Bradley v. The People. ---- BRADLEY V. THE PEOPLE. (4 Wallace, 459.) State taxation of National banks. A tax on the capital of a bank is not equivalent to a tax on the shares, and therefore, where State banks are taxed on their capital only, a State statute imposing a tax on the shares of National banks is void. Van Allen v. The Assessors, ante, p. 1, affirmed. WRI RIT of error to the Supreme Court of Illinois, to review a decision of that court revising a decision of the board of supervisors of Peoria county, to the effect that the shares of stock of National banks held by Bradley were not subject to a State and county tax. The State Supreme Court held the shares liable to such tax. (39 Ill. 130.) The objection to the validity of the tax was, that under the State statute the shares of National banks were taxed at a greater rate than State banks, the latter being taxed only on their capital stock, and not on the shares held by stockholders. Messrs. Dexter and Walker, for the shareholders, plaintiffs in error. Mr. Palmer, contra. Mr. Justice NELSON delivered the opinion of the court. The question raised in this case came before us in the case of Van Allen v. The Assessors, 3 Wall. 573, 581 (ante, p. 1), from New York, where the statute taxing the State banks was substantially like that of Illinois. We there held the tax unauthorized for the defect stated. It was in that case attempted to be sustained on the same ground relied on here, that the tax on the capital was equivalent to tax on the shares, as respected the shareholders. But the position was answered that, admitting it to be so, yet, inasmuch as the capital of the State banks may consist of the bonds of the United States, which were exempt from State taxation, it was not easy to see that the tax on the capital was an equivalent to a tax on the shares. Austin v. The Aldermen. We see no distinction between the two cases, and the judgment of the court below must be reversed, and the proceedings remanded, with directions to enter a judgment affirming the decision of the board of supervisors. Judgment accordingly. AUSTIN V. THE ALDERMEN. (7 Wallace, 694.) Taxation of shares - Where to be taxed. A State statute required the assessors of each city and town in which any shareholder in National banks resided to include such shares in the assessment of such person. The defendant resided in Boston, owned shares in several National banks there situated, and was there assessed on such shares. He refused to pay the tax on the ground that the State statute was in violation of the National Banking Act permitting States to tax shares of National banks "at the place where such bank is located and not elsewhere." Held, that as in this case the assessment was in conformity to the act of Congress, the defendant had no cause for complaint and could not impeach the validity of the State statute. RROR to the Supreme Judicial Court of Massachusetts. The action was brought by the aldermen of Boston to recover a tax which the city had assessed on defendant's bank stock. The case was reported below in 14 Allen, 359. The opinion states other facts. I. J. Austin, for plaintiff in error. No argument on the other side. Mr. Justice SWAYNE delivered the opinion of the court. This case is brought before us by a writ of error, issued pursuant to the twenty-fifth section of the Judiciary Act of 1789. The legislature of Massachusetts, by a statute passed on the 15th of May, 1865 (ch. 242), provided for "the taxation of shares in associations for banking, established under the laws of the United States," and prescribed the mode of procedure for that purpose. The statute is confined to such associations in that State, and to Austin v. The Aldermen. shares held by persons living within its limits. The third section enacts that the assessment for taxation shall be made where the shareholders reside. The proviso in the act of Congress which permits the shares to be taxed by the States, requires them to be included "in the valuation of the personal property" of the holder," in the assessment of taxes imposed by or under State authority, at the place where such bank is located, and not elsewhere." Act of June 3, 1864, ch. 106, § 41, 13 Stat. at Large, 112. There are other regulations upon the subject, but they do not affect the point to be considered, and need not to be more particularly adverted to. The plaintiff in error lived in Boston, and was the owner of stock in six National banks there situated, and the valuation and assessment were there made. It is not denied that this was in conformity to the act of Congress, but it is insisted that the taxes assessed were illegal and void, because the statute of the State requires that they shall be assessed at the place of the residence of the shareholder, without reference to the locality of the bank. The only question of Federal jurisdiction, and of which this court can take cognizance is, whether the plaintiff in error has been deprived of any right, contrary to the act of Congress, upon which he relies for protection. This The facts bring the case within the terms of the act, according to the strictest construction which can be given to them. is conclusive of the case. Whether, in another case, arising upon a different state of facts, the statute may not produce results in conflict with the act of Congress, and which this court will therefore be bound to revise and correct, is an inquiry upon which we are not called to enter. We can only consider the statute in connection with the case before us. Having ascertained that it has wrought no effect which the act forbids, our jurisdiction is at an end. The twenty-fifth section of the Judiciary Act is explicit upon the subject. The right of taxation, where it exists, is necessarily unlimited in its nature. It carries with it inherently the power to embarrass and destroy. It is well settled that the States cannot exercise this authority in respect to any of the instrumentalities which the general government may create for the performance of its constitutional func Kennedy v. Gibson. tions. It is equally well settled that this exemption may be waived wholly, or with such limitations and qualifications as may be deemed proper by the law-making power of the nation; but the waiver must be clear, and every well-grounded doubt upon the subject should be resolved in favor of the exemption. In respect to the class of cases to which the one before us belongs, the waiver is expressed in clear and unmistakable language. Important questions have arisen as to the construction and effect of the permission given to tax, by the act of Congress under consideration, with reference to the National securities held by the banks. These questions have been settled by this court in repeated decisions. Van Allen v. The Assessors, 3 Wallace, 573; The People V. The Commissioners, 4 id. 244; Bradley v. The People, id. 459. In this case, the only question open for our examination must, for the reasons before stated, be resolved against the plaintiff in The provision of the National Banking Act that suits under it, in which officers or agents of the United States are parties, shall be conducted by the district attorney, is directory only, and the fact that private counsel is employed to conduct a suit by the receiver of a National bank against the stockholders thereof is not a matter of defense to the stockholders. It is the duty of the Comptroller of the Currency to decide when proceedings are necessary against the stockholders of a National bank to enforce their personal liability, and to what extent such liability shall be enforced; and in an action by a receiver to enforce such liability, such prior determination of the Comptroller must be distinctly averred and proved. Where less than the entire liability of stockholders is sought to be enforced, proceedings may be had in equity and an interlocutory decree may be taken for contribution. Where contribution only is sought, all the stockholders who can be reached by the process of the court may be joined in the suit, and it will be no objection that there are others beyond the jurisdiction of the court who cannot, for that reason, be made co-defendants. Kennedy v Gibson Creditors of a National bank cannot proceed directly in their own name against the stockholders or debtors of the bank, nor are they proper parties to a suit by a receiver. * Suits may be brought by National banks as well as against them under section 57 of the National Banking Act, of June 3, 1864. A case. PPEAL from a decree of the Circuit Court of the United States for the District of Maryland. The opinion states the Messrs. Brent and Merrick, for appellant. Mr. Steele, contra. Mr. Justice SWAYNE delivered the opinion of the court. This is an appeal in equity, from the decree of the Circuit Court of the United States for the District of Maryland. The bill was filed by the appellant. For the purposes of the points necessary to be considered, the case may be briefly stated. The appellant has been duly appointed receiver of the Merchants' Bank of Washington city, under the 50th section of the act of June 3d, 1864, and brings this bill to charge the defendants, who are alleged to be stockholders of the bank, with the personal liability prescribed by the 12th section of the act. The facts necessary to warrant the appointment of a receiver are sufficiently set forth. It is averred, that he has already ascertained that the assets and credits of the association are wholly insufficient to pay its debts and liabili ties, and that it will be necessary to the complete and entire administration of the trust reposed in him, that recourse shall be had to the personal liability imposed upon the stockholders;" that two thousand shares of the capital stock, amounting to $200,000, were issued by the bank to its stockholders; that it will be necessary to collect from them this amount to make good the deficiency in the means to meet the balance of the indebtedness of the bank, which will remain after the application of all the available assets, to the discharge of its liabilities, and that "after such application is made, a balance of the indebtedness will remain due, largely exceeding the said sum of $200,000." The stockholders, besides the defendants, are named, and it is alleged that a part of them reside in the District of Columbia, and one of them in the State of New York. The prayer of the bill is, that an account may be taken, and that each of the defendants shall be decreed to pay to the re *See, however, Act of Congress of June 30, 1876, section 2. |