Nat'l Bank of Detroit v. City of Detroit, 99.
| Decision Date | 09 November 1936 |
| Docket Number | No. 99.,99. |
| Citation | 277 Mich. 571,269 N.W. 602 |
| Parties | NATIONAL BANK OF DETROIT v. CITY OF DETROIT et al. |
| Court | Michigan Supreme Court |
OPINION TEXT STARTS HERE
Action in assumpsit by the National Bank of Detroit, to recover taxes paid under protest, against the City of Detroit and another. From a judgment adverse in part, plaintiff appeals, and defendants file a cross-appeal.
Affirmed in part, and reversed in part. Appeal from Circuit Court, Wayne County; Allan Campbell, Judge.
Argued before the Entire Bench, except POTTER, J.
Walter Barlow, of Detroit (Raymond J. Kelly, of Detroit, of counsel), for city of Detroit and others.
Bulkley, Ledyard, Dickinson & Wright, of Detroit (Robert E. McKean and Ellis B. Merry, both of Detroit, of counsel), for National Bank of Detroit.
Plaintiff brings this action in assumpsit to recover from defendant City, taxes paid under protest. The case was tried without jury, and plaintiff had judgment for a portion of its claim. Both parties appeal from such judgment.
Plaintiff's claim is divided in two parts: First, it seeks to recover the amount paid under protest, representing a tax of the year 1934, upon the amount of Federal Reserve Bank stock owned by it, and which was not allowed as a deduction by defendant in determining the assessed valuation of plaintiff's shares of common stock; second, it claims recovery of the sum of $16,542.25, paid under protest, representing an increase of tax for 1934 upon plaintiff's shares of common stock over the amount it contends it should be taxed, and wherein plaintiff claims that defendant did not properly determine or allow the amount of tax-exempt securities owned by plaintiff and deductible in determining the assessed valuation of such stock.
The trial court found for plaintiff on its first claim as above outlined, and entered judgment for it in the amount of $3,958.86. Defendant, in its cross-appeal alleges this to be error and urges upon us the same contentions it urged in National Bank of Detroit v. City of Detroit, 272 Mich. 610, 262 N.W. 422, relative to the deduction of Federal Reserve stock, when computing the amount of its tax. We there held that such Federal Reserve stock should be deducted in its entirety, and we here find no reason to change our decision. The court properly entered judgment against the City on such claim.
The trial court found against plaintiff on its above-stated second claim (third count), and did not permit recovery thereon. The plaintiff, on appeal, alleges this as error.
The question here involved is grounded upon a construction and application of the provisions of paragraph 8, of section 8, Act No. 94, Pub.Acts 1931, relating to the method of computing the tax-exempt securities, other than Federal Reserve Bank stock.
The foregoing cited statute provides that, for taxation purposes, the stock of a bank shall be assessed at the amount of its capital, surplus, and undivided profits, less the assessed value of its real estate, and less the amount of tax-exempt securities representing the investment of its capital account, as distinguished from the amount of tax-exempt securities representing the investment of its deposits. The statute provides for the deduction of tax-exempt securities, but only for those representing investment of capital contradistinguished from those representing investment of deposits. When it cannot, with reasonable certainty, be determined whether the source of the investment is from capital or from deposits, the statute provides a formula for the determination of the proportion thereof which shall be deemed to represent investment of capital and therefore deductible. The formula prescribed is that the amount of tax-exempt securities so deductible shall be that proportion thereof which the total capital bears to the total capital and deposits.
It is undisputed that the determination of tax-exempt securities in the instant case must be in pursuance to the statutory formula.
On April 1, 1934, plaintiff's total capital was $25,553,383.37; its deposits, $204,087,470.06; its tax-exempt securities, $113,346,794.98.
It is undisputed that the assessed valuation of plaintiff's common stock should be $13,053,382.37, this being the sum of: Common stock, $5,000,000., surplus, $5,000,000., and undivided profits, $3,053,382.37. This then becomes 51.08 per cent. of the total capital.
The defendant, in computing the amount of tax-exempt securities, which should be deemed to represent the investment of plaintiff's total capital, applied the ratio of the plaintiff's total capital of April 1, 1934, to the sum of its total capital and deposits of the same date (11.13 per cent.), to the monthly average of plaintiff's tax-exempt securities during the year 1933. By this method $7,966,665.09 of tax-exempt securities was found to represent the investment of plaintiff's total capital. Then by taking 51.08 per cent. thereof (as hereinbefore outlined) the...
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Mfrs. Nat. Bank of Detroit v. City of Detroit
...the Federal Reserve Bank of Chicago was made. Such an investment was required by law (12 U.S.C.A. § 282). In National Bank of Detroit v. City of Detroit, 277 Mich. 571, 269 N.W. 602, we said (page 603): ‘Defendant, in its cross-appeal alleges this to be error and urges upon us the same cont......
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