Opinion
(December Term, 1864.)
1. A court of equity will entertain a bill against a municipal corporation for the purpose of trying the legality of a tax imposed by the corporation.
2. The General Assembly may authorize a municipal corporation to lay taxes on the town property, the persons, and subjects of taxation incident to the person, of those who have a business residence in town, though they have a residence also out of town.
THIS was a suit brought in the Court of Equity of CUMBERLAND.
The bill states that the plaintiffs have their places of business in the town of Fayetteville, and reside with their families in the county of Cumberland, in the neighborhood of said town. The plaintiff (618) Worth is a commission merchant, and agent of the Cape Fear Steamboat Company. The corporation demands from him a tax on money on hand, dividends received from money invested in steamboat company, salary as steamboat agent, and a riding vehicle. The plaintiff Lutterloh is a merchant, and the owner of a steamboat plying between Fayetteville and Wilmington. The corporation demands from him a tax on money on hand, capital in steamboat company, riding vehicle, State bond, money in Beaver Creek Cotton Factory, located out of town, and dividends received from money invested in that factory. The plaintiff Steel is a merchant. The tax demanded from him is on some of the articles above mentioned.
The bill charges that the right to tax the plaintiffs in respect to these articles is founded on an act of the General Assembly ratified on 28 May, 1864, entitled "An act to enlarge the powers of the mayor and commissioners of the town of Fayetteville," the fourth section of which enacts, "That the mayor and commissioners of the town of Fayetteville be and they are hereby empowered to impose the same taxes, for municipal purposes, upon all persons whose ordinary avocations are pursued within the corporate limits of the town, although residents beyond the corporate limits, in like manner and to the same extent as upon persons resident within the corporate limits: Provided, that nonresidents thus taxed shall have the right to vote at municipal elections"; and the act of 1862-'63, ch. 19, entitled "An act to enable all the incorporated towns in this State to lay additional taxes."
The bill was filed by the plaintiffs on behalf of themselves and others having the same interest.
The prayer of the bill was for an injunction.
The defendant demurred, and the cause was removed to this (619) Court for argument.
Moore for plaintiffs.
Winston, Sr., for defendant.
The Court has had great difficulty on the question of jurisdiction. In this State the courts of law and the courts of equity are held by the same persons, and there is a strong tendency to disregard the distinction between questions of law and equity, and to allow the jurisdiction of the courts to run into each other and become confounded; that is especially so when, as in this case, both parties wish to get a speedy adjudication, and the defendants waive all objections so as to put on the court the duty of raising the question as to jurisdiction and the burthen of deciding it, without the aid of an argument on both sides. Manly v. Raleigh, 57 N.C. 370, was a case like this: Both parties wished a speedy adjudication; the question was not raised, and passed sub silentio; but that case is now relied on to sustain the jurisdiction of a court of equity to determine on an injunction bill "a dry question of law." It is admitted the question could be presented in a court of law by paying the tax under protest, and bringing an action for money had and received; but it is said, according to the mode of proceeding at law, every taxpayer must bring a separate action, and it is necessary that jurisdiction should be assumed in equity to prevent the "multiplicity of suits." That is a head of equity jurisdiction under which the Court has in some special instances interfered by injunction, and as Manly v. Raleigh was a bill against a municipal corporation, and not against its tax collector, and is a precedent directly applicable to the present bill, we have concluded to act upon it, and take the jurisdiction. No injury can (620) result, for if the operations of a corporation are likely to be seriously impeded by having its sources of revenue stopped, it may insist on an injunction bond being filed, and it will become the duty of the court to require a bond large enough for full indemnity, and it is apprehended that the few who file bills for themselves and "on behalf of all others in like condition" will not be willing to bind themselves to answer the whole default for the sake of raising an equity on the ground of avoiding "the multiplicity of suits." We take occasion to say, in order to "exclude a conclusion," that this decision is confined to bills against municipal corporations, and will not be considered an authority to sustain an injunction bill against tax collectors of the Confederate States, or of the State or of a county. That subject involves other and far graver considerations, which are left open, and in respect to which we do not wish to be at all committed. I will suggest one or two:
1. An injunction against tax collectors, the effect of which is to stop all collections, might seriously obstruct the operations of the Government — a consequence in comparison with which the notion of preventing a multiplicity of suits sinks into insignificance, and which consequence is avoided when the taxes are paid to the collectors under protest, and he pays them over to the Government, taking its indemnity in respect to such actions as may be brought against him.
2. Equity acts in personam, and enforces its orders and decrees by process of contempt. When one having judgment at law is about to use it against conscience, a bill is not entertained against the court of law or the sheriff, but against the party to the action; an injunction goes against him and he is put in contempt for disobeying it. A bill cannot be entertained against the Government, and it would seem it ought not to be entertained against the officer of the Government; for, should he be enjoined, he cannot be put into contempt, for he cannot obey the order of the court unless he violates his sworn duty and is guilty of direct disobedience to the orders of the Government of which he is (621) an officer.
3. A court of equity has no machinery and no officers by which it can enforce its orders against an officer of the Government. For illustration: Suppose a bill to be entertained against a sheriff, and he is enjoined from the collection of taxes, the copy, subpoena and fiat are handed to him (say by the clerk); he disobeys the order. What officer has the court by whom the sheriff can be taken into custody and brought before it for the alleged contempt? Who is to call out the posse comitatus? I will pursue the subject no further.
On the question presented by the bill we have had but little difficulty. By the proper construction of section 4 of the act of May, 1864, the taxes which may be imposed upon all persons whose ordinary avocations are pursued within the corporate limits of the town, although resident beyond the corporate limits, are restricted to property owned by them in the town, and to their persons, and subjects incident to their persons. The only question made is in regard to the latter, when one has a business residence in town, which is the meaning of the description, "persons whose ordinary avocations are pursued within the corporate limits." The money he has on hand, the salary which he earns there, the income which he receives there, whether it be interest on bonds, the debtors residing elsewhere, or dividends on stock in a factory situate out of town, or in a steamboat company, are subjects incident to his person; and in respect to the particulars enumerated by the three gentlemen who filed this bill, we do not see that the commissioners have exceeded the power given them by the act. We understand the "riding vehicle" to mean the buggy used to come into town every morning and go out every night, and consider it adjunct to their town residence, and incident to its enjoyment. In respect to the other gentlemen in behalf of whom the bill (622) is filed, the allegations are not sufficiently distinct to enable us to express an opinion. The question, then, is narrowed to this: Had the Legislature power to authorize the mayor and commissioners to impose such a tax on persons who transact their business and live in town during the day and live in the country during the night?
It was earnestly contended by Mr. Moore that the Legislature has no power to authorize the imposition of such a tax upon strangers who may occasionally visit the town. That question is not presented by the case; for although the act refers to these gentlemen as persons resident beyond the corporate limits, in contradistinction to persons resident within the corporate limits, it also refers to them as persons whose ordinary avocations are pursued within the corporate limits, and the facts being stated at large, the question of residence is left open to be governed by the application of principles of law whereby these gentlemen are put on very different footing from mere strangers. They have two residences, a business residence in town and a domestic residence in its vicinity, and may be called amphibious citizens, who enjoy the conveniences and comforts of their double residence. They have the benefit of a town residence for the transaction of business, the advantage of town society for themselves and families, of attending church, sending their children to school, etc., and the benefit of a country residence for cheapness, healthfulness, and the pleasure of country life. They live in town nearly if not quite half of the twenty-four hours of every day in the year, and must be considered in part residents of the town. Taking that to be so, there can be no reason on general principles why they should not contribute to the expenses of the town, excluding their country residence and property out of town (which pay no town tax), on the same ground that (623) every man contributes to the expenses of the community in which he lives. The provision which confers on these amphibious citizens the right to vote at municipal elections meets the objection which might otherwise have been made on the footing of the time-honored maxim, "representation and taxation should go together."
Manly v. Raleigh, 57 N.C. 370, cited on the question of jurisdiction, is an authority in support of the power of the Legislature. It is there held that the Legislature has power to extend the limits of an incorporated town, without the consent of the persons included by the extension. In a general view the act under consideration does in effect the same thing. These gentlemen and their country residences might have been included by extending the limits of the town, whereby all would have become liable to a town tax. The greater includes the less. Perhaps the object has been answered by making them to some purposes citizens of the town, without the inconvenience of extending its territorial limits. That, however, is not a question of power, but of expediency, with which as a Court we have no concern.
The bill is dismissed.
Cited: Huggins v. Hinson, 61 N.C. 128; Brodnax v. Groom, 64 N.C. 246; Commissioners v. Capehart, 71 N.C. 160; R. R. v. Lewis, 99 N.C. 64; Mace v. Commissioners, ib., 67.
(624)