SUPERVISORS OF ALBANY 'V. STANLEY.
OouN of 'the United State$.April 3,1882.)
STATUTS CoNSTRUCTION""";'SEPARABLE PnOVI5IONe-VAUDITY.
In a statute which contains invalid or uneonstitutional provisions, that which is unaffected by those provisions, or which can stand without them, must remain. If the valid and invalid are capable of separation, only the lat· ter are to be disrcp;arded.
STATE TAXATION-NATIONAL BANK SHARES-DEDUCTION OF DEBTS.
Where the federal statute (Rev. St. t 5219) permits Hi state to authorize all shares held in national banks by any person to be included in the valuation of his personal property and to be assessed at the place where the national bank 18 located, subject to the restriction" that the taxation shall not be at a greater rate than is assessed upon other moneyed capital in the hands of individuals," and a state statute is' passed in relation to taxation, requiring assessors to assess to each tax-payer his real estate at its value and his personal estate at its full value after deducting debts owed by him, and providing that if before the completion of the assessment he makes affidavit" that the value of the personal estate owned by him, after deducting his just debts and his' property invested in the stock of any corporation liable to bEl: taxed therefor, does not affidavit, it shall be the duty of the exceed a certain sum, to be specified in board of assessors to value such real or personal estate, or both, as the case may be, at the sum specified in such affidavit, and no more," and a statute subsequently passed, relating to the taxation of bank shares,made no provision for deducting debts, held, that such statutes remain a valid rule of assessment for shareholders of national banks who have no debts to deduct; that the prior statute is not in conflict with the act of congress; and that the later statute is valid, except in that it does not authorize a deduction for qebts of the spl\reholder, which, being a distinct and separable principle, will not invalidate the , whole act.
OF DEBTS TO BE GIVEN.
Under such statutes the assessors were not without authority to assess national bank shares; and where no debts existed to be deducted the aSSessment dl4,exist such was valid and the tax paill was a valid tax; but where which ought to be deducted, the assessment was voidable but not Void, the assessors being authorized in such cases, until notified in some prt'per manner that the shareholder owed debts which he was entitled to have deducted. BRADLEY, J., dissenting.
In error to the circuit court of the United States for the northern district of New York. MILLER, J. This is a writ of error to the circuit court for the northern district of New York, in which Stanley, the defendant in error, recovered a judgment against plaintiffs in error for taxes exacted and paid under legal process on shares of the stock of the National Albany Exchange Bank. A large number of the shareholders of the bank who had paid this tax made an assignment of
SUPERVISORS OF ALBANY V.STANLEY.
their claims to Stanley, and he recovered a judgment' in the action for the sum of $61,991.20, with interest and costs. The ground of this recovery was that the statute of New York, under which the shares of the bank were assessed, was void, because it did not permit the shareholder to make deduction of the amount of his debts from the valuation of the shares of stock owned by him, in ascertaining pleadings in the amount for which the shares should be taxed. the case set out the sums paid by the stockholders and their names, and their assignment to Stanley, the payment under compulsion of legal process, and a demand for the repayment on the Albany county authorities. The case was submitted to the court on· a waiver of trial by jury, and on the findings of fact and conclusions of law thereon by the court, judgment was rendered for plaintiffs. The facts found by the court are thus stated:
"First. That the allegations of the complaint in regard to the citizenship of the plaintiff, the citizenship and powers and liabilities of the defendant, the organization and capital of the National Albany Exchange Bank, the ownership of the shares of capital stock of the National Albany Exchange Bank, the assessment of the stockholders in said bank, named in said complaint, .by the board of assessors of the city of Albany, the names and residences of said stockholders, the collection of taxes from said stockholders, and the payment of the same to the county treasurer Qf the county of Albany, and the demand made by Chauncy P. Williams, before the commencement of this action of the treasurer of the county of Albany, are true as therein set forth. I'Second. That the amounts collected from the said stockholders and paid to the treasurer of the county of Albany, and the times the said amounts were so paid to said treasurer, were as follows, to-wit: $907.90 paid August 11,1874; $127,84 paid August 11, 1874; $1,868.06 paid May 1, 1875; $I,409.:J3 paid May 27,1876; $1,202.32 paid May 3,1877; $I,336.6Q paid April 17, 1878;
$1,478.02 paid April 22, 1879; $11,604.75 paid May 1, 1875; $8,147,26 paid May 21, 1876; $7,822.34 paid May 3, 1877; $7,357.94 paid April;:\.6, 1878; $6,243.20 paid AprU 21, 1879·
.. Third. Tbat the sums above named were not paid voluntarily by said stockholders, but were forcibly collected by the marshal of the city of Albany under a warrant issued to such marshal by the receiver of taxes of said city, pursuant to a warrant issued to said receiver of taxes by the board of supervisor. of the county of Albany, by levying upon the property of the said stockholders respectively, as alleged in said complaint. . "Fourth. That the said assessments were made and said amounts collected and reee'ved by the treasurer of the county of Albany, as above stated, under color of an act of the legislature of the state of New York, entitled I An act authoriZing the taxation of the stockholders of banks and surplUS funds of slivingsbanks,' passed April 23, 1866, being chapter 761 of the Laws of 1866. 'and not otherwise.
" Fifth. That the allegations of the complaint with reference to the assignments by the re3pcctive stockholders of s,lid bank of their claims against the county of Albany, by reason of the matters alleged in the said complaint, are true as set forth in said complaint, and that the plaintiff, at the time of the commencement of this action, was the holder and owner of all claims against the county of Albany, or against the defendant, arising out of the matters alleged and set forth in said complaint. "Sheth. That the said act of the legislature of of New York, chapter 761 of the Laws of 1866, did not permit the deduction of debts by the owners of stock in banks or banking associations, in the assessment thereof for taxation, although such deduction of debts of the owner was, at the time of the assessments alleged in the said complaint, permitted and reqUired by the laws of the state of New York to 'be made from the value of every kind of personal property and moneyed capital, other than bank stock, in assessing the same for the purpose of taxation.. ·, Seventh. That the allegations in the fourth count of said complaint, as to the presentation to the said board of assessors by said Chauncy P. Williams of theatfidavit of his indebtedness, and the request by him for a reduction of his assessment on his bank stock, and the refusal of said board of assessors to make such reduction, and the application by said Williams to the supreme court of the state of New York for a writ of mandamus, and the subsequent legal proceedings thereon, including the decision of the supreme court of the United States, are true, as set forth in said fourth count."
It does not appear by this findirig of the court that any shareholder, for whose payment of taxes this suit is brought, made affidavit or other application in regard to his indebtedness, that it might be deducted from his assessment, nor that any of these shareholders owed anything to be deducted from the assessed value of the shares held by them, except the seventh finding of facts in regard to C. P. Williams. ' Unless, therefore, the other shareholders who paid the tax ,on the shares of ;their stock wereoentitled to recover back the sum paid without any evidence'that they had made affidavit of the amount which they would be entitled to deduct from the assessment of their shares, if the same rule had been applied to assessment of shares as to other personal property, and without any, evidence that they owed anything whatever to be deducted from any assessment of their personal property, including bank sbares,the judgment in this case cannot be supported. ." The judge who decided the case on the circuit found as a sion of law that the assessment of all shares of national banks was because·the statute of New York, uIidel' which the assessments were llecessarily made, was void, as Leing in conflict with the act of congress on
SUPERVISORS OF ALBANY V. STANLEY.
tnat subject, and he declares, in an opinion delivered in the case of Nationa' Albltny Kr;change Bank v. Hills, in a chancery suit, that the in this class of cases are absolutely void, the assessors having acted without any jurisdiction. If this view of the subject be sound -if the officers who assessed and collected this tax were utterly without authority to collect any tax whatever, or if there was no law by which in any case they could assess and collect tax on shares of national banks-then it is of no consequence to inquire of anything beyond the fact that plaintiff's assignors did pay such a tax under legal compulsion. On the other hand, if the law is for any purpose a valid law, and if it can be held to furnish the rule of taxatiol1 as t() any class of owners of national bank shares, then the onus is on plai;ntiff to show that his assignors are not of that class. The question here to be decided arises under two statutes· of, the state of New York in regard to taxation. The first of. these is the . act of 1850, relating to the assessment and collection of taxes in the board city of Albany. The sixth section of the act requires aS8eSSors to prepare an assessment roll, in which there shall he set opposite the name of each tax-payer (1) a:11 his real estate liable to taxation, and its value; (2) the full value of all his personal property after deducting the just debts owing by him. Section I} of the act is as follows:
.. If any person shall at any time before. the assessors shall have completed their make affidavit that the value of his real estate does not exee9d a certain sum, to be speeified in such affidavit, or that the 'value of the personal estate owned by him, after deducting just debts, and hi's property invested in the stock of any corporation or assoclation liable to be taxed therefor, does not exceed a certain sum, to besJlecHied· in: the affidavit, it shall be the duty of the board of assessors to. value such reahdrpersonal estate, or both, as the case may be, at the sum specified in such affidavit, and no more."
In 1866 the state enacted a law concerning the- taxation of bank shares which was evidently intended to meet the requiretnentsofthe act of congress in relation to state taxation of the shares of nationaJl banks, and the provision of this statute related only to taxing stockholders in banks, and to the capital invested in individual banks. The first section of this act reads as follows, and, it contained no other provision for deductions as the basis of taxation, what is found in this section:
.. No tax shall hereafter be assessed upon the capital of an,. bank or banking association orgariize(f under the authority of this state or of the United States, uut the stockholclers in such banks and IJanking . associations s\lall Jpe
assessed and taxed on the value of their shares of stock therein, Said shares shall be included in the valuation of the personal property of such stockholder in the assessment of taxes at the place, town, or ward where such bank or banking association is located, and not elsewhere, whether the said stockholders reside in said place, town, or ward, or hot, but not at a greater rate than is ltssessed upon other moneyed capital in the hands of individuals in this state. And in making assel:lsment there shall also be deducted from the value of such shares such sum as is in the same proportion to such value as is the assessed value of the real estate of the bank or banking association, and in which any portion of their capital is invested in which said shares are held, to the whole amount of the capital stock of said bank or banking association: and provided further, that nothing herein contained shall be held or construed to exempt from taxation the real estate held or owned by such bank or banking association: but the same shall be subject to state, county, municipal, and other taxation to the same extent and rate and in the same manner as oth6l" real estate is taxed,"
In the case of People v. Dolan, 86 N. Y. 59, the question was whether, taking these two statutes together, an owner of shares of. stook in a national bank was entitled to deduct from the assessed value of his shares the just debts owing by him. It was argued that into this act of 1866 for the taxation of bank shares there should enter, as part of it, the provision of the act of 1850 which allowed this deduction as to all personal property, and that nothing in the act of 1866 forbid this or was inconsistent with it. It was also insisted that unless the act of 1866 was so construed it would violate the act of congress which only permitted the shares of national banks . to be taxed at the same rate as other money capital of the citizens of the state. But the court of appeals overruled both propositions, and held that the true meaning of the act of 1866 was that no such deduction should be made, and that as thus construed it was not in conflict with the act of congress on that subject. In the subsequent case of Williams v. Weaver, Williams, who was a shareholder in the National Albany Exchange Bank, m£!.de the affidavit required by section 9 of the act of 1850, and, presenting it to the board of assessors of the county, demanded a reduction in accordance with it from the valuation of his bank shares. On the refusal of the assessors to comply with this request a proceeding was commenced in the courts of the state, in which the court of appeals reaffirmed the principles of the case of People v. Dolan. That ,case coming into this court by writ.of error, it was here held that while 'We were. bound to accept the decision of the highest court of the state in construction of its own statute, the act of 1866 as thus construed. wail in that particular in conflict with the act of congress, because it