The Albany Mutual Building Association v. The City of Laramie

• Decision Date: 16 August 1901
• Citation: 10 Wyo. 54,65 P. 1011
• Parties: THE ALBANY MUTUAL BUILDING ASSOCIATION v. THE CITY OF LARAMIE
• Court: Wyoming Supreme Court

65 P. 1011

10 Wyo. 54

THE ALBANY MUTUAL BUILDING ASSOCIATION v. THE CITY OF LARAMIE

Supreme Court of Wyoming

August 16, 1901

ERROR to the District Court of Albany County, HON. CHARLES W BRAMEL, Judge.

Action by the City of Laramie against the Albany Mutual Building Association to recover a tax levied against the property of defendant, and for the recovery of a penalty of two hundred dollars for failing to list property for taxation. Judgment for plaintiff, and defendant prosecuted error. The facts are stated in the opinion.

Judgment modified and affirmed.

J. H Symons and N. E. Corthell, for plaintiff in error.

The statute makes a radical distinction between mutual associations and benefit associations. The mutual association is not taxed, but its members are taxed on their unredeemed or unborrowed shares. (Laws 1890, Ch. 29.) This rule is a just recognition of a real distinction inherent in the subject. (Safety Bldg. Loan Co. v. Ecklar (Ky.), 50 S. W., 50; Maynard v. Granite State Prov. Asso., 92 F. 440; Mechanics, etc., B. Asso. v. Meriden Agency, 24 Conn, 159; St. Joseph, etc., Asso. v. Thompson, 19 Kan. 321; Williar v. Baltimore, etc., Asso., 45 Md. 546.) In the mutual society there can be none but mutual and reciprocal relations. All the funds in hand at any time must be applied in satisfaction of the stock of the association and in no other way. The trustees may not loan it to outsiders. They are limited to passing on the securities offered, and may not control the securities except to foreclose them if dues and interest be not paid. When the stock matures there is ipso facto a dissolution of the obligation. None of the three concurrent conditions essential to taxation exists in the case of this association. a. The association has no property interest or right in the nature of property in the securities. b. The association has no surplus of credits or debts. c. The only interest in the nature of surplus credits or property is that of the individual shareholder who has paid into the association and has not received his money out; he is the owner against whom the law requires the assessment of property to be made. The right of property is the thing taxable, and that "consists in the free use, enjoyment and disposal of all one's acquisitions, without any control or diminution save only by the laws of the land." (1 Black. Com., 138; Rigney v. Chicago, 102 Ill. 77.)

If the mortgages were real debts due the association they would still not be taxable as moneys and credits, for the reason that the association owes to its shareholders as much as is due from them. Its debts always equals its credits. Whether the loan to members is considered from the standpoint of the tax laws, the usury laws, the rules for the interpretation of contracts, or the language of the contracts themselves, the courts agree that it is not a loan in any proper sense, but that the borrower occupies the relation both of debtor and creditor; that his stock is a credit and his debt a dividend representing simply his ultimate share in partnership funds. (Harn v. Woodard, 151 Ind. 132; Ohio V. B. & L Asso. v. Court, 42 W. V., 818; Kansas City v. Mercantile Mut. B. & L. Asso., 145 Mo. 50; Silver v. Barnes, 6 Bing. New Cas., 180; Johnson v. Potomas B. Asso., 13 Fed. Cas., 784; Am. Homestead Co. v. Linigan, 46 La. Ann., 1118; Delano v. Wild, 88 Mass. 5; Massey v. Citizens' B. & S. Asso., 22 Kan. 636; Robertson v. Homestead Asso., 10 Md. 397; Bertche v. Eq. L. & Inv. Asso., 147 Mo. 343; Clarksville B. & L. Asso. v. Stephens, 36 N. J. Eq., 354; Mich. B. &. L. Asso. v. McDevitt, 77 Mich. 1; Reeve v. Ladies' B. Asso., 56 Ark. 335; Pabst v. Economic B. Asso., 1 McArthur, 385; Cook v. Eq. B. & L. Asso., 104 Ga. 814; Hawkins v. Americus, etc., Asso., 96 Ga. 206; Eq. Loan & Inv. Asso. v. Peed (Ind.), 52 N. E., 203; Sec. Sav. & L. Asso. v. Elbert (Ind.), 54 N. E., 753; Fidelity Sav. Asso. v. Shea (Ida.), 55 P. 1022; Faust v. Twenty-third Ger. B. Asso., 84 Md. 186; Robertson v. Asso., 10 Md. 397; Rice's Case, 50 Md. 312.)

The statute of 1890 has not been repealed. The act of 1890-91 is a re-enactment of Sec. 3791, R. S., which stood consistently with the Building Association Act, the obvious purpose being to remove uncertainty as to whether corporate stocks in general should be assessed to the company or stockholder, to preclude any implication in favor of double taxation, or in favor of the exemption of foreign corporations, and to make proper allowance for capital invested in real estate outside the State. The clause relating to assessment of credits was left unchanged. The act of 1895 superseded the first clause of the act of 1891 and simplified the situation by placing corporations upon the same footing with individuals. Both acts were general acts referring to corporations essentially different in their nature from the plaintiff in error. The Legislature did not have building associations in view or there would have been an express repeal. To operate as a repealing statute the implication must be a necessary one. If both can stand they must be allowed to do so. (Standard Cattle Co. v. Baird, 8 Wyo., 144; Syndicate Imp. Co. v. Bradley, 7 Wyo., 228; State v. Owen, id., 84; Board v. Chaplin, 5 id., 74.)

The act of 1897 repealed the act of 1890 only so far as it related to the formation, regulation and conduct of associations. But the plaintiff in error did not file notice of its election to bring itself under the new law until after the date of the assessment in question.

To maintain the suit there must have been an actual valid assessment of specific property in the mode provided by law. (Cooley on Taxation, 248; Un. Pac. R. Co. v. Donnellan, 2 Wyo., 478.) There was not a valid assessment in this case. (R. S., 223, 224.) After the second Monday in June the assessor could not lawfully add to the assessment roll. (Cooley on Taxation, 415; People v. Forrest, 96 N.Y. 544.) And at no time could he assess property not returned against a taxpayer who had submitted a list. (R. S., 225; Cooley on Taxation, 357.) The board was functus officio on July 3d, and hence its sessions after that time were not authorized. The board was illegally constituted. The Mayor participated in the equalization unlawfully. The charter must control. It cannot be changed by ordinance. (Cooley on Taxation, 366, 415, 282; 2 Dillon on Mun. Corp., 781; Dwyer v. Hackworth, 57 Tex. 245.) There is nothing on the roll to indicate whether the figures "20000" mean integral moneys and credits, or so many dollars, or cents. (Bradley v. Seaman, 30 Cal. 610; Hurlbut v. Butenop, 27 id., 57; Woods v. Freeman, 1 Wall., 398; Tilton v. Or. Cent. M. R. Co., 3 Saw., 22.) The city failed to show any tax warrant for the collection of the alleged tax. Without a tax list and warrant there is no authority to take any proceedings for collection. (Cooley on Taxation, 424.) There is no statute authorizing suit, and without it suit will not lie. (Fairbault v. Misener, 20 Minn. 396; Cooley, 435.)

The statute prescribing a penalty is to be strictly construed. (People v. Dolan, 5 Wyo., 245; Turner v. Sawyer, 150 U.S. 578; Bolles v. Outing Co., 77 F. 966.) The plaintiff in error is not liable for the penalty even if its property should be held to be taxable. It did not refuse to assist in listing within the meaning of the statute. Neither did it refuse to take the oath. A different penaly is inflicted for omissions from the list.

C. P. Arnold, for defendant in error.

The law concludes the contention that the assessor has no right to make out a list when the taxpayer has made one, however faulty. (R. S., Sec. 1351.) The taxpayer may not list a fraction of his property and thereby tie the hands of the assessor. The obligation upon him is to make a full and complete inventory. (R. S., Sec. 1352.) The assessor listed the property in question on May 19, within the time allowed by statute. There is no evidence rebutting the presumption of the regularity and validity of the official acts of the assessor. (10 Ency. Law, 43; Board v. Searight, 3 Wyo., 777.) The fact that the oath of the assessor to the roll was made June 22 is of no consequence. There is no requirement that the oath should be taken at any particular time. The same considerations control as to the time for the sessions of the board. (Hallo v. Helmer, 12 Neb 87.) The taxpayer was entitled to no other notice than the one handed it when the officer tendered the list to be filled out, which notice informed it when the board would meet. (R. S., Sec. 1356.) It was the business of the association to look after its interests and to appear before the board if it desired relief. (Board v. Searight, 3 Wyo., 777; State v. R. R. Co., 30 P. 693.) The ordinance directing suit is a sufficient warrant for the collection of the tax. Moreover, the tax list is sufficient. There is nothing in the proposition that the figures under the heading of moneys and credits do not indicate what is meant. The dollar is the only unit of value, and the roll shows a valuation of 20,000 units, and hence a valuation of 20,000 dollars. (Hopkins v. Orr, 124 U.S. 510; Hines v. Chambers, 29 Minn. 11.) There is no other statutory penalty inconsistent with the penalty sought here to be enforced. The penalty is for refusing to assist in listing property which the taxpayer is required to assist in listing. Statutes designed to secure honest returns and fixing penalties for false or deficient lists are everywhere in force and universally sustained. (Cooley on Taxation, 357; Com. v. Cook, 50 Pa. St., 201; Gilliland v. State (Ind.), 42 N. E., 238; Com. v. Holidy (Ky.), 33 S. W., 943; State v. Halter (Mass.), 47 N. E., 665; Durban v. People, 54 Ill.App. 101; Hartford v. Champion, 58 Conn. 268; Berry v. State, 10 Tex....