City of New Orleans v. Citizens Bank of Louisiana

• Citation: 42 L.Ed. 202,17 S.Ct. 905,167 U.S. 371
• Decision Date: 24 May 1897
• Docket Number: No. 108,108
• Parties: CITY OF NEW ORLEANS v. CITIZENS' BANK OF LOUISIANA
• Court: United States Supreme Court

167 U.S. 371

17 S.Ct. 905

42 L.Ed. 202

CITY OF NEW ORLEANS

v CITIZENS' BANK OF LOUISIANA.

No. 108.

May 24, 1897.

Samuel L. Gilmore, for appellant.

Wm. A. Maury, for appellee.

Mr. Justice WHITE delivered the opinion of the court.

Under the taxing laws of the state of Louisiana, real estate held or owned by banking corporations is assessed like the same class of property owned by other citizens, but special provision is made for the assessment in other respects of the capital of the banks, as follows:

'That no assessment shall hereafter be made under that name, on the capital stock of any national bank, state bank, banking company, banking firm or banking association, whose capital stock is represented by shares, but the shares shall be assessed at their actual value as shown by the books of the bank, or banks, to the shareholders, who appear as such upon the books, regardless of any transfer not registered or entered upon the books, and it shall be the duty of the president or other officer to furnish to the assessor a complete list of those who are borne upon the books as shareholders; and all taxes so assessed shall be paid by the bank, company, firm, association or corporation, which shall be entitled to collect the amounts from the shareholders or their transferees; all real estate owned by the bank, company, firm, association or corporation shall be assessed directly to the bank, company, firm, association or corporation, and the pro rata of such direct property taxed, proportioned to each share of capital stock, shall be deducted from the amount of taxes assessed to that share under this section.

'Such assessment shall be made where the bank, &c., is located, and not elsewhere, whether the shareholders reside there or not. The said book value shall be ascertained upon a statement duly sworn to by the president, cashier or secretary, and chairman of finance committee, or in the absence of such latter officer then by one of the directors, showing the assets in detail, and the valuation placed upon each, and said valuation shall be at a fair market value. The sworn statement of the bank's condition made next preceding the date of listing shall be the basis of assessment. Any president or other officer who shall refuse or fail to deliver the said list of shareholders, and said statement of book value and of bank's condition, within the first twenty days of January of each year to the assessor, shall be guilty of a misdemeanor, and on conviction shall be punished by fine or imprisonment, or both, at the discretion of the court. The district attorney will at once act upon any complaint of such neglect or refusal made to him by the assessor, or by the board of assessors in the parish of Orleans.' Acts La. 1890, p. 133; Acts La. 1888, p. 123.

The revenue laws of the state, in addition, provide that, whenever the assessors find that property has been omitted from the assessment rolls, such property shall be assessed for the current year and for three back years.

The Citizens' Bank of Louisiana, a corporation created under the laws of that state, filed in 1892 its bill in the circuit court of the United States against the city of New Orleans, the board of state assessors for the parish of Orleans and the state tax collectors, for the various collection districts in the parish of Orleans. The bill, in substance, alleged that although the bank was contractually exempt from state and municipal taxation, under its charter and the acts supplementary thereto, the board of assessors were about to assess the bank, under the assessing law above referred to, not only for the tax of the year 1892, but also for the three preceding years, viz. 1889, 1890, and 1891; that the assessing board had called upon the bank for a list of its shareholders, in order to make the assessment; and that, unless restrained, the assessment would be made, and the tax collected thereon. Besides alleging the contractual exemption resulting from the charter, the bill averred that the fact of such exemption was conclusively determined by the presumption of the thing adjudged, resulting from judgments previously rendered between the parties. The bill also averred that an attempt to enforce the assessment and tax would impair the obligations of a contract protected by the constitution of the United States, the rights asserted by the bank under the federal constitution being specially set up and claimed in the complaint. The prayer was for a restraining order, and for an injunction enjoining the board of assessors from taking the steps necessary to make the assessment, from completing the assessment, and the collectors from collecting any tax thereunder. The restraining order which was issued allowed the board of assessors to obtain the necessary information from the bank to make the assessment, and also the formal making of the assessment by the board, subject to the final decision as to its legal right to assess the bank, but restrained any attempt to collect any tax, or to enforce any assessment after it was made under the conditions above state, until the final decision in the cause. Under the terms of the restraining order, the board of assessors assessed the bank in accordance with the law above referred to for the year 1892, and for the years 1889, 1890, and 1891.

The complainant was refused leave to file an amended bill attacking these assessments for invalidity in form. Thereupon the complainant filed a supplemental bill against the sheriffs of 13 parishes in the state of Louisiana, outside of the parish of Orleans. This bill alleged that the sheriffs named as defendants were ex officio tax collectors for the respective parishes in which they held the office of sheriff, and that as such they proposed to collect, and were about to collect, certain taxes for various years on real property belonging to the bank, situated in said parishes, and which had been illegally assessed for taxation therein; that the assessment of the taxes complained of had impaired, and the collection thereof would further impair, the obligations of the contract resulting from the charter of the bank, protected from impairment under the constitution of the United States. The prayer was that the named defendants be made parties to the bill, and that the collection of the taxes be perpetually enjoined. Demurrers to the jurisdiction to entertain either the original or supplemental bill having been overruled, answers were filed specially denying the right of the bank to the exemptions claimed. A hearing was had, and from a decree entered against them (54 Fed. 73) the defendants appealed to this court.

The court found in favor of the complainant, and adjudged that 'the exemption of said Citizens' Bank, its capital, property, and shares of stock of its shareholders, is hereby recognized and decreed to exist as conferred by its charter and the laws amendatory thereof, and relating to the Citizens' Bank, and especially by Act No. 40 of 1874, extending the charter of the Citizens' Bank, which extension, and the said exemption for the further period thereof, is hereby recognized and decreed to exist, and the injunction herein issued is hereby made peremptory.' The injunction which the final decree allowed forbade the collection of taxes for designated years by the state of Louisiana and the city of New Orleans 'upon the capital, property, or shares of stock of the shareholders of said bank, whether assessed against the bank or its shareholders,' and in addition the writ also enjointed the demanding or collecting from the bank of any state or city license tax.

The exemptions to which the decree below held the bank to be entitled related, therefore, to distinct objects of taxation one not necessarily connected with or dependent upon the other, and may be summarized as follows: First, that the bank was not subject to taxation on its capital, shares of stock, or real estate and furniture actually used for the carrying on of its banking business, and that the bank could not be lawfully obliged to pay the sum of any tax assessed on its shareholders; second, that the stockholders of the bank were not liable for assessment on their shares of stock; third, that the bank was also not subject to taxation on any real estate held by it which had been mortgaged to secure stock subscriptions, and had become the property of the bank under foreclosure proceedings, because property so acquired became, by virtue of the purchase, a part of its capital stock; fourth, that the nonliability of the bank to taxation exbraced also immunity from the payment of a license tax to either the state of Louisiana or the city of New Orleans.

The contentions which arise between the parties on this appeal from the decree below rendered are as follows: First. The bank asserts that by the effect of its charter it was contractually exempt from taxation on all the foregoing objects of taxation; that this exemption existed, not only during the terms of the original charter, but during the term for which the charter was extended,—the contract being asserted to result, not only from the express terms of exemption in the original act, but from the fact that the very nature of the contract between the bank and the state carried this exemption into the period of the extended charter, as the bank and its capital was dedicated to the payment of the bonds, outstanding obligations of the state, and the bank was therefore, in a measure, a quasi state institution. Second. That the contractual right to the exemption as above stated is conclusively determined by the presumption of the thing adjudged, resulting from certain judgments relied upon.

On the other hand, the contention of the defendants is that the exemption did not originally inally obtain, or, if it did, was not carried into the extended period of the charter, because it could not be so carried under the constitutions of the state of Louisiana of 1868 a...