City Nat. B'k of Paducah v. City of Paducah and Morgan. nothing if the shares of its stockholders were sold, and that its shareholders, if any one, were entitled to relief. The point, however, does not seem to have been maturely considered, and, indeed, it is doubtful whether the petition in that case, charging as it did, not an impending multiplicity of suits, but that the sale of the shares, would greatly damage the bank, by impairing its credit and stability, and injuring the owners of the stock, by casting a cloud over the title and destroying its convertability, made out a case for relief. The bill under consideration alleges, and the evidence meets, substantially, the averment, that the city is threatening to sue the bank and each of its stockholders, in separate suits, and will, unless restrained, sue out attachments garnishing the bank and attaching the stock of the shareholders, involving the plaintiff in a great many petty suits; breaking down the business of the bank, depreciating its stock, bringing endless confusion on the ownership of the same, injuring the credit of the bank, putting a cloud upon the same, and doing it an irreparable injury. That if the bank pays these taxes, the stockholders will sue it, and in either event, a multiplicity of suits will result. Upon the whole, I think the bank is so far the trustee of the stockholders, and the custodian of the dividends that it is entitled to maintain the bill. It might be subjected to great annoyance by stockholders, who denied the legality of the tax, and gave the bank notice that it would pay it at the peril of being sued by them. It is certainly no hardship to permit the whole question to be litigated in a single action. We assume in this connection that all the stockholders in this bank, each having the same ground for relief, and the same defense being applicable to all, might have united in a single bill without multifariousness. (Cooley on Taxation, 545.) This being so, we see no objection to the bank main City Nat. B'k of Paducah v. City of Paducah and Morgan. taining a like bill as trustee for the entire body of stockholders. We should feel inclined to go to the limit of the law in sustaining a practice so convenient, and, so far as we can see, so unobjectionable. It is also insisted that a remedy by injunction cannot be invoked in this case. While it is freely conceded that a court of equity has no general power to restrain the collection of taxes for any irregularity of assessment, or for overvaluation or unjust discrimination, and that to sustain a bill the case must be brought within some acknowledged head of equity jurisdiction, we think this exigency is met in either of the two following cases: 1. Where the enforcement of the tax would lead to a multiplicity of suits; or 2. Where the law authorizing the tax is itself invalid. Upon the first ground the interference of a court of equity was held proper in Heywood v. City of Buffalo, 14 N. Y. 534, and in Dows v. City of Chicago, 11 Wall. 108, 111. The opinion in that case received the sanction of the Supreme, Court of the United States. The second ground of interference was also recognized by the Supreme Court in the same case, approving Cook County v. The Chicago, Burlington & Quincy R. R. Co., 35 Ill. 465. In the case of the same railway company v. Frary, 22 Ill. 34, speaking of exceptions to the general rule, that a court of equity will not interfere, it is observed, "Those exceptions are confined almost, if not entirely, to cases where the tax is unauthorized, or it is assessed upon property which is not subject to the tax. The case of the Illinois Central R. R. Co. v. The County of McLean, 17 Ill. 291, fell within the latter exception. The same rule is practically affirmed in Munson v. Minor, 22 Ill. 601, and Central Warren Road Co. v. Black, 32 Ind. 471. In Warden v. Board of Supervisors, 14 Wis. 618, an exception is mentioned of objections which go to the very ground City Nat. B'k of Paducah v. City of Paducah and Morgan. work of the tax assessed, so as to affect materially its principle and to show it must necessarily be illegal. "Where it appears that the established principle of taxation has been violated, and that actual injustice will ensue, or that the tax is levied for an unauthorized purpose, of course equity will interfere, in proper cases, to prevent the wrong." (See High on Injunctions, 195-200.) Both of the reasons above given for the exercise of equity jurisdiction, are apparent in this case, and we think the complainant has not mischosen its remedy. While in a case of over-valuation, or unjust discrimination an appeal to the supervising officers might correct the error, they would have no power in a case like this to question the validity of the ordinance by virtue of which the tax was assessed. Coming now to the vital point in this case, viz: The valid ity of the legislation by which the tax in question was imposed, we find the general proposition firmly established, that banks organized under acts of Congress are regarded as fiscal agents of the government and exempt from taxation, except as Congress may specially authorize it. McCulloch v. Maryland, 4 Wheat. 416; Weston v. The City of Charleston, 2 Pet. 448; Farmer's Bank v. Dearing, 91 U. S. 34. In the organization of National banks, Congress has given a qualified authority for State taxation in the following section of the Revised Statutes: SEC. 5219. "Nothing herein shall prevent all the shares in any association from being included in the valuation of the personal property of the owner or holder of such shares, in assessing taxes imposed by authority of the State within which the association is located; but the Legislature of each State may determine and direct the manner and place of taxing all the shares of National banking associations, located within the State, subject only to the two restrictions, that City Nat. B'k of Paducah v. City of Paducah and Morgan. the taxation shall not be at a greater rate than is assessed upon other moneyed capital in the hands of individual citizens of such State; and that the shares of any National banking association, owned by non-residents of any State shall be taxed in the city or town where the bank is located and not elsewhere. Nothing herein shall be construed to exempt the real property of associations from either State, county or municipal taxes to the same extent, according to its value, as other real property is taxed." While the section in question would not be open to construction if the entire moneyed capital of the State, in the hands of individuals, were taxed at a uniform rate, the interpretation to be put upon it, where different rates of taxation are imposed upon different classes of moneyed capital, is not free from doubt. Has the State a right to tax the shares of National banks at the highest rate imposed upon any class of moneyed capital, regardless of the proportion which that class bears to other classes? On the other hand, is it confined to the lowest rate imposed upon any class of moneyed capital; with like disregard of the relative amount of the different classes? The last question is answered directly, in the case of Hepburn v. The School Directors, 23 Wall. 480, in which it was proved that mortgages, judgments, recognizances and moneys owing upon articles of agreement for the sale of real estate were exempt from taxation in a certain district, except for State purposes. This was held a partial exemption only, and it is said it cannot be the intention of Congress to exempt bank shares from taxation, because some moneyed capital was exempt. Suppose, however, there were in a certain district a very small amount of moneyed capital of one species and a very large amount of another; that the former was heavily taxed and the latter exempt altogether, would the municipality be authorized to tax the shares of National banks at the rate imposed upon City Nat. B'k of Paducah v. City of Paducah and Morgan. the former? Suppose, for example, that State banks, exempted from taxation, absorbed three-fourths of the "other moneyed capital" of a certain city, and the remaining onefourth was heavily taxed, would it not be not only an unjust. discrimination but a mere evasion, to tax the shares of National banks at the rate imposed upon the taxed quarter? These questions have never been definitely settled, but bearing in mind that the obvious intention of Congress was to permit taxation, but to inhibit unjust discrimination, it would seem the answer would be easy. I regard the true construction to be this: That when by local legislation different rates are prescribed for different classes of moneyed capital, the rate imposed upon shares in national banks should approximate as closely as may be to the rate imposed upon other moneyed capital of the same or similar class, viz., shares of State banks. While this rule might be subject to qualifications in localities where the capital of State banks bore a very small proportion to other moneyed capital, and the exemption was intended as a bounty, I think it furnishes, as a general rule, a safe guide to the validity of the tax. It is urged, however, that the course of legislation upon this subject repels the inference here drawn from the language of the section, and shows, affirmatively, that Congress intended to permit the States to discriminate in favor of their own banks, by repealing a proviso inhibiting such discrimination, originally annexed to the section in question. The 41st section of the original act of 1864, 13 Statutes, 112, provides that "nothing in this act shall be construed to prevent all the shares in any of the said associations, held by any person or body corporate from being included in the valuation of personal property of said person or corporation, in the assessment of taxes imposed by or under State authority, at the place where such bank is located, and not elsewhere; but not at a greater rate than is assessed upon other |