Public Nat Bank of New York

Decision Date19 November 1928
Docket NumberNo. 16,16
PartiesPetition of PUBLIC NAT. BANK OF NEW YORK
CourtU.S. Supreme Court

Mr. Wm. H. King, of New York City, for Keating as Receiver of Taxes.

Mr. Henry S. Manley, of Falconer, N. Y., for Ottinger, Atty. Gen.

Mr. Justice SUTHERLAND delivered the opinion of the Court.

The petitioner, a national banking association organized under the National Bank Act (12 USCA § 21 et seq.) with its principal office in the city of New York, brought suit in the federal District Court for the Southern District of New York against Andrew B. Keating, receiver, and William Reid, Jr., collector of taxes of the city of New York, to enjoin them from collecting taxes assessed against shares in the association in pursuance of a state law, but by, and for the the sole use of, the city. The prayer for relief rested upon the contention that the provisions of the state law, which fixed the rate of tax, discriminated in favor of other moneyed capital in the hands of individual citizens of the state, in contravention of section 5219, U. S. Rev. Stats. (12 USCA § 548), and of provisions of the Constitution of the United States. A statutory court of three judges was constituted under section 266 of the Judicial Code (U. S. Code, title 28, § 380; 28 USCA § 380), and a master appointed, by whom evidence was taken and reported. When the case came on for final hearing, the court, of its own motion, dissolved after directing that the cause proceed before a single district judge upon the ground that the suit was not one coming within the terms of section 266. Petitioner applied to this court for a writ of mandamus requiring the judges composing the statutory court to reconvene and proceed to a determination of the case. Upon filing the petition, a rule to show cause was issued (278 U. S. 555, 49 S. Ct. 7, 73 L. Ed. —), upon a return to which the application has been heard.

The statutory court held that section 266 did not apply because neither of the defendants was an officer of the state and the suit involved only the action of city officials in the collection of taxes for the use of the city. 29 F.(2d) 621. In support of this ruling, Ex parte Collins, 277 U. S. 565, 48 S. Ct. 585, 72 L. Ed. 990 (June 4, 1928), was relied upon. In that case suit was brought to enjoin proceedings under a resolution of the city of Phoenix, Arizona, directing the paving of a street upon which petitioner was an abutting owner. The improvement was to be made pursuant to general statutes of the state, which were assailed as contravening the due process clause of the Fourteenth Amendment. The District Judge denied a request to call two judges to sit with him, upon the ground that the case did not come within section 266. This court sustained the action of the District Judge, and held that the section did not apply, although the constitutionality of a statute was challenged, because the defendants were local officers and the suit concerned matters of interest only to the particular municipality involved. We need add little to what we there said.

Section 266 provides that no injunction 'restraining the enforcement * * * of any statute of a state by restraining the action of any officer of such state in the enforcement * * * of such statute, * * * shall be issued or granted * * * upon the ground of the unconstitutionality of such statute,' except upon a hearing and determina- tion of a court composed of three judges. The suit here involved the constitutionality of a state statute, but it was not brought to restrain 'the action of any officer of such state in the enforcement' thereof. The persons sued are municipal officers, having no state functions to perform, but charged only with the duty of collecting and receiving taxes assessed by other city officials in no respect for the use of the state but for and in behalf of the city alone. In effect, the contention for petitioner practically comes to this-that the general purpose of section 266 being to safeguard state legislation assailed as unconstitutional from the improvident action of federal counts, the words, 'by restraining the action of any officer of such state in the enforcement * * * of such s...

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