City of Hattiesburg v. First Nat. Bank, 7761.

Decision Date25 January 1935
Docket NumberNo. 7761.,7761.
Citation9 F. Supp. 519
PartiesCITY OF HATTIESBURG v. FIRST NAT. BANK OF HATTIESBURG.
CourtU.S. District Court — Southern District of Mississippi

Green, Green & Jackson, of Jackson, Miss., and Harold Cox, of Jackson, Miss., for State Tax Collector.

Watkins & Eager, of Jackson, Miss., for the bank.

HOLMES, District Judge.

A motion to remand this case has heretofore been overruled, after its consideration by the court upon lengthy briefs submitted by each side. (D. C.) 8 F. Supp. 157. In those briefs it was tacitly conceded that the amount in controversy was sufficient to sustain jurisdiction in this court, but counsel for the city have asked and obtained a rehearing for the purpose of urging that the amount does not exceed the sum or value of $3,000, exclusive of interest and costs. Their contention is that the city seeks a several judgment for taxes against each shareholder of the bank; that the assessment cannot be against the bank but must be against each separate taxpayer by reason of a several liability growing out of a several ownership of stock. They say that the bank may not remove because the controversy here at issue in a judicial proceeding for taxes involves the liability not of the bank but of each shareholder, and that the assessment which will be made, if any is made, will be against each several stockholder for the amount apportioned to each stockholder's share or shares, none of which amounts exceeds $3,000. Counsel concede that, if the bank were suing in equity to restrain collection of the tax in controversy, the amount would be sufficient, because if it pays an unlawful tax assessed against its stockholders they may resist the right of the bank to collect it from them; that its position, involving a trust relation, authorizes a court of equity to see that it is protected in the exercise of the duties appertaining to it; and that equity may interfere to prevent a multiplicity of suits, but where the taxing authority is plaintiff, they contend that the real defendants are the shareholders.

The contention ignores the real relation between the parties to this proceeding. The question now raised was necessarily involved in the prior decision upholding jurisdiction, although not dealt with in the opinion for the reason indicated. As will be seen, the bank is a statutory agent for the purpose of returning the assessment and paying the tax. Its duty and responsibility are absolute and mandatory, not contingent and voluntary. The proceeding is to assess and collect ad valorem taxes upon the bank's surplus valued at $250,000 for each year. The amount is approximately $6,500 per annum, or $13,000 for the two years 1931 and 1932. This liability, under statutory method, is sought to be imposed directly upon the bank. There is to be a single assessment of the total number of shares at their aggregate value, and the liability of the bank to pay the tax is sole and separate for the total amount.

The Mississippi statute (section 3138, Code 1930) provides for assessment of the number and amount of all the shares of the capital stock of the bank estimated at par and increased by its surplus fund or accumulation of profits, but if the shares are of less value than par they shall be assessed accordingly. It provides that: "The taxes levied on such bank or banking association shall be a first lien on its assets." National banks are treated precisely as banks created under the laws of the state of Mississippi; but each...

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  • Wolff v. Jordan Marsh Co.
    • United States
    • U.S. District Court — District of Massachusetts
    • January 29, 1935
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