People v. Commissioners of Taxes and Assessments
| Decision Date | 01 October 1876 |
| Citation | 94 U.S. 415,24 L.Ed. 164 |
| Parties | PEOPLE v. COMMISSIONERS OF TAXES AND ASSESSMENTS |
| Court | U.S. Supreme Court |
ERROR to the Court of Appeals of the State of New York.
he relator, the Gallatin National Bank of the city of New York, was, prior to 1864, a State bank, incorporated under the general banking laws of New York. It surrendered that charter, and was reorganized as a national bank, under the act of Congress of June 3, 1864, 13 Stat. 99, known as the National Banking Act, and c. 97 of the laws of 1865 of New York, known as the 'Enabling Act,' with a capital of $1,500,000, divided into thirty thousand shares of $50 each.
The bank has reserved from profits $300,000. It also holds, on deposit with the treasurer, bonds of the United States of the par value of $591,000, on which the premium, estimated at twenty per cent, would be $118,200; so that the bank has, in addition to its capital, a surplus of $418,200.
The commissioners of taxes and assessments of the city of New York having signified their intention to tax this surplus, the president of the bank made a statement of its condition. Its capital and surplus were shown to be $1,918,200, which, on a division, would make each share $63.60. As those bonds were liable to daily and almost hourly fluctuation, and so might slightly exceed the estimate, he made affidavit that the value of each share did not exceed $64.
Thereupon the commissioners, deducting $5 per share as the proportion of the assessed value of the bank's real estate, took $59 as the valuation of each share, and imposed the tax accordingly. The relator, to test the validity of such assessment, sued out of the Supreme Court of the State a writ of certiorari, which, upon a hearing, was quashed; and it thereupon appealed to the Court of Appeals, where the judgment below was affirmed. It then brought the case here.
The statutes bearing upon the question at issue are set forth in the opinion of the court.
Mr. Daniel D. Lord for the appellant.
The surrender by the Gallatin Bank of its original charter, and its reorganization under the National Bank Law, in conformity with the Enabling Act of New York, formed a contract with the State, limiting, for taxable purposes, the assessment of the shares of the bank to their par value. This contract is as much protected by art. 10 of the Constitution of the United States as are contracts between individuals. Prov. Bank v. Billings, 4 Pet. 514; Gordon v. Tax Court, 3 How. 133; Piqua Bank v. Knoop, 16 id. 369; Ohio Life Insurance & Trust Co. v. De Bolt, 16 id. 416; Jefferson Bank v. Skelly, 1 Black, 436; Home of the Friendless v. Rouse, 8 Wall. 430; Wash. University v. Rouse, id. 439.
Mr. Hugh L. Cole, contra.
The relators complain that their shares of stock in the Gallatin National Bank are assessed at too large a sum. They appeal from the judgment of the Court of Appeals sustaining the determination of the commissioners of taxes, which fixed the taxable value of such shares at $59 each, whereas the par or nominal value of such shares is $50 each.
Many grave questions were discussed by the council upon the argument, to which we do not think it necessary to refer. We place our judgment upon a single ground.
The laws of the State of New York provide that shares of stock like those we refer to shall be assessed 'on the value' of the shares, and at 'their full and true value, as they (the assessors) would appraise the same in payment of a just debt due from a solvent debtor,' deducting the proportional value of the real estate owned by the bank. 2 Stat. N. Y. 1866, p. 1647, c. 71; 1 R. S. N. Y. 393, sect. 17.
The assessors were justified, under this authority, in fixing the value as we have stated. The appraisement included the reserve fund, which is as much a part of the property of the bank, and goes to fix the value of shares, equally as if it were not called by that name, but remained as a part of the specie, bills...
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