National Bank stock subject to taxation by State and municipal authorities.--Court of Appeals--September term.
The City of Utica vs. G. Clarence Churchill et al.
--The point in controversy in this action was, substantially, whether or not certain taxes imposed by the city of Utica
upon the stockholders of the Second National Bank of Utica
upon their several shares in said bank were legally imposed, and whether payment of the same could be legally enforced.
held unanimously (Judge Porter
not sitting in the case) that the interest of the stockholders in the national banks organized under the act of Congress of June 3, 1864, are legally taxable for State and county and municipal purposes, pursuant to the laws of the State
; that the objection that these moneyed institutions are instrumentalities of the General Government
for the execution of its constitutional powers, and are exempt from State taxation upon the principle by which the late Bank of the United States
was adjudged to be exempt, does not apply where, as in these cases, the tax, instead of being assessed against the corporation, is against the individual stockholders; that this last position was authoritatively adjudged by the Supreme Court of the United States
in the case of Osborn vs.
The United States Bank (9 Wheaton
, 738); that the stockholders are not exempt from taxation, though the capital of the banks be invested in the securities of the public debt of the United States
; that taxes are imposed upon the owners of property in respect of, or on account of, such ownership.
Hence, where a certain kind of property is declared by the Constitution
or by law to be exempt from taxation, the exemption is conferred upon such owners; but the stockholders are not in a legal sense the owners of the securities held by the bank.
Their interest is of a collateral nature, and is not the interest of an owner.--New York Herald.