183 F. 1 (6th Cir. 1910), 2,035, Preston v. Sturgis Milling Co.

Docket Nº:2,035.
Citation:183 F. 1
Case Date:December 01, 1910
Court:United States Courts of Appeals, Court of Appeals for the Sixth Circuit

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183 F. 1 (6th Cir. 1910)




No. 2,035.

United States Court of Appeals, Sixth Circuit.

December 1, 1910

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Helm Bruce (Helm & Helm, of counsel), for appellant.

H. X. Morton and James F. Fairleigh, for appellee.

Before SEVERENS and WARRINGTON, Circuit Judges, and COCHRAN, District judge.

COCHRAN, District Judge.

The appellant, Preston, was complainant in the court below, and he appeals from a decree dismissing his bill on demurrer. The relief which he sought was the subjection of certain specifically described real estate owned by the defendant, Sturgis Milling Company, appellee here, located in the town of Sturgis within the Caseyville district of Union county, Ky., to the payment to him of the sum of $7,155.74 and costs. He claimed that there was lien on the real estate for that amount and that he was entitled to enforce it. The way in which he claimed that this lien had arisen and that he had become entitled to enforce it was this:

Theretofore he and his wife, who had since died, had obtained several judgments in the lower court on its law side against the Caseyville district for the principal and interest of certain bonds duly issued on its behalf under an act of the Legislature of Kentucky entitled 'An act to incorporate the Madisonville and Shawneetown Straight Line Railroad Company,' approved February 18, 1870 (Sess. Acts 1869-70, vol. 1, p. 342, c. 366), in aid of the construction of the railroad, which if built was to run through the district, upon which judgments executions had issued and been returned unsatisfied; and pursuant to the provisions of the act a tax sufficient to pay the judgments had been duly levied, and the property subject thereto had been duly assessed. The appellee owned taxable property within the district, of which that sought to be sold was a part, and $7,155.74 was the amount of the tax due from it according to the levy and assessment. The act provided that the tax authorized by it should be collected by the sheriff of the county upon his giving bond therefor, and that upon his failure for 30 days after its levy to do so he should forfeit his office, and the county court should appoint a collector who upon giving bond should collect the tax. By section 25 thereof it was provided as follows, to wit:

'That sheriffs and other officers having in their hands for collection taxes levied under this act shall have all the powers of distraining and selling personal property which sheriffs have in the collection of the state revenue; and when such officer shall be unable to find personal property liable to sale for

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the unpaid tax of any individual, he may levy the same on any real estate of such person situated in the county and shall sell the same under the regulations prescribed by law for the selling of real estate under execution; and all taxes levied under this act shall be a lien on the real estate of the person taxed, which shall lie in the county in which such tax is levied; but the owner of any real estate sold may redeem the same at any time within five (5) years after such sale, by paying the purchase money and ten (10) per cent. per annum thereon, with all taxes of every description paid by the purchaser after his purchase, and ten (10) per cent. per annum thereon.'

The taxpayers of the district had repudiated its indebtedness incurred in aid of the construction of the railroad and determined to prevent its collection, and, if violence was necessary to this end, to resort to it. The sheriffs of the county from fear, or from sympathy with the position of the taxpayers, had repeatedly refused to give bond for the tax, or, after doing so, had resigned, so that, for much the greater portion of 18 years previous to the bringing of this suit, the county had been without a sheriff. Collectors had from time to time been appointed, but with a single exception had refused to qualify or resigned after qualifying. In that instance the collector appointed had proceeded to the performance of his duty by distraining the personal property of one of the taxpayers and advertising same for sale at the county seat, but on the day of sale a crowd of 600 or 800 armed men assembled there, and not only prevented the sale, but compelled the collector to flee the county for his life, to which he had never returned.

It was by virtue of the clause in section 25 of the act in these words, to wit:

'And all taxes levied under this act shall be a lien on the real estate of the person taxed, which shall lie in the county in which such tax is levied'

-- that appellant claimed that there was a lien on appellee's real estate for that sum, and it was because of his inability to collect it otherwise that he claimed that he was entitled to enforce this lien. The facts stated appeared from the allegations of the bill which were admitted to be true for the sake of the demurrer.

The lower court denied appellant the relief he sought on the ground that there was no legislation authorizing its granting. It has been earnestly and ably argued here that he is entitled to such relief; but, after carefully considering all that has been said, we are constrained to hold that the lower court's position was well taken, and that it was powerless to relieve the situation.

Before stating more in detail than above the grounds upon which it is claimed that appellant is entitled to the relief which he sought, we desire to make good the fundamental principle which underlies the lower court's decision and to indicate its scope. That principle is that the power of taxation is legislative and cannot be exercised otherwise than under legislative authority. It seems to us that if one will enter into the possession of this principle and comprehend its full scope he will have no difficulty in reaching the conclusion that the decision was correct. The scope of the principle is that each step in the process of taxation from beginning to end can be taken only as the Legislature may prescribe. This is true of the levy of the tax, of the assessment of the property subject thereto, if it be an ad valorem tax, of the collection

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of the tax, and of its disbursement after it has been collected. Courts of law by the writ of mandamus have power to compel persons charged with the performance of these duties to perform them. But in exercising such jurisdiction they do not to any extent exercise the power of taxation. That power is exercised only in the taking of any of the steps in the process of raising and disbursing taxes. It is not, however, within the scope of this principle that the judiciary shall in no event exercise this power of taxation. Its scope is that it shall not exercise it unless the Legislature shall so provide. If the Legislature does so provide, it may exercise it to the extent provided.

That this is a fundamental principle of jurisprudence, and that such is its scope, has been settled beyond question by the Supreme Court of the United States in the following cases, to wit: Rees v. Watertown, 19 Wall. 107, 22 L.Ed. 72; Heine v. Board of Levee Commissioners, 19 Wall. 655, 22 L.Ed. 223; Barkley v. Board of Levee Commissioners, 93 U.S. 258, 23 L.Ed. 893; Meriwether v. Garrett, 102 U.S. 472, 26 L.Ed. 197; Thompson v. Allen County, 115 U.S. 550, 6 Sup.Ct. 140, 29 L.Ed. 472.

Each one of these cases had to do with a tax duly authorized to be raised from the taxpayers within a certain political legal entity to pay certain obligations incurred by it, and in each one the tax had not been paid, and a United States Circuit Court had been appealed to for its assistance in enabling the holder of such obligations to obtain the tax. In the first three cases the tax had never been levied, and the relief sought was its levy, collection, and payment to plaintiff. No relief was sought as to the assessment of the property subject to the tax unless that was included in its levy. Possibly the assessment of property for general purposes answered the purpose of an assessment as to the particular tax involved. In the last two cases the tax had been levied and property assessed, and the relief sought was the collection of the tax and its payment to plaintiff.

We will first dispose of the three cases in which no levy had been made. In the Rees and Heine Cases there was opposition to the payment of the tax, and its levy had been evaded by the officials whose duty it was to make it, or so many of them as not to leave a quorum, resigning; in the Barkley Case there had been no evasion. The trouble there was that the political legal entity had ceased to exist and the officials whose duty it was to levy the tax had gone out of office with such cessation. In the Rees and Barkley Cases judgments had been obtained at law for the amount of the indebtedness and executions returned thereon unsatisfied; in the Heine Case no such judgment had been obtained. The indebtedness there was simply due and unpaid. In the Rees and Heine Cases the relief was sought in equity; in the Barkley Case at law, by the writ of mandamus. In all three cases the way in which levy, collection, and payment of the tax was sought was by a direction to the United States marshal for the district to levy, collect, and pay. It is not so clear that this was so in the Heine Case, at least from Mr. Justice Miller's opinion therein. But it appears from the brief of counsel for the appellant as given in the Lawyer's Cooperative Publishing Company's edition of the Supreme Court Reports

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that such was the case. The suit had been originally brought against the officials whose duty it was to make the levy. They set up that they had resigned and disclaimed any interest in the matter. Thereupon an amended bill was filed against the defendants as...

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