University of the South v. Jetton
| Decision Date | 14 August 1907 |
| Docket Number | 3,481. |
| Citation | 155 F. 182 |
| Parties | UNIVERSITY OF THE SOUTH v. JETTON et al. |
| Court | U.S. District Court — Middle District of Tennessee |
Spears & Lynch, Crownover & Crabtree, A. T. McNeal, and J. J Vertrees, for plaintiff.
Lynch & Phillips, Charles T. Cates, Atty. Gen., and Thos. B. Lytle for defendants.
In the study of this case it is found that the industry of eminent counsel on both sides has accumulated such a number of cases in the briefs as to make it impracticable to restate or to rediscuss these cases in this memorandum opinion without extending its limits beyond all reasonable length. In this situation I deem it sufficient to assure eminent counsel that I have examined the cases and have undertaken to give them the consideration which they deserve, in view of their bearing on the issues presented in this case for determination. Under such circumstances I shall content myself with a simple reference to some of the cases which seem to me to support and to require the ruling which is about to be made on the issues here to be disposed of.
It is probably best in the outset to remark that, so far as the lessee complainants are concerned, there is no statute of the state confessedly which has undertaken to exempt them from taxation, and their contention, consequently, does not and cannot involve a federal question such as to give this court jurisdiction; and this view makes it immaterial to consider whether the case as to each of these complainants would show a jurisdictional amount sufficient to sustain jurisdiction for I think it is certain, upon the authorities, that the amount connected with the complaint of each one of these lessees is a separate matter, and that their several complaints could not be aggregated or put together to make up jurisdictional amount. However this may be, as just suggested, I do not now find it necessary to decide. There is, as to them, really no substantial federal question. And the second ground of the demurrer is special and separate against the complainants other than the University of the South, and is accordingly sustained, and all other grounds assigned in the demurrer, and the demurrer as a whole, so far as it applies to the University of the South, is overruled, for reasons which will sufficiently appear in the further statements of this memorandum opinion.
The first objection is that the bill presents no federal question, and that there is a want of federal jurisdiction, as distinguished from state jurisdiction. However, upon a careful study of this question, I am unable to accept the views so cogently presented by the able counsel on behalf of the state's revenue collecting and tax assessing officers. Reference may be made to the following cases: Bank of Kentucky v. Stone (C.C.) 88 F. 383; Union & Planters' Bank v. City of Memphis, 111 F. 561, 49 C.C.A. 455; Illinois Central Railroad Co. v. Adams, 180 U.S. 28, 21 Sup.Ct. 251, 45 L.Ed. 410; City Ry. Co. v. Citizens' Railroad Co., 166 U.S. 557, 17 Sup.Ct. 653, 41 L.Ed. 1114.
The case of Hamilton Gaslight Co. v. Hamilton City, 146 U.S. 258, 13 Sup.Ct. 90, 36 L.Ed. 963, is relied on by the defendants' able counsel as supporting the proposition that there is a want of federal jurisdiction. It must be remembered, however, that there was in that case a contention that there was no statute of the state of Ohio which furnished authority or color for the city in the enactment of the ordinance in question, and it was said in reference to this that a municipal ordinance not passed under supposed legislative authority could not be regarded as a law of the state, within the meaning of the constitutional provision against impairing the obligation of contracts. The court, after recognizing the soundness of this contention as a general proposition of law, proceeded to say distinctly that federal jurisdiction was sustained because it appeared that the defendant grounded its right to enact the ordinance in question upon a certain section of the Municipal Code of Ohio, as found in the Revised Statutes of Ohio, and it was held that the circumstance that the ordinance was passed under the authority or color of that section raised a federal question, and gave to the federal courts jurisdiction. This case was distinguished in this respect in the case of American Waterworks & Guarantee Co. v. Home Water Co. (C.C.) 115 F. 171.
Now, in the case at bar the entire tax proceeding on its face, and in every step of the procedure from first to last, is based obviously and expressly upon the revenue act of 1903 (Acts 1903, p. 599, c. 257) passed by the General Assembly of the state of Tennessee, and I think under the authorities the existence of a federal question here cannot be successfully denied, and that the court possesses jurisdiction as between the University of the South and the defendants; and I conclude the position which is suggested, rather than argued, that this is a suit against the state, is not maintainable, and just in this connection I may refer to the contention that, while the tax proceeding is expressly and avowedly under the act of 1903 in its different provisions as authority for the tax, still the tax proceeding and judgment would be good, if such a proceeding can be maintained and such a tax laid or assessed under any other provision of law, and under any other classification of the property of the lessees as personalty, or otherwise. I am sure that defendants' very able and thoughtful counsel will agree that it would be extremely embarrassing for the court to go entirely outside of the case, as made in the tax proceeding clearly and expressly, and also in the pleadings, and inquire whether or not the tax proceeding was illegal and void, and whether or not, if found to be so, it could be sustained upon other grounds and other provisions of law different from those under which the proceeding was clearly conducted, and which proceeding is sought to be enjoined by the pleadings in this case, which pleadings present exactly the same issues and questions as those which arose on the tax proceeding on its face. I do not think this can be done. Ogden City v. Armstrong, 168 U.S. 224, 18 Sup.Ct. 98, 42 L.Ed. 444. Such an inquiry as that of going outside of anything that appears on the face of the tax proceeding, or in the pleadings which present the case for the court's ruling, would manifestly be to make the case turn on issues partly of law and partly of fact entirely dehors the proceeding. It would be to consider issues that do not arise on the face of the act of the Assembly, nor, again, in the tax proceeding expressly under color of the authority of that act, nor, again, in the pleadings which make the case for decision.
In this same connection reference may be made to the case of University v. Skidmore, 87 Tenn. 155, 9 S.W. 892 the decision in which eminent counsel insist should be read into the revenue act, and so considered as if it appeared in the very face of the act, and in consequence of which it is said the constitutional invalidity of the act would appear. This, however, would be again to go outside of the record, and if the law declared in the Skidmore Case were read into this act the situation would still be that the act would be contradictory on its face, in that it expressly and clearly declares what property shall be taxed and what shall be exempt, and then declares in positive terms that there shall be no other exemption. Furthermore, whether or not the Skidmore Case could be relied on would involve an inquiry into the nature of the lease contracts, and a construction of those contracts, and whether the lease contracts relate to parcels of property within the 1,000-acre exemption, or, again, possibly whether or not the interest of the lessees could, as matter of law, be separated from the general fee and general ownership, so as to become the subject of taxation in the hands of the lessee. These questions would give rise in any case, and in as many cases as may occur in the future, to lawsuits of serious difficulty, and unless the University of the South can protect itself by injunction, as it is now seeking to do, it seems evident enough that it will be subjected to a lawsuit in respect of each and every lease contract which it makes. If it should stand by until the tax proceeding is carried to completion, the tax record then on its face, and on the face of all that might be considered, would confer upon the purchaser at the tax sale a title, to defeat which it would be necessary for the University of the South to bring suit, or to be sued, and then set up its exemption from taxation, as broadly declared in the Skidmore Case. The tax proceeding would obviously prevent handling the property on the market so long as it existed, and would injure its market value and its rental value, and its validity would depend on matters entirely outside of the tax record as made up, and on which the tax title would rest. If we may assume that the University of the South has as many as 50 lessees, it would involve it in as many as 50 separate lawsuits to protect its property and to maintain practically its value to it for renting or for other uses. It would involve it in lawsuits with tax purchasers at the tax sales, and would, of course, unless it should protect its tenants and lessees, cause a rental loss on account of the fact that such lessees and tenants would refuse to be involved in litigation in connection with the title, the ownership of which might be regarded as doubtful. In view of these and some other points which might be suggested, I conclude, without difficulty or misgiving, that the University of the South has a constitutional right to maintain a bill to protect its exemption contract against impairment. Under...
To continue reading
Request your trial