Equity will restrain the collection of taxes illegally imposed, but there must be some equitable ground for relief besides the illegal ity of the tax ; Allen v. Car Co., 139 U. S. 658, 11 Sup. Ct. 682, 35 L. Ed. 303. Such ground may be liability to irreparable injury or to vexatious litigation; Union Pac. R. Co. v. Cheyenne, 113 U. S. 525, 5 Sup., Ct. 601, 28 L. Ed. 1098. Where there is a statutory rem edy, it is exclusive ; but if the statute leaves open to judicial inquiry all jurisdictional questions, the decision of an administrative board does not preclude a resort to judicial remedies ; Ogden City v. Armstrong, 168 U. S. 239, 18 Sup. Ct. 98, 42 L. Ed. 444. If a remedy is provided, as by a board of equal ization, redress there must first be sought; Altschul v. Gittings, 86 Fed. 200.
Equity will not stop an assessing officer from performing his statutory duty for fear he may perform it wrongfully, until an as sessment has actually been made ; First Nat. Bank v. Albright, 208 U. S. 548, 28 Sup. Ct. 349, 52 L. Ed. 614.
See, as to a remedy in equity, a note in 16 L. R. A. (N. S.) 685.
Taxes become a lien on property only by statute; Linn v. O'Neil, 55 N. J. L. 58, 25 Atl. 273; Heine v. Levee Com'rs, 19 Wall. (U. S.) 659, 22 L. Ed. 223.
A state may tax property for previous years, where it has escaped taxation; Jack son Lumber Co. v. McCrimmon, 164 Fed. 759; an act for the assessment and collection of back taxes for several years on property that had escaped taxation was upheld in Gallup v. Schmidt, 183 U. S. 300, 22 Sup. Ct. 162, 46 L. Ed. 207, following the decision in the state court.
Recovery Back of Taxes. It was held in Elliott v. Swartwout, 10 Pet. (U. S.) 156, 9 L. Ed. 373: Under the law as it stood at that time, congress having made no special provi sion, where a collector charged excessive du ties and the party paying them, in order to get possession of the goods, accompanied the payment by a declaration to the collector that he intended to sue him to recover back the amount erroneously paid, and a notice not to pay it over to the treasury, an action could be maintained against the collector for the excessive charge.
Taxes illegally assessed and paid may al ways be recovered back, if the collector un derstands from the payor that the taxes are regarded as illegal and that suit will be in stituted to compel the refunding of them; Erskine v. Van Arsdale, 15 Wall. (U. S.) 75, 21 L. Ed. 63, a case of internal revenue taxes.
The last two cases were cited and follow ed in Pacific Steam Whaling Co. v. U. S., 187 U. S. 447, 23 Sup. Ct. 154, 47 L. Ed. 253.
Where a state officer receives money for a tax paid under duress with notice of its ille gality, he has no right to it and the name of the state does not protect him from suit; Atchison, T. & S. F. R. Co. v. O'Connor, 223 U. S. 280, 32 Sup. Ct. 216, 56 L. Ed. 436, Ann. Cas. 19130, 1050.
The grounds of protest need not be set out ; Whitford, Bartlett & Co. v. Clarke, 80 Atl. 257 ; there must be a distinct' and definite protest against paying the particular tax, on the ground of its illegality. The form may not be material; Rogers v. Greenbush, 58 Me. 390, 4 Am. Rep. 292 ; it is enough if the tax collector was notified in writing that the tax es claimed were illegal and void, and that suit would be brought to recover back the amount paid ; Shoup v. Willis, 2 Idaho (Hash.) 120, 6 Pac. 124. The grounds need not be set out in an action to recover back internal revenue taxes ; Stewart v. Barnes, 153 U. S. 456, 14 Sup. Ct. 849, 38 L. Ed. 781; Herold v. Kahn, 159 Fed. 608, 86 C. C. A. 598. In respect of
custom duties, more formality is required. See a note in 36 L. R. A. (N. S.) 476, where the cases are collected.
The rule is firmly established that taxes voluntarily paid cannot be recovered back, and payments with knowledge and without compulsion are voluntary ; when paid, under protest or with notice of suit, a recovery may, on occasion, be had, although, generally speaking, even protest or notice will not avail if the payment be made voluntarily, with full knowledge, and without any coercion by the actual or threatened exercise of power-pos sessed, or supposed to be possessed, over per son or property, from which there is no means of immediate relief than payment ; Chesebrough v. United States, 192 U. S. 253, 24 Sup. Ct. 262, 48 L. Ed. 432 (purchase of war revenue stamps for a deed without pro test or notice).
Neither a statute imposing a tax, nor the execution issued, nor a mere demand for payment, is treated as duress. It does not necessarily follow that there will be a levy on goods. Or, if there is, the citizen may pay the money, regain the use of his prop erty and maintain a suit for the recovery of what has been exacted. But he has the same right to sue if he pays under compulsion of a statute whose self-executing provisions amount to duress. For instance, an act re quiring that if a franchise tax is not paid by a given date a penalty of 25 per cent. shall be incurred and the license of the corpora tion cancelled and the right to sue be lost. Payment to avoid such consequences is not voluntary, but compulsory, and the money may be recovered back ; Gaar, Scott & Co. v. Shannon, 223 U. S. 468, 32 Sup. Ct. 236, 56 L. Ed. 510, following Atchison, T. & S. F. R. Co. v. O'Connor, 223 U. S. 280, 32 Sup. Ct. 216, 56 L. Ed. 436, Ann. Cas. 19130, 1050.
See PROTEST.
The state rule excludes Interest on over due taxes unless the statute so provides ; the I United States rule allows interest unless for bidden by statute ; Billings v. United States, 232 U. S. 261, 34 Sup. Ct. 421, 58 L. Ed. —, citing Cooley, Taxation 17, and Rochester v. Bloss, 185 N. Y. 42, 77 N. E. 794, 6 L. R. A. (N. S.) 694, 7 Ann. Cas. 15, as to the state rule, and U. S. v. R. Co., 106 U. S. 327, 1 Sup. Ct. 223, 27 L. Ed. 151, and U. S. v. R. Co., 154 Fed. 519, as to the federal rule. Inter est accrues on a tonnage tax on foreign-built yachts ; U. S. v. Bennett, 232 U. S. 299, 34 Sup. Ct. 433, 58 L. Ed. —. See TONNAGE.
The bankrupt act prefers taxes due to any state and not only those due to the state in which the proceedings are ; New Jersey v. Anderson, 203 U. S. 483, 27 Sup. Ct. 137, 51 L. Ed. 284 ; and this covers all taxes, includ ing yearly license fees of corporations organ ized under a state law for the privilege of doing business ; id.; but this does not apply to the liability of an employer to the state under a state workmen's compensation act; In re Farrell, 211 Fed. 212.
The fact that a tax statute acts retroac tively does not cause it to be unconstitution al ; Billings v. U. S., 232 U. S. 261, 34 Sup. Ct. 421, 58 L. Ed. —.
Federal courts may issue a mandamus against counties or municipal corporations, to compel the levy of a tax to pay their judg ments ; Deuel County v. Bank, 86 Fed. 264, 30 C. C. A. 30.
The collection of taxes by distraint is one of the most ancient methods known to the law ; Scottish U. & N. Ins. Co. v. Rowland, 196 U. S. 611, 25 Sup. Ct. 345, 49 L. Ed. 619 ; and government bonds may be distrained up on for that purpose; id.
See LICENSE; Po LICE POWER; PROPERTY.