that might legally be levied on the property, and all that in equity he ought to pay, before an injunction will be allowed to restrain the collection of the tax, or is this •equitable requisition confined to cases only where the tax is merely voidable? And can he in all cases where the tax is void have an injunction? Cases last above cited, and Gulf R. Co. v. Morris, 7 Kan. *210, *229; Smith v. Leavenworth Co., 9 Kan. *296, *300; Gulf R. Co. v. Blake, 9 Kan. *489; City of Lawrence v. Killam, 11 Kan. *499. We shall not answer the foregoing questions, but will pass to the third question propounded by the parties, (properly the first question for •decision in the case,) and in determining that question we shall also in effect determine the second question propounded by the parties, to-wit, are the plaintiffs entitled to an injunction in this ease ?
Are the plaintiffs entitled to sue jointly in this action ? We think not. Their actions, if they have any, are several, and not joint. It is the several stock of each, and not the joint stock of both, that has been taxed in this case. The plaintiffs have no joint interest, or interest in common, in the matter. It can make no difference to Hudson how much Johnson is taxed on his ten shares of stock, nor to Johnson how much Hudson is taxed on his three shares of stock. Their interests are entirely separate and distinct. It is true, the questions involved in the two cases are precisely alike; but the similarity of the questions involved in two or more cases, whether of law or fact, or both, never was a sufficient foundation for a joint suit by two or more plaintiffs. The joint or common interest of the plaintiffs, necessary to enable them to sue jointly, must be in the subject-matter of the action, and not merely in the legal questions involved in their separate causes of action. We suppose it will be admitted that, except for the statute, (Code, § 253,) the plaintiffs could not maintain this action, nor any joint action, to restrain the collection of taxes severally assessed against them. New-comb v. Horton, 18 Wis. 566; Barnes v. Beloit, 19 Wis. 93. But it is claimed that section 253 of the Civil Code authorizes such an action. Said section reads as follows:
"Sec. 253. An injunction may be granted to enjoin the illegal levy of any tax, charge, or assessment, or the collection of any illegal tax, charge, or assessment, or any proceeding to enforce the same ; .and any number of persons whose property is affected by a tax or assessment so levied may unite in the petition filed to obtain such injunction."
This is the only section of the statute that is supposed to give to the plaintiff any right to sue jointly, in an action like this. .This section gives to every man a right to enjoin any illegal tax that mayjie assessed against him, whether the tax affects his property only, or his and others. And it gives to all persons whose property is affected by the same illegal tax the right to unite in the action to enjoin such tax. But it does not give the right to two persons to unite in an action to enjoin two illegal taxes severally assessed against each of them. Where a tax is illegal in the abstract, illegal in and of itself, illegal as applied to every owner of taxable property in the county or district, then every person who has property affected by such illegal tax, or so many of them as may choose, may unite in an action to restrain the collection of such tax. Thus, where a tax is levied to pay interest on illegal bonds, (Bridge Co. v. Wyandotte, 10 Kan. *326,) or to pay illegal street assessments, (Gilmore v. Norton, 10 Kan. *491; Gilmore v. Fox, 10 Kan. *509,) all persons whose prop*erty may be affected by such tax, or so many of them as choose, may unite in an action to enjoin the same; for the tax as a tax is illegal. But when the tax, as a tax, is valid, as for instance, an ordinary county tax, or state tax, or school tax, but becomes illegal only as applied to particular persons or property, or to particular eases, then each person severally interested must sue .alone. Thus, a legal tax charged upon property in the wrong county, (Griffith v. Carter, 8 Kan. *625,) or upon property illegally assessed, (Leavenworth Co. v. Lang, 8 Kan. *284; Kansas Pac. Ry. Co. v. Rus-sell, 8 Kan. *558,) or upon property not subject to taxation, (Kansas Indians, 5 Wall. 737, overruling the cases of Blue-Jacket v. Johnson Co. Com'rs, 3 Kan. *299, Miami Co. Com'rs v. Wan-zop-pe-che, Id. 364; Kansas Pac. Ry. Co. v. Prescott, 16 Wall. 603, overruling supreme court of Kansas; Kansas Pac. Ry. Co. v. Culp, 9 Kan. *38; Parker v. Winsor, 5 Kan. *362; Douglas Co. v. Union Pac. Ry. Co. .5 Kan. *615,) or upon property exempt from taxation, (Washburn College v. Shawnee Co., 8 Kan. *344; Vail v. Beach, 10 Kan. *214; St. Mary's College v. Crowl, 10 Kan. *442,) becomes illegal in these particular cases. But still, the owner of the property taxed in the wrong county, the owner of the property illegally assessed, the owner of the property not subject to taxation, and the owner of the property exempt from taxation, could not all unite in the same action to enjoin said tax. This tax, as applied to these four persons, might be a county tax in and for the same county, and therefore in one sense the same tax; but it could not in any sense be called the same illegal tax. It would in fact, as applied to the property of these four different persons, be four different illegal taxes. It is admitted that, all the taxes charged against the plaintiffs in the case at bar are legal and valid, as taxes, but only become illegal and invalid as applied to certain particular property of the plaintiffs, and as applied in the manner it was done. The taxes charged against these two plaintiffs are the regular and ordinary state, county, school, and other taxes; but it is claimed that these are illegal in this particular case because stock, as stock, in this class of corporations, is not taxable at all, because if the stock is taxable at all, it is * taxable to the corporation, and not to the stockholders; and because the stock in the present case was never legally assessed. In. whatever aspect we may view this case, the plaintiffs have no joint, action. If we view the taxes in the abstract, as general taxes, state, county,school, etc., then they are legal and valid; but if we view them as taxes upon separate interests, then they become separate taxes, and the plaintiffs have no joint interest therein, and no right to sue-jointly under the statute. The statute authorizes a joint suit only when the property of the different plaintiffs is affected by the same illegal tax, and not when their separate property, is affected by different illegal taxes.
The judgment of the court below must be affirmed.
(All the justices concurring.)