Adams v. First Nat. Bank of Gulfport

• Court: Mississippi Supreme Court
• Writing for the Court: SMITH, C. J.
• Citation: Adams v. First Nat. Bank of Gulfport, 77 So. 195, 116 Miss. 450 (Miss. 1918)
• Decision Date: 14 January 1918
• Docket Number: 19703
• Parties: ADAMS, STATE REVENUE AGENT, v. FIRST NAT. BANK OF GULFPORT

77 So. 195

116 Miss. 450

ADAMS, STATE REVENUE AGENT, v. FIRST NAT. BANK OF GULFPORT

No. 19703

Supreme Court of Mississippi

January 14, 1918

Division A

APPEAL from the circuit court of Harrison county, Hon. J. H NEVILLE, Judge.

Proceeding by Wirt Adams, state revenue agent, against the First National Bank of Gulfport. From a judgment for defendant plaintiff appeals.

The facts are fully stated in the opinion of the court.

Reversed and remanded.

Mayes &amp Mayes and Mize & Mize, for appellant.

The question presented to the court here is this: Is the property of the First National Bank of Gulfport taxable that is set out in the state revenue agent's claim before the board of supervisors, which constitutes the basis of the complaint in this cause, to wit, capital stock, surplus, undivided profits, and any and all other property, assessable to the bank which had escaped taxation by reason of not having been assessed?

On the authority of the case of Owensboro National Bank v. Owensboro, 173 U.S. 664, the state is vested with the general power to impose a tax directly on a national bank, and the authorities therein cited are ample to sustain this contention.

To the same effect is Aberdeen First National Bank v. Chehallis Co., 166 U.S. 440; also Marguire v. Board of Revenue, 71 Ala. 401, and our own state authority in cases of Vicksburg Bank v. Worell, 67 Miss. 47; Bank v. Oxford, 70 Miss. 504.

The latest case on this point, which we claim is absolutely decisive of our contention, is that of First National Bank of Jackson, Mississippi, v. McNeel, Internal Revenue Collector, decided by the United States circuit court of appeals for this, the 5th Circuit, on Jan. 8, 1917; 238 F. 559, which affirmed the case of Bank v. Oxford, 70 Miss. 504, and construing the statute on the subject, uses the following language:

"The statute, as so construed, imposes the tax, not on the bank or its capital, but upon the shareholders; the bank being required to pay for them. The absence of express provision in the statute giving the bank the right to recover from its several shareholders their proportional parts of the amount so paid for them does not show that there is no such right of recovery, or that the intention was for the tax to fall ultimately upon the bank and not upon its shareholders. Home Savings Bank Co. v. Des Moines, 205 U.S. 503.

"That the tax fell upon the shareholders and not upon the bank is sufficiently shown by the language of the statute, giving it the meaning which the supreme court of Mississippi has found that it expresses. The conclusion is that the payment in question was not for 'taxes imposed' within the meaning of those words as used in the provision of the corporation tax act as to the deductions allowable in ascertaining the corporation's net income, as the tax in question was imposed, not on the corporation, but upon its shareholders," citing a number of authorities.

We think this case absolutely decisive of our contention and it is supported by the other authorities cited in this brief. See, also, Bank of Magnolia v. Pike County, 72 So. 697.

We therefore respectfully submit that the case should be reversed and remanded and the appellee held liable for back taxes on the property set out in the schedule set out in the record.

Griffith & Wallace, for appellee.

We take it that nothing is better settled or freer from dispute than (1) that the shares of stock in a national bank are owned by and belong to the individual shareholder and are not in anywise the property of the bank, and (2) that a national bank and such property as it owns (which does not include the shares of stock therein) can only be taxed by a state in the manner and within the limits permitted by congress. These are propositions which over and over have been declared by the supreme court of the United States and are manifest on principle besides. Secs. 5210 5219, Rev. St. U. S.; Owensboro National Bank v. Owensboro, 43 L.Ed. 850; First National Bank of Albuquerque v. Albright, 52 L.Ed. 614; Bank v. Chehalis Co., 41 L.Ed. 1069. Bell v. Pennsylvania, 33 L.Ed. 896; Van Slyke v. Wisconsin, 20 L.Ed. 240; Charleston Nat'l Bank v. Melton, 171 F. 743; Eliot Nat'l Bank v. Gill, 134 C. C. A. 358; 37 Cyc. 833; First National Bank v. City of Richmond, 39 F. 309; National Bank of Va. v. Richmond, 42 F. 877; Brown v. French, 80 F. 166; First National Bank v. Lampasas, 78 S.W. 42; Miller v. First National Bank, 21 N.E. 860; First National Bank v. Fisher, 26 P. 482; Tiffiny on Banking, 436-7.

We submit that there may be "a stretch and a strain if it be willed" but nothing less than a judicial complement supplying appropriate legislation can make ends meet here, and as to this proceeding for want of...