Bonaparte v. American-First Nat. Bank in Okla. City

• Decision Date: 29 October 1929
• Docket Number: Case Number: 19167
• Citation: 1929 OK 459,281 P. 958,139 Okla. 189
• Parties: BONAPARTE, County Treas., v. AMERICAN-FIRST NAT. BANK IN OKLAHOMA CITY
• Court: Oklahoma Supreme Court

1929 OK 459

281 P. 958

139 Okla. 189

BONAPARTE, County Treas., v. AMERICAN-FIRST NAT. BANK IN OKLAHOMA CITY

Case Number: 19167

Supreme Court of Oklahoma

Decided: October 29, 1929

Syllabus

¶0 1. Taxation--Classification of Property--Shares of Bank Stock as Separate Class.

Classification of property for purposes of taxation is a legislative function, and when such classification is not based upon an invidious or unreasonable distinction, it will not be interfered with by the courts, and shares of stock in banks and banking associations may be made a separate class for such taxation purposes. Comanche County et al. v. American Nat. Bank of Lawton, 122 Okla. 34, 252 P. 408.

2. Same--Limitation on Ad Valorem Rate for Stock in National Banks.

Shares of stock in banks organized under the banking laws of the United States shall not be listed and assessed for ad valorem taxation purposes at a greater rate than is assessed upon any other moneyed capital in the hands of the individual citizens of the state. Section 9607, C. O. S. 1921.

3. Same--Statutes Construed and Applied.

"Moneyed capital in the hands of the individual citizens" includes money invested in private banking enterprises, investments of individuals in securities that represent money at interest, and other evidences of indebtedness such as normally enter into the banking business. Comanche County et al. v. American National Bank of Lawton, 122 Okla. 34, 252 P. 408.

4. Same.

Sections 9588 and 9608, C. O. S. 1921, provide rates of taxation on moneyed capital in the hands of individual citizens invested in securities which represent money at interest and other evidences of indebtedness such as normally enter into the banking business. Under the provisions of section 9607, C. O. S. 1921, the rate of taxation upon shares of stock in banks organized under the banking laws of the United States may not be at a greater rate than is provided by sections 9588 and 9608, Id.

Error from District Court, Oklahoma County; T. G. Chambers, Judge.

Action by the American-First National Bank, in Oklahoma City, against E. B. Bonaparte, County Treasurer. Judgment for plaintiff, and defendant appeals. Affirmed.

Wilson & Wilson, Embry, Johnson & Tolbert, Brown & Stater, and Wilbur J. Holleman, for defendant in error.

J. K. Wright, Co. Atty., W. F. Smith, Asst. Co. Atty., and M. W. McKenzie, Municipal Counsellor of Oklahoma City, for plaintiff in error.

ANDREWS, J.

¶1 The defendant in error, hereinafter called the bank, commenced this action in the district court of Oklahoma county against the plaintiff in error, hereinafter called the county treasurer, to recover money paid for taxes levied against the shares of stock of the bank by the proper agencies of government in Oklahoma county for the fiscal year ending June 30, 1927, said money having been paid by said bank under protest for the use and benefit of the shareholders as provided by the statutes.

¶2 It was agreed that the rate of taxation levied against said property was $ 44.11 per $ 1,000 of the assessed valuation. It is the contention of the bank that the tax levied and assessed was illegal, unauthorized, and unenforceable because the same was in excess of the rate of taxation levied against moneyed capital in the hands of individual citizens within the state of Oklahoma, in that the rate assessed against moneyed capital in the hands of the individual citizens for the same year was at the rate of 40 mills per $ 1,000, and that by reason thereof the rate assessed against the shares of stock was greater than that assessed against the moneyed capital in the hands of individual citizens in competition therewith.

¶3 The petition, as supplemented, asserts a similar claim as to the tax paid by the bank upon its real estate. This proposition is not urged on the appeal, no doubt for the reason that the evidence shows that the real estate of the bank was taxed at the same rate as other real estate.

¶4 The answer of the county treasurer was, in substance, a general denial. At the conclusion of the evidence, the county treasurer interposed a demurrer thereto and asserted that the evidence was insufficient in law to entitle the bank to recover. The county treasurer offered no evidence, and stood on his demurrer to the evidence. The court took the matter under advisement and made its findings of facts and conclusions of law and rendered judgment in conformity therewith.

¶5 The findings of facts and conclusions of law, with the formal parts omitted, are as follows;

"The court finds from the evidence that the bank, during the year 1926, was engaged, among other things, in the following businesses: Buying and selling automobile notes, cattle notes, notes secured by real estate mortgages, and buying and selling United States bonds and municipal bonds and warrants, and public service corporation bonds; that on January 1, 1926, it had on hand $ 1,187,152.98 automobile paper, cattle notes $ 42,825.25, real estate loans or notes secured by real estate mortgage $ 281,082.70, United States bonds, $ 3,915,400, municipal bonds and warrants, $ 1,641,194.06, public service corporation bonds, $ 17,000. Of course, this only includes a part of the assets of the bank, but it is that portion of the assets that the court deems material in passing upon the question involved in this case.

"The court finds that the bank was buying and selling, and it was a part of its business, these various assets, and that the same are moneyed capital, and that the same were a substantial part of the business carried on by the bank during that year. (While the cattle loans have been listed in this statement of assets, yet the court does not consider this item should be taken into account for the reason that the testimony shows the cattle loans did not extend for a period of over six months, which will be referred to hereafter.)

"The court further finds, with reference to the item of automobile notes, that only one-third of the total amount stated would be notes due and payable over eight months from the date of the notes, being $ 395,717.66. The testimony reasonably shows that the automobile loans for that year in Oklahoma City approximated $ 40,000,000, one-third of which would be $ 13,333,000.

"The testimony shows that in Oklahoma City there were a number of local dealers in bonds, aside from national banks, mostly individuals, who bought and sold bonds upon the market in a sum in excess of $ 10,000,000.

"As to the real estate mortgage loans, the evidence discloses that for the year 1926 numerous persons and numerous individuals and corporations were engaged in the business of loaning money on real estate security, and that in Oklahoma county there were at least $ 20,000,000 of loans of this character.

"The evidence also shows that there were also various individuals and corporations dealing in public service corporation bonds by buying and selling the same in the same manner as the plaintiff bank.

"The evidence further developed that the other five or six national banks in Oklahoma City were doing the same kind and character of business, with reference to the moneyed capital above stated, as was the First National Bank, in proportion to the invested capital of the banks and that the banks in all the larger cities of the state of Oklahoma were doing proportionately the same amount of business, and that in all the other cities there was substantially the same competition by individuals and corporations engaged in these various businesses.

"The only authority that the state has for levying a tax on national banks is that granted to it by act of Congress, and the congressional enactment, section 5219, and the amendment thereto, is the law upon which this question must be determined. This portion of the act giving permission to the various states to tax national banks, reads as follows: 'In the case of a tax on said shares, the tax imposed shall not be at a greater rate than is assessed upon other moneyed capital in the hands of individual citizens of such state coming into competition with the business of national banks.*** Nothing herein shall be construed to exempt the real property of associations from taxation in any state or in any subdivision thereof to the same extent according to its value as other real property is taxed.'

"We have three statutory provisions which the court thinks are material in determining this case: Sections 9588, 9607, and 9608 of the Compiled Oklahoma Statutes, 1921.

"Section 9588 provides: 'A tax of 10 cents for each $ 100 and each remaining major fraction thereof, where such mortgage is for five years or more; 8 cents for each $ 100 for each mortgage where such mortgage is for four years and less than five years; a tax of 6 cents for each $ 100 where such mortgage is for three years and less than four years; a tax of 4 cents for each $ 100 where such mortgage is for two years and less than three years, and a tax of 2 cents for each $ 100 where such mortgage is for less than two years. * * *'

"Under the congressional enactment, 5219, the permission for a state to levy a tax upon the value of the shares of stock of the national bank, and the mortgage loans held by the bank make up, in part, its capital stock and the value of the shares of stock. The taxation of a national bank upon an ad valorem basis of $ 44.11 per $ 1,000, is discriminatory against the bank where other individuals, under the Oklahoma statute, are required to pay only the amount of money stated in the section quoted upon each $ 100 of mortgage indebtedness during the term the mortgage runs.

"Section 9608 provides: 'Any person owning any bond, note of any duration of over eight months, or other choses in action evidenced by writing located in the state of Oklahoma, may take the same to the office of the county treasurer of the county in which the owner of said bond, note of a duration exceeding eight months, or other choses in action, resides, or he may send a description of the same

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