Court Opinion

ID: 4141468
Source: CourtListenerOpinion
Date Created: 2017-02-18 03:11:02.873378+00
Date Added: 2024-06-11T14:22:38.950935
License: Public Domain

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             OFFICE    OF THE   AlTORNEY         GENERAL   OF   TEXAS

                                     AUSTIN

QrmhLaC.MU(I(
A-Old-

     Honoxable T. la.Trlnblo
     Tlrst Air8i8tant
     St&q     Superintendent of Publlo Inmtruotion
     Allatin,    Toar

     Dear Slrr

                  wo have raoeivad
     8n opinion    from tale depar                              a your TeQuostr
                  ". . . .

                                                    ntlgamlt     f&i8
                                                     on8 as outlimed
                                                  d aiat statt88  ao-
                                                    Na aTrite at the

                  Total Cepltal Aooouats                   574,340
                    Lees real ost*to
                  BaalcingRouse                  160,000
                  Other Real &state               23,730
                  Total                                    183,730
fbnorable T. Y. 'I'rimbl6,
                        Pt+ 2

         hseeosed         to Share R6ldera              390,610
         8ti                                            312,b9O
         Asss66ed Value Per Shr6                   OU.7.92
         gOnlnSonnatlon   furni~he4   b~Mr.AldmJ6nk6,
    Bireotor of R666ar6h fir th6 klk6rdtr 6f T6x66
    6n.36 6p6oialirtin tax 6utt6r6,Xhthe~Ai6ziliO    Ha-
    tlon61Bank oleima that     th6 a68666rn6& 6horrlbbe
    made up laeordfng.tothe tollori6g rtatomtl
         aapital stook
           Cla88 A Prpmd                     'gp&fJ
           Gemman
         8WRlU6                                 5o:odo
         Uudlvld6d Profit8                    149,335
         Benerve k Retlr6mnt Ao-
           oount prelerrad rtook              llO.OoQ
         Tot6l Capital Aooount6               w3,‘3hO
                      i%Ook, 01866
         te66 .CaRpittll
           A Pr6ferred                        k70.000
         Aotual Value 6.fStook (lOC$) f39,JbO
         Le66   Real      ic6tate

         value or BANiSSTOGlC
         Asaeesea or Tax Yelo,
         2650   Shares;      Va lueo f la o h6hare                866.978
            *you will not. tlmt thr aiti0rm00 betw66n u6
    18 that   we did not list in our 6t6t6ment, tb 01686
    A pwferrrd atooL $235 000 at 6l.l,uhila aooordi&
    to &!X. Jet&6    illtO~&IddiiOLl,he h6  li6t.d   th6
    $235,000 a8 asset6    amkLag UP ths total 06&dt6& 60-
    aour& and has deduotsd 06 it6l St66k cla66 A .prrC
    ierred stook $l,-@,OOO, whPqh i8 figumd at the rata
    of two for 066 rstirablo ?al66.
         l#
          . . . .(I
Honorabla T. Y. Trimbla, Page 3

          At OUT T6qU86t iOr additional iniOlm4tiOnWd hata
reoelved from YOU the i&lo&z@ 6UpplePlsntel informtion:
         wRaferrlngto lour advioe that    you doalro oer-
    taln lnfonaation in ardor that detexdmtlon ry be
    padO 46 to the prOROT 466W6&WRt    Of WM b6Itk #to&
    of the Amarillo Hatlonal Bank, end partioularlyto
    rour repu66t that  w6 gits you lnforrrtloaaoneom-
    i!ltJ   the    fOl&6ilrg         IJW36tiNi6        -

             ‘1. Who           16   th.    OWWf       Ot   the    ~TCdOTl’d
                      6tOOk         and   66   they    h6V6      title t6       it?

                     Reoomtruotioo                Blnanoa Corporation
                     .16 the OUIM~ and h01b.r                     Of    title    to
                      all outstandi~ ~ef0rx-d                          6tOQk.

             ;2.     &i66 the ow&er OS the preferred 6toUk
                     elm  lnotelllthamortga&e   agalll6tthe
                     preferred atOOk?
                     Reo~mtruotlon -06      %r~OHAtiOllo1n-
                     ec and holder of the preferred itook
                     however, no note with mortgage axeout-
                     ed or held.
             “3.     We undershnd that the Reoon6traation
                     PIM!XOO GOrpOT8tiOn own6 or bold6 th6
                     &WfalWd   atook, 6x14it 60 did th6
                     R. F. a. loan the bank $23~,000 or
                     $470,000 In oatihand~~othsr-~~valtrablo
                     OOn6id6TatiOil?
                     R6oonst&aotionflnanoe Oorporatlon pm--
                     oharedpreierred atook inbankaad pai&
                     in OSSh.th6 6~61Of $500,000.     B66k h66
                     mada payment to R.   F. O.,  of $30,000    in
                     oaah, thi6 pamnt 16aring the oUt6t6nd-
                     ing retirable value of preferred       OtWk
                     (amount dtieR.P.Q.,)    the sum of $470,000.

             “4.     UpOn  the 4bOYa a66UlfQttOIl,
                                                 What (LO66the
                      oontraot with the Rooonetfuotion?laaitoo
                      Corporation provide relative to the date
                      of retirement and/or the amount or Bprpltu
fIonorabl6 T. M. Trimble, We   4

          and undivided jWOfit6 that should be 6et
          46lde 6aoh year ?OT t&6 T6tir6IMMtOf
          the68 preferred atooka?
          phe retirement of prefwred  etoak @hall
          be sabup laoh mar on a baa16 of twa and
          onrhal? (2$$) wry oent# aid amountto
          be set over in a ?n6d ?or the retlrsnmt
          or prererrad atook. This 2&$ atuat oom6
          out of earn&a   aooruad for that year.
          * . . . .”

          Attaohed t0 ,$OUrNQU66t 16 4 MW6Q4~T OuigRw
o? a pObli8bellreport o?-the oondition o? the Amrllla lm-
tlonal Bank at the oloae of bu6hioss Deoember 31, 19k.l. #6
QuOtO imm the pWtinent pert thexvo? a6 ?Z41lO66t
                       *aAF~TAL'~AaaCutiTS
     "Oapltal Stook;
       (a) Ulnas A preSsrred, total par
             235,000&C, retlrable .talros
           lb70,000.00:(Rat60r tuti-
           dcmds on retlrable rdloe ia 3%)
       (01 Uij&un &ok, tot&par (265,ooo.oo 500,00&00
     *&U’~lU~                                 50,000.00
     Wnbiv5Aed ~Ofit6                        X49,335.42
     ~666~vt6 Iana retlramnt aoootmt for
        Rirfekred at&Ok)

          "TOTAL LXABILITIESAI'JD
             OAPITOL ACCOUHTS             14.160.304.74"
          The applioable t6Xi6& 6tatut68 Of thi6 State an
Artlolee 7165and 7166,&r*i68d Old1 statute6 O? TILBI, 1925.
          Seotlon 5ld a? Tltia 12 (Bank8 and Bapklng), of
the U. S. 0. A., prOVid66;
          I. . . .

          %Otwlthatandlng any other prooi6ion of law
                     or oonssnt to tax expwsa4 or
     or any prlvllo::e
.

     Honorable T. M. Trimble, kg6    5

          implledly granted thereby,     the    shares of pxwfsrred
          stook of national banking e6sooietloaa,and the
          shares o? proserred atoak,     oepltel not.66 and dr
          bentW66 o? State banks end tru6t oompen186, ao-
          qulred before or after    %-a&     20, 1936 by Reoonstruo-
          tlon Flnenoe Corporntlon,and the dfvidsnda or in-
          terest derived therMram by the Reoonstruotion?I-
          nenoa Corporation, shall not 60 long a6 Reoonstruo-
          tlon Fineno Corporation 6hail continue to own the
          llems,be subject t0 any taxation by the United Statea,
          by any Territory, dspend6noy, or posssaaion thereof,
          or the Distrlot    o? Oolumbla, or by enp Stats, oounty,
          munlolpelity or local taxi% aathorlty,whsthor IAU-
          posed, levle4 , or assessed on, before or aft6r Earah
          20, 19%,     end whether for e past, prtreentor future
          taxing psrlod. . , .*
               T&e prinolpel dl??ioulty In dstennIn!ngyour p~po-
    sit&on erlsae baoauss of the mennsr ln whioh the benk oarrlae
    the Clese A Preferred St&ok upon it6 b00ks. J.t6hW6 that
    olaes of stook to have a pr value of $235,ooO.OOend yet the
    taots presented show that the Class A Preferred 3t0ok ha6 a
    retireblevalue of $470,000.00whloh la the prinolpal remln-
    lng unpaid anount of tho original lot% to tktibank by the Ro-
    oonstruotlonFlnenoe Corporation. In afidJ.tion  to the $235,000.00
    per velue of the steak ths bank appear6 to have set up a re-
    tlremsnt retaerveo? $llO,OOO.OOend an "undividedprofits"
    fund of $149,335.42 out of whlab it may elsot to pey the addi-
    tional mount   0r $125,000.00 to pay the total sum Or $470,000.00
    repreeentlngthe value of ths stock ownat by the Reoonstructlon
    Flnanoe Corp0retionand th6 amount remfilningunpeld of the
    orlglnel abllgetion o? $500 000.00 borrow& by the be& ?SOJE
    ths ReoonstruotlonPlnanoe Eorporetion.
                  The ?eota 6hOW that the'ReoonstruotionBlriuwo Cor-
     poration owns the title to the ales61A Preferred Stook end
     that it ha8 po.MeSsiOn Of 66Em. Under the axpreaa p1~016lOns
     of   said Seotlon 516 o? Tit16 12, U. s. 0. A., aupre, all stock
    .purohasedand owned by the ReoonotruotlonPinan Corporetion,
     pursuant   to   anid statute,    is 6xsnpt irom *any temtlon by . . .
                             munlotpellty or 10061 taxing authority. ."
     %z zE'ihi?%i%i           of 6x Perte frrensford 19lO   60 S Ct. 94:
                  354   84 L.    Ed. 1249; Steto Tex'Com. : Belilmore gel
     %I$      &k      i938 199 A. 119 117 Kb. 40 i Flrkt Netlonel Benk
     V, stet’e lb:,ConmlLsloa, 1939: 92 Pea. (2 987, 43 N. IL 307,
     Honorable T. M. Trlmbls, Page 6

     oertiorarldenied, 1940, 60 23.Ct. 173, 308 0. S. 515, 8i,
     L. Ed. 4391 and Herohante liationaiBank of LGobileQ. U. S.,
     1941, 37 Fed. sup. 931, 93 ot. 01. 705.
               The law Is, themfora, olear. The tmr ana rull.
     ialue of the Prererred Stoak aannot be taxed by the Amarillo
     Independent ClohoolDietriot.
               Shares of bank stook aro to be assessed as other
     personal     property
                       at the *true and full val.wm.     There is no
     exaluslvemethod for determIningthat value. Any mthod may
     be employad whlah In Its nature Is reasonably oaloulated    to
     lstablIsh slob value. It may be mhan by tha market ralm of
     the stock; by payment or dlvldands ror suah period or tIms
     and at euoh rate as to reasonably JustMy ralm or by an ao-
     oounting of the banks net oapltal assets to arx4va at tha .valuo
     baok or the shares. In short any method reasonably aalaulatad
     to reaoh a aorreat oonoltmion as to value Is surrlal0d ror
     the taxIdngauthor1ties. The laws of this state plaaa the duty
     or determInIng the value or suoh stook within the diaorotloa
     or the 10441 aseesalng .authorItIes.The Legislature ha8 reet-
     ed in boards of equalIz&tlon,as oonstituted by etatute, the
     601s dlsoretlon In the valuation and the equalizationof valuaa
     of property subjeot to ad valorem taxation. Their aotion Is
     olothed with the presumption that It has been rightfully    made
     on the basis of aotual raluo and the aourta will daaline to
     disturb auah assessments uuleea shown to be arbitrary and
     grossly exoeeslve or fraudulentor based upon a tundamentally
     wrong prlnolple or method. 40 Tex. Jur. 158. Furthar than
     this the oourts have not gone nor aan this dspartmant in stat-
     ing the rule.
               Eroept a4 to the appllaablelaw, we are unable  to
     advise you oonoernlw the aorreat formula or method, of the
     two eubmltted by you, to be used In maklag the assessment of
     the atook or thr A~~lllo national Bank. You aan, however
     rollow the law whloh wa have glren to you In this OPlnIOn in
     making your aaseasmant.
               Trusting that this opinion will be of soma bansilt
     to you, we are
                                             Yours very truly
                                       ATTOlW3Y   OENEF#L OF TEXAS

A&                                     ,,+&Lk.Lq
                                               Harold SdoOraaken

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