Miller v. First Nat. Bank of Cincinnati

• Decision Date: 21 May 1889
• Parties: MILLER, Treasurer, v. FIRST NAT. BANK OF CINCINNATI MILLER, Treasurer, v. THIRD NAT. BANK. MILLER, Treasurer, v. MERCHANTS' NAT. BANK.
• Court: Ohio Supreme Court

21 N.E. 860

46 Ohio St. 424

MILLER, Treasurer, v. FIRST NAT. BANK OF CINCINNATI

MILLER, Treasurer, v. THIRD NAT. BANK.

MILLER, Treasurer, v. MERCHANTS' NAT. BANK.

Supreme Court of Ohio.

May 21, 1889

Error to district court, Hamilton county.

The action below was by the treasurer of Hamilton county against the First National Bank of Cincinnati. The questions arise upon a demurrer to the petition on the grounds (1) that there is a want of proper parties; and (2) that the petition does not state facts sufficient to constitute a cause of action. The petition is as follows:

‘ Plaintiff says that he is the duly elected and qualified treasurer of Hamilton county, Ohio, now holding and exercising said office, and that the defendant is a national bank incorporated under the laws of the United States, having now, and during all the time hereinafter referred to, its place of, and transacting its business in, Cincinnati Hamilton county, Ohio. Plaintiff says that, in each of the years 1877, 1878, 1879, 1880, and 1881, the said defendant by its cashier, for the purposes of taxation, made a return to the auditor of Hamilton county, Ohio, purporting to be a true return of the resources and liabilities of said bank at the close of business on the Wednesday next preceding the second Monday of May of each of said years, but did not return any statement of the names and residences of the stockholders therein, with the number of shares held by each but, instead thereof, a written statement that said bank would pay the taxes for and on behalf of the stockholders and said bank did pay the taxes levied, in accordance with said returns so made out; but plaintiff says that the auditor of said county of Hamilton in the year 1881, discovered that said returns were false. Thereupon, said auditor proceeded to correct said returns, and having fully inquired, in accordance with the requirements of the statute in such cases made and provided, into the amount of the personal property, money, credits, and investments that said bank should have returned for each of said years, and having first notified the cashier of said bank, and permitted full opportunity for the same to be heard by its counsel and officers, to show that its said returns were correct, he, the said auditor, thereupon found that each of said returns were false, and that there had been omitted from the same, personal property which should have been included therein, and listed for taxation of the value, for the year 1877 of $82,837, for the year 1878 of $475,522, for the year 1879 of $349,246, for the year 1880 of $481,159, and for the year 1881 of $377,827, which said sums the said auditor, on April 8, 1882, placed on the tax-list against the defendant, as and for the years 1877, 1878, 1879, 1880, and 1881, respectively, when the same should have been returned, and opposite to the same the taxes on said sums for the said years, amounting, for the year 1877, to the sum of $2,410.56, for the year 1878, to the sum of $13,571.40, for the year 1879, to the sum of $10,121.14, for the year 1880, to the sum of $14,915.50, and for the year 1881, to the sum of $8,837.76, which taxes now stand charged on the duplicate of said Hamilton county; that the same are due and unpaid, and the stockholders of said bank are indebted to the plaintiff, as treasurer of said county, in the said sum of $2,410.56, with interest thereon from December 20, 1877, and in the sum of $13,571.40, with interest thereon from December 20, 1878, and in the sum of $10,121.14, with interest thereon from December 20, 1879, and in the sum of $14,915.50, with interest thereon from December 20, 1880, and in the sum of $8,837.76, with interest thereon from December 20, 1881, which, though payment has often been demanded, the defendant has failed and refused, and still fails and refuses, to pay. Plaintiff further says that the defendant, at all times during the years above mentioned, had in its possession, and now has, money and property belonging to its stockholders more than sufficient to pay all the sums of taxes so, as aforesaid, due from the said stockholders; but, instead of applying the same or any part thereof to the payment of said taxes, has paid over large portions of the same as dividends to the said stockholders, although the defendant has been repeatedly notified, by the treasurer of said county, of the non-payment of said taxes; and, notwithstanding the premises, the defendant has, during all said years, been transferring, and permitting to be transferred, from one person to another, the stock thereof, as the stockholders therein have from time to time requested; and said defendant will, unless restrained by the order of this court, continue to refuse to pay said taxes, and will, at the same time, continue to pay dividends to stockholders of said bank, and to transfer the stock thereof to the great and irreparable damage of plaintiff. Wherefore, plaintiff prays that defendant, its officers and agent, be enjoined from paying to its stockholders, or any of them, any dividends, and from transferring on its book or otherwise any shares or share of its capital stock, until said taxes and interest shall have been paid in full; and that the court cause an account to be taken of the moneys and property in defendant's possession belonging to the several stockholders, and cause the taxes and interest, as aforesaid, due from them and each of them, to be paid in full out of said money and property in defendant's possession; and for such other and further relief as may be just.’

‘ CHAS. EVANS,

‘ [Duly verified.] County Solicitor.’

The demurrer was sustained, and judgment rendered thereon for the defendant, which, on error, was affirmed by the district court; and this proceeding is prosecuted to reverse both judgments on the ground that the court of common pleas erred in sustaining the demurrer to the petition. The cases of Miller, Treasurer, v. Merchants' National Bank of Cincinnati, and Same v. Third National Bank, were argued and submitted with the case here reported.

The only remedy for the making of a false return to the auditor by the cashier of a bank, of the resources and liabilities of the bank for the purposes of taxation, is afforded by Rev.St. § 2679 (See Gen.Code, § 3055), which provides that the auditor may examine the books of the bank, and any officer or agent of it under oath, and make out the statement, and any officer of the bank may be fined not exceeding $100 for failing to make the statement, or for willfully making a false one.

Syllabus by the Court

1. There is no authority in the statutes of the state, nor of the United States, for listing and valuing the shares in a national bank in the aggregate, and placing such aggregate on the tax-list in the name of the bank. Such shares when listed and valued for taxation, are required to be placed on the proper tax-list in the names of the respective owners.

2. The listing of the shares for taxation is provided for and secured by section 2765, Rev. St., and the correction of returns made by the cashier of the bank to the county auditor is provided for by section 2769 and not by section 2782, Id.

W. S. Little, Goss & Cohen, Foraker & Black , and Rufus B. Smith , County Sol., for plaintiff in error.

Lincoln & Stephens , for defendants in error.

MINSHALL, C. J., (after stating the facts as above .)

It is evident that the relief prayed for against the stockholders in this case cannot be granted, as they are not parties to the action; and, unless the plaintiff is entitled to some relief upon the facts stated against the bank, the demurrer to the petition was properly sustained. And, as regards the bank, there is but one question in the case that needs to be determined,-for the determination of it will dispose of all the others that have been raised,-and that is, whether the shares of stock in a national bank are to be listed for taxation in the names of the shareholders or in the name of the bank. The power of the state to impose any tax upon such shares is conferred by the statutes of the United States. Section 5219, Rev. St. This is not controverted. It is...