Tyler v. Dane County, Wis.

CourtUnited States District Courts. 7th Circuit. Western District of Wisconsin
Citation289 F. 843
PartiesTYLER et al. v. DANE COUNTY, WIS., et al.
Decision Date28 May 1923

289 F. 843

TYLER et al.
v.
DANE COUNTY, WIS., et al.

United States District Court, W.D. Wisconsin.

May 28, 1923


[289 F. 844] [Copyrighted Material Omitted] [289 F. 845]

Sanborn, Blake & Aberg, of Madison, Wis., for plaintiffs.

William J. Morgan and Herman L. Ekern, Attys. Gen., Franklin E. Bump, Asst. Atty. Gen., and John Harrington, Inheritance Tax Counsel, of Wisconsin, and Theodore G. Lewis, Dist. Atty., of Madison, Wis., for defendants.

LUSE, District Judge.

The plaintiffs, citizens of Massachusetts, bring this action as executors of the estate of Charles E. Cotting, who in his lifetime was a citizen of Massachusetts, against the defendants to recover $6,163.32, alleged to have been exacted by the defendants and paid by the plaintiffs involuntarily under duress and protest, by way of inheritance taxes upon shares of stock owned by the decedent in corporations foreign to the state of Wisconsin, but which did business and owned property in this state. The complaint avers ownership by plaintiffs' decedent of various shares of stock in corporations, some of which were organized and existed under the laws of the state of Wisconsin, and some of which were organized and existed under the laws of foreign states, and that in the process of settlement of the estate, and in order that the plaintiffs, as executors, might have the stock transferred to them, it became necessary to have ancillary administration of said estate in the state of Wisconsin, with reference particularly to the transfer of the shares of stock in the corporations organized under the laws of the state of Wisconsin, and that in the process of such administration it was claimed by the public administrator of Dane county, who was appointed special administrator of the estate in Wisconsin for the purpose of such ancillary administration, and by the tax commission of the state of Wisconsin, and was determined by the county court of Dane county, that before these plaintiffs could have transfer of the shares in the Wisconsin corporations an inheritance tax must be paid to the state of Wisconsin upon all the stock transferred including that in the foreign corporations aforesaid, and that in order to effect a transfer of such stock in the Wisconsin corporations, and under such coercion and duress, and under protest, the plaintiffs paid the sum of $6,163.32, the amount found due on the transfer of stock in the foreign corporations, to the defendant Rinder as treasurer of Dane county, and that he and the defendant Dane county paid over to the defendant Henry Johnson, as treasurer of the state of Wisconsin, $6,101.69 of such sum. It is further averred, in substance, that the statute of Wisconsin does not warrant the interpretation placed upon it by the collecting officers of the state, including the county court of Dane county, and that, if the laws of Wisconsin are so construed as to warrant such result, the same are unconstitutional under the provisions of the Fourteenth Amendment to the Constitution of the United States.

Separate demurrers to the complaint are interposed by the defendant Henry Johnson, on the one hand, and the remaining defendants, on the other, the grounds of demurrer being identical, as follows: (1) That the court has no jurisdiction of the subject-matter of the action. (2) That there is a defect of parties defendant in this action, in this, to wit, that it appears by said complaint that the state of Wisconsin is [289 F. 846] a party in interest and is a necessary party thereto. (3) That several causes of action have been improperly united. (4) That the complaint does not state facts sufficient to constitute a cause of action.

The first two assigned grounds of demurrer may be treated together, and those grounds with reference to the defendant Johnson will be considered first. The theory that the statutes of Wisconsin do not warrant such construction as to impose a transfer tax upon stock in foreign corporations owned by nonresident decedents where the corporations do business and own property within the state of Wisconsin, was not seriously urged by the plaintiffs upon the oral argument nor in their briefs, and in discussing the question under consideration it will be assumed for its purpose only that the phase of the Wisconsin inheritance tax law here involved is unconstitutional. On this assumption the case of Atchison, etc., Ry. Co. v. O'Connor, 223 U.S. 280, 32 Sup.Ct. 216, 56 L.Ed. 436, Ann. Cas. 1913C, 1050, together with Erskine v. Van Arsdale, 15 Wall. 75, 21 L.Ed. 63, and the Virginia Coupon Cases, 114 U.S. 270, 5 Sup.Ct. 903, 962, 29 L.Ed. 185, are deemed to establish the individual liability of a treasurer to repay taxes paid to him involuntarily and under protest, where the tax is exacted under an unconstitutional statute. The case of Smith v. Reeves, 178 U.S. 436, 20 Sup.Ct. 919, 44 L.Ed. 1140, however, establishes the proposition that, if an action to recover moneys exacted by way of illegal taxes be brought against a state treasurer as treasurer, and the relief sought is a judgment against that officer in his official capacity, so that judgment would compel the defendant to pay out of the public funds in the treasury of the state a certain sum of money, then the action is in reality one against the state, and within the inhibition of the Eleventh Amendment to the Constitution of the United States.

The doctrine which renders government officials, acting as such, individually responsible for their acts done under an unconstitutional law, rests upon the theory that an unconstitutional law is no law at all, and that the officer who acts under it is afforded no protection, and is judicially regarded as acting in his personal capacity only. The case of Atchison Ry. Co. v. O'Connor was to enforce such personal liability. If the instant action is brought merely to enforce the personal responsibility of Henry Johnson, then the action is not in fact against the state, and, so far as the point now under discussion is concerned, is maintainable. If, however, the instant case is one the result of which will be to compel the defendant Henry Johnson, as state treasurer, to pay out of the public funds of the state the moneys sought to be recovered, then the action is one in reality against the state, within the doctrine of Smith v. Reeves. So far as this point is concerned, no distinction is perceived between an action in which recovery of illegal taxes is sought, as in Smith v. Reeves, supra, and one in which the recovery is based upon the unconstitutionality of the law under which the taxes are exacted.

The defendant Johnson is named in the summons as 'Henry Johnson, State Treasurer of Wisconsin,' and is similarly named in the complaint. The prayer for relief, as it was originally drawn, prayed judgment 'against Henry Johnson, as treasurer of the state of Wisconsin. ' [289 F. 847] Upon leave plaintiffs amended this prayer in several particulars, so that the prayer now demands 'Judgment against the defendants.' Should judgment result, it would of necessity run against 'Henry Johnson, State Treasurer of Wisconsin. ' In other words, judgment would go against that defendant in his official capacity, and not as an individual who has committed a wrong against the plaintiffs. I am unable to avoid the conclusion that the demurrer of the defendant Johnson must be sustained because of these considerations.

In considering the complaint against Dane county and its treasurer, it is deemed that the Eleventh Amendment to the Constitution of the United States is not applicable. Actions against municipalities, including counties, for the recovery of illegal taxes, are familiar and are well illustrated by the case of Ward v. Love County, 253 U.S. 17, 40 Sup.Ct. 419, 64 L.Ed. 751, in which it was held in substance that it was no defense that a portion of the taxes had been paid over by the defendant county to the state and other municipal bodies. Cases in which recovery had been allowed against federal officers and agents in the federal courts are numerous, and the principle underlying them is applicable, as I see it, to the defendant treasurer of Dane county. As already indicated, it being assumed that the law under which these taxes were collected is unconstitutional, it follows that the acts of the treasurer and of Dane county in collecting the taxes are as though there were no law covering the subject. The collection and receipt of the taxes by these defendants was unlawful, and the taxes being paid under coercion, and payment protested, that the county treasurer has paid the taxes over to the county, and the county has remitted to the state treasurer all but 1 per cent. thereof, is no defense. The payment under protest and duress was notice that payment over to the state treasurer would be at their peril, even though it be assumed that the county and its treasurer were acting merely as agents in the transaction. The case of Elliott v. Swartwout, 10 Pet. 137, 9 L.Ed. 373, is illustrative of this doctrine, which has been consistently applied, so far as I am informed, down to and including the case of Eisner v. Macomber, 252 U.S. 189, 40 Sup.Ct. 189, 64 L.Ed. 521, 9 A.L.R. 1570.

The third ground of demurrer, to wit, that several causes had been improperly united, has not been pressed, either on the oral argument or in the briefs, and it is not deemed necessary to discuss it separately particularly in view of the amendment of the complaint. The court views the action as one to recover the entire amount of taxes paid on the transfer of stock in the corporations foreign to the state of Wisconsin, in the collection of which both the defendants Dane county and its treasurer took part and are responsible to the plaintiffs, providing the tax was illegal and was paid and received as alleged in the complaint. It is contended that the determination of the existence and amount of the tax by the county court of Dane...

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9 practice notes
  • Fair Assessment In Real Estate Association, Inc v. Nary, No. 80-427
    • United States
    • United States Supreme Court
    • December 1, 1981
    ...against both the taxing authority and the taxing officials, were not unknown to the lower federal courts. See, e. g., Tyler v. Dane County, 289 F. 843 (WD Wis. 1923); International Paper Co. v. Burrill, 260 F. 664 (Mass.1919). In Matthews v. Rodgers, 284 U.S. 521, 52 S.Ct. 217, 76 L.Ed. 447......
  • Yoerg v. Iowa Dairy Industry Commission, No. 48357
    • United States
    • United States State Supreme Court of Iowa
    • October 20, 1953
    ...section 80-11-13, * * * we are satisfied these are suits against Utah.' Some other decisions are: Tyler v. Dane County, D.C.W.D.Wis.1923, 289 F. 843; Lord & Polk Chemical Co. v. State Board of Agriculture, 111 N.C. 135, 15 S.E. 1032; Automobile Sales Co. v. Johnson, 174 Tenn. 38, 122 S.W.2d......
  • State ex rel. Walker v. Jones, No. 6175.
    • United States
    • Montana United States State Supreme Court of Montana
    • November 23, 1927
    ...intended to exercise the utmost taxing power of the state in the imposition of excise, or succession, taxes. Tyler v. Dane County (D. C.) 289 F. 843;Hoyt v. Keegan, 183 Iowa, 592, 167 N. W. 521;State ex rel. Graff v. Probate Court, 128 Minn. 371, 150 N. W. 1094, L. R. A. 1916A, 901;Peabody ......
  • Toy Nat. Bank v. Nelson, No. 695-697.
    • United States
    • United States District Courts. 8th Circuit. Northern District of Iowa
    • February 5, 1930
    ...Bank (C. C. A.) 26 F.(2d) 890, 891; Ogden City v. Armstrong, 168 U. S. 224, 18 S. Ct. 98, 42 L. Ed. 444, 453; Tyler v. Dane County (D. C.) 289 F. 843, 847; Schell v. Cochran, 107 U. S. 626, 2 S. Ct. 827, 27 L. Ed. 544, 545; Stanley v. Board, 121 U. S. 535, 7 S. Ct. 1234, 30 L. Ed. 1000; Hug......
  • Request a trial to view additional results
9 cases
  • Fair Assessment In Real Estate Association, Inc v. Nary, No. 80-427
    • United States
    • United States Supreme Court
    • December 1, 1981
    ...against both the taxing authority and the taxing officials, were not unknown to the lower federal courts. See, e. g., Tyler v. Dane County, 289 F. 843 (WD Wis. 1923); International Paper Co. v. Burrill, 260 F. 664 (Mass.1919). In Matthews v. Rodgers, 284 U.S. 521, 52 S.Ct. 217, 76 L.Ed. 447......
  • Yoerg v. Iowa Dairy Industry Commission, No. 48357
    • United States
    • United States State Supreme Court of Iowa
    • October 20, 1953
    ...section 80-11-13, * * * we are satisfied these are suits against Utah.' Some other decisions are: Tyler v. Dane County, D.C.W.D.Wis.1923, 289 F. 843; Lord & Polk Chemical Co. v. State Board of Agriculture, 111 N.C. 135, 15 S.E. 1032; Automobile Sales Co. v. Johnson, 174 Tenn. 38, 122 S.W.2d......
  • State ex rel. Walker v. Jones, No. 6175.
    • United States
    • Montana United States State Supreme Court of Montana
    • November 23, 1927
    ...intended to exercise the utmost taxing power of the state in the imposition of excise, or succession, taxes. Tyler v. Dane County (D. C.) 289 F. 843;Hoyt v. Keegan, 183 Iowa, 592, 167 N. W. 521;State ex rel. Graff v. Probate Court, 128 Minn. 371, 150 N. W. 1094, L. R. A. 1916A, 901;Peabody ......
  • Toy Nat. Bank v. Nelson, No. 695-697.
    • United States
    • United States District Courts. 8th Circuit. Northern District of Iowa
    • February 5, 1930
    ...Bank (C. C. A.) 26 F.(2d) 890, 891; Ogden City v. Armstrong, 168 U. S. 224, 18 S. Ct. 98, 42 L. Ed. 444, 453; Tyler v. Dane County (D. C.) 289 F. 843, 847; Schell v. Cochran, 107 U. S. 626, 2 S. Ct. 827, 27 L. Ed. 544, 545; Stanley v. Board, 121 U. S. 535, 7 S. Ct. 1234, 30 L. Ed. 1000; Hug......
  • Request a trial to view additional results

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