State ex rel. Wilson v. First National Bank of Carterville

• Decision Date: 23 March 1904
• Parties: THE STATE ex rel. WILSON, Collector, v. FIRST NATIONAL BANK OF CARTERVILLE, Appellant
• Court: Missouri Supreme Court

79 S.W. 943

180 Mo. 717

THE STATE ex rel. WILSON, Collector,
v.
FIRST NATIONAL BANK OF CARTERVILLE, Appellant

Supreme Court of Missouri

March 23, 1904

Appeal from Jasper Circuit Court. -- Hon. Jos. D. Perkins, Judge.

Reversed.

Howard Gray and McAntire & Scott for appellant.

(1) The power to levy taxes is purely statutory and must be clearly given, otherwise it can not be exercised. State ex rel. v. Railroad, 149 Mo. 635; Carondelet to use v. Picot, 38 Mo. 130; State ex rel. v. Shortridge, 56 Mo. 126; State ex rel. v. Railroad, 87 Mo. 236. The power to collect taxes is purely statutory and the collector can take no step which is not provided for by the statute. McPike v. Penn, 51 Mo. 63. The assessment is the basis of the tax, and if it is void, the tax is void. State ex rel. v. Railroad, 114 Mo. 1; State ex rel. v. Railroad, 149 Mo. 635; St. Louis v. Wenneker, 145 Mo. 230; State ex rel. v. Thompson, 149 Mo. 441; Railroad v. Cass county, 53 Mo. 171; Philadelphia v. Miller, 49 Pa. St. 440. (2) The assessment list offered in evidence for the taxes for 1901 shows that the assessor took the capital stock of the bank and deducted from it the value of the real estate, six thousand dollars, the furniture and fixtures, two thousand dollars, and then assessed the balance at 60 per cent. The taxbill and assessment list both for this year show that the taxes were not levied on the stock of the shareholders. The same is true of the taxes for 1900, except the error is more glaring when it is shown that the capital stock of fifty thousand dollars, and only part of the assessment list where the real estate is itemized, is valued at fourteen thousand eight hundred and fifty dollars, but the assessor deducted eleven thousand eight hundred and one dollars from the capital stock, assessed the balance at 40 per cent. The tax book copied in the evidence showed that the taxes were all assessed and levied directly against the bank and on its property with no reference to stock or shareholders. (3) The petition in this case alleges that the appellant is a national bank governed by the act of Congress in relation thereto. This being true, the tax assessed and levied directly against the bank is unlawful and void. Bank v. Owensboro, 173 U.S. 664; Limeberger v. Rouse, 43 Mo. 67; Bank v. Meredith, 44 Mo. 500; State ex rel. v. Catron, 118 Mo. 280; Springfield v. Bank, 87 Mo. 442; Collier v. Chicago, 4 Biss. 472; Bank v. Richmond, 42 F. 877; Bank v. Fischer, 45 Kan. 726; Sumner County v. Bank, 62 Ala. 464; Bank v. Stone, 174 U.S. 432; Brown v. French, 80 F. 166; Miller v. Bank, 3 N. B. C. 711; Stapylton v. Thaggard, 91 F. 931. A bank is not estopped from denying liability to pay tax levied on its capital stock as the personal property of the bank by the fact that for several years it has paid taxes so levied. Bank v. Huffman, 61 N.W. 418. National banks being the creatures of Congress and the right of the States to tax anything pertaining to them being wholly derived from the grant made by Congress, the power to tax shares in such banks for State purposes must be accepted with all the conditions and reservations annexed to its exercise. Maguire v. Board of Revenue, 71 Ala. 401. A State is wholly without power to levy any tax, either direct or indirect, upon national banks, their property, assets or franchises, except when permitted to do so by Congress. Bank v. Owensboro, 173 U.S. 664; sec. 5219, R. S. U. S. 1878. (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 that the bank had in its possession money or property of the shareholder out of which the tax could be paid. Hershire v. Bank, 35 Iowa 272; Bank v. Huffman, 61 N.W. 418. (5) The levying of taxes is a matter solely of statutory creation and no means can be resorted to to coerce their payment other than those pointed out in the statute, and as there was no provision by statute authorizing suit against the bank for taxes on the shares of stock, judgment should have been for the defendant. City of Carondolet v. Picot, 38 Mo. 125; State ex rel. v. Snyder, 139 Mo. 554. (6) Previous to the Act of 1895 the statute expressly provided that the president or other chief officers of a corporation, such as banks, should under oath deliver to the assessor a list of all shares of stock held therein and the names of the persons who hold the same. Laws 1895, p. 195. In 1895 the statute was amended, omitting the requirement to give the names of the persons who held the stock. R. S. 1899, sec. 9153. While that is true, there was no change of any other statute which provided the method and means and the remedy for the collection of the taxes upon the shares, neither was there any authority given in the laws of 1895 to either assess to the bank or to levy a tax upon the shares of stock of the banking corporation. The law of 1895 did not provide for the taxation of shares of stock in the bank; it only provided that they be assessed. R. S. 1899, sec. 9153. The same section, however, did provide that private bankers, brokers, money brokers and exchange dealers should make like returns and be assessed and taxed. There is no provision, however, authorizing the taxes to be levied or collected from them. The change of the statute made no difference as to whom the shares of stock should be assessed, for the reason that it is a well-recognized principle that property must be assessed to the owner of the same, and not to some one else, and unless such assessment is made to the owner, such assessment is invalid. State ex rel. v. County, 84 Mo. 234; City of Jefferson v. Mark, 74 Mo. 62; State ex rel. v. Railroad, 114 Mo. 7; Abbott v. Lindenbower, 42 Mo. 162. (7) The shares held by the owners of stock in banks and the capital stock of such banks or other corporations, are distinct properties and so taxable. Shelby v. Bank, 161 U.S. 150. (8) It is true that banks may be agents for the collection of shareholders' taxes, yet the shares of stock themselves must be assessed to the owners and there must be some act to show that the shares of stock are assessed separate from the capital of the bank, and in order to maintain a remedy against the bank, the bank must be the agent of the State for the collection of those taxes which our statutes do not reach. Bank v. Golding, 2 Utah 10; Miller v. Bank, 46 Ohio St. 431. (9) While it is true that section 9155, Revised Statutes 1899, provides that the banks shall pay the taxes assessed upon the shares and that the banks may recover from the owners of the shares the amount so paid or deduct the same from the dividends, yet no provision is made or authority given to sue the bank for its default, but on the other hand it is provided that if the bank fail to do that it shall be liable to a penalty of $ 1,000 to be recovered by indictment and that the shares of stock may be levied on and sold for the payment of the taxes. State ex rel. v. Catron, 118 Mo. 280; R. S. 1899, secs. 9156, 9230, 9231. Our position is: First. That the shares of stock were not assessed at all. Second. That if it be claimed that it was an assessment of the shares of stock, the assessment on the shares was in gross against the bank and was not authorized and is illegal. Desty on Taxation, 377; People v. N. Y. Tax Comrs. (71 U.S.), 4 Wall. 244; Rosenblatt v. Johnston, 104 U.S. 462; Bank v. Covington, 21 F. 485; Bank v. Ky. (76 U.S.), 9 Wall. 353; Bank v. Richmond, 39 F. 309; Collins v. Chicago, 4 Bliss 472; Bank v. Mobile, 62 Ala. 284; Bank v. Miller, 19 F. 381; Bank v. Parker, 41 F. 402; Bank v. Richmond, 42 F. 877; Miller v. Bank, 46 Ohio 424; Bressler v. Wayne Co., 25 Neb. 468; Bank v. Elmira, 53 N.Y. 49. (10) Even a refusal of the cashier of a bank to furnish list of shareholders does not authorize assessment against bank. 87 Mo. 441. An assessment not in the name of the real owner is void. Abbott v. Lindenbower, 42 Mo. 163; Smith v. Davis, 30 Cal. 537; Blatner v. Davis, 32 Cal. 328; People v. Whipple, 47 Cal. 591; Crawford v. Schmidt, 47 Cal. 618. The authorities in Missouri construing section 9153 to the present date are as follows: Loenburger v. Rowse, 43 Mo. 80; City of Springfield v. Bank, 87 Mo. 443; Ogden v. St. Joseph, 90 Mo. 527; State ex rel. v. Catron, 118 Mo. 280; State ex rel. v. Bank of Neosho, 120 Mo. 169; City of Stanberry v. Jordan, 145 Mo. 377; State ex rel. v. Bank, 160 Mo. 647; Relf v. Columbia Fire Insurance Co., 11 Mo.App. 377. The State is wholly without power to levy any tax, either direct or indirect, upon national banks, their property, assets or franchises, except when permitted so to do by the laws of Congress. Bank v. Owensboro, 172 U.S. 850.

E. L. Shepherd, E. O. Brown and Geo. W. Crowder for respondent.

(1) The law of 1895 (now section 9153, R. S. 1899), relating to the taxation of national banks in this State, is to be read in connection with section 9155, Revised Statutes 1899...