Case Information
*1 ,,_, ‘, ~‘i~&ablr Ri t, Oroslor, page
,, ‘, the wrooiml propeity of ttite mefini of tax* ; banking odrporatlono in the hands of the, ehar from thlr that suoh car-
holdora. It follows poratlona are mt now roquirod~to rendor thelt, permonal progorty ror taxation;, . . .* , ,’ Tho &me oozietruotlon of the Toxar rtatuts’r iavb~ved
vai srrnounood by thp Court of Civil‘ f@.r,petiB Of %‘oxncr in the y ; ;, : ome 0r First ITatlonnl Bank 0r Impaaos vr: City or.uimpaa~ .78 8, w. 42, writ or erroti dlemiossd by the S&rem Coui+t., ,ih& * “, .-oouPt rtatod an r0im8t “It iti settled by doolrrfonrr of the Sup-
. roni, Cow: of the United Statea that it linot .,, ” uithln the $ovor Of a etate to eubjeat tW pro- ” party of natlonal banka to taxation vithout, I. : the Comont or the federal Con.gwar The only
‘, provlaion or the redoral etatutoe vhioh author- lcer such taxetion la eeotion 5219 o tho Re- vlsed Statutec of the United St&tee U.S. Camp. f St. 1901, p, 3502), and that permitd ruah.tcua- tion w agalnat buch benka, ‘upon riml eetate Onlg. It authoyizes atato taxation or the atoek of suoh banke aa a@net the wnom of *~ such #took, btit not a$ agalnat the bar&m. In Le&islaturo harmony Vith that rtstuto, .,’ thi8 state has we full provlrrlon for the aa- ,. awm?nt and colleotlon of taxea,upon national “’ b&k stock from the ovnern of uuah rt.oQk, and has made no attempt to oom901 national banks to priy taxes on euah 9roportgr ‘~ Sayleo* Rev. Cl?. St. 1897, arts. 5079, 5079a, and 5080, Henoe ne’ are of opinion that the bank vae under no I, ,;:~ legal obligation to render’and 9&y taxer on the
proporty’ln question. Thoee visve are rrupport- cd by ntithmity. * Miller V. First Ration81 .Bmk, 46,0hio St. 424, 21’R.E. 8601 Blrat lot; Bank Y, Ffshor, 45 fan. 726, ,26 Pao. 482.’ It la our opinionthat under th6 lava of this State to matlonal bank:,ir texablo cq&nat raonal ,prapertg bslonging~ to ouch a .Nat- loaal bank mcy not ‘taxed by the Stats, %rther, &aver of .I’ . a’. b .~.
.‘, in ‘a dat$onal bank may be taxed in the hand8 of the i&k rharoholder 8. This ha8 been the lav or thir .Stato rinoo the ourly Texae Suprome Court oat30 0r Uarrlsoa Y+’ Yinor, 46 Vex, 15,~ mhs aowt rtatod au 3ollovar
“It fr a& well nettled by the Supreme ‘, court or the United Stattoe, by whose constru0~ ,, ,~’ ‘. tloa an aot of Congree8 thie oourt Is uri@aor- “, tionably bound,. that the rrhaiw of bankin5 a81 roolatlons authorized by the abt of June 3, ‘Y’ ,1864, ‘To provide a “national ourronc ” &or
; ” In the hand8 of the ahareholdorr are I’ iable $6
ta?ustIon by, tho Statoa with the lltitatlon8
; c and on the oondltlono sot forth in tho forty-.‘,
.’ ‘first soctloa of said sot, although the entlr@
a&pital of euah bank I8 Invested in national roourltloo, whloh are dealwed by theetatuto
.. ( authoriaing thorn to be %xcmg
* by ‘or ‘under 5tatoWg;horlty. ., 5
The Ae8088or8,
Comafo8loaor8, Wall.., 2 1;: Natloaal Bmk v., Uoxmtoavoalth, O~Wall., 353. , . .,.I - j
The next question that arl~sa fa whether 02 not tho mh&rer of- rtook ,la a National bank vhIah are taxed In the name8 of the rhareholdore should bo aeaevsed at value tioh iu me- duood b+aueo or tho ,faot that. the National Bank own8 Federal , Rerervo rtook. Tho rule or lav In euoh a 0088 88 to United Water bonde owned by a Natloncrl bank vaa stated by ,th8 C,owt . .’ : 0r TQXW in the dam 0r Adair V* Robinson, or oltii A9 oala .1 ,./ 25 ‘8.: If.. 734. Th question before the oourt la that QM@ YOI e rt@tad therola 80 rollowe: The ‘faoto are sot oontrovertod The ‘faoto are sot oontrovertod
“and li &iy quo&ion presented for ow de& “and li &iy quo&ion presented for ow de&
#ion right of the ovnara of the rtock #ion 18 the right of the ovnara of the rtock
or the. bank to ronder the. awio for taxation at or the. bank to ronder the. awio for taxation at
: ‘.‘ftr aotual Y~~UO, lone the amount of the United &ate8 bond8 Andy the legal tender not08 owned,
.’ b thr ba@c oa the I8t day ?r.+naary~ Aa ‘De ._
.1591:. . ..*y I ," .* <, '.
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' The oourt'hald OII follwel !l%crcs is ho decision of that oourt
I.4 .
known to u; whloh tenda to sustain the content&on of eefondcnt II ln ,errorj but, on the contrary, la.
filie oaffo of Vm Nlon v.~Aoa~~~~r, 3 lidll. 573;. , :’ ,it~,ia eqmmily dooided by a majority of the ii. .. supreme cowt of. the, United Etatou, after thor- ‘, :. ‘ough tuul e~hauotive ~dleouoeion of the question; ,,, that it was not tho r&at of the ehareholdare .~. ’
‘.of .a national bank to hem deducted from the ~’
“‘-value of their sham@ of atook, when rendered
to the state offioor for taxation, the drum of
tione;r invested by the bank in United Etatgs bonda. Nor 18 there anything in the deoieionr.
: court of. tu~rome, thla state, that Yo
hare discovered, which coL-stonauoee tho rule for easeermont of chaws cf bauk stook vhlch
,.’ ,~’ ,,the defendants in error contend for, . .~ ,”
In the case of Fimt E!%sional Zank of'C5.m.ioinui~t1, : Chio, 0. Qutir, 246 FM. 163, the shareholders in a Rational bank’oontendsd that the value of the sharer of stock in said : bank must be reduced for etate ad valorem tax purpoaor beoawe’
the bank'r ovqorohip of lahtcrcs of rtock 4~ a Fedorsl Remrvo that 08SO b&k. The oontontlon of the bank’s Wwoholderr’in ~wu” 88 t0110vr 8 *The plal&iff oltiims that the provision8 ‘: #
. .of’riotion 5219, R.8,U.S. (Aot June 3, 1864, d. 106 ( 41, 13 Stat, 111, aa amended Febrmarg .: , .’ ,.lO, 1868 (15 Stat. 34, c. 7)), are so far ro- ealed by oectlon of the Federal Resorve AoC : i, Act, Dee. 23 15113, 0. ..6, 30 Stat. 25 (Omp. St. ‘~ P 1916,’ 1 gSo3j~), that the sharoholdora in the plaintiff be& aro oxenpt fron taxation by via’-
tuo of rootion 7 the last-nmod eat (Corsp,
,, St i 1916 ! 979%) on ao much of ito capital : ,.
8na‘ rurpiur a8 ia, invoated ir, rtook of the
peder0.l ReseHs Bank. '4 telqlorary ul$lnotion~,
: irruod tmeA'the bill Vai filed. "
II w ..**, :. , , .'
:~ *4 Honorabl* i. L. Croaler, page.14
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‘1. . i P6r the subscription. thus made.” thd national bank booomor a 8-c fholder oc rtook- holder In the Fedomil Reserve Dw, but may not. , +nsfer OP hypotheoato lte ahWeaj each of tiLti face value $100. SubaeOtion 3 $a.of’the
,‘, ‘, ~ ,@Otion’ prorldeo that J . wVcdoral Roa’erve D&&a, inolud%
: capital atook and atipluo therein, and the in-
o&a dwivcd thorofrom, ah&l1 bo exmpt from
~eeberal, state, end looal taxation, oxoopt tex- es ,upon red estate, 1”
/
’ Ia tho above quoted portions of the First liatlonal :, Dank Y, Sh.wr oaao it may be soon. that Thor ehmeboldora in the Rational Dwk.vere oonteridlng that the provlnlon.ln Fed- eral Resews Act, vhioh providoa that tho Fodoml ReaOrvo; and tho aurplw therein and : .banklaoludhg stock tho oAplt+l
,lncome dorived tharof’rom voro exempt from Stat0 taxation rO- to rcduoe t&o value of thr qkihwd tho State tw&q authorities .aIqarea of atock.in the plalntlff~a National Bank boo&use ,aa%d ~benk’ovncd eharoa of etook in a Federal Reserve Dank. l’he
oourt @nevered the aontention and stated ae follova~ ,. ’
.“The CJX~llQtfOA ppoildod in .?ootiOa 7 dOOS ‘not extend to national banks orgnnieed undo?
the,lVational DanUng’Lan,’ I&ad Coagmsa Ant&d-
od that their capital otoolr..ehould be relieved
from taxation, it would have oaid 80~
,. *T& stock pkohaeed by the plaintiff ia.
‘the ‘Pedoral Roaervi3 Da& irr but & nontaxable
inveatmont of psrt of its oapltal and aur-
plus. As acrid’ 5n Firlit Hat. Bank vw &bright,
208 u. 8. 48, 553, 20 5up. Qt. 349, 350 (52
,,‘L. zd. 614 J . . n~The’lav does not oonaidez. the xkatuw Of
.I ,a b&k18 investment not texed in f$xing tho Palnor V. Mal&ho~, 1%
~~ ooluo of ts atook.
u.S; 669, lo sug. Ct. 324, 33 Ii. Ed. 772). ’ ,..
:: *5 ‘%hatever value the ohares lsaucd by the :., ,’ ppbfatlff .natiorml benk po~oem, they are :to
., that extont tax&bU in the hand8 of their own-
,.. em .a.nd holdera. Rosonblatt v. Johnrton, 104 Ur. I’ 8. 462, 26 L. Ed. 832~ my, of San Fran- oto., oirob, Y. Croaker-Xoolworth Nnt. Bank (0.0,) .* 92 Fed, 273. The oourte have repeatedly ruled’ ” ‘, .that., IA Sixbig. ‘the value of the shnros OS stock of natlonal bank8 for .tfWng purpof~o8, ”
;, the value due ,t3 the bank’s olmershlp or non-‘,
taxable United Btates~bonda as a part of ltr se, for inntanoe,
..“‘. aaaets must be lnoludod.
Cleveland Trurt Co. v. L!indcr, 184 0.9.. 111, ‘22 8up. Ct. 394 L. Ed, 4%~ Xa or o.~Anwi~' ~"?: ' oan Nat. Bank, i5g Pod. 396, 401, 86 C .C.A. 3?b;c ;, ,, : : _ 6)~ Van Allen,v. Aeaeseorr, 3 Well. (C.0.A. e” 73, 18 L. Ed, 229 Peoplo ve Comlsrionera, ~.. ’ ” *. Well. at pago 25 , 6 18 Lt. Ed. 3441 Nat, Bank Y. Comonvealth, g Wall* at p&8&e 359, 19 II. Et&
.,7Olj Born0 Cavings Bank Ye De* Moines, 205 lJ.8,
’ .at pwoe 528, 513, 27 Bupr. Otr 571, 51 Lr Ed.. ,901. .Tho ~amo rulo~ appllea to nontaxable stook
.,’
e ;y tho plaintiff in tho Fsafwai Roaorvo
The cotit denled the oodtentioa of tho ~rhareholdorr ls tWXiation&l bon4 and held that the mm rulip applied aa $0 .rtook ovned bu the,Natlonal bank in a Federal Roeerve bank ‘&a har beon p:oviouely announoed CtQpma vhere the NatlOn8l
bank ouaed United .Stator bond8 ~8 p8rt pi it8 &88et8r Court or Appeale’ affirmed de0bi081:
ihe Ceoult of the ‘Matriot Court aud utsted ~a Sollow; 1~
“Ne are aatiafled, not only with tho oor- ,,’ reotners OS this oonoluaion; but with the peak aonlng of the opinion on vhloh the conoluaio~
18 baaed, and 8ro oontont to affirm the juds- .~ ‘, ., ment upon that opinion; Uo think its oloar that . . .
Oongreso ihtendcd to place a r.mtlonal bank@ 8
holdingr OS Federal Reeerve Bank rtock ugoa pl+ the, uame beair ar
oieel its’holdingr OS govern- meat. Ii onde, eo r8p ae exemption *iron taxation
~o&rablo it: L. Cro&r, pwe 16 ._ *
,. " ihares of natlonel bank #took held by
“‘,atookholdera therein*” You are therefore’ advised that in the opinion of thla deiartment, the value of ahyea OS atook owned by atook- holdera in a National bank may not be reduood beoauao of the Nationd bank own8 aha??oa of atook in a Pxloral I fiwt~thot Reaewo bank.
We trust that the f6regoing fulli tfnayerr youc la- ‘q&y O?I $hla ptter,
Your8 very truly