National State Bank of Oskaloosa v. Young.

but this does not render it unconstitutional or invalid. It is impossible to so frame a law for the assessment and collection of taxes, as that it will not in some cases work a hardship. Says Mr. Cooley (Const. Lim. 513): "Absolute equality and strict justice are unattainable in tax proceedings. The Legislature must be left to decide for itself how nearly it is possible to approximate so desirable a result. It must happen under any tax law that some property will be taxed twice, while other property will escape taxation altogether. * * * Nevertheless, no question of constitutional law is involved in these cases, and the legislative control is complete."

In this case, if the plaintiff had acquired the money after the 1st of January, and purchased the stock after the 1st of April, he would have escaped municipal taxation on either for that year. But as he owned the money at the time it was assessed to him, and the stock at the time that was assessed to him, we see no legitimate way in which he can escape payment of the assessment on both. If the plaintiff is not liable for the tax on the stock for the year 1873, then the stock escapes municipal taxation altogether for that year.

The petition for a rehearing is overruled.

NATIONAL STATE BANK OF OSKALOOSA V. Young.

(25 Iowa, 311.)

Taxation of personal property of National banks.

The personal property and assets of National banks, such as safes, office furniture, etc., are not taxable.

BILL

ILL in chancery to enjoin the collection of a certain tax alleged to be illegally assessed against plaintiff, upon $61,260 of personal property.

Decree in the District Court perpetually enjoining the collection of the tax.

Defendant appeals.

National State Bank of Oskaloosa v. Young.

Z. F. Fisher, for appellant.

Seevers & Cutts, for appellee.

BECK, J. The cause was before us at the June term, 1867, upon the appeal of the defendant, from an order overruling a demurrer to plaintiff's bill. The judgment of the District Court was affirmed and the cause remanded. Upon a trial, the defendant having answered the petition, a decree, as prayed for by plaintiff, was entered, and defendant again appeals to this court.

The plaintiff is a banking association, organized prior to January 1, 1866, under the act of Congress of June 3, 1864, with a capital stock of $100,000. It was assessed for taxation, for the year 1866, in the sum of $61,260, upon personal property, by the assessor, and return of such assessment duly made. The basis of this assessment appears to have been the capital stock of the bank, after deducting the value of government bonds deposited with the Treasurer of the United States, and real estate held by the bank. The plaintiff claims that, under the decision of this court, the assessment is illegal, the capital stock not being subject to taxation. See Hubbard v. Supervisors of Johnson County, 23 Iowa, 130.

The defendant maintains that, while the capital of the bank is not subject to taxation as such, yet personal property held by it is liable to taxation, as like property held by other incorporations or citizens of the State, and that all such property or means of the bank, excepting United States bonds, are taxable as personal property. In other words, that the safes, office furniture, cash on hand and due from other banks, bills discounted, etc., etc., which make up what is called assets, are subject to taxation.

The case presents the question as to what extent the National banks are subject to taxation by the State and involves the construction of the act of Congress creating them.

It is proper to remark, that, under the theory of defendant's counsel, which is in effect that the property of the bank should be assessed as other property, his estimate of the amount or value upon which tax should be paid is erroneous and would operate most unjustly. The cash on hand, cash items, bills receivable and amounts due from other banks, under his view of the law, should be assessed as moneys and credits; if that be so, from the amount thereof the bona fide debts of the bank, such as the amount due depositors and the circulation, should be deducted. But the bank

National State Bank of Oskaloosa v. Young.

is charged in making the assessment with all its cash and credits, but no deduction is made for its debts. This is in violation of the rule which is advocated by defendant's counsel.

Section 41 of the act of Congress, approved June 3d, 1864, authorizing the organization of National banks, provides that, "in lieu of all existing taxes every association shall pay to the Treasurer of the United States" certain duties upon its circulation, deposits, and capital stock not invested in United States bonds, and in these words: "That nothing in this act shall be construed to prevent all the shares of said association held by any person or body corporate, from being included in the valuation of the personal property of such person or corporation in the assessment of taxes imposed by or under State authority, at the place where such bank is located, and not elsewhere, but not at a greater rate than is assessed upon other moneyed capital in the hands of individual citizens of such State." * "Provided, also, that nothing in

this act shall exempt the real estate of associations from either State, county, or municipal taxes to the same extent, according to its value, as other real estate is taxed."

From the payment of what taxes does this act exempt these associations? The language of the act replies in explicit terms, "all existing taxes," that is, all actual assessments for revenue that are denominated taxes. The terms include all State, county or municipal taxes. The power of Congress thus to legislate is not doubted, and we are not aware that it is denied. That such was the intention of Congress is most apparent from the language of the section above quoted, as well as from the context. The shares of the bank, and not estate owned by it, are excepted from the exemption by express words, and the State is permitted to tax such property. The express grant of this power to tax specific property is conclusive evidence of the intention to withhold the power to tax other property. Expressio unius est exclusio alterius. Neither are the taxes from which the banks are exempt such as may be levied upon particular kinds of property or in a particular manner, but all assessments for revenue that may be intended by the general term "taxes," are included within the language of the law.

We conclude, therefore, that no revenue can be collected by a State, county or municipality from banks organized under this act, except by assessments upon their shares and real estate. This conclusion we conceive to be consistent with just and equitable taxa

Turner v. The First National Bank of Keokuk et al.

tion. The shares of the stockholders represent the capital of the institution. To tax the shares and also the property of the bank would be double taxation.

A and B are equal partners in a mercantile firm, with a capital of $100,000 invested in goods. It would be gross injustice to require each partner to pay taxes on $50,000 for his interest in the firm, and to tax the firm on $100,000 for the goods in which the capital is invested. Now, the interest which the partner has in the firm is precisely the same that the stockholder has in the bank, which is called shares. It would be double taxation and gross injustice to assess taxes on both the shares and the property which those shares represent.

The defendant insists that the plaintiff did not make a proper application to the supervisors for the correction of the assessment roll, and cannot, therefore, have relief in this action. Without determining that such an application was necessary, we find by the evidence that it was made.

The cashier of defendant, upon application of the assessor, rendered a sworn statement, from which the assessment was made. It is claimed by defendant's counsel that plaintiff is thereby estopped to deny the correctness of the assessment and tax; this by no means follows. It does not appear that the cashier intended to bind plaintiff to pay the tax, or if he so intended, that he had the power so to do.

The decree of the District Court is

Affirmed.

TURNER V. THE FIRST NATIONAL BANK of Keokuk et al.

(28 Iowa. 562.)

National banks: Suspension of - What are debts against Parties.

Under section 50 of the act entitled "An act to provide a National currency," etc., the assets in the hands of the receiver of a bank that fails are, when reduced to money, to be ratably divided and appropriated to the payment of all legal liabilities of the association, whether such liabilities are debts, technically so called, or result from the non-feasance or malfeasance of the association

Turner v. The First National Bank of Keokuk et al.

in respect of its binding obligations and duties-as from its failures while in possession of bonds left by an individual with it on special deposit or for safe-keeping.*

In a proceeding for the adjudication of a claim against a National bank that has suspended, the receiver appointed under the National Banking Act may be properly joined as a party defendant.

* Section 50 of the National Banking Act is substantially repeated in the Revised Statutes, sections 5234 to 5237 inclusive. By section 3 of an act of Congress approved June 30, 1876, it is provided as follows:

"SEC. 3. That whenever any association shall have been or shall be placed in the hands of a receiver, as provided in section fifty-two hundred and thirtyfour and other sections of said statutes, and when, as provided in section fiftytwo hundred and thirty-six thereof, the Comptroller shall have paid to each and every creditor of such association, not including shareholders who are creditors of such association, whose claim or claims as such creditor shall have been proved or allowed as therein prescribed, the full amount of such claims and all expenses of the receivership, and the redemption of the circulating notes of such association shall have been provided for by depositing lawful money of the United States with the Treasurer of the United States, the Comptroller of the Currency shall call a meeting of the shareholders of such association by giving notice thereof for thirty days in a newspaper published in the town, city or county where the business of such association was carried on, or if no newspaper is there published, in the newspaper published nearest thereto, at which meeting the shareholders shall elect an agent, voting by ballot, in person or by proxy, each share of stock entitling the holder to one vote; and when such agent shall have received votes representing at least a majority of the stock in value and number of shares, and when any of the shareholders of the association shall have executed and filed a bond to the satisfaction of the Comptroller of the Currency, conditioned for the payment and discharge in full of any and every claim that may hereafter be proved and allowed against such association by and before a competent court, and for the faithful performance and discharge of all and singular the duties of such trust, the Comptroller and the receiver shall thereupon transfer and deliver to such agent all the undivided or uncollected or other assets and property of such association then remaining in the hands or subject to the order or control of said Comptroller and said receiver, or either of them; and for this purpose, said Comptroller and said receiver are hereby severally empowered to execute any deed, assignment, transfer, or other instrument in writing that may be necessary and proper; whereupon the said Comptroller and said receiver shall by virtue of this act be discharged and released from any and all liabilities to such association, and to each and all of the creditors and shareholders thereof; and such agent is hereby authorized to sell, compromise or compound the debts due to such association upon the order of a competent court of record or of the United States Circuit Court for the district where the business of the association was carried on. Such agent shall hold, control and dispose of the assets and property of any association which he may receive as hereinbefore provided for the benefit of the shareholders of such association as they, or a majority of them in value or number of shares, may direct, distributing such assets and property among such shareholders in proportion to the shares held by each; and he may, in his own name or in the name of such association, sue and be sued, and do all other lawful acts and things necessary to finally settle and dis