Adams v. People's Bank of Biloxi
| Decision Date | 23 November 1914 |
| Docket Number | 14176 |
| Citation | 66 So. 407,108 Miss. 346 |
| Parties | ADAMS, STATE REVENUE AGENT v. PEOPLES' BANK OF BILOXI et al |
| Court | Mississippi Supreme Court |
APPEAL from the circuit court of Harrison county. HON. W. H. HARDY Judge.
Proceeding by Wirt Adams, state revenue agent, for the assessment of the First National Bank of Gulfport and the Peoples Bank of Biloxi, on capital stock, surplus, and undivided profits alleged to have escaped taxation. From an order of the board of supervisors vacating the assessment, affirmed by the circuit court, the revenue agent appeals.
The facts are fully stated in the opinion of the court.
Judgment reversed and remanded.
Mayes & Mayes, for appellant.
Ford & White and Bowers & Griffith, for appellee.
OPINION
In accordance with the statute (section 4740 of the Code of 1906), the revenue agent gave notice to the tax collector of Harrison county to assess the First National Bank of Gulfport and the People's Bank of Biloxi, by way of additional assessments on the roll in his hands with certain property, to wit, "capital stock, surplus, undivided profits and any and all other property assessable to the banks" which had escaped taxation during each of the years from 1902 to 1907, inclusive, by reason of not having been assessed. Objections were made by the banks to such assessments. The board of supervisors, upon the hearing, ordered that the assessments for back taxes be denied, rejected and vacated, and stated in the orders that the property sought to be taxed had been assessed for taxes for the years mentioned. On the hearing upon appeal in the circuit court before the judge, jury being waived, the judgments of the board of supervisors were affirmed. From the judgments of the circuit court, this appeal was prosecuted by the revenue agent. The assessments of the two banks are considered together as one case.
It was agreed by counsel that the action of the board of supervisors, in canceling the assessments for the years 1902 and 1903 against the People's Bank of Biloxi, is correct and should be affirmed. The liability for taxes against that bank for the year 1904 was admitted, and at this hearing we deal only with the assessments against the bank for the years 1905, 1906, and 1907.
The First National Bank of Gulfport had not been organized in 1902, and the assessment for that year was omitted. In 1903 the First National Bank was assessed under the heading, "Amount of money, United States legal tender notes, and other notes and certificates of the United States payable on demand and circulating or intending to circulate as currency, and gold and silver or other coin on hand, or in deposit or loaned;" in 1904, "Capitol stock and surplus;" in 1905, "Capital stock and undivided profits;" 1906 and 1907, "Personal property not otherwise enumerated."
The People's Bank was assessed in 1905, "Amount of bonds, certificates, script or other forms of indebtedness of the state, or any county, city, town, village, board, or body capable of being a debtor, held by the person rendering the list and in whose behalf it is rendered;" in 1906, "Amount of indebtedness to the party assessed which he regards as probably collectible;" and for 1907, "Amount or other personal property not otherwise mentioned."
The statute (section 4273 of the Code of 1906; section 3764 of the Code of 1892; Laws of 1890, p. 6) provides a special plan for the assessment for taxation of banks. Therein it is required that the officers of the banks shall deliver to the assessor of taxes of the county a written statement, under oath, of the number and amount of all its shares of capital stock, when paid in, "and of the sum of all undivided profits or surplus or accumulation of any sort constituting part of the assets of the bank and not including its real estate." "The value of such shares estimated at par and increased by the proportion of the par value of all the shares of the stock to the said surplus fund or accumulation . . . shall be the basis of the taxation of such shares . . . to the owner thereof." If the shares of the bank are of less value than par, they shall be valued accordingly.
For the purpose of illustration, we give below two of the statements delivered by officers of the banks to the county assessor, one for each bank, both for the year of 1907:
Capital stock paid in
$ 250,000 00
Surplus and undivided profits
76,500 00
Less:
All of the statements returned by the bank officers omitted to state the number and amount of shares of the capital stock paid in. They state the amount of capital stock paid in and of the surplus and undivided profits, and from this they deduct certain sums. In the case of the People's Bank it will be noted, in the copy of the statement given above, that the "percentage of loans possibly uncollectible," amounting to nearly two-thirds of the total of the capital stock and accumulation, was deducted In the statement of the First National Bank a deduction was made of certain allowances on bills receivable, etc., which reduced the amount of the capital stock about fifty per cent.
At the hearing in the circuit court, cashiers of both banks testified. A. B. Austin, cashier of the People's Bank, testified that there had been no impairment of the capital stock of the bank during the years in question; that it had been above par, and that there had been a surplus in the bank, which surplus had not been impaired, but had been increased; that none of it had been charged off on account of bad debts. H. A. Jackson cashier of the First National Bank, testified that the capital stock of that bank was not worth less than par during any of the years of the back assessments, and that the surplus had increased.
The evidence shows that, during the whole period covered, the capital stock and surplus of the banks were worth dollar for dollar. The statements returned by the bank officers were for a much less amount than the value of the banks' stock and accumulations. The amounts on the assessment rolls were those given as balances after deductions in the statements. The shares of the bank appear therefrom to have been at less value than par, when it is shown by testimony that they were of equal or greater value. The banks, therefore, were not assessed with all of the property on which they should have paid taxes. According to the statements and the assessments in the case of the First National Bank, there was no surplus really assessed. The assessments were all less in amount than the actual capital stock paid in. In the People's Bank, deducting the real estate, the amounts were less than the capital stock; including the real estate as a part of the capital stock, a little more.
It was claimed in the objections filed by the bank, to the notice by the revenue agent, that the statements returned, and the assessments thereon, constituted a full showing by the banks of their assessable property, and that the approval by the board of supervisors of the rolls, with such assessments thereon, made them legal and sufficient assessments of the capital stock and accumulations, and...
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