NAT. BANK OF CmCAGO V. FARWELL,
(aircuit Court, D. lllinO'is.
May 24, 1881.)
In th.e taxation of the shares of a national bank, the shareholders are not entitled to any allowance for such of the capital and surplus of the bank as may be invested in government bonds.
2. SAME-TAXATION OF SHARES-AsSESSMENT.
In the taxation of the shares of a national bank, it must appear that the assessors acted under some agreement or rule which necessarily tended to tax such shares at a greater rate than is assessed upon other moneyed capital in the hands of individual citizens of Buch state, in order to render their assessment void under section 5219 of the Revised Statutes.-[ED.
Hitchcock, Dupree cf; Judah, for complainant. Francis Adams, for defendant.
DRUMMOND, C. J. The act of congress creating national banks declares that the taxation by the different states of the shares of stock in national banking associations shall not be at a g:r;eater rate than is assessed upon other moneyed capital in the hands of individual citizens of such states. This is a bill filed by the plaintiff to restrain, by injunction, the collection of a tax by the defendant, for the reason, as alleged, that this provision of the statute has been violated by the assessment of the shares of stock of the plaintiff in this case. It is stated in the bill that no allowance was made by the assessors for the amount of capital and surplus invested in government bonds. This is answered, showing that such allowance need not be made, by the case of Allen v. Assessors, 3 Wall. 573, and the case of People v. Commissioners, 4 Wall. 244. The bill alleges several cases in which a discrimination is claimed to have been made against the shares of stock of the plaintiff, as that the shares of stock of other banking associations have been assessed at less value. But it is not sufficient that other capital may in fact have been assessed differently from that of the plaintiff. In mak-
FIRST NAT. BANK OF OHICAGO V. FARWELL.
ing assessments it cannot be expected that the estimates of value placed by the assessors upon the property of individuals, or of corporations, should always be the same, and' the fact that there may have been differences in this respect will not authorize a party to come into a court of equity and ask for an injunction to restrain the collection of taxes. It is also alleged in the bill what was the amount the capital stock of the plaintiff, and of its surplus, and what was the aggregate fair cash value of its shares of stock on the first of May, 1880, and what was the assessment on such value aga.inst the plaintiff according to the mode of valuation adopted by the assessor; and the oillthen 'declares what was the capital of certain other banks, naming them, and that the assessment upon those banks was not at the same rate as that made against the plaintiff. But there is no allegation what returns were made by those banks to the assessors, nor is there any statement that the' assessors knew what was the value of the stock of those banks. So that it is quite possible the valuation named in the bill by the assessor may have been the result of mistake or misapprehension, or of misinformation. The rule which seems to be established by the supreme court of the United States in cases of this Drt is this: that it must appear in the act of the legislature it was the intention of the statute to tax the shares of the capital stock of the national banks at a higher rate than other moneyed capital in the hands of individuals, or there must be some agreement or combination or rule established by the assessors, the necessary effect of which is to produce the same result. It may be admitted that it is difficult, under this rute, for a party to come into a federal court of equity and obtain an inj unction against the collection of a tax. The inclination of the supreme court seems to be to discourage applications of this kind, as interfering with the collection of funds which are necessary to carryon the government of the state. In the case of The German National BalJ,k 91 Chica.qo v. Kimball, recently decided in the supreme court of the United States and not yet reported, it appears to be implied that
there must be a distinct averment in the bill that the shares of stock of a national hapkare valued higher for the purposes of taxation than other moneyed capital generally, and that it is not enongh to allege that such may be the fact in a particular ; that the mere allegations that the assessments are partial, unequal, and even unjust, are not sufficient. It is, perhaps, inferable from the opinion in that case that the supreme court will not go further than it has already gone in the <)ase of The People v. Weaver, 100 U. S. 539; in Pelton v. National Bank, 101 U. S. 143; and in Cummings v. National Bank, 101 U. S. 153. In this case there appears to have· been no agreement or of action among the assessors by which a general rule or rate has been adopted either hy the assessors generally, or hy any single assessor, the necessary effect of which is to tax the shares of stock of the First National Bank of Chicago at a higher rate than other moneyed capital in the hands of individuals, and therefore the motion which has been. made for an inj unction will he overruled.
NOTE. Section 5219 of the Revised Btatutes has recently been construed in Bank v. Hills, 5 FED. REP. 248; in Bank v. Maher, 6 FED. REP. 417; in Youngstown v. Hughes, Id. 737; and in Bank v. Wat61's, ante, 152.-[ED.
(Circuit Court, D. Rhode Island.
April 27, 1881.)
PLEA IN ABATEMENT-SUIT PENDING IN STATE COURT.
The pendency of a suit in equity in a state court cannot be pleaded in abatement or bar of a like suit involving the same subject-matter, and between the same parties, in Ii federal court-rED.
In Equity. Defendant set up the following plea in bar of the bilL
"This defendant, by protestation, not confessing or acknowledging the matters and things in and by said bill set forth and alleged to be true in such manner and form as the same are thereby and therein set forth and alleged for plea to the whole of said bill, saith: That at the October term, A. D. 1877, of supreme court of the state of Rhode Island, held in and
for the connty of Providence, the Cranston Savings Bank, the People's Savings Bank, the City Savings Bank, the Union Savings Bank, each a corporation duly created by the general assembly of the state of Rhode Island, located and doing business in the city of Providence, in the county of Providence, and other parties, all creditors of the A. & W. Sprague Manufacturing Company, and holders of its mortgage extension notes mentioned in said bill, as well in their own behalf as in behalf of all Qther creditors of the said 'corporation, the A. & W. Sprague Manufacturing Company, in said complainant's said bill named, exhibited their bill of complaint in said supreme court against the said A. & W. Sprague Manufacturing Company, and the said William Sprague, Amasa Sprague, as copartners, doing business.under the firm of A. & W. Sprague,' and against this defendant, as trustee under said trust conveyance, dated November 3, 1873, and as trustee or assignee under said deed of assign:ment, bearing'date April 6, 1874, ftom said A. & W. Sprague Manufacturing '('ompany to this defendant, in said complainant's (Mary Annl\ Latham's)sai.d present bill, of complaint mentiQlled and referred to, praying ,that thjs defendant might be removed from 4is office as trustee under said conveyance, bearing date the first day of November, A. D. 1873, and thM some suitable person or persons might be appointed trustee or trustees in his stead, and also praying that this defendant might be removed from his office as assignee under said conveyance, dated the sixth day of April, 1874, and that some suitaule person or persons might be appointed assignee or assignees in his place and stead, and also praying that this fendant might be required to render an aceount of his doings as trustee and as assignee as aforesaid, and to make proper conveyances of the property and estate in his handsto the trustee or trustees, and the assignee or assignees to be appointed in his stead: and also praying that his agent and servants might be enjoined from interfering with, managing, or controlling the property and estate embraced in the conveyances aforesaid, in their bill of complaint set forth, and more especially from conducting the business of cotton spinning, calico printing, or other manufacturing business, except under the direction of said supreme court; and also praying such other and further relief in the premises as to,said supreme court might seem meet. And this defendant, and all said other defendants named therein, were severally duly served with process issued from said supreme court upon said bill of complaint, so as aforesaid exhibited to them, and duly appeared and put in their joint and several answers thereto; and said complainants therein duly filed their replication to such answers; and said present complainant, Mary Anna Latham, as claiming to be a creditor of the said A. & W. Sprague Manufacturing Company as aforesaid, appeared and became a party to said former bill of complaint in said supreme court, and which said former bill is, as this defendant avers, now depending and remaining as of record in said supreme court, being yet undetermined and undismissed. And thIs defendent avers that the said bill now exhibited by the said Mary Anna Latham against this defendant, is for the same matter as the said bill before exhibited by said Cranston Savings Bank and other complainants against this defendant, and others in said suprememe court as aforesaid
and therefore this defendant doth plead the said former bill and answer in bar to the said complainant's. present bill, and humbly prays the judgment of this honorable court whether he shall be put to make any other or further answer thereto, and prays 'to be hence dismissed with his reasonable costs and charges in this behalf most wrongfully sustained."
Andrew B. Patten, Jerome B. Kimball, Roger A. Prior, and Benj. F. Bntler, for complainant. O. Frank Parkhurst, Jas. Tillinghast, Benj. F. Thurston, and Ohas. Hart, for defendant. Before LOWELL and COLT, JJ. COLT, D. J. The main question which arises upon the defendant's plea is whether the pendency of a suit in a state court between the same parties, and involving the same subject-matter, ean be pleaded in abatement, or in bar, to a suit in the circuit court of the United States. It is undoubtedly true, as a general rule, that as between two courts of concurrent jurisdiction, that which first gets control of the litigation will be allowed to prosecute it to an end; and that consequently the pendency of another prior suit between the same parties, and involving the same subject-matter, may be pleaded in abatement of a subsequent suit in another court. But this rule does not extend to courts of foreign jurisdiction. It has been often held that the courts of a state are foreign, in this sense, to the courts of the United States. In White v. Whitman, 1 Curt. 494, OU1,tis, J., says:
" The pendency of another action for the same cause in a foreign court is npt a good plea in abatement at common law. The question is whether the court of the state of Connecticut is to be considered a foreign court within the meaning of this rule. In Browne v. Joy, 9 John. 221, it was held that such a plea of a former action in another state court was not a good plea; and in Walsh v. Durkin, 12 John. 99, the same law was held applicable to a plea of a former suit, pending in a circuit court of the United States. These cases seem to me to have been correctly decided, though the constitution and laws of the United States require that the judgments rendered in one state shall receive full faith and credit in another; yet, in respect to all proceedings prior to judgment, the courts of the different states, acting under different sovereig-nties, must be considered as so far foreIgn to each other that a remedy sought by judicial proceedings under one cannot be treated as a mere and simple repetition of a remedy sought under another. " .. .. And the same considerations are applicable to a second suit in a circuit court of the United States, while one is pending in a state court. In Wadleigh v. Veazie, 3 Sumn. 165, Mr. Justice Story declared that such a plea could not be allowed."
LATHAM V. CHAFEE.
The same doctrine is laid down·in the case of Lyman v. Brown, 2 Cqrt. 559. In Loring v. Marsh, 2 Cliff. 322, 323, the court (OlijJord t J.) says:
"The undeviating rule in this circuit has been that the pendency of another action for the same cause in a state court is not a good plea in abatement. '* -!I' "". The same rule is established in most of the states."
After referring to cases where expressions may be found which may seem in conflict with this rule, the learned judge observes:
" None of these cases, howeve;, decide the question under tion, and I am of the opinion that the pendency of a suit in the state court cannot be pleaded in bar or abatement to a suit between the same parties in this court."
The same doctrine is· maintained in the supreme COUl't of the United States. In Stanton v. Embrey, 93 U. S. 554, the court express themselves as follows:
"Btill it is insisted by the defendant in error that the pendency of a prior suit in another jurisdiction is not a bar to a subsequent suit in a circuit dourt, or in the court below, even though the two suits are for the same cause of action, and the C<JUrt here concurs in that proposition. Repeated attempts to maintain the negative of that proposition have been made, and it must be admitted that such attempts have been 8ucqessful in a few jurisdictions; but the great weight of authority is the other way."
And, again, in Gordon v. Gilfoil, 99 U. S. 178, decided in the supreme court at the October term 1878, this language is used:
CI But it has been frequently held that the pendency of a suit in a state court is no ground even for a plea in abatement to a suit upon the matter in a federal court."
That the general rule in equity causes is the same; cannot be doubted. The case of Loring v. Marsh, before referred to, was of this character. In the case of Insurance 00. v. Burnes' Assignee, 96 U. S. 593, the supreme court lay down the rule at follows: "The rule in equity is analogous to the rule at law. Story, Eq. PI. +
741. In Foster v. Vassall,3 Atk. 587, Lord Hardwicke said: 'The general rule of courts of equity, with regard to pleas, is the same as in courts of law, but exercised with a more liberal discretion.' In Lord Dillon v. Alvares, 4 Ves. 357, a plea of a pending suit in a court of chancery
in Ireland was overruled in the English court of chancery. Certain it is that the plea of a suit pending in equity in a foreign jurisdiction will not abate a suit at law in a domestic tribunal. This was shown in a very able decision made by the supreme court of Connecticut in Hatch v. Spofford, 22 Conn. 485, where the authorities are learnedly and logically reviewed. See, also, 7 :Met. (Mass,) 570, and 16 Vt. 234. If, then, a bill in equity pending in a foreign jurisdiction has no effect upon an action at law for the same cause in a domestic forum, even when pleaded in abatement; if, still more, it has 1W effect wn.en pleaded to another bill in equity, as the authorities show,-it is impossible to see how it can be a basis for an injunction against prosecuting a suit at law."
This examination of the subject, in the light of the authorities referred to, points to the corrclusion that the defendant's plea cannot be sustained, and renders unnecessary the consideration of the other points raised. The arguments made at the hearing, with reference to the rule in cases where another tribunal with jurisdiction has already in some iorm acquired the custody of the property or res in liti· gation, are inapplicable. , 'Unless the decisions upon the Bubject in the cases of Mal· let,t v. Dexter, 1 Curt. 178, and Haines v. Carpenter, 1 Wood, 262, ca.n in some way be referred to this flame distinction upon the ground of their being administration suits, they \\iould appear to be incbnsistent with the two later decisions from Ourtis, as well as other authorities herein cited. In Brooks v. Mills ,Co. 4: Dill. 524:, Judge Love held the plea bad groUJids, and his remarks that the courts, except in Loring v. Marsh, had not gone so far as to' decide that another suit in a state court in the same district would not be' a good answer, would seem to point to a distinction which can hardly be considered sound. The plea is therefore overruled.
LATHAM 11. CHAFEE.
(Vircuit Court, D. IlhotUIsZand. May 23, 1881.)
REMOVAL OF TRUSTEE-MISMANAGEMENT-FRAUD-lNJIDlCTION-RIll. CElVER.
In a suit for the removal of a trustee, a court of equity will not summarily interfere, before answer filed, by the granting of a preliminary injunction and the appointment of a receiver,upon charges of fraud and bad business management, unless such charges are clearly established, and the peculiar circumstances of the case imperatively demand the relief sought.-[ED.
In Equity. Motion for a preliminary injunction and the appointment of a receiver. Jerome B. Kimball, Andrew J. Patten, Benj. F. Butler, and Roger Prior; 'for complainant. G. Frank Parkhurst,Jas. Tillinghast, Benj. F. Thurston, and' Chas. Hart, for defendant. COLT, D. J. The bill under which this motion arises is for the remo'val of a trustee; It does not ask that the property may be sold or distributed"and only for such an account as would be rendered necessary by a removal. Upon "the face of the papers it appears that this property has remained in the possession of the trustee for more than seven though no complaint of delay is made in the bill, and there is no prayer to hasten the final discharge of the We are judically informed that a recent decision has grave obstacles in the way of giving title to tkeestates' held by the trustee, and it is to be hoped that nothing in this pro. ceeding will be allowed to interfere with a disposition of said estates in accordance with the trusts under which they are held. The immediate and only question now before us is not whether, upon a full hearing after answer filed, the defend. ant shall be removed as trustee, but whether, at this stage oj the proceedings, such a case has been out as calls for the summary interference of the court by way of a preliminary injunction and the appointment of a receiver. The merits of this controversy, as they may be developed upon a