state court that the assessment upon the lots was invalid as in violation of any provision of the Federal Constitution.

a party who never set it up or in any way alluded to it. Nor can it be said that the nee essary effect in law of a judgment which is silent upon the question is the denial of a claim or right which might have been involved therein, but which in fact was never in any way set up or spoken of.

No question of a Federal nature claimed under the Constitution of the United States can be said to have been made by the mere allegation "that the amount of said tax is greater than the reasonable market value of said lots, whether considered singly or together; the assessment against each partieular lot being greater in amount than the value of such particular lot, and the aggre gate assessment being greater in amount than the reasonable market value of all of said lots taken together; and that said defendants are seeking to enforce, as against plaintiff, not merely a sale of said lots, but also to compel plaintiff to pay the full amount of said tax regardless of whatever sum said lots may be sold for, and regardless of the actual value of the same." There is nothing else in the record which can be said to raise this Federal right or claim.

Nor does the record herein show by clear and necessary intendment that the Federal question must have been directly involved so that the state court could not have given judgment without deciding it. In such case it has been held that the Federal question sufficiently appears. Green Bay & M. Canal Company v. Patten Paper Company, 172 U. S. 58, 68 [ante, 364], and cases cited. In substance the validity of the statute or the right under the Constitution must have been drawn in question. Powell v. Brunswick County, 150 U. S. 433 [37: 1134]; Sayward v. Denny, 158 U. S. 180 [39: 941]. The latest decision to this effect is Capital National Bank of Lincoln v. First National Bank of Cadiz, 172 U. S. 425 [ante, 502]. Although no particular form of words is necessary to be used in order that the Federal question may be said to be involved, within the meaning of the cases on this subject, there yet must be something in the case before the state court which at least would call its attention to the Federal question as one that was relied on by the party, and then, if the decision of the court, while not noticing the question, was such that the judgment was by its necessary effect a denial of the right claimed or referred to, it would be sufficient. It must appear from the record that the right set up or claimed was denied by the judgment or that such was its necessary effect in law. Roby v. Colehour, 146 U. Š. 153, 159 [36: 922, 924]; Chicago, It is asserted in the petition that the deB. & Q. Railroad Company v. Chicago, 166 fendant Dillworth, the treasurer of Holt U. S. 226, 231 [41: 979, 983]; Green Bay & county, is attempting to enforce the assessM. Canal Company v. Patten Paper Comment levied by the common council, and that pany, and Bank of Lincoln v. Bank of Cadiz,


In all these cases it did appear from the record that the rights were set up or claimed in such a way as to bring the subject to the attention of the state court. It is not enough that there may be somewhere hidden in the record a question which, if raised, would be of a Federal nature. Hamilton Mfg. Company v. Massachusetts, 6 Wall. 632 [18: 904]. In order to be available in this court some claim or right must have been asserted [200]*in the court below by which it would appear that the party asserting the right founded it in some degree upon the Constitution or laws or treaties of the United States. In such case, if the court below denied the right claimed, it would be enough; or if it did not in terms deny such right, if the necessary effect of its judgment was to deny it, then it would be enough. But the denial, whether express or implied, must be of some right or claim founded upon the Constitution or the laws or treaties of the United States, which had in some manner been brought to the attention of the court below. The record shows nothing of the kind in this case.

A claim or right which has never been made or asserted cannot be said to have been denied by a judgment which does not refer to it. Hamilton Company v. Massachusetts, supra. A point that was never raised cannot be said to have been decided adversely to

Upon these facts we are compelled to hold that we are confined to a discussion of the only Federal question which this *record pre-[201 sents, viz., the validity of the personal judg ment against the plaintiff in error. The assignment of error above set out is broad enough to raise the question, not only as to the sufficiency of notice, but as to the validity of such a judgment against a nonresident.

he claims plaintiff in error is personally liable for the taxes and interest, and will enforce payment thereof unless restrained, and that plaintiff's personal property is liable to be illegally seized for the payment of the tax. These allegations are substantially admitted by the answers of the defendants, except as to the illegality of the possible seizure of plaintiff's personal property. By filing the counterclaim the contractor makes a direct attempt to enforce, not only the lien upon the lots, but the personal liability of the lotowner. Thus a nonresident, simply because he was the owner of property on a street in a city in the state of Iowa, finds himself by the provisions of the state statute, and without the service of any process upon him, laid under a personal obligation to pay a tax assessed by the common council or by the board of public works and city engineer under the statute, upon his property abutting upon the street, for the purpose of paying the expenses incurred in paving the street, which expenses are greater than the benefit the lots have received by virtue of the improvement. The plaintiff, prior to the imposition of that assessment, had never submitted himself to the jurisdiction of the state of Iowa, and the only jurisdiction that state had in the assessment proceedings was over the real property belonging to him and abutting on the street to be improved. An

assessment upon lots for a local improvement is in the nature of a judgment.

It is said that the statute (Code of Iowa, $478) provides for the personal liability of the owner of lots in a city in the state of Iowa, to pay the whole tax or assessment levied to pay the cost of a local improvement, and that the same statute provides that the assessment shall also be a lien upon the respective lots from the time of the as[202]sessment. It is also said that the statute has been held to be valid by the Iowa supreme court. This seems to be true. City of Burlington v. Quick, 47 Iowa, 222, 226; Farwell v. The Des Moines Brick Manufacturing Company et al. 97 Iowa, 286 [35 L. R. A. 63]. The same thing is also held in the opinion of the state court delivered in

the case now before us.

In this case no question arises with regard to the validity of a personal judgment like the one herein against a resident of the state of Iowa, and we therefore express no opinion upon that subject. This plaintiff was at all times a nonresident of that state, and we think that a statute authorizing an assessment to be levied upon property for a local improvement, and imposing upon the lotowner, who is a nonresident of the state, a personal liability to pay such assessment, is a statute, which the state has no power to enact, and which cannot, therefore, furnish any foundation for a personal claim against such nonresident. There is no course of reasoning as to the character of an assessment upon lots for a local improvement, by which it can be shown that any jurisdiction to collect the assessment personally from a nonresident can exist. The state may pro vide for the sale of the property upon which the assessment is laid, but it cannot under any guise or pretense proceed farther, and impose a personal liability upon a nonresident to pay the assessment or any part of it. To enforce an assessment of such a nature against a nonresident, so far as his personal liability is concerned, would amount to the taking of property without due process of law, and would be a violation of the Federal Constitution.

In this proceeding of the lotowner to have the assessment set aside and the statutory liability of plaintiff adjudged invalid, the court was not justified in dismissing the petition and giving the contractor, not only judgment on his counterclaim foreclosing his lien, but also inserting in that judgment a provision for a personal liability against the plaintiff and for a general execution against him. Such a provision against a nonresident, although a litigant in the courts of the state, was not only erroneous, but it was so far erroneous as to constitute, if enforced, a violation of the Federal Constitution for the reason already mentioned. By resorting to [203]the state *court to obtain relief from the assessment and from any personal liability provided for by the statute, the plaintiff did not thereby in any manner consent, or render himself liable, to a judgment against him providing for any personal liability. Nor did the counterclaim made by the defendant Contractor give any such authority.

The principle which renders void a statute providing for the personal liability of a nonresident to pay a tax of this nature is the same which prevents a state from taking jurisdiction through its courts, by virtue of any statute, over a nonresident not served with process within the state, to enforce a mere personal liability, and where no property of the nonresident has been seized or brought under the control of the court. This principle has been frequently decided in this court. One of the leading cases is Pennoyer v. Neff, 95 U. S. 714 [24: 565], and many other cases therein cited. Mexican Central Railway Company v. Pinkney, 149 U. S. 194, 209 [37: 699, 705].

The lotowner never voluntarily or otherwise appeared in any of the proceedings leading up to the levying of the assessment. He gave no consent which amounted to an acknowledgment of the jurisdiction of the city or common council over his person.

A judgment without personal service against a nonresident is only good so far as it affects the property which is taken or brought under the control of the court or other tribunal in an ordinary action to enforce a personal liability, and no jurisdiction is thereby acquired over the person of a nonresident further than respects the property so taken. This is as true in the case of an assessment against a nonresident, of such a nature as this one, as in the case of a more formal judgment.

The jurisdiction to tax exists only in regard to persons and property or upon the business done within the state, and such jurisdiction cannot be enlarged by reason of a statute which assumes to make a nonresident personally liable to pay a tax of the nature of the one in question. All subjects over which the sovereign power of the state extends are objects of taxation. Cooley, Taxation, 1st ed. pp. 3, 4; Burroughs, Taxa tion, sec. 6. The power of the state to tax[204] extends to all objects within the sovereignty of the state. Per Mr. Justice Clifford, in Hamilton Mfg. Company v. Massachusetts, 6 Wall. 632, at 638 [18: 904, 906]. The power to tax is, however, limited to persons, property and business within the state, and it cannot reach the person of a nonresident. Case of the State Tax on Foreign-held Bonds, 15 Wall. 300, 319 [21: 179, 187]. In Cooley, Taxation, 1st ed. p. 121, it is said that "a state can no more subject to its power a single person or a single article of property whose residence or legal situs is in another state than it can subject all the citizens or all the property of such other state to its power." These are elementary propositions, but they are referred to only for the purpose of pointing out that a statute imposing a personal liability upon a nonresident to pay such an assessment as this oversteps the sovereign power of a state.

In this case the contractor, by filing his counterclaim herein, has commenced the enforcement of an assessment and a personal liability imposed by virtue of just such a statute, and the judgment under review gives him the right to do so. The lotowner is called upon to make such defense as he can

to the claim of personal liability, or else be forever barred from setting it up. He does claim that as a nonresident he did not have such notice, and the state or city did not obtain such jurisdiction over him, with regard to the original assessment, as would authorize the establishment of any personal liabil ity on his part to pay such assessment.

The contractor nevertheless has obtained a judgment, not alone for a foreclosure of his lien, but also for the personal liability of the lotowner, and unless he can in this proceeding have the provision in the judg ment, for a personal liability, stricken out, the lotowner cannot thereafter resist it, even when the lots fail (if they should fail) to bring enough on their sale to satisfy the judgment.

The case of Davidson v. New Orleans, 96 U. S. 97 [24: 616], has been cited as authority for the proposition that the rendering of a personal judgment for the amount of an assessment for a local improvement is a matter in which the state authorities cannot be controlled by the Federal Constitution. It [205]does not appear in that case that the complaining party, in regard to the state statute was a nonresident of the state, but, on the contrary, it would seem that she was a resident thereof. That fact is a most mate




which in effect requires the deduction of the debts of the banks, and that unincorporated banks and bankers shall be assessed upon the moneyed capital belonging to the bank or banker and employed in the business, after deducting the debts existing in the business, makes no discrimination between unincorporated banks and bankers on the one hand and shareholders in national banks on the other.

The increase of the value of national bank shares by reason of the franchises of the bank itself, while there is no such added value in the case of unincorporated banks, does not make the taxation of such shares at their true value a discrimination against the shareholders and in favor of the unincorporated banks.

This court will not take judicial notice of the report of the auditor of the state, nor refer to any statement or alleged fact stated therein, unless that fact is found by the trial court.

The term "credits" in the Ohio statute in

cludes claims for labor or services, but these claims are not moneyed capital within the meaning of U. S. Rev. Stat. § 5219, respect ing discrimination against national banks.

[No. 137.]

rial one, and renders the case so unlike the Argued January 13, 16, 1899. Decided Febru one at bar as to make it unnecessary to further refer to it.

The statute upon which the right to enter

ary 27, 1899.

ERROR to the Supreme Court of the

this personal judgment depends being as to I State of Ohio to review a judgment of

the nonresident Iotowner an illegal enactment, it follows that the judgment should and must be amended by striking out the provision for such personal liability. For that purpose the judgment is reversed, and the cause remanded to the supreme court of Iowa, for further proceedings therein not inconsistent with this opinion. So ordered.



H. P. CHAPMAN, as Treasurer of Lorain County, Ohio.

(See S. C. Reporter's ed. 205-220.)

Meaning of the term "moneyed capital" discrimination in taxation-value of national bank shares-judicial notice-meaning of the term "credit."


The term "moneyed capital" as used in U. S. Rev. Stat. § 5219, forbidding greater taxation of shareholders of national banks than is imposed on other moneyed capital, does not include capital which does not come into competition with the business of national banks, such as deposits in savings banks or moneys of charitable institutions, the exemp tion of which from taxation is not forbidden by the Federal statute.

2. The law of Ohio that the shares of national

that court reversing the judgment of the Circuit Court of Lorain County, Ohio, and affirming the judgment of the Court of Common Pleas of Lorain County dismissing an action brought by the First National Bank of Wellington, Ohio, against H. P. Chapman, Treasurer of Lorain County, to restrain the collection of taxes, through or by means of the bank, by the defendant, levied under a statute of Ohio upon individual shareholders in the bank. Affirmed.

See same case below, 56 Ohio St. 310.

Statement by Mr. Justice Peckham: This action was brought to restrain the collection of taxes, through or by means of the bank, by the defendant in error, levied under a statute of Ohio upon certain individual shareholders in the bank, on the ground, specified shareholders were illegal as having as alleged, that the assessments upon such been made without regard to the debts of such individual owners, contrary to the case[206] of other moneyed capital in the hands of individual citizens, whose debts were permitted to be deducted from the value of such capital before the assessment of taxes there


The petition contained allegations intended to show a case for the interposition of a court of equity, and a tender was therein made of the amount of the taxes which the plaintiff admitted to be due on such shares after deducting the debts.

The answer, while not taking any objec banks shall be assessed at their true value, tion that a case for equitable relief by in

173 U. S.

junction was not made, provided the conten- | tion of the petition as to the assessments being illegal was well founded, claimed, substantially, that by the laws of the United States and of Ohio the assessments were legal, and the petition should therefore be dismissed. Upon trial in the court of common pleas of Lorain county the court found the following facts:

stock of said bank set opposite their respective names, to wit:

S. S. Warner..
R. A. Horr...
W. Cushion, Jr...
C. W. Horr..
O. P. Chapman.
E. F. Webster.
W. R. Wean.

S. K. Laundon.



50 shares. .120 shares.




.120 shares. "That said shares were valued by said

"First. Plaintiff is a national banking association incorporated under and by virtue of an act of Congress entitled 'An Act to Pro-state board of equalization for the year 1893 vide for the National Currency, Secured by at $36,607.90, and certified by said board a Pledge of United States Bonds, and to to the auditor of Lorain county as the taxProvide for the Circulation and Redemption able value of the same; that the rate of taxThereof,' approved June 3, 1864, and the ation for all tax *assessed and collected for[208] amendments thereof, and is established and the year 1893 within said county and village doing business in the village of Wellington, was $0.0255 on a dollar's valuation, and county of Lorain, and state of Ohio. amounted on said value of said shares to $933.50.

"Second. The defendant is the duly elected and qualified treasurer of the county of Lorain and state of Ohio.

"Third. The plaintiff has a capital stock of $100,000, divided into 1,000 shares of $100 each, all of which are fully paid up, and certificates for the shares are outstanding and owned by a large number of persons.

"Fourth. That in accordance with section 2765 of the Revised Statutes of Ohio, then and now in force, the cashier of plaintiff duly reported in duplicate to the auditor of said county the resources and liabilities of said banking association, at the close of business on the Wednesday next preceding the second Monday of May, 1893, together with a full statement of the names and residences of the shareholders therein, with the number of shares held by each, and the par value thereof, as required by said section; that MOV]included in said return so made by said cashier was the real estate owned by the plaintiff, valued at $3,420, separately assessed and charged on the tax duplicate of said county; that thereupon said auditor proceeded, as required by section 2766 of the Revised Statutes of Ohio, to fix the total value of said shares according to their true value in money, and fixed the same at $74,710, exclusive of the assessed value of plaintiff's real estate, and made out and transmitted to the annual board of equalization of incorporated banks a copy of the report so made by said cashier, together with the valuation of such shares as was fixed by said auditor; that said state board of equalization, acting under sections 2808 and 2809 of the Revised Statutes of Ohio, did examine the return aforesaid, made by said cashier to said county auditor, and the value of such shares as fixed by said county auditor, and did equalize said shares to their true value in money, and fixed the valuation thereof at $74,710, exclusive of the assessed value of plaintiff's real estate, and the auditor of said state did certify said valuation to the auditor of said county of Lorain, which said auditor of said county did enter upon the tax duplicate of said county for the year 1893.

"Fifth. That the following named stockholders of said bank were on the said day next preceding the second Monday of April, 1893, the owners of the number of shares of

"Sixth. That on said day next preceding said second Monday of April, 1893, and at the time the cashier of said banking association made return to the auditor of said county of the names and residences of the share holders of said association, with the numbers and par value of the shares of capital stock of said banking association for the year 1893,-to wit, between the first and second Mondays of May of said year,—each of said above named shareholders was indebted and owing to others of legal bona fide debts a sum in excess of the credits, from which, under the laws of Ohio, he was entitled to deduct said debts to an amount equal to the value of said shares. That proof of said indebtedness was duly made to said auditor by the shareholders aforesaid at the time that the valuation of said shares of stock was so fixed by him, and that said auditor refused to allow the deduction of any indebtedness of said shareholders from the

value of said shares, as so fixed by said board of equalization, and the auditor of said county carried upon the duplicate delivered to the treasurer the entire valuation of said shares so made, without allowing any deductions therefrom, by reason of any bona fide indebtedness of said shareholders to others, from the valuation so fixed by said board of equalization.

“Seventh. That the plaintiff tendered to said treasurer of Lorain county on the 28th day of December, 1893, and offered to pay to said treasurer, the sum of $485.80, if he would receive the same in full for the tax assessed upon the valuation of the shares of stock owned by the shareholders named in the petition for the entire year of 1893; and said treasurer refused to accept the same; and said treasurer intends, if not enjoined by this court, to use all lawful means for the collection of said tax so assessed upon the valuation of said shares of stock."

The court also found as a conclusion of law from the above facts that the injunction should be denied and the petition dismissed. The plaintiff appealed to the circuit court *of[209] Lorain county, where, after argument, the judgment for defendant was reversed and judgment ordered for plaintiff enjoining the collection of the tax. The defendant, the treasurer of Lorain county, brought the case

to the supreme court of the state, where, after hearing, the court reversed the circuit court and affirmed the judgment of the common pleas dismissing the petition. Chapman v. First National Bank of Wellington, 56 Ohio St. 310.

The state law on the subject of taxation, so far as it may be claimed to in any way affect the question, is contained in the various sections of the Revised Statutes of Ohio, which are set out in the margin.†

†Section 2730 gives definitions of the terms used in the article relating to taxation. This section is not set out in so many words, but as therein used the following terms are thus defined:

a. "Real property" and "lands" mean not only land itself, but everything connected therewith in the way of buildings, structures, and improvements, and all rights and privileges appertaining thereto.

b. "Investment in bonds" includes moneys in bonds or certificates of indebtedness of whatever kind, issued by incorporated or unincorporated companies, towns, cities, villages, townships, counties, states, or other incorporations, or by the United States.

c. "Investment in stocks" includes all moneys Invested in the capital stock of any association, corporation, joint-stock company, or other company, where the capital or stock is divided into shares transferable by each owner without the consent of the other shareholders, for the taxation of which no special provision is made by law.

d. "Personal property" includes (1) every tangible thing the subject of ownership, whether animate or inanimate, other than money, and not forming part or any parcel of real property; (2) the capital stock, undivided profits, and all other means not forming part of the capital stock of a company, whether incorporated or unincorporated, and all interest in such stock, profits, or means, including shares in a vessel as therein stated; (3) money loaned on pledge or mortgage of real estate, although a deed may have been given, provided the parties consider It as security merely.

e. The term "moneys" includes surplus or undivided profits held by societies for savings or banks having no capital stock, gold and silver coin, bank notes of solvent banks in actual possession and every deposit which the person owning, holding in trust, or having the beneficial interest therein is entitled to withdraw in money on demand.

1. The term "credits" means the excess of the sum of all legal claims and demands, whether for money or other valuable thing, or for labor or service due or to become due to the person Hlable to pay the tax thereon, including deposits In banks, or with persons in or out of the state, other than such as are held to be money as deained in this section, when added together (estimating every such claim or demand at its true value in money) over and above the sum of legal bona fide debts owing by such person; but In making up the sum of such debts owing, no obligation can be taken into account (1) to any mutual insurance company; (2) for any unpaid subscription to the capital stock of any jointstock company; (3) for any subscription for any religious, scientific, or charitable purpose; (4) for any indebtedness acknowledged unless founded upon some consideration actually received and believed at the time of making the acknowledgment to be a full consideration therefor; (5) for any acknowledgment made for the purpose of diminishing the amount of credits 173 U. S.

[blocks in formation]

Messrs. F. S. Monnett, Attorney General of Ohio, and S. W. Bennett for defendant in error.

*Mr. Justice Peckham, after stating the[211 facts, delivered the opinion of the court:

Complaint is made in behalf of the shareholders of the national bank in question that they are, by means of the system of taxa-[212] to be listed for taxation; (6) for any greater amount or portion of any liability as surety than the person required to make the statement of such credits believes that such surety is in equity bound to pay, etc.

Other sections read as follows:

Sec. 2736. Each person required to list property shall, annually, upon receiving a blank for that purpose from the assessor, or within five days thereafter, make out and deliver to the assessor a statement verified by his oath, as required by law, of all the personal property, moneys, credits, investments in bonds, stocks, joint-stock companies, annuities, or otherwise, in his possession or under his control on the day preceding the second Monday of April of that year, which he is required by law to list for taxation, either as owner or holder thereof, or as parent, husband, guardian, trustee. executor, administrator, receiver, accounting officer, partner, agent, factor, or otherwise; and also of all moneys, credits, investments in bonds, stocks, joint-stock companies, or otherwise, held on said day by another, residing in or out of this state, for and belonging to the person so listing, or anyone residing in this state, for whom he is required by law to list, and not listed by such holder thereof, for taxation in this state.

Sec. 2737. Such statement shall truly and distinctly set forth, first, the number of horses and the value thereof; second, the number of neat cattle, and the value thereof; third, the number of mules and asses, and the value thereof; fourth, the number of sheep, and the value thereof; fifth, the number of hogs, and the value thereof; sixth, the number of pleasure carriages (of whatever kind) and the value thereof; seventh, the total value of all articles of personal property, not included in the preceding or succeeding classes; eighth, the number of watches, and the value thereof; ninth, the number of piano fortes and organs, and the value thereof; tenth, the average value of the goods and merchandise which such person is required to list as a merchant; eleventh, the value of the property which such person is required to list as a banker, broker. or stock jobber; twelfth, the average value of the materials and manufactured articies which such person is required to list as a manufacturer; thirteenth, moneys on hand or on deposit subject to order; fourteenth, the amount of credits as herein before defined; fifteenth, the amount of all moneys invested in bonds, stocks, joint-stock companies, annuities or otherwise; sixteenth, the monthly average amount or value, for the time he held or controlled the same, within the preceding year, of all moneys, credits, or other effects, within that time invested in or converted into bonds or other securities of the United States or of this state, not taxed, to the extent he may hold or control such bonds or securities on said

day preceding the second Monday of April; and any indebtedness created in the purchase of such bonds or securities shall not be deducted from the credits under the fourteenth item of

this section; but the person making such statements may exhibit to the assessor the property


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