Remington v. Cent. Pac. R.R. Co., 198 U.S. 95 (1905)
Case details
Citation
198 U.S. 95
Full caption
REMINGTON v. CENTRAL PACIFIC RAILROAD COMPANY.
Country
United States
Jurisdiction
Federal
Court
Supreme Court of the United States
Decided
Apr. 17, 1905
REMINGTON v. CENTRAL PACIFIC RAILROAD COMPANY.
error to th e circu it cour t of the unit ed sta tes fo r the NORTHERN DISTRICT OF NEW YORK.
No. 460. Submitted March 6,1905.—Decided April 17, 1905. TL*
court as jurisdiction of a writ of error, upon a judgment dismissing
£ro SU] f0^iurlsdiction, when it appears in due form that the nla; -6 ^uch?ment was want of service on defendant and that the If a n tv enied v^liHity of the removal of the case from a state court.
a remove *s filed as soon as it appears in the case that the even 7 th contr°versy is sufficient to warrant removal it is filed in season notwik 7e Tme f°r answer has expired under the New York practice,
an mg failure to serve a complaint as to which quaere. p. 96Following up a motion to stay in the state court the day after notice of the
amount in controversy, and obtaining an order relieving defendant from any technical default, which order took effect the same day that the petition for removal was filed, two days after such notice does not estop defendant from removing the suit. The facts appearing of record, an allegation in a petition for removal that the time has not arrived at which defendant was required to answer or plead is sufficient. Presenting the petition to a judge in chambers satisfies the statute. Although the state court, before removal, has refused, subject to an appeal,
to set aside a summons, the Circuit Court has power to reopen the question and to set the summons aside. Semble, service on a director of a corporation, which is doing no business
and has no property in the State, when he is casually in the State for a few days, is bad.
The facts are stated in the opinion.
Mr. James G. Flanders for plaintiff in error.
Mr. Maxwell Evarts for defendant in error.
Mr . Just ice Holme s delivered the opinion of the court.
This is a writ of error to the Circuit Court upon a judgment dismissing the action for want of jurisdiction of the defendant. That question is certified from the court below.
The action was brought in the Supreme Court of the State of New York on April 10, 1903, by serving a summons on a director of the defendant in error, the railroad. On April 22 the plaintiff’s attorney gave twenty days’ additional time to t e defendant in which to appear generally or specially or to move to vacate the summons. On May 11 a firm of lawyers gave notice of a motion to set aside the service, and also that t ey appeared only for that purpose. An agreement was ma e giving the defendant time to appear after the motion wM decided. The motion was not decided until September > 1903, when it was denied and an order to that effect was en^ tered on October 2. The defendant’s attorneys filed a n° 1 & of appeal on October 15, and the next day gave notice^o^ motion to stay proceedings on the order, to be made on p. 97ber 24. On the same October 16 the plaintiff made an affidavit in which it appeared that the sum which he sought to recover was more than $2,000. This contained the first definite notice to defendant, as no declaration had been filed. An order to take plaintiff’s deposition and this affidavit were served on the defendant on October 23. On October 26 a petition for removal to the United States Circuit Court was presented by the defendant to a judge of the state court in chambers and the bond was approved. Before the petition for removal was filed the motion for a stay came up on October 24 in the state court and was argued, and a stay was ordered, the defendant at the same time being relieved from any default in appearing. The matter of the appeal was not passed upon. This order was entered on October 26. On November 4 the record was filed in the United States Court.
In the Circuit Court the defendant renewed its motion to set aside the service of the summons, the plaintiff objecting on various grounds, which will be dealt with, and moving to remand the case. On July 23, 1904, the court granted the defendant’s motion and overruled the plaintiff’s, and on August 30 a judgment was entered dismissing the action for want of jurisdiction of the defendant. See Wabash Western Ry. v. Brow, 164 U. S. 271. The plaintiff’s rights were saved by a bill of exceptions, the form of the judgment and a certificate of the judge, and the case now is brought here. . It is objected by the defendant that this court has not jurisdiction, on the ground that it does not appear that the want of jurisdiction of the court below as a Federal court was 1 e ground of the judgment. But it appears clearly that the ground of the judgment was the absence of service on the deendant, and that the plaintiff denied the validity of the attempt to remove. See Excelsior Wooden Pipe Co. v. Pacific r 9e Co., 185 U. S. 282, 284, 285, and cases cited. The ormer question was decided to be subject to review on error y this court in Shepard v. Adams, 168 U. S. 618. That case as not been overruled. The latter question was held also
VOL. CXCVIII—7
proper to be brought here, in Powers v. Chesapeake & Ohio Ry., 169 U. S. 92. The jurisdiction of this court must be sustained.
Coming then to the motion to remand it is said that the petition to remove was filed too late, because the time for answer had expired. It would be a strong interpretation of the New York Code of Civil Procedure, § 418, to say that it requires an answer within twenty days after the summons when no complaint or even notice stating the sum of money for which judgment will be taken, § 419, has been served. See Dancel v. Goodyear Shoe Machinery Co., 106 Fed. Rep. 551. But it is a sufficient reply to the motion and to the objection to the removal that the petition was filed as soon as the case became a removable one. Powers v. Chesapeake & Ohio Ry., 169 U. S. 92; Kansas City Suburban Belt Ry. v. Herman, 187 U. S. 63, 67, 68. The suggestion that the defendant was estopped by the fact that it followed up its motion to stay in the state court in accordance with its notice, on October 24, when the right to remove had been made to appear the day before, seems to us too technical, supposing it to be open here. Indeed it was a proper preliminary in one respect. The order made on that motion was “ that the defendant be relieved from any default in appearing herein, and that all proceedings on the part of the plaintiff be stayed, pending said appeal and until ten days after the decision thereof, except” an order for the examination of the plaintiff. It did not estop the defend ant from insisting on a substantial right that it got rid o a purely formal objection which still is pressed—in our opinion without ground. Dancel v. Goodyear Shoe Machinery Co., 10 Fed. Rep. 551. The order did not take effect until October 26. Wilcox v. National Shoe & Leather Bank, 67 App. Div. N. 466; Hastings v. Twenty-third Ward Land Improvement 0-, 46 App. Div. N. Y. 609; Vilas v. Page, 106 N. Y. 439, 455.
It is urged that the petition did not justify removal, becaus the allegation that the time had not arrived at which t e fendant was required to answer or plead was an allegation a conclusion of law. Allegations which involve such cone p. 99sions import that the facts which justify them are true. Many such allegations are permitted to avoid an intolerable prolixity on matters not likely to be controverted. Haskell v. Merrill, 179 Massachusetts, 120, 123; Alton v. First National Bank of Webster, 157 Massachusetts, 341, 343; Commonwealth v. Clancy, 154 Massachusetts, 128, 132; Windram v. French, 151 Massachusetts, 547, 551; Evans, Pleading, 1st ed., 48, 139, 143-146, 149-157, 164. The facts appeared of record. When the defendant expected the plaintiff to demand more than $2,000 is immaterial. The only material point is when the demand was stated in the case. Assuming the objection to be open here, if there was any defect, which we do not imply, it was but a defect of form. Powers v. Chesapeake & Ohio Ry., 169 U. S. 92, 98, 101. The presenting of the petition to a judge in chambers, and the filing of it in the state court, satisfied the statute. See Noble v. Massachusetts Benefit Association, 48 Fed. Rep. 337; Loop v. Winters’ Estate, 115 Fed. Rep. 362.
We come then to the setting aside of the summons. We assume, for purposes of decision, as we already have assumed, t at Shepard v. Adams, 168 U. S. 618, is consistent with the ecisions that the jurisdiction of the Circuit Court as a Federal court only is in question. Louisville Trust Co. v. Knott, 191
• 89. If there has been no valid service the court has no power, and a distinction is possible between such a case and mere question touching the proper limits between equity aw, or the traditional authority of the court. We leave epard v. Adams as we find it, since a reconsideration of the tha^ H]0^ necessarF to decide the present case. It is said was 6 C ecis*on state court, although appealed from, mad st°°d no higher than a similar decision that y + 6 ^rcu^ Court, if the case had been begun before noriffhtT ma^ be that the defendant would have had bad no ° rene^ motion, but the Circuit Court would have that it^ ^Ve ^eave- It the Circuit Court was satisfied
। °r i s predecessor the state court, had made a mistake,
Syllabus. 198 U. S.
it had power to reopen the matter. It did so and its action in that respect is not open to question here. However stringent may be the practice in refusing to reconsider what has been done, it still is but practice,.not want of jurisdiction, that makes the rule.
The plaintiff in error does not argue the merits of the order of the Circuit Court. Assuming that they, as well as the jurisdiction of the court to make the order, are open here, we see no sufficient reason for disturbing the decision. The Circuit Court was warranted by the affidavits before it in finding that the defendant was doing no business and had no property in the State of New York, and that the service on a director casually within the State for a few days was bad. Conley v. Mathieson Alkali Works, 190 U. S. 406; Geer v. Mathieson Alkali Works, 190 U. S. 428. The arguments do not seem to us to need to be noticed in greater detail.
Judgment affirmed.
COVINGTON v. FIRST NATIONAL BANK OF
COVINGTON.
FIRST NATIONAL BANK OF COVINGTON v.
COVINGTON..
APPEALS FROM THE CIRCUIT COURT OF THE UNITED STATES FO
THE EASTERN DISTRICT OF KENTUCKY.
Nos. 113, 114. Argued January 5, 19O5.-Decided April 17, 1905.
A Federal court is not required to give a judgment in a state cou greater weight than is awarded to it in the courts of the uta e i. it was rendered. As it is the settled rule in Kentucky that an ^gg tion in a suit for taxes is not an estoppel between the parties as of any other year, even though such adjudication invo ves of an exemption by contract, not only as to taxes invo ve 1 but also as to all taxes that might be levied under t e con
Federal courts will not enjoin the collection of taxes for subsequent years on.the ground that their invalidity was adjudicated by such a judgment. The statute of Kentucky of March 21, 1900, taxing shares of national
banks, from the years 1893 to 1900 and thereafter held, void and in conflict with § 5219, Rev. Stat., as to those portions which are retroactive as imposing a burden on the bank not borne by other moneyed corporations of the State, and valid and not in conflict with § 5219 as to taxes imposed thereafter. A difference in methods in assessing shares of national banks from that of
taxing state banks does not necessarily amount to a discrimination, rendering the act invalid under § 5219, and justify the judicial interference of courts for the protection of the shareholders, unless it appears that the difference in method actually results in imposing a greater burden on the national banks than is imposed on other moneyed capital in the State.
This case was here upon a former appeal, which was dismissed for want of final decree in the court below. Covington v. Covington First National Bank, 185 U. S. 270.
The original action was brought to enjoin the assessment or collection of taxes on certain shares of capital stock of the First National Bank of Covington for the years from 1893 to 1900, inclusive, and to enjoin the arrest of the president and cashier of the bank for not listing such shares, and for a decree adjudicating the same not liable to taxation up to the time of the expiration of the charter of the bank on November 17, 1904.
he principal grounds alleged and relied upon are that by reason of the acceptance of the terms of the act of the general assembly of Kentucky, passed in 1886, known as the Hewitt aw, an irrevocable contract had been made between the bank an the State, whereby the former was to pay to the State
axes at a certain rate on its stock, surplus and undivided pro ts, which, when paid, were to be in full of all other State, county or municipal taxes, except those levied on the bank’s rea estate. It was averred that complainant had regularly
Th taxes UP and including those due July 1, 1900.
a t e fact that the bank had such irrevocable contract had een a judicated and finally determined by a decision in the p. 102Court of Appeals of Kentucky in a litigation wherein the State and the city of Covington and the bank were parties. The bill further set up that an attempt was being made to compel the complainant to list for taxation its shares of stock under an act of the State of Kentucky, passed March 21,1900 (Session Acts 1900, p. 65). The act under which the taxes were assessed is given in the margin of the opinion in the case of Covington v. Covington First National Bank, 185 U. S. supra, and for convenience of reference is also inserted in the margin here.1 It was also averred in the bill that the act of March 21, p. 1031900, which undertakes to impose taxes for the years 1893 and following, is unconstitutional and void, and operates to discriminate against the complainant, in violation of section 5219 of the Revised Statutes of the United States. The defendants having filed a plea to the jurisdiction and a general demurrer to the bill, upon motion for a temporary injunction, attempts to enforce taxes levied or assessed upon the shares of capital stock at any time previous to March 21, 1900, were enjoined. 103 Fed. Rep. 523.
1
“ An act relating to the taxation of the shares of stock of national banks: “Whereas, the Supreme Court of the United States has lately decided that article three (3), chapter one hundred and three (103), of the acts of eighteen hundred and ninety-one, eighteen hundred and ninety-two, and eighteen hundred and ninety-three is void and of no effect in so far as the same provides for the taxation of the franchise of national banks, in consequence of which decision there is not now and has not been since adoption of said article in eighteen hundred and ninety-two any adequate mode of taxing national banks, while state banks are now, and have been ever since eighteen hundred and ninety-two, taxable for all purposes, State and local, therefore: “Be it enacted by the General Assembly of the Commonwealth of Kentucky. “Sec ti on 1. That the shares of stock in each national bank of this State shall be subject to taxation for all state purposes, and shall be subject to taxation for the purposes of each county, city, town and taxing district in which the bank is located. “Sec . 2. For purposes of the taxation provided for by the next prece mg section, it shall be the duty of the president and cashier of the bank to is the said shares of stock with the assessing officers authorized to assess rea estate for taxation, and the bank shall be and remain liable to the Sta e, county, city, town and district for the taxes upon said shares of stock. “Sec . 3. When any of said shares of stock have not been listed for taxa tion for any of said purposes under levy or levies of any year or years since the adoption of the revenue law of eighteen hundred and ninety-two, i shall be the duty of the president and cashier to list the same for taxa io under said levy or levies: Provided, That where any national bank as e tofore, for any year or years, paid taxes upon its franchise as provi e article three (3) of the revenue law of eighteen hundred and ninety- wo, s bank shall be excepted from the operation of this section as to sai years: And provided further, That where any national bank has ere for any year or years, paid state taxes under the Hewitt billin ° . state taxes required by this act for the same year or years, sai an be entitled to credit by said excess upon its state taxes require y Sec . 4. All assessments of shares of stock contemplated by this act shall e entered upon the assessor’s books, certified and reported by the assessing cers as assessments of real estate are entered, certified and reported, and e same shall be certified to the proper collecting officers for collection as sessments of real estate are certified for collection of taxes thereon. th EC Th6 assessments of said shares of stock and collection of taxes C0n^ernP^a^ed by this act, may be enforced as assessments of
December 17, 1900, a decree was entered, but not being final the writ of error was dismissed. 185 U. S. supra. After the case was sent back to the Circuit Court the prior decision in that court was followed, and it was further held that the judgment of the state court was not a bar to the right to collect taxes for other years than the year directly involved in the judgment set up, and that as the Hewitt law and its acceptance by the bank had been conclusively held not to constitute an irrevocable contract as to taxes between the State and the complainant, and as the law was valid as to future taxation the injunction could not be granted as to taxes assessed under the law of March 21, 1900, after its passage.
decree was, therefore, entered, dismissing the complainant’s ill as to taxes levied after said date, and permitting the former
*
a r an<^ co^ec^^on °f taxes thereon may be enforced. with rC PurP®se ^his act i® to place national banks of this State, mav ?° ^axation, upon the same footing as state banks as nearly as deck;«6 with said article three (3) of the revenue law and said deeismn of the Supreme Court. should b^t^^reas> is important that state banks and national banks shall toi 6 a™ equally for all purposes, an emergency exists, and this act A„™ “nd be in tOTCe from passage.” Approved March 21, 1900.
Argument for the City of Covington. 198 U. S.
decree enjoining the assessment and levying of taxes before the passage of the law to stand. 129 Fed. Rep. 792.
From so much of the decree as enjoined the taxes assessed prior to March 21, 1900, the city appealed; from so much thereof as refused the injunction and dismissed the bill as to taxes assessed after that date, the bank appealed. Both appeals are now before this court.
Mr. J. H. Hazelrigg, with whom Mr. F. J. Hanlon and Mr. Ira Julian were on the brief, for the City of Covington:
The act of March 21, 1900, providing for taxation of shares of national banks is not repugnant to § 5219, Rev. Stat., because of its retroactive provision. Kentucky Stat., Ch. 108; Nat. Bank v. Owensboro, 173 U. S. 664; Board of Councilmen v. Mason & Foard Co., 100 Kentucky, 48; Blackwell on Tax Titles, 5th ed., §324; Kentucky Statutes, §§3176-3375, 4020, 4022, 4090, 4241; Constitution of Kentucky, §§ 170-174, Scobee v. Bean, 22 Ky. L. R. 1076; Chester n . Black, 6 L. R. A. 802; Butler v. Toledo, 5 Ohio St. 225; Mills v. Charleston, 29 Wisconsin, 400; Marion Co. v. L. & N. R. R. Co., 91 Kentucky, 388; In re Van Antwerp, 56 N. Y. 261; L. & N. R. R- Co. v. Commonwealth, 1 Bush. 250; Long v. Kiende, 27 Hun, 66, Mattingly v. Dist. Columbia, 97 U. S. 687; Plummer v. Marathon Co., 46 Wisconsin, 104; Florida &c. R. R. v. Reynolds, 183 U. S. 471; Cooley on Taxation, 291, 309; Mercantile Nat. Bank v. New York, 121 U. S. 138; Lou. & Jeff. Ferry Co. v. Commonwealth, 22 Ky. L. R. 446; Commonwealth v. Citizens’ Nat. Bank and Citizens’ Nat. Bank v. Commonwealth, 25 Ky. L. 2254; London v. Hope, 26 Ky. L. R. 112.
The act in controversy is not unconstitutional by reason of any conflict whatever with section 5219 Rev. Stat. am v. Nashville, 95 U. S. 22; Bank v. Commonwealth, 9 Wa . 362; Nat. Bank v. Davenport &c., 123 U. S. 83, Van y v. Wisconsin, 154 U. S. 581; First Nat. Bank v. 2/ ' 160 U. S. 660; Aberdeen Bank v. Chehalis Co., 166 L. S. > Merchants1 Bank v. Pennsylvania, 167 U. S. 461, Lan er
COVINGTON v. FIRST NAT. BANK. 10Ö
198 U. S. Argument for the City of Covington.
Mercantile Bank, 186 U. S. 458; Hammond v. Massachusetts &c., and Churchill v. Utica, 154 U. S. 550; and see 3 Wall. 387; People v. Commissioners, 4 Wall. 244.
As to the alleged contract of exemption, the estoppel proposed by the bank should not prevail in this court because the same would not prevail in the courts of Kentucky. Section 905, Rev. Stat.; Mills v. Duryee, I Cr. 484; Hampton v. McConnell, 3 Wheat. 234; McElmoyle v. Cohen, 13 Pet. 326; Christmas v. Russell, 5 Wall. 290; Thompson v. Whitman, 18 Wall. 457; Phoenix Ins Co. v. Tennessee, 161 U. S. 184; Abrahams v. Casey, 179 U. S. 218; Neioport v. Commonwealth, 21 Ky. L. R. 47; Metcalf v. Watertown, 153 U. S. 671; Negley v. Henderson, 59 S. W. Rep. 19; Bell Co. Coke Co. v. Pineville, 23 Ky. L. R. 933; Cooper v. Newell, 173 U. S. 555; Union Planters’ Bank v. Memphis, 111 Fed. Rep. 570; N. C., 189 U. S. 71; Hilton v. Guyot, 159 U. S. 113; Chicago & A. R. R. Co. v. Wiggins F. Co., 108 U. S. 118; Chase v. Curtis, 113 U. S. 452; Renaud v. Abbott, 116 U. S. 227; Embry v. Palmer, 107 U. S. 3; New Orleans v. Citizens’ Bank, 167 U. S. 371; Freeman on Judgments, §576; Wills’ Res Judicata, §531; Deposit Bank v. Frankfort, 191 U. S. 499; Bergmann. Bly, 66 Fed. Rep. 40, 43; Lavin v. Emigrant Savings Bank, 1 Fed. Rep. 641, 650; Shelby
orley v. Lake Shore Ry. Co., 146 U. S. 166; Insurance Company v. Iron Company, 42 Fed. Rep. 376; Railroad Company v. Blossburg, 20 Wall. 137, 143; Bank v. Bank, 136 U. S. 235; awton v. I oung, 52 Fed. Rep. 439; Sanford v. Roe, 69 Fed. Rep. 546; Bauserman v. Blunt, 147 U. S. 647; Thompson v. awyer Co., 57 Fed. Rep. 1030; Luther v. Borden, I How, 1;
v- Pidgeon, 4 Wall. 196; Leffingwell v. Warren, 2 c , 603, Railroad Company v. Trust Company, 82 Fed. P V Hite, 85 Fed. Rep. 268; Railroad Company jr 80 Fed- ReP- 234; Rice v. Adler, 71 Fed. Rep. 151; 43 F^P d Fed- Rep. 121; Durden v. Malloy, 698 %’ , 407 ’ Railroad Company v. Guest, 84 Fed. Rep.
; South^nd v. Village of Ernst, 86 Fed. Rep. 597;
Argument for First National Bank. 198 U. S.
Thomas v. Burney, 35 Fed. Rep. 115; Talliaferro n . Barnett, 47 Arkansas, 359.
Mr. Shelley D. Rouse and Mr. Edmund F. Trabue, with whom Mr. James S. Pirtle, Mr. John C. Doolan and Mr. Attila Cox, Jr., were on the brief, for First National Bank:
The act of March 21, 1900, so far as it is retroactive, infringes the Fourteenth Amendment, in taking the property of the bank and its shareholders without due process, and denying it the equal protection of the law; and so far as it authorizes the assessment and taxation either previously or subsequently to March 21, 1900, discriminates against national banks and their shareholders, and offends § 5219 of Rev. Stat. Commonwealth v. Citizens’ Nat. Bk., 25 Ky. L. R. 2100, 2254; Scobee v. Bean, 109 Kentucky, 526; Baldwin v. Shine, 84 Kentucky, 502; Lexington v. Fishback, 109 Kentucky, 170; Frankfort v. Fidelity Trust Co., Ill Kentucky, 667; National Bank v. Owensboro, 173 IT. S. 664; Ferry Co. v. Kentucky, 188 U. S. 385, 395; Bellevue v. Peacock, 89 Kentucky, 495; Van Allen v. Assessors, 3 Wall. 573; Railroad Co. v. Commonwealth, 24 Ky. L. R. 2124; Commonwealth v. Nute, 24 Ky. L. R. 2138; Franklin County Court v. L. & N. R. R- Co., 84 Kentucky, 59; Commonwealth v. L. & N. R. R- Co., 89 Kentucky, 139.
The judgment of the Campbell Circuit Court, affirmed by the Kentucky Court of Appeals, adjudging in the bank s favor an irrevocable contract under the “Hewitt law” exempting the bank from all taxation, except by that law imposed, is res judicata of that question, and prevents its relitigation here. Owensboro National Bank case, 173 U. S. 648; Bank of Ken tucky v. Stone, 88 Fed. Rep. 383; S. C., 174 IT. S. 799; New Orleans v. Citizens’ Bank, 167 U. S. 371; Sou. Pac. Co. v. ni e States, 168 U. S. 45; Baldwin v. Maryland, 179 U. 8. 2^; Newport v. Commonwealth, 50 S. W. Rep. 845; S. C., 51 • • Rep. 433; Frankfort v. Deposit Bank, 111 Kentucky, , N. C., 191 U. S. 499.
Mr . Jus tic e Day , after making the foregoing statement, delivered the opinion of the court.
That the acceptance of the provisions of the so-called Hewitt law did not constitute an irrevocable contract, releasing the bank from taxes upon compliance with its terms, has been settled. Bank Tax Cases, 102 Kentucky, 174; Citizens’ Savings Bank v. Owensboro, 173 U. S. 636. Reference is made to the various cases leading up to this result in Deposit Bank v. Frankfort, 191 U. S. 499, 508. We are, therefore, left upon this branch of the case to consider the effect of the judgment of the state court of Kentucky, set up in the complainant’s bill as an adjudication of the rights of the parties and a final determination that the acceptance of the Hewitt law had the effect of a valid contract. When this case was before the Circuit Court for the second time, 129 Fed. Rep. 792, Judge Cochran, after an elaborate review of the Kentucky cases, reached the conclusion that as the taxes involved in the case in which the adjudication was had were for a different year than those involved in this suit, the former judgment did not have the effect of an estoppel between the parties, being only conclusive, under the Kentucky decisions, as to taxes in the yeais involved in the suit in which the judgment was rendered.
e do not doubt that this is the settled law of the Supreme ourt of Kentucky. Nor does it make any difference, in the view which that court takes of the matter, that the adjudicaion as to the right to collect the taxes involved the finding o an exemption by contract, which included not only the taxes or t e years in suit, but all taxes which might be levied under e authority of the contract. The ground upon which the ased its decision with reference to the effect of such
JU ication is stated in the case of City of Newport v. Com°^lth, 106 Kentucky, 434, 444, as follows:
e only question remaining for decision is upon the .plea res judicata.
e pea in this case avers that the subject matter of the p. 108former suit was identical with that involved in this action, and that the facts were the same in both actions, except that the former action attempted to collect a tax for the year 1893, and the present action was attempting to collect a tax for the year 1894. . . .
“The authorities seem to hold that when a court of competent jurisdiction has, upon a proper issue, decided that a contract, out of which several distinct promises to pay money arose, has been adjudged invalid in a suit upon one of those promises, the judgment is an estoppel to a suit upon another promise founded on the same contract. But taxes do not arise out of contract. They are imposed in invitum. The taxpayer does not agree to pay, but is forced to pay; and the right to litigate the legality of a tax upon all grounds must, of necessity exist, regardless of former adjudications as to the validity of a different tax.”
It is unnecessary to cite the cases; they will be found in Judge Cochran’s opinion. It is sufficient to say that if this case had been decided in the state court in Kentucky the adjudication pleaded herein, not involving taxes for the same years as those now in controversy, would not avail as an estoppel between the parties. It is true that a different rule prevails in the courts of the United States. The reasons therefor were stated in an opinion by Mr. Justice White, speaking for the court, in the case of New Orleans v. Citizens’ Bank, 167 U. S. 371, and in cases arising in a Federal jurisdiction the doctrine therein announced will doubtless be adhered to. The learned counsel for the plaintiff in error refer to the decision o this court in Deposit Bank v. Frankfort, 191 U. S. supra, as authority for the doctrine that where a contract right has been adjudicated which involves an exemption from all taxation such adjudication will conclude the parties as to the right legally tax for other years, although the particular year was not directly involved in the suit in which the adjudication was made. But in that case the court was dealing with the c ec to be given to a judgment of a Federal court in which sue p. 109contract right had been adjudicated, when the Federal judgment was set up in a state court; and in that case it was recognized, in the opinion of the court as well as in the dissenting opinion, that the courts of Kentucky, in giving effect to the judgments of their own courts, were guided by a different rule, and in that State an adjudication involving taxes for one year cannot be pleaded as an estoppel in suits involving taxes for other years. 191 U. S. 514, 524.
The case of Deposit Bank v. Frankfort was only concerned with the effect to be given to a Federal judgment adjudicating a contract right, when pleaded in a state court. We are now dealing with the weight to be attached to a state judgment when pleaded as res judicata in a Federal court. That was the very question decided by this court in the case of Union & Planters’ Bank v. Memphis, 189 U. S. 71, wherein it was held that the Federal courts were not required to give to such judgments any greater force or effect than was awarded to them by the courts of the State where they were rendered. Upon this branch of the case the question then is, What effect is given in the courts of Kentucky to such pleas of estoppel? As we have seen, it is there settled that the judgment would not be effectual to protect the alleged contract rights of the complainant as to the taxes involved for years other than the one directly involved in the adjudication set up. We, there-ore, find no error in the judgment of the Circuit Court refusing
an injunction upon the ground of an estoppel by judgment.
s to the taxes for the years prior to the passage of the act o March 21, 1900, it is argued by the bank that to give this letroactive effect to the law will be to deprive it and its stocko ers of their property without due process of law, and will , ? ,m ^^tion of section 5219 of the Revised Statutes, pro-1 iting discrimination against national banks and their stock° ers. The act of March 21, 1900, as stated in the preamble, was passed because of a decision of this court holding prior egis ation of the State undertaking to tax the property of
a lonal banks unconstitutional. Owensboro National Bank v, p. 110Owensboro, 173 U. S. 664. In the Owensboro case it was held that section 5219, Rev. Stat., was the measure of the power of the State to tax national banks, their property or franchises, which power was confined to the taxing of the stock in the name of the shareholders and the assessment of the real estate of the banks, and that taxation under the laws of the State of Kentucky upon the franchise of the bank was not within the purview of the authority conferred by the act of Congress, and was therefore illegal. Section 5219 of the Revised Statutes of the United States is as follows:
“Sec . 5219. Nothing herein shall prevent all the shares in any association from being included in the valuation of the personal property of the owner or holder of such shares, in assessing taxes imposed by authority of the State within which the association is located; but the legislature of each State may determine and direct the manner and place of taxing all the shares of national banking associations located within the State, subject only to the two restrictions, that the taxation shall not be at a greater rate than is assessed upon other moneyed capital in the hands of individual citizens of such State, and that the shares of any national banking association owned by non-residents of any State shall be taxed in the city or town where the bank is located, and not elsewhere. Nothing herein shall be construed to exempt the real property of associations from either state, county, or municipal taxes, to the same extent, according to its value, as other real property is taxed.”
Under the new taxing law, act of March 21, 1900, it is declared to be the purpose to require the bank to return the shares of stock for the years prior to 1900, and since the adoption o the revenue law of 1892, with the privileges and deductions stated in section 3 of the act. Notwithstanding the prior revenue law had been held invalid, and there was no statute specifically taxing these shares of national bank stock on e statute books of Kentucky, prior to the passage of the act o March 21,1900, the Supreme Court of Kentucky, in the case o
COVINGTON v. FIRST NAT. BANK. Ill
Scobee v. Bean, 109 Kentucky, 526, has held that there was ample statute law in that State for the taxing of shares in national banks under the laws of that State providing for the taxation of real and personal property of every kind, and that the provision that the individual shareholder in a corporation shall not be required to list his property therein so long as the corporation pays the taxes on its property of every kind, impliedly requires the individual to list his shares and pay the tax in the absence of the return required by law of the corporation. In that case the court held that there was nothing in its decisions running counter to section 5219. These views were further enforced in Commonwealth v. Citizens’ National Bank, 80 S. W. Rep. 158; Town of London v. Hope, 80 S. W. Rep. 817; Citizens’ National Bank of Lebanon v. Commonwealth, 25 Ky. L. R. 2254. Following the state court in the interpretation of its own statutes, it may be said that, as to shareholders residing in Kentucky and over whom the State has jurisdiction, the Supreme Court of that State has construed its statutes as requiring shareholders in national banks for the years 1893 to 1900, inclusive, to return their shares for taxation; and if they did not make the return the duty was required of the corporation. In this view of the law it may be that, as to local shareholders, the act of March 21, 1900, as held by the Supreme Court of entucky, created no new right of taxation, but gave simply a new remedy, which by the law, is operative to enforce preexisting obligations. It may be admitted that section 5219 permits the State to require the bank to pay the tax for the shareholders. National Bank v. Commonwealth, 9 Wall. 353;
But there is nothing in the general statutes of Kentucky beb e e ac^ March 21, 1900, specifically requiring national n s to return shares of stock in the corporation when such • ,areS by persons domiciled beyond the State. The s o shares of foreign-held stock in an incorporated comy, m the absence of legislatipn imposing a duty upon the
Opinion of the Court. 198 U. 8.
company to return the stock within the State as the agent of the owner, is at the domicile of the owner. Cooley on Taxation, 16. It is true that the State may require its own corporations to return the foreign-held shares for the owner for the purposes of taxation. Corry v. The Mayor and Council of Baltimore, 196 U. S. 466. Section 5219, Rev. Stat., authorizes the State to tax all the shares of a national banking association, including those owned by non-residents, as well as those owned in the State, in the city or town where the bank is located, but this section does not itself impose the tax; it is authority for state legislation to thus tax national bank shareholders. And this statute is express authority to the State by appropriate legislation to make the bank the agent of the shareholders for the purpose of returning the shares and paying the taxes thereon.
In Commonwealth v. Citizens’ National Bank, 80 S. W. Rep. 158, the Kentucky Court of Appeals seems to have held that a national bank might be required, under § 4241, Kentucky Statutes of 1903, to return the shares held in it for the years 1893 to 1900, inclusive, as omitted property. In that case it is said: “It was held under the previous statute that the shares of stock in national banks might be assessed to the shareholder by the assessor, and should be given in by the shareholder in the list of his personal property. Scobee v. Bean, 109 Kentucky, 526; N. C., 59 S. W. Rep. 860. The act of March 21, 1900, did not, therefore, make that taxable which was not taxable before, but simply provided another mode for the assessment of the shares of stock and the payment of the taxes. It was the duty of the assessor to make the assessment. It was also the duty of the president and cashier of the bank to list the shares of stock with the assessor; but when the assessment was not made the property was simply omitted from the tax list, and the sheriff is authorized by section 4241, Ky. Stat., 1903, to institute the proceeding to have any omitted property assessed.” And the court further held the bank liable for tie penalty imposed for not listing taxable property. The groun p. 113upon which this judgment rests is that shareholders were bound to return the shares in the years from 1893 to 1900 under the then existing state law, and the act of 1900 made the bank the agent of the shareholders and did not require a new duty, but only imposed the duty upon the agent as a means of making effectual the former obligation of the shareholders. None of the Kentucky cases deals with the effect of the requirement under the act of 1900, that the bank return the shares of stock held by foreign stockholders, who clearly were not required under the previous laws of that State to return shares of stock when neither the shares nor the owners were within the State.
Section 5219 requires that a State in taxing national banks shall be subject to the restriction that the taxation shall not be at a greater rate than is assessed upon other capital in the hands of the individual citizen. Neither this section nor section 5210 of the Revised Statutes, requiring a list of the shareholders to be kept by the bank, has the effect to levy taxes. It is a limitation upon the right of the State, and the State must not discriminate against national banks by the use of methods of taxation differing from those in use in taxing other moneyed capital in the hands of individual citizens.
It is averred in the amended bill, and the answer having een stricken from the files and the case submitted upon the P ea to the jurisdiction and general demurrer, it must be taken as true “that during said years [1893 to 1900] many of its s areholders were non-residents of the State of Kentucky, w o, in many instances, have sold and transferred their shares ot stock during said time.”
The statutes of the State of Kentucky, which have been construed by the Supreme Court of that State in the cases cited, b° require the payment of taxes by the shareholders or by the 1 °r shareholders, can have reference only to share-, s st^ jurisdiction of the St^te. Whether the w'fh111 as a discrimination against national banks:
ln t e prohibition of section 5219, involving, as it does, a
VOL. c^cvni—8 p. 114right of Federal creation must be ultimately determined in this court. The act of March 21, 1900, imposes upon the bank a liability for taxes assessed upon its shareholders, whether within or without the State. This liability did not exist before the passage of the act, and in Commonwealth v. Citizens’ National Bank, supra, the Court of Appeals of Kentucky held that the statutes of the State made the bank liable for a penalty of twenty per cent for the years 1893 to 1900, inclusive. It seems to us that to permit the statute to require the bank to return the shares of such foreign-held stock, and be subjected to a penalty in addition, is imposing upon national banks a burden not borne by other moneyed capital within the State. In support of the equivalency of taxation, which it is the purpose of section 5219 to require, this court said, in Owensboro National Bank v. Owensboro, 173 U. S. 664, 676: “The alleged equivalency, in order to be of any cogency, must of necessity contain two distinct and essential elements—equivalency in law and equivalency in fact.”
Without considering the question of constitutional power to tax non-resident shareholders by means of this retroactive law, it seems to us that in imposing upon the bank the liability for the past years, for taxes and penalty, upon stock held without the State, and which before the taking effect of the act under consideration it was not required to return, there has been imposed upon national banks in this retroactive feature of the law a burden not borne by other moneyed capital in the State. This law makes a bank liable for taxes upon property beyond the jurisdiction of the State, not require to be returned by the bank as agent for the shareholders, by a statute passed in pursuance of the authority delegated i § 5219, thus imposing a burden not borne by other moneye capital within the State. ,
We think the Circuit Court was right in that part ° I ® decree which enjoined the collection of taxes against the an for the years 1893 to 1900, inclusive.
As to the alleged discrimination against sharehol ers in p. 115198 U. S. Syllabus.
national banks because the assessment of the property of state banks is upon the franchise and not upon the shares of stock, there is nothing in the bill to show that this difference in method operates to discriminate against national bank shareholders by assessing their property at higher rates than are imposed upon capital invested in state banks. And as to the deduction of the value of real estate and other deductions allowed to state banks, the Supreme Court* of Kentucky has held that all deductions allowed to state banks must be allowed in like manner in assessing the property of shareholders in national banks. Commonwealth v. Citizens’ Bank, 80 S. W. Rep. 158. Nor does the allegation that in cities of the first, second and third class state banks are assessed upon their shares for city taxation, but upon their franchises and property for state and county taxation, in the absence of averments of fact showing that thereby a heavier burden of taxation is imposed upon national than state banks in such cities, warrant judicial interference for the protection of shareholders in national banks. Davenport Bank v. Davenport Board of Equalization, 123 U. S. 83.
Judgment affirmed.