Dodge v. Nevada Nat. Bank of San Francisco

• Decision Date: 13 May 1901
• Docket Number: 667.
• Citation: 109 F. 726
• Parties: DODGE, Assessor, v. NEVADA NAT. BANK OF SAN FRANCISCO.
• Court: U.S. Court of Appeals — Ninth Circuit

109 F. 726

DODGE, Assessor, v. NEVADA NAT. BANK OF SAN FRANCISCO.

No. 667.

United States Court of Appeals, Ninth Circuit.

May 13, 1901

Franklin K. Lane, City Atty., and W. I. Brobeck, for appellant.

T. I Bergin, for appellee.

Before GILBERT and ROSS, Circuit Judges, and HAWLEY, District Judge.

HAWLEY District Judge.

Appellee brought this suit in the circuit court of the United States to enjoin appellant, as the assessor of the city and county of San Francisco, from enforcing an assessment made by him on the shares of stock held by it as a national bank.

Preliminary to a discussion of the legal questions raised, it should be stated that section 5219 of the Revised Statutes gives to the several states the right to assess and tax the shares of a national bank under certain conditions, subject to certain restrictions. It reads as follows:

'Nothing herein shall prevent all the shares in any association from being included in the valuation of the personal property of the owner or holder of such shares, in assessing taxes imposed by authority of the state within which the association is located; but the legislature of each state may determine and direct the manner and place of taxing all the shares of the national banking associations located within the state, subject only to the two restrictions that the taxation shall not be at a greater rate than is assessed upon other moneyed capital in the hands of individual citizens of such state, and that the shares of any national banking association owned by non-residents of any state shall be taxed in the city or town where the bank is located, and not elsewhere.'

After the decision in People v. Badlam, 57 Cal. 594, the legislature added to the revenue law what is designated as section 3608, Pol. Code, which it was supposed would be sufficient provision to authorize assessments to be levied upon shares of stock in the national banks. The question being presented to the court in McHenry v. Downer, 116 Cal. 20, 47 P. 779, whether the legislature had made proper provision by said section for the assessment and taxation of national bank shares, the court decided that no proper provision had been made by the state for the exercise of that power. At the next session of the legislature it passed and transmitted to the governor for his approval a bill entitled 'An act to amend section 3608 of the Political Code of the State of California, relating to the general revenue of the state, and to property liable to taxation for the purpose of revenue; and to add new sections, to be known as sections numbers 3609 and 3610; also, relating to the general revenue of the state, and of property liable to taxation, for the purpose of revenue. ' St. 1899, p. 96.

The governor not having signed or returned the bill to the legislature within 10 days (exclusive of Sundays) of its receipt by him, it became a law March 14, 1899, under the provisions of the constitution (article 4, Sec. 16), without his approval, and took effect immediately. Acting under the provisions of these sections, appellant, as the assessor of the city and county of San Francisco, proceeded to and did assess the shares of the national banks having their principal place of business in that city and county for the fiscal year 1899-1900. The court, after hearing the case adjudged and decreed that this statute 'took effect on March 14, A.D. 1899, and not prior thereto, and was and is inoperative to authorize any assessment or taxation of any property therein mentioned and referred to liable and subject to taxation on the first Monday of March A.D. 1899, and the same was not and is not retroactive, and did not authorize the assessment of the stock of the complainant in the bill of complaint in said cause mentioned and alleged: * * * that the assessment of the stock of the complainant in the bill of complaint alleged and set forth was and is wholly unauthorized, null, and void, and of no effect whatever,'-- and 'perpetually and forever restrained and enjoined' the assessor, appellant herein, and his successors in office, from acting upon the assessment mentioned in the complaint, etc. Did the court err in entering this decree? This is the sole question presented by this appeal. Its determination requires a careful examination of certain constitutional provisions and statutory enactments of the state of California relative to the levy and the assessment of taxes, and of the principles of law applicable thereto. The case has been ably argued by the respective counsel, and the question has been fully and thoroughly discussed in all its features. It is claimed by appellee that the act in question is unconstitutional; but, before considering that question, which is one of great interest and importance, we will first consider and determine whether or not the court erred in entering the decree upon the ground therein stated.

Section 8 of article 13 of the constitution provides that:

'The legislature shall by law require each taxpayer in this state to make and deliver to the county assessor, annually, a statement, under oath, setting forth specifically all the real and personal property owned by such taxpayer, or in his possession, or under his control, at 12 o'clock meridian on the first Monday of March.'

The provisions of the Political Code follow closely the rules prescribed in the constitution. Section 3628 of this Code provides, among other things, that:

'The assessor must, between the first Monday of March and July of each year, ascertain the names of all taxable inhabitants and all property in this county subject to taxation, except such as is required to be assessed by the state board of equalization, and must assess such property to the persons by whom it was owned or claimed, or in whose possession or control it was at 12 o'clock m. of the first Monday of March, next preceding.'

Section 3629 provides that the assessor 'must exact from each person a statement, under oath, setting forth specifically all the real and personal property owned by such person, or in his possession or under his control, at 12 o'clock m. on the first Monday in March. ' Section 3652 prescribes the form of oath the assessor must append to his assessment book, wherein he is required to swear that he has assessed the property referred to in section 3628 of that Code; that he has assessed such property to the persons by whom it was owned, or in whose possession or control it was, at 12 o'clock m. of the first Monday of March next preceding. Section 3717 declares that 'every tax due upon personal property is a lien upon the real property of the owner thereof, from and after 12 o'clock m. of the first Monday of March in each year.'

The contentions of the respective counsel may be briefly stated as follows: Appellant claims that on the face of the statute which became a law on March 14, 1899, and in the light of the previous legislation and decisions of the court in regard thereto, it was the evident intention of the legislature in passing the act to have it take effect immediately, and to have it apply to the assessment of taxes for the year 1899 that, this intention being manifest, it is the duty of the court to follow the plain intent of the legislature; that, in the matter of the assessment of this national bank stock, the assessor is permitted from the first Monday in March until the first Monday of July in each year, in which time to add to the assessment roll all property in his county liable to taxation in that time; that the shares certainly became liable to taxation on March 14, 1899; that at that time, and for many weeks subsequent thereto, the assessor was in the act of assessing all property within his county subject to taxation; that until the assessment roll was completed and turned over to the equalizers, on the...