Where the unsoundness of a federal question so clearly appears
from previous decisions of this Court as to foreclose the subject
and leave no room for controversy, the writ of error will be
dismissed.
This Court having decided in
Carstairs v. Cochran,
193 U. S. 10, that
the State of Maryland can, as an exertion of its taxing power,
without denial of due process of law, tax tangible property having
a situs within its borders irrespective of the residence of the
owner, and can if necessary impose the obligation to pay such tax
upon the custodian or possessor of such property, giving a lien
thereon to secure reimbursement, the only federal question involved
and which would give this Court jurisdiction in this case is so
foreclosed that the writ of error is dismissed for want of
jurisdiction.
This Court will not usurp the functions of a state court of last
resort in order to distort, if not destroy for infirmity of state
power, a state statute expressly upheld as valid by the state
court.
The facts, which involve the constitutionality of a taxing law
of the State of Maryland and the jurisdiction of this Court to
consider the same on writ of error, are stated in the opinion.
MR. JUSTICE WHITE delivered the opinion of the Court.
The City of Baltimore sued to recover from the Hannis Distilling
Company, a West Virginia corporation, $18,218.77, of which
$9,259.28 was the amount of state and city taxes for 1902 on an
assessment of 50,996 barrels of distilled spirits, and $8,959.49
was the sum of state and city taxes for 1903
Page 216 U. S. 286
on an assessment of 54,514 barrels of distilled spirits. It was
alleged that the spirits assessed were "in the ownership and
possession or custody of said defendant in the City of Baltimore,
State of Maryland . . . at the time each assessment was made." The
declaration, as amended, alleged that the taxes sued for had been
levied by virtue of
"chapter 704 of the acts of General Assembly of Maryland passed
at the January session of 1892, as amended by chapter 320 of the
acts of the general assembly of Maryland, passed at the January
session of 1900."
The provisions thus referred to are embraced in §§ 214 to 224,
inclusive, of Article 81 of the Code of Public General Laws of
Maryland of 1904. Their purpose is indicated by §§ 214 and 215,
which are as follows:
"SEC. 214. There shall be levied and collected upon all
distilled spirits in this state, as personal property, the same
rate of taxation which is imposed by the laws of the state on other
property for state and county purposes."
"SEC. 215. For the purpose of such assessment and collection, it
is hereby made the duty of each distiller, and of every owner or
proprietor of a bonded or other warehouse in which distilled
spirits are stored, and of every person or corporation having
custody of such spirits, to make report to the state tax
commissioner, on the first day of January in each and every year,
of all the distilled spirits on hand at such date, and the tax for
the ensuing year from the said first of January shall be levied and
paid on the amount of distilled spirits so in hand, as representing
the taxable distilled spirits for such year; provided, however,
that the same distilled spirits shall not be taxed twice for the
same year."
By the remaining provisions of the act, the machinery for
levying and collecting the taxes for which the act provided was
created. Such regulations afforded those interested an opportunity
to be heard as to the amount of any assessment, made it the duty of
the person having the possession, control, or custody of the
spirits assessed to pay the taxes levied thereon, and gave to the
persons thus made liable to make
Page 216 U. S. 287
payment a lien upon the spirits to secure the reimbursement of
the taxes paid.
Because of diversity of citizenship, the defendant removed the
case to the Circuit Court of the United States for the District of
Maryland. In that court, two pleas to the declaration were filed.
By the first, it was alleged that the corporation was not only
incorporated under the laws of West Virginia, but had always been
exclusively a citizen and resident of that state, and of no other.
The corporation, it was averred, was not, at the time when the
taxes sued for were levied, the owner of the distilled spirits upon
which the levy was made, or any portion thereof, and, indeed, had
never at any time since the assessment and levy had any interest,
direct or indirect, in the distilled spirits in question. Under
these circumstances, it was charged
"that under the provisions of Article 15 of the Bill of Rights
of the Constitution of Maryland, as the same has been construed by
the Court of Appeals of Maryland . . . the respective taxes levied
on the assessed value of all of the said barrels of distilled
spirits . . . were levied on the owners of said barrels of
distilled spirits, who were and are persons other than this
defendant, and the said taxes were not and could not have been
levied on this defendant."
The plea then proceeded to aver that, at all times prior to the
day when the assessment had been made and since, the spirits
assessed has been stored in the defendant's bonded warehouse,
subject to the acts of Congress applicable to bonded warehouses,
and that the defendant had at no time "any further custody or
control of the spirits than is by the acts of Congress applicable
to the subject." The plea further charged that the corporation had
no funds in its possession or under its control belonging to the
owners of the spirits with which to pay the taxes; that the
corporation had not agreed to pay them, that it had never borne any
other relation to the owners than that of creditor, and therefore
there was no right to recover the taxes from the corporation or to
compel it to pay them. It
Page 216 U. S. 288
was specially averred that to compel the corporation to pay the
taxes would be to deprive it of its property without due process of
law in violation of the Fourteenth Amendment to the Constitution of
the United States. The second plea substantially reiterated the
averments of the first, and, in addition, specially alleged that
all the persons who owned the distilled spirits resided outside of
the State of Maryland, and could not be taxed
in personam,
and that, by the construction given to the Constitution of the
state by the highest court of the state, the property, although
situated in the state, was not susceptible of being taxed, and
therefore the taxes were void, and there was no power to cast upon
the corporation the duty of paying them, and to compel the
corporation to pay the taxes would be a violation of the due
process clause of the Fourteenth Amendment.
A demurrer filed by the city to both pleas on the ground that
they stated no defense was sustained without an opinion. The
distilling company electing to stand upon its pleas, judgment was
entered against it for the amount of the taxes. Thereupon a writ of
error directly from this Court was prosecuted upon the assumption
that questions under the Constitution of the United States were
involved which gave a right to an immediate resort to this Court
for their solution. Upon the correctness of such assumption our
jurisdiction depends. The assumption, however, may not be indulged
in simply because it appears from the record that a federal
question was averred if such question be obviously frivolous or
plainly unsubstantial either because it is manifestly devoid of
merit or because its unsoundness so clearly results from the
previous decisions of this Court as to foreclose the subject and
leave no room for the inference that the questions sought to be
raised can be the subject of controversy.
Leonard v. Vicksburg,
S. & P. R. Co., 198 U. S. 416,
198 U. S. 421,
and cases cited;
Delmar Jockey Club v. Missouri,
210 U. S. 324,
210 U. S. 335;
McGilvra v. Ross, 215 U. S. 70,.
The assignments merely charge that error was committed
Page 216 U. S. 289
in sustaining the demurrer to the pleas, and consequently in
refusing to give effect to the alleged rights under the
Constitution which the pleas asserted. But the pleas based the
claim of federal right not merely upon the inherent operation of
the law under which the taxes were levied, abstractly considered,
but upon limitations which it was assumed were to be treated as
embodied in the law in consequence of restrictions on the general
power of the state to tax, based upon the construction which it was
asserted had been given to a provision in the Bill of Rights in the
state constitution by the court of last resort of the state. And
the argument elaborately pressed at bar concerning the assumed
federal question accords with this conception of the pleas, since
it does not deny that the act under which the taxes were levied
would not be wanting in due process if it had been enacted by a
state government possessing normal powers of local taxation, but
contends that the act under consideration must be held to be
wanting in due process because its provisions should be construed
with reference to the assumed abnormal limitations upon the taxing
power of the State of Maryland above referred to. By the limitation
which the argument thus assumes to exist, it is urged the
government of the State of Maryland, in the exertion of its taxing
power, is confined exclusively to the levy of taxes
in
personam upon the owners of property. Being thus limited by
the state constitution, the argument proceeds to insist that there
was no taxing power in the State of Maryland adequate to embrace an
assessment of taxes upon a mere custodian of distilled spirits, and
consequently that the compelling of a custodian to pay such an
imposition, not being within the taxing power, was virtually an
exercise of the power of eminent domain, and hence there was such a
proposed taking of the money or property of the custodian, without
full and adequate compensation, as would constitute a denial of due
process of law. In addition, it is elaborately insisted that as, by
the Constitution of the United States, a state may not extend its
taxing authority
Page 216 U. S. 290
over nonresidents, it must follow from the limitations on the
taxing power of the State of Maryland above asserted that that
state, not having the power to tax a nonresident owner of distilled
spirits, could not, without a violation of the Fourteenth Amendment
of the Constitution of the United States, by indirection accomplish
the same result by imposing the obligation to pay upon the
custodian. But back of the abstract theories as to the scope of the
state taxing power, upon which these propositions necessarily
depend, lies the inquiry whether, for the purposes of this case, in
view of the previous decisions of the court of last resort of the
State of Maryland and of this Court dealing with such decisions, it
is open to press such theories, and to attempt to make them the
basis of the assumed existence of rights under the Constitution of
the United States.
In
Carstairs v. Cochran, 95 Md. 495, suit was brought
by Cochran, as treasurer and tax collector, to recover from
Carstairs and another the amount of taxes assessed and levied in
respect of distilled spirits in a warehouse of the defendants, the
assessment and levy having been made under the identical law by
virtue of which the assessment and levy here in controversy were
made. The Court of Appeals of Maryland upheld the statute, and
consequently sustained the validity of the tax. In opening its
opinion, the court said:
"This appeal constitutes the third attack upon the validity of
the Act of 1892, c. 704, as now amended by the Act of 1900, c. 320,
being §§ 204 to 213, inclusive [of Article 81] of the Supplement to
the Public General Code of Maryland, providing for the collection
of taxes upon distilled spirits in this state. The appellants admit
that all the features of the law which are here assailed upon
constitutional grounds were considered by the court in
Monticello Distilling Co. v. Baltimore, 90 Md. 416, and
that, while the act was there held invalid, as it then stood,
because of the failure to provide for a hearing in respect to the
valuation to be placed on the
Page 216 U. S. 291
spirits for the purposes of taxation, it was declared to be 'in
other respects free from constitutional objections.'"
After then stating that it was contended that, as the
Monticello case had been decided on the ground that the
statute did not provide adequate notice, the declarations of the
court in that case, upholding the constitutionality of the law in
other respects, were
obiter, the court proceeded to
consider that contention and hold that it was not well founded,
because the reasoning in the
Monticello case concerning
the constitutionality of the statute was directly responsive to the
contentions made, and therefore involved in the case as presented.
Although reaching this conclusion, in view of the court's estimate
of the importance of the subject, it nevertheless proceeded to
reconsider all the contentions concerning the constitutionality of
the statute. As a prelude to the reinvestigation, the court
said:
"The provisions of the Act of 1892, c. 704, were sufficiently
detailed in the opinion rendered in
Monticello Distilling Co.
v. Baltimore, supra, and that statement will be adopted for
this case without repeating it here. That act is assailed here as
it was there, as fundamentally vicious, and upon precisely the same
grounds, with the exception of the want of notice of assessment,
which has been cured by the Act of 1900, c. 320. These grounds are
two-fold: first, that it lays a tax upon property, and not upon the
owner of the property, and second, that it compels one not the
owner of the spirits to pay the tax due by the owner, who is
usually unknown to the party compelled to pay."
And after an elaborate consideration of all the contentions, the
conclusions reached in the
Monticello case were adhered to
and the constitutionality of the statute imposing the tax was
reaffirmed. The case was brought to this Court (
Carstairs v.
Cochran, 193 U. S. 10), and
the repugnancy of the statute to the Constitution of the United
States was elaborately pressed. Preliminarily to a consideration of
the federal questions which were presented for decision, the Court
at the
Page 216 U. S. 292
outset declared (p.
193 U. S. 16)
"that the statutes in question do not conflict with the
Constitution of Maryland is settled by the decisions of its highest
court." In considering the federal question, it was held that the
State of Maryland could, as an exertion of its taxing power,
without denial of due process of law, tax tangible property having
a situs within its borders, irrespective of the residence of the
owner, and could impose, if necessary, the obligation to pay such
tax upon the custodian or possessor of such property, giving a lien
thereon to secure the reimbursement of the tax so paid. It was,
moreover, expressly held that neither the regulations contained in
the laws of the United States concerning bonded warehouses for the
storage of distilled spirits or the fact that the custodian in
whose warehouse such spirits were stored had issued negotiable
receipts for the same operated to prevent the assessment of the
spirits for state taxation, and the imposing of the duty to make
payment of the tax upon the warehouseman. Since the decision in the
Carstairs case, the right of a state, consistently with
the Constitution of the United States, to tax tangible property
having a situs within its borders, irrespective of the residence of
the owner, and to impose the duty on a warehouseman to pay a tax
upon distilled spirits in his custody, even although the warehouse
in which they were stored was bonded under the laws of the United
States, has been again upheld in
Thompson v. Kentucky,
209 U. S. 340.
It follows that, at the time the writ of error directly from
this Court was sued out upon the assumed theory that the Maryland
act imposing the taxes sued for was repugnant to the due process
clause of the Constitution of the United States, such contention
had been expressly decided to be without foundation by this Court,
and therefore the propositions of federal right upon which alone
the jurisdiction of this Court depended was foreclosed and not open
to controversy, and afforded no substantial basis for the writ of
error unless, for some of the reasons alleged by counsel, the case
is taken out of this general principle.
Page 216 U. S. 293
To accomplish such result, the argument is that, in
Carstairs v. Cochran, this Court erroneously, although
unwittingly, assumed that the law of the State of Maryland levying
the tax which was in question in that case, and which is the same
law and character of tax involved in this case, had been upheld by
the Maryland court of last resort as a valid exercise of the state
taxing power. This alleged oversight, it is suggested, arose from
the fact that the Court overlooked the "singular limitations" on
the taxing power of the State of Maryland, which, as we have
previously seen, it is asserted, results from a provision in the
Bill of Rights of the constitution of that state, by which it
insisted the state is bereft of general powers of taxation, and is
limited strictly to taxing the owners of property
in
personam. Before further noticing this theory, we briefly
advert to an attempt to support the suggestion of oversight alleged
to have occurred in the decision in the
Carstairs case by
reference to the subsequent case of
Corry v. Baltimore,
196 U. S. 466. The
Corry case did not concern the Maryland law here in
question, but involved the constitutionality of a tax imposed by
the State of Maryland upon the shares of stock in a domestic
corporation held by a nonresident of the state, which were assessed
at the domicil of the corporation, accompanied with the obligation
upon the corporation to pay the tax. The principal contention was
that the tax was repugnant to the due process clause of the
Fourteenth Amendment, because, as the complainant stockholder was a
nonresident of Maryland, the tax was an attempt to extend the
taxing power of the state over a person not subject to its
jurisdiction. The Court, while recognizing that the Maryland court
had decided that the tax in question was not upon the stock
in
rem or upon the corporation, but was upon the owner,
nevertheless decided that the tax was not wanting in due process,
because the situs of the stock for the purpose of taxation was in
effect fixed by the act of incorporation by which the stockholder
was bound, and that the right thus to tax at the domicil of the
corporation carried with it
Page 216 U. S. 294
as an incident the regulating power to compel the corporation to
pay. Because it was recognized that the court below had decided
that the tax there in question was
in personam, and,
accepting the complexion given to the tax by the court of last
resort of Maryland, it was held not to be repugnant to the
Constitution of the United States, lends even no semblance of
support to the proposition that thereby it was in the remotest
degree intimated that the
Carstairs case was mistakenly
decided, or that, in disregard of the ruling made by the Maryland
court in the
Carstairs case, it was intended to intimate
that the burden which the court in that case had sustained as an
exercise of the taxing power of the State of Maryland was not the
exertion of such authority. And this serves to demonstrate the
unsubstantial character of the contention concerning the limitation
of the state taxing power, as applied to the case before us, by
which alone the semblance of support for the existence of a federal
question necessary to confer jurisdiction upon this Court can be
evolved. Beyond dispute, in the
Carstairs case the court
of last resort of Maryland upheld the act here in controversy as an
exertion of the taxing power of the state, and in so doing declared
that it but reiterated and re-expounded rulings by it previously
made. It follows that, as for the purposes of a review by this
Court of alleged questions concerning the repugnancy of the taxing
act to the Constitution of the United States, the decision of the
state court, maintaining, under the state constitution, the
validity of the taxing power which the act exerted, was binding
upon this Court, it must result that contentions to the contrary
are so devoid of merit as to present no substantial federal
question.
Castillo v. McConnico, 168 U.
S. 674. Indeed, considered in its ultimate aspect, the
entire argument by which it is sought to evolve a supposed federal
question, and thus to escape the controlling effect of the decision
of this Court in the
Carstairs case, rests upon the
assumption that the conclusion of the state court in that case as
to the validity of the taxing act under the state constitution was
not
Page 216 U. S. 295
sustained by the reasoning which the court gave for its
conclusion, or that the reasoning was inherently unsound because it
proceeded upon a misconception of the state constitution. In other
words, the only possible foundation for the asserted federal
question is the conception that this Court would usurp the
functions of a state court of last resort in order to distort, if
not to destroy, for infirmity of state power, a state law expressly
upheld as valid by the state court of last resort.
Dismissed for want of jurisdiction.