City of Gadsden v. American Nat. Bank

This bill is filed by the appellee, American National Bank, against the respondents, John A. Camp, as tax collector of Etowah county, and as ex officio tax collector of the city of Gadsden, and the city of Gadsden, a municipal corporation, to use the language of appellee's *Page 491 brief, "for the purpose of enjoining said John A. Camp, as Tax Collector of Etowah County, Alabama, and as Tax Collector of the City of Gadsden, from levying on any of the property of the appellee or of its shareholders, and from selling the same for the payment of any taxes assessed against the corporate shares of appellee; and also to restrain such Tax Collector from collecting such taxes and from threatening, harassing or vexing the complainant or its stockholders in an effort to collect the same or any part thereof."

The ground upon which the bill rests the right to relief is: "That a large amount of moneyed capital in the hands of individual citizens, corporations and other organizations which is exempt from taxation or which was not taxed at as great a rate as assessed against the corporate shares or capital stock of appellee, was used in competition with appellee in the territory in which it did business. The contention of the appellee in said bill is that section 5219 of the Revised Statutes of the United States, as amended, being section 548, title 12, of the United States Code Annotated, prohibited the State of Alabama, and its political subdivisions from taxing complainant's corporate shares or capital stock at a greater rate than is assessed upon other moneyed capital coming into competition with the business of appellee, and that, therefore, the tax which the said John A. Camp was attempting to collect on the shares or capital stock of the American National Bank was illegal," etc.

"It must be regarded as settled, that taxpayers can not resort to a court of equity, to enjoin the collection of a tax claimed to be illegal, unless with the illegality of the tax there is connected some recognized ground of equitable jurisdiction." City Council of Montgomery v. Sayre et al.,65 Ala. 564; City of Ensley v. McWilliams, 145 Ala. 159,41 So. 296, 117 Am. St. Rep. 26; Adams, Tax Collector, et al. v. Southern Railway Co., 176 Ala. 320, 58 So. 397; Mayor, etc., of Mobile v. Baldwin, 57 Ala. 61, 29 Am. Rep. 712.

In the case first above cited, a bill filed to enjoin a municipal corporation from collecting an illegal tax, it was observed: "If bills of this kind could be entertained, municipal corporations would be placed at the mercy of reluctant and litigious tax-payers, embarrassed in all their operations, and incapable of preserving the peace, order, and proper government of the localities to which their powers extend." City Council of Montgomery v. Sayre et al., 65 Ala. 564,566.

And in Mayor, etc., of Mobile v. Baldwin, 57 Ala. 61, 72, 29 Am. Rep. 712: "Admitting the tax is illegal and void, the corporation is merely pressing the payment of an unfounded, unjust demand, and threatening the commission of a personal trespass, to compel payment. If it persists, the complainants have an adequate remedy at law. In Dillon on Music. Cor. § 738, it is laid down that 'equity will not restrain even an illegal and void tax assessment where it is sought to be enforced against personal property only, since here the party has an adequate remedy at law; nor in such a case will equity interfere because several join in the bill asking it.' In Dows v. City of Chicago, 11 Wall. 108 (20 L. Ed. 65), which was abill to enjoin the city from collecting a tax on shares of thecapital stock of a national bank, the court says: 'Assuming the tax to be illegal and void, we do not think any ground is presented by the bill justifying the interposition of a court of equity to enjoin its collection. The illegality of the tax and the threatened sale of shares for its payment constitute themselves alone no ground for such interposition. There must be some special circumstances attending a threatened injury of this kind, distinguishing it from a common trespass, and bringing the case under some recognized head of equity jurisdiction, before the preventive remedy by injunction can be invoked.' " This is a case in point, and is in harmony with the most recent decisions of the United States Supreme Court. Matthews v. Rodgers, 284 U.S. 521, 52 S. Ct. 217, 76 L. Ed. 447; Stratton, Secretary of State of Illinois v. St. Louis Southwestern Railway Co., 284 U.S. 530, 52 S. Ct. 222,76 L. Ed. 465.

Nor does the bill bring the case within the influence of Shanks et al. v. Winkler et al., 210 Ala. 101, 97 So. 142. There the levy was a special tax for school purposes, and the single levy covered a period of six years, and the levy constituted a lien on all the lands within the school district, and constituted a cloud on the title of the taxpayer, and it was there observed: "The tax has been levied for a period of 6 years, and will be collected annually, so that a multiplicity of actions at law will be necessary for its recovery from year to year in the absence of the equitable relief sought by the bill. The case averred involves no necessity for an apportionment of taxes, no occasion for a new assessment, no interference with the regular revenue of the state or county, and, in our judgment, the considerations stated above suffice to sustain the equity of the bill." Shanks v. Winkler, 210 Ala. 103,97 So. 142, 143.

That is not so here. The levy is for a single tax year, and the tax may be paid under protest, and, if illegal, may be recovered in a single action at law, at the suit of appellee. Ward, Tax Collector, v. First Nat. Bank of Hartford (Ala. Sup.)142 So. 93.1 This affords a complete and adequate remedy at law. Matthews v. Rodgers, supra. *Page 492

We are therefore of opinion that the bill is without equity, and the circuit court in equity erred in overruling the demurrer to the bill and in granting the injunction, and the decree of the circuit court is reversed and one here rendered sustaining the demurrer and dissolving the injunction, and the cause will be remanded.

Reversed, rendered, and remanded.

All the Justices concur, except THOMAS, J., who dissents.

1 Ante, p. 10.