National City Bank of Cleveland v. Bowers, s. 36781
| Decision Date | 12 July 1961 |
| Docket Number | 36782,Nos. 36781,s. 36781 |
| Citation | 172 Ohio St. 378,176 N.E.2d 227 |
| Parties | , 16 O.O.2d 239 NATIONAL CITY BANK OF CLEVELAND, Appellant, v. BOWERS, Tax Commr., et al., Appellees. NATIONAL CITY BANK OF CLEVELAND, Appellee, v. BOWERS, Tax Commr., Appellant. |
| Court | Ohio Supreme Court |
Syllabus by the Court
1. Under the provisions of Section 5725.04, Revised Code, relating to stock in Ohio financial institutions, all shares of such stock owned by foreign or domestic insurance companies, or by resident or nonresident dealers in intangibles, are subject to the intangible personal property tax.
2. Under the provisions of Section 5709.04, Revised Code, such shares of stock owned by charitable institutions are not subject to such tax.
On November 13, 1959, the Tax Commissioner of Ohio entered an order imposing an intangible personal property tax assessment on certain shares of stock of The National City Bank of Cleveland held by five different classes of shareholders during the years 1957 and 1958.
On an appeal to the Board of Tax Appeals, the order of the Tax Commissioner was affirmed except as to the assessment against shares of stock held by the class of shareholders known as charitable institutions.
The controversy is in this court by reason of appeals by both the National City Bank and the Tax Commissioner. The bank's appeal relates to the four classes of shareholders whose shares of stock were held taxable, while the commissioner's appeal involves the one class--charitable institutions--whose shares of stock were held exempt.
McAfee, Hanning, Newcomer & Hazlett, Rufus S. Day, Jr., and Bradford P. Colcord, Cleveland, for appellant in cause No. 36781 and appellee in cause No. 36782.
Mark McElroy, Atty. Gen., and Joseph L. White, Bexley, for appellees in cause No. 36781 and appellant in cause No. 36782.
As presented by the parol evidence, stipulations and exhibits, the controlling facts are not in dispute.
The questions of law here presented require the application of several statutes, especially Section 5725.04, Revised Code, which reads:
'All the shares of the stockholders in a financial institution located in this state, incorporated or organized under the laws of the state or the United States, the capital stock of which is divided into shares, except shares defined as deposits in Section 5701.05 of the Revised Code, and all the shares of the stockholders in an unincorporated financial institution located in this state, the capital stock of which is divided into shares held by the owners of such financial institution, and all the ownership interests of the depositors in the capital employed in an incorporated financial institution located in this state, the capital of which is not divided into shares, or which has no capital stock, and the capital employed, or the property representing the capital, in any other financial institution located in this state, the capital of which is not divided into shares, or which has no capital stock, shall be listed and assessed at the book value thereof, and taxed in the manner provided in Sections 5725.01 to 5725.26, inclusive, of the Revised Code.
'The capital employed in an incorporated financial institution located in this state, the capital of which is not divided into shares, or which has no capital stock, shall be deemed to mean and describe the ownership interests of the depositors in such incorporated financial institution and not any of the capital or property of or belonging to such incorporated financial institution.'
In clear unambiguous terms it is provided in this statute that it is applicable to 'all' such shares with the single exception of 'shares defined as deposits in Section 5701.05 of the Revised Code.'
A study of the above-quoted language of Section 5725.04 discloses that the tax there levied is not a tax on either foreign or domestic insurance companies or on dealers in intangibles. Instead it is a tax on 'all the shares of the stockholders in a financial institution located in this state.'
The bank contends that these classes of stockholders are impliedly exempted from payment of this tax by reason of the provisions of Sections 5725.25 and 5725.26, Revised Code. However, these sections significantly provide merely that these stockholders are not required to return the financial institution tax. This is quite different from the allowance of an exemption or exception which must be clear and not predicated on mere inference. National Tube Co. v. Glander, Tax Com'r, 157 Ohio St. 407, 105 N.E.2d 648.
In referring to the provisions of Section 5725.04, Revised Code, supra, the Board of Tax Appeals said:
With reference to the fifth class of stockholders known as charitable institutions involved in the appeal by the Tax Commissioner, the Board of Tax Appeals analyzed the matter as follows:
'It appears to us that the only shares of a stockholder in a financial institution which are clearly exempted from taxation are those held by that class referred to and listed by appellant as charitable institutions.
'Section 5709.04, Revised Code, provides as follows:
"Money, credits, investments, deposits, and other intangible property belonging, either legally or beneficially, to corporations, trust[s], associations, funds, foundations, or community chests organized and operated exclusively for religious, charitable, scientific, literary, health, hospital, educational, or public purposes, exclusively for the prevention of cruelty to children or animals, or exclusively for contributing financial support to any such purposes, no part of the net earnings of which inures to the benefit of any private shareholder or individual, and no substantial part of the activities of which is carrying on propaganda or otherwise attempting to influence legislation, shall not be subject to taxation.'
'This statute, which must read in pari materia with Chapter 5725 of the Revised Code, and in particular with the provisions of Section 5725.04, Revised Code, unequivocally spells out a clear-cut exception to Section 5724.04 [5725.04], Revised Code, inasmuch as it provides that investments belonging either legally or beneficially to charitable institutions shall not be subject to taxation.
'No such clear-cut exception has been brought to the board's attention by the appellant with respect to the other four classes of shareholders.'
This court is of the opinion that the decision of the Board of Tax Appeals is correct as to all five classes of stockholders, and therefore such decision is hereby affirmed.
Decision affirmed.
RADCLIFF, J., of the Fourth Appellate District, sitting by designation in the place and stead of HERBERT, J.
I concur in the judgment in case number 36782, in paragraph two of the syllabus relating thereto, and also in that part of the judgment in case number 36781 relating to bank shares owned by nonresidents of Ohio.
However, in my opinion, the General Assembly has expressly and specifically provided that bank shares owned by a foreign insurance company or by a domestic insurance company or by a dealer in intangibles shall not be subject to the tax levied by Section 5725.04, Revised Code, on shares in a financial institution.
Section 5725.25, Revised Code, reads:
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...two years before Certified Credit Corp., this proposition was settled, albeit sub silento, in National City Bank of Cleveland v. Bowers (1961), 172 Ohio St. 378, 176 N.E.2d 227. Two appeals were there involved. In No. 36781, it was held, by a four-to-three decision, that shares of stock of ......
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National City Bank of Cleveland v. Porterfield, 68-98
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