McCULLOUGH v. CITY OF DENVER et al. (Circuit Court, D. Colorado. July 13, 1889.) INJUNCTION-TRESPASS-NOMINAL DAMAGES. The court will not enjoin a municipal corporation from laying a ditch or flume over private property, though the entry by the city was made on the Sabbath day, and in a forcible and lawless manner, where it appears that the ditch is for a necessary public purpose, and that complainant's damages are but trifling. In Equity. Motion for injunction. Teller & Orahood, for complainant. O. C. Marsh and J. F. Shafroth, for defendants. HALLETT, J. In McCullough against the city of Denver and others, the court is asked to restrain the building of a ditch or flume over a tract of land adjacent to the city. The land is vacant, except that complainant is grading streets through it, and preparing it for use as town lots. It has been used for brick-yards. There are houses on all sides of it, and it is now valuable only as an addition to the town. For many years ditches on this tract have been in use for conveying water to other parts of the town, and the one last used was destroyed by complainant's work in grading the streets. On Sunday, June 30, the city authorities entered the premises with a large force of men, and made an underground flume on the north side of Eighteenth avenue, as defined by complainant's work. It is not said that the work was done in a manner to cause unsightly ditches, or otherwise injure the land in any way, having regard to the use which is to be made of it, and the purpose was to convey water to other parts of the town, where it was greatly needed. It is a matter of profound regret that the city authorities should feel at liberty to go about a work of this kind with force and arms, and on the Sabbath day. A municipal government, charged with the duty of maintaining law and order and rights of property within the corporate limits, should not be endowed with or entertain the predatory instincts and lawless habits of private corporations. In this instance the conduct of the city government seems to have been according to the practice of a railroad corporation stealing a right of way. Such indecent and illegal proceedings cannot be justified in any case, and there is no shadow of excuse for such conduct in this instance. The extraordinary conduct of the city authorities will not, however, give authority to the court to interpose by injunction. The damage to complainant's land on account of the flume will be trifling, and the water is needed for public use. Under such circumstances the court will decline to act, and leave complainant to his action at law for any damages he may be entitled to. OLYPHANT v. ST. LOUIS ORE & STEEL Co. et al. (Circuit Court, N. D. Illinois. July 8, 1889.) SET-OFF-UNLIQUIDATED DAMAGES-INSOLVENCY. A garnishee of an insolvent company is not entitled, upon intervention in an action by the company's creditors for appointment of a receiver, etc., to have set off against the judgment obtained against it as garnishee a claim against the company for unliquidated damages growing out of the breach of a contract independent of the one upon which the garnishee was garnished, and arising subsequent to the service of process in the garnishment. In Equity. Intervening petition of the North Chicago Rolling Mill Company. George Willard, for intervenor. Hutchinson & Luff, for respondent. GRESHAM, J. On December 1, 1883, the North Chicago Rolling Mill Company, an Illinois corporation, and the St. Louis Ore & Steel Company, a Missouri corporation, entered into a written contract whereby the former company agreed to manufacture and deliver to the latter company 18,000 tons of steel rails at $35 per ton, in monthly installments, during the year 1884. About the same time Cherrie & Co., of Chicago, agreed with the Chicago company to purchase from the St. Louis Company and deliver to the Chicago company, 100,000 tons of Pilot Knob iron ore. Cherrie & Co. failed on July 3, 1884, not having fully performed their contract, and the St. Louis Company agreed to sell and deliver to the Chicago Company a quantity of ore of the same class, at the same price. Ore was delivered under this contract. The failure of Cherrie & Co. appears to have embarrassed the St. Louis Company, and on July 21, 1884, in a suit brought against that company in the circuit court of the United States for the Eastern district of Missouri, a receiver was appointed, who took charge of the company's assets, and undertook to carry on its business. On the same day the Joliet Steel Company, an Illinois corporation, brought a suit in attachment against the St. Louis Company, and garnished the Chicago Company, claiming that it was then indebted to the St. Louis Company in the sum of $19,000 for ore sold and delivered under the contract already referred to. The Chicago Company filed a plea of set-off, containing different items of indebtedness due to it from the St. Louis Company, all of which were allowed, except a claim for unliquidated damages growing out of the non-fulfillment of the contract of December 1, 1883, the court holding that a claim of that nature could not be allowed as a set-off in a suit at law. Ajudgment was entered against the Chicago Company, as garnishee, in favor of the St. Louis Company, for $16,000, for the use of the Joliet Company; and the Chicago Company then filed its intervening petition in this case. After setting out the proceedings in the suit in garnishment, the petition avers that the St. Louis Company is insolvent, and prays that the damages resulting from the non-fulfillment of the rail contract be ascertained and set off against the judgment entered against the petitioner as garnishee. After the intervening petition was filed, the St. Louis Company effected a compromise with its creditors, and the suit against it in the federal court at St. Louis was dismissed, and its property was restored to its possession. The judgment against the Chicago Company, as garnishee, was for money due for pig-iron bought from the St. Louis Company, and the claim of the former company is for unliquidated damages growing out of the failure of the latter company to receive rails under the contract of December, 1883, a contract having no connection with the one upon which the Chicago Company was garnished. When the latter company was served as garnishee, no part of the claim now urged as a set-off had accrued. The Chicago Company, then, had no right of action for the recovery of that claim, or any part of it. Indeed, it was then uncertain whether that company would make or lose money by the further performance of the rail contract. Without ruling upon other questions discussed by counsel it is sufficient to say that the claim for unliquidated damages growing out of the failure of the St. Louis Company to receive rails under the rail contract, after the failure of that company, and after the commencement of the suit in attachment, and the service of the writ of garnishment upon the Chicago Company, was properly rejected by the court in the trial of the action at law, and cannot now be set off against the judgment rendered against the garnishee. The intervening petition is dismissed without prejudice to the right of the Chicago Company to prosecute an action against the St. Louis Company. FIRST NAT. BANK OF RICHMOND v. CITY OF RICHMOND et al. (Circuit Court, E. D. Virginia. July 15, 1889.) TAXATION-NATIONAL BANKS. Rev. St. U. S. § 5219, providing that shares of national bank stock may be taxed as part of the personalty of the owner, and that each state may tax them in its own manner, except that the taxation shall not be at a greater rate than is imposed on other "moneyed capital" owned by citizens of the state, and that the shares of non-residents shall only be taxed in the city wherein the bank is located, do not authorize the taxation of the stock of a bank in solido by the city in which it does business, but only the shares of individual owners residing in the city are taxable, and they must be taxed separately, in order that the owner may deduct from their value the amount of his personal indebtedness, where the state laws or municipal ordinances permit such deductions, and require equality of taxation. In Equity. Bill for injunction. Johnston, Boulware & Williams, for complainant. HUGHES, J. The question in this case is upon the amount of a tax assessed by the city of Richmond upon a national bank, and upon the manner of assessing and collecting it. It was competent for congress to have prohibited any taxation of the national banks by states, cities, counties, or towns. Indeed, on general principles of public policy, the mere silence of congress on the subject, in its legislation respecting the national banks, would have been a prohibition of such taxation. But congress was not entirely silent, and provided, in section 5219 of the Revised Statutes of the United States, that nothing in its legislation respecting the national banks should be construed to "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 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." A clause is added, authorizing real estate of national banks to be taxed by the states at the same rate as other real estate. Authority is here given to tax the shares of national banks as part of the taxable estates of the owners of the shares; and, in laying this tax, the state is prohibited from assessing it at a greater rate than is assessed upon other moneyed capital in the hands of individual citizens. It is plain that the tax authorized by congress is a several tax upon the shares of each individual stockholder, as distinguished from a lumping tax, or tax in solido, upon the bank itself. By "moneyed capital" is evidently meant, either money itself, or negotiable securities readily convertible into money, and having a quotable market value, as distinguished from ordinary property. In substance, therefore, congress declares that national bank shares may be assessed for taxation as the property of the individual owners of them respectively, and that these shares, being themselves moneyed capital, shall not be assessed at a higher rate than is assessed upon other forms of moneyed capital in the hands of individual citizens. The constitution of Virginia requires that taxation shall be equal and uniform; that no species of property shall be taxed higher than any other species of property; and that stocks shall be taxed according to their market value. An ordinance of the city of Richmond provides that any person taxed may deduct from the aggregate value of solvent debts and securities held by him all bonds, securities, liquidated claims, and demands due from him to others, in computing the tax to be assessed against him. The city of Richmond imposes a tax of one and four-tenths per cent. of their market value upon all shares of stock in any bank or corporation of the city whose capital stock is itself not assessed for taxation. In this condition of the law, the defendant F. W. Cunningham, city collector of the city of Richmond, presented for payment a tax-bill to the First National Bank of Richmond, the complainant here, made out as follows: 1889. Mr. H. C. Burnett, Cashier of the First National Bank of the City of Richmond, to the City of Richmond, Dr. For taxes upon shares of stock $840,000 $801,680 at 1.4-$11,223 52 Whereupon the bank exhibited in this court its bill of complaint against the city of Richmond and its collector, praying an injunction against the collection of the tax. A temporary injunction was granted, and the case is now heard for a final decree, either of perpetuation or dismissal. The bill recites that the capital of the bank is $600,000, (which seems to have produced a surplus fund of $240,000;) that the par value of its shares (6,000 in number) is $100, and their market value $140; that its capital consists in part of Stock in the Union Bank of Richmond, (whose tax is paid by that bank,) 10,500 -all of which property is tax-paid or non-taxable as against the First National Bank. The bill charges that the city imposes, and requires the bank to pay, the tax of one and four-tenths per cent. upon the market value of its shares, without allowance of any deduction for the non-taxable securities and specifically taxed property thus shown to be held by the bank; and charges also that this tax is so assessed that the owners of the shares thus taxed are deprived of the privilege, allowed other moneyed capitalists, of deducting from the amount of securities held by them, including their shares, respectively, the amount of bonds, securities, liquidated claims, and demands due from them respectively to others. It complains that, besides this discrimination against its own individual shareholders in favor of other moneyed capitalists, the city unlawfully discriminates against the banks of the city, as corporations, in favor of corporations which are taxed on their capital stock, all of which latter are allowed to deduct the amount of exempted securities held by them from the values assessed against them. Thus it is charged that, contrary to national, state, and municipal law, the tax levied against the shareholders of the complainant, under the present system of taxation enforced by the city of Richmond, discriminates against them in three particulars, viz.: (1) Other corporations get the benefit of relief from taxation upon all nontaxable securities which form part of their capital, in which relief their shareholders participate; whereas, under the method of taxation complained of, this bank's shareholders are deprived of such relief as to nearly half the amount of its original capital. (2) The tax being as |