Argument for Petitioners.

309 U.S.

owner's liability did not deny full faith and credit to such judgment. P. 492.

198 Ark. 743; 131 S. W. 2d 620, affirmed.

CERTIORARI, post, p. 642, to review the reversal of a decree against a landowner in a suit to enforce collection of drainage district taxes.

Messrs. George B. Rose and George Rose Smith for petitioners.

A state court may not enjoin the collection of a tax ordered by a federal court to be levied and collected for the purpose of paying a judgment rendered therein. Riggs v. Johnson County, 6 Wall. 166; United States v. Council of Keokuk, 6 Wall. 514; Supervisors v. Durant, 9 Wall. 415; Mayor v. Lord, 9 Wall. 409; Hawley v. Fairbanks, 108 U. S. 543; Gaines v. Springer, 46 Ark. 502.

The court below denied full faith and credit to the judgment of the federal court. The plea that the state court injunctions barred the collection of the taxes had been overruled by the federal court. Art. IV, § 1; paragraph 2 of Art. VI of the Const.; R. S. § 905; Chandler v. Peketz, 297 U. S. 609; Stoll v. Gottlieb, 305 U. S. 165; Knights of Pythias v. Meyer, 265 U. S. 30-33; Hancock National Bank v. Farnum, 176 U. S. 640; Metcalf v. Watertown, 153 U. S. 671; Dupasseur v. Rochereau, 21 Wall. 130, 134; Crescent City Co. v. Butchers' Union, 120 U. S. 141, 146; Pittsburgh Railway Co. v. Long Island L. & T. Co., 172 U. S. 493, 507; Des Moines Nav. & R. Co. v. Iowa Homestead Co., 123 U. S. 552, 559; Embry v. Palmer, 107 U. S. 3, 10.

The plaintiffs were deprived of their property without due process of law by the ruling that judgments in suits of which the creditors had no notice could be pleaded in bar of the judgment of the federal court. Moreover, the suits in the state court were collusive. The chief beneficiaries were the Commissioners themselves, who took

no appeal, although the state supreme court had many times decided that the benefits bore interest, and would certainly have reversed. Windsor v. McVeigh, 93 U. S. 274; Hagar v. Reclamation Dist. No. 108, 111 U. S. 701; Ochoa v. Hernandez, 230 U. S. 139; Scott v. McNeal, 154 U. S. 34; Hale v. Finch, 104 U. S. 261; Wabash Railroad v. Adelbert College, 208 U. S. 39; Empire v. Darlington, 101 U. S. 87; Brooklyn v. Insurance Co., 99 U.S. 362.

Mr. Walter G. Riddick, with whom Mr. Charles T. Coleman was on the brief, for respondent.

MR. JUSTICE BLACK delivered the opinion of the Court.

Kersh Lake Drainage District was organized, in 1912, under the general drainage law of Arkansas. An assessment of the value of benefits to accrue to each of the tracts of land embraced in the District was duly made, upon the basis of which annual levies were extended against each tract. And the District issued interest bearing certificates of indebtedness in payment of construction work done for it by contract.

Respondent Johnson, a landowner in the District, brought suit against the District and its Commissioners in the Lincoln Chancery Court of the State of Arkansas in order to establish that he had fully paid the share of benefit taxes apportioned to his land and was therefore entitled under Arkansas law to have his land declared free from any further drainage tax liability. In 1931, that state court rendered its final decree to the effect that the lien of the District for such taxes had already been "fully satisfied and released," and enjoined further extension of drainage taxes against his lands. In 1932, the same state court rendered a like decree in favor of W. A. Fish and other named landowners of the District.

November 1, 1935, a judgment against the District was obtained by certificate holders in the federal court for the Eastern District of Arkansas. The Circuit Court of Appeals affirmed. To enforce their judgment, these creditors then instituted proceedings in the same Federal District Court, for mandatory injunction to require the appropriate county clerks to extend drainage benefit taxes for the District upon their tax books; to require county officials to collect these taxes; and to provide that "if any property owners fail to pay their drainage tax the defendant, Kersh Lake Drainage District, and its Commissioners be required to institute suit for the collection of the delinquent taxes, and to prosecute the same with due diligence to a conclusion, and to see that the delinquent lands are sold promptly under the decrees of foreclosure, . . ." Answering, the District set up among other defenses that "a large number of tracts of land in the District have fully paid the entire value of assessed benefits against said lands and that said property owners obtained a decree in the Lincoln Chancery Court in the case of W. A. Fish, et al. v. Kersh Lake Drainage District on June 15, 1932, enjoining and restraining the Commissioners of the defendant District from levying or extending any tax against those lands, the assessed benefits of which have been fully paid."

The District Court decreed that a mandatory injunction issue compelling the "County Clerks and County Collectors to perform their duties in the collection of the drainage taxes upon the lands in suit"; that there be extended taxes "of six and one-half per cent of the benefits assessed against each tract of land . . . until the whole of this decree has been satisfied"; that the "Commissioners... be required to institute suits for the collection of all delinquent taxes of said District, and to prosecute the same with due diligence to a conclusion, . . ."; and

285 F. 2d 643.

that "the said Commissioners are deemed receivers of this court. . ." And the Circuit Court of Appeals affirmed.

Pursuant to this mandatory injunction, the drainage taxes were extended on the tax books but respondent Johnson and other landowners in whose favor the decrees of the Lincoln Chancery Court had been rendered, refused to pay. Suit for collection was filed against their lands in the Lincoln Chancery Court by the Commissioners. In reliance upon the 1931 and 1932 State Chancery Court decrees as final determinations that the assessments apportioned to their respective tracts of lands had been discharged, pleas of res judicata were interposed by the landowners. Referring to this answer of the landowners, the Commissioners amended their complaint and alleged (1) that the state court decrees of 1931 and 1932 were void because certificate holders had not been made parties, and (2) that the certificate holders' judgment against the District and the mandatory injunction decree of the federal court were "res judicata of all the questions . raised by the" landowners. The trial court decided against the landowners, but the Supreme Court of Arkansas reversed and held that the unappealed Chancery Court decrees in 1931 and 1932 amounted to conclusive adjudications that the particular lands here involved were responsible for no further benefit taxes, thus sustaining the landowners' pleas of res judicata."

First. The unappealed 1931 and 1932 Decrees of the Lincoln Chancery Court of the State of Arkansas.

As stated by the Supreme Court of Arkansas, the general jurisdiction of the Lincoln Chancery Court, under the state law, to render the 1931 and 1932 decrees is "acknowledged," and this determination by the state's highest court is binding upon us. However, petitioners' argu

4

'92 F. 2d 783.

198 Ark. 743; 131 S. W. 2d 620; 132 S. W. 2d 658.

'Cf. Protho v. Williams, 147 Ark. 535, 547; 229 S. W. 38.

ment is that these decrees were void because certificate holders were not made parties in and had no notice of the Chancery proceedings. Therefore, they contend that in giving effect to the state court decrees and treating them as res judicata in the present proceeding the court below deprived certificate holders of their property without due process of law in violation of the Fourteenth Amendment." Petitioners also add the contention that the 1932 state court decree was "collusive as a matter of law."

Although the Drainage District was not in terms legislatively declared to be a corporation, its powers and limitations were similar to those of corporations and its Commissioners were comparable to corporate directors." Among the duties of the Commissioners-as provided by the very statute upon which the certificates involved here rest-were those of protecting and enforcing creditors' rights on obligations issued by the District. And the Commissioners in 1931 and 1932 litigated with the landowners the disputed question of proportionate amounts of taxes due the District by virtue of drainage benefits received by the particular tracts here in question.

8

"Because of this and the further contention that the Supreme Court of Arkansas had denied full faith and credit to the judgments of the Federal District Court, certiorari was granted.

7

See, e. g., reference to "the board of directors," Acts of Ark. 1909, p. 849.

8

The Act of 1909 set up detailed standards for creation and control of the District; provided for management of District affairs by a Board of Commissioners under outlined supervision by Arkansas courts; and intrusted the Commissioners with the conduct and control of litigation for the collection and enforcement of unpaid benefits against lands in the District. Such litigation was required to be conducted in the State Chancery Court having jurisdiction in the County where the particular lands were located; and the lands covered by the 1931-1932 Lincoln Chancery Court decrees were located in Lincoln County. Arkansas Acts 1909, p. 829.