Ruggles v. City of Fond Du Lac

• Decision Date: 22 November 1881
• Parties: RUGGLES v. CITY OF FOND DU LAC.
• Court: Wisconsin Supreme Court

53 Wis. 436

10 N.W. 565

RUGGLES

v.CITY OF FOND DU LAC.

Supreme Court of Wisconsin.

Filed November 22, 1881.

Appeal from circuit court, Fond du Lac county.

Appeal from an order overruling a demurrer to the complaint. The complaint contains two counts. The demurrer is to the whole thereof, on the ground that two causes of action are improperly united, and to each count on the ground that it fails to state a cause of action. It is alleged in the first count, in substance, that on May 1, 1879, the plaintiff held 526 shares of the capital stock of the First National Bank of Fond du Lac, of the value of $52,600, but that he was then indebted for 375 shares of said stock in the sum of $37,800; that the assessors of the defendant city in that year assessed such stock for the purpose of taxation at its value; that he presented to such assessors a sworn list or schedule of such stock, showing his indebtedness thereon, but they refused to exempt from the assessment thereof an amount equal to such indebtedness; that he appealed to the board of review from the assessment, but that board refused to reduce the assessment on the sole ground that the value of bank stock is not subject to reduction for debts of the owner; that he made special application to the common council of the city for relief in the premises, but relief was refused on the ground of want of authority; and that he paid the taxes assessed on the full value of the stock to the city treasurer by compulsion and under protest, such treasurer holding a proper warrant to collect the same, and threatening to collect the same by levy upon and sale of such stock. The second count contains substantially the same allegations, with additional averments of irregularities in the assessment, which, it is claimed, invalidate the whole tax. These additional averments are not considered in the opinion of the court, and it is unnecessary to state them specifically here.E. S. Bragg, for respondent.

W. D. Conklin, for appellant.

LYON, J.

The act of congress, under which the First National Bank of Fond du Lac was organized, permits state taxation of the shares of stock in national banks, with the restriction that the same shall not be taxed “at a greater rate than is assessed upon other moneyed capital in the hands of individual citizens of such state.” Rev. St. (U. S.) § 5219. A statute of this state (Rev. St. § 1038) exempts from taxation “so much of the debts due or to become due to any person as shall equal the amount of bona fide and unconditional debts by him owing.” Section 10. The supreme court of the United States held in People v. Weaver, 100 U. S. 539, that a statute of New York, which the court of appeals of that state had interpreted as prohibiting the deduction of debts owing by any person from the value of national bank shares owned by him, for the purposes of assessment and taxation, was, becauseof another statute of that state, in contravention of the above limitation of the power of the state to tax such shares, and therefore void. The statute referred to is similar to our section 1038, above mentioned, except that the deduction of debts is to be made from the value of all personal property, including moneyed capital, whereas, under our statute it is only to be made from credits, or, what is the same thing, from moneyed capital. This difference in the statutes obviously is of no significance. The ruling would necessarily have been the same had the New York statute been precisely the same as our section 1038. See, also, Pelton v. Nat. Bank, 101 U. S. 143;Cummings v. Nat. Bank, Id. 153; Evansville Nat. Bank v. Britton, 8 Fed. Rep. 867.

The case last cited was in the circuit court of the United States, and arose in Indiana. It appears from the opinion of Mr. Justice Harlan that the statute of that state imposed taxes only upon the balance of the credits of an individual, after deducting from the value of such credits the amount of his bona fide indebtedness; while in the valuation of shares of bank stock no deduction was allowed for the shareholder's indebtedness. The latter provision was held void, because it discriminated against the shareholder in violation of the law of congress. The decisions of the supreme court of the United States on this subject are authority, and the state courts are not at liberty to disregard them. It inevitably results from these adjudications that so long as our statute exempts, for the purposes of valuation, assessment, and taxation, from the credits of an individual an amount equal to his bona fide and unconditional indebtedness, the same exemption must be made from the ascertained value of national bank stock, if the owner thereof owes bona fide and unconditional debts.

Unlike the statutes of New York and Indiana, our statute does not expressly prohibit such exemption in favor of the indebted shareholder in a bank. It merely provides that bank stock shall be assessed and taxed, and where, (Rev. St. § 1042;) it imposes the duty upon the bank officers to give the assessors certain information, (section 1051;) and it authorizes the assessors to value the stock according to their best judgment, (Section 1057.) There is no provision in our statute which is necessarily in conflict with the act of congress, because it contains nothing which prevents the court from holding that the exemption of section 1038, § 10, is applicable to the valuation, assessment, and taxation of bank stock. If a statute admits...