State to Use of City of Memphis v. Mercantile Bank

• Decision Date: 23 June 1895
• Citation: 31 S.W. 989,95 Tenn. 212
• Parties: STATE, to Use of CITY OF MEMPHIS, v. MERCANTILE BANK et al. STATE, to Use of SHELBY COUNTY, v. SAME. STATE, to Use of CITY OF MEMPHIS, v. GERMAN BANK et al. STATE, to Use of SHELBY COUNTY, v. SAME. STATE, to Use of CITY OF MEMPHIS, v. HOME INSURANCE & TRUST CO. STATE, to Use of SHELBY COUNTY, v. SAME.
• Court: Tennessee Supreme Court

31 S.W. 989

95 Tenn. 212

STATE, to Use of CITY OF MEMPHIS, v. MERCANTILE BANK et al.

STATE, to Use of SHELBY COUNTY, v. SAME.

STATE, to Use of CITY OF MEMPHIS, v. GERMAN BANK et al.

STATE, to Use of SHELBY COUNTY, v. SAME.

STATE, to Use of CITY OF MEMPHIS, v. HOME INSURANCE & TRUST CO.

STATE, to Use of SHELBY COUNTY, v. SAME.

Supreme Court of Tennessee.

June 23, 1895

Appeal from chancery court, Shelby county; John L. T. Sneed Chancellor.

The following suits were consolidated:

Suits by the state and city of Memphis and by the state and county of Shelby against the Home Insurance & Trust Company to recover taxes. From a judgment allowing recovery of the taxes for some years and denying it for others, all parties appeal. Reversed on appeals of plaintiffs.

Suits by the state and city of Memphis and by the state and county of Shelby against the Mercantile Bank and others to recover taxes. Judgment in both cases for defendants, and plaintiffs appeal. Reversed.

Suits by the state and city of Memphis and by the state and county of Shelby against the German Bank and others to recover taxes. From a judgment allowing the collection of taxes for some years and denying it for others, all parties appeal. Reversed on appeal of plaintiffs.

Metcalf & Walker and F. T. Edmondson, for complainants. Turley & Wright, for defendants.

GILLIAM Special Judge.

These bills are to recover taxes claimed to be due the state county, and city of Memphis from the defendants respectively, for the years 1887 to 1894, inclusive, and involve large amounts. Some of the questions raised upon these records are in substance the same as in the case of State v. Bank of Commerce (decided at this term) 31 S.W. 993, and are controlled by the opinion delivered in that case. These six cases may be disposed of by one opinion.

In the case against the Mercantile Bank the chancellor refused all relief, and dismissed the bills. Complainants appealed, and assigned errors. The taxes here sued for against the bank aggregate about $36,000. The Mercantile Bank claims to have and enjoy all the rights, powers, privileges, and immunities granted to the Gayoso Savings Institution (it being the same form of charter under which the Bank of Commerce operates). The Gayoso Savings Institution did a banking business at Memphis for many years, but in the year 1879 failed. Thereupon a bill was filed by the president of the bank in the chancery court at Memphis to administer its assets, and wind up its affairs as an insolvent corporation. In this bill such proceedings were had that on the 11th day of June, 1880, the court, by decree, directed the receiver of the corporation to sell the charter of said company, in obedience to which direction he, on June 28, 1880, sold the same at public auction, at which sale it was purchased by Julius A. Taylor for the sum of $201. The sale was duly reported, and by the court confirmed. The decree of sale was as follows: "In this cause, on petition and motion of the receiver, it is ordered that, after advertising same for ten days, he proceed to sell at public auction to the highest bidder for cash the charter of the Gayoso Savings Institution, together with all the rights and privileges thereunder." The material part of the report of sale is in these words: "That under the order in this cause of June 11, 1880, and pursuant to the following advertisement, *** he, on Monday, June 28, 1880, offered for sale in front of the courthouse door, the charter of the Gayoso Savings Institution, when and where the same was struck off and sold to Julius A. Taylor at and for the sum of $201, his being the highest, last, and best bid, with which he has complied. *** This June 28, 1880." The decree confirming the sale, entered July 21, 1880, is as follows: "This cause came on to be further heard upon the report of sale by the receiver, filed herein the 28th day of June, 1880, which is in words and figures following (here insert report); and, there being no exceptions to said report, the same is in all things confirmed, and the title to the charter of the Gayoso Savings Institution, with all the powers, privileges, and franchises thereunto belonging, is hereby vested in J. A. Taylor, his heirs and assigns." Afterwards, by an act of the legislature, the name was changed to Mercantile Bank, and Taylor and his associates or assigns organized the present corporation, and claim immunity from all taxation, except the annual commuted tax of one-half of 1 per cent. to the state.

It is contended: (1) That the state, having sued the defendant as a corporation, cannot be heard to say that it is not such, or that it has not all the rights, privileges, and immunities claimed by it under the charter. (2) That by the purchase of the charter of the Gayoso Savings Institution it became entitled to all the immunities enjoyed by that institution. We think that both of these questions have been answered in favor of the state by two late decisions of this court,--State v. Butler, 15 Lea, 104; Id., 2 Pick. 614, 8 S.W. 586; Memphis v. Bank, 91 Tenn. 574, 19 S.W 1045. We hold that the defendant, by the purchase of the charter, got no immunity from taxation, whatever else may have been the effect of the attempt to sell the charter; that the grant of such immunity was personal, and cannot be transferred without the consent of the state. It does not matter that the stockholders of the company, or nearly all of them, were parties to the case in which the sale was made. Conceding, for argument's sake, that they would be estopped to claim from the purchaser that which was sold and that which he bought at the sale, they would remain just as much the owners of their stock after as before the sale. Had the assets been more than enough to pay the bank's liabilities, they would have been entitled to such surplus. Again, the decree of sale did not direct a sale of the immunities, and without this the purchaser cannot enjoy the...