First National Bank of Nephi v. Christensen

• Decision Date: 09 September 1911
• Docket Number: 2125
• Court: Utah Supreme Court
• Parties: FIRST NATIONAL BANK OF NEPHI v. CHRISTENSEN, County Treasurer, et al

118 P. 778

39 Utah 568

FIRST NATIONAL BANK OF NEPHI v. CHRISTENSEN, County Treasurer, et al

No. 2125

Supreme Court of Utah

September 9, 1911

Rehearing Denied November 11, 1911.

APPEAL from District Court, Fifth District; Hon. Joshua Greenwood Judge.

Action by the First National Bank of Nephi against B. Christensen County Treasurer of Juab County, and others.

Judgment for defendants. Plaintiff appeals.

AFFIRMED.

W. R. Hutchinson for appellant.

APPELLANT'S POINTS.

Taxing by a uniform rule requires uniformity not only in the rate of taxation, but also uniformity in the mode of the assessment upon the taxable valuation. Uniformity in taxing implies equality in the burden of taxation, and this equality of burden cannot exist without uniformity in the mode of assessment, as well as in the rate of taxation, and the uniformity must be co-extensive with the territory to which it applies. (Pelton v. National Bank, 101 U.S. 143; Cummings v. National Bank, 101 U.S. 153; Boyer v. Boyer, 113 U.S. 690; Hills v. Exchange Bank, 195 U.S. 319.)

If the state law justly administered would produce uniformity, but the officers knowingly and purposely apply an additional rule of valuation of the shares of national banks in order to impose disproportionate taxes upon them the courts will give relief. (1 Cooley on Taxation [3d Ed.], page 712; and see note one, page 714 and cases cited; First National Bank v. Hungate, 62 F. 548; First National Bank v. Treasurer Lucas Co., 25 F. 749; Puget Sound National Bank v. King County, 57 F. 433.)

All property, not exempt, shall be taxed in proportion to its value, and that the legislature shall provide by law a uniform and equal rate of assessment and taxation on all property in the state according to its value in money. (Constitution of Utah, art. 13, secs. 2 and 3.)

National Banks like any other taxpayers, against whom discrimination is made, are entitled to the protection of this constitutional provision. (First Nat. Bank v. Lindsay, 45 F. 619.)

When the taxing officers of a county by tacit understanding assess all personal property at a lower per cent. of its actual value than they assess national banks, the collection of the excess will be restrained. (First National Bank v. Treasurer Lucas County, 25 F. 749.)

T. L. Foote and Thurman, Wedgwood & Irvine for respondents.

RESPONDENT'S POINTS.

What the "rate" of taxation in the state in counties other than Juab was, is immaterial. (People v. Moore, 1 Idaho, 504.)

The testimony introduced in regard to the full cash value and the assessed value of real estate and personal property was immaterial and irrelevant. (Albany City v. Maher, 6 F. 417; Silver Bow County Commissioners v. Davis, 12 P. 688; National Bank v. City of Boston, 125 U.S. 60; Talbott v. Silver Bow County Commissioners, 139 U.S. 438; Mercantile Natl. Bank v. City of New York, 121 U.S. 138.)

The evidence in regard to the full cash value and the bank assessed value of the stock of the Nephi National Bank was immaterial and irrelevant for the reasons: (a) It was, itself a national bank, and not "other moneyed capital." (b) The assessed valuation of its stock was a greater per cent of its full cash value than was the assessed value of plaintiff's stock. (c) The law does not apply to imperfections and inaccuracies in assessments or to mere over-valuation. (Stanley v. Albany County Supervisors, 15 F. 483; Williams v. Weavern, 75 N.Y. 30; Williams v. Albany County Supervisors, 122 U.S. 154.)

The "other moneyed capital" referred to in the statute means "money employed in a business whose object is to make profit by investing in securities by way of loan, discount or otherwise, which, from time to time, are reduced again to money and re-invested. (Mercantile Natl. Bank v. Shields, 59 F. 952; Palmer v. McMahin, 133 U.S. 660; First Natl. Bank v. Chambers, 21 Utah 347.)

The only substantial limitation upon the power of the states to impose taxes upon the shares of national banks, is that they shall not subject such shares to taxation to an amount greater than they assess upon their own banks or upon moneyed capital in the hands of their own citizens. (First Natl. Bank v. Douglas County, Fed. Cas. No. 4799 (1 Dill. 330); Lionberger v. Rouse, 9 Wall. 468; Mercantile Natl. Bank v. City of New York, 28 F. 776.)

In the taxation of the shares of a national bank, it must appear that the assessors acted under some agreement or rule which necessarily tended to tax such shares at a greater rate than is assessed upon other moneyed capital in the hands of individual citizens of such state in order to render their assessment void. (First Natl. Bank of Chicago v. Farrell, 7 F. 518; Washington Natl. Bank v. King County, 38 P. 219.)

STRAUP, J. FRICK, C. J., and McCARTY, J., concur.

OPINION

STRAUP, J.

Plaintiff, a banking association of Nephi, Juab County, Utah, organized under the national banking laws of the United States, brought this action to enjoin the collection of a tax alleged to be wrongfully assessed against its shares of stock. The ground of objection to the tax is that in the valuation of the shares for the purpose of taxation a much larger valuation was placed on them in proportion to their real value than was placed on other moneyed capital and on real and personal property in the county and state. The only finding made by the court, and that in the nature of a conclusion, is "that the assessed valuation of the shares of stock of the plaintiff corporation as put down in the assessment books of Juab County by the assessor of said Juab County for the year 1907 is not a greater valuation than is assessed upon all other moneyed capital in the hands of individual citizens of the State of Utah, and that it is not a greater valuation than is placed upon the shares of book stock in other banking institutions in the City of Nephi or County of Juab, or the State of Utah, and that it is not a greater valuation than is placed upon other moneyed capital in the hands of individual citizens of Nephi City, or the County of Juab, or the State of Utah." Upon these findings a judgment was entered in favor of the defendants, from which the plaintiff has prosecuted this appeal.

It contends that the findings are not supported by and are against the evidence; and that the assessed valuation placed on its shares of stock was (1) in violation of section 5219, R. S. U.S. (U.S. Comp. St. 1901, p. 3502), and of section 2508 of the Compiled Laws of Utah, 1907, providing that shares of stock of national banking associations shall not be taxed by authority of the state in which the association is located at a greater rate than is assessed upon other moneyed capital in the hands of individual citizens of such state; and (2) in violation of the constitutional provisions of the state, and of the statute, providing for a uniform and equal rate of assessment and taxation.

The findings made by the court are of no help, except to see the conclusion reached by the court. At what valuation plaintiff's shares of stock were assessed, or what were their real or cash value, or at what valuation other property of the county was assessed, whether at its real or cash value, or at what proportion of its real or cash value, the court did not take the trouble to find, but imposed the labor on us to ascertain such facts.

The evidence is somewhat conflicting. A deputy assessor testified: That some lands worth thirty dollars per acre were assessed at $ 6.50; $ 100 or more an acre at fifty dollars to sixty dollars; from twenty dollars to forty dollars an acre at ten dollars; that real estate generally was assessed at from fifty to seventy-five per cent. of its value, and in most cases the assessment would not exceed fifty per cent. of its market value; horses worth from seventy-five dollars to $ 150 apiece were assessed at forty dollars to fifty dollars cattle worth from twenty-two dollars to thirty-five dollars a head were assessed at fourteen dollars to twenty dollars; shares of stock of an irrigation company worth from sixty dollars to sixty- five dollars were assessed at twenty-five dollars; and that merchandise and other personal property at about seventy- five per cent. of its market value. A deputy state auditor testified that shares of stock of banking institutions of the state were, as a rule, assessed below their par value, in the majority of cases from sixty-five to seventy or seventy-five per cent. of their par value, and that he had not known of an instance where shares of stock of a bank were assessed at the actual cash value until his attention was called to the assessment of the shares of stock of the banking institution of the plaintiff. Testimony of other witnesses was also given that shares of stock of the Nephi National Bank, also organized under the banking laws of the United States, with a capital stock of $ 50,000 of 500 shares at a par value of $ 100 each, were assessed at thirty-five dollars a share. This bank was organized in November, 1906, when one-half of its capital stock, $ 25,000, was paid in, and the other half, $ 25,000 in payments in February, March, April, and May, 1907. The stock, however, was all subscribed for in November, 1906, when the charter was issued, but only $ 25,000 of the capital stock had been paid in when the stock was assessed in January, 1907. The banking institution of the plaintiff, the First National Bank of Nephi, was also incorporated for 500 shares at a par value of $ 100 each. The stock, when the assessment complained of was made, in January, 1907, was then, and prior thereto had been, fully paid up. Its shares of stock were assessed at $ 200 a share, or at $ 100,000. The assessor testified that he arrived at that valuation from a sworn statement of the...