First National Bank of Gulfport v. Adams/Opinion of the Court

Petitioner is a national bank located at Gulfport, Harrison county, Miss. The state revenue agent instructed the tax collector for that county as follows:

'The following described property, in said county, to wit:     Capital stock, surplus, undivided profits, and any and all      other property properly assessable to banks, amounting to      $75,150, belonging to and owned by First National Bank of      Gulfport has escaped taxation during each of the years of      1902, 1903, 1904, 1905, 1906, and 1907, by reason of not      being assessed.

'You are, by virtue of the Annotated Code of Mississippi of     1906, chapter 131, section 4740, now notified and required      to, within ten days hereafter, make the proper assessment of      said property by way of an additional assessment, on the roll      or tax list in your hands, and to give ten days' notice in      writing to said First National Bank, whose property is so      assessed, and also notify in writing the board of supervisors      of said county of said assessment.'

In obedience to this instruction, the collector entered upon the rolls of his office an assessment to the bank in these words:

'Amount of all other personal property not otherwise     mentioned, $174,000.'

Objection was duly offered upon the ground that the corporation was assessed, and not the stockholders, as required by section 5219, Revised Statutes of the United States (Comp. St. § 9784). The Harrison county circuit court overruled this and directed the board of supervisors--'to assess the First National Bank of Gulfport, Mississippi,     with capital stock, surplus, undivided profits, and any and      all property assessable to said bank, in the sum of $75,150,      for the years 1903, 1906, and 1907, which said property was      at said time owned by said First National Bank, and which had      escaped taxation for each of the years as hereinbefore set      out; and said board of supervisors is hereby directed to make      such assessment by way of additional assessment on the roll      and tax list of Harrison county, Mississippi.'

The Supreme Court of the state approved this judgment. See State Revenue Agent v. Bank, 108 Miss. 346, 66 South. 407; Adams v. First National Bank of Gulfport, 116 Miss. 450, 77 South. 195; First National Bank of Gulfport v. Adams, 123 Miss. 279, 85 South 308.

Section 5219 Revised Statutes (copied below), prescribes the full measure of the power of the several states to impose taxes upon national banking associations or their stockholders. Any assessment not in conformity therewith is unauthorized and invalid. Bank of California v. Richardson, 248 U.S. 476, 483, 39 Sup. Ct. 165, 63 L. Ed. 372.

'The tax assessed to shareholders may be required by law to     be paid in the first instance by the corporations themselves      as the debt and in behalf of the shareholder, leaving to the      corporation the right to reimbursement for the tax paid from      their shareholders, either under some express statutory      authority for their recovery or under the general principle      of law that one who pays the debt of another at his request      can recover the amount from him.' Home Savings Bank v. Des      Moines, 205 U.S. 503, 518, 27 Sup. Ct. 571, 576 (51 L. Ed.     901.)

But, as pointed out in Owensboro National Bank v. Owensboro, 173 U.S. 664, 676, 677, 19 Sup. Ct. 537, 43 L. Ed. 850, a tax levied upon a corporation measured by the value of its shares is not equivalent to one upon the shareholders in respect of their shares.

Where the validity of an assessment by officers of the state is properly challenged, and the matter comes here, this court must determine the effect of the thing actually done. What might have been done under the local statute is not controlling. We think it clear that the assessment in the present case was against the corporation and beyond the power of the state definitely delimited by section 5219.

The judgment of the court below must be reversed, and the cause remanded for further proceedings not inconsistent with this opinion.

Mr. Justice CLARKE took no part in the consideration or decision of this cause.