may be completely decided as between the litigant parties, the circumstance that an interest exists in some other person whom the process of the court cannot reach, as if party be the resident of some other state, ought not to prevent a decree upon its merits." In Shields v. Barrow, 17 How. 139, the court points out three classes of parties to a bill in equity: "They are: (1) Formal parties. (2) Persons having an interest in the controversy, and who oughv to be made parties, in order that the court may act on that rule whieh requires it to decide on and finally determine the entire controversy, and do complete justice by adjusting all the rights in valved in it. These persons are Commonly termed necessary parties; but if their interests are separable from those of the parties before the court so that the court can proceed to a decree. and do complete and final justice, without affecting other Perpersons not before the court, the latter are not indispensable parties. sons who not only have an interest in the controversy, but an interest of such a nature that a Ii nal dec:ree cannot be made without either affecting that interest, or leaving the controversy in such a condition that its final termination may be wholly inconsistent with eqUity and good conscience." The court further says: "It remains true, notwithstanding the act of congress and the 47th rule, that a circuit coart can make no decree affecting the rights of an absent person. and can make no decree between the parties before it, which so far involves or depends upon the rights of an absent person that complete and final justice cannot be done between the parties to the suit without affecting those rights." In Coiron v. Millaudon, 19 How. 113, it i3 held that the fact that such persons are beyond the jurisdiction of the court is not a sufficient reason for omitting to make them parties, because neithe.r the act of congress nor the 47th equity rule enables the circuit court to make a decree in [l suit in the absence of a party whose rights must necessarily be affected by such decree. See, also, Barney v. Baltimore City, 6 Wall. 280. Demurrers sustained.
Exp. Co. v.
Comptroller, et al. September 21, 1889.)
(Oircuit Oourt, E. D. Tennessee.
The federal eourts have jurisd' ction of suits involving the validity of a tax imposed by a alleged to be in violation of the United States constitution, without regard to the citizenship of the parties thereto.
The law of Tennessee provic.ing uat. in case of taxes alleged to be illeg-al, the remedy shall be to pay such taxes nnder protest, and It bring suit therefor, does not apply where we tax alleged to be unconstitutional, as such a tax is void .
Under act C"ne-. March 3, 1887. provi<ling that no civil suit shall be brought in either the a,,,,det or oirc'lit court al!:t.Jnilt any person by any original process in any other Jist-jet than that Whereof he is an inhabitant. except when jurisdiction is founded only on the fact that the action is between citizens of
UNr£ED STATES EXP. CO. tI. ALLEN.
different states, a suit to enjoin collection of a tax, on the ground that it violates the United States constitution, must be dismissed as to such defendants as are non-residents of the district in which it is brought. 4.
Act Tenn. March 29. 1887, imposing a license tax upon express companies, is unconstitutional, as invading the exclusive power of congress to regulate interstate commerce, liS against an express company engaged in interstate transportation.
Act Tenn. April 8, 1889, providing that such tax shall be paid for transporting- one or more packages between points within the state, the amoullt of such tax being regulated by the length of the company's lines, is, in effect, a tax on interstate business, and is unconstitutional.
In Equity. On bill for injunction. Tracy, .McFaTland, Platt & BoaTdrnan, John .M. Bright, R. L. Bright, and Russell & Daniels, for complainant. W. G. .M. Thornas and Joel Fort, for defendants.
KEY, J. The bill is filed in this case to enjoin the collection of a tax imposed upon complainant by the state, by the acts of 1887 and 1889, upon the ground that the tax is in violation of the constitution of the United States. At the threshold we are met with a motion by defendants to dismiss the suit for various reasons. It is insisted that there is not such diverse citizenship as to give this court jurisdiction. Diverse citizenship is one ground of jurisdiction in a federal court, but not the sale ground, by any means. Controversies aft to the constitution and laws of the United States are of federal judicial cognizance as well, and the question in this case arises out of this branch of the court's j urisdiction, to which defendants' motion does not apply. Another reason for the motion to dismiss is because the state of Tennessee has, by law, provided that the remedy in such cases as the one under consideration is to pay the taxes assessed under protest, and then bring suit to recover the same. This act of the legislature is constitutional unquestionably, but the case of Poindexter v. GTeenhow, 114 U. S. 270,5 Sup. Ct. Rep. 903, is decisive of the point made. Virginia had a law of like provisions with the Tennessee law, and objection was made that the money had not been paid and suit brought thE'refor. But the court held substantially that as Virginia had enacted a law making certain coupons receivable for taxes, a,nd as these coupons had been tendered and refused, the provisions of the federal constitution against legislation impairing the obligations of contracts had been violated, and no payment of the tax could be required as a condition of bringing suit. An unconstitutional tax is a void tax, and no right or duty can inhere in or depend upon it. There was no prepayment of the tax, and suit thereafter in the Virginia case. It is true coupons had been tendered, but this was done not as compliance with the Virginia statute, or under its provisions, but it was done so that the tax-payer might comply with the terms of his contract with the state, and if the state refused to stand by its bargain, that he might find protection under the federal constitution. If. in the case in hand, the tax is unconstitutional, it is void. It confers
noright,inlposes nO duty, supports no obligation. Nothing can be predicated upon it. . The only other branch of defendant's motion that it is neceesary to consider is that the suit should be dismissed as to defendant Allen, because the face of the hill shows that he is not a resident of this district. As to this the motion must be sustained. The act of congress, approved August 13,1888, correcting the enrollment of the act of March 3, 1887, provides in section 1: "No civil snit shall be brought before either of said courts [the district or circuit] against any persall by any original prucess or proceeding in any other district than that whereof he is an inhabitant, but where the jnrisdiction is fuu nded only on the fact that the action is between citizens of different states, suit shall be brought only in the district of the residence of either the plaintiff or defendant. "25 St. at Large, 434. This suit is not founded on diverse citizenship, and does not fall under the last category of the clause quoted, but it does fall under the first, and the language is positive and peremptory. This leaves the case here as to the sheriff and his deputy, to whom the process for the collection of the tax came, and by whom it was levied, and whom it sought to enjoin. The bill seeks to enjoin the collection of two taxes, or a tax imposed in two years, each for $3,000. The legislature of Tennessee, by an act approved March 29, 1887, provided that the following taxes should be paid by express companies: "In lieu of all otber taxes, except ad valorem tax, if the lines are less than 100 miles long, per annum $1,000. If the lines are over 100 miles long, per annum $3,000." The same authority, by an act approved April 8, 1889, provided that express compflnies should pay a tax, "in lieu of all other taxes except ad valorem tax, if the lines are less than 100 miles long, for one or more packflges taken up at one point in this state and transported to another per annum $1,000. If the lines are more than 100 point in this miles long, for one or more packflges taken up at one point in this state and transported to another point in this state, per annum $3,000." By this act it is made a misdemeanor, punishable by a fine and imprisonment, to conduct the express business without prepayment of the tax. In a case entitled Com. v. Express Co., under an act of Kentucky similar in its provisions to the Tennessee law of 1887, the Louisville law and equity court, in an ably written opinion, held the act void because the tax was an infraction of the provision of the federal constitution in regard to interstate commerce. And the circuit court of the United States for the southern district of Mississippi, in Express Co. v. Hemmi:ngway, ante, 60, takes a similar view in regard to a Mississippi statute of like import. The cases decided by the supreme court of the United States which favor or support a different view 0:1 this tax are Osborne v. Mobile, 16 Wall. 479, and lVigg'ins Ferry Co. v. St. Louis, 107 U. S. 36.5, 2 Sup. Ct. Rep. 2.57. But in Leloup v. Mob'ile, 127 U. S. 640, 8 Sup. Ct. Rep. 1380, the supreme court overrules, substantially at least, these decisions. It says: "In view of the course of decisions which have been
UNITED STATES EXP. CO. fl. ALLEN.
made since that time, (1872,) it is very certain that such an ordinance would now be regarded as repugnant to the power conferred upon congress to regulate commerce among the several states." Leloup v. Mobile, supra, 647. This, though said of the Osborne Case, must in principle apply with equal force to the Wim;ins Ferry Case. It seems to me that, under the line of decisions of our supreme court, the tax imposed upon the complainant by or under the act of 1887 was void, as repugnant to the constitutional authority given congress to regulate commerce between the states. It is, in no sense, a property or ad valorem tax. It is essentially a license, or privilege tax. There is no description of or limitation of the business. It makes no difference whether it be interstate or intrastate. If it be an express company, it is taxed. If it be a hundred miles long it must pay $1,000. If more, it must pay $3,000. Complainant is an instrumentality of interstate transportation. It does business through and between states, as well as within them, and cannot be so taxed. The act of 1889, however, attempts to avoid the difficulty in which the act of 1887 is involved. It provides that the company may be taxed when it carries one or more packages from one point in the state to another point in the state. This is meant to be considered as a tax for the privilege of doing business within the state, and to escape being regarded as a tax on business between states. The tax may be avoided should no packages be borne from one point to another in this state. This tax, carried to its logical results, bears as hardly on the company as the other. If it confine its operations to an interstate business, it must still have its agents and offices at the various stations on its lines to receive and deliver its packages, so that the interstate business would be burdened with charges which otherwise would be divided between the two classes of business. The fact that the interstate business may be thus burdened does not necessarily invalidate the tax, perhaps. But is not this provision of the statute a mere device to fasten the tax upon the company? It is no exercise of the police power of the state. If the tax be paid, it makes not the slightest difference whether the packages taken up and carried and delivered between and at points in the state be one or a million. It is not a tax regulated by the amount of business. It is as much if one package be carried as if ten millions go. A package of a dime in value, carried five miles, may involve a license fee of $1,000 or $3,000, depending altogether on the length of the line of transportation used by the company. The length of the line used is the measure of the tax. This cannot be the standard. Steamship Co. v. Pennsylvania, 122 U. S. 326,7 Sup. Ct. Rep. 1118. The supreme court says in Leloup v. Mob'ile, 127 U. S. 645, 8 Sup. Ct. Rep. 1380: "Ordinary occupations are taxed in various ways, and, in most cases, legitimately taxed, but we fail to see how a state can tax a business occupation when it cannot tax the business itself. Of course, the exaction of a license tax as a condition of doing any particular business is a tax on the occupation; and the tax on the occupation of doing a business is surelY a tax on the business."
And again at 648, in the same case, the court says: .. "In out opinion such a construction of the constitution leads to the conclusion that no state has the right to lay a tax on interstate commerce in any form whether by way of duties laid on the transportation of the subjects of that commerce, or on the receipts derived from that transportation, or on the occupation or business of carrying it on, and the reason is that such taxation is a burden on that commerce, and amounts to a regulation of it, which belongs solely to congress. " So, under the tax law of the state of 1889, although the tax purports on its ince to be for carrying on the express business within the state, yet, as already shown, the burden of the tax falls upon the interstate business, and amounts to a collection of the tax from that source to a great extent at least. It follows from the views announced that an injunction may issue as prayed for, on complainant executing bond, with sufficient surety in the penalty of $10,000, to satisfy such decree as may be finally rendered against it in the cause.
UNITED STATES V. AMERICAN BELL TEL.
Co. et al.
(Circuit Court, D. Massacltusetis.
September 9, 1889.)
Under Rev. St. U. S. § 954, giving the federal courts power to permit parties to amend pleadings at any time, on such conditions as they may prescribe, a motion by one defendant in equity to withdraw an answer and file the same plea as is filed by its co-defendant. will be granted when not made for the purpose of setting up a merely technical defense, nor after evidence has been taken, and it is probable that it will be more convenient to try the issue raised by the plea first, and where a replication has been Iiled to the co-defendant's plea.
In Equity. On motion for leave to amend. Charles S. Whitman, George A. Jenks, and Owen A. Galvin, for complainant. Chauncey Smith, Elias Merwin, and James J. Storrow, for defendant American Bell Telephone Company. COLT, J . I n this case the defendant company has filed a general answer to the bill, and the defendant Bell has filed a plea and answllr in support thereof. The defendant company now asks leave to withdraw its answer, and to file the same plea and answer in support thereof which has been filed by Bell. By section 954 of the Revised Statutes, the courts of the United States may, at any time, permit either of the parties to amend any defect in the process or pleadings, upon such conditions as they may in their discretion or by rule prescribe. The plenary power of the courts of the United States with respect to amendment of pleadings, under the acts of