DETERMINATION OF THE TAXABLE VALUE OF BANK ASSETS.

Court of Appeals for Clermont County.

#### The Milford National Bank, of Milford, Ohio, v. Cleona Searles, Auditor of Clermont County, Ohio, et al.

Decided, October, 1917..

’ *Taxation—Value of Bank Assets, How Determined—Valuation of Beal Estate as Shown by the Bank’s Books Should be Used Instead of that Shown by the Tax Duplicate, When.*

Where real estate belonging to a bank is carried on its books at a ;■> valuation less than that appearing on the tax duplicate, the auditor or tax commission in considering the value of the bank’s resources for the determination of the tax, value of its shares are justified in.adding to the net resources shown in its •' report, the amount such valúe of the real estate ás it appears " on the tax duplicate exceeds its value as shown on the books • of the bank.

*D. W.,Murphy,*for Plaintiff.

. *Joseph McGhee*and *Charles G. White,*contra.

In May, 1916, the cashier of the Milford National Bank duly filed with the county auditor of Clermont county in accordance with Section 5411, General Code, a sworn statement'of the resources and liabilities of said bank with a detailed statement of the names and holdings of the several stockholders therein.

This statement showed that the stock was divided into 600 shares of the par value of $100 each, and'for the purpose of fixing the value thereof showed that the bank had capital stock, $60,000; surplus, $60,000; undivided profits, $5,450; unpaid ‘ dividends, $730,'making a total of $126,180.

■ Included in the resources of the bank making up this sum was the real estate investment consisting of the banking house owned - by'the bank,"in whieh it did business, which was carried on'the *408’books of the bank at a valuation of $20,000, as set out in said statement. This real estate was listed for taxes as such, on the real estate tax duplicate of said county, at a valuation of $25,080.

To fix the total value of the shares of stock in said bank the county auditor, acting by virtue of Section 5412, General Code, deducted from said total of $126,180 said real estate value of $25,080 and thus fixed the taxable valuation of said shares, excluding real estate, at $101,100.

'The county auditor thereupon transmitted to the tax commission a copy of such report with the valuation of such shares so fixed 'by him. And the tax commission, in due course coming to act on such valuation and return under the provisions of Sections 5619 and 5620, General Code, made an addition to the total valuation of $126,180 as fixed by the county auditor, of the sum of $4,530, and fixed the total valuation of said shares of bank stock at $130,710.

The amount of this addition is the difference between the valuation of the real estate of the bank as carried on its books and shown in its statement, viz., $20,000, and the. valuation as it stands on the tax duplicate, viz., $25,080, which is $5,080. But from this sum, however, the tax commission deducted an item, shown in the statement,’ bf "current expenses and taxes paid, $550,” making the net addition the sum of $4,530.

Plaintiff -seeks an injunction against the collection of taxes upon this increase.

Per Curiam.

The decision of this case involves a construction of Section 5412, General Code:

"Upon receiving such report the county auditor shall fix the total value of the shares of such banks, and the value of the property representing the capital employed by unincorporated banks the capital stock of which is not divided into shares, each, according to their true value in money, and deduct from the ■ aggregate sum so found, of each, the value of the real estate in- . eluded in the statement of resources as it stands on the duplicate. Thereupon he shall make and transmit to the annual *409state board of equalization for banks a copy of the report so made by the cashier, manager or owner, with the valuation of .such shares or property representing capital employed as so fixed by the auditor.”

The real estate of the bank is valued and listed for taxation on the regular real estate tax duplicate of the county under the general laws relating thereto just as all other real estate is valued and listed (Section 5409, General Code). If this particular real estate belonging to the bank is there listed at too high a valuation the law provides a method for securing a proper reduction. 'This valuation can not 'be changed or affected by any action taken in the valuation of the shares of stock in the bank.

The provision requiring the deduction from the aggregate valuation of the shares of stock of the value of the real estate, included in the statement of resources as it stands on the duplicate, is for the purpose of preventing double taxation on that part of the resources invested in real estate on which taxes are paid as such.

The bank can carry this real estate upon its books at such value as it may deem proper, but if that amount is less than the amount which stands on the tax duplicate, then to the extent of such excess it is not included in the statement of resources. The deduction to be made is the value on the duplicate which is included in the statement of resources.

In this case it can be seen that if the total resources of $126,-180 include real estate of only $20,000 in actual value, then there must be $106,180-in other assets instead of $101,100 as fixed by the- auditor, and the tax commission was justified in increasing that valuation. The deduction of $25,080, the full value of the real estate as it stands on the duplicate, from the total resources as returned by the bank, unless such increase is made, would decrease the valuation of such other assets $5,080, which would not be authorized by law.

'The value of the real estate for the purposes of taxation has been fixed by the agencies provided by law at more than $20,000, *410to-wit, $25,080; and if, that amount is to be deducted in fixing the valuation of the bank shares on which stockholders are to be taxed, at least that amount must appear in the statement of resources.

The action of the tax commission in increasing the valuation of the assets of the bank so that they would include the full value of the real estate as it stands on the duplicate, which is the amount deducted in fixing the value of the shares, was in accordance with the facts and the law.

The relief prayed for by plaintiff must therefore be denied and the petition dismissed. ' .