Union Trust Co. of Spokane v. Spokane County

• Decision Date: 13 September 1927
• Docket Number: 20624.
• Citation: 145 Wash. 193,259 P. 9
• Parties: UNION TRUST CO. OF SPOKANE v. SPOKANE COUNTY.
• Court: Washington Supreme Court

259 P. 9

145 Wash. 193

UNION TRUST CO. OF SPOKANE v. SPOKANE COUNTY.

No. 20624.

Supreme Court of Washington

September 13, 1927

Department 1.

Appeal from Superior Court, Spokane County; Lindsley, Judge.

Action by the Union Trust Company of Spokane against Spokane County. From a judgment in favor of the defendant, plaintiff appeals. Reversed.

Wakefield & Witherspoon, Harry T. Davenport, and Garrecht & Twohy, all of Spokane, for appellant.

Roberts & Skeel and Elwood Hutcheson, all of Seattle, amici curiae.

Chas W. Greenough and A. O. Colburn, both of Spokane, for respondent.

FRENCH J.

The plaintiff, a corporation, was organized under the laws of the state of Washington prior to the year 1917 as a trust company. Under the act of 1917 (Rem. Comp. Stat. § 3231) certain powers were conferred upon trust companies, the first of which is 'to execute all the powers and possess all the privileges conferred on banks.'

It is stipulated in this case that the trust company has not functioned as a bank, as the word 'bank' is ordinarily used, since 1917.

The question involved in this appeal is, Does the plaintiff's capacity, under the law, to exercise banking functions make it taxable as a bank under Rem. Comp. Stat. § 11143, which reads as follows:

'All the shares of stock in banks whether of issue or not, existing by authority of the United States or of the state, and located within the state, shall be assessed to the owners thereof in the cities or towns, where such banks are located, and not elsewhere, in the assessment of all state county and municipal taxes imposed and levied in such place whether such owner is a resident of said city or town or not all such shares shall be assessed at their full and fair value in money on the first day of March in each year, first deducting therefrom the proportionate part of the assessed value of the real estate belonging to the bank. And the persons or corporations who appear from the records of the banks to be owners of shares at the close of the business day next preceding the first day of March in each year shall be taken and deemed to be the owners thereof for the purposes of this section.'

In Mercantile Bank v. New York, 121 U.S. 138, 7 S.Ct. 826, 30 L.Ed. 895, the court, discussing the distinction between banks and trust companies, said:

'The business of banking, as defined by law and custom, consists in the issue of notes payable on demand, intended to circulate as money where the banks are banks of issue; in receiving deposits payable on demand; in discounting commercial paper; making loans of money on collateral security; buying and selling bills of exchange; negotiating loans, and dealing in negotiable securities issued by the government, state and national, and municipal and other corporations. * * * Trust companies, however, in New York, according to the powers conferred upon them by their charters and habitually exercised are not in any proper sense of the word banking institutions. * * * It is evident, from this enumeration of powers, that trust companies are not banks in the commercial sense of that word, and do not perform the functions of banks in carrying on the exchanges of commerce.'

Section 3221, Rem. Comp. Stat., defines banking and banks as follows:

'The term 'banking' shall include the soliciting receiving or accepting of money or its equivalent on deposit as a

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