| Va. | Mar 13, 1919
delivered the opinion of the court.
This case originated in the hustings court with a petition by the Merchants National Bank of Richmond against the city of Richmond, to correct an alleged' erroneous assessment for the year 1915, directly against the bank upon its capital stock, surplus and undivided profits, less the assessed value of its real estate and other deductions allowed by law, instead of being levied and assessed against the shareholders of the stock of the bank upon the value of their shares ascertained as the law prescribes. Moreover, complaint was made that the assessment instead of being limited to the alleged maximum rate of thirty cents on each $100 of the ascertained value of the shares of stock was fixed levied and collected at $1.40 on each $100 of such value. To an order of the hustings court granting the relief prayed for, this writ of error was allowed.
Whatever merit there may have been in this assignment in the first instance, the error in procedure was cured by the consent order, nunc pro tune, whereby the amount of taxes ascertained to be due from the shareholders was assessed against them. The court, by virtue of the consent order, was within its powers thus to admit the shareholders (the real persons in interest) as parties, and to make a correct assessment against them. Commonwealth v. Schmelz, 114 Va. 364" court="Va." date_filed="1913-01-16" href="https://app.midpage.ai/document/commonwealth-v-schmelz-6812693?utm_source=webapp" opinion_id="6812693">114 Va. 364, 76 S. E. 905.
By way of premise to the consideration of this feature of the case, we may observe, that the city of Bichmond, under its charter, possesses plenary power of taxation, subject only to such limitations as may be placed upon the exercise of that power by the Constitution and legislature.
The ordinance approved April 9, 1915, is founded upon the city charter and the segregation, act passed by the General Assembly at its extra session of 1915, and approved March 15, 1915, (an emergency was declared to exist with respect to it, so that the act was in force from its passage). Acts 1915, Ch. 85, p. 119. The gravamen of the bank’s
The history of the litigation of which that case is the sequel was this: By authority of the ordinance (one of the features of which is here drawn in question) the city assessed the capital employed by Drewry-Hughes Co. (and other merchants residing and doing business in the city), in their business as merchants, at $1.40 on the $100. From an order of the hustings court declaring the correct rate of taxation in that case to be thirty cents on the $100, the city appealed, and at the November term, 1916, of this court that judgment was affirmed. The case again-came before us on rehearing, and was ably argued by the original counsel, and also by others, whose localities were affected by the decision, on briefs; and in an exhaustive opinion, written by Judge Kelly and concurred in by all the other judges, the judgment of the hustings court was reversed. The last opinion covers the contentions stressed in this case, save the insistence that the exception in the segregation act as therein construed would, if applied to national banks, be violative of section 5219, swpra.
Since, therefore, we have no purpose to recede from the conclusions reached in the merchants’ tax case, further elab
The act after segregating the several kinds and classes of property, so as to specify upon what subjects State taxes and upon what subjects local taxes may be levied, respectively, and limiting the maximum local rate of taxation on segregated intangible personal property at thirty cents on the $100 of assessed value thereof, contains the following exception: “except that the capital of merchants shall not be subject to the State taxation, but may be taxed locally •as prescribed by law; and the shares of stock of banks, banking associations, and other institutions enumerated in section seventeen in Schedule ‘D’ of the act aforesaid, which shares of stock shall be taxed as provided by law.” .
Judge Kelly, in his opinion, justly observes: “If the purpose of the draftsman had been to restrict local taxation of the capital of merchants to the rate previously named in that particular act, undoubtedly he would have used the words, ‘as prescribed by this act,’ or their equivalent, instead of ‘as prescribed by law.’ If this be not true, then it would follow that ‘shares of stock of banks’ could only be taxed locally at the thirty-cent rate, for, as we have seen, it cannot be plausibly contended that the words, ‘as prescribed by law,’ when applied in the act to merchants’ capital, have any other or different meaning than the words ‘as provided by law’ when applied therein to bank stock. The necessary result of the decision of this court in Tresnon v. Board of Supervisors, 120 Va. 203" court="Va." date_filed="1916-11-23" href="https://app.midpage.ai/document/tresnon-v-board-of-supervisors-of-henrico-county-6813427?utm_source=webapp" opinion_id="6813427">120 Va. 203, 90 S. E. 615, is that the local taxation of bank stock is not controlled by the terms of the segregation act.”
Judge Kelly also points out that section 168 of the Constitution does not conflict with the right of the taxing power
In 9 U. S. Comp. Stat.. (1916), title “National Banks,” at p. 11993, note 29, it is said: “Moneyed capital.—The purpose of this section is to prevent unjust discrimination against United States banks, so that the phrase ‘moneyed capital’ used therein means capital engaged in the operations of banking, which is used as a source of profit, so that Act N. Y., July 1, 1882, s. 312, declaring that the stockholders in banks organized under the authority of the State or United States shall be assessed for the value of their stock, was not void under this section, because the assessment roll showed that the securities of life insurance companies, the stock of State corporations, the deposits of savings banks, the stock of trust companies, and companies created outside of the State and owned in the State, virtually escaped taxation, since such property, excepting that of savings banks and trust companies, was not ‘moneyed capital in the hands of individuals’ as contemplated by this section.” Mercantile Nat. Bank. v. New York (1887), 121 U.S. 138" court="SCOTUS" date_filed="1887-04-04" href="https://app.midpage.ai/document/mercantile-bank-v-new-york-91904?utm_source=webapp" opinion_id="91904">121 U. S. 138, 7 Sup. Ct. 826, 30 L. Ed. 895" court="SCOTUS" date_filed="1887-04-04" href="https://app.midpage.ai/document/mercantile-bank-v-new-york-91904?utm_source=webapp" opinion_id="91904">30 L. Ed. 895; National Bank, etc. v. Boston (1888), 165 U. S. 60, 8 Sup. Ct. 772, 31 L. Ed. 689" court="SCOTUS" date_filed="1888-03-19" href="https://app.midpage.ai/document/bank-of-redemption-v-boston-92174?utm_source=webapp" opinion_id="92174">31 L. Ed. 689; Palmer v. McMa
These decisions of the Supreme Court of the United States (and authorities might be multiplied on the subject) show that the fundamental grievance of defendant in error, that the rate of tax imposed under the segregation act and the ordinance of the city upon the shareholders of bank stock constitutes “a gross and illegal discrimination against that species of property as compared with all other moneyed capital,” is groundless.
In conclusion, it is only fair to the learned judge of the hustings court to state, that on August 3, 1917, when he delivered his judgment in this case, fixing the maximum amount of tax against shareholders of bank stock at thirty cents on the $100, the first decision of this court in City of Richmond v. Drewry-Hughes Co. was still in force, and he naturally regarded it as strongly persuasive if not controlling authority in the instant case.
For the reasons given, the order complained’of must be reversed, and the case remanded for further proceedings to be had therein in conformity with the views expressed in this opinion.
Reversed.