Case Name: MANUFACTURERS NATIONAL BANK OF DETROIT v. CITY OF DETROIT
Court: Michigan Supreme Court
Jurisdiction: Michigan
Decision Date: 1938-06-30
Citations: 285 Mich. 273
Docket Number: Docket No. 34, Calendar No. 39,930
Parties: MANUFACTURERS NATIONAL BANK OF DETROIT v. CITY OF DETROIT.
Judges: Wiest, C. J., and Butzel, Bushnell, Chandler, and McAllister, JJ., concurred with North, J.
Reporter: Michigan Reports
Volume: 285
Pages: 273–290

Head Matter:
MANUFACTURERS NATIONAL BANK OF DETROIT v. CITY OF DETROIT.
1. Taxation — National Banks — Capital Stock — Cashier’s Duties.
A national bank, located -within this State, is legally bound to pay a tax levied upon the shares of its capital stock, since the cashier is charged by law with the payment of the taxes and permitted to charge the amount so paid against the shares of stock so taxed (1 Comp. Laws 1929, § 3437).
2. Same — Illegal Exactions on Banks — Action at Law — Parties.
Action of bank for recovery of illegally exacted taxes which it had paid under protest would be an action at law, not against its stockholders, but against the political subdivision to which the tax had been paid.
3. Same — Capital Stock op Bank — Adequacy op Remedy at Law por Illegal Assessment — Injunction.
A bank which has paid an illegal assessment for taxes on its capital stock does have a complete and adequate remedy at law, hence is not entitled to injunction to restrain the collection of taxes for the payment of which it was liable under the statute either because remedy at law was inadequate or to avoid a multiplicity of suits (1 Comp. Laws 1929, §§ 3437, 3507).
4. Same — Injunction—Irreparable Injury.
Since it is a matter of great importance in the administration of public affairs, the levy or collection of taxes should not be restrained by injunction, at least other than in exceptional cases where denial of injunctive reljef. would result in irreparable injury (1 Comp. Laws 1929, §3507).
5. Same — Payment Under Protest — Injunction—Adequacy op Remedy at Law.
Record in suit by bank to restrain collection of taxes on its capital stoek held, without an indication that plaintiff would suffer any unusual hardship in paying tax under protest and-thereafter proceeded in an action at law to recover amount paid if protest made were meritorious, hence, decree dismissing bill because remedy at law was adequate was proper (3 Comp. Laws 1929, §§3437, 3444 as amended, 3507).
Sharpe and Potter, JJ., dissenting.
Appeal from Wayne; Nicol (Henry G-.), J.
Submitted April 20, 1938.
(Docket No. 34, Calendar No. 39,930.)
Decided June 30, 1938.
Bill by Manufacturers National Bank of Detroit against City of Detroit, a municipal corporation, its treasurer, County of Wayne, a municipal corporation, its treasurer, and Auditor General of State of Michigan for declaration of rights, interpretation of a statute, to allow exemption from taxation of certain investments, to set taxable cash value of shares and for other relief. Bill dismissed. Plaintiff appeals.
Affirmed.
Bodman, Longley, Bogle, Middleton & Farley, for plaintiff.
Raymond J. Kelly, Corporation Counsel, and Walter Barlow, Chief Assistant Corporation Counsel, for City of Detroit and its treasurer.

Opinion:
North, J.
The circuit judge dismissed plaintiff's bill in chancery upon the filing of which an injunction was issued to restrain the collection of taxes for the payment of which plaintiff was liable under the statute. Dismissal of the bill of complaint was on the ground that plaintiff had an adequate remedy at law. It may also be fairly inferred that the ruling was prompted by the statute in this State which forbids the issuing of an injunction to stay the collection of taxes. The general tax law of this State provides:
"No injunction shall issue to stay proceedings for the assessment or collection of taxes under this act." 1 Comp. Laws 1929, § 3507 (Stat. Ann. § 7.168).
I am not in accord with the conclusion of Mr. Justice Sharpe that the decree of the circuit judge should he reversed, this being done on the ground that plaintiff did not in fact have an adequate remedy at law. There can be no question but that plaintiff was legally bound to pay a tax levied upon the shares of its capital stock. It is so provided by statute and we have so held in recent decisions.
"In case of taxes assessed upon the shares of the capital stock of any bank he (the tax collector) shall call upon the cashier of such bank and demand payment thereof, and thereupon it shall be the duty of such cashier to pay the same, and charge the amount so paid against the shares of stock so taxed. " 1 Comp. Laws 1929, § 3437 (Stat. Ann. § 7.90).
In National Bank of Detroit v. City of Detroit, 272 Mich. 610, 617, under the above statute, this court held:
' ' The bank becomes liable for the payment of the taxes, with the right to obtain repayment from its stockholders. Eyke v. Lange, 104 Mich. 26. If it wrongfully paid taxes illegally exacted under protest, the action for recovery would not be against its stockholders but against the political subdivision to which the tax had been paid. ' '
Further, in National Bank of Detroit v. City of Detroit, supra, we definitely held that in an action at law brought by the bank itself for the recovery of taxes assessed on shares of its capital stock the bank could recover from the city the amount paid if the taxes were illegally assessed and paid by the bank under protest. In support of this holding we cited Security National Bank of Watertown v. Young (C. C. A.), 55 Fed. (2d) 616 (84 A. L. R. 100); McFarland v. Central National Bank of Topeka, Kan. (C. C. A.), 26 Fed. (2d) 890. It follows that in this jurisdiction the bank does have a complete and adequate remedy at law and the holding of the trial court to this effect should be affirmed.
In arriving at an opposite conclusion my Brother has cited the cases hereinafter noted, but it seems to me an examination of these cases discloses that they are clearly distinguishable and not in point in view of the law of this jurisdiction.
Cummings v. National Bank, 101 U. S. 153, 157, is perhaps the principal case relied upon; but in this case it is important to note that the Supreme Court of the United States pointed out the express provision of the law of the State from which the case came by saying:
"The statute also answers another objection made to the relief sought in this suit, namely, that equity will not enjoin the collection of a tax except under some of the well-known heads of equity jurisdiction, among which is not a mere overvaluation, or the illegality of the tax, or in any case where there is an adequate remedy at law. The statute of Ohio expressly provides for an injunction against the collection of a tax illegally assessed, as well as for an action to recover back such tax when paid, showing clearly an intention to authorise both remedies (legal and equitable) in such cases." '
Decision in Public National Bank of New York v. Keating (C. C. A.), 47 Fed. (2d) 561 (81 A. L. R. 497), and Whitney National Bank v. Parker, 41 Fed. 402, cited by my Brother, seems to be based largely on the Cummings Case just above noted and distinguished; and in the first of the two cases last above cited it is said of the jurisdiction in which the case arose, "There is no adequate remedy in the State courts at law. By this suit in equity, a multiplicity of suits will be avoided." Also in the Whit ney National Bank Case, supra, the same reason for equity taking jurisdiction to avoid a multiplicity of suits is urged. Obviously under the law of Michigan a suit in equity is not necessary to avoid a multiplicity of suits because the whole matter can be adjudicated in a single suit at law brought by the bank.
The remaining case cited by my Brother is Knopf v. First National Bank of Chicago, 173 Ill. 331 (50 N. E. 660). In this case the Illinois court recognized the right of equity to enjoin the collection of taxes in that State where the levy of such taxes was without authority and therefore in violation of the rights of every taxpayer in the tax district. Obviously under such circumstances the controverted question could not be adjudicated in a single suit at law, as in the instant case. Because of the situation with which it was confronted, the Illinois court said:
"In conformity with this principle this court has constantly recognized the right of an individual or individuals to restrain an entire tax that is without authority and void. ' '
Since it is a matter of great importance in the administration of public affairs (City of Birmingham v. Oakland County Supervisors, 276 Mich. 1), the levy or collection of taxes should not be restrained by injunction, at least other than in exceptional cases where denial of injunctive relief would result in irreparable injury. .
"When a tax as assessed is only a personal charge against the party taxed, or against his personal property, it is difficult in most cases to suggest any ground of equitable jurisdiction. Presumptively the remedy at law is adequate. If the tax is illegal and the party makes payment, hé is entitled to recover back the amount. The case does not differ in this regard from any other case in which a party is compelled to pay an illegal demand; the illegality alone affords no ground for equitable interference, and the proceedings to enforce the tax by distress and sale can give none, as these only constitute an ordinary trespass. To this point the decisions are numerous (citing many decisions including those of this court). The exceptions to this rule, if any, must be of cases which are to be classed under the head of irreparable injury; where the recovery of damages would be inadequate redress. A case would be exceptional, also, if under the law no remedy could be had to recover back moneys paid." 4 Cooley Taxation (4th Ed.), § 1641.
See, also, City of Detroit v. Wayne Circuit Judge, 127 Mich. 604; Henry v. Gregory, 29 Mich. 68. Especially should the law as above stated be followed in this jurisdiction wherein by statute it is provided that an injunction shall not issue to stay proceedings for the assessment or collection of taxes. 1 Comp. Laws 1929, § 3507 (Stat. Ann. § 7.168). Nothing appears in this record indicating that plaintiff would have suffered any unusual hardship if, as it had a right to do, it had paid the tax under protest and thereafter proceeded in an action at law to recover the amount paid if the protest made were meritorious. Aside from appellant's erroneous contention that it did not have an adequate remedy at law, there is nothing in this record to sustain the claim that equity has jurisdiction. The circuit judge was right in concluding that plaintiff had an adequate remedy at law and in entering a decree dismissing its bill of complaint. The decree is affirmed, with costs to appellees.
Wiest, C. J., and Butzel, Bushnell, Chandler, and McAllister, JJ., concurred with North, J.
See 1 Comp. Laws 1929, § 3444, as amended by Act No. 32, Pub. Acts 1931.—Reporter.