The Mount Holly news. [volume] (Mount Holly, Burlington Co., N.J.) 1891-1942, 1907-04-02
Decision on Bank Stock Assess
ft1ar1fa


The New Jersey Supreme Court ha
rendered a decision in the case of Henling
Lippincott against the township of Chester
in which Mr.. Lippincott appealed from
the assessment on certain bank stock
The appeal was on writ of certiorari, anG
brought up for review the assessment
against Mr.. Lippincott on 216 shares o.
stock of the National State Bank of Cam
den, at $67. so per share, making value
of $14,580. The opinion is given below
in full, with the exception of omission Of
titles of some authorities quoted:
1. The owners of national bank stock
are to be taxed thereon at its true value.
2. In ascertaining the true value of the
shares of such stock for the purposes of
taxation, the act approved May II, 1905
pamphlet laws, page 457) does not require
that the non-taxable property of the banks
should be deducted from their assets.
8. The only effect of that act is to.allow
an individual taxpayer to claim the same
deductions and exemptions as against the
assessment of his shares of national bank
stock as he might against the assessment
of his other personal property
The taxes were assessed for the year
1905. On May 20. 1905, the bank had as
capital stock, surplus and undivided pro.
fits $500. 34s. SO. Of this it had real estate
$S5, 6S5; stocks, and bonds $96. $50, mort
cages. $500; and United States bonds
and premiums $1O8,S75. In ascertaining
the value of the prosecutors shares the
ass essor deducted from the assets of the
bank the assessed valuation of the real
property of the bank and made no other
deducation or exemption therefrom.
1t is conceded that the stocks. bonds,
mortgages and United States bonds and
premiums in which the capital stock, sur
plus and undivided profits were invested
are non-taxable in the hands of individuals.
If, in making the assessment, the stock
holder was entitled to have the assessor
deduct the non taxable securities in which
the assets of the bank were invested, the
assessment was erroneous and excessive;
if, on the contrary, he was not entitled to
have such securities deducted, the assess
ment was right.
The sole question therefore is whether
the holder of shares of bank stock is en-
titled to have the assessor, when he values
the shares, deduct from the assets, in ad-
dition to the assessed value of the real
property of the bank, the value of the
non taxable securities held by the bank
as part of its assets. 1t has been held BY
the Supreme Court of the United States
that national bank shares are liable, under
the acts of Congress, to state taxation, al
though the entire capital of the bank is
invested in United States bonds. That
bank shares represent proprietary interests
distinct from that of the capital stock.
In Evansville Bank VS.. Britton, it
was held that under certain limitations
national bank shares are taxable with ex.
elusive reference to their value, and with
out regard to the nature of the property
held by the bank as corporation.
In our own state it was held that own
ers of national bank stock were to be tax
ed thereon at its true value, and that in
ascertaining the true value of such shares
for the purpose of taxation, our then ex-
isting laws (the tax act of 1859, pamphlet
laws 1149 and the bank act of 1899, pamph-
let laws. page 43D did not require that
non-taxable property of banks should be
deducted from their assets. But the pros.
ecutor in this case contends that the re-
duction claimed is allowed by an act of
the Legislature entitled "a supplement to
an act entitled An act for the assessment
and collection of taxes, approved April s,
19O3,' approved May II, 1906" (pamphlet
laws, page 45D which provides as follows:
81. In assessing the shares of stock of
banks or banking institutions organized
under the laws of this state or of the
United States the assessor shall allow all
the deductions and exemptions granted by
law from the value of other taxable prop
erty owned by individuals in this state.
and the assessment and taxation of such
shares of stock shall not be at greater
rate than is made or assessed upon other
moneyed capital in the hands of individ-
uals In this state. In making such assess
ment, the assessed valuation of the real
property of such bank or banking associa-
ton shall be deducted from the total val.
uation of the shares of stock assess ed
against the stockholders.
Upon an examination we find that the
act above recited is in effect the same as
the New York act of July l, 1882, the
chief difference being in the use of the
word exemptions" in our act instead of
the word exceptions" used in the New
York statute. The New York act was
construed by the United States Supreme
Court in Mercantile Bank VS.. New York,
121 U. S. 1873. In that case the court held
that, under the New York statute. the
owners of national bank stock were not
entitled to claim any deduction from the
assessed value of their shares on account
of United States securities owned by the
bank. The conclusion there announced
and the reasoning by which it is supported
we regard as decisive of the present case.
1t will be observed that the language of
our act is not apt language if the intent
was to allow the valuation of the bank
stock to be reduced by deducting from the
assets of the bank such securities as were
exempt from taxation. The word ''de-
auctions" is not an apt word for such pur-
pose.
1t is true the word exemptions" is not
an appropriate word in the view we take
of the act, but in matters of taxation we
must incline in favor of sustaining the
tax. and he who sets up an exemption
must be required to establish it.
1t will also be observed that the act OF
1905 provides that Sin making such as
sessment, the assessed valuation of the
real property of such bank or banking as
sociation shall be deducted from the total
valuation of the shares of stock assessed
against the stockholders. If the Legis-
lature had intended there should also be
deducted from the total valuation of the
shares of stock assessed against the stock
holders" the nontaxable securities hello
by the bank, it would, we presume, have
said so in appropriate language The
fact that the act authorizes the deduction
of real estate in making the assessment
is an indication that nothing but real es
tate is to be deducted on the principle
that the expression of one thing exclude
the other.
The constitution of our state require