Continental Nat. Bank of Salt Lake City v. Naylor

• Decision Date: 19 February 1919
• Docket Number: 3199
• Citation: 179 P. 67,54 Utah 49
• Court: Utah Supreme Court
• Parties: CONTINENTAL NAT. BANK OF SALT LAKE CITY v. NAYLOR, County Treasurer

179 P. 67

54 Utah 49

CONTINENTAL NAT. BANK OF SALT LAKE CITY v. NAYLOR, County Treasurer

No. 3199

Supreme Court of Utah

February 19, 1919

Appeal from the District Court of Salt Lake County, Third District Hon. P. C. Evans, Judge.

Action by Continental National Bank of Salt Lake City against R. C Naylor, county treasurer of Salt Lake County, Utah.

Judgment for defendant. Plaintiff appeals.

AFFIRMED.

Howat Marshall, Macmillan & Nebeker, of Salt Lake City, for appellant.

Richard Hartley, Co. Atty., and H. L. Mulliner, of Salt Lake City, for respondent.

THURMAN, J. CORFMAN, C. J., and FRICK, WEBER, and GIDEON, JJ., concur.

OPINION

THURMAN, J.

This is an action to enjoin the collection of a tax.

Plaintiff is a national bank doing business in Salt Lake City. Defendant is the county treasurer of Salt Lake county. The complaint, in additions to these facts, alleges the capital stock of plaintiff on January 1, 1915, was the sum of $ 250,000, divided into 2,500 shares of the par value of $ 100 each; that said shares were outstanding in the hands of plaintiff's stockholders; that the surplus on said date amounted to $ 50,000; that the total of capital and surplus was $ 300,000, and each share of said stock on said date was of the value of $ 120; that the proper officers of Salt Lake county, in making assessments for that year on all property in said county except that of the shares of stockholders in plaintiff's and other banks, systematically, designedly, and intentionally assessed and valued the same at not to exceed 33 1/3 per cent. of the true money value thereof: that such assessment and valuation constitute the basis upon which property owners other than the owners of bank shares were assessed in said county; that in assessing and valuing the shares in plaintiff's bank said officers wrongfully, unlawfully, systematically, and intentionally assessed and valued said shares at 91.32 per cent. of the true value thereof in money, and the taxes levied on said shares were based on said disproportionate, excessive, unequal, and nonuniform valuation and assessments; that in assessing and valuing said bank shares said officers arbitrarily, systematically, and wrongfully included as part of the value a large sum for and on account of good will of the business of plaintiff, but intentionally and systematically failed and refused to assess, value, or consider in any manner whatever, or tax the good will of the business of any person, firm, or corporation in said county except the supposed good will of the plaintiff's business and that of other banking institutions; that, if said bank shares had been assessed and valued the same as other property in said county, the taxes on the shares of plaintiff's stock holders would not have exceeded the sum of $ 2,794.91 which sum plaintiff paid to the defendant, and stands ready to do whatever in equity ought to be done in the premises, but plaintiff alleges defendant wrongfully and unlawfully demands payment by plaintiff of the further sum of $ 4,517.19; that unless such further sum is paid defendant threatens to sell the real estate of plaintiff upon which taxes for said year have been paid, and the shares of plaintiff's stockholders, and if not restrained he will execute said threat, and thereby cloud the title of said property, and cause plaintiff and its stockholders irreparable injury for which there is no plain, speedy, or adequate remedy at law; that said shares of stock were originally assessed by the assessor of said county for said year at 102.98 per cent. of the true value thereof in money; that within the time allowed by law plaintiff filed an application with the board of equalization of said county, duly verified, for a reduction of the assessed valuation of said shares so that the same would be assessed equally and uniformly with the assessment on other classes of property in said county, and afterwards at a duly convened session of said board appeared before it and showed facts upon which it claimed that such reduction should be made; that said board wrongfully arbitrarily, and capriciously refused to reduce said valuation, so that the same would be equal and uniform with the valuation of other classes of property in said county, but on the contrary, only reduced the same to 91.32 per cent. of the true value of the same in money, thereby causing the tax on said shares, to the extent of $ 4,517.19, to be unequal, nonuniform, excessive, and discriminative, as previously alleged.

Plaintiff further alleges that said assessor and board of equalization in assessing and valuing property in said county for said year for taxation purposes knowingly, systematically, and intentionally discriminated generally against the holders of shares in banking institutions as a class for the purpose of compelling them and said banks to pay an unequal, unjust, and excessive portion of the public revenues.

Plaintiff prays that the excess valuation complained of be adjudged invalid; that defendant be perpetually enjoined from selling, or attempting to sell, said property, and temporarily restrained during the pendency of the action from further proceeding to enforce collection. The restraining order was issued.

Plaintiff afterwards by amendment to its complaint alleged, in substance, that the action of the assessor and board of equalization complained of, and the statute under which the assessment was made, were and are in violation of the Constitution and statutes of Utah, and a denial to plaintiff and its shareholders of the equal protection of the laws, a right secured by the Fourteenth Amendment to the Constitution of the United States, which right is claimed under said amendment.

Defendant by his answer admits that plaintiff is a national bank in Salt Lake City; that defendant is treasurer of Salt Lake county; that plaintiff paid defendant the sum of $ 2,794.91 as alleged; that plaintiff filed its verified application with the board of equalization for the reduction of the valuation of said shares; that plaintiff appeared before said board upon the hearing of said application, and said board did, upon said hearing, reduce the valuation of said shares from $ 210,950 to $ 175,814. Defendant, for want of information, denies the allegations of the complaint as to the capital stock of the plaintiff and the value of the shares thereof, except that he admits that on the 1st day of January, 1915, plaintiff did employ in its business fully paid up capital stocks in the sum of $ 250,000; that 2,500 shares of said stock were outstanding in the hands of its stockholders; and that plaintiff had a surplus of $ 50,000 or more.

Further answering, defendant affirmatively alleges: That the shares of stock of plaintiff bank, at the time and in the manner provided by law in 1915, were duly assessed to and against the stockholders of said bank as provided in title 80, chapter 3, Comp. Laws Utah 1907; that in determining the value of said shares the assessor of said county, in the exercise of his discretion and judgment as assessor, duly determined that the value of said shares, after making all lawful and proper deductions, was $ 210,950; that thereafter, within the time provided by law, the plaintiff, on its own behalf and that of its stockholders, applied to the board of equalization of said county for a reduction in the valuation so fixed by the assessor; that said application was duly considered by said board, who, being advised, duly and regularly exercised its discretion and judgment as to the valuation of said shares, and so acting reduced the valuation, $ 210,950, fixed by said assessor, to the sum of $ 175,814; that the judgment of said assessor and said board of equalization so exercised, and the valuation so finally determined, is final and conclusive as to the valuation of said shares of stock for the purposes of assessment for said year. Defendant prays judgment that plaintiff's prayer for relief be denied; that the restraining order be dissolved, and the action dismissed, with costs.

The trial court found the issues in favor of the defendant, entered judgment dissolving the temporary restraining order, and denied the application for a perpetual injunction. Plaintiff appeals and assigns many errors.

The gist of appellant's whole contention, when reduced to a single proposition, is that in the year 1915 the assessing officers of Salt Lake county in determining the value of bank shares for taxation purposes, systematically, wrongfully, and intentionally discriminated against said class of property as compared with other classes of property in the county. The various questions presented and discussed in appellant's brief represent different phases of this contention, and, in the opinion of the court, all of them are within the issues presented by the pleadings. We make this statement at this stage of our remarks in answer to suggestions made by respondent to the effect that certain points raised and relied on by appellant are not within the issues.

Appellant cites and quotes at length numerous sections of the Constitution, both state and federal, and also various provisions of the state law relating to taxation, upon which it relies in support of its contention. For the convenience of those whom it may concern, the sections of the state Constitution and laws cited by appellant are made part of this opinion and quoted at length.

Sections 2 and 3, art. 13, Utah Constitution:

"Sec. 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. The word property, as used in this article is hereby declared to include moneys, credits, bonds, stocks, franchises...