1. In Nebraska, no demand for taxes is required, but it is the
duty of every person subject to taxation to attend at the office of
the county treasurer and make payment.
2. Certain lands in that state, the patents for which had been
withheld from the Union Pacific Railroad Company by the United
states, having been assessed for taxation and the taxes remaining
unpaid, the tax lists, with warrants thereto attached, were issued
authorizing the county treasurer, upon default in the payment of
the taxes, to enforce the collection of them by the seizure and
sale of the personal property of the company. The company paid them
while protesting in writing that they were illegally and wrong
fully assessed and levied and were wholly unauthorized by law. At
that time, they had not been demanded, and no special effort had
been made by the treasurer for their collection, nor had he
attempted to seize the personal property of the company. Patents
for the lands were subsequently issued to the company. After the
decision in
Railway Company v.
McShane, 22 Wall. 444, that the lands were exempt
from taxation, the company brought this action to recover the
amount so paid.
Held that there being no statute giving
the right to recover in such cases, the action could not be
maintained.
Page 98 U. S. 542
The facts are stated in the opinion of the Court.
MR. CHIEF JUSTICE WAITE delivered the opinion of the Court.
This was a suit to recover back taxes for the years 1870 and
1871, paid by the Union Pacific Railroad Company upon certain lands
in Dodge County, Nebraska. The lands were among those granted by
Congress to the company to aid in the construction of its railroad,
12 Stat. 489, but the patents were withheld until after the taxes
had been paid, by reason of the joint resolution of Congress
"for the protection of the interests of the United states in the
Union Pacific Railroad Company, the Central Pacific Railroad
Company, and for other purposes,"
approved April 10, 1869. 16 Stat. 56.
The lands were returned by the United states land officers to
the state auditor and by him to the county clerk for taxation, as
required by the General Statutes of Nebraska, and were placed upon
the assessment list of the county. The general and the local taxes
levied for the respective years were carried out against these
lands, with others upon the lists, and the railroad company
designated as owner. In due time, the tax lists, with warrants
attached for their collection, were delivered to the treasurer of
the county. The taxes for the year 1870 became payable May 1, 1871,
and those for 1871, May 1, 1872. The warrants authorized the
treasurer, if default should be made in the payment of any of the
taxes charged upon the lists, to seize and sell the personal
property of the persons making the default to enforce the
collection.
No demand of taxes was necessary, but it was the duty of every
person subject to taxation to attend at the treasurer's office and
make payment. During the years 1870, 1871, and 1872, the railroad
company was the owner of other lands in the county, and other
property, both real and personal, on which taxes were properly
levied. On the 11th of August, 1871, the company attended at the
treasurer's office, and paid all taxes
Page 98 U. S. 543
charged against it for the year 1870, and on the 20th of July,
1872, all that were charged for the year 1871. Before these
payments were made there had been no demand for the taxes, and no
special effort had been put forth by the treasurer for their
collection. The company had personal property in the county which
might have been seized, but no attempt had been made to seize it,
and no other notice than such as the law implies had been given
that payment would be enforced in that way.
At the time the several payments were made the company filed
with the treasurer a notice in writing that it protested against
the taxes paid, for the reason that they were illegally and
wrongfully assessed and levied, and were wholly unauthorized by
law, and that suit would be instituted to recover back the money
paid.
This suit was begun Aug. 20, 1875, and on the trial the judges
of the circuit court were divided in opinion as to the question,
among others,
"whether the payment of the said taxes under the written
protests above appearing, without any demand therefor or effort to
collect the same, made the payment a compulsory one in such sense
as to give the plaintiff (the railroad company) the right to
recover back the amount thereof as at common law, there being no
statute giving or regulating the right of recovery in such
cases."
The presiding judge being of the opinion that the payment was
voluntary and not compulsory, judgment was entered against the
railroad company, and the case has been brought to this court upon
a writ of error for a determination of the question upon which the
judges were divided, and which has been duly certified upon the
record.
We have no difficulty in answering the question in the negative.
We had occasion to consider the same general subject at the last
term in
Lamborn v. County Commissioners, 97 U. S.
181, which came up on a certificate of division from the
Circuit Court for the District of Kansas. As that was a case from
Kansas, we followed the rule adopted by the courts of that state,
which is thus stated in
Wabaunsee County v. Walker, 8 Kan.
431:
"Where a party pays an illegal demand with a full knowledge of
all the facts which render such demand
Page 98 U. S. 544
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 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."
This, as we understand it, is a correct statement of the rule of
the common law. There are, no doubt, cases to be found in which the
language of the court, if separated from the facts of the
particular case under consideration, would seem to imply that a
protest alone was sufficient to show that the payment was not
voluntary, but on examination it will be found that the protest was
used to give effect to the other attending circumstances. Thus, in
Elliott v.
Swartwout, 10 Pet. 137, and
Bond
v. Hoyt, 13 Pet. 266, which were customs cases, the
payments were made to release goods held for duties on imports; and
the protest became necessary, in order to show that the legality of
the demand was not admitted when the payment was made. The recovery
rested upon the fact that the payment was made to release property
from detention, and the protest saved the rights which grew out of
that fact. In
Philadelphia v.
Collector, 5 Wall. 730, and
Collector
v. Hubbard, 12 Wall. 13, which were internal
revenue tax cases, the actions were sustained
"upon the ground that the several provisions in the internal
revenue acts referred to warranted the conclusion as a necessary
implication that Congress intended to give the taxpayer such
remedy."
It is so expressly stated in the last case. P.
79 U. S. 14. As
the case of
Erskine v. Van
Arsdale, 15 Wall. 75, followed these, and was of
the same general character, it is to be presumed that it was put
upon the same ground. In such cases, the protest plays the same
part it does in customs cases, and gives notice that the payment is
not to be considered as admitting the right to make the demand.
The real question in this case is whether 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
Page 98 U. S. 545
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 accompanied, and no opportunity had been afforded the
parties of obtaining a judicial decision of the question of their
liability. As to this class of case, Chief Justice Shaw states the
rule in
Preston v. Boston, 12 Pick. (Mass.) 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 every thing 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 the manner of executing the power. Three years afterwards,
and after the decision in
Railway Company v.
McShane, 22 Wall. 444, which was supposed to hold
that the particular lands now in question were not subject to
taxation, this suit was brought. Under such circumstances, we
cannot hold that the payment was compulsory in such a sense
Page 98 U. S. 546
as to give a right to the present action. As the answer to this
question disposes of the case, it is unnecessary to consider the
other questions certified.
Judgment affirmed.