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CHICAGO, B. & Q. R. CO. V. OSBORNE, 265 U. S. 14 (1924)
U.S. Supreme Court
Chicago, B. & Q. R. Co. v. Osborne, 265 U.S. 14 (1924)
Chicago, Burlington & Quincy Railroad Company v. Osborne
Nos.19, 224, 225
Argued April 14, 15, 1924
Decided April 28, 1924
265 U.S. 14
APPEALS FROM THE DISTRICT COURT OF THE UNITED STATES
FOR THE DISTRICT OF NEBRASKA
Where railroad companies, complaining of systematic and intentional discrimination by a state board in the assessment of taxes, were allowed no remedy by the state law other than a writ of error from the state supreme court to correct only errors of law apparent on the face of the record prepared by the board itself, with no supersedeas pending review to prevent infliction of penalties on their agents for failure to pay the tax, held that the remedy was not adequate, and that the case was cognizable by the district court in suits for injunction. P. 265 U. S. 15.
Appeals from decrees of the district court which dismissed the suits brought by the appellant companies to restrain collection of state taxes upon the ground that their remedy at law was adequate.
MR. JUSTICE HOLMES delivered the opinion of the Court.
These are bills in equity brought to restrain the collection of taxes upon the respective railroad companies for the year 1922 on the ground that the farm lands in Nebraska were systematically and intentionally undervalued while the railroad properties were valued at their full worth and more. After a hearing by three judges sitting under § 266 of the Judicial Code, it was held that the plaintiffs "had an adequate remedy at law under the statutes of the Nebraska in prosecuting error proceedings to the Supreme Court of the Nebraska," and for that reason a preliminary injunction was denied. Appeals were taken and the correctness of the above ruling is the only question here. It is not disputed that the proceedings in the supreme court of the state are purely judicial, so that Prentis v. Atlantic Coast Line Co., 211 U. S. 210, does not apply to this case. Bacon v. Rutland R. Co., 232 U. S. 134; Prendergast v. New York Telephone Co., 262 U. S. 43, 262 U. S. 48.
The Board of Equalization and Assessment equalizes the assessments of other property made in the counties
and itself determines the assessments upon railroads. When is has made its final order, it certifies it to the counties and the county treasurers thereupon issue distress warrants and notify agents of delinquent corporations to pay over all moneys of the corporation in their hands not exceeding the amount of the tax. A failure of the agent to do so is made a misdemeanor, and is punished by a fine. There is no provision for a supersedeas pending proceedings before the supreme court, and none by which the plaintiffs can pay under protest and bring an action at law. Dawson v. Kentucky Distilleries & Warehouse Co., 255 U. S. 288, 255 U. S. 296-297. Yet, if the Board is guilty of the conduct charged in the bill, the only remedy given by the statutes is a writ of error to take to the supreme court a record prepared by the Board. Compiled Stats.1922, § 5901.
If an action to recover the payment were allowed, the suit might be brought in the courts of the United States, under the usual conditions, as well as in those of the state. Singer Sewing Machine Co. v. Benedict, 229 U. S. 481, 229 U. S. 486. But the writ of error, of course, can be sued out only in the state, and a remedy in the state courts only has been held not to be enough. Smyth v. Ames, 169 U. S. 466, 169 U. S. 516; St. Louis-San Francisco Ry. Co. v. McElvain, 253 F. 123, 136; Franklin v. Nevada-California Power Co., 264 F. 643, 645. That however is not the only objection. On a writ of error, the court is confined to the record. The most that it could do, it would seem, would be, if errors appeared on the face of the record, to set aside an excessive valuation and remit the matter to the same Board to try again, which is hardly satisfactory if the Board is seeking to evade the law. United States v. Osage County, 251 U. S. 128, 251 U. S. 133-134. When such a charge as the present is made, it can be tried fully and fairly only by a court that can hear any and all competent evidence, and that is not bound by findings of
the implicated board for which there is any evidence, always easily produced. We are of opinion that there is jurisdiction in equity over the case stated by the bill, and that therefore the Judges "should dispose of the application for a temporary injunction on the merits and otherwise proceed with the suit in regular course." Union Pacific R. Co. v. Weld County, 247 U. S. 282, 247 U. S. 287.
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