Bressler v. Wayne County.

error was and had been a resident of the precinct of Wayne, Wayne county, Nebraska, and was on the said date the owner of two hundred and twenty-nine shares of the capital stock of the First National Bank of Wayne county, Nebraska, of the par value of $100 each, of the total value of $22,900. Said bank is a corporation duly organized and existing under and by virtue of the laws of the United States, under the act known as the National Bank Act. U. S. R. S., 1874, tit. 82. On or about the 1st day of April, 1887, the plaintiff in error gave a list of his taxable property to the assessor of Wayne precinct, which list included the number of shares of said stock first mentioned, and at the same time gave to such assessor a list of debts owing by him, duly sworn to, amounting to $14,200, and asked that the lastmentioned amount be deducted from the value of the bank stock owned by plaintiff in error, he having no other credits from which he could deduct such indebtedness, and that he be taxed and assessed only upon the residue of said shares, viz., eightyseven shares. The assessor refused to allow such deduction, and returned and assessed against plaintiff in error the whole number and amount of said shares, such shares being assessed at $25 each, without deducting the indebtedness referred to. On the 6th day of June, 1887, plaintiff in error appeared before the board of county commissioners of Wayne county, sitting as a board of equalization, and made application to have his assessment corrected by allowing him the deduction for debts, owing, as before mentioned, which application and request was by said board refused. On the 16th day of January, 1888, said plaintiff in error filed a petition in error in the District Court of Wayne county, and the same question was submitted to the court, and the decision of the county board was by that court affirmed. Plaintiff now assigns the said ruling of the District Court as error, and claims that he should be, and by law is, entitled to deduct from the value of his shares of stock in said National bank his bona fide debts, and he be taxed only upon the residue. Section 27, chapter 77, of the Compiled Statutes, entitled "Revenue," and under which the right to offset plaintiff's indebtedness is claimed, is as follows: "In making up the amount of credits which any person is required to list for himself, or for any other person, company or corporation, he shall

Bressler v. Wayne County.

be entitled to deduct from the gross amount of credits the amount of all bona fide debts owing by such person, company or corporation to any other person, company or corporation for a consideration received, but no acknowledgment of indebtedness not founded on actual consideration, believed, when received, to have been adequate, and no such acknowledgment made for the purpose of being so deducted, shall be considered a debt within the meaning of this section; and so much only of any liability as surety for others shall be deducted as the person making out the statement believes he is legally and equitably bound and will be compelled to pay on account of the inability or insolvency of the principal debtor; and if there are other sureties, who are able to contribute, then only so much as the surety in whose behalf the statement is made will be bound to contribute; provided, that nothing in this section shall be so construed as to apply to any bank, company or corporation exercising banking powers or privileges, or to authorize any deductions allowed by this section from the value of any other item of taxation than credits." The proviso at the end of the section has no bearing upon this case, as the law for the taxation of banks is to be found elsewhere in the chapter referred to. It is provided by section 5219 of the Revised Statutes of the United States, that the taxation of shares in National banks shall not be at a greater rate than is assessed upon moneyed capital in the hands of individual citizens of the States where the banks are located. The statute of the State of New York governing the assessment of property required the board of assessors to prepare an assessment-roll, in which there shall be set opposite the name of each tax payer (1) all his real estate liable to taxation, and its value; (2) the full value of all his personal property, after deducting the just debts owing by him. The Court of Appeals of that State held, in People v. Dolan, 36 N. Y. 59, that by that section, and another which need not be here copied, no deduction from the value of shares of National bank stock could be made on account of indebtedness of the tax payer. But in Supervisors v. Stanley, 105 U. S. 305; ante 33, the Supreme Court of the United States held otherwise, and refused to accept People v. Dolan as authority. In the case of Hills v. Bank, 105 U. S. 319; ante 45, the same conclusion was reached; and in Bank v.

Bressler v. Wayne County.

Britton, from Indiana, 105 U. S. 325; ante 48, under a statute of that State, almost like our own, the doctrine was reaffirmed; and it was there held "that the taxation of bank shares by the Indiana statute, without permitting the shareholder to deduct from their assessed value the amount of his bona fide indebtedness, as in the case of other investments of moneyed capital, is a discrimination forbidden by the act of Congress."

In the following cases it has been held by the Supreme Court of the United States that the authority of the States to tax the shares of National bank stock is derived wholly from the act of Congress permitting it, and that without the consent of Congress such bank stock shares could not be taxed by State authority at all. McCulloch v. Maryland, 4 Wheat. 316; Osborn v. Bank, 9 id. 738; Weston v. Charleston, 2 Pet. 449; People v. Weaver, 100 U. S. 539-543; 2 Nat. Bank Cas. 57. By this it will be seen that the question for decision is not one of the construction to be placed on a law of this State but upon, a law of Congress, thus becoming a Federal question, upon which the Supreme Court of the United States is the court of last resort, and therefore binding on us. The same question was before the Supreme Court of Indiana in Wasson v. Bank, 8 N. E. Rep. 97; and the rule of the Supreme Court of the United States in the cases cited was followed. In that case it is said: "There can be no doubt that under these decisions all credits of whatever nature, which includes the credits from which the tax payer may deduct his bona fide debts, as here decided, whether interest-bearing or not, are moneyed capital, in the sense in which the term is used in the act. And under these decisions, also, statutes which allow the tax payer to deduct his debts from such moneyed capital, and deny this right to the holders of shares of National bank stock, must yield to the paramount act of Congress, which inhibits such discrimination." Substantially the same question was decided by the Supreme Court of California in Miller v. Heilbron, 58 Cal. 133; ante 330, in the same way. See also Ruggles v. Fond du Lac, 10 N. W. Rep. 565; Richards v. Rock Rapids, 31 Fed. Rep. 505; Whitbeck v. Bank, 127 U. S. 193; 8 Sup. Ct. Rep. 1122; ante 309; Bank v. Paducah, 5 Cent. L. J. 347; 1 Nat. Bank Cas. 300; 2 Flip. 61. In addi

Norton v. Derby National Bank.

tion to the fact that we are bound by the decisions of the Supreme Court of the United States as being the supreme law of the land, many of the State courts have, as we have seen, adopted the same rule. The judgment of the District Court is therefore reversed, and the cause remanded for further proceedings in accordance with law.

The other judges concur.

NORTON V. DERBY NATIONAL BANK.

(61 N. H. 589; 60 Am. Rep. 334.)

Guaranty by bank of contract between third persons.

No action may be maintained against a National bank upon a contract made by its cashier on its behalf to guarantee a contract between third persons for delivery of building materials.

A

CTION on a guaranty. The head-note and opinion show the necessary facts.

Wiggin & Fuller, for plaintiff.

G. C. & G. K. Bartlett, for defendants.

ALLEN, J. The defendants' cashier had no authority to make the guaranty, and there was nothing in the acts, conduct or course of business of the defendants' officers, by which he was held out as having authority to make it. The guaranty itself being false and a fraud upon both parties, the cashier undertook to cure one fraud by committing another, and recorded a false vote of authority to make the guaranty, and certified the false record to the plaintiff.

Had the forged record been a true one; had the directors voted as the record and certificate declared, or had they made the guaranty themselves, the defendants could not have been bound by their action, for a guaranty of that kind would have been beyond the scope of their powers. The power of corporations is limited

Norton v. Derby National Bank.

by the purposes for which they are created, and which are named in the charter or act authorizing their existence. National banks derive their powers from what is known as the National Banking Law (act of Congress, June 3, 1864, U. S. R. S., title 62), declaring that any association organized under the act shall be a body corporate, and

"may exercise by its board of directors, or duly authorized officers or agents, subject to law, all such incidental powers as may be necessary to carry on the business of banking, by discounting and negotiating promissory notes, drafts, bills of exchange and other evidences of debt; by receiving deposits; by buying and selling exchange, coin and bullion; by loaning money on personal security; and by obtaining, issuing and circulating notes according to the provisions of this title."

Real estate may be purchased and held for immediate accommodation in the transaction of business, and received in the collection of debts, and as security for previous indebtedness. U. S. R. S., §§ 5136, 5137. The power given by the law is to carry on the banking business, and includes such incidental powers as may be necessary to effect that object. It is nowhere mentioned that a bank may guarantee the performance of written contracts made for other purposes than the payment of money or the transfer of securities. If in the course of their business, the bank find it necessary to indorse for transfer, or otherwise specially guarantee negotiable commercial paper (People's Bank v. National Bank, 101 U. S. 181; 2 Nat. Bank Cas. 97), it will not be claimed that the guaranteeing of other written contracts is included within any of its powers, general or special, or is necessarily incidental. It is no part of the business of a bank, nor necessarily incidental to. it, to guarantee a building contract, or one for furnishing building materials; and the defendants had no power to make the guaranty which is the subject of this action.

The plaintiff claims that the defendants are liable, because it was the duty of their cashier and clerk to record the votes and official acts of the directors, and the bank are bound by the false record as if it were true; or that the plaintiff in good faith parted with her property, relying upon the strength of the record and the guaranty, and the defendants are estopped from denying the truth of the record and the validity of the guaranty. The doctrine that principals are bound or made liable for the wrongs done VOL. III-72.