The New York herald., 1877-01-14
THE COURTS.
Important Decision as to the Taxation
Of Bank Stock.
A TRUSTEES TROUBLES.
How Jim Fisk is Remembered IN
Boston.
THE NOMENCLATURE 'OF RANK.

InC NOMCNOLAI ONC VI '"'""
Among the decisions just rendered by the Supreme
Court General Term, the suit brought by the Trades
mans Bank the city Of New York against the Com
missioners OF Taxes and Assessments. IN which wr'
of ccrtiorari was obtained to review the proceedings
OF tho taxing the shares owned IN tho
capital stock OF the bank presents points OF special In
tercst to banking Institutions and all owners oil bank
stock The decision in the case IS embodied IN an
opinion written by Judge Daniels Chief Justice Davis
aud Judge Brady concurring IN the opinion Inc
history OF the all the legal points involved are
fully set forth in the opinion published below
The reiator is banking institution formed and doing
the business OF banking under ana oy vlr'ue o .ne
laws tho United states These laws have suojecled
inc nc rsons owning rs stock taxation under The
laws o. the state. Certain restrictions nave oeeh I'M
posed upon tho exercise ny the State oi hat author
But us II has not that they have bccn in-
fringcd in tho proceedings complained oi no farther
Ausion 10 them VIII become necessary IN the DISPOSE
ton OF this case The market value OF the shares was
assumed by the Com sloners 10 nave Dceh tucr TAX
Able value and that was held be the proper va!ua
be placed Tor that purpose upon them ~ me
OF the People OK rel the Gaatin National BANK
VS.. tho Commissioners recently decided oy TINS
Court That decision was very cicnrly u proper ono,
anl II must be controlling upon that feature oi tho
present case But IN the case now Lcorc the
Court II ID objected that the proper deduction
directed 10 by the statute providing for taxing
shares IN stit Tor the portion ot The cap
ltai invested real made IN THIS fn
stance that that respect he action OF the Com
mssivncrs should be corrected The capital OIL the
bank WAS shown be sioOO,O0O, divided INTO 30 900
shares OF $4O each S2OO,OO0 was Tho assessed
valuation placed OH tho real estate Of the
bank for tho purpose o va1aa n%a'0n m s5S S5a
each. lu making the assessment for the purpose OF
taxing them the ION mmssioncrs deducted $s from tho
market Of each share on account oil tho invest
ncnt nude y the bank real estate. and thereby as
tcssed their taxable value al thc sum Of
$4s each share And that was the correct
be apportioncd according TO the proportion
ot the actual amount o the capital OF the bank IN.
vested IN the real estate that appeared TO DO equal
to one fifth Inc entire capital oi the bank Aud
s+ssing the valuation OF tho shares one-nith OF their
par value was deducted from them, which iet eacn
snare l,ublc 10 assess the basis OF It's market
yuuc To The extent OF s4S The ol each share
$40 Its appreciation IN value In the market had
advanced IL SlU winch made It's actual value $6 and
In assessing il NTH OF It's par value was deducted
because the real OF the bank was assessed nt
yaIuation eauullng one-iith OF IT'S nominal capital
The relator CLAIMS that tins deduction was too small;
that instead ot It's being made On Tue oasis OF the ac
tual capital bank should be graduated accord
ing 10 the market value Of the shares That would
require deduction U one-hith OF that value, which
would be the of Sl ~ Tor each share and would
rcd ucc the assessablc valuc to the sum OF $44 80
The difference though but small amount upon each
share, III the aggrcg will honinaly amount to tho
of $50 OOJ. Aud 1t Is sufficient 10 rcnder Inc case
one vi ordinary Importance. But stiil II The posi-
t,on taken behalf OF the rcaor Is correct The result
cannot prevent it IRON being maintained II Will he
tho conscq vi the peculiar pnrascology of the
statute winch, however Will be to some extent CON-
pei,sated by the assessabe valuation which must
be borne Iy the stock these institutions whenever
their market value shall iui below their par value
These contingencies arc not always accurately pro-
vided Tor by legislation, and as they cannot be uni
tormy anticipated they can only DC justly controlled
oy subsequent legislative changes
rhe statute US II existed when the shares in the
bank were assessed by tho Com ssioncrs aud US II
Row exists after declaring mat the shares
IN these institutions shall DC assessed ior
Taxation. provided that I'm making sacn assess,
mcnt there shall also be deducted from the value of
sucn shares such sum as Is III the same proportion 10
such value the assessed value OF tho real estate OF
tho bank or bankng association, and III which any
portion Of their capital Is invested IN which said shares
are the whole amount oil capital STOCK of said
bunk or banking assoca calion." Nol =, Laws OF 1866
l647 sec H. Thus Provision deals with Two elements
o valucthat OF the shares IN the market ana tat VI
The liked OF nominal capital o inc bank Tue market
value OF the shares that which Is required 10 10
valued Tor assessment and the liked or nominal capital
of tue bank is thut which must be considered IN deter
MIMI ing the rule bc applied to ascertain the dcduc.
ton to be made on account oi Tue Investment III feai
estate. In this that investment appears TO
have been oEciih OF the nominal capital Al least
IL has been 50 assessed. AMI that under the
scrms Of the statute Is tho criterion by
winch tho rule Tor the deduction has been de-
cured In the proportion borne ~ that value 10
the nominal capital the deduc ION from the uctual
value OF the shares Is to be made II would nave been
an eAtireiy equitable rule II tho real estate were as
ses according 10 It's value Tor the law have
reqtrcd that vaiuc 10 have been nrs deductcu from
thc aggregate actual value OF all tho shares Then di-
y,ucd tue residue Dy whole number anu the quo
ticut assessed their proper value Tor the pur.
pose ui taxation. But that was not done. dii-
no other duty 10 perform than 10 follow It, That re-
uurcs that the deduction rnadc IRON the actual value
OF the sures shall be Tue III proportion to that
uinouut us that IRON tho nominal capital by the
value oi the real estate in 10 other way can
The deduction from The value OF the shares be IN the
same proportion 40 that value; MS tue statute has
declared II shall lie as the assessed vuluc Ot the
reul estate Is to the whole amount OF the capt.
lui stock OF the bank The proport onale deduction
In The latter case Is rendered applicable to
iurer order ascertain the amount at which the
rhnrcs shou,d DC asscsscd That IN this instance Is
t.lth Will lf
NTH whole amount oi the capita stock o tho
bank and for that reason the statute required tho
same proportiouatc amount or onc-hith TO be de-
IRON the tuiL value vi the value OF the shares
IN order TO determine tneir isscssabc vaIuaion That
not done by the COMMISSIONER. But 'heir ueduc-
tion WAS mude the same principle as the statute
required 10 be applied 10 the aggregate value oi mo
shares had been the same 10 amount as tue capital
Stock OF the bank They deducted $S IRON each share.
which was one-hth OF the amount oil nominal capital
rcprcscntcd by IT, instead OF sll 20 which was one
nth uf the full value Jf share Under the sn,utc
the larger amount the proper deduction TO be made
because It was nenfth of the market value OF the
shares Ia this case II seems an advantage 10 thc
bunk. but not 10 the entire apparent difference. De-
cause the real estate has been alred wasusscssed
below It's actual value The legislative rule Will not
produce exact justice In all cases Under II portion
or the value OF the shares VIII be likely 10 escape
assessment when that exceeds the nonha capital vi
the bank while more VIII he assessed lhan should DC
when the shares deprecated below their par value.
II s however, a rlga rule providcd by the statute,
winch has rendered 1t nilcxblc. The Court eau only
carry Il effect II mas been declared For that
reason the assessment should be so lar modified rs 10
deduct iron OF s66 which IL the iulI value OF
the shares the SUN vi Sll 20 onenith oil that value.
That will assessabc value TO the SUN Oi
S44 So point has been Tor the hrst time pre-
senied the modification should be without costs.
Mr.. Horace Barnard appeared Tor tho Dank ana MT
Hugh l.. Cole Tor the Commissioners oil Taxes ana As
sessmcnts.
A TRUST ESTATE.
Before Judge Donohue, in supreme Court, Cham
bcrs, motion was argued in which Joseph II. God
win Jr IN mis- suit trustee against Charles ii.