Lindsay v. First National Bank

This was an action brought in the circuit court of the United States for the Western district of Louisiana by the First National Bank of Shreveport, a corporation created under the laws of the United States, against Robert H. Lindsay, assessor of the parish of Caddo, the police jury of said parish of Caddo, and the city of Shreveport, Louisiana. The declaration or petition sets forth that the capital stock of said bank consists of 2,000 shares, of $100 each, held and owned by about 20 persons, who are named in the petition; that Robert H. Lindsay, as assessor of the parish of Caddo, had assessed the shares of stock of said corporation against the said stockholders on the tax roll of the current year 1889 at the rate of $80 per share, aggregating the sum of $160,000; that such assessment was unlawful, unjust, and excessive, and that the bank and said stockholders, in due time and form, applied to the police jury of said parish, sitting as a board of reviewers, under the provisions of the revenue laws of said state, for the cancellation of said assessment, or to have the same corrected, but that said board of reviewers failed and refused to cancel or correct such assessment, which accordingly appeared on the tax roll for the year 1889 of said parish; that under the existing laws, on all property subject to taxation, the state levies a tax of 6 mills on the dollar of valuation; that the parish of Caddo, through its police jury, levies a tax of 8 mills on the dollar of valuation, and the city of Shreveport levies a tax of 23 3/4 mills on the dollar of valuation,-making a total tax of 37 3/4 mills on the dollar of valuation; that, under said illegal assessment, the state of Louisiana, the parish of Caddo, and the city of Shreveport are about to collect such taxes, aggregating $6,040, from the petitioner, 'unless prevented by the decree of this honorable court'; that the state of Louisiana has no power or right to tax in any manner the capital stock of any national bank, except so far as such power and right have been granted by the congress of the United States; that, under existing laws of the United States, the state may determine and direct the manner of taxing all shares of national banks having their domicile in the state, provided such taxation shall not be at a greater rate than is assessed upon the moneyed capital in the hands of individual citizens of the state, and that the true intent and meaning of such proviso is that the tax assessed on the shares of national banks shall be equal and uniform with the tax assessed and levied on other property in said state and on the individual owners thereof; that by the statute of the United States authorizing the state to tax, under certain limitations, shares of national banks, by the 'law of the land,' and by the constitution and laws of the state of Louisiana, it is expressly provided that taxation shall be equal and uniform; that the assessment so as aforesaid made violates the principle of equality and uniformity, in this: that the said Lindsay, assessor, has assessed said shares of stock at a much higher value proportionately than that at which he assessed the property of other citizens subject to taxation, the assessment of said shares being twice as high as that placed on other property; that the said assessor, Lindsay, has willfully failed and neglected to assess and place on said tax roll moneys in the possession of citizens of the state, and moneys by such citizens loaned out, bonds, judgments, notes, accounts, and other verdicts held by and due to citizens of the state, and property of other kinds owned by citizens of the state and by persons not citizens of the state, all of which was and is subject to taxation, and should have been assessed and placed on said tax roll, and that the value of said property so omitted from said tax roll exceeded, at the time when said assessment should have been made, the sum of $1,000,000; that the acts of the said assessor, Lindsay, relating to said tax roll, destroy the uniformity of the rule fixed by the constitution and laws of the state, and are subversive of the act of congress allowing shares in national banks to be taxed, which act intended to protect the owners of such shares from greater burdens than are imposed on other moneyed capital in the state where such banks are located; that, in arriving at the assessment of said shares in said bank, the said assessor, Lindsay, and the said police jury, sitting as a board of reviewers, took the capital stock of said bank, viz. $200,000, and added thereto $40,000, the earnings of the bank, which did not and does not in any manner constitute any portion of the capital stock of said bank, and which the bank held and now holds in United States bonds, by law exempted from taxation; that section 29 of Act No. 85 of the general assembly of Louisiana (session of 1888), the existing revenue act of said state, provides that the actual shares of stock of every national bank shall be assessed to the stockholders, and the taxes so assessed shall be paid by the bank, and that all property owned by the bank taxable under section 1 of said act shall be assessed directly to the bank, and the pro rata share of such direct taxes and of all exempt property proportioned to each share of capital stock shall be deducted from the amount of taxes assessed to that share under said section 29; that, the said earnings having been invested in property exempted from taxation, the said assessor and the said police jury should have deducted the same proportionately from the amount of taxes assessed to each share in said bank; that, by the provisions of the twenty-ninth section of said Act No. 85 of the general assembly of Louisiana (session of 1888), the said bank is required to pay the taxes assessed to its stockholders; that the corporation known as the First National Bank of Shreveport is a juridical person, separate and distinct from each and every person holding stock therein, and is not and cannot be bound to discharge the obligations of such other persons, and that said provisions of said section of said act violate the constitution of the United States, etc.; that this is a case arising under the constitution and laws of the United States, and presents federal questions, and that this honorable court has jurisdiction to hear and determine the same; that, therefore, the petitioner prays that the said Lindsay, assessor, said police jury of Caddo parish, and the city of Shreveport be cited to answer hereto; that, after all legal notices and delays, there be judgment in favor of petitioner declaring said assessment null and void, and prohibiting the collection of any tax from petitioner or its stockholders; or, in the event the court should not hold said assessment absolutely void, petitioner prays for a judgment reducing said assessment so as to make it equal and uniform with other assessments, and striking therefrom the amount of property held by the bank exempted from taxation, and prays for all orders and decrees necessary in the premises for costs, and for general relief.

The defendants appeared, and filed the following exception:

'Now come defendants in above-entitled suit, and except to plaintiff's suit, which is in the law side of the court, on the ground and for the reason that the allegations of plaintiff's bill or petition show that his remedy is not by an action at law, but by injunction and bill in equity, and this court is without jurisdiction to entertain this suit as an action at law; whereupon defendants pray that this exception be sustained, and plaintiff's suit be dismissed, with costs.'

After argument, this exception was overruled, and thereupon the plaintiff filed an amendment or supplemental petition, averring that the bank holds the amount of $183,000 in bonds of the United States, constituting a portion of its capital, and so holds the same at the time of the unequal and illegal assessment set forth in the original petition, and that, in assessing said capital stock in which said amount of bonds was included, there was and is an unjust discrimination against said bank and its stockholders, and the shares of the stockholders in said company are assessed at a greater rate than was assessed upon moneyed capital in the bonds of individual citizens of the state; that United States bonds in the hands of individual citizens of the state were not and are not assessed or taxed; that the statute of the state of Louisiana under which the assessment was made discriminates unjustly against petitioner and its stockholders, and violates the principles of equality and uniformity in taxation by exempting such United States bonds from taxation when held by individual citizens of the state, and taxes the same when held by the bank and its stockholders; and that said assessment and the statute under which it was made are null and void.

Subsequently the defendants filed the following exception to the amended petition:

'Now come defendants in the above-entitled suit, and except to the amended and supplemental petition filed by the plaintiff, on the ground and for the reason that the allegations therein contained disclose no cause of action against these defendants; wherefore they pray that this exception be sustained, and that said petition be dismissed, at plaintiff's costs.'

On motion and after argument, this exception was overruled, and the defendants filed an answer, denying generally the allegations of the original and amended petitions, admitting that the shares of stock of plaintiff's bank were assessed in the assessment roll of 1889 to the respective stockholders named in the petition at a valuation of $80 on each share, of the face value of $100, and averring that said assessment was at the rate of two-thirds of the actual cash value of such shares, which were, at the rate of said assessment, worth in the market the sum of $120 dollars in cash per share, if not more; denying that the assessor or the board of reviewers in and for the parish of Caddo have willfully or intentionally omitted any property from assessment or taxation for the year 1889, and stating that, if there was 'surveyed capital in the hands of individuals' in said parish not assessed for the year 1889, the same belonged largely to the shareholders of plaintiff's bank, and was not returned by them for assessment according to law; denying that defendants have discriminated or attempted to discriminate in any manner against the shareholders of plaintiff's bank, and that said bank or its stockholders have any just cause of complaint.

The record further declares that on March 4, 1891, the case came on to be heard; that a jury was impaneled and sworn to try the same; and that, after evidence was put in, the jury rendered the following verdict:

'We, the jury, find the assessable value of each share of stock in the plaintiff's bank is twenty-three dollars and a half, after deducting from the assessment in controversy the amount of United States and state bonds held by the bank as portion of its capital stock.'

On March 14, 1891, there was entered a judgment in the following terms:

'In this case, by reason of the law and the evidence, and the verdict of the jury being in favor of the plaintiff, the First National Bank of Shreveport, it is ordered, adjudged, and decreed that there be judgment in favor of said bank, against the state of Louisiana, reducing the assessment on each share of the capital stock of said bank, made against its several stockholders, as set forth in the petition, for the year 1889, from eighty dollars a share to twenty-three 50/100 dollars a share, said amount of twenty-three 50/100 dollars being (according to the rate of assessing all property at two-thirds of its cash value, adopted by and governing the assessing officers of the parish of Caddo, for and during the year 1889, in making the assessment of said year) equal to two-thirds of the amount found by the jury to be the full assessable value of each share, and reducing the aggregate assessment of the entire 2,000 shares of the capital stock of said bank on the assessment roll or tax roll of 1889 from one hundred and sixty thousand to forty-seven thousand dollars; and it is further ordered and decreed that there be judgment to the same effect against the parish of Caddo, and against the police jury of said parish; and it is further ordered and decreed that there be judgment to the same effect in favor of said bank, and against the city of Shreveport; and it is further ordered and decreed that there be judgment against the defendant R. H. Lindsay to the same effect; and it is further ordered and decreed that plaintiff have and recover from the defendants in solido costs, to be taxed.'

W. W. Howe and John S. Blair, for appellants and plaintiffs in error.

A. H. Leonard, for appellee and defendant in error.

Mr. Justice SHIRAS, after stating the facts in the foregoing language, delivered the opinion of the court.