Smith v. Rackliffe

• Citation: 87 F. 964
• Decision Date: 03 May 1898
• Docket Number: 422.
• Parties: SMITH v. RACKLIFFE.
• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)

87 F. 964

SMITH v. RACKLIFFE.

No. 422.

United States Court of Appeals, Ninth Circuit.

May 3, 1898

C. N Sterry and E. S. Pillsbury, for plaintiff in error.

W. F Fitzgerald and W. H. Anderson, for defendant in error.

Before GILBERT and ROSS, Circuit Judges, and HAWLEY, District Judge.

GILBERT Circuit Judge.

The plaintiff in error, as receiver for the Atlantic & Pacific Railroad Company, was the plaintiff in an action which was brought against the state treasurer of the state of California, under section 3669 of the Political Code of California, to recover $2,272.80 taxes paid by said company for the year 1893, alleging, in his complaint, that said railroad company was operating, under a lease from the Southern Pacific Railroad Company, a certain line of railroad in the state of California, over which leased line the lessor company also ran its trains; that said line of road, and the rolling stock thereon, owned and operated by the Southern Pacific Railroad Company, were returned by that company to the state board of equalization for assessment for the year 1893, and were assessed to said Southern Pacific Company at a certain apportioned valuation per mile for all of the road which is covered by the lease; that the rolling stock on said leased road, owned and operated by the Atlantic & Pacific Railroad Company, was returned under protest by that company to the state board of equalization, and was by said board assessed for the year 1893 to its said owner; that each of said companies paid the taxes levied upon its property; that the said rolling stock of the Atlantic & Pacific Railroad Company so assessed was not used alone upon the line of the leased road in California, but was used in said company's traffic in other states, and was constantly coming and going into and out of said state, and that the Atlantic & Pacific Railroad Company's headquarters and the situs of its rolling stock is in the county of Bernallio, N.M., in which county all of its rolling stock was returned for taxation in 1893; that said assessment on the rolling stock of both companies using said road resulted in double taxation. The action was begun in the name of J. W. Reinhart, the former receiver of said road, and against J. R. McDonald, then the state treasurer. To the said complaint a demurrer was interposed, upon the grounds-- First, that the court had no jurisdiction of the subject-matter of the action; and second, that the complaint failed to state facts sufficient to constitute a cause of action. The circuit court, McKenna, J., sustained the demurrer upon the second ground, but disposed of the question of the jurisdiction in the following language:

'The view that this is a suit against the state is presented by the attorney general with great strength and plausibility. But, even if the contention be true, I think it is a fair deduction from the authorities, as from principle, that, the right of suit against the treasurer of the state being given, it may be brought in the federal courts when other grounds of jurisdiction exist, as they do in this case. I do not think it is necessary to review the cases. They are very numerous, and the care of counsel has cited all of them. ' Reinhart v. McDonald, 76 F. 403.

Upon writ of error from this court, the plaintiff in error contends that the circuit court erroneously sustained the demurrer, and the defendant in error again raises the objection which was presented in the lower court, that the court is without jurisdiction of the subject-matter of the action upon the ground that it is an action against the state of California, and subject to the inhibition of the eleventh amendment to the constitution of the United States, which provides that 'the judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by citizens of another state, or by citizens or subjects of any foreign state. ' There can be no doubt that the action, although nominally against the state treasurer, is in fact an action against the state of California. From the time of the adoption of the eleventh amendment the supreme court of the United States has held that it should be construed fairly and liberally, and in consonance with its manifest purpose, and has established the doctrine that when, 'the nominal defendants have no personal interest in the subject-matter of the suit, but defend only as representing the state, the state is the real party against whom the relief is sought, and this suit is substantially within the prohibition of the eleventh amendment. ' Hagood v. Southern, 117 U.S. 52, 6 Sup.Ct. 608; Louisiana v. Jumel, 107 U.S. 711, 2 Sup.Ct. 128; In re Ayers, 123 U.S. 443, 8 Sup.Ct. 164, Louisiana v. Steele, 134 U.S. 230, 10 Sup.Ct. 511. In re Ayers, 123 U.S. 443, 8 Sup.Ct. 164, Mr. Justice Matthews said, of the purpose of the eleventh amendment:

'It was thought to be neither becoming nor convenient that the several states of the Union invested with that residuum of sovereignty which had not been delegated to the United States, should be summoned as defendants to answer the complaints of private persons, whether citizens of other states or aliens, or that the course of their public policy and administration of their public affairs should be subject to, and controlled by, the mandates of judicial tribunals without their consent, and in favor of individual interest. To secure the manifest purposes of the constitutional exemption guarantied by the eleventh amendment requires that it should be interpreted, not literally and too narrowly, but fairly, and with such breadth and largeness as to effectually accomplish the substance of its purpose. In this spirit, it must be held to cover, not only suits brought against a state by name, but those also against its officers, agents, and representatives, where the state, though not named as such, is nevertheless, the only real party against which alone, in fact, the relief is asked, and against which the judgment or decree effectively operates.'

The present case comes clearly within the line of cases to which these words apply. It is a case in which the state of California is alone interested as defendant. No personal relief is sought as against the state treasurer, no act of his is brought in question, and no official misconduct is charged against him. So far as he is concerned, the action is purely impersonal. It was originally begun against McDonald his predecessor in office. It is the aim of the action to recover from the state treasurer, in his official capacity only, money which has been paid to the state for taxes, and mingled with other funds of the state. The money which the treasurer receives as such is kept by him in the vaults of the state treasury. It is so required by subdivision 1 of section 452 of the Political Code. If a judgment were rendered for plaintiff in the action, the treasurer, upon the controller's warrant, would be required to repay the tax money out of taxes so illegally collected, and to pay the costs out of the general fund of the treasury. The money sued for was not originally paid to the treasurer. It did not...