State v. Buder

• Decision Date: 18 July 1922
• Docket Number: No. 23687.,23687.
• Parties: STATE ex rel. JOHNSTON et al. v. BUDER, Assessor, et al.
• Court: Missouri Supreme Court

242 S.W. 979

295 Mo. 63

STATE ex rel. JOHNSTON et al. v. BUDER, Assessor, et al.

No. 23687.

Supreme Court of Missouri, in Banc.

Motion for Rehearing Denied June 13, 1922.

July 18, 1922.

Certiorari by the State of Missouri, at the relation of John L. Johnston and the Liberty Central Trust Company, against William Buder, Assessor, and the Board of Equalization of the City of St. Louis, to quash the action of the Assessor and the Board of Equalization in increasing the assessment of the relator the Liberty Central Trust Company. Record of Board in making increase quashed.

Fordyce, Holliday & White, William C. Connett, and Bennett C. Clark, all of St. Louis, for relators.

Henry S. Caulfield and Geo. F. Haid, both of St. Louis, for respondents.

HIGBEE, J.

Certiorari to quash the action of the assessor and board of equalization of the city of St. Louis in increasing the assessment of the relator the Liberty Central Trust Company.

The trust company, an incorporated bank, on December 27, 1921, delivered to the assessor a verified list of all shares of stock held therein and the face value thereof, the value of all real estate represented by such shares of stock, together with all reserved funds, undivided profits, etc., as required by section 12775, R. S. 1919. This statement shows amount of capital, surplus, and undivided profits, $4,283,265, which includes real estate in this state carried on its books at the value of $2,325,436. A part of this real estate was, on June 1, 1921, incumbered by a mortgage, executed by a former owner, to secure the payment of notes for the principal sum of $1,725,000, held by the First National Bank of St. Louis, to which the trust company pays the interest; the notes being a part of the liabilities of the trust company. All of the real estate was assessed to the trust company for the year 1922.

The issue in the case is thus stated by the respondents:

"The sole question for the consideration of this court is whether, in determining the value of the stock of the relator bank for the purpose of assessment against the stockholders under the provisions of section 12775, R. S. 1919, there should be deducted from the amount of the capital, surplus, earnings, profits, etc., the sum of $1,725,000, the amount of the mortgage indebtedness upon the real estate of the bank, although said sum is not included in and does not form a part of the capital, surplus, etc., shown by the books of the bank, and the question arises in this way:

"The Liberty Central Trust Company owned real estate which it carried on its books at $2,365,435.98 (tender `Resources'), some of which was acquired by it subject to the obligations of the Penco Realty Company, a prior owner, amounting to $1,725,000, shown under the head of `Liabilities' The bank's statement further shows capital, surplus, and undivided profits of $4,068,197.23 and earnings of $488,845.18 (returned for assessment at $4,283,265), so that the mortgage indebtedness appears upon its books as a liability distinct from the capital, surplus, and undivided profits, etc., and therefore is not included in such surplus and undivided profits. The board of equalization, therefore, deducted from the capital, surplus, and undivided profits the difference between $1,725,000 and $2,365,435.98, the whole value of the real estate, to wit, about $640,000, and allowed the latter sum as a deduction from the capital, surplus, and undivided profits as the value of the real estate represented by such shares of stock, and also allowed a deduction for certain stocks owned by the bank in other corporations, and fixed the amount to be assessed against the shares of stock, the amount of the difference, to wit, $3,415,570, as shown by its order on page 23 of the abstract."

This indebtedness of $1,725,000, being a liability of the trust company, it thus appears that the sole question for consideration is whether in determining the value of the stock this liability should be deducted from the amount of the capital, surplus, and undivided profits of the company, as stated by respondents. Section 12775, R. S. 1919, so far as material, reads:

"Persons owning shares of stock in banks, or in joint stock institutions or associations doing a banking business, shall not be required to deliver to the assessor a list thereof, but the president or other chief officer of such corporation, institution or association shall, under oath, deliver to the assessor a list of all shares of stock held therein, and the face value thereof, the value of all real estate, if any, represented by such shares of stock, together with all reserved funds, undivided profits, premiums or earnings, and all other values belonging to such corporation, company, institution or association; and such shares, reserved funds, undivided profits, premiums or earnings and all other values so listed to the assessor shall be valued and assessed as other property at their true value in money, less the value of real estate, if any, represented by such shares of stock."

It is insisted by respondents that by deducting the $1,725,000 from the total value of the real estate, there remains the sum of about $640,000 as the total amount invested by the company in real estate, and they stress the claim that this sum is the total value of real estate represented by the shares of stock. It is further said in respondents' brief:

"The bank saw fit to place in its resource column the entire value of the real estate, and therefore, in order to show the true situation, it became necessary for it to place the amount of the unpaid real estate obligations in its liability column so that its statement of capital stock, surplus, earnings, etc., would properly include only its actual cash investment in...