Dawson v. Kentucky Distilleries & Warehouse Co., 255 U.S. 288 (1921)

Dawson v. Kentucky Distilleries & Warehouse Company


Nos. 439

, 582


Argued January 6, 1921
Decided February 28, 1921
255 U.S. 288

APPEAL FROM THE DISTRICT COURT OF THE UNITED STATES
FOR THE EASTERN DISTRICT OF KENTUCKY

Syllabus

1. The tax sought to be imposed by a law of Kentucky of fifty cents a gallon upon whisky either withdrawn from bond within the state or transferred in bond from the state elsewhere, although described as an "annual license tax" on persons engaged "in the business of owning and storing" whisky in bonded warehouses, is not an occupation tax, but essentially a property tax, tested by the local law. P. 291.

2. Being a property tax, it is void because it fails to comply with § 171 of the Kentucky Constitution, which provides that taxes shall be "uniform upon all property of the same class subject to taxation," whisky never having been classified separately and being taxed under another law on its fair cash value. P. 291.

3. To pay under protest and sue to recover is not such an adequate legal remedy against an illegal state tax as will prevent the federal courts from exercising their equitable jurisdiction to restrain enforcement if the right to recover back is uncertain under the state law when the injunction suit is begun. P. 295. § 162, Ky.Stats., considered.

4. An equitable remedy available in the state court is not lost by suing in a federal court. P. 296.

5. Under the amendment of Jud.Code § 266, which provides that proceedings in a federal court to restrain execution of a state statute shall in certain circumstances be stayed to await determination of a suit in a state court to enforce it, accompanied by a stay of proceedings under it, the stay granted in the state court must be sufficiently general to protect the suitors in the federal court from the irreparable injury against which they there sought protection. P. 296.

274 F. 420 affirmed.

Direct appeals under Jud.Code § 266 from orders granting interlocutory injunctions. The facts are stated in the opinion.