Property within a state which is in the possession of a receiver
by virtue of his appointment as such by a circuit court of the
United States is not subject to seizure and levy under process
issuing from a court of the state to enforce the collection of a
tax assessed upon its owner under the laws of the state.
The exclusive remedy of the state tax collector in such case is
in the circuit court which appointed the receiver, where the
question of the validity of the tax may be heard and determined and
where the priority of payment of such amount as may be found to be
due which is granted by the laws of the state will be recognized
and enforced.
The writ of habeas corpus is not to be used to perform the
office of a writ of error, or of an appeal.
When no writ of error or appeal will lie, if a petitioner for a
writ of habeas corpus be imprisoned under a judgment of a circuit
court which had no jurisdiction of the person or of the subject
matter or authority to render the judgment complained of, then
relief may be accorded by writ of habeas corpus.
This is a petition for a writ of habeas corpus, filed by leave
of court March 7, 1893, by M. V. Tyler, Sheriff of the County
Page 149 U. S. 165
of Aiken, South Carolina, representing that he is unjustly
detained by G. I. Cunningham, United States Marshal for the
District of South Carolina, to which the marshal made return upon a
rule laid upon him to do so. The facts appearing from the petition,
return, and accompanying documents are as follows:
On December 5, 1889, in the case of
Bound v. The South
Carolina Railway Company, Daniel H. Chamberlain was appointed
receiver of the railway company by an order of the Circuit Court of
the United States for the District of South Carolina, with the
usual powers of receivers in such cases, and all of the property of
the company was placed under his care and management, and protected
by injunction. On March 7, 1892, the receiver filed a bill in
equity in that court against the treasurers and sheriffs, eighteen
in number, in the counties through which the railroad in his
possession passed, alleging that the treasurers were about to issue
tax executions, and the sheriffs about to levy and seize thereunder
property of the railroad company for the taxes for the fiscal year
beginning November 1, 1890. The bill alleged that the taxes for
that fiscal year were unconstitutional and illegal in part upon
various grounds set forth therein in detail and involving an
alleged wrongful and illegal raising of the valuation by the state
board of equalization; that the levy and sale of the road would
cause irreparable injury, preventing the receiver from carrying on
the business of the railroad as a common carrier; that there was no
adequate remedy at law; that a multiplicity of suits would be
necessary to protect his rights if he sued at law, and that the
levy would cast a cloud upon the property, and prayed for an
injunction against the issue and levy of the tax warrants in
question. The bill further set forth that the receiver had tendered
without condition the taxes admitted to be due, and that the same
had been refused by the county treasurers, but pending the motion
for preliminary injunction the defendants were permitted to waive
this refusal and receive the amounts tendered, which was
accordingly done. On April 8, 1892, the court, after full hearing,
issued the injunction prayed for, and, the defendants having
answered, it was provided by order of
Page 149 U. S. 166
court that the testimony should be taken in due course in time
for final hearing at the November term, 1893.
For the fiscal year beginning November 1, 1891, the receiver
made a return of the property for taxes as provided by law similar
to the return he had made the year previous and, the state board of
equalization having again proceeded in the matter of the assessment
and valuation as before, the receiver again tendered the taxes
calculated on the valuation as returned, and not upon the valuation
as assessed. The amounts so tendered were received, but tax
executions or warrants were issued by the county treasurers for the
difference between the return and the assessment, and on February
4, 1893, levy was made by Tyler, Sheriff of Aiken County, upon
property in the hands of the receiver at Aiken. There were
apparently two warrants, one for $1,215.14 and the other for
$466.40, and the value of the property levied on was $9,500. That
property consisted of fourteen freight cars, five belonging to the
South Carolina Railway, one to another South Carolina company, and
eight to various railroad companies of other states. All of the
cars were marked with the initials of the corporations to which
they belonged, and most of them with the names of the owners in
full. Eight of the cars were loaded with merchandise belonging to
shippers. The cars were chained to the track of the South Carolina
Railway Company alongside of the only freight depot of the company
in Aiken, and effectively stopped traffic through that depot for a
period of twelve days. On Monday, February 6, 1893, the receiver
filed his petition in the circuit court of the United States,
alleging the illegality of the taxes for which the warrants were
issued, in substantially the same terms as in the bill of the year
before, and setting forth that he had paid the taxes admitted to be
due; that the court in the previous case had decided a tax in all
respects similar to be illegal, and after disclaiming any intention
to delay or escape the payment of the taxes due, and alleging that
he was only doing his duty as an officer of the court, prayed that
the treasurer and sheriff be enjoined from interfering with the
property in the receiver's charge, and be committed for contempt
for levying upon property in the
Page 149 U. S. 167
custody of the court. The court issued a restraining order and a
rule to show cause, returnable at Charleston on February 20, 1893,
as follows:
"Ordered, that an order do forthwith issue and be served upon
said MacMitchell and M. V. Tyler requiring, them to show cause
before me on the 20th day of February, 1893 at 10 o'clock A.M. at
the United States courthouse, Charleston, South Carolina, why they
should not be attached and punished as prayed for."
"2. That the said MacMitchell and M. V. Tyler do likewise show
cause before me at the same time and place why they should not be
enjoined and restrained from interfering with any or all of the
property of the said South Carolina Railway Company or other
property in the possession and control of the said D. H.
Chamberlain as receiver and officer of this court, or from
interfering in any manner whatsoever with the officers and agents
of the said receiver, and also from levying upon, advertising, or
selling or in any manner whatsoever attempting to dispose of the
said property."
"3. That the said MacMitchell and M. V. Tyler do likewise, in
due course, file an answer, if any, why such further relief as may
be necessary should not be granted in the premises."
"4. In the meantime, it is ordered that the said MacMitchell and
M. V. Tyler be, and they are hereby, restrained and enjoined from
levying upon, seizing, advertising, or selling or in any manner
whatsoever endeavoring to interfere with or to dispose of the said
property in the possession of the said D. H. Chamberlain as
receiver of this Court until the hearing of the rule and the order
of this Court thereon."
"5. That a copy of the petition and order herein be forthwith
served upon the said MacMitchell and M. V. Tyler."
On February 8, a supplemental petition was filed by the receiver
reciting the filing of the original petition, the order thereon,
and the service of copies of said petition and order, and stating
that the sheriff refused to comply with a written demand, on
February 7, for the release of the property from his custody.
Accompanying this supplemental petition were affidavits
Page 149 U. S. 168
stating the facts in detail, whereupon the order of February 6th
was so modified as to require the respondents to show cause on
February 11, 1893, instead of February 20.
The respondents answered the petitions on February 12, denying
any unlawfulness in the assessment and admitting that the property
was in the possession of the court, but denied that such possession
exempted the same from process of law for the collection of taxes
by the state. They admitted the levy upon the cars, but denied any
knowledge or information sufficient to form a belief that any of
them belonged to corporations other than the South Carolina
Railway, and denied that the levy seriously interfered with the
receiver or the public in doing business over said road. They
further denied that the facts stated in the original and
supplemental petitions, if true, were sufficient to constitute a
contempt of court, and insisted upon various matters, afterwards
again set forth in the application for habeas corpus.
They asserted the legality and regularity of the warrants for
the collection of the taxes, and that the levy was made in
obedience thereto, and submitted that they were acting under the
laws of South Carolina, as the officers and agents of the
state,
"and as such engaged in the performance of their duties in
issuing the said execution, in making the said levies, and in
retaining possession of the property so levied upon, under the
valid, constitutional laws of the said state, and that if said
petitioners have any controversy with anyone in regard thereto, it
is a controversy with the State of South Carolina, which is no way
a party to these proceedings, and that there can be no controversy
with the respondents in this regard unless they were acting without
the commission and warrant of the State of South Carolina, and were
trespassers, which they deny,"
and finally they disclaimed
"any intention to treat this court or its orders with
disrespect, and state that they have been actuated alone with a
desire to discharge their official duties as officers of the State
of South Carolina."
This return was accompanied by a large number of affidavits
tending to show the legality of the tax complained of.
A hearing having been had, the circuit court delivered its
Page 149 U. S. 169
opinion, stating the facts briefly and holding that the
interference by the court by injunction was justified on the ground
of excessive levy, and on the ground of the taking of property
other than the property of the alleged taxpayer, but further that
while property in the hands of a receiver of any court, either
state or national, was bound for the payment of taxes -- state,
county, or municipal -- yet that a receiver is not bound to pay
taxes in his judgment unlawful unless by the order of the court
whose officer he is, and that in the present proceeding, it was not
competent for the court to go into the question of whether the tax
was or was not illegal. The circuit court thereupon entered
severally the following orders:
"This cause came on to be heard on petition, rules to show
cause, return thereto, and affidavits, and on hearing the same, and
upon due consideration thereof, it is"
"Ordered, adjudged, and decreed that an injunction do issue to
M. V. Tyler, Sheriff of Aiken County, his deputies and agents,
enjoining and restraining them from further intermeddling,
interfering with, keeping, and holding the personal property
distrained upon by him, belonging to the petitioner, as receiver of
the South Carolina Railway Company, or in his care and custody as
receiver and common carrier, and that this injunction remain of
force until the further order of this Court."
"It is further ordered that the said property be restored to the
custody of the receiver of this Court, and that the marshal put him
in possession thereof."
"M. V. Tyler, Sheriff of Aiken County, having been served with
two rules to show cause why he be not attached for contempt for the
matters set forth in copy of petition to each rule attached, and
sufficient cause not having been shown, and it further appearing
that he, notwithstanding, continues to hold and detain said
property, we adopt the precedent set in
In re
Chiles, 22 Wall. 157, by the Supreme Court of the
United States."
"It is ordered, adjudged, and decreed that he is in contempt of
this Court, and of its orders and process."
"It is further ordered that he do pay a fine of five hundred
Page 149 U. S. 170
dollars, and that the clerk of this court shall enter judgment
thereon, and issue execution therefor, and that he also stand
committed to the custody of the marshal of this court until he has
paid said fine or purged himself of his contempt herein."
Among other averments in the petition for the writ of habeas
corpus, it was alleged that by an Act of the General Assembly of
South Carolina (No. 631), approved March 19, 1874, 15 S.C.Stat.
789, it is provided that in all cases where it is claimed that
taxes have been erroneously or illegally charged upon taxable
property within the state, the person so claiming may, by petition,
submit a full statement of the facts in the case, and the
Comptroller General may make such abatement thereof as in his
judgment the same may demand, and that such relief so granted in
cases for erroneous charges as aforesaid has not been sought by the
receiver or the railroad company; that by the statutes of the
state, it is also provided that the collection of taxes shall not
be stayed or prevented by any injunction, writ, or order issued by
any court, or judge thereof, Gen.Stats.C.C. sec. 171, and that in
all cases where taxes are charged against any person, which he may
conceive to be unjust or illegal for any cause, he shall pay the
taxes notwithstanding, under protest, and upon such payment's being
made, the person so paying may, within a time limited, by action
against the county treasurer, recover such taxes as may in such
suit be adjudged to have been wrongfully or illegally collected. It
was further averred that by the Act of Congress approved March 3,
1887, and amended by the Act of August 13, 1888, the receiver
appointed in this case was required to manage and operate the
property situated in South Carolina according to the requirements
of the valid laws of that state, in the same manner as if in
possession of the owner thereof, and petitioner insisted that the
action of the circuit court in appointing a receiver did not change
the title or possession of the property or its relation to the
sovereign power of the state to tax it, and was subject in like
manner as the property would have been subject had it remained in
the hands of its owners. Petitioner also referred to an Act of
the
Page 149 U. S. 171
Legislature of South Carolina approved December 24, 1892, Acts
S.C. 1892, p. 81, which provided that the assessment of property
for taxation should be deemed and held to be a step in the
collection of taxes; that certain enumerated sections of the
General Statutes, thereby declared to be in full force and effect,
should be construed to mean as giving full and complete power to
the county auditor, independent of any rights conferred on county
boards of assessors or other officers, in the matter of securing a
full and complete return of property for taxation in all cases, and
that the action of the auditor under those sections should not be
interfered with by any court of this state by mandamus, summary
process, or any other proceeding, but that the taxpayer should have
the right to pay his tax on such return under protest, as now
provided by law. Petitioner therefore insisted that an adequate
remedy at law was given the taxpayer for unjust and excessive
taxation, and that it was not competent for a court of the United
States to grant the injunction in this case, any more than it would
have been for a court of the state; that the receiver's possession
is that of the court, only for the parties litigant in the suit,
and to the extent only of the power to subject the property to the
rights of suitors, subject to the paramount right of the state to
tax the property according to its own laws; that the railway
company was a citizen of South Carolina, and hence that the
receiver, as plaintiff in his petition, represented a citizen of
South Carolina, and proceeded against the petitioner, Tyler, who
was also a citizen of that state; that the amount involved was less
than gives jurisdiction to the circuit courts of the United States;
that on the grounds indicated, the court had no jurisdiction, and
its order was void, and that therefore the order of commitment and
fine was void. In conclusion petitioner insisted:
"1st. That the injunction proceeding by the receiver is a suit
against the State of South Carolina; that to enjoin the functionary
is to forbid the function of the state to tax by its own laws, and
fix and assess its amount by its own procedure, and that your
petitioner, as the officer charged with this state function, is
sued by the receiver, which is in fact a suit against
Page 149 U. S. 172
the state, and contrary to the Eleventh Amendment of the
Constitution of the United States."
"2d. That under the laws of the United States and of the state,
the remedy of the owner or taxpayer is ample by proceeding at law,
and he can have none in equity, which is denied by the statute of
the state, and on general principles of equity practice, and that
the exigency which induced the appointment of a receiver does not
in any respect change the legal aspect of the case, but makes the
order of the court of the United States illegal, void, and without
jurisdiction."
"3. That to fine and imprison your petitioner for action as a
legal officer under and according to the valid laws of South
Carolina is to deny the authority of the state itself by making it
impossible for the state to execute its laws by agents, except
under penalties which the United States courts cannot impose as an
obstruction to the functions of the state itself."
"Wherefore your petitioner insists that he is held in custody
against law and contrary to the Constitution of the United States,
the supreme law of the land. "
Page 149 U. S. 180
MR. CHIEF JUSTICE FULLER, after stating the facts in the
foregoing language, delivered the opinion of the Court.
Unless the order of commitment was utterly void for want of
power, this application must be denied. The writ of habeas corpus
is not to be used to perform the office of a writ of error or
appeal; but when no writ of error or appeal will lie, if a
petitioner is imprisoned under a judgment of the circuit court,
which had no jurisdiction of the person or of the subject matter,
or authority to render the judgment complained of, then relief may
be accorded.
Ex Parte Parks, 93 U. S.
18;
Ex Parte Terry, 128 U.
S. 289;
Neilsen, Petitioner, 131 U.
S. 176. And even if the contention were well founded,
which is not at all to be conceded, that under the fifth section of
the Judiciary Act of March 3, 1891, a writ of error might be
brought to review such a judgment as that before us, and
Page 149 U. S. 181
that thereby our appellate jurisdiction was enlarged, we should
still decline to consider the whole record for error merely, but
only to ascertain whether the judgment was absolutely void.
The property in question was in the custody of the circuit
court, in a cause within its jurisdiction, and protected by
injunction. The power exercised was the power to protect the
property in the custody of the court from invasion, and in order to
sustain the receiver's application, the ordinary grounds of equity
interposition were not required to be set forth. Whether inadequacy
of remedy at law in respect of the disputed taxes, or the requisite
jurisdictional amount, or diverse citizenship were shown to exist
was not and could not be matter of inquiry. But it may be observed
that diverse citizenship is not material in ancillary and dependent
proceedings, where jurisdiction exists over the subject of the
litigation,
Krippendorf v. Hyde, 110 U.
S. 276;
Morgan's Co. v. Texas Central Railroad,
137 U. S. 171,
137 U. S. 201,
that the objection of adequacy of legal remedy, as here presented,
goes to the want of equity, and not to want of power,
Reynes v.
Dumont, 130 U. S. 354, and
that an apparent defect of jurisdiction for lack of a matter in
controversy of sufficient pecuniary value can be availed of only by
appeal or writ of error,
In re Sawyer, 124 U.
S. 200,
124 U. S. 221.
In the latter case, the distinction between an absolute want of
power and its defective exercise -- between cases where the subject
matter falls within a class over which equity has jurisdiction and
those where it does not -- is clearly pointed out, and the
authorities cited.
No rule is better settled than that when a court has appointed a
receiver, his possession is the possession of the court, for the
benefit of the parties to the suit and all concerned, and cannot be
disturbed without the leave of the court, and that if any person,
without leave, intentionally interferes with such possession, he
necessarily commits a contempt of court and is liable to punishment
therefor.
Wiswall v.
Sampson, 14 How. 52;
Taylor v.
Carryl, 20 How. 583;
Davis v.
Gray, 16 Wall. 203;
Krippendorf v. Hyde,
110 U. S. 276;
Barton
Page 149 U. S. 182
v. Barbour, 104 U. S. 126;
Gumbel v. Pitkin, 124 U. S. 131.
Ordinarily the court will not allow its receiver to be sued
touching the property in his charge, nor for any malfeasance of the
parties or others, without its consent, and while the third section
of the Act of Congress of March 3, 1887, 24 Stat. 552, c. 373, now
permits a receiver to be sued without leave, it also provides
that
"such suit shall be subject to the general equity jurisdiction
of the court in which such receiver or manager was appointed so far
as the same shall be necessary to the ends of justice."
Neither that nor the second section, which provides that the
receiver shall manage the property "according to the valid laws of
the state in which such property shall be situated," restricts the
power of the circuit courts to preserve property in the custody of
the law from external attack.
In this case, instead of issuing an attachment against the
petitioner at once for forcibly seizing the rolling stock of this
railroad under the circumstances appearing upon the face of the
record, the court adopted the course of serving him with a rule to
show cause and with an order restraining him, in the meantime, from
interference with the property. The petitioner refused to release
the property upon request of the receiver, and persisted in his
attempt to hold possession thereof by force in disregard of the
order of the court.
The general doctrine that property in the possession of a
receiver appointed by a court is
in costodia legis, and
that unauthorized interference with such possession is punishable
as a contempt, is conceded, but it is contended that this salutary
rule has no application to the collection of taxes. Undoubtedly
property so situated is not thereby rendered exempt from the
imposition of taxes by the government within whose jurisdiction the
property is, and the lien for taxes is superior to all other liens
whatsoever, except judicial costs, when the property is rightfully
in the custody of the law; but this does not justify a physical
invasion of such custody and a wanton disregard of the orders of
the court in respect of it. The maintenance of the system of checks
and
Page 149 U. S. 183
balances characteristic of republican institutions requires the
coordinate departments of government, whether federal or state, to
refrain from any infringement of the independence of each other,
and the possession of property by the judicial department cannot be
arbitrarily encroached upon save in violation of this fundamental
principle.
The levy of a tax warrant, like the levy of an ordinary
fieri facias, sequestrates the property to answer the
exigency of the writ, but property in the possession of the
receiver is already in sequestration, already held in equitable
execution, and, while the lien for taxes must be recognized and
enforced, the orderly administration of justice requires this to be
done by and under the sanction of the court. It is the duty of the
court to see to it that this is done, and a seizure of the property
against its will can only be predicated upon the assumption that
the court will fail in the discharge of its duty -- an assumption
carrying a contempt upon its face.
The acceptance of the rule had been general, and but few
decisions were cited on the argument in illustration of its
application.
The Court of Appeals of Maryland, in
Prince George's County
Commissioners v. Clarke, 36 Md. 206, stated the question
presented to be
"whether, after a decree has been passed by a court of equity
for the sale of real estate, and trustees have been appointed to
make such sale, a collector of taxes has the power to seize and
sell the same, or any part thereof, for taxes due."
And the court thus proceeded:
"The decree was passed the 9th of November, 1865. The taxes for
which the land was sold were assessed for the years 1866 and 1867,
and the collector's sale took place the 29th of September, 1870.
The land in the meantime had been sold by the trustees, under the
decree in the equity case, but exceptions having been filed to the
sale, the question of its ratification was still pending; so that
both at the time of the imposition of the taxes and at the time of
the collector's sale, the land in question was under the control
and jurisdiction of a court of equity. Under these circumstances,
it was not admissible for a collector to step in and by summary
distress and sale divest the court
Page 149 U. S. 184
of its jurisdiction, and transfer the question of title to
another tribunal. His plain and obvious duty was to apply to the
court for the payment of the taxes due, and as they had full power,
the presumption is that they would have directed their payment
through their agents, the trustees, in a manner that would have
occasioned no unnecessary delay, while at the same time the rights
of all interested would have been properly protected."
In
Greeley v. Provident Savings Bank, 98 Mo. 458,
payment of taxes upon intervention of the tax collector in a case
wherein a receiver had been appointed was resisted upon the ground
of lapse of time, and the court said:
"The amount of the taxes was undisputed and the receiver had in
his hands funds sufficient to pay them, and we think the order
should have been made. It may be conceded that the state did not
have an express lien upon the assets that went into the hands of
the receiver, but it had a right paramount to other creditors to be
paid out of those assets -- a right which it could have enforced
through its revenue officers by the summary process of distress but
for the fact that the property and assets of its debtor had passed
into the custody of its courts, whose duty it was, in the
administration and distribution of those assets, to respect that
paramount right, upon the untrammeled exercise of which depends the
power to protect the very fund being distributed, and to maintain
the existence of the tribunal engaged in distributing it, and to
make no order for the distribution of assets
in custodia
legis except in subordination to that right. The ordinary
revenue officers of the state being deprived of the ordinary means
of securing the state's revenue from the fund in the custody of the
court, the duty devolved upon the court to be satisfied, and upon
the receiver to see, that the taxes due the state were paid before
the estate was distributed to other creditors, and we can conceive
of no scheme of administration that the court could properly adopt
by which the state's demand could be reduced to the level of an
ordinary debt and be cut off unless presented to the court for
allowance within a given time."
And see Central Trust Co. v. N.Y. & Northern
Railroad, 110 N.Y. 250.
Page 149 U. S. 185
County of Yuba v. Adams, 7 Cal. 37, was also a case of
intervention, and the view of the court was thus expressed:
"The levy of the tax gave to the intervener a judgment and lien
on the property assessed, having the force and effect of an
execution, which might be enforced in the same manner as other
executions. This lien was not divested by the subsequent
proceedings taken by Brumagim and others, but the fund, being in
the custody of the law, was not liable to seizure, and the proper
remedy was by direct application to the court having the fund in
possession."
We do not understand any other or different rule to have
obtained in the courts of South Carolina. Indeed, in
Hand v.
Savannah & Charleston Railroad, 17 S.C. 219, the court,
without objection, passed upon a claim for taxes by the state
against the property of the railroad company in the hands of the
court, and held that it could not be maintained.
If such be the ordinary rule in the state courts, it is quite
apparent that it is the only one that can be properly applied where
property is in the custody of the courts of the United States.
Their officers are the agents of the United States, and, without an
order of the court appointing them, they are in duty bound to hold
the property, and refer those who would interfere with it to the
court.
In
Georgia v. Atlantic & Gulf Railroad, 3 Woods,
434, an application was made to the Circuit Court of the United
States for the Southern District of Georgia on behalf of the State
of Georgia for leave to sell the depots, freight houses, passenger
houses, and offices of the railroad company by virtue of a writ of
fieri facias which had been levied on the property to
enforce the collection of taxes due the state, and the levy
suspended by affidavit of illegality filed by the railroad company
under a provision of the Code of Georgia to that effect. A receiver
had been appointed by the circuit court after the levy, and had
possession subject to the prior lien of the execution which was
being contested. Mr. Justice Bradley, for reasons given, held that
the levy was void and denied the application for leave to proceed
with the execution, while he declared that the court would take
care that the full
Page 149 U. S. 186
right of the state should be preserved so far as it should be
brought judicially to the notice of the court.
In
Western Union Tel. Co. v. Atl. & Pac. Tel. Co.,
7 Bissell 367, Judge Drummond decided that proceedings in the state
court on the part of one of the parties to condemn a right of way
of the other, in the exercise of the power of eminent domain, was
invalid because the property was in the possession of the circuit
court of the United States through receivers, "and, that being so,
no action could take place in the state court affecting it without
the consent first obtained of this court."
In
Covell v. Heyman, 111 U. S. 176,
where the question arose as to the replevin by process from a state
court of property held by a United States marshal, which this Court
held could not be permitted, Mr. Justice Matthews, delivering the
opinion, said:
"The forbearance which courts of coordinate jurisdiction,
administered under a single system, exercise towards each other,
whereby conflicts are avoided, by avoiding interference with the
process of each other, is a principle of comity, with perhaps no
higher sanction than the utility which comes from concord; but
between state courts and those of the United States, it is
something more. It is a principle of right and of law, and
therefore of necessity. It leaves nothing to discretion or mere
convenience. These courts do not belong to the same system so far
as their jurisdiction is concurrent, and although they coexist in
the same space, they are independent, and have no common superior.
They exercise jurisdiction, it is true, within the same territory,
but not in the same plane, and when one takes into its jurisdiction
a specific thing, that
res is as much withdrawn from the
judicial power of the other as if it had been carried physically
into a different territorial sovereignty. To attempt to seize it by
a foreign process is futile and void."
This principle is applicable here, for whether the sheriff were
armed with a writ from a state court or with a distress warrant
from a county treasurer, this property was as much withdrawn from
his reach as if it were beyond the territorial limits of the
state.
The inevitable conclusion that this must be so if
constitutional
Page 149 U. S. 187
principles are to be respected in governmental administration
does not involve interruption in the payment of taxes or the
displacement or impairment of the lien therefor, but on the
contrary it makes it the imperative duty of the court to recognize
as paramount, and enforce with promptness and vigor, the just
claims of the authorities for the prescribed contributions to state
and municipal revenue. And when controversy arises as to the
legality of the tax claimed, there ought to be no serious
difficulty in adjusting such controversy upon proper suggestion.
The usual course pursued in such cases is by intervention
pro
interesse suo, as in the instance of sequestration. 2
Dan.Ch.Pl. & Pr. 4th ed. 1057, 1744;
Savannah v.
Jesup, 106 U. S. 563,
106 U. S. 564.
The tax collector is a ministerial officer,
Erskine v.
Hohnback, 14 Wall. 613;
Stutsman Co. v.
Wallace, 142 U. S. 293, and
no reason is perceived why he should not bring his claim to the
attention of the court, while, on the other hand, it is clearly the
duty of the receiver to do so if he contends that the taxes are
illegal. If found valid, they must be paid; if invalid, the court
will so declare, subject to the review of the appellate
tribunals.
The courts of the United States have always recognized the
importance of leaving the powers of the state in respect to
taxation unimpaired. Where the questions involved arise under the
state constitution and laws, the decisions of its highest tribunal
are accepted as controlling. Where the Constitution and laws of the
United States are drawn in question, the courts of the United
States must determine the controversy for themselves.
Such was the aspect of this case. The receiver had denied the
validity of a distinctive portion of the annual taxes, and under
the direction of the court had proceeded by bill to test the
question in reference to the levy for the previous fiscal year.
Injunction had been granted, issues made up, and the case stood for
final hearing. The alleged illegality existed in the levy for the
current year. The receiver paid the undisputed taxes and, upon the
forcible intervention of the collectors to compel payment of the
balance, brought the controverted point again to the attention of
the court in his
Page 149 U. S. 188
application for the protection of the property. So far as the
order before us is concerned, we are not called upon to review the
grounds upon which the assertion of illegality is rested. It has
been repeatedly and uniformly held by this Court that, in a proper
case for equity interposition, an injunction will lie to restrain
the seizure of property in the collection of taxes imposed in
contravention of the Constitution of the United States.
Osborn v.
Bank, 9 Wheat. 738;
Dodge v.
Woolsey, 18 How. 331;
Allen v. Baltimore &
Ohio Railroad, 114 U. S. 311;
In re Ayers, 123 U. S. 443;
Shelton v. Platt, 139 U. S. 591.
Whether or not the particular case is one calling for that measure
of relief it is for the circuit court to determine in the first
instance, and its action cannot be treated as a nullity.
It is said that any restraint upon or correction of unjust and
illegal assessment and taxation by judicial interposition is
inconsistent with the revenue laws of South Carolina, which only
permit payment under protest and recovery back at law, and our
attention is called to statutory provisions forbidding the courts
to interfere with the collection of taxes by any writ, process, or
order and to various decisions thereunder. In
State v. County
Treasurer, 4 S.C. 520, the subject was considered whether the
legislature was precluded by the state constitution, prescribing
the jurisdiction of the circuit courts, from taking away the remedy
by prohibition commonly resorted to in the case of illegal
taxation, and it was held that it was not, a vigorous dissenting
opinion being delivered by Chief Justice Moses, who said:
"The power to tax is the most extensive and unlimited of all the
powers which a legislative body can exert. It is without restraint
except by constitutional limitations. To tie up the hand that can
alone resist its unlawful encroachments would not only render
uncertain the tenure by which the citizen holds his property, but
would make it tributary to the unrestrained demands of the
legislature."
In
State v. Gaillard, 11 S.C. 309, application was made
to the court for a writ of mandamus, directed to the county
treasurer, commanding him to receive bills of the Bank of
Page 149 U. S. 189
South Carolina for taxes, and the writ was refused. Mr. Justice
McIver concurred on the ground that the constitutionality of the
prohibitory act had been settled in the case of
State v. County
Treasurer, just cited.
In
Chamblee v. Tribble, 23 S.C. 70, the action was
brought to enjoin the county treasurer from collecting certain
taxes for railroad purpose. The constitutionality of these
provisions was again adjudged, Mr. Justice McIver concurring, as
before, solely on the ground of
stare decisis, while Mr.
Justice McGowan dissented.
In
Bank v. Cromer, 35 S.C. 213, the court granted a
mandamus to correct an assessment, and held that the statute did
not prohibit the courts from exercising proper control over
officers charged with the listing and assessment of property for
the purpose of taxation when proceeding contrary to law.
This was followed by the passage of the Act of December 24,
1892, providing that the assessment of property for taxation should
be deemed and held to be a step in the collection of taxes, and
inhibiting interference by mandamus, summary process, or any other
proceeding, with official action in respect of assessments.
Manifestly the object of this legislation was to confine the
remedy of the taxpayer for illegal assessments and taxation to the
payment of taxes under protest, and bringing suit against the
county treasurer for recovery back, but all this is nothing to the
purpose. The legislature of a state cannot determine the
jurisdiction of the courts of the United States, and the action of
such courts in according a remedy denied to the courts of a state
does not involve a question of power.
The reasonableness of the contention that it would have been
wiser, in this instance, for the circuit court to have directed the
receiver to pay these taxes and bring suits at law, in nine
different courts, against the county treasurers of as many
counties, to recover them back, need not be passed upon.
The jurisdiction exercised by the circuit court had relation to
the property in its custody, and the proceeding before us relates
only to its exercise of power in the protection of that property
from unauthorized seizure.
Page 149 U. S. 190
The stress of the argument, however, on behalf of the petitioner
is placed upon the proposition that this proceeding is void because
it is in fact a suit against a state, and forbidden by the eleventh
amendment. But this begs the question under consideration. The
petitioner was either in contempt or he was not. This property was
in the custody of the circuit court under possession taken in a
cause confessedly within its jurisdiction, and if such possession
could not be lawfully interfered with, the petitioner was in
contempt, and, apart from the question of the validity of such
legislation, we know of no statute of South Carolina that attempts
to empower its officers to seize property in the possession of the
judicial department of the state -- much less in that of the United
States.
The object of this petition was, we repeat, to protect the
property; but even if it were regarded as a plenary bill in equity
properly brought for the purpose of testing the legality of the
tax, we ought to add that, in our judgment, it would not be
obnoxious to the objection of being a suit against the state. It is
unnecessary to retravel the ground so often traversed by this Court
in exposition and application of the Eleventh Amendment. The
subject was but recently considered in
Pennoyer v.
McConnaughy, 140 U. S. 1, in
which Mr. Justice Lamar, delivering the opinion of the Court, cites
and reviews a large number of cases. The result was correctly
stated to be that where a suit is brought against defendants who
claim to act as officers of a state, and, under color of an
unconstitutional statute, commit acts of wrong and injury to the
property of the plaintiff to recover money or property in their
hands unlawfully taken by them in behalf of the state or for
compensation for damages, or, in a proper case, for an injunction
to prevent such wrong and injury or for a mandamus in a like case
to enforce the performance of a plain legal duty, purely
ministerial, such suit is not, within the meaning of the amendment,
an action against the state.
And while it was conceded that the principle stated by Chief
Justice Marshall in the leading case of
Osborn v.
Bank, of the United States, 9 Wheat. 738, that "in
all cases where
Page 149 U. S. 191
jurisdiction depends on the party, it is the party named in the
record," and that "the Eleventh Amendment is limited to those suits
in which a state is a party to the record," had been qualified to a
certain degree in some of the subsequent decisions of this Court,
yet it was also rightly declared that the general doctrine there
announced -- that the circuit courts of the United States will
restrain a state officer from executing an unconstitutional statute
of the state when to execute it would be to violate rights and
privileges of the complainant that had been guarantied by the
Constitution and would do irreparable damage and injury to him --
has never been departed from.
The views expressed in
United States v. Lee,
106 U. S. 196;
New Hampshire v. Louisiana, 108 U. S.
76;
In re Ayers, 123 U.
S. 443;
Hans v. Louisiana, 134 U. S.
1;
McGahey v. Virginia, 135 U.
S. 662, and numerous other cases, render further
discussion unnecessary.
The levies here were excessive, were made in large part on
property other than that of the defendants in the warrants, and in
such a way and on such property as to obstruct the operation of the
railroad. No leave of court was sought, and it was known that the
legality of the amount unpaid was disputed by the receiver and that
identical taxation had been previously held by the court to be
illegal. The sheriff declined, upon request, to release the
property from seizure or to yield to the order of the court.
Such conduct was not to be tolerated, and the court was
possessed of full power to vindicate its dignity and to compel
respect to its mandates. Its action to that end is not subject to
review upon this application.
The petition for the writ of habeas corpus is
Denied.
MR. JUSTICE FIELD did not hear the argument, and took no part in
the consideration of this and the following cases.
