City of Lexington v. Aull

1. The City of Lexington was authorized by its charter “ to levy and collect taxes upon real and personal property within the city, not exceeding,” &e. (Sess. Acts, 1845, p. 161.) The Banners’ Bank of Missouri was incorporated by an act of the general assembly approved March 2, 1857, and established in the city of Lexington. (Sess. Acts, 1857, p. 34.) By the thirty-second section of said act it was provided as follows : “ In consideration of the privileges granted by this act to the banks incorporated in this state, each hanking company agrees to pay to the state annually one per cent, on the amount of the capital stock paid in by the stockholders other than the state, which shall be in full of all bonus and taxes to be paid to the state by the respective banks.” By ordinance shares of stock in incorporated companies (excepting manufacturing companies) were subjected to taxation for city purposes. It was further provided that persons owning shares of stock that were taxable were not required to deliver to the assessor a list thereof, but the president, or other chief officer, of such corporation was required to deliver to the assessor a list of all shares of stock held therein, and the names of the persons holding the same. For a violation of this provision on the part of such officer by a failure to hand in such a list, the ordinance attached a penalty of one thousand dollars. Held, that the Farmers’ Bank of Missouri was subject and liable to the tax thus imposed; that the penalty imposed upon the president for _a refusal to hand in the required list to the assessor was legal and válida

Error to Lafayette Circuit Court. The fifth, sixth and nineteenth sections of a revenue ordinance of the city of Lexington approved May 13,1858, are as follows: “ Sec. 5. Persons owning shares of stock in incorporated companies, taxable by law, are not required to deliver to the assessor a list thereof; but the president, or other chief officer of such corporation, shall deliver to the assessor a list of all shares of stock held therein, and the names of the persons who hold the same. Sec. 6. If the president, or other chief officer of such corporation, fail to comply with the provisions of the fifth section of this article, he shall forfeit to the mayor, councilmen and citizens of the City of Lexington the sum of one thousand dollars, to be recovered as other fines and forfeitures.” By another section the following property was subjected to taxation: “ Ninth. Shares of stock in incorporated companies, except manufacturing companies, (the property of which alone shall be taxed).” It is for a violation of the fifth section above set forth that this action is brought. The cause was tried by the court without a jury. The court refused to give the following declarations of law asked in behalf of plaintiffs: “ 1. Under the charter granted to plaintiffs by the general assembly of Missouri, power and authority are given to plaintiffs to pass the ordinances read to the court in evidence in this case by plaintiffs, and plaintiffs had the power and authority, under their said charter, to pass an ordinance imposing the duty on the defendant to give in for assessment and taxation the number of shares the stockholders hare in said Farmers’ Bank, in said city of Lexington ; and said ordinance and ordinances in reference to the strbject matter of this suit, passed by said plaintiffs, are of force and authority, and not null and yoid. 2. The plaintiffs had under their charter legal authority and power to impose a fine on defendant for his failure to give in a list of stockholders in said bank ; and plaintiffs have authority and right, under the law of the land, to impose a tax for city purposes on the shares the stockholders hold in said bank. 8. From the facts in proof before the court the plaintiffs have a right to recover.” The court gave the following declarations of law asked by , defendant: “ 1. The ordinance of plaintiff given in evidence, imposing the duty on the defendant to give in the number of shares the stockholders have in said bank to the assessor for the plaintiff, to be taxed for the benefit of plaintiff, is and' was null and void. 2. The plaintiff had no legal authority to impose a fine on the defendant for his failure to give in a list of stockholders in said bank; and the said city have no authority in law to impose a tax for city purposes on the shares the stockholders held in said bank.” The court gave judgment for defendant. I. Shares in bank stock may, under the charter of the city of Lexington, by proper ordinance, be assessed and become liable to pay taxes for city purposes. , Such shares are property. The words “ personal property” include money, goods, chattels, things in action, and evidence of debt. The word “ property” includes real and personal property. (R. C. 1855, p. 1027.) The city had the right to levy the tax on the shares of bank stock for the support of the city government, the payment of the city debt, and for the improvement of the city. The power to impose the tax includes the power to pass such ordinances as, in the wisdom of the mayor and board of councilmen, will best carry out the objects of the grant. The fifth section of the revenue ordinance, which requires the president, or other chief officer of the company, to delivei to the assessor -a list of the shares of stock and the names of persons holding the same, is within the powers' granted. Otherwise the shares might escape taxation, or the shares of some holders might be taxed and others not, thereby rendering such tax unequal as to the stockholders. This section is almost a literal transcript of the thirtieth section of the revenue law of the state. (R. C. 1855, p. 1331.) The óity having the power to tax, had, as incident to this power, the authority to pass such ordinances as would make the exercise of the power efficient. Sections five and six are legitimate exercises of this power. The power given to the city to levy and collect taxes on real and personal property is not limited to such real and personal property on which the state levies and collects taxes for state purposes; but the power is general on real and personal property “not hereinafter excepted.” The exceptions do not embrace shares of stock in banking or other incorporated companies. .The “ Farmers’ Bank of Missouri” is not exempt from the payment of taxes. The bank agreed to pay to the state, for the privileges conferred on it; annually, one per cent, on the amount of the capital stock paid by the stockholders other than the state, which shall be in full of all bonus and taxes to be paid to the state. (Sess. Acts, 1857, p. —~, § 32 ; 5 .Gill, 231; Angelí & Ames on Oorp. 102, 244, 276, 283; 4 Pet. 152; 8 W. & S. 334; 6 Barr, 70 ; 4 Mete. 568; 3 How. 133; 15 Johns. 44; 5 Blackf. 250 ; 5 Gilm. 48; 1 B. Mon. 14; 9 Paige, 470 ; 2 Hill, 265 ; 4 Wheat. 411; 6 Humph. 515; 3 Gratt. 215; 10 Jdo. 561; 24 Mo. 94; 3 Barn. & Aid. 12; 14 Ala. 402; 3 Zabr. 510'; 6 Pet. 736.) I. The charter incorporating plaintiffs and authorizing them to levy and collect a tax for city purposes, does not authorize plaintiffs to levy a tax on shares of stock owned by persons in the Farmers’ Bank located in said city of Lexington. The eleventh section of the act incorporating plaintiffs confers no such power. The words “ to tax real and personal property” are the operative words in the act, and ehoses in action, bank stock, &c., are not and were not intended to be included by the words “ real and personal property.” The powers granted to corporations are to be strictly construed, and they have no rights except such as are specially granted, and those that are necessary to carry into effect the powers so granted. (15 Johns. 382 ; 15 Johns. 558.) The plaintiffs had no authority by their charter to impose the penalty on the defendant for failing to give in a list of the stockholders and the shares owned by them in said bank. This power, if to be found anywhere, is in the eleventh section of the act above referred to, and provides that plaintiffs may from time to time “ pass such ordinances to carry into effect the objects and the powers hereby granted as the welfare of the inhabitants may require, and to impose and appropriate fines, penalties and forfeitures for the breach of any ordinance, and provide for the collection and execution thereof;” and an inspection of the grant of powers in the charter shows that the power in question is not one of them. See the whole of the eleventh section of the charter. Admit the state may, in its sovereign capacity, levy a tax of the kind, impose the duty on the president or chief officer to give in the amount of stock, impose a penalty for the refusal, yet the plaintiffs have no such power, unless derived from the charter, and it is not there found, and even the state has, by special enactments, thought proper to bring bank stock within the influence of taxation, and never yet supposed that under .the words “ personal and real estate” clioses in action were included; and the plaintiffs, though circumscribed in their charter to specific objects for taxation, attempt and affect the sovereign power. Again, the plaintiffs have no power to say the owners of shares of stock need not give them in to their assessor, but that another man shall, or pay such penalty as .they denounce. Bank stock is not a thing in itself capable of being taxed on account of its locality, and any tax imposed upon it must be in the nature of a tax upon incomes, and of necessity confined to the person of the owner, who, if he be a nonresident, is beyond the jurisdiction of the state and not subject to its laws. (Angel & Ames on Corp. p. 536, § 458; Union Bank of Tennessee y. The State, 9 Yerg. 490 ; Johnson y. Commonwealth, 7 Dana,'338.)