State v. Citizens' Bank of Louisiana

• Decision Date: 29 May 1899
• Docket Number: 12,861
• Citation: 27 So. 709,52 La.Ann. 1086
• Parties: STATE OF LOUISIANA v. CITIZENS' BANK OF LOUISIANA
• Court: Louisiana Supreme Court

27 So. 709

52 La.Ann. 1086

STATE OF LOUISIANA v. CITIZENS' BANK OF LOUISIANA

No. 12,861

Supreme Court of Louisiana

May 29, 1899

April 1900 [Copyrighted Material Omitted] [Copyrighted Material Omitted]

MONROE, J. WATKINS, J., concurring, handed down a separate opinion. BREAUX, J., and BLANCHARD, J., handed down separate dissenting opinions.

OPINION ON REHEARING.

The pleadings and facts in this case are set forth in the original opinion, and need not be recapitulated.

The plea of res adjudicata rests upon the proposition that a license tax is a tax upon the capital of the bank, and hence that a judgment declaring such capital exempt from taxation establishes the "thing adjudged," with respect to the present claim for a license.

Although this question can no longer be considered an open one, we have given the able presentation of it, by the learned counsel for defendant, our serious consideration. We find the authorities cited in the original opinion conclusive upon the subject, however, and they are binding upon this court. It may be remarked, in addition, that if exemption of capital, necessarily, or in the contemplation of law makers, carried with it the exemption of the occupation of the owner of the capital, it seems hardly probable that the Constitutions and laws of this State would, for many years, have contained separate provisions upon those subjects.

In so far as concerns the judgment of the Supreme Court of the United States in the matter of "The State of Louisiana ex rel. Citizens' Bank vs. Board of Assessors," taken up by writ of error to this court and reported in 167 U.S. 407, that judgment affirms the judgment of this court, as reported in 48 Ann., 35, to the effect that "Where the Citizens' Bank subjects property to its ownership which was mortgaged to secure stock subscriptions, the property is not exempt from taxation, as part of the capital stock of the bank," and nothing else was decided in that case. In the case entitled "City of New Orleans vs. Citizens' Bank," 167 U.S. 373, appealed from the Circuit Court of the United States, there were three questions presented and decided, viz:

1. The majority of the court, sustaining the plea of res adjudicata, held that the bank is not liable to taxation on its capital stock, or its banking house, or furniture, used for its business, and that it can not be required to pay a tax assessed upon its shares in the hands of its shareholders.

2. It was further held that the bank is liable to taxation on property acquired in foreclosure of mortgages.

3. It was further decreed that the claim of the bank to the non-liability of its shareholders to taxation should be rejected, and the question left open.

4. And, finally, the court refused to sustain the proposition "that the non-liability of the bank to taxation embraced also immunity from the payment of a license tax to either the State of Louisiana, or the City of New Orleans," and held that the question of non-liability for such license tax was not in the case.

It is manifest, then, that, whether the bank is liable for a license tax, was not decided. On the other hand, it was decided that the question of immunity from taxation on capital does not embrace or include the question of immunity from a license tax. Again, the Circuit Court had held that the bank was exempt from taxation on mortgaged property, bought in by it, because the property so acquired became, by virtue of the purchase, a part of its capital stock. But the Supreme Court said: "Evidently it was a confusion of thought on this question, which led the court below to hold that the property bought in, in enforcement of the stock mortgages, and held by the bank, was the capital of the bank, and, therefore, not liable to taxation."

It is said that, even though it be held that exemption from license taxation is not included in the language by which exemption from capital taxation is conferred, the court must, nevertheless, be convinced that it was the intention of the State that exemption from taxation, upon the business, or occupation, of the bank, should be included in the grant, for the reason, that, by the act of 1836, the bank acquired the character of an agency, established by the State of Louisiana for governmental purposes, and that it would be unreasonable to suppose that the State would hamper the operations of its own agent by requiring it to pay a tax; and that such intention becomes all the more improbable in view of the fact that the capital of the bank was expressly exempted from taxation during the continuance of its charter, and the exemption thus accorded has been held and construed by the various departments of the State government, from 1836 up to within a few years past, to include exemption from taxation such as is now sought to be imposed.

There is nothing in the pleadings upon the subject of the construction placed by the officers of the State upon the exemption granted to the bank; nor was any evidence offered bearing upon that subject, save the pleadings and judgments in the suits relied on to sustain the plea of res adjudicata, and they show, conclusively, that from 1878, up to the present time, the officers charged with the assessment and collection of taxes, have denied the exemption claimed by the bank on its capital, and have endeavored to compel it to pay taxes, and that, in some respects, the claim of the bank has been sustained, whilst, in other respects, it has not been sustained. Thus, the claim that it was exempt, with respect to mortgaged property bought in by it, appears to have been as urgently pressed as any other part of its demand, and yet the Supreme Court, in the case already cited (167 U.S.) says, upon the subject: "The record affirmatively shows that for many years after the charter was adopted, the property acquired by the bank under foreclosure of mortgage was taxed like property of other citizens, and the tax was voluntarily paid. 'Indeed' (says the court) 'it was stated in the discussion at bar, and not denied, that the supposed right of the bank to exemption on property acquired by it, under foreclosure of mortgage, was for the first time asserted in this suit, and that for the long series of years which had elapsed since the organization of the bank, that character of property was regularly taxed, and the tax paid.'" And the judgment of the Circuit Court, decreeing such property exempt, was accordingly reversed. For the purposes of the present case, therefore, we shall be unable to consider the effect of any supposed construction of the law under which the exemption is here claimed, or of any acquiescence in such contruction by the officers charged with the execution of the law. This suit was brought in 1894, for the collection of the license for the current year, amounting, as appears from the original opinion, to $ 450.00. We should not, therefore, be called upon, even if the pleadings and evidence were other than they are, to deal with the question of giving a retrospective operation to a new and suddenly conceived construction of a law which had long been otherwise interpreted, and of thereby requiring the payment of a large sum for licenses, for years during which no one believed them to be due and no demand was made for their collection. When such a case is presented, it will be considered upon its merits, as was the case of the "State vs. The Comptoir National, etc., 51 Ann., 1272, which has been invoked. That case can not, however, be considered authority for the proposition that the State can be permanently estopped from enforcing the collection of its taxes by the previous acquiescence of its officers in a misconstruction of the law. Upon the contrary, express reference is made in the opinion to the fact that the future taxation of the defendant had been provided for, and it was found, moreover, that the statute under which the State claimed was inapplicable to the case.

Returning to the question; what should be presumed to have been the intention of the State, in view of the relations established between it and the bank by the act of 1836, and by other acts, subsequently passed? The main proposition advanced by counsel for the defendant relates to a supposed general understanding, in 1836, and is fairly summed up in the following statement, in one of their briefs:

"The idea that prevailed at the time the bank was established was that the enterprise was, in a certain sense, a State, rather than a private enterprise; that the carrying on of the business designed to be carried on, was an inestimable boon to the State, not merely sanctioned by the State, but in which the State herself engaged. It was inconsistent with the fundamental object of such an enterprise, the administration of which was controlled by the State, that it should be subjected to any license tax."

There is no evidence before us as to the condition of public sentiment in 1836 concerning the enormous aid extended by the State to what all writers and jurists would concur in holding to be, and to have been, a private corporation. It is not doing violence to probabilities however, to suppose that there were some persons, not connected with the bank, who doubted the propriety of using the credit of the State in that way. At all events, the experience of the State, in aiding property banks, and other enterprises, would seem not to have been either pleasant or profitable, as may be inferred from the character of some of the provisions incorporated in the Constitutions adopted since that time. Thus, the Constitution of 1845, prohibited the State from subscribing to the stock of any corporation, and prohibited the creation, renewal, or extension of any corporate body with banking or discounting privileges, and...