
    The People ex rel. The Savings Bank of New London, App’lt, v. Michael Coleman et al., Com’rs, Resp’ts.
    
      (Supreme Court, General Term, First Department,
    
    
      Filed March 31, 1892.)
    
    1. Taxes—Foreign savings banks—Shares of national banks.
    Shares of stock in New York national banks held by a foreign savings bank may be taxed here, even though such bank can show an exemption of its property accorded by the statutes of the state in which it is situated.
    2. Same—Deductions.
    Though the amount of assets necessary to pay depositors is exempt from taxation, such assets cannot be entirely disregarded in determining what part of the property of .the bank can be taxed, and the bank allowed to offset the entire amount of its liabilities against the stock held by it.
    3. Same—Discrimination.
    To entitle a party to relief on the ground of discrimination, the extent of such discrimination should be shown.
    (Patterson, J., dissents.)
    Appeal from orders upon certiorari to review decision of tax commissioners.
    
      S. B. Brownell, for app’lt; George S Coleman, for resp’ts.
   O’Brien, J

This appeal presents the question whether it was error upon the part of the tax commissioners to assess shares held by relator in New York city national banks for taxation in 1890 to the amount of $92,464.

' The facts, as they appear from the petition and return to the certiorari, show that the relator and appellant is a corporation created by and under the laws of Connecticut. On the second Monday of January, 1890, the relator was the owner of certain shares of stock in various banks located in the city of New York, and was assessed for taxation as a stockholder in the aggregate sum of $156,284.

The relator having applied for a cancellation of the assessment, the tax commissioners considered it and took evidence concerning the property of the savings bank, ascertaining among other things the following facts: that the relator was a moneyed and business corporation, organized and doing business as a savings bank, in and under the laws of the state of Connecticut, and that it had no office nor business nor tangible property within the ciiy or state of New York; that the gross assets of,the relator amounted to............................... $4,611,798 64 and its liabilities were........................ 3,675,159 59

Leaving a gross surplus of.................. $936,639 05

After deducting from this gross surplus an amount representing all propei'ty of the relator not liable to taxation, or taxable elsewhere than in New York city, or real estate, which deduction aggregated.................................. $743,772 34 there remained a net surplus of................. 192,866 71

The difference between the actual value of shares assessed..................................... $256,462 50 and the net taxable surplus of the relator........ 192,866 71

is.........'............................... $63,595 79

The difference between the actual value of the stock of the bank shares and the assessed value thereof is explained by the fact that pursuant to the provisions of § 312 of chapter 409 of the Laws of 1882, a deduction is required to be made from the actual value, in order to determine. the assessed value; deducting from the original valuation.................... $156,284 00 the excess of valuation....................... 63,595 79

Leaving a taxable balance of................. $92,688 21

This amount is slightly in excess of the aggregate assesssment actually imposed upon the relator, which as we have stated, was......................................... $92,464 00

The tax commissioners also ascertained that the relator had no capital stock so called, and was neither taxed nor taxable in Connecticut on the value of its assets, for local purposes, but was taxable in said state on its corporate franchises only; that in the assessment and taxation of bank shares, and other forms of personal estate, in the state of Connecticut, no deduction is by-law allowed for the debts of the owner of such property. The relator claims that the decision of the assessors was erroneous and illegal, upon the following grounds:

First. That the relator, being a savings bank, is exempted by the laws of the state of New York from taxation on its personal property, including its bank shares.

Second. That the assessment is not authorized by the federal law under which the national banks were incorporated, nor by the laws of New York, because the debts of the relator should have been allowed or offset against the assessment of its national bank shares.

These grounds were held by the learned judge at special term to be untenable,.and we see no ground for disturbing the conclusion thus reached. In overruling the first position taken by the appellant, that savings banks are not wholly exempt from taxation under the laws of the state of New York, the learned judge referred to the case of The People ex rel. Ithaca Savings Bank v. Beers, 67 How. Pr., 225, which fully considers this question, and with the reasoning thereof we are entirely satisfied.- In’that case, after examining thb statutes in reference to savings banks, it was held that the property in the hands of a savings bank might be taxed in this state after deducting, first, the amount of all the just debts owing by it, and second, the amount of its assets actually invested 'in United States securities. Even though the relator could show an exemption of property, accorded by the statutes of' Connecticut, this would not avail to exempt such property in the slate of New York. Catlin v. Trustees of Trinity College, 113 N. Y., 142; 22 St. Rep., 189.

In support of the second ground urged by appellant, it is insisted that the commissioners’ refusal to allow the debts of the relator to offset or go in reduction of the assessment of it as a stockholder in the National Bank was illegal and erroneous, and against both the federal and state law.

It is a little difficult for us to follow the process of reasoning by which any such deduction can be made, based on the action of the commissioners. Their return shows, that taking all the assets of the bank,.and deducting, therefrom all the liabilities of every kind, there remained a.gross surplus which, in part, consisted of real estate and property not liable to taxation, or taxable elsewhere than.in New York city, which was deducted for the purpose of ascertaining the net surplus.

It was by following this method, as we have seen, of allowing the debts and liabilities to be offset against the assets, that the balance was reached. Appellants cannot seriously urge that because the amount of assets necessary to pay depositors is- exempt from taxation, that in reaching a conclusion as to what property of a savings bank can be taxed, that the assets are to be entirely disregarded, and against any particular piece of property or asset otherwise liable to taxation the bank shall be entitled to offset the entire amount of its liabilities. This in effect and in substance would be to exempt banks from all taxation upon any and all property, which, as we have seen, is not the law in this state, because it is hardly conceivable that any bank actively engaged in business could not at all times present a statement of liabilities in the shape of the amount due depositors, if nothing more, which would exceed a particular class of property or a particular asset sought to be taxed. We agree with appellants, that no assessment for taxation upon national banks, or the holders of their stock, can be laid except in accordance with the terms of the federal law, and that one of the conditions or limitations imposed by that law is that the taxation shall not be at any higher rate than that imposed upon money capital in the hands of individual citizens.

The question remains, however, has the federal statute been violated ?

The laws of this state governing the taxation of bank stock have been upheld by the suéneme court of the United States, and we must therefore regard that question as settled. Mercantile Bank v. State of New York, 121 U. S., 138; Palmer v. McMahon, 133 id., 660.

;■ By referring to the provisions of our state law with respect to ! the taxation of bank stock, chapter 409 of the Laws of 1882, it will be found that they correspond with the requirements of the federal laws, and make provision for the two restrictions placed upon the right to tax as found in § 5219 of the Bevised Statutes of the United States, which is the authority under which the several states assessed bank stock of the national banks, i This statute appellant insists has been violated by a discrimination made against it, but it nowhere affirmatively appears what, if any, is the extent of such discrimination, and this should affirmatively appear to entitle the relator to any relief by the court based on such a ground. Not only does appellant claim such discrimination, without any proof to support it, but it was further urged that the learned court below fell into an error in stating that the commissioners “ pursued the same course as is required by law in the case of an individual or domestic corporation.” It has not been pointed out to us what portion of this statement is error, nor has it been suggested in what respect the treatment accorded to the relator was different from that which was accorded and extended to citizens or corporations of this state.

We might present the question in another view, viz.: if it had been shown that some method other than the one pursued towardst-the relator had been adopted in reference to New York banks or citizens, a ground of complaint might be present. We feel satisfied however, upon examining all the proceedings of the commissioners, that if the relator were a New York savings bank, the assessment made could not be successfully assailed on the ground of illegality or error.

Stocks held by savings banks are not to be accorded the exemption granted by the Bevised Statutes to stocks owned by the state or by literary or charitable institutions, because the statute expressly exempts the latter institutions.

Apart from those reasons already alluded to, the case of the Bank of Redemption v. Boston, 125 U. S., 60, is a seeming authority for the proposition, that even if a savings bank as such were not taxable under the laws of this state on its deposits and accumulations, it would be liable as a stockholder in a national bank without regard to the ownership of the shares.

It is unnecessary for us to consider seriatim the other arguments advanced by the appellant, as they have been fully met and ably answered by the respondents in a brief which disposes of every question presented by appellant on this appeal.

Upon an examination therefore of the- entire record, it not appearing that the action of the commissioners was either illegal or erroneous, we think that the order appealed from should be affirmed, with costs and disbursements.

. 'Yak Brunt, P. J., concurs in result; Patterson, J., dissents.  