First Nat. Bank v. Chehalis County

• Decision Date: 08 March 1893
• Citation: 32 P. 1051,6 Wash. 64
• Parties: FIRST NAT. BANK OF ABERDEEN v. CHEHALIS COUNTY ET AL.
• Court: Washington Supreme Court

32 P. 1051

6 Wash. 64

FIRST NAT. BANK OF ABERDEEN v. CHEHALIS COUNTY ET AL.

Supreme Court of Washington

March 8, 1893

Appeal from superior court, Chehalis county; Mason Irwin, Judge.

Action by the First National Bank of Aberdeen, Wash., against the county of Chehalis and James M. Carter, treasurer, to restrain the collection of taxes levied on plaintiff's capital stock. From a judgment sustaining a demurrer to the complaint, plaintiff appeals. Affirmed.

Preston Carr & Preston, James B. Howe, and M. J. Cochran, for appellant.

James A. Haight, Asst. Atty. Gen., for respondents.

STILES J.

The appellant bank complains that the county treasurer of Chehalis county is about to levy upon the property of the bank for taxes for the year 1891 which were assessed to the bank upon its capital stock in the sum of $50,000. The complaint shows that, although its cashier delivered to the county assessor a list of its stockholders, giving their residence, together with a statement of the amount of the capital stock of the bank held by each of its stockholders on the 1st day of April, 1891, the assessor refused to assess the stock to the holders thereof, and assessed the whole of it to the corporation in solido. The tax was levied under the revenue act of 1891, and the first point made by appellant is that an assessment of the capital stock of a national bank, made to the bank in solido, is forbidden by the provisions of Rev. St. U.S. § 5219. It seems to us however, that this contention must be resolved against the appellant upon the authority of National Bank v. Com., 9 Wall. 353. Section 5219, Rev. St. U.S., is 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 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 nonresidents of any state shall be taxed in the city or town where the bank is located; and not elsewhere. Nothing herein shall be construed to exempt the real property of associations from either state, county or municipal taxes to the same extent, according to its value, as other real property is taxed." This section, so far as the point in issue goes, is in substance the same as the forty-first section of the act of congress establishing national banks, (13 Stat. 111.) In the case cited, the state of Kentucky, many years before national banks were thought of, had the following provisions among its laws: First. That on bank stock or stock in any moneyed corporation of loan or discount there should be paid an annual tax of 50 cents on each share thereof equal to $100, or on each $100 of stock therein owned by individuals, corporations, or societies. Second. The cashier of a bank and the treasurer of any other institution whose stock is taxed should, on the 1st day of July in each year, pay into the treasury the amount of tax due. If such tax were not paid, the cashier and his sureties should be liable for the same and 20 per cent. upon the amount, and the said bank or corporation should thereby forfeit the privileges of its charter. 2 Rev. St. Ky. 1860, pp. 239, 266. Under these provisions it was held, in the case above cited, that the bank was subject to an action for the amount of the tax assessed upon the stock; the theory being that the state had the right to resort to the bank as a garnishee for the collection of its claims against the stockholders for taxes which it might otherwise be unable to collect by any means within its power. That case is unreversed, and must be taken to be conclusive authority upon the argument of the question before us. Bank v. Fisher, (Kan.) 26 P. 482, and Miller v. Bank, (Ohio,) 21 N.E. 860, are late cases, where, from a superficial reading of the opinions, it might be gathered that a different holding had been adopted in the supreme courts of Kansas and Ohio, but a closer reading shows that in both of those states the statute expressly provides for the assessment of the shares of stock to the owner, and contains no provision regarding payment of the tax by the bank itself. Sections 21 and 23 of our revenue law of 1891 contain substantially the same provisions as the Kentucky statute above quoted, in so far as the assessment and collection are concerned, ( Paul v. McGraw, 3 Wash. St. 296, 28 P. 532;) and upon the first point, therefore, the decision must be against the appellant.

The further, and perhaps the principal, ground of appellant's action is found in the following paragraphs of its complaint "(13) That on the 1st day of April, 1891, there existed in the county of Chehalis, state of Washington, taxable moneyed capital (other than and beyond that invested in shares of stock of national banks and banking business) owned by citizens of said state, resident in said county, and there invested in loans and securities, to them payable and owing by other citizens of said state residing in said county, of vast amount, to wit, exceeding the sum of two hundred and thirty-seven thousand four hundred dollars. (14) That on said 1st day of April, 1891, there existed in the state of Washington, in counties other than the county of Chehalis, aforesaid, other taxable capital in money and moneyed capital, (aside from the moneyed capital referred to in the paragraph immediately preceding, and aside from the capital invested in banks and banking business,) owned by citizens of the state of Washington, resident in said state, (in counties other than the county of Chehalis,) and there invested in loans and securities to them payable, and owing by other resident citizens of said state, in counties other than the county of Chehalis, of vast amount, to wit, exceeding the sum, as complainant is informed and believes, of fourteen million dollars. (15) That on the said 1st day of April, 1891, the total capitalization of national banks located in the state of Washington was the sum of seven million dollars; that the total capitalization of banks there located, but incorporated under the laws of the state of Washington, was the sum of four million dollars; and that at the same time large amounts of moneyed capital were invested in the state of Washington by residents of said state, in the stocks and bonds of insurance, wharf, and gas companies; and, in addition to the foregoing, there then existed in said state other moneyed capital amounting to at least twenty-six million dollars, being the other moneyed capital hereinbefore referred to; that in no case, as complainant is informed and believes, and so charges the fact to be, is the stock of any national bank, or the shares of the stock of any national bank located in the state of Washington, valued for assessment for taxation in said state at a less sum or assessed upon a valuation of less than eighty-five per cent. of the par value thereof; and, further, that the total assessment and total valuation in the assessment for taxation throughout the state of Washington for the year 1891 of and upon the bonds and shares of banks, banking corporations, insurance, gas, wharf, and other corporations, was the sum of eight million two hundred and five thousand five hundred and three dollars. (16) That the facts alleged in the preceding paragraphs hereof numbered 13, 14, and 15 were then, and during all of the times intervening between the 1st day of April, 1891, and the time of the return of the several assessment rolls throughout the state of Washington by the county assessors to the county auditors, well known to the assessor of the county of Chehalis, and all other county assessors throughout the state of Washington, and during all of said times, and until the 1st day of March, 1892, were well known to the several county and state officers hereinbefore referred to, and also to the boards of equalization and boards of county commissioners and the auditor of each of the counties in said state, and since the 1st day of March, 1892, have been and now are well known to the defendant the treasurer of Chehalis county. (17) That on said 1st day of April, 1891, the entire...