First Nat. Bank v. Hungate

• Decision Date: 18 June 1894
• Citation: 62 F. 548
• Parties: FIRST NAT. BANK OF WALLA WALLA v. HUNGATE.
• Court: United States Circuit Court, District of Washington, Southern Division

62 F. 548

FIRST NAT. BANK OF WALLA WALLA v. HUNGATE.

United States Circuit Court, D. Washington, Southern Division.

June 18, 1894

B. L. &amp J. L. Sharpstein, for complainant.

Miles Poindexter, for defendant.

HANFORD District Judge.

The amended bill of complaint shows that for the year 1892 the assessor of Walla Walla county assessed the individual shareholders of the complaining bank separately for a certain number of shares of First National Bank stock, and unjustly discriminated against said shareholders by valuing their shares at 300 per cent. of the face value, which is considerably above the actual cash value of said complainant's stock while a large amount of other moneyed capital in the county owned by individual citizens of this state was intentionally omitted from the assessment roll, and permitted to entirely escape taxation. The bill also alleges that one of the shareholders applied at the proper time to the county board of equalization to reduce the assessment on his shares, and that the board refused to make any reduction, or in any manner correct the inequality of said assessment, and at the same time made a declaration of a general policy to refuse to change the assessments affecting bank stock, and to not accept any tender that might be made of less than the entire amount of tax levied thereon. After levy of the tax, the same shareholder tendered to the county treasurer 60 per cent. of the amount of the tax on his shares in full payment, which was refused. The tender has not been kept good by deposit but in the bill the bank offers to pay such portion of the taxes levied as this court may adjudge legal and collectible from the bank.

The laws of this state in force at the time of said assessment made all banks therein agents for their respective shareholders, and authorized the collection from each bank of taxes upon its stock assessed against it as such agent. 1 Hill's Code, §§ 1038-1040. Compliance with the provisions of this statute is prerequisite to enforcement of obligations and the exercise of rights created thereby. The complainant is not charged upon the assessment roll as agent for its shareholders, nor charged at all for any tax upon its stock, nor even referred to by its proper corporate name in the assessments against its several shareholders; therefore the warrant to the tax collector confers no authority upon him to seize the property of the bank to pay said taxes, and charge the same against the shareholders.

Unjust discrimination in the valuation of national bank stock, as compared with the assessment of other moneyed capital in the hands of individual citizens of the state, is prohibited. Rev. St. U.S. Sec. 5219. Shareholders of national bank stock have this statute as a guaranty that they cannot be taxed upon their stock heavier than other moneyed capital in the state; and, when appealed to in their behalf, the courts are bound...