National Bank of Virginia v. City of Richmond

• Decision Date: 01 July 1890
• Citation: 42 F. 877
• Parties: NATIONAL BANK OF VIRGINIA v. CITY OF RICHMOND et al. MERCHANTS' NAT. BANK v. SAME.
• Court: U.S. Court of Appeals — Fourth Circuit

42 F. 877

NATIONAL BANK OF VIRGINIA v. CITY OF RICHMOND et al.

MERCHANTS' NAT. BANK v. SAME.

United States Circuit Court, E.D. Virginia.

July 1, 1890

James Alfred Jones, for National Bank of Virginia.

Pegram & Stringfellow, for Merchants' National Bank.

C. V Meredith, City Atty., for defendants.

Before BOND and HUGHES, JJ.

BOND J.

On July 17, 1889, the defendant Cunningham, who was the the statute on which the indictment is framed, to include the governor of a state? Is National Bank of Virginia, located at Richmond, a bill of taxes assessed upon the shares of stock of that association, of which the following is a copy: 1889.

(Ward 3.)

The Merchants' National Bank, to City of Richmond, Dr.

Tax on shares os stock, . . . . . . . . . . . . . $255,000 Less value of real estate, . . . . . . . . . . . 53,942 -- With a request that the same be promptly paid, to avoid a penalty of 5 per cent. imposed by the ordinances of that city. A similar bill for taxes, to the amount of $2,324, was presented to the National Bank of Virginia, as a tax on its shares of stock which were valued at $216,000, with a deduction of $50,000 for real estate held by the bank. After the presentation of these bills by the collector, the corporations whose shares had been assessed for the payment of the tax filed separate bills of complainant in this court to enjoin the collector from proceeding to collect the same from the bank. A temporary injunction was issued and now, the matter having been finally heard upon their answers and exhibits and arguments of counsel, it is to be determined whether the temporary injunction shall be dissolved or made permanent.

The power to tax national bank shares is given by section 5219 of Revised Statutes, which declares that nothing in the law of the United States respecting banks shall prevent all the shares in any such association from being included in the valuation of the personal property of the owner or holder of such shares, in assessing taxes imposed by authority of the state within which the association is located. The tax in these cases is assessed upon all the shares issued by the association in solido against the association, and the cashier is required by the collector to pay it or be subject to a penalty. In the Case of First Nat. Bank of Richmond, 39 F. 309, (tried in this court a short time ago,) the record in which case has gone to the supreme court, it was held by the district judge that such an assessment of a tax on the whole of the shares of a bank, at their market value, was nothing else than an assessment of the capital stock of the bank, and was not authorized by the act of congress, and that to tax the shares of the bank at all they must be listed in the name of the shareholder. Any other view of the law than this would work a grievous wrong to the shareholders of national banks. By the law of Virginia, every person assessed for a tax upon his personal property has a right to deduct from the valuation the amount of his indebtedness, so that he may be charged only with taxes on what he owns, when a balance is struck between him and his creditors. To assess the bank on all its shares in solido is to prevent entirely a shareholder therein from this benevolent and just provision of law.

Since the decision in the Case of the First Nat. Bank of Richmond, prompted by a desire to remedy this difficulty, the general assembly of Virginia, by act approved January 27, 1890, provided:

'An act to legalize and confirm certain taxes imposed by the city of Richmond for the year 1889, upon all the shares of stock

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