Upon the motion of complainant for leave to file a bill of complaint invoking the original jurisdiction of this court, a rule was issued directing the defendants to show cause why such leave should not be granted. Defendants, by their return to the rule, oppose the motion upon the ground, among others, that the merits have been conclusively settled against complainant by prior decision of this court.
The bill alleges that the defendant Helvering is Commissioner of Internal Revenue, and that the other defendants are collectors of internal revenue in the several internal revenue districts in the state of Ohio; that on December 22, 1933 (Gen. Code Ohio, § 6064-1 et seq.), the state Legislature passed an act providing a system of control for the manufacture, sale, and importation of, and traffic in, beer and intoxicating liquors within the state, and creating a state monopoly for the distribution and sale of all spirtuous liquors under a department of liquor control; that the state has purchased intoxicating liquors at a cost of more than $4,500,000 for sale to permit holders and to the public through its state stores, each of which will be entirely and exclusively state owned, managed, and controlled; that the state is about to open in the various counties one hundred and eighty-seven such state liquor stores; that defendants have threatened to, and unless enjoined by this court will, levy and collect excise taxes on the agencies and operations of the state in the conduct of its department of liquor control, and enforce against the state, its officers, agents, and employees, penalties for nonpayment of taxes imposed by section 3244, Rev. St., as amended (U.S.C. tit. 26, § 205 (26 USCA § 205)), and other designated statutes of the United States; that complainant is not subject to these statutes and is immune from any tax imposed thereby; and that the acts of Congress which impose such taxes do not by their terms include a state, or its officers or employees, and were not intended to do so. It is further alleged that the circumstances of the case are extraordinary and exceptional in several respects, among them being that the attempt is to tax a sovereign state; and it therefore is contended that the equity power of the court is properly invoked under the principles stated in Hill v. Wallace, 259 U.S. 44, 62, 42 S.Ct. 453, 66 L.Ed. 822.
The state act deals with the subject in great detail; but for present purposes the provisions set forth in the bill to which we have just referred are all that require consideration.
The provisions of the federal statutes, so far as necessary to be stated, follow:
U.S.C. tit. 26, § 205, 26 USCA § 205 (Rev. St., § 3244, as amended):
'(a) Retail liquor dealers.-Retail dealers in liquor shall pay $25. Every person who sells or offers for sale foreign or domestic distilled spirits, wines or malt liquors otherwise than as hereinafter provided in less quantities than five wine gallons at the same time shall be regarded as a retail dealer in liquors.
'(b) Wholesale liquor dealers.-Wholesale liquor dealers shall each pay $100. Every person who sells, or offers for sale foreign or domestic distilled spirits, wines or malt liquors, otherwise than as hereinafter provided in quantities of not less than five wine gallons at the same time shall be regarded as a wholesame liquor dealer.'
U.S.C. tit. 26, § 11, 26 USCA § 11 (Rev. St. § 3140, as amended):
'* * * Where not otherwise distinctly expressed or manifestly incompatible with the intent thereof, the word 'person,' as used in this title, shall be construed to mean and include a partnership association, company, or corporation, as well as a natural person.'