The herald., 1894-01-16
IT IS NOT A SAVINGS BANK,
And Must Not Be Assessed as
Such.
An Important Bank Decision From
Judge Shaw.
a Nice Legal Distinction Between oan
and Trust Company aud a Saw
iDgs Bank-some Law
Potnts.

Judge Shaw rendered an important
decision yesterday in the case OF the
City of Los Angeles We. State Loan and
Trust company, judgment being in
favor Of the defendant. The opinion is
as follows:
"This ia an action to recover certain
taxes, amounting to 5000, levied and
assessed against the defendant by the
city assessor for the year 1892. The
assessment was made upon the theory
that the defendant was savings and
loan corporation, or, in ordinary lang.
uage. savings bank, and therefore to
be assessed with the amount of it's de-
posits under the prov isions of subdi-
vision of section 36l7 of the Political
Code.
Deposits in ordinary commercial
banks constitute debts owing by the
bank to the several depositors and not
to the bank. But by subdivision 8
aforesaid it is provided that credits,
claims, debts and demands due arising
or accruing for or on account Of money
deposited with savings and loan cor
porations snail, for the purposes of
taxation, be deemed and treated as an
interest in the property of such cor
poration and shall not be assessed to
the creditor or owner thereof
On the frat Monday in March, 1892,
the total deposits held by the defendant
amounted to $358.847.
OF this sum s249, ,939.01 consisted of
ordinary deposits subject to check, or
on certificate, the same as in an ordin-
ary commercial BANK, while the re-
mainder was composed of interest-bear-
ing deposits, the accounts of which
we're kept in separate ledgers, and
which were denominated savings de-
posits" and term savings deposits"
The defendant received these deposits
under certain agreements with the de-
positors in regard to interest and time
and terms of withdrawal similar to the
rules OF an ordinary savings bank.
The city assessor claimed that, aH to
these deposits, the defendant was either
de iure or de facto savings and loan
corporation, and instead of assessing the
deposits to the several depositors, he
assessed them to the defendant, claim
ing the right to do go under the provi-
sions of section 36l7 above quoted. The
legality OF this action is the Question to
be determined.
After this review OF the facts in the
case, Judge Shaw says:
"The rules which the bank has
adopted in regard to these deposite,
while similar to those Of savings
bank, do not by their terms affect the
title to the funds, nor have the effect of
preserving title in the depositor. The
relation of the defendant to these de-
posters is therefore not that of an
agent or trustee to principal, but that
of borrower to q lender.
81 am therefore of the opinion that the
defendant is not savings and loan COR
poration, either de jure or de facto, and
that these deposits should not be as
sessed or treated 40 the property of the
defendant. but should be taxed to the
several dspositors in the same manner
as deposits in an ordinary commercial
bank.
II do not think there is anything said
in the case of Security Savings Bank
and Trust company vs. Hinton, 81 Cali
fornia 2l4. which is in conflict with this
conclusion.
"The judgment will be for the defend