State ex rel. Bank v. Gehner

Citation5 S.W.2d 40
Decision Date11 April 1928
Docket NumberNo. 28293.,No. 28294.,28293.,28294.
PartiesTHE STATE EX REL. UNITED STATES BANK and GUSTAVE W. NIEMEN v. FRED GEHNER, Assessor of City of St. Louis, ET AL. THE STATE EX REL. STATE NATIONAL BANK and GEORGE F. COCHRAN v. FRED GEHNER, Assessor of City of St. Louis, ET AL.
CourtUnited States State Supreme Court of Missouri

(1) Section 12775, Revised Statutes 1919, fixes a tax upon the value of the shares of banks. The value so taxed is the actual value as represented by the net — not by the gross — assets of the bank. State ex rel. Johnson v. Buder, 295 Mo. 63; State ex rel. v. Brinkop, 238 Mo. 298; State ex rel. v. Trust Co., 261 Mo. 448; State ex rel. v. Buder, 271 S.W. 508; State ex rel. v. Lesser, 237 Mo. 326; State ex rel. v. Shryack, 179 Mo. 439. (2) The actual value of such shares can only be determined by taking into consideration and deducting from the gross assets the actual liabilities of the bank — those things which the bank would have to pay before the stockholders could receive anything. Such are the items here involved. The stockholders could receive nothing until these items were paid. Therefore they must be deducted before what is left for the shareholders — which determines the value of the shares — can be ascertained. Cases cited above.

Julius T. Muench and Oliver Senti for respondents; North T. Gentry, Attorney-General, of counsel.

(1) Under the laws of this State it was the duty of the officers of relator banks to include in their return for taxation against their shareholders, as of June 1, 1927, the money of said banks, including the amount representing taxes due and payable and not yet paid, and taxes and interest accrued but not yet payable on said date. Sec. 12775, R.S. 1919. There is no provision in the laws of this State which authorizes relator banks to deduct from their return for taxation against their shareholders taxes due and payable but not yet paid, or taxes and interest accrued but not yet payable. Sec. 12775, R.S. 1919. (2) Tax exemptions are in derogation of equal right and are not favored by the courts, but should be construed strictly against those claiming them. State ex rel. v. Johnston, 214 Mo. 656; State ex rel. v. Casey, 210 Mo. 235; St. Louis Lodge v. Koeln, 262 Mo. 444. (3) The policy of our law, constitutional and statutory, is that no other property than that enumerated shall be exempt from taxation. Constitution, secs. 6, 7, art. 10; Sec. 12753, R.S. 1919; State ex rel. Globe-Democrat v. Gehner, 294 S.W. 1018.

SEDDON, C.

The two above-entitled causes, or proceedings, are original proceedings in certiorari, commenced in this court, in which the relators seek to quash the findings and orders of the Board of Equalization of the City of St. Louis, Missouri, made and entered on March 29, 1927, and the record of said Board of Equalization, relating to the assessment (as of June 1, 1926) of the shares of the capital stock of the United States Bank of St. Louis, Missouri, a banking corporation organized and existing under the laws of this State, and relating to the assessment (as of June 1, 1926) of the shares of the capital stock of the State National Bank of St. Louis, Missouri, a banking corporation organized and existing under and by virtue of the laws of the United States, which assessments were made by respondents for the purpose of taxing the shares of the capital stock of said banking corporations for the year 1927. The first cause (No. 28293) is brought at the relation of, and by, said United States Bank of St. Louis, Missouri, and Gustave W. Niemen, a shareholder of said banking corporation, as relators and petitioners. The second cause (No. 28294) is brought at the relation of, and by, said State National Bank of St. Louis, Missouri, and George F. Cochran, a shareholder of said banking corporation, as relators and petitioners. The respondents in each of said proceedings are Fred Gehner, who was, and now is, the Assessor of the City of St. Louis, and who was, and now is, the ex-officio president of the Board of Equalization of said city, and four named individuals, who were the members of said Board of Equalization of said city, and who constituted said board at the time the assessments complained against herein were made.

The two proceedings, aforesaid, are submitted upon the pleadings filed in this court in each of said proceedings, consisting of the relators' application and petition for our original writ of certiorari; the respondents' return to our original writ (which return transmits to this court the record of said Board of Equalization relating to the assessments complained against herein), and relators' motion for judgment, which motion is in the nature of a demurrer to respondents' return to the writ of certiorari. The salient facts are not controverted, and they are clearly set forth in respondents' returns, and in the record of the Board of Equalization transmitted to this court therewith, filed, respectively, in the above-numbered causes. Relators' motion for judgment, being in the nature of a demurrer to the return, admits the substantive facts pleaded in the return.

The return of respondents filed in Cause No. 28293 sets out, in haec verba, the findings and order of respondents, constituting the Board of Equalization of the City of St. Louis, made and entered by said board on March 29, 1927, relating to the assessment of the shares of the capital stock of relator United States Bank, which order, in part, is as follows:

"The Board finds and determines from the evidence that a blank return for state, city and school taxes for the year 1927 was duly served by the Assessor of the City of St. Louis upon the United States Bank of St. Louis, and that said corporation in due and proper time returned the form, on which appeared the following: Amount of capital, $1,000,000; amount of surplus and reserves, $521,921.98; amount of undivided profits, premiums and earnings, $66,261.75; total, $1,588,183.73, which said sum, from said return the Board finds, under the laws of the State of Missouri, is assessable for taxation purposes in the case of the United States Bank.

"The Board further finds and determines that the United States Bank had an item of `reserve for taxes' in the sum of $30,122.82, representing taxes accrued but not yet payable, and `reserve for interest,' representing interest accrued but not yet payable, in the sum of $5,764.83; total, $35,887.65, which items were not included in the return made by the bank and which items the Board finds are also assessable.

"The Board further finds and determines that the United States Bank, in making its return, was not entitled to deduct said sums as liabilities in arriving at the value of its shares for taxation, and, by reason of the foregoing facts so found by the Board, the Board orders and directs that the assessment as of June 1, 1926, against the shares of stock of the said United States Bank, be and it is hereby increased by adding to the list of property returned by said bank the said sum of $30,122.82, carried as reserve against taxes accrued on or prior to June 1, 1926, but not payable until after June 1, 1926, and the sum of $5764.83 on account of interest accrued on June 1, 1926, but not payable until after June 1, 1926, or a total of $35,887.65, thereby increasing the assessment of the shares of said bank from the said sum of $1,588,183.73, as shown by the return of said bank, to the sum of $1,624,071.38."

The return of respondents filed in Cause No. 28294 likewise sets out, in haec verba, the findings and order of respondents, constituting the Board of Equalization of the City of St. Louis, made and entered by said board on March 29, 1927, relating to the assessment of the shares of the capital stock of relator State National Bank, which order, in part, is as follows:

"The Board finds and determines from the evidence that a blank return for state, city and school taxes for the year 1927 was duly served by the Assessor of the City of St. Louis upon the State National Bank of St. Louis, and that said corporation, in due and proper time, returned the form, on which appeared the following: Amount of capital, $2,000,000; amount of surplus and reserves, $500,000; amount of undivided profits, premiums and earnings, $298,863.38; total, $2,798,863.38.

"From which total is deducted interest in banking house, Security Building, Fourth and Locust streets, St. Louis, 1,000 shares of Security Building Company, $150,000; stock Federal Reserve Bank, $75,000; United States Liberty Bonds, $520,000; United States Treasury Certificates, $1,100; United States Treasury bonds, $4,680; total deductions, $750,780.

"The Board further finds and determines that of these deductions only the deduction on account of interest in the banking house is allowable, and said deduction is allowed, leaving a net of $2,648,863.38, which the Board finds, under the laws of the State of Missouri, is assessable for taxation purposes in the case of State National Bank.

"The Board further finds and determines from the evidence that the said State National Bank of St. Louis had an item of `Reserve for general state and school taxes for 1924, $62,387.26; for taxes for 1925, $66,834.65; for federal income taxes, $4927.91; total, $134,149.82, which was net included in the above return made by the bank and which item the Board finds is also assessable.

"The Board further finds and determines that the said State National Bank, in making its return, was not entitled to deduct said sums as liabilities in arriving at the value of its shares for taxation, and, by reason of the foregoing facts so found by the Board, the Board orders and directs that the assessment as of June 1, 1926, against the shares of stock of the said State National Bank of St. Louis be and it is hereby increased by adding to the list of property returned by the said State National Bank of...

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3 cases
  • General Am. Life Ins. Co. v. Bates
    • United States
    • Missouri Supreme Court
    • June 9, 1952
    ...ex rel. Globe-Democrat Pub. Co. v. Gehner, 316 Mo. 694, 696(I), 294 S.W. 1017, 1018, and cases there cited. State ex rel. United States Bank v. Gehner, 319 Mo. 1048, 5 S.W.2d 40, 43, involved taxes against the shares of a state and the shares of a national bank under Sec. 12775, R.S.1919, S......
  • Robert Williams & Co., Inc. v. State Tax Commission of Missouri
    • United States
    • Missouri Supreme Court
    • September 10, 1973
    ...of 'actual or real value.' General American Life Ins. Co. v. Bates, 363 Mo. 143, 249 S.W.2d 458 (1952) and State ex rel. U.S. Bank v. Gehner, 319 Mo. 1048, 5 S.W.2d 40, 45 (1928). Citing § 53.030, RSMo 1969, V.A.M.S., requiring county assessors to value all property at its actual cash value......
  • Mercantile Bank Nat. Ass'n v. Berra
    • United States
    • Missouri Supreme Court
    • September 11, 1990
    ...taxation plan was amended accordingly (for example, taxation of banks' real property was permitted). In State ex rel. United States Bank v. Gehner, 319 Mo. 1048, 5 S.W.2d 40, 43 (1928), the bank taxation mechanism was aptly described in this Under the scheme, or system, of taxation in effec......

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