Parker v. Raleigh Sav. Bank

• Decision Date: 31 March 1910
• Citation: 67 S.E. 492,152 N.C. 253
• Parties: PARKER v. RALEIGH SAVINGS BANK.
• Court: North Carolina Supreme Court

67 S.E. 492

152 N.C. 253

PARKER v. RALEIGH SAVINGS BANK.

Supreme Court of North Carolina

March 31, 1910

Appeal from Superior Court, Wake County; O. H. Allen, Judge.

Action by V. O. Parker against the Raleigh Savings Bank. From a judgment for plaintiff, defendant appeals. Dismissed.

Where the Corporation Commission in performing its duty imposed by Pub.Laws 1909, c. 440, § 33, in assessing the value of bank stock, bases the estimated value of the stock by including in the surplus of the bank state bonds held by it, and thus increases the value of the stock, the bank or the stockholders may institute injunction proceedings.

Civil action, heard at the February term, 1910, of the superior court of Wake county by his honor O. H. Allen, judge presiding, upon an agreed statement of facts, substantially as follows: Plaintiff contracted to sell to the defendant 10 bonds of the state of North Carolina, par value $1,000 each issued in pursuance of chapter 510, Pub. Laws 1909, for the price of $10,550. The bank refused to take and pay for the bonds, alleging that the plaintiff stated to the defendant at the time said agreement to purchase was entered into, that the said bonds could be carried by the defendant as part of its surplus, and that the tax value of the shares of stock held by the shareholders of the defendant bank would not be increased by virtue of the defendant owning said bonds, and the defendant stated to plaintiff at the time that it would purchase said bonds upon this representation of the plaintiff, and the said representation was a part of the inducement for the defendant to enter into said agreement to purchase said bonds and became part of the consideration for said agreement. This is admitted by plaintiff in the "case agreed." In the answer of the defendant it is charged that such allegations were false and untrue, but there is no averment or finding which charges plaintiff with intentional deceit and fraud. The plaintiff asks for $250 damages for breach of contract, the admitted difference between the market and contract price of the bonds. The superior court rendered following judgment upon the "facts agreed": "The court being of the opinion that the holding of the bonds as stated in the complaint would not increase the tax value of the shares of stock held by the stockholders, and the court being of the further opinion that an increase of the tax value of the shares of stock held by shareholders of the defendant company by virtue of defendant company holding said bonds as a part of its surplus would be an illegal tax on said bonds and the income and coupons accruing thereon; it is therefore ordered and adjudged that the plaintiff recover of the defendant the sum of $250 and the cost of this action, to be taxed by the clerk."

Murray Allen, for appellant.

W. H Pace, for appellee.

BROWN J.

The object of this "friendly suit" is evidently to procure a construction of section 4, c. 510, Acts 1909, which is as follows: "The said bonds and coupons shall be exempt from all state, county or municipal taxation or assessment, direct or indirect, general or special, whether imposed for purposes of general revenue or otherwise, and the interest paid thereon shall not be subject to taxation as for income, nor shall said bonds and coupons be subject to taxation when constituting a part of the surplus of any bank trust company or other corporation." No one disputes the proposition that our state bonds are all exempt from direct or income taxation in the hands of an individual or corporation, but it is contended that when the Corporation Commission come to determine the taxation value of a share of stock owned by a stockholder in a bank or other corporation, in case they find that any portion of its surplus assets, over and above the amount of its capital stock, is invested in this particular issue of bonds, under the terms of the act the Commission must deduct them from such assets. It is contended that the words "nor shall said bonds and coupons be subject to taxation when constituting a part of the surplus of any bank, trust company or other corporation" are not to be found in any other Legislature authorizing the issue of bonds, and that the General Assembly inserted them in the act of 1909 for the purpose of creating a home market for the bonds and to largely enhance their value. In view of the fact that there are several million more of these bonds to be shortly issued we would be glad to decide this important question now, but regret that we are unable to do so in the form presented.

With perfect respect and deference for the learned counsel, as well as for the parties, this is evidently a "suit made to order," arising, not out of a real controversy between the parties litigant, but instituted solely for the purpose of obtaining the opinion of the court upon a "feigned issue." In the case of Blake v Askew, 76 N.C. 327, such...