Newman v. Wait

<p>Case for penalties of $500 each, brought on No. 6 of the' acts of 1865, for that the defendant, cashier of the First National Bank of Brattleboro, did not, as such cashier, transmit to the town clerk of said Brattleboro, in the years 1866 and 1867, or either of said years, a list of the names of such stock or shareholders of said bank as resided in said town, according to the provisions of said act. Plea, the general issue, and trial by jury, September term, 1872, Barrett, J., presiding. The allegations of the declaration are sufficiently stated in the opinion'. The plaintiff offered evidence to show, and the defendant conceded, that iu the years 1866 and 1867, the defendant made no returns to the town clerk of said Brattleboro, as required by said act; whereupon the plaintiff rested his case.</p> <p>The defendant’s counsel claimed in defence, that as said bank was organized under the act of Congress approved June 3, 1864, entitled “An act to provide a national currency,” the defendant as cashier thereof was amenable to no law but said act of Congress, and that the state legislature had no power to prescribe or define his duties as such cashier.</p> <p>The defendant offered evidence tending to show, that at all times in the years 1866 and 1867, said bank kept such list of the stockholders in said bank as was required by said act of Congress, which lists were at all times open to the inspection of the listers of said town, who were permitted at all times in those years to transcribe therefrom, and set in the grand list of said town, all such stock of said bank as they deemed taxable ; that in the month of April, 1866, the listers of said town called at said bank, and, with the defendant’s permission and aid, transcribed from said lists of said bank, and set in the grand list of said town for that year, all the stock of said bank that was subject to taxation in said town, and that the same was duly taxed, so that said town in that year suffered no damage by reason of the defendant’s omission to make such return that year to the clerk of said town ; that in April, 1867, the listers of said town in like manner transcribed and set in the grand list of said town for that year, all the stock of all the stockholders in said bank who were residents of said town on the first day of April in that year, and that the same was duly taxed, and that said listers might have transcribed and set in said grand list in like manner the stock of shareholders in said bank who were non-residents of this state on the first day of April in that year, but omitted to do so at their own option. The plaintiff’s counsel waived all objection to the admission of the evidence offered, under the general issue; but claimed that if admitted, it constituted no legal defence to said action. The court thereupon (the defendant, on leave being granted to except, consenting) directed a verdict, proforma, for the plaintiff; to which the defendant excepted.</p> <p>The defendant insists, that as said bank was organized under said act of Congress, he, as cashier thereof, was amenable to no other law, and that the state legislature had not power to prescribe or define his official duties.*</p> <p>But, conceding for a moment that the legislature may prescribe this duty to bank cashiers, still, the duty when performed, would have been no aid to state taxation. It was held by the supreme court of Pennsylvania, in Marlcoe et al. v. Sartranft et al., and by the Supreme court of Ohio, in Frazer v. Sibern et al., both reported in Am. Law Reg. of June 1867, and in Van Allen v. The Assessors, 8 Wal. 573, People v. The Commissioners, 4 Wal. 244, Bradley v. The People, lb. 459, and in numerous other cases, that “ taxation by a state, of shares in national banks, must conform strictly to the requirements of the national bank act of June' 1864. Our act of 1865 does not conform to it in three essential particulars : 1st, as to place of taxation; 2d, as to rate of taxation ; and thirdly and fatally, because it attempts to tax the stock of banks, instead of individual shares.</p> <p>But it seems to us that, beyond all question, the act of 1865, so far as it relates to the taxatiou of the shares of non-residents, is invalid and void. The second section provides that the stock and shares of all such banks shall be set in the list, and taxed in the same manner that stock in the state banks is liable to be taxed by the existing laws thereof. But the third section requires cashiers to transmit to the clerk of the town where such bank is situated, a list of the names of all non-resident stockholders, with their number of shares, &c., and by implication, these shares are to be set in the list of that town and taxed; and the fourth section provides, that when the collector in such town shall have a tax against any non-resident stockholder, “ it shall be the duty of the cashier,” upon presentation of such tax, “ to pay the same,” and charge it over to the stockholder on the books of the bank. Our listing law of 1849 provided that the shares of bank stock owned by non-residents, should be set in the list in the towns where the banks are located, and taxed the same as the shares of resident citizens. Comp. Sts. ch. 80, § 23. This provision was omitted from the act of 1855, and from the Gen. Sts. in 1863, and only “ ■all the real and personal estate owned by the inhabitants of this state, shall be set in the list and taxed.” In 1854 an act had been passed requiring bank cashiers to deduct one per cent, 'from the dividends upon the shares of non-residents, and pay the same directly to the state treasurer. This, with the amendment made thereto in 1864, was the law when this act of 1865 was passed. Therefore, we believe the 3d and 4th sections of the act of 1865 are a nullity, for four reasons. 1st. Because they do not of themselves confer any authority upon towns to set in the list and tax the shares of non-residents. 2d. Because Congress had conferred upon the state no power to prescribe duties to cashiers of national banks, orto prescribe that all stock'and dividends of non-residents should be holden to the banks for taxes. 3d. Because this is an attempt to place the shares of both resident and non-resident stockholders in the grand list, and subject them to like taxation, when, by the then existing laws, only the shares of residents could be set in the list, those of non-residents only being subject to the two per cent, deduction under said acts of 1855 and 1864. 4th. Because until - the passage of the act of Congress of February, 1868, the state had no authority for the taxation of the shares of non-residents ; such shares being personal property, follow the owner, and there is no power in a state to tax the rights which citizens of other states hold in an institution not created by the state, but created by, and deriving all its powers from, the United States.</p> <p>We think the court below erred in excluding the evidence offered. The defendant offered evidence to show that in the year 1866 the listers, pursuant to § 40 of said banking act, called at said bank, procured the names, residences, and amount of stock of all stockholders of said bank, and that such stock was set in the list that year and duly taxed, and that they did the same iu the year 1867, with the exception of omitting, at their option, the non-resident stock from the list. This is a remedial statute and gives the forfeiture to towns, not as a fine by way of punishment, but as a compensation for damages. Newman, v. Waite, 43 Vt. 587, and Brattleboro v. Waite, 44 Vt. 459. As the town suffered no damage on account of the defendant’s omission to make returns, the plaintiff is not entitled to recover.</p> <p>The defendant conceded, that in the years 1866 and 1867, he made no returns to the clerk of said town of Brattleboro, as required by the act of 1865. The neglect and refusal of the defendant to make those returns, entitle the plaintiff to recover the forfeiture prescribed by section five. Acts of 1865, No. 6 ; Newman v. Waite, 43 Vt. 587.</p> <p>The defendant’s counsel claimed in defence, that as said bank was organized under an act of Congress, the defendant as cashier was amenable to no law but said law of Congress, and that the state legislature had not power to prescribe or define his duties as cashier. This assumption is too broad for serious consideration.</p> <p>The evidence offered by the defendant, constituted no legal defence to the action, and the county court properly excluded it, and directed a verdict for the plaintiff. The fact that he kept a list of the stockholders in said bank, as required by section 40 of the act of Congress, did not excuse him from obedience to the law of Vermont, which required him to transmit a copy of so much of that list as would enable the authorities of Brattleboro to ascertain what shares of the stock of the bank were there taxable. So, too, the evidence that the listers by other means obtained evidence of what shares they supposed taxable, was wholly irrelevant to the issue.</p> <p>There is no difficulty in reaching a just conclusion as to the rights of these parties, upon the uncontroverted facts of the case. Under the act of 1865, the defendant owed to the town of Brattleboro the duty of transmitting to the clerk of that town, a list of some stockholders of the bank of which he was cashier, whose stock that town had the right to tax in the years 1866 and 1867, and he did not perform that duty in either of those years. When he thus omitted to do the duty he owed, he committed a wrong to the town. For the omission of that duty, and as reparation of that wrong, the legislature has prescribed a forfeiture of $500 for pach neglect. That forfeiture is due the town, irrespective of the amount of damages actually suffered, or of the defendant’s performance of other duties more congenial to his taste, and less derogatory to his sense of omnipotence. Newman v. Waite, supra ; Brattleboro v. Waite, 44 Yt. 459.</p>