U.S. Supreme Court CITY BANK FARMERS' TRUST CO. v. SCHNADER, 291 U.S. 24 (1934)

[Page 291 U.S. 24, 28]

county court, which has jurisdiction to pass on both the amount of the tax and the legality of its imposition. The bill was therefore dismissed for want of equity.

1. It is conceded that neither the statutes of Pennsylvania nor the decisions of its courts permit an action at law for the recovery of a tax paid under protest. If that procedure were permissible in the state courts, the appellant could pursue the same remedy in a federal court; there being the requisite diversity of citizenship and amount in controversy. Matthews v. Rodgers, 284 U.S. 521, 52 S.Ct. 217. Under the state law, the only remedy afforded one who has paid a tax is an application for refund to the board of finance and revenue, an administrative body; but the action upon the claim is final and no court may review or set aside the board's decision. [Footnote 2] The District Court, however, was of opinion that the taxpayer's right of appeal from the appraisal to the court of common pleas of Dauphin county constituted such a remedy at law as ousted the jurisdiction of a federal court of equity. The act of Assembly3 requires the appointment of an appraiser whose duty is to report his appraisement in writing to the department of revenue, which must then give immediate notice to all parties interested, and continues: 'Any person not satisfied with the appraisement ... may appeal within thirty days to the court of common pleas of Dauphin County, on paying or giving security to pay all costs together with whatever tax shall be fixed by the court. Upon such appeal, the court may determine all questions of valuation, and the liability of the appraised estate for such tax, subject to the right of appeal to the Supreme or Superior Court.'

[Page 291 U.S. 24, 35]

The decree of the District Court is reversed and the cause remanded, with instructions to reinstate the bill and proceed to a hearing upon the merits.

So ordered. Footnotes

Footnote 1 Act of June 20, 1919, P.L. 521 (72 Purdon's Penna. Stats. 2301), as amended by Act of June 22, 1931, P.L. 690, 2 (72 PS Pa. 2301).

Footnote 2 Act of April 9, 1929, P.L. 343, art. 5, 503; 72 Purdon's Penna. Stats. 503 (72 PS Pa. 503).

Footnote 3 Act of April 9, 1929, P.L. 343, 1202; 72 Purdon's Penna. Stats. 1202 (72 PS Pa. 1202).

Footnote 4 Act of April 9, 1929, P.L. 343, 203(h), 1406; 72 Purdon's Pa. Stats. 203(h), 1406 (72 PS Pa. 203(h), 1406).