Connecting Gas Co. v. Imes

• Decision Date: 20 February 1926
• Docket Number: No. 370.,370.
• Parties: CONNECTING GAS CO. v. IMES, County Treasurer, et al.
• Court: U.S. District Court — Southern District of Ohio

11 F.2d 191 (1926)

CONNECTING GAS CO. v. IMES, County Treasurer, et al.

No. 370.

District Court, S. D. Ohio, E. D.

February 20, 1926.

Eagleson & Laylin, of Columbus, Ohio, for plaintiff.

C. C. Crabbe, Atty. Gen., and Wilbur E. Benoy, Sp. Counsel, of Columbus, Ohio, for defendants.

Before DONAHUE, Circuit Judge, and HOUGH and WESTENHAVER, District Judges.

WESTENHAVER, District Judge.

This action is in equity against the county treasurers of five Ohio counties, seeking to enjoin the collection of certain taxes alleged to have been illegally assessed. The plaintiff is a public utility, as defined in section 614 — 2, Ohio Gen. Code. The property owned by it has been appraised and valued, and taxes thereon levied and assessed, by the tax commission of Ohio in the manner provided in sections 5420 to 5428. Upon filing its bill, plaintiff made an application for a preliminary injunction. The Ohio tax commission, by the Attorney General, has appeared and asked leave to intervene and he made a party defendant.

Certain motions addressed to the bill are also tendered therewith. The District Judge to whom application for an injunction was made, doubted his authority to hear it alone, because of the requirements of section 266, Judicial Code (Comp. St. § 1243). Thereupon he called to sit with him another District Judge and a Circuit Judge.

The first matter, to be considered by this court thus constituted, is the question of power. If section 266 applies, a District Judge cannot hear alone the application for a preliminary injunction, nor, since the amendment thereto of February 13, 1925 (Comp. St. Supp. 1925, § 1243), hear the case upon a final hearing. If, however, the section does not apply, the other judges have no right to participate in the present hearing. The question being one of power, it must be determined before we proceed to consider plaintiff's application for a preliminary injunction or the tax commission's application to intervene, or its several motions.

The question thus presented turns on the grounds on which plaintiff seeks relief, the nature of the relief sought, and the specific remedies, if any, provided by Ohio statutes to enjoin the collection of taxes illegally assessed. Plaintiff seeks relief upon two grounds: First, it is alleged that the true value in money of its taxable property does not exceed $1,083,683.32, whereas the tax commission, by failing to adopt and apply proper principles in fixing that value, has arbitrarily determined that value to be $1,484,230, and has certified this valuation to the county auditors of the five Ohio counties in which plaintiff's property is situated, and these auditors have spread that valuation upon the tax duplicate, and certified the same to the county treasurer for collection; second, that, while plaintiff's property has been valued at or in excess of its true value in money, all other real and personal property in said five counties and the several taxing districts thereof, being likewise required by law to be valued at its true value in money, has been uniformly valued at only 60 per cent. or less of its true value in money, which discrimination, it is charged, is the result of intentional and systematic, and therefore fraudulent and arbitrary, action on the part of the local taxing authorities.

The first ground does not present any federal question. If plaintiff is entitled to relief upon that ground, it is so entitled only in accordance with the local law of the state of Ohio.

The second ground, however, does present a federal question. It is unnecessary to repeat in detail the allegations in this respect of the bill. It is sufficient to say that, if the averments are sustained by proof, a case is made of a denial to plaintiff of the equal protection of the law, in violation of the Fourteenth Amendment. In this respect the case is controlled by Taylor v. L. & N. R. R. Co. (6 C. C. A.) 88 F. 350, 31 C. C. A. 537; Cummings v. National Bank, 101 U. S. 153, 25 L. Ed. 903; Raymond v. Chicago Traction Co., 28 S. Ct. 7, 207 U. S. 41, 52 L. Ed. 78, 12 Ann. Cas. 757; Greene v. Louisville & Interurban R. R. Co., 37 S. Ct. 673, 244 U. S. 499, 61 L. Ed. 1280, Ann. Cas. 1917E, 88; L. & N. R. R. Co. v. Greene, 37 S. Ct. 683, 244 U. S. 522, 61 L. Ed. 1291, Ann. Cas. 1917E, 97; Chicago G. W. Ry. v. Kendall, 45 S. Ct. 55, 266 U. S. 94, 69 L. Ed. 183.

If jurisdiction is, however, properly invoked upon the last ground, this court has jurisdiction also to hear and determine the case upon the first, without even proceeding to determine the second. Greene v. Louisville & Interurban R. R. Co., supra, 499; Chicago Great Western Ry. v. Kendall, 45 S. Ct. 55, 266 U. S. 94, 69 L. Ed. 183.

The relief sought is to enjoin the collection of a tax alleged to have been illegally assessed. Ordinarily a court of equity will not enjoin the assessment and collection of an illegal tax. There must be some special ground of equitable jurisdiction, other than the hardship and inconvenience involved in raising and paying money under protest, and then suing at law to recover it. Taylor v. L. & N. R. R. Co., supra; Pittsburgh, etc., Ry. v. Board of Public Works, 19 S. Ct. 90, 172 U. S. 32, 43 L. Ed. 354; National Bank v. Kimball, 103 U. S. 732, 26 L. Ed. 469. In Ohio this rule has been modified by statute, which confers jurisdiction to enjoin either the illegal levy or the collection of taxes illegally levied. Section 12075, G. C.; Steese v. Oviatt, 24 Ohio St. 248, 253; Stephan v. Daniels, 27 Ohio St. 527, 531, 536; Tone v. Columbus, 39 Ohio St. 302, 48 Am. Rep. 438.

The special remedy provided in Ohio is found in sections 12075 to 12078 — 2. Section 12075 confers jurisdiction on common pleas and superior courts to enjoin the illegal levy or collection of taxes and assessments, and also to recover them back when collected. The first is an action in equity. In actions to enjoin the illegal levy of taxes and assessments, the corporations or persons for whose use and benefit the levy is made must be made defendants, and, if the levy is to go upon the tax duplicate, the county auditor must also be joined as a defendant. If the action is merely to enjoin the collection of taxes and assessments, section 12077 provides that it may be brought against the officer alone whose duty it is to collect them. If the action is to enjoin the collection of taxes or assessments, and it is admitted that a part thereof was legally levied, then section 12078 requires the payment or tender of such sum as is admitted to be due.

When these sections were enacted, the tax commission had not yet been created. Section 1465 — 31 of the act creating the tax commission now prohibits the issue of any injunction suspending or staying any order, determination, or direction of the commission, or any action of the auditor of state, treasurer of state, or Attorney General, required by law to be done in pursuance of such order, determination, or direction. It further provides, however, that nothing contained therein shall affect any right or defense in any action to collect any tax or penalty. It may be conceded that this new section prohibits any state court from enjoining the illegal levy of a tax when the same is made by the tax commission. It may also be conceded that this section prohibits the enjoining of the county auditor from spreading upon the tax duplicate and certifying to the county treasurer any tax illegally levied by the tax commission. No opinion need be or is expressed on this point, one way or the other. It is plain, however, that the provisions of section 12075 may still be invoked against the collection by the county treasurer of any tax illegally levied, as well when the illegal levy is made by the tax commission as when it is made by the local taxing authorities of any county or district thereof.

Such would be the status of the plaintiff's action, if brought in the state court under favor of section 12075. Its status is no different in this court, since, as we have seen, this court may grant relief according to the state law, if its jurisdiction is properly invoked on any federal ground. It is settled law that, where a state statute creates a new right, the federal courts will enforce that right and grant relief, either on...