Des Moines Nat. Bank v. Fairweather, 33525.

• Decision Date: 28 September 1921
• Docket Number: No. 33525.,33525.
• Citation: 184 N.W. 313,191 Iowa 1240
• Parties: DES MOINES NAT. BANK v. FAIRWEATHER, MAYOR, ET AL.
• Court: Iowa Supreme Court

191 Iowa 1240

184 N.W. 313

DES MOINES NAT. BANK

v.FAIRWEATHER, MAYOR, ET AL.

No. 33525.

Supreme Court of Iowa.

Sept. 28, 1921.

Appeal from District Court, Polk County; Thomas Guthrie, Judge.

Supplemental opinion on rehearing. Petition overruled.H. W. Byers, Reson S. Jones, C. A. Weaver, and Paul Hewitt, City Legal Department of Des Moines, all of Des Moines, for appellant.

Sargent, Gamble & Reed, of Des Moines, for appellees.

EVANS, C. J.

Original opinion was filed herein on February 12, 1921, and is reported in 181 N. W. 459. Certain points are made in the petition for rehearing which merit further discussion. In our original opinion we disposed of plaintiff's first six grounds of complaint on the theory that each and all presented federal questions, and were disposed of by federal authority. This assumption on our part was too broad, in that ground 4 of the complaint did challenge the validity of the assessment made by the board of review as being in violation of our own statute, section 1322. All the grounds of complaint are specifically set out in the original opinion and we will not repeat them here. The challenge of ground 4 now under consideration was and is that by the express provisions of section 1322 of our Code Supplement 1913, the assessor was required to deduct from the assets all securities exempt from taxation in order to arrive at a basis of valuation of the shares of stock. The point is now pressed in the petition for rehearing. The point thus made involves a consideration of both sections 1321 and 1322, which are as follows:

“Sec. 1321. Private banks or bankers, or any persons other than corporations hereinafter specified, a part of whose business is the receiving of deposits subject to check, on certificates, receipts, or otherwise, or the selling of exchange, shall prepare and furnish to the assessor a sworn statement, showing the assets, aside from real estate, and liabilities of such bank or banker on January first of the current year, as follows:

1. The amount of moneys, specifying separately the amount of moneys on hand or in transit, the funds in the hands of other banks, bankers, brokers or other persons or corporations, and the amount of checks or other cash items not included in either of the preceding items;

2. The actual value of credits, consisting of bills receivable owned by them, and other credits due or to become due;

3. The amount of all deposits made with them by others, and also the amount of bills payable;

4. The actual value of bonds and stocks of every kind and shares of capital stock or joint stock of other corporations or companies held as an investment, or in any way representing assets, and the specific kinds and description thereof exempt from taxation;

5. All other property pertaining to said business, including real estate, which shall be specially listed and valued by the usual description thereof; the aggregate actual value of moneys and credits, after deducting therefrom the amount of deposits, and the aggregate actual value of bonds and stocks, after deducting the portion thereof otherwise taxed in this state, and also the other property pertaining to the business, shall be assessed as provided by section thirteen hundred and five of this chapter, not including real estate, which shall be listed and assessed as other real estate.

Sec. 1322. Shares of stock of national banks and state and savings banks, and loan and trust companies, located in this state, shall be assessed to the individual stockholders at the place where the bank or loan and trust company is located. At the time the assessment is made the officers of national banks and state and savings bank and loan and trust companies shall furnish the assessor with lists of all the stockholders and the number of shares owned by each, and the assessor shall list to each stockholder under the head of corporation stock the total value of such shares. To aid the assessor in fixing the value of such shares, the said corporation shall furnish him a verified statement of all the matter provided in section thirteen hundred twenty-one of the supplement to the Code, 1907, which shall also show separately the amount of the capital stock and the surplus and undivided earnings, and the assessor from such statement shall fix the value of such stock based upon the capital, surplus, and undivided earnings. In arriving at the total value of the shares of stock of such corporations, the amount of their capital actually invested in real estate owned by them and in the shares of stock of corporations owning only the real estate (inclusive of leasehold interests, if any) on or in which the bank or trust company is located, shall be deducted from the real value of such shares, and such real estate shall be assessed as other real estate, and the property of such corporation shall not be otherwise assessed. A refusal to furnish the assessor with the list of stockholders and the information required under this section shall be deemed a misdemeanor and any bank or officer thereof so refusing shall be punished by a fine not exceeding five hundred dollars.”

It will be noted that by the provisions of section 1321 the private banker is required to aid the assessor by furnishing to him certain enumerated data as a description of his assets, including specific description of such assets as are “exempt from taxation.” Section 1322, by its reference to section 1321, in effect calls for the same data. The argument now is that the same data which fixes the assessable value of the assets of a private banker must also fix the assessable value of the shares of stock of an incorporated bank.

[1] Manifestly United States securities are exempt from state taxation. To assess them for taxation in the hands of the owner. whether private banker or other person, would be an interference with federal prerogative. Clearly therefore a private banker as owner of United States securities could, under federal law, insist upon their exemption from taxation. Does it follow that, under section 1322, they must be eliminated from consideration of the assessor in fixing upon the assessable value of the shares of stock held by the shareholders? Section 1322 answers this question in the negative in that it expressly directs the assessor to “fix the value of such stock” by basing such valuation “upon the capital, surplus, and undivided earnings.” Such was the course pursued by the assessor in this case. Whereas another provision of this section provides for the elimination of real estate from such basis of valuation, there is no provision in such section for eliminating “exempt” assets from such basis. We are not considering at this point whether any discrimination is presented in the operation of these two sections. If yea, a federal question would be presented which we consider in the next division hereof. We hold here only that section 1322 is mandatory upon the assessor as presenting a specific enumeration as a basis for the valuation of stock for the purpose of taxation, and that such enumeration does not permit the elimination of “exempt assets” for the purpose of such valuation. It follows that the valuation fixed...