1. The jurisdiction of suits between citizens of the same state,
in internal revenue cases, conferred by the Act of March 2, 1833,
"further to provide for the collection of duties on imports," 4
Stat. at Large 632, and the act of June 30, 1864, "to provide
internal revenue," &c., 13
id. 241, was taken away by
the Act of July 13, 1866, "to reduce internal taxation, and to
amend an act to provide internal revenue," &c., 14
id.
172.
Insurance Company v.
Ritchie, 5 Wall. 541, affirmed.
2. Where such citizenship as is necessary to give jurisdiction
to the federal courts is not averred, the suit cannot be
maintained.
3. Where the circuit court dismisses a bill for want of
jurisdiction apparent on its face, the general rule is not to allow
costs.
The Judiciary Act of 1789 limits the jurisdiction of the federal
courts, so far as determined by citizenship, to "suits between a
citizen of the state in which the suit is brought and a citizen of
another state."
An act of 1833, [
Footnote 1]
"to provide further for the collection of
Page 76 U. S. 561
duties on imports," extended the jurisdiction to cases
arising under "
the revenue laws of the United States"
where other provision had not been made. And it authorized any
person injured in person or property on account of any act done
"under any law of the United States for the protection of
the
revenue or the collection of duties on imports" to maintain
suit in the circuit court. It also allowed any person sued in a
state court on account of any act done "under the revenue laws of
the United States" to remove the cause by a mode which the act
itself set forth into the circuit court of the United States.
With the passage of the internal revenue laws made necessary by
the late rebellion, it was doubted by some persons whether this act
of 1833 extended to cases under the new enactments. And the
internal revenue act of 1864, [
Footnote 2] by its fiftieth section, extended in general
words "the provisions" of the act of 1833 to cases arising under
the
internal revenue acts.
By an Internal Revenue Act of the 13th July, 1866, [
Footnote 3] however (§ 67),
Congress made provision for removing cases from state courts to the
circuit court, authorizing such removal in a way which it
particularized
"in any case, civil or criminal, where suit or prosecution shall
be commenced in any court of any state against any officer of the
United States . . . or against any person acting under or by
authority of any such officer, on account of any act done under
color of his office,"
&c.
And by the sixty-eighth section, immediately following, it
"repealed" the fiftieth section of the act of 1864, with, however,
this proviso:
"
Provided that any case which may have been removed
from the courts of any state under said fiftieth section to the
courts of the United States shall be remanded to the state court
from which it was so removed, with all the records relating to such
cases, unless the justice of the circuit court of the United States
in which such suit or prosecution is pending shall be of opinion
that said case would be removable from the court of the state
Page 76 U. S. 562
to the circuit court under and by virtue of the provisions of
this act."
In this state of the statutes, Hornthall & Kuhn, describing
themselves in the same as "partners in trade in the City of
Vicksburg,
State of Mississippi," filed a bill against one
Keary, described in it as "Collector of Internal Revenue of the
United States for the Second Collection District of the State of
Mississippi," praying for an injunction to restrain Keary from
collecting an internal revenue tax assessed on certain cotton of
theirs, which tax they alleged was not due, but which the
respondent nevertheless threatened, as they alleged, to collect by
distraint of their goods. In the subpoena, both parties were
described as citizens of the State of Mississippi. On demurrer, the
court below, sustaining the demurrer, dismissed the bill for want
of jurisdiction apparent on its face and awarding costs to the
respondent. The other side took this appeal.
Page 76 U. S. 563
MR. JUSTICE CLIFFORD stated the particulars of the case, and
delivered the opinion of the Court.
Owners or holders of cotton, produced within the United States
upon which no tax has been levied, paid, or collected are required
by the Act of the thirteenth of July, 1866, as amended, to pay a
tax upon the same of two and one-half cents per pound, and the
provision is that such tax shall be and remain a lien thereon in
the possession of any person whomsoever from the time the act took
effect or the cotton was produced as aforesaid "until the same
shall have been paid." [
Footnote
4] Due notice in writing was given by the appellee, as
collector of internal revenue for that district, on the ninth of
May, 1866, to the appellants that a tax on three hundred and
forty-one bales of cotton, amounting to three thousand one hundred
and forty-seven dollars and twenty-three cents, had been assessed
against them under that act as amended by the assessor of that
collection district, and that a list of the same in due form had
been transmitted to him for collection. Payment of the tax having
been delayed beyond the time allowed by law, they were also
notified that they had become liable to pay five percent additional
upon the amount of the same, together with interest from the first
day of January preceding the date of the notice, and that if the
tax was not paid within ten days from the service of the notice,
the same would be collected by distraint and sale of property.
Before the ten days expired, the appellants filed their bill of
complaint in the circuit court for that district, praying that the
appellee, as such collector, might be enjoined from enforcing the
payment of the tax for several reasons, of which the following are
the most material:
1. They admit that during the winter preceding the filing of the
bill of complaint, they shipped from that port three
Page 76 U. S. 564
hundred and forty-one bales of cotton, but they allege that the
internal revenue tax on the same was duly paid to the collector or
to his legally authorized deputy, that the permits for the shipment
were duly issued by that officer, though they cannot be exhibited,
as they still remain in his possession, and they also allege that
the charge in the notice that the tax on the cotton is unpaid is a
fraudulent and corrupt fabrication.
2. That the proceedings threatened by the collector are not
authorized by the acts of Congress providing for the collection of
such taxes; that such proceedings are applicable only to the
collection of taxes on incomes, licenses, and the like, and not to
the collection of the cotton tax, as that is made a specific lien
on the cotton, which cannot be removed from the district where it
was produced until the tax is paid or a bond given to secure such
payment.
Pursuant to the prayer of the bill of complaint, an injunction
was issued forbidding the collection of the tax until the further
order of the court, but on motion of the district attorney, the
injunction was subsequently dissolved. Required to plead, answer,
or demur, the district attorney demurred specially to the bill of
complaint, showing for cause: (1) that it was not the proper remedy
for the alleged grievance; that the remedy, if any, was by appeal
to the commissioner; (2) that the circuit court has no jurisdiction
in equity to enjoin the collection of internal revenue taxes. Both
parties were heard, and the court sustained the demurrer, dismissed
the bill of complaint, and awarded costs to the respondent, and the
complainants appealed to this Court.
Jurisdiction of the circuit court in the case is denied in
argument by the appellee upon two grounds: (1) because the parties
to the suit are citizens of the same state; (2) because the circuit
court has no power to afford a remedy by injunction for such a
grievance. But in the view taken of the case, it will not be
necessary to examine the second proposition with much
particularity, as the first is clearly correct, and must
prevail.
Controversies between citizens of different states are
Page 76 U. S. 565
plainly within the judicial power of the United States, as
conferred by the Constitution, and Congress provided in the
eleventh section of the Judiciary Act that the circuit courts
should have original cognizance, concurrent with the courts of the
several states, of suits between a citizen of the state where the
suit is brought and a citizen of another state. [
Footnote 5] Citizenship of the parties to a
suit, where it is the foundation of jurisdiction in the federal
courts, must be distinctly averred so as to show not only that they
are citizens of different states but also that one of them is a
citizen of the state where the suit is brought. [
Footnote 6] Express allegation of the facts
material to give jurisdiction is necessary, because such courts are
courts of special, and not of general, jurisdiction, and
consequently there is no presumption in favor of their jurisdiction
where the facts requisite to show it do not appear in the record.
[
Footnote 7] Nothing of the
kind is shown in this case, either in the pleadings or in any part
of the proceedings in the suit. On the contrary, the complainants
are described in the bill of complaint as partners in trade in the
City of Vicksburg, State of Mississippi, and the respondent is
therein described as the Collector of Internal Revenue of the
United States for the Second Collection District of Mississippi,
leaving it to be clearly inferred that both parties are citizens of
the same state. But the matter is not left to inference, as the
parties are in express terms described as citizens of Mississippi
in the subpoena which was issued at the same time on motion of the
complainants.
Unable successfully to deny that proposition, the next
suggestion of the appellants is that all revenue cases are within
the jurisdiction of the circuit courts, but the suggestion cannot
be sustained, as will be seen by reference to the several acts of
Congress upon that subject. [
Footnote 8]
Page 76 U. S. 566
Provision was made by the second section of the act of the
second of March, 1833, that the jurisdiction of the circuit courts
should extend to all cases in law or equity arising under the
several laws of the United States for which other provisions were
not already made by law. [
Footnote
9] Undoubtedly the act was passed for the protection of the
officers charged with the collection of import duties, but the same
provision was, by the fiftieth section of the act of the thirtieth
of June, 1864, extended to cases arising under the laws for the
collection of internal duties. [
Footnote 10]
Strong doubts are entertained whether the circuit courts, even
during the period when that provision was in force, were authorized
to enjoin the collection of internal revenue taxes, but it is not
necessary to decide the point, as Congress subsequently repealed
the fiftieth section of the last-named act and expressly enacted
that the original act should not be so construed as to apply to
cases arising under the other sections of the act, or to any act in
addition thereto, or in amendment thereof, nor to any case in which
the validity or interpretation of said act or acts shall be in
issue. [
Footnote 11]
Suits between citizens of different states may still be brought
in the circuit courts, but where both parties reside in the same
state the circuit courts have no original cognizance of any case
arising under the internal revenue laws. Such cases, when commenced
against an officer acting under those laws in a state court, may be
removed on petition of the defendant into the circuit court for the
district, and the jurisdiction of the court is clear beyond
dispute, irrespective of the citizenship of the parties; but the
Act of the second of March, 1867, provides that no suit for the
purpose of restraining the assessment or collection of a tax shall
be maintained in any court. [
Footnote 12]
Viewed in any light, the circuit court had no jurisdiction of
this controversy, and consequently this Court has no power to grant
the relief prayed for in the bill of complaint.
Costs were improperly allowed in the court below, as the
Page 76 U. S. 567
case was dismissed for the want of jurisdiction on the face of
the pleadings, and in such cases the general rule is that costs
will not be allowed in this Court. [
Footnote 13] Sometimes an exception to that rule is
admitted, as where the defendant in the court below is the
defendant in this Court, but inasmuch as the costs were improperly
awarded in his favor by the circuit court, the better opinion is
that he is not entitled to the benefit of that exception, as the
decree in his favor must be reversed to correct that error.
[
Footnote 14]
Decree reversed and cause remanded with directions to
dismiss the bill of complaint, but without costs.
[
Footnote 1]
4 Stat. at Large 632.
[
Footnote 2]
13 Stat. at Large 241.
[
Footnote 3]
14
id. 172.
[
Footnote 4]
14 Stat. at Large 98;
ib., 471.
[
Footnote 5]
1 Stat. at Large 78.
[
Footnote 6]
Conkling, Treatise, 4th ed., 344;
Bingham v.
Cabot, 3 Dall. 382;
Gassies v.
Ballon, 6 Pet. 761.
[
Footnote 7]
Turner v. Bank of
America, 4 Dall. 8;
Sullivan
v. Steamboat Company, 6 Wheat. 450.
[
Footnote 8]
Insurance Company v.
Ritchie, 5 Wall. 541;
Philadelphia v.
Collector, 5 Wall. 728.
[
Footnote 9]
4 Stat. at Large 632.
[
Footnote 10]
13
id. 241, § 50.
[
Footnote 11]
14
id. 172, § 67.
[
Footnote 12]
14 Stat. at Large 475;
Philadelphia v.
Collector, 5 Wall. 730.
[
Footnote 13]
McIver v.
Wattles, 9 Wheat. 650;
Strader v. Graham,
18 How. 602 [memorandum opinion -- omitted];
Inglee v.
Coolidge, 2 Wheat. 363;
Montalet v.
Murray, 4 Cranch 46;
Bradstreet v.
Potter, 16 Pet. 318.
[
Footnote 14]
Winchester v. Jackson, 3 Cranch 514.
