The times. [volume] (Richmond, Va.) 1890-1903, 1901-02-06
IMPORTANT DECISION.
Judge WaddiIl Hands Down Opinion
in Old Litigation.
CASE IN COURT MANY YEARS
stnse vii, Recover from Those Finan-
ciaI Institutions That Refused 10
Pny the amount Assessed
Against Thcm-A Lengthy
Paper Read by the judge
Appeal May DC Taken


Judge Edmund waddill, Jr-, sitting IN
the United States Circuit Court, yester-
aav handed down an opinion which means
very much to the Commonwealth OF Nir-
sinia.
He decided that the State has right
n assess for taxation the shares of stock
in national banks.
For ten years this case-or rather, these
cases. for there were four or five Of
thenl-have been pending in the United
states Circuit Court. The National Banks
at Lvnchburs and one at Lexington and
another a; Roanoke resisted the pay
uen+ of The tax An injunction was
sued out about len years ago to restrain
1be Commonwealth from collecting this
tax An The other national banks paid
,be amount assessed against the shares
of stock
The case was first argued before Judge
Robert NJ Hughes, but he retired before
:, decision was rendered. Judge Nad6ili
heard argument II the iiockbrldSc Alum
Springs last summer AttorneE-6enefal
and Messn.s Blackford and HorsleS'
John H. Lewis and Wilson and Manson,
all OF Lync!lour:s, appeared for the banks.
y BIG VICTORY
.Jrdge waddills decision is a great VIC
Tory for. the state The amount Of money
10 lie paid IN lack taxes VIII amount TO
several thousands OF dollars. Bnt, as
At,ditor- Marye said, had t;le decision
been in favor OF the contention OF the
hanks ali the national banks lLaat nave
been paying the tax would have stoppeu
paying and the Commonwealth Wouitf
have lost much money,
II is probable that the case will be ap-
yealed 10 the United States Circuit Court
of Appeals.
The test case decided was that of the
Peoples National Bank OF Lynchburg vs.
Morton Marye, Auditor OF Public Ac-
counts.
Similar suits were Instituted by four
national banks of the city of Lynchbnrg
against the Auditor, in which are in
yolxed the taxes due by the stockholders
of the said several banks to the State Of
Virginia since the year lS9t- In july,
1896 temporary injunct.ons were gr2lsted
il. ali four causes against the Auuiior
by Judge Simouton. and the suits IN
equity have been pending before tile
court since that time and involve the
Assembly of Virginia in reference 20 tie
taxation of national banks. the first
passed ON the 9Th Of March. 1892 and the
last TWO on The Sd of March, iSaf.
THE JUDGES OPINION.
Judge Wsddin handed down an elah-
crate written opinion, disposing Of all the
questions raised in these causes, the re-
suit OF which was a dismissal of the
suits and victory for the State The
Judge decided that it was unnecessary TO
pass upon The validity of The act OF the
9Th of March, 1890, as 30 proper case was
made for the granting OF an injunction
upon tie pleadings at the instance OF the
banks: that as to The act of the 9Th OF
March, 1895. providing for the collection
of delinquent taxes. the banks were not
placed in a fiduciafy relation III reference
to said taxes and could not interpGse III
behalf OF their stockholders, and tiiIt
the act of March s. 1886 under which the
banks are at present assessed. was valid
and constitutional. The opinion covers
many Interesting and important legal
question some of which follow:
INJUNCTION AGAINST THE STATE.
Upon this subject Judge Waddill said:
Courts of equity are seldom called upon
to exercise a more delicate power than
that Of granting injunctions to enjon
the collection of a. States revenue Such
power on the part OF courts is expressly
inhibited by the Federal statutes as to
taxes due the United States, and Federal
Courts should proceed with great caution
in exercising such power as to taxes due
the State. 1t is a prerogative, The exer-
else of which may result in great harm,
and only where the right is clear the
necessity for action urgent and the alb
sence Of any other remedy apparent
should court of equity interpose.
Quite an array OF authorities OF the
United States Supreme Court is cited t.
sustain the position taken
The Judge said: Stopping the States
revenues is a serious matter, except in
cases where ii is essential TO the mein-
tenarice OF the citizens rights, and the
power of a court of equity to do full JUS
tice in such a case, to the taxpayer on
the one hand or TO the State on the other,
is so difficult of accomplishment. if indeed
it can be done at all, that in doubtful
cases the injunction should he denied
The case at hand is a striking, Illustration
of the cnbarraSSmentS resulting from
the Intervention Of courts OF equity by
wr-its of injunction. Aside from other
complications that might arise by reason
of the inability of the court properly TO
deal with the matter of taxation. it ap-
pears that the State has not been paid
its taxes either by the bank or its stock
holders. Its hand is stayed at the m
stance of the bank. The stockholders
from whom the tax is due, are not before
the court. and the result is. even in the
event of q favorable decision to the State
it may lose all its dues entirely.
TAXATION OF THE BANKS real.
ESTATE.
..-rhe taxation by the stae of the real
estate of the bank, in addition to that
placed upon the shares of the stock.iold-
crs, is not unequal taxation in the sense
Nv, NnraS- EJ1fj a
does not therefore. inyaiidate the act.
Section 52l9 of the Revised Statutes con-
templates that the tax on real estate nay
be imposed independently of the tax upon
The share of the stockholder It may be
said. IN passing, that the taxation OF the
shareholders in national banks. indepen-
IDENTIFY of the real estate owned by the
hanks fs he ami, aa that adoNted In