25 N.D. 635 | N.D. | 1898
Lead Opinion
In 1896 a controversy arose in Traill county between the board of county commissioners, sitting to equalize and correct assessments, and the banks doing business in the county, relative to the proper equalization of the taxes upon bank stock. As a result of this controversy the said board on the 11th day of July, 1896, passed a resolution and entered the same upon its records, which reads: “On motion all shares of bank stock was equalized to average sixty (60) per cent on capital stock.” From the decision so entered the First National Bank of Hillsboro, plaintiff herein, appealed to the district court of said county. In the district court the plaintiff was successful, and the defendant brings the case here on appeal.
When the case was reached for trial in the district court the defendant appeared specially, and moved to dismiss on the ground that the court had no jurisdiction, for the reason that it appeared by the notices of appeal that it was an attempt to appeal from the board of equalization, and that the statute allowed no appeal from such board. The denial of this motion is the first point for our consideration. We think the point cannot fairly be considered open in this jurisdiction since the decision in Pierre Waterworks Co. v. Hughes County, 5 Dak. 145, 37 N. W. 733. It was squarely raised in that case, discussed with great ability by Chief Justice Tripp, and the unanimous court held that the appeal would lie. That decision has never been reversed, modified, or questioned. Then as now appeals were allowed from all decisions of the board of county commissioners from matters properly before them. Political Code of 1877, § 46, chapter 21; Revised Codes 1895, § 1927. But much learning was expended in the waterworks case in determining that the board of equalization was in fact the board of county commissioners. The statute then in force (§ 28, chap. 28, Political Code of 1877) declared: “The board of county commissioners of each county shall constitute a board of equalization for the county, and said board or a majority of the members thereof shall hold a session of not less than two days,” etc. It was contended that there were
But, notwithstanding the broad language of our statute which declares that appeals may be taken from “all decisions” of the board upon matters properly before it, we must not be understood to give judicial sanction to the proposition as stated. It must have its limitations. It would not be proper for us to enter into an extended discussion as to what matters may not be appealed. We need only say that the powers of a board of county commissioners are very comprehensive and extend to all ordinary matters in which the county, as such, is interested. They are in fact executive, administrative, political, and judicial or quasi judicial. Courts have no such extended powers. They are limited to the consideration of matters purely judicial in character. See §§ 85 and 96, State Constitution. But if a party be wrongfully and unjustly taxed in violation of law (and that is what plaintiff claims in this case), then a wrong exists for which there must be a remedy in law in some form. The courts can take cognizance of it, independent of any action of the county commissioners, because it is inherently judicial in character; and being a proper subject for judicial determination, the manner in which it may be brought before the court is entirely within legislative control. It is our duty to give force to the statute so far as it comes within the Constitution; and
We are concerned only in ascertaining whether or not the holders of the stock of the plaintiff bank have been unlawfully taxed. Under § 1184, Kevised Codes 1895, the bank stock is assessed against the shareholders, but the bank as agent for such shareholders is required to pay the tax. Hence the bank is the proper party plaintiff in this case. It is conceded that the capital stock of the plaintiff bank is $50,000, divided into shares of $100 each. Its surplus fund at the date of taxation was $10,000. The resolution from which the appeal was taken fixed the valuation of shares of bank stock at 60 per cent on capital stock, or for the plaintiff bank at $60 per share. The book value of the stock, as shown by capital and surplus, was $120 per share. Its actual market value is not disclosed. What evidence there is on the point tends to show that it was a larger figure. It was not therefore to the disadvantage of the stockholders to value the entire stock at' the amount of the capital stock. The evidence shows without contradiction that other moneyed capital in that taxing district was
This argument of double taxation has frequently been made under these same circumstances in behalf of banks and the holders of shares of bank stock. It has not been allowed by the better-considered or modern cases. Its basis is untenable. It proceeds upon the theory that the bank and its shareholders are one. Counsel in this case have argued at great length, and presented an array of figures to demonstrate that the bank pays upon its shares upon a valuation largely in excess of their par value. This is all wrong. The bank does not pay a penny of taxes upon the shares except as agent for the stockholders, and for all money so paid it reimburses itself from the dividends or other property belonging to such shareholders. The shareholders pay no tax upon the real estate. That is the property of the bank. The shareholders and the bank are as distinct for purposes of taxation as separate individuals. In law the bank is an entity, — a person, — with its individual assets and its individual liabilities. Among these individual liabilities is its obligation to pay to its stockholders the face value of the shares of stock held by them. True this obligation may not mature until the bank ceases to do business; but it is no less a sacred obligation. If, then, the property of the bank be sufficient as between the creditors of the bank, the law, for reasons of public policy, makes the shareholder a deferred creditor, but he is none the less a creditor. His certificates of stock constitute the evidences of the bank’s
In the case of Van Allen v. Assessors (Churchill v. Utica) 3 Wall. 573, 18 L. ed. 229, it is said: “The corporation is the legal owner of all the property of the bank, real and personal; and within the powers conferred upon it by the charter, and for the purposes for which it was created, can deal with the corporate property as absolutely as a private individual can deal with his own.” And again: “The interest of the shareholder entitles him to participate in the net profits earned by the bank in the employment of its capital, during the existence of its charter, in proportion to the number of his shares; and, upon its dissolution or termination, to his proportion of the property that may remain of the corporation after tlie payment of its debts. This is a distinct, independent interest or property, held by the shareholder like any other property that may belong to him. Now, it is this interest which the act of Congress has left subject to taxation by the •states, under the limitations prescribed.” In that case it was held | that while the capital stock of the bank was invested in United States Í bonds that were exempt from taxation, nevertheless the shares of stock' in the hands of shareholders were subject to taxation. To same effect' is New York v. Tax & A. Comrs. 4 Wall. 244, 18 L. ed. 344 ; Palmer v. McMahon, 133 U. S. 660, 33 L. ed. 772, 10 Sup. Ct. Rep. 324. In Farrington v. Tennessee, 95 U. S. 687, 24 L. ed. 560, it is said: “The capital stock and the shares may both be taxed, and it is not
’
The District Court is ordered to set aside its judgment and decree herein, and reinstate the resolution appealed from.
Reversed.
Dissenting Opinion
dissenting. I am unable to agree with my associates in the disposition made of this case. I differ from them, however, only upon the question of the right to appeal from the action of the county board when sitting as a board of equalization. True, such action may be somewhat in the nature of a “decision,” and it is further true that the statute defining the powers and duties of the county board declares that, “from all decisions of the board lipón matters properly before it, an appeal may be taken to the district court by the person aggrieved.” Revised Codes 1895, § 1927. But it is conceded by the courts whose decisions are cited and referred to with approval in the majority opinion, that this statutory provision cannot be construed literally without inviting the most serious consequences to public business. In the very cases cited and those referred to in the cases cited, it is held that many “decisions” of the county board cannot be reviewed by an appeal under this statute, and that among the decisions of the board expressly enumerated as nonappealable are those which are political and those which are administrative in their nature. It will at once be observed
Fortunately the courts have, to some extent, foreseen the serious consequences which would inevitably follow from the practice of allowing appeals to be taken from all “decisions” in matters properly before the board of county commissioners. It must be conceded, however, that a literal interpretation of the statute would permit all such decisions to be reviewed in the district court upon the easy terms specified in the statute; but courts under established rules of construction may depart from the literal meaning of terms employed in a statute when this course will give effect to the legislative intent. This rule has been fully recognized in the ease cited in the majority opinion, and there referred to.
But I maintain that for obvious reasons, the salutary rule of construction should be applied in the case at bar, and insist that the same is broadly ignored by the majority of the court in deciding this case. In my opinion there are peculiar and cogent reasons which are opposed to allowing the assessment and collection of the public revenues to' be obstructed by the vexatious delays that would certainly follow if it be once settled by this court that appeals would lie to the courts with respect to decisions in matters of taxation made by the county board. True, such delays have not occurred in the past, but I explain this fact by the prevailing understanding of the profession that no such appeal will lie. Since this court has been organized, not a single tax case has come before us under this statute. It is quite probable, too, that this appeal would not have been attempted had the law not been somewhat changed hy the revisioners of the Codes. Under the original statute the board of county commissioners did not, in strictness, act as a board of equalization; but under the Revised Codes it does so act. See Revised Codes 1895, § 1218.
But I am unable to see how this change, which is nominal rather than real, can at all militate against the strength of the reasons which stand opposed to allowing an appeal from the decisions or conclusions which a board of equalization, however constituted, may make.
There are considerations too numerous to mention which, in my judgment, should constrain the courts of this state to hold that the
I claim, further, that such appeals are inadequate as. a means of arresting the illegal action of either the board of equalization, or the other county officers who have duties to perform in connection with the levying the taxes, extending the same upon the tax lists or collecting the tax so extended. After property values are equalized by the county and state boards, the next step under the statute is to extend the tax upon the list as against the values so equalized, and this is followed by delivering the list to the county treasurer for collection. Once in the.hands of the county treasurer the taxes on the list are required to be collected by that officer, and there is no power short of a decree of a court which will excuse the treasurer for the noncollection of such taxes. The collection of taxes is not among the duties of county boards, nor can such board lawfully prevent such collection by its unaided action. And just here attention is called to the fact that an appeal from the action of the board of equalization is a useless expenditure of energy, and wholly abortive as a means of preventing any step required by law to be taken by the taxing officers, after the board has completed its work and has equalized the taxes and adjourned sine die. If an illegal tax is laid by means of the unauthorized action of the board, such illegal tax must nevertheless, under the statute, so far as the tax is affected by the alleged right of appeal, be extended upon the tax list by the auditor and be thereafter collected by the treasurer. The appeal
The obnoxious resolution of the board of equalization was adopted in the month of July, 1896, and the appeal therefrom was perfected within thirty days thereafter. Since then, the appeal has been pending in the district court and in this court until the present time, — December, 1898. Meanwhile, what have the taxing officers of Traill county been doing in the way of discharging their imperative duties under the law with respect to collecting the public revenue ? This question is readily answered from the record, which shows that the alleged illegal tax has in due course found its way to the tax list, which at last advices was in the hands of the county treasurer for collection, where it was placed in due course under the law in the year 1896. .If the treasurer has ex gratia foreborne to collect this tax, it has been solely an act of forbearance on his part, and cannot be attributed to any restraint placed upon his action by virtue of this appeal. Not only does the appeal not operate as a stay of official action in general, but the treasurer, not being a party to it, cannot be affected by such appeal. Nor did the appeal operate practically or at all to restrain the county auditor from extending the tax against the plaintiff’s property in accordance with the value fixed in the obnoxious resolution of the hoard.
Again, it must not be overlooked in this connection, as further illustrating the abortive character of this alleged remedy by appeal, that the good or bad effect of the resolution of the board remains intact despite the appeal. The trial court, assuming the powers of a court of equity, decreed that the resolution should be “reversed,” but did not attempt the impossible by further decreeing that the board should in 1897 reassemble and pass another and different resolution, fixing the value of plaintiff’s. property as a basis for a tax to be levied for
The appeal law, § 1931, provides in terms that “the district court may enter a final judgment,” but this cannot be construed as conferring authority to enter a judgment without a hearing and against strangers to the record. But the same section also confers upon the district court authority to send the same back to the board, with an order how to proceed, and “require such board to comply therewith by mandamus or by attachment for contempt.” If this section can be applied to the case at bar at all, the only proper course to pursue (after the district court had entered its judgment reversing the obnoxious order) was to send the case back to the board, and direct it to annul or reverse the order appealed from. There would, it is true, be insurmountable obstacles to this course of procedure. Not only had the board of equalization adjourned sine die for the year 1896, without power to reassemble as such board, but, as we have seen, other taxing officers not parties to the record had in the interval taken action based upon the resolution in question, and taxes based thereon had been levied, extended, and delivered to the treasurer for collection long before the district court entered its judgment. I allude to these considerations, however, only for the purpose of further illustrating the thought that the legislature could not have contemplated an appeal from the action of a board of equalization when it enacted the statute embraced in § 1941, Revised Codes 1895.
But there is another consideration which is very persuasive to my mind at least, against this alleged right of appeal. It is this: Boards
I will add but a single consideration to these already advanced. If the decisions of the county board, while sitting as a board of equalization, are reviewable under this statute, I can see no escape from the conclusion that a decision of the county board, in levying the annual taxes for all purposes, is likewise appealable under the same statute. But if such an appeal would not arrest the collection of the taxes as levied, and I think it would not have that effect, the same would be an idle and worse than useless proceeding; but if it did stay the collection of the tax, sueh a result would be nothing less than a public calamity.
These considerations and many others which could be added, have convinced me that the legislature did not intend to include .tax proceedings in providing for appeals from the “decisions” of county boards. Such appeals, if ever allowed, can only be justified under a statute which clearly confers the right, and our statute, in my judgment, does not do so.
(This case should have been reported in one of the earlier volumes, but was, through the inadvertence of the printer, mislaid and omitted.)
Concurrence Opinion
concurs.