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
SUP1!;RVISO:aS OF ALBA-NY V.
did tax shares of the national banks at a higher rate than other moneyed capital in the state. In that case, reported in 100 U. S. 539; S. C. 21 Alb. Law J. 210, there are no words which declare the act of 1866 to be void, but the ca.reful language of the decision is that "in refusing to plaintiff the same deduction for debts due by him from his shares of national bank stock that it allows to others who have moneyed capital otherwise invested, it is in conflict with the act of congress." Accepting, therefore, as we must the act of 1866 as construed by the court of appeals of New York as not authorizing any deductioIi for debts by a shareholder of a national bank, is it for that reason absolutely void? This cannot be true in ita full sense, for there is no reason why it should not rema.in the law as to banks or banking associations organized under the laws of the state, or as to private bankers, of which there no doubt exists a large number of both classes. What is there to render it void as to a shareholder in a national bank who owes no debt which he can deduct from the a.Bsessed value of his shares? . The denial of this right does not affect him. .He pays the same amount of tax that he would if the law gave him the right of deduction. He would be in no-better condition if the lll.w expressly authorized him to make the deduction. What legal interest has he in a question which only affects others? Why should he invoke the protection of the act of congress in a case where he has nO rights to protect? Are courts to sit and decide abstract questions of law in which the parties before the court show no interest, and which, if decided either way, affect no right of. theirs? It would seem that if the act remains a valid rule of assessment for shares of state banks and for individual bankers, it should also remain the rule for shareholders of national banks who have no debts to deduct, and who could not therefore deduct anything 'if, the statute conformed to the requirements of the act of congress. It is very difficult to conceive why the act of the legislll.ture should be held void any further than when it ·affects some right conferred by the act of congress. If no such l'ight exists, the de1icateduty of declaring by this court that an act of state legislation is void is an assumption of authority uncalled for by the merits of the case, and unnecessary to tlie assertion of the rights of any party to the suit... The general proposition IDustbe conceded that in Qstatute whieh 'dontains invalid or unconstitntional provisions, that which iBun':. -affected' by these provisions, or which can stand without them, -must
1'em::.:n. If the valid and invalid are capn.ble of sepa:·.ltion, only the latter are to be disregarded. In the case of Ra'ilroad OOB. v. Schutte, 103 U. S. 118, decided at the last term, this point was pressed upon us with much earnestness, and its decision was necessary to the judgment of the court. "It is contended," said the court, "that as the provision of the act in respect to the execution and exchange of the state bonds is unconstitutional, the one in relation to the statutory lien on the property of the company is also void and must -fall. We do not so understand the law." And yet this was a case in which the scheme of exchanging the bonds of the state for the bonds of the company, in order that the company might get the benefit of the better creq.it of the state, was accompanied by a mortgage created alone by the statute in fayor of the state as her security, and, the court, whiie holding that the exchane;e of bonds was void as beingjn conflict with the constitution of the state of Florida, neld that the mortgage which secured the honds of the company, and which was only a mortgage by operation of the same statute, was valid. The language of this coud in the two cases cited in the bri«;lf of U. S. v. ReeBe, 92 U. S. 214, and Trade-mark Cases, 100 U. S. 82, concedes the general principle that the whole of a statute is not necessarily void because a part of it may be so. Said the court in the latter case: "While it maY'be true that when one part of the !jtatute is valid and constitutional and another part is unconstituthe valid part where they are tional and void, the court may distinctly separable, 80 that each may stand alone, it is not within the judicial promise to give to the words used by congress a narrower meaning than they are manifestly intended to bear. · · ." The case of U. S. v. Reese also implies that there may be unconstitutional provisions which do not vitiate the whole statute or even a single seotion, because the argument is to show that in that nase there could be no separation of the good from the bad. It is also to be observed that in both these cases it was a creating and , punishing offences criminally, which was to be construed in regard to the limited constitutional power of congress in criminal matters. The case of State Freight Tax, 15 Wall. 232, arose out of a statute of Pennsylvania which attempted to impose a tax on commerce forbidden by the constitution of the United States. The act imposed a tax upon every ton of freight carried by every.railroad company, steam-boat company, and canal company doingbusines8 within the state. The railroad company who contested the tax presented a
SUPERVISORS OF ALBANY V. STANLEY.
statement which separated the freight transported by them between and puints tlalc.y w;tlJin the state and limited to such that which was received from or carried beyond those limits. This courtbeld the latter to be void·as a tax on interstate commerce, and did not declare the whole tax or the whole statute void. It said:
"It is not the purpose of the law but \ts effect which weare now consider ing. NOl' is it at all material that the tax is levifld upon all freight, as well that which is wholly internal as that embarked in interstate commerce. * >I< * The conclusion of the whole matter is that, in our opinion, the act of the legislature of Pennsylvania of August 25. 1864, so far as it applies to articles carried through the state or articles taken up in the state and carried out of it, or articles taken up without the state and brought into it, is unconstitutional and void."
The same langnage is repeated in Erie Ry. Co. v. Pennsylvania, 15 Wall. 282, decided at the same time, and both cases were remanded to the state court for further proceedings in conformity with the opinion, which could only mean to enforce the tax on transportation limited to the state and not on interstate commerce. This ie a clear case of distinguishing between the articles protected Ly the constitution of the United States and those whicli were not, though nothing in the language of the statute authorized any such distinction. But in a review of the caees in this court on this subject" that of Austin v. Aldermen of Boston, 14 Allen, 35'7, will be fOUIld to most nearly resemble the one before us. It related to the same matter of invalid; of a statute of a state taxing shares of the national banks as being in conflict with the act of congress. That act said that such taxes might be assessed at the place where said bank was· located and not elsewhere.. The act of the Massachusetts legislature directed the aSsessment and taxation of the shares at the place where the owner resided. The plaintiff in error, Austin, having contested the tax on his shares in the oourts of the state unsuccessfully, brouciht the case here by writ of error. This court declined to enter upon the question of the validity of the Massachusetts statute, because the case did not show that Mr. Austin was taxed on his shares in any other place than Boston, the place where the bank was located. The argument of counsel in the case before us is that any tax or a tax on any person on account of his bank shares is void because the whole of the New York statute i"s void. If the arguill.mt is sound i* was equally applicable to Austin's case.
The statute of Massachusetts, which made no limitation of taxation to the place where the bank was located, must be held void under any principle which would wholly invalidate the statute of New York, because it did not allow the deduction of the owner's indebtedness from his slm.res. And if the Massachusetts statute was utterly void as to national bank shares, then the tax on Mr. Austin's shares in Bostonwas void, and hE! had a right to be proteoted against. the unconstitutional statute. The court evidently went upon the principle that the statute was only void as against the act of con· gress in cases where some-one was injured by the particular matter in which there was such conflict. The case seems to us directly in point. the same effect are the cases of People v. Bull, 46N. Y. 57; Gordon v. Cornes, 47 N. Y. 608; Village of Middleton. Ex parte, 82 N.Y. 196. If we examine the statute before us on principle we shall find but little reason to hold it to be wholly void as regards bank shares. . If the statute stood alone there is nothing in it in conflict with the actof congress. It is only when we look to the other statute, which prevents the deduction of debts from the entire value of personal properly, that we discem the diecrimination against bank shares. The act declares that bank shares shall be taxed according to their value,. after deducting the real estate and other property on which the bank itself· pays tax. This is eminently just. It provides for a mode of ascertaining their value, the officers who shall do it, and how the tax shall be collected. In all this the law is valid except that it does not authorize a deduction for debts of the shareholder. This is a distinct and separable principle. When the shareholder has no debts to deduct the law provides a mode of assessment for him which is not in conflict with the act of congress, and the law in that case can be held valid. Under the decision in Austin v. Aldermen oj Boston it is vo,lid as to him. If he has debts to be deducted the case of Williams v. Weaver ahowit that in taking the steps which this court has held he may take, he can secure that deduction, and when secured the remainder of the law remains valid. In other words, in such a case so much of the law as conflicts with the act of congress in the given case is held invalid, and that part of the state law which is in accord with the act. of <longress is held to be the measure of his liability. There is no difficulty here in drawing the line between those cases to which the statute does not apply and to those to which it does; between th& cases in which it violates the act of congress and those in which it.
SUPERVISORS OF ALBANY V. STA.NLEY.
does not.. There is therefore no necessity of holding the statute void, as to all taxation of national bank shares, when the cases in which it is invalid can be readily ascertained on presentation of the facts. It that the assessors were not without authority to assess national bank shares; that where no debts of the owners existed to be deducted the assessment was valid and the tax paid under it a valid tax; that in cases where there did exist such indebtedness, which ought to be deducted, the assessment was voidable but not void. The assessing officers acted within their authority in such <lases until they were notified in some proper manner that the share. holder owed just debts which he was entitled to have deducted. ' If they then proceeded in disregard of the act of congress the assessment was erroneous, and the case of Williams v. Weaver shows how that error could be corrected. The case before us shows no error in any case but that of Mr. Williams, and in that case he has obtained the judicial decision of this <lourtthatthe tax he paid was illegally exacted from him. Nor do the facts of his case raise the question whether, in a case wllere the debts of the shareholder do not equal the assessors' value of his shares, the tax is wholly erroneous, or only so m.uch as represent the assessment of his indebtedness that should have been deducted, for his affidavit was that his debts equalled the value of his bank shares. Nor 'do the findings of fact raise the question whether, without making affidavit and demand on the assessors, a suit can be maintained to recover when such indebtedness actually existed'; for he did make affidavit and demand, and no other tax-payer has shown any such notice or demand, or that he had any indebtedness to be deducted. There is neither finding of fact nor avermept in the pleadings on either point as to any other assignors of plaintiff than Mr. Williams. It results from these considerations that the judgment of the circuit court is reversed, and that on the finding of facts judgment should be rendered for plaintiff on the fourth count for the amount of thll tax paid by Williams, with interest, and on all the other counts for defendants. It is so ordered.
BRADLEY, J., dissenting. I dissent from the judgment of the courti in all these cases for the reason that, in my opinion, the state laws authorizing the capital stock of national banks to be taxed without allowing any deduction for the debts of the stockholders, where such deduction is allowed in relation to other moneyed capital, are void in
toto SO far as relates to national banks. To hold the law valid except as to those who are actually indebted and actually claim the benefit of the deduction, and actually set it up in a suit brought by the bank for relief, is practically to render the condition of the actof congress nugatory, and to deprive the national banks and their holders of its protection. 'fhe tax, though lad on the stockholders, is required to be paid by the bank itself, which must pay without deduction unless the shareholders give the bank notice of the amount of their debts. This is a most ingenious expedient to avoid such deductions altogether. The probability that not one in ten of the shareholders will ever have notice of the assessment in time to make the claim, and the natural reluctance they would have (if they had notice) to lay the amount of their debts before a board of bank officers will effectually secure the state from claims for deduction. . And that was no doubt the object of the law. But this unequal operation of it, in its practical effect, might not be sufficient to render it void. It is void, in my judgment, because it makes no exception, but is general in. its terms, subjecting to taxation the capital stock of national banks without the privilege of deducting debts. Denying to it operation and effect as to those who desire to claim the benefit of the deduction, and giving it effect as to all others, is to tear a portion of the law out by the roots. It is not like the case where a portion of a law which may be separated from the rest can be declared invalid without affecting the remainder of the law; nor like the case of a general law w.hich the legislature has power to make, but froni the operation of which some individuals may. have a legal or constitutional exemption which they can plead in theil' defence; but it is wrong in form; wrong in toto. The legislature had no authority or power to make the capital of national banks taxable except in the same manner as other moneyed capital of the state. The practical iniquity of the law is seen in this, that it affects the value of all the stock, whoever holds it.. As the law stands it acts as a prohibition against the purchase of the stock by those who owe debts, and they constitute a considerable portion of every community. It does 110t help the validity of the law for us to declare that it is pro tanto void, and in fact make a new law for the state. Its validity must be decided by its actual form and terms. If these cannot stand, the law is void.
NOTE. The cases affected by this decision are: Fi1'st Ward Bank v. Hughes, 6 FED. REP. 737; Albany City Nnt. Bank v.Maher, Id. 417; Fi1'st Nat. Bank of Utica v. Waters,7 FED. REP. 1[)'2; First Nat. Hnnk of Cldeago v, Farwell, ld. 518; Nat. Albany Exch. Hanjz v. WellS, 18 Blatdlf. 54.0; Van Allen v. 'l'he
HILLS V. NATIONAL ALBANY EXOHANGE BANK.
Assessors,3 Wall. 573; affirmed in People v. Com'rs,4 Wall. 244: and see generally, 0:1 the subject of state taxation of national banks, St. Louis Nat. Bank v. Papin, 4 Dill. 29; Bank 01 Omaha v. Donglas 00.3 Dill. 299: Fwst Nat. Bank v. Douglas Co. rd. 330; Union Nat. Bank v. Chicago, 3 Biss. 82; Collins v. Chicago,4 Biss. 472: Nat. Bank v. Com. 9 Wall. 353; Lionberger v. RoUse, rd. 468: Tappan v. Merchants' Nat. Bank, 19 Wall. 490; Hepburn v. Schooldist.23 Wall. 480: Waite v. Dowley, 94 U. S. 527: Adams v. Nashr;lll'e, 95 U. S. 19; Pelton v. Nat. Bank, 101 U. S. 146: Merchants' Nat. Bank v. C'nmming, 17 Alb. L. J. 34-5; City Nat. Bank v. Paducah, 5 Cent. L .·J. 347 ;Ean!; uf Commerce v.1.'t;nuessee, 25 Alb. L. J. 188.-fED.
Hrr.LS 11. NATIONAL ALBANY EXOHANGE BANK.·
(Supreme Oourt of the United States.
April 3, 1882.)
INJUNCTION-COLLECTION OF STATE TAX-SlTIT BY NATIONAL BANK.
A suit may be maintained by a na,tional bank on behalf of theshareholdel'll to enjoin state officers from the collection of a state tax on the shares of the bank, on the ground of an illegal assessment arising from the failure to deduct from the valuation the debts owed by the shareholders. 2.
SAME-SUIT BY SHAREHOLDER.
A shareholder who has made the affidavit and demand therefor required by law, may bring suit to enjoin the collection of such tax.
SAME-TENDER, WHEN NOT NECESSARY.
As a general rule, when tender of performance of an act is necessary to the establishment of any right against another party, this tender or offer to perform is waived or becomes unnecessary when it is reasonably certain that the offer will be refused, or that payment or performance will.not be accepted.
ON BEHALF OF SHAREHOLDERS.
Where it is shown that an affidavit and demand would have been unavailing, the shareholders may be permitted to show in an action by a. national bank, brong'lIt on their behalf, the deductions to which they were entitled, and the collection of the amount of such deductions would be enjoined.
Appeal from the circuit court of the United States for the northern district of New York. MILLER, J. This is an appeal from a decree in chancery of, the circuit court for the northern district of New York, and it prese,nts very much the same questions that have just been decided in the case of Sup'rs of Albany Go. v. Stanley. That was a commonlaw action to recover for taxes unlawfully exacted for years prior to 1879 on shares of the National Albany Exchange Bank, and the present suit was brought to enjoin the appellants from collecting a simi.Jar tal: assessed and yet unpaid for that year. In this case the bank sued in right of and as representing all the stockholders, and the cir.This case reverses 8. C. 5 FED.