1. Mandamus is proper to review error of a district court in
refusing to call in additional judges, under Jud.Code § 266, in a
suit praying an interlocutory injunction against state officers. P.
310 U. S.
355.
2. The application for mandamus may be made by one of several
defendants. P.
310 U. S.
356.
3. A suit by a national bank to enjoin the collection of a state
tax is not a suit to restrain the enforcement of a statute of the
State "upon the ground of the unconstitutionality of such statute,"
within the meaning of Jud.Code § 266, where the bill makes no
attack upon the state legislation involved, but alleges that state
officials have misconstrued it and have made an assessment which is
unconstitutional because excessive and discriminatory and which is
also invalid because it discriminates against national bank shares
in violation of R.S. § 5219, and includes preferred shares of the
bank owned by the Reconstruction Finance Corporation, which are
exempt under the Act of Congress of March 20, 1936. P.
310 U. S.
357.
A petition for an injunction on the ground of the
unconstitutionality of a statute as applied, which requires a
three-judge court,
Page 310 U. S. 355
is to be distinguished from one based on the alleged
unconstitutionality of the result obtained by the use of a statute
which is not attacked as unconstitutional. The latter does not
require a three-judge court, its attack being aimed at allegedly
erroneous administrative action.
Motion denied.
On a motion for leave to file a petition for a writ of mandamus
and on the respondent's return to a rule to show cause.
MR. JUSTICE REED delivered the opinion of the Court.
The county treasurer and ex-officio tax collector of Pima
County, Arizona, moves to file a tendered petition for a writ of
mandamus to be directed to District Judge Ling of the federal
district court for that state. A rule to show cause has issued, and
the return has been made. Petitioner, a county treasurer, and other
officials are defendants, together with their counties, in a suit
brought in the district court by the Valley National Bank in which
the Bank is seeking an interlocutory and permanent injunction
against the collection of certain taxes by the counties. The
district judge has ruled that he will hear the case while sitting
alone, and petitioner contends that, under § 266 of the Judicial
Code, he is entitled to have the case heard before three judges.
Mandamus is the proper remedy. [
Footnote 1]
Arizona taxes shares of bank stock in the name of the
shareholders, and requires the bank to pay for them. [
Footnote 2]
Page 310 U. S. 356
Assessments are made in the first instance by county assessors,
with an appeal allowed first to a county and then to a state board
of equalization. The state board returns the final assessment with
a levy of the rate for state purposes to the county supervisors.
This body adds the several local rates and places the assessment
upon the tax roll. Collection is performed by the county treasurer,
[
Footnote 3] and the taxes
collected are apportioned between state and county. [
Footnote 4] Where a bank is doing business in
several counties, the value of its stock is apportioned among the
counties in accordance with the assets located in each. [
Footnote 5] Because other property in
the state has been under-assessed the state board, in 1935, ordered
that bank shares be valued at 75% of capital stock, surplus and
undivided profit. Assets, borrowings, deposits, and other
liabilities are disregarded.
The petitioner is the only defendant to apply for mandamus. As
the issuance of such an order depends on the jurisdiction of the
single district judge, sitting alone, over the suit pending in the
district court, this is sufficient. As the issues with this
petitioner in that suit include those with all other defendants, we
do not need to state the issues arising with the officials of
counties other than Pima. The Bank states its controversy with the
petitioner arose in the following manner. The Bank had branches in
several counties. It had common capital stock, a surplus, and
undivided profits. Also the Bank had an issue of preferred which it
had sold to the Reconstruction Finance Corporation prior to the
time of the 1935 assessment at the par value of $1,240,000, and
which the Reconstruction Finance Corporation still owns. Taking the
position that the preferred owned by the Reconstruction Finance
Corporation could not be taxed,
Page 310 U. S. 357
the Bank reported a total value of $524,629.50, 75% of $699,026
(the amount of its common, surplus, undivided profits and
reserves), as the total taxable value of its shares, and
apportioned this among the counties according to the assets there
located. On this basis $139,088.80, 26.53% of its total taxable
value, was apportioned to Pima County. The assessor of Pima County
made an assessment of $327,590, the "actual cash value of the real
and personal property" situated in Pima County. By agreement of the
parties, the Bank paid the amount which under its computation was
due Pima County, the right to litigate the validity of the county's
assessment being reserved. Subsequently, the petitioner having
threatened to institute proceedings to enforce the county's
assessment, the Bank brought its suit in the district court to
enjoin collection.
The Bank, by its bill in the district court, seeks an injunction
upon several grounds. We are of the opinion that none of these
compels the trial judge to call a three-judge court under §
266.
The assessment in Pima County was made in the amount of the
value of the Bank's real estate and personal property. It is,
therefore, says the Bank, impossible to tell whether the assessment
is the valuation of the property, the proportion of the value of
the common stock alone or that of the aggregate of the common and
preferred. An assessment upon the property, it is alleged, is "void
as unauthorized by the statutes of Arizona." If the valuation
includes the preferred stock, the complaint alleges it is invalid
because of the Act of March 20, 1936, exempting the preferred stock
while owned by the Reconstruction Finance Corporation. [
Footnote 6] If the valuation is upon
the common stock alone, it is said to be invalid (1) because the
valuation is far beyond the actual value, and therefore
confiscatory, and (2) because the valuation is discriminatory
Page 310 U. S. 358
since the common stock in other banks is assessed at 75% of the
value of common stock, surplus, and undivided profits and other
classes of property at sixty percent of its actual value, while
this valuation is on the basis of approximately twice the common
stock, surplus, and undivided profits of the bank and twice its
actual value. It is further alleged that this excessive and
discriminatory valuation violates R.S. § 5219, which limits the
rate of taxation of national bank shares to that assessed "upon
other moneyed capital in the hands of individual citizens . . .
coming into competition with the business of national banks." It is
prayed that action under these assessments, for the reasons stated,
be enjoined as violative of the Constitution and laws of the United
States and Arizona.
Section 266 lays down as one of the requirements for a
three-judge court that the injunction against the officer of the
state to restrain the enforcement, operation or execution of the
state statute must be sought "upon the ground of the
unconstitutionality of such statute."
Insofar as it is alleged that the assessments are void because
unauthorized by the Arizona statute, the injunction sought is
obviously not upon the ground of the unconstitutionality of the
state statute as tested by the federal Constitution.
The allegations that the assessments should be enjoined because
violative of the statute exempting preferred stock owned by the
Reconstruction Finance Corporation and R.S. § 5219 depend upon no
constitutional provision within the meaning of Judicial Code § 266.
If such assessments are invalid, it is because they levy taxes upon
property withdrawn from taxation by federal law [
Footnote 7] or in a manner forbidden by the
National Banking Act. [
Footnote
8] The
Page 310 U. S. 359
declaration of the supremacy clause [
Footnote 9] gives superiority to valid federal acts over
conflicting state statutes, but this superiority, for present
purposes, involves merely the construction of an act of Congress,
not the constitutionality of the state enactment. This was decided
as to § 266 in
Ex parte Buder, [
Footnote 10] and, before that, a similar result had
been reached in
Lemke v. Farmers Grain Company [
Footnote 11] in regard to a
provision of the Judicial Code granting direct appeal to this Court
in cases where the sole issue [
Footnote 12] was the unconstitutionality of a state
statute. [
Footnote 13]
It is said, however, that the allegations of confiscation and
discrimination in valuation of the common shares in comparison with
the stock of other banks and other property show the injunction is
sought upon the ground of the unconstitutionality of the statute.
This point depends upon excessive valuation of the shares. The
validity of the statute itself is not involved. Variations by
assessors in valuations of like property, taxable under the same
statute, sufficiently marked to be discriminatory under the
Constitution or valuations so large as to be confiscatory cannot
properly be said to be the basis for attack on the ground of the
unconstitutionality of the statute. Such assessments, if made and
if invalid, are so because of a wrong done by officers under the
statute, rather than because of the requirement of the statute
itself. [
Footnote 14]
But it is said by the petitioner here that the last sentence of
§ 3071 requires this excessive and discriminatory
Page 310 U. S. 360
assessment. That sentence reads:
"When a bank maintains branches or conducts business in more
than one county, city, or town, the assessed value of the capital
stock shall be apportioned among the several counties, cities, and
towns in which the main office or such branches are maintained or
business conducted, and the amount apportioned to each county,
city, or town shall not be less than the actual cash value of the
real and personal property of such bank situated in such county,
city, or town."
If this is interpreted as requiring that the apportionment of
the value of the capital stock to each county must not be less than
the tangible property in that county, the aggregate apportionment
may be much larger than the assessed value of the stock. A greater
assessment per share will occur if the total valuation is allocated
to common shares only. If the valuation, reached under the formula
by treating the preferred as capital stock, is allocated among the
common shares only, it would mean that the preferred was treated as
stock for purposes of the valuation, and disregarded for the
assessment of individual shares. The argument of petitioner is
that, if the result, as he contends the Bank alleges, violates the
federal Constitution by discrimination of common shares as compared
to shares of other banks without preferred stock or owners of other
property, the statute violates it. Therefore, in effect, the attack
on the constitutionality of the assessment is an attack on the
constitutionality of the statute.
The contention of the Bank, however, is that the assessor
misinterpreted the statute; that the objectionable aspect of the
assessment is the attribution to the common of the whole amount
instead of an apportionment to both preferred and common or the use
of the preferred as capital stock in the state valuation formula.
We are not now called upon to reach any conclusion upon the meaning
of the Arizona tax statutes. If the trial court determines
Page 310 U. S. 361
that the assessment complained of is made properly under the
statutes and that, by the statute, the assessment is to be prorated
among the common shares, it would determine only a question of
statutory construction. It is necessary to distinguish between a
petition for injunction on the ground of the unconstitutionality of
a statute as applied, which requires a three-judge court, [
Footnote 15] and a petition which
seeks an injunction on the ground of the unconstitutionality of the
result obtained by the use of a statute which is not attacked as
unconstitutional. The latter petition does not require a
three-judge court. [
Footnote
16] In such a case, the attack is aimed at an allegedly
erroneous administrative action. [
Footnote 17] Until the complainant in the district court
attacks the constitutionality of the statute, the case does not
require the convening of a three-judge court, any more than if the
complaint did not seek an interlocutory injunction. [
Footnote 18] Where, by an omission to
attack the constitutionality of a state statute, its validity is
admitted for the purposes of the bill, a determination by the trial
court that the assessment accords with the statute would result in
the refusal of the injunction and the dismissal of the bill.
Jurisdiction, properly assumed, may be lost by the special court
when it appears that a prerequisite such as need for relief against
state officers is lacking. [
Footnote 19] Even where the statute is attacked as
unconstitutional, § 266 is inapplicable unless the action
complained of is directly attributable to the statute. [
Footnote 20] There is no indication
that Congress sought by § 266 to have every attack on the
constitutionality of a state statute determined by a three-judge
court.
Page 310 U. S. 362
It sought such a bench only to avoid precipitate determinations
on constitutionality on motions for interlocutory injunctions.
As the foregoing ground adequately disposes of the petition for
mandamus, we do not discuss the other reasons for refusal urged by
the Bank.
The motion to file the petition for mandamus is
Denied.
[
Footnote 1]
Ex parte Williams, 277 U. S. 267,
277 U. S. 269;
Stratton v. St. Louis Southwestern Ry. Co., 282 U. S.
10,
282 U. S.
16.
[
Footnote 2]
Revised Code of Arizona, 1928, §§ 3069-3071.
[
Footnote 3]
Id., § 3110.
[
Footnote 4]
Id., § 3111.
[
Footnote 5]
Id., § 3071.
[
Footnote 6]
49 Stat. 1185.
[
Footnote 7]
Pittman v. Home Owners' Loan Corp., 308 U. S.
21.
[
Footnote 8]
R.S. § 5219;
Owensboro Nat. Bank v. Owensboro,
173 U. S. 664,
173 U. S.
668.
[
Footnote 9]
Art. VI, cl. 2: "This Constitution, and the Laws of the United
States which shall be made in Pursuance thereof; . . . shall be the
supreme Law of the Land. . . ."
[
Footnote 10]
271 U. S. 271 U.S.
461,
271 U. S.
465-466.
[
Footnote 11]
258 U. S. 258 U.S.
50,
258 U. S.
52.
[
Footnote 12]
Spreckels Sugar Refining Co. v. McClain, 192 U.
S. 397,
192 U. S.
407.
[
Footnote 13]
See D. A. Beard Truck Line Co. v. Smith, 12 F. Supp.
964.
[
Footnote 14]
Cf. Ex parte Williams, 277 U.
S. 267,
277 U. S. 271;
Jett Bros. Co. v. Carrollton, 252 U. S.
1,
252 U. S. 5.
[
Footnote 15]
Stratton v. St. Louis Southwestern Ry. Co.,
282 U. S. 10.
[
Footnote 16]
Ex parte Hobbs, 280 U. S. 168.
[
Footnote 17]
Ex parte Williams, supra.
[
Footnote 18]
Stratton v. St. Louis Southwestern Ry. Co.,
282 U. S. 10,
282 U. S.
15.
[
Footnote 19]
Oklahoma Gas Co. v. Packing Co., 292 U.
S. 386,
292 U.S.
391.
[
Footnote 20]
Ex parte Collins, 277 U. S. 565,
277 U. S. 567,
569.