Charleston Federal Savings Loan Ass v. Alderson

Decision Date26 February 1945
Docket NumberNo. 400,400
Citation324 U.S. 182,65 S.Ct. 624,89 L.Ed. 857
PartiesCHARLESTON FEDERAL SAVINGS & LOAN ASS'N et al. v. ALDERSON, State Tax Com'r
CourtU.S. Supreme Court

See 324 U.S. 888, 65 S.Ct. 863.

Appeal from the Supreme Court of Appeals of the State of West virginia.

Mr. J. Campbell Palmer, III, of Charleston, W. Va., for appellants.

Mr. Kenneth E. Hines, of Charleston, W. Va., for appellee.

Mr. Chief Justice STONE delivered the opinion of the Court.

The question is whether the tax officials of West Virginia, who have assessed appellants' property for state taxation at its full value, have denied to appellants the equal protection of the laws, guaranteed by the Fourteenth Amendment, by their mode of valuation, for taxation, of property of the same class belonging to other taxpayers.

Appellants are three Federal Savings and Loan Associations, organized under federal laws, and one Building and Loan Association, organized under state laws. They filed petitions with the county court of Kanawha County, West Virginia, seeking a review and reduction of the 1941 assessment of their property for taxation by the county assessor. They alleged that their property was assessed at a proportionately higher assessment valuation than the property of other taxpayers and that such assessment was unequal and discriminatory, in contravention of the state constitution and the Fourteenth Amendment to the federal Constitution.

The county court, sitting as a Board of Review, reduced the assessments after a hearing. On Appeal the Circuit Court for Kanawha County reversed the determination of the county court, and reestablished the assessments. The Supreme Court of Appeals of West Virginia, the highest court of the state, affirmed, 30 S.E.2d 513, holding that appellants had failed to make such a clear showing of the unequal effect of the tax as to justify their complaint.

The case comes here on appeal from the judgment of the Supreme Court of Appeals of West Virginia, purporting to have been taken under § 237(a) of the Judicial Code as amended, 28 U.S.C.A. § 344(a), 28 U.S.C.A. § 344(a) which authorizes an appeal from the 'final judgment or decree in any suit in the highest court of a State in which a decision in the suit could be had, * * * where is drawn, in question the validity of a statute of any State, on the ground of its being repugnant to the Constitution, * * *, and the decision is in favor of its validity.' In their protests against the assessments, filed with the county court, appellants did not draw in question the validity of any statute. They alleged only that the assessments were not uniform and equal with the assessments of other property owners and that they violated the Fourteenth Amendment. And in their petition for appeal to the Supreme Court of Appeals of West Virginia appellants contended only that the assessments denied to them equal protection of the laws in violation of the Fourteenth Amendment.

It is essential to our jurisdiction on appeal under § 237(a) that there be an explicit and timely insistence in the state courts that a state statute, as applied, is repugnant to the federal Constitution, treaties or laws. Loeber v. Schroeder, 149 U.S. 580, 585, 13 S.Ct. 934, 936, 37 L.Ed. 856; Erie R.R. Co. v. Purdy, 185 U.S. 148, 153, 154, 22 S.Ct. 605, 607, 46 L.Ed. 847; Fullerton v. Texas, 196 U.S. 192, 193, 25 S.Ct. 221, 222, 49 L.Ed. 443; Corkran Oil Co. v. Arnaudet, 199 U.S. 182, 193, 26 S.Ct. 41, 44, 50 L.Ed. 143; Wall v. Chesapeake & Ohio Ry. Co., 256 U.S. 125, 126, 41 S.Ct. 402, 403, 65 L.Ed. 856; Citizens' National Bank v. Durr, 257 U.S. 99, 106, 42 S.Ct. 15, 16, 66 L.Ed. 149; Thornton v. Mississippi, 323 U.S. 668, 65 S.Ct. 76; Carter v. General American Life Ins. Co., 323 U.S. 676, 65 S.Ct. 188; Putzier v. Richardson, 323 U.S. 677, 65 S.Ct. 191. And it has long been settled that an attack upon a tax assessment or levy, such as appellants here made, on the ground that it infringes a taxpayer's federal rights, privileges, or immunities, will not sustain an appeal under § 237(a). Jett Bros. Co. v. City of Carrollton, 252 U.S. 1, 40 S.Ct. 255, 64 L.Ed. 421; Citizens' National Bank v. Durr, supra; Indian Territory Illuminating Oil Co. v. Board of Equalization, 287 U.S. 573, 53 S.Ct. 115, 77 L.Ed. 503; Miller v. Board of County Com'rs, 290 U.S. 586, 54 S.Ct. 78, 78 L.Ed. 518; Baltimore National Bank v. State Tax Comm'n, 296 U.S. 538, 56 S.Ct. 125, 80 L.Ed. 382; Irvine v. Spaeth, 314 U.S. 575, 62 S.Ct. 117, 86 L.Ed. 466; Memphis Gas Co. v. Beeler, 315 U.S. 649, 650, 62 S.Ct. 857, 859, 86 L.Ed. 1090; Commercial Credit Co. v. O'Brien, 323 U.S. 665, 65 S.Ct. 75; see Ex parte Williams, 277 U.S. 267, 272, 48 S.Ct. 523, 525, 72 L.Ed. 877; cf. Reeves v. Williamson, 317 U.S. 593, 63 S.Ct. 71, 87 L.Ed. 485.

Where it appears from the opinion of the state court of last resort that a state statute was drawn in question, as repugnant to the Constitution, and that the decision of the court was in favor of its validity, we have jurisdiction on appeal. For we need not inquire how and when the question of the validity of the statute was raised when such question appears to have been actually considered and decided by that court. Manhattan Life Ins. Co. v. Cohen, 234 U.S. 123, 134, 34 S.Ct. 874, 877, 58 L.Ed. 1245; Chicago, R.I. & P.R. Co. v. Perry, 259 U.S. 548, 551, 42 S.Ct. 524, 525, 66 L.Ed. 1056; Saltonstall v. Saltonstall, 276 U.S. 260, 267, 48 S.Ct. 225, 72 L.Ed. 565; Home Ins. Co. v. Dick, 281 U.S. 397, 407, 50 S.Ct. 338, 341, 74 L.Ed. 926, 74 A.L.R. 701; Nickey v. Mississippi, 292 U.S. 393, 394, 54 S.Ct. 743, 78 L.Ed. 1323; Whitfield v. Ohio, 297 U.S. 431, 435, 436, 56 S.Ct. 532, 533, 80 L.Ed. 778. But it does not appear from the opinion of the Supreme Court of Appeals that the federal question was presented to or considered by that court. While the opinion intimates that appellants' objection was made to the administration of the statute, it nowhere indicates that they contended that, as applied, the statute was invalid as repugnant to the federal Constitution.1

Appellants in their assignment of errors in this Court have failed to attack the state statute as repugnant to the Constitution, stating only that the finding and judgment below sustaining the assessment violate the equal protection clause. Even where the federal question has been properly raised below, an appeal under § 237(a) may be dismissed where appellants fail to attack a statute explicitly in their assignments of error here. Cady v. Georgia, 323 U.S. 676, 65 S.Ct. 190; cf. Herbring v. Lee, 280 U.S. 111, 117, 50 S.Ct. 49, 51, 74 L.Ed. 217, 64 A.L.R. 1430; Seaboard Air Line Ry. v. Watson, 287 U.S. 86, 91, 53 S.Ct. 32, 34, 77 L.Ed. 180, 86 A.L.R. 174; Flournoy v. Wiener, 321 U.S. 253, 64 S.Ct. 548.

For these reasons we grant appellee's motion to dismiss the appeal. Treating the papers on which the appeal was allowed as a petition for writ of certiorari, as required by § 237(c) of the Judicial Code, as amended, 28 U.S.C. § 344(c), 28 U.S.C.A. § 344(c), certiorari is granted, since appellants have properly attacked the validity of the assessments under the equal protection clause of the Fourteenth Amendment, and we proceed to consider the merits.

Section 14a of Chapter 11, Article III of the West Virginia Code of 1943, provides that 'the capital of every building and loan association and federal savings and loan association, as represented or evidenced by the investment shares and investment accounts in such association, shall be assessed at its true and actual value. * * * The real and actual value of such capital, represented by the market value of such investment shares and investment accounts as aforesaid, shall be ascertained according to the best information which the assessor may be able to obtain. * * *'

Section 1 of the same chapter and article provides: 'All property shall be assessed annually as of the first day of January at its true and actual value. * * *' And Article 10, § 1 of the Constitution of West Virginia provides: '* * * taxation shall be equal and uniform throughout the State, and all property, both real and personal, shall be taxed in proportion to its value, to be ascertained as directed by law. No one species of property from which a tax may be collected shall be taxed higher than any other species of property of equal value.' This section of the constitution also provides for the division of all taxable property into four classes, with a prescribed limitation on the amount of tax which may be levied upon each class. Class 1 consists of 'personal property employed exclusively in agriculture, * * * products of agriculture, * * * including livestock, while owned by the producer' and includes 'money, notes, bonds, bills and accounts receivable, stocks and other similar intangible personal property', which is the class of property for which appellants are taxed.

Notwithstanding these provisions of the constitution and statutes of the state, it appears from the evidence, and the state Court of Appeals found, that in 1941, and since, the assessor of Kanawha County, following the instructions of the state tax commissioner, employer a different method in the valuation and assessment of the property of building and loan associations and federal savings and loan associations, including appellants, from that employed in assessing Class I property of other taxpayers. It is this difference in the mode of assessing the property of different taxpayers which petitioners contend has resulted in taxing the property of appellants at its full value and like property of other taxpayers at less than its full valuation, in violation of the equal protection clause.

It appears from the record that the assessor in 1941 for the first time followed the uniform practice of assessing the capital of building and loan associations and federal loan associations as evidenced by their investment shares and...

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