Exchange Nat. Bank v. Miller

• Decision Date: 07 February 1884
• Citation: 19 F. 372
• Parties: EXCHANGE NATIONAL BANK v. MILLER, County Treasurer, etc. [*]
• Court: U.S. District Court — Southern District of Ohio

19 F. 372

EXCHANGE NATIONAL BANK v. MILLER, County Treasurer, etc. ^[*]

United States Circuit Court, S.D. Ohio, Western Division.

February 7, 1884

Perry &amp Jenney, Stallo, Kittredge & Wilby, and Harrison & Olds, for complainant.

Foraker & Black and O. J. Cosgrove, Co. Sol., for defendant.

Before BAXTER and SAGE, JJ.

SAGE J.

The tax from which the complainant prays to be relieved was assessed on the duplicate of 1882, under the following sections of the Revised Statutes of Ohio:

'Sec 2765. The cashier of each incorporated bank shall make out and return to the auditor of the county in which it is located, between the first and second Monday of May annually, a report in duplicate, under oath, exhibiting, in detail, and under appropriate heads, the resources and liabilities of such bank at the close of business on the Wednesday next preceding said second Monday, together with a full statement of the names and residences of the stockholders therein, with the number of shares held by each, and the par value of each share.

'Sec. 2766. Upon receiving such report, the auditor shall fix the total value of the shares of such bank according to their true value in money, and deduct from the aggregate sum so found the value of the real estate included in the statement of resources as the same stands on the duplicate; and when the bank is located in any city of the first or second class, he shall thereupon make out and transmit to the city board of equalization, otherwise to the county board of equalization, a copy of the report so made by the cashier, together with the valuation of such shares as so fixed by the auditor.'

The complainant contests the validity of the tax on the general ground that its shares are assessed at a higher rate than other moneyed capital in the hands of individual citizens, specifying (1) that the shares are valued too high, compared with other property on the tax duplicate; and (2) that the assets of the complainant consist, in part, of United States bonds, not subject to taxation, but included in the valuation made by the auditor and placed on the duplicate.

In support of the first objection the complainant has introduced testimony relating to a meeting of decennial assessors from all parts of the state, held at Columbus in 1880, preparatory to the appraising of real estate, at which meeting, according to the testimony of two witnesses, the conclusion or general understanding was that real estate should be assessed at two-thirds to three-fourths of its value, and that by that rate the assessment would represent the true cash value in money, taking into consideration 'that real estate is almost always sold on long terms, and the losses occurring thereby. ' A third witness testifies that he was present, but that to the best of his recollection no rate was fully agreed upon. One witness states that the meeting was quite large, but how many assessors attended, or how many localities were represented, does not appear, nor does it appear that assessors were guided in their valuations by the action of the meeting, in opposition to their own judgment of the money value of the property by them appraised. There is testimony also that the object of the meeting was to make the assessments of real estate uniform. And whether two-thirds to three-fourths of what is spoken of by witnesses as the value of real estate sold upon payments-- part in cash and part on time-- would be what is spoken of as its true cash value in money, does not appear. There is testimony tending to show great inequalities in the valuation for taxation of real and personal property, including shares in national banks, but in no instance does a witness testify that any assessor has been governed in making an assessment by any other rule than his judgment of the true money value of the property assessed.

It is contended for the complainant that this testimony brings the case within the rule of Pelton v. Nat. Bank, 101 U.S. 143, and Cummings v. Nat. Bank, 101 U.S. 153. That is not our view. In Pelton v. Nat. Bank it was held that the systematic and intentional valuation of all other moneyed capital by the taxing officers far below its full value, while shares of national banks were assessed at their full value, was a violation of the act of congress which prescribes the rule by which they were to be taxed by the state. In that case the court found that the valuation of national bank shares was intentionally higher than the valuation of other personal property, and that this discrimination was neither an accident or a mistake, but a principle deliberately adopted in the valuation of all shares in national banks, and applied without exception and therefore the decree below in favor of the complainant was affirmed. In Cummings v. Nat. Bank, the supreme court found that the assessors of real property, the assessors of personal property, and the auditor of Lucas county, Ohio, concurred in establishing a rule of valuation by which real and personal property, except money, was assessed at one-third, and money or invested capital at six-tenths, of its actual value, and that the assessments on shares of incorporated banks, as returned by the state board of equalization for taxation to the auditor of Lucas county, were fully equal to their selling price and to their true value in money, and the decree enjoining the collection of the excessive tax was affirmed.

No such state of facts is shown in the case now before this court. It is true, as shown by the testimony, that, although the shares of the complainant were valued for taxation at but 86.7.per cent. of their true value in money, they were valued higher than other personal property, but the error or inequality is not shown to arise otherwise than from a mistake in judgment on the part of the assessing officials. It would, perhaps, be more exact to say that the judgment of the assessors, in their official valuation, differs from the judgment of witnesses in their unofficial valuation, as expressed in their testimony. The differences are no greater than frequently arise between witnesses in cases on trial on questions of value. And there is no certain standard by which the court can determine which is correct. Valuations, excepting of money and of standard marketable articles, are, at best, uncertain. The influences which affect salable values are various and often complicated. Much depends upon who is the owner or vendor, as well as upon who is the purchaser. The shrinkage in the value of estates result in many instances largely from the consideration that the salable value imparted by the fact of the ownership of the deceased is gone. A thousand influences, tangible and intangible, so affect the salable value of property, real and personal, in the city and in the country, as to make its true valuation a work of exceeding difficulty, and it is not to be wondered at, nor is it a circumstance of itself warranting an appeal to a court of chancery, that there are great inequalities in valuations for taxation. To correct these the state has provided for appeals to appropriate tribunals, whose duty it is to equalize valuations and the burden of taxation. When these are exhausted all that can be done, practically, is done, excepting in cases of intentional discrimination.

We are of opinion that the rule laid down in Nat. Bank v. Kimball, 103 U.S. 732, applies here. There it was held that no case for relief is made by averring that the assessments are unequal and partial, and that some other property is rated for taxable purposes at less than one-half of its cash value, unless it is further averred that the officers appointed to make assessments combine together and establish a rule or principle of valuation, the necessary result of which is to tax one species of property higher than others, and higher than the average rate. It has been held, and, we think, correctly, that inequalities in valuation may be so great as to authorize the court to conclude that they are the result of intention, but we do not think that the testimony warrants such conclusion in this case.

To the same effect as Nat. Bank v. Kimball is Wagoner v. Loomis, 37 Ohio St. 571, where it was decided that inequalities in valuations, made under a valid law, of property for taxation, do not constitute grounds for enjoining the tax, in the absence of fraudulent discriminations by the agents and officers making such valuations, and that a petition for such injunction, which shows that the plaintiff's property was valued at only 80 per cent. of its true value in money, while other property in the county was valued at only 40 per cent. of its value, and avers that such valuations were unequal, unjust, and illegal, is insufficient.

2. Is the assessment invalid for the reason that the assets of the complainant consisted in part of United States bonds, not subject to taxation, but included in the valuation made by the auditor, and placed on the duplicate? The legislature, in providing for the taxation of shares in national banks, is subject to two classes of restrictions: First, those imposed by congress, and contained in section 5219, Rev. St.; and, second, those imposed by the constitution of the state of Ohio. If the act under which the assessment was made exceeds any of these restrictions it is invalid, at least to the extent of the excess. The valuation of shares in national banks, under sections 2765 and 2766, Rev. St. Ohio, quoted above, is fixed by deducting from the resources of the bank, its liabilities, and also the value of the real estate, included in the statement of resources, as the same stands on the duplicate. These are the only deductions.

It is urged on behalf of the complainant, that, by the constitution and st...