Manchester Democrat. [volume] (Manchester, Iowa) 1875-1930, 1903-01-28
Iake q Harmon. Attorneys for PlaIntlr.


basis Of the assessment; the law also requires
that the assessment must BIO against the stock.
tns 6ak pas S
the amount OF money of the said stakeholder In
It's hands. Including his dividends. and said div
idends are to be withheld until said taxes are
The preliminary steps for taxation Of said
stock begins with the bank, and the bank Is Ia
this makes the bank party in interest, 1t is
the agent Of the shareholder and made liable tor
s a Ts s ues
National Bank VS.. HOFFMAN, 90 Iowa. 1l9.
equity abhors multiplicity of suits, and If the
merits Of the controversies between many par
ties can be settled In one suit 1t Is the equitable
way to do II. There can be no question but
what the bank is interested and is o proper par
ty, and under Section 3464 of the Code may pros
Palo Alto Blk. Company VS.. Mahar, 65 Iowa
"a.
In the case OF bar there are thirty eight stock
is no necessity for fhirty-eght suits; It would
bank has right to maintain this appeal.
The capital stock of q national bank is not
held BY and in this way
The national banking law provides that the
taxation t alton upon the shares In national banks by
hands Of individuals within the state"
Section 27ol. Revised Statutes Of the United
States shall be exempt from taxation by. or I'M
der State, municipal or local authority"
held e%s 49, s5 4oS Sa rs a sas
questioned, however, even if our Supreme Court
The shares of stock In State Bank are as
sessed to the bank and not to the stakeholder,
hence no double taxation In case the capital
hQn q iryYn In MN n a
government bonds the capital equivalent to
shares Of stock) SO invested is exempt. hence no
f double taxation ESempting bonds
already taxed; that's In order to make them
salable the government has provided that they
them at low rate Of interest retaining as
value Of taxable and non.taxable bonds At all
events they are made by law exempt from. taxa
ton, and II taxed by the state, would be q double
taxation, Our statute provides, as well as. the
National Banks are 70 be assessed to q a .s Is
holders. Our salute provId Tnat this shall be
81 the y, actual % hs f
value Of the shares of stock, as provided by our
statute ts arrived at by taking into account the
as ean Se
the assessor &c, Code, Section 1922. The cap
ital stock, surplus, undivided earnings are the
the value Of the stock, the real estate Is .hxed
like other real estate, and Y IT was moi aseducted
from the actuaf rdile Of the stock, as the law
taxation thereon, which would be contrary to
both the Federal and State law before referred
TO-. SO Iowa, 28:
invested In non-taxable government bonds goes
into the estimate in ascertaining the value OF
tho shares of stock of said bank, which is the
basis of assessment, 1t logically follows that un-
less tho amount of government bonds represent
Ing such undivided earnings is not deducted
must be d Sl
amount OF said bonds; therefore In this case
the assessment is too large by rwenty-six Thou
assessment must be cut down In that amount
unless the courts Of our land have held other
wise; This brings US to consider the authoritie:
cited and relied on by defendant In support Of
its contention.
The case quoted at greatest length and appar.
van Allen vs.. Assessors, srd Wallace us. That
case arose under the New York statute, which
provides for the assessment of shares of stock in
All Of the capital stock Of the bank was Invested
in government bonds In that case and 1t was
claimed by the plaintiff that because Of that fact
Quoted from the value Of said stock, otherwise
Il would be double taxation; and would be dis.
held void for another reason. and the assess
question Of the exemption Of SAID bonds from ON
capital stock Of the bank, which was Invested il
government bonds. could not be deducted from
o. RSs
donbtedly equitable, as the stock of the bank
being all invested In government bonds wa.
Bank notes from the government for circulation
the value Of said bonds and to deduct said bonds
stances. would be unjust, besides, 1t will be OBJ
served that under the State law, the bonds were
large majority Of cases ' the stock in Nationa
BANKS greatly exceeds IN actual the par value
and the excess Of the actual above the par value
N sucn cases would escape taxation; take fol
INSTANCE THIS bank in question. Its capital stocl
500 900 Its surplus $4,000. Its undivided earn
%ss Lee is sc now ya Se shares s
$4,000 Of the value Of said stock would escape
and hence might be great reason why the gov
eminent bonds held by the bank should NOT be
deducted: The opinion In the Van Allen case
ously assailed BY Chief Justice Chase In a dis
SEM sentng opinion, concurred IN by two other jus
duct said bonds from the value of the stock
would amount to double taxation. and would be
discriminating against National Banks and tax
property, and hence violation Of the nationa
banking law. The reason there given finds full
endorsement by this Court In the view that II
shown.
In case cited in the 18th Federal Reporter the
Court follows the decision Of tho majority In the
Van Allen case, and further holds that wheI
the surplus fund of National Bunk Is Invested
In government bonds, 1t cannot be deducted
from the value OF the shares of stock of the bank
These cases and others which follow them have
settled the question for the present at least thai
the government bonds owned by National Bank.
and purchased out of the funds Of the capita
stock, or from the surplus fund, cannot be dc
Qucted from the value OF the shares of stock
but no case has been cited by defendants coun
sci. nor can any be found SO far as this Cour
can ascertain that the amount of government
bonds purchased by the funds Of the undivided
earnings OF the bank cannot be deducted from
the valuation OF said stock; while the capital
stock and surplus fund is the sole property o.
stockholders until the bank is wound up, the I'm
divided earnings In the bank is only nominally
the property Of the bank, 1t is considered among
the assets Of the bank, but In fact, the bank
their agent; said earnings are subject to diyd.
END among the shareholders and Is in fact their
property, and q dividend Of said funds can be
forced against said bank In equity on sufficient
showing II being their property. It therefore
bonds SO purchased can be deducted from the
value of said stock; If 1t was bonds held
by State Bank 1t could be. and the same
u he!d by an Individual; why make the excep-
ton because the holder of the bonds is national
yious that It would violate the provisions of Sec
ton Al of the National Banking laws, 1t would be
3 discrimination In favor of state and individual
banks against national banks, and would be tax
Ing property In bank stock at a greater rate than
hands Of individuals But 1t is claimed by de-
fendant that many Of the decisions cited use
sweeping language, namely that Investments by
such banks In government bonds are not to be
deducted; such Language. however. Is only used
not In issuetn either them. Itmay be asked,
n