Case Name: THE PEOPLE, Plaintiffs in Error, v. C. W. MOORE, Defendant in Error
Court: Idaho Supreme Court
Jurisdiction: Idaho
Decision Date: 1873-01
Citations: 1 Idaho 504
Docket Number: 
Parties: THE PEOPLE, Plaintiffs in Error, v. C. W. MOORE, Defendant in Error.
Judges: WhitsoN and Hollister, JJ., concurred.
Reporter: Idaho Reports
Volume: 1
Pages: 504–513

Head Matter:
THE PEOPLE, Plaintiffs in Error, v. C. W. MOORE, Defendant in Error.
National Bank Act — State—Territory.—The word “state,” wherever used hy congress in the currency act of 1864, or in the amendments thereto, should he construed to mean “territory” as well, wherever the same is applicable.
National Bank Shares — Taxation.—When congress enacted the currency act of 1864, it intended to permit the shares in national banks, in the hands of individuals or corporations, to be taxed, wherever such associations might be organized, whether in states or territories.
Idem. — Congress did not intend, by the first proviso of the forty-first section of the national currency act of 1864, to require uniform taxation in all the different municipalities of a state or territory, but only that the same should be uniform in the municipality or subdivision in which the bank is located, or in which the shareholder resides.
Legislative Authority — Taxation.—Congress has sufficiently authorized the legislature of this territory to pass a law requiring the taxation of national bank shares in the hands of individuals or corporations.
Construction — Place oe Taxation. — The limitation as to the place of taxation of bank shares, contained in the national currency act of 1864, and in the act of 1868, amendatory thereof, requiring the assessment to be made “at the place where the bank is located, and not elsewhere,” must be construed to mean the state within which the bank is located.
^Revenue Law — Taxation—Bank Shares. — The revenue law in force in 1871, did not authorize the assessment or taxation of shares of national bank stock in the hands of individuals or corporations.
Error to tbe district court of tbe second judicial district of Ada county, to review a judgment rendered against tbe plaintiffs upon sustaining a demurrer to tbe complaint, on tbe ground that said complaint does not state facts sufficient to constitute a cause of action.
E E. Ensign and A. Heed, for the plaintiffs in error:
Has tbe territory a right to levy taxes upon the shares pf stock of national banks owned and held within its limits ? Such shares are personal property belonging to the individual. (People v. The Commissioners, 4 Wall. 256.) The shares of stock are taxable, not.tbe capital. {VanAdíen v. The Assessors, 3 Id. 573; 9 Id. 468.) Without any special grant of power tbe states or territories have a right to tax all property witbin their jurisdiction belonging to tbe citizen. (1 Dill. 0. 0. 314; 12 Wall. 423; 9 Id. 587; 4 Wheat. 437-439.) The statute of the territory is in strict conformity to the act of congress. (9 Wall. 470.) Under our statute all property, whether real or personal, is taxed at a uniform rate. (3 Am. Hep. 407; 101 Mass. 575.) A party can not complain of his assessment, if his property is taxable, on the grounds that others are not assessed, or that their property is exempt. (1 Dill. C. C. 539; 9 Wall. 470.)
B. Z. Johnson, for the defendant in error:
The judgment of the court below should be affirmed, for that: 1. A territory has no authority to impose taxation upon national bank shares.
And, first, these banks are, as constitutional agencies of the federal government, exempt from such taxation. (Pitts-burg v. First National Banle, 55 Pa. St. 48; Van Allen v. The Assessors, 3 Wall. 589; Veazie Bank v. Fenno, 8 Id. 548; McCul-loch v. Maryland, 4 Wheat. 429; Bank of Commerce v. Neio York City, 2 Bl. 634; Osborn v. United Slates Bank, 9 Wheat. 863; Weston v. The City of Charleston, 2 Pet. 449; 12 Stats, at Large, p. 710, sec. 1; 13 Id., p. 425, sec. 2; 12 Id., p. 346, sec. 2; Id., id. 546; 13 Id., p. 218, sec. 1; Id., p. 306, sec. 18; Bank of Commerce v. New York City, 2 Bl. 628; Bank Tax Cases, 2 Wall. 200; Brown v. Maryland, 12 Wheat. 448; Crandall v. Nevada, 6.Wall. 48; Dobbins v. Erie County, 16 Pet. 447; Currency act of June 3, 1864.) If the territories may impose this tax it must be by virtue of an express grant of the power from congress. (City of Pittsburg v. First National Bank, 55 Pa. St. 50; Van Allen v. The Assessors, 3 Wall. 595; National State Bank of Oskaloosa v. Young, 25 Iowa, 313.) The provisos of the forty-first section of the national bank act are not a grant of any power to tax these national bank shares. First office of proviso. (United States v. Dickson, 15 Pet. 165; Mines v. United States, Id. 445; Voorhees v. Bank of United States, 10 Id. 471; Sedgwick on Stat. & Con. Law, 62, note; Bice v. Keokuk, 15 Iowa, 583; Matter of Webb, 24 How. Pr. 247.)
And second, congress can not confer the right of taxation upon the states of the union. (McCullough v. Maryland, 4 Wheat. 425; Gibbons v. Ogden, 9 Id. 198; Browns. Mary land, 12 Id. 448; Bobbins v. The Oom. of Brie County, 16 Pet. 447; Nathan v. Louisiana, 8 How. (U. S.) 82; Lane County v. Oregon, 7 Wall. 77; The Collector v. Day, 11 Id. 123; Ward v. Maryland, 12 Id. 428; Van Allen v. The Assessors, 3 Id. 585; The State v. First Nat. Bk., 4Nev. 355; Ben-ner y. Porter, 9 How. (U. S.) 242. Tbe provisos of tbe forty-first section are to be strictly construed, and they do not extend to the territories. (1 Kent’s Com. 385; United States v. Dickson, 15 Pet. 165; Van Allen v. The Assessors, 3 Wall. 587; Nat. Bk. Act, secs. 6, 9, 30, 40, etc., throughout the act; Allenv. Pegram, 16 Iowa, 167; 4 Whart. 422; Ang. & Ames on Corp.,sec. 15; Bouv. Law Diet., title Municipal Corporations; Queen v. Com. of Poor Laxos, 6 Ad. & EL 68; Smith’s Com. Stat. Law, sec. 489; Broivn’sLessee v. Blougher, 14 Pet. 198; Amendments of Bk. Act, 1; Act March 3,1865; 13 Stat. 498; Act February 10,1868; Act July 12,1870; 1 Kent Com. 348; Hepburn v. Nlbz'y, 2 Cranch, 445; New Orleans v. Winter, 1 Wheat. 91; Barney v. Baltimore, 6 Wall. 287; Scott v. Jones, 5 How. (U. S.) 377; Messenger v. Mason, 10 Wall. 507.)
2. The legislature of this territory had not attempted, at the time of this assessment, to exercise this authority; and the imposition of the taxes in question here was not authorized bylaw. (County Treasurer v.- Webb, 11 Minn. 503; Ang. & Ames on Corp., secs. 458, 560, 561; 28 Iowa, 149, 450; Bradley v. The People, 4 Wall. 459; Hubbard v. The Supervisors, 23 Iowa, 147; The People v. The Assessors of Boston, 44 Barb. 148, 158; National Bank v. Commonwealth, 9 Wall. 359; Van Allen v. The Assessors, 3 Id. 581.)

Opinion:
Noggle, C. J.,
delivered the opinion.
WhitsoN and Hollister, JJ., concurred.
This action is brought by the district attorney against the defendant, to collect taxes on personal property. The defendant appeared and filed a demurrer to the plaintiff's complaint; that demurrer was sustained by the district court; from that decision, sustaining the defendant's demurrer, the plaintiff has appealed to this court. The proceedings in this court seem to be for the purpose of determining the question, whether the shares of stock in the National Bank, in the hands of the defendant, were properly assessed in 1871; whether such assessment was authorized by the laws of congress and of this territory. The court will dispose of the three questions argued:
1. Does the law of congress, known as the national currency act of 1864, and its amendments, give the power of taxation to the territories? or has congress by any law prior to the date of the assessment in 1871, extended to Idaho territory the power of taxation? By section 6 of the organic act for this territory it is among other things provided: "That the legislative power of the territory shall extend to all rightful subjects of legislation, consistent with the constitution of the United States and with the provisions of this act; but no law shall be passed interfering with the primary disposal of the soil; no tax shall be imposed upon the property of the United States, nor shall the lands or other property of non-residents be taxed higher than the lands or other property of residents." This law of congress was in force, and this territory had been organized and was in operation, long before the currency law was enacted by congress. It was then a territory, possessing the inherent power of taxation, a government that could only be sustained by taxation.
We must therefore conclude that when congress used the word state, in the currency act of 1864, or in the amendments thereto, they also meant territory wherever that term is applicable. This conclusion is arrived at after a careful review of the authorities quoted by the counsel on both sides of the case; from the case of McCulloch v. Maryland, 4 Wheat. 429, to Ward v. Maryland, 12 Wall. 428. From all these authorities, as well as from the very interesting arguments of counsel on both sides, we feel confident that when congress enacted the currency law of 1864, it intended to permit the shares in these national associations in the hands of individuals or corporations, to be taxed, wherever such associations might be organized, whether in states or territories.
TVe will nest dispose of tbe last point, and will consider tbe second point last.
Tbe last point argued is by far tbe least important point in tbe case, and tbe court is now unanimous in tbe opinion that Congress did not intend that taxation should be uniform in all tbe different municipalities of states or territories; that all that is meant in tbe first proviso of tbe forty-first section of tbe national currency act of 1864, by requiring that tbe shares in these national associations might be taxed where such bank is located, and not elsewhere, but not at a greater rate than is assessed upon other moneyed capital in tbe bands of individual citizens, etc., could only have reference to tbe taxes of tbe municipality or county in which tbe bank was located or tbe shareholder resided.
It is true that in tbe case of Providence Institution for Savings and Jewell v. City of Boston, 101 Mass. 575, and also in tbe third volume of American Reports, 407, this question is discussed in such a manner that it is well calculated to deceive and give a wrong impression. Tbe case sustains tbe law as we understand it; sustains tbe legality of tbe tax in Massachusetts by affirming tbe judgment sustaining tbe tax. In doing so, however, great labor is expended in reasoning down tbe objections to tbe law that some localities in tbe state might assess a greater tax than other localities in tbe same state. We think that congress did not attempt to exempt tbe shares of national banks owned by or in tbe bands of individuals or corporations from municipal taxation ; all that congress did require was that wherever taxed, whether for state, territorial, county, school, town, or city purposes, such shares should not be assessed at a greater rate than is assessed on other moneyed capital in tbe bands of individual citizens of such state.
In tbe opinion of tbe court congress has sufficiently authorized Idaho territory to pass a law, requiring tbe taxation of national bank shares in tbe bands of individuals or corporations. Tbe limitation mentioned in tbe first proviso of tbe forty-first section of tbe national currency law of 1864, when construed in connection with tbe act amending tbe same law approved February, 1868, in relation to taxing shares in national banks, and when congress say that "nothing in this act" (meaning the currency act of 1864, aforesaid) " shall be construed to prevent all the shares in any of said associations, held by any person or body corporate, from being included in the valuation of the personal property of such person or corporation, in the assessment of taxes, by or under state authority, at the place where such bank is located, and not elsewhere, but not, at a greater rate than is assessed upon other moneyed capital in the hands of individual citizens of such state," and by said amending act declare that the place where the bank is located, and not elsewhere, in section 41 of the act to provide a national currency, approved June 3, 1864, shall be construed and held to mean, the state within which the bank is located; also in providing that stockholders who did not reside within the state, that their shares shall be taxed in the city or town where said bank is located, and not elsewhere; showing plainly, we think, that in requiring uniformity, congress had reference only to the state, territory, county, town, or city, wherever the shareholder might reside, in the state or territory where the bank is located, that if the bank should be located in a city, the state or territorial and the county and city assessment should not be at a greater rate in the state or territory, county and city, than is assessed in the same state or territory, county and city, on other moneyed capital in the hands of individual citizens of that city or county, provided, that such shareholder resided in the state where the bank Avas located.
Congress did not intend that the tax on shares of stock held by a resident of Owyhee or Boise county, should pay just the same taxes that the shareholder in Ada county pays. All that the currency act and its amendment require is that the assessment shall not be at a greater rate than is assessed on other moneyed capital in the hands of individual citizens of said county or other municipality, where such shareholder may reside, in the state Avliere such bank is located. When congress conferred upon the legislature of Idaho territory the power over all rightful subjects of legislation, congress knew as well then as now that even the territorial government must be carried on in part by taxing tbe property within tbe territory; that tbe territorial government they bad established required tbe organization of counties, towns, and cities, whose governments must be sustained by a tax upon tbe property within them; and also knowing that tbe wants, necessities, and expenses of these different municipalities could not be uniform, congress could have bad no intention to require that such municipal taxation should be uniform throughout the territory or the state.
We will now consider the point passed over, which we regard as the decisive point in this case, and which is the last point necessary to be considered by the court, and that is, does the revenue act of Idaho territory, that was in force when these taxes were assessed, authorize the assessor to assess the shares of national bank stock in the hands of individuals or bodies corporate in name? We think not. We also think that the territorial taxation of those shares, under the legislation of congress, is lawful whenever the legislature pass such laws as authorize the territory to do so. (Van Allen v. The Assessor, 3 Wall. 573.)
Congress organized the system of national banks, and in the absence of express inhibition, possessed the right to surround that system with all the necessary safeguards to protect such banks and their shareholders in future; and if congress sees fit, as it has done, to regulate the taxing power of the states over these institutions, that exercise is not to be questioned; because, by the terms of the federal constitution, "the laws of the United States shall be the supreme law of the land, and the judges in every state shall be bound thereby, anything in the constitution or laws of any state to the contrary notwithstanding." The national currency act of 1864 provides that nothing contained in that act shall be construed to prevent all the shares in any of the said associations, held by any person or body corporate, from being included in the valuation of the personal property of said person or corporation in the assessment of taxes, imposed by or under state authority, at the place where such bank is located, and not elsewhere; but not at a greater rate than is assessed upon other moneyed capital in the hands of individual citizens of such state. This must be regarded as the regulation of a taxing power that existed in the states, and by the law of congress in the territory of Idaho, prior to the currency law of June, 1804. If said provisions of said forty-first section of the national currency act aforesaid are mere regulations of the taxing power, then the local law must conform to the law of congress upon that subject.
For the purpose of ascertaining the authority given to tax the shares in question, as provided by congress, we must first examine our organic act, and the laws enacted by our legislature under that act.
Section 6 of the organic act for Idaho territory provides, among other things, as before stated: ' ' That the legislative power of the territory shall extend to all rightful subjects of legislation consistent with the constitution of the United States, and provisions of this act; but no law shall be passed interfering with the primary disposal of the soil; no' tax shall be imposed upon the property of the United States; nor shall the lands or other property of non-residents be taxed higher than the lands and property of residents." These are the only inhibitions in the organic act that in any way reach the legislative ¡rower upon the question of taxation. This is virtually leaving all other power of taxation, not prohibited by the organic act, with the territorial legislature.
From all these various laws, from time to time passed by congress, we think there is no doubt it was the intention to confer upon the territorial legislature the power to tax the shares in the hands of individuals or bodies corporate of national banks; but we think the tax imposed must be upon the shares in name, and that it is unsafe to attempt to tax them in any other manner. Eo nomine et numero.
As to the last proviso, in the forty-first section of the national currency law, it is sufficient to say, there is no other bank in the territory excepting the first national bank of Idaho, at Boise city; therefore, no unfair discrimination is possible between this bank and. any other bank in the territory. We are of the opinion, tbat the laws of Congress authorize legislation in this territory for the purpose of taxing the shares of national banks, in the hands of individuals and bodies corporate.
We will now examine the statutes of Idaho and see if our revenue laws furnish sufficient authority for assessing the shares in the hands of the defendant. The last part of section 5 of the revenue law then in force, chapter 1, on page 20 of- the fifth session laws, is the law relied upon by the counsel against the demurrer and in support of the tax. That part of the section relied upon reads as follows, viz.: "All capital loaned, invested, or employed in any trade, commerce, or business whatever; the capital stock of all corporations, companies, associations, firms, or individuals doing business or having an office in the territory; the money, property, and effects of every kind, except real estate, of all banks, banking institutions or firms, bankers, money-lenders, and brokers," may be assessed.
Section 1 provides an annual ad valorem tax of eighty cents upon each one hundred dollars value of taxable property for territorial purposes; and the same section 4, said revenue act, provides, that upon the same property the board of commissioners from each county is also hereby authorized and empowered to levy and collect, annually, a tax for county expenditures, not exceeding one hundred and fifty cents on,each one hundred dollars; and upon the same property a further special tax may be levied to meet purposes under the laws of this territory.
The revenue law contains six hundred and eighty-nine sections; but that part of section 5 above set out, comes nearer authorizing the assessment and taxation of shares of stock in the hands of individuals than any other portion of the revenue law. We are unable to say, after examining these laws, with as much care as possible, under all the circumstances, that there is any law in Idaho territory that authorizes the assessment or taxation of national bank shares where the bank is located in the territory.
It will probably not be denied that personal property of the nature of bank shares ordinarily follows the situs of the owner, that it is usually situated where tbe owner resides. "We think that under the ordinary rule, this description of property, in the absence of statutory provision, would be deemed to be situated where the owner resided. Congress, however, in the forty-first section of the national currency law of June, 1864, did assign to the shares in these national associations a situs for the purpose of taxation. That situs of the shares in said national associations, by the act construing said section, approved February 10, 1868, is fixed within the state where the bank is located, and in the case before us, within the territory of Idaho. And by the proviso of the amending act aforesaid, it is provided: " That the shares of any national bank owned by non-residents of any state in the city or town where said bánk is located, and not elsewhere." We think the territorial legislation does .not sufficiently conform to the laws of congress, and that the defendant's demurrer should be sustained.
We think this point raised by the demurrer, and lastly considered by the court, is well taken, and for that reason the judgment of the district court is affirmed.