Richmond dispatch. [volume] (Richmond, Va.) 1884-1903, 1897-02-12
BANK CAN'T RECOVER
,rpREME COURT so DECIDES IN
THE UNIONS CASE.
SHARES OF STOCK ARE TAXABLE.
rho Atlantic and DanvilIc Railroad
,toudamus Proceedings Dismissed.
rcreusson Against Doughtrcy De-
cidcd-Other Matters.

.-,, most important and interesting
as. 90 Richmond people decided in the
..-.re Court OF Appeals yesterday was
.,.. OF the Union Bank OF Richmond
.rs. the city Of Richmond. which was
~ ,be recovery OF Sil66.2s. paid into the
.r as taxes in the year 1889. under
,....st. The suit and the opinion de-
,..s hy Judge Harrison involved no
..o POINTS in law, but the decision con-
arms thc laws touching the questions in
,,.,.. as they now stand upon the
...stc-nook The case came up from
On. circuit Court OF the city OF Rich
,,,rl whose judgment is affirmed. The
hank claimed that. Of the sum taxed. the
..x upon M90gl was Illegally exacted.
.. thc task upon IL had already been paid
,, t.e city. or the stock was exempt from
t.Nluon The opinion OF the Court Of
Appeals follows:
aIms action was brought by the Union
u.rk ol Richmond to recover back taxes
maid ly 80 TO the city of Richmond. The
lraaon AYERS that the plaintiff was
..rr.Iei 10 pay TO the defendant.
.cr-. IT'S protest. S6,15S, claimed by the
oil. as % lcsal tax upon 4395 shares of
rrrTs capital stock. assessed thereon.
81. the market value OF 500 per share.
making an aggregate assessment upon
sl shares Of $iS9.50O; that both the as
s.s.m.lt and collection Of this tax was
H-.l because the value Of the shares
of tl. stock was constituted 10 the ex-
tout OF Sls0I Of property upon which
u. taN had already been paid TO the city.
cr was exempt from taxation - that tho
ordinance under which the tax was col
l,.tcI was repusnant TO the Constitution
of the state, and that so much of the
tax as was based upon the $Sl9.OH was
illegally eXacted from the plaintiff. and
that the defendant is legally bound 10
return the same-to wit, the sum OF
iiHg. with interest thereon from June
9 l~g.
"The plaintiff only seeks to recover
back 81. i66.29 Of the tax paid by it, and the
only question raised by the pleading is
whether that amount Of the tax was lie
sally assessed and collected, because to
that extent IL was imposed upon $3l9,OI
ot the banks capital that ought to have
been deducted from the market value of
the shares Of stock before the assess
meut was made.
The answer TO this question is found
iu the fact that the taX-here assessed and
collected was not imposed upon the capt
tai Of the bank, but upon the shares of
stock issued by the bank and hence the
bank has no right to deduct its capital
from the stockholders capital i'm order TO
ascertain what the stakeholder must pay
taxes upon.
STOCKHOLDERS ASSESSED.
The charter eof the defendant confers
The general power of taxation except only
as it may be limited by the laws of the
State and of the United States. and Its
ordinance providing for this tax upon
shares Of bank stock is in conformity
with the statute, which provides for an
assessment in similar cases for State pur-
poses. The statute Acts 1SS3-'S4. page sos.
section IT, expressly provides that no tax
shall be assessed upon the capital of any
bank or banking association organized
under the authority of the State, but that
thl stockholders i'm such banks or bank
ing association shall be assessed ana
taxed on the market value of their shares
ot stock therein at the same rate as is
assessed upon other mOneyed capital in
thl hands of individuals residing in the
state and requires each of such banks
O. banking associations to pay into the
Treasury of the State the tax imposed
upon such shares.
The contention that this is in effect a
tax upon the capital of the bank is not
new; the same question has been repeat
ciy before the Supreme Court of the
l.lited States and decided adversely 10
plaintiffs view.
'I- First National Vank VS.. Common
wealth. &c, 9 Wall. S53 359, the distinc-
tior vas very fully stated in the follow
ils language:
aYTr has beov oeto bl{ebod &c tbo lou,
governing this court that the property or
interest of a stockholder in an incorpo-
rated bank, commonly called a share. the
shares in the aggregate totally being
called sometimes the capital stock Of the
bank, is "a different thing from the money
a capital of the bank held and owned by
the corporation. This capital may consist
Of cash or Of bills and notes discounted.
cr OF real estate combined with these.
Ina whole Of l. may be invested in bonds
OF Che government, or in bonds of the
State OF I'm bonds or mortgages. In what
et.r 10 may be invested il is owned by the
balk as a corporate entity, and not by
the s.0ckhOlders A tax upon this capital
is a tax upon the bank, and we have held
That when that capital was invested in the
securities Of the government it could not
b- taxed nor could the corporation be
ON The other hand, we have held that
The shareholders. or stockholders. by
which is meant the same thing. may be
taxed by the States on stock or shares so
he-d by them, although all the capital OF
tAe bank De invested in Federal securities. |
provided the taxation does not violate the
rule prescribed by the act Of 1854.
Sec Van Allen VS.. Assessors, Wall, |
t'5-o&i People, &c, VS.. Commissioners,
o. & Wall, 2jj; Mercantile Bank VS.. New
1olk, l2l u. s., 1888
10 ls urged that because the law re- !
q1.fts This tax on the shares Of stock /
holders 10 be paid by the officers Of the |
'+Ah it SIS, therefore, 10 be deemed a tax
on mo capital Of the bank. This position
4a mol tcnabie. In the case of sharehold- |
en- AoI residing In the State, this Is the /
oN'y mode in which the State can reach /
,n'f Shares for taxation. National Bank |
W. commonwealth. supra.
me record shows that the tax here |
No" l.a-iie4 Of was assessed by the city /
~ richmond upon the shares of stock /
..51,4 10y iho plaintiff bank. and not upon /
--- e'bi.a- This being 50, there is no /
elolha Tor the contention that any part |
Vl lne capital Of the bank should have /
oI 1e4lcted from the aggregate market /
'aile OF such shares.
the refusal Of the court to allow the /
CuOr
-.e amendment proposed was an addi- !
,.o-NI aFerment that the assessment en- /
.'".-l 1Jib shares Of stock owned by per- /
''.a VINO did not al the time Of the /