People v. Bank of Shasta County

SHAW, J.

The plaintiff, by this action, seeks to enforce payment of $540.90 assessed as taxes against the Bank of Shasta County by the state board of equalization, under the supposed authority of subdivision (c) of section 14, article

[508]

XIII, of the constitution, and section 4 of the act of April 1, 1911 (Stats. 1911, p. 531).

On March 24, 1911, the Bank of Shasta County, being then insolvent, was closed by the superintendent of banks, and he took possession of its assets for purposes of liquidation, under the provisions of the Banking Act. He proceeded to reduce the assets of- the bank to money and realized therefrom $518,260.37. The total indebtedness of the bank amounted to $637,801.08, leaving a deficiency of $119,197.11. He then obtained from the stockholders, on account of their constitutional liability to creditors, the sum of $45,358, making a total fund of $563,618.37 for the payment of debts. Of this fund he had paid to the creditors of the bank, prior to the first Monday of March, 1913, the sum of $554,886.94, leaving the sum of $8,731.43 in his hands at that date.

On the 13th of March, 1913, the superintendent of banks reported to the state board of equalization that on the first Monday of March, 1913, he had on hand assets of the bank amounting to $8,731.43. The state board levied a tax of $540.90 against the supposed assets of said bank, upon the theory that the superintendent had reported assets amounting to $54,089.43. The complaint prays judgment for this sum against the bank and the bank superintendent.

At the trial it was admitted that the report showed only $8,731.43 as assets on hand. The tax rate is fixed at one per cent of the value of the shares. It follows from this admission that the claim for taxes cannot exceed $87.31 in any event. It is claimed by the respondent that this balance of $8,731.43 is not taxable, under the constitution, as the value of the shares.

Subdivision (c) of section 14, article XIII, aforesaid, provides that the shares of capital stock of banlcs organized under the laws of this state “shall be assessed and taxed to the owners or holders thereof. ’ ’ It then provides as follows: 1 ‘ There shall be levied and assessed upon such shares of capital stock an annual tax, payable to the state, of one per centum upon the value thereof. The value of each share of stock in each bank, except such as are in liquidation, shall be taken to be the amount paid in thereon, together with its pro rata of the accumulated surplus and undivided profits. The value of each share of stock in each bank which is in liquidation shall be taken to be its pro rata of the actual assets of such bank.”