The voluntary payment of a municipal tax while a suit is pending
in this Court between the party taxed and the officers of the
corporation, to
Page 134 U. S. 548
determine whether it was legally assessed, leaves no existing
cause of action, and requires the dismissal of the writ of
error.
Robertson v. Bradbury, 132 U.
S. 491, distinguished from this case.
The fact that there is no controversy between the parties may be
shown at any time before the decision of the case, and there is no
laches in delaying to bring it before the court until after
argument heard on the merits.
The case, as stated by the Court in its opinion, was as
follows:
This was a writ of certiorari issued out of the Supreme Court of
the State of New Jersey on the 6th of November, 1882 at the
instance of Henry S. Little, receiver of the Central Railroad
Company of New Jersey, a corporation of that state, commanding
Samuel D. Bowers, Comptroller of the City of Elizabeth, and the
City of Elizabeth, to certify and send to that court their
proceedings relative to an assessment of certain taxes made by that
city upon real property of the company within the city limits,
particularly described in the writ, for the year 1876.
Upon the hearing of the case in that court, the investigation
extended to like assessments made by the city for the years 1877 to
1882, inclusive, and the judgment of the court was that the
assessments should stand affirmed. That judgment having been
affirmed by the Court of Errors and Appeals of the state, this writ
of error was prosecuted. The federal question involved is as to
whether these assessments impaired the obligation of a contract
which the company claimed existed between it and the state by
virtue of an act of the state legislature approved March 17, 1854,
and were therefore violative of Section 10, Article I, of the
Constitution of the United States.
After the argument of the case in this Court upon its merits,
the defendants in error were given leave to file briefs, a
privilege of which they availed themselves, and they also filed a
motion to dismiss the writ of error. This motion is based upon the
followings grounds:
First. Because the taxes levied on the property of the company
in the City of Elizabeth in and for the years 1876 to
Page 134 U. S. 549
1882, inclusive, being the same taxes mentioned in the record in
this cause, have been paid and satisfied in full since the writ of
error was issued, together with the costs in the case.
Second. Because the writ of error is being prosecuted by the
plaintiff in error for the sole purpose of obtaining the opinion of
this Court as to the validity of an alleged contract on the subject
of taxation between the State of New Jersey and the company, and
the state is not a party in the form or sense in which a party in
interest must be a party to a litigation in order to be bound by
the judgment of the court.
Third. Because the plaintiff in error does not owe any taxes to
the City of Elizabeth, to Samuel D. Bowers, the former comptroller
of the city, or to any existing officer of the city, nor does the
company owe any sum of money to the city for taxes.
Fourth. Because all claims for taxes heretofore made or held by
the City of Elizabeth, or any officer thereof, against the Central
Railroad Company of New Jersey, or the property of the company, or
any receiver of it, have been adjusted, compromised, and paid in
full, voluntarily, by the railroad company or its appropriate
officer or representative.
The motion is supported by a number of affidavits of the tax
officers of the City of Elizabeth, including the present
comptroller and the commissioners of adjustment. From these
affidavits it appears that during the year 1887, by virtue of a
statute of the state passed in 1886, the commissioners of
adjustment for the City of Elizabeth readjusted and reduced to a
considerable extent the taxes levied by the city upon the property
of the railroad company for the years 1876 to 1882, inclusive, and
also for the year 1883; that during the progress of that revision
and readjustment, H. W. Douty, real estate agent of the company,
appeared before the commissioners from time to time, and urged the
reduction of the claims of the city for taxes against the property
of the company; that after the adjustment had been completed, the
taxes were paid by the railroad company, before interest on them
began to accrue under the act by virtue of which the adjustment was
made; that no warrant was issued or other step or proceeding
Page 134 U. S. 550
taken by or on the part of the city for the collection of the
taxes prior to the time of payment, nor could any proceedings have
been taken to enforce their payment for several months thereafter,
and that no protest against the payment or objection thereto was
made by the company or any person acting on its behalf. It appears
that during the progress of the readjustment, the commissioners
committed an error by including therein certain taxes for the years
1884, 1885, and 1886. Douty requested them by letter to correct
that error, saying: "If this is done, I am satisfied the adjustment
will be promptly paid after confirmation." The correction was made
as requested, and the taxes thus readjusted and reduced -- the same
taxes here in dispute -- were paid by the company, as above set
forth.
As regards the costs of the proceedings in the court below, it
seems they were paid under the following circumstances:
After the judgment of the Court of Errors and Appeals had been
rendered, an entry was made upon its record reciting the fact that
the judgment of the supreme court had been affirmed at the costs of
the plaintiff in error, and further ordering that the record and
proceedings be remitted to the supreme court of the state, to be
proceeded with in accordance with law and the practice of the
court. As the counsel for the plaintiff in error supposed that that
form of the judgment would preclude the taking of a writ of error
from this Court, by an arrangement between counsel for both
parties, the record was changed to its present form, and the costs
in the case were then paid by the plaintiff in error.
Page 134 U. S. 552
MR. JUSTICE LAMAR delivered the opinion of the Court.
As opposed to this motion, there is no denial of the fact that
the taxes in dispute have been paid. It is insisted, however, that
such payment was not voluntary, but was made under duress, as the
only means of avoiding execution, and
Page 134 U. S. 553
that payments were made before suit brought only when imposed by
the court as a condition for being permitted to bring suit, and
after suit brought, only to save property from sale in the absence
of any stay or possibility of getting one. But an examination of
the affidavit of the principal attorney for the railroad company,
filed here, discloses the fact that the taxes which are referred to
in this connection are the taxes assessed for the years 1884 to
1887, inclusive. In the case of those taxes, the proceeding for
their collection were regulated by an act of the New Jersey
Legislature passed in 1884, which, in the sixteenth section,
provided that if any company should desire to contest the validity
of any tax levied thereunder, such contest should be made by
certiorari which might be granted "on such terms as the justice or
court granting the writ may impose."
But that act, and the proceedings for the collection of taxes
under it, are in nowise before the Court in this case. In the
nature of things, the proceedings which the attorney describes
could not have applied to the collection of the taxes for the years
1876 to 1882, inclusive, for this suit, which relates to them, was
disposed of by the supreme court of the state long before the act
of 1884 was passed. There is nothing in the record to show that the
payment of the taxes in dispute was imposed by the court as a
condition precedent to the company's right to bring suit to test
their legality. In fact, no such condition was imposed or could
have been imposed when this suit was brought, for there was no
statute of the state at that time giving any such power to the
court.
In respect to the taxes here in dispute, it is claimed that they
were also paid involuntarily, because, under the readjustment act
of 1886, the readjustment made by the commissioners was
"final and conclusive upon all persons, became immediately due,
was collectible by the comptroller without interest if paid within
sixty days, and if not paid within six months it was made the
comptroller's mandatory duty to sell the lands assessed at public
auction to the highest bidder, and the purchaser at such sale
obtained title by fee simple absolute. "
Page 134 U. S. 554
We do not think the payment of the taxes under the circumstances
detailed in the affidavits before referred to, and admitted,
substantially, by plaintiff in error was an involuntary payment or
a payment under duress within the meaning of the law. In
Wabaunsee County v. Walker, 8 Kan. 431, cited with
approval in
Lamborn v. County Commissioners, 97 U. S.
181, and also in
Railroad Co. v. Commissioners,
98 U. S. 541,
98 U. S. 543,
it was said:
"Where a party pays an illegal demand with a full knowledge of
all the facts which render such demand illegal, without an
immediate and urgent necessity therefor, or unless to release his
person or property from detention, or to prevent an immediate
seizure of his person or property, such payment must be deemed to
be voluntary, and cannot be recovered back. And the fact that the
party at the time of making the payment files a written protest
does not make the payment involuntary."
The case in 98 U.S.,
supra, was a suit by the Union
Pacific Railroad Company to recover taxes it had paid upon certain
of its lands granted to it by act of Congress. The lands had been
assessed by the county in which they lay for general and local
taxes, and in due time the tax lists, with warrants attached for
their collection, were delivered to the treasurer of the county.
The warrants authorized the treasurer, if default should be made in
the payment of any of the taxes charged upon the list, to seize and
sell the personal property of the persons making the default to
enforce the collection. Under the law of Nebraska, no demand of
taxes was necessary, but it was the duty of every person subject to
taxation to attend the treasurer's office and make payment. The
company paid the taxes before any demand had been made for their
collection, and before any special effort had been put forth by the
treasurer to enforce their collection at the same time filing with
the treasurer a written protest against their payment, for the
reason that they were illegally and wrongfully assessed, and were
unauthorized by law, and gave notice that suit would be instituted
to recover back the money paid. In delivering the opinion of the
Court, Mr. Chief Justice Waite said:
"The real question in this case is whether
Page 134 U. S. 555
there was such an immediate and urgent necessity for the payment
of the taxes in controversy as to imply that it was made upon
compulsion. The treasurer had a warrant in his hands which would
have authorized him to seize the goods of the company to enforce
the collection. This warrant was in the nature of an execution
running against the property of the parties charged with taxes upon
the lists it accompanies, and no opportunity had been afforded the
parties of obtaining a judicial decision of the question of their
liability. As to this class of cases, Chief Justice Shaw states the
rule, in
Preston v. Boston, 12 Pick. 14, as follows:"
"When, therefore, a party not liable to taxation is called upon
peremptorily to pay upon such a warrant, and he can save himself
and his property in no other way than by paying the illegal demand,
he may give notice that he so pays it by duress, and not
voluntarily, and, by showing that he is not liable, recover it back
as money had and received."
"This, we think, is the true rule, but it falls far short of
what is required in this case. No attempt had been made by the
treasurer to serve his warrant. He had not even personally demanded
the taxes from the company, and certainly nothing had been done
from which his intent could be inferred to use the legal process he
held to enforce the collection, if the alleged illegality of the
claim was made known to him. All that appears is that the company
was charged upon the tax lists with taxes upon its real and
personal property in the county. After all the taxes had become
delinquent under the law but before any active steps whatever had
been taken to enforce their collection, the company presented
itself at the treasurer's office and, in the usual course of
business, paid in full everything that was charged against it,
accompanying the payment, however, with a general protest against
the legality of the charges and a notice that suit would be
commenced to recover back the full amount that was paid. No
specification of alleged illegality was made, and no particular
property designated as wrongfully included in the assessment of the
taxes. The protest was in the most general terms, and evidently
intended to cover every defect that might thereafter be discovered,
either in the power to tax or
Page 134 U. S. 556
the manner of executing the power. . . . Under such
circumstances, we cannot hold that the payment was compulsory in
such a sense as to give a right to the present action."
See also 2 Dillon on Municipal Corporations ยงยง 941-947,
and cases there cited.
The reasoning of the Court in that case applies equally to the
facts of this. In no sense do we think the payment of the taxes in
suit was made under duress. Their payment, under the circumstances
above set forth, was in the nature of a compromise by which the
city agreed to take, and the company agreed to pay, a less sum than
was originally assessed. The effect of this act was to extinguish
the controversy between the parties to this suit.
This case is clearly distinguishable from
Robertson v.
Bradbury, 132 U. S. 491. In
that case, the jury, by returning a verdict in favor of the
plaintiff, virtually found that he had been compelled to pay the
illegal duties assessed against his goods by the collector of the
port at New York in order to get possession of them from the
collector. Here there is no question as to the seizure of goods at
all. The lands which had been assessed were still in the possession
and under the control of the railroad company. No warrant had been
issued against them, and no active steps had been taken by the city
to enforce the collection of the taxes assessed; nor could any such
proceedings have been resorted to by the city for at least several
months thereafter. Moreover, the question of the validity of the
taxes was involved in pending litigation.
It is true that the judgment of the court below stands
unsatisfied except so far as relates to the costs, which, as before
stated, have been paid; but that is immaterial inasmuch as the
controversy upon which that judgment was rendered had been
extinguished. That in effect satisfied the judgment. Neither the
affirmance nor the reversal of that judgment would make any
difference as regards the controversy brought here by this writ of
error. It matters not that the taxes from 1884 to 1887, inclusive,
were paid under duress. They are in no wise before the court, and,
according to the showing of the plaintiff in error, they differ
materially from the taxes in dispute in this case.
Page 134 U. S. 557
It is well settled that when there is no actual controversy
involving real and substantial rights between the parties to the
record, the case will be dismissed. In
Lord v.
Veazie, 8 How. 251, a writ of error was dismissed
by this Court where it appeared from affidavits and other evidence
by persons not parties to the suit that there was no real
controversy between the plaintiff and defendant, but that the suit
was instituted to procure the opinion of this Court upon a question
of law in the decision of which they had a common interest opposed
to that of other persons who were not parties to the suit and had
no knowledge of its pendency in the circuit court. Chief Justice
Taney, in delivering the opinion of the Court, said:
"It is the office of courts of justice to decide the rights of
persons and of property when the persons interested cannot adjust
them by agreement between themselves, and to do this upon the full
hearing of both parties. And any attempt, by a mere colorable
dispute, to obtain the opinion of the court upon a question of law
which a party desires to know for his own interest or his own
purposes, when there is no real and substantial controversy between
those who appear as adverse parties to the suit, is an abuse which
courts of justice have always reprehended and treated as a
punishable contempt of court."
In
Cleveland v.
Chamberlain, 1 Black 419, the rule laid down in
Lord v. Veazie, supra, was adhered to and held applicable
to a case in which it appeared that the appellant had purchased and
taken an assignment of all the appellee's interest in the decree
appealed from, and the appeal was dismissed.
In
Wood Paper Co. v.
Heft, 8 Wall. 333, an appeal upon a bill for the
infringement of a patent was dismissed, it having been made to
appear to the court that after the appeal, the appellants had
purchased a certain patent from the defendants under which the
defendants sought to protect themselves, and that the defendants,
as compensation, had taken stock in the company which was the
appellant in the case. And it was further held that the fact that
damages for the infringement alleged in the bill had not been
compromised did not affect the propriety of the dismissal.
Page 134 U. S. 558
In
San Mateo County v. Southern Pacific Railroad Co.,
116 U. S. 138, a
writ of error was dismissed where it appeared that the taxes
assessed against the company had been paid to the county after the
suit had been commenced, the court resting its judgment upon the
reason that there was no longer an existing cause of action in
favor of the county against the railroad company. To the same
effect,
see Henkin v. Guerss, 12 East 247;
In re
Elsam, 3 B. & C. 597;
Smith v. Junction Railway,
29 Ind. 546;
Freeholders of Essex v. Freeholders of Union,
44 N.J.Law 438.
A further defense urged against this motion is laches. It is
urged that the facts upon which it is based were known to the
defendants in error at least two years ago, and that any objection
to the writ of error should have been made before the argument of
the case upon its merits. It is also insisted incidentally that the
motion was filed in violation of professional courtesy, inasmuch as
it was through the intercession of the attorney for the plaintiff
in error that an extension of time was allowed the defendants in
error within which they could be heard on brief, after the argument
on the merits.
We do not think, however, the question of laches has any bearing
upon this question. The fact that there is no controversy between
parties to the record ought, in the interest of a pure
administration of justice, to be allowed to be shown at any time
before the decision of the case. Any other rule would put it in the
power of designing persons to bring up a feigned issue in order to
obtain a decision of this Court upon a question involving the
rights of others who have had no opportunity to be heard.
If, as is contended on behalf of the plaintiff in error, the
question involved in this case is one of great importance to the
railroad company and to the state, and is identical with that in a
number of other eases pending in the court below, so much the more
important is it that it should not be decided in a case when there
is nothing in dispute. Nor is it material that the case was
selected by the plaintiff in error, and agreed to by the defendant
in error, before the writ of error was prosecuted, as one in which
the question of taxation under the
Page 134 U. S. 559
New Jersey statutes could be fully considered and finally
decided by this Court, for it is well understood that consent does
not confer jurisdiction.
For the reasons above stated,
The motion to dismiss the writ of error is granted at the
costs in this Court of the plaintiff in error, and it is so
ordered.
