*1 it clear that after giving defendants money paid credit for the plaintiff by assignment, virtue making and after allow- ances for expenses paid by plaintiff in connection drilling operations plaintiff $9,- there was due to the sum of 436.90, which by is the amount fixed In court. fact there was Clary evidence Mr. which would judgment have warranted a $9,727.76. Defendants, though testify fully regarding joint allowed to agreement, venture dispute $9,436.90 did the item of way except they they contend have a counterclaim that amount, exceeds that but this is involved in the pending action County. Pondera They proof offered Clary no did Mr. not give them all payments the credits for production from oil they were entitled.
There was no prejudicial reversible or disregarding error in relating joint the evidence venture was done trial court.
Other contentions of defendants have been considered but we find no reversible error in the record. judgment is accord- ingly affirmed.
MR. CHIEF JUSTICE HARRISON and MR. JUSTICES ADAIR and concur. CASTLES Corpora BANK, Columbus, Montana,
YELLOWSTONE tion, Plaintiff v. STATE BOARD OF Respondent, EQUALIZATION and J. F. Montana; State REID, WINTERS, BYRNE, W. J. and E. J. as members of Constituting Equalization the said State Board of Montana, Defendants, State Munincipal Corpora STILLWATER COUNTY, Montana, tion and Political Subdivision of State of Montana; County ALICE MARVIN, Treasurer of said Stillwater Municipal Corporation ; THE County, Montana, COUNTY, Montana, EQUALI OF BOARD STILLWATER BROWN, HARRY ERNIE HUDSON ZATION; T. KEATING, TED County, as Members Stillwater *2 County Commissioners, Montana, Board Ex-Officio constituting County, of and said Members Stillwater Appel Montana, Equalization, Board Defendants lants. No. 10024. April 29,
Submitted October 1959. Decided 1960. Dissenting May 4, oninion filed 1960. (2d) 351 Pac. Henry Grant, Jr., County Atty., Columbus, appellants. I. Wertz, Helena, for Blenkner, Columbus, Wesley E. A. W. orally. Wesley argued Wertz respondent. W. LESSLEY, Judge, sitting W. W. District
HONORABLE HARRISON, delivered place MR. JUSTICE CHIEF Opinion of the Court. judgment in the District appeal from entered
This an plain- Thirteenth District favor Judicial Court defendants, against the Bank tiff, Yellowstone of Columbus County, Stillwater et al. respondent (hereinafter Bank cause, plaintiff
In this *3 of its sur- respondent), after assessment simply referred to as its County percent, paid at 30 plus by Stillwater assessor complaint it its and later protest; subsequently, tax under filed (herein- complaint. appellants its and amended The defendants County, Montana, appellants), after referred to as Stillwater Marvin, County, the County Treasurer of Stillwater Alice then Harry Brown, County Equalization, and T. Stillwater Board of Keating, Hudson as of the Board of Ernie and Ted members Comity, Montana, ex- County and Commissionersof Stillwater County, Mon- constituting the Stillwater officio members of and tana, Equalization together with the Board of Board of State demurrer, Equalization filed their which was overruled trial court. answer, taking Equalization
The State Board of then filed an respondent legal position appellants as the Bank. The same demurrer, judgment chose to stand on their and entered was respondent against appellant for Bank and the lower court Still- trial from the appeal here' on County. The case comes water judgment. subsequent its ruling on the demurrer court’s of bank the value fixing of is concerned with This ease taxation. purposes shares 1957, the Laws of Session with
In accordance County to county assessor of Stillwater Board had directed “moneyed capital” imposition of taxes fix the basis for 5”, $100,000 in “Class plaintiff Bank as follows: 5” and $127,277 use of the words “Class 4”. The “Class referring simple method of nothing 4” is more than a “Class of true and full value percent percent application respect taxes” imposition of determining the “basis for 84-308, under section capital and shares of banks” “moneyed Laws of 1957. by Chapter 172 of the Session as amended provisions follow the County authorities refused to refused the directions of and also to follow the new law law, Chapter 172, must be followed. Board that the new county with whether the We shall not concern ourselves Board may disregard Equali- the instructions of the officials county standing challenge has sufficient zation or whether the legislative constitutionality assume, shall act. We with- directly deciding matters, go to the merits of the out these statutes involved. are here concerned with section law we governing from 1929 until amended 1957. Before law read follows:
amendment imposition for the of taxes the different “As a basis specified, percentage the true and herein classes of each class shall be taken follows: full value (7 %) full “Moneys credits, per centum of true and seven value. *4 banks, national
“Moneyed capital and shares of both and full (30%) of true and value.” state, thirty per centum 1947, Chapter 46 of Montana now of Title Revised Codes statutory is the basic sections 84-4601 to R.C.M. authority in this This designed comply area. law with and meet the demands of the Federal The statute is law. Federal section 5219 (section of the Revised Statutes of the United States Code). of may paraphrased Title of United It States allowing banks, state to tax the of national follow shares three other alternatives, here; not relevant use of one is but and must place be in of all others. The State Montana of shares imposes of national banks and state same tax on banks. The bank are the of shares the owner shares. specific amend- law on which this ease is the centered This
ment to section 84-308. amendment is introduced, Bill 1957. As it was Session Laws of Senate governor law passed signed by and into on March it We set out full: moneys imposition and (2000.6) taxes on
“84-308 Basis for shares. credits, moneyed capital hank As a basis for classes the different imposition of taxes true and of each specified, percentage of the full value herein as follows: shall be taken class
“ (7%) true ‘Money credits, per centum seven full value.
“ banks, ‘Moneyed both national and capital and shares on that (30%) true and full value state, thirty per centum represented by surplus, full of the true and value portion per (7%) on bank; seven centum shown on books represented by surplus and full the true portion of por- bank; provided that on books of the on the as shown surplus is over above the amount such tion of bank, shall be capital the excess stated represented true full value. thirty per centum .subject to (30%) prepare, distribute and equalization shall state board may require to obtain from forms as such to be used cause reports of such facts business doing the banks
203 taxable tbe figures may necessary and ascertain as be ” taxes.’ imposition of of bank shares as a basis for the may us, original before we With the law and the amendment epitomize specifies meaning 84-302 classes its and effect. Section as classification of imposition the basis for the of taxes. The “moneyed capital” fixed section and shares of banks amendment, 84-308; changed this effect been has not a “basis” set review statutes will show that the 84-308, amended, corresponds out section with Classes However, appear and 5 84-302. our that section we have on special relating only moneys statute books classification laws credits, money capital shares; Chapter and bank it is 84-308; Session Laws of sections 84-303 to now section amended, being 84-308,as passed of course the law construed and reading in this decision. A Chapter make it must specifically clear that it does not original relate itself to our classification law and the several different classes of specified. Thus, it must that Equali- clear State Board of zation’s the terms 4” use of “Class 5” a “Class term of application percent percent reference on of 7 and 30 of true and full determining imposition value in the basis for tax as to moneyed capital and shares of banks under the law we are here concerned. true,
It is section 84-4605 makes this reference: mon- “such eyed capital provided by to be ascertained as section 84-301”. This is ineffective operative because effect of sections 84-304 since their enactment in 1929. legislative
The above constitutes background and factual amendatory now law we consider. specifications Two this appeal: of error are raised in Chapter 1. That approved by effective until governor; approve that did not 8, 1957; he it until March that Monday (March first was after the in March 1957) the attached; time lien time, the tax after lien may no one obligation; diminish that that this amendment seeks to do thus in direct conflict with section 39 of Article Y of the Constitution of the State of Montana. That 172 is unconstitutional, in that it allows —
portions of bank part surplus to be taxed at a lower rate than class, other in the to-wit: same property in “moneyed capital” class. This is claimed to be class, discrimination as to taxation within a discrimination clearly prohibited 1, 11, XII by sections and 17 of Article *6 the Constitution of the State of Montana. specification error, 172,
.The additional Chapter Ses- unconstitutional, graduated sion Laws is in is of 1957 that it ad reverse, valorem tax in is much and not advanced with force effect, and appellants’ argument. is in fact abandoned in appellants. the first
We consider contention the . Monday significant in is to determine and fix The first March ownership purposes. and for Sections the situs 1947; Ford Motor Linnane, 102 84-409, and R.C.M. Co. v. 84-406 306, 325, 803; Hayes Smith, 58 Mont. 192 P. 57 P.2d v. Mont. is it Significance that date to isolate place To other 615: procedure ignore and and to other taxing process from-the total process. in the subsequent steps and vital ‘ ’’ ‘ n after is acquired. is done situs assessing of the 84-409, a bank R.C.M. The shares of 84-406 and Sections 1947; 46, 84, R.C.M. the assess- Title under assessed are are furnished the banks until the statements done ing days demand, national), after or assessment five and (both state the the banks to furnish state- in of failure of case by assessor ments. . important imposition taxes” becomes when “basis for changes by Legislature the It is evident made. are
levies levying if effective before time of “basis” affecting year. taxes for that current to affect the in time are' assessments, determine they make their annual -Assessors, when pro- and full as basis of true value assign percentage and 84-402, R.C.M. 1947. Section section 84-302. See in section vided course, Of bank part general 84-302 classification law. is a law, general classification shares are not included Thus, amended, part. it can be 84-308, which section as assign responsibility, determining seen the assessor’s one shares, full of bank ing basis of true and it at assign, is to under section determine shares; a time assessment of bank this is time of the annual days. Monday March, by many subsequent to the first Though process, been the state details have altered Ry. McIntyre, ment from Butte 71 Mont. Electric Co. v. apropos.
227 P. is most “It will thus be seen that nothing classification has to do with the assess statute whatever assessed ment of or the determination of value.” Succinctly stated, had when time arrived determine year 1957, Chapter taxable in the value of the bank shares effect; was in full in effect when the time force year computing for the taxes levying arrived in the year. was, is, law; This it is applied for that a classification Monday subsequent steps after the first March levying on assessing, computing, and are carried to the inevitable destroyed by point end. The force of this is not admit- view ting obvious, e., i. lien taxed that the tax attached *7 4, 1957). Monday (March in as of the first Mai’ch provides 39 Y of that “no
Section of Article our Constitution liability any person, obligation corporation, or association or therein, by state, any municipal corporation the or held or owned exchanged, transferred, remitted, post- shall ever released or be any way by legislative assembly; nor poned, or in diminished the liability obligation extinguished, except by shall or such ’’ payment treasury. Emphasis supplied. proper thereof into the in remitting, releasing, Does 172 amount result to or diminishing “obligation liability” held or an or owned city? obligation, has is in state or Our court said a lien not an it held lien is not has the cancellation a the cancellation obligation of an due the Christofferson v. State. Chouteau
206
County, 105
577,
Mont.
We consider ques and answer the constitutional this, tions raised. guiding rule, We do well aware of as set in Dickey out Com’rs, 315, v. Board 121 191 Mont. P.2d 317, that “the universal rule is that constitutionality of a statute will not be determined in case unless such a determi absolutely necessary nation is upon to a decision the merits of necessity the action.” Here the exists. answer, categorically,
We question: Is statute consti- tutional ?
The constitutional stricture
which we measure our statute
is
well-known
11
section
of Article XII of the Montana Con-
stitution,
provides
that “Taxes shall be levied and col-
by general
public
only. They
lected
and for
purposes
laws
shall
be uniform
subjects
the same class of
within the territorial
’’
limits
authority
tax.
levying the
appellants present
question
the constitutional
entry. First,
statute,
double
not a
this is
classification
but an
and,
exemption
thus,
clearly
statute
unconstitutional under
rule enunciated
Victor Chemical Works v. Silver Bow
County,
Second,
appellants
Mont.
It
there
fallacious
to insist
was no
A
respect
section
to classification.
consideration of
fallacy.
Six was
facts and events makes evident this
Class
statutes,
inert,
though
letter” lifeless
still on the
“dead
even
Supreme
of the United
because of the decision of
Court
City
Miles
National Bank of
v. Custer
States
Commercial
155, 259;
48 S.Ct.
County, 76 Mont.
245 P.
U.S.
*8
it.
that conform
395,
Montana decisions
subsequent
L.Ed.
County, Mont.
Plains
Sanders
National Bank of
v.
See First
Corporation of
Banking
450,
247;
279 P.
State ex rel. Conrad
418,
amended 84-308 Section formerly in this is now classified included class Montana n , supplied. Emphasis 1947.” the Revised Codes consideration, under reading, amendment practical A “moneyed capital” bank shares and makes it evident all “moneyed capital” by it; bank shares and are affected all Legislature subject the same classification. banks are impo- may the basis for formula to determine devise its own namely, question, bank shares sition on mat- said, “moneyed This has “The whole capital”. court is there legislative power, ter left to the discretion of purposes property for the nothing to forbid the classification of different classes different of taxation and the valuation of only subject, respect to the equality, methods. The rule of applied impartially methods to be requires same means and class, operate shall that the law to all the constituents of each so uniformly in similar circum- persons all equally and Moore, 182 P. Hilger 56 Mont. stances.” v. as to wisdom here concern ourselves
We will not Legislature originates formula the legislative act. The are con this court. We Legislature set not for out is for City Bank Miles only inequality. taint See with the cerned 885; none here. 291, 19 we find County, 93 Mont. P. 2d v. Custer statute, exemption suggested also, that this an It has been in the Victor exemption struck down an statute such It is a classifi- case, supra. We do not so find. Chemical Works fraught with constitutional Its formula statute. cation inequality. This statute is constitutional. (cid:127) is judgment properly
The demurrer was overruled. affirmed.
MR. JUSTICES ANGSTMAN and CASTLES concur. dissenting: MR. JUSTICE BOTTOMLY .. Act”, appeal validity
This involves the “Bankers Relief of the 84-308, R.C.M. being Chapter of and section Laws nn every taxpayer appeal vitally affects The determination of the in. the Montana. entire State of majority merely
The that this concerns opinion asserts case This taxation. fixing purposes the of value of bank shares for of opinion the rests. upon constitutes the basic error classification, purposes, for presents problems of the case moneyed capital banks, both national state. and shares vitally important as we shall later show. The difference important question, The most questions presented. Two are answered, directly questions the must first be and that which constitutionality of Act. comprehend question presented
To the constitutional moneyed capital and history that taxation essential of the bank should set out. shares be being*,
Prior act enactment of classification 1919, property in Montana was not classified Laws purposes; is, taxation that all was assessed and property. were then levied the entire assessed value by the ease Act held constitutional Classification 477, provided Moore, 146, 182 P. that Hilger v. 56 Mont. assigned specified types property should be designated assessed A true and full classes. levy purposes applied property for then to the classified here, act, original pertinent of taxes. In the collection following: “All provided that it should include Class state, unsecured, including all moneys credits, secured or municipal bonds, warrants and county, other school district and however, offset; provided, any deduction or without securities not em- as herein used shall terms, moneys and credits by banking business employed in the moneyed capital brace the ’ ’ in this state. individual any corporation association or banking Emphasis added. should following property provided 6 of the law
Class banking associa- stock national be “The shares of included. employed conducting bank- tions, moneyed capital by any banking corporation, association ing other business moneyed capital to be ascertained individual this state. Such banking such cor- monies and credits of deducting from the deposits individual, amount poration, association or representing money borrowed for use indebtedness any national bank- business, and of the shares of said the value all deducting the value of ing association, ascertained *10 percentage assigned The real estate of such association.” property 5 7 its true and full value. value for Class was of% 6 assigned property for Class valuation its full true and value. 40% Hilger applying that the Moore, supra,
In it was asserted v. reducing assigned thus percentages of value to assessed value and upon levy be made the value which the should contravened 11 XII Sections and of Article of the State Constitution. provide Those sections : ‘‘ support main- necessary Section 1. The revenue for the by assembly, provided legislative shall the tenance of the state be levy taxation, uniform rate assessment and shall regulations just prescribe shall such as shall secure a valuation specially property, except provided for of all for taxation assembly may impose legislative in this article. The also a license tax, persons upon corporations doing upon both business ’’ in the state. by general laws “Sec. 11. Taxes shall be levied and collected only. They upon uniform public purposes and for shall be subjects territorial limits of the author- same within the class of ’’ ity levying tax. holding that the classification statute was con- court may be percentages that these different of value stitutional and uniformity still maintain the demanded assigned to 146, 182 P. : Mont. our State Constitution said 481] [56 ‘‘ 11 the sentence section with scetion Construing- the first shall uniform meaning* reasonably levied clear: The taxes taxing district. same within the same class of raising state purpose The entire state is one district for the taxes, Every county county separate is a for taxes. district every city city taxes, Or, stating of sections principle etc. mandatory injunction form, 11 in different mode of assess- legislature prescribe that it shall such uniform just all taxable ment as shall secure a valuation of by general laws and for all taxes shall be and collected levied upon the they shall public purposes only, and that be uniform property within the territorial limits author- same class ity uniformity declared levying tax. This is rule of intention of Constitution, if determine the our we are able to * * * discrimina- aright. enough its It is that there is no framers against of the same class”. tion favor of one as another City Bank Miles v. In case of Commercial National Bank ques- a National County, 76 Mont. P. Custer against discriminated tioned whether the classification statutes imposi- National Banks in the capital stock of the shares of there National Bank showed that tion taxes. In that ease the type were banking associations who were individuals and other being but were taxed capital competition with them using *11 their true and full 5 the rate 7 Class at of % being taxed at moneyed whereas, the bank shares were capital, shares, by statu- specific Bank 40 their true and full value. % the individual tory are to the bank and not to provisions, taxed owner of the shares. taxed
A these are to be valued and formula as to how shares by Montana. to bank is set the statutes of State of out 1947. In R.C.M. the Custer See 84-4601 to sections individuals, and other County position was that case the bank’s
211 corporations associations, moneyed capital and using were moneyed competing being with the banks but taxed on this were capital at a lesser than rate the bank. Supreme money position Montana Court took the that the money
was money employed competition invested and not in with the by Banking Corpora- business conducted the National tion, ap- and held that discrimination did not exist. The bank pealed Supreme decision of Montana Court Supreme States, question Court of the United since a federal That involved. court reversed the decision of the Montana Supreme upon authority Court Bank Hart- of First National ford, City Hartford, 548, 462, Wis. v. 273 U.S. 47 S.Ct. 71 767, L.Ed. Bank, and State of Minnesota v. First National 273 561, 468, U.S. S.Ct. L.Ed. 774. case,
In
supra,
558,
page
Hartford
We see then that the United States Court decision moneyed capital held that unless individuals, corporations, banks, and associations competing who were not but with not identically banks was classified and taxed the same na- banks, tional then the national banks would be discriminated against illegal. and the tax The confusion this decision caused Banking evident from the later ex case of State rel. Conrad Mady, Corp. of Great Falls v. 83 Mont. 272 P. where Supreme Supreme the Montana held that Court Court since appar- of the United States had said a discrimination was private competition ent in between individuals who were the National same as Banks and had to he taxed the therefore private individuals it improper then to tax became higher state banks at a level than National Banks. The facts in of this case showed that assessors order to avoid Supreme the discrimination condemned the U.S. Court had all lowered National Bank assessments to 7 °/0 money only same value Class This left credits moneyed capital shares 6. The the state bank Class Bank State showed the discrimination and court held the Mont., Bank must at saying page State be taxed at 7 83of % at page of 272 P.:
"Our Constitution commands the taxation all property exempt. desirable, imperative, not It is if for the state to tax national bank These a considerable shares. constitute percentage state, the taxable and national banks wealth of present system cog in under our are an essential the business Congress, In shares pursuant wheel. order to to the act of against them, and that there shall not be discrimination nor favor, shares, in their that national bank bank obvious state shares, moneyed capital employed banldng conducting state, moneyed capital by corporations business this coming compe- individual into the hands citizens state, should be national banks, tition with the business alike, the same value.” and taxed classified Emphasis added. *13 be- question
To further illustrate that this of discrimination competing properties tween Class of section R.C.M. 1947, impression original not one of in this is the of state case County, National Bank Billings Montana of v. Yellowstone Mont. 252 P. a this brought 882. There national bank to supreme being court the not question as to whether or it was against discriminated when state banks allowed deduct were to the by value United States Government held securities them computing upon when the property value which their to be assessed whereas the value of United States Government by securities held banks national was included in the measure of the assessed value of stock of national taxation banks for purposes. “By The court held that the Constitution state the is commanded tax the property corpora- to of the banks—the shares, also if they independent tions—and the a have value of the property taxable the property bank. It cannot tax the the banks and at the same tax the shares to the that time extent property the is taxed, property, but it can tax the the also the they shares to extent that beyond have value above the of the bank which been may has taxed. And the shai’es to that extent without the reference to character the go securities which to make the which up the shares [Citing have over above the taxable bank. the cases.]”
They a precedent there held that had been in the overlooked decision the East Rogers, case of Helena State Bank v. Mont. 236 P. and that because of that fact that case had indicated that the value of federal securities could not be measuring used in the value of the shares of stock of the banks over and above the taxable of the bank itself. The court repudiated statement and held that an it was error part the taxing officials omit the value the Federal However, they
Securities assessing when banks. held not that since the value of the Federal Securities should have been omitted purposes, for assessment the national banks were against remedy. discriminated without and were appealed Supreme case was to the United States Court respect holding affirmed the effect State corporate to the taxation of state the shares must be taxed banks they necessary are national so the case of banks far discrimination, prevent exemp- and that in neither case does apply tion of federal securities in the taxation such shares. They held, however, that the not without national bank was remedy against since had state bank been assessed securities, and considering without the federal value of against taking the national into the value bank consideration securities, of the federal and that since such assessments were following supreme county ruling made authorities Montana, error, court of which was State *14 against by national banks who were discriminated such action they county could recover the taxes which had officials paid protest computed under so were dis- and which taxes as the the criminatory respect paid to taxes which were result in the same classification. This deemed essen- banks was pointed though out that supreme tial because the court even decision taxing county, officers in view of the later of of power tax the shares Supreme the Montana Court had to of they the shares national banks taxing state banks as were of nevertheless, effected, equality that be therefore would county taxing appeared that the had under- nowhere officers power they any intention to that or that taken exercise had of doing so. therein pattern. form a definite rule law
These cases of property all that taxation included within class set out of until never leen In addi- must he has now overruled. uniform property has been taxed has been upon tion the basis reasonable. held holding in the discrimina-
Following decisions cases that exisited, tion problem equality within the class of how should presented. pursued effected was The course was lower percentage on the discriminated that assigned Banking rel. property. the favored See Conrad State ex Mady, supra. Great Falls v. It determined that was however unsatisfactory this solution was thus Laws clarifying legislation added what it felt was respect properties included within Classes and 6. provisions types property.
The first two defined Section 84-303, moneys 1947, defines credits “That saying: R.C.M. moneys hereby purpose are of taxa- and credits defined for moneys moneyed constituting capital tion as all not herein- defined, after unsecured, including and all credits secured and state, county, all municipal bonds, school district and other war- securities, rants and offset; provided, without deduction or however, credits, defined, herein shall not embrace credits moneyed constituting capital as hereinafter defined or evidence by mortgage personal of debt secured of record real or ’’ the state of Montana. moneyed Section capital R.C.M. defines as: capital “Moneyed hereby bonds, moneys, defined as *15 competition sonal in investments not with made such business moneyed capital shall not be deemed
This part definition follows the federal statutes wherein they set out those items must exactly be taxed as the shares banking corporations of national are to and be taxed
216 next to deduc- discrimination. The three sections related without pertinent and not here. tions to determine assessed value are 84-308, Bank- Section before amendment R.C.M. out “As concluding er’s Relief Act section and set was the different classes imposition a for the basis specified, percentage a true and full property herein class shall be taken as follows: of each value credits, per (7 and full “Moneys %) of true and seven centum . value.
“Moneyed capital state, banks, shares both and national thirty per (30%) centum true and value.” full repealed 84-302, section section R.C.M. portion
This by effecting percent on 6 Section property. reduction Class provided percentage 84-302 in of Class part value 84-308, property By section percent. was the enactment of percent. These R.C.M. became from did nor Class amendments not add subtract national and state The class still included bank shares of both moneyed capital corporations, banks and in all addition bank capital associations, moneyed and individuals when such banking bank- employed competition with the in the business or ing assigned class business. amount which could be persons the class long as the question had never been had correctly necessarily be within the class who should original change setting out all been classified therein. necessarily change in the new basis effect a did generally speaking The class included included within class. moneyed capital. national state and the shares of banks both capital by money, is: moneyed 84-304, section R.C.M. Now including evi- bonds, or other evidences of indebtedness *16 conducting in moneyed capital employed the class is within by any corporation, association banking banking other business then that this classifi- perceive or individual in this state. We general classes, stock of both three the shares of cation includes moneyed capital of both national and state and the banks moneyed capital any other national and state and the banks person, moneyed capital or if such corporation association All competition used in with the national and state banks. properties in to avoid discrimina- these must be taxed alike order necessarily against any in tion included Bank Miles Class. The Act tested the case of City County, 93 Mont. In that v. Custer P.2d appellant that the case the contended laws enacted created and moneys discriminated in favor and credits owned indivi- corporations duals and other than national and banks and corporations coming competition those the hands of into employed business of national conducting banks who were a banking or investment business. That for this reason the Act XII, was void because contravened section Article case, State Constitution. In that contending the bank was legislature split moneys up could not and credits into two categories They contending or two classifications. were moneys only and thing thing credits constituted and one one they differently and that could be classified within the In speaking regard moneys class. of classification in credits, court “The said: use to which the productivity devoted and its stick in measuring constitute ” determining proper [Citing its classification. cases.] They said, “Moneys credits, employed when the bank- ing a in competition therewith, business or in business have greatly productivity compared moneys increased ordinary corporation credits in the hands of the individual only. moneys using them for investment uses its casual bank trade, buys through as a stock its use and sells securi- paper profit, purchases ties' and commercial notes at a dis- count, loans, whereby malíes short-time it is enabled to secure many profit interest or during reinvest it times a given year. By banking reason of these practices, careful investment in a banking during year’s business yields the course of a time larger money much on than income basis the same yields money in the hands of the casual investor. use of the compared a bank as investor, essentially to the occasional *17 different in greater productivity; and results thereof because a substantial exists proper reason as a foundation for the divi- moneys sion of purposes and credits into two for the of classes * * * conclude, taxation. Ye hold, therefore and so that moneys may purposes and credits be classified for of taxation classes, where, here, by different as reason of the difference productivity same, the use and of the substantial a reason exists as a such foundation for classification.”
Following this decision and until important changes no were taxation property. made the of Class 6
After the this decision settled that law was the classification reasonable, percentage assigned was the value the classified taxing proper and the state statutes pro- did not any against any for vide discrimination of the nec- essarily within included Class 6. provides
Then “Banker’s Act”. came the Relief This law only the hanks and the hanks. Section 84-308 reads relief for for as follows: moneys (2000.6) imposition
“84-308. Basis taxes on for of moneyed capital credits, shares. and hank As a basis for imposition of classes different of specified, percentage herein a true and full of the value of each as class shall be taken follows:
“Moneys credits, per (7%) seven centum of true and full value.
“Moneyed banks, capital and shares of both national and state, thirty per (30%) of true and full centum value on portion represented by and full value not surplus, true (7%) bank; per of on the books seven centum shown represented by on that full sur- portion of the true and value plus bank; provided that on that as shown on the books of the portion surplus over of of such which is and above bank, represented by ex- capital amount of a stated subject thirty per (30%) shall to cess be centum true full equalization prepare, value. state board shall dis- may require cause be as it tribute and used such forms to reports doing obtain from the in this banks business may necessary figures such facts and to ascertain the imposition taxable value bank shares as a basis for taxes.”
What bank, is this: As after does assessed value “moneyed capital” determined, per- of 30 cent assigned purposes of assessed por- to that tion moneyed capital represented by surplus. As to portion however, surplus, percent- which constitutes age assigned purposes percent up value for tax is 7 capital portion stated surplus a bank. On the in excess capital bank, of the stated percentage assigned *18 again patent 30 is percent. This an obvious and discrimination in against the banks and corpo- individual citizens and of favor rations competition employed conducting in with banks or in a banking or investment business. can an individual How or corporation advantage take given of reduction corporations to the banks? The would if ever a have seldom capital. stated bank The never a individual can have “stated bank capital.” To read the law without more is see its ob- vious This in discrimination. discrimination offends and is 11, 1 contravention XII sections Article the Consti- tution question State presents Montana. The law very substance same scheme which this court struck down County, Victor Chemical Works v. Silver Bow Mont. 308, 730, exception. 301 P.2d with one Whereas in the Victor subject property Chemical case the to be to double classi- only years, property fieation for three here the is be classi apparent perpetuity. Here, case, fied at two rates in in that percentage assigned the 7 portion % in the by implication class bears no relation at all even to the productivity separately the use classified. As said in case, page the Victor Chemical 130 Mont. at agree not page 735, P.2d at that such a “We can reclassi already fication of the purpose once classified for taxation is reasonable or consistent with our Constitution.” To paraphrase Supreme Court, the United States “To hold other reality deprive wise would to exalt artifice above and to statutory question purpose.” provision of all serious See Gregory Helvering, page Upon v. U.S. at the au thority alone, County of Victor Chemical Works v. Silver Bow Laws should must and be held unconsti tutional. judicially
When tax as here a law has been determined to be reasonable, just questions discrimination without serious special changes providing arise when are made tax benefits to special urged purpose It is that the classes. law would serve industry. banking I beneficial to the do subscribe to the theory good always good is for the banks is however what people for the of the State Montana. At the time this deci- sion is written the economic status of State of Montana extremely future uncertain bleak. While the it obvious opportune this is not an time to contract the tax base While taxes are saved for the benefit of the state. law industry, specific segment of our state is obvious that taxpayers up must make the deficits thus created in our other budgets. majority taxpayers surely governmental taxes well as the banks could. cannot afford these additional tampered question here with the laws and intro- Act uncertainty formerly into a law that was duced an element An such as now in section stable. “escalator” clause *19 R.C.M.1947, open everyone so that to me seems to the door spe- special promote legislation gain interest can his own to percent tax at 30 can advantage. cial If a held reasonable law certainty legally percent be held reasonable at 7 where does go required in tax become fixed. If the “escalator” can law down, go up? is is not 70 percent can it not If 7 reasonable percent? If classification law can be said to allow graduated taxes graduated property tax within class are other majority legal? holding opinion to be held The raises my majority opinion these questions. opinion, In far ex- legality ceeds the boundaries of afforded the Classification by Hilger Moore, supra. Act v.
I something majority believe should be said also about the holding that year the new law took effect in the by appellant
Contention is made that the tax classification assigned percentage upon values became fixed first Monday Day”. of March 1957 “Tax The banks equalization state If, board of contend this is however, not so. the bank’s is then, day? contention valid what is the correct majority by saying answers this not Monday the first in March. This is an answer majority at all. If the rea- soning sound, they point day should be to able exact that simply say became fixed. To “no” without more taxpayers does not constitute answer which the require. majority deserve and point will not other they time to fix the tax because cannot show another tax time yet recognize appellant refuse I correct. would judgment reverse the of the district court and direct that a appellant judgment ground Chap- entered ter Laws is unconstitutional.
MB. JUSTICE ADAIR: foregoing opinion by
I in the dissenting concur Mr. Justice Bottomly. notes indebtedness, including and other evidence in- evidences by mortgage personal debtedness on real secured or corporations individual coming hands citizens and in com- petition employed with the business national banks or in con- ducting banking business; or investment provided, however, bonds, notes and other evidence indebtedness them hands corporations employed engaged individuals in the banking merely or investment representing per- business and
Notes
notes by mortgage personal on real or secured dence of indebtedness corporations hands individual citizens in the national competition banks or business coming business. In employed conducting banking investment set 1947, it is out that included 6 of R.C.M. Class section