63 Minn. 80 | Minn. | 1895
The defendant is a building and loan association, incorporated under the general laws of this state, having its general office and place of business at Minneapolis, and doing business within and without the state as a national association.
On May 3, 1893, it having been required by the assessor to re
As we construe the certificate of the trial court, the statement of facts, and decision attached thereto, there is only one question before us for decision, viz. the constitutionality of Laws of 1891, c. 331, §§ 34, 35 (G. S. 1894, §§ 2888, 2889). They read as follows:
“Sec. 34. Every such association shall be assessed for and pay taxes upon its office furniture and fixtures and all real estate acquired in the course of its business.
“Sec. 35. The amount standing to the credit of each member of any such association, upon its boohs, shall be considered and held as the individual credit of such member, and each member shall list the shares held by him for taxation, at their real value in money, in the county of his residence, the same as other credits are listed, except shares upon which loans have been made or money-advanced by the association.”
It is conceded by both parties that these provisions apply to the defendant, and, if they are constitutional, that none of its personal property can be assessed to it and taxed, except its office furniture and fixtures, and that its return to the assessor was correct, and his action in adding to it was unauthorized. The state, however, contends that these provisions of the statute impinge on sections 1 and 3, article 9, of the constitution, the here material parts of which are as follows:
“Section 1. All taxes to be raised in this state shall be as nearly equal as may be, and all property on which taxes are to be levied*87 shall have a cash valuation, and be equalized and uniform throughout the state. * * *”
“Sec. 3. Laws shall be passed taxing all moneys, credits, investments in bonds, stocks, joint-stock companies, or otherwise, and also all real and personal property, according to its true value in money. * * *”
These provisions of the fundamental law of the state are imperative, and require that taxes shall be uniform and equal, as near as may be, and that all property not exempted by the constitution shall be taxed according to its true value in money. The method of securing these results is left with the legislature, and the mere fact that the statute here in question seeks to take building and loan associations of the class to which the defendant belongs out of the operation of the general tax laws of the state does not make the statute unconstitutional, provided it secures substantial equality of taxation of all of the property held or owned by the class for whose benefit the law was enacted. But, whatever the method adopted, the legislature cannot, directly or indirectly, exempt any property from taxation which the constitution does not so exempt.
The test, then, of the validity of the statute we are considering is whether or not it, in effect, exempts from taxation any substantial part of the property of the building and loan associations to which it applies. These associations, including the defendant, are corporations of this state. Their legal existence, right to do business, to hold property, and to protect and enforce their property rights, all depend upon our laws. Their moneys, credits, and other property within this state, no matter what the relations, duties, or obligations of the associations to their shareholders may be, are therefore subject to taxation in .this state. All of their moneys, although they are received from a large number of shareholders, widely separated, and must be returned to them, with accrued profits, are, nevertheless, the property of the association, which is protected by our laws, and has a situs in this state. In re Jefferson, 35 Minn. 215, 28 N. W. 256.
This brings us to the pivotal question in this case. Do these sections 3á and 35 (G. S. 1891, §§ 2888, 2889) provide a method whereby substantially all of the property of these associations is taxed?
Counsel for the defendant answer the question in the affirmative,
Without intimating any opinion as to the correctness of the first proposition as a whole, we pass to the second, and submit it to the crucial test of the express provisions of section 35. So testing-it, it would seem that its inaccuracy lies so plainly on the very surface of the statute as to render any extended discussion unnecessary. The business of the defendant, and that of the class of building and loan associations known as “national” associations, is not by law limited to this state, but its shareholders are scattered over the entire country; and the trial court found that a large majority of the stock of the defendant is owned outside of this state. Now section 35, by necessary implication, exempts from taxation all stock owned out of the state, for it provides that “each member shall list the shares held by him for taxation, at their real value in money, in the county of his residence, the same as other credits are listed.” This exempts all stock held by nonresidents from taxation in this state. If it may be assumed that they will list their stock for taxation in the county and state of their residence, yet taxation of the stock of the corporation of this state in another state — for example, New York — is not the equivalent of taxation of the property of a corporation it represents in Minnesota.
This section 35 (Q-. S. 1894, § 2889) not only exempts from taxation in
It is true, as claimed by counsel for defendant, that a law providing for the taxation of property is not unconstitutional, because, in its practical operation, property which ought to pay taxes escapes the burden. But such is not this case. It is conceded, both by the defendant and the state, that section 34, by necessary implication, exempts from taxation the personal property of the defendant and similar associations. Such being the case, it is unconstitutional, unless the legislature has provided for the taxation of the representative of the property, — the stock. This, as we have seen, has not been done, but, on the contrary, a large portion of such stock is also, by section 35, exempted from taxation in this state. Hence, sections 34 and 35 must fall together, for they are interdependent.
2. The defendant further contends that, if Laws 1891, c. 131, §§ 34, 35 (G-. S. 1894, §§ 2888, 2889), are unconstitutional, then Laws 1889, c. 236, § 35, which, it is claimed, provides for the taxation of all of the
We need not consider the question whether or not Laws 1889, c. 236, § 35, is still in force, for the claim that this section provides for the taxation of all of the stock of the association can find no support in the provisions of Laws 1889, c. 236, §§ 35, 36. Both of these sections must be construed together; and, when so read and construed, it is apparent that they make no provision for the taxation of the stock of nonresidents in this state, and that these sections, in this respect, are as obnoxious to the constitution as are Laws 1891, c. 131, §§ 34, 35 (G-. S. 1894, §§ 2888, 2889), which we have considered. It is true that Laws 1889, c. 236, § 35, provides that every stockholder shall pay taxes upon the shares held by him; but, by reference to the next section, section 36, it becomes apparent that only resident stockholders are referred to, for the secretary of the association, by this last section, is only required to transmit to the auditor of every county in this state, in which the association shall have shareholders, a statement of the names of every person in such county holding stock, and the amount and value of the shares. This, in the absence of any géneral or other tax law providing for the taxation of such stock held by nonresidents, by necessary implication exempts the stock of persons not living in any county in this state from taxation. As we have already suggested, the defendant is a corporation of this state, having here its principal place of business, and its money and credits, and other personal property within the state, must be taxed in this state; and any method of substituted taxation, whereby the stock of the association is to be taxed, in lieu of the specific taxation of such property, must provide for the taxation within this state of all of its stock, or it will be unconstitutional.
Order affirmed.