City Of Richmond v. Merch.S' Nat. Bank Of Richmond

• Citation: 98 S.E. 643
• Parties: CITY OF RICHMOND. v. MERCHANTS' NAT. BANK OF RICHMOND.
• Decision Date: 13 March 1919
• Court: Supreme Court of Virginia

98 S.E. 643

CITY OF RICHMOND.

v.MERCHANTS' NAT. BANK OF RICHMOND.

Supreme Court of Appeals of Virginia.

March 13, 1919.

Error to Hustings Court of Richmond.

Petition by the Merchants' National Bank of Richmond against the city of Richmond, to correct an assessment. Order granting plaintiff relief prayed for, and defendant brings error. Reversed.

H. R. Pollard, of Richmond, for plaintiff in error.

Coke & Pickrell and Legh R. Page, all of Richmond, for defendant in error.

WHITTLE, P. This case originated in the hustings court with a petition by the Merchants' National Bank of Richmond against the city of Richmond, to correct an alleged erroneous assessment for the year 1915, directly against the bank upon its capital stock, surplus, and undivided profits, less the assessed value of its real estate and other deductions allowed by law, instead of being levied and assessed against the shareholders of the stock of the bank upon the value of their shares ascertained as the law prescribes. Moreover, complaint was made that the assessment, instead of being limited to the alleged maximum rate of 30 cents on each $100 of the ascertained value of the shares of stock, was fixed, levied, and collected at $1.40 on each $100 of such value. To an order of the hustings court granting the relief prayed for, this writ of error was allowed.

Two assignments of error were pressed: (1) That the court erred in overruling the motion of the city to dismiss the proceeding for want of jurisdiction. (2) In establishing 30 cents on the $100 of value as the maximum rate that could be levied by the city on the shares of bank stock in place of $1.40.

The first assignment rests upon the contention that the assessment, in essence, isagainst the stockholders, and therefore the proceeding should have been in their name, and could not be maintained by the bank. Main St. Bank, Inc., v. City of Richmond, 122 Va. 574, 95 S. E. 386.

Whatever merit there may have been in this assignment in the first instance, the error in procedure was cured by the consent order, nunc pro tunc, whereby the amount of taxes ascertained to be due from the shareholders was assessed against them. The court, by virtue of the consent order, was within its powers thus to admit the shareholders (the real persons in interest) as parties, and to make a correct assessment against them. Commonwealth v. Schmelz, 114 Va. 364, 76 S. E. 905.

2. The remaining controverted question for our determination is, What was the maximum rate which the city of Richmond could lawfully levy on the shares of bank stock for the year 1915?

By way of premise to the consideration of this feature of the case, we may observe that the city of Richmond, under its charter, possesses plenary power of taxation, subject only to such limitations as may be placed upon the exercise of that power by the Constitution and Legislature.

The ordinance approved April 9, 1915, is founded upon the city charter and the segregation act passed by the General Assembly at its extra session of 1915, and approved March 15, 1915 (an emergency was declared to exist with respect to it, so that the act was in force from its passage). Acts 1915, c. 85, p. 119. The gravamen of the bank's complaint is that its capital is taxed at the rate of $1.40 on the $100, instead of 30 cents, the rate imposed on other moneyed Capital in the hands of individuals. Its contentions are based on an alleged conflict between the ordinance and section 1040a of the Code; section 168 of the state Constitution; the fact that at the date of the assessment the rate of taxation on all intangible property taxed that was also taxed by the state was at the rate of 30 cents on the $100; and that a higher rate than 30 cents contravened section 5219, Rev. Stat. U. S. (U. S. Comp. St. § 9784). All of these objections except the last were practically disposed of. by the construction placed upon the segregation act by the decision of this court in the case of City of Richmond v. Drewry-Hughes Co., 122 Va. 178, 94 S. E. 989.

The history of the litigation of which that case is the sequel was this: By authority of the ordinance (one of the features of which is here drawn in question) the city assessed the capital employed by Drewry-Hughes Company (and other merchants residing and doing business in the city) in their business as merchants at $1.40 on the $100. From an order of the hustings court declaring the correct rate of taxation in that case to be 30 cents on the $100, the city appealed, and at the November term, 1916, of this court that judgment was affirmed. The case again came before us on rehearing, and was ably argued by the original counsel, and also by others, whose localities were affected by the decision, on briefs; and in an exhaustive opinion, written by Judge Kelly and concurred in by all the other judges, the judgment of the hustings court was reversed. The last opinion covers the contentions stressed in this case, save the insistence that the exception in the segregation act as therein construed would, if applied to national banks, be violative of section 5219, supra.

Since, therefore, we have no purpose to recede from the conclusions reached in the merchants' tax case, further elaborate discussion of the questions settled by that decision is unnecessary. This statement is predicated upon the view that the exceptions in the act of 1915, in respect to the capital of merchants and the...