Ankeny v. Blakley

• Decision Date: 07 December 1903
• Citation: 74 P. 485,44 Or. 78
• Parties: ANKENY v. BLAKLEY, Sheriff, et al.
• Court: Oregon Supreme Court

74 P. 485

44 Or. 78

ANKENY v. BLAKLEY, Sheriff, et al.

Supreme Court of Oregon

December 7, 1903

Appeal from Circuit Court, Umatilla County; W.R. Ellis, Judge.

Suit by Levi Ankeny against William Blakley, as sheriff of Umatilla county, and another, for an injunction to restrain respondents from collecting a tax on certain bank stock owned by complainant. From a judgment denying the writ, complainant appeals. Affirmed.

The First National Bank of Pendleton, having been assessed on its paid-up capital stock by the assessor of Umatilla county as of March 1, 1899, applied to the county board of equalization on September 2d following to be relieved from such assessment; specifying, among other objections, that the stock was not legally taxable to the bank. Recognizing the validity of the objection, the board canceled the assessment but at the same meeting assessed the stock to the several shareholders, residents of the county and nonresidents of the state, according to the holdings of each, and, among others 290 shares to the plaintiff, at $46,617; being a large advance upon the valuation assessed to the bank. Feeling aggrieved at the action of the board, the plaintiff instituted this suit to enjoin the collection of all taxes levied against his shares of stock, except such as would accrue upon a valuation of $76.94 per share, which he has tendered in full payment to the proper functionary. The gist of the complaint is that on March 1, 1899, there was subject to assessment in Umatilla county, Or., a large amount of moneyed capital, to wit, about $400,000, invested in securities, by way of loans, discounts, etc., and about $105,000 invested in shares of capital stock in private banking concerns, other than stocks in national banks; that all of such moneyed capital was assessed, valued, and taxed at no greater rate than the par value of such securities loans, and discounts, and the paid-up par value of such shares of bank stock, increased by the undivided profits and surplus; that the value placed upon shares of national bank stock for assessment purposes was so excessive, as compared with that placed upon such moneyed capital otherwise invested, as to amount to an illegal discrimination against the First National Bank of Pendleton and the owners and holders of shares of stock therein; "that the said assessor and county board of equalization knowingly willfully, and arbitrarily adopted a system of valuation, assessment, and taxation designed to operate unequally upon different classes of property similarly situated, and knowingly, willfully, and arbitrarily adopted a system of valuation, assessment, and taxation whereby all the shares of stock in the First National Bank of Pendleton, and particularly the shares of this plaintiff therein, were assessed, valued, and taxed at a greater rate than other moneyed capital subject to taxation in said county and state, in the hands of individuals and banks other than national banks, and in competition with said First National Bank, was assessed, valued, or taxed." The evidence shows that the shares of stock in the First National Bank were first rated on a cash basis at $250 per share; that when the board of equalization assessed them to the individual holders the rate was raised to $320 per share, but that in each case a ratable reduction was made for the real estate held by the bank--that asset being assessed to it, and a further reduction of 40 per cent. upon the balance, to make the valuation correspond with that placed upon other personal property for assessment purposes; that the rate of valuation to the stockholders was made upon the basis of what plaintiff paid for a block of stock that was sold in Portland by the executor of the Failing estate, and that what is designated and known as the "Ankeny Trust Fund" was not taken into consideration, as the board had no knowledge of it; that in assessing notes and accounts of private investors, other than banks, the assessor valued them at 40 per cent. less than their face, taking no note of unpaid accumulated interest; that the Farmers' Bank of Weston was assessed on real property at $18,720, and on 300 shares of its capital stock at $6,850, which was reduced by the board of equalization to $5,268; the Pendleton Savings Bank, on real property at $21,975, and on 500 shares of capital stock at $27,315; and the Bank of Milton on real property at $4,595, and on 254 shares at $7,871. It was further shown that at the time of the assessment the Pendleton Savings Bank had a paid-up capital of $50,000, with a surplus of $24,650; that shares of stock were sold about the time for $135 per share, and that their book value was $149.20; that the Bank of Milton had a paid-up capital of $25,400, and net undivided profits of $11,070.25; that the book value per share was $104.60, and that the cash value was a trifle less; that the Farmers' Bank of Weston had a paid-up capital of $31,350, and net undivided profits of $7,001.47, and that the stock would have sold at the value represented by these figures if it had been offered; that the First National Bank had a paid-up capital of $70,000, a surplus fund of $18,287.81, undivided profits of $21,683.25, and was assessed on its real property at $24,935; that its stock was worth from $335 to $350 per share; that at a directors' meeting held January 5, 1894, a resolution was adopted as follows: "Whereas, owing to the unfavorable season for crops, low prices, and the unprecedented damage to crops during the harvest, this bank has been compelled to accept a large amount of real estate and chattel mortgage security, the paper thus secured cannot be depended on for early payment, and the further fact that our shareholders are now taxed upon our surplus fund to such an extent as to become burdensome: Therefore be it resolved that we declare a dividend of 230 per cent. of our capital stock of $70,000, payable out of our surplus fund, and that first there be deducted from said dividend the balance due profit and loss account, to wit, $4,839.94, and the balance, $156,160.06, be paid to Levi Ankeny, trustee for all the shareholders of this bank proportionately to their holding of the stock in said bank, and that said dividend, known as 'Dividend No. 22,' be payable, first, in such notes of such bank as are secured by mortgage; second, in such notes as it is not probable will be paid within the next eight months." The condition of the trust fund mentioned in the resolution was not disclosed at the time of the assessment. The findings of fact and law being favorable to the defendants, a decree was rendered dismissing the complaint, from which the plaintiff appeals.

J.N. Teal and J.H. Raley, for appellant.

J.J. Balleray and T.G. Hailey, for respondents.

WOLVERTON J. (after stating the facts).

We will consider first the contention of counsel that the shares of bank stock were assessed when they were listed upon the roll in the name of the bank, and a valuation placed upon them by the assessor, and that thereafter the county board of equalization was without power or competent authority to put a higher valuation upon them, without notice to the shareholders. It is provided (B. & C. Comp. § 3080) that if it shall appear to the board of equalization that there are any lands or other property assessed twice, or in the name of a person or persons not the owner thereof, or assessed under or beyond its actual value, or any lands, lots, or other property not assessed, the board shall make the proper corrections, and (by B. & C. Comp. § 3081) that the board shall not increase the valuation of any property so assessed without giving to the person in whose name it is assessed at least three days' notice in which to appear and show cause why the valuation should not be increased, but that such notice shall not be necessary if the person appear voluntarily, and be there personally notified by a member of the board that his property, or some part, is assessed below its actual value. If any property, therefore, is assessed in the name of a person not the owner, or under or beyond its actual value, the board is authorized to make the proper corrections. But how? If a valuation is to be increased, the person in whose name the property is assessed must have three days' notice. But what interest has a person in property assessed to him that he does not own? His only concern is to be relieved of the assessment, and whether the valuation is to be raised or lowered cannot affect him further, so that if he secures a release from such assessment, his sole object has been subserved. The bank in the present instance appeared voluntarily and objected to the capital stock of the institution being assessed to it, and the board, realizing that the property had been assessed to the wrong person, relieved it of the assessment. Its object was therefore at an end, and what reason was there left for notifying the bank to show cause why the valuation should not be increased? It was the duty of the board, however, to change the assessment. This it did by relieving the bank, which was present, and assessing the stock to the shareholders; they being the persons to whom the shares were properly assessable. Now, the fact that the stock happened to be listed in the name of a person not the owner affords no reason why the true owners, when the correction is made and the stock is assessed to them, should have notice that the assessor had primarily listed it below its actual value, and the law does not require it. As to them, it never had been assessed; hence the act was not an increase in a valuation fixed by the assessor. The board of equalization listed it to them upon the roll for the first time, and put a valuation upon it, thus effectuating an initial...