City of Jackson v. Deposit Guaranty Bank & Trust Co

• Decision Date: 23 March 1931
• Docket Number: 29233
• Parties: CITY OF JACKSON v. DEPOSIT GUARANTY BANK & TRUST CO
• Court: Mississippi Supreme Court

133 So. 195

160 Miss. 752

CITY OF JACKSON v. DEPOSIT GUARANTY BANK & TRUST CO

No. 29233

Supreme Court of Mississippi

March 23, 1931

APPEAL from circuit court of Hinds county, First district, HON. W H. POTTER, Judge.

Action between the city of Jackson and the Deposit Guaranty Bank &amp Trust Company. From the judgment, the former appears. Affirmed.

Affirmed.

W. E. Morse, of Jackson, for appellant.

Chapter 22 of the Laws of Mississippi of 1930 is in violation of section 61 of the Constitution of the state of Mississippi for the reason that section 1 of chapter 193 of the Laws of 1920 was not brought forward but was amended by section 11, chapter 22 of the Laws of 1930.

Seay v Laurel Plumbing & Metal Co., 110 Miss. 834, 71 So. 9.

The mischief designed to be remedied by section 61 of the Constitution of 1890 was the enactment of amendatory statutes in terms so blind that legislators themselves were sometimes deceived in regard to their effects, and the public, from the difficulty in making the necessary examination and comparison failed to become apprised of the changes made in the laws.

Moore v. Tunica County, 107 So. 659; Buford v. State, 111 So. 850; Holmes v. State, 111 So. 860; Hart v Backstrom, 113 So. 898.

Chapter 22 of the Laws of Mississippi of 1930 is in violation of section 87 of the Constitution of the state of Mississippi as it attempts to suspend a general law for an indefinite time.

Chapter 22 of the Laws of Mississippi of 1930 is in violation of section 90-H of the Constitution of the state of Mississippi as it is a local or special statute.

Toombs v. Sharkey County, 106 So. 473.

Chapter 22 of the Laws of Mississippi of 1930 is in violation of sections 112 and 181 of the Constitution of the state of Mississippi.

The legislature can assess banks either as individuals or according to section 181 of the Constitution but if the legislature attempts to tax them according to the value of the shares, as they have attempted to do under chapter 193 of the Laws of 1920, being section 8263 of Hemingway's Code of 1927, then the basis of this assessment cannot be varied by the legislature from that set forth in section 181 of the Constitution. The Constitution provides that "by taxing the shares according to the value thereof (augmented by the accumulations, surplus and unpaid dividends)," that the true value is arrived at.

The true value is the only basis of proper assessment.

Chicago R. R. Co. v. Robertson, 84 So. 449.

In order to carry out the design of section 112 three things are necessary: 1. "Property must be assessed for taxes under general laws," because without a legal assessment no tax can lawfully be imposed or collected. 2. Property must be assessed at its 'true value.' This must be done in order to prevent unjust discrimination by selecting different modes of valuation. 3. Property shall be taxed in proportion to its value and taxation shall be equal and uniform. These are the three rules upon which the entire plan of taxation is reared.

Adams v. State Bank, 75 Miss. 701, 23 So. 395.

When the state undertakes to collect toll from her citizens, the hand of the tax gatherer must fall with equal weight upon all. It will graft no vicious exception upon it.

Adams v. Oxford, 78 Miss. 832, 29 So. 402; Magnolia Bank v. Pike County, 111 Miss. 857, 72 So. 697; First National Bank of Tupelo v. Board of Supervisors of Lee County, 124 So. 482.

Chapter 22 of the Laws of Mississippi of 1930 is in violation of section 182 of the Constitution of the state of Mississippi as the legislature cannot contract away the taxing power on account of the prohibition of section 182 of the Constitution as they have attempted to do. They have made the offer to the various banks and upon their acceptance the state proposes to issue these bonds.

Chapter 22 of the Laws of Mississippi of 1930 is in violation of the state Constitution, Federal Constitution and the Federal Statutes, in that in attempts to regulate national banks and attempts to assess them on a different basis from state banks.

Davis v. Elmira Savings Bank, 40 L.Ed. 700.

Where the Constitution deals with the subject its provisions cannot be enlarged or restricted by legislative enactment in the absence of the constitutional award for so doing; and where the Constitution enumerates powers granted or denied, it must be held to have named all of the powers so dealt with as being, with the necessary implications, the full limit of authority or restriction.

McCool v. State ex rel. Howie, 115 So. 121.

Under section 181 of Constitution banks and other monied corporations could be assessed as individuals, or assessed as banks. If they are assessed as banks, then section 181 tells the legislature how this assessment must be made.

The notion that a bank may deduct the amount of nontaxable securities it may own, because an individual may, arises from misconception and is completely dispelled by considering that the bank is not taxed as an individual, but in its representative character; that the owners of the bank (shareholders) are the burden bearers of these taxes, and the bank is named and used as an instrumentality for reaching the property of shareholders in this form. Individuals are entitled to deduct from the sums of their claims such as are not taxable, because the basis on which they are taxable is the amount due them; but, as the bank (or its shareholders) is not taxable on the basis of what is due it, but the capital is to be taxed at its value to the shareholders, no deduction is allowable for anything held by it.

Bank of Oxford v. Town of Oxford, 12 So. 204.

Where the Constitution deals with the subject its provisions cannot be enlarged or restricted by a legislative enactment in the absence of the constitutional award for so doing; and where the Constitution enumerates powers granted or denied, it must be held to have named all the powers so dealt with as being with necessary implication, the full limit of authority or restriction.

McCool v. State, 115 So. 121.

There was a discrimination in favor of state banks and against national banks under chapter 22 of the Laws of 1930.

Section 5219, Federal Statutes.

National banks, and property, and their shares can be taxed under state authority only after Congress consents, and in conformity with the restrictions attached to its consent.

First National Bank of Hartford v. City, 71 L.Ed. 767.

Chapter 22 of the Laws of 1930, is for the purpose of strengthening state banks, and national banks would not receive any benefit therefrom.

The guarantee of the equal protection of the laws requires that all persons subject to such legislation shall be treated alike under circumstances and conditions both in privileges conferred and in liability imposed.

Lowry v. Clarksdale, 122 So. 193.

The main purpose of Congress in fixing limits to the state taxation on investments in the share of national banks was to render it impossible for the state in levying such a tax to create and foster an unequal and unfriendly competition by favoring institutions or individuals carrying on a similar business and operations and investments of like character.

Mercantile National Bank v. Mayor of New York, 121 U.S. 138.

Chapter 22 of the Laws of 1930, abridge the privileges and immunities of national banks operating in the state of Mississippi. One of the privileges given to national banks is that they should be assessed for taxes on the same basis as other competing money capital. This privilege is taken away from them under this legislation and a preference is made in favor of state banks.

Butler & Snow, Geo. T. Mitchell, and Flowers, Brown & Hester, all of Jackson, for appellee.

The provision in section 11 of the act that the surplus of banks, in an amount equal to one hundred per centum of the capital shall be exempt from all taxation is a constitutional provision.

There is in the Constitution no limitation upon the power of the legislature to grant exemptions.

Courts uphold what the legislature enacts on the subject of exemptions "unless they can see clearly that there is no fair reason for the law that would not require its extension to others whom it leaves untouched; or, that the exemption could under no circumstances be for the public good.

City of Jackson v. Mississippi Fire Insurance Co., 132 Miss. 421; Equitable Fire Insurance Company v. Board of Supervisors, 146 Miss. 734, 111 So. 871.

There is a limitation upon the power of the legislature. This limitation is that there must underlie the exercise of the power" some principle of public policy that can support a presumption that the public interest will be subserved by the exemption granted.

1 Cooley on Taxation (3 Ed.), 343.

The exemption provision in the 1930 Act may be repealed by the legislature at its pleasure.

City of Jackson v. Mississippi Fire Insurance Co., 132 Miss. 421; Christ Church Hospital v. Philadelphia County, 24 Howard 300, 16 L.Ed. 602; Tucker v. Ferguson, 22 Wall, 527, 22 L.Ed. 805; West Wisconsin Railroad Company v. Board of Supervisors, 93 U.S. 595, 23 L.Ed. 814; Doyle v. Continental Insurance Company, 94 U.S. 540, 24 L.Ed. 151; Northwestern Fertilizer Co. v. Hyde Park, 94 U.S. 666, 24 L.Ed. 1038; Wisconsin & Michigan Railway Company v. Powers, 191 U.S. 379, 48 L.Ed. 229; Banning Company v. California, 240 U.S. 153, 60 L.Ed. 574; Seton College v. South Orange, 242 U.S. 100, 61, L.Ed. 170; Salt Manufacturing Company v. Saginaw, 13 Wall. 373, 20 L.Ed. 611; Welch v. Cook, 97 U.S. 541, 24 L.Ed. 1112; Grand Lodge v. New Orleans, 166 U.S. 143, 41 L.Ed. 951.

Banking capital in view of section 181 of the Constitution of 1890, can be exempted from taxation.

The legislature had and has the sole...