A bill in equity will not lie to enjoin a collector of internal
revenue from collecting a tax assessed by the Commissioner of
Internal Revenue against a manufacturer of tobacco, although the
tax is alleged in the bill to have been illegally assessed.
The remedy of a suit to recover back the tax after it is paid,
which the statute provides, is exclusive.
This suit was brought in a state court of Louisiana by the
appellant, a tobacco manufacturer, against the appellee, a
collector of internal revenue, to obtain an injunction restraining
the appellee from seizing and selling the property of the appellant
to pay two assessments of taxes against him, made by the
Commissioner of Internal Revenue, and to have the assessments
declared void. An injunction having been granted
ex parte,
the appellee removed the suit, by certiorari, into the Circuit
Court of the United States for the District of Louisiana, on the
allegation that it was brought on account of acts done by the
appellee, as such collector, under authority of the internal
revenue laws of the United States, and to enjoin him, in his
official capacity, from enforcing the payment of assessments made
against the appellant, under authority of such laws, by executing
warrants of distraint, as authorized by such laws.
After the removal of the suit the appellant, under an order to
reform his pleading, filed a bill in equity in the circuit court.
It set forth the assessments complained of as being in these
words:
Page 109 U. S. 190
image:a
The bill also averred that the assessments did not show upon
what they were based, nor upon what the taxes were claimed to be
due, and were void for uncertainty and unauthorized by law, and the
Commissioner of Internal Revenue was without jurisdiction to make
them; that the Irwin & Snyder assessment was made more than
fifteen months after the time which it embraced had elapsed, and
that was true, also, as to a part of the Snyder assessment, and the
commissioner had no authority to make an assessment except for a
period of time not exceeding fifteen months before it was made;
that the appellant was never a member of the firm of Irwin &
Snyder; that he never owed the amount of either assessment; that,
when he commenced the manufacture of tobacco, he gave a bond to the
United States, in a penalty of $20,000, conditioned that he would
stamp all tobacco manufactured by him, as required by law, and
comply with all the requirements of law relating to the manufacture
of tobacco, and the sureties thereon were solvent, and that, if the
United States had any lawful claim against him, an action would lie
on the bond, which was ample security, while he was without
adequate remedy against the United States for the seizure of his
property to pay the claims. The prayer of the bill was for a decree
declaring each of the assessments void as against the appellant,
and enjoining the
Page 109 U. S. 191
appellee from distraining on the property of the appellant for
the purpose of collecting the amounts of the assessments, and from
attempting to collect the same except by judicial process.
The appellee demurred to the bill for want of equity, and
because no suit could be maintained in any court to restrain the
collection of any tax of the United States, and the appellant could
not be permitted in this suit to attack the validity or regularity
of the assessments or restrain the execution of a warrant issued
thereunder. The circuit court sustained the demurrer and dismissed
the bill. To review its decree this appeal is brought.
MR. JUSTICE BLATCHFORD delivered the opinion of the Court. After
reciting the facts, he said:
The sole object of the suit is to restrain the collection of a
tax which purports to have been assessed under the internal revenue
laws. A decree adjudging the tax to be void as against the
appellant is sought for only as preliminary to relief by
injunction, and would be futile for any purpose of this suit,
unless followed by an injunction.
The Internal Revenue Act of July 13, 1866, c. 184, 14 Stat. 152,
provided, § 19, as follows:
"No suit shall be maintained in any court for the recovery of
any tax alleged to have been erroneously or illegally assessed or
collected, until appeal shall have been duly made to the
Commissioner of Internal Revenue according to the provisions of law
in that regard, and the regulations of the Secretary of the
Treasury, established in pursuance thereof, and a decision of said
commissioner shall be had thereon, unless such suit shall be
brought within six months from the time of said decision, or within
six months from the time this act takes effect,
provided
that if said decision shall be delayed more than six months from
the date of such appeal, then said suit may be brought at any time
within twelve months from the date of such appeal."
By § 10 of the
Page 109 U. S. 192
Act of March 2, 1867, c. 169, 14 Stat. 475, it was enacted that
§ 19 of the said act of 1866 be amended "by adding the following
thereto: . . . . And no suit for the purpose of restraining the
assessment or collection of tax shall be maintained in any court."
In the Revised Statutes this amendment of and addition to § 19 of
the act of 1866 is made a section by itself, § 3224, separated from
that of which it is an amendment, and to which it is an addition,
and reads thus: "No suit for the purpose of restraining the
assessment or collection of any tax shall be maintained in any
court." The word "any" was inserted by the revisers. This enactment
in § 3224 has a no more restricted meaning than it had when, after
the act of 1867, it formed a part of § 19 of the act of 1866, by
being added thereto. The first part of § 19 related to a suit to
recover back money paid for a "tax alleged to have been erroneously
or illegally assessed or collected," and the section, after thus
providing for the circumstances under which such a suit might be
brought, proceeded, when amended, to say that "no suit for the
purpose of restraining the assessment or collection of tax shall be
maintained in any court." The addition of 1867 was
in pari
materia with the previous part of the section, and related to
the same subject matter. The "tax" spoken of in the first part of
the section was called a "tax"
sub modo, but was
characterized as a "tax alleged to have been erroneously or
illegally assessed or collected." Hence, when, on the addition to
the section, a "tax" was spoken of, it meant that which is in a
condition to be collected as a tax, and is claimed by the proper
public officers to be a tax, although on the other side it is
alleged to have been erroneously or illegally assessed. It has no
other meaning in § 3224. There is therefore no force in the
suggestion that § 3224, in speaking of a "tax," means only a legal
tax, and that an illegal tax is not a tax, and so does not fall
within the inhibition of the statute, and the collection of it may
be restrained.
The statute clearly applies to the present suit, and forbids the
granting of relief by injunction. It is distinctly alleged in the
bill that the appellee claims that the appellant owes to the United
States the amounts assessed for taxes, both the tax
Page 109 U. S. 193
assessed against the appellant and that assessed against Irwin
& Snyder. The bill also shows sufficiently that the assessment
had relation to the business of the appellant as a manufacturer of
tobacco, and to his liability to tax, under the internal revenue
laws, in respect to such business. The instructions of the internal
revenue department in regard to the preparation of assessment lists
provided that where an assessment was reported against a
manufacturer of tobacco for having removed any taxable articles
from his manufactory without the use of the proper stamp, or for
not having duly paid such tax by stamp at the time and in the
manner provided by law, the entry in the column headed "article or
occupation" should be "stamp Tax, Tob.," with liberty to use the
initials "S.T." as an abbreviation for "stamp tax." The
instructions stated that "Tob." is an abbreviation for "tobacco."
Resort may be had to these instructions to show the meaning of the
abbreviations in the assessment list. Read by the light of the
instructions, the list shows a tax which the appellant might be
liable to pay, and one which the commissioner had general
jurisdiction to assess against him.
The inhibition of § 3224 applies to all assessments of taxes,
made under color of their offices, by internal revenue officers
charged with general jurisdiction of the subject of assessing taxes
against tobacco manufacturers. The remedy of a suit to recover back
the tax after it is paid is provided by statute, and a suit to
restrain its collection is forbidden. The remedy so given is
exclusive, and no other remedy can be substituted for it. Such has
been the current of decisions in the circuit courts of the United
States, and we are satisfied it is a correct view of the law.
Howland v. Soule, Deady 413;
Pullan v. Kinsinger,
2 Abb.U.S. 94;
Robbins v. Freeland, 14 Int.Rev.Rec. 28;
Delaware R. Co. v. Prettyman, 17 Int.Rev.Rec. 99;
United States v. Black, 11 Blatchford C.C. 543;
Kissinger v. Bean, 7 Bissell 60;
United States v.
Pacific Railroad, 4 Dillon 69;
Alkan v. Bean, 23
Int.Rev.Rec. 351;
Kensett v. Stivers, 18 Blatchford C.C.
397. In
Cheatham v. United States, 92 U. S.
85,
92 U. S. 88, and
again in
State Railroad Tax Cases, 92 U. S.
575,
92 U. S. 613,
it was said by this Court that the system prescribed by the United
States
Page 109 U. S. 194
in regard to both customs duties and internal revenue taxes, of
stringent measures, not judicial, to collect them, with appeals to
specified tribunals, and suits to recover back moneys illegally
exacted, was a system of corrective justice intended to be
complete, and enacted under the right belonging to the government
to prescribe the conditions on which it would subject itself to the
judgment of the courts in the collection of its revenues. In the
exercise of that right it declares, by § 3224, that its officers
shall not be enjoined from collecting a tax claimed to have been
unjustly assessed, when those officers, in the course of general
jurisdiction over the subject matter in question, have made the
assessment and claim that it is valid.
The decree of the circuit court is affirmed.
