Bagnall v. State

25 Wis. 112 | Wis. | 1869

Cole, J.

It appeared quite'clear to me on the argu'ment, that all the important questions raised by the demurrer to the complaint in this case — which were so fully and ably argued by the counsel for the plaintiff— had already been decided adversely to his views in the case of Van Slyke v. The State of Wisconsin (23 Wis. 655), and that, unless we were prepared to change that decision, the demurrer must'be sustained. So, in fact, the counsel himself seemed to regard the effect of that decision, and hence he combatted the main propositions' in that case with all the vigor of his reasoning. And he contended that this court in that decision had wholly misconceived the true intent and meaning of the 41st section of the national banking law, -which permits taxation by state authority of the shares of national banks, and had also misapprehended the decisions of the su*118preme court of the United States, giving a construction to that section. He therefore invited the court to a reexamination of the grounds upon which the Yan Slyke case was‘decided, being convinced, as he said, that a careful review of the whole subject would satisfy us that the decision made in that case ought not to stand. I have accordingly reexamined the questions involved in that case with all the care and reflection I have been able to bestow upon them, and while candor compels me to admit that I am not entirely free from doubt as to how they should be decided, yet I am inclined to the opinion that the conclusions there reached are correct, for the reasons stated by the chief justice in his opinion. I am aware that some of the state courts have taken a different view of the effect of the decisions of the supreme court of the United States upon this subject from that held by this court in the Yan Slyke case. They seem to suppose that the supreme court has really decided that where the state law does not provide for the taxation of the shares, eo nomine, of the state banks, there can be no taxation of the shares of the national banks, although, by the method of taxation resorted to by the state, the tax against the shares in the national banks does not exceed that imposed in some form upon the state banks or their stockholders. But I do not so understand those decisions. And it seems to me a little singular, if the supreme court intended to decide that congress had provided a certain definite mode for taxing the shares in the national banks, and that the state -could only tax those shares where by its laws the shares, eo nomine, in the state banks were also taxed, that it did not say this in so many words, without resorting to any course of reasoning to show that a tax on the capital of the state banks was not an equivalent to a tax on the shares, inasmuch as the capital of the state banks might consist of the bonds of the United States which are exempt from state taxation. . For it would be sufficient to *119say, if this were really tlie view of that court, that, as • tlie state law does not provide for taxing tlie shares in the state'banks, there can be no. taxation of the shares of the national banks. This would be the most natural way of disposing of the question. In the cases which came before that court, where the tax was imposed on-the capital of the state banks, those banks were entitled to a deduction of that portion of their capital invested in United States securities. Hence it was easy to see that this tax on the capital was not an equivalent for a tax on the- shares of the stockholders, as the supreme court say in more than one of the cases. But in this state every state bank, in consideration of the franchises or privileges granted by the banking law, is required to pay the state treasurer a semi-annual tax of three-fourths of one per centum on the amount of the capital stock of the bank, regardless of the fact whether its capital is invested in United States securities, or whether a portion of its capital has been lost in business. This taxis paid on the “capital stock” by these corporations, as a compensation for the special privileges granted them by the state, and as a fair equivalent for the exemption from local taxation on their property. State Bank v. The City of Milwaukee, 18 Wis. 281. And this constitutes the fundamental distinction between a case arising under our state banking law, and one arising where the tax is upon the capital stock of the state bank, and the bank is entitled to a deduction from its capital stock of the amount invested in United States securities. For wherever a tax of a given percentage is imposed upon the capital stock of a state bank, and that capital is liable to be diminished on account of a portion or all of it being invested in United States securities, and the same rate is imposed upon the shares of national banks, there it is plain the taxation is not equal or equivalent. The latter species of property is subjected to a greater rate of taxation than the for*120mer. And it was doubtless to prevent this unwise,, unjust and improper discrimination against the national banks, that the provisos in the 41st section were enacted by congress. But where the law is such that the rate imposed on the shares in the national banks can in no possible event exceed the rate imposed on the state banks, the object of the second proviso is certainly fulfilled.

In this state, the taxation at the rate of one and one-half per cent upon the shares in the national banks in no contingency exceeds, while it doubtless in many cases falls short of, the taxation upon the state banks. What injustice, then, is done the owners of shares in the national banks, if the tax on the state banks is imposed upon the capital stock, instead of being imposed upon the shares of these banks ? The variance in the mode of taxation is of no practical importance, since in either case the tax is substantially the same, and must always be equal to, if it does, not exceed, the taxation imposed previous to 1867 upon the shares in the national banks. But this whole field of discussion is so fully gone over by the chief justice in his opinion in the Yan Slyke case, that further remarks upon these points would seem quite unnecessary.

It is objected that Iby the laws of this state the owner of shares in national banks was not required to include them in the valuation of hiá personal property. A bare reference to chap. 400, Laws of 1865, and chap. 136, Laws of 1868, will show that this is a mistake. It is said, however, that these statutes fix an arbitrary value for all shares. The law of 1868 makes it the duty of the assessor to inquire into and ascertain the true cash value of the shares at the time fixed by law for the assessment of personal property for taxation for the years 1865 and 1866, and also provides that in no case shall such shares be assessed at more than their par value. We do not understand that it is claimed that the plaintiff’s share was assessed too high, or was not worth par. *121Moreover, if there was an overvaluation, the plaintiff might have had it reduced. The law required that the same rate of tax which was assessed and levied in 1865 and 1866 upon other moneyed capital in the hands of individual citizens of the state, in the city or place where the bank is located, should be assessed upon these, shares, but that in no case should the rate exceed one and one-half per cent.,upon the assessed value, of the shares. This was conforming the legislation strictly to the limitations in the act of congress, unless that act requires the tax to be in all cases upon the shares of the state banks. I have already assumed that it 'was not the intention of congress, in framing the second proviso, to prescribe a mode of taxing the state banks, but to prevent unjust discrimination against the national banks. And this being so, the law of 1868 is in harmony with the 41st section.

It is alleged in the complaint that the rate imposed on the plaintiff’s share for the years 1865 and 1866 exceeded the rate per cent, charged and assessed for “ state tax” on other moneyed capital in the hands of individual citizens of Milwaukee for those years. This allegation may be true, and yet the plaintiff’s share may not have been taxed as high as other property, which paid not only a state tax but also local and municipal taxes. The question is, Was one and a half per cent, upon the plaintiff’s share a greater rate of taxation than was assessed upon other moneyed capital in Milwaukee of equal value for all purposes? This is not pretended. ■ It was doubtless much less than was in fact imposed upon other property; since the local and municipal taxes constitute by far the greater burthens of taxation.

The authority of the legislature to pass a law providing for a re-Ussessment of a tax for a given year, where there has been a defect in the existing statute or in the tax proceedings, Iras been frequently affirmed by this court. No further remarks upon that point are deemed necessary.

*122It follows, from these views, that the demurrer to the complaint must be sustained.

By the Court. — Demurrer sustained.