ERROR TO THE CIRCUIT COURT OF THE UNITED STATES FOR THE DISTRICT OF MARYLAND.
MR. JUSTICE WHITE delivered the opinion of the court.
The city of Baltimore sued to recover from the Hannis Distilling Company, a West Virginia corporation, $18,218.68, of which $9,259.29 was the amount of state and city taxes for 1902 on an assessment of 50,996 barrels of distilled spirits, and $8,959.49 was the sum of state and city taxes for 1903
on an assessment of 54,514 barrels of distilled spirits. It was alleged that the spirits assessed were "in the ownership and possession or custody of said defendant in the city of Baltimore, State of Maryland . . . at the time each assessment was made." The declaration as amended alleged that the taxes sued for had been levied by virtue of "chapter 704 of the acts of general assembly of Maryland passed at the January session of 1892, as amended by chapter 320 of the acts of the general assembly of Maryland, passed at the January session of 1900." The provisions thus referred to are embraced in §§ 214-224, inclusive, of Article 81 of the Code of Public General Laws of Maryland of 1904. Their purpose is indicated by §§ 214 and 215, which are as follows:
"SEC. 214. There shall be levied and collected upon all distilled spirits in this State, as personal property, the same rate of taxation which is imposed by the laws of the State on other property for state and county purposes. "SEC. 215. For the purpose of such assessment and collection it is hereby made the duty of each distiller, and every owner or proprietor of a bonded or other warehouse in which distilled spirits are stored and of every person or corporation having custody of such spirits to make report to the state tax commissioner, on the first day of January in each and every year, of all the distilled spirits on hand at such date, and the tax for the ensuing year from the said first of January shall be levied and paid on the amount of distilled spirits so in hand, as representing the taxable distilled spirits for such year; provided, however, that the same distilled spirits shall not be taxed twice for the same year."
By the remaining provisions of the act the machinery for levying and collecting the taxes for which the act provided was created. Such regulations afforded those interested an opportunity to be heard as to the amount of any assessment, made it the duty of the person having the possession, control or custody of the spirits assessed to pay the taxes levied thereon, and gave to the persons thus made liable to make
payment a lien upon the spirits to secure the reimbursement of the taxes paid.
Because of diversity of citizenship the defendant removed the case to the Circuit Court of the United States for the District of Maryland. In that court two pleas to the declaration were filed. By the first, it was alleged that the corporation was not only incorporated under the laws of West Virginia, but had always been exclusively a citizen and resident of that State, and of no other. The corporation, it was averred, was not, at the time when the taxes sued for were levied, the owner of the distilled spirits upon which the levy was made, or any portion thereof, and indeed, had never at any time since the assessment and levy had any interest, direct or indirect, in the distilled spirits in question. Under these circumstances it was charged "that under the provisions of article 15 of the bill of rights of the constitution of Maryland, as the same has been construed by the Court of Appeals of Maryland . . . the respective taxes levied on the assessed value of all of the said barrels of distilled spirits . . . were levied on the owners of said barrels of distilled spirits, who were and are persons other than this defendant, and the said taxes were not and could not have been levied on this defendant." The plea then proceeded to aver that at all times prior to the day when the assessment had been made and since, the spirits assessed had been stored in the defendant's bonded warehouse subject to the acts of Congress applicable to bonded warehouses, and that the defendant had at no time "any further custody or control of the spirits than is by the acts of Congress applicable to the subject." The plea further charged that the corporation had no funds in its possession or under its control, belonging to the owners of the spirits with which to pay the taxes; that the corporation had not agreed to pay them, that it had never borne any other relation to the owners than that of creditor, and therefore there was no right to recover the taxes from the corporation or to compel it to pay them.It
was specially averred that to compel the corporation to pay the taxes would be to deprive it of its property without due process of law, in violation of the Fourteenth Amendment to the Constitution of the United States. The second plea substantially reiterated the averments of the first, and, in addition, specially alleged that all the persons who owned the distilled spirits resided outside of the State of Maryland and could not be taxed in personam, and that, by the construction given to the constitution of the State by the highest court of the State, the property, although situated in the State, was not susceptible of being taxed, and, therefore, the taxes were void, and there was no power to cast upon the corporation the duty of paying them, and to compel the corporation to pay the taxes would be a violation of the due process clause of the Fourteenth Amendment.
A demurrer filed by the city to both pleas, on the ground that they stated no defense, was sustained without an opinion. The distilling company, electing to stand upon its pleas, judgment was entered against it for the amount of the taxes.Thereupon a writ of error directly from this court was prosecuted upon the assumption that questions under the Constitution of the United States were involved which gave a right to an immediate resort to this court for their solution. Upon the correctness of such assumption our jurisdiction depends. The assumption, however, may not be indulged in simply because it appears from the record that a Federal question was averred, if such question be obviously frivolous or plainly unsubstantial, either because it is manifestly devoid of merit or because it unsoundness so clearly results from the previous decisions of this court as to foreclose the subject and leave no room for the ...