New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1880-11-28
OPINION OF JUDGE WALLACE.

The suit of the National Exchange Bank of Albany
was begun last spring in the United States Circuit
Court for the Northern District of New-York to
restrain the Receiver of Taxes and the City Marsha
of Albany from collecting the tax of 1870 under the
Act of 1866 on the ground that 1t was invalid, and
that therefore all proceedings under 1t we're VOID
1t contended that the Act was III conflict with
the National Banking Act, because bank shares
under this law were assessed at greater rate than
other moneycd capital III the hands OF individual
citizens Following is the decision Of Judge Wal
lace:
United States Circuit Court Northern District of New
York.-The National Albany Exchange Bank against
Charles A. Hills ef. al.
WALLACE. 1.-The complainant has filed its bill In
equity enjon the collection of tax assessed in 1879
against its shareholders by the Board OF Assessors OF
the City OF Albany, the defendants being the officers OF
the city charged with the collection OF taxes.
The bill proceeds the theory ast that the assess
mont against the SHAREHOLDERS vold because there
was no legal authority for making any assessment !;
second If not void. for Of original authority, it
based a rule OF unequal valuation OF dhcrett
classes Of property Intentionally adopted by the as
order to discriminate unjusily against share
holders National banks and XccSsive and as TO
the the collection Of the tax should be restrained
Both of these theories grounded on that section
Of the OF Congress relating 70 National Banking AS
eocaons which restricts taxation of shares in such as
socaons imposed by the authority of the State within
which the association is located by providing that the
taxation shall b. at greater rate than is assessed
upon other money capital IN the hands oil individual ct
Tens OF such States"
The assessment complained of was made under color
Of an act of the Legislature OF this State passed April
o. 1885, entitled, An act authorizing the taxation OF
banks aud surplus funds of savings banks"
Tons act. construed by the highest Court
of the State in view OF previous legislation
and upon consideration Of the various provisions and
directions OF the itself established system OF tax
alton for bank shares cuar TO itself and ndepend-
en of the general system of taxation In existence III
the state" and upon tins ground 1t decided 10y the
Court OF Appeals (DOan agt the People. SO N y" 59
that u bank shareholder VINO had been assessed upon
the value of his not entitled to any deduc-
ton Of his debts although the general laws
the and the local Jaw relating to assessments
in the City of Albany contained provisions Whereby IN
SSmeu of personal property deduction should
be for the debts owing by the person assessed
far as this act the law of Congress by
imposing upon shares OF National banking Ass0-
ciatOn at greater rate than Is assessed upon other
oneycd capital in The hands of individuals, concedcdly
81 oaanO; stand hut the point IN controversy IS whether
an made under the act is VOID for want Of
power to make any assessment, or is
ony when made without granting the deduc-
allowed by the general laws Of the state. If the
asses,urs have mower make valid assessment of
the nomiae against the owners for the value
Of :heir SHARE the whole foundation Of the taxation
fails. Ga tho other hand If The assessors have au
thol1ty to assess unier the statute III question or
uldrT The ot.er Of the State then The inquiry
wnetcr the assessment IS erroneous, because the
lrop r deductions were denied. Or because rule OF
vaiuation when Disseminated unfairly against the
stocRho d.Ts adDpted aud THIS beng so, whether
there is any remedy cxcept IN direct proceeding to
review the Obviously II The first theory
Of the c0nu.aHdnt Is sound, IL Is OF no Importance
whether shareholders OF the complainant were, in
iac,, owing dents which would have been deducted
f0 ne assessment not, because there jnIis-
dcii@h ioi any action on IS.e pII Oh ,ne AsssS.is.
~ he o. ue case wlnc strained to adopt
IL vii uot b. necessary 10 examine the second theory
wnie" h, 1cgn az G' cot and 3out uop os
Low ifIfT Tam q q iliTlfV
for assessment is to be f,un IN the statute OF 1866.
ana that ac respects the taxation of N,-
toDsl Banking ASsooiatons, is radically vcious and
can have operation. Tuis cOncinsl II is prelicaie
T T pe nG pe at Weaver 200 g. - $780, al" "o"
Tue construction gwen % thc act IN Doan ag'. The
People j. explicitly TO The eAcct hat the ac' sleuded
10 establish system Of taxation for bank capital pc
en- far 10 aud Independent OF the general ystcn
OF taxation IN existence IN the state It's there declared
the act was intended as substitute for the then
the liCIey ~ rg ~ f ~ te I"i % t'so
ton of the statutory intent II cannot be quest oned
that the act must stand or fan upon ITS own roysiors
ana cs"nTS DC sf"iIl ny 'GG'nG as
reading IL rs though 1t contained these pro
would secure TO the holder OF bank shares the
mvtOns and PRIVILEGES allowed 10 the holders
strucjion o the law, ned by ihe Suurcwe Court
Of the United States in People against Weaver,
siale who's money invested IN bank shares. a
s sso. cs ,' o. w oarw "nese in SG% 0 Of
the prohibition Of me law Of Congress. IL was only
se.sn-nt ON account OF ms debts which he claimed.
AMI the question not before the Court whct or
not the y Ole assessment VOID mt the opinion
proc eos mon tnc ground ana expressly dec ares at
TIE sfatut Of the state is ia conflict wn tho Act OF
Congress because lt does not permit such deduction
would sem nat 5afss qssC 9 are concaye
though ia declared only that the share, in
National Banking Association shouit be taxed aturae
ana upon assessment proIolted by the Act Of Con.
gTVs, rut also as thou@h declared tha 30 other tax
should &c IMPOSED on account OF such ,Aare because
efsi laws rs respects the txao1 Of capital .cIrcsclcd
BY bank shares Is - implication repeal OF those pro-
The decisions Of Of state 10 constiuc-
vowed, cOnciu-ivc uUon the courts Of the Unei
States. and the construction wLch was given las The
Court % Appeals statute ms been recognized a.
controlling and final by The 5upr Cour OF tc United
But It Ia urged behalf Of the defendants that the
Court 81 Appeals nsy i.con'ijef ts views IN the hight OF
which ensne from lh't htcisoh. Undoubtedly these
consequences may be sefl"u- shareholders OF National
~ i , in 5l .1r.c 'r su,h
as well as those graycr when lead Cours to sce
for construction OF law which Viii uphold II il
pos5ie wound appeal aitn elcat force TO any trbnua
IclOre winch lhe question org. ally presented might
come. But ihs COur, must aAc he law II finds IT,
aud must accept the decision Of the Court Of Appeals
a. authoritative. This COur cannot substitute In the
place of decision Its own judgment what
O ApDcals might possibly decide upon a
sideratiCn OF the questions involved.
Beside, the decision Of the Court Of Appeals reference
,hoald be made 40 the act Of Legislature Of June 20
1880, legislative exposition Of the act OF 1865 |
q
act 1866 and does not essentially prOys-
ions from the carrier act except hat expressly de
caIes assessment OF bank shares each stock
holder shall be allowed all the deductions and exemptions
allowed by law, assessing The other taxable
persOnal property owned by Individual citizens OF tue
State, and the assessment and taxation shall not be
greater rate than Is made or assessed upon other
moueyed capital IN the hands OF ind vidual Of
tins state. This act was wholly unnecessary, II
for defendants the original
construed though the provisions Of the general
relating reductions were Incorporated int;
IL is much be regretted that the conclusion thus |
reached may lead 10 the loss Of large sum taxes
iustiy due from taxpayers To the uocIpaty repre-
sented Dy the defendants. Bur the result must be at
fributea To III legislation, which by attempt
Ing 10 Impose exceptional and unjust rule or taxation