Charleston v. People's National Bank. It is not necessary to repeat the facts on which our judgment is to be pronounced, for they are recited in the agreement which precedes this opinion. The ordinance of the city council imposed the tax "on the shares in the hands of its shareholders, respectively" (§ 22, p. 96, city ordinances, 1859-70), and if the shares upon which it is claimed the proposed tax is to operate can be comprehended within its terms, the judgment of the Circuit Court must be affirmed. The institution in question was established and organized as one of the National banks, under the act of Congress of 3d June, 1865, "to provide a National currency secured," etc. (13 U. S. Statutes, 99). For its formation it was necessary that a certificate should be prepared and filed with the Comptroller of the Currency at Washington, which should contain, among other things, a specification of the amount of its capital stock, and the number of shares into which it was to be divided. This is the evidence of the amount of such capital stock and its distribution into shares, and these last are then fixed, designated and known at the bureau of currency by the record preserved in the proper office thereof. The act further provides by its 13th section, page 103, "for an increase of the capital from time to time, provided that the maximum of such increase shall be determined by the Comptroller of the Currency; and no increase shall be valid until the whole amount of such increase shall be paid in, and notice thereof transmitted to the Comptroller, and his certificate obtained, specifying the amount of such increase of capital stock, with his approval thereof, and that it has been duly paid in as a part of the capital of such association." The argument, on the part of the respondent, proceeds upon the ground that the proposed increase of the capital by the said twentyfive hundred shares was effected by the subscription to that extent, and the acceptance of certain securities therefor, held by the cashier in trust for the association. If this is well founded, then the increase does not depend on a compliance with the conditions expressed in the act of Congress, but on arrangements which the shareholders, originally organized under it, may make with third persons, in the face of the very law to which they owe the existence of their association, and under which, it is to be assumed, they are at least to carry out the obligations which it imposes. The error is in the attempt to give force to these shares as valid Charleston v. People's National Bank. and properly constituted shares of the association, before the approval of the Comptroller, when, in point of fact, the increase of the capital depended upon it. The resolution on the 1st day of July, 1871, to increase the number of shares, by its very terms, made it dependent on such approval. Until obtained, the capital remained as originally fixed. The act of the stockholders to that end was no more than a proposition among themselves, the effect of which was subject to the assent of the higher authority designated by the act of Congress. A solution of the proposition may be tested by the inquiry, whether, if before the 7th January, 1872, any one of the so-called stockholders could have required the association to issue a certificate for the shares so agreed to be taken by him. Only one answer could be given to it, and that, it appears to us, would conclude the respondent from imposing the tax, which must be upon shares of the capital stock, which, before the 7th January, 1872, was limited to the amount originally allowed by the certificate of organization. It is supposed that these additional shares are subject to the tax because the $250,000 which they represent was actually paid before the 1st of January, 1872, and a semi-annual dividend declared and paid on them for the half year then ending. The ordinance in question "imposed the tax on taxable property within the said city in the hands of tax payers on 1st January, 1872." The proposed increase of the capital was required by the act of Congress to be paid in as a precedent condition, on the performance of which the approval of the Comptroller depended. If he had withheld it, the very requisite which was necessary to make the money deposited the medium through which the certificates of the additional shares could of right be demanded, was wanting. That the money thus subscribed remained in possession of the bank, and that those who had advanced it, received on 7th January, 1872, a dividend for the half year ending on the first day of the said month, in common with the original stockholders, cannot affect the question. The original stockholders could apply the profits of the bank at their own pleasure, and if those who were interested in restricting the application of the dividends to the original stock do not complain, their want of objection cannot convert what must be considered as mere proposals for stock into valid and legal shares. The tax is not on the dividend, but on the share. The view which the Comptroller of the Currency took of National Bank of Chattanooga v. Mayor. the liability of the said twenty-five hundred shares to the tax of the government is clear, from the fact that although the said banking association, on 3d January, 1872, returned to him, subject to taxation by the government, only seven thousand five hundred shares, he imposed no tax beyond them, and accepted the said return payment as a compliance with the law. While we are in no way bound by his decision, it cannot prejudice our conclusion, that the public officer charged by Congress with the duty of estimating the capital of these associations, on which the United States tax was to be laid, on the same facts before him, with the knowledge of the further extension of the capital of this bank, did not exact any tax on the said twenty-five hundred shares. The answer of the court is, that the city council of Charleston did not have the right to levy the tax on the twenty-five hundred shares under the facts stated. The judgment of the Circuit Court is, therefore, reversed. Judgment reversed. NATIONAI BANK OF CHATTANOOGA V. MAYOR. (8 Heiskell, 814.) National banks not liable to privilege tax. National banks are not liable to a privilege tax imposed by city ordinance on occupations and business transactions although" banks and banking" are in terms included. A PPEAL by complainant from the decree of the Chancery Court at Chattanooga, dismissing bill on demurrer, April Term, 1875. D. M. KEY, Ch. Wheeler & Marshall, for complainants. G. A. Wood, for defendants. NICHOLSON, C. J., delivered the opinion of the court. This bill is filed in this case to enjoin the enforcement of a distress warrant, issued by the corporate authorities of Chattanooga National Bank of Chattanooga v. Mayor. against the First National Bank, for failing to pay a tax of $100, assessed by them on the privilege of banking. The bill was demurred to on several grounds, and the demurrer sustained and the bill dismissed. The National Bank has appealed. The charter of the city of Chattanooga authorizes its municipal authorities to levy and collect taxes on all privileges taxable by the laws of the State. By section 46 of the act of 1873, chapter 118, it is enacted, "that the occupation and business transactions that shall be deemed privileges, and be taxed, and not pursued or done without license, are the following," and among others, "banks and banking." By this enactment, the occupation of banking is forbidden, except upon license issued, and then it becomes a privilege and subject to taxation. If under this act, banking is taxable as a privilege, by the State, then the corporation of Chattanooga had the power to levy the tax complained of. We think it manifest that it was not the intention of the Legislature to subject the National banks to taxation for the exercise of the privilege. To constitute a privilege, the occupation or business transactions must be such, that the Legislature could forbid it to be pursued or done, and which could only be pursued or done, under a license issued by the authority of the State. The Na- · tional banks are authorized to pursue their banking business by virtue of acts of Congress. As the Legislature has no power to prohibit the exercise of the privilege so conferred by Congress, it would seem clear that it was not in their contemplation to include National banks among the privileges to be taxed. It follows that the corporate authorities of Chattanooga had no power to tax the First National Bank as a privilege, and that the distress warrant was illegally issued and is void. The bank might have proceeded by certiorari and supersedeas, to have the warrant quashed, but it is well settled that the Chancery Court has jurisdiction, to declare void, judgments rendered without authority, and to enjoin process issued thereon. The decree sustaining the demurrer is sound, and the cause remanded for answer and further proceedings. The costs of the court will be paid by the defendant. Wiley v. The First National Bank of Brattleboro. WILEY V. THE FIRST NATIONAL BANK OF BRATTLEBORO. (47 Vermont, 546.) National banks - Special deposits for safe-keeping. The taking of special deposits, to keep merely for the accommodation of the depositor, is not within the authorized business of National banks; and the cashiers of such banks have no power to bind them on any express contract accompanying, or any implied contract arising out of, such taking. (See note, p. 911.) A CTION on the case with a count in trover for certain United States bonds. Plea, the general issue. The plaintiff's evidence tended to show that defendant was a National bank organized under the act of Congress of June, 1864, known as the "National Currency Act;" that in January, 1869, he delivered, at their banking-house in Brattleboro, to S. M. Waite, the cashier, United States bonds of the value of $2,400, and received a written receipt therefor, as follows: "THE FIRST NATIONAL BANK OF BRATTLEBORO. "BRATTLEBORO, VT., Jan. 8, 1869. "Lucius L. Wiley has deposited in this bank twenty-four hun-, dred dollars of 5-20s, 1867, for safe-keeping, as a special deposit. "S. M. WAITE, C." July 1, 1869 That at the several dates minuted on the margin of said paper, he called at said bank and said Waite paid him the interest on said bonds and entered said memoranda on the margin of the paper; that in August, 1871, he presented said receipt to said Waite at said. bank, and demanded said bonds of him; that said Waite did not then, nor had he since, delivered said bonds to the plaintiff; that some time before said demand was made, said Waite informed him that said bonds had been stolen the June before. The defendant offered no evidence, and declined to go to the jury with any question of fact, but asked the court to hold as matter of law that under said act of Congress National banks could not be held liable for special deposits; that said Waite could only bind himself, and |