First Nat. Bank v. Dawson County
| Decision Date | 28 February 1923 |
| Docket Number | 5233. |
| Citation | 213 P. 1097,66 Mont. 321 |
| Parties | FIRST NAT. BANK OF GLENDIVE v. DAWSON COUNTY ET AL. |
| Court | Montana Supreme Court |
Appeal from District Court, Dawson County; Frank P. Leiper, Judge.
Action by the First National Bank of Glendive against the County of Dawson and another. Judgment for plaintiff and defendants appeal. Reversed and remanded with directions to dismiss.
W. D Rankin, Atty. Gen., and W. T. Pigott, of Helena, for appellants.
Hurley & O'Neil, of Glendive, for respondent.
This action was brought by the plaintiff against the defendants to recover taxes paid under protest. The plaintiff, a national bank at Glendive, Mont., alleges that for the year 1921 there was listed and assessed against it real property of the value of $17,780 and "shares of stock and moneyed capital" valued at $85,452. That during the same year there was listed and assessed against all national banks in Dawson county real estate of the value of $50,250 and "shares of stock and moneyed capital" valued at $213,978. During that year there was listed and entered upon the books of Dawson county "assessments for money and credits, secured and unsecured, including all state, county school district and other municipal bonds, warrants and securities, which represented investments of individuals in securities which represent money at interest and other evidence of indebtedness such as normally entered into the business of banking in the sum of $188,110, which represents moneyed capital in the hands of individuals which enters into competition with national banks and with money invested in the stock of national banks. * * *" That in the year 1921 various counties of the state of Montana made assessments upon like property in the hands of individuals in the sum of $57,257,031, which represents moneyed capital in the hands of individuals which enters into competition with national banks and with money invested in the stock of national banks. That the tax upon money and credits of individuals is computed upon a basis of 7 per cent. of its assessed valuation; whereas, the tax upon the shares of stock of plaintiff is based upon a 40 per cent. valuation.
The plaintiff paid under protest the tax imposed against it in the sum of $2,446.17, which is $2,018.09 in excess of what it would have been computed on a basis of 7 per cent. instead of 40 per cent., and asked judgment for the latter sum. The phrase "shares of stock and moneyed capital," as employed in plaintiff's complaint, is tautological.
The defendants, Dawson county and Etta J. Sorenson, its treasurer, by answer admit the assessment against the bank and that money and credits of individuals are taxed upon a basis of 7 per cent. of their assessed valuation, and that in 1921 the money and credits of individuals in Dawson county were assessed at $188,110, but deny that any portion of this enters into competition with national banks or with money invested in the stock of national banks. They also admit that various counties of the state had listed and entered upon the assessment books money and credits in the sum of $57,257,031, but deny that any part of it represents moneyed capital in the hands of individuals which entered into competition with national banks or with money invested in the stock of national banks.
On the first Monday of March, 1921, the bank had on deposit about $100,000 in money. It carries about that much money all the time.
From the testimony there is no doubt that the plaintiff is a bank of discount and deposit and that it carries on the ordinary business of a national bank.
In Dawson county there are state as well as national banks, and in computing taxes the capital stock and holdings of the state banks were computed on the same basis as those of the national banks. The stock of building and loan associations was included in the 7 per cent. classification. Under this the building and loan stock was assessed at a valuation of $79,369. Other property under the same classification amounted to $109,510. There was no testimony to the effect that this $109,510 was used in competition with the plaintiff, or with any bank. On the contrary, the only testimony concerning it was, "I haven't any idea for what use or purpose it is put." Nor was there any testimony as to how the $57,257,031 above mentioned was or is employed. The names of 60 persons owning stock in the building and loan association, in various amounts from $197 to $5,153, appear in the record.
The plaintiff had judgment, from which defendants appeal.
The only question involved is whether the tax or system of taxation complained of injuriously discriminates against shares of stock in national banks in favor of moneyed capital in the hands of individual citizens of the state. The state would be without power to levy any tax upon shares of stock in, or upon any of the property of, national banks, were it not for the permissive legislation of Congress. Owensboro National Bank v. Owensboro, 173 U.S. 664, 19 S.Ct. 537, 43 L.Ed. 850; Talbott v. Silver Bow County, 139 U.S. 438, 11 S.Ct. 594, 35 L.Ed. 210; New York ex rel. Williams v. Weaver, 100 U.S. 539, 25 L.Ed. 705. This was recognized as the law in Dennis v. First National Bank, 55 Mont. 448, 178 P. 580. Congress, however, has given that authority to the states by the provisions of section 5219, Revised Statutes of the United States (U. S. Comp. St. § 9784), which reads as follows:
While this section provides for taxing the shares to the owner or holder thereof, it does not prescribe to the state the mode in which the tax shall be collected (National Bank v. Commonwealth, 9 Wall. 353, 19 L.Ed. 701). By its very terms it confers upon the Legislature of each state the right to determine and direct the manner and place of taxing all the shares of banking associations located within the state, subject to the restrictions mentioned. So it has been held by the Supreme Court of the United States that the bank may be required to pay the whole tax as agent of the stockholders. National Bank v. Commonwealth, supra; Bell's Gap Railroad Co. v. Pennsylvania, 134 U.S. 239, 10 S.Ct. 533, 33 L.Ed. 892; Van Slyke v. Wisconsin, 154 U.S. 581, 14 S.Ct. 1168, 20 L.Ed. 240; First National Bank of Aberdeen v. Chehalis County, 166 U.S. 440, 17 S.Ct. 629, 41 L.Ed. 1069. This power is referred to in First National Bank of Aberdeen v. Chehalis County, supra, as the "statutory appointment of the bank to pay the whole tax as agent of the stockholders."
In the instant case it will be assumed that the assessment of the stock of the plaintiff was made in accordance with the provisions of chapter 81 of the Session Laws of the Seventeenth Legislative Assembly, approved February 11, 1921, now sections 2064 to 2067, inclusive, Revised Codes of 1921. Under this act it may not be doubted that the shares of stock in national banks are assessed to the owners or holders thereof consistently with the provisions of section 5219, supra, and that the bank is simply made the agent of its stockholders for convenience. As illustrative, section 2 of the act provides, in part:
"For convenience, the assessment of shares of stock in national banks, and herein referred to, shall be entered on the personal property assessment list under the name of the bank, and in such statement the names of the holders of bank stock shall be set forth, and the shares owned by each, and such assessment, when so entered, shall have all the force and effect as if made in the name and against the holders of bank stock individually."
On this phase of the case no contention is made. It is tacitly admitted that if the holders of the shares of national bank stock have not been the objects of unfriendly discrimination by the laws of the state, the plaintiff has no grievance.
The effect of section 5219...
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