Dennis v. First Nat. Bank of Great Falls

• Decision Date: 03 February 1919
• Docket Number: 4276.
• Parties: DENNIS, Treasurer of Cascade County, v. FIRST NAT. BANK OF GREAT FALLS.
• Court: Montana Supreme Court

178 P. 580

55 Mont. 448

DENNIS, Treasurer of Cascade County, v. FIRST NAT. BANK OF GREAT FALLS.

No. 4276.

Supreme Court of Montana

February 3, 1919

Appeal from Eighth District Court, Cascade County; H. H. Ewing Judge.

Action by Lee Dennis, Treasurer of Cascade County, Mont., against the First National Bank of Great Falls, Mont., for and on behalf of its stockholders. From a judgment for defendant plaintiff appeals. Affirmed.

Geo. A Judson, H. R. Eickemeyer, and La Rue Smith, all of Great Falls, and S. C. Ford and Frank Woody, both of Helena, for appellant.

Cooper Stephenson & Hoover, of Great Falls, for respondent.

COOPER J.

In 1915 the Legislative Assembly enacted chapter 31 (Laws 1915, p. 45), amendatory of sections 2503-2505 of the Revised Codes, relating to the assessment of real estate owned by banks, national and state, and shares of stock of such institutions. Section 1 of the act provides:

"All shares of stock in state and national banks and banking corporations, whether of issue or note [not?], existing by authority of the United States or of this state, and located within this state, and doing business within the state shall be assessed to the owners thereof; *** all such shares must be listed and assessed with regard to their value at twelve o'clock noon, on the first Monday of March of each year, to be ascertained by adding the surplus and undivided profits to the face value of such shares, provided, that if any portion of the capital stock of any bank or banking corporation herein named, shall be invested in real estate and such bank or banking corporation shall hold title thereto, the assessed valuation of such real estate shall be deducted from the total value of the shares of stock of such bank or banking corporation *** and such real estate shall be assessed to the bank or banking corporation holding the same, as other real estate. The persons or corporations who appear upon the records of the bank or banking corporation herein named, to be the owners of shares at the close of the business day next preceding the first Monday in March in each year, shall be taken and deemed to be the owners thereof for the purpose of this section. Such shares of stock shall not be assessed at any higher rate than other property and shall be subject to all deductions allowed or given in the assessment of other property."

Section 2 provides that the bank shall pay the assessment upon the shares above mentioned, and that for convenience their assessment shall be entered on the personal property list in the name of the bank.

Section 3 prescribes the duties of bank officers, requiring them to furnish to the assessor certain information with relation to the capital stock, surplus, etc., of the bank.

Pursuing the provisions of the act, the assessor of Cascade county assessed the shares of the capital stock of the First National Bank of Great Falls more particularly described below. The bank refused to abide by the assessment and a suit was instituted by the treasurer of the county against the bank to have determined the rights of the parties. The matter was submitted to the court on an agreed statement of facts, the more salient features of which may be briefly epitomized thus:

It is agreed that the cashier of defendant bank delivered to the assessor the statement required by section 2 of the act, including the face value of the bank's capital stock ($200,000), the amount of surplus ($150,000), and undivided profits ($35,161.90), making a total of all three items of $385,161.90; that $344,358.98 of this amount was represented by and invested in real estate owned by the bank and situate in Montana, upon all of which the taxes have been duly paid by the bank; that the real estate owned by it in Cascade county was for the year 1917 assessed by the assessor and valued for assessment at the sum of $229,730; that the assessor, acting under the provisions of section 1 of the statute above, deducted from the total of capital stock, surplus, and undivided profits amounting to $385,161.90 the sum of $229,730, the assessed valuation placed by him upon the bank's real estate located in Cascade county, and thus ascertained that there remained the sum of $155,431.90, not represented by real estate and taxable to the stockholders of the bank as provided by the statute, and assessed such amount at 75 cents upon the dollar, making a total of $116,575; that agreeably to a ruling of the state board of equalization that all bank stock should be assessed at 65 cents upon the dollar the sum last above mentioned was reduced to $101,030, at which amount the shares were assessed, the tax levied amounting to $3,705. It was further agreed that if the contention of the bank should be sustained, i. e., that the assessor should have deducted from the total of capital stock, surplus, and undivided profits, $385,161.90, the amount invested in real estate owned by it, to wit, $344,358.98, there would have remained $40,902.92 assessable to the stockholders, which, assessed at 65 cents upon the dollar (agreed to be the true valuation for present purposes), would have been of the assessable value of $26,586.89 only, and that the legal tax on that amount for the year in question would have been but $975 instead of $3,705.26, which sum of $975 was tendered and paid into court by the bank.

The district court found in favor of the defendant's contention and entered judgment accordingly. The county treasurer has appealed.

The trial court in its preface to the "conclusions of law" stated the point at issue in these words:

"The only question presented by the facts in this case is whether the actual amount of real estate investments or the assessed value of the real estate of the defendant should be deducted from the aggregate of the capital, surplus and undivided profits in ascertaining the value of the shares of the capital stock of the defendant for taxation, section 1 of chapter 31 above providing that 'the assessed valuation of such real estate shall be deducted from the total value of the shares of stock,' etc."

The court concluded:

"That the assessment of the stock of the defendant is illegal and void, and that $975 was the total amount of the legal assessment that could be levied and assessed against the stockholders of the bank."

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