Boonville National Bank v. Schlotzhauer

• Court: Missouri Supreme Court
• Writing for the Court: Graves, J.
• Citation: Boonville National Bank v. Schlotzhauer, 317 Mo. 1298, 298 S. W. 732 (Mo. 1927)
• Decision Date: 27 September 1927
• Docket Number: 27971
• Parties: Boonville National Bank, Appellant, v. Oscar J. Schlotzhauer, County Collector; R. D. Pealer, Clerk of County Court; and S. H. Groves, Thomas Grathwohl and Walter Brickner, Judges of County Court of Cooper County

298 S.W. 732

317 Mo. 1298

Boonville National Bank, Appellant, v. Oscar J. Schlotzhauer, County Collector; R. D. Pealer, Clerk of County Court; and S. H. Groves, Thomas Grathwohl and Walter Brickner, Judges of County Court of Cooper County

No. 27971

Supreme Court of Missouri

September 27, 1927

Appeal from Cooper Circuit Court; Hon. Henry J. Westhues Judge.

Reversed and remanded.

Montgomery Rucker & Hayes for appellant; Bryan, Williams & Cave, amici curiae.

(1) For purposes of a demurrer, all allegations of the petition and all inferences of fact that may fairly and reasonably be drawn therefrom, must be taken as true. Martin v. Ray County Coal Co., 288 Mo. 241. (2) A banking corporation is the proper party plaintiff in a suit to test the legality of a tax upon the shares of its stockholders. First Natl Bank v. City of Independence, 99 N.W. 142; Whitney Natl. Bank v. Parker, 41 F. 402; Cummings v. National Bank, 101 U.S. 156; Knopf v. First Natl. Bank, 50 N.E. 660; Citizens Natl. Bank v. Columbia Co., 63 P. 209. (a) Under the statutes of Missouri, a bank is required to make a return of all of its taxable property as represented by its shares of stock and to pay the taxes thereon, but may recover from the owner of such shares the amount so paid or deduct the same from the dividends accruing on such shares. Secs. 12775, 12777, R. S. 1919. (b) "An executor or administrator, a trustee of an express trust, or a person expressly authorized by statute, may sue in his own name without joining with him the person for whose benefit the suit is prosecuted. A trustee of an express trust, within the meaning of this section, shall be construed to include a person with whom or in whose name a contract is made for the benefit of another." Sec. 1156, R. S. 1919. (c) Under the foregoing statutes and decisions, the plaintiff bank may bring suit for relief against a discriminatory tax upon its stock without joining its stockholders for the reason that it is acting in a fiduciary capacity as the agent of its stockholders when it makes the return and pays the tax. (d) The bank is a proper party plaintiff for the reason that a multiplicity of suits is thereby avoided. Cummings v. Natl. Bank, 101 U.S. 156; First Natl. Bank v. City, 99 N.W. 142; Whitney Natl. Bank v. Parker, 41 F. 402; Knopf v. National Bank, 50 N.E. 660. (3) An injunction will lie in behalf of a taxpayer to prevent the collection of an illegal tax, provided he has paid or tendered all the taxes except those he claims to be illegal. St. Louis Iron Mt. Ry. Co. v. Anthony, 73 Mo. 431; Jacobs v. Cauthorn, 293 Mo. 154; Newmeyer v. Railway Co., 52 Mo. 81; Ewing v. Board of Education, 72 Mo. 436; Valle v. Zeigler, 84 Mo. 214; Overall v. Ruenzi, 67 Mo. 203; Arnold v. Hawkins, 95 Mo. 569; State ex rel. v. Western Union Tel. Co., 165 Mo. 502. (a) It is not necessary to the exercise of equitable relief that plaintiff should not have any remedy at law, but only that such remedy be inadequate or incomplete. Jacob v. Cauthorn, 293 Mo. 155; McAlister v. Peterson, 256 Mo.App. 279; Pocoke v. Peterson, 256 Mo. 501. (b) The remedy of certiorari is inadequate, because it takes up only the record, and the discrimination complained of does not appear upon the record, but only from evidence outside the record. Hannibal Railroad Co. v. State Board of Equalization, 64 Mo. 294; Ward v. Board of Equalization, 135 Mo. 309. (c) The bank cannot pay the illegal taxes and recover them by suit. Robins v. Latham, 134 Mo. 466; Ruby v. Shain, 54 Mo. 207; Wolf v. Marshall, 52 Mo. 167. (d) A defendant who alleges discrimination against itself in the matter of taxation cannot raise such question of discrimination as a defense in an action by the collector to collect the taxes, but must resort to a court of equity to restrain the collection of the excess, on payment or tender of what is admitted to be due. State ex rel. v. Western Union Tel. Co., 165 Mo. 502; State ex rel. Johnson v. Bank, 279 Mo. 228. (e) If there were a remedy at law to prevent the collection of the discriminatory tax or to recover it after payment, the remedy would not be complete because it would attain the full end and justice of the case, in that it does not reach the whole mischief and secure the whole right of the party in the present time and in the future. Hubbard v. Slavens, 218 Mo. 619. (4) The defendants are the proper and only necessary parties defendant. Newmeyer v. Railroad Co., 52 Mo. 81; St. Louis I. M. & S. v. Anthony, 73 Mo. 435. (5) The deliberate, intentional, systematic and arbitrary valuation of the plaintiff's property at its full value, while other property is deliberately, intentionally, systematically and arbitrarily assessed at less than its full value, is a fraud upon and a discrimination against the fully assessed taxpayer and is in violation of the State and Federal Constitutions. Sioux City Bridge Co. v. Dakota County, 260 U.S. 441; First Natl. Bank v. Christensen, 118 P. 778; Spokane Trust Co. v. Spokane Co., 126 P. 54; Washington Water Power Co. v. Kootenai Co., 270 F. 369; Taylor v. L. & N. Railroad, 88 F. 350; Spokane Railroad Co. v. Spokane Co., 143 P. 306; Raymond v. Chicago Traction Co., 207 U.S. 20; Cummings v. Natl. Bank, 101 U.S. 153; City Ry. Co. v. Beard, 293 F. 448; Secs. 3 and 4, Art. 10, Mo. Constitution. (a) Uniformity in taxation means uniformity not only in the rate of taxation, but also uniformity in the mode of assessment. City Railway Co. v. Beard, 293 F. 448; Sioux City Bridge Co. v. Dakota Co., 260 U.S. 441; First Natl. Bank v. Christensen, 118 P. 778; Spokane Railroad Co. v. Spokane Co., 143 P. 307. (b) Provisions of the Fourteenth Amendment are not confined to the action of the State through its legislative, executive or judicial authority, but relate to all instrumentalities through which the State acts. Sec. 1, Art. 14, U.S. Constitution; Raymond v. Traction Co., 207 U.S. 20. (c) Nor does the right to assess property at full cash value make a tax legal where other property is assessed at a fraction of its cash value. Washington Water Power Co. v. Kootenai Co., 270 F. 369. (d) Remedy of the fully assessed taxpayer is not to secure an increase in the assessment of the under-assessed property, but rather to have the assessment of his property reduced to the level of the underassessed property. Sioux City Bridge Co. v. Dakota Co., 260 U.S. 441; Taylor v. L. & N. Railroad, 88 F. 350. (e) A tax on bank shares is not an excise tax, but a property tax coming under the protection of the Constitution. Spokane Trust Co. v. Spokane Co., 126 P. 54. (6) All property in Missouri subject to taxation falls in the same class. State ex rel. Tompkins v. Shipman, 290 Mo. 65. (7) A suit to annul portion of assessment because of fraud is a direct and not a collateral attack. Lovitt v. Russell, 138 Mo. 474; State ex rel. Johnson v. Bank, 279 Mo. 228; Howey v. Howey, 240 S.W. 457; Lieber v. Lieber, 239 Mo. 31; Hamilton v. McLean, 139 Mo. 678; Payne v. O'Shea, 84 Mo. 129; Murphy v. DeFrance, 101 Mo. 151; Liebhardt v. Lawrence, 120 P. 222; Ford v. Clendenin, 109 N.E. 124; James v. Young, 206 P. 905; 15 R. C. L. 839, sec. 312; Heisinger v. Modern Brotherhood, 179 N.W. 166; Gray Co. v. Hamer, 277 F. 155; 23 Cyc. 1062.

Charles W. Journey and John H. Windsor for respondents.

(1) Under the statutes the shares of banks are to be assessed at their true value in money less the value of real estate, if any, represented by such shares of stock. Sec. 12775, R. S 1919. (2) A board of equalization, in performing its duties, acts judicially. Secs. 12853, 12820, 12827, R. S. 1919; State ex rel. Johnson v. Merchants & Miners Bank, 279 Mo. 228; State ex rel. Gottlieb v. Western Union Tel. Co., 167 Mo. 502; Black v. McGonigle, 103 Mo. 159; St. Louis Mutual Ins. Co. v. Charles, 47 Mo. 465; Railroad v. Maguire, 49 Mo. 483; 34 C. J. 519, sec. 826. (3) The actions of boards of equalization in fixing assessment values being judicial in their character, the judgments of such boards cannot be attacked in a collateral proceeding except for want of jurisdiction or for fraud. State ex rel. Johnson v. Merchants & Miners Bank, 279 Mo. 228; State ex rel. Ashby v. Lumber Co., 198 Mo. 430; Lovitt v. Russell, 138 Mo. 474; State ex rel. v. Vaile, 122 Mo. 33; Union Depot Co. v. Frederick, 177 Mo. 138. (a) The plaintiff does not question the jurisdiction of either the County Board of Equalization or the State Board of Equalization, nor does it allege sufficient facts to show fraud. Plaintiff states in its petition that the valuation of the shares of stock in plaintiff's institution were assessed on identically the same basis as the shares of stock in other banking corporations in Cooper County. This does not violate the Federal statute prohibiting states from assessing the shares of national banks at a higher rate than other moneyed capital in the hands of citizens employed in competition with the moneyed capital used by national banks. First Natl. Bank v. Chehalis Co., 166 U.S. 440; Davenport Natl. Bank v. Board of Equalization, 123 U.S. 83; National Bank v. Staats, 155 Mo. 55. (b) A collateral attack is an attempt to impeach the judgment by matters dehors the record, in an action other than that in which it was rendered; an attempt to avoid, defeat or evade or deny its force and effect in some incidental proceeding not provided by law for the express purpose of attacking it. In fact, any collateral attack is any proceeding which is not instituted for the express purpose of annulling, correcting or modifying a decree or judgment. 34 C. J. 520, sec. 827; Lovitt v. Russell, 138 Mo. 474. (c) If a judgment be attacked for want of jurisdiction the fact must appear on the face of the record. State ex rel. Johnson v. Merchants & Miners Bank, 279 Mo. 228. (4) The plaintiff...