Board of Trustees of Whitman College v. Berryman

• Decision Date: 04 June 1907
• Docket Number: 250.
• Citation: 156 F. 112
• Parties: BOARD OF TRUSTEES OF WHITMAN COLLEGE v. BERRYMAN et al.
• Court: U.S. District Court — District of Washington

156 F. 112

BOARD OF TRUSTEES OF WHITMAN COLLEGE v. BERRYMAN et al.

No. 250.

United States Circuit Court, E.D. Washington, Southern Division.

June 4, 1907

George Turner, Thomas Burke, W. T. Dovell, and Allen H. Reynolds for complainant.

Lester S. Wilson and Otto B. Rupp, for defendants.

WHITSON District Judge.

Elkanah Walker, Cushing Eells, and others, on the 20th day of December, 1859, secured a charter from the Legislature of Washington Territory for the establishment of an educational institution to be devoted to the instruction of persons of both sexes in science and literature. The persons therein named and their successors were declared to be a body politic and corporate, in law, by the name and style of the 'President and Trustees of Whitman Seminary. ' It was provided that the corporation should have perpetual succession, with power to acquire, possess, and hold property, real, personal, and mixed, and to sell, grant convey, rent, or otherwise dispose of the same at pleasure with power to sue and be sued, plead and be impleaded, in all courts of justice, both at law and in equity. Sess. Laws Wash. T. 1859-60, p. 422.

The persons named in the act of the Legislature accepted the conditions of the grant, and established said seminary at Walla Walla in pursuance of its purposes, and in accordance with the provisions therein contained. It was maintained as Whitman Seminary until the 20th day of November, 1883, when the act was amended by the territorial Legislature. The name was changed to Whitman College, and it was amended in other respects, but in so far as vital to the matter now at issue reference need only be made to section 6, relating to taxation, which reads as follows:

'That the property of said board of trustees of Whitman College, including all income and proceeds shall be used exclusively for the purposes of education, and in consideration of said use, said property, income and proceeds, shall not be subject to taxation. ' Sess. Laws Wash. T. 1883, p. 400.

The amendment was accepted; and, being thus empowered, Whitman College became the successor of Whitman Seminary and received by appropriate conveyances its property and assets, and thereafter continued to be, and is now, maintained as an educational institution for the purposes expressed and in accordance with the original act and the amendments thereof.

Thus may be briefly summarized the allegations of the bill in so far as it relates to the history of the subject-matter which leads up to the controversy in this case. That controversy arises out of the attempt of the defendants, who are alleged to be, respectively, the assessor, treasurer, auditor, and board of county commissioners of Walla Walla county, to assess for taxation, and levy taxes upon, certain real property belonging to the complainant, which it is contended is in violation of the amendatory act of 1883, and it has taken the form of a demurrer to the bill of complaint, which challenges both the jurisdiction of the court and the equity of the bill.

First, as to Jurisdiction.

(a) It is objected that an amount sufficient to sustain jurisdiction is not disclosed, the tax sought to be collected being $946.32; that the amount of the tax, and not the value of the property taxed, furnishes the criterion by which jurisdiction should be determined, and that future taxation is so speculative and involved in so much uncertainty as not to be the subject of inquiry; that complainant may not be the owner of the property, and if so future taxes may not be assessed. As to the extent of this rule, we must now inquire.

In Citizens' Bank v. Cannon, 164 U.S. 319, 322, 17 Sup.Ct. 89, 41 L.Ed. 451, the Supreme Court, in discussing the question, said:

'The purpose of the bill is to restrain certain tax assessors and tax collectors from collecting taxes for specific years, and, if the amount of such taxes does not confer jurisdiction, it is, from the nature of things, impossible for a court to foresee what, if any, taxes may be assessed in the future.'

So it was thus stated in Holt v. Indiana Mfg. Co., 176 U.S. 72, 20 Sup.Ct. 272, 44 L.Ed. 374:

'And the effect on future taxation of a decision that the particular taxation is invalid cannot be availed of to add to the sum or value of the matter in dispute.'

That the rule is well settled the following authorities will attest: Fishback v. Western Union Tel. Co., 161 U.S. 96, 16 Sup.Ct. 506, 40 L.Ed. 630; Washington, etc., R. v. District of Columbia, 146 U.S. 231, 13 Sup.Ct. 64, 36 L.Ed. 951; New England Mortgage Security Co. v. Gay, 145 U.S. 123-130, 12 Sup.Ct. 815, 36 L.Ed. 646; Northern Pacific Railroad Co. v. Walker, 148 U.S. 392, 13 Sup.Ct. 650, 37 L.Ed. 494; Walter v. Northeastern Railroad, 147 U.S. 370, 13 Sup.Ct. 348, 37 L.Ed. 206; Clay Center v. Farmers' Loan & Trust Co., 145 U.S. 224, 12 Sup.Ct. 817, 36 L.Ed. 685; Mayor, etc., of Baltimore v. Postal Tel. Cable Co. (C.C.) 62 F. 500; Linehan Railway Transfer Co. v. Pendergrass, 70 F. 1, 16 C.C.A. 585; Woodman v. Ely (C.C.) 2 Fed. 839; Murphy v. East Portland (C.C.) 42 F. 308.

Nor can the contingent loss which may be sustained by either of the parties through the probative effect of the judgment, however certain it may be that such loss will occur, be considered for the purpose of sustaining jurisdiction. New England Mortgage Co. v. Gay, 145 U.S. 123, 12 Sup.Ct. 815, 36 L.Ed. 646; Rude v. Westcott, 130 U.S. 152, 9 Sup.Ct. 463, 32 L.Ed. 888; Elgin v. Marshall, 106 U.S. 578, 1 Sup.Ct. 484, 27 L.Ed. 249; Gibson v. Shufeldt, 122 U.S. 27, 7 Sup.Ct. 1066, 30 L.Ed. 1083; Bruce and Another v. Manchester & Keene Rd., 117 U.S. 514, 6 Sup.Ct. 849, 29 L.Ed. 990.

In the latter case it was held:

'The matter in dispute, on which the jurisdiction of this court depends, is the matter which is directly in dispute in the particular cause in which the judgment or decree sought to be reviewed has been rendered; and the court is not permitted, for the purpose of determining its sum or value, to estimate its collateral effect in a subsequent suit between the same or other parties.' These authorities would at first blush appear to deny the jurisdiction of the court in this case. Such was my firm conviction at the conclusion of the oral arguments. The correct solution of the question turns upon what is in dispute here; whether it is the taxes now assessed, and which may in the future be assessed, or whether it is the right to be exempt from taxation pursuant to the terms of the statute. That the Supreme Court had in mind a distinction in this regard is disclosed by reference to Citizens' Bank v. Cannon, supra, where this language was used:

'It is further argued that jurisdiction may be seen in the averment of the bill that the value of the exemption of the bank's property during the continuance of its charter exceeds $2,000 for each parish. But the answer to this is that this is not a suit to exempt property from taxation permanently. The purpose of the bill is to restrain certain tax assessors and tax collectors from collecting taxes for specific years, and, if the amount of such taxes does not confer jurisdiction, it is, from the nature of things, impossible for a court to foresee what, if any, taxes may be assessed in the future.'

Complainant was seeking in this case to enforce an exemption granted by the laws of the state of Louisiana, but the object sought was to be exempt from the payment of taxes already assessed, asserted, it is true, by reason of the act of exemption and in reliance upon it; but the purpose of the suit related wholly to particular taxes less than the jurisdictional amount, together with those anticipated for succeeding years.

In Scott v. Donald, 165 U.S. 58, 17 Sup.Ct. 265, 41 L.Ed. 632, interference with the right to import liquors into South Carolina was the ground upon which an injunction was sustained. It is true in that case it was stipulated between the parties that the right to import liquors in the manner in which the complainant had been importing them, and intended in the future to import them, was of the value of $2,000 and upwards; but the stipulation related purely to a question of fact, and the jurisdiction could only have been sustained upon the principle that complainant's right to import liquors was the matter in dispute, for the tax complained of was an insignificant amount.

Lanning v. Osborne et al. (C.C.) 79 F. 657, involved water rates for irrigation which had been fixed at $3.50 per acre; the purpose of the suit being to establish the right to collect $7 per acre. In referring to the argument of counsel against jurisdiction, Judge Ross, in sustaining it, said:

'I am unable to see the least ground for their contention. But for the high character of the counsel, and for the earnestness with which they press the point, I should be disposed to think it little less than absurd to say that the subject-matter of the controversy between the complainant and the respective defendants is the sum of $3.50-- the mere difference between the annual rate contended for by the defendants and that to which the complainant asserts a right. The real subject of the controversy is the asserted right on the part of the land and town company to establish the rates at which it will furnish water to the defendants for the purpose of irrigation, in the absence of any action on the part of the board of supervisors of the county. The establishment of that right, denied by the defendants, is the principal object of the bill, and it is the value of that right which constitutes the amount in controversy. Railway Co. v. Kuteman, 4 C.C.A. 503, 54 F. 547; Fost. Fed. Prac. Sec. 16; Stinson v. Dousman, 20 How. (U.S.) 461, 15 L.Ed. 966; Railroad Co. v. Ward, 2 Black (U.S.) 485, 17

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