The opinion of the court was delivered by: John E. Miller, District Judge.
On October 9, 1956, the plaintiffs filed their motion for
preliminary injunction and temporary restraining order,
restraining the defendant and its agents from proceeding to sell
the property comprising the estate of plaintiffs' decedent, until
a trial of the question of liability is consummated during the
January, 1957, jury calendar in the Fort Smith Division.
Upon the presentation of the motion, the Court issued a
temporary restraining order, restraining the defendant and
various named collection agents of defendant from "proceeding to
take inventory of the estate of J.W. Myers, deceased, giving
notice of the sale of the said estate and selling the assets
comprising the estate as it is proposed they do to satisfy the
assessment of additional income tax, penalties and interest
assessed against the estate for 1942 and 1943".
The temporary restraining order would have expired by its own
terms on October 20, 1956, except that on October 12 the Court
extended it to October 31, 1956, and set for hearing on October
31, 1956, at 9:30 a.m., the plaintiffs' motion for preliminary
The motion for preliminary injunction came on for hearing on
the date set, at which time the plaintiffs proceeded to introduce
ore tenus testimony and certain exhibits thereto in support of
The defendant did not introduce any testimony, but did
cross-examine the witnesses produced by the plaintiffs.
It is the contention of the defendant that:
1. The Court is without authority to hear plaintiffs' motion or
grant the relief requested therein on the ground that the United
States, as a sovereign, is immune from suit save as it consents
to be sued and not otherwise, and that the Congress has not, by
legislative enactment, granted authority for the maintenance of
an action on motion for an injunction.
2. That all persons sought to be enjoined are not properly
before the Court in that the motion seeks to enjoin the United
States and certain agents for collection of taxes named in the
motion from proceeding to sell the property until the trial of
the principal case is completed; that the United States is
properly before the Court, but if the Court should issue the
injunction as prayed for in the motion, that it would be a denial
to the other persons named in the motion of an opportunity to be
heard in their own behalf.
3. That the motion for a preliminary injunction is in the
nature of a "suit for the purpose of restraining the * * *
collection of a tax * * * and is specifically prohibited by the
provisions of Section 7421(a) of the Internal Revenue Code of
4. That under the mandate of the United States Court of Appeals
for the Eighth Circuit, issued in the case of Bushmiaer v. United
States, 230 F.2d 146, 152, the Director of Internal Revenue has
been authorized to proceed to collect the taxes "without let or
2. That the Court is invested with jurisdiction to consider a
request for an injunction against a Collector of Internal Revenue
individually, and that in such a suit the defendant here, the
United States of America, is in law the real party in interest.
It is clear that the United States as sovereign is immune from
suit save as it consents to be sued, and the terms of its consent
to be sued in any court define that court's jurisdiction to
entertain the suit. United States v. Sherwood, 312 U.S. 584, 61
S.Ct. 767, 85 L.Ed. 1058; United States v. Shaw, 309 U.S. 495, 60
S.Ct. 659, 84 L.Ed. 888.
Section 7421(a) of the Internal Revenue Code of 1954,
26 U.S.C.A., provides:
"(a) Tax. — Except as provided in sections 6212(a)
and (c), and 6213(a), no suit for the purpose of
restraining the assessment or collection of any tax
shall be maintained in any court."
The exceptions in the above statute are not applicable to the
question before the Court.
However, the United States Supreme Court, in Miller v. Standard
Nut Margarine Co. of Florida, 284 U.S. 498, 52 S.Ct. 260, 264, 76
L.Ed. 422, in commenting upon R.S. § 3224, which at that time
provided "`No suit for the purpose of restraining the assessment
or collection of any tax shall be maintained in any court'",
held, in harmony with the rules generally followed in courts of
equity, that a suit will lie to restrain the collection of an
illegal tax when exceptional and extraordinary circumstances
Beginning with the second sentence on page 509 of 284 U.S., on
page 263 of 52 S.Ct., the court said:
"The principal reason is that, as courts are
without authority to apportion or equalize taxes or
to make assessments, such suits would enable those
liable for taxes in some amount to delay payment or
possibly to escape their lawful burden, and so to
interfere with and thwart the collection of revenues
for the support of the government. And this court
likewise recognizes the rule that, in cases where
complainant shows that in addition to the illegality
of an exaction in the guise of a tax there exist
special and extraordinary circumstances sufficient to
bring the case within some acknowledged head of
equity jurisprudence, a suit may be maintained to
enjoin the collector. Dows v. City of Chicago, 11
Wall. 108, 20 L.Ed. 65; Hannewinkle v. [City of]
Georgetown, 15 Wall. 547, 21 L.Ed. 231; State
Railroad Tax Cases, 92 U.S. 575, 614, 23 L.Ed. 663.
Section 3224 is declaratory of the principle first
mentioned and is to be construed as near as may be in
harmony with it and the reasons upon which it rests.
Cumberland Telephone & Telegraph Co. v. Kelly, 6
Cir., 160 F. 316, 321. Baker v. Baker, 13 Cal. 87,
95. Bradley v. People, 8 Colo. 599, 604, 9 P. 783; 2
Sutherland, 2d Lewis ed., § 454. The section does not
refer specifically to the rule applicable to cases
involving exceptional circumstances. The general
words employed are not sufficient, and it would
require specific language undoubtedly disclosing that
purpose to warrant the inference that Congress
intended to abrogate that salutary and
well-established rule. This court has given effect to
Section 3224 in a number of cases. Snyder v. Marks,
109 U.S. 189, 191, 3 S.Ct. 157, 27 L.Ed. 901; Dodge
v. Osborn, 240 U.S. 118, 121, 36 S.Ct. 275, 60 L.Ed.
557; Dodge v. Brady, 240 U.S. 122, 36 S.Ct. 277, 60
L.Ed. 560. It has never held the rule to be absolute,
but has repeatedly indicated that extraordinary and
exceptional circumstances render its provisions
inapplicable. Hill v. Wallace, 259 U.S. 44, 62, 42
S.Ct. 453, 66 L.Ed. 822; Dodge v. Osborn, supra, at
page 121 of 240 U.S., at
page 276 of 36 S.Ct.; Dodge v. Brady, supra. Cf.
Graham v. Du Pont, 262 U.S. 234, 257, 43 S.Ct. 567,
67 L.Ed. 965; Brushaber v. Union Pacific R. Co.,
240 U.S. 1, 36 S.Ct. 236, 60 L.Ed. 493."
None of the tax collecting officers of the United States are
parties to this proceeding. They are named in the motion for the
preliminary injunction, but there has been no service of process
on any of the officials, and the only defendant before the Court
is the United States, and, as heretofore stated, there does not
appear to be any legislative enactment by the ...