State v. Title Guaranty Trust Co.

• Decision Date: 14 July 1914
• Docket Number: No. 18084.,18084.
• Citation: 169 S.W. 28,261 Mo. 448
• Parties: STATE ex rel. KOELN, Collector, v. TITLE GUARANTY TRUST CO.
• Court: Missouri Supreme Court

169 S.W. 28

261 Mo. 448

STATE ex rel. KOELN, Collector, v. TITLE GUARANTY TRUST CO.

No. 18084.

Supreme Court of Missouri, Division No. 2.

July 14, 1914.

Rehearing Denied July 25, 1914.

1. TAXATION (§ 47) — DOUBLE TAXATION — WHAT CONSTITUTES.

When a taxpayer who holds the legal title to a solvent note pledges it to secure his own debt, he cannot deduct from the amount of the note his debt, and taxation upon the full amount is not double taxation.

2. TAXATION (§ 351)—PROPERTY SUBJECT TO TAXATION.

Where a trust company deposited notes amounting to $549,000 to secure its bonds amounting to $500,000, and defendant purchased the equity of the trust company, defendant cannot be taxed upon the full amount of the notes, but is subject to taxation only upon the equity amounting to $49,000.

3. TAXATION (§ 597)—TAX SUITS—APPEAL— REVIEW.

In an action by the collector to recover personal taxes, the Supreme Court on appeal is not bound by the record of the board of equalization, but must go beyond the bare record entries and ascertain the real proceedings had by the board; the record of the board not being conclusive as in certiorari.

4. TAXATION (§ 467) — ASSESSMENT — POWER OF CITY BOARD OF EQUALIZATION.

Rev. St. 1899, p. 2562, art. 25, § 3, provides that all laws requiring any officer of any county to perform any duty, service, or trust shall include all corresponding city officers named in the charter and scheme of separation for the government of the city and county of St. Louis. By Laws 1903, p. 253 (Rev. St. 1909, § 11,407), the board of equalization of the county of St. Louis was given power to assess omitted property. Held, that the giving of such power to the county board likewise conferred it upon the city board of equalization.

5. TAXATION (§ 482)—ASSESSMENT — ASSESSMENT OF OMITTED PROPERTY — NOTICE — WAIVER.

Where the board of equalization of the city of St. Louis, in adding omitted property, failed to give the notice required by Rev. St. 1909, § 11,407, the taxpayer who appeared before the board cannot defeat the assessment on the ground of want of notice; his appearance having waived it.

6. TAXATION (§ 489) — ASSESSMENT — ENTRY OF ASSESSMENT.

Where the board of equalization of the City of St. Louis added omitted property, the fact that the record did not show the special class of property to which the omitted property was added did not invalidate the assessment.

Appeal from St. Louis Circuit Court; J. Hugo Grimm, Judge.

Action by the State, on the relation of Edmond Koeln, Collector, against the Title Guaranty Trust Company. From a judgment for plaintiff, defendant appeals. Reversed and remanded, with directions.

This is a suit for personal taxes in which judgment went for the plaintiff.

At the assessment of June 1, 1910, the defendant returned to the assessor an assessment list or "tax return" showing the following items:

                Class.           Articles.            Value.         Total Value
                                                                     by Classes
                Fifth.    Money on hand.........  $ 12,735.71
                Sixth.    Money deposited in
                           bank or other safe
                           place ...............   173,620.31        $185,356.02
                Eighth.   Aggregate statement
                           of all solvent notes
                           secured by mortgage
                           or deed of
                           trust ...............    93,597.34
                Ninth.    Aggregate statement
                           of all solvent
                           bonds, whether
                           state, county
                           town, city, township
                           incorporated
                           or unincorporated
                           companies ...........    51,100.00         144,697.34
                                                                      __________
                Tenth.    Title plant ..........   350,000.00         350,000.00
                                                                     ___________
                Subject to state, school and city tax ........       $680,060.00
                

On April 1, 1911, the following entry was made on the record of the board of equalization:

"On motion, the board proposed to increase the assessment of the following." Then are enumerated a number of different names, among which is included "the Title Guaranty Trust Company, $680,060.00, proposed to increase to $2,500,000.00."

The records of the board read in evidence show that Messers, Rohan, Allen, and Gottlieb appeared before the board in behalf of the defendant on April 5, 1911, and furnished to the board evidence on the question of defendant's taxable property. On April 8th following a committee representing defendant again appeared before the board. On April 15, 1911, the following entry was made in the records of the board:

"On motion, the board increased the personal assessment of the Title Guaranty Trust Company from $680,060.00 to $861,000.00."

No notice of the action of the board taken on April 15, 1911, was given to defendant.

The evidence before the board of equalization and on the trial showed that the item of $93,597.34 was the face value of the solvent notes held by the defendant, secured by real estate, and which had not been pledged for the payment of bonds. Such evidence also showed that the Lincoln Trust Company had owned notes secured on real estate to the amount of $549,385.56, which it had placed in the Union Trust Company of St. Louis as trustee to secure the payment of $500,000 of first mortgage gold bonds issued by the Lincoln Trust Company. The latter company by an agreement in writing conveyed to the defendant its equity in the notes so deposited with the Union Trust Company, in consideration of the payment by the defendant to the Lincoln Trust Company of the amount of $49,385.56, just the difference between the amount of the notes and the amount of bonds they were deposited to secure. The board, after hearing the evidence, added to the total of the original assessment list as returned by the defendant the full amount of the hypothecated notes, making $680,060+$549,385.56= $1,229,445.56. The board then estimated the total value at 70 per cent. of the latter sum, and fixed its total assessment in round numbers at $861,000 a net increase of $180,940 of the total assessment. The total rate of taxation for all purposes is $2.22 on the $100 of valuation.

Wilfley, Wilfley, McIntyre & Nardin, of St. Louis, for appellant. Edward W. Foristel and Frank H. Haskins, both of St. Louis, for respondent.

ROY, C. (after stating the facts as above).

I. The Lincoln Trust Company acted under the provisions of the eighth clause of section 1124, R. S. 1909, when it placed the $549,385.56 in notes in the Union Trust Company to secure the bonds issued by the Lincoln Trust Company. Appellant truly says that the bonds thus issued were not exempted by that or any other law from taxation. It further says that to tax both the bonds and the notes would be double taxation. We think not. There is no law which enables a taxpayer to deduct the amount of his debts from the amount of his taxable property. When a taxpayer holds a solvent note and places it as collateral to secure a note made to another party by him, he is subject to taxation on the full value of such collateral note, because the law taxes his property ignoring his debts. The Lincoln Trust Company was taxable with the full value of the...