State v. Richards

• Citation: 18 A. 582,52 N.J.L. 156
• Parties: STATE (TRENTON SAV. FUND Soc., Prosecutor) v. RICHARDS, Receiver, etc.
• Decision Date: 08 November 1889
• Court: United States State Supreme Court (New Jersey)

18 A. 582

52 N.J.L. 156

STATE (TRENTON SAV. FUND Soc., Prosecutor)

v. RICHARDS, Receiver, etc.

Supreme Court of New Jersey.

Nov. 8, 1889.

(Syllabus by the Court.)

Certiorari.

Argued June term, 1889, before KNAPP and DIXON, JJ.

F. C. Lowthrop, Jr., for prosecutor. W. M. Lanning, for defendant.

DIXON, J. This certiorari brings up the assessment of taxes against the Trenton Savings Fund Society for the year 1888, in the city of Trenton. The prosecutor insists that it should have been taxed only under the supplement to "An act concerning savings banks," approved April 27, 1888, (P. L. 1888, p. 545,) by which it was enacted "that all savings banks shall, in lieu of all other taxes, pay an annual tax on the amount of their deposits of one-half of one per centum, after deducting therefrom available funds on hand or on deposit to meet current payments or expenses, and the amount invested in any securities issued by this state, or by any county, town, township, or city in this state, or which, by the statutes of this state or of the United States, are exempt from taxation, and the cost of the real estate purchased under foreclosure, which real estate shall be subject to the same tax as other like property." Under this statute, the prosecutor claims it would be chargeable with only one-half of 1 per centum, or $48,725.91, while the tax actually levied was at the general city rate of 1.65 per centum on $16,170 of realty, and $116,322 of personalty. The city contends that the statute above set forth is unconstitutional.

The case was presented by counsel on both sides upon the, assumption that the tax provided for by this statute was a property tax; and therefore the question discussed was whether the tax was in accordance with article 4, § 7, par. 12, of the constitution, which requires that "property shall be assessed for taxes under general laws, and by uniform rules, according to its true value." But this assumption is unwarranted. The tax is not levied upon property at all, nor on anything which has any certain relation to property. It is to be gauged by the amount of the bank's deposits, after deducting certain items of the bank's property; and the amount of its deposits indicates the bank's debts, not its possessions. If a bank were penniless, and in debt to depositors, its tax might be greater than if it owned millions. Such a tax was evidently not intended to be a tax on property. If it should be deemed such, it would certainly be unconstitutional for the reason (not to mention other grounds of objection) that it is not to be assessed according to the true value of the property on account of which it is levied. The tax is, in our judgment, to be regarded as a personal tax, chargeable upon this class of artificial persons, either because of the franchises which they enjoy, or because of the business which they do. It bears some relation both to the value of their franchises, and to the volume of their business, as indicated by the amount of deposits intrusted to them. Taxes of this nature do not come within the range of the constitutional paragraph above cited; and therefore, looking merely at the tax which this statute imposes, we see no reason for doubting its validity.

But the statute declares that this tax is to be paid in lieu of all other taxes; and consequently, if the enactment is sustained, it will exempt from taxation all the property of these institutions, except so far as it expressly permits such property to be taxed. The validity of this exemption is the real point at...