CHICAGO, M. &:
:ST. p;lty.
CO. V. HARTSHORN.
5U
Caduc testifiestha.Hheloanscoverirt{the in question were made by Go6qyeat'Dental Vtilcanite Company,of which he was urer.ThatcCimplmy, aftefthe appointment of Mr. Chandler as of the ColbrPrinting Conl pany, claimed from him the balance due uport these the the claim, taking a. full release from the 'If·Cad\1c had no authority to thus use the money of the Goodyear Company , that question cannot affect the rights of the receiver in' this case. Whether made without authority or wise,the loana, u);>on the m'idetrce, were made by the Goodyear Coni. pany, fl,l1d:notbt Caduc/andthefinding 'of the master is therefore correct. , The ,exce!>tions to the master's Teport in each case must be overruled.
CBrCAGO,'y.
& ST. P.
Ry. Co: v. HARTSHoRN,'Treas., etc., and a.1). ,
«»cuit Oourt, No iJ.lowa. 1.
Notwithstanding that the law of Iowa restricts taxation in aid of raUroa.ds to the suin of5 per cent."upPu the taxable property in the township,stU! ce.n be lawfulli compelled to pay. lU addition to such o per cent, tax and, interest thereon, the peMlty.provided by law for delay in the pay· ment'of taXes'; .following:7'oPnn v. HartBhorn,29 N'. W. Rep. 764. B.ut:E-PENA1.TIEB-REPEAL OF STATUTE.
TO RAiLROADS-PENALTIES, , '
I.
Under Oode IQwa,§ 45.. pal!.) 1, which providllll that'. the repeal of. e.,statute not aftect, any ,!nder tha< statute, La:,!,/! Iow!i' 159, 1, repealing Laws 1876,c.123.whlCh authorIzed the votIng by any township lUI the GUlta' of taxes in aid of· railroads. does not .repeal :anypenalties of taxes so .vo}ed, WhiGh. had accrued at the time of the passage of the act of 1884;. followmg 'J'obm v. 'iIi};l'tg-Mrn, 8Upl'a. On demurrer'to a bill to restrain the sale of realt.,y for delinquent. .. where :it: appears thJtt,a.lthough the coroplfl;ilJ,ant did not tender thefllll pounw·tre.asu,l'er demandeci a pellaH;v in excess of what'Was dbe,'aili;tt'he complainarlt is therefore entitled to SOII}6 relief, though nono the' fl111l'elief aslt&d. the demurrer cannot be sustained. i' FOR ..'
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InEquity. Bill to restrain sale of realty for delinquent taxes. Demurrer to bill. Goo; E. Clark and BlUrton Ha'lUJOn, for complainants. E. B. Soper, for SH'IRA!',J.. Tn the of May sud June, 1881, several of the to'Wnships Qf Falo AltoeountYi Iowa, voted a 5 per cent. tn: in aid: of the :consttuction of the line 'of. the Cedar Rapids, .Iowa Falls & Northwestern "&l.i1w.a.y Company,through the respective townships. The validity ofithie'tl1OC thus voted 'wftsdisputed, and" t<> determine this questibnrsltits were: institute<lin the state courts; and, in the fall of 1885, by of thesuprel1lecourt of Iowai,JJitwasheld that the taxes I
FEDER,AI, REPORTER." · · ," · . · .. 1 . J,.' '. · .
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.were iOn the cow:plainantfflndered to the treasurer of Palo Q9.:11flty of. the. 5 per pent. levied;up.Qnijjs proPerty with interest the rateof6per bent. from. the date oLthe matudtY,()f the date. oLthe tender,making m of $4,737.59. ·The. refused thisaJI,l,Cll:mt, ,Qlairping .that the penalties and interest due on tbeprincipal amounted to 138 per To prev,eIlt a sale of its property,the cO'ln:plail1Ql1t filed the presflnt bill; and,J>v, a demurrer thereto, two quest,ions.Jlrepr'fflented,; in aq.dition to th"e 5 PElt "lent. tax, and interest, a further sum, by way of penalty, can be exacted j and, (2) if so, whether the repeal of the act under which the tSlXwlUJ the dght .. the .' ,. . ..... i ),. In the case of Snell v. Campbell, 24 Fed. Rep. 880, decided at the June term, 1885, of this court, it was questioned, but not decided, whether, under the law restricting taxation in aid of railroads to the sum of 5 per cent. upon the taxable property, there could be collected, in addition to the 5 per cent. ,tax, and .interest thereon, a further s,um by way of a penalty. J " ·., . r' i . . .',':.' " ' ':1 . In the case,of v. Ifart81wrn" 29 W. Rep. 764, decided October 22, 1886,' this"precise was presented, ana the supreme court of Iowa held. that the penalty Wllll and Iectible; notwithstanding the'rtistrictiv.e provisions' of the statute. this decisionthe point is authoritatiyelydecidedj and,foll(!)wing this rulipg, t\1is cql;irt is bound to q.o, it m.ust be held that the coniplainant is compelled to pay, not only the S.per cent. tax levied, but also the legal penalties due thereon. In this, case of Tobin v·. Hart8lurrn, it W8ii lil,lsQ held,cbntrartto the' ruling that the adoption ?f chapters 159 and 194 of Acts of TwenhethGeneral Assembly- dId not remit the penalties that had accrued at the date· of. these acts, the right thereto saved by thept6visions of sectio\?15 of the Code. This section provides thllt repeal ora statute, does not revive a statany duty ute previously repealed, nor affectany right imposed, any penalty inourred j or any proceeding commenced, under or by virtue ofthe statute repealed; II ',Section 866 Code provided the penalties to beimposed for non-pa,ymerit of taxe,s. Chapter 194 of the Acts of the Twentieth General Assembly expressly repeals this section, and then enacts a substitute, changing the rate of penalty;. and further provides "that the penalties of thisseotionshalltlokapply to, or be collected upon, any taxes levied in aid of the constreuction of any railroad in this state." . It is unquestionably true that, by the provisions of section 45, the mere repeal oh.:statute would leavetlnaffecteda penalty alrea.dy incurred; but this section,cannot beheld,tolimiHhe rightoHhe legiSla.ture to remit a penalty by express enactment. In Snell v .. OampQell the view taken was that the railroad 'Compallyhad avested,rightin theS pet;cent.tax voted, but that the penalties prescribed by section 866'were purely penalties, and, as such, were within the control of the state until actuwly collected, and that the state had therigbtto remit the same. The act of 1884 changed
B'
CHICAGO, M· .&S'11.:1'. RY. CO. V.HARTSHORN.
543
the amount of the penalties provided for by section 866, and then declared that" the penalties provided for by tbis section shall not apply to, or be collected upon, any taxes levied in aid of the construction of any railroad in this state.'" <Dertainly, this 'proviso gives support to the contention that it was the intent of the legislature to declare that the penalties alreidyoocruedshould not be collected upon any taxes voted in aid It,wouldsee,m to,have been thepu;rpose of the legislature to limit the.,burden oftaxation, for .the purpose ofaiding railways, by that, the penalties imposed for· the. non-payment of ordinary taxes, 8,1! forth 866, should not apply to taxation in aid of rai!waysj'1and the language used would seem to include all taxes or not. If such was the intent 9£ no ,rAASQn is perceived why effect should .not be given'tb-ereto,:which would ,result in holding, as was done in Snill v. (;klmpbell, that, the legislature having remitted the penalty before its collection, neither the railway company, nor the county treasurer, could lawfully enforce payment of such penalties by a sale ofthe lands of· the tax-payers. But, as already stated in the case of Tobin Hartsho7'n,decidedby the supreme court of Iowa since the decision of SneUv. (hmpbeU.,it has th!":t the tax-payer is liable for the penalties that had accrued up'Wrthe date of the repeal, of theetatute authorizing the tax, and this con'$tfucition bf the statute settles the question, and m.ust be followed as true rule'inthis court;: ail :well as in the state courts. 'The avetD.lent in the billie that the county treasurer, by direction of the ranway doinpany, in whose aid the, tax was voted, claims 138, per penalty upon the aIllbuntof the tax levied upon complainant's prc;>pe:rty. In the brief of defendant's counsel; it is stated that alL ties, after dateofthe repea1ingact, are waived,and that, upon payment of the ta::k,witlfpenalty, to April 9, 1884,wiihinterest on the aggregate thereof ,from May 1, 1884, at ethe rate of 6 per cent., a full discharge and i'elease1ViU be given. The total amount to be pam is to be ascertained according to the rule laid down, in Tobin v.Hartshorn. Under this rule the of the county wa's not justified in demanding a penalty amountil)g -to' 138 per cent., and· the .facts averred in the bill show that, on the one hand, the complltina.nt did not tender the full amount due, andotfthtfdthet the county den'landed a penalty in ex· cess,of',1Vhat! was legally ·due. The demurrer is general, and therefore admits "all tMfactspositively alleged in the bill, arid cannot btl sustained if these 'facts show thatdOmplainant is entitled to any relief. The com. plainant,being entitled to restrain the sale of its property for the excessive penalties claimed by defendants, in so farsbow.s an equity and riiht to som,e' relief, and the must therefore .be overruled·. :J'l ;',', 1_
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, : , rofficers' Of'8 bought 'a tract c,f land 'COl'1 poratron. wIthout authority fr()]jt!the' dIrectors. Thetltle was ,made to B., who executed, it to,,A. to ,secure, Wm in' advances pf money 1;18 ,];tad a,lr\'l,ady "the anditfterwards made.for ,it. A. transf\'lr,r!'ld the' mottgages third '. B. s.upsequently . conveyed the land to the corpdtatl0Ii: '&ld, the trans!feree;havlllg paid full to, t9-J:l 'IUOttg8$es; and its properiy I'lliving passed hito of a.recelvert whO sold ,the land, the transferee,oftlie m.ortgaHes:waillentitled' to be first fund ,thu the
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'J. ;Tpis is a of the WtesHPoint authority from the directors, tpe) JOf ['.qe.title in; the. naJ;lle pf tlJ' B. ,Eager. :; Jill' ,executed?,' the in. q"lls,ti.Qp.,to. B. Brown, advancing large l:llltpS for, and be !tooktnese :pll,yi,ng ,to purposejo£ml'1ng.lthem [C?P: thl;l associaticmd: He didadiVaneetlf !wg@ Wllqunt tion,whichhas: never been' ,the 'and pl0rk gages for value" and they afteJ;wal'ds, ,passeJl from, to the tlnt complainant.. ,Eager,. s.ubseqMlltJy W the title to theasS(I)ciation; ,and. by par,tje&.' took possessfuh :of the the,association r 9i those lands; been,Jlold;/l.Pd tPe:,fungS)I,reJpt};le hands , ofthe court.: The mortgages ,are all :regullg On a,SSQciation was and is indebted to: Bllown.largely in pi the aqJ.Qu,ni of these mortgages, so there was . I think. therefore; the mortgages shOUld be foreclosed; and,'/ls.t4e property has in fact been sold, the order will be for the payment of proceeds ;of the property,so far as is necessary, tl> the complainant: on the notes S\l:" cured by tbi) ,mortgages." : ' . ; '" d" i . , , " The creditors of the association claim a right to be heard in this matter, and insist that the case should not be disposed of without further testimony on their behalf. The order for the payment of money will therefore be stayed, if within 60 days they give bond or security, to be I
ISee Poole v. West Point, etc., Ass'n, ante, 518.