State ex rel. to Use of Bay v. Citizens State Bank
| Decision Date | 29 March 1918 |
| Parties | THE STATE at Relation and To the Use of JOHN T. BAY, Collector of the Revenue of Shannon County, v. CITIZENS STATE BANK, Appellant |
| Court | Missouri Supreme Court |
Appeal from Shannon Circuit Court. -- Hon. W. N. Evans, Judge.
Affirmed.
S. A Cunningham for appellant.
(1) Failure of the petition to state a cause of action is available to the defendant at any time in any court, while the case is pending, either in the trial or appellate court and whether raised by demurrer or not. R. S. 1909, sec. 1804; Hudson v. Cahoon, 193 Mo. 557. (2) The assessor may obtain of the bank a list of the shareholders, as provided by the statute, but he should make the assessment against the shareholders personally, and has no right to collect the taxes by selling the property of the bank or the shares of other stockholders, or other property belonging to them except that of delinquent. Bank v. Meredith, 44 Mo. 500; Springfield v. Bank, 87 Mo. 445. Taxes should be assessed in the name of the owner of the stock, and not against the corporation or the property which the shares represents. State ex rel. v. Catron, 118 Mo. 280; State ex rel. v. Bank, 180 Mo. 717; State ex rel. v. Shryack, 179 Mo. 424; State ex rel. v. Bank, 160 Mo. 640. The shares of stock are personal property of the stockholders, and the corporation has not and cannot have any interest in them. R. S. 1909, sec. 2984; Watson v. Printing Co., 56 Mo.App. 151; State v. Railroad, 37 Mo. 269. (3) The court should not have admitted the tax bills in evidence, for the reason that they show the delinquent personal tax to have been assessed against the Birch Tree State Bank, a corporation, and not against the stock of the shareholders as is required by law. R. S. 1909, sec. 11357. (4) The petition for back taxes against the bank drawn on the theory that the bank is the agent of the shareholder for the payment of his taxes must allege and prove that the bank had in its possession, money or property of the shareholder out of which the taxes could be paid. Hershire v. Bank, 35 Iowa 272; Bank v. Huffman, 61 N.W. 418. It is not every promise made by one to another, from the performance of which a benefit may ensue to a third, which gives a right of action to such a third person; he being neither privy to the contract nor to the consideration. The contract must be made for his benefit, as its object, and he must be the party intended to be benefited, and it will not be so far extended as to give to a third person who is only indirectly and incidentally benefited by it a right to sue upon it. Porter v. Woods, 138 Mo. 554; Bank v. Chick, 170 Mo.App. 350; Howsmon v. Water Co., 119 Mo. 304; Beattie Mfg. Co. v. Clark, 208 Mo. 89; Uhrich v. Surety Co., 166 S.W. 845; Burton v. Larkin, 36 Kan. 246. A tax is not a debt in the ordinary sense of that term, as it is not founded upon contract, and as a general thing a debt can not be created in any other way. State ex rel. v. Snyder, 139 Mo. 553; Carondelet to use v. Picot, 38 Mo. 130. (5) The power to sell the property, both real and personal, of the corporation, when not expressly vested in the stockholders by the statute, is one which the directors alone can carry into effect. This is done by a resolution duly passed at a meeting called for that purpose, or at a regular meeting when a sale of the property of the corporation may be authorized. Magee on Banks and Banking (2 Ed.), sec. 90, p. 104; Hill v. Mining Co., 119 Mo. 29; secs. 1084, 1112, R. S. 1909; Miles v. Bank, 187 Mo.App. 247. The court should have given defendant's declaration offered at the close of all the evidence, there being no evidence on which to base his finding for plaintiff. State ex rel. v. Bank, 160 Mo. 640.
John H. Chitwood and L. B. Shuck for respondent.
This action was brought in the name of the State, by John T. Bay, Collector of the Revenue in Shannon County, Missouri, to recover of defendant, the sum of $ 127.69, being the balance due as taxes, assessed in June, 1913, against the stockholders of the Birch Tree State Bank, the latter having formerly done a banking business in said county. The tax statement filed with petition indicates on its face that the taxes sued for were assessed against the Birch Tree State Bank, a Missouri incorporated bank, but the assessment list for 1913 was offered in evidence by respondent, and it shows that the cashier of said Birch Tree State Bank made out and certified to the assessor of said county the statement required by Section 11357, Revised Statutes 1909, showing the list of stockholders in said bank, with the name of each inserted, and the number of shares owned by them respectively. Said statement gives the total number of shares held by the fourteen shareholders named, as one hundred, of the face value of $ 100 each, making $ 10,000. The amount of reserve funds, undivided profits, premiums or earnings, and all other values belonging to said corporation, are mentioned therein as amounting to $ 6064. The value of the real estate is placed in said statement at $ 4000, and the total value of the remaining property, at $ 16,064. The assessor, as shown by the list, deducted from the last named amount the value of the real estate, which left the total net value of the stock of said bank (at $ 120.64 per share) $ 12,064. The net value of the stock was then assessed at $ 6032, and the real estate aforesaid assessed at $ 1600.
It is fair to assume that the taxes levied on the above real estate were paid by the Birch Tree State Bank, as they are not included in the tax statement filed with the petition. Said tax statement likewise shows that J. W. Holden and W. A. McIntire, two of the stockholders of said Birch Tree State Bank, owned four shares each in said bank; that on January 19, 1915, they each paid the taxes on their assessment of stock, amounting to $ 5.52; that the remainder of taxes due on stock assessment, after deducting the $ 11.04 paid by the above stockholders, was $ 125.17. The latter sum, plus $ 2.52 interest, constituted the balance of $ 127.69 sued for in this action.
It appears from the record, that on October 21, 1913, W. I. Marshall, P. D. Gum, John F. Budd, J. W. Holden and E. T. Pate, representing themselves as directors and stockholders of the Birch Tree State Bank, sold and conveyed to the defendant bank, the assets of said Birch Tree State Bank. The defendant, in the contract of sale, assumed and agreed to pay all amounts due from said Birch Tree State Bank, to its depositors, and all other creditors, "except stockholders from their stock representing the capital of the Birch Tree State Bank." The contract recites that W. I. Marshall, and the other directors and stockholders representing the Birch Tree State Bank, warrant that said bank has no other liabilities than those mentioned in "Exhibit B" attached to and made part of said contract of sale; and that they will hold the defendant harmless from the payment of any claims that may be brought against it by any of the creditors of the Birch Tree State Bank, other than those mentioned in said "Exhibit B." The taxes sued for are neither specifically mentioned, nor referred to, in either the contract of sale, or exhibits attached thereto.
C. L. V. Randall, a stockholder in defendant bank, was sworn as a witness in behalf of respondent. He testified that the defendant bank never bought the capital stock of the Birch Tree State Bank, and that it never assumed any of the liabilities that might have grown out of the capital stock; that the only liabilities which his bank did assume were set out in the contract, and that all such liabilities were paid.
Such other facts, if any, as may be deemed important, will be referred to in the opinion.
At the conclusion of the above testimony, the appellant interposed a demurrer to the evidence, which was overruled, and judgment entered by the trial court on May 15, 1915, for $ 127.69 and costs, in favor of respondent, and against defendant. The latter in due time filed its motion for a new trial, and motion in arrest of judgment. Both motions were overruled, and the cause duly appealed by it to this court.
I. At an early date the General Assembly of the State of Maryland passed an act authorizing the taxation of national banks in said State. In McCulloch v. State of Maryland, 17 U.S. (4 Wheat.) l. c. 436-7, Chief Justice Marshall, in construing the above act, said:
Subsequently, Congress passed that which is now known as Section 5219, United States Compiled Statutes 1901, Chapter Three, Volume Three, page 3502, which reads as follows:
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