Lindsay v. First National Bank/Opinion of the Court
This was a proceeding instituted in the circuit court of the United States for the Western district of Louisiana by the First National Bank of Shreveport, to have declared invalid an assessment of the shares of its capital stock, made by the assessing officers of the state of Louisiana for the parish of Caddo, in the year 1889.

It is provided by the twenty-seventh section of the act of 1886 of the state of Louisiana that 'all taxpayers shall have the right of testing the correctness of their assessments before the courts of justice in any procedure which the constitution and laws may permit'; and, by the fifty-sixth section of the act of 1888, that 'all suits relating to taxes and licenses shall be preference suits in all courts where pending, and shall be tried without a jury as speedily as possible, and in chambers if court is not in session.'

The bank filed a declaration or petition on the law side of the court, alleging that the assessment in question was unjust and unequal, and in disregard of the constitution and laws of the state of Louisiana and of the United States authorizing the state to tax, under certain limitations, shares of the capital stock in national banks, and asking that there be judgment in favor of the petitioner declaring said assessment null and void, and prohibiting the collection of any tax from petitioner or its stockholders; or, in the event the court should not hold said assessment absolutely null, petitioner prays for a judgment reducing said assessment so as to make it equal and uniform with other assessments, and striking therefrom the amount of property held by the bank exempted from taxation and for general relief.

The defendants appeared, and to this petition filed what is styled an 'exception,' equivalent to a demurrer, alleging that the suit was an action at law, but that the allegations of plaintiff's petition disclosed that the remedy was not by an action at law, but by injunction and bill in equity, and that the court was without jurisdiction to entertain the suit as an action at law, and therefore prayed that this exception be sustained, and plaintiff's suit be dismissed, with costs.

This exception was overruled, and, after other proceedings which it is not necessary here to notice, the case was put at issue by an answer traversing the allegations of the petition; a jury was sworn; evidence was adduced by both parties; the judge instructed the jury; a verdict was rendered; and a judgment, in pursuance of the allegations of the petition and of the findings of the verdict, was entered in favor of the bank.

It may be presumed that these proceedings were in due conformity with the practice in the courts of the state, in which no distinction is made between the legal and equitable sides. But it is quite evident from the nature and history of the case, as disclosed by the record, that the case was one in equity, and which, in the circuit court of the United States, ought to have been prosecuted in regular chancery form, as prescribed by the rules in equity.

The suit was not brought to recover excessive taxes that had been paid under protest, nor for damages, nor to recover specific property, real or personal. Its object was to cancel or modify an assessment made by official persons. The relief prayed for was in the nature of a decree enjoining the collection of taxes. The verdict did not call for the payment of damages or the surrender of the possession of land or chattels, but consisted of a finding that the assessment complained of should be reduced, in manner as prayed for in one part of the petition. The judgment was essentially a decree modifying the assessment, and enjoining the officers from collecting the taxes as imposed.

The case is thus brought within the rule, which this court has so often had occasion to lay down, that the remedies in the courts of the United States are, at common law or in equity, not according to the practice of state courts, but according to the principles of common law and equity, as distinguished and defined in that country from which we derive our knowledge of these principles, and that, although the forms of proceedings and practice in the state courts shall have been adopted in the circuit courts of the United States, yet the adoption of the state practice must not be understood as confounding the principles of law and equity, nor as authorizing legal and equitable claims to be blended together in one suit. Bennett v. Butterworth, 11 How. 674; Thompson v. Railroad Co., 6 Wall. 134; Broderick Will Case, 21 Wall. 520.

It is true that the cases in which such strictures have been expressed have been usually those in which resort has been had to equitable forms of relief, instead of legal remedies, and when defendants have thus been deprived of the constitutional right of trial by jury; but, so long as we attach importance to regular forms of procedure, we cannot sustain so plain an attempt as is here presented to substitute the machinery of a court of law, in which the facts are found by the jury and the law prescribed by the judge, for the usual and legitimate practice of a court of chancery. How inadequate and incongruous the legal remedy is in a case like the present is shown by the socalled 'judgment.' It does not adjudge a sum of money as due by the defendants to the plaintiff, whose payment could be enforced by appropriate writs of execution, but it awards a judgment in favor of the plaintiff, and against the defendants, by decreeing a reduction or abatement of the legal assessments, there existing no legal writ by which the defendants can be compelled to respect or obey the decree.

It is therefore clear that the court below should have sustained the defendants' demurrer or exception, and dismissed the suit.

This view of the case takes from our cognizance the several errors assigned to the admission and rejection of evidence and to the charge of the court; nor are we called upon, with the record in its present shape, to decide whether questions were really presented which gave the circuit court of the United States jurisdiction, whether at law or in equity, at the suit of a national bank organized and doing business in the district in which the suit was begun.

The judgment of the court below is reversed, and the cause remanded, with directions to sustain the exception and dismiss the suit. 

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