Commercial National Bank v. Chambers

• Decision Date: 10 April 1900
• Citation: 21 Utah 324,61 P. 560
• Court: Utah Supreme Court
• Parties: COMMERCIAL NATIONAL BANK, RESPONDENT, v. ALMA D. CHAMBERS, TREASURER OF WEBER COUNTY, APPELLANT

61 P. 560

21 Utah 324

COMMERCIAL NATIONAL BANK, RESPONDENT, v. ALMA D. CHAMBERS, TREASURER OF WEBER COUNTY, APPELLANT

Supreme Court of Utah

April 10, 1900

Appeal from the Second District Court, Weber County, Hon. H. H Rolapp, Judge.

Action by plaintiff against defendant, as treasurer of Weber County to have declared void all taxes assessed against the bank for the year 1898 in excess of $ 612.99, and to have the treasurer enjoined from collecting such excess, or from enforcing the collection by sale of the property assessed, or otherwise. This case raises the question as to whether or not plaintiff was entitled to deductions from the stock assessment for the value of the real estate situated outside the limits of this State, and also to have the bona fide debts of non-resident shareholders deducted from the value of their stock. From a judgment for defendant plaintiff appealed.

Reversed and remanded.

George Halverson, Esq., for appellant.

"As a general rule, equity has nothing to do with erroneous assessments. Aside from the requirements of the statute public policy requires that the revenues should be promptly assessed and collected by those officers and through those agencies which the law has specially provided for that purpose. Unless, therefore, a case can be brought, by its particular and peculiar facts, under some one of the heads of equity jurisdiction, such as preventing a multiplicity of suits, removing clouds from title, or the like equity will not ordinarily interfere unless the tax be illegal. The remedy prescribed by the statute will be found most ample and expeditious, and in such cases it ought to be exclusive." Stewart v. Maple, 70 Pa. 221; 1 High on Inj., Secs. 488, 492, 493; Hughes v. Kline, 30 Pa. 227; Macklot v. City of Davenport, 17 Iowa 379; Merrill v. Gorham, 6 Cal. 41; Porter v. R R. Co., 76 Ill. 561; 11 Desty Tax'n, 661; Bank v. Lawler, 46 Conn. 243; Seeley v. Town of Westport, 47 Conn. 294; Glass Co. v. McCaleb, 81 Ill. 556; Mayor v. Miserole, 26 Wend., 131; State R. R. Tax. Cases, 92 U.S. 575; Cooley on Taxation, 542; Oregon & W. M. Sav. Bank v. Jordan, 17 P. 622; Cambell v. Brashford, 16 P. 269; Phoenix Grain & Stock Exchange v. Gleason, 13 N.E. 209; N.Y. Grain & Stock Exchange v. Gleason, 13 N.E. 204; High on Inj., Sec. 586 and Note 3. See also Sec. 485; Chicago v. Frary, 22 Ill. 34.

"It is only where the assessment is wholly void, or void with respect to separable portions of the property, the amount collected on which is ascertainable, or where the assessment has been set aside as invalid that an action at law will lie for the taxes paid, or for a portion thereof. Overvaluation of property is not a ground of action at law for the excess of the taxes paid, beyond what should have been levied upon a just valuation. The courts can not, in such cases, take upon themselves the functions of a revising or equalization board." Newman v. Supervisors, 45 N.Y. 676-87; 53 N.Y. 49; 101 N.Y. 240; Lincoln v. Worcester, 8 Cush., 55; Hicks v. Worcester, 130 Mass. 478; Balfour v. Portland, 28 F. 738; Stanley v. Supervisors, 121 U.S. 535; Taylor v. Robertson, 52 P. 1 (Utah); People v. Goldtree, 44 Cal. 325; Maxwell v. Board; 53 Cal. 391; Orr v. State Board, 28 P. 418 (Idaho); Merrill v. Gorham, 6 Cal. 41; Trader's Ins. Co. v. Farwell, 102 Ill. 13; Powers v. Bowman, 53 Iowa 359; Osbourne v. Blake, 19 Kan. 299; Hogenback v. Howard, 34 Mich. 1; State Railroad Tax Cases, 92 U.S. 613; West Portland Park Association v. Kelly, 45 P. 901.

Where there is no method pointed out by statute to secure a review of the action of the board of equalization the writ of certiorari is the proper and only means of bringing such action before the court for review. Swift v. Poughkeepsie, 37 N.Y. 516; Milwaukee Iron Co. v. Schubel, 29 Wis. 444; People v. Board of Assessors, 39 N.Y. 81; People v. The Assessors of Albany, 40 N.Y. 154; Western R. R. Co. v. Nolan, 48 N.Y. 518; Orr v. State Board, 28 P. 418, citing Desty on Taxation, p. 631.

So where a remedy exists by certiorari for the correction of errors and the complainant has neglected to avail himself of that remedy, he will not be allowed relief by injunction because of such errors in the absence of fraud. High on Inj., Sec. 488; Western R. R. Co. v. Nolan, 48 N.Y. 513; West Portland Park Assn. v. Kelly, 45 P. 902; Cooley on Taxation, 747-753-755; Gage v. Evans, 90 Ill. 569; Cleghoine v. Postlewait, 43 Ill. 428; Darling v. Gunn, 50 Ill. 424.

And this is the rule laid down by our supreme court in the case of Home Fire Ins. Co. v. Lynch, 19 Utah 189; 56 P. 681.

Only such deductions may be made, and from such property or credits as the statute permits; and they must be made in the manner, and upon the production of such evidence, as the statute requires. Secs. 2516, 2517, 2518, R. S. 1898; 25 Am. and Eng. Ency., 229; Oregon & Wash. Sav. Bank v. Catlin, 15 P. 462 (Ore.); Cooley on Taxation, 748-750.

The court erred in overruling the defendant's demurrer upon the ground that the complaint is uncertain in that it does not show the rate of taxation levied against said property, and only alleges by way of argument and inference what the total amount of taxes would be if assessed as contended for by the plaintiff. Voorhees v. Fisher, 9 Utah 303.

Coming now to the question: Is the plaintiff entitled to the deductions claimed, irrespective of the objections urged?

1. The constitution provides, Article 13; Section 2: "All property in the State, not exempt under the laws of the United States, or under this constitution, shall be taxed in proportion to its value, to be ascertained as provided by law. * * *

Sec. 3. The Legislature shall provide by law a uniform and equal rate of assessment and taxation on all property in the State, according to its value in money, * * * provided that a deduction of debts from credits may be authorized." * * *

Section 2506 of the Revised Statutes of 1898 provides:" All taxable property must be assessed at its full cash value. Land and the improvements thereon must be separately assessed." State v. Thomas, 16 Utah 86; 50 P. 615.

Section 2516, Subdivision 6 of Section 2517, and Section 2518 provide for the deduction of debts from the gross amount of credits.

Sections 2507, 2508, and 2509 provide for the assessment of bank stock. Dutton v. Citizens' National Bank, 36 P. 721; Rhodes v. Kelley, 51 P. 593; Dwight v. Boston, 90 Am. Dec. 149; 12 Allen, 316. See Judge v. Spencer, 15 Utah 42; 48 P. 1098; Consolidated National Bank v. Pima County, 48 P. 292.

It is a strained construction of the word "credit" or of the word "demand" to hold it to include stocks in a corporation. Dutton v. Citizens' National Bank, 36 P. 721; First National Bank v. Ayers, 36 P. 724. Affirmed in First National Bank v. Ayers, 160 U.S. 660; 16 S.Ct. 412; Niles v. Shaw, 34 N.E. 162 (Ohio); Chapman v. First National Bank, 47 N.E. 56 (Ohio, 1897). Affirmed in Chapman v. First National Bank, 173 U.S. 205, 19 S.Ct. 407, 43 L.Ed. 669 (U.S. S.Ct. Rep., Feb., 1899); Bridgman v. Keokuk, 33 N.W. 355; Seward v. Cattle, 14 Neb. 144; First National Bank v. Township of St. Joseph, 9 N.W. 838 (Mich.); McHenry v. Downer, 47 P. 779 (Cal.); Raleigh R. R. Co. v. Wake, 87 N.C. 414; Bressler v. Wayne County, 49 N.W. 787 (Neb.).

All the later cases sustain the constitutionality of the statute in refusing to allow stockholders to deduct debts from bank stock, and in holding that bank stock is not a credit within the meaning of the statute. Dutton v. Citizens' National Bank, 36 P. 719; Washington National Bank v. King County, 38 P. 219; Bressler v. Wayne County, 32 Neb. 834; 49 N.W. 787; First National Bank v. Chehalis County, 32 P. 1051; Chapman v. First National Bank, 47 N.E. 56; First National Bank v. Ayers, 36 P. 724; First National Bank v. Ayers, 160 U.S. 660 16 S.Ct. 412, 40 L.Ed. 573 (1896); Mercantile Bank v. City of New York, 121 U.S. 830; Mercantile Bank v. Shields, 28 F. 777; Richards v. Rock Rapids, 31 F. 505.

Albert R. Heywood, Esq., Hugh A. Tait, Esq., for respondent.

If the deductions should have, as we claim, been allowed, then to that extent the tax was illegal, and the bank in paying the tax on the real estate and tendering the amount of the legal part of the tax on the shares, complied with Section 2683 of the statutes, and became at once authorized to an injunction against this illegal excess, and indeed this was the appropriate mode of relief. See also Pelton v. Commercial National Bank, 11 Otto, 143; Cummings v. Merchants' National Bank, 11 Otto, 153.

The stockholders refused to pay this illegal excess, and had a right to. See Cummings v. Bank, supra.

And this action was properly brought by the bank for the stockholders. Bank v. Hills, 5 F. 249; Whitney v. Parker, 41 F. 402; see note bottom p. 387, 19 F. Rep.; Cummings v. Bank, supra; Hills v. Nat. Ex. Bank, 15 Otto, 319.

Before applying Secs. 2508 and 2518 of our statute, the court's attention is invited to the following authorities, holding that deductions for bona fide debts must be allowed to shareholders against the assessed value of shares of national banks. The cases on this point in the Supreme Court of the United States and many other courts are referred to in the opinions in the following cases; the citations are so voluminous that it is ventured that their additional listing in this brief will be overdoing it. McAden v. Com. Mecklenburg Co., 2 S.E. 670 (97 N.C. 355); First Nat. Bank v. Fisher, 26 P.R. 482; Newport v. Mudgett, 51 P.R. 466; Bramel v. Manring, 51 P.R. 1050.

Refusal to include the shares of bank stock in credits of the shareholder from which his debts could be deducted, infringes upon the rule of uniformity and equality required by the constitution. Pullman Bank v. Manring, 51 P. R., 464.

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