SIOUX 'FALLS NAT. BANK'

v; SWENSON.

et al.

621

SIOUX FALLS

NAT.

BANK 11. SWENSON

(Cf,rcuit COW1't, D. South. DaJrota. January 5,1892.)

1.

TAXATION OF NA.TIONAL BANKS-INJUNCTION-FEDERAL QUESTION.

A bill to enjoin the collection of taxes assessed against a national bank and against the stockholders on their shares, on the grounds that the taxation was double, that the stockholders were not' allowed to set off debts against the valuation of their shares, and that the board of equalization illegally increased the assessment, raises the federal question of the validity of the tax, under Rev. St. U. S. § 5219, prescribing the method in which national bank shares may be taxed. Compo Laws S. D. § 1570, makes it the duty of a bank and its officers to retain so much of thll dividends belonging to its stockholders as shall be necessary to pay the taxes levied upon their shares until the tax has been paio, out does not require the bank to pay the tax out of the fund thus retained. Hc!q, that when a national bank sues in its own behalf and for its individual stockholders to enjoin the collection of a tax assessed against the capital stock, and also against the shares as the property of the stockholders,and does not aver that it has in its hands or under its control any dividend helonging to stockholders wllich could be aJlPlied to pay the taxes, the proceeding'is bi separate and distinct rights; and the jurisdictional amount must heideterminedbythe amount of the tax against each complainant, and not: by the tax llgainst all.

S.

S,UlE-JURISI>ICTIONAL AMOUNT-How ASCERTAINED.

In Equity. Suit byihe Sioux Falls National Bank against Ole S. and others to enjoin the collection of taxes. Keith kBate8, fO!'COblplainant; , , D. R.' Bauey, Brockway, and Park Davis, for defendants. Befo!e'SHIRAsrtnd EDGERTON, JJ. SHIRAB, J. The bilHil this cause is file4 by complainant, the Sioux :J!'alls National Bank, in its own behalf, and also in behalf of itsstbCk. holder$,fof the purpose of restraining the collection of certain taxes year against said bank and its shareholdors for state, county, and city pnrposes, the defendants being the county treasurer of Minnehaha 'county, S. D., the county of Minnehaha, and the city 'of Siorix.Falls. It is averred in the bill that, in addition to ment made against the several shareholders of said complainant'bank; there was also assessed against said bank, upon its capital stock, the sum of $28,500, the same being in form an assessment made in the name of C. E. McKinney,the president of the bank, which said assessment was afterwards increased 75 +per cent. by the state board of equalization; and it is charged that this assessment, and the taxes levied are illegal and void, because, in effect, the same is a double as.. sessment. In theariswer filed herein it is admitted that the assessment and the taxes based thereon are void, and it is averred that the board of of Minnehaha county on the 31st day of January, 1891, adopted a resolution declaring the assessment and the ta)(es levied thereon null arid void. There is some question as to the power of the board to thus annul taxes payable ttfihe state and city, and therefore the complainant seeks an injunction restraining the enforcement of the taxes admitted to be ille. gally Touching the assessment made against the several share. holders inthe bank, it is averred in the bill that the assessor, in the first

,

REP,ORTER,

vol.

I

instance, assessed the several shareholders upon a valuation of substanupontlle fqll oftqe stock, and}hat the assessor, tially 75 per in making the assessment of personal property and moneyed capital in said city of Sioux Falls; aimed to assess the same upon the basis oJ twothirds of its actual valuEl,u,nd that persons owniqgcredits, other tha l1 bank..at0ck were allowedlQ deduct therefrom the amount of bOil,afide inby It further averred that, at the time; the assessor was, making the named assessment, certain of the sharehOlders in the bank claimed exemption from assessment on the bank shares held by ,them, because the indebtedness owing the value of the shares of stock held by them, but 'by that WllS ,refused by the assessor as well as by the county board of equalization; before· whom the same claim on behalf of said duly It iii! also averred that the state board of equaliZfi,tion'increased ,the8ssessment of the shares of bank-stock 75 per cEln't.; apd'that the,'tax,es for state, county, and city purposes were levied upon the basis of this increased assessment, which it is averred is illegal and void. It is further shown in the bill that the shareholders, who'donot claim deductions on account of indebtedness, have tendered the amount of tax due fro!l'1,them upon the basis of the assessment made by the assessor in the first instance. T;Q'the portions of the bill that are tl1e the shareholders a demurrer upon the bill, answer, and deis interposed, and the case is murrer. Objectiouis taken, in the first instance, to thejurisdiction of the court, on the double ground ,t118.t the Qontroversy is not within federal jurisdiction,and, further, that, if it is, the at law is adequate, and the protherefore thJIl proceeding in ;equity cannot be sustained. yisions,of lloot1Qn 4 ot: the. of August 13,1888, (25 St. at Large, 436,) for purposes ,national banks, are deemed ,to citizens of they The, com plainarit and, defendants "ra of tb.e!¥lme state, 8n4, if it must be; l:!t:Gaulle the ,controyer.sy arises under; the laws of th,e United States. The contentioIil: of complajnant, which,:we hold topewe11 founded, is that the matter in dispute under, the ws of tIle Unit.Eld States, for thl;l controverllY is whetber themethoq qfassessment pur/J;ued :Was Oil,': WaS! not a violatiou of the prov,isious of section q219 of the Revised the '{Jnited But under:th,e statute nOW in force, t9f"'fit; the act ofAugust 13, 18gS, the States has: tlotjurisdiction of cases arisinK under the constitution Of laws of the the in.volyed, ex,pluElive of !\neJ :OO!lts, eAceeds $2,000.. According to the averments of the bill, the llssessment in,tJhe.lJI.am.!l ofitaprl;lsident. ppally placed upon which, -;\'l!all Jedfld in tl/f;l for state, county, !1ncl city p\lr. poses, The amount thus $2,000. 'l'he highesta,a,sessment against any single llgainst C.E. McKinney for the sum of $39,501, and
I. ", '. ,

SIOUX FALLS NAT. BANK lI:SWUSON.

623

the. tdtal tax levied thereon is thaIithejurisdictionitlamount. Thus that, to reach. th¢' requisitesllm, the amount Of tax aSsessed, or more J>I;l};ti,es in. ipWrest mu!?t be,added together. Is this permissible? In considering this question the provisions of the :atatut\l.,ofS.outh in regard to the duty of the corporation ing the taxes assessed against the shareholders, must be kept in mind. By 1570 Laws of the state, it is made the duty (If the .bank, or of the managing officers thereof,to .retain so much of the dividends belonging to the shareholders as sballibenecessary to pay ,until the tax bas been paid; the taxes levied upon the shares of officer of the pankpaying a:ny:dividend before the tax of the has been paid,is nWde pelllonally liable for the unpaid tax. however., not' hnpose the duty of paying the tax out ofthe:dividends upon the ballk.The 'bank, therefore, cannot be said to uhder its charge a! fund to be by it distributed in payment of the' 'assessed agairist shareholder,' and in this respect theslBt· ute 'br:lf;jbuth Dakota differ$(l'oin the of Kentuckv, which WM underiObD:Sideration in Battle v; Com., 9 Wall. 353, and which anthor..; ized a judgment against the bank; if it :refused to pay the taxes assessed, and it also differs from' the statute cif that the bank mightpay the and which the in Bank, .101 11' wa.'l substantially as the Kentucky.statute. Furthermore, It is not the bill that there is in the hands or under the control of the complainant any 'dividend belonging to' the stockholders which could, under any be appliedto}he payment of the taxes; and hence it. is llot,)n,',any way, made to appear that the bank has a fund in excess of $2,Ot)O which is involvedintltis, controversy, or can be made bledna.ny way for the ,of the taxes assessed against the .shareh<>lders.' Hence there is no claim asserted against the bank, or in which, it may be said to be interested 'as trustee or otherwise, other or different from tne several claims based ';:pon the' taxes assessed against the, bank :in of its against 'the shareholders individually. Can these be aggregated 'together hi order ·to.relLch the amount? In determining the jurisdiction of the supreme courtupc>u or writ of error; that court has been repeatedly called upon to determine '!when the mattei-in dispute"-which is the phrase used in eecand 692 of the Revised Statutes;'regulatiWg appeals and writs -of error to the supreme cburt, as well as in section 1 of the act of Au.. gust13, 1888, prescribing tbe'jurisdiction of thecircuitcourts-exceeda ihe.Jimit named in the statute, and thel!e decisions are therefore perti'nen,t.to' the question now under consideration. ,In Seaver v. Bigelow, 5 Wah: 208, in which several creditors having judgments, no one of which $2,000, united in a creditors' bill to reach a fund in excess of iha:! sum, it was held that an appeal did not lie, it being said: , "Uj,s,'true, the fund" which exceeds tliJs\lln -9f $2.000, but neither oftlle judgment creditors has. any lnterest in it exceeddIlg tb&amount of his jiidgment. Hence, to susLainanappeal in this' class

it

, 624

nD,ERALJ,tEPORTER ,

,vol. 48.

of, cases,wbere separate and distinct interests are in dispute of an amount less than the wherE! thejoinder of parties is permitted indulgence of tpe court, for Its convenience and to save expense, by woilld be giving a privilege to tile patties not common to other litigants, and Which is forbidden by law." In Paving 00. v. Muiford,100U.' S: 147, which was a suit in equity, it was held that, " ' ,,"It ,i,s well settied that neither co-defendants nor co-complainants can unite and distf.nct interests for the purpose of making up the amount to give us jur,isdiction on an appeal." In ,kU88eU v. 10li, U. 8.;303, an injunction WaS sought by three for themselves and a number of others, forthe'purpose of restraining of an' alleged, illegal assessment ,rriade on their property to meet a rendered against a levee board in The circuit court di13ruissed the bill, and an appeal wasJaken to the court, whichJp ()f jurisdiction, on the ground dtdnot appelltl.' that the anyone pf the property· owners exce,eded, $2,000 in amount. In passthe question the court held: ,!', While the appellants,anl'l those, w,hom have been chosen to represent, are all in tbe;questiqn on Which their liability tq the appellee depends" they are separately,cbarged with the, several amounts assessed' against resting on them as a body. The prothem. There is no joint' ceeding on' his part was to reqUire each of the several land-owners in the le'veedistrlctto payhis'separate sbareofthedebt that had been established agaiIist"j;he district. The reooverywas against each separately. While the appeIlaute were permitted, for.convenience' sake and to ,save expense, to unite In a petition setting forth the grievances of which complaint was made, theh'J>bject was to relieve each separate owner from the awount for which he his property, was found'to be accountable· .A:n'injunction, if grantl3l'l, would necessarily be to prevent the appellee from collecting from each bW'net'the amount' for which he Was separately Hable. It is clear that, under the rulings in Pa?1f,'l1.g Co. v. Mu!ffJ'rd., 100 U. S, 147: Seaver v. Bigelow,' 5 Wall. 208; Rich v. Lambert, 12 l{o\V. Stratton v. J a1'vis; 8 Pet. 4; and Oliver.". Alexander, 6 Pet. 143,-suchdistinct and separateiilterests cannot bel'oited for the purpose of making up the amount necessaty to give us jurifildiction on appeal." '"',,

tax.

,', . '

.

-',

'i

'

.

, In Hawky v. Fairbanks, 108 U. S. 543, 2 Sup. Ct. Rep. 846, several parties, having separate jqdgments against the town of Amboy, united iJ;l a/ petition for a writ of mandamus to compel a county clerk to levy a tax sufficient to pay the judgtnents, in, question. The trial court grante<l the writ, comJI}anding the clerk to extend upon the tax collector's book a s,um Ilufficient to pay, each of the several judgments held by the ').'0 reverRe thisjudgment awrit of, error was sued out, and in the supreme court a motion to dismiss was made on the ground that the amounts of the several judgments could not be added together to make out-the amount requisite to confer jurisdiction' on the supreme court. The court held that the proceeding embraced distinct causes of actionin favor of different parties, and that the amounts due the several relators <:ould not be added together, but that the jurisdiction depended

SIOUX FALLS NAT. BANK

v.

SWENSON.

625

upon the question whether the amount due any single relator was ficient to confer jurisdiction. The record showed that the amount due one of the relators exceeded the jurisdictional amount, and the court retained the case as to that relator, but dismissed the writ as to all the others. In the opinion delivered in Gibson v. Shufeldt, 122 U. S. 27, 7 Sup. Ct. Rep. 1066, will be found an exhailstive review of the prior decisions on this subject. See, also, Olay v. Field, 138 U. S. 464, 11 Sup. Ct. Rep. 419, and Henderwn v. Coke Co., 140 U. S. 25, 11 Sup. Ct. Rep.:691. The· rule deducible from these authorities is, that jurisdiction is not conferred because a number of persons are interested in"R given question,. and the aggregate of the several claims may exceed the amount requisite for jurisdiction. The "matter in dispute,llwithip the meaning of the statute, is not the principle or rule of decision which is involved in the controversy, and whichmaybe.(lommon to the interests of all the parties to the litigation, but it is the money value which is at stake; and the claims of the several parties cannot be added together to form the matter in dispute; unless each party has all undivided interest in a claim to the p,roperty thatjs the su!:>j ect of the litigation. In the case now before the court the bank and its shareholders are all questionainvolved in the legal proposition touching the validity or invalidity of the mode of assessment pursued, but the money interest they have in the litigation is. separate and distinct. 'The tax assessed against the bank is separate and distinct from that assessed against the. shar:eqolders, and the tax assessed against one shareholder cannot be collecled,from another. If the tax collector should· undertake to enforce the,,Pltytgent of the taxes complained of, he wQnldproceed against the property Qreach shareholdElr separately for the tax due from him alone. The -bnnk'1uld each one of the shareholders could have commenced a separate action to restrain the collection ofthe tax assessed against each one, and in such case neither of the complainants would have had any money interest in the cases brought on behalf of the other shareholders. As the case now stands, the bank arid its sharelwlders are interested alike in the legal propositions arising on the record, but there is no common or interest in any property 1 nor in any fund, nor ina tax sessed in a lump against property owned in common. The assessment and tax is against each one separately, and the money interest each one has in the litig'ltion is measured by the amount of the tax assessed against him individually. That is the extent of the money interest each one has in the suit, and the case, therefore, is one wherein for convenience' sake, and to save cost and expense, one suit mllY be brought to settle the rights of all; but the money claims involved are separate and distinct, .and the amount thereof cannot be added together for the purpose of conferring jurisdictionupoIl this court. It is clear from the record suits been brought by each shareholder for the purpose of canceling the assessment complained of, none of them could have been m.aintained in this court, because none would have involved a sum exceeding$2,OOOj and under the authorities cited it is equally clear v.48F.no.8-40

626

lI'EDERAL REPORTER,

vol. 48.

that,whilerthejoinderoheparate and distinct claims Ol'rights ofaction may be 'parmittecil under pi-oper circumstances, for convenience' sake: and to prevent a multiplici1tJy.of suits,Mdto escape unneCellsarycosts, it i13 not'per.mitted to addtog.etherthe severaland distinct money interests belonging. to the litigantS', in order: to oreate a jurisdiction which does hot otherwise exist. As it !appears from the face of the record that none of the distinct and several amounts of taxes assessed against the bank and its shareholders exceeds $2,000, it is clear that the controversy does not embrace a matter in dispute exceeding that sum the etatute,is a requisite tothejurisdictioD; and, being without jurisdiction, aU that the court,can do is'to dismiss the bill for that reason. ',EOOERTON,J.,oonours.

ill

,.,;

(CirouU

·In Eg:litt:r; ·Suit' by the !>akota National Bank against Ole S. Swell80ll and others to enjoin thecolleotiiaIi of taxell.. , ' '.' .. :, ' , M()Mar«n& Oarl.flna, fa!,' .. '.'. ' D: R. Ba4;ley,C. L . .Broc'k:Wtr:lJ, and Park Dwut8; for defendants. ' . Before SHIBAII and ·.

, ·. The want of It does 'not. BPpe.ar that an.y of the tnesa88ess.ed agains.'t th.&comPIa.in.ant. banlt. or' any. ODe of its. it Mtappear that ,tbe involves eha1'Elboiders exceeds $2,000, an" "a in exceeciing.in V'l;\lue $2,000, Which under now in force isa requisite to the jurisdiction'of thiS court. For the authontieEi arid 'grounds 1m e:l)tema. upon which this rulillg Is balled; see opinion 'jullt Aled lnth9 of Bank 48 Fed.. Rep. 62L .I
,1llDOUTON, J.t OQncUra.,

STATE ez'

ret

CITY OF'

CQLtl'MBUS

& XENIA R. Co. eta!.

<Ctrcuit Co'Urt.8. D. Ohio, E:

· ·

,I

December Ill, 189L)

L"RBHOVAL OP CAUSEs-I'RooEEDnfil IN' M.umAMUll. 'i . 'As the federal circuit courts no except in aid of juristliction previously acquired, an original proceedinll in manctam'UB, brought upon' the relation of a' City to' compeL railroads to-lower the grade of a street orossing,is not removM>le;thllil'llto from the Sl;ate court at ,lfue :iD,stance of a non. defendapt. v. ,7, Ct-Rep. 638, 120 U. S. 450, fol. ' ' " . , .. ' . " lowed. PARTt. 'll.' SAlIIE---JURISDICTION OPCIBOUIT In Buch a proceeding the sta,j:e is tlle real party in interest, and for thill reaSOn also the circuit court wouLd 'have no jurisdlctibn of the' case. New Hampshire v. State, 2 Sup. Ct. 108 V.·S. 76,,' foUowetL: ,',' ,t. SAME-FEDBRAL .QqES'JI(>,N. , . '. '....: ,.', I" j '.' ,.,.. , ." The fact that one of the roads claims to a vested right in the existing cross· . ·lng, which is entitled to proteCtion UDder the 'constitution· of the United States