Rich v. Packard Nat'l Bank

• Citation: 138 Mass. 527
• Parties: Salem Rich v. Packard National Bank
• Decision Date: 28 February 1885
• Court: United States State Supreme Judicial Court of Massachusetts

138 Mass. 527

Salem Rich v. Packard National Bank

Supreme Judicial Court of Massachusetts

February 28, 1885

Argued September 17, 1884.

Franklin.

Judgment for the defendant affirmed.

A. De Wolf, for the plaintiff.

F. G Fessenden, for the defendant.

C. Allen & Colburn, JJ., absent. Devens, J.

OPINION

Devens, J.

The only question discussed in the case at bar is whether the shares in a national bank located in Greenfield, of certain stockholders who reside in a regularly organized fire district in the same town, may be subjected to a tax assessed for fire-district purposes; and whether the same, if assessed, may be collected. Any other question which might have been raised, as to the form of the action or otherwise, is expressly waived.

The national banks are instrumentalities created by the United States government for the performance of its constitutional functions. It is not, therefore, within the power of the States to impose taxes upon them, except so far as this is permitted by the laws under which they are created, and with such limitations and qualifications as those laws prescribe. Austin v. The Aldermen, 74 U.S. 694, 7 Wall. 694, 19 L.Ed. 224.

Section 5219 of the U.S. Rev. Sts. provides that all the shares in any such banking association may be "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;" and that "the Legislature of each State may determine and direct the manner and place of taxing all the shares of national banking associations located within the State, subject only to the two restrictions, that the taxation shall not be at a greater rate than is assessed upon other moneyed capital in the hands of individual citizens of such State, and that the shares of any national banking association owned by non-residents of any State shall be taxed in the city or town where the bank is located, and not elsewhere." Our statutes, while they include also state banks, are intended to carry out these provisions, and to enable the Commonwealth to avail itself of the control thus granted over the shares of national banks, so far as taxation is concerned. St. 1873, c. 315. Pub. Sts. c. 13, §§ 8-19.

Section 8 of the Pub. Sts. c. 13, enacts that "all the shares of stock in banks, whether of issue or not, existing by authority of the United States or of the Commonwealth, and located within the Commonwealth, shall be assessed to the owners thereof in the cities or towns where such banks are located, and not elsewhere, in the assessment of all state county, and town taxes imposed and levied in such place, whether such owner is a resident of said city or town or not," &c. This section provides in terms only for an assessment of state, county, and town taxes. It is made upon all the shares equally, and is apparently intended to impose upon each stockholder the same burden. As taxes are arbitrary impositions for the public necessities, the language of the statute by which they are imposed is always to be carefully considered, especially when, as in the present case, if the plaintiff's contention be correct, some of the stockholders of this national bank are to bear a burden not imposed upon others. It is to be observed, also, that it is a burden of a character which could not fall upon certain other stockholders, unless at least there was additional legislation. Thus, if a stockholder was a resident of another town than that wherein the bank was located, and was there a member of a fire or school district organization, his bank shares could not be there subjected to assessment for any of its taxes. Little v. Little, 131 Mass. 367. Nor could they be thus assessed in the town where the bank was located, as the holder, not being an inhabitant, could not there be a member of such subordinate local organization. That it is intended that all the shares of a bank shall bear an equal burden is further shown by the fact, that, whether the taxable rate be...