The Waco National Bank v. F. O. Rogers, Tax Collector, 51 Tex. 606

Bonner, Associate Justice. The decisive question in this case is this: Is the Waco National Bank, under the laws in force in 1876, liable for tbe State and county taxes for that year, assessed on shares of stock in the bank not owned by it, but owned by the individual shareholders ? By act of May 2,1874, (Laws 14th Leg., 213,) which determines tbe rights of the parties in this case, it was made the duty of every person, firm, corporation, or association owning any of the property thereinafter mentioned in this State, on the first day of January of each and every year, to render and return the same for taxation.

Among other descriptions of property, is mentioned the following: “Fourth. All State, county, town, or city bonds; all shares or stocks in moneyed or banking associations or institutions.” It is said by Mr. Justice Miller, in National Bank v.

Commonwealth, 9 Wall., 358, that “In the several recent decisions concerning the taxation of the shares of the national banks, as regulated by sections 40 and 41 of the act of Congress of June 3,1864, it has been established as the law governing this court, that the property or interest of a stockholder in an incorporated bank, commonly called a share, the shares in their aggregate totality being called sometimes the capital stock of the bank, is a different thing from the moneyed capital of tbe bank held and owned by the corporation.

This capital may consist of cash, or of bills and notes discounted, or of real estate combined with these. The whole of it may be invested in bonds of the government, or in bonds of the States, or in bonds and mortgages. In whatever it may be invested, it is owned by the bank as a corporate entity, and not by the stockholders.” (National Bank v. Commonwealth, 9 Wall., 358; Van Allen v. The Assessors, 3 Wall., 573; Bradley v. The People, 4 Wall., 459; Harrison v.

Vines, 46 Tex., 15.) The above act of May 2,1874, requires the assessment to be made against the owner of the shares or stocks in a moneyed or banking association. The case of Harrison v. Vines, 46 Tex., 15, decides that the words “share” and “stock” are used as synonyms, and that such corporator’ is required to give in for taxation the part or portion of the capital or capital stock of the corporation or association which he owns. Evidently it. was not contemplated by the act that the shares or capital stock of the bank should be assessed against it in its corporate capacity, unless thus owned and held by it.

However desirable it might be on grounds of public policy, and particularly to reach such shareholders as may reside without the State, that a fair and equitable mode of assessment could be devised, not amounting to double taxation, bv which banks could be assessed for the value of the shares or capital stock owned by the individual members as well as for the moneyed capital owned by it as a corporate entity, the same to be charged up against the dividends of the shareholders respectively, yet, until thus provided by statute, this cannot be legally done.

In our opinion, the act of May 2,1874, did not permit such assessment, and there was error in the judgment below in dissolving the injunction and dismissing the bill. As the sworn answer of the defendant shows the assessment to have been illegally made, the judgment below is reversed; and this court now proceeding to render the judgment which should have been rendered below, it is therefore ordered and adjudged that the injunction be made perpetual, the costs of this and the court below to be taxed against appellee. Reversed and rendered!.