Case ID: us_74/html/0694-02.html
Source: Caselaw Access Project
Author: {"author": "\n      Mr. Justice SWAYNE", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Austin v. The Aldermen.
    ' If a State statute, passed in professed exercise of an authority given by Con- ■ gress to the States to pass such, a statute, does not deprive, contrary to the act of 'Congress, the-party to the suit, of any right, nor work, as to him, any effect which the act of Congress’forbids, this court cannot, oh the case being brought here by such party, on the ground that the State statute .violated the act of Congress, declare the State statute void.
    
      Nor, in'considering whether the act'does or does not do this, will this court enter upon the question, whether, in another caso arisi.ng upon a different state of facts from that of the case' before it, the statute might not produce.results in conflict .with the apt of Congress, and''which this 1 court would therefore be bound to revise and correct.
    'Error to the Supreme Judicial Court óf Massachsetts.
    The case was this: By a true interpretation of the rights of the Federal government, as settled by/this court, the States have no right to tax its means and. instruments of government. However, Congress, in’ creating the associations known as,National banks — tpid by a statute which obliges the parties applying for banking privileges to designate the “particular.county and city, town or village,”, where the business of the association is to be carried on* — made a proviso, in these words, as to the right of the States to . tax them:
    
    “ Provided, that nothing .in-this act. shall be construed tó prevent all the shares in any of the said associations, held by any person, from being included in the valuation.of the personal property of such person, in the assessment of taxes imposed, by or under State authority,'a* the place where such hank is located, and, noi elsewhere,” &c*
    In .exercising ór attempting to exercise the authority thus conferred, Massachusetts — in which State many of these associations were, and under whose system of taxation it is the practice to include in the valuation of the personal property belonging to its taxable citizens, everything of that nature, which they, own in any place whatever — enacted a statute thus (act of May. 15, 1865, ch. 242):
    “' The assessors of each city and town, in which any shareholder t;. such association resides, shall include all shares in such associations held, by persons resident and liable to taxation in said city or town, in the valuation of the personal property of such person,, for the assessment of all taxes imposed and levied in said town by authority of law, to.be assessed,” &e.
    
      In this condition of the statutes,'Federal and State, the assessors of Boston valued and assessed the bank shares of Austin, living in Boston, and being the owner of stock in six banks,situated there. He objected to this, because, as lie maintained, the Massachusetts act, under which it purported to be "done, did not conform to the limitation of the act of Congress, as to the place of taxation; that is to say, he maintained, that the State law, in order to conform to this limitation, should have-authorized the assessors to include the shares of the National banks in the valuation of the personal property of the holders only in the place, i. e., in the city, county or village where the banks were located; whereas the State ■ law had disregarded the.limitation as to place, by requiring the assessors to include these shares in the valuation, not in .the city, town .or village only where the bank is-located, but elsewhere, to wit, in the town 'where the shareholders reside; and so that, under the State act, shareholders in the National ■ banks, residing in cities, towns, or villages where no banks were located, might be assessed there for shares which they owned in banks located in cities, towns, or villages where they-do not and never did-reside.
    On suit brought against him by the Aldermen of Boston, for the tax which the city assessors had assessed on his bank stock in Boston, the Supreme Court of the State decided, that-the true construction of the proviso did not confine the assessment of the tax to the place where the bank was located, and that it merely required that the tax, to be valid, . should be imposed under the State authority existing at the place where it was thus.located; 'in other words, “that, the reference in the proviso to the place where the bank is located, was designed to define the State authority-which was 1 t,o be. allowed to impose a tax, and not to limit the place of-assessment.”
    It will, of course, be observed by the reader — whether this interpretation-of the act was well founded, or whether the one of Austin was right — that—assuming the State act to be valid at all — so far as Austin was concerned, no practical injury was done him, he residing in Boston, and all-the banks in which he had stock being situated there; or in other words, that had the State act conformed to the proviso of the act of Congress, as interpreted by him, the result, to him, would have been the same, though it might not have been' to persons living out of Boston, and having'stock, in banks in. that city.
    The case was now here under the twenty-fifth section of the Judiciary Act, whichf givés a right of review here to a party where there has been drawn in-question in the highest court,, the validity of a statute of a State as being repugnant to a law of the United States, and the .decision has been in favor of such validity.
    
      Mr. I. J. Austin, for the plaintiff in error,
    argued that the only question before this court, was this precise one,-viz., whether the construction put, by'the Supreme Court of the State, upon the proviso, was right? In other, words, with what intention did Congress use the phrase, “place where such bank'is located ?” Did that word there signify the.State, territory, or district, or,did. it signify the particular city, town, or village in which a National bank was located ? The position of the learned counsel was in favor of the last view, and in support of it he submitted various propositions in opposition to the view of the court below.
    If, then, the State act did not conform to the permission or proviso of the act of Congress, it mattered not whether Austin was or was not worse off than if it had conformed. The State act was void, and the assessment and tax laid under it.was void also. And Austin had a right to have the judgment below reversed, in order that he might have a trial of his rights, without prejudice from any influence which an erroneous construction of an act of Congress might be presumed to have had on the court.
    
      No argument on the other side.
    
    
      
       13 Stat. at Large, 112.
    
    
      
       Austin v. The Aldermen, &c., 14 Allen, 359-365.
    
   Mr. Justice SWAYNE

delivered the opinion of the qouit..

This case is brought before us by a writ of error, issued pursuant to the twenty-fifth section of the Judiciary Act of 1789.

The legislature of. Massachusetts, by a statute passed on the 15th of May, 1865 (ch. 242), provided for “the taxation of shares in associations for'banking, established .under the laws of the United States,” and prescribed the mode of procedure for that purpose. The statute is confined, to such associations in that State, and to shares ‘held by persons living within its limits. The third section enacts that the assessment for taxation shall be made where the shareholders reside.

The proviso in the act of Congress which permits the shares to be taxed by the States, requires, them to be included “in the valuation of the personal property” of the holder, “in tpe assessment of taxes imposed by or under .State,- authority, at the place where' such bank is located, and-not elsewhere.” There are other regulations upon the subject, but they do not affeef the point to be considered, and need not to be more particularly adverted to.

The plaintiff in error lived in Boston, and was the owner 'of stock in six National,banks there situated, and the valuation and assessment were there made.

It is pot denied that this was in conformity to the act of Congress, but it is insisted that the taxes assessed were illegal' and void, because the statute of the State requires that they shall be assessed at the place of the residénce of the shareholder, without reference to the locality of the bank.

The only question of Federal jurisdiction,.and of which this court can take cognizance is, whether the plaintiff in eri-or has been deprived of any right, contrary to the act of Congress, upon which he relies for protection.

• The facts bring the case within the terms of the act,-according to the strictest construction which cau be given to .them. This is conclusive of the case. Whether, in another case, arising upon a different'-state of facts; the. statute .¡may not produce results in conflict with the abt of Congress, and-which this court will therefore be bound to revise and correct, is an inquiry upon which we are' not called to enter. We .can' only-consider the statute .-in connection- with the case before us. 'Having ascertained that it has wrought no effect-which the act forbids,.our jurisdiction -i^ at ah.end1: The twenty-fifth section,,of the Judiciary-'Act'is explicit upon the subject.. ..

.The r'ght of taxation,; ,wherp it exista, is necessarily unlimited in its nature. -It carries with if iohefeutly, the power to embarrass and destroy.'

' It is Well settled that the States cannot- exercisp this du-1 thouity in.respect; to any of the, instrumentalities Which the general government may Create, for-the performance pf its .constitutional'functions. It- is equally,well settled, .that this exemption..may be "waived- wholly, or with such limitations and, qualifications/as may be deemed proper, by the láwmaking-power of the nation; /but-the waiver must, be clear; and every well-grounded doubt upónéthe- subject shopld be, resolved in favor of the exemption.

In respect to the elass.of cases to which the ope. before us, belongs, the jvaiver is expressed in.'clear and- Pqmistak'able language,.'

Important questions have arb m as to the construction and 'effect of-the permission given to tax, by'the act of Congress, under consideration, with reference to the-national securities .held' by the banks. - These questions have been settled by this court in repeated decisions.

In this case, the only question open for our .examination ■ must, for the reasons before stated, be resolved against the plaintiff in error.

Judgment xeeirmed. 
      
       Act of June 3, 1864, ch. 106, § 41, 13 Stat. at Large, 112.
     
      
       Van Allen v. The Assessors, 3 Wallace, 573; The People v. The Commissioners, 4 Id. 244; Bradley v. The People, Id. 459.