The opinion
COTTERAR, District Judge
(specially concurring): The two questions argued upon the pending motion pertain to the equity jurisdiction of this court and the validity of the tax in controversy.
It is contended that by section 9 of the Income Tax Act, sections 2 and 7,. subd. B, art. 1, c. 107, Session Raws of 1915, relating to ad valorem taxation, are made available to plaintiff'as an adequate remedy by state law. Section 2 allows a hearing, upon evidence, before the county board of equalization, and an appeal by transcript to the district court. Section 7 provides for payment and suit, where the action had is not subject to appeal. But section 9 of the Income Tax Act does not purport to make those sections applicable to income taxes. It provides only that the auditor may revise returns and hear complaints, with equivalent powers, and by like remedy and proceedings, as the county board of equalization. His action was invoked by the plaintiff in the way thus authorized. As the terms of section 9 are plain, and it defines the course open to the plaintiff, by familiar rule it cannot be interpreted as contemplating any other remedy.
A sale by the sheriff under the tax warrant authorized by section 10 of the Act, pursuant to section 7392, Revised Raws of 1910, would divest title as in case of execution. This would not, however, justify an equitable remedy, as the mere enforcement of an illegal tax by process constitutes only a trespass, for which, the law is presumed to give an adequate remedy, as decided in Shelton v. Platt, 139 U. S. 591 , 11 Sup. Ct. 646, 35 L. Ed. 273 , and many other cases to the same effect. But by section 11 the tax is declared to be a lien on all the property of the delinquent, and as the plaintiff’s property consists partly of land, although mainly of leases, jurisdiction was acquired to free the land of the tax lien. And whether otherwise sustainable, in view of the character of mineral leases in this state, it should be retained in order to determine the entire controversy over an integral assessment. The plaintiff, therefore, is entitled to pursue *882 a remedy in equity to obtain an adjudication upon the validity of the tax. Ohio Tax Cases, 232 U. S. 576 , 34 Sup. Ct. 372, 58 L. Ed. 737 ; Green v. Louisville & Interurban R. R., 244 U. S. 499 , 37 Sup. Ct. 673, 61 L. Ed. 1280 , Ann. Cas. 1917E, 88.
On the merits, the complaint is that the situs of the income is, in 'whole or in part, beyond the limits of the state, and that there is a discrimination as between residents and nonresidents. Primarily, the taxation of incomes, is well within the taxing power of a state. But a proper classification of this tax is no doubt vital in determining whether it is to be upheld. That it is not a property tax in the ordinary sense is clear, as taxes of that character are otherwise authorized by the state Constitution, and the income tax is laid on earnings from both property and business. Obviously, it is meant to be the same kind of a tax upon income from either source, and it could not be so if laid on the property yielding the returns. If it should be finally decided in this state that it is a tax on the recipient only, then doubtless its situs for taxing purposes would be at his domicile. But “a statute must be construed, if fairly possible, so as to avoid not only the conclusion that it is- unconstitutional but also grave doubts upon that score.” United States v. Jin Fuey Moy, 241 U. S. 394 , 36 Sup. Ct. 658, 60 L. Ed. 1061 , Ann. Cas. 1917D, 854.
With that guiding rule in view/this income tax may well be classified, under the broad terms of the state Constitution of Oklahoma, as a special tax on income of nonresidents, as • property having ag situs within the taxing jurisdiction of the state, and as being sustained because arising from property or operations, or both, in the state, and the advantages and protection afforded thereto by its laws. Section 12 of article 10 of the Constitution, in authorizing income taxes, does not define their precise character, but wisely leaves it, as well as the method of imposition, wholly to the Legislature, and neither that section nor the Income Tax Act specifies that the income tax shall be regarded as a tax on thé recipient. This interpretation is deemed to be quite in harmony with the views of the State Supreme Court, as manifested in its decisions.'
The state lays this burden on an asset or species of property originating in the state, although it may be intangible for a period, and its exact and ultimate value may be realized later, perhaps outside of the state. See Adams Express Co. v. Auditor, 166 U. S. 185 , 17 Sup. Ct. 604, 41 L. Ed. 965 . This may be a liberal exercise of the taxing power, but the power exists, and it is all-sufficient to sustain the tax. A debt owing on a bank deposit in Missouri to a citizen of Kentucky is taxable in both states. Fidelity & Columbia Trust Co. v. City of Louisville, 245 U. S. 54 , 38 Sup. Ct. 40, 62 L. Ed.--(Nov. 5, 1917). The jurisdiction of the state of domicile “over a creditor’s person does not exclude the power of another state, in which he transacts his business, to lay a tax upon the credits there accruing to him against resident debtors, or thus to enforce contribution for the support of the government under whose protection his affairs are conducted.” Liverpool, etc., Ins. Co. v. Orleans Assessors, 221 U. S. 346 , 31 Sup. Ct. 550, 55 L. Ed. 762 , L. R. A. 1915C, 903. And the power to tax is *883 evidently not ruled by the place of payment. Upon like principle, the receipt of income outside of this state does not control the validity of the tax.
The element of personal ability or services in acquiring the income may be disregarded. It enters into all income and causes the returns from an occupation. But it has not been deemed important in the taxation of property, and need not be deducted from an assessment.
No constitutional objection to the tax here involved is found from the supposed discrimination against nonresidents. While the same exemptions are allowed, only a resident may deduct losses outside of the state. If a case were presented where losses of that kind had occurred, the question would arise whether the inequality was such that the taxpayer might successfully complain of it. But there is no occasion to decide the question, as the plaintiff does not allege such losses and consequent prejudice. The fact that discrimination might arise does not render the law void, and that is all the plaintiff contends in his bill. A law may be good on its face, but fail because of its application. Yick Wo v. Hopkins, 118 U. S. 356 , 6 Sup. Ct. 1064, 30 L. Ed. 220 . Here the law is apparently valid, and a case of harmful application should not be assumed.
As stated, this tax should be regarded as laid upon a special kind of property, consisting of the net returns from property or business in the state, and as thus classified under the state Constitution, the power of the state being established, the tax must stand. The motion for a temporary injunction is properly denied.