281 U.S. 121 (1930), 270, Henrietta Mills v. Rutherford

Docket Nº:No. 270
Citation:281 U.S. 121, 50 S.Ct. 270, 74 L.Ed. 737
Party Name:Henrietta Mills v. Rutherford
Case Date:April 14, 1930
Court:United States Supreme Court
 
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281 U.S. 121 (1930)

50 S.Ct. 270, 74 L.Ed. 737

Henrietta Mills

v.

Rutherford

No. 270

United States Supreme Court

April 14, 1930

Argued March 5, 1930

CERTIORARI TO THE CIRCUIT COURT OF APPEALS

FOR THE FOURTH CIRCUIT

Syllabus

1. A suit to enjoin the collection of a state tax, as violative of the Fourteenth Amendment, upon the ground that the taxing officials, in making the assessment, arbitrarily and intentionally valued the plaintiff's property much above its true value, while assessing all other property in the county at only 60% of true value, will not lie in the federal court if the plaintiff has a plain, adequate and complete remedy at law. Jud.Code § 267; U.S.C. Title 28, § 384. P. 123.

2. It must appear that the enforcement of the tax would cause irreparable injury, or that there are other special circumstances bringing the case under some recognized head of equity jurisdiction, before the aid of a federal court of equity can be invoked. P. 124.

3. The mere fact that the validity of the tax may be tested more conveniently by a bill in equity than by an action at law does not justify resort to the former. Id.

4. In this case, under § 7979, Consolidated Statutes of North Carolina, the taxpayer had an adequate remedy at law by first paying the tax and then suing to recover it. P. 125.

5. The Act of Congress cited supra, has reference to the adequacy of the remedy on the law side of the federal courts. P. 126.

6. The enforcement in the federal courts of new equitable rights created by states is subject to the qualification that such enforcement must not impair any right conferred, or conflict with any inhibition imposed, by the Constitution or laws of the United States. P. 127.

7. A state statute conferring a merely remedial right to enjoin collection of invalid taxes cannot enlarge the right to proceed in a

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federal court sitting in equity, and the federal court may therefore be obliged to deny an equitable remedy which the plaintiff might have had in a state court. P. 127.

8. The Act of Congress, supra, though it does not extend to the jurisdiction of the federal court, governs the proceedings in equity, and, unless the case is one where the objection may be treated as waived by the party entitled to raise it, the prohibition is not to be disregarded. P. 128.

3 F.2d 570 affirmed.

Certiorari, 280 U.S. 541, to review a decree of the circuit court of appeals which affirmed a decree of the district court dismissing a bill to enjoin the collection of a state tax.

HUGHES, J., lead opinion

MR. CHIEF JUSTICE HUGHES delivered the opinion of the Court.

The Henrietta Mills, a corporation of North Carolina, brought this suit in the district court of the United States to enjoin Rutherford county, in that state, from collecting a tax upon the property of the corporation for [50 S.Ct. 271] the year 1927 or for any subsequent year based upon any valuation in excess of sixty percent of the actual and fair market value. It was alleged that the enforcement of such a tax would deprive the corporation of its property without due process of law and deny the equal protection of the laws, in violation of the Fourteenth Amendment of the federal Constitution.

The bill of complaint charged that the actual value, in the sense of the applicable statutory provision of the state, of the property of the corporation in Rutherford

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County on May 1, 1927, did not exceed $1,887,352, but that the property was actually assessed at $2,637,819. The corporation complained to the county commissioners, as the constituted board of equalization and review, but the board declined to pass upon the questions presented. The corporation then appealed to the state board of assessment, which, after hearing, reduced the assessment by the sum of $275,000 and fixed the value of the property at $2,362,819. The bill alleged that the tax officials of the county and of the state had intentionally and arbitrarily valued the complainant's property greatly in excess of its true value, while at the same time they had fixed the value of all other assessable property within the county at only sixty percent of its true value; that the assessment of complainant's property should have been reduced in like proportion -- that is, to $1,132,411.20, and that the complainant had paid to the county a sum which would be equal to the tax if laid upon such a valuation.

The answer denied that there had been any arbitrary and intentional overvaluation, or any unlawful discrimination against the complainant, and alleged that the complainant had an adequate remedy at law.

The district court decided against the complainant upon both these grounds, and dismissed the bill of complaint. The decree was affirmed by the circuit court of appeals. 32 F.2d 570.

Section 16 of the Judiciary Act of 1789 (1 Stat. 82) provided

That suits in equity shall not be sustained in either of the courts of the United States, in any case where plain, adequate and complete remedy may be had at law.

This explicit prohibition, continued in § 723 of the Revised Statutes and § 267 of the Judicial Code (U.S.C. Tit. 28, § 384), has clear application to proceedings to enjoin the collection of taxes upon the ground that they are illegal or unconstitutional. It must

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appear that the enforcement of the tax would cause irreparable injury, or that there are other special circumstances bringing the case under some recognized head of equity jurisdiction, before the aid of a federal court of equity can be invoked. The mere fact that the validity of the tax may be tested more conveniently by a bill in equity than by an action at law does not justify resort to the former.1

In the present case, a distinction is sought to be taken upon the ground that a statute of North Carolina gives a right to proceed in equity, and it is argued that a...

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