No. 13170 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1975 

FIRST NATIONAL BANK OF 

LEWISTOWN, MONTANA et al., 

Petitioners, 

-vs - 

DEPARTMENT OF REVENUE OF 

THE STATE OF MONTANA, 

Respondent. 

OKIGINAL PROCEEDING: 

Counsel of Record : 

For Petitioners: 

Gough, Booth, Shanahan and Johnson, Helena, 

Montana 

Ronald F. Waterman argued, Helena, Montana 

Luxan, Murf itt and Davis, Helena, Montana 

Howard Jo Luxan Jr. argued, Helena, Montana 

For Respondent: 

Joseph Ro Massman argued, Helena, Montana 

Submitted : October 17, 1975 

+ C 

1 , . Decided : 

:' 1 

Filed : 
Mr. Justice Castles delivered the Opinion of the Court. 

This is an action brought under the Uniform Declaratory 

Judgments Act, section 93-8901, et seq., R.C.M. 1947, and requests 

this Court to assume original jurisdiction. Both sides agree 

there are no facts in dispute. This Court agreed to accept jurisdiction. 

This action arises out of a dispute between the various 

banks involved in this litigation and the Department of Revenue 

as to the interpretation of one statute, section 84-308, R,C.M, 

1947. 

Each year banks doing business in the state of Montana 

are required to complete a "~ank Statement for Assessment" showing 

all the resources and liabilities of that bank as disclosed by its 

books, at twelve o'clock noon on the first Monday of March. Each 

of the banks involved in this action complied with that requirement. 

Each entered on the Bank Statement for Assessment, the dollar amount 

of the capital stock as shown on the books of the bank and inserted 

as surplus the dollar amount of the surplus as shown on the books 

of the bank. Further, each bank set forth on the statement the 

amount of undivided profits and other reserves as shown on the 

books of the bank. In each instance, each of the figures supplied 

to the Department of Revenue by the individual banks was the 

figure shown on the books of each bank, as required by statute and 

regulation. 

Also, pursuant to the Department's regulation MAC 

42-2.22 (20) - S22410, each bank had its bond portfolio valued 

within the time designated by regulation. 

The banks and the Department do not disagree as to the 

amounts entered on each of the banks' Bank Statement for Assessment. 

Nor is there a question as to any other issue involved in reaching 

the valuation of stock to be assessed to the stockholders of each 

bank. 
From the assessment statement filed by each bank, the 

Department made various calculations apportioning the value of 

stock assessed to the stockholders as shown on each bank assessment statement, between the 7% and 30% categories as required 

by section 84-308. The calculations were based upon adjustments 

made by the Department to the amount of surplus as shown on 

the books of each bank. The Department took the depreciated or 

appreciated value of the bond portfolio, applied that.figure 

against the amount of undivided profit as shown on the books of 

the bank; if the result of those calculations was a negative 

undivided profit figure, the Department then adjusted the surplus 

of each bank by deducting from the surplus figure as shown on the 

books of the bank, the negative undivided profit figure and used 

this adjusted surplus figure, rather than the amount of surplus 

as shown on the books of each bank. The Department then determined 

what proportion of the value of stock assessed to the stockholder 

was to be classified within the 7% classification and what proportion was to be classified within the 30% classification. 

The banks involved in this litigation allege that the 

above adjustment of the amount of surplus as shown on the books 

of each bank by neglative undivided profits for use in apportioning 

the value of stock to be assessed to the stockholder between the 

7% and 30% classification was incorrect, illegal and contrary to 

statute and illegally increased the taxable value of each bank. 

Each bank appealed the classification and taxable value as 

determined by the Department to the appropriate county tax appeal 

board in each of the counties where the individual banks transact 

business. The decisions of the county tax appeal boards were then 

appealed to the State Tax Appeal Board where they were pending upon 

this Court's acceptance of jurisdiction. 

The sole issue is whether or not the Department may make 

adjustment in the figures shown on the books of the various banks 
involved in this litigation in determining what proportion 

of the value of stock assessed to the stockholder is to be 

classified within the 7% classification and what proportion is 

to be classified within the 30% classification. 

The pertinent portion of section 84-308, R.C.M. 1947, 

which this Court finds to be controlling provides: 

"Moneyed capital and shares of banks, both 

national and state, thirty per centum (30%) 

of true and full value on that portion of the 

true and full value not represented by surplus, 

as shown on the books of the bank^ seven per 

centurn (7%) . . on that c or ti on of the true and full 

value represented byL surplus as shown on the books 

of the bank; provided that on that portion of any 

such sur~lus which is over and above the amount 

represenked by stated capital of a bank, the excess 

shall be subject to thirty per centum (30%) of 

true and full value. " (Emphasis added. ) 

We find the quoted statute's meaning to be clear and 

unambiguous. There are no technical words and a common understanding of the statute is clear from its reading. The drafters 

of the legislation obviously intended there should be no 

accounting adjustments made to the figure shown on the books of 

the bank when apportioning the amounts between the 7% and 30% 

classifications. 

In Morrison v. Farmers & ~raders' State Bank, 70 Mont. 

146, 150, 225 P. 123, this Court recognized: 

"* +: * The intention of the legislature in enacting 

the statute is the consideration which must control 

in its construction * * * and to ascertain that intention recourse must be had, first, to the language 

employed 9: 9~ * indulging the presumption that the terms 

used were intended to be understood in their ordinary 

sense, unless it is made apparent from the context that 

theyintended to be given a different meaning. * f; *I' 

(Emphasis added.) 

We therefore find the Department cannot take the depreciated 

or appreciated value of the bond portfolio, and apply those figures 

against the amount of undivided profit as shown on the books of the 

bank, and adjust the surplus figure as shown on the books of the bank, 

to arrive at the bank's assessed value. It must use only those 

figures shown on the books of the bank, as required by statute. 
The Department argues that it does not know what to do 

with the newly created bond assessment that is required by 

MAC 42-2.22(20)-S22410. That regulation was adopted by the 

Department when it was determined by the Department that the 

present assessment system did not accurately portray the true 

picture of the bank's property. This Court can sympathize with 

the ~e~artment's position; however, we must point out that the 

solution to that problem lies with the legislature, and cannot 

be solved by drafting assessment regulations and using them for 

classification purposes. 

This Opinion shall constitute a declaratory judgment.