Bismarck daily tribune. [volume] (Bismarck, Dakota [N.D.]) 1881-1916, 1915-06-10
STOCKHOLDERS
WILL Be TAXED
supreaa. Court t'i 1 4 I. That Bank:
ing Corporations Cannot Be
Taxed. Fh

The supreme court yesterday hand.
ed down an opinion in the case OF
Merchants State Bank Of Velva VS..
MtiHenry County, involving the COL
lection Of a tax levied against the
Sank Upon it's shares OF capital stock,
which Is Of great interest in the
state in that II involves the future
procedure in the assessment and col.
lection Of taxes against both state
and nationa! banks. Judge Goss wrote
the opinion.
The court ruled that a tax levied
against any bank is void and that
such tax should Believed against the
individual stockholders Of the bank,
in proportion to their stock holdings.
Il further held that a court of equi-
~ could not restrain the collection Of
q tax levied against any banking cor.
poration, but that remedy could be
had by paying such tax under dis
traint and then suing for the recov-
cry of same. This decision calls the
attention Of the taxing power of the
state to the proper mode Of collec-
ton in such cases.
The syllabus follows:
FROM M'HENRy COUNTY.
The Merchants State Bank OF Velva,
North Dakota, a Domestic Corpora
ton, Plaintiff and Respondent,
VS.. t.vw r.
The County of McI1enry. in the State
OF North Dakota, ct al, Defendants
and Appellants.
Syllabus: Action to enjoin coffee
ton Of a tax levied against a state
bank upon its shares OF capital stock.
Held,
(l) The capital stock, surplus, re.
serve funds, undivided profits, loans
and discounts. banking furniture and
fixtures not real estate, and all strict
~ banking utilities are hot taxable to
the bank nor at all as items OF per.
sonallty, but Of and to the %sharehold-
ecs, apportioned on a per share valu-
alton.
(2) "A bank is not subject to taxa.
ton for the values Of its shores of
capital stock. Instead assessment
and levy should be made upon the
value Of the shares determined under
Sec. Ellis, G. L. 1918, and in the name
Of and against its respective share
holders.
80 The purported assessment and
tax levied thereon against the bank
for the aggregate value OF its bank
shares is void. ,....
ca Such q void tax cannot We can
celed and its collection entoined by a
suit in equity, unless there also eX-
lists some generally recognized head
of equitable jurisdiction emitting the
Court to administer equitable relief.
90 No irreparable injury can re-
suit 70 plaintiffs from enforced col
lection OF this void tax, as it may sue
to recover it back and therefore has
an adequate reief at law.
CO. AS no action al law will lie
against the bank by its shareholders
upon It's being compelled to pay the
void tax, no multiplicity Of suits can
arise to confer equitable jurisdiction.
Equitable relief is denied and this ac-
ton ordered dismissed.
From a judgment Of the District
Court Of McHenry County, Burr. J
cancelling the tax and staying its col
lection, defendants appeal.
Reversed and dismissed. Opinion
of the Court by Goss, J. Christian.
son, j., being disqualified, did not par
ticipate, Hon. C. W. Buttz, Judg, CT
the District Court Of the Second Judi
cial District, sitting in his stead.
John Thorpe Of Towner, States At
torney Of McHenry County, and
George E. Wallace Of Bismarck fof
and for the State Tax Commisslon),
]. II. Ulsrud and D. j. O'Connell OF
Towner, Attorneys for Defendants
and Appellants.
Palda, Aaker' e Greene of Minot,
Attorneys for Plaintiff and Respond.
ONT .' .J.-